Business Report Wall Street Drifts After Last Week's Big Gain

U.S. stocks ended near flat on Monday, pausing after the S&P 500's biggest weekly gain since January 2013, while energy shares fell with another decline in oil prices.

Among the day's biggest positives, shares of Gilead Sciences <GILD.O> rose 1.7 percent to $112.59, a day ahead of its scheduled earnings release. Micron Technology <MU.O> shares jumped 4 percent to $32.30 and was the largest percentage gainer on both the S&P 500 and Nasdaq 100 after it announced a $1 billion stock repurchase.

But energy shares were by far the day's biggest drag, with the S&P 500 energy index <.SPNY> falling 2 percent. U.S. crude oil <CLc1> briefly traded below $80 a barrel after Goldman Sachs slashed its crude price forecasts, citing abundant supply and lackluster demand.

The S&P 500 ended the day down slightly after closing out its best week since early January 2013, a sharp recovery from the market's recent selloff. The index is now up 5.3 percent from its Oct. 15 low.

"After almost a 10 percent correction on the S&P, the bulls showed up and sent the prices right back up. Now... we're on track for closing in the upper half of the range for the month, which is a bullish sign," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Accommodative central bank policies globally should keep "an underlying bid for stocks," he said.

The Dow Jones industrial average <.DJI> rose 12.53 points, or 0.07 percent, to 16,817.94, the S&P 500 <.SPX> lost 2.95 points, or 0.15 percent, to 1,961.63 and the Nasdaq Composite <.IXIC> added 2.22 points, or 0.05 percent, to 4,485.93.

The majority of companies are beating earnings expectations. With results in from 213 of the S&P 500 companies, 71.4 percent beat analysts' forecasts, which would be highest percentage since the third quarter of 2011, Thomson Reuters data showed.

U.S.-traded shares of Brazilian companies tumbled after President Dilma Rousseff won reelection, defeating market favorite Aecio Neves by a slim margin.

Petrobras ADRs <PBR.N> slumped 13.7 percent to $11.16 and Vale <VALE.N> lost 5.2 percent to $10.58. A Brazilian exchange-traded fund <EWZ.P> dropped 5.4 percent.

After the bell, shares of Twitter <TWTR.N> dropped 9.6 percent to $43.88 after it reported quarterly revenue that surpassed expectations but forecast fourth-quarter sales that may miss targets.

On the S&P 500, the largest decliner was Nabors Industries <NBR.N>, down 6.7 percent to $17.48. On the Nasdaq, the largest decliner was Tesla Motors <TSLA.O>, down 5.8 percent at $221.67.

Declining NYSE issues outnumbered advancers 1,737 to 1,308, for a 1.33-to-1 ratio on the downside; on the Nasdaq, 1,424 issues fell and 1,235 advanced for a 1.15-to-1 ratio.

The benchmark S&P 500 index posted 53 new 52-week highs and one new low; the Nasdaq Composite recorded 45 new highs and 62 new lows.

About 6.1 billion shares changed hands on U.S. exchanges, below the 8 billion average this month, according to data from BATS Global Markets.

(By Caroline Valetkevitch; Additional reporting by Rodrigo Campos; Editing by Bernadette Baum, Meredith Mazzilli and Nick Zieminski)

http://www.foxbusiness.com/markets/2014/10/27/wall-street-eases-after-last-week-big-gain-energy-weighs/

FOMC Meeting and Facebook Earnings good of business report

The Federal Reserve’s policy-setting committee meets next week and investors will once again be looking for clues as to the timing and trajectory of interest rate hikes.

The central bank’s Federal Open Markets Committee meets Tuesday and Wednesday with a policy announcement due at the conclusion of Wednesday’s meeting.

The FOMC is widely expected to wrap up the Fed’s long-running bond purchasing program known as quantitative easing. Since last December the Fed has been gradually scaling back its monthly bond purchases by $10 billion each month. The amount of purchases now stands at $15 billion per month, but Fed policy makers have indicated they will phase out the entire amount at the October meeting.

The next step in a return to normal monetary policy after years of stimulus programs is raising interest rates from their current near-zero range. The big question is whether the Fed next week will alter the language of its statement to eliminate the phrase “for a considerable period,” which has been used to describe how long rates will remain low after quantitative easing ends.

