Financial Headline News for Tuesday 1/31

1) Phil's Financial Tip of the Day:
Some taxpayers who filed their federal tax returns early this year will have to wait a week longer than initially projected to get their refunds.

Early filers may have to wait longer for their tax refund-From USA Today

Some taxpayers who filed their federal tax returns early this year will have to wait a week longer than initially projected to get their refunds.

The delay was caused by new safeguards installed in IRS computer systems to prevent refund fraud, IRS spokesman Michelle Eldridge says. The problem is limited to taxpayers whose returns were filed before Jan. 26. Taxpayers whose returns were accepted on or after that date will not be affected, Eldridge says.

For many early filers, even a one-week hold-up could present a serious hardship, says Andy Stadler , an enrolled agent in Terre Haute, Ind. He received a call on Friday from a client who was counting on her refund to pay her electric bill, and feared her power would be cut off before she got the money.

"The people that come in early tend to be people who really need their tax refunds desperately," he says. "Even a week is a huge deal."

The delay has also created headaches for tax preparers because they've been forced to explain to clients that their refunds may be delayed.

TurboTax is notifying its customers of the potential delays through e-mail and has posted a notice on its Facebook page, says spokeswoman Julie Miller. H&R Block has also posted notices about the delay, noting that it affected all types of returns, regardless of how they were filed or who prepared them.

Even with the delay, taxpayers will still receive their refunds "in line with historic refund delivery times," Eldridge says. Taxpayers who e-file their tax returns and arrange for direct deposit typically receive their refunds within 10 to 21 days.

The IRS provides a "Where's My Refund" tool that provides an update on the status of taxpayers' refunds, but the IRS notes that the dates are estimates and subject to revision. For that reason, taxpayers shouldn't automatically assume they'll receive their refunds on the projected date, says Judy Strauss , an enrolled agent in Cobleskill, NY.

"This week some people were expecting the money to come through and the IRS had a computer problem," she says. "It can happen."

2) In the Markets today:
A disappointing round of economic data weighed on U.S. stocks Tuesday, but major indexes still posted the largest January gains in 15 years.

Stocks Fall at Close of Banner Month-From The Wall Street Journal

A disappointing round of economic data weighed on U.S. stocks Tuesday, but major indexes still posted the largest January gains in 15 years.

The Dow Jones Industrial Average declined 20.81 points, or 0.2%, to 12632.91, punctuating month's end with its first four-session losing streak since November.

Nonetheless, the Dow's 3.4% rise in January was the biggest since 1997, and the Dow's 415 point gain in January was the most on record.
The Standard & Poor's 500-stock index edged lower by 0.6 point, or 0.1% to 1312.41, and the Nasdaq Composite rose 1.9 points, or 0.1%, to 2813.84. The S&P 500's 4.4% rise was its biggest in January since 1997. As with the Dow, the S&P 500's 55-point gain in January was the biggest on record.

"Absent from trading patterns were days when screens were either all red or all green," said Teddy Weisberg, trader at Seaport Securities in New York. "January was one of the best months we've had in a long, long time."

The Dow climbed as much as 66 points early Tuesday before a reading on U.S. consumer confidence in January sent stocks lower. The abrupt swing into negative territory came after the Conference Board's index of consumer confidence retreated to 61.1 this month—well shy of the 68.0 reading expected by economists surveyed by Dow Jones Newswires. A reading that showed slower economic growth in the Chicago area last month didn't help.

The weaker-than-expected data offset early investor enthusiasm for a European Union pact to move 25 of 27 member governments closer to fiscal union and a permanent bailout fund for the 17-nation euro zone.

Investors once again digested quarterly earnings reports from major corporations. Exxon Mobil fell 2.1%, leading the Dow lower, after reporting its fourth-quarter earnings edged up 1.6%, in line with estimates. Still, margins declined in the fourth quarter because of rising oil prices and tepid fuel demand.

Pfizer fell 0.8% after the biopharmaceutical company reported fourth-quarter earnings and revenue that topped expectations, but it lowered its 2012 earnings outlook slightly to reflect unfavorable changes in foreign-exchange rates.

In corporate news, RadioShack plunged 30% after the consumer-electronics retailer reported disappointing preliminary fourth-quarter earnings and a drop in gross margins, citing significant declines in its Sprint business. The company also said it decided to suspend share repurchases "for the near term."

