McDonald's New CEO Faces Onslaught of Competition

January 29, 2015, 8:46 am

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Filed under: McDonald's, Food & Beverage, Restaurants, CEOs, This Built America

By CANDICE CHOI

NEW YORK -- McDonald's new boss must feel like a freshly crowned king under siege.

The world's biggest hamburger chain is facing an onslaught of competition, from better-burger chains such as Five Guys Burger and Fries to brands like Chipotle Mexican Grill (CMG) that tout the superior quality of their ingredients.

Supermarkets and convenience stores are selling more on-the-go food, too. Last year, visits to convenience stores for prepared foods rose 3 percent, while visits to supermarkets were up 1 percent, representing millions of visits, according to the NPD Group.

After seeing its own customer visits decline at established U.S. locations for two straight years, McDonald's (MCD) said Wednesday it was replacing CEO Don Thompson with its chief brand officer, Steve Easterbrook. It was the latest in a string of changes the company has announced in hopes of appeasing investors and winning back customers.

In addition to plans to simplify its menu and improve service, McDonald's recently launched a marketing campaign intended to associate its brand with the positive emotion of loving. And in early March, it's planning a "Turnaround Summit" for franchisees in Las Vegas.

But even if McDonald's gets its house in order, its rivals aren't going away. Here's a look at what it's up against in its flagship U.S. market:

Problem? Burger Boomlet

McDonald's is facing new burger competition.

Shake Shack, which is expected to make its much anticipated debut on the New York Stock Exchange, promotes its use of hormone- and antibiotic-free beef and is emblematic of the "better burger" trend.

The company has grown to 63 locations around the world, including 36 in the U.S. Over time, it sees potential for at least 450 U.S. locations. That's tiny when compared with McDonald's, which has more than 36,000 locations around the world, including more than 14,000 in the U.S.

But Shake Shack isn't the only one rushing into the burger market. Five Guys, for instance, has more than 1,000 U.S. locations and more than 1,500 in development, according to its website. BurgerFi, which was founded in 2011 and has 63 locations, says it plans to add up to another 50 this year.

Traditional rivals also are pressuring McDonald's. Burger King (BKW) in 2012 rolled out a new menu and marketing in hopes of revitalizing its brand. It has since introduced items that compete more directly with McDonald's, including a "Big King" sandwich that resembles a Big Mac.

Wendy's (WEN), meanwhile, is trying to position itself as a more premium fast-food chain with burgers and sandwiches made with specialty bread and remodeled stores with more inviting decor.

McDonald's answer: To step up its own game, McDonald's plans to roll out an option that lets people build their own burgers at 2,000 stores by later this year.

Problem? Chipotle Factor

The gravitation toward places that promise better ingredients doesn't end with burger rivals. Chipotle, for instance, is often cited as the successful contrast whenever McDonald's troubles are mentioned.

A big part of Chipotle's draw is that people can walk down a line and watch their food being assembled quickly, exactly as dictated. Since McDonald's sold its stake in the chain in 2006, Chipotle has grown to more than 1,700 locations. In the latest quarter, sales surged 19.8 percent at established locations.

It's not just the format that attracts people, however. Chipotle also burnishes its image with its "Food with Integrity" slogan. That ethos around good ingredients is turning up throughout the industry. Subway this month rolled out new chicken strips that it says doesn't have artificial flavors or preservatives, and says it's working on improving other ingredients.

McDonald's answer: McDonald's is taking note. Mike Andres, president of McDonald's USA, said last month the company is also looking at shrinking the ingredients it uses.

Problem? Coffee and Breakfast Competition

For established coffee chains such as Starbucks (SBUX) and Dunkin' Donuts (DNKN), a key way of driving sales is becoming more of a destination for food.

Already, Starbucks says about a third of its transactions include a food item, and the company is pushing hard to increase that figure. It's introducing new salads and sandwiches that can be heated up in an oven. And to attract customers in the evenings, it's rolling out wine, beer and "small bites" like chicken skewers to thousands of locations in coming years.

Dunkin' Donuts is trying to boost food sales as well, and has expanded sandwich offerings for the breakfast and lunch hours. Like Starbucks, it's trying to make more use of its stores in the afternoons, when the morning rush dies down.

Meanwhile, Taco Bell, which is owned by Yum Brands (YUM), last year launched a national breakfast menu in hopes of stealing some McDonald's customers. The Mexican-style food chain targeted the breakfast leader by featuring real-life people named Ronald McDonald professing their love for items like the waffle taco.

McDonald's answer: McDonald's has said it plans to play up its coffee offerings, which can be a draw for people who end up spending more on food. It's also playing up the fresh eggs it uses for its popular Egg McMuffin.

 

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Market Wrap: U.S. Stocks Rally, Finish Higher as Oil Gains

January 29, 2015, 9:06 am

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Filed under: Energy, Earnings, Market News, Oil & Gas Industry, Stocks

By Sinead Carew

NEW YORK -- U.S. stocks rallied Thursday afternoon and closed higher as an upturn in oil prices and a rally in Apple and Boeing shares helped offset some disappointing earnings and lingering questions over U.S. monetary policy.

The S&P 500 had fallen as much as 0.6 percent earlier, led by energy stocks, which then reversed direction along with crude prices.

Technically the market was a little oversold ... so we just needed a little bit of positive news to spark an afternoon rally.

While the afternoon rise in crude wasn't huge, it was enough to cheer up the market after two weak days, said Randy Frederick, managing director at Charles Schwab (SCHW) in Austin.

"Technically the market was a little oversold, so we were in a pretty good position to bounce, so we just needed a little bit of positive news to spark an afternoon rally," he said.

The market has been advancing and retreating within a range of 200 to 300 points for some time as traders grapple with earnings reports, a strong dollar and weak oil prices and uncertainty about when U.S. interest rates will rise, said Dennis Dick, head of markets structure at Bright Trading.

"There's a lot technical trading going on," he said. "When the fundamentals are confusing and the macro is confusing, you have to lean on the technicals."

Harman International (HAR) shares rose 23.8 percent, making it the biggest percentage gainer in the S&P after it beat profit and revenue expectations.

Coach (COH) shares rose 6.8 percent after the handbag maker posted a better-than-expected quarterly profit. Dow component McDonald's (MCD) added 5 percent after announcing its CEO will retire.

Shares in Chinese internet giant Alibaba Group (BABA) fell 8.8 percent after revenue missed expectations and raised questions about China's economy. Qualcomm (QCOM) fell 10.3 percent after trimming its 2015 outlook.

The Dow Jones industrial average (^DJI) rose 225.48 points, or 1.31 percent, to 17,416.85, the Standard & Poor's 500 index (^GPSC) gained 19.09 points, or 0.95 percent, to 2,021.25 and the Nasdaq composite (^IXIC) added 45.41 points, or 0.98 percent, to 4,683.41.

Apple (AAPL) closed up 3.1 percent and Boeing (BA) finished 5.8 percent higher.

Supporting stocks, data showed weekly applications for unemployment insurance fell to their lowest in almost 15 years, adding to bullish signals on the labor market.

Investors also continued to digest Wednesday's Federal Reserve statement, which failed to give much clarity about when rates would begin going up.

The energy sector finished up 0.17 percent with U.S. crude oil turning around to settle up 8 cents at $44.53.

About 7.7 billion shares changed hands on U.S. exchanges, above the 7 billion average for the last five sessions, according to BATS Global Markets.

NYSE advancing issues outnumbered decliners 2,074 to 1,000, for a 2.07-to-1 ratio; on the Nasdaq, 1,823 issues rose and 893 fell for a 2.04-to-1 ratio favoring advancers.

The S&P 500 posted 16 new 52-week highs and 26 lows; the Nasdaq composite recorded 37 new highs and 101 lows.

-With additional reporting by Rodrigo Campos.

What to watch Friday:

• At 8:30 a.m. Eastern time, the Commerce Department reports fourth-quarter gross domestic product, and the Labor Department releases the employment cost index for the fourth quarter.
• The Institute For Supply Management-Chicago releases its survey of business conditions during January in the Chicago area at 9:45 a.m.
• The University of Michigan releases its final survey of January consumer sentiment at 10 a.m.

These selected companies are scheduled to report quarterly financial results:

• AbbVie (ABBV)
• Altria Group (MO)
• Chevron (CVX)
• Eli Lilly (LLY)
• Honda Motor Co. (HMC)
• Lear (LEA)
• Legg Mason (LM)
• Manpower (MAN)
• MasterCard (MA)
• Mattel (MAT)
• Newell Rubbermaid (NWL)
• Simon Property Group (SPG)
• Tyco International (TYC)
• Tyson Foods (TSN)
• Weyerhaeuser (WY)
• Xerox (XRX)

 

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15 Apps to Make Your Life Less (Income) Taxing

January 29, 2015, 10:00 pm

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Filed under: Taxes, Income Tax

By Maryalene LaPonsie

Let's take a moment to marvel at the wonder that is smartphones. Sure, they may ruin our relationships and make us worse parents, but they can do so much good. They can save us money, make us money and, don't forget, take some pretty swell photographs, too.

But seriously, despite the negatives that come from the seemingly inescapable need to check our phones every 45 seconds, smartphones really do have plenty of positives. Now that we're into the tax season, Money Talks News finance expert Stacy Johnson has one more reason to love them. He's compiled a list of the best smartphone apps to help you organize your records and file your tax return.

Apps to Get Organized

Let's start with the apps that help you organize your records. Your life will be easier if you use these apps throughout the year rather than trying to wade through a pile of receipts in January, but procrastination is a personal friend of mine, so I understand if you're going the pile-of-receipts route. Here are five apps to help you dissect your records and easily find what you need when filling in your tax forms.

• Shoeboxed. Around since 2007, Shoeboxed provides a painless way to pull, categorize and store information from receipts. You simply send your documents to the company, and one of its workers will process and verify the information. The app works in conjunction with the Shoeboxed website and is compatible with other organizational tools such as Gmail and Evernote. A free version is available, but that requires you to self-process almost all your receipts. For $9.95 a month, Shoeboxed will do the heavy lifting and process and categorize up to 1,000 documents a month.
• OneReceipt. For a totally free version of the same concept, try OneReceipt. Use your iPhone to take photos of receipts and then index and store the info. Android users are out of luck when it comes to an app, although they can still sign up for an account online.
• Expensify. If you have a small business, Expensify might be right up your alley, although it could work for individuals, too. The app lets users take photographs of receipts as well as import data from banks and credit cards. All that information is used to create and store organized expense sheets. Individuals can get a free account with 10 receipt scans a month. For anything more than that, sign up for a team account starting at $5 a month.
• Slice. One final receipt organizer worth noting is Slice. This app is really intended to organize online shopping by recording purchases and tracking packages. That said, it could work for your tax records, too, if you make a lot of business-related purchases online. Slice links with your email account to pull and store e-receipt data. Best of all, Slice is free.
• PowerWallet. PowerWallet is our pick for a comprehensive money management system. It links to your bank and financial accounts to track spending and organize expenses. You can also use it to create a budget and set up bill alerts. Power Wallet is free to sign up.

Apps to Find Deductions

Once you have your receipts and financial records organized, you should be able to quickly pull up many of the numbers you need. Some apps can make it even easier to claim certain deductions.

• MileIQ. If you travel frequently for business and have an iPhone, MileIQ may become your favorite new app. All you have to do is install it, and the app automatically tracks all your travel and logs it into reports that can be used for either a tax deduction or submitted for employer reimbursement.
• MileBug. For those with an Android or Windows phone, MileBug does essentially the same thing as MileIQ. This app is available for iPhones as well and can create reports in either a CSV or HTML format.
• ItsDeductible. Offered by tax software provider TurboTax (INTU), ItsDeductible is a free way to track your donations either online or on your iPhone. The app is set up to track everything from drop-offs at the thrift store to cash donations to mileage. For donated items, the app will even give you a suggested resale value to use when itemizing deductions. TurboTax users can import data from ItsDeductible to their tax forms.
• IDonatedIt: Another useful app for tracking non-cash donations is iDonatedIt. Like ItsDeductible, this app is only available for Apple devices. In addition to recording donations and their value, iDonatedIt lets you attach photos for documentation.
• Deductr: This final app really bundles up just about everything offered by the nine apps above and delivers it in one sleek interface. Deductr is a mileage tracker, an expense organizer and a time management system all rolled into one. It will also flag you about potential deductions based on your spending. There is also one other thing deductr is: expensive. It costs $19.95 a month or $199 a year, making this a best bet for small-business owners rather than individuals.

Apps to Make Filing Easy

At last, it's time to file your return, and there may be no need to pull out the laptop or fire up your desktop computer for this. Instead, consider whether you can use one of these tax apps to file your taxes and track your refund.

• H&R Block (HRB). Watch this spiffy commercial to see how the H&R Block app can have you filing your taxes in less time than it takes to get a mocha latte. H&R Block has several apps that can be used to file a return, estimate taxes or track your refund. The apps are free, but there is a fee to submit your forms. For example, sending a 1040EZ form via the app will set you back $9.95.
• TurboTax. Not to be outdone, TurboTax also has a mobile app that allows users to take photos of their W-2s and automatically fill in their tax forms. As with H&R Block, the app may be free, but there could be a cost if you want to submit your paperwork to the IRS.
• TaxACT. Another major player in the online tax prep business is TaxACT. Like its competition, the TaxACT Express app lets you take a photo of your W-2 and complete your form on your phone. One big difference is that TaxACT will both prepare and e-file simple federal and state returns for free.
• Taxsoftware.com. In the event there is no way you'll get your tax forms done by April 15, Taxsoftware.com offers an app for Apple (AAPL) users to submit Form 4868. The form gives you a six-month extension on filing your return. However, if you think you owe money, be aware that filing a 4868 doesn't give you an extension on paying, so you may still end up with late fees. But at least you'll avoid the late filing fee, which can be 5 percent of what you owe. Taxsoftware.com charges 99 cents for this app.
• IRS2Go. Finally, our list wouldn't be complete if we didn't mention the IRS's official tax app. Known as IRS2Go, this free app for Apple and Android devices will help you locate free tax preparation services, allow you to request copies of your tax records and, of course, track the status of your refund.

I don't recommend using your smartphone to ignore your kids or avoid your work, but I do suggest downloading an app or two to make filing your taxes a little less painful. Will you be using an app this year? Let us know your favorites (and which ones we should avoid) by leaving a comment below or on the Money Talks News Facebook (FB) page.

 

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These 3 Tricks Are the Deflated Footballs of Investing

January 29, 2015, 10:00 pm

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Filed under: Apple, Investing Basics, Sports, Investing

This is supposed to be a showcase week for the National Football League, building up to Sunday's Super Bowl. However, it seems as if all that the sports media world is talking about is how the New England Patriots may or may not have used footballs that were not inflated to league-required specifications.

This is a big deal. In the snowy conditions of the AFC Championship game that propelled the Patriots to the final contest of the season, a lighter football is easier to throw and catch. The weight of the Deflategate scandal will linger, but some will always argue that part of the competitive art of the game is to find ways to give your team the upper hand.

Investors can play with their own version of deflated footballs, too -- and unlike in the NFL, it's not against the rules. Let's go over a few ways that investors can gain an advantage over their peers in the pursuit of beating the market.

1. Get There Early

Everyone's a genius in retrospect. Buying into Apple (AAPL) just ahead of the iPod rollout in the fall of 2001 would have resulted in nearly a 100-bagger today. There have been big gains for those hopping on everything from cloud computing to streaming video before those platforms started to take off.

This doesn't mean that investors should be speculating in penny stocks or chasing overpriced securities. Sometimes what seems like a ground-floor opportunity actually winds up being a trapdoor to the basement. However, spotting a hot trend or a fast-growing company when it has minimal analyst and financial media coverage is the way many stories detailing someone's best investment start.

2. Buy the Beaters

Most companies beat, or at the very least meet, Wall Street's quarterly earnings estimates. However, investors should always look for the publicly traded companies that consistently beat analyst profit targets.

Southwest Airlines (LUV) was one of last year's biggest winners. Shares of the no-frills carrier soared 126 percent in 2014, fueled by a year of rising travel demand and lower jet fuel costs. The company also consistently beat analyst income forecasts in every quarter through 2014.

3. Buy What You Know

Legendary mutual fund investor Peter Lynch made a killing in the market with the simple "Buy what you know" tenet. He invested in the places where he regularly ate, shopped and slept. He would take his wife and daughters to the mall to gauge retail store trends.

It's a strategy that continues to work today. What are you passionate about? What are the publicly traded companies in your line of work? How many of the companies that are local to you trade on an exchange? Don't buy them all, of course: You want to buy the ones that are successful. Your experience and insight place you at an advantage to folks who don't care, don't know, or don't hear about the companies.

The Deflategate theory claims that underinflated footballs give the offenses that use them an advantage because they are easier to grip, and the same sentiment applies here. Buy companies that are easier for you to grasp and they will make it easier to score in all forms of inclement weather.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready to score this year? Check out our free report for one great stock to buy for 2015 and beyond.

