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DailyFinance.com

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    Businessman leaving office with box of personal items
    Getty Images
    By Marianne Hayes

    John Livesay was the West Coast director for a major women's magazine who was tasked with snagging new advertisers.

    After he had been there for a decade, the company was restructured in 2009 -- and he got caught up in a round of layoffs.

    But while most of his co-workers were storming out in a rage, Livesay did something that really caught his manager off guard -- he offered to create a detailed turnover report to make sure his clients continued to get the care they deserved.

    "I became very close to a lot of the big advertisers," Livesay explains. "I'd gone to some of their weddings, and watched them have kids. I cared about them too much to just walk out."

    That professionalism paid off: Two years later, Livesay's old boss remembered his good attitude and extra effort and rehired him for a new job at the company.

    Livesay is what experts call a "boomerang employee," or someone who leaves a company and then rejoins it down the line.

    And that situation is not as uncommon these days as you might think.

    According to a recent survey put out by Kronos and Workplace Trends, over three-quarters of HR professionals say they're more open to the idea of rehiring a past employee than they were five years ago. Meanwhile, 40 percent of workers say they'd consider taking a boomerang position.

    Numbers like these drive home just how important it can be to exit a company on a high note -- which is why it's critical to have a strong exit strategy in place before you turn in your notice.

    To help you craft one, we tapped a handful of workplace pros to get the inside scoop on how to leave a company with grace -- and under great terms.

    1. Stay Mum Until You Break the News to Your Boss

    If you know you're about to quit, it can be soooooo tempting to divulge your secret to a work friend -- changing jobs is a big step, and it's only natural to want to talk it through with someone in your inner circle.

    But as much as you want your work buddy to tell you that you're doing the right thing, fight the temptation to dish.

    The Better Strategy: Kick off the quitting process the right way by telling your manager first.

    "Many people make the error of whispering over the water cooler about how nervous they are to quit. Then their manager hears about it before they even step foot in their office," says career pro Dana Manciagli, author of "Cut the Crap, Get a Job! A New Job Search Process for a New Era."

    Not only could this irritate your boss, but you've lost your chance to manage the narrative of why you're leaving. Once word of your quitting has become office gossip, it can take a life of its own.

    Instead, go into your manager's office with a clear story line about why you are resigning, when you want your last day to be and how you want the news communicated to others in the company.

    The last point is particularly important, because as Manciagli notes, there may be organizational or political issues to manage, and your manager may need to alert HR and others in the company before word gets out.

    Whatever the case, work with your manager to clarify the timing and public details surrounding your decision so that you're both sharing the same story.

    As Harvard business administration professor Len Schlesinger told the Harvard Business Review last year: "There is only one story, told one way, and you stick to it. That way nobody can ever say they heard anything different."

    2. Don't Immediately Consider a Counteroffer

    We all want to be so essential to a company that it can't run without us -- which is why a counteroffer can be so appealing.

    But our pros caution against going into your manager's office thinking your resignation is really just the beginning of a negotiation.

    The Better Strategy: "I always recommend that folks go in confident -- with their minds made up that they are leaving," Manciagli says.

    If the company does come back with a counteroffer, be realistic about why your boss is making it.

    While it may be true that you're a vital pillar of the organization, it's more likely that your manager would rather throw money at the situation than deal with the turmoil caused by your departure.

    And remember that a counteroffer isn't a magic wand that will fix anything other than how you are being compensated. If there are other reasons why you want to leave, they are likely to remain, so you should weigh the pros and cons.

    And, Manciagli says, if you do accept the counteroffer, you need to be prepared to recommit to your current job for a solid year -- no more job hunting.

    "You've got to show for at least the next year that you are fully committed -- not one foot in and one foot out," she says.

    3. Be a Ray of Sunshine After You Give Notice

    If your current job is a drag, calling it quits doesn't give you free rein to talk poorly about the company or a colleague -- to anyone.

    "You may think there's no way on earth you're ever going to see this person again, and then -- sure enough -- they show up in another capacity five years later," says Judy Robinett, a networking expert and author of "How to Be a Power Connector: The 5+50+100 Rule for Turning Your Business Network Into Profits."

    The Better Strategy: Off-the-cuff remarks or jabs made on social media are sometimes all it takes to burn a potentially important bridge.

    So John Sullivan, an HR expert and professor of management at San Francisco State University, suggests adopting the "it's not you, it's me" mantra.

    Translation: You guys are great. It's nothing personal.

    "If you don't have something nice to say, don't say anything at all," says Sullivan, adding that this is especially important if you have any hopes of being rehired in the future. "When you leave a job, you want people to say, 'Good for you.' "

    4. Try to Ensure a Smooth Transition

    Sure, you may be fantasizing about how lost people will be without you, but if you want to keep that business relationship strong, you should put together a thoughtful action plan for those you leave behind.

    Your decision to leave may mean that your manager will have to reshuffle your workflow so the ship doesn't sink in your absence. If you help manage the situation, you'll also help manage their feelings about you.

    The Better Strategy: Draft a solid transfer plan outlining all of your pending projects, your recommendations for wrapping them up and specific employees you plan to brief on what you've got cooking. You can even include a retooled job description.

    Making your transition seamless is something your colleagues -- and your boss and your boss's boss -- will appreciate.

    "Imagine this as being the playbook that someone else picks up," Manciagli says. "Show your manager you understand their situation -- and that you want to be part of helping to fill that gap."

    5. Don't Use Your Exit Interview as a Therapy Session

    That last meeting with HR can be a potential minefield. While it may be tempting to unload about the company or share details about toxic colleagues, try to refrain.

    That's because there's no such thing as anonymity or off-the-record comments.

    The Better Strategy: "You're giving feedback to the company, and that HR person absolutely can and will share what they heard in some format," Manciagli says. "So unless you have a positive, constructive solution to something you observed, don't throw anybody under the bus."

    Sullivan takes it a step further, saying that effective action is rarely taken after the fact in these situations.

    So if you drive home that your boss is ineffectual, not only will they hear about it -- which burns a bridge -- but, Sullivan says, it isn't likely that HR will actually penalize that person.

    "I'm not a fan of dishonesty, but usually nothing happens," he says. "More often than not, it's written down and put in a file."

    6. Remain Valuable Post-Departure

    Chances are you've made some important connections at your current job, and it's crucial to keep those relationships going strong.

    "The most powerful asset you have is your network," Robinett says. "It only takes 25 to 50 key people to get you anywhere you need to go."

    So don't say sayonara to your daily duties -- or your colleagues.

    The Better Strategy: In addition to being positive in those final weeks at a job -- and creating a smooth transition -- put in the effort to continue to build your reputation in your colleagues' eyes even after you leave.

    Start by considering how to add value to the picture they already have of you. So instead of just periodically checking in with a here's-what's-going-on-with-me email, elevate your approach by thinking of little ways to be helpful.

    For example, send them news about relevant trends in your industry, forward useful articles or even facilitate key introductions when possible.

    "Those are terrific value-adds you can do for people that will put you in their upper 5 percent," Robinett says. "They'll remember you and keep you top of mind."

    And who knows, that may just lead to your next great job.

     

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    Pink piggy bank on wood table
    Getty Images
    By Matt Shapiro

    In our "Ask a CFP" Q&A series, we cede the floor to a certified financial planner who will address what we think are some of the trickiest money topics out there.

    Today, Matt Shapiro, a certified financial planner with LearnVest Planning Services, delves into whether there's ever a point when you can comfortably consider yourself finished with building your nest egg.

    "From the time you earned your first paycheck, you likely heard the same advice over and over: Start putting away for retirement -- now!

    And it is sage advice to consider, especially when you look at the stats: The median nest-egg balance for American households last year was a mere $2,500, according to the National Institute on Retirement Security.

    Data like this shows just how imperative it is to make your golden years a priority -- and may lead you to believe there's no such thing as saving too much for retirement.