U.S. Steel climbed 5.1% after the company reported a wider-than-expected fourth-quarter loss, but it said it expected a significant improvement in current-quarter results.

Mattel's fourth-quarter earnings rose 14% on improved margins, despite slower-than-expected sales growth, and the toy maker raised its dividend 35%. Shares of the largest U.S. toy maker by revenue jumped 5%.

Archer Daniels Midland fell 3.6% after the agribusiness company's fiscal second-quarter earnings plummeted 89% tied to a large write-down related to an Iowa facility. The company also experienced weakness in three of its major segments.

United Parcel Service fell 0.7% after the company reported better-than-expected fourth-quarter earnings and provided an upbeat 2012 outlook.

Avery Dennison's fourth-quarter earnings fell 81% from a year-earlier period that included a tax benefit as the maker of labels and tags also reported sales declines at its retail branding and specialty businesses. Shares fell 5.8% and were among the worst performers on the S&P 500.

3) Top financial story of the day:
The beleaguered housing market continued to struggle as U.S. home prices posted declines in November.

Home prices drop more than expected in November: S&P-From Reuters

Single-family home prices fell more than expected in November, highlighting the struggle for a sector yet to make a meaningful recovery, a closely watched survey showed on Tuesday.

The S&P/Case-Shiller composite index of home prices in 20 metropolitan areas declined 0.7 percent on a seasonally adjusted basis, a bigger drop than the 0.5 percent economists had expected.

The decrease added on to the 0.7 percent decline seen in October.

"The consensus view was that the rate of decline in home prices was slowing, and in fact what we've seen at the end of the year is that the rate of decline in home prices is accelerating," said Christopher Low, chief economist at FTN Financial in New York.

On a seasonally adjusted basis, 17 out of 20 cities racked up monthly declines and average national home prices were around levels seen in mid-2003.

Prices in the 20 cities also steepened their year-over-year decline, falling 3.7 percent compared to a 3.4 percent decline in October.

"Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall," David Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.

"The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand."

There was little reaction in financial markets immediately following the data as investor attention turned to Europe and hopes that a Greek bond deal will get done this week.

Recent data has lead to optimism the housing sector is in the early stages of the healing process, with some economists looking for prices to find a bottom this year. Still, the recovery is expected to be a lengthy one as the market remains hampered by an excess amount of homes for sale in the midst of weak demand.

4) Quote of the Day from Dave Ramsey.com:
Instead of worrying about what people say of you, why not spend time trying to accomplish something they will admire. — Dale Carnegie

Financial Headline News for Monday 1/30

1) Phil's Financial Tip of the Day:
Money spoke to five families who face challenges that could keep them from meeting their financial goals. With a few tweaks to their game plan, they can get back on course. Here, the DiSilverios' story -- and the recommended financial fixes.

Managing the Family Finances: 'Spying Was Easier'-From Money

Laura DiSilverio knows how to get to the bottom of things. She spent 20 years as an Air Force intelligence officer before retiring in 2004 to write mystery novels.

Today Laura is flummoxed by the job of managing 11 investment accounts. She and her husband, Tom, are unsure whether they're on track for him to retire in 15 years and help pay for college for their daughters, Lily, 14, and Ellen, 12. As Laura puts it, "Spying was easier."

Fortunately Laura is assured of having $36,000 a year in an Air Force pension. (Tom will qualify for $18,000 at age 60 for being a reservist.) However, they estimate needing about twice that once they retire.

Their retirement accounts are 75% in stocks, with the rest evenly divided between bonds and cash. The DiSilverios' 529 college savings plans, 100% in equities, have been on a roller-coaster ride for the past few years, ending up about even. "We might as well have hidden the money in a mattress," Laura says.

Best New Money Moves

Their Finances

Income: $163,000
Assets: $428,500 in retirement savings, $38,000 college savings, $34,000 cash, $130,000 in home equity
Goals: Retire at 68 (Tom); fund college for kids

The Problem

The DiSilverios have too many accounts, says Clarissa Hobson, a financial planner in Colorado Springs, and their portfolio is not diversified enough.
Also, since their oldest daughter is just four years away from college, the all-stock 529 plan is far too risky.

