Stocks Take a Hit From Good News on Economy

Good news on the US economy is back to being bad for Wall Street. Stocks slumped Tuesday after a pair of reports came in better than expected.

• The S&P 500 fell 66.35 points, or 1.1%, to 5,909.03.
• The The Dow Jones Industrial Average fell 178.20 points, or 0.4%, to 42,528.36.
• The Nasdaq composite fell 375.30 points, or 1.9%, to 19,489.68.

One report said US employers were advertising more job openings at the end of November than economists expected. The other said activity for finance, retail, and other services businesses grew much faster in December than expected.

The strong reports are of course good news for workers looking for jobs and for anyone worried about a possible recession that earlier seemed inevitable to pessimists. But such a solid economy could also keep up pressure on inflation, and it could make the Federal Reserve less likely to deliver the cuts to interest rates that Wall Street loves, the AP reports.

Nvidia and other Big Tech stocks took some of the heaviest hits on Tuesday. Nvidia had been on track to set another all-time high in morning trading, after CEO Jensen Huang unveiled a suite of new products and partnerships the night before. He talked up the potential for AI technology in robotics, among other opportunities for big growth. But after Tuesday economic reports, which dropped following the market's first half hour of trading, Nvidia swung to a loss of 6.2% and became the heaviest weight on the S&P 500. Losses for Tesla, Amazon, Apple, and Microsoft were also among the strongest forces dragging the index lower.

story continues below

Helping to keep Tuesday's losses for stock indexes in check was Cintas, which rose 2% after making public its offer to buy its smaller rival, UniFirst, for $275 per share in cash Cintas provides uniforms, restroom supplies, fire extinguishers and other products to businesses. UniFirst jumped 20.9% to $204.569, below Cintas' offer price. Shutterstock and Getty both climbed after they announced they were joining to become a $3.7 billion visual content company to provide customers with a broader array of still imagery, video, music, 3D, and other media. Getty shares jumped 24.1%, while Shutterstock climbed 14.8%.

(More stock market stories.)