    That's why I sometimes get asked:

    Why So Many People Ask This Question Few of today's workers have access to pensions, and the future of Social Security remains uncertain -- leaving the onus of planning and saving for retirement largely in your own hands.

    Plus, when you see headlines about how Americans aren't saving enough for retirement, it's only natural to feel stressed about making sure you're setting aside enough in your 401(k) or IRA.

    What I Tell Them From time to time, I do see people in their 30s or 40s who may be able to stop saving for retirement early -- the ones who receive a large inheritance.

    For the rest of us, figuring out when exactly we could be 'done' is hard to do without first doing a reverse calculation, based on your target retirement number.

    To get to your number, you need to determine how much income you think you'll need to live on each year, based on your retirement lifestyle goals, then multiply that by the number of years you expect to be retired.

    And if you don't yet know how you envision your future retirement lifestyle, consider basing your calculations on the assumption that you'll need to replace 85 percent of your income in your golden years.

    So let's say you think you'll need $4 million to retire comfortably at age 67. Assuming a hypothetical 7 percent annual return on your retirement investments, you could, in theory, stop contributing to retirement if you had close to $500,000 in your nest egg by 35.

    Realistically, few of us reach that level of retirement savings so early in life -- most of us will likely have to keep contributing up until close to the age we intend to retire.

    So the question you probably should be asking yourself instead: 'Am I saving enough now to retire by my desired timeline?'

    Of course, the answer to that will vary by individual, but generally the younger you are when you start saving, the sooner you'll likely be to reach your goals -- thanks to the longer amount of time you have to take advantage of compound growth.

    Let's look at another example: Say a 25-year-old man wants to save $1 million to retire by age 67. If he starts to set aside $500 a month right away in a 401(k) that returns a hypothetical 7 percent a year, he could surpass the $1 million mark by 63. If he keeps saving for another four years, he could reach $1.4 million -- and that's not even taking into account any company match.

    However, if he waits until 40 to start saving but doubles that contribution to $1,000 a month, he'll only have earned about $927,000 at 67 -- $73,000 shy of his initial goal.

    So by starting early, the man is able to surpass his goal without having to raise his retirement contribution over time -- and making it potentially easier to devote increases in income toward other goals, like contributing to a kid's college fund.

    By starting later, he may have to decide if he'll retire later -- or choose to live off a smaller retirement number.

    The Bottom Line There's no hard-and-fast rule when it comes to knowing when you can consider yourself 'finished' with saving for retirement -- it all depends on the progress you're making toward your retirement number.

    So consider doing the calculations now to see whether you're a few years ahead of schedule -- or need to step up your savings game."

     

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    October CPI Up 0.2%

    By Lucia Mutikani

    WASHINGTON -- Consumer prices increased in October after two straight months of declines as the cost of health care and other services rose, evidence of firming inflation that further supports views that the Federal Reserve will raise interest rates next month.

    The economic outlook also got a boost from other data Tuesday showing a fairly solid increase in manufacturing output in October after dropping for two consecutive months.

    There is nothing that derails a December Fed rate hike in today's data.

    "There is nothing that derails a December Fed rate hike in today's data. Inflation is starting to turn a corner and manufacturing production remains resilient," said Thomas Costerg, an economist at Standard Chartered Bank in New York.

    The Labor Department said Tuesday its Consumer Price Index rose 0.2 percent last month, reversing September's 0.2 percent drop. In the 12 months through October, the CPI advanced 0.2 percent after being unchanged in September.

    Signs of stabilization in prices after a recent downward spiral are likely to be welcomed by Fed officials and give them some confidence that inflation will gradually move toward the central bank's 2 percent target.

    Inflation has persistently run below target. In the wake of a robust October employment report, the U.S. central bank is expected to raise its benchmark overnight interest rate from near zero at its Dec. 15-16 meeting.

    There is hope tightening labor market conditions, characterized by a jobless rate now in a range that some Fed officials view as consistent with full employment, will put upward pressure on wages and drive inflation toward its target.

    A report from the Fed showed manufacturing production increased 0.4 percent as the output of both long-lasting and nondurable goods rose.

    Manufacturing, which accounts for 12 percent of the U.S. economy, declined in both August and September. The sector has been hobbled by a strong dollar, spending cuts by energy firms and efforts by businesses to reduce an inventory bloat.

    However, further declines in mining output and a weather-related drop in utilities production weighed on overall industrial production last month.

    Still, the increase in manufacturing output was another indication that economic growth would accelerate in the fourth quarter after braking to a 1.5 percent annual rate in the July-September quarter.

    Abating Headwinds

    "The healthy rise in manufacturing sector production is a welcome sign that the headwinds to this sector are beginning to ease," said Millan Mulraine, deputy chief economist at TD Securities in New York. "The outlook for the industrial sector is becoming incrementally more favorable."

    The dollar was trading higher against a basket of currencies, while prices for U.S. Treasuries fell. U.S. interest rate futures implied a 70 percent chance of a December rate hike, up from 68 percent on Monday, according to CME Group's FedWatch. Stocks on Wall Street rose, boosted by better-than-expected earnings from Walmart (WMT) and Home Depot (HD).

    In October, the so-called core CPI, which strips out food and energy costs, gained 0.2 percent after a similar rise the prior month. Rents and medical costs accounted for much of the increase in the core CPI last month.

    The rental index increased 0.3 percent after rising 0.4 percent in September. Medical care costs rose 0.7 percent, the largest increase since April.

    In the 12 months through October, the core CPI increased 1.9 percent after rising by the same margin in September.

    The Fed tracks the personal consumption expenditures price index, excluding food and energy, which is running below the core CPI. The dollar's 18 percent rise against the currencies of the United States' main trading partners since June 2014, has made imports such as apparel and automobiles less expensive.

    Inflation should get a boost next year as the weak readings from late 2014 and this year drop out of the calculation.

    Energy prices, including gasoline and electricity, rose last month. While food prices rose marginally, four of the six major grocery store food group indexes increased, with cereals and bakery products posting the largest increase since August 2011.

    Hospital costs increased 2 percent in October and airline fares rose 1.5 percent, ending a string of three consecutive declines. There were also increases in recreation costs, but apparel prices recorded their biggest decline since December. Prices for used cars and trucks fell for a sixth straight month.

     

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    Wal-Mart's Q3 Beats Street

    By Nathan Layne

    Walmart Stores reported slightly stronger-than-expected quarterly earnings Tuesday as it booked its fifth straight gain in U.S. same-store sales, sending its shares up more than 4 percent.

    However, the company also said it expected sales at stores open at least a year to grow more slowly during the current quarter, which includes the crucial holiday shopping season, and that business would remain competitive.

    Walmart's earnings have been under pressure from costs to boost entry-level wages and spruce up stores. Last month it warned that those costs would lead earnings to decline by as much as 12 percent next year, prompting many investors to dump the stock.

    The company has also said that those investments, while hitting profits, are also starting to translate into better customer service and helping to lift sales.

    "We are starting to get some good momentum," Greg Foran, chief executive of U.S. operations, said on a call with reporters.

    Net profit attributable to the world's largest retailer fell to $3.304 billion, or $1.03 a share, in the third quarter ended on Oct. 31 from $3.711 billion, or $1.15 a share, a year earlier.

    Analysts on average had expected 98 cents a share, according to Thomson Reuters I/B/E/S.

    The results included a boost of 4 cents a share from an adjustment of accounting for leases.

    Sales at U.S. stores open at least a year rose 1.5 percent, while customer traffic increased 1.7 percent. The company said food, apparel and home goods performed well, while its entertainment department struggled due in part to a lack of blockbuster products on the market to drive demand.

    Walmart said inventory on a comparable store basis fell by 1.9 percent, a sharp contrast with Macy's and other retailers that warned of a build-up of stock in recent weeks.

    In a note to clients, Cowen & Co. analyst Oliver Chen wrote that Walmart's "clean inventory position" should somewhat limit promotional pressure among discounters during the holiday season. He also said Walmart's sales growth, driven by sales and apparel, should generally bode well for Target (TGT), which reports quarterly results Wednesday.