The Advice

Consolidate. Tom and Laura should roll the seven old 401(k)s and IRAs into two IRAs and move all accounts to a single brokerage. "That would be less overwhelming," says Laura.
Get a better 529. The DiSilverios should switch from their high-fee 529 to the Colorado Direct Portfolio college savings plan, which offers low-cost Vanguard funds. They should select the age-based investment options, which automatically become more conservative as the girls approach college.
Re-allocate. The DiSilverios should keep more in stocks than the average fiftysomethings, says Colorado Springs financial planner Susan Strasbaugh, since they can rely on pensions.
Still, 63% in large U.S. stocks is too risky. Strasbaugh suggests cutting the large U.S. stock holdings to 31% of their portfolio and adding some international and REIT funds.
Refinance. Tom and Laura will add only $50 to their monthly payment if they refinance to a 15-year loan, allowing them to retire debt-free.

2) In the Markets today:
Stocks pared losses Monday afternoon but still finished the day in the red, as investors focused on the standoff between Greece and its private creditors and a surge in Portugal's borrowing costs.


Stocks slip as investors wait for Greece, EU-From USA Today

Stocks closed slightly lower and yields for ultra-safe U.S. government debt fell to their lowest level this year Monday while financial markets around the world waited for Greece to nail down a deal to reduce its crushing debt

Greece and the investors who bought its national bonds were close to a deal over the weekend. The investors would swap their bonds for replacements with half the face value.

Greece needs the deal to secure a crucial installment of bailout loans and avoid missing an upcoming bond payment. But the deal has been in the works for weeks and could still fall apart.

The Dow Jones industrial average dipped 6.74 points, or 0.05%, to 12,653.70. Financial stocks were the worst performers in the broader market, with Bank of America (BAC) down 3%. The Standard & Poor's 500 index lost 4.61, or 0.25%, to 1,313.02. The Nasdaq composite index slipped 4.61, or 0.16%, to 2,811.94.

Nearly two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was light at 3.5 billion shares.

US Treasury prices rose, pushing yields to their lowest level this year. The euro dropped 0.6% against the dollar, and European stocks sank.

Borrowing costs for European countries with the largest debt burdens shot higher Monday. The two-year interest rate for Portugal's government debt jumped to 21% after trading around 14% last week.

In addition to the Greek debt problem, European leaders gathering in Brussels hope to focus on how to stimulate economic growth and create jobs at a time when huge government spending cuts threaten to push many countries back into recession.

The latest data showed Spain was a step closer to recession after its economy shrank in the last three months of 2011.

Experts say Europe's efforts to cut its high levels of debt will be for nothing if its economies remain uncompetitive. The leaders will also discuss a new treaty on tightening budget controls and setting up a permanent bailout fund.

But the meeting will be dominated by another topic that is not officially for discussion — Greece's debt problem.

Greece has reached a tentative deal with its private creditors that could avert a disastrous default this spring. Investors holding €206 billion ($272 billion) in Greek bonds would exchange them for bonds with half the face value. The replacement bonds would have a longer maturity and pay a lower interest rate. When the bonds mature, Greece would have to pay its bondholders only €103 billion.

But because Greece has been in recession for years, some experts fear it could need more rescue loans from its bailout partners — other eurozone countries and the International Monetary Fund— if it is to remain solvent.

Richer countries like Germany, however, are losing patience with giving Athens loans, saying the Greek government is not implementing reforms and austerity cuts quickly enough.

A German official even proposed to have an EU official directly oversee Athens' government spending. The idea was quickly rejected, however, by both the European Commission and Greek leaders.

Despite progress in Greece's debt talks with private creditors, the continued uncertainty over its finances pushed markets lower Monday.

Britain's FTSE 100 fell 1.1%. Germany's DAX was off 1%. France's CAC-40 shed 1.6%.

Sentiment, which has been relatively buoyant so far this year on hopes for a recovery in the U.S., was also dented by Fitch Ratings agency's announcement late Friday that it had downgraded five eurozone countries, including Italy and Spain.

Looking ahead, investors will keep an eye on an Italian bond auction and more earnings, which were mixed Monday in Europe — airline Ryanair beat expectations but appliances maker Philips disappointed.

