this is "nightly business report" with tyler mathisen and susie gharib. funded in part by -- thestreet.com and action alerts plus where jim cramer an portfolio manager stephanie li share their investment strategies, stock pi market insights. you can learn more at thestreet.com/nbr. welcome to this special holiday of "nightly business report." this is tyler mathisen, susie gharib has the night off. major closing highs for the indexes and lows like plummeting crude oil prices. that wasn't all that happened this year in the world of business. the economy and the job market hit a number of milestones as well. the health care sector dominated deal making, recalls royaled the auto business and a chinese

ecommerce company called ali baba, tonight we look back on 2014, the year that was. >> with the dow notching record highs more than 30 times and the s&p about 50, the bull market is now more than 5 years old. but 2013's perpetual push upward bumped into appear old acquaintan , volatility. in november, stocks bounced up to new highs but in december, there was another slide. stock prices waivered as the federal reserve prepared to end the economic stimulus program. tongue over the taper hung over the clouds like a year ago. now still about the fed but the question is when it will begin to push interest rates back up? can the economy handle higher interest rates?

well, employment numbers are better but real incomes really aren't and inflation is still below the fed's target level of 2%. >> one reason for the low inflation is a historic drop in the price of oil, down more than 45% from the year's high in june. why? it is simple and complex as the law of supply and demand. supply is up. the u.s. alone has increased production 65% in just five years. demand, though, is decidedly down. because the global economy is slowing. here at home, the drop in oil pushed gas prices down by a dollar a gallon and more in some places. cheaper gas, of course, puts an estimated $100 billion back into the hands of u.s. consumers. that's about $60 a month for the typical household. but is that enough to get them spending again? money still tight for most of us. so where is the u.s. finding growth? companies are still sitting on

record piles of cash, some of the money is staying overseas as the wait for u.s. corporate tax reform lingers on. but there's plenty of money to invest in the latest technologies and corporate spending is helping to grow the economy. tech is booming. silicon valley is a world leader. apple's new iphones are a huge hit. in seattle, boeing gets orders for more than fuel efficient jets from all over the globe and google expanded in new york city which is suddenly flush with more than 4 million jobs, the most the big apple has ever had. >> major indexes closing at numerous records, almost too many to count but hard to talk about the stock market without t what may be th the year for investors, oil prices. so with us, don shoe and jackie deangelis on energy. happy holidays, welcome. don, sum it up in a few seconds.

>> with the market, we've hit record highs upon record highs. so as we look at what's happening in 2014, the bull run was in tact but this time around, it wasn't so much a lot of the technology names we talked about before. it was health care that was a real driver for the market this time around. those stocks, biotechnology, pharmaceuticals alike, a lot of deal making like you said drove that to be the best performing in the s&p 500. with the record highs, a lot of investors calling to question whether or not they can sustain that going into 2015. of course, the trend has been positive for a lot of them so far. >> when you look at the sectors, almost all of them higher except the one you follow most closely which is energy and were not for oil prices -- >> a huge drag, of course. >> huge drag. a lot of factors we talked about in the piece. is it as simple as that? >> it really is as simple as that.

i don't think investors were expecting energy to be the story that it was in the back half of the year. it was no secret that supply was ramping the way analysts were expecting it to. this year, we finally started producing over 9 million barrels a day. that's almost up to the point of what saudi arabia's output is. we never thought we'd be at that level. the demands part of the equation is what took us off guard. when the demand started to fall off, prices started to decline. the question right now, how do we curtail the supply to be able to meet the demand? does the demand equation change in 2015 so that supply should stay stable right now in these are all the enknowns. >> let's talk about opec. are they irrelevant? >> a lot of people think opec is becoming irrelevant but i would say the last meeting in november changed the game. when they did not change their stance in terms of production and prices tanked further, they showed muscle and said, we're in this game. >> what's their end game?