For months the Fed has said rates will remain low “for a considerable period” beyond the end of QE. A number of Fed policy makers have called for eliminating the phrase in order to prepare global markets for the inevitability of higher rates.

Also on the calendar next week is a report on durable goods orders due Tuesday and the release of the final third-quarter GDP figure out Thursday.

Bellwether companies reporting earnings include drug makers Pfizer (NYSE: PFE) and Merck (NYSE: MRK), and tech giant Facebook (FB). Facebook, whose numbers are out Tuesday, will look to duplicate Yahoo!’s (YHOO) stellar quarter reported this week, and avoid the poorer-than-expected results reported by Amazon.com (AMZN).

Coffee retailer Starbucks (SBUX), always a good measure of consumer sentiment in terms of how often consumers are willing to pay as much as $5 for a cup of coffee, reports earnings Thursday.

Follow Dunstan Prial on Twitter @DunstanPrial

Upbeat Earnings News on Markets in the Green

U.S. stocks advanced on Friday, as earnings from Microsoft (MSFT) and Procter & Gamble (PG) and easing concerns over the possible spread of Ebola in the United States helped put the S&P on track to snap a four-week losing skid.

Microsoft was up 2 percent at $45.91, after it reported higher-than-expected quarterly revenue while keeping its profit margins largely intact.

Fellow Dow component Procter & Gamble gained 2.7 percent to $85.51 and was also one of the biggest boosts to the S&P 500, after the world's largest household products maker posted quarterly results and said it would split its Duracell battery business into a separate company.

But Amazon (AMZN) plunged 7.5 percent to $289.69 as the biggest drag on both the S&P 500 and Nasdaq 100 after the online retailer's sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts.

According to Thomson Reuters data through Friday morning, of 205 companies in the S&P 500 that have reported earnings, 69.8 percent have topped analyst's expectations, above the 63 percent rate since 1994 and the 67 percent rate for the past four quarters. On the revenue side, 59.8 percent have beaten expectations, slightly below the 61 percent rate since 2002 but above the 58 percent rate for the past four quarters.

The S&P 500 is up 3.9 percent for the week, putting the index on track for its best week since the start of 2013, boosted largely by solid corporate earnings reports. The benchmark index is down 2.5 percent from its record high set on Sept. 18 after slumping more than 7 percent as volatility has spiked.

Investors continued to monitor developments on the Ebola virus. A doctor who worked in West Africa with Ebola patients was in an isolation unit in New York City after testing positive for the virus, while the World Health Organization set out plans for speeding up development and deployment of experimental Ebola vaccines.

"The management of the Ebola virus has given the market some confidence that they can move forward and focus on what pricing is really predicated upon - earnings and data - and in both cases they have been very constructive," said Peter Kenny, chief market strategist at Clearpool Group in New York.

At 12:18 p.m. Eastern time the Dow Jones industrial average rose 107.6 points, or 0.65 percent, to 16,785.5, the S&P 500 gained 11.73 points, or 0.6 percent, to 1,962.55 and the Nasdaq Composite added 21.88 points, or 0.49 percent, to 4,474.67.

Sales of new U.S. single-family homes rose to a six-year high in September, up 0.2 percent to a seasonally adjusted annual rate of 467,000 units.

The largest percentage gainer on the S&P 500 was Edwards Lifesciences (EW), which rose 12.0 percent, while the largest decliner was Amazon.

On the Nasdaq 100 the largest gainer was KLA-Tencor (KLAC), which rose 7.3 percent, while the largest decliner was Amazon.

Advancing issues outnumbered declining ones on the NYSE by 1,782 to 1,164, for a 1.53-to-1 ratio on the upside; on the Nasdaq, 1,353 issues rose and 1,195 fell for a 1.13-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 32 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 40 new highs and 30 new lows. 

(Editing by James Dalgleish, Bernadette Baum and Chris Reese)

http://www.foxbusiness.com/markets/2014/10/24/markets-in-green-on-upbeat-earnings-news/

Why some companies won't mail you privacy policies

You know those privacy statements that come in the mail from financial institutions? The ones that you should read but probably never do? Well, some banks and other financial institutions are liklely to stop sending them to you through the mail soon. Instead, they will make them available online under revised regulations just adopted by the Consumer Financial Protection Bureau.