In Asia, most indexes closed lower as investors there reacted to Friday's release of data showing the U.S. economy grew more slowly than expected in the last three months of 2011. The U.S. economy grew at an annual rate of 2.8% in the October-December quarter, lower than the 3% that economists were expecting.

Japan's Nikkei 225 index shed 0.5% to close at 8,793.05. South Korea's Kospi was 1.2% lower at 1,940.55 and Hong Kong's Hang Seng dropped 1.7% to 20,160.41. Australia's S&P/ASX 200 lost 0.4% at 4,272.70.

Benchmarks in mainland China, Singapore, Indonesia, India and the Philippines also fell. Taiwan and New Zealand rose.

Japan's Mitsubishi Electric plummeted 14.8% after the Defense Ministry and the Cabinet Satellite Intelligence Center said they would not sign contracts with the electric machinery manufacturer, which acknowledged it had overcharged on defense and space-related projects, Kyodo News agency reported.

Traders are awaiting more data this week for clues about which way the U.S. economy is headed. On Wednesday, the Institute for Supply Management will release its manufacturing index for January and the U.S. Labor Department will release monthly employment data Friday.

"Because the market has been expecting rather good economic data from the U.S. … I am afraid if those figures disappoint the market, it may trigger further correction in the stock market," said Louis Wong, dealing director of Phillip Securities Ltd.

Benchmark oil for March delivery fell 78 cents to $98.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 14 cents to end at $99.56 per barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3127 from $1.3208 late Friday in New York. The dollar fell to 76.18 yen from 76.72 yen.

3) Top financial story of the day:
Deflation, not inflation, may be the theme for 2012.

Demand for Bank Loans Hints at Deflation-From The Wall Street Journal

Deflation is no imaginary threat.

Yes, the cost of gasoline is up nearly 10% from a year ago. Many Americans are still facing sticker shock in the grocery aisle. And plenty of companies have been dogged by an unpleasant run-up in their commodity costs. That said, the stronger force in the U.S. economy today is actually a deflationary one. A quarterly survey of credit conditions, which the Federal Reserve is expected to release Monday afternoon, may help illustrate this.

The loosening of the credit spigot that helped get the recovery going in mid-2009 has largely come to a halt. After seven consecutive quarters of easing standards on business loans for large and medium-size firms, banks started to tighten them in the fourth quarter as Europe's debt crisis came to a head. A similar change has occurred for lending to small firms, where standards actually began to tighten last summer. Monday's release will show whether this tightening continued at the start of the first quarter.

To be sure, banks can't keep loosening standards forever. And to say they have stopped getting easier with credit terms isn't to say they have slammed the credit window shut. Business-loan growth, in fact, has been a bright spot for banks in recent months. Through December, commercial and industrial loans outstanding were up about 10% year on year, according to the Fed. So far, though, that hasn't translated into much of a pickup in economic growth.

And that is why the U.S. can ill afford any further tightening of credit terms now. After all, demand for loans hasn't exactly been surging. In fact, the Fed's survey suggests the opposite is happening. In the third quarter, the net percentage of banks reporting stronger demand for business loans from large and medium-size firms was 20%. By the fourth quarter, that had fallen to a net 16% reporting weaker demand. Business-loan demand from small firms fell by even more.

It may be that companies have enough cash on hand that they simply don't need to borrow, or that they are raising funds in the bond market instead. Even if that holds for the biggest firms, though, smaller ones still rely on bank loans. Their weaker demand is a cautionary sign for economic growth after a disappointing 1.7% increase last year.

And it suggests that deflation, not inflation, may be the theme for 2012.

4) Quote of the Day from Dave Ramsey.com:
It always seems impossible until it's done. — Nelson Mandela

Financial Headline News for Friday 1/27

1) Phil's Financial Tip of the Day:
Now that tax time is coming-Check this out!

The $8,000 Tax Mistake-From Dave Ramsey.com

Lori Thompson thought she was doing the right thing when she went to a so-called pro to file her 2009 income taxes. Early on, however, she had a bad feeling that turned out to be right on target.

"I had just purchased my first home," Lori said. "When tax season came around, I knew I could no longer use the (1040)EZ form." She chose an agent who billed himself as an expert with 25 years of experience, specializing in first-time homeowner taxes—just what she was looking for. But as the agent began sorting through Lori's records, she had one of those unexplainable "bad feelings."