do they want to squeeze out the higher cost u.s. producers or squeeze them so they scream? >> i think they're worried about losing shares. they say we're going to eat the price decline but hold on to market share. if that squeezes shale, it squeezes shale. every man for itself, it could get ugly. >> back to stocks, oil prices thought to be a net positive for the economy but in recent weeks, as oil as receded, collapsed in some people's view -- >> of course. >> -- equities hit a hard spot. >> the numbers are quite staggering. this last quarter alone, and we're only in the middle, haven't finished december at this point. by mid december just in the s&p 500 energy companies alone, that oil price decline left the decline in stocks of all varieties in the energy sector. so much so that just this quarter to date, we've lost about 265 billion, with a b, dollars worth of market values

for these energy companies. this slide in oil price is huge but it's important to remember. the driver for the economy right now, oil is a big part of it but smaller part of the overall index than say, technology and financial stocks. those are the most heavily rated in the index. you want to see leadership there. if oil prices rebound, that's great as well. >> let's spin in ahead here. why don't you go first, jackie. what is the outlook for energy prices over the first six months or all of 2015? >> first six months, analysts and traders alike say we could go lower from here. nobody really wanlts to call the bottom until they get a sense of where this story is going until some of the data shows us if the demand is going to come back on the table. having said that, people said to me once we do hit the bottom, maybe it's somewhere in the 40s. we'll rebound quickly back to the $60 or $70 range. that could happen in the back half of the year. >> for you, dom, we got back

last week guidance from the interest rates. what's the outlook for the stock prices 2015? >> 2015, you see a lot of experts say that you'll see the same level of valuation in the overall market but it's going to match earnings' growth. earnings growth is not expected to be gang busters but still expected to grow. a lot of experts are seeing, yes, gains in the stock market. but you're not talking about the 10, 15, 20% return varieties. >> the profit growth dividend. >> 5 or 6%. >> jackie, dom, appreciate it. to the economy that's helped out by the low energy prices we just mentioned but they didn't start out that way. if anything, the brutal winners slammed the brake on much of the company's economic activity but the growth engine was turned on. steve liesman reports. >> reporter: five long years after the end of the recession, a period marked by sluggish growth and stubbornly high unemployment, the u.s. economy may have turned a corner in 2014. beginning the year with a surprise decline in growth,

attributed to weather but many say, here we go again. the u.s. economy proceeded to rock again, counting two best quarters in 2003 and on best track for job gains since 2000. unlike previous growth spurts, this time it didn't appear the gains would be given back. >> it's hard to find an economic measure where we're not significantly better off. i don't have to tell you about the stock market and where that's gone, corporate profits, record highs. but also, unemployment now lower than previously. we've seen the housing market recover, not as fast as we'd like. the auto industry recovering. we remain the most dynamic, innovative economy in the world. >> reporter: indeed, the u.s. looks like the shining city on the hill compared to other places around the world like europe which teetered on the verge of recession and china, the growth reduced. it was a difference in monetary policy. the federal reserve ended the

open end quantitative easing. >> looking at unfolding economic development and as the economy strengthens and we come closer to achieving our objectives, i think it's very likely that we will, you know, progress on the path of normalizing policy. >> reporter: at the same time, the european central bank takes its first step into a u.s. style program to kick start its economy. >> q.e. program, which could include sovereign bonds, falls within our mandate or better. it's an instrument we could use in the pursuit of our mandate. not to pursue our mandate would be legal. >> reporter: next year looks to be one where the fed takes another step towards normalcy, possibly raising interest rates for the first time in eight

years but it's not without risk. if 2014 turns out to be another false start, the fed could be moving too early. if growth continues to be strong, the fed could find itself behind the curve. for "nightly business report," ev in washington. >> one major component of the economy, the job market and this year, american businesses picked up their pace of hiring. turning 2014 into a solid year for job growth. >> reporter: a year ago, the national unemployment rate stood at 6.7%. now it's down to 5.8%, the lowelo lowest it's been since july of 2008. in november alone, u.s. employers added more than 320,000 jobs and 2014 is on track now to become the strongest hiring year since way back in 1999. the gains have come across all the major sectors with professional services like accountants and engineers leading the way.

wages though have barely budged in seven years and although there have been signs of improvement recently, they are still barely keeping place with inflation. >> comes to us now from washington, d.c. so hamp from where you sit, what drove job creation this year? >> it was a little engine that could syndrome this year. this time last year the month of december produced only 84,000 jobs and at the close of the fed meeting this year, we had the fed chairman trumping the last three months of 2014 averaging 280,000 but to get to the core of your question, it started out with jobs essentially that did not pay all that well. it became widespread and we're now at a point where, again, there's some competition for skilled labor and skilled jobs and that's actually beginning to produce some wage growth along the way as well.

