1) Phil's Financial Tip of the Day:
I came across this article which summarizes the 11 changes in retirement benefits becoming in 2012:
http://finance.yahoo.com/news/11-retirement-benefit-changes-coming-in-2012.html
Start your planning now!
2) In the Markets today:
Dow Jones industrial average gains 52 as hopes build for greater European bailout powers
Dow ends up 52 on hopes for wider bailout powers-From AP
The Dow Jones industrial average closed up 52 points following a report that European leaders are considering more aggressive programs to bail out weaker countries in the region.
Broader market indicators were mixed. The S&P 500 index rose 1 point and the Nasdaq composite edged lower. Materials and health care companies rose the most. Agricultural supplies company Monsanto Co. gained 2.8 percent; drug maker Pfizer Inc. added 2 percent.
Stocks were stuck in neutral for most of the day after Standard & Poor's said it might downgrade the AAA rating of Europe's bailout fund. A report in the Financial Times late in the afternoon sent the Dow up as many as 117 points. The newspaper reported that European leaders are considering making more financial aid available to struggling countries.
Investors remain cautious ahead of a summit of European leaders Thursday and Friday where the main task will be coming up with credible plans for preventing a simmering debt crisis from causing a breakup of the euro, the currency shared by 17 European nations. Such a shock would likely cause a deep recession in Europe that would spread through the world economy.
"We are coming to a head in Europe, and it's no longer about the small countries like Greece," said Paul Zemsky, chief investment officer at ING Investment Management. He said current stock prices reflect traders' expectations of a rate cut from the European Central Bank on Thursday and strong political action on Friday. Any less that, he said, and "it's anyone's guess show bad things will get, but they'll get pretty bad."
The Dow Jones industrial average closed up 52.30 points, or 0.4 percent, at 12,150.13. Among its top performers was 3M Co., which rose 1.5 percent after the maker of Post-It notes forecast 2012 earnings that were stronger that many analysts expected.
The Standard & Poor's 500 index closed up 1.39 points, or 0.1 percent, to 1,258.47. The Nasdaq composite average closed down 6.20, or 0.2 percent, at 2,649.56.
U.S. stock indexes have risen sharply from the lows they hit during a Thanksgiving-week drubbing. The S&P 500 is up 8.6 percent since Nov. 25, when it closed at 1,158.67.
Late Monday S&P said it might downgrade the debt of 15 countries that use the euro. The announcement, and S&P's followup statement Tuesday about possibly downgrading the European bailout fund, halted a rally in European markets.
The impact on the market was muted, said Robert Tipp, chief investment strategist with Prudential Fixed Income, because investors are coming around to the view that the European debt crisis may be through its worst phase. He noted that bond traders are willing to accept much lower yields on debt issued by nations such as Italy, whose borrowing costs spiked to dangerous levels in recent weeks.
"There's going to be volatility going forward, and it's going to be difficult for countries to follow their commitments, but I think you finally crossed that point where they took enough steps that the markets will get the message" that there is a credible crisis-rescue plan in the works, Tipp said.
In corporate news:
— Leap Wireless International Inc. rose 1 percent after the prepaid mobile phone company said it is buying spectrum in Chicago from Verizon Wireless and sell it spectrum bandwidth nationwide.
— Homebuilder Toll Brothers Inc. added 2.7 percent after it reported fiscal fourth-quarter earnings that beat analysts' expectations.
— Alpha Natural Resources Inc. fell 1.1 percent after the company agreed to pay more than $200 million to avoid being sued over a 2010 mine disaster that killed 29 men.
— Darden Restaurants Inc. fell 12.4 percent, the most in the S&P 500 index, after the company slashed its profit forecast for 2012. The company is trying to turn around its struggling Olive Garden restaurant chain and cope with rapidly rising food costs.
3) Top financial story of the day:
Citigroup Inc. is eliminating 4,500 jobs in its latest effort to cut costs. The bank will take a $400 million charge in the fourth quarter.
Citigroup to Cut 4,500 Jobs, Take $400 Million Charge-From The Wall Street Journal
Citigroup Inc. will eliminate roughly 4,500 jobs over the next few quarters, or about 1.6% of its work force, as volatile financial markets and new regulations crimp profits.
Vikram Pandit, Citigroup's chief executive, disclosed the move on Tuesday afternoon at a Goldman Sachs investor conference in New York. Mr. Pandit said Citigroup would take a $400 million charge in the fourth quarter to cover severance and other expenses.
Citigroup has so far announced fewer layoffs than peers during the latest wave of bank belt-tightening.
Still, the job cuts unveiled Tuesday include about 1,500 more positions than what had been expected as recently as last month.
More than 2,500 banks cut their work forces in the third quarter, reducing employment by a combined 20,332 jobs, or 2.5%, according to an analysis by The Wall Street Journal of filings with U.S. banking regulators.
Citigroup's securities and banking division is expected to account for about one-fifth of the job cuts.
CitigroupCitigroup said it planned to hire 500 bankers and traders over the next two years.
Since then, however, fears over the European debt crisis and new regulations capping bank profits in other once-lucrative areas have altered the outlook.
Citigroup's bonus pool for bankers is expected to be down considerably compared with last year, people familiar with the situation said. That is partly a reflection of the lower investment-banking profits expected this year, but also a sign of longer-term pressures facing the business from new regulations that require banks to hold higher capital levels.
Citigroup shares were among the most active in after-hours trading, where they fell 13 cents, or 0.4%, to $29.62. Citigroup's shares are down 37% so far this year.
Separately, Mr. Pandit warned that accounting and hedging gains that contributed to Citigroup's third-quarter profit would probably reverse in the fourth quarter. Because of tightening credit spreads,
Citigroup would have reported a $200 million accounting charge tied to the putative cost of repurchasing some liabilities, and a $300 million hedging loss on its loan book if its quarter had ended Monday, Mr. Pandit said.
"I should note, however, that this number can vary significantly and will be based on our spreads in the last day of the quarter," Mr. Pandit said.
Mr. Pandit also said that Citigroup would book a $300 million noncash charge against deferred tax assets, as a result of a new law in Japan that will lower the corporate tax rate in that country. The possibility of the lower tax rate was previously disclosed by Citigroup.
Analysts said they were not overly concerned about the charges.
"They are a modest distraction away from what is an overall improving story," said Glenn Schorr of Nomura Securities.
4) Quote of the Day from Dave Ramsey.com:
Give me a stock clerk with a goal and I'll give you a man who will make history. Give me a man with no goals and I'll give you a stock clerk. — J.C. Penney
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