"I was told I could eliminate any worries if I purchased their IRS guaranteed protection package," Lori said. Many tax prep companies offer protection packages like the one Lori was offered. They guarantee the customer that the company will correct any mistakes an agent may make in calculating or filing the customer's income taxes. Since Lori was already feeling uneasy, she bought the extra protection, but the bad feeling wouldn't go away.

 

I Owe How Much?

When the process was complete, Lori's agent told her she owed $8,000 in taxes, plus nearly $300 for the tax preparation itself! "I was stunned and panicked at the same time," Lori said. "I asked, 'How can this be? If I just bought a house, shouldn't that make a difference? Don't I get the first-time homebuyer's credit?'"

But the agent told her she'd received all the deductions she was eligible for and asked if she was prepared to pay the entire amount. "At this point, I was being rushed along because the next client had already been waiting 20 minutes," she said.

As Lori became more anxious, the agent suggested she get a loan or ask family or friends to help her pay the bill. She paid the fee for the service, gave the agent permission to file her return electronically, and left to find a way to come up with the $8,000.

 

A Second Opinion Is A Good Thing

That evening, a friend suggested Lori get a second opinion and put her in touch with Evelyn Saunders, a CPA and one of Dave's Endorsed Local Providers (ELP) in the California area. Lori met with Evelyn the next day and got some great news. She did not owe $8,000—she was actually due a refund!

"She found that the other preparer at the chain tax prep service made numerous mistakes not only in how my return was calculated, but also in the lack of deductions I was eligible for, such as the first-time homebuyer credit I mentioned several times," Lori said.

Lori also simply felt better about the service she received from Evelyn. "I feel more secure because I believe she is truly working to do the best job possible for me, instead of feeling like I'm just the next person in line," Lori explained. "I can ask questions, and she will actually take the time to answer or explain without making me feel like I'm encroaching on the next person's time slot."

 

Tax Chain's Broken Promises

Using the documents Evelyn provided, Lori returned to the original agent to file an amended return.

The agent corrected the mistakes, but the company refused to refund her preparation fees or the cost of the guaranteed protection package.

Lori eventually chalked up the experience as an expensive lesson learned, and she now recommends avoiding big chain tax prep companies altogether. "Doing someone's taxes is a very personal thing and should be personalized," she said. "It cannot and should not be packaged in a one-size-fits-all format these large companies tend to use."

 

Find Your Tax Professional

Dave has a tax ELP in your area who will give you the same personalized, one-on-one service Lori received. Contact your ELP today!

 

Reclaim Your Cash Now!

Millions of people who take the standard deduction or don't use a true tax pro overpay the IRS. Are you one of them? Find out more.


2) In the Markets today:
Blue-chip stocks finished in the red, pushing the Dow to its first losing week this year, after a reading on domestic economic growth fell short of expectations.


Stocks end mixed after fourth-quarter GDP report-From USA Today


US stocks ended the day mostly lower Friday after the government reported the economy grew at a slower pace than economists had expected in the fourth quarter.

The Dow Jones industrial average fell 74 points, or 0.6 percent, to close at 12,660.46 The broader Standard & Poor's 500 index fell 2 points to end the day at 1,316.33. The Nasdaq composite index edged up 11 points to close at 2,816.55.

A slump in the Dow pushed the index down for the week, the first time that has happened in 2012. The index had risen three weeks in a row and is up 4% so far this year.

Nearly two stocks fell for every one that rose on the New York Stock Exchange. Volume was light at 3.9 billion shares.

The Commerce Department said the U.S. economy grew at a modest 2.8% in the final three months of last year. Economists had expected 3% growth.

While that is the fastest quarterly growth in 2011, full-year growth adjusted for inflation's impact was 1.7% compared to 3% in 2011. A recovery in the U.S. is vital for global growth at a time when Europe is facing another recession.

Among stocks making big moves, Chevron (CVX) ended the day down 2.5% after falling more 3%, the most of the 30 stocks in the Dow average, because the energy giant's fourth-quarter revenue and earnings per share came in well below what analysts were expecting. Oil and natural gas production declined in the quarter.