i think better paying jobs has to be the job story of 2015. >> you hinted at the answer to the next question. the quality of the jobs created and you seem to be suggesting that they keep getting better and better and better. >> yeah, we even in the november jobs report, we had a four tenths of an increase in average hourly earnings, doesn't sound like much but one of the biggest monthly increases we've seen in quite a few years, however, year over year, we're only talking about 2% wage growth. the fed said it can live with 3% wage growth and still hit 2% inflation target, so lots of room from a fed standpoint, for wages to grow and really, i think, you need the more spending power in the hands of consumers to keep the overall economy growing. >> so what will it take to keep the job growth going and what could potentially throw a wrench into it? >> more of the same, especially the near term hike we get from

lower oil prices, putting more money in people's pockets. that too boosting the total demand figures in early january when we see what kind of holiday season we've had going forward. but the road blocks along the way are still tight labor market in some respect. is this growth for real? can it be sustained? you know, have we really turned a big corner here? >> all right, hampton. thank you very much. happy holidays. hampton pearson in washington for us. >> you too. the auto industry hit by major recalls this year but were buyers scared away from the brands that were hit hardest?

the auto industry facing some of the biggest safety controversies in its history. it's been a big year and a big focus for investors, drivers, and regulators. topping the list, recalls of two of the biggest, the takata air bag recall and general motors' faulty ignition switches. >> reporter: cars and trucks are selling, almost 17 million sold this year, but recalls have auto makers reeling. the year's biggest? about 18 million vehicles worldwide has to do with dangerous air bags made by a japanese company, takata. at least five deaths are blamed on those defective air bags and the recall list is still growing. manufacturers, in the meantime, have refocused on safety. in the wake of gm's failure to deal with faulty ignition switches blamed for some 40 plus deaths more than a decade ago.

in its rearview mirror, gm can still see and feel the effects of a 35 million fine and a recall covering 15 million vehicles. >> philip lebeau has been tracking the recalls and their impact on the industry and comes to us from chicago. phil, welcome. it's been a record year for recalls but how have those recalls affected the brands that have been hardest hit by them? >> well, it's certainly tarnished some of the brands. general motors took a hit. honda because it's linked so closely with takata is a hit but in terms of people coming into the showrooms, it doesn't slow down sales at all. these recalls mostly impacted older models. when people go into a showroom, tyler, they have short memories. they look at the recalls and say, that's somebody else's problem or that's a 2008 model. i'm not looking at that. i'm looking at a 2015 model. >> right, some of the ignition

switch recalls particularly on cars that aren't made anymore. with the recalls, phil, are the cars less reliable or more reliable? >> actually, cars are more reliable now than they were five, ten years ago. what's happened, tyler, the globalization of the auto industry means that you have fewer suppliers and so you have a commonality of parts. one part goes bad, takata for example, it affects millions of vehicles. we likely see this in the future too when recalls are announced it will impact millions of vehicles. >> let's talk about falling gasoline prices a little bit. i think it's in part responsible for the fact we seem to be falling in love, once again, with suvs. jooep cherokee had a great year. talk to me about that and what gas prices may mean for more fuel efficient cars like the hybrids. >> like the toyota prius is a perfect example.

we see lower sales for the prius and other hybrids and we see that this year. that's tougher to convince people to pay a slight premium to buy more fuel efficient hybrid vehicle. it's tough, tyler. why don't i buy a compact car to not pay $3,000 more? we should point out fuel efficiency is part of what people look for when they go into the showroom. it's not like people forgot about what happened ten years ago when we fell in love with gas guzzler, they're still thinking about that but we go back towards the suvs. >> do we know anything about the aluminum bodied f-150 truck and how it's doing? supposedly more fuel-efficient. >> it's expected to be more fuel-efficient. we won't know how the public reacts on the new truck until next year. we see them trickle into showrooms. early reviews are positive but that's usually with all new vehicles. talk to me in the middle of next

year and see how the public embraces. >> we'll talk to you later, thank you, philip lebeau. your health care, is it a changing landscape to avoid u.s. corporate taxes through so-called inversion deals made for a very busy year for some of the biggest drug makers? >> reporter: phi soar, noe vartez, eli lilly. all the big names, the subjects of big talks with deals worth $10 billion this year. one reason, pressure on their product pipeline. it has some looking for growth outside their own company. another reason? taxes. companies that could relocate to overseas addresses often get a tax break. the washington did clamp down on the so-called inversion craze with new rules in september. the biggest of the far ma deals involve the botox maker, alegin.