    Walmart said operating income fell 8.8 percent to $5.7 billion. Foran said the company had added more labor hours than initially planned during the quarter while also making investments in customer-facing parts of the store.

    Walmart said consolidated revenue fell 1.3 percent to $117.4 billion, weighed down by international operations, which have been hurt by a stronger dollar. It said online sales increased 10 percent in the quarter, slower than its plans for growth in the mid-to-high-teens this fiscal year. It cited weakness in Brazil, China and the U.K.

    The company forecast same-store U.S. sales growth would slow to 1 percent in the fourth quarter due to a tough comparison from last year when a big drop in fuel prices and food inflation boosted sales.

    Walmart narrowed its forecast for earnings per share in the full fiscal year to end-January to $4.50 to $4.65 from $4.40 to $4.70. The market consensus was for $4.50.

    Walmart (WMT) shares were up 4.4 percent at $60.43 in morning trading.

     

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    Weather impacts Thanksgiving travel.
    Jonathan Newton/The Washington Post via Getty Images
    By SCOTT MAYEROWITZ

    NEW YORK -- A stronger economy and lower gas prices mean Thanksgiving travelers can expect more congested highways this year.

    During the long holiday weekend, 46.9 million Americans are expected to go 50 miles or more from home, the highest number since 2007, according to travel agency and car lobbying group AAA. That would be a 0.6 percent increase over last year and the seventh straight year of growth.

    While promising for the travel industry, the figure is still 7.3 percent short of the 50.6 million high point reached in 2007, just before the recession.

    Like on every other holiday, the overwhelming majority of travelers -- almost 90 percent -- will be driving. And they will be paying much less at the pump.

    AAA says the average retail price for gasoline is now $2.15 a gallon, 74 cents cheaper than the same time last year. With the average car getting 18.5 mpg, that means a family driving 300 miles will save $12 in fuel this holiday.

    Airlines for America, the lobbying group for several major airlines, forecasts 25.3 million passengers will fly on U.S. airlines, up 3 percent from last year. (AAA's forecast shows fewer numbers of fliers because it looks at a five-day period while the airline group looks at the 12 days surrounding Thanksgiving.)

    Airfare is basically flat compared to last year, with a mere 0.3 percent or 69 cent average increase, according to the Airlines Reporting Corp., which processes ticket transactions for airlines and travel agencies.

    Traveler counts are little fuzzier when it comes to other forms of transport.

    Bus use will continue to grow, according to the Chaddick Institute for Metropolitan Development at DePaul University. The school expects 1.2 million to take buses, up 1 percent to 2 percent from last year. However, AAA says travel by cruises, trains and buses will decrease 1.4 percent this Thanksgiving to 1.4 million travelers.

    Air Travel Tips

    Since flying can often cause the most disruptions and leave travelers feeling helpless, here are some tips to cope with any delays. Flights are packed around the holidays and if there is any hiccup, the difference between getting home and not can come down to asking the right questions and acting fast.

    Delays
    • At the first sign of a serious mechanical problem, call the airline to have it "protect" you on the next flight out. That way if the mechanical problem leads to a cancellation, you are already confirmed on a new flight and can just print a new boarding pass.
    • If you miss your flight connection -- or bad weather causes delays -- get in line to speak to a customer service representative. But also, call the airline directly. If the phone lines are jammed, try the airline's overseas numbers. You'll pay long-distance rates, but might not have to wait. (Add those numbers to your phone now.) Finally, consider sending a Tweet to the airline.
    • Consider buying a one-day pass to the airline lounge. For one thing, there are usually free drinks and light snacks. But the real secret to the lounges is that the airline staffs them with some of its best -- and friendliest -- ticket agents. The lines are shorter and these agents are magically able to find empty seats. One-day passes typically cost $50 but discounts can sometimes be found in advance online.
    • If weather causes cancellations, use apps like HotelTonight and Priceline to find last-minute hotel discounts for that night. Warning: Many of the rooms are non-refundable when booked, so only lock in once stuck.
    Luggage
    • Weigh it at home first. Anything over 50 pounds (40 pounds on some airlines like Spirit) will generate a hefty overweight surcharge, in addition to the checked bag fee.
    • Before your bag disappears behind the ticket counter make sure the airline's tag has your name, flight number and final destination. Save that sticker they give you -- it has a bag-tracking number on it.
    • Place a copy of your flight itinerary inside your suitcase with your cellphone number and the name of your hotel in case the tag is ripped off.
    • If you can't live without it, don't check it. It might take days to return a lost bag. Don't pack medication or outfits for tomorrow's meeting or wedding. Never check valuables such as jewelry or electronics.
    • Prepare your carry-on bag as if it will be checked. You might not have planned to check your bag, but given today's crowded overhead bins many fliers don't have a choice. Pack a small canvas bag inside your carry-on so if you are forced to check it, you can at least keep your valuables with you.
    Seats
    • Set up alerts for seat openings. ExpertFlyer.com offers free notifications when a window or aisle seat becomes vacant. For 99 cents, it sends an email if two adjacent seats become available. The service is available for Alaska Airlines, American Airlines, JetBlue Airways, United Airlines and Virgin America but not for Delta Air Lines and some smaller carriers.
    • Check the airline's website five days before the trip. That's when some elite fliers are upgraded to first class, freeing up their coach seats. Another wave of upgrades occurs every 24 to 48 hours.
    • Check in 24 hours in advance when airlines start releasing more seats. If connecting, see if seats have opened up 24 hours before the second flight departs.
    • Keep looking for new seats. Even after checking in, seats can be changed at airport kiosks and on some airlines' mobile applications.

     

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    Federal Building DOJ
    Andrew Harnik/AP
    WASHINGTON -- The Justice Department has announced criminal charges against two companies that manufactured and sold dietary supplements.

    An indictment unsealed Tuesday accuses Dallas-based USPlabs of falsifying marketing labels and lying about the nature and source of ingredients in its products. Also charged is S.K. Laboratories, an Anaheim, California firm.

    Benjamin Mizer, the head of the Justice Department's civil division, said the deception put lives at risk.

    Four of the six individuals who were charged were arrested Tuesday, and the two others are expected to turn themselves in.

    It wasn't immediately clear if the defendants had attorneys.

    The indictment was announced as part of a yearlong nationwide sweep against makers and marketers of dietary supplements.

     

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    Top 3 Ways to Save on Thanksgiving Dinner
    Thanksgiving is right around the corner and if you're cooking a big holiday feast, it could gobble up your cash. Thankfully, we compiled some of the best ways to save from previous episodes, that will help you save this holiday season.

    First, weigh your food to find the best deals. Pre-bagged produce all costs the same, so pick out the heaviest of the bunch to get more food for your money.

    Next, don't be afraid of the canned food aisle, it's there to save you cash. A 1.5-cup can of store-bought, canned cranberry sauce costs $1.89, or only $1.26 per cup, whereas 3.5 cups of homemade cranberry sauce cost $10.25, or $2.93 per cup. That's a savings of nearly 57 percent.

    Gravy doesn't have to strain your budget either. Turkey gravy by the jar or packet can cost up to $2.50. That may seem like a good deal, but if you're already cooking a turkey, just strain the pan drippings, skim the fat from a heated saucepan, add flour, whisk and then add the drippings back in. You can also add water or, preferably, stock to homemade gravy that can't be beat.

    So, when you shop for your Thanksgiving dinner, remember these tips. Because knowing which ingredients to buy, will make you thankful for all the money you'll be saving.

    View Poll

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Noel Randewich

    NEW YORK -- U.S. stocks forfeited gains Tuesday after a soccer match between Germany and the Netherlands was called off over fears of a bombing.

    All three major U.S. indexes had ventured into positive territory following upbeat earnings reports from Walmart and Home Depot. But they quickly relinquished those gains after the friendly match was canceled less than two hours before its start due to indications of a planned attack with explosives at the stadium in Hanover.