Ford Motor (F) fell 4.2% after reporting disappointing fourth-quarter earnings due to weak sales in Europe. The company said results were also hurt by trouble at parts suppliers in Thailand due to flooding there.

Starbucks (SBUX) fell 1% after reporting late Thursday that full-year results were likely to come in below expectations. Procter & Gamble (PG), which makes Tide, Crest and other consumer products, fell about 0.75% after cutting its earnings outlook.

European markets were muted after the latest economic data from Spain, which already has the highest unemployment rate among the 17 nations that use the euro. Spain has more than 5 million people without jobs, and its National Statistics Institute said the jobless rate shot up from 21.5% to 22.8% in the fourth quarter.

Britain's FTSE 100 slipped 1% to 5,736.13 while Germany's DAX dropped 0.4% to 6,516.90 and France's CAC-40 lost 1.1% to 3,324.88. The euro was up 0.2% at $1.31137.

High unemployment and budget cuts across the eurozone are forecast to weigh on even traditionally stronger economies like Germany.

Attention was also focused on the resumption of talks to reach a deal on how Greece can avoid a catastrophic default on its debt. Greece and its bailout rescuers — other countries that use the euro and the International Monetary Fund— are asking private creditors to swap their Greek bonds for new ones with a lower value and interest rate.

The two sides have so far disagreed over what interest rate the new bonds should take. Some negotiators have said they hope to have a deal this weekend, in time for a European leaders' meeting on Monday.

While investors appear to expect a deal at some point — the euro was up and eurozone borrowing rates were down, suggesting a steady increase in confidence — some were still focusing on the fact that the crisis is far from over.

Portugal's markets have worsened in recent days on fears that its austerity efforts will not be enough to achieve its deficit-reduction targets and that it may end up like Greece, needing a second bailout effort and possibly a debt writedown.

Getting economies like Portugal to grow is fast becoming a priority and is expected to be one of the main topics of discussion at the European leaders' summit in Brussels on Monday.

Earlier in the day, Asian markets showed little momentum ahead of the weekend.

Japan's Nikkei 225 index fell 0.1% to close at 8,841.22 while South Korea's Kospi rose 0.3% to 1,957.18. Hong Kong's Hang Seng rose 0.3% to 20,501.67 and Australia's S&P/ASX 200 gained 0.4% to 4,288.40.

Japanese exporters continued to be hit by a strong yen, which reduces the value of profits from exports. The dollar fell to 76.95 yen from 77.49 yen.

Nintendo, the Japanese gaming giant behind the Super Mario and Pokemon games, plummeted 4.1%, a day after it lowered its annual earnings forecast to a 65 billion yen ($844 million) loss. The company blamed the strong yen for much of the loss.

Japanese electronics company NEC plummeted 7.1% after announcing Thursday that it was slashing 10,000 jobs worldwide and would slide into the red for the full year.

Benchmark oil for March delivery was up 39 cents at $100.09 per barrel in
electronic trading on the NY Mercantile Exchange.

The contract rose 30 cents to finish at $99.70 per barrel on the Nymex on Thursday.

3) Top financial story of the day:
That's the final, pathetic growth number for 2011.

2011 GDP: 1.7%-From The Business Insider

From the just-released GDP report:

Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.

The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

Not exactly a barnburner.

4) Quote of the Day from Dave Ramsey.com:
There is no real excellence in all this world which can be separated from right living. — David Starr Jordan

Financial Headline News for Thursday 1/26

1) Phil's Financial Tip of the Day:
Now that tax documents are coming in daily to meet the January 31st deadline, here is a checklist to go through before preparing your tax return for 2011.

Tax Documents You Shouldn't Be Missing-From Yahoo Finance

2011 may already be in your rear-view mirror, but, before saying a final buh-bye to last year, let’s look back and get straight with the IRS. Tax time doesn’t have to be a painful process. As a matter of fact, it’s easier than ever, especially with so much available online. However, there is still one part of the process that’s paperbound—the beginning.

Here are some of the five most important documents to have on hand to start filing your taxes this year:

1. 1040 Tax Return Form


Your 1040 tax return form is where the filing happens. This form describes information about you, the taxpayer, your dependents, and all items as it comes to income. On this form you--or your tax-preparing software--calculate your tax deductions as well as your tax credits and show what funds have already been withheld from your earnings. This is also where you’ll eventually complete how much tax is due (or refund!) given your adjusted gross income (your “AGI”).