 

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20 Simple Hacks to Make Your Stuff Last Longer

January 29, 2015, 10:00 pm

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Filed under: Food & Beverage, How to Save Money, Consumer Electronics, Saving

By Maryalene LaPonsie

There are all sorts of ways to save money today. You could find deals on food, buy generic items or negotiate a better price on a new car. All those are great ways to stretch your dollars, but what if you could reduce your trips to the grocery store and minimize your Amazon pantry purchases? What if you could squeeze a couple more years out of your car? Consider it done:

Food

According to data from the USDA, American food expenditures in 2013 averaged $4,504 per person, split about evenly between food eaten at home and calories consumed on the go. You can reduce how much you spend by practicing proper food storage and eliminating the need to chuck rotten food in the trash. Here are five tips to get you started.

• After opening items packaged in jars or cartons, such as salsa, spaghetti and cottage cheese, store them upside down to keep mold at bay and your items fresh longer.
• Wrap your salad greens in a paper towel to keep them from becoming slimy and inedible.
• Keep the wrapper on blocks of cheese when you cut. Touching the cheese directly can transfer bacteria from your hands and encourage mold growth.
• It's an old wives' tale that leaving the avocado pit in half an avocado or guacamole will keep it from browning. What does work is to lightly press plastic wrap on to it to minimize its contact with air.
• Store your flour in the freezer to keep it fresh and avoid any icky bug infestations.

Cleaning Supplies

A 2013 survey found Americans spend $42 a month on cleaning supplies. You could reduce your costs by switching to homemade cleaners, buying generics or following this simple advice:

• Cut sponges in half to make them last twice as long.
• While you're cutting stuff, slice your dryer sheets in half, too. Depending on your climate and size of your laundry loads, you may even be able to get away with using a third or quarter of a sheet.
• Also, try using less laundry detergent. Unless your laundry is heavily soiled, a little soap can go a long way.
• Take bar soap out of its packaging and let it sit out for a couple of weeks to dry before you use it. Dry soap will last longer. Plus, get a soap dish that lets water drain away between uses.
• Spraying cleaning solutions directly onto windows and countertops is a sure way to use too much. Instead, spritz the solution on your cleaning cloth or paper towel.

Personal Care Items

Have you visited the cosmetics counter recently? Being beautiful on the outside isn't particularly cheap. Regardless of whether you buy the drug store brands or splurge on luxury items, make the most of your purchases by following these tips:

• Drying your razor will extend its life. Rub it on a piece of old denim to dry it and keep it sharp.
• Use up the last of the toothpaste by cutting open the tube.
• Q-tips are perfect for digging out and using up the last of your lipstick.
• If your bronzer is running low, mix in a little moisturizer to make it last longer.
• Store shampoo and conditioner bottles upside down. Then when you reach the end of a bottle, add a little water and shake to get out every last bit.

Other Items

Finally, there are plenty of other items in your home, both large and small, that you may want to last longer. We have hacks and advice for those, too.

• Skip the high heat of the dryer and air-dry your clothes to make them last longer. Try washing in cold water, while you're at it.
• Freeze candles the day before you plan to use them to extend their burn time.
• While you probably don't want to put your alkaline or lithium batteries in the freezer, storing rechargeable batteries there can help them keep their charge longer. Just make sure they reach room temperature before using them.
• Practice proper appliance maintenance, such as changing furnace filters, cleaning refrigerator coils and descaling your coffee maker. All will extend the life of these home essentials.
• Don't skip maintenance on your car, either. Regular oil changes can go a long way to extending the life of your main mode of transportation.

What can you add to our list? We want to hear how you make your stuff last longer. Leave a comment below or on the Money Talks News Facebook page.

 

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Super Bowl of Manufacturing: Wash. vs. Mass. [Infographic]

January 29, 2015, 10:00 pm

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Filed under: Sports & Recreation, This Built America

Super Bowl XLIX takes place Sunday between the Seattle Seahawks and New England Patriots, but you probably knew that already. Last year's blowout victory for the Seahawks over the Denver Broncos was the biggest television event to ever air in the U.S. with an average audience of 111.5 million viewers -- making three of the last four Super Bowls the new ratings record holder.

Some of those viewers tried to take the day a step further by launching an unsuccessful campaign to make the Monday after a national holiday. With this year's match expected to become the new ratings ruler, advertisers are paying around $4.5 million for just a 30-second ad this year.

The teams' states make for interesting comparisons off the field. New England, especially Massachusetts, has a long history of manufacturing that has evolved from clothing and shoes to electronics and chemical products -- with good wages to show for it. Washington has a storied legacy of innovation in transportation (Boeing (BA)), food (Starbucks (SBUX)) and technology (Amazon (AMZN) and Microsoft (MSFT)). The states' gains charted below are helping Americans win off the field.

 

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12 Simple Ways to Save Money Around the House

January 29, 2015, 10:00 pm

≫ Next: In Big Shake-Up, Kate Spade to Close Saturday Stores

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Filed under: How to Save Money, Home & Garden, Saving

The average American spends about $17,000 per year -- or 33 percent of income -- on housing, according to the Bureau of Labor Statistics. That's doesn't just include rent or mortgage payments; it also covers the many little costs, from repairs to supplies to decorating.

But there are plenty of tricks you can adopt to cut those costs dramatically. Here are 12 easy ways to save money around the house that everyone can do.


Paula Pant ditched her 9-to-5 job, traveled to 32 countries, became a successful investor and runs a business from her laptop. Her blog, Afford Anything, is the gathering spot for successful rebels who know they can afford anything -- just not everything. Visit Afford Anything to learn how to crush limits, create wealth and maximize life.

 

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In Big Shake-Up, Kate Spade to Close Saturday Stores

January 29, 2015, 11:45 pm

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Filed under: Company News, Retail, Shopping, Apparel, Stores

By Krystina Gustafson

Kate Spade announced Thursday it will shutter its Kate Spade Saturday and Jack Spade stores to focus on building its label into a $4 billion brand.

Both brands will continue to be a part of the luxury label's portfolio, with Kate Spade Saturday being folded into Kate Spade, and Jack Spade being sold at other retailers and online.

"A key tenet of our road map for growth is ensuring that we are disciplined and forward-looking with our investments, putting our resources behind targeted initiatives that will maximize profitability," CEO Craig Leavitt said.

Kate Spade (KATE) shares rose about 10 percent to near $33 in morning trading.

Saturday, which caters to a younger customer and has more modest price tags than the main Kate Spade label, had 19 locations; Jack Spade had 12.

Spade expects to incur charges $32 million to $39 million due to the store closings.

Kate Spade announced the shake-ups as it released preliminary results for 2014. For the year, the company expects to report a net sales increase of more than 40 percent from last year, to a range of $1.13 billion to $1.14 billion.

It anticipates adjusted earnings at $145 million to $150 million, including losses of $29 million from Kate Spade Saturday and the brick-and-mortar operations of Jack Spade. Thomson Reuters (TRI) consensus estimates forecast Kate Spade will post non-GAAP earnings of $137 million for 2014.

"All told, with momentum building, the business focus narrowing and most major overhangs ... now eliminated, we remain bullish on Kate shares," Sterne Agee analyst Ike Boruchow said.

 

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U.S. Growth Cools in 4Q, but Consumer Spending Shines

January 30, 2015, 12:36 am

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Filed under: Economic Indicators, GDP, Economy, This Built America

By Lucia Mutikani

WASHINGTON -- U.S. economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006.

The slowdown followed two back-to-back quarters of bullish growth and is likely to be short-lived given the enormous tailwind from lower gasoline prices. Other data Friday showed consumer sentiment jumped to an 11-year high in January.

We look for strong domestic consumption to continue supporting growth momentum in the coming quarters even as investment suffers due to falling oil prices.

"We look for strong domestic consumption to continue supporting growth momentum in the coming quarters even as investment suffers due to falling oil prices," said Gennadiy Goldberg, an economist at TD Securities in New York.

Gross domestic product expanded at a 2.6 percent annual pace after the third quarter's spectacular 5 percent rate, the Commerce Department said Friday in its first fourth-quarter GDP snapshot.

Most economists believe fundamentals in the United States are strong enough to cushion the blow on growth from weakening overseas economies.

Even with the moderation in the fourth quarter, growth remained above a 2.5 percent pace, which is considered to be the economy's potential. Economists had expected GDP to expand at a 3 percent rate in the fourth quarter.

U.S. stocks were trading lower on the GDP report, while prices for U.S. Treasury debt rose. The dollar was largely unchanged against a basket of currencies.

For all of 2014, the economy grew 2.4 percent compared to 2.2 percent in 2013. The report came two days after the Federal Reserve said the economy was growing at a "solid pace," an upgraded assessment that keeps it on track to start raising interest rates this year.

The U.S. central bank has kept its short-term interest rate near zero since December 2008 and most economists expect a mid-year lift-off.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, advanced at a 4.3 percent pace in the fourth quarter -- the fastest since the first quarter of 2006 and an acceleration from the third quarter's 3.2 percent pace.

Lower gasoline prices -- they are down 43 percent since June, according to government data -- and a strengthening labor market are fueling a surge in optimism among households. The University of Michigan's consumer sentiment rose to 98.1 this month, the best reading since January 2004, from 93.6 in December.

"The level of consumer sentiment supports our view that consumer spending will kick the year off on a robust foot after the drop in energy prices left consumers' wallets full," said Bricklin Dwyer, an economist at BNP Paribas in New York.

Muted Inflation

A separate report from the Labor Department showed labor costs rising steadily in the fourth quarter, but remaining well below levels that would bring inflation closer to the Fed's 2 percent target.

Inflation pressures were muted in the fourth quarter. The personal consumption expenditures price index fell at a 0.5 percent rate, the weakest reading since the first quarter of 2009. Excluding food and energy, prices rose at a 1.1 percent pace, the slowest since the second quarter of 2013.

The strong pace of consumer spending in the fourth quarter, however, was overshadowed by a drop in capital expenditure. Business spending on equipment fell at a 1.9 percent rate. It was the largest contraction since the second quarter of 2009.

Business spending on equipment had advanced at an 11 percent rate in the third quarter. The fourth-quarter weakness could reflect cuts or delays to investment projects in the oil industry. But it could also be payback after two back-to-back quarters of robust gains.

But a fourth report showing factory activity in the Midwest increased in January, after two straight months of declines, suggests that a rebound is in the cards. The gain came as orders and order backlogs increased.

A wider trade deficit, as slower global growth curbed exports and solid domestic demand sucked in imports, subtracted 1.02 percentage point from GDP growth in the fourth quarter. Trade had added 0.78 percentage point to third-quarter growth.

Restocking by businesses to meet growing demand contributed 0.82 percentage point to fourth-quarter GDP.

Other details of the report were mixed. Government spending was a drag as a defense-driven investment burst faded, while residential construction made a mild contribution to GDP growth.

 

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Looking For an Affordable Home? Try Main Street -- Anywhere

January 30, 2015, 1:00 am

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Filed under: Real Estate, Personal Finance, Housing Market, Home Buying

By Eric Reed

New York -- If you want to meet more girls, consider changing your name to Ryan. If you'd like to encourage Norse fishermen to move to a remote shoreline in the North Atlantic Ocean, have all the mapmakers label it something cheerful like "Greenland." If you'd like to increase property values, try renaming your neighborhood something pleasant like "Willowy Boulevard."

It turns out, that might actually help.

Recently, online real estate broker Zillow.com (Z) put together a survey of how property values relate to the street names they're on. The team discovered that there's a lot of power in a name. Street names can indicate whether a neighborhood is old or new, rural or downtown and, often, expensive or cheap. In fact nationwide it turns out that property values can swing pretty widely, predicted by nothing more than the street where they're located.

"We looked at years of data about sales and listings," Zillow CEO Spencer Rascoff wrote in The New York Times. "We learned three things about the relationship between home values and street names: First, names are better than numbers. Second, lanes are better than streets. Third, unusual names are better than common ones."

How much of a difference can this make? Sometimes enormous.

The most common street name in the United States, according to the U.S. Census Bureau, is 2nd Street. (There are roughly a thousand more 2nd Streets than 1st Streets across the country, which really drives that American educational crisis home.) Nationwide a house located on 2nd Street is worth about 48 percent less than the national average, all other things equal. Spell out the name and you make matters worse; "Second Street" homes sell for 60 percent less than average.

In fact, numbered streets turn people off everywhere in the country except for Atlanta, New York City and Denver. In New York people presumably don't have many other choices, but in Denver it turns out they actually prefer streets with numbers instead of names.

Main Street a Minus

Proud as we are of our website namesake, Main Street U.S.A. fares no better. By Zillow's estimate a home on Main Street loses 44 percent of its value just by dint of the mailing address. As Rascoff noted, common names in general suffer this fate, and Main Street is one of the most common a town can have.

Occupiers everywhere will be pleased to know that Wall Street, while fairly common, tends to have homes worth about 60 percent of the norm. (In fact, after several random searches, it's surprisingly hard not to have property values worth less than normal. One wonders if there's a cluster of gloriously titled neighborhoods out there with their thumbs on the scale.)

So where's all this property value going? Well, it turns out that every developer who named his sun-blasted subdivision "Shady Acres" was actually on to something. Descriptive names like "Lake Front" and "Sunset" often are indicators of high value, as are unusual names and "Ways," "Drives" and "Boulevards."

Homes located on Sunset Way, for example, tend to be about 76 percent more expensive than average while Lake Forest Drive gets an 11 percent bump. Idiosyncratic history buffs can also take heart: homes on Verdun Avenue cost 123 percent more than the national average.

For the Fun of It

It's dangerous to read too much into this data though. Rascoff specifically warns readers not to confuse correlation with causation here. In reality, it's pretty unlikely that home buyers pay close attention to the street signs. Far more likely, they pay attention to what those street signs reflect.

Lake Shore Drive has more value because, odds are, that house is somewhere close to a lake and people like water. Mechanically numbered streets may reflect a grid-like or heavily planned development, and older neighborhoods are more likely to end in "Street."

Still, the numbers are there and names have value. They say something about a neighborhood, and might even be a good place to start if you're looking for something affordable.

After all, if you want to save money, it turns out you can't beat Main Street.

To have some fun with Zillow's tool, MainStreet decided to plug in a few well known streets from popular culture. Here's how they stack up against the real world:

• Yellow Brick Road -- Greater by 12 percent
• Mockingbird Lane -- Less by 23 percent
• Evergreen Terrace -- Less by 10 percent
• Spooner St -- Less by 26 percent
• Sudden Valley Ct -- Less by 24 percent
• Privet Dr. -- Less by 19 percent
• Baker St -- Less by 42 percent
• Grove St -- Less by 24 percent
• Beacon St -- Greater by 80 percent
• Sesame St -- Less by 7 percent

Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website A Wandering Lawyer.

 

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Super Bowl XLIX: 25 Fun Financial Facts

January 30, 2015, 1:00 am

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Filed under: Sports, Music & Entertainment, Sports & Recreation, This Built America

By Clay Wyatt

The Super Bowl marks the dramatic culmination of the NFL season. On Sunday, the New England Patriots and Seattle Seahawks will compete for the Vince Lombardi Trophy as their fans await the opportunity for a year's worth of bragging rights. But while the main event is the game, football is also a big business. Plenty of money trades hands before, during and after the event.

1. It's the Most-Watched Event in History

The Super Bowl has been the most watched television event in United States history for two of the last three years. NBC told Adweek it would be a "huge disappointment" if that record isn't broken again.

2. It Would Take 9,000 Years of Your Work to Buy the Stadium

If you dream of hosting the Super Bowl in your own stadium one day, it would take almost 9,000 years of work to buy the current venue, University of Phoenix Stadium, given the U.S. median household income of $51,900 and the $455 million it cost to build it. Factor in other routine expenses such as food and shelter -- not to mention all applicable taxes -- and you'd need a very potent Fountain of Youth to buy what would surely be an extraordinarily obsolete facility by then.

3. 51 Minutes of Commercials Would Pay for the Stadium

You'd have a much quicker route to owning University of Phoenix Stadium if you profited from Super Bowl commercials. A one-minute ad costs a whopping $9 million this year, according to USA Today. It would take about 51 minutes of commercial revenue to pay for the entire stadium.

4. There Will Be Fewer Car Ads This Year

You'll see fewer car ads during this year's Super Bowl thanks in part to high advertising prices, according to Kantar Media. Companies that won't be buying a spot include Volkswagen and Jaguar.

5. Tickets Cost More Than an Average Month's Salary

As of this writing, a Super Bowl ticket will cost you around a month's salary if you earn the national average. According to TiqIQ, an online aggregator of event tickets, the average Super Bowl ticket price is $5,188.30, as of Jan. 27 -- that's up 51.8 percent over the same time last year. Tickets are the priciest of any event.

6. The Event Will Bring 100,000 Visitors to Phoenix

Officials in the Phoenix area expect the event to generate bring at least 100,000 visitors and generate at least $500 million for the local economy, according to AZ Central.

7. Car Rentals Will Surge

Car rentals are expected to increase by approximately 40 percent near game day, according to the NFL.

8. Hotel Rooms Are Almost Twice as Expensive

Hotel rooms in the Phoenix area cost 89 percent more than they did last year. Despite high prices, most hotels in the Phoenix area are sold out.

9. Flights Will Surge the Day After

Phoenix Sky Harbor International Airport is expected to see a 60 percent increase in passengers the day after the game, according to ABC. That should mean big business for airlines, airport vendors, taxi companies and others that provide services to travelers.

10. Second Biggest Day of the Year for Eating

Grocery stores stand to hit it big on Super Bowl Sunday. This day trails only Thanksgiving in terms of food consumption.

11. Winning Players Earn Double Average American's Salary

Last year, each Seattle Seahawks player earned $92,000 for winning the big game. That's roughly twice the average American's salary of $46,400. It's not clear what the payout will be this year, but this figure has either increased or remained the same for every Super Bowl in history.

12. Players Earn Average American's Salary for Losing

Denver Broncos players each earned $46,000 for their part in Super Bowl XLVIII. This figure has also increased or stayed the same throughout history, suggesting the losing players in Super Bowl XLIX will earn about the average American's salary.

13. Halftime Performers Aren't Paid

The performers on stage at halftime might be filthy rich, but they don't earn anything for it.

14. $7,200 for Footballs?

Seventy-two footballs will be used for Super Bowl XLIX. At Walmart's (WMT) price of $99.95 for an official NFL game ball, balls for the whole game would add up to nearly $7,200.

15. The Two Teams Are Worth Nearly $4 Billion

The Patriots are worth $2.6 billion, and the Seahawks are worth $1.33 billion.

16. NFL Is Looking to Become a $25 Billion Organization

The NFL seeks to reach $25 billion in annual revenue by 2027. As of last year, it stood at about $10 billion.

17. Five Seahawks Are in the Top 50 in Merchandise Sales

According to NFL Players Inc., the licensing and marketing arm of the NFL Players Association, five Seahawks players are among the top 50 in sales of licensed products: Russell Wilson, Richard Sherman, Marshawn Lynch, Earl Thomas and Kam Chancellor.

18. Two Patriots Are in the Top 50 in Merchandise Sales

Two Patriots players -- Tom Brady and Rob Gronkowski -- are among the top 50 in sales of licensed products.

19. You Could Dine with Peyton Manning for $200

For $200, you could attend the Super Bowl Breakfast, featuring Denver Broncos Quarterback Peyton Manning, this year's Bart Starr Award winner, at the JW Desert Ridge Resort & Spa in Phoenix. New Orleans Saints Quarterback Drew Brees and other current and former NFL players will also be in attendance at the Jan. 30 event.

20. You Could Watch a Doug Flutie Performance for $7,000

If the big game isn't enough for you, your experience can include a performance by former NFL quarterback Doug Flutie. While he won't throw an incredible pass or drop-kick an extra point, a $7,000 ticket will get you access to, among other things, a performance by his band in the Touchdown Club.

21. Gamblers Lost Record Amount Last Year

Those who bet on Super Bowl XLVIII in Nevada lost big, dropping $19.8 million. A 2.5-point spread favored the Broncos, who were soundly defeated.

22. People Will Bet $100 Million This Year

There are expected to be more than $100 million in bets by game time in Las Vegas. As of this writing, the game is a pick 'em in Las Vegas, and odds are not expected to fluctuate much leading up to the game.

23. Seahawks Win Best for Investors?

The Super Bowl indicator, which states that the stock market will likely perform positively that year if the winner comes from the National Football Conference, is on a six-year streak of success, according to The Wall Street Journal. That means an overall accuracy rate of 81 percent. If the Seahawks, an "original," pre-merger National Football Conference team, win this year, look for a bull market.

24. The Vince Lombardi Trophy Costs More Than a Car

It costs an astonishing $50,000 to make the sterling-silver Vince Lombardi Trophy.

25. MVP Gets $30,000 and a Trip to Disney World

The Super Bowl MVP doesn't just say he's "going to Disney (DIS) World" because he feels like it. In addition to a huge payout and tons of glory, he usually gets asked to be a Disney spokesman and gets paid $30,000 to participate in Disney ads and appear at the park. That's not a bad way to cap a successful season.

 

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At White Castle and Chipotle, Fast Food Goes Vegan

January 30, 2015, 1:00 am

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Filed under: Health Care, U.S. Government, Restaurants

By Erik Baard

The American hunger for meat, especially beef, is abating for the first time in living memory. Now vegetables are claiming more space in an unexpected place: the fast food counter, with White Castle and Chipotle (CMG) heavily promoting new vegan entrees.

The new options come as Washington and the United Nations are pushing plant-based diets to save the environment and lower health care costs. The restaurant chains, however, say they're just answering consumer demand with new products, not letting bureaucrats lead them by the nose. White Castle introduced its vegan slider, made by Dr. Praeger's Sensible Foods, on Dec. 30. The product was trial tested over the summer in New York and New Jersey. Chipotle Mexican Grill is promoting its new vegan organic tofu Sofrita burritos.

Jamie Richardson, vice president of government and shareholder relations at White Castle System, said customers, particularly millennials, "have a range of reasons for wanting a vegan option, and they might not be vegan but have friends who are." The new sliders, which cost 99 cents, are "chock full of vegetables like carrots, zucchini, peas, spinach, broccoli and more" and come with a choice of three sauces.

Does Uncle Sam Want You to Eat Less Meat?

Food experts summoned by the Obama administration are wooing the same demographic. The committee charged with drafting the 2015 Dietary Guidelines for Americans (and the accompanying "food pyramid" graph recently redesigned as a plate) for the Department of Health and Human Services and the U.S. Department of Agriculture agreed to include a blurb about the environmental costs (and therefore future food security impact) of meat consumption.

"A green message can be a real motivating factor," Miriam Nelson, a Tufts University professor of nutrition, told Science. "It could be used as another messaging tool."

Congress balked at this new environmentalist inroad and demanded in its late December budget package that the Dietary Guidelines stick strictly to nutrition. The UN's Intergovernmental Panel on Climate Change reported in November that eating less meat could slow global climate change, confirming earlier findings published in peer-reviewed science journals. Those papers prompted pronouncements against meat overindulgence by UN Secretary General Ban Ki-Moon.

The UN has a tough row to hoe. Where wealth increases, as in China and even India, meat consumption tends to follow. In many nations, agriculture is a bigger contributor to climate change than even transportation. The U.S. is, according to the UN Food and Agriculture Organization, the second largest per capita meat eating nation after Luxembourg. That said, "Per capita meat consumption in the U.S. has stagnated in recent years and may be declining," noted Emily Cassidy, research analyst with the Environmental Working Group. That's because omnivores have shifted to eating more vegetables. Vegetarians, who eat eggs and dairy but not meat, make up just 5 percent of the U.S. population, according to a 2012 Gallup poll, flat or slightly down from 1999. About 2 percent of Americans say they're vegan, abstaining from all animal products.

Environmental Effects

Over 9 billion farm animals are slaughtered each year for meat, according to the Human Society. Americans eat nearly 271 pounds of meat per person annually, with chicken now surpassing beef for the first time in a century. The National Oceanic and Atmospheric Administration's fisheries division reported in October that U.S. operators landed 9.9 billion pounds of fish and shellfish in a year, up 245 million pounds from just two years before.

"If all Americans forego meat and dairy for one day a week, that's the equivalent of taking 7.6 million cars off the road for the year," Cassidy said. "From 2001 to 2011, all agricultural greenhouse gas emissions were up 14 percent. Globally, livestock accounts for 18 percent of greenhouse gas emissions." Going vegan isn't the only way to reduce emissions -- the U.S. has already reduced its carbon footprint by eating chicken instead of beef.

When asked if such information spurred Chipotle's menu expansion, Chipotle's communication director Chris Arnold said, "That's not the motivation. ... It's not about the environmental benefits. That's not what drives our business. Great-tasting food is." Ditto for meat. "We started down this path because we think meat from animals that are raised in humane ways and without the use of antibiotics or added hormones simply tastes better."

But because of short supplies of meat measuring up to Chipotle's standards -- trademarked as "Responsibly Raised" -- the company has at least twice in the past year needed to suspend selections, first beef and then pork. Sofritas accounts for about 3 percent of sales.

Eschewing conventional modern livestock practices -- the much lambasted "industrial farming" -- might preserve soil and biodiversity, Cassidy said, but at the cost of increasing greenhouse gas emissions like methane from ruminant digestion. That's because Chipotle's "Responsibly Raised" cattle take longer to reach slaughter size. Chipotle might not be able to account for such environmental impact complexities anytime soon. In May, shareholders rejected by 2:1 margin a motion by Trillium Asset Management and Domini Social Investments requiring that the company issue an annual sustainability report.

Different Philosophies

White Castle hired Social Responsibility and Sustainability Manager Shannon Colliver four years ago. While the company reuses cardboard boxes and piloted a composting program in Columbus, Ohio (and is exploring composting in New York City and Chicago), "we're in the early stages of being able to understand better what our impact is."

That White Castle and Chipotle concurrently have major vegan rollouts is more striking for the companies' dissimilarities. Columbus-based White Castle is an old, family-owned stalwart that prefers to add outlets to its established markets. Chipotle is a hot young company that in a single generation swooped down from hipper Denver and into 44 states. Chipotle went public in 2006 and remains a darling among investors even as fast food giant McDonald's (MCD), which once owned a chunk of the burrito maker, stumbles.

Herbivores are finding ways to graze at other fast food chains. The other American burrito grande, Yum Brands (YUM) subsidiary Taco Bell, replaced lard with soy oil in its beans more than 20 years ago, making possible a range of dishes that People for the Ethical Treatment of Animals calls "accidentally vegan." Even Dairy Queen sells dairy-free Starkiss treats, and Burger King started slinging vegetarian burgers in 2002.

Richardson says White Castle underestimated how popular vegan sliders would be and is racing to reformulate its buns to be vegan too. They are made with L-Cysteine, which Richardson admitted was derived primarily from "duck feathers."

The company went to market with that incomplete package, because "we didn't want the perfect to be the enemy of the good," Richardson said. Glossing over the fine print while trumpeting a switch away from animal products can ignite vegan ire. In 2002 McDonald's settle a lawsuit for $10 million and suffered bad press when American Hindus discovered that while the company switched to vegetable oil from tallow for its french fries, one of the product's unspecified "natural flavors" still came from beef.

 

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4 Ways to Tell If Your 401(k) Is a Bad Egg

January 30, 2015, 1:00 am

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Filed under: Retirement, Mutual Funds, Retirement Plans, 401K, IRA

By Donna Fuscaldo

Do you know how much you're paying for your 401(k) investments? If the answer is "No," you're not alone. In an AARP survey of 401(k) plan participants' awareness and understanding of fees, 71 percent of respondents said they did not pay any fees at all.

Department of Labor regulations now require more fee disclosures when it comes to 401(k) plans. But 401(k) fees come in so many flavors and layers that, chances are, even the most savvy investors don't have a clear understanding of what they're paying.

There are plan administration fees, investment fees, individual services fees, third-party fees, sales charges and management fees. These fees vary from firm to firm and fund to fund, and they can often be found buried in your quarterly or annual fund statements. Unfortunately, many investors don't take the time to review them, setting up a situation where they end up with pricier investments than are available to them -- be it in the same plan, or other retirement savings vehicles, such as IRAs. The good news is, there are ways to easily tell whether or not a 401(k) plan is too expensive. Here are four:

1. Does the 401(k) Plan Manager Have a Transparent Fee Breakdown?

Other than listing the fund's expense ratio, the industry isn't required to disclose where the money goes, making it easy to bury fees, says Greg Carpenter, founder of Employee Fiduciary. Which is why one sign you might be paying too much is when your fees aren't broken down on your statement. "If you see fees going to the financial adviser and/or the record keeper, chances are you are getting a good deal," Carpenter says, "because there isn't any place to hide the fees."

2. Are Your Funds' Expense Ratios Higher Than Most?

A fund's expense ratio is typically listed under an "expenses" or "fees" tab (or section) in the fund's prospectus. Jared Snider, a wealth adviser at Exencial Wealth Advisors says that investors shouldn't be paying more than 40 basis points for funds within a 401(k) plan. Yet, the median 401(k) investor in a data analysis by San Francisco investment firm SigFig pays 49 basis points.

3. Are Cheaper Share Classes of Your Funds Available?

Many people don't realize that fund companies offer as many as seven or eight share classes of a particular fund, says Carpenter. You may be paying as much as 1.5 percentage points more than an investor in another share class in the same fund, he says. The kicker: the higher the expense ratio will directly lower the returns of your fund, compared with the fund's other share classes with lower expenses.

American Funds, for example, have six classes for funds, with expense ratios of anywhere from 67 basis points to 1.24 percent, Carpenter says.

Going back to expense ratios, even 67 basis points is high. As you can see from the chart below, the average expense ratio paid by investors who have a Vanguard-managed 401(k) plan is 0.27 percent.



4. Are Your Returns Unimpressive?

Granted, past performance is not an indication of future results and chasing returns with no regard for volatility isn't smart. But you can get an idea of how your 401(k) is doing by comparing your rate of return to that of similar investments in your other accounts or -- why not? -- the performance of other investors with similar goals and risk appetite.

Not ready to broach that topic at your next college alumni reunion? Take a look at the chart above, which compares 401(k) plan performance and fees for 11 companies over the 12 months ending Jan. 20. While the data is aggregated for all plan participants who use SigFig's portfolio tracker, regardless of age, risk tolerance and investment choices within the plan, lower-cost plans stand out with better returns.

Finding out how much you are paying in fees is half the battle. Lowering those costs could win the war. The three easy steps below will take you that much closer to that victory.

1. Review your 401(k) investing options carefully. Choose index funds or exchange-traded funds, where you aren't paying for someone to manage your investments actively. "Passive funds are going to have lower expenses," says Snider. "Actively managed funds incur more costs and research has shown [that] whenever you drive down the cost of participating in the markets as an investor, you gain more return."
2. Don't see any low-cost investing options in your 401(k)? Ask. Call your company's human resources or 401(k) plan administrator and see if there is anything they can do to add low-cost funds to your plan's lineup.
3. Evaluate other retirement savings options. If your employer offers a 401(k) company match, by all means maximize it. But once you're contributing what you need to get the full matching contribution, you may consider other retirement savings vehicles that have more, potentially better investing options. Depending on your income, you may be able to put as much as $5,500 in an IRA in 2015. Open an account at a low-cost brokerage firm and max that out, rather than contributing to a higher cost 401(k) beyond a company match.

Donna Fuscaldo is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.

 

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Shake Shack Shares Sizzle in Stock Market Debut

January 30, 2015, 2:28 am

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Filed under: Market News, Food & Beverage, Restaurants, Stocks, IPOs

By JOSEPH PISANI

NEW YORK -- Investors seem to be craving burgers and crinkle-cut fries.

Shares of Shake Shack, a burger chain that started as a New York City hot dog cart, more than doubled in their stock market debut Friday.

Shake Shack, created by restaurateur Danny Meyer's Union Square Hospitality Group, is the latest "fast-casual" chain to attract investors. Many Americans are ditching fast-food chains, such as McDonald's, for restaurants that tout fresh ingredients. Shake Shack cooks its burgers to order and promotes its use of natural ingredients, including hormone- and antibiotic-free beef.

Shake Shack's New York roots are also likely driving demand for the stock.

"There isn't anyone on Wall Street who hasn't tried their burgers and shakes," says Kathleen Smith, principal at Renaissance Capital, an exchange-traded fund manager that focuses on IPOs. "It's a local favorite."

Shake Shack raised $105 million Thursday, selling 5 million shares at $21 a share.

It had initially forecast that its shares would fetch $14 to $16 a share from investors, and raised that forecast to $17 to $19 a share Wednesday as demand grew.

Shares began trading Friday, and were up 130 percent, or $27.40, to $48.40 in the afternoon -- suggesting that the company could have sold its stock for a higher price in its IPO and raised more money.

The company and the banks that priced the IPO may have been surprised by how much demand there was for Shake Shack's shares, Smith said.

It has 63 locations in nine countries, but most of them are along the East Coast. Others are in Las Vegas, Chicago, London and Istanbul.

Shake Shack plans to use some of the money raised to open restaurants in new markets. The company said it expects to eventually have 450 locations.

The stock's pop Friday follows IPOs of other fast-casual restaurants in 2014 that have had big first-day gains, including Mediterranean-style restaurant chain Zoe's Kitchen (ZOES), chicken chain El Pollo Loco Holdings (LOCO) and burger chain The Habit Restaurants (HABT).

As for Shake Shack, its stock is trading under the ticker symbol "SHAK" on the New York Stock Exchange.

It took about 14 years for Shake Shack to go from the hot dog cart in Manhattan's Madison Square Park to Wall Street. Three years after the cart opened in 2001, the company opened a kiosk in the same park, then restaurants in New York City. Long lines are common, and guests are given vibrating pagers that signal when an order is ready.

The first restaurant outside New York City opened in 2010 in Miami.

 

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Week's Winners and Losers: Apple Sizzles, Microsoft Fizzles

January 30, 2015, 3:50 am

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Filed under: Technology, Earnings, Internet, Restaurants, Investing

There were plenty of winners and losers this week, with the iPhone helping deliver consumer tech giant Apple a record quarter of profitability and a struggling restaurant chain coming under fire for sexual discrimination allegations.

Microsoft (MSFT) -- Loser

A handful of analysts lowered their price targets on Microsoft after the software giant posted uninspiring quarterly results. The Wall Street pros also hosed down their earnings forecasts.

The future is murky for Microsoft. It may seem to be doing all of the right things by announcing that it would make the upcoming Windows 10 operating system upgrade free to existing users for the first year, but that should sting near-term profitability.

Microsoft is making waves in consoles and smartphones, but Xbox gaming systems and Lumia devices are low-margin fare. The company is flush with cash and with plenty of time to get it right, but the next few quarters will be challenging.

Apple (AAPL) -- Winner

The world's largest consumer tech company just pulled off the world's most profitable quarter. Fueled by a healthy spike in iPhone sales, Apple came through with earnings topping $18 billion. Eyeing the list of the 25 most profitable quarters -- excluding one-time windfalls -- it's really just oil companies and a handful of Apple appearances.

There may be concerns that too much is riding on the iPhone. Back out the iconic smartphone and Apple's revenue would have declined 7 percent instead of soared 30 percent. However, it's hard to knock Apple for being a one-trick pony when it's a pretty amazing trick.

Ruby Tuesday (RT) -- Loser

The struggling casual-dining chain can't seem to catch a break. It was sued Tuesday by the U.S. Equal Employment Opportunity Commission, which accused Ruby Tuesday of workplace sex discrimination.

The federal agency is alleging that Ruby Tuesday posted temp summer positions at a high-traffic Utah location, but only opened the applications to women. The temp gig included housing, and Ruby Tuesday reportedly didn't want to deal with any potential challenges of having to house women and men together.

It may not seem like a big deal, but it is for a company that's been slumping since a short-lived turnaround last year.

Brinker International (EAT) -- Winner

Ruby Tuesday may have made waves for the wrong reason, but larger rival Chili's is doing pretty well. Brinker International, the parent company of Chili's and Maggiano's Little Italy, posted better-than-expected quarterly results.

Chili's posted another quarter of solid restaurant-level growth. In the fickle world of casual dining, Maggiano's Little Italy stretched its streak of positive comps to an impressive 20 quarters in a row.

Alibaba (BABA) -- Loser

China's largest e-commerce company took two hits this week, and only one of them was self-inflicted. Alibaba was initially weak after Yahoo (YHOO) announced that it would spin off its 15 percent stake in the Chinese Internet darling. The fear here is that many Yahoo investors will dump the stock when the spinoff is complete by year's end.

Alibaba then made matters worse by posting financial results that fell short of Wall Street's top-line expectations. That's the kind of weakness that stings both Yahoo and Alibaba, since the 15 percent stake that was initially valued at $40 billion was closer to $34 billion by Thursday's close.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple and Yahoo. The Motley Fool owns shares of Apple, Microsoft and Yahoo. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.​

 

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Court Upholds Deceptive Ad Claims Against POM Wonderful

January 30, 2015, 4:57 am

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Filed under: Company News, Advertising & Marketing, Food & Beverage, Scandals and Lawsuits, Ripoffs & Scams

By PETE YOST

WASHINGTON -- A federal appeals court said Friday that many advertising claims for POM Wonderful juice were deceptive in asserting that it curbs the risk of heart disease, prostate cancer and erectile dysfunction and is clinically proven to work.

In a 3-0 decision, the U.S. Court of Appeals for the District of Columbia Circuit upheld a conclusion reached earlier by the Federal Trade Commission that many of POM's ads made misleading or false claims. The ads appeared in national publications, on Internet sites, bus stops, billboards, newsletters and on tags attached to the products.

We see no basis for setting aside the commission's conclusion that many of POM's ads made misleading or false claims about POM products.

POM Wonderful produces a number of pomegranate-based products.

"We see no basis for setting aside the commission's conclusion that many of POM's ads made misleading or false claims about POM products," wrote appeals judge Sri Srinivasan, an appointee of President Barack Obama.

The Federal Trade Commission Act doesn't allow, "and the First Amendment does not protect -- deceptive and misleading advertisements," Srinivsan wrote.

The other two judges in the case were chief appeals judge Merrick Garland and appeals judge Douglas Ginsburg. Garland was nominated by President Bill Clinton, Ginsburg by President Ronald Reagan.

The court upheld the commission's requirement that POM gain the support of at least one randomized, controlled, human clinical trial before claiming a causal relationship between consumption of POM products and the treatment or prevention of any disease.

Ruling against the FTC on one point, the appeals court said it found inadequate justification for the commission's blanket requirement of at least two such studies as a precondition to any disease-related claim.

The appeals court examined studies the company used -- an early one that was favorable to POM and two later, larger ones that weren't. The court said that a POM newsletter omitted any mention of the unfavorable studies and trumpeted the findings of the favorable study.

"A consumer reading POM's promotional materials after 2006 would not have known of those studies or that they cast doubt" on the prior findings, the appeals court stated.

POM had won its own false advertising case against a competitor last June, when the Supreme Court ruled in its favor. The justices ruled 8-0 that POM could proceed with a lawsuit alleging that the label on a "Pomegranate Blueberry" beverage offered by Coca-Cola Co.'s (KO) Minute Maid unit is misleading because 99 percent of the drink was apple and grape juice. The Supreme Court found that the juice label may technically comply with Food and Drug Administration rules but still may be misleading to consumers.

 

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Forget the Super Bowl: Head Straight to the Commercials

January 30, 2015, 6:41 am

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Filed under: Advertising & Marketing, Sports, Music & Entertainment

Skipping the Super Bowl may seem un-American. But then, even with last year's massive average audience of 111.5 million, according to audience metrics company Nielsen, 65 percent of people in the U.S. choose to do something else.

Those who don't like football -- or maybe the New England Patriots or Seattle Seahawks draw their ire -- still might enjoy watching the commercials. As much an annual rite as the game, the Super Bowl commercials are the showcase for marketers who want to reach a massive audience and also prove how clever or funny they are. After all, come up with a killer ad, and a business captures media coverage and water cooler conversation for days, making the millions that companies spend on the spot look reasonable for the total amount of attention they get.

But how do you watch the commercials without sitting through every pass and punt? Luckily, you have a number of convenient options. Although some are after-the-game choices, they still free you up to watch this year's Puppy Bowl from Animal Planet.

Dish Network Lets You Automatically Skip the Play

TV distributors that provide ways to record programs and then automatically skip by the commercials have been the bane of marketers for years. Now Dish Network, in an attempt to reach an obvious audience of people who pass on football while trying to be a hero to advertisers, has turned the concept upside down in something it calls Reverse AutoHop. If you use Dish and have the PrimeTime Anywhere feature enabled for NBC before the game, you can record the whole event and, starting Monday, skip everything but the commercials.

Watch 15 Commercials Before the Game

Rolling Stone has collected 15 deliberately leaked Super Bowl commercials. You can see Katie Couric and Bryant Gumbel from 1994 confused about the Internet in a BMW spot; several offerings, both sentimental and humorous, from Budweiser (BUD); Kim Kardashian in a T-Mobile (TMUS) ad; and various offerings from Lexus, Victoria's Secret (LB), Wix.com, Dove, Mercedes-Benz, Kia, No More, Newcastle's threatened we're-going-to-feature-a-bunch-of-brands video, Eat24 and Carl's Jr.

And a Few More Pre-Game Features

IGN.com has its own set of leaked spots. You can get most of what Rolling Stone offers, plus an extended cut of the Carl's Jr. ad and others from Nationwide, Squarespace, WeatherTech, McDonald's (MCD), Friskies, a couple from Snickers (check the Brady Bunch one), Esurance with Lindsay Lohan, Toyota (TM), Mountain Dew, mophie, Pepsi (PEP), Sprint (S) and mobile game Heroes Charge.

Don't Forget the Movies

Upcoming films often use the Super Bowl as a massive launch platform. IGN has seven movie trailers that will wind up in between touchdowns and tackles.

Post-Game Roundup

The previews don't cover all the ads, according to the Advertising Age list of companies running spots. But a quick web search will show who has the whole list. IGN and Advertising Age are two likely sources, as are the major broadcast networks.

Lego Time

If all that isn't enough, you can tune in to the Brick Bowl. A+C Studios, an animation firm in the U.K., plans to "recreate some of the best of the halftime commercials as a stop-motion animated film, using thousands of Lego bricks, in less than 36 hours." This could be pretty amusing.

 

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Exxon Adds Discrimination Protections for LGBT Workers

January 30, 2015, 8:34 am

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Filed under: Energy, Company News, U.S. Government, Oil & Gas Industry, People

By Anna Driver

HOUSTON -- Exxon Mobil (XOM), the world's largest publicly traded oil company, has changed its U.S. employment policies to prohibit discrimination based on sexual orientation and gender identity as now required by federal law.

