While the holidays are no doubt a time to celebrate with friends and family, there is such a thing as too much holiday cheer. In fact, last year the Consumer Reports Holiday Shopping Poll found that 13.6 million Americans are still juggling debt from last season after getting a little too into the gift-giving season.
I came across an excellent article about how not to go into debt this holiday season:
http://financiallyfit.yahoo.com/finance/article-113698-11432-1-6-steps-to-skirting-holiday-debt?ywaad=ad0035
One of the best advices in this article is not to shop when you are hungry or tired. You should never make any decisions in this state of confusion. As the old saying goes-Fatigue makes cowards out of all of us. So be well rested and well fed when you go out to the malls.
2) In the Markets today:
Stocks tumbled after a summit that could help stem Europe's economic turmoil got off to a rocky start and the European Central Bank declined to enact new bond purchases.
Stocks fall after top euro bank reins in bond buying hopes-From USA Today
US stocks fell sharply Thursday after the head of the European Central Bank said there was no existing plan for large-scale government bond purchases, as many in the markets had hoped.
President Mario Draghi's remarks sent borrowing costs for Italy, Spain and other countries with heavy debt burdens sharply higher. European stock indexes fell and the euro weakened against the dollar.
ECB Draghi was speaking after the central bank cut its benchmark interest rate to 1% and took other modest steps to help shore up Europe's financial system.
At 4 p.m. ET, the Dow Jones industrial average was down 186 points, or 1.5%, to 12,010, ending a three-day run of modest gains. The Standard & Poor's 500 index fell 25 points, or 2%, to 1,235. The Nasdaq composite dropped 48 points, or 1.8%, to 2,600.
Banks were hardest hit. JPMorgan Chase (JPM) slid 4.3%, the most of the 30 large companies in the Dow. Bank of America (BAC) dropped 3.8% Citigroup (C) plunged 7.6% and Morgan Stanley (MS) dropped 7.3%.
"People are very nervous that Europe will yet again fail to adequately address the sovereign debt crisis," says David Kelly, chief market strategist for JP Morgan Funds. He says investors overlooked good news on the U.S. economy Thursday: Claims for unemployment benefits dropped, and wholesale companies increased their inventories in expectation of stronger sales.
In France, French President Nicolas Sarkozy and German Chancellor Angela Merkel tried to muster support from other European leaders for their latest bid to save the euro currency from collapsing under the weight of huge government debts. A summit that begins Thursday has been billed as a make-or-break moment to convince markets that Europe will take bold enough action to prevent the euro from breaking up.
The yield on the benchmark 10-year Italian government bond jumped a quarter of a percentage point, a large move, to 6.12% as investors sold the bonds following Draghi's remarks. The yield on Spain's 10-year bond rose one-third of a percentage point to 5.71%.
Traders sent yields on Italian government bonds above 7% last month, a level at which weaker countries like Greece and Portugal were forced to seek relief from their lenders. When borrowing costs jump too high, it threatens a government's ability to pay off existing debts and could ultimately lead a government to default.
Markets had interpreted recent remarks by Draghi to mean that the ECB would step in to buy government bonds if nobody else would. His comments Thursday dampened those expectations. Large-scale purchases of European government bonds by the ECB would send borrowing rates for indebted
European countries sharply lower and ease strains on Europe's financial system.
The Dow had jumped 14.5% from its low of the year on Oct. 3 through Wednesday's close on growing optimism that European leaders would resolve the region's debt crisis and signs that the U.S. would avoid falling into another recession.
The stock market's drop came despite new figures showing that the number of people applying for unemployment benefits fell last week to the lowest level in nine months.
Among companies making large moves, Costco Wholesale (COST) fell after reporting earnings that fell short of analysts' expectations. The retailer said higher costs ate up much of a 12.5% increase in sales.
Amgen (AMGN) rose after it said it plans to spend about $5 billion on buying back its stock from investors. The drugmaker expects to acquire more than 9 % of its outstanding stock.
DemandTec (DMAN) jumped on news that International Business Machines (IBM) plans to buy the software company for $440 million in cash. DemandTec's software helps businesses set prices for products they sell.
MEMC Electronic Materials (WFR) fell after the solar energy company said it would eliminate 20% of its workforce and cut other costs.
High-end electric car company Tesla Motors (TSLA) plunged after the company was downgraded by an analyst.
3) Top financial story of the day:
Unemployment benefit applications fall to 9-month low, latest sign of improving job market
Unemployment aid applications drop to 9-month low-From AP
The number of people applying for unemployment benefits fell last week to the lowest level in nine months, that latest evidence that the job market is improving.
The four-week average, a less volatile measure, fell for the ninth time in 11 weeks to 393,250. That's the lowest average since early April. Applications that drop below 375,000 — consistently — tend to correlate with a steady decline in the unemployment rate.
"There have been numerous indications that the labor market is healing and today's jobless claims report only reinforces that view," Dan Greenhaus, chief global strategist at BTIG, a trading firm.
The unemployment rate fell to 8.6 percent in November, the government said last week, down from 9 percent the previous month. That's the lowest rate in two and a half years.
Still, the unemployment rate dropped last month in part because more people gave up looking for work. Once the unemployed stop looking for jobs and drop out of the work force, they are no longer counted as unemployed.
Employers added a net total of 120,000 jobs last month. The economy has generated 100,000 or more jobs five months in a row — the first time that has happened since April 2006.
The report on hiring gains followed other positive signs. Manufacturing firms are boosting output and retailers reported a strong start to the holiday shopping season. Consumer confidence jumped in November to the highest level since July, and Americans' pay rose in October by the most in seven months.
Many economists expect growth to accelerate in the final three months of the year, to about a 3 percent annual rate. That would be an improvement from 2 percent growth in the July-September period.
But the U.S. economy is vulnerable to shocks from overseas. European leaders are struggling to contain a two-year old debt crisis and the 17 nations that use the euro may already be in recession, economists say.
That could slow U.S. exports and cut into overseas profits earned by U.S. multinationals. Even worse, the crisis could force European banks to cut back on lending and U.S. banks to follow suit, leading to a credit crunch. Most economists are penciling in slower U.S. growth next year, partly because of Europe's slowdown.
Fewer people are receiving unemployment benefits, and the number of people on extended benefits also fell. Some of that decline is because those out of work found jobs. But economists think most have likely used up all their benefits.
The number of people receiving benefits fell by 174,000 to 3.58 million. But that doesn't include several million people receiving aid under extended programs put in place during the recession. All told, 6.6 million people received unemployment aid in the week ending Nov. 19, the latest data available. That's about 400,000 fewer than the previous week.
Congress is debating whether to continue the extended benefit program, which expires at the end of this year. The program provides up to 99 weeks of benefits in states with high unemployment rates. If the program isn't continued, the Labor Department estimates that about 1.8 million people could lose benefits by early February.
4) Quote of the Day from Dave Ramsey.com:
People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents. — Andrew Carnegie
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