    That added to apprehension following last week's attacks in Paris that killed 129 people.

    "These situations create uncertainty and in uncertain times everyone goes to cash," said Mohannad Aama, managing director at Beam Capital Management in New York.

    Despite the broad market's reversal, Walmart (WMT) ended 3.5 percent higher and Home Depot (HD) climbed 4.4 percent, pushing the S&P 500 retail index up 1 pct.

    There's a shift in consumer behavior, but the consumer is still spending.

    The healthy quarterly performance of Walmart and Home Depot stood in contrast to results from department stores Macy's (M) and Nordstrom (JWN) last week that sent some retail stock sharply lower.

    "There's a shift in consumer behavior, but the consumer is still spending," said Steve Goldman, principal of Goldman Management in Short Hills, New Jersey. "They're just spending differently, whether on restaurants or travel."

    Home Depot rival Lowe's (LOW) rose 1.7 percent and Target (TGT) added 0.8 percent. Both report their quarterly results Wednesday.

    Data released Tuesday offered a mixed view of the health of the U.S. economy -- consumer prices increased in October after two straight months of declines, while industrial production fell.

    The modest rise in inflation could bolster chances of the Federal Reserve raising interest rates next month, but weak industrial output raised concerns about the robustness of fourth-quarter economic growth.

    The Dow Jones industrial average (^DJI) rose less than 0.1 percent to end at 17,489.50 and the Standard & Poor's 500 index (^GSPC) lost 0.1 percent to finish at 2,050.44. The Nasdaq composite (^IXIC)
    was essentially flat, ending at 4,986.02.

    Seven of the 10 major S&P sectors fell, with the utilities sector's 1.9 percent drop leading the decliners.

    Criminal Probe

    Shares of dietary supplement-makers sank after federal agencies, including the Department of Justice, said they would announce criminal and civil actions related to unlawful advertising and sale of dietary supplements.

    GNC Holdings (GNC) dropped 6.4 percent, Vitamin Shoppe (VSI) fell 4.9 percent and Herbalife (HLF) lost 1.5 percent. None of the companies were named in the subsequent Justice Department release.

    Underscoring the uneven performance among retailers, Urban Outfitters (URBN) dropped 3.8 percent and Dick's Sporting Goods (DKS) lost 9.4 percent after handing in quarterly report cards that disappointed investors.

    Declining issues outnumbered advancing ones on the NYSE by 1,934 to 1,126. On the Nasdaq, 1,501 issues fell and 1,290 advanced.

    The S&P 500 index showed 10 new 52-week highs and 16 new lows, while the Nasdaq recorded 46 new highs and 148 new lows.

    About 7.5 billion shares changing hands on U.S. exchanges, compared to the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

    -Abhiram Nandakumar contributed reporting from Bangalore, India.

    What to watch Wednesday:
    • The Commerce Department releases housing starts for October at 8:30 a.m. Eastern time.
    • The Federal Reserve releases minutes from its October policy meeting at 2 p.m.
    Earnings Season
    These selected companies are scheduled to report quarterly financial results:
    • Aramark (ARMK)
    • Keurig Green Mountain (GMCR)
    • L Brands (LB)
    • Lowe's (LOW)
    • NetApp (NTAP)
    • Salesforce.com (CRM)
    • Staples (SPLS)
    • Target (TGT)

     

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  • 11/17/15--21:00: Learning How to Pay Off Debt
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    Learning How to Pay Off Debt


    Stephanie Benedetti works for a nonprofit in Washington, D.C., and while she's a savvy saver now, she wasn't always so budget-conscious. Here's how she managed to pay down thousands of dollars in student loans in just three years.

    After completing undergraduate and master programs, Benedetti found herself with quite a bit of debt. "When I was in school, I had over $90,000 in student loan debt accumulated," she says. "[I was] just kind of living my life, having fun, going to happy hours [and] not really keeping track of how much I was paying off and how much I was saving."

    Two years later, Benedetti met her husband, Rob, which changed everything. "He was totally planning for his financial future," she remarks. Rob motivated her to save and work toward paying off her student loans, while he continued to put money away for a house.

    With the help of her husband, Benedetti was able to cut costs of living by consolidating bills like rent and utilities. She also cut her gym membership and other expenses that had free alternatives. "I went line by line through everything I was spending and monitored literally every dollar that was coming in and every dollar that was coming out," she explains.

    Benedetti also thought it would be wise to look for an additional source of income, but she needed a job with flexible hours. She realized she could babysit to earn extra money, and parents were willing to pay a premium for her because of her masters degree.

    With less debt and more cash in the bank, Benedetti is more financially stable than ever. She adds, "Now I'm well set up for the future, and I think my whole life has changed because I really set that financial goal and reached it."

     

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    Worried woman looking at bills
    Getty Images
    By Stacy Johnson

    Until the Fair and Accurate Credit Transactions Act was signed into law in 2003, Americans weren't entitled to a free copy of their credit reports. And 24 years ago, when I began my career in consumer news, you couldn't see your credit score at all, at any price.

    Consumer access to credit reports and scores is a good thing. After all, if someone's going to make important decisions about your future based on this stuff, we have both the right and obligation to make sure it's accurate, as well as understand how to improve things.

    While it's good to be vigilant, however, let's not become obsessed. Here's this week's question:

    On my latest credit check, there was a remark about a lower ranking because "I had no mortgage." I paid my mortgage off by 1996 and don't understand how that could be counted against me. How can I fix this? -Helen

    Here's your answer, Helen!

    Can a lack of debt hurt your credit score?

    When it comes to credit scores, by far the most important factor is how good you've been at paying your bills on time, every time, for a long time. Do that flawlessly, and you can rest easy.

    While a long, on-time history is the main thing, however, it's not the only thing. Something else lenders like to see is a mix of different types of credit. The two major kinds are revolving credit, like credit cards, and installment credit, like car and mortgage loans.

    So what Helen may have seen when she checked her score is a notation that it may be negatively affected by a lack of installment loans.

    I can't blame Helen for being concerned. After all, scores are important and when a notation indicates you may have done something wrong, it's easy to think it's a big deal and needs fixing. But in this case, it isn't and it doesn't.

    What should Helen do?

    For starters, take note that only 10 percent of your score is related to your credit mix, according to Fair Isaac, originator of the most widely used score. So having a variety of credit types isn't hugely significant.

    Of course, there's a quick, albeit ridiculous, solution if Helen wants to try to raise her score by diversifying her credit portfolio. She could take out a mortgage, car loan, signature loan or other type of installment loan.

    But unless Helen's life depends on earning the highest possible credit score, she'd be nuts to take out a loan for the sole purpose of making Fair Isaac happy. If she has a great history of paying her bills on time, the impact on her score of not having an installment loan will be negligible. If her history isn't so great, she's much better off simply continuing to make on-time payments rather than taking on new debt.

    I found an article on Kiplinger that addressed a similar issue: How paying off a mortgage affects credit scores. From that article:
    Craig Watts, a spokesman for Fair Isaac, the firm that created the widely used [FICO] score, says that your credit score will likely be unaffected (by paying off a mortgage.) If your mortgage is your only installment loan, however, your score could suffer a slight ding, although not enough to make you want to change your plans.
    Bottom line? While Fair Isaac or potential lenders may want you to have lots of different kinds of credit to earn the highest possible credit score, let's not get carried away. Paying interest is almost always a waste of money and often a source of stress. Please: Pay off your mortgage, credit cards, car loans and anything else you owe. And when you do, don't worry about any notations you see and don't obsess about any potential negative impact it will have, particularly if you aren't going to be borrowing soon. If you pay your bills on time, both you and your score will be just fine.

    Got a question you'd like answered?

    A great way to get answers to just about any money-related question is to head to our Forums. It's the place where you can speak your mind, explore topics in-depth and, most important, post questions and get answers. It's also where I often look for questions to answer in this weekly column. You can also ask questions by replying to our daily emails. If you're not getting them, fix that right now by subscribing here.

    About me

    I founded Money Talks News in 1991. I've earned a CPA (currently inactive), and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.

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    The 3 Fastest Ways to Raise a Credit Score

     

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    Roasted turkey on set table
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    By Krystal Steinmetz

    With Thanksgiving just around the corner, this is not the news you want to hear: Turkey prices have reached a record.

    Retailers are paying roughly 21 percent more for the popular Thanksgiving bird this year than they did in 2014 and the turkeys are smaller, Bloomberg reports.

    "Wholesale, fresh turkey hens surged 18 percent from a year earlier to a record $1.5993 a pound as of Nov. 6, and frozen turkeys were up 5.6 percent at $1.309 a pound, after touching an all-time high of $1.385 a week earlier," Bloomberg said.

    Avian influenza, also known as bird flu, wiped out a whopping 8 million turkeys earlier this year. The outbreak of the disease also pushed many farmers to sell their turkeys earlier than normal, so many of the birds available to consumers this Thanksgiving are smaller than average, according to Bloomberg.

    Avian flu also led to an increase in the price of eggs this year.

    Though turkey prices are up, you may not notice a big difference in your holiday grocery bill. Many stores absorb the increase so consumers won't be tempted to shop elsewhere, according to The Huffington Post.

    Purdue University agricultural economist Corinne Alexander said that despite a potential increase in what you'll pay for turkey this Thanksgiving, the other items on your holiday menu should be on par with what you paid last year, AgriNews reports.

    Alexander said that for people living on a fixed-income or struggling financially, any increase in the price of food can be devastating to their budget.

    "For these families, any food price rise is significant," Alexander said. "We should remember those who are less fortunate and share our food bounty."

    Americans eat about 49 million turkeys during their Thanksgiving holiday feast.

    Have you bought your Thanksgiving bird yet? How much did you pay compared to last year? Share your comments below or on our Facebook page.

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    Protecting Your Plumbing for the Holidays

     

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    Woman paying bills online at home
    Getty ImagesIf listening to hold music and quibbling over your account details isn't your idea of fun, maybe you should hire someone to negotiate your cable or Internet bill.


    Despite many consumers' interest in streaming content online, TV subscription prices continue to rise. In fact, consumer research from Leichtman Research Group Inc. found in a survey of 1,222 American households earlier this year that the mean reported monthly spending on TV cable, satellite or other TV subscriptions is nearly $100, an increase of 39 percent since 2010.

    If you notice your bills creeping up, then maybe it's time to call your provider and ask for a better rate. But if you hate sitting on hold or negotiating, a few new services will do the dirty work for you.

    BillCutterz and BillFixers

    Companies like BillCutterz and BillFixers will call to negotiate on your behalf in exchange for half of whatever discount they negotiate for the first year.

    BillCutterz has been in business since 2009, and customers most often request help negotiating cellphone, cable, satellite TV and Internet bills, according to vice president Sydney Alcala. The company can also negotiate gym memberships, landscaping, pest control and alarm and security bills. Overall, the average savings is around 35 percent, and customers can save 10 percent off BillCutterz's cut by giving the savings amount for a year upfront rather than splitting the costs monthly. (If the savings last longer than a year, you keep all the of savings beyond those first 12 months.)

    A more recent entrant to the market, brothers and recent graduates Julian and Ben Kurland launched BillFixers in July 2014 as a side gig. Now Ben works on it full time and Julian is part time, along with five employees. The brothers say they attract a variety of customers, and they're able to negotiate a discount around 95 percent of the time.

    "You get folks who are really savvy about dealing with money, and that's why they come to us," Ben Kurland says. "You get folks who are just busy and don't want to deal with the hassle and figure they'll throw it to someone else." Senior citizens are another key market, Julian Kurland adds.

    Both companies ask that you send a copy of your bill so your negotiator has your account number and knows what you're currently paying and for what plan. One way he or she can help, according to Alcala, is by identifying premium channels, cellphone insurance or other add-ons you don't use. "We'll ask, 'Do you know you're paying for that, and is that something that you want?'" she says. "We want to make sure you're not paying for something you're not going to use."

    The amount of additional information you must share with BillCutterz or BillFixers depends on what the provider requires. For instance, some providers require the last four digits of your Social Security number or a passcode to verify your identity. If customers balk at giving out their personal information, they can join the call to verify their identity and authorize the negotiator to speak on their behalf.

    AirPaper

    If you're ready to cut the cord entirely, a San Francisco-based company called AirPaper will help you minimize hassles by sending a letter to Comcast, Time Warner Cable or Verizon at a cost of $5 (in some cities, you can have someone else return your equipment for an additional fee).

    AirPaper launched its Comcast cancellation letter service earlier this year and has since added Time Warner and Verizon. You'll need to provide the minimum amount of information required by that service provider, which is typically name, address and account number. "When a customer signs up to cancel with our service, we generate a letter and mail it on their behalf to their local Comcast branch," explains co-founder Eli Pollak. "It's a fully automated process."

    However, it's not automated on Comcast's side, Pollak explains, so it can take five to 10 business days for them to process. And if you're still under contract, then AirPaper's process won't help you avoid early termination fees.

    Should You Enlist One of These Company's Help?

    That depends on whether you have the time and motivation to do it yourself. While many people dread negotiating, Stuart Diamond, author of the best-selling book on negotiation "Getting More," says it's easier than we think. "[For] small things like phone company discounts, it's probably better to do it yourself," he says. "Sit down, figure out your arguments and try to make a human connection."
    Instead of threatening to switch providers (which may not even be an option in some markets), Diamond recommends asking if they've ever given a discount to other customers and under what circumstances. "If you can find a precedent, a big company will usually say OK," he says.

    Another strategy is to reference the language on the company's website. "These companies all have website that promise good customer service, and people hate to contradict themselves," says Diamond, who also teaches a popular course on negotiation at University of Pennsylvania's Wharton School of Business. "Just reference their own standards."

    If all else fails and you're not getting anywhere with one representative, "you can always call back and get somebody else," Diamond points out.

    Some customers first try negotiating themselves and then enlist BillCutterz to see if they can increase their savings, Alcala says. "Since we do this every day, our savings experts have been trained and they know what to say, who to say it to," she says. "Some people are good negotiators so they can get similar to what we get. Or we can call back and get $20 or $30 off [a month], which is a pretty big difference for most people."

    Ben Kurland says they've boiled it down to a science with each provider. "We've figured out the right people to talk to and when to talk to them," he says. (Pro tip: Representatives tend to field fewer calls between 9 a.m. and 11 a.m., according to Ben Kurland, so that's a good time to call when they're less frazzled.)

    Negotiating yourself means you'll get to pocket the entire discount without sharing anything with an outside company. But if you put it off or never enlist the help of a third party, then you're likely leaving money on the table every month - and that won't do your wallet any favors.

    Susan Johnston Taylor contributes to the money section of USNews.com. Her articles on business and personal finance have also appeared in or on The Boston Globe, Learnvest.com, Entrepreneur.com and FastCompany.com. You can find her on Twitter @UrbanMuseWriter.

     

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    Three jigsaw pieces bronze silver and gold as a podium concept of winning
    Alamy


    Health insurance companies are increasingly adding the metal plans to the names of the plans, which can add to the confusion of which option to choose.

    Since 2014, all the health insurance plans being offered are now designated by a metal level -- platinum, gold, silver or bronze. The names of the metal levels are intended to be a shortcut on how much a consumer will pay for their coverage. Figuring out what they mean is crucial to all consumers, not just ones who are receiving subsidies.

    Metal levels provide a guide to the amount of cost sharing consumers will be paying for all plans. Cost sharing is the amount you pay for deductibles, co-pays or co-insurance, said Nate Purpura, vice president of consumer affairs at eHealth.com, an online health insurance exchange based in Mountain View, California.