Exxon spokesman Alan Jeffers said Friday the company's board approved the policy change at a meeting on Wednesday and noted that the oil company "always updates its policies to comply with the laws where we work."

Investors had pressed for the change for years, filing shareholder proposals for Exxon to guarantee protections against discrimination based on sexual orientation since 1999.

To articulate its policy through the lens of legal conformance is not an affirmative changing of course and full adoption of equality, but instead a calibrated response to retain government contracts.

Exxon has previously resisted making the change, saying it already prohibited all forms of discrimination at its offices anywhere in the world.

But lesbians, gays, bisexuals and transgender, or LGBT, people now are federally protected classes. In July, President Barack Obama signed an executive order banning federal contractors from discriminating against LGBT workers.

The U.S. government relies on supply contracts for fuels from many oil companies, which also have lease agreements to work on federal lands or offshore.

An organization that monitors companies' LGBT policies suggested Exxon's policy change was a calculated one while New York State Comptroller Thomas DiNapoli, who pushed for the move, welcomed it.

"To articulate its policy through the lens of legal conformance is not an affirmative changing of course and full adoption of equality, but instead a calibrated response to retain government contracts," said Deena Fidas of The Human Rights Campaign Foundation.

DiNapoli, who oversees 12 million Exxon shares, said: "We commend Exxon for joining its many Fortune 500 peers and investors in the 21st Century where LGBT rights are synonymous with civil rights."

In September 2013, Exxon said it would extend benefits to spouses of its U.S workers in same-sex marriages. At the time, it was a sweeping reversal by one the world's top companies following a landmark ruling by the U.S. Supreme Court that led to same-sex couple eligibility for federal benefits.

Exxon's peers including Chevron (CVX), Royal Dutch Shell (RDS-A) and BP (BP) are known for their more liberal policies for gay and transgender workers.

 

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Market Wrap: Stocks End Month Down; Shake Shack Shares Rally

January 30, 2015, 9:06 am

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Filed under: Energy, Market News, Oil & Gas Industry, Stocks, IPOs

By Sinead Carew

NEW YORK -- U.S. stocks ended lower Friday after a volatile session as investors worried about weak U.S. growth data and whether instability in Europe could hurt corporate earnings in the United States, at the end of a rough month for the market

U.S. economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006.

This came after Greece's finance minister said the government wouldn't cooperate with the European Union and International Monetary Fund mission.

It feels like a flight-to-safety trade on a month-end. People are putting money into assets that have done well this month.

A brief afternoon rally from rising oil prices failed to stick as investors, nervous about U.S. and global economies, fled to bonds from equities and even sold off utilities stocks, the worst performing sector on the day.

"It feels like a flight-to-safety trade on a month-end. People are putting money into assets that have done well this month," said Peter Coleman, head trader at ConvergEx Group in New York, who said Friday was a good reflection of the month.

The Dow Jones industrial average (^DJI) fell 251.9 points, or 1.45 percent, to 17,164.95, the S&P 500 (^GSPC) lost 26.26 points, or 1.3 percent, to 1,994.99 and the Nasdaq composite (^IXIC) dropped 48.17 points, or 1.03 percent, to 4,635.24.

The S&P energy sector was the only one to finish higher Friday with a 0.74 percent increase after falling as much as 1.5 percent earlier in the session. It rebounded when crude futures rose 8 percent after a survey showed the biggest decline since 1987 in the number of rigs drilling for U.S. oil.

For the week, the Dow and S&P were each down 2.8 percent, and the Nasdaq fell 2.6 percent. For January, the Dow was down 3.6 percent and the Nasdaq was off 2.1 percent.

The S&P fell 3.1 percent in January, which was its biggest monthly loss since January 2014 and its first back-to-back monthly decline since April-May 2012.

Consumer Continue to Spend

Consumer spending was a bright spot as data showed U.S. consumer sentiment rose in January to its highest in 11 years on better job and wage prospects.

That confidence appeared to be reflected in some corporate results. Amazon.com (AMZN) shares jumped 13.7 percent after earnings beat Wall Street expectations on strong holiday season sales.

"Winners are being rewarded, whereas the market has really no tolerance for anything that comes up short," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio.

In contrast to the broader market, shares of burger restaurant Shake Shack rose more than 118.6 percent in their market debut.

About 8.5 billion shares changed hands on U.S. exchanges, well above the almost 7 billion average for the last five sessions, according to BATS Global Markets.

NYSE declining issues outnumbered advancers 2,107 to 991, for a 2.13-to-1 ratio; on the Nasdaq, 2,040 issues fell and 691 advanced, for a 2.95-to-1 ratio.

The S&P 500 posted 18 new 52-week highs and 15 lows; the Nasdaq composite recorded 43 new highs and 86 new lows.

-With additional reporting by Rodrigo Campos and Ryan Vlastelica.

What to watch Monday:

• The Commerce Department releases personal income and spending for December at 8:30 a.m. Eastern time.
• At 10 a.m., the Institute for Supply Management releases its manufacturing index for January, and the Commerce Department releases construction spending for December.

These selected companies are scheduled to release quarterly financial results:

• 1-800-Flowers.com (FLWS)
• Anadarko Petroleum (APC)
• Exxon Mobil (XOM)
• Lennox International (LII)
• Pitney Bowes Inc. (PBI)
• Rent-A-Center (RCII)
• Sysco (SYY)

 

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What to Ask at Hotel Check-In to Snare the Room You Want

January 30, 2015, 10:00 pm

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Filed under: Travel, Travel Industry, How to Save Money, Vacation Planning

By Robert McGarvey

When you are standing at a hotel front desk, signing into a room, you have precious seconds to ask a few key questions and if you don't speak up, you may have blown your chance to snare a room that meets your particular wishes.

One question not to ask: can I see the room first? Indeed if you are checking into an albergue -- a shared sleeping space -- while walking the 500-mile Camino in Spain, you definitely want to ask to see the room first. Quality varies widely. Ditto for hostels and similar budget accommodations. Ask to see the bed before you take it, and your regrets will be fewer. But at hotels in America, Europe and major Asian cities, nah, no one has asked to see a room first in a long time.

Yet there are excellent questions that demand asking before you agree to take a room. Remember, too, noted travel blogger Chris McGinnis, "a lot of times, people think hotel rooms are all the same. That's not so, especially at older hotels." At a Ramada Inn Express on the highway, yes, rooms may be much alike. But check into an historic hotel like Taj Boston -- built in the 1920s, across from the Public Garden -- and the rooms weren't necessarily standardized to begin with and, over the years, renovations added more differences.

Asking questions at the desk saves surprises and discomfort down the line. Road warriors are quick to offer their favorites.

1. How far is it from the elevator? That's a favorite for McGinnis and, depending upon the individual traveler, the right answer can go either way. Some like to be a far remove from what they perceive as the hubbub of an elevator. Some do not like the long walks down sometimes dark hallways.
2. When was the last time the room was renovated? That's what advice columnist April Masini -- aka Ask April -- likes to know and her thinking is that at many hotels, renovations are done in stages (often a floor or two at a time). You do not want the room that hasn't been touched in years. If you want a fresh room, the answer you get will tell you if this is the room you want.
3. What is the view? That's the question from travel blogger Johnny Jet who explained that in places like Hawaii, one set of rooms have gorgeous ocean views -- while the other rooms look out at dumpsters and worse. You may have to pay a little extra for the ocean view, but at least make this a conscious choice. A plus of avoiding the dumpsters, noted Jet, is that you will also avoid the noisy 4 a.m. garbage collection truck.
4. What floor is the room on? Frequent traveler Ryan Geddes likes that question, because rooms on higher floors generally are quieter and, if a view is involved, the view is better.
5. Is there a connecting door? Blogger Road Warriorette explained that she likes to not have such a door - usually in a room so that several rooms can be joined together in a suite -- because, she says, "It feels less safe, honestly. Plus in my experience you can hear what's going on in the adjoining room much more clearly than if there is no door, which can make it hard to sleep." Connecting doors just seem to let in a lot more noise from the adjoining room, and that's bad if you are a light sleeper or you are hoping to get some work done that needs real concentrations.
6. Can I get a late check-out? That's the question from business travel expert Joe Brancatelli who blogs at JoeSentMe. Most hotels want you out at 11 a.m., sometimes noon, but many will let you stay several hours beyond that, at no charge, if you ask in advance.

Ask just those six questions and, generally, you have eliminated the unpleasant surprises that come with getting a room in a location you don't want and with features you despise.

Word of advice: if there is a line behind you in particular, be sure to ask your questions because, noted McGinnis, a harried desk clerk -- seeing the frowning faces behind you -- may want to move you along as soon as possible. If that means giving you what you want, so be it.

 

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