What heck happened to that jolly stock market that you saw last time around, around christmas eve. Since then the grinch has mostly been in charge. Today on the second trading day of the year, the creature with the heart two sizes too small came in the form of tumbling oil prices, renewed worries about the eurozone and a strengthening u. S. Dollar. Heres a look at the damage on this the worst day since october for blue chip shares the dow dropped 331 with chevron and exxonmobil among the biggest decliners. Nasdaq was down 74 and the s p 500 lost 37 points. Oil prices hit 5 1 2year lows briefly dipping below 50 a barrel. West texas crude ended the day down 2. 65. It closed just a droplet above 50 bucks. Benchmark brent crude finished at 53. 11, as you see there. Compounding oils woes, the suddenly muscular u. S. Dollar. It soared to a nearly nineyear high today mostly at the expense of the euro. Bob pisani has more now on how the stronger dollar, falling bond yields and tanking oil prices led to todays big selloff on the street. Reporter there are three macro themes that are playing out in 2015. Number one, the week euro, a strong dollar. Number two, fiveyear lows in oil and number three, low bond yields. Traders know how to jump on a bandwagon and follow a trend and thats what theyre doing. Following a trend. Theyre shorting europe with italy, spain, france and germany all down 3 to 5 . And theyre continuing to short energy, shale stock, with even the biggest names like chesapeake concho and Pioneer Natural Resources down 5. 6 . This knockon effect, so caterpillar was down 5 on a downgrade from jpmorgan due to its exposure to the energy business. And lower prospects for construction in states with Strong Energy economies dropped names like united rentals, thats an Equipment Rental company, and fluor, a construction company. And they shorted Global Growth with many big Global Industrial names like illinois tool works, textron, 3m and honeywell all down. When will this end . Crude stability and stability in the dollar would help a lot but u. S. Corporate earnings could also help. Theyll be out in a couple weeks. Many companies will be talking about a strong u. S. Economy and the benefits of lower oil. For nightly business report, im bob pisani at the new york stock exchange. So whats the longer term impact on the markets here and overseas as the euro stumbles and the dollar gains strength . Its not just cheaper oil prices. Falling oil prices have been getting the headlines lately but with the u. S. Economy picking up steam since last spring and europe seemingly on the verge of economic stimulus the dollar looks pretty good right now. But a stronger dollar has consequences for stocks. If you look at the dow, its not just the two Energy Stocks that are dragging it down. Among the other leaders are people like caterpillar. People exposed to the world economy. So this is a sign that things may be slowing down not only in europe but generally. Caterpillar and other companies that do a lot of their business outside the United States are finding their products more expensive to sell. If earnings suffer well you know what happens to stock prices. Likewise for big retailers selling not only overseas but to tourists who are suddenly finding it more expensive to buy here. Think macys abercrombie fitch, and tiffany, which noted back in november that foreign Tourist Spending in the Third Quarter of 2014 was flat compared to the year before. So what happens next . If as most people think, the fed begins to raise Interest Rates later this year the dollar may get more expensive, but there may be a bright side. Cheaper imports here in the united s falling oil is holding down prices at the gas pump and other cheap imports could mean low inflation numbers. If that in turn becomes a stimulus for exporters like china, japan and especially europe it could be a good thing for the Global Economy. Where does the Global Economy need demand . It needs demand in europe it needs demand in japan, it needs command in china and from the u. S. Perspective id almost have europe grow a little faster than the u. S. Because we really need europe to recover. Longer term then a rising dollar isnt painting a dire picture, but shortterm it looks like a choppy stock market. Of course if the road keeps looking this bumpy, we might begin to use the high dollar and low oil as an excuse the way we used a tough winter last year to explain why stocks were down. Jim paulson joins us to talk more about the issues that are weighing on the markets and what they may mean for you and your investments. Hes chief investment strategist with Wells Capital management. Jim, welcome and happy new year to you. Happy new year. Weve been talking all day long about the strengthening dollar Falling Oil Prices the greek concern about whether greece will stay in the eurozone and the Euro Currency but is something more fundamental going on with equities namely that there is a revaluation because prices had simply on a valuation basis gotten a little too high . I think theres some of that tyler. One of the reasons were having such a violent Market Reaction here is just the vulnerability of the stock market as we came into this year. I mean look we had three years of straight up moves in the stock market and there was building complacency, calm and confidence about the future. In some sense the market was gearing for a gut check, if you will. On top of that valuations at about 18 times trailing earnings here in the United States are certainly no longer cheap. And theyre now