    Choosing a higher metal such as gold or platinum means the out of pocket costs at a doctor's or hospital visit will be less. The silver and bronze plans, which are the lowest metal plans, "tend to have higher cost sharing" and consumers will have to spend more money on deductibles and co-pays, he said.
    The amount of the premiums you pay each month increase as you go up the metal level ladder, but the amount of the cost sharing declines.

    The metal plans were created to differentiate between the amount of cost sharing or actuarial value for each option -- bronze plans cover the least amount at 60 percent of a person's medical costs while silver plans covers 70 percent. As the names imply, the more precious the metal, the more coverage it provides -- with gold plans covering 80 percent and platinum covering 90 percent of the costs.

    "The actuarial value breaks out what percent of costs are paid by the insurer or by the consumer so silver plans have an actuarial value of 70 percent," said Theresa Stenger, an account manager for Trion Group, a King of Prussia, Pennsylvania-based employee benefits marketplace company. "For every dollar spent on health care expenses, the insurer pays 70 cents and the member would pay the 30-cent difference through their deductibles, co-pays and co-insurance."

    Factors to Examine ...

    All the metal plans have their pros and cons, and examining them in a simple fashion can help the consumer determine which one works best for him.

    Gen-Xers and millennials who have no health issues and rarely go to the doctor might opt for a bronze plan, said Purpura. Make sure you can pay the deductible in case of an accident and maximum out of pocket amounts.

    Consumers who take prescription drugs on a regular basis or have other ailments like diabetes should consider buying a silver, gold or platinum level plan. Although you pay more in your premium each month, that money could be "more than made up for in the money you'll save when you get medical care over the course of the year," he said.

    Other factors are equally important such as your doctor, hospital network and prescription drugs, so don't overlook them.

    Consumers should calculate how much they can afford to pay not only the monthly premium, but also the deductible over the course of a year.

    "The bronze plan will be less expensive from a premium perspective, but could the consumer afford to pay $6,600 out of pocket in one year should a medical issue arise?" Stenger said. "A consumer needs to consider what they can afford to pay in premium for better, more comprehensive coverage versus what they can afford to pay in premiums alone."

    A bronze plan sold by one insurer is not the same as a bronze plan sold by its competitor, so check out the details such as the cost of a prescription drug. If you rarely take medications, then a plan where you pay a slightly higher amount, such as $40, might make more sense than one where you pay nothing but has a more expensive premium or higher deductible.

    "You could have a bronze plan that pays for all prescriptions and nothing else," said Jack Hooper, CEO of Take Command Health, an online health insurance exchange based in Dallas. "Another company might make another bronze plan that covers no prescriptions, but pays for mental health or emergency care or whatever to reach the 60 percent level. You win when you can correctly discern which plan is skewed to cover your needs the best."

    Receiving Subsidies ...

    The subsidies make all plans more affordable, so consumers who receive them tend to buy plans which are higher up the metal level ladder, Purpura said. People who receive subsidies are "most likely" to enroll in a silver plan while consumers not receiving them lean toward bronze plans.

    "The dollar value of your subsidies is tied to the so-called 'benchmark' plan in your area, which is always a silver plan," he said. "That means that the value of your subsidies relative to your premiums begins to diminish if you climb too far up the metal ladder."

     

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    Florida Daily Life
    Lynne Sladky/AP
    By SCOTT MAYEROWITZ

    NEW YORK -- American Airlines (AAL) is changing its frequent flier program, becoming the latest carrier to have passengers earn miles based on how much they spend rather than how far they fly.

    The move announced Tuesday follows similar changes by Delta Air Lines (DAL) and United Airlines (UAL) and benefits business travelers who purchase expensive, last-minute tickets.

    The Fort Worth, Texas-based airline also tweaked its reward chart, effective for trips booked after March 22. A domestic roundtrip award ticket remains 25,000 miles but flights from the U.S. to Canada and Alaska will go up to 30,000 miles roundtrip. Off-peak flights to Hawaii also become more expensive at 40,000 miles instead of 35,000 miles but peak flights remain 45,000 miles. Some long-haul flights to South America, Europe and Asia are increasing, too.

    The biggest change domestically is the introduction of new 15,000 mile roundtrip awards for short flights of 500 miles or less.

    American spokesman Casey Norton said the most-popular awards aren't changing. At least 75 percent of the award tickets booked wouldn't cost more under the new system.

    But it will likely be harder for those infrequent travelers to earn miles.

    Under the current system, a non-elite member of American's loyalty program flying roundtrip between New York and Dallas would earn 2,778 miles. Starting in the second half of 2016, that same passenger would earn 5 miles for each dollar of airfare -- excluding government taxes and fees -- they spend.

    So a passenger flying on deeply discounted $148.20 roundtrip advance-purchase ticket ($111.63 base fare plus $36.57 in taxes) would only lose out, netting only 558 miles. But somebody buying a last-second $1,174.20 ticket on that same route ($1,066.04 base fare plus $108.16 in taxes) would come out ahead by earnings 5,330 miles.

    Elite fliers would earn seven, eight or 11 miles a dollar based on their status tier, similar to Delta and United's programs.

    American had held off making any changes to its program until it finished its merger with US Airways. The new combined airline recently unified its reservation systems -- the hardest part of any merger -- and is now moving on to make other changes.

     

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    FILE - In this Wednesday, March 25, 2015, file photo, apartment buildings under construction are seen, in Maitland, Fla., a suburb of Orlando. The Commerce Department reports on October U.S. home construction Wednesday, Nov. 18, 2015. (AP Photo/John Raoux, File)
    John Raoux/APApartment buildings under construction in Maitland, Fla.
    By Lucia Mutikani

    WASHINGTON -- U.S. housing starts in October fell to a seven-month low, weighed down by a steep decline in the construction of multifamily homes, but a surge in building permits suggested the housing market remained on solid ground.

    While the drop in groundbreaking activity reported Wednesday by the Commerce Department implied a moderation in residential investment early in the fourth quarter, it did little to change the view that the Federal Reserve would hike interest rates next month.

    "Overall, fundamentals for the sector remain solid. Household formation is rising, demand for new homes is outstripping supply, and homebuilder confidence remains near its highest level in a decade," said Michelle Girard, chief economist at RBS in Stamford, Connecticut.

    Groundbreaking dropped 11 percent to a seasonally adjusted annual pace of 1.06 million units last month, the lowest level since March, the Commerce Department said. October marked the seventh straight month that starts remained above 1 million units, the longest stretch since 2007. Building permits increased 4.1 percent to a 1.15 million-unit rate.

    Rapidly rising household formation, mostly driven by young adults leaving their parental homes and a strengthening labor market, is supporting the housing sector.

    Highlighting the housing market's underlying strength, a second report from the Mortgage Bankers Association showed applications for loans to purchase homes jumped 6.2 percent during the week ended Nov. 13 from a week earlier.

    In the wake of the soft October housing numbers, Barclays trimmed its fourth-quarter gross domestic product estimate by one-tenth of a percentage point to a 2.2 percent annual rate.

    Housing has contributed to GDP growth in each of the last six quarters, adding 0.2 percentage point to the third-quarter's 1.5 percent growth pace.

    "Homebuilding may not keep the Fed from 'liftoff' but it will be their biggest concern. When Fed officials say they want to see more investment spending this recovery, they really mean residential housing construction," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

    Minutes of the Fed policy-setting committee's Oct. 27-28 meeting showed officials rallied behind a possible December increase in the U.S. central bank's benchmark overnight interest rate.

    U.S. stock markets were trading higher, with the S&P homebuilding index rising 2.15 percent. D.R. Horton (DRI), the largest U.S. homebuilder, gained 1.69 percent. Lennar (LEN), the nation's second-largest homebuilder, advanced 2.22 percent.

    The dollar was flat against a basket of currencies. Prices for longer-dated U.S. government debt pared their losses.

    Land Labor, Shortages

    Economists had forecast housing starts dropping to only a 1.16 million-unit pace last month. Many viewed the weakness in October as being related to land and labor shortages, constraints that have been flagged by homebuilders.

