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DailyFinance.com

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    Shutterstock
    Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.

    Let's go over some of last week's best and worst performers.

    Energy Recovery (ERII) -- Up 200 percent last week

    The market's biggest winner was Energy Recovery, tripling in value after striking a lucrative 15-year licensing deal with Schlumberger (SLB). Schlumberger will have exclusive rights to Energy Recovery's VorTeq hydraulic pumping system.

    The deal calls for Energy Recovery to receive $125 million as well as ongoing royalties for the rights. That's a pretty big deal for Energy Recovery, as that was roughly the stock's market cap when the week began.

    Weight Watchers (WTW) -- Up 132 percent last week

    Oprah Winfrey came to the rescue of one of this year's worst performers. Winfrey revealed that she will be taking a 10 percent stake in the diet plan specialist. She will also be taking an active role in promoting the brand, something that is ultimately more important than taking a minority stake in the company. Winfrey's influence is obvious and she can certainly help a brand that really needs it.

    Revenue has been sliding at the company. Folks pay an average of $377 a year to Weight Watchers, and that's hard to justify in a world where fitness apps and websites offer cheaper ways to encourage active lifestyles and healthy eating. If anyone can help turn things around, it's probably Winfrey.

    Higher One (ONE) -- Up 33 percent last week

    An asset sale helped push shares of Higher One higher. It agreed to sell its Campus Labs data analytics business in a $91 million deal. Higher One has fallen out of favor since its days as a market darling when it revolutionized personal finance on college campuses. Unloading a subsidiary isn't going to help its overall business, but unlocking the value always helps.

    Pandora Media (P) -- Down 38 percent last week

    The market turned down the volume on Pandora after the streaming music pioneer posted a problematic quarterly report. Usage is slipping. There may be a whopping 78.1 million active listeners relying on Pandora for music, but that's below the 79.4 million active listeners that it had on its rolls just three months earlier. The number of hours of content served also slipped sequentially to 5.14 billion from 5.3 billion.

    The launch of Apple's (AAPL) new premium streaming service at the start of the quarter clearly didn't help. Apple Music was offering three free months to get folks to use its service and it appears to have initially won over some Pandora users. The real test will come in the current quarter as Pandora tries to woo those music fans back.

    Skechers (SKX) -- Down 30 percent last week

    Another stock that got tripped up on loose laces was Skechers. It posted quarterly results that fell short of Wall Street forecasts. Revenue clocked in at $856 million. Analysts were holding out for $877 million.

    Domestic wholesale sales rose at a mere 12 percent clip over the prior year. Double-digit growth isn't a problem, but Skechers was growing a lot faster in its previous quarters.

    Apollo Education Group (APOL) -- Down 28 percent last week

    Finally, we have the parent company of the University of Phoenix flunking out. Apollo posted a 14 percent year-over-year drop in revenue, fueled by yet another decline in enrollment levels. There are 190,700 degreed enrolled students at Apollo's schools, but that's a sharp drop from the 233,500 folks that it was schooling a year earlier.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple, Pandora Media and Skechers. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    Food and Farm Mad Cow
    Nati Harnik/AP
    PARIS -- t's official: Ham, hot dogs and other processed meats can lead to colon, stomach and other cancers -- and red meat is probably cancer-causing, too.

    While doctors in rich countries have long warned against eating too much meat, the World Health Organization's cancer agency gave the most definitive response yet Monday about its relation to cancer -- and put processed meats in the same danger category as smoking or asbestos.

    The findings don't say that a slice of salami is as dangerous as a cigarette, but they could weigh on public health policy and recommendations by medical groups amid a growing debate about how much meat is good for us. The meat industry protests the classification, arguing that cancer isn't caused by a specific food but also involves lifestyle and environmental factors.

    A group of 22 scientists from the WHO's International Agency for Research on Cancer in Lyon, France evaluated more than 800 studies from several continents about meat and cancer. The studies looked at more than a dozen types of cancer in populations with diverse diets over the past 20 years.

    Based on that evaluation, the IARC classified processed meat as "carcinogenic to humans," noting links in particular to colon cancer. It said red meat contains some important nutrients, but still labeled it "probably carcinogenic," with links to colon, prostate and pancreatic cancers.

    Ian Johnson, a nutrition researcher with the Institute of Food Research who is unconnected to the IARC findings, cautioned that the classification doesn't reflect "the actual size of the risk," but said meat consumption is one of many factors contributing to high rates of bowel cancer in the U.S., western Europe and Australia.

    "The mechanism is poorly understood, and the effect is much smaller than, for example, that of cigarette smoking on the risk of lung cancer," he said.

    The cancer agency noted research by the Global Burden of Disease Project suggesting that 34,000 cancer deaths per year worldwide are linked to diets heavy in processed meat -- compared with 1 million deaths a year linked to smoking, 600,000 a year to alcohol consumption and 200,000 a year to air pollution.

    The agency said it didn't have enough data to define how much processed meat is too dangerous, but said the risk grows with the amount consumed. Analysis of 10 of the studies suggested that a 50-gram portion of processed meat daily increases the risk of colorectal cancer over a lifetime by about 18 percent.

    Doctors have warned that a diet loaded with red meat is linked to cancers, including those of the colon and pancreas. The American Cancer Society has long urged people to reduce consumption of red meat and processed meat.

    "For an individual, the risk of developing colorectal cancer because of their consumption of processed meat remains small, but this risk increases with the amount of meat consumed," Dr. Kurt Straif of the IARC said in a statement. "In view of the large number of people who consume processed meat, the global impact on cancer incidence is of public health importance."

    The North American Meat Institute argued in a statement that "cancer is a complex disease not caused by single foods" and stressed the importance of lifestyle and environmental factors.

    The researchers defined processed meat as anything transformed to improve its flavor or to preserve it, including sausages, canned meat, beef jerky and anything smoked. They defined red meat as "all types of mammalian muscle meat, such as beef, veal, pork, lamb, mutton, horse and goat."

    The report said grilling, pan-frying or other high-temperature methods of cooking red meat produce the highest amounts of chemicals suspected to cause cancer.

     

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    New Home Sales
    Gerry Broome/AP
    By Lucia Mutikani

    WASHINGTON -- New single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground.

    The Commerce Department said Monday sales dropped 11.5 percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August's sales pace was revised down to 529,000 units from the previously reported 552,000 units.

    The September report does little to alter our view that the housing market is continuing to recover.

    The moderation in new home sales is at odds with other housing reports that have painted a bullish picture of the sector. New home sales, which account for 7.8 percent of the housing market, tend to be volatile on a month-to-month basis because they are drawn from a small sample.

    "The September report does little to alter our view that the housing market is continuing to recover. We view the new home sales data as unreliable and many other more reliable housing indicators have been sending upbeat signals lately," said Daniel Silver, an economist at JPMorgan (JPM).

    September data on existing home sales, homebuilder confidence and housing starts have been fairly strong.

    The housing index fell more than 1 percent on the data, underperforming a marginally weaker stock market. D.R. Horton (DRI), the largest U.S. homebuilder, dropped 2.7 percent. Lennar (LEN), the nation's second-largest homebuilder, fell 2.1 percent.

    Prices for U.S. government debt rose, while the dollar slipped against a basket of currencies.

    Housing Supporting Economy

    A sturdy housing market is supporting consumer spending through an increase in household wealth, which is helping to soften the blow on the economy from faltering global growth, a strong dollar and weak capital spending in the energy sector.

    Efforts by businesses to reduce an inventory bloat also have weighed on growth, leaving gross domestic product growth estimates for the third quarter running below a 2 percent annualized rate.

    The economy grew at a 3.9 percent rate in the second quarter. The government will publish its advance third-quarter GDP estimate Thursday.

    Economists had forecast new home sales slipping to only a rate of 550,000 units. Sales were up 2 percent compared to September of last year.

    New home sales tumbled 61.8 percent in the Northeast to the lowest level since April. Sales declined 6.7 percent in the West and were down 8.7 percent in the populous South. In the Midwest, sales fell 8.3 percent.

    With sales weak, the stock of new houses for sale increased 4.2 percent to 225,000 last month, the highest level since March 2010. Still, supply remains less than half of what it was at the height of the housing boom.

    At September's sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since July 2014. That was up from 4.9 months in August.

    The median price of a new home rose 13.5 percent from a year ago to a nine-month high of $296,900.

    "The strong price gains suggest either that the mix of houses shifted to more expensive houses or that homebuilders are pushing up prices," said John Ryding, chief economist at RDQ Economics in New York. "Weakening demand would be accompanied by slowing price gains or price declines."

     

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    Wall Street Pep Boys
    Richard Drew/APManny, Moe and Jack, mascots of Pep Boys, pose for photos on the floor of the New York Stock Exchange to celebrate the company's 90th anniversary in 2011.
    By Arunima Banerjee and Anya George Tharakan

    Japanese tire-maker Bridgestone said it would buy auto parts retailer Pep Boys-Manny, Moe & Jack (PBY) for $835 million to expand its retail presence in the United States.

    The deal will boost Bridgestone's retail network by more than a third in the United States, the company said.

    Bridgestone operates a chain of auto care and tire stores in the United States through its Bridgestone Retail Operations unit.

    "Bridgestone is looking to expand its market share in services and tires ... it's a little harder to understand what they might do with [Pep Boys'] retail operations but they'll come up with a plan for it," Jefferies analyst Bret Jordan said, adding that it was unlikely the company would get rival bids from strategic buyers.

    Bridgestone's U.S. business accounts for nearly half of its total sales, according to Thomson Reuters (TRI) data.

    The company's $15-a-share cash offer represents a premium of 23.5 percent to Pep Boys' Friday closing. Pep-Boys' shares jumped nearly 23.3 percent to $14.98 in morning trading.

    The company, founded in 1921 by four friends who pooled together $800 to open an auto parts store in Philadelphia, will add about 800 locations to BSRO's existing 2,200 centers.

    Pep Boys has been on the block since June, when it said it was considering selling itself as part of a strategic review.

    Unlike rivals AutoZone (AZO) and Advance Auto Parts (AAP), Pep Boys hasn't benefited from a resurgent U.S. auto industry due to high costs eating into its earnings and falling sales at its do-it-yourself business.

    The Wall Street Journal reported in May that private equity firm Golden Gate Capital and other suitors had expressed interest in buying the company.

    Private equity firm Gores Group walked away from a $15-a-share deal to buy Pep Boys in 2012.

    The deal is expected to close in the beginning of 2016.

     

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    FILE - In this April 2, 2015 file photo, the 2016 Nissan Maxima SR is presented at the New York International Auto Show, in New York. A Nissan recall for possible fuel leaks in crashes has been expanded to include nearly 59,000 Altima and Maxima sedans worldwide. The recall now covers certain 2013 to 2016 Altima midsize cars and some 2016 Maxima large cars. (AP Photo/Mark Lennihan, File)
    Mark Lennihan/AP2016 Nissan Maxima SR
    DETROIT -- A Nissan recall for possible fuel leaks in crashes has been expanded to include nearly 59,000 Altima and Maxima sedans worldwide.

    The recall now covers certain 2013 to 2016 Altima midsize cars and some 2016 Maxima large cars. Also included are some 2014 to 2016 Teana sedans made in Russia. All have V6 engines.

    Nissan says in documents posted by U.S. safety regulators that in a crash, fuel could leak from a seal between the gas tank and the fuel sending unit. That could cause a fire.

    The company says the problem was discovered in crash tests, and it has no reports of fires, injuries or fuel leaks.

    Dealers will install a retainer ring to help maintain a proper seal. The recall should begin within the next two months.

    The recall began in July with about 5,500 2016 Maxima sedans, but Nissan said at the time it was investigating to find out whether more models were affected.

    A company spokesman said Monday that no Infiniti luxury brand vehicles are affected by the recalls.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Caroline Valetkevitch

    NEW YORK -- The Dow and the S&P 500 edged lower Monday as energy shares dropped with oil prices and Apple retreated a day before its quarterly results.

    Investors were cautious ahead of the Federal Reserve's two-day policy meeting, which begins Tuesday. The market is looking for clues on the outlook for when the Fed may begin raising interest rates.

    Apple (AAPL) shares fell 3.2 percent to $115.28, making it the biggest drag on all three major indexes, while a weak outlook from one of its suppliers, Dialog Semiconductor, led a fall in other semiconductors. An index of semiconductors was down 2 percent after three days of gains.

    With Apple, it's more about their forecast and China news and any upgrades they may want to announce.

    The iPhone-maker reports quarterly results after the market closes Tuesday.

    "With Apple, it's more about their forecast and China news and any upgrades they may want to announce," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

    The S&P energy sector fell 2.5 percent, leading sector declines for the S&P 500. Crude oil prices slipped as global oversupply pushed fuel storage sites close to capacity. Exxon (XOM) fell 2.1 percent to $81.22, while Chevron (CVX) was down 2.7 percent to $88.77.

    U.S. stocks have mostly gained in October after a weak third quarter. The S&P 500 is up 7.9 percent for the month so far.

    "It's been a pretty big move up, so we're seeing a little bit of consolidation today," Meckler said.

    The Dow Jones industrial average (^DJI) fell 23.65 points, or 0.1 percent, to 17,623.05, the Standard & Poor's 500 index (^GSPC) lost 3.97 points, or 0.2 percent, to 2,071.18 and the Nasdaq composite (^IXIC) added 2.84 points, or 0.1 percent, to 5,034.70.

    Among the top Nasdaq gainers, shares of Ctrip.com (CTRP) rose 22.1 percent to $90.78 after the online travel firm said it would merge with Qunar Cayman Islands. Qunar (QUNR) jumped 7.9 percent to $42.65.

    Strong quarterly results from tech companies have helped improve expectations for overall U.S. third-quarter earnings.

    S&P 500 earnings are estimated to have declined a more modest 2.8 percent in the quarter, compared with 4.2 percent forecast at the start of the month, according to Thomson Reuters (TRI) data.

    Housing Slips

    Data showed new home sales fell 11.5 percent in September, suggesting a softening of the housing market. An index of housing shares was down 0.4 percent.

    Among other gainers, Pep Boys (PBY) jumped 23.4 percent to $14.99 after it agreed to be acquired by Bridgestone for $15 a share.

    Piedmont Natural Gas (PDM) rose 36.9 percent to $57.82 after it agreed to be bought by Duke Energy. Duke Energy (DUK) fell 2.4 percent.

    NYSE declining issues outnumbered advancers 1,916 to 1,153, for a 1.66-to-1 ratio; on the Nasdaq, 1,749 issues fell and 1,077 advanced, for a 1.62-to-1 ratio favoring decliners.

    The S&P 500 posted 36 new 52-week highs and 8 lows; the Nasdaq recorded 111 new highs and 73 lows.

    About 6.1 billion shares changed hands on U.S. exchanges, below the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

    -Abhiram Nandakumar contributed reporting from Bangalore, India.

    What to watch Tuedsay:
    • The Commerce Department releases durable goods for September at 8:30 a.m. Eastern time.
    • Standard & Poor's releases S&P/Case-Shiller index of home prices for August at 9 a.m.
    • The Conference Board releases the Consumer Confidence Index for October at 10 a.m.
    Earnings Season
    These selected companies are scheduled to report quarterly financial results:
    • Alibaba Group (BABA)
    • Apple (AAPL)
    • Comcast (CMCSA)
    • Dupont (DD)
    • Ford Motor Co. (F)
    • Gilead Sciences (GILD)
    • Merck & Co. (MRK)
    • Pfizer (PFE)
    • Reynolds American (RAI)
    • Twitter (TWTR)
    • United Parcel Service (UPS)

     

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    Girl dressed as ghost
    Getty Images
    By Raechel Conover

    It's possible to create pretty much any Halloween costume by thinking outside the box (putting aside the fact that many of the ideas here start with a box). Choosing to DIY instead of buy can save money on a holiday that costs more than you might think. Each person who celebrates Halloween this year will spend an average $74.34 for decorations, costumes and candy, according to the National Retail Federation. With more than 157 million Americans expected to mark the holiday, it's a $6.9 billion retail bonanza. At the very least, the money saved making one of these costumes at home can be put into a bigger candy budget.