above average and theyre up the key mobile is up 50 in the last year so the market is extended. So i think if the market was in a vulnerable state, and then you bring in this whole idea of a deflationary spiral happening and you feed on it by having oil drop below 50 a barrel and you have europe threatening to push greece out of the eurozone and traders just moved out of the way to the sidelines, and so theres a bit of a panic today. So jim, it sounds from what youre saying that you were not as worried about a complete crisis in the eurozone is that a correct read . I mean is europe going to be ok . You know sue, what makes me feel about about europe and indeed Global Growth i think we come into this year worried about deflationary spiral. I think by summer were going to see much better evidence of improved growth across the globe. And heres why, i think. I cannot think 2014 of a more aggressive policy stimulus year than we had last year. If you think about giving the world a massive drop in Energy Prices at the same time that Government Bond yields are collapsed everywhere about the globe, and then in europe you also weaken their currency and you do the same thing with the yen, thats a tremendous amount of stimulus a fiscal tax cut on energy like a quantitative easing policy among their bond yields and then weaker currency. Were redirecting a lot of stimulus to the eurozone and japan and even the emerging world. And i think were going to see the globe bounce in terms of growth. Might not be till the spring or summer but if we do i think that will bring a bid back to equity markets as well as maybe back to the euro back to the yen, might even bring the dollar back down here in the United States. So what should i do with my u. S. Money, my stock prices and values that may have gone up by 10 or so over the past year . Is this the time to invest more . Is it a time to take a little money off the table . I think in terms of the stock market i think were headed tyler, for volatile year and maybe roughly flat year in the u. S. Stock market. But i dont want to bet on it tremendously because i think the bull market is still several years away from peaking. Were just taking a pause this year maybe. I would maintain an overweight in equities but put a bigger portion of it invest it off shore away from the United States. Id go to europe japan and emerging world. Id look at the beatup commodity economies of canada and australia whose stock markets have way underperformed. Id bet against this deflation story. And look at adding you know commoditybased stocks commoditybased economies. Id go to where theres easing aggressively to repair it, and away from the United States which is moving away from supporting the stock market. Contrarian views there, we appreciate you stopping by. Jim paulson, Wells Capital management. Despite the recent volatility on wall street the u. S. Economy is on sound footing. While some other economies are struggling. So whats the role of the u. S. From a global perspective . Steve liesman looked for some answers at the American EconomicAssociations AnnualConference Today in boston. Reporter policymakers and leading economists at the American EconomicAssociations Annual meeting in boston the professions biggest gathering, generally gave the u. S. Economy a good diagnosis, believing it can avoid the ailments afflicting weak economies overseas is like europe and japan. We have had an uneven Global Recovery to be sure. Despite the sometimes sour attitudes in this country, the u. S. Continues to dominate industrial economy success. Even with the Downside Risks faced by the American Economy over the last year its still likely to be the relative winner of the party. Reporter San Francisco fed president John Williams said hes factoring that into his decision on whether to raise Interest Rates, but he says the u. S. Is still on track for a midyear consideration of those rate hikes. The u. S. Domestically has a lot of momentum a lot of tailwinds to the domestic side. The tailwinds that we have in terms of Energy Prices in terms of jobs can outweigh those weakness from abroad. Reporter but he chimed in when the fed starts raising rates, it can take its time. We may be a little more patient than weve been in the past. As long as were experiencing very low inflation theres no reason for it to be particularly abrupt. Reporter the biggest concern is europe. Outright quantitative easing from the European Central bank but theres a lot of concern with Interest Rates already low, it wont do much good especially without deeper Economic Reforms to liberalize european economies. And those changes could help out the u. S. Economy, although it might be able to withstand european weakness it would still benefit from european strength. For nightly business report, im steve liesman, in boston. Still ahead, why investors are pouring money into passive index funds and turning their backs on stock pickers . Are they making the right moves for the long term . Congress comes back from its holiday break tomorrow and some senators are wasting no time in pushing a bipartisan bill aimed at approving the completion of the controversial keystone xl pipeline which will bring crude from the oil sands of canada all the way down to refineries along the gulf coast. Democratic senator joe manchin of West Virginia and republican senator john holden of north dakota are cosponsoring legislation that will be filed tuesday with a debate on the senate floor expected by next monday. Some good news for the commercial real estate market. A new