    "Structural issues including a shortfall in immigrant labor are inhibiting construction. The supply shortage in the single-family market is not likely to be alleviated any time soon," said David Nice, an economist at Mesirow Financial in Chicago.

    Groundbreaking on single-family home projects, the largest segment of the housing market, fell 2.4 percent to a 722,000-unit pace in October. Single-family starts were pulled down by a 6.9 percent plunge in groundbreaking activity in the South, where most homebuilding takes place. Single-family starts rose in the Northeast, the Midwest and the West.

    Starts for the volatile multifamily segment plunged 25.1 percent to a 338,000-unit pace.

    Single-family building permits rose 2.4 percent last month to their highest level since December 2007. Single-family permits in the South also hit their highest level since December 2007. Multifamily building permits increased 6.8 percent.

    "The October permit requests were above the starts number, and for the past three months permits have been running a little ahead of the building pace, so don't be surprised if housing activity rebounds solidly in November," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

     

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    Build Up To England v France Football Friendly
    Ben Pruchnie/Getty Images


    What should travelers expect in the wake of terrorist attacks such as those that shocked Paris last week?
    Time will make the scars easier to bear, but the mood in Paris and the logistics for travelers heading there will change for the foreseeable future. After 9/11, Americans eventually began to look at airplanes almost the same way again, and sooner or later Parisians, too, will return to their cafes and concert halls with the most of their famous ease and enjoyment of life.

    But one look at the Transportation Security Administration shows how impossible it is for a generation to completely forget a major act of terror.

    In the short term life will change and travelers to France should prepare to visit a conflict zone. Signs will show up, first and foremost on the streets. For the foreseeable future the City of Light is under siege and will crawl with heavily armed police. Although trains (metro and national) are running as normal and taxis have not left the streets, build in extra time and prepare for checkpoints and bag searches.

    It's also important for travelers to understand the reason cities militarize in the wake of a terrorist attack. Many people treat it as security theater, soldiers posturing against large guns when the attack has already happened.

    Unfortunately, said Roger Cressey, a former member of the National Security Council and a partner with Liberty Group Ventures, cops have to treat the possibility of multiple attacks as an all-too-realistic possibility. In many ways the wake of an attack, with a city focused on tending to its wounded and burying the dead, would be the perfect time for a follow up or copycat.

    Law enforcement doesn't have the luxury of making the assumption that there won't be additional attacks.

    "Law enforcement doesn't have the luxury of making the assumption that there won't be additional attacks," he said. "I mean, can you imagine the first politician to go after a commissioner of the police who said, 'Oh yeah I, thought this was one and done ...'?"

    He added that it's important for authorities to ignore the people who are dismissive of some of these steps. "They're not the people that law enforcement is worried about," he said." It's more when you don't have specific information about specific individuals and their intent you have to cast a very broad net."

    In fact, life after an attack moves more slowly in general, and by design. Lines, checkpoints, holdups all allow law enforcement to buy time, slow down and process threats.

    For visitors and residents of Paris, and likely many other French cities, this will create both inconvenience and costs. While both Charles de Gaulle and Orly airports are open, the airports have warned travelers to expect delays due to heightened security.

    Many airlines are allowing passengers until Nov. 22 to change itineraries into or out of Paris at no charge.

    Even as they create problems, checkpoints exist because they work. Random checks create an unpredictable obstacle for terrorists, who depend upon dependability to pull off their attacks. Even the possibility of a bag search at the metro station is enough to force an attacker to choose a new target.

    "It's akin to the TSA," said Kiersten Todt, president of Liberty Group Ventures and a former congressional staff member who helped develop the Department of Homeland Security. "You're going to go where you have the least amount of pushback and resistance."Even when an attack continues, checkpoints tend to minimize and contain the violence.

    "If you look at where the least effective attempt was in Paris, it was the stadium," Todt said, speaking of where attackers had to detonate their bombs prematurely due to security.

    Perhaps the biggest challenge to responding after an attack is dealing with the unknown. Unlike on television, there is no confession against the clock, rarely any such thing as perfect knowledge. Instead, law enforcement makes the best guesses it can and tries to secure the most vulnerable targets.

    That will mean greater security outside of landmarks, tourist attractions and transportation hubs, which all currently remain open.

    Watching armed soldiers patrol the streets is a world bending feeling for many westerners. Police and soldiers carrying assault rifles blend poorly into the background of our lives and, no matter how official their capacity, it's almost impossible even in a romantic city to walk by someone equipped for the battle and not feel a sense of menace.

    Even if he's on our side, it seems to scream that the fight has come home. It's darkly ironic, then, that those soldiers serve exactly the opposite purpose.

    If the first goal of security in a conflict or post-conflict zone is to prevent another attack, Todt and Cressey said, the second is to help civilians -- both city denizens and visitors -- regain a sense of normalcy. Heavy security in the streets may seem intimidating, but they also provide some sense of reassurance that it's safe for people to leave their homes and return to public spaces.

    "You don't want that type of environment two, three days after an event," Todt said. "The appearance of safety and security [is] psychologically very important for the citizens."

    Traveling through a conflict zone requires extra care, time and expense. However, Paris isn't a conflict zone. It's a city getting back up on its feet.

    Visiting it will incur delays, hassle and probably some extra expense. Go anyway.

     

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    Janet Yellen Speaks At Monetary Policy Implementation Conference
    Andrew Harrer/Bloomberg via Getty Images Federal Reserve Chair Janet Yellen
    By Jonathan Spicer and Rodrigo Campos

    NEW YORK -- Federal Reserve officials Wednesday continued to flag December as a likely time for interest rates to rise after seven years near zero, with two expressing confidence they will be able to pull off a rate hike smoothly despite fears of an abrupt market reaction.

    Investors reacted by increasing the odds for a rate increase next month to 72 percent, from 64 percent Tuesday, based on interest rate futures prices.

    Cleveland Fed President Loretta Mester repeated her position that the U.S. economy is now strong enough to absorb a modest policy tightening. Atlanta Fed President Dennis Lockhart, sitting alongside her on a panel in New York, said global financial markets have settled since the August turmoil that caused the U.S. central bank to delay raising rates.

    I am now reasonably satisfied the situation has settled down ... So I am comfortable with moving off zero soon.

    "I am now reasonably satisfied the situation has settled down ... So I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions," Lockhart told a conference of bankers, traders and regulators.

    "I believe it will soon be appropriate to begin a new policy phase," he said, adding he will monitor economic data between now and a meeting on Dec. 15-16, for which he has a vote on policy. Mester regains a vote next year under a rotation.

    Sentiment for a December hike took firm hold at the Fed's October 27-28 policy meeting, according to meeting minutes released Wednesday that showed a solid core of U.S. central bankers poised for liftoff.

    The Fed's October statement helped convince skeptical markets that a rate hike may finally be imminent after several years of near zero rates. But the October session also saw central bankers begin grappling with longer-term issues that may be relevant to the pace of subsequent rate hikes, including whether the U.S. economy's lower long-term potential means low interest rates will become a permanent norm.

    For now, however, Fed officials seem confident that the central bank will meet its twin goals of full employment and stable two percent inflation.

    Rob Kaplan, the Fed's newest policymaker, declined to use his first public appearance as president of the Dallas Fed to comment directly on the timing of a rate hike, but expressed confidence that inflation will rise back to the Fed's goal over the medium term. The Fed has said it needs exactly that confidence before raising rates.

    Once rate hikes start, he said, the Fed will reassess conditions at each meeting and will pause further rate hikes if needed.

    The comments were the latest in a string of communications from Fed officials meant to prepare global markets for the first U.S. rate hike in nearly a decade. The policy change is expected to continue pushing the U.S. dollar higher, pulling capital from emerging markets and elsewhere towards rising U.S. rates.

    'Huge Surprise'

    New York Fed President William Dudley, whose branch of the central bank will use a handful of new levers to wrench rates up from near zero, told the New York conference he does not expect a "huge surprise" or major market reaction to a hike in part because it has been so loudly telegraphed.

    Trillions of dollars of reserves parked at banks and worries that bond markets are less liquid and stable than in the past have added to concerns that deep volatility could greet the Fed rate hike.

    Lockhart said he was "very confident" in the new tools and noted that the big focus now was deciding whether to make the policy change next month.

    He said that any lingering concerns about U.S. labor market strength have been satisfied for a rate hike. Inflation he said was less clear, but he expects prices to rise as the downward pressure from a strengthening dollar and falling oil prices fades.

    "A key point regarding inflation is that conditions have not been deteriorating, just hanging below target," said Lockhart, seen as a centrist among the Fed's 17 policymakers. "On balance for me the data have been encouraging and affirm that the economy has been growing at a moderate pace."

    -Ann Saphir in Houston and Howard Schneider in Washington contributed reporting.

     

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    Federal Reserve Yellen
    Andrew Harnik/APFederal Reserve Chair Janet Yellen
    By Howard Schneider and Jason Lange

    WASHINGTON -- A solid core of Federal Reserve officials rallied behind a possible December rate hike at the central bank's last policy meeting, but central bankers also debated evidence the U.S. economy's long-term potential may have permanently shifted lower.

    After a summer and early fall that saw the Fed rattled by U.S. market volatility and a sell-off in China, "most" participants felt conditions for a rate hike "could well be met by the time of the next meeting," minutes of the Fed's Oct. 27-28 meeting released on Wednesday said.

    The decision was made to make an unusually direct reference in their post-meeting statement to a possible December rate hike, with only "a couple" of members expressing concerns about setting too strong an expectation of action, according to the minutes. Staff outlined how the Fed had potentially fallen behind in communicating its intentions, with markets pushing expectations of an initial rate hike into next year.

    The U.S. financial system appeared to have weathered the turbulence in global financial markets without any sign of systemic stress.

    The language in the October statement drew those expectations quickly back to December.

    "The U.S. financial system appeared to have weathered the turbulence in global financial markets without any sign of systemic stress," the minutes said. "Most participants saw the downside risks arising from economic and financial developments abroad as having diminished and judged the risks to the outlook for domestic economic activity and the labor market to be nearly balanced."

    But despite the faith in the near-term outlook, the Fed also debated what could become a core concern as it enters its first policy tightening cycle in a decade -- the underlying potential of the U.S. economy.

    The debate took the form of a discussion of the equilibrium real interest rate -- the policy rate, net of inflation, that would be consistent with full employment and the Fed's 2 percent inflation goal. Central to many macroeconomic models, the estimated equilibrium rate forms a barometer of sorts for how far current rates are from "normal," and how much stimulus the central bank has built into the system.

    According to staff estimates, the equilibrium rate likely fell below zero during the crisis, has only recovered a bit, and is "close to zero currently."

    For the Fed that may mean little room to maneuver if it wants to avoid tightening financial conditions too quickly, and may mean that it will never get too far from the zero lower bound.

    The concern is serious enough that "several" Fed officials felt it would be "prudent" to plan for other ways to stimulate the economy if low rates become permanently embedded.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Sinead Carew

    NEW YORK -- U.S. stocks closed higher Wednesday and investors appeared positively inclined toward higher rates after minutes from the Federal Reserve October meeting showed a solid core of officials rallied behind a possible December rate hike.

    Central bankers at the October policy meeting also debated evidence the U.S. economy's long-term potential may have permanently shifted lower.

    The three major indexes added to earlier gains after the 2:00 p.m. Eastern time release and buying accelerated ahead of the close.

    I think the market is ready and comfortable for an increasing Fed funds rate.

    "I think the market is ready and comfortable for an increasing Fed funds rate," said Alan Rechtschaffen, portfolio manager at UBS Wealth Management Americas in New York. "We just have to turn this aircraft carrier around, get out of this zombie-like economy which is being fed on an elixir of low interest rates and get to a process of normalization."

    The Dow Jones industrial average (^DJI) rose 247.66 points, or 1.4 percent, to 17,737.16, the Standard & Poor's 500 index (^GSPC) gained 33.14 points, or 1.6 percent, to 2,083.58 and the Nasdaq composite (^IXIC) added 89.19 points, or 1.8 percent, to 5,075.20.

    Investors widely expect the central bank to raise rates in December, but remain uncertain about the magnitude of the increase and the pace of further hikes.

    While stocks often sell off on the prospect of a rate hike, which would raise borrowing costs, many investors are now focusing on a hike as a positive reading for the economy.

    "It sounds pretty hawkish to me, that they want to raise rates in December," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. "That should be a confidence-boosting thing. That means they're more confident in our economy now."

    Apple (AAPL) shares rose 3.2 percent at $117.29 after Goldman Sachs (GS) added the iPhone-maker to its "conviction buy" list, saying it sees potential for the stock gaining as much as 43 percent from current levels.

    The stock provided the biggest boost to the three major indexes.

    Movers and Shakers

    All 10 S&P sectors closed higher, led by a 2-percent rise in health care, followed by a 1.8-percent rise for the financial sector, which would benefit from higher rates.

    Qualcomm and Target were the biggest drags on the S&P. Qualcomm (QCOM) fell 9.4 percent after a South Korean regulator alleged it violated competition laws.

    Target (TGT) fell 4.3 percent after warning it will miss its fiscal-year forecast for online sales growth.

    Data released Wednesday showed housing starts fell to a seven-month low, but a surge in building permits suggested the housing market remained on solid ground.

    NYSE advancing issues outnumbered decliners 2,371 to 697, for a 3.40-to-1 ratio; on the Nasdaq, 1,936 issues rose and 920 fell, for a 2.10-to-1 ratio favoring advancers.

    The S&P 500 posted 19 new 52-week highs and 7 lows; the Nasdaq recorded 55 new highs and 116 lows. About 7.2 billion shares changed hands on U.S. exchanges, compared with the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

    -Chuck Mikolajczak in New York and Abhiram Nandakumar in Bangalore, India contributed reporting.

    What to watch Thursday:
    • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
    • Freddie Mac, the mortgage company, releases weekly mortgage rates at 10 a.m.
    Earnings Season
    These selected companies are scheduled to report quarterly financial results.
    • Best Buy (BBY)
    • Gap (GPS)
    • Intuit (INTU)
    • Ross Stores (ROST)
    • J.M. Smucker Co. (SJM)
    • Williams-Sonoma (WSM)

     

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    From Big Dreams to Owning a Small Business

    Ten years ago, Diane and John MacPherson were at a crossroads in their careers. After careful thought and planning, they decided to start their own small business and open a bed and breakfast across the country. Here's how they made their dream a reality.

    The MacPhersons were living in Laguna Beach, California, and working "typical corporate jobs" when they realized they were just living for the weekends. As passionate bike riders and foodies, they worked hard on a business plan to mesh everything they loved to do. Soon they were owners of Foster Harris House in Washington, Virginia.

    The couple learned several lessons on their journey, specifically while considering the recession and their newborn baby. "One of the most important [lessons] was to start off with a rainy day fund, as opposed to planning on building a rainy day fund," John says.

    In the first few years, the MacPhersons quickly saw a trend of seasonal dips in business, which left them in the red for a few months. It's typical for B&B owners to experience this, but the times were still scary for the budget-conscious couple. To balance their profit and expenditures, they astutely planned to make major business expenses during peak revenue times.

    Growing Foster Harris House to pay for their retirement and child's education took a little more creativity. "We added a dinner service, we started doing the cycling tours and we published a cookbook," Diane explains. "And we're going to continue to find ways to make the business bigger and better so that we can eventually retire some day."

    While owning your own business isn't easy, the couple advises hopefuls to hang on to their aspirations, especially when times are tough. Diane adds, "If you don't stick with your dream and put 100 percent into it, you'll never know if you can make it or not."

     

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