    Rocket kid. This Halloween costume suggested by Real Simple is made entirely from items most likely on hand. Dress in all white and use duct tape to create armbands and leg stripes. Use two Pringles cans, streamers and two party hats to create a power pack and Rocket Kid is set for takeoff.

    Life-size legos. This Pinterest-inspired costume has only three components: a big box, Solo cups and paint. Start by painting the box blue or red to match the color of the cups, cut armholes and a head hole in the box, and remove the bottom to allow for legs and feet. Glue the Solo cups in place -- two lines of three on the front and back, just like a Lego. For an extra touch add a hat: Paint a smaller box, cut out a hole for the head and glue two more Solo cups on top.

    Hula girl. This easy and cheap Halloween costume from Real Simple uses a brown paper bag cut into strips for the skirt and different color cupcake liners strung together for a colorful lei and headband.

    Animal. Pretty much any animal can be the muse for a homemade Halloween costume. Don a monochromatic sweatsuit and use felt or fabric scraps to fashion a hat or headband to be the ears. Create a tail and other fur detail with scraps of fabric and yarn.

    Jellyfish. Dress in white or a light color. Glue white or light pink streamers around the bottom of a clear umbrella and cut eyes from construction paper to attach to the side. Carry the umbrella and -- poof! -- a jellyfish.

    Game show contestant. Wear a college sweatshirt and cut off the side of a cardboard box. On the front panel, paint a scoreboard from "The Price Is Right" or another game show. Use twine to hang the panel in front of you like a podium, add a name tag and it's done. This easy Halloween costume also can be the building block for a group Halloween costume -- "Family Feud" contestants, for example.

    Stick figure. Assemble an all-black outfit, including a hoodie -- old clothes only. Take a can of neon spray paint and spray a stick figure onto the back of the clothing, with a circle on the hood to serve as the head. Repeat on the front and outline the hood opening for the head.

    Bad yearbook picture. This Pinterest-inspired Halloween costume for women requires loading on the blush, bright blue eye shadow, ruby red lipstick, etc. Pick out a gaudy shirt and style big hair and bangs. Cut armholes near the bottom on two sides of a cardboard box and cut off the bottom. Cut out one of the remaining sides, leaving a 3-inch strip of cardboard around the edges and paint this strip to make a picture frame. Paint the inside back of the box a bright blue for the backdrop.

    Grapes. This is a classic, dead simple and low-cost getup that can still go for as much as $75 in stores. Instead, start by dressing all in purple. Blow up purple balloons and attach them to the clothing to become a walking cluster of grapes. Top off the costume with a green hat.

    Rock, paper, scissors. This group costume takes a bit of effort but is clever and uncomplicated. Cut a cardboard box into the shape of a rock, one side for the front and one for the back. Cut armholes into the sides and spray paint the box gray. Cut armholes in another box and paint the front and back white. Decorate the white surfaces with thin, horizontal lines and three small black circles at the left edges to replicate a piece of loose-leaf paper. Finally, take two large pieces of strong cardboard or poster board and cut them into the shape of scissors, paint them and string ribbon between the two cutouts to wear over the shoulders like a sandwich board.

    Soap and loofah. For the first part of this couples' costume, cut out holes for the arms and head from a rectangular cardboard box and remove the bottom. Paint the box white and spray paint the word "soap" on the front and back, attaching bubble wrap to the corners to look like suds. For the loofah, buy a bunch of tulle and sew it thick and bunchy onto an old dress or pants/shirt combo, preferably the same color as the tulle. Attach a loop of white rope to complete the look.

     

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    nest full of golden eggs with...
    ShutterstockNext year IRA income limits will increase for spouses without retirement accounts.
    By Emily Brandon

    You won't be able to save more in a 401(k) or individual retirement account in 2016. However, you can earn slightly more and still be eligible to contribute to a Roth IRA and claim the saver's credit. Here are the ways your retirement accounts will change in 2016.

    401(k) contribution limits unchanged. The contribution limit for 401(k)s, 403(b)s, most 457 plans and the federal government's Thrift Savings Plan will remain $18,000 in 2016. The catch-up contribution limit for workers age 50 and older will also stay the same at $6,000. "The pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment," according to a statement from the IRS. Most savers don't come anywhere near the 401(k) contribution limits. Only about 10 percent of 401(k) participants contribute the maximum possible amount each year, according to Vanguard 401(k) plan data.

    IRA contribution limits stagnant. The IRA contribution limit will continue to be $5,500 in 2016. Workers age 50 and older can make catch-up contributions of an additional $1,000. Many retirement savers max out their IRA each year. Some 43 percent of IRA investors contributed the maximum possible amount in 2013, according to an Employee Benefit Research Institute analysis of IRAs.

    Bigger Roth IRA income cutoffs. Workers can earn $1,000 more in 2016 and still be eligible to contribute to a Roth IRA. Eligibility to make Roth IRA contributions phases out for taxpayers whose adjusted gross income is between $117,000 and $132,000 for individuals and heads of household and $184,000 to $194,000 for married couples. "This will make a few more folks eligible for the Roth," says Kevin Brosious, a certified financial planner and president of Wealth Management Inc. in Allentown, Pennsylvania. However, there are a couple of ways you can contribute to a Roth IRA even if your income is above the cutoff amounts. "A backdoor Roth is where you contribute into a nondeductible IRA and then convert it to a Roth IRA," Brosious says. "Also, the IRS now allows after-tax contributions made to a 401(k) to be converted into a Roth IRA."

    Traditional IRA income cutoffs remain the same. Savers who have a workplace retirement account can additionally claim a tax deduction for IRA contributions, unless their income exceeds certain annual limits. The IRA tax deduction is phased out for singles and heads of household whose modified adjusted gross income is between $61,000 and $71,000, the same as in 2015. The income phaseout range is $98,000 to $118,000 for married couples when the spouse who contributes to the IRA also has access to a workplace retirement plan. There are no income limits for the IRA tax deduction for people who don't have a retirement account at work.

    IRA income limits increase for spouses without retirement accounts. Savers who don't have a workplace retirement account but are married to someone who does can claim the full tax deduction on their IRA contribution until the couple's income exceeds $184,000, which is $1,000 more than in 2015. The IRA tax deduction for spouses without retirement accounts is gradually phased out for couples earning between $184,000 and $194,000 in 2016.

    Higher income limit for the saver's credit. Workers with slightly higher incomes will qualify for the saver's credit in 2016. Single retirement savers are eligible for the credit until their adjusted gross income exceeds $30,750, which is $250 higher than in 2015. The income limit for married couples will climb by $500 to $61,500. And heads of household qualify for the credit if their income is $46,125 or less, up from $45,750 in 2015.

    This tax credit for people who save for retirement isn't well known, with only 30 percent of workers saying they are aware of the saver's credit, according to a survey of 4,550 workers by Harris Poll for the Transamerica Center for Retirement Studies. For people who qualify, the saver's credit is worth between 10 and 50 percent of the amount contributed to a retirement account up to $2,000 for individuals and $4,000 for couples, with the biggest credits going to people with the lowest incomes. "Now, even more low- and moderate-income American workers can benefit from this valuable tax incentive to save for retirement," says Catherine Collinson, president of the Transamerica Center for Retirement Studies. "The saver's credit literally pays workers to save for retirement. It's a free matching contribution from the IRS."

    Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

     

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    Credit card
    Getty Images
    By Christopher Elliott

    A recent poll bears out something I already believed to be true and am happy to see: Consumers are finally losing their enthusiasm for airline and other affinity credit cards.

    Bankrate (RATE), an aggregator of financial rate information, reports that its Money Pulse survey found that cardholders "express little enthusiasm for accumulating extra rewards." In fact, half the respondents said they wouldn't care if their card stopped offering loyalty rewards altogether.

    Affinity cards, for the uninitiated, are credit cards offered by a bank and co-branded with another company, such as an airline or hotel, that often allow cardholders to collect miles or points for every dollar spent. Critics say the cards prod consumers to spend ever more money so they can collect points toward perks such as free air travel, reduced hotel rates or preferential treatment at travel destinations. Who wants out? People like Dick Martin, a retired information systems supervisor from Moses Lake, Washington. Frustrated by blackout dates, high mileage requirements for award tickets and an annual fee, he recently cut ties with his plastic.