report shows the u. S. Office vacancy rate took a sharp drop in the final quarter of 2014 falling to the lowest level since 2009. Reese inc. The Research Firm behind that vacancy data expects even greater declines in the coming year thanks to steady gains in the u. S. Labor market. As more americans go back the work that office space is filling up. But just like buying or renting a house, its all about location, location, location. Diana olick reports. Reporter Americas Office market is working its way back literally, to better health. What weve seen here in the last year or so is that conditions are really turning a corner. Fundamentals are starting to accelerate in office and we expect that to continue. Reporter while not exactly robust continued job growth is finally showing up upstairs. The National Office vacancy rate fell in the Fourth Quarter of 2014 to 16. 7 according to reese. Absorption of new office space was at the highest level since 2007 and is now exceeding construction at a fast clip. The National Recovery really began in the major markets like energy in houston, technology in San Francisco and the west coast and financial in new york. Reporter but harold who works the washington, d. C. Market says the recovery there is lagging. Vacancies are low by national standards, but still high for the city historically. As long as we have the brakes on Government Spending and not a lot of bills going through congress, theres nog for the lawyers, the lobbyists to fight over. Thats a lot of what drives the washington market. Reporter what is now in high demand even in d. Clchlt is new construction that caters to the new way we work wide open spaces lots of light and floor plans that allow for more workers in less space. You are catering to high growth tenants, ideally, and those tend to be and this cycle certainly has been technology companies, its media companies, creative type of companies. Reporter names like boston properties, vornado are seen by some bets in the reit space. Theyre in all the right coastal places. One wild card houston. It had been a leader in the Office Recovery but falling gas prices could cap the gains or even worse lead to losses. For nightly business report, im diana olick in washington. Gilead Sciences Scores a deal with cvs sending shares higher. Cvs will make gileads drug sovaldi and harvoni, the exclusive treatment option for beneficiaries on some of its plans. A competing drug made by abbvie will only be available if patients receive a medical exception. Last month gilead shares tumbled after express scripts said it would exclusively offer abslees helpc treatment on its largest plan. Shares of cvs were off, gilead rose 2 . Abbvie saw its stock fall 2 . Kite pharma and amagain developed a deal to market cancer immunity treatments. Theyll Fund Research costs through the filing of a new drug application. Shares of kite pharma popped 15 , up more than 9. Amgen fell 1 . And some good news for isis pharmaceuticals. Johnson johnson said it will pay the company up to 835 million for the option to license three drug testing targetsing autoimmune diseases in the bowel. J j fell a fraction to 103. 79. Morgan stanley fired an employee for stealing data from up to 10 of its Wealth Management clients, about 350,000 people. So far the bank says theres no evidence of Economic Loss but account names and numbers were briefly posted online. At least information didnt include Social Security numbers or passwords. Shares of Morgan Stanley off about 3 today to 37. 50. Investors got a chance to react to news that holly frontier will take a huge inventory charge. The oil refiner said it would book a pretax charge up to 400 million for the fiscal 2014 year because of the Fourth Quarter drop in crude oil prices. The stock down more than 4 . It finished at 36. 78. 2014 was a record breaking year for money heading into vanyard group. The biggest provider of index tracking mutual funds. According to the wall street journal, 216 billion poured into vanguards socalled passive investments, those are the ones that mimic indexes and other stock benchmarks but they just charge a fraction of what a typical mutual fund does. The author of the article joins us to discuss whether this trend will continue in the new year. Kristin, welcome, nice to have you here. Thanks so much for having me. Why was vanguard really so tough for other companies to beat lt year . Some of it must be fees. Its really all about fees. If you look at vanguard theyre charging 18 cents for every 100 to invest versus a fund run by a stock picker. Thats a huge incentive for people. Do the individual investors just get smart all of a sudden or is much of this money coming from institutions 401 k Plan Administrators and the like . No you know its been a slowly growing trend. Vanguards actually had a record year in the past but its been growing up until this point. I would say the Tipping Point really came this year or in 2014 when you just saw regular stock funds just take such a performance hit. I mean more than 70 of them were underperforming in 2014. You know kristin, a lot of people though say this new year is going to bring with it volatility and that volatility really benefits the active investors less than the indices. What do you hear on that front . And might that tilt investors back to active Fund Managers . Absolutely. I mean if you look at what happened in the market today, if you were an investor in one of vanguards largest s p 500 funds, you would have lost some today, right . So if the market continues to be volatile this