Until now, financial institutions have been required to provide written copies of privacy notices in separate mailings, on an annual basis. Now, under the new regulations, institutions will be allowed to notify you that a privacy statement is available through other ways, including a notification that could be on your billing statement or in a coupon book.

Under the new rules, institutions can shift to online privacy notices only if the policy hasn’t changed and under certain conditions. The main one is that the institution must not share customers’ nonpublic personal information with unaffiliated third parties. Institutions that do such sharing, initiating a federally mandated opt-out provision, must continue providing printed privacy policies annually. Also, any privacy policy provided online instead of through the mail must use a model disclosure form designed by federal regulators. Finally, the privacy policy must remain posted on the financial institution’s website and be available without requiring customers to log in.

Institutions that do not meet the requirements must continue providing printed copies annually. For customers without Internet access, institutions would be required to mail the annual printed copy within 10 days of receiving a request by phone. Institutions will still be required to notify customers of any changes to their privacy policies as they have before.

The CFPB estimates that the change could save the industry $17 million annually. It hopes those savings will encourage institutions to limit their customer data sharing and adopt the model disclosure, which is designed to make the policies easily understandable.

“Posting privacy notices online will make it easier for consumers to access these important policies, while also making it cheaper for financial institutions to provide disclosures,” the CFPB's director, Richard Cordray, said in a statement.

What to do

Don’t assume your bank or any other financial institution will continue sending a written copy of its privacy policy. Check your billing statement and other communications for notices about how to access the policy online. It’s always a good idea to peruse privacy policies to find how exactly what the institution is doing with your information, although the fact that the policy has been moved online should mean that your data is not being shared with unaffiliated third parties. That’s probably a good thing.

—Anthony Giorgianni

Copyright © 2005-2014 Consumers Union of U.S., Inc. No reproduction, in whole or in part, without written permission. Consumer Reports has no relationship with any advertisers on this site.

Insurance Mistakes : Five Costly Home owners

Your home is where your heart is, but it can also cost you unnecessarily if you are making bad moves when it comes to your homeowner’s insurance.

While not having enough coverage is a costly mistake, particularly if your house burned to the ground, there are things you may be doing that make your premiums higher than your neighbor down the block.

With that in mind, here’s a look at five mistakes insurance experts say will cost you more each month.

Accepting the status quo:

We shop around when buying an appliance, purchasing a car or even spending for a new dress but when it comes to homeowner’s insurance people often stick with the coverage they have each year. “One of the things people don’t do is true comparison shopping,” says Keith Moore, Chief Executive of CoverHound, the insurance Website. “If you never shop the rate I guarantee you are paying more than you should.” According to Moore homeowners should shop their policy on an annual basis.

Making upgrades and forgetting about it:

Upgrading your kitchen, installing high-end fixtures and otherwise improving your house will undoubtedly make you happy but it can cost you if you forget to upgrade your insurance along with it. “Often major upgrades like gourmet kitchens or glamour baths not only improve the aesthetics and livability of your home, but they increase the value,” says Richard Hutchinson, general manager of Progressive Home Advantage. “Consequently, the cost to replace these items also increases if you’re faced with a total loss.”  What’s more, Progressive says features such as pools, hot tubs or trampolines could leave you more vulnerable to lawsuits, thus increasing the amount you pay each month to protect your home.

Having a low credit score:

You may not think a low credit score matters when it comes to homeowner’s insurance, but it does and in some cases it matters a lot. According to Moore, in every state except California your credit score can drive up the price of your homeowner’s insurance. “There’s a direct correlation between someone with a low credit score and the frequency of claims,” says Moore. “Someone with a credit score of 500 not only lets bills slip but also the general maintenance of the home, which leads to claims.”

Setting too low of a deductible:

Nobody wants to be hit with a high deductible when something goes wrong, but setting the amount you have to meet before the insurance kicks in at too low of an amount could end up costing you more. According to Laura Adams, senior analyst for insuranceQuotes.com, if you set your deductible too low it almost encourages you to make more claims than if you had a high deductible to meet. “One claim on your policy can cause your rate to rise on average 9%,” says Adams. “In some states we’ve seen a 32% rate in increase just from making one homeowner’s claim.” If you set the deductible high it forces you to avoid making any frivolous claims and seeing your premiums go up long after the repair is made.

Letting discounts expire:

One of the good things about homeowner’s insurance is that the carriers give you a lot of discounts. For instance you can get a discount for having your auto insurance with the same carrier, for not smoking or for being a retiree. Even living in a gated community will get you a break on your insurance. While most people are trained to ask about all the discounts upfront, they fail to follow through once their discount expires to get a new ones. According to Moore some discounts can last as long as five years, like the new homeowner discount, while others are only in effect for two years. Staying on top of when the discounts expire and getting new ones can go a long way in saving you money each month.  “You should ask when they expire and rates go up and shop around again,” he says.

Jobless Claims Rise to 283,000 on US

The number of new claims for jobless benefits rose last week but remained near fourteen-year lows, the latest sign of an improving labor market.

Initial claims for unemployment benefits increased by 17,000 to a seasonally adjusted 283,000 in the week ended Oct. 18, the Labor Department said Thursday. That was slightly above the 282,000 claims forecast by economists surveyed by The Wall Street Journal.

Claims for the previous week were revised up by 2,000 to 266,000. That was the lowest level since April 2000. The Labor Department said there were no special factors impacting the data.

The four-week moving average for initial claims, which smooths out week-to-week volatility, fell 3,000 to 281,000, its lowest level since May 2000.

The report also showed the number of people filing continuing claims for unemployment benefits fell 38,000 to 2.35 million for the week ended Oct. 11. Those figures are reported with a one-week lag.

Adjusted for population growth, initial claims are hovering around their lowest level on record. The low level reflects increased optimism on the part of employers as the economic recovery gains traction.

It also reflects a labor market that has become less dynamic over the last few decades. Employers have become less likely to lay off workers, though they have also grown more cautious about hiring new ones.

A sluggish jobs recovery since the recession has picked up this year. Payrolls have expanded an average 227,000 a month through September, putting 2014 on track to be the strongest year of job growth since the late 1990s.

But more than five years into the current expansion, most economists believe the amount of idled labor remains high by historical standards. The nation's unemployment rate is a still-elevated 5.9%, while many of those who do have jobs are stuck in part-time employment.

Federal Reserve officials have pledged to keep interest rates at their current level near zero for a "considerable time" to support a continued recovery in the labor market.

"I would still view the amount of slack in my own personal view as still being elevated," Federal Reserve Bank of San Francisco president John Williams said in a recent interview with The Wall Street Journal. "The unemployment rate is still well above my estimate of the natural rate; and if anything, the unemployment rate understates the amount of slack out there," he said.

The Labor Department report on jobless claims can be accessed at:http://www.dol.gov/ui/data.pdf

Paid Off $50K of Debt in Less Than 3 Years

Graduating from college debt-free feels really good. When Ja’Net Adams got her degree from South Carolina State in 2003, she was one of those fortunate students who started her adult life without debt, and things went along really well for her.

She got married. They bought a house. They bought a new car. They had their first child. Then, in 2008, she lost her job.

Adams and her husband sat down to assess their financial situation, and they had to face a harsh reality: They had just lost nearly 75% of their household income, and they were $50,000 in debt.

“I’m a warning sign to people of what can happen after graduation,” Adams said. She always considered herself a financially conscientious person, but their debt came down to some misunderstandings and a couple of bad decisions.

Rather than focusing on the past, Adams and her husband immediately changed their habits so they could work toward a financially stable future. This time, when they sat down to figure out their debt, they also made what Adams calls a “Dream Sheet,” a list of their short-, medium- and long-term goals, as motivation for sticking to tough changes they needed to make.

They tracked their spending for two weeks — everything, down to a pack of gum at a gas station — before reconvening and figuring out where to cut expenses.

It was easy to decide, even though it would be an extreme adjustment: No eating out. Get rid of cable. Reduce the minutes on the cellphone plan.

After about five months, she was working again, which was a serious improvement on their income of unemployment benefits and her husband’s starting salary as a teacher. They also started working side jobs: Both went to college on athletic scholarships (tennis for her, basketball for him), so they made money coaching kids.

It took only 2 1/2 years from the point Adams lost her job for them to pay off the student and auto loans.

What She Learned

Adams, now 33, attended college on a tennis scholarship, and she thought her husband (they’re high school sweethearts) was also free of student loan debt because of his basketball scholarship. It was only after they got married that she learned that he had $25,000 in federal student loan debt. They made the payments without issue, but looking back, Adams said they should have communicated and attacked the debt more aggressively.

Instead, they traded in one of their vehicles and got a new car for $25,000.

“We could have given that money to the student loan payment,” Adams said she realized later. “We could be further along financially if we hadn’t made those mistakes.”

The other mistake? Building a home with a no-money-down mortgage. They could have saved a lot of money by staying in their $800-a-month apartment (two bedrooms, two bathrooms, utilities and cable included), rather than taking on a home loan with private mortgage insurance (not to mention the student and auto loan debt they could have tackled with their savings).

Even though they never had trouble making their loan payments, Adams said they could have been smarter about their finances, and they could have more in savings by now. Still, she’s happy they turned things around when they did.

“I’m thankful for losing that job, because it set me on the path to where I am today,” Adams said. She now owns her own financial consulting business, and she speaks to college students all over the U.S. and Canada about money and debt. She just wrote a book — “Debt Sucks!” — geared toward young adults. She may be thankful she lost her job, but the experience was “hard and devastating,” she said. That’s why she wants to educate others.

Going Forward Without Debt

Adams considers her family debt-free, even though they still have mortgage payments. At the time of her pivotal unemployment, she had just gotten back from maternity leave, and she made a vow to herself that her next child wouldn’t be born into debt. She was able to reach that goal, as well as a few others.

They have revised their original Dream Sheet (which they laminated and keep on the refrigerator, as a reminder of what they’re trying to achieve through their sacrifices), and right now Adams and her husband are working to pay off their house in the next 10 years, as well as save so their children can go to college and graduate debt-free. One of their previous goals on the Dream Sheet was to build a savings account for their oldest son, and as he turns 7 this month, he’ll add some of his birthday money to the account. Keeping their goals in the forefront of their minds has helped them stay on track.

They also realized they had to share their goals with others. That made it easier for them to stay on track, because their friends and family knew about their goal of becoming debt-free.

“There were some people who laughed at the time, but now they’re asking me how to get of debt,” she said. “It’s taken the stigma off it — we have to talk more about money.”

Paying off debt not only frees you up financially, but can also help you build your way to good credit. Keeping credit balances low or paid off, and making all debt payments on time can help raise your score over time. To see how your debt is affecting your credit, you can see your credit scores for free.

Christine DiGangi covers personal finance for Credit.com. Previously, she managed communications for the Society of Professional Journalists, served as a copy editor of The New York Times News Service and worked as a reporter for the Oregonian and the News & Record. 

People Miscalculate Insurance Needs-How can understand of insurance?

After 30 years of teaching risk management, I have concluded that most people just don’t understand insurance. This repeatedly leads them to pay way too much to cover small known costs, while going without protection against the really big risks they face.

I call insurance for small predictable costs “haircut” insurance. That is, if you need to get your hair cut every six weeks like I do, you don’t need insurance–it’s not a risky expenditure. Nevertheless, people often do insure against low-cost predictable events.

In this category I put dental insurance that covers predictable annual cleaning visits: by self-financing your checkups, you can save enough to cover the cost yourself. But then the same people who buy checkup insurance also don’t read their policies to see whether expensive dental surgery is covered (and often it’s not!). Extended warranties on relatively low-cost consumer products are another example: why buy extra coverage for a kitchen microwave when the manufacturer’s warranty covers product defects anyhow, and most microwaves don’t break?

Along the same lines: most people pay too much for auto insurance when they elect low deductibles, towing, car rental, glass coverage and other features in their policies.  Yet they could save quite a lot in annual fees by upping the deductibles and dispensing with other frills–after all, the chance of needing these other services are low, and it’s probably more cost-effective to pay for it when needed. Same goes for homeowners insurance: You can invest the savings from a $10,000 deductible policy and make money on it, while retaining coverage for the big risk like a major fire, flood or earthquake.

Conversely, while paying for the small stuff, many students and colleagues forget about the big stuff. For instance, everyone starting a family after their baby was born–only to have her spouse perish in a motorcycle accident when she was in her 8^th month of pregnancy.

should buy life and disability insurance–before the family is launched! A woman I know told me she was planning on buying life insurance on her biker husband

Finally, one of the most critical risks you face is liability–the chance of being hit with a huge lawsuit from someone whose child slipped in your driveway and broke her neck. Despite the relatively low cost of a $1 million to $2 million policy, on the order of a few hundred dollars, few Americans understand how exposed they are to huge potential losses.

Insurance is best suited to help you finance catastrophes, not haircuts.

Olivia S. Mitchell is a professor of Business Economics and Public Policy at the Wharton School of the University of Pennsylvania where she focuses on pensions, household finance and risk management.

Prudential business leaders reflect on findings from women's study

Our eighth biennial study on the "Financial Experience & Behaviors Among Women" uncovers optimism about recovering markets and encouraging short-term improvements, but troubling long-term trends.

With the economy and financial markets continuing to improve, women appear to be less worried about their financial security than they were in the immediate aftermath of the 2008 financial crisis.

Women still have a number of identifiable financial goals, of course. High on their list: having enough money to maintain their lifestyle throughout retirement, to cover health care expenses and to reduce personal debt. They also don't want to become a financial burden to loved ones or outlive their savings. And they define financial success as achieving a comfortable, financially secure retirement. The difference is simply that they no longer attach as high a degree of importance to these goals as they did a few years ago.

Nonetheless, women we surveyed feel no more prepared to make wise financial decisions today than they did two years ago or even a decade ago. Nor has their understanding of financial and insurance products improved. Not surprisingly, the Confidence Gap—our measure of women's confidence in their ability to achieve their financial goals—has not improved over that 10-year span, either.

Despite these findings, women—like men—still do not tend to seek out financial professionals to help them achieve their goals. This is particularly concerning given that women increasingly are making the financial decisions in their households. Nearly half of women—44 percent—are the primary breadwinners in their households, and 27 percent of married women now say they "take control" of financial and retirement planning and manage it themselves, up from 14 percent in 2006.

One of the biggest perceived impediments to reaching financial goals is not having enough disposable income to dedicate toward them, cited by about half of women. But they also admit to a lack of familiarity with financial products and the sense that they simply don't know what to consider when evaluating their options.

While the survey paints a troubling picture of their long-term financial preparedness, the results indicate that women are more confident in their ability to manage day-to-day finances. And they have advice for financial services firms about how to help them achieve their long-term financial goals: simplify the process, stop using so much jargon, look out for the customer's interests, and maintain a strong code of ethics.

At Prudential, we remain steadfast in our commitment to improve women's financial literacy, and to develop innovative tools and resources to help them create a clear path toward a more secure retirement.

Our latest study reinforces that there will always be more for us to learn about women's financial insecurities and long-term goals. Our 14 years of dedicated research have given us the foundation and framework necessary to empower women to take control and secure their future

http://www.prudential.com/media/managed/wm/WM-new-womens-survey.html

on busines :How to Invest Your 401k Savings

How to Invest Your 401k Savings

These days, we all have to be investment experts. If you want to retire in style and enjoy the same kind of golden years as earlier generations did, you have to take control of your own financial destiny. The amount of money you will have to live on depends on you – namely, your ability to make the right choices for investing your 401k savings and other retirement savings.

Unfortunately, you’re probably not getting much guidance from your plan sponsor for your 401k. You may just have a sheet of investment choices. How do you go about making sense of those 401k savings choices and decide what is best for you?

Manage Your Savings as a Single Portfolio

If you are like most people, you have your retirement savings spread across more than one account. To make the most out of your retirement savings, you need to make sure you have the appropriate asset allocation across your entire retirement portfolio, including your 401k savings. Include the assets that you have in other locations as you consider how to invest your 401k savings.

Organize the 401k Savings Investment Choices

A little organization can go a long way. Your fund sheet should at least provide categories for the different funds like “stock,” “bond,” “balanced,” and probably “target date.” The first thing you want to do is to separate out the target date funds from the rest, as deciding if target date funds are good for you is a separate decision (we’ll come back to this below).

Next, look for the word “index,” which is evidence of a passively-managed index fund. Index funds aim to replicate a market index like the S&P 500 or the Russell 1000 Value. Active funds, in contrast, try to outperform their benchmark indexes—but they come with higher fees. The fees for passive funds tend to be significantly lower than that for active funds.

You want to further separate the choices into “asset class buckets.” These include distinctions like growth versus value, large or small capitalization, international developed or emerging markets and so on.

401k Target Date Funds – Yes or No?

Now we come back to the target date fund question. First, let’s define what they are. Target date funds are a mixture of investments, such as stocks and bonds, that are allocated for you based on the amount of time that you have left before retirement. As you get older, the target-date fund will automatically shift your portfolio into less risky investments.

Because the target date fund’s asset allocation is being managed separately from the rest of your holdings, you should only consider target date funds if you do not have any other holdings. If you hold other investment assets, your portfolio will not have the optimal asset allocation.

If you do not have any other savings and are considering target date funds, you need to be aware of some additional shortcomings. Target date funds don’t know anything about your retirement goals, your risk profile and how much you are saving. Two people with entirely different risk profiles and financial situations will get exactly the same allocations just because they have a similar age. Plus target date funds don’t allocate assets in a tax-efficient manner. Because target date funds hold a large number of asset classes in a single account, it makes optimizing your portfolio for tax efficiency more difficult.

Investing Your 401k Savings

Now that you’ve organized your portfolio and your choices and made a decision – yea or nay – about target date funds, the next step is to figure out how you want to allocate your assets, and then pick a fund from each “asset class bucket.” Research has shown that the way you slice up your investments among asset classes is the most important determinant of successful long-term portfolio performance. So treat this decision seriously, and seek assistance from experts to help you get this right.

Jemstep’s Portfolio Manager can give you customized asset allocation advice based on your risk tolerance, goals and investing preferences. It can also analyze the options within your 401k plan, and offer you specific buy/sell recommendations based on what’s offered within your plans and make sure you stay on track with alerts when it’s time to make a change or rebalance.

https://www.jemstep.com/article/How-to-Invest-Your-401k-Savings?utm_source=outbrain&utm_medium=outbrain&utm_campaign=Owned

Business Report: U.S. Budget Deficit Shrinks to 2008 Level

Higher tax revenues helped the U.S. budget deficit drop to its lowest level in six years in fiscal 2014, falling by nearly one-third to $483 billion, the Treasury Department said on Wednesday.

The deficit, which stood at $680 billion a year ago, has been falling dramatically since a run of four consecutive $1 trillion-plus deficits between 2009 and 2012. In 2008, the deficit was $459 billion.

The significant decrease in the deficit from the previous year was due to a combination of higher receipts and “stable outlays” in fiscal 2014, the Treasury Department said in a statement.

Government receipts totaled $3,021 billion in 2014, the report stated, or $247 billion higher than in 2013, a 9% increase. As a percentage of GDP, receipts equaled 17.5%, 0.8 percentage points higher than in 2013. The increase in receipts from 2013 can be attributed to “a stronger economy and the expiration of certain tax provisions,” the Treasury said.

Treasury Secretary Jacob Lew and Office of Management and Budget Director Shaun Donovan said the significant decline in the deficit represents a “return to fiscal normalcy.”

The two officials noted that the 2014 deficit fell to 2.8% of GDP, the lowest percentage since 2007 and the most significant improvement in four decades.

Current policies and a strengthening U.S. economy “have resulted in a reduction of the U.S. budget deficit of approximately two-thirds -- the fastest sustained deficit reduction since World War II,” Lew said in the statement.

“What I don't think we have is an emergency right now,” Lew added later in a press conference. “The challenge we have is to sustain the economic engine so that we're seeing the growth now and over these next 10 years.”

The Treasury Department cited the following data for contributing to the decline:

Individual income taxes were $1,394.6 billion, $8.4 billion higher than government estimates. Withheld and nonwithheld payments of individual income tax liability were higher than estimates by $1.6 billion and $7.0 billion, respectively.   

Corporate income taxes were $320.7 billion, $9.3 billion higher than estimates.  This difference reflected higher-than-expected payments of 2014 corporation income tax liability of $9.7 billion that were partially offset by higher-than-estimated refunds, according to the Treasury Department.         

Social insurance and retirement receipts were $1,023.9 billion, $3.8 billion lower than estimates. This reduction was primarily attributable to lower-than-estimated deposits by states to the unemployment insurance trust fund of $3.0 billion. Reductions in other sources of social insurance and retirement receipts -- primarily Social Security and Medicare payroll taxes -- accounted for the remaining reduction in this source of receipts relative to government estimates.             

In addition, growth in wages and salaries “made collections of individual and payroll taxes strong throughout the year,” the Treasury stated.

Another contributor to the increase was the expiration of the temporary cut in payroll taxes and the increase in tax rates on income above certain thresholds, which went into effect in January 2013.

Corporation income tax collections also increased in 2014 due to growth in taxable profits. Federal Reserve deposits of earnings also increased, primarily because of higher yields on a larger portfolio. 

Outlays for 2014 were $3,504 billion, $50 billion above those in 2013, a 1% increase. As a percentage of GDP, outlays were 20.3%, half a percentage point lower than the prior year’s 20.8%.

Spending was lower than the previous year for many agencies and programs, according to Treasury, such as the Department of Defense; the unemployment insurance program; the Federal Deposit Insurance Corporation; flood insurance and disaster relief; crop insurance and the Supplemental Nutrition Assistance Program; and housing programs.

For the month of September, the Treasury recorded a budget surplus of $106 billion, up from a year-ago surplus of $75 billion. Analysts polled by Reuters had expected a $80.9 billion surplus for the final month of fiscal 2014.

http://www.foxbusiness.com/economy-policy/2014/10/15/us-budget-deficit-shrinks-to-2008-level/?intcmp=fbtopstories

Businees News Washington unemployment rate in September increases slightly to 5.7 percent

Washington state's unemployment rate rose slightly to 5.7 percent last month, state officials said Wednesday.

Numbers released by the state's Employment Security Department show that the September jobless rate was up from August's 5.6 percent rate, and that businesses saw a loss of about 600 jobs from August to September.

Industries that saw the biggest gains include construction, up 2,900 jobs; retail trade, which gained 2,000; and government, up 2,000. Hospitality and leisure had the biggest loss last month, down 4,800 jobs, with 1,900 of those losses in food services and drinking places. Education and health services lost 3,500 jobs, and the transportation, warehousing and utilities category was down 1,000.

The national unemployment rate was 5.9 percent.

Although job growth has moderated since the start of the summer, the state is still on pace to deliver the best overall job growth since 2005, said Paul Turek, an economist with the Employment Security Department.

Two different surveys are used to calculate unemployment figures and job losses and gains. The unemployment rate represents the percentage of the labor force that is unemployed and actively looking for work. People who have stopped looking for work aren't counted. The job gains and losses estimates are based on a U.S. Bureau of Labor Statistics survey of businesses.

More than 198,000 people were unemployed and looking for work in the state last month, and 57,621 of them received unemployment benefits.

http://www.foxbusiness.com/markets/2014/10/15/washington-unemployment-rate-in-september-increases-slightly-to-57-percent/

Business Report: EBay beats on 3Q profit expectations, but misses revenue forecasts and cuts outlook

 on Wednesday reported better-than-expected earnings for the third quarter but cut its sales forecast for the year. Shares dropped 3 percent after-hours.

The company's PayPal business had another strong quarter. Revenue grew 20 percent to $1.95 billion and mobile payment volume jumped 72 percent to $12 billion. PayPal remains on track to process 1 billion mobile transactions this year. Earlier this month eBay said it would split off the payment processor, its fastest growing unit, late next year.

The marketplaces business grew revenue 6 percent to $2.16 billion, and gained 3.4 million new buyers to end the quarter with 152 million active buyers, up 13 percent.

The San Jose, California-based company said it had profit of 54 cents per share. Earnings, adjusted for one-time gains and costs, were 68 cents per share. The results surpassed Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 67 cents per share.

EBay posted total revenue of $4.35 billion in the period, falling short of Street forecasts. Analysts expected $4.37 billion, according to Zacks.

For the current quarter ending in December, eBay expects its per-share earnings to range from 88 cents to 91 cents on revenue of $4.85 billion to $4.95 billion. Analysts surveyed by Zacks had expected higher revenue of $5.17 billion.

The company cut its forecast for full-year revenue to a range of $17.85 billion to $17.95 billion, from a prior range in July of $18 billion to $18.3 billion.

EBay shares have declined slightly more than 8 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed nearly 1 percent. Shares fell 35 cents to close at $50.24, a fall of almost 7 percent in the last 12 months.

http://www.foxbusiness.com/industries/2014/10/15/ebay-reports-earnings/?intcmp=fbfeatures