2. W-2 Form


For full-time employees, the W-2 is what you need to pull out of your mail pile and have on hand.

This form lists your total earnings from each employer as well as what was deducted already from your paycheck, such as taxes withheld and healthcare premiums, for the year. If you’re a part-time worker or freelancer you’ll get a W-9 with similar information.


3. 1099 Forms


1099 forms are also tied to income but very different kinds. You’ll get a 1099 for interest earnings (such as from a savings account), as well as for investment earnings, any capital gains you made from buying, holding then selling stocks or other investments. Or, if you’re incorporated as a small business owner or independent contractor, this is how your payments get reported to the IRS as well. Have all of these on hand when you’re ready to file.

4. Mortgage Statement


Now that income statements are out of the way, don’t forget those mortgage statements. Mortgage statements show how much principal you paid toward your mortgage and just as importantly, how much you paid in mortgage interest. That interest is one of the biggest tax deductions that homeowners have.

5. 2010 Tax Returns.

Lastly, you’ll have to go back in time one more time and pull out your 2010 tax returns and copies of any additional payments you may have made. You’ll need all this to refer to when filling out your 2011 tax return.


2) In the Markets today:
Stocks fell, surrendering early gains, after a wave of disappointing economic data offset strong earnings from blue chips and the Federal Reserve's pledge to hold down interest rates.

January rally interrupted as buyers pull back-From Reuters

A month-long rally on Wall Street appears to be sputtering as stocks slipped on Thursday in what investors called a possible warning of weakness ahead.

Weaker-than-expected home sales figures and a group of mixed earnings reports tempered the market's recent buying interest.

With the S&P 500 up nearly 5 percent for the year, analysts said the market was due for a pullback.

Wall Street has advanced in recent weeks as U.S. data raised expectations the economic recovery was picking up steam.

"This market is tired and overbought, and we're seeing the results of that today," said Larry McMillan, president of McMillan Analysis Corp.

"After yet another knee-jerk rally on moderately positive economic news, the buyers are out of gas," McMillan said.

Stocks began higher, helped by the Federal Reserve's vow on Wednesday to keep interest rates near zero at least until the end of 2014, a support for buying of risky assets.

But gains were short-lived and the market turned lower in the morning. The Dow's losses were limited by Caterpillar Inc (NYSE:CAT - News), which rose 2.1 percent to $111.31. The heavy equipment maker posted a jump in quarterly earnings that far exceeded Wall Street expectations.

Housing-related stocks led the reversal after sales of new single-family homes fell for the first time in four months in December. It followed Wednesday's soft pending home sales report and dented optimism that housing may have reached a bottom.

Toll Brothers Inc (NYSE:TOL - News) lost 5 percent to $22.07. The PHLX housing sector index (Nasdaq:^HGX - News) declined 1.3 percent.

Banks, which stand to benefit from a recovery in housing, also fell. The KBW Bank index (Philadelphia:^BKX - News) dropped 2.2 percent. SunTrust Banks Inc (NYSE:STI - News) shed 5.2 percent to $20.50 after Deutsche Bank lowered its rating on the stock.

AT&T Inc (NYSE:T - News) posted a $6.7 billion quarterly loss, in part on a break-up fee for its failed T-Mobile USA merger. The shares fell 2.5 percent to $29.45 and were the primary reason the telecom sector was the worst of the S&P's 10 sectors.

The Dow Jones industrial average (DJI:^DJI - News) was down 22.33 points, or 0.18 percent, at 12,734.63. The Standard & Poor's 500 Index (SNP:^GSPC - News) was down 7.60 points, or 0.57 percent, at 1,318.45. The Nasdaq Composite Index (Nasdaq:^IXIC - News) was down 13.03 points, or 0.46 percent, at 2,805.28.

Stocks also rose early after data showed orders for durable manufactured goods rose more than expected in December, while unemployment benefit claims last week rose only moderately.

3M Co (NYSE:MMM - News), a conglomerate with operations throughout the economy, also supported the Dow after it reported higher-than-expected quarterly earnings as demand from industