It's a fact: Most people don't have to face the "problems" that come from getting too rich too young. Which begs the question of when and how to start some financial planning -- and possibly becoming wealthy a little later in life.
The easiest and best answer is start now, said certified financial planner Geri Eisenman Pell, CEO of Pell Wealth Partners.
"You're never really to young to start or too late to start figuring out when you want to be financially independent and when to create that road map to retirement," she said, adding that everyone needs a financial plan and a financial planner to help craft it."You need to figure out what your goals are, how you're going to achieve your goals, and what you're going to do on a daily, monthly [and] annual basis," Pell said.
Key components to consider include a Roth individual retirement account, 401(k) plan, cash reserves and education savings, which Pell called the "foundation blocks" of a financial plan.
Some retirement vehicles can be considered "gifts," thanks to "fabulous" financial perks, said Pell.
"If you put money in a Roth IRA, you don't get a tax deduction right now, but all of the money grows completely tax-free and then you take it out tax-free," she said. Another gift? The matching contribution -- sometimes dollar for dollar, up to a certain percentage of savings -- that some companies offer employees participating in their 401(k) plans. That's what Pell calls "free money.
"Keep in mind that "doing something is always better than doing nothing," she said. "Even putting away small amounts of money will start to build the psychological habit of getting excited about saving and investing."
Still have doubts? Don't feel ready or able to save?
"You need to ask yourself the question: In five years, are you going to wish that you started [a financial plan]?" said Pell, She explained that she used to have two file cabinets in her office -- one labeled "rich" and the other "filthy rich." "I used to ask clients: 'In the future, which one do you want me to put you in?' "
At checkout registers in department stores across the country, you can expect to receive a smile and a sales pitch. Well, at least a sales pitch. Store credit cards are moneymakers for businesses, and you can expect clerks to dangle a nice discount in front of you in the hope you'll apply.
The discount on store merchandise and other rewards are often tempting -- and many of us take the bait -- but are store credit cards a good deal?
Pros of store credit cards
Store credit cards aren't all bad. In fact, they can come with some nice benefits. As we see it, there are four major pros for getting a store credit card.
Discounts: Not only do you get an initial 10 percent to 20 percent discount when you sign up, you may also be in line to receive extra discounts all year long. Store credit card holders may be the first to receive special coupons or gain access to exclusive sales events as a reward for their loyalty.
Flexibility: Some, but not all, store credit cards are affiliated with one of the major credit card companies. That means your department store card can also be used for purchases elsewhere as a regular Visa, MasterCard or American Express card. As a bonus, depending on the retailer's program, you may even earn rewards points to be redeemed as future discounts at the store.
Credit benefits: If your credit score could use some polishing, a store credit card may be able to help. Consistently using and paying off the card will help establish a pattern of good credit habits that can, in turn, boost your score.
Financing options: Finally, some store credit cards can be used to obtain zero percent financing offers. Stores may give you 18 months or more interest-free to pay off a major purchase made with their credit card.
Cons of Store Credit Cards
While there are definitely some nice perks attached to store credit cards, all is not rosy. Here's a look at some of the negatives attached to these accounts.
High interest: By far, the biggest negative associated with store credit cards is their interest rate. A recent CreditCards.com survey showed the average APR on America's biggest retail-branded credit cards had increased to 23.43 percent, far higher than the average for all credit cards (15 percent). Some have APRs climbing to almost 30 percent. And remember that zero percent financing we discussed? If you don't pay off your purchase within the allotted time, many store cards go back and apply the interest retroactively. So let's say you had 18 months to pay off a $2,000 purchase, but you still had a $200 balance at the end of the financing period. The store will then tack on 18 months' worth of interest to your balance. Yikes!
Limited use: Some store cards may offer the same flexibility as a regular credit card, but others can only be used at that particular retailer. In addition, you may have a very low spending limit. Both make it questionable whether the cards are a good deal, particularly when you consider the ding to your credit score that we're going to talk about next.
Credit damage: Your credit score gets dinged slightly every time you have it pulled for a card application, and your score will also suffer if your card balances are too high. The damage can be felt in other ways. When reviewing loan applications, creditors not only consider how much debt you have but also how much existing credit is available to you. If you already have enough credit to go on a $20,000 spending bender, lenders might be hesitant to give you access to more cash.
Temptation to spend: Another negative we see with store cards is the temptation to buy more. Stores aren't giving out cards and coupons to be nice; it's a strategic business decision. They hope that by giving you a few perks, you'll come to their store and blow your budget once you see all the great things they have for sale.
Better deals elsewhere: As Stacy mentioned in the video, there are credit cards offering sign-up bonuses good for a free plane ticket, a reward that could be a better deal than 15 percent off one day's purchases. So when you're offering up your signature, be sure you're getting as much for it as possible. (Check out: How to Play the Credit Card Rewards Game, and Win.)
The Bottom Line
So back to the original question: Should you apply for a store credit card? In the past, we've told you the answer is no.
However, if you there's a store you shop at regularly and a card gets you an extra discount, it may make sense. But be sure you follow these two rules:
Buy only what you would purchase if you didn't have the card. No extra trips just because there is a "cardmember only" sale.
Pay off your balance each month.
Still, you might want to check out the other credit cards on the market to see if you can find one that offers better rewards with a lower interest rate. You can get all the details on some of the best deals in our credit card section.
Do you have a store credit card? What made you apply and do you regret the decision? Tell us in the comments below or on our Facebook page.
-Kari Huus contributed to this post.
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Stan Honda, AFP/Getty ImagesHurricanes can damage your finances along with your home.Extreme winter weather has already arrived in some parts of the country: Parts of California have seen snow and more is expected. Some meteorologists are calling for a cold, snowy winter from coast to coast, and that means it's time to get prepared.
According to tale of the ant and the grasshopper from Aesop's Fables, the wise ant stored up food during the warmer months in preparation for winter, while the lazy grasshopper would only sing in the summer and found himself starving and begging for food come winter. Although the predictable change of seasons may not cause you personally to break the bank -- unless it's the holiday season -- unexpected and severe weather emergencies can quickly leave you in a financial rut. In addition to severe cold, other weather emergencies such as thunderstorms, lightning, floods, hurricanes, tornadoes, extreme heat and drought can also pose major dangers to your health and bank account.
The National Oceanic and Atmospheric Administration and Federal Emergency Management Agency stress the importance of preparing for severe weather before it strikes. As a frugal shopper, the same strategy applies. Since controlling the weather isn't possible, focus on what you can control: your preparation and finances.
Here are some simple tips to help you save money:
1. Look into tax-free incentives. Find out if your state has any tax-free holidays for emergency supplies and equipment.
States such as Alabama, Louisiana and Virginia have severe weather, hurricane or emergency preparedness tax-free weekends. Visit your state's tax department website to see if there are any tax incentives offered in your area, as well as eligible items, which may include portable generators, batteries, cellphone batteries, fire extinguishers, flashlights, duct tape, first aid kits and more. Be aware that qualifying items vary by state and there may be price limits in place.
2. Stockpile non-perishables. Be sure to stock up your pantry with non-perishables by taking advantage of coupons and store promotions. Make sure you buy enough extra items to avoid the need to buy that item at full price before the next sale comes around. Using this strategy can help you gradually grow your emergency stockpile.
3. Save on water. Don't want to spend an arm and a leg on bottled water? Simply drink tap water. Studies have shown that tap water may actually have more health benefits than bottled water, contrary to public opinion. To store tap water in preparation for an emergency, use plastic juice containers after cleaning them.
If you still prefer to buy bottled water at the store, wait for sales and promotions on the big name brands and use manufacturer coupons. A different strategy is to simply go for the generic, store-brand water, which can save you a bundle compared to the expensive name-brand at full price. Be sure to compare the unit price among the different water products and packaging. You'll typically save more by buying a gallon of water than a pack of bottled waters.
4. Beat the mad dash to the store. Be sure to hit the grocery store before the masses. Once you catch wind about even the possibility of severe weather in the news, I recommend getting to the store quickly to grab any supplies that you direly need. You'll have more selection and a better chance of purchasing the least expensive option or brand before the shelves are bare. Do this as early as possible. If you find yourself without much lead time, only go out to the store if you have adequate time and there is not an immediate threat. In other words, don't drive out in the middle of a bad storm or leave your house during a tornado to grab a loaf of bread.
5. Build an emergency kit. Instead of buying an expensive, pre-assembled emergency kit, create your own by shopping for supplies you'd need in the event of a disaster. At the top of your list is water, at least one gallon of water per person per day, for both drinking and sanitation, as well as a minimum three-day supply of non-perishable food, including canned goods and shelf stable foods.
Make sure you have a flashlight, extra batteries, a first aid kit, moist towelettes, garbage bags, a battery-powered or hand-crank radio and other essential items your family will need in the case of an emergency. You can find a complete list of recommended supplies that should be included in a basic disaster supplies kit on ready.gov.
As one of my friends likes to say, "Proper planning prevents poor performance." This applies so well to emergencies and severe weather. To summarize: Have a plan, be the "ant" that stores up for the winter and unexpected storms and save money along the way.
Laura Harders is the founder of Beltway Bargain Mom, one of Washington, D.C.'s most popular sites for money-saving tips, finding the best deals and living a frugal lifestyle.
Daniel Acker/Bloomberg via Getty ImagesBy Nathan Layne
Sears Holdings (SHLD) reported a smaller quarterly loss Thursday as it slashed advertising and payroll costs, but the struggling retailer's sales continued to tumble, hurt by weak apparel demand.
The owner of the Sears department store and Kmart discount store chains said its net loss attributable to shareholders narrowed to $454 million in the third quarter ended on Oct. 31 from $548 million a year earlier.
Revenue at stores open more than a year fell 9.6 percent at Sears and 7.5 percent at Kmart. Apparel sales were sluggish at both chains, mirroring a trend at other retailers as unusually warm weather sapped demand for coats and sweaters.
Sears said total revenue fell 20 percent to $5.75 billion, due in part to store closings and the loss of sales from Canada on its consolidated accounts after it sold most of its stake in that business.
The company reported a cash level of $294 million, up slightly from a year ago but down from $1.8 billion in the previous quarter, when the sale of stores into a real estate investment trust boosted its coffers.
The cash drop reflects $936 million spent to repurchase debt, a move Sears said would lower its interest expenses and free up room to borrow more if needed. The company said it had $1.3 billion in immediately available liquid assets, and the resources to meet its financial obligations.
The adjusted loss before interest, tax, depreciation and special items narrowed to $280 million in the quarter from $296 million a year earlier. This was the company's fifth straight quarter of improvement.
Sears said it cut expenses by $207 million, mainly by reducing outlays for payroll and advertising.
But the slide in sales took a toll on gross margins, which decreased by 11 percent on a comparable basis.
Margins also suffered because rent payments accounted for a higher percentage of revenue. Sears, which is now paying rent at stores sold to the REIT, said it expected that situation to improve as it brings in other retailers as tenants in some locations.
NEW YORK -- Financial planner Barry Eckstein has heard a lot of extravagant spending stories. But when clients were chatting with him about the holidays a couple of years ago, he couldn't believe his ears.
The couple had bought a mink coat. Not just any mink coat, mind you -- a mink coat for the their precious little Yorkie.
"It was custom-made, white and cost a couple thousand dollars," said Eckstein, of Wantagh, New York. "My initial reaction was: 'Oh boy.' "
Canine couture might not be on everybody's shopping list for holiday gifts. But the Furry Furrier is just one end of a spectrum. For the rest of us, even when we know we shouldn't be spending so freely, we do it anyway. It is as if we turn our brains off in November, and then switch them back on in the New Year.
Indeed, nearly 4 in 10 people say they spend more money than expected for holiday gifts, according to a new shopping survey by credit agency Experian. That makes for a whopping $806 a person this holiday season, up from $758 last year.
To finance the spending flurry, 12 percent of people are planning to open up new credit cards for the holiday season -- and 9 percent predict that they will be paying off those charges late.
"The majority don't even have a holiday spending budget in place -- and it makes it very hard to plan if you don't have a budget," said Rod Griffin, Experian's director of public education.
"Tradition because people think, 'This is the way it's always been done, and there is no other way to do it,' " said Sellery. "And guilt because people feel they have to buy more and more things that nobody really needs."
Avoid the Madness
Since gift-giving is an exchange, you can help both sides avoid what Experian's Griffin calls "Dark January." Simply come to an agreement beforehand with the various friends and family members in your life about who will exchange gifts and a price threshold, and save everyone a ton of money in the process.
Otherwise you could fall into holiday horror stories like Brooklyn-based author and comedian Sara Benincasa. She was once given membership to an "incredibly posh" gym which cost around $3,000, she estimates.
"The person was not so subtly trying to tell me to lose weight," remembers Benincasa, author of the new book "DC Trip." "It felt like a pretty demeaning gift. Unsurprisingly I used the gym twice -- both times just to sit in the sauna."
To avoid similar disasters, remember that you have a choice in how your holidays are designed. Bruce Sellery, for instance, arrived at an elegant solution with his many siblings and cousins: They stopped giving gifts. This was the suggestion of his sister, a stressed-out mom of three. "She just said one year, 'Can we stop doing this?' It's been so great for everyone's stress reduction," he said.
Of course you do not have to go quite that far, and completely eliminate all gift-giving from your life. You can simply set an artificially low limit, and have a $5 gift-exchange among a group of friends or relatives, which are "hysterical," says Sellery. (His own contribution to his family's exchange one year: A collection of miniature soaps he acquired from luxury hotels.)
You can also call off the Holiday Arms Race by setting a hard cap: Agree that every family member only gives one gift to one person, in a Secret Santa-type exchange. Or take what you would have blown on gifts and select a charity together -- sponsoring a child in poverty overseas, for instance, whose story and progress you could follow together as a family.
A final tip, from planner Barry Eckstein: Set a budget and do all of your holiday saving for the set amount throughout the year, in a dedicated account. Then force yourself to stick to that amount. That will likely eliminate most big-ticket impulse purchases -- such as doggy mink coats.
(The writer is a Reuters contributor. The opinions expressed are his own.)
Ty Wright/Bloomberg via Getty ImagesBy Lucia Mutikani
WASHINGTON -- U.S. service sector activity slowed in November but remained at levels consistent with a steady pace of economic growth for the fourth quarter, a business survey showed Thursday.
Other data reported a small increase in first-time applications for unemployment benefits last week, but planned job cuts announced by companies in November were the fewest in 14 months.
With the labor market showing resilience, economists say it is almost certain the Federal Reserve will raise interest rates at the Dec. 15-16 meeting for the first time in nearly a decade.
It will take some pretty bad economic numbers for the Fed to pull back from the brink.
"It will take some pretty bad economic numbers for the Fed to pull back from the brink," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Fed Chair Janet Yellen told lawmakers Thursday that the central bank was close to lifting its key overnight interest rate from near zero. Yellen gave an upbeat view of the economy, saying "growth is likely to be sufficient over the next year or two to result in further improvement in the labor market."
The Institute for Supply Management said Thursday its index of non-manufacturing activity fell to 55.9 last month from a reading of 59.1 in October. A reading above 50 indicates expansion in the service sector.
The new orders index dropped fell 4.5 points to 57.5 last month. There were also declines in measures of service sector employment, backlogs and export orders. Deliveries are slowing and inventories are still considered high which could constrain order growth in the months ahead.
Twelve service industries, including real estate, retail, transportation and warehousing, finance and insurance and public administration reported growth last month. The six industries reporting contraction included wholesale trade, utilities and agriculture.
The report came after news this week from ISM that the manufacturing sector contracted in November for the first time in three years. Still, economists said the soft service sector survey didn't signal a slowdown in gross domestic product growth from the third quarter's 2.1 percent annual rate.
"Even after this drop off, the latest figure was still consistent with real GDP growth of around 2.25 percent," said Daniel Silver, an economist at J.P. Morgan in New York.
There was little market reaction to the economic data, but the U.S. dollar dropped to a near one-month low against the euro after the European Central Bank unveiled a smaller interest rate cut and bond purchases than investors had anticipated. Stocks and Treasury debt prices were trading lower.
Labor Market Resilience
In second report, the Labor Department said initial claims for state unemployment benefits increased 9,000 to a seasonally adjusted 269,000 in the week ended Nov. 28.
It was the 39th straight week that claims held below 300,000, which is normally associated with a healthy labor market. Claims are near levels last seen in 1973 and there is little room for further declines as the labor market normalizes.
The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, fell 1,750 to 269,250 last week.
In a third report, global outplacement consultancy Challenger, Gray & Christmas said U.S.-based companies announced 30,953 job cuts in November, the smallest amount since September 2014 and down 39 percent from October. There were 1,355 oil-related job cuts, the fewest since June.
Last week's jobless claims have no bearing on Friday's Labor Department employment report for November as they fall outside the survey period. According to a Reuters survey of economists, nonfarm payrolls likely increased 200,000 last month after rising 271,000 in October. The unemployment rate is forecast unchanged at a 7½-year low of 5 percent.
"The claims data suggest that the trend in employment growth remains more than strong enough to keep the unemployment rate trending down over time," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.
In a fourth report, the Commerce Department said new orders for manufactured goods increased 1.5 percent after two straight months of declines, on rising demand for transportation equipment and a range of other goods.
The business isn't attractive, "given the difficulties successive managers have had in turning it around," the Journal reported Thursday, citing a person familiar with the matter.
There is almost certainly no buyer who would realistically retain the existing management.
"There is almost certainly no buyer who would realistically retain the existing management," Pivotal Research Group analyst Brian Wieser said. He also said that U.S.-centric digital advertising had evidently not been Alibaba's focus.
Yahoo's board, which includes co-founder David Filo, Walmart Stores (WMT) former Chief Executive Officer H. Lee Scott Jr. and Charles Schwab (SCHW) Chairman Charles R. Schwab, is also expected to discuss the planned spinoff of Yahoo's 15 percent stake in Alibaba.
Alibaba will be interested in buying back its shares from Yahoo only at a steep discount, the Journal said, citing the person.
Yahoo shareholders could end up paying billions in taxes if the U.S. Internal Revenue Service deems the spinoff taxable. The company had sought a private letter ruling from the IRS to confirm if the transaction would result in a tax obligation, but the IRS denied the request in September.
Activist investor Starboard Value said Yahoo's board should "immediately abandon" the spinoff and begin a "competitive process to sell its valuable core business at the highest price possible."
The board is "seriously considering" pausing on the spinoff until there is more clarity on the tax implications, Re/code reported, citing sources.
Yahoo had earlier planned to complete the spinoff by the end of December, but the company said in October the transaction was now expected to close in January.
Alibaba and Yahoo were yet to respond to requests for comment.
Yahoo (YHOO) shares were down 1 percent at $35.25 in late morning trading. Alibaba (BABA) shares were down 1 percent at $84.07.
Nicholas Kamm, AFP/Getty ImagesFederal Reserve Chair Janet YellenBy MARTIN CRUTSINGER
WASHINGTON -- Federal Reserve Chair Janet Yellen told Congress Thursday that economic conditions appear to be improving enough for policymakers to raise interest rates when they meet in two weeks -- as long as there are no major shocks that undermine confidence.
Yellen said that even after the first rate hike, the Fed expects future rate increases will be at a gradual pace that will keep borrowing costs low for consumers and businesses.
In testimony before the Joint Economic Committee, Yellen warned that waiting an extended period of time to start raising rates would carry risks.
"Were the FOMC to delay the start ... for too long," she said, "we would likely end up having to tighten policy relatively abruptly to keep the economy from overshooting" the Fed's goals for unemployment and inflation.
"Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into a recession," Yellen said.
She also cited concerns by Fed critics that keeping rates exceptionally low for too long "could also encourage excessive risk taking and thus undermine financial stability."
Fed policymakers meet on Dec. 15-16. The Fed's key short-term rate has been at a record low near zero for the past seven years.
Many private economists are forecasting the first rate hike by the Federal Open Market Committee, the Fed's policy panel, will be a modest quarter-point move, followed by four more quarter-point moves over the next year.
"Between today and the next FOMC meeting, we will receive additional data that bear on the economic outlook. These data include a range of indicators regarding the labor market, inflation and economic activity," Yellen told the JEC. "When my colleagues and I meet, we will assess all of the available data and their implications for the economic outlook in making our decision."
The Labor Department will release its November employment report on Friday. Analysts believe the data will be key in determining whether the Fed boosts rates this month.
Asked about the upcoming unemployment report, Yellen said the Fed will be watching for "a continued solid trend of job creation" that would indicate the economy has good momentum going forward.
Yellen repeated past comments that she believed two key factors keeping inflation below the Fed's 2 percent target -- the rise in the value of the dollar and falling oil prices -- were likely to fade over time.
Strong Signal
Private economists said Yellen's remarks over the past two days sent a strong signal that the Fed is ready to start raising interest rates at its meeting this month.
Gus Faucher, senior economist at PNC, said he was looking for a rate hike "barring much weaker data over the next couple of weeks."
The Fed has left its target for the federal funds rate, the interest that banks charge on overnight loans, near zero since December 2008. It has used ultra-low borrowing costs as a way to stimulate economic activity and fight the worst recession since the Great Depression of the 1930s. The Fed has not raised the funds rate since June 2006.
Yellen said that the Fed currently anticipates that even after further improvements in the labor market and inflation, economic conditions are likely to warrant lower rates than normal "for some time."
She said that a Fed move to start raising rates will be a sign of "how far our economy has come in recovering from the effects of the financial crisis and the Great Recession. In that sense, it is a day that I expect we all are looking forward to."
Yellen spoke shortly after the European Central Bank announced that it was cutting a key interest rate and extending its stimulus program to enhance efforts to bolster the 19 European countries that use the euro currency. This action disappointed investors, who had been looking for stronger moves.
NEW YORK -- The S&P 500 suffered its biggest drop since late September on Thursday as the European Central Bank disappointed market hopes for greater stimulus.
The ECB move triggered a spike in the euro that caught investors by surprise, forcing them to shift positions that hit most asset classes. Bond prices dropped after the announcement.
At the same time, the CBOE Volatility index, the stock market's fear gauge, jumped 13.8 percent, closing at its highest since Nov. 17.
The biggest influence was the [ECB President Mario] Draghi talk this morning; it didn't satisfy the U.S. markets.
The ECB cut its deposit rate deeper into negative territory and extended its asset buys by six months, as expected. But some market participants had hoped for greater stimulus.
All 10 S&P 500 sectors fell in a second day of sharp losses for U.S. stocks. Health care ended down 2.2 percent, leading the day's decline in the S&P 500, followed by energy, down 2 percent.
"The biggest influence was the [ECB President Mario] Draghi talk this morning; it didn't satisfy the U.S. markets," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Yellen told lawmakers the U.S. central bank was close to lifting its overnight interest rate from near zero. She gave an upbeat view of the economy, saying "growth is likely to be sufficient over the next year or two to result in further improvement in the labor market." The Fed's next policy meeting is on Dec. 15-16.
The Dow Jones industrial average (^DJI) fell 252.01 points, or 1.4 percent, to 17,477.67, the Standard & Poor's 500 index (^GSPC) lost 29.89 points, or 1.4 percent, to 2,049.62 and the Nasdaq composite (^IXIC) dropped 85.70 points, or 1.7 percent, to 5,037.53.
The S&P 500 posted its biggest daily percentage decline since Sept. 28 and closed at its lowest since Nov. 13.
Some of the selling was related to leveraged funds that were likely forced to close positions as volatility spiked. According to Bank of America (BAC) research, these funds, which were heavily involved in the dramatic selloff in late August, have since returned to the level of leverage they had prior to that downturn.
Slow Week
Volume was elevated in S&P 500 index options expiring on Friday, particularly in put options that suggest people were hedging against the possibility of losses, said Henry Schwartz, president of options analytics firm Trade Alert, in New York.
"After a really slow week it does look like hedgers are taking some action today," he said.
Data released Thursday showed initial U.S. jobless claims for last week rose but remained at levels consistent with a strengthening labor market. Friday's employment report is expected to show the U.S. economy added 200,000 jobs in November.
Zafgen (ZFGN) shares were down 5.1 percent at $5.96 after the company said the U.S. Food and Drug Administration was putting on complete hold a late-stage study testing its experimental obesity drug.
Declining issues outnumbered advancing ones on the NYSE by 2,518 to 579, for a 4.35-to-1 ratio on the downside; on the Nasdaq, 2,159 issues fell and 674 advanced for a 3.20-to-1 ratio favoring decliners.
The S&P 500 posted 9 new 52-week highs and 26 new lows; the Nasdaq recorded 53 new highs and 78 new lows.
What to watch Friday:
At 8:30 a.m. Eastern time, the Labor Department releases employment data for November and the Commerce Department releases international trade data for October.
John Greim/LightRocket via Getty ImagesBy Kyle James
There's no arguing that Target has a loyal following among many shoppers. While the retail giant may not always have the lowest prices, it certainly attracts consumers happily willing to pay a little extra to avoid the crowded aisles of some other discounters.
But there are certain items which are almost always cheaper at Target (TGT) compared to other retailers. Here are eight such items that'll save you money on your next Target shopping trip.
1. 'Green' Cleaning Products
Not only has Target led the natural cleaning trend over the past few years, but they often do it at a price lower than the competition. For example, Target sells the 28-ounce bottle of Method All-Surface Cleaner for an affordable $2.99, while Walmart sells the same product for $5.49 and Amazon sells it for $8. Another great example is Green Works laundry detergent in the 90-ounce size; at Target you'll pay $11.99, while you'll pay $23.27 at Walmart and $19.21 at Amazon. You'll also find similar savings at Target on other popular natural cleaning brands, including J.R. Watkins, Honest and Seventh Generation.
2. Kids' Bedding and Decor
When buying bedding for your child's room, your wallet will likely benefit greatly from shopping at Target. You'll find steep savings on sheet and comforter sets, throw blankets and even decorative pillows. This is especially true when buying "character" bedding from Star Wars, Disney and Sesame Street. For example, you can purchase the popular Star Wars Classic Twin Sheet Set from Target for $19.79, while you'll have to pay $26.07 on Amazon. If you're shopping for a girl, you'll also save at Target, as you can buy the four-piece Disney Frozen bed set for $31.49 where you'll have to pay $36.97 at Walmart.
3. Photo Frames
When compared to the competition, Target is a great place to shop for picture frames and save money. While they easily beat the price at specialty stores like Michaels and Jo-Ann Fabric, they surprisingly also undercut the likes of Walmart and Amazon. For example, at Target you can buy 8x10 inch frames (set of two for $13.99, while you'll have to pay $19.97 at Walmart and $18.99 at Amazon.
The savings you'll find at Target aren't limited to the popular 8x10 size -- it's seen across all picture frame sizes and designs. Plus, they often have coupons available via their Cartwheel app on home items and decor that will bring the price down even further.
4. Beauty Items
Target is where you'll get the most bang for your buck when buying cosmetics and makeup. While prices are generally better at Target when compared to Amazon, Walmart and Macy's, the real savings comes in the gift card deals they offer. A current example is a free $5 Target gift card when you buy three L'Oreal products. When the gift card is factored into the price, Target easily beats the competition.
Other examples include a free $5 Target gift card with the purchase of three Aveeno items and buy one, get one for 50 percent off with all fragrances. Also, be sure to always check for printable Target coupons before you visit to ensure you get the lowest price on beauty items.
5. Name-Brand Baby Gear
Brands like Graco, Britax and Evenflo are often cheapest at Target. For example, Target currently sells the Graco Pack 'N Play Playard for $59.99 (color: Pasadena), while the cheapest color currently on Amazon is $69.97. The same can be said for the Evenflo High-Back Booster seat; you'll find it for $33.99 at Target and have to pay $39.98 at Amazon, $35.98 at Walmart and $39.99 at Babies R Us. It's always a smart idea to check pricing at Target before buying baby products, as you'll often find the lowest price.
6. Men's Deodorant
Target is a great place to save money on deodorant and anti-perspirant for men. For example, Target sells the two-pack of men's Old Spice High Endurance Deodorant for $3.97, while Walmart sells the same product for $5.97. Also, you can find a two-pack of Axe Phoenix Anti-Perspirant at Target for $6.29, compared to $7.37 at Walmart. I found similar savings on other popular brands like Gillette, Degree and Dove Men's Care as well.
For whatever reason, women's deodorant is cheaper across the board at Walmart and Amazon. But if you're a guy, or buying for one, purchase from Target and take advantage of the lower prices.
7. Tall Kitchen Bags
This one might seem a bit random, but kitchen trash bags -- the tall variety -- are 25 percent cheaper at Target compared to Walmart. Specifically, I'm talking about the store brand at each store. At Target, you can get the Up & Up brand in a 110 count box for $9.99, while you'll pay $12.52 for a box of only 100 bags of the Walmart brand. Both bags received strong customer reviews, making the Target brand a solid buy.
8. Wedding Registry Gifts
Because of the exclusive discounts they offer, wedding registry gifts are simply cheaper at Target. If the wedding couple registered at several stores and Target is one of them, always choose to shop with them and you'll save. For example, they currently have a discount code (WEDDING20) that is good for 20 percent off your $100 or more regular-priced wedding registry gift. So if you're buying the couple the KitchenAid Mixer they registered for, you'll only pay $200 instead of $250 -- a price that beats all of the major competition.
By the way, having been married for 15 years, I can honestly say that this mixer is the only gift we received that we still use today. It clearly falls under the category of quality items worth the price.
By knowing the items at Target that provide the most savings, you can plan your next trip accordingly and save money. Also, it's worth noting that most of the products listed above provide the same savings in-store as they do online. Happy savings.
(Note: Prices as of October.)
What items, if any, do you usually find cheaper at Target compared to other major retailers?
Are you considering converting your home's garage into a man cave? Before you permanently ditch parking and storage space in exchange for a testosterone-friendly getaway, you may want to consider this: your garage man cave project could hurt your home's value and make it harder to sell.
Turning your garage into a living space is one of four home improvement projects highlighted by MarketWatch that could end up sucking the value out of your home.
Homeowners need to think carefully before they get rid of their garage and turn it into a man cave, family room or extra bedroom, because it could make their home less attractive to many people, New York real estate agent Brendon DeSimone, author of the book "Next Generation Real Estate," told MarketWatch.
A recent survey by real estate investment and operating firm Crescent Communities found that 74 percent of homebuyers said having a garage is extremely or very important. If you still want to proceed with your garage project, consider leaving the garage doors on the outside so if you do sell your house, a buyer has the option to easily turn the space back into a garage, Michele Silverman Bedell, of New York-based Silversons Realty, told Marketwatch.
Here are three other home renovation projects that could dent the value of your home:
Removing one bedroom to make another bedroom (or room) bigger: Reducing the number of bedrooms in your house is a big no-no from a real estate standpoint. "When you start eliminating bedroom space, you've completely changed the comparable value of your home in the neighborhood," David Pekel, president of Pekel Construction and Remodeling, in Wauwatosa, Wisconsin, told MarketWatch. By reducing the number of bedrooms in your house, you've also reduced the number of potential homebuyers who would be interested in your home, despite how big another bedroom or living space is.
Removing closets: People want, and typically need, closets. Bedell said she had a client who removed the closet from their master bedroom and built a big master bath in the space. The result? The home was much harder to sell.
Wallpaper: Sure, wallpaper can really spruce up a room, but many people don't like it. Plus removing it can be difficult. I can attest to that. Every single room in my house had wallpaper circa 1979 -- think orange and avocado green flowers, silver trees and flocked brown and gold geometric patterns. My husband and I made the mistake of thinking it would be easy to remove. Every room we worked on was awful and time-consuming, and I will never purchase another house with wallpaper. Bedell said overdoing wallpaper or any other finish can deter potential homebuyers and hurt your home's resale value.
Of course, you shouldn't shy away from a home renovation project you really want just because it may hurt your home's value if you sell it. It's just something to be aware of. If you do decide to move forward with a potentially home-devaluing home improvement project, DeSimone recommends that you "do it in a way that you can put it back when you go to sell."
A few months ago, we suggested getting your tax strategy together before it was time to panic.
Well, it's time to panic.
We're less than a month to the end of 2015 and any plans you have to lessen your tax hit by the end of the year should probably be implemented now. Rebecca Pavese, a certified public accountant, financial planner and portfolio manager with Palisades Hudson Financial Group's office in Atlanta says that, at the very least, you should be calculating your income, tax payments and deductions to date, and estimating your totals for 2015.
"You need this baseline information before making any moves," she says.
Once you've done that, the easiest way to save is by reducing your taxable income. Bankrate's (RATE) Kay Bell notes that boosting your retirement savings can be particularly helpful. If you haven't made your maximum $18,000 contribution 401(k) ($24,000 for people age 50 or older) or $5,500 contribution for an IRA ($6,500 for people age 50-plus), now is the time.
"If your employer permits you to make extra contributions to your 401(k), put in as much as you can afford.
"If your employer permits you to make extra contributions to your 401(k), put in as much as you can afford," says Bill Ringham, vice president and senior wealth strategist at RBC Wealth Management. "You typically contribute pretax dollars, so the more you invest, the lower your taxable income. Your earnings also grow on a tax-deferred basis."
Ringham also notes that 529 plan contributions are tax deductible in several states, so contributing to your kid's college fund will allow your earnings grow tax-free, provided they are used for qualified higher education expenses. Just make sure it's going toward college, however, as distributions not used for qualified expenses may be subject to income tax and a 10 percent penalty. Meanwhile, it's also time to take inventory of your other investments in 2015 ... and root for the losers."Tax-loss selling can minimize or eliminate capital gains on one asset by realizing a loss to offset it," Pavese says. "There's dollar-to-dollar offset. If for instance you've had $5,000 of capital gains, you can offset them completely with $5,000 of capital losses."
The best part is that you can carry those tax losses forward indefinitely. If you don't need those losses to offset capital gains right away, you can use the excess loss to offset gains in a future year. That's particularly helpful since net capital losses (capital losses minus capital gains) can only be deducted up to a maximum of $3,000 in a given tax year. Any losses beyond $3,000 must be carried over, which also makes it worth your while to consider putting off selling some of your "winners" until next year."
"Capital gains can increase your adjusted gross income -- and, consequently, your tax bill," Ringham says. "So if you are considering selling an asset that has increased in value, such as a stock, you may want to wait until January so the gain will be realized next year."
If you're in a really desperate situation, there's also a chance you can just give some of those investments away. Highly appreciated stocks or mutual funds you've owned for more than one year can go directly to a charity, so if you've purchased shares for $1,000 and they are now worth $10,000, giving those share to a qualified charity would give someone in the 28 percent tax bracket a $2,800 tax deduction, based on the current market value of the donated shares.
"You benefit three ways," Pavese says. "First, you're doing good. Second, you won't pay the capital gains tax you'd owe if you sold the security instead. And third, you'll get a deduction if you itemize."
Once all of that is complete, you'll want to consider doing some housekeeping.
Bankrate's Bell suggests homeowners submit January mortgage payment and property taxes by Dec. 31 so they can deduct the interest for 2015. Also, if you haven't taken advantage of your flexible spending account for health care, now is a great time to schedule doctor's appointments or buy eligible supplies ranging from glasses to knee braces to cold medicine. Pavese, meanwhile, suggests filing a new W-4 form with your employer and adjusting your December tax withholding just to keep from running afoul of penalties and interest. However, just about anything you can do to lower your adjusted gross income is helpful.
"Lowering your income has many potential benefits," she says. "If you can lower your taxable income to below $74,900 for a married couple filing jointly or $37,450 for a single filer, you will pay zero percent federal tax on sales of assets you've held longer than one year and zero percent on dividends. Even if you can't get your taxable income quite so low, you may be able to lower it enough to step down to the next lowest capital gains tax rate."
Lowering income can also lower deduction hurdles that are calculated as a percentage of that income. For example, unreimbursed medical expenses can only be deducted if they exceed 10 percent of adjusted gross income, and investment expenses must exceed 2 percent. However, if you can't adjust to a desirable level for 2015, now is the time to start banking deductions for 2016. Pavese suggests that, instead of paying your estimated quarterly state income tax by Dec. 31 and deducting it on your 2015 return, you can pay it Jan. 1-15 and get a 2016 deduction. Also, if an additional deduction would trigger alternative minimum tax, pay your fourth-quarter state income tax and real estate tax installment in January.
"If your bracket will go up next year, consider deferring certain deductions, such as state taxes and real estate taxes, so you can claim them on your 2016 return," Pavese says. "The higher your bracket, the more the same deduction can save you."
This article is commentary by an independent contributor.
Just 17 percent of people comparison shop for their prescriptions to find better deals, a new survey shows.
That means 83 percent are potentially paying hundreds of dollars more than necessary each time they fill a prescription, according to Consumer Reports.
The nonprofit found that medications can cost as much as 10 times more at one retailer compared with the cost at another.
"[We] discovered enormous price variations around the country, but also within the same zip code. Most people would not think, 'Hey, I'm going to pick up the phone and call around,' but you can save a bundle of money if you do."
For its survey, Consumer Reports had secret shoppers call the pharmacies of more than 200 stores in six metros across the country to price five common generic prescription drugs. Their findings included:
Those with the highest prices were:
In Raleigh, North Carolina, the price for one month's supply of generic Cymbalta, an antidepressant that's also used to treat pain, ranged from $43 (at Costco) to $249 (Walgreens).
In Dallas, the price for generic Plavix, a blood thinner, ranged from $23 (independent Preston Village Pharmacy) to $150 (CVS).
In Denver, the price for generic Actos, for Type 2 diabetes, ranged from $15 (Cherry Creek Pharmacy) to $330 (grocery store Albertson's Save-On).
Overall, the retailers with the lowest prices were:
HealthWarehouse.com
Costco
Independent pharmacies
Those with the highest prices were:
Walgreens
Rite Aid
CVS
Medication prices vary more for consumers who are paying out of pocket rather than with insurance. Consumer Reports found, however, that even consumers paying a flat insurance copay can sometimes save money by shopping around:
Sometimes the price you'd pay out of pocket (what those without insurance are charged) might be less than your copay -- a fact pharmacists may neglect to mention. Case in point: Metformin -- used to treat type 2 diabetes -- sells for just $4 for a month's supply, or $10 for a three-month supply, at stores such as Target and Walmart, while a copay for a month's worth averages about $11.
Do you comparison shop for your medications? Let us know what you've learned by doing so below or in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.
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Getty ImagesWhen caring for your children and parents, it is especially important to hone your budget and routinely assess your financial situation.By Kimberly Palmer
When her father was diagnosed with a respiratory disease about seven years ago, Joy Frank-Collins juggled her work schedule and parenting demands to maximize the time she spent by his side. Frank-Collins, a 41-year-old who heads her own communications firm in Marietta, Ohio, also coordinated with her siblings to pay for expenses that weren't covered by insurance. "If you know your parents will need your help, you have to think, 'What can I set aside to provide the necessary support for my parents?'" she says. After a long fight with his illness, her father died at age 75 in January.
As a member of the sandwich generation -- adults who simultaneous care for children and aging parents -- Frank-Collins had to navigate what is becoming an increasingly familiar challenge. "Individuals who find themselves in the sandwich generation are forced with contemplating taking care of things today in a way that may negatively impact their future," says Rebekah Barsch, vice president of financial planning for Northwestern Mutual. Family members might cut back on their work hours or sacrifice savings in order to care for aging parents, she adds. "The pressure, both financial and emotional, weighs on people," she says.
Those pressures are one reason that 37 percent of Gen X, who are between ages 35 and 49, don't feel financially secure, according to the 2015 Northwestern Mutual Planning & Progress Study of 5,474 adults. About 1 in 4 said they are "not at all confident" they will achieve their financial goals, and 2 in 10 said they believe they will never retire, largely because they won't have enough retirement savings.
"The number of people who find themselves sandwiched between generations continues to grow as the baby boom generation gets older and is expected to live longer than ever before -- longer than they're capable of caring for themselves," says Phillip Rumrill, a professor of rehabilitation counseling at Kent State University and co-author of "The Sandwich Generation's Guide to Eldercare: Concrete Advice to Simultaneously Care for Your Kids and Your Parents."
At the same time, he adds, children are living at home for longer, which means people in middle age are often caring for, and financially supporting, both generations at once. "We estimate that 1 in 8 Americans between the ages of 40 and 60 are caring for both children and parents or grandparents at once," he says. That caregiving often coincides with intense years of career demands as well as the need to save for retirement.
If you're a member of the sandwich generation, here are six financial strategies to help your family get through the challenge:
Pick your priorities. "Maybe we start saving for college tuition later, or we save less now with the idea of ramping it up later, when our incomes are back at full stride," Barsch says. She recommends making it a priority to continue saving for retirement, but to scale back in other areas, such as spending on luxuries such as vacation and cars.
Stick to a revised budget. Taking on responsibility for parents can make it especially important to hone your budget, says Stacy Newton, North and South Carolina division executive for SunTrust Bank. "Because they have so much on their plates, making a plan is critical. We encourage people to set limits on spending, shopping sales and to stay within their means," she says. When it comes to vacation or holidays, for example, Newton suggests focusing on shared family experiences rather than dollars spent. She also urges people to use their banks' spending alerts to stay within budget.
Give yourself an annual checkup. "It's like going to the doctor," Newton says. "Take a few minutes off work and sit down with a financial adviser to review current financial priorities, and make sure everything is aligned." A recent SunTrust survey of 519 adults with incomes $75,000 and up found that among those in middle age (ages 45 to 54), just 37 percent say they are saving enough to live comfortably in retirement, compared to 57 percent in other age groups. An annual check up can help determine where you stand and what adjustments need to be made.
Plan for eldercare. While parents often anticipate the costs that come with children, they are less likely to budget for the expense of caring for their parents, Rumrill says. Those costs can include paid caregivers, a nursing facility or medical expenses, he adds. Budgeting in advance, as well as checking for any available benefits through the federal government, particularly Social Security or veterans' benefits, can help ease some of that pressure, he says.
Make use of new technology. Kyle Hill co-founded HomeHero.org, a website that helps families find and hire in-home care for seniors in California and has plans to expand to other states in 2016. Users can browse caregivers and also use the site to make payments. For Hill, the need is personal: He watched his father struggle to care for his 98-year-old mother from a different state. "There was no easy way to manage her care from far away," he says, particularly to oversee caregiver shifts and activities. Automating the process through a website makes it easier and more affordable for family members to find high-quality, paid caregivers, he says.
Coordinate with siblings. Lan Jewel, 45, a communications professional in New York, worked out a plan with her four siblings about 15 years ago, before any of them had the additional financial pressure of children. Her parents had limited savings, so the siblings all chipped in to purchase long-term care insurance, and some also send money to them once a month. "It has definitely put a strain on our relationships since the financial burden has increased," she says, and the stress from the Great Recession didn't help. "But this is an obligation that I feel I have to juggle, even as the expenses of rearing two children in New York City increase as my kids get older. My parents sacrificed so much for us kids," she says.
Frank-Collins also suggests working through any tensions with siblings and other family members before a health crisis hits, because coordination becomes essential. "We would almost tag each other out at the hospital," she recalls, referring to the frequent bedside visits when her father was sick. "You have to sit down and have these conversations that you never thought you would have. Because you're the person in the middle, you have to prepare."
WASHINGTON -- U.S. employment increased at a healthy pace in November, in another sign of the economy's resilience, and will most likely be followed by the first Federal Reserve interest rate rise in a decade later this month.
Nonfarm payrolls rose 211,000 last month, the Labor Department said Friday. September and October data was revised to show 35,000 more jobs than previously reported.
The unemployment rate held at a 7½-year low of 5 percent, as people returned to the labor force in a sign of confidence in the jobs market. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped 0.7 of a percentage point this year.
The clear message from the labor market to the Fed is: 'Just do it!'
"The employment report should remove the final doubts about a rate hike at the December meeting. The clear message from the labor market to the Fed is: 'Just do it!'" said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria the U.S. central bank has set for the Fed's first rate hike since June 2006.
Yellen said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working age population.
A Reuters survey of banks that deal directly with the Fed showed all but one of the so-called primary dealers expect the Fed will hike rates at the Dec. 15-16 meeting. They see only a gradual pace of monetary policy tightening through 2016.
The U.S. dollar firmed against the euro after European Central Bank President Mario Draghi said in New York that the ECB could deploy more stimulus if needed. U.S. Treasury debt yields initially rose, but later fell after OPEC failed to agree an oil production ceiling. U.S. stocks ended higher.
Soft Patch
The second month of strong job gains should allay fears the economy has hit a soft patch, after reports showing tepid consumer spending in October and a slowdown in services industry growth in November. Manufacturing contracted in November for the first time in three years, according to one business survey.
A strong U.S. dollar and spending cuts by energy companies have been headwinds to the economy. A separate report from the U.S. Commerce Department on Friday showed the international trade deficit widened in October as exports hit a three-year low.
Wilfredo Lee/APJob seekers attend a job fair at the Dolphin Mall in Miami.Though wage increases slowed last month, economists say that was mostly payback for October's outsized gains, which were driven by a calendar quirk. Anecdotal evidence, as well as data on labor-related costs, suggest that tightening job market conditions are starting to put upward pressure on wages.
"Payroll gains were despite continued weakness in manufacturing and energy sectors, suggesting little spillover into the rest of the economy," said Samuel Coffin, an economist at UBS in Stamford, Connecticut.
Average hourly earnings increased 4 cents, or 0.2 percent from 0.4 percent in October. That lowered the year-on-year reading to 2.3 percent from 2.5 percent in October. The average workweek, however, fell to 34.5 hours from 34.6.
Other labor market measures watched by Fed officials were mixed.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, rose to 62.5 percent from a near 38-year low of 62.4 percent.
Broad Gains
But a broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose 0.1 of a percentage point to 9.9 percent. That reflected an increase in part-time workers.
Employment gains in November were broad-based, though manufacturing shed 1,000 positions. Factory employment has declined in three of the last four months.
Manufacturing has been crippled by dollar strength, efforts by businesses to reduce bloated inventory and investment cuts by energy companies scaling back well drilling and exploration in response to the sharply lower oil prices.
Mining purged 11,000 jobs, with oil and gas extraction losing 2,400 positions. Mining employment has dropped by 123,000 since reaching a peak in December 2014. Three quarters of the job losses over this period have been in support activities for mining.
Oilfield services provider Schlumberger (SLM) this week announced another round of job cuts in addition to 20,000 layoffs already reported this year.
Construction payrolls increased 46,000 last month, the largest gain since January 2014. Retail jobs rose 30,700 and transportation and warehousing employment rebounded after two straight months of declines.
Professional services added 27,000 jobs and government payrolls increased 14,000 last month.
"It's hard not to like today's reading on the labor market. We can anticipate further improvement ... next year," said Scott Anderson, chief economist at Bank of the West in San Francisco.
An outbreak of E. coli linked to Chipotle has expanded to nine states, with a total of 52 reported illnesses.
The Centers for Disease Control and Prevention said Friday seven additional people were sickened, including in three more states: Illinois, Maryland and Pennsylvania. The most recent illness started on Nov. 13, it said.
The majority of the illnesses have been in Oregon and Washington, where cases were initially reported at the end of October. Additional cases were later reported in California, Minnesota, New York and Ohio.
Of the 52 people infected, the CDC says 47 reported eating at a Chipotle restaurant the week before the illness started. The agency hasn't yet determined the ingredient that made people sick.
The CDC also said illnesses that started after Nov. 11 may not be reported yet.
People usually get sick from Shiga toxin-producing E. coli, the bacteria commonly associated with foodborne outbreaks, for two to eight days after swallowing the germ, according to the CDC. Most infected people get diarrhea and abdominal cramps.
Earlier Friday, Chipotle said it was tightening its food safety standards.
The Denver-based chain known for touting the quality of its ingredients said it hired IEH Laboratories in Seattle to help improve its procedures. It said it will implement testing of all produce before it is shipped to restaurants and enhance employee training for food safety and handling.
Chipotle hasn't yet said how sales have been affected by the bad publicity from the outbreak, but plans to provide a financial update before a presentation for analysts and investors Tuesday. In October, the company had forecast sales at established locations would be up in the low- to mid-single digit percentages for 2015.
The company's shares fell 2.7 percent to $550.25 in trading Friday afternoon.
Chipotle said it tested ingredients before, but that it is moving to testing smaller batches and a larger number of samples.
"In testing for pathogens, in many ways you're looking for needles in haystacks. Through this high resolution testing program, we are making the haystacks smaller by working with smaller lots," the company said.
It said that no ingredients that are likely to have been connected to the incident remain in its restaurants or supply system.
Chris Arnold, a spokesman for Chipotle Mexican Grill (CMG), said the company's local produce suppliers may not all be able to meet the new standards. The company noted that its local produce program accounts for a "relatively small percentage" of the produce it uses, and only runs from around June through October in most parts of the country.
Nicholas Kamm, AFP/Getty ImagesFederal Reserve Chair Janet YellenBy Jason Lange, Lindsay Dunsmuir and Jonathan Spicer
WASHINGTON and PHILADELPHIA -- Federal Reserve Chair Janet Yellen has the evidence of U.S. labor market health she wanted in order to raise benchmark interest rates for the first time in a decade this month, but she may have a tougher time selling further hikes.
Yellen's arguments against potential dissenters at the Dec. 15-16 Fed policy meeting were strengthened by Labor Department data Friday that showed employers hired 211,000 people in November while even greater numbers joined the workforce.
Federal funds futures contracts imply a 79-percent chance that the Fed will end seven years of near-zero interest rates at its December meeting and about even odds of a second rate rise by March.
Beyond that the outlook is more mixed. Interest rate futures maturing in the second half of next year are rising slightly, showing traders are wagering the Fed will manage no more than two further hikes before the end of next year.
You have an open debate between doves and hawks as to what the pace of increases should look like.
The differences among Fed policy makers were on display at a Philadelphia Federal Reserve conference Friday where Narayana Kocherlakota, in his last speech as president of the Minneapolis Fed, gave a sharp critique of a central bank that he said was too anxious to begin raising rates and thus would fail to create perhaps millions of jobs in a timely manner.
James Bullard, the more hawkish head of the St. Louis Fed, followed that presentation with one that argued it is time to raise rates and to begin shrinking the central bank's $4.5 trillion balance sheet which was bulked up in recent years to boost the economy.
"You have an open debate between doves and hawks as to what the pace of increases should look like," said Art Hogan, chief market strategist at Wunderlich Securities in New York, referring to the divisions within the Fed over readiness to tighten monetary policy.
The Fed has appeared gun shy on tightening policy twice already this year, in June and September. Its key policy rate has been 0-0.25 percent since the depths of the financial crisis in late 2008.
Mixed Messages
Wall Street's top banks said Friday in a Reuters poll that they expect the central bank to maintain a slow pace of rate hikes, with the median forecast for the fed funds rate for mid-2016 about 0.75 percent and 1.125 percent for the end of the year.
The Fed's policymakers hold very different views of where the central bank's benchmark rate will end next year, ranging from less than zero to 3 percent, according to projections released in September that were based on their views of appropriate policy. The median outlook was for four quarter-point rises next year, while their views of the long-term normal level range from between 3 percent and 4 percent.
Worryingly for a consensus-seeking Yellen, it isn't just traditional "doves" such as Gov. Lael Brainard who are questioning the pace of rate rises. Even some of the hawks, who would typically worry more about inflation risks than weak economic growth, are weighing a possibility that they may face a long spell of below normal economic growth and low inflation.
Bullard noted that rates have remained low in most advanced economies. If that persists it "may be leading us to an outcome with low nominal interest rates and low inflation that can last for a very long time," he said, adding the Fed needs to be willing to pause and also to speed up its pace of tightening.
One driver for the pace of rate rises will be whether inflation picks up next year, and Friday's data suggested workers might not be getting big enough raises for businesses to raise prices much.
Average hourly earnings rose 2.3 percent in November from a year earlier, down from 2.5 percent in October. Without more inflationary pressures, policymakers likely want to raise rates more gradually.
Friday's jobs report also highlighted Brainard's argument that weakness in the global economy could constrain U.S. growth more than policymakers currently expect. Manufacturing jobs, which are among the most exposed to the global economy, actually fell by 1,000 in November, the third drop in the last four months.
"While this report can help justify a rate hike in December, it can't justify anything more than a very gradual path of rate hikes," said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
-Ann Saphir in San Francisco, and Dion Rabouin and Rodrigo Campos in New York contributed reporting.
NEW YORK -- U.S. stocks rallied Friday, giving the S&P 500 its biggest gain since early September, as employment data suggested the economy was strong enough to sustain a Federal Reserve rate hike this month.
Financials, which benefit from higher borrowing costs, led the rally. The S&P financial index jumped 2.7 percent.
JPMorgan Chase (JPM) rose 3.2 percent to $67.89 after European antitrust regulators dropped charges against the bank on blocking exchanges from derivatives markets.
We're going to see the market focused on what the U.S. economy is doing, rather than Fed policy.
But the rally, which followed two days of sharp losses, included most sectors and allowed the three major indexes to post slight gains for the week.
"Stocks are going to have to shift to a domestic economic performance focus. We're going to see the market focused on what the U.S. economy is doing, rather than Fed policy," said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.
"I think we see a continued upward trend for the rest of the year."
Nonfarm payrolls increased 211,000 in November, the Labor Department said, while September and October data were revised to show 35,000 more jobs than previously reported.
Analysts said the report, which also showed the unemployment rate held steady at 5 percent, most likely paves the way for the Fed to raise rates this month for the first time in nearly a decade.
The Dow Jones industrial average (^DJI) rose 369.96 points, or 2.1 percent, to 17,847.63, the Standard & Poor's 500 index (^GSPC) gained 42.07 points, or 2.1 percent, to 2,091.69 and the Nasdaq composite (^IXIC) added 104.74 points, or 2.1 percent, to 5,142.27.
For the week, the Dow and Nasdaq were up 0.3 percent, while the S&P 500 was up 0.1 percent.
Nine of the 10 major S&P 500 sectors ended up. The energy index slipped 0.5 percent as oil prices fell on news that OPEC was planning to maintain its production near record highs despite depressed prices.
December Rate Hike
The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria for a rate hike. The Fed's policy-setting committee will meet on Dec. 15-16.
Avon Products (AVP) rose 5.8 percent to $4.22 after a private equity investor group led by Barington Capital proposed a restructuring of the cosmetics maker.
Advancing issues outnumbered declining ones on the NYSE by 1,999 to 1,045, for a 1.91-to-1 ratio on the upside; on the Nasdaq, 1,840 issues rose and 965 fell for a 1.91-to-1 ratio favoring advancers.
The S&P 500 posted 22 new 52-week highs and 20 new lows; the Nasdaq recorded 69 new highs and 101 new lows.
About 7.7 billion shares changed hands on U.S. exchanges, compared with the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.
-Lewis Krauskopf contributed reporting from New York.
What to watch Monday:
The Federal Reserve releases consumer credit data for October at 3 p.m. Eastern time.
H&R Block (HRB) releases quarterly financial results after U.S. markets close.
"Buy now, pay later" is the modern way of life. Credit cards are a highly profitable business for the companies that issue them, so it's no surprise that banks continue to inundate consumers with credit card offers, especially during the shopping frenzy of the holiday season. These come-ons are among several financial traps lurking out there today.
Visa (V), MasterCard (MA), Discover Financial Services (DFS) and American Express (AXP): Their cards are common fixtures in hundreds of millions of wallets around the world. According to Federal Reserve data, the average credit card debt per card-holding U.S. household is $16,140. In total, the average American consumer owes $918.5 billion in credit card debt.
You probably get credit card offers in the mail all the time; the volume of unsolicited offers tends to increase the day after Thanksgiving. Here's some important information that will help you sort through the pitches and separate the good values from the rip-offs.
The Introductory Rate
The introductory rate, or "teaser rate," expires after a designated period of time. Federal law requires introductory rates to remain in effect at least six months after signup. This rate is below market and typically applies only to balance transfers and cash advances, although they can also apply to purchases. Introductory rates are usually extremely low, ranging from zero to 4 percent for up to 12 months. Be sure to read the fine print for what the percentage rate will be once the initial introductory period ends.
Annual Percentage Rate -- Fixed vs. Variable
If you don't pay your balance in full by the due date, you'll be charged interest on the remaining balance. How much interest you pay is determined by the annual percentage rate, or APR, on the card.
If you pay the full balance on your credit card every month, you won't have to pay any interest on your balance ($0), and can ignore APRs.
All credit cards have either a fixed or variable APR, determined largely by the "prime rate," which is the interest rate commercial banks charge their most creditworthy customers, which are usually corporations. For example, if a bank is offering a credit card at "prime plus 5" and its prime rate is 6 percent, then the bank is essentially offering customers an 11 percent loan (6 percent + 5 percent).
A fixed APR locks in your rate so that it does not fluctuate with changes to the prime rate on which it is pegged. The variable APR, on the other hand, moves in step with the prime rate. If conditions are volatile and interest rates spike, the variable APR that originally enticed you can end up bearing little resemblance to what you actually pay.
While it's preferable to have a card with a fixed APR, these cards are few and far between. As of this writing, the average fixed APR is at 13.1 percent and the average variable APR rate stood at 15.7 percent.
Cards for Bad Credit
Everyone deserves a second chance. At least that's the premise behind credit cards for those with bad credit. In most cases, these types of credit cards are "secured," which means that the person must put money onto the card upfront before he or she can access the credit via the card.
Some companies offer "unsecured" credit cards with low credit limits and high interest rates. These rates can reach up to 20 percent or higher.
The rationale for secured and unsecured cards is that, in today's society, a credit card confers legitimacy on people and makes life easier. It's becoming harder and harder to function by simply using cash. Also, if you have bad credit but you rack up a good history with these types of cards, you can repair your damaged credit score.
Rewards
Some credit cards are tied to charges for hotels, rental cars, air travel, grocery and gas purchases, etc. The premise is that the more products and services you purchase, the more "points" you earn in return for free or discounted rewards.
But beware: Many of these incentive-based cards come with high interest rates and big annual fees. That said, if their interest rates aren't excessive and there aren't a lot of hidden restrictions or fees, reward cards can be a good deal, offering free hotel rooms, bonus rental car use, free airline tickets -- you name it.
Nonetheless, cast a discerning eye on the agreement. For most frequent flyer credit cards, you'll see high interest rates and restrictions for the privilege of getting miles in return. It's not worth it and tantamount to paying for overvalued stocks.
Evaluating the Key Areas
Now that you've been tutored on the basics, here are the most important areas to scrutinize when weighing the pros and cons of a credit card offer:
What's the interest rate? Compare fixed and variable APRs. If you think interest rates will remain stable, you might want to opt for the lower variable rate. Remember, that's a risky option. If interest rates go up, you lose.
Thanks to the new credit card laws, the companies that issue cards can't raise rates on existing balances during the first year unless a prior promotional rate expired, the index on a variable index rate increased, or you were 60 days late in paying your bill. If your rate rises because of a late payment, the bank is required to restore it to its lower rate once you've made six consecutive monthly payments, on time of course.
Is there an introductory rate? If so, what is it and how long does it last? If the introductory rate is more than 13.1 percent (the average fixed APR) and doesn't last at least six months, forget it.
Is there an annual fee? A credit card annual fee is a yearly fee -- typically ranging from $15 to $300 -- charged by the credit card company for the privilege of letting you have the card. Don't agree to pay much more than about $50. If you can, opt for a card with no annual fee.
What's the late fee? If you make a late payment, what will you get charged? A typical credit card late fee is about $35.
What's the over-the-limit fee? Look for cards that don't impose a charge of this kind. Some cards will notify you if you've gone over your limit without hitting your pocketbook with a penalty.
Are there any hidden fees? Some cards charge balance transfer and account termination fees. Avoid these cards. You can find cards that don't incur such fees.
Also beware of fishy interest calculations. There are many ways a card issuer can calculate interest owed. One of the shadiest tricks is to use a late payment as a reason to jettison the interest-free period for new purchase transactions and then calculate the interest as far back as the original purchase date.
Another dodgy maneuver is to charge daily interest on the full purchase amount even if partially repaid on deadline. Read the fine print on your credit card statement. If the contract allows the card company to get away with either of these schemes, cancel your card and look for one that only charges interest from the date the new statement was produced.
John Persinos is editorial manager at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.
Nervous investors should think twice before diving into so-called defensive stocks, especially those securities with high dividends. You might end up putting more risk into your portfolio than you realize. Stocks that have less volatility than the overall market and pay higher dividends than most other stocks are often seen as a way to reduce risk in a portfolio. Traditionally, these are found in the defensive sectors, including consumer staples, utilities and health care.
Given the state of the world, it's easy to see why investors would want to get defensive. The war in the Middle East is certainty getting hotter. Cities are under the threat of terrorist attacks, and tensions between Russia and Turkey increased when Turkey shot down a Russian warplane on the Syrian border. Meanwhile, the European economy still looks saggy and the once-fast growing Chinese economy is decelerating. And the Federal Reserve looks set to start raising the cost of borrowing money sooner rather than later.
Sectors are trading at high multiples. The problem is that "the defensives are expensive," says Ramona Persaud, portfolio manager for Fidelity Global Equity Income fund (FGILX), the Fidelity Dividend Growth fund (FDGFX) and the Fidelity Equity Income fund (FEQIX). Many of the traditional stock sectors that might once have helped reduce risk in a portfolio are trading at relatively high multiples.
She warns that investors could easily lose more money from a declining stock price than they gain from a healthy dividend.
In fact, that may already have happened to some investors. The Utilities Select Sector SPDR exchange-traded fund (XLU), which tracks a basket of utility stocks, has retreated around 10 percent this year, while the broader Standard & Poor's 500 index (^GSPC) of major stocks is up slightly over the same time. Contrast that loss with the current 3.6 percent dividend yield on the fund. Clearly, those holding the fund since the beginning of the year would have resulted in a net loss, not including the effect of taxes.
Over the years, the Fed's low interest-rate policies forced yield-seeking investors toward dividend-paying stocks like utilities, bidding up prices and valuations, explains Jeff Carbone, senior partner and founding member of Cornerstone Financial Partners, a wealth management company in Charlotte, North Carolina.
That yield seeking effect is now happening in reverse, with investors selling their holdings in anticipation of what Carbone says is an "imminent increase" in interest rates by the Fed. To reiterate, the pullback in dividend stocks like utilities was happening before the Fed has actually done anything. That anticipation of future event is normal in the stock market.
How do you find dividend stocks now? "Let's find something with a similar yield that is growing," says Mike Boyle, head of asset management at advisory Advisors Asset Management in New York. It is better to find stocks that are growing their income and will likely use those increased earnings to boost the dividend. "Focus on areas with strong earnings and income growth, like technology," he says. A good example of a company that is growing earnings and has a huge potential to grow its dividends is Apple (AAPL).
Using the combo approach also tilts the scales in the investor's favor in the current market. You pay a lower multiple of earnings for a company that is growing its dividends. For Persaud, the trick is buying quality companies at a bargain. "Dividend growth is just cheaper."
That's why she purchased Israeli generic drug company Teva Pharmaceutical Industries (TEVA), which she purchased at a discount relative to U.S. pharmaceutical giants Bristol Myers Squibb Co. (BMY) or Pfizer (PFE).
Know the warning signs. Whenever you invest with the expectation of receiving dividends, you need to be on the lookout for potential problems.
"Usually when the yield gets unreasonably high, that's a telltale sign something is wrong," says Eric Ervin, CEO of ETF provider Reality Shares in San Diego.
For instance, if a stock usually yields 3 percent, but suddenly shows a 6 percent dividend, then that could be a sign that investors expect the dividend to be cut in half. Again, investors discount expected future events.
You should also look to see whether the payout of dividends as a ratio of earnings is sustainable. Companies do need to retain some of their income for capital expenditures and to buy back stock. If the payout is too high for too long, then management may be stretching things too far and it could eventually result in a dividend cut.
The average payout ratio of dividends to earnings is now around 40 percent for the S&P 500, Ervin says. Normally, it's more like 50 percent, he says.
Simon Constable is a columnist and author. In addition to following the financial markets, he likes to watch his cat play with string. You can follow him on Twitter @simonconstable.