    "There were too many blackout dates," Martin says. "The points required for any flight were quite high, and I also paid $70 per year for the privilege of having the card."

    Milton Kidd, a retired professor from Washington, D.C., says he felt strung along by his airline-branded affinity card. He paid a $79 annual fee and obediently collected miles for years. But when he finally had a chance to book a seat from Portland, Maine, to Tallahassee, Florida, his airline told him he needed to buy more miles. He had to redeem all of the miles he'd earned and pay the airline an additional $326. "The entire thing was a rip-off," he says.

    Kidd is allowing his remaining miles to expire and has cut up his card.

    Only a limited number of customers actually benefit from these payment systems in a meaningful way over the long term, experts warn. You're probably not one of them.

    But ending the relationship isn't easy. Travelers are sometimes bound to their cards by irrational fears, Web sites that extol the virtues of point-collecting and, of course, by the debt they've accrued by overspending.

    Even when travelers know the cards overpromise rewards and have the potential to damage their personal finances, they still don't want to give them up, says Thomas Nitzsche, a spokesman for ClearPoint Credit Counseling Solutions, a nonprofit agency offering consumer credit counseling. They don't want to lose the ability to earn more miles or the elusive "free" ticket. Nearly half of ClearPoint's clients at least initially refuse to part with their mileage-earning credit cards, he says. The biggest reasons: unfounded fears that their existing rewards will be deleted or their credit rating will be affected.

    "It's something close to addiction," Nitzsche says. "In some cases, clients just leave with our advice and then come back months later when the cards are completely maxed out or defaulted and closed by the creditor."

    Did he just say "addiction"? Yes, and it's not hyperbole. Michele Paiva, a psychotherapist and neuromarketer in Downingtown, Pennsylvania, says compulsively collecting miles is akin to drug dependence. (Neuromarketing is the study of consumers' cognitive responses to marketing stimuli, such as lower prices or promotions.) "An affinity card creates a false sense of relationship, of being special," she explains.

    My experience with reporting about these cards as a consumer advocate supports both Nitzsche's and Paiva's assertions. After my first column on the topic appeared, I was surprised by a barrage of e-mails from angry cardholders who criticized my story with playground insults.

    Many of them appeared to be coming from the readers of several small travel blogs, whose publishers were understandably angry. After all, they were pocketing generous commissions from credit card companies for each new customer they referred, and my stories were bad for business. Even more disturbing was that some of these bloggers had been cited as travel experts by colleagues in the media.

    The mainstream view on affinity cards varies. Some industry-watchers say cardholders can win the game by learning the system and paying off their cards every month. "Those who always pay their balances in full and on time will usually come out ahead," says Jason Steele, a credit card expert at CompareCards.com, who says he is not compensated by credit cards for his advice.

    "But that's only about half of all cardholders."

    Credit card companies employ hundreds of lawyers and MBAs to ensure that the revenue is much greater than the rewards you receive.

    Others say an affinity card is worth it only if you're a frequent business traveler on an expense account -- and even then, it can be risky.

    "Credit card companies employ hundreds of lawyers and MBAs to ensure that the revenue is much greater than the rewards you receive," says K. Alexander Ashe, the chief executive of Spendology, a company that develops budgeting apps. Even in the hands of an experienced user, it's easy to inadvertently carry a balance, such as when there's a delay in getting a reimbursement from your employer. "Many credit cards accrue interest on a daily basis," Ashe warns.

    Matthew Coan, publisher of the financial website Casavvy.com, says travelers such as Martin and Kidd can't be blamed for signing up in the first place. "People get excited when they get the offer for a branded card and feel like they need to take advantage of it," he says. The catch -- that the rewards cards carry a higher interest rate and fees than comparable payment systems -- tends to get buried in the fine print.

    "If you decide to carry a balance on your branded card, then the interest that you pay will greatly outweigh any rewards that you will be earning," Coan says.

    Of course, talk like that is probably considered blasphemy in the Church of Miles, but facts are facts. Unless you pay all your bills on time and have time to master the complex rules of this game, you're better off without these cards.

    Christopher Elliott's latest book is "How To Be The World's Smartest Traveler" (National Geographic). You can get real-time answers to any consumer question on his new forum, elliott.org/forum, or by emailing him atchris@elliott.org.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

     

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    Healthcare application
    Alamy
    By Marisa Torrieri

    Which health insurance will you choose?

    On the surface, it's a simple question -- but it's one that can be fraught with much anxiety.

    For those who have health coverage through work, the process can be as simple as reviewing your company's health plan comparison sheets, calling your benefits hotline, clicking a few buttons -- and voilà, you've made your elections.

    But for all those self-employed people out there -- contractors, freelancers and all-around one-man bands -- choosing a health plan isn't quite so easy a process.

    It can feel more like you're working on a senior thesis, with all the fact-finding and research you have to do. But instead of gaining more clarity, you can often end up more confused than when you started.

    Metal plans? HMOs? Coinsurance? Oh, my!

    To show just how difficult it can be, we asked two self-employed people facing vastly different health care choices -- one wants bare-bones solo coverage, the other has to cover a family of four -- to share the difficulties they're encountering in choosing a health plan for 2016.

    Then we asked Sarah O'Leary, founder and CEO of ExHale Healthcare Advocates -- a Dallas-based company that helps consumers and businesses navigate their health care options -- to offer advice on what factors should come into play with their decision-making.

    Her guidance could help those of you out there who can't just run down the hall to pick your resident HR rep's brain.

    Courtesy: Rick Rockwell
    The Healthy Single Guy

    Who: Rick Rockwell, 39, health and fitness consultant, Sacramento, California.

    My health care scenario: "As someone who works in the fitness industry, staying healthy is important to me. Currently, my main job is to manage a website that reviews health supplements, but I've also been a personal trainer, wellness coordinator and health instructor for more than 10 years.

    That means I exercise four to five days a week. I don't drink or smoke. I take vitamins and protein supplements. And I try to eat well. I've only been to the doctor once in the last three or four years -- I don't even go for annual checkups.

    So it's frustrating that, because of the Affordable Care Act, I'm forced to buy insurance that I'll rarely use.

    Fortunately, for 2015 I qualified for tax credits on a basic plan I got through my state exchange, which helped push my premium below $100. But I have to shop for a new policy for 2016 because I'm now in a higher income bracket and no longer qualify for the same tax breaks.

    I'm dreading picking a new plan -- I think the process is a pain, and I don't want to shell out a lot every month for something I won't use.

    So my goal is to pay as little as possible. The bare minimum coverage is all I really need -- just something to have in case of an emergency."

    What the health care pro says: For starters, O'Leary says Rick should consider recalibrating how he thinks about health insurance. "[Just as] we're required to carry auto insurance, we're now required to carry health insurance -- or risk the penalties if we choose not to," she says.

    Plus, there are risks to his chosen profession. "As a personal trainer, he could have a weight fall on him and be in a situation where he needs his insurance," she adds.

    Unfortunately, Rick doesn't qualify for the most bare-bones catastrophic health plans designed to provide coverage only in the event of a serious accident or illness.

    So Rick's most-affordable option would likely be a bronze health plan, which tends to have low premiums but pays for only 60 percent of medical costs.

    "You only qualify for a catastrophic plan if you're under 30 or you are over 30 and can certify that you can't afford coverage or are experiencing financial hardship," O'Leary explains.

    So Rick's most-affordable option would likely be a bronze health plan, a category of ACA coverage that tends to have low premiums but pays for only 60 percent of medical costs, on average.

    Premiums can vary greatly by region or state, but O'Leary says Rick could find comparable bronze plans on the California health exchange and on the open market -- adding that there could be one administrative advantage to shopping off the exchange.

    "When people are sure they aren't going to receive subsidies, they'll sometimes choose to go on the open market because you don't have to fill out the same [type of] application that's necessary for HealthCare.gov or the state exchanges -- it's just a little bit easier," she explains. "But you have to make sure it's a legit, quality plan that meets minimum ACA requirements or risk getting penalized through your taxes."

    If Rick doesn't travel much outside of his immediate area, he could save further by choosing an HMO bronze plan, O'Leary suggests. HMOs typically offer low premiums because they cover only in-network doctors, but they often have restricted service areas.

    If he goes the HMO route, Rick could potentially reap some tax benefits by opening a health savings account. That's a type of account to which he can contribute pre-tax dollars to cover medical costs -- as long as he has a high-deductible health plan.

    O'Leary suggests one other avenue Rick could explore: "If he belongs to a professional association or union, [he should find out] if they offer a health plan, which might be another way for him to save money [on his health care costs]."

    Courtesy: Yoon Kang-O'Higgins
    The Working Mom

    Who: Yoon Kang-O'Higgins, 40, museum educator, Seattle.

    My health care scenario: "In January, my health benefits changed because I decided to scale back at work, going from being a full-time employee to a part-time contractor.

    Because the art-education consultancy where I work is based in New York and I'm a remote employee in Seattle, I wasn't eligible for the same insurance options as the other staff [when I was full-time]. So my employer and I picked a plan through a Seattle-based provider, which they paid for.

    That plan covered my entire family, which includes my husband, Mark, 45, and our two sons, Oisin, 11, and Ronan, 10. Mark is an artist and art instructor at two colleges, but he's a freelancer, so he doesn't receive health benefits through work.

    When I switched to contractor status, my employer stopped paying for my insurance, so I took over the monthly premiums, which run $1,042 per month for a silver plan, with a $2,500 family deductible.

    Now that it's open-enrollment season, I've started research on the health exchange, but it's hard to comparison shop because I heard my current plan will be changing -- although I don't know how yet.

    Another option has also emerged: The private foundation where I work a few days a week has offered me access to their health plan, but I'd still need to pay a portion of the premium because I'm part-time.

    The foundation's insurance provider estimated I'd have to pay about $1,000 a month, but with a high deductible -- something like $10,000. I'm not sure it's worth it.

    Other than an annual X-ray Ronan gets to monitor an elbow condition, which costs us a few hundred dollars out of pocket, no one in my family has a chronic health need. So I feel like choosing a plan for us shouldn't be so difficult.

    It would make our lives easier to stick with what we have, but if it doesn't make sense economically, we'll switch. I'm just feeling decision paralysis because of all the details I have to sift through."

    What the health care pro says: O'Leary cautions Yoon not to fall into the common trap of making decisions based solely on premiums -- potentially saving $100 a month isn't enough reason to make a switch.

    Rather, she suggests that Yoon put in the elbow grease to create a spreadsheet so she can compare factors like premiums, deductibles, co-pays, coinsurance, prescription drug costs, total out-of-pocket costs and out-of-network coverage for any plan she's considering.

    People are feeling the pinch of costs, so they don't want to spend a lot on premiums. But we encourage them not to let that cloud their judgment.

    "People are feeling the pinch [of costs], so they don't want to spend a lot on premiums," O'Leary says. "But we encourage them not to let that cloud their judgment. [Many factors] fit into the equation of what makes a quality plan for you."

    Even if Yoon sticks with her current plan, changes are afoot -- so it's important that she confirm that her family's preferred doctors will continue to be covered.

    "Don't just take the website's word for it. Call up your doctors and make sure they're in-network," O'Leary suggests. "And when you get your insurance card in January, double-check and triple-check that info, because you have a small window to appeal if you feel they've changed the network since you signed up."

    Ultimately, O'Leary says that if Yoon has been happy with her coverage, her plan remains affordable, and she doesn't anticipate big surgeries or procedures, she shouldn't feel pressured to switch.

    O'Leary does, however, offer up a strategy that could potentially help lower the cost of Ronan's annual elbow X-ray.

    If Yoon's plan doesn't cover it at 100 percent, she can shop around to see how much that same X-ray would cost at different imaging centers, or use a site like Healthcare Bluebook to do a price search in her area. She can then use that information to negotiate the price up front at a chosen facility.

    "[People don't realize] the amount of negotiation that can be done for non-emergency tests and procedures," O'Leary says. "The money you could save by being a smart shopper can be significant."

     

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    By Ellen Chang

    Consumers can easily boost their credit scores by avoiding some of the fallacies surrounding the extremely convoluted manner in which credit scores are tabulated.

    Each of the three credit bureaus uses its own formula and guards its methods closely, but consumers shouldn't find themselves in a conundrum when they are examining their strategies on paying off credit cards and other bills.

    Consumers reap many rewards when they raise their current credit score, because higher scores mean shelling out less money in interest, which can yield thousands of dollars in savings. A high credit score also means consumers receive a lower interest rate for credit cards, auto loans and mortgages, and the benefit extends to lower rates for auto and home insurance premiums.

    For a quick gauge of where you stand, here's a quick rundown: a score of anything below 620 ranks as poor, 620-699 is fair, 700-749 is good and anything over 750 is excellent.

    Check out your credit reports from Equifax, Experian and TransUnion at least once a year and examine them for errors. Consumers can access credit reports annually for free at www.annualcreditreport.com.

    Paying Your Bills Is 35 percent of a Credit Score ...

    "If there are any inaccuracies, from an address to an incorrect outstanding balance on a credit card, correct them right away by following the directions on each agency's website," said Kevin Gallegos, vice president of the Phoenix operations for Freedom Financial Network, a consumer debt resolution company. "Under the terms of the Fair Credit Reporting Act, the credit bureaus must investigate any disputed items and remove them from the credit report if they cannot be verified."

    Even though you might be pinching pennies and waiting for each paycheck anxiously, make sure your top priority is to pay every single bill on time, every time. Lenders look for borrowers who pay their bills on time. A consumer's payment history accounts for 35 percent of your credit score, "making it the largest piece of the pie," said Bruce McClary, spokesman for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization.

    "Making timely creditor payments should top the list of healthy habits that help build a better credit score," he said.

    Keep your credit card balances low and minimize the percentage utilization to under 35 percent, said Gallegos. For an individual with a credit card with a limit of $10,000, a balance of $3,500 is already a 35 percent utilization ratio.

    "Anything over 35 percent is considered high and can impact credit scores," he said. "Over 50 percent will have a definite negative impact on a credit score and a maxed-out card will very negatively impact the score."

    Pay off the balance of secondary credit cards that you rarely use, because those balances "just muddy up" your credit report, said Howard Dvorkin, a certified financial planner and chairman of Debt.com, a Plantation, Florida-based financial advice website. Keep your report clean, so limit it to one or two cards.

    "Building up a credit score is time consuming, so take baby steps," he said. "Pay your bills on time. Don't mess with this step or you'll fall flat on your face. Your mantra should be: pay on time, pay on time."

    Store Credit Cards Aren't a Good Option ...

    Avoid signing up for credit cards offered by retailers. The discounts they offer are tantalizing, but the interest rates they offer are very high, even up to 27 percent. Even worse, some retail credit cards come with an interest rate that is the same for every customer, treating those with exceptional credit scores exactly the same as those who are below average, McClary said.

    Sears offers three cards -- both the Sears and Sears MasterCard cards offer a whopping APR of 25.24 percent, and the store's "Home Improvement" account offers 14.40 or 18.40 percent based on creditworthiness.

    "It doesn't appear that lower rates are available for those with excellent credit," he said.

    Offers from your local furniture store to consumers to finance a purchase can often come from a subprime lender, even if your credit score is good. These retailers are simply using subprime lenders or companies that finance loans for consumers with lower credit scores.

    Reading the fine print will help you avoid having a subprime lender on your credit report. While doing business with a known subprime lender may not have any impact on your score, it may end up being another item you need to explain when a company like a mortgage lender takes a look at your credit history, McClary said.

    If you regret opening a store credit card or find that you rarely shop there, don't automatically close it. Opening and closing accounts too frequently should be avoided.

    "Keeping a credit card for a long period of time helps build a lengthy credit record which ultimately benefits the score," he said.

    Credit Cards Build Your Profile ...

    Not using credit cards at all is not the solution either, said Gallegos. The credit bureaus can only "rely on past payment history to help determine how borrowers will do in the future," he said. If you refrain from borrowing and only use your debit card, then potential lenders have no information to base their expectations.

    Build your credit report by taking out one credit card such as one with a low limit and pay off the balance each month, said Josh Tschirigi, a financial adviser at Somerset Wealth Strategies in Portland, Oregon.

    "Once you get comfortable with this card, it's a good idea to take out additional cards, because one factor in calculating a credit score is how many credit card accounts you have and how long you have had them," he said. "The more you have and the longer you have them, the better your credit score is if you avoid debt delinquencies."

    Medical debt is now being treated differently and the changes in credit scoring means the debt will not be weighed "as heavily as credit card or other kinds of debt," Gallegos said.

    "Building a strong credit score comes from people being aware of their overall financial picture and they must learn and understand loans, debt, credit cards, income, cash flow and savings," said Shawn Gilfedder, CEO of McGraw-Hill Federal Credit Union in East Windsor, New Jersey. "With a better understanding of their personal finances and by setting goals, they will then be able to change habits."

     

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    Auto Sales
    Charles Krupa/AP
    DETROIT -- Fiat Chrysler (FCAU) is recalling nearly 94,000 SUVs because the air conditioning lines are too close to the exhaust manifold and could catch fire.

    The company looked into the problem after U.S. regulators got two complaints about smoke and fire in certain 2015 Jeep Cherokees.

    Fiat Chrysler says it doesn't know of any related injuries or crashes. Most of the SUVs are in North America.

    Dealers will replace the lines if needed. Customers who lose air conditioning or see a dashboard warning light should contact dealers.

    The company also announced that it's recalling more than 88,000 Ram pickups mainly in North America because the rear axle shafts could break and cause a wheel to separate. Most of the 2015 and 2016 Rams are still at dealers.

    The problem was discovered in a company investigation that found the axle shafts weren't properly heat treated. They can wear and overheat, causing the trucks' anti-lock brake warning light to come on. Fiat Chrysler says it knows of one crash but no injuries caused by the problem.

    Dealers will inspect and replace the axle shafts if needed.

     

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    FILE - In this March 13, 2015 file photo, workers inspect the new aluminum-alloy body Ford F-150 trucks before they get painted at the company's Kansas City Assembly Plant in Claycomo, Mo. The Commerce Department releases its September report on durable goods on Tuesday, Oct. 27, 2015. (AP Photo/Charlie Riedel, File)
    Charlie Riedel/AP
    By Lucia Mutikani

    WASHINGTON -- A gauge of U.S. business investment plans fell for a second straight month in September, pointing to a sharp slowdown in economic growth and casting more doubts on whether the Federal Reserve will raise interest rates this year.

    Other data released Tuesday showed consumer confidence slipped this month amid worries over a recent moderation in job growth and its potential impact on income. Housing, however, remains the bright spot, with home prices accelerating in August.

    That should boost household wealth, supporting consumer spending and the broader economy, which has been buffeted by a strong dollar, weak global demand, spending cuts in the energy sector and efforts by businesses to reduce an inventory glut.

    The drift of data suggests that the first time the Fed will raise rates will be in the spring.

    The continued weakness in business spending, together with the slowdown in hiring, could make it difficult for the Fed to lift its short-term interest rate from near zero in December, as most economists expect. The U.S. central bank's policy-setting committee started a two-day meeting Tuesday.

    "The drift of data suggests that the first time the Fed will raise rates will be in the spring," said Steve Blitz, chief economist at ITG Investment Research in New York.

    Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, slipped 0.3 percent last month after a downwardly revised 1.6 percent decline in August, the Commerce Department said.

    These so-called core capital goods were previously reported to have dropped 0.8 percent in August. The data was the latest dour news for manufacturing, which has borne the brunt of dollar strength, energy sector investment cuts and the inventory correction.

    Manufacturing accounts for 12 percent of the economy.

    In a separate report, the Conference Board said its consumer sentiment index fell to 97.6 this month from a reading of 102.6 in September. Consumers were less optimistic about the labor market, with the share of those anticipating more jobs in the months ahead slipping.

    There was a drop in the proportion of consumers expecting their incomes to increase and more expected a drop in their income. The downbeat assessment of the labor market follows a step down in job growth in August and September.

    Softer Growth

    Data ranging from trade to retail sales and industrial production have all suggested a significant loss of momentum in the third quarter.

    Housing continues to outperform the economy. A third report Tuesday showed the S&P/Case Shiller composite index of home prices in 20 metropolitan areas increased 5.1 percent in August from a year ago after rising 4.9 percent in July.

    U.S. stocks were trading lower, while the dollar was little changed. Prices for U.S. government debt rose.

    According to a Reuters survey of economists, gross domestic product likely expanded at a 1.6 percent annual rate in the third quarter, slowing from a brisk 3.9 percent pace in the second quarter. The government will publish its advance third-quarter GDP estimate Thursday.

    The dollar has gained 15.4 percent against the currencies of the United States' main trading partners since June 2014, undermining the profits of multinational companies such as Procter & Gamble (PG) and 3M (MMM).

    At the same time, a plunge in oil prices has squeezed revenues for oil field companies such as Schlumberger (SLM) and diversified manufacturer Caterpillar (CAT).

    Schlumberger, the world's No.1 oilfield services provider, said this month it didn't expect a recovery in demand before 2017 and anticipated that exploration and production spending would fall for a second consecutive year in 2016.

    "It is hard for firms to commit to expanding plants and upgrading equipment in a global economy that continues to deliver so many speed bumps," said Diane Swonk, chief economist at Mesirow in Chicago.

    Shipments of core capital goods, which are used to calculate equipment spending in the government's GDP measurement, rose 0.5 percent last month after a downwardly revised 0.8 percent drop in August. Core capital goods shipments were previously reported to have dropped 0.4 percent in August.

    A 2.9 percent decline in transportation equipment spending helped to weigh down overall orders for durable goods -- items ranging from toasters to aircraft that are meant to last three years or more -- which fell 1.2 percent last month.

    Durable goods inventories fell 0.3 percent, the largest drop since May 2013, while unfilled orders declined 0.6 percent.

     

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    2000 05 Chevrolet Impala LS
    Alamy2000-04 Chevrolet Impala
    By TOM KRISHER

    DETROIT -- For the third time in seven years, General Motors (GM) is recalling cars that can leak oil and catch fire, in some instances damaging garages and homes.

    The recall, which covers 1.4 million vehicles dating to the 1997 model year, is needed because repairs from the first two recalls didn't work. More than 1,300 cars caught fire after they were fixed by dealers, the company said.

    In the previous recalls, in 2008 and 2009, GM told owners to park the cars outside until repairs can be made since most of the fires happened shortly after drivers turned off the engines. A spokesman was checking to see if the same recommendation applies this time.

    In addition, GM will notify owners of 500,000 more cars that weren't repaired in the previous recalls, spokesman Alan Adler said.

    The latest recall, mainly in North America, includes: the 1997-2004 Pontiac Grand Prix and Buick Regal; the 2000-2004 Chevrolet Impala; the 1998 and 1999 Chevrolet Lumina and Oldsmobile Intrigue; and the 1998-2004 Chevrolet Monte Carlo. All have 3.8-liter V6 engines.

    Over time, a valve cover gasket can degrade, allowing oil to seep out. Under hard braking, oil drops can fall onto the exhaust manifold and catch fire. Flames can spread to a plastic spark plug wire channel and the rest of the engine.

    GM says it has reports of 19 minor injuries in fires caused by the cars. In 2008, a GM spokeswoman said the cars were responsible for 267 fires, including at least 17 that burned structures.

    The problem first surfaced in 2007, when 21 consumer complaints about engine fires in some of the cars prompted the National Highway Traffic Safety Administration to investigate. That probe found three injuries. Most of the blazes happened five to 15 minutes after the engines were turned off, according to agency documents.

    The investigation led to the recall in March 2008 of more than 200,000 U.S. cars with supercharged engines. A year later GM recalled almost 1.5 million more cars that weren't supercharged. Dealers replaced the spark plug wire channels but documents filed with the government don't mention any repair of the oil leaks.

    GM is finalizing a fix in the most recent recall. The company will use state registration databases in an effort to track down the owners and notify them by mail, he said.

    The 1,300 fires were discovered when GM began investigating whether to recall some 2004 models that weren't part of the earlier recalls, Adler said. He said he didn't know why the recall wasn't done sooner given the large number of fires.

    Company investigators ultimately found 1,345 fires in previously recalled cars and decided "that the recall would be to come up with a better fix for the vehicles that were out there," Adler said.

    The recall is so large that it could have an impact on GM's fourth-quarter earnings, although Adler said that hasn't been determined.

    "Since we have not decided on the remedy, we do not know whether the cost will result in a material charge to earnings," he said.

     

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    By Steve Leisman

    The chance of recession in the next 12 months jumped to a two-year high in the latest CNBC Fed Survey as Wall Street continues to downgrade the outlook for U.S. growth and push out the date for the first Fed rate hike.

    Respondents to the survey, including economists, fund managers and analysts, see a 22 percent chance of a recession in the next year, up from 19 percent last month and the highest level since the fiscal cliff debate seized Washington and the nation in January 2013. The chance of recession, however, remains well below its all-time high of 36 percent in 2011, but higher than the 13 percent all-time low at the beginning of this year.

    The economy is losing momentum in a way that in the past has been consistent with the Fed cutting interest rates, certainly not raising them.

    "The economy is losing momentum in a way that in the past has been consistent with the Fed cutting interest rates, certainly not raising them," Mark Vitner, a senior economist at Wells Fargo, wrote in response to the survey.

    The median of the 41 respondents sees the first rate in December, compared with September in the prior survey. While about half of the respondents forecast the first rate hike this year, the other half sees it into 2016 and even, for some, as late as 2017. As recently as the September survey, 80 percent were certain of a 2015 hike.

    "The earliest possible liftoff date for the FOMC is now January," wrote John Donaldson, vice president of Haverford Trust. "That would likely require a good to very good holiday season for consumer spending combined with a winter without a polar vortex."

    Not everyone is so sure. Many expressed concerned about the dangers of the Fed waiting too long to raise rates. Nearly half worry that not hiking rates will give the central bank less defense against a future downturn. A third are concerned about the risk to the credibility of the Fed, which has forecast a rate rise this year for some time.

    "There is an increasing risk that the Federal Reserve will be too slow in beginning to normalize interest rates and will need to raise rates much more aggressively in the future," said Mark Zandi, chief economist of Moody's Analytics.

    The overwhelming economic concern among respondents is weak overseas growth, chosen by 41 percent as the biggest threat to the U.S. economy. The next biggest threat, chosen by 13 percent, is geopolitical risks. Slow wage growth is the main concern with the domestic economy, but it only ranked in third place, a sign that many believe the underlying domestic economy is at least stable.

    Still, the outlook for U.S. growth continues to creep lower, with average growth for 2016 being lowered for the fifth straight survey. Growth next year, which had been estimated as high as 2.9 percent, is now seen at 2.6 percent. Growth in 2015, once estimated to be at 3 percent, is now seen at just 2.3 percent. And the outlook for inflation in the U.S. continues to fall. Respondents believed for most of this year that the consumer price index would hit 2 percent. Now, the outlook is for just 1.75 percent.

    "In an environment with weak oil prices and falling commodity prices how could so many members be 'reasonably' sure that inflation would get back to 2 percent over the 'intermediate term' by end-2015?" asked Robert Brusca, chief economist of Fact and Opinion Economics

    The outlook for the S&P brightened just a bit or, at least, the forecast didn't fall for the first time since the summer. The average respondent sees the S&P 500 at 2,079 by year-end, up 8 points from Monday's close, and at 2,166 for the end of 2016, or about a 4.5 percent gain.

    Only a third of respondents judge that stocks are already discounting a rate rise, suggesting some downside risk for equities if the Fed were to hike this year. The outlook for the 10-year yield continues to decline, with rates seen hitting just 2.7 percent at the end of 2016, down from 2.9 percent in the prior survey.

    The survey was conducted from Oct. 22 through Oct. 25.


    Fed Rates 'Too Low for Too Long'

     

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    A Rite Aid pharmacy is pictured in Maine
    Alamy
    By Greg Roumeliotis and Lauren Hirsch

    NEW YORK -- Drugstore chain Walgreens Boots Alliance said Tuesday it would acquire smaller peer Rite Aid for $17.2 billion including acquired debt.

    The $9-a-share cash deal would combine the second- and third-largest U.S. drugstore chains by sales, creating the largest U.S. retail pharmacy chain in numbers of stores.

    The price represents a 48 percent premium to Monday's closing price of Rite-Aid, the day before the agreement was signed, the companies said in a joint release.

    A Walgreens-Rite Aid deal would need approval from the U.S. Federal Trade Commission, which studies retail mergers to ensure they comply with antitrust law.

    Shares of Rite Aid (RAD), which had a market value of $6.36 billion at Monday's close, rose as much as 44 percent to $8.74 on Tuesday after the Wall Street Journal first reported the news. Walgreens (WBA) stock rose as much as 7 percent to $95.48.

    -With additional reporting by Siddharth Cavale in Bangalore, India; Diane Bartz in Washington; and Ransdell Pierson and Caroline Humer in New York.

     

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    In door heating thermostat set at a room temperature and money
    Alamy
    By Richard Valdmanis

    BOSTON -- After shelling out about $1,000 a month to heat his 190-year-old Massachusetts bed and breakfast during a harsh winter last year, Brian Weinrich is hoping for some relief this season. By all accounts, he should get it.

    Americans are likely to see their lowest heating bills in years thanks to a glut in the domestic fuel supply and predictions of milder winter weather, forecasters and regional fuel dealers say, a welcome outlook after record snowfalls and repeated price spikes over the past two seasons.

    "I'm hopeful for a bit of a break," said Weinrich, 67, whose 1824 brick and wood-frame building in the Berkshire mountains is a seasonal draw for snowshoers and skiers.

    The U.S. Energy Information Administration predicted this month that households using natural gas as a heating fuel are likely to spend an average 10 percent less this winter than last, while those using heating oil could see bills down 25 percent to their lowest since 2009.

    Since then, energy futures have dropped even further. Natural gas touched a three-year low below $2 per mmBtu this week, while heating oil dipped to around $1.43 a gallon, near their lowest level since the aftermath of the 2008 financial crisis.

    "The pass-through from wholesale to household is not quick, but over the long-term these further declines will reach people," said EIA spokesman John Cogan, referring to this week's drop in futures prices.

    About half of U.S. households use natural gas as a heating fuel, while less than a quarter -- mainly concentrated in New England -- use heating oil.

    One of the main reasons for the reprieve is America's years-long drilling boom, which has topped up domestic supplies and helped tip energy markets into a price nose-dive.

    The rise of fracking technology, which involves pumping water, sand and chemicals into a well to extract oil or gas, has helped lift U.S. production of natural gas by 35 percent since 2005 and oil by 45 percent since 2010.

    The OPEC producer group led by Saudi Arabia, meanwhile, has kept price pressures low by leaving oil spigots open in an effort to retain global market share even as Chinese demand growth has slowed.

    Another key is weather. An El Nino weather event, characterized by unusually warm water off South America's Pacific coast, promises higher temperatures for much of the U.S. North and Midwest, the biggest heating fuel markets, according to the National Oceanic and Atmospheric Administration.

    That should reduce demand for heating fuel.

    "This is going to be helpful," said John Drew, director of the Action for Boston Community Development, which helps poor households cover their energy costs.

    It will be great if people get a few more gallons out of their money, but it doesn't mean life will be easy.

    "It will be great if people get a few more gallons out of their money, but it doesn't mean life will be easy," he said, adding that winter heating bills are among the biggest challenges facing the region's poor.

    The steep decline in heating oil prices that began in the middle of 2014 has slowed a gradual years-long shift among New England households from fuel oil to natural gas. But pipeline construction has lagged, which experts said could still lead to localized price hikes for gas and electricity in the region during cold snaps.

    Pipeline capacity has been added to deliver natural gas to the New York market since last year, but "constraints still exist in the Northeast," the EIA said.

    In Maine, where a larger share of households heat with fuel oil than in any other state, heating oil companies said customers were celebrating sharply reduced costs.