year or if theres a widespread market loss that wont be good for investors in index funds because theyre just mimicking indexes. Thats where managers might have a chance to have a comeback. I know youre not a Financial Adviser and dont really give financial adviseed aadvice but i often thought as a core holding in most portfolios why would you not have an index fund . Theyre inexpensive to own, they at least march the market so that takes the risk of underperforming the market out of the equation . Well you know and i can speak from personal experience here a lot of people just dont really Pay Attention to whats in their 401 k or even what theyre investing in personally until theyre either very close to retirement age or Something Else in their life happens, at least thats what a lot of investors have told me they didnt start reassessing until they thought, shoot, im about to retire in a few years and why am i paying all these fees. What is vanguard looking to do in this new year in 2015 . Thats a pretty high benchmark to beat with all that money going into the fund. Absolutely. I mean 200 billion they saw in 2014. Just to put that in context, the fund company with the second highest number only saw 26 billion. So i cant imagine vanguard is going to have quite the year it did in 2014. On the other hand they have expansion plans. Theyre looking at virtual Financial Advisory services. Theyre expanding overseas. You could see more of the same success, but 2162 26 billion is a hard number to beat. Thank you very much. Whats it like to be driving handsfree on the highway . Were taking you on a test drive, and one that you likely have never seen before. December was another blockbuster month for auto sales thanks to lower gas prices a stronger economy and an incredible affection for big pickup trucks and sufbs. Sales at chrysler last month shot up 20 thanks to strong sales of jeeps and regular trucks and even though sales at ford rose just 1 it was the automakers best december in nine years. For 2014 the Auto Industry sold just under 17 million cars and light trucks. That was the best year in nearly a decade. Heres a look at how shares of detroits big three fared today, Fiat Chrysler and ford down on this soggy market day. Gm lost 1. 5 . Aaa says the nationwide average price of gasoline has fallen for a record 102 days in a row to 2. 20 a gallon and that has some lawmakers considering hiking the federal gas tax. South dakota senator jim soon the incoming republican leader of the Senate Transportation committee, says hes open to a possible increase in the gasoline tax as a way to replenish the highway spending bill fund that expires in may. The last federal gas tax hike was back in 1993. The future of higher gas taxes may be a real challenge for drivers on the nations highways. Driverless cars is another potential one, but that future is fast approaching. Phil lebeau took a test drive across california and shows us now how the handsfree and footfree technology really works. Reporter it may not be long until you can drive handsfree and footfree on the highway. This is audis a7 piloted driving test car. We took it for a spin to see how the technology works. Were on the highway just outside of palo alto california. The vehicles let me know that its okay for it to take control. I press these two buttons right here and l. E. D. Strip on the front dashboard as well as the Instrument Panel lets me know that the piloted driving technology is in control of the car, and thats it. Now were handsfree footfree. You cant see my feet but im not controlling the acceleration or the braking of this vehicle. As were driving down the highway here towards San Francisco. If theres a car that slows down in front of us and we need to lane change there are 20 sensors in this vehicle that are measuring the other vehicles on the road if its safe to make a lane change it will do so. Now, this technology only works on the highway. When you need to exit the lea or slow down and go into street traffic, the vehicle will tell us. Were turning right now. Im not controlling the vehicle at all. But in a half mile or so its going to tell me that our next exit is coming up here and its time for me to take control of the vehicle. Which is basically pressing two buttons deactivate in 15 seconds. Reporter 15 seconds until it deactivates. I press these two buttons here. Lets me know that im now in manual driving and im taking control. In fact im going to lane change here. Do it the oldfashioned way, looking out the back window to make sure its time to get off at our exit here. For now, this a7 pile ted test car is just that a test car, but audi believes much of the technology will be incorporated into other models within the next couple of years. In prim nevada phil lebeau, nightly business report. That is so cool. Finally tonight we leave you with positive market thoughts on this really ugly day on wall street. Not only is this the first full week of trading in 2015 it is also the start of the third year of a president ial term and according to barrons thats bullish for stocks. In all third years since 1940 the market has been higher 100 of the time. And what about years that end in the number five . Those have all been positive for stocks since 1970. Well well have to bank on that. Well take it on a day like today, right . That does it for us on nightly business report. Im sue herera. Im tyler mathisen. Have a great evening. Well be attacking attendance. Be here. This is bbc world news america. 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