1) Phil's Financial Tip of the Day:
Sandra Block covers personal finance for USA TODAY.
Despite running here there and everywhere to get your last minute Christmas gifts and also enjoying Holiday parties, it is still the time of year to study last second ways of getting a higher tax refund by taking advantages of tax tips. Remember it is only 18 more days until 12/31 so time is running out.
Your Money: Steps you take now can boost tax refund-From USA Today:
http://www.usatoday.com/money/perfi/columnist/block/story/2011-12-12/year-end-tax-planning/51846264/1
2) In the Markets today:
Stocks slipped in Tuesday afternoon trading as investors digested a statement from the Federal Reserve.
Wall Street closes lower on Fed disappointment-From Reuters
Stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis.
Though the Fed did leave the door open to further easing next year, as it has done after recent meetings, it gave no indication it was any more inclined to provide new economic stimulus.
The Fed left monetary policy on hold and said financial market turbulence posed threats to economic growth. It also characterized the U.S. economy as expanding moderately despite an apparent slowing in global growth, though it added that unemployment remains elevated and housing activity depressed.
The Fed "gave the economy a very slight upgrade, but it sort of took the wind out of domestic equities, probably because some were hoping that they would hint at another -like program," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
Wall Street traded higher for much of the volatile session, but turned negative after the Fed's announcement. The losses accelerated going into the close and the S&P 500 briefly fell below its 50-day moving average. A close under that key level could signal more losses to come.
The Dow Jones industrial average (DJI:^DJI) slid 66.45 points, or 0.55 percent, to end at 11,954.94.
The Standard & Poor's 500 Index (SNP:^GSPC) dropped 10.74 points, or 0.87 percent, to 1,225.73.
The Nasdaq Composite Index (Nasdaq:^IXIC) lost 32.99 points, or 1.26 percent, to close at 2,579.27.
The disappointment with the Fed came at the tail-end of a trading session that was largely focused on Europe, especially after German Chancellor Angela Merkel rejected any suggestion of raising the limit on Europe's bailout fund.
Investors had been closely eyeing developments concerning the fund, the European Stability Mechanism (ESM), which will go into effect from the middle of next year and replace the current European Financial Stability Fund. The ESM will have an effective lending capacity of 500 billion euros.
"The developments in Europe don't address the region's short-term liquidity issues, so the next step is trying to figure that out," said Randy Frederick, director of trading and derivatives for Charles Schwab in Austin, Texas.
"That uncertainty is why our markets have been pressured lately. We're still all about Europe here."
Consumer-related stocks were the worst performers. Shares of Best Buy (NYSE:BBY) tumbled 15.5 percent to $23.73 after the electronics retailer reported a quarterly profit below expectations as bigger discounts squeezed margins. The S&P consumer discretionary sector (.GSPD) fell 2 percent.
U.S. government data showed U.S. retail sales rose less than expected in November as a drop in receipts for food and beverages weighed against stronger sales of motor vehicles, tempering expectations of a strong holiday shopping season.
U.S. crude oil futures prices rose more than 2 percent, advancing above $100 a barrel at the session high, with traders citing tension between the West and Iran as a possible trigger. The S&P energy index (SNP:^GSPE) had been up more than 2 percent at its session high, but was unable to maintain its gains and closed down 0.5 percent.
The only sector to close higher was utilities (.GSPU), considered a defensive play.
3) Top financial story of the day:
Fed officials left their policy options open for 2012 but took no actions and offered an assessment of the economy that was guardedly more upbeat.
Fed Takes No Action; Outlook a Bit Better-From The Wall Street Journal
Federal Reserve officials left their policy options open for 2012 but took no actions Tuesday and offered an assessment of the economy that was guardedly more upbeat, but still marked by "significant downside risks."
Nine out of 10 Fed officials voted to keep the central bank's easy-credit policies unchanged for the second meeting in a row in what was the last Federal Open Market Committee meeting of the year. It took place the day of Fed Chairman Ben Bernanke's 58th birthday.
Officials reiterated that short-term interest rates are likely to stay close to zero until mid-2013 at least. In their assessment of the economy, they said indicators pointed to some improvement in the U.S. jobs market.
Data since they last met at the start of November suggests the "economy has been expanding moderately, notwithstanding some apparent slowing in global growth," Fed officials said in a statement.
Still, the Fed is concerned the economy could be hit by higher taxes and continued government layoffs next year, as well as the repercussions from the debt crisis in Europe, which has close financial and trade ties with the U.S. With inflation expected to come down in 2012, some Fed officials have already started to argue in favor of additional steps to spur growth.
The Fed is looking at revamping its communication strategy, which could be a step toward easier monetary policy. Officials are considering whether to make their internal interest-rate forecasts public.
If they do that, and those forecasts suggest short-term interest rates will stay low for even longer than investors now believe, that could drive long-term rates down and be a boost to growth.
The post-meeting statement gave no indication of the state of that debate. That suggests the Fed has left it to be resolved next year. Minutes of the meeting, due out in three weeks, might reveal more.
As part of its internal debate about communications, Fed officials might soon need to address the conditional pledge they made in August to keep short-term rates near zero until at least mid-2013. The date is starting to look off. Prices in the futures markets suggest investors don't expect the first rate increase to occur until late 2013 or early 2014.
"The Fed likely thinks now that such a tightening move will not come at least until late 2014," said Roberto Perli, managing director at broker-dealer ISI and a former Fed staffer. Providing details of its interest-rate expectations could be a more systematic way of revealing the outlook for interest rate policy.
Another item on the agenda for next year could be another round of mortgage-backed securities purchases. Officials have suggested in recent weeks they are open to more purchases if the economy doesn't perform well next year, though the view isn't unanimous.
The roster of Fed officials voting on policy in 2012 could make it easier for Mr. Bernanke to navigate the unusual voting rules of official meetings toward a consensus. Fed governors vote at every meeting, as does the president of the Federal Reserve Bank of New York. Among the presidents of the 11 other regional Fed banks, four vote per meeting on a rotating basis.
Three out of the four officials who get a vote next year seem open to action: San Francisco Fed President John Williams, Atlanta Fed President Dennis Lockhart and Cleveland Fed President Sandra Pianalto. Only one -- Jeffrey Lacker from Richmond -- is likely to be opposed.
They replace three officials who openly, and at times vociferously, disagreed with the Fed's efforts in August and September to spur economic growth: Richard Fisher of the Dallas Fed, Charlie Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis. Only one who rotates out of a vote -- Charles Evans from Chicago -- strongly supports more action by the Fed to boost growth.
Mr. Evans dissented for the second time in a row at Tuesday's FOMC meeting, arguing that additional monetary policy accommodation was warranted.
Mr. Bernanke probably already has enough support from the other five permanent members of the FOMC to launch a third round of asset purchases if he wants to. But more public support would make his job a bit easier and reduce the decibel level of internal dissent that has tended to surround Fed decisions in recent years.
Opposition to the Fed's second round of bond purchases launched in Nov. 2010, especially from inside the central bank, might have muted its potential benefits by leading investors to question the Fed's commitment to the program.
Mr. Bernanke moved ahead in August and September despite three FOMC dissents, the most opposition faced by a Fed chairman since 1992, showing his determination to act. Though Messrs. Fisher, Plosser and Kocherlakota will continue to take part in FOMC meetings and to air their views in public speeches, they won't have the dissent as a tool to register their disagreement in 2012.
4) Quote of the Day from Dave Ramsey.com:
Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young. — Henry Ford
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