an offer worth more than $50 billion for the company but aligan steered away and accepted an offer to join with ireland activist for more than 60 billion. that wasn't all for activist that made a deal to buy another american company, forest labs for $28 billion. coming up, the chinese ecommerce company that made its way to the new york stock exchange and became the biggest initial public offering ever. perhaps the biggest stock

story of the year with ali baba's initial public offering. not only introducing to jack mao, colorful guy but title biggest ipo ever. kayla tausche there with the very day it started trading. >> reporter: alibaba is off and running. the chinese ecommerce giant soaring above $90 in debut after pricing for $68 a share. a company founded in the apartment of entrepreneur jack mao in 1999 with just a dozen partners now responsible for 80% of china's ecommerce and valued today by the public market in the united states at $240 billion. alibaba's business model often described as a mash-up of amazon and ebay but a formidable challenge to tech companies here in the u.s. bigger than disney, ibm and j.p.

morgan chase but mao said he draws inspiration from another u.s. corporation. >> we hope the next 50 years the world changes because of us. we want to be bigger than warner, bigger, we want to learn to change the business lasting senchs. we hope 15 years later they say this is like microsoft, like ibm, like warner. they changed, shape the world. >> reporter: alibaba's platform sold 26 billion in goods last year and vendors responsible for 60% of all packages shipped in china. alibaba helps small businesses connect to new customers and in turn, china's middle clas. that's the main reason they're clam moring for share. willing to pay more than the ipo price formally mentioning jack mao as the richest man in

mainland china. alibaba is still centered on the little guy, reminded by a famous movie character. >> the hero i had, forrest gump. i watched before coming to new york. i started to watch the movie again, telling me that no matter what ever change, you are you and i'm still the guy 15 years ago. >> reporter: alibaba, of course, is now far bigger. >> kayla tausche with us now with more on alibaba and the other big tech stories of the year. alibaba, ipo biggest ever came off seemingly without a hitch. how did it change the landscape and the willingness for people to back these big ipos? >> people were a little bit hesitant to see a company that was technically based in the kaman islands with the bulk of business in china now trading here on u.s. soil but investors really bought the story.

they clamored to get the shares and when i talk to bankers on the day of the ipo, they said twice as many orders for shares of alibaba coming from u.s. retail investors than shares of facebook, tyler. this has become a household name and it's really broken down the borders of ecommerce, this company that was an upstart that came from nowhere and all of the sudden is bigger -- >> china, but never going to be a household name and player in the u.s. what do you think? >> the expectation is that it will and the demand from u.s. investors through their retail financial advisors trying to get these shares shows you that it is starting to pick up a little bit. now it's bigger than j.p. morgan chase, bigger than facebook. >> what? >> when you think about the market cap, james mao said in the piece, he wants to be bigger than walmart. his stock already is. >> one on the radar screen, uber the ride sharing service. the valuations tossed around for

this company, if it does indeed go public this year, are astronomical for what i think is a taxi service. i don't get it. >> well, the key to something like uber and the reason why now is the time that a company like uber can grow so much is this little tool right here. this smartphone. this wouldn't have been the power behind a company like uber were we talking about five years ago but uber now worth $40 billion just six months ago, it was worth $18 billion, which even then sounded astounding number. a year and a half, worth $3.5 billion but investors say the earnings back that up that uber in a year's time could make $10 billion in bookings because people say, hey, i don't want to get stuck in traffic. i'd like to have someone drive me and -- >> i use it too. >> it's comparable to a taxi, why not? >> kayla, thank you very much, have a good new year. thank you everybody for watching this special holiday edition of "nightly business report." i'm tyler mathisen, have a great

evening, everybody and we'll hope to see you right back here tomorrow night. "nightly business report" has been funded in part by -- thestreet.com and action alerts plus where jim cramer and fellow portfolio manager stephanie link share their investment strategies, stock picks and market insights. you can learn more at thestreet.com/nbr.

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