    "In this area, and a lot of New England, we have big old historic homes that burn a couple thousand gallons of oil a year," said Gary Nash, owner of Main Street Fuel in Richmond, in south coastal Maine. "So when you cut costs in half like we've seen this year, that's a tremendous savings."

    More than seven in 10 Maine households continue to use fuel oil as their primary energy source for home heating.

    -Dave Sherwood contributed reporting.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Caroline Valetkevitch

    NEW YORK -- U.S. stocks slipped Tuesday on uncertainty over the U.S. rate outlook and disappointing results from Ford and other companies.

    Upbeat results from Apple after hours, however, could give the market a boost Wednesday.

    Shares of Apple (AAPL), the biggest company by market capitalization, rose 2.8 percent to $116.89 after it reported higher-than-expected earnings and revenue. Apple's stock ended the regular session down 0.6 percent at $114.55.

    Nasdaq 100 e-mini futures also edged up after Apple's results.

    "Both earnings and revenues were above expectations, which I think was well embraced based on the fact that a lot of companies have been struggling on the top line," said Daniel Morgan, senior portfolio manager at Synovus Trust Co., which owns Apple shares.

    Also after the bell, shares of Twitter (TWTR) dropped 11 percent to $27.89 after it reported results. Twitter's stock ended the regular session up 1.5 percent at $31.34.

    During the regular session, Ford (F) dropped 5 percent to $14.89 after quarterly results missed expectations, while JetBlue Airways (JBLU) fell 3.2 percent to $25.36 after it said it will make less money per mile in October than it did a year ago.

    Shares of other airlines also fell, and the Dow Jones transportation average dropped 2.6 percent.

    The Federal Reserve began its two-day policy meeting Tuesday. While expectations for a rate hike this week are slim, investors are looking for clues in its policy statement Wednesday as to when the Fed will begin to raise interest rates.

    That's going to be parsed every way possible," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

    Casting more doubts on whether the Fed will raise rates this year, data showed U.S. non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, slipped last month after a downwardly revised decline in August.

    The Dow Jones industrial average (^DJI) fell 41.62 points, or 0.2 percent, to 17,581.43, the Standard & Poor's 500 index (^GSPC) lost 5.29 points, or 0.3 percent, to 2,065.89 and the Nasdaq composite (^IXIC) dropped 4.56 points, or 0.1 percent, to 5,030.15.

    Movers and Shakers

    Alibaba (BABA) rose 4 percent to $79.44 after the e-commerce giant reported better-than-expected revenue. After the bell, shares of Twitter dropped after it reported results. Twitter (TWTR) stock ended the regular session up 1.5 percent.

    Declines in crude oil weighed further on energy shares, and the S&P energy index, down 1.2 percent, led sector declines for the S&P 500.

    Health care was only one of two S&P 500 sectors to end in positive territory for the day. The index was up 1.7 percent after better-than-expected earnings from top drugmakers Pfizer and Merck. Pfizer (PFE) was up 2.4 percent at $34.99 and Merck (MRK) was up 1.1 percent at $53.47.

    Rite Aid (RAD) shares jumped 42.6 percent to $8.67. Sources said Walgreens Boots Alliance (WBA) is nearing a deal to buy the rival drugstore chain.

    Among other gainers, shares of hotel operators rose after The Wall Street Journal reported at least three Chinese firms were looking to bid for Starwood Hotels & Resorts Worldwide. Starwood (HOT) shares were up 9.1 percent at $74.81 while shares of Marriott International (MAR) were up 1.8 percent at $77.99.

    NYSE declining issues outnumbered advancing ones 2,293 to 797, for a 2.88-to-1 ratio; on the Nasdaq, 2,003 issues fell and 820 advanced, for a 2.44-to-1 ratio favoring decliners.

    The S&P 500 posted 14 new 52-week highs and 13 new lows; the Nasdaq recorded 56 new highs and 122 new lows.

    Federal Reserve policymakers meet to set interest rates and release a statement at 2 p.m. Eastern time.

    Earnings Season:
    These selected companies are scheduled to report quarterly financial results:
    • Anthem (ANTM)
    • Amgen (AMGN)
    • General Dynamics (GD)
    • GlaxoSmithKline (GSK)
    • Mondelez International (MDLZ)
    • Northrup Grumman (NOC)
    • Occidental Petroleum (OXY)
    • PayPal (PYPL)
    • Walgreens Boots Alliance (WBA)
    • Williams Cos. (WMB)

     

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    Are You Overusing Household Products?
    There are many ways you can save by cutting back on your household products. For instance, instead of using paper towels you can use old newspapers to clean windows and mirrors. Newspaper can easily soak up dust and dirt, and, best of all, it won't leave any streaks. Here are a few more tips you can try.

    First, when it comes to spray cleaners don't spray directly onto the surface -- it always leads to using too much product. Contrary to what you might think, over-spraying can actually lead to more streaks, too. Instead, give your cleaning rag a quick spritz, then wipe down the surface.

    Next, toothpaste can be costly, and while advertisers would like you to think more is better, that's not really true. In fact, a small, pea-sized amount is what most dentists recommend to adequately brush your teeth.

    Finally, using too much carpet cleaner can stain the area and leave a soapy residue, attracting more dirt over time. Instead, start out with less potent options like soap, water or white vinegar. And be sure to properly dry the area after cleaning to extend your carpet's lifespan.

    There are several ways to avoid overusing and overspending on household products. Give these tips a try and you'll see the savings for yourself.

    View Poll

     

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    U.S. CVS Caremark Flu Shots
    M. Spencer Green/AP
    By Raechel Conover

    With flu season about to rear its ugly head, now is the time to line up for your annual flu shot. Peak time for flu in the United States generally falls in January or February, but activity can erupt as early as October and it takes two weeks after vaccination for the body to develop the necessary antibodies. The Centers for Disease Control and Prevention recommends that everyone over the age of 6 months get a dose of the vaccine. This can be costly for an entire family, especially without health insurance coverage.

    To find the cheapest source for flu shots, Cheapism checked prices at six of the largest pharmacy chains (based in 2014 revenue from prescriptions); warehouse clubs Costco and Sam's Club, which are known for low prices and allow non-members to use their pharmacies; and a doctor's office in Columbus, Ohio. As of the third week of September, all the chains had a supply of the vaccine in stock, as did the doctor's office. Some employers organize a flu-shot day for employees and spouses, with the cost dependent on your insurance and employer.

    Price Breakdown. For self-pay, Costco is cheapest: $14.99 for members and non-members alike, compared with $20 at Sam's Club. Target and Walmart price the injection about the same, at $24.99 and $25, respectively. Kroger is charging $30 this year, while Rite Aid, CVS and Walgreens cluster on the high end, at $31.99. Prices at doctors' offices vary widely. Last year a local physician quoted $82.70 for the flu vaccine. This year the going rate is $30.
    Provider Price
    Costco
    $14.99
    Sam's Club
    $20
    Target
    $24.99
    Walmart
    $25
    Kroger
    $30
    Doctor's Office
    $30
    CVS
    $31.99
    Rite Aid
    $31.99
    Walgreens
    $31.99

    Insurance Coverage for Flu Shots. Many insurance companies consider the influenza vaccine a preventive measure and cover some or part of the cost. Every pharmacy and the doctor's office we contacted can run insurance information through their systems and quickly let patients know whether all, part, or none of the cost is covered. (Other doctors may not provide this convenience. The safest bet is to check with your insurance company before heading to an appointment.)

    In-Store Rewards. To entice consumers to the pharmacy for a flu shot, many retailers offer in-store perks to soften the sting. At CVS, customers receive a 20 percent-off shopping pass up to $100, good for any non-sale and non-pharmacy item. The Pharmacy Rewards program at Target offers 5 percent savings on a full day of shopping with every five prescriptions filled, and a flu shot counts toward that. Each flu shot at Walgreens translates into a donated vaccine for a child in need.

    Appointments/Walk-Ins. Every place we called, aside from the doctor's office, adheres to the same policy: no appointment necessary. Just walk in and wait your turn. Most pharmacies estimate a 10- to 15-minute wait, more or less, depending on traffic. If you go on a weekend, patience may be in order. Check your doctor's office for procedures -- some require appointments and others have designated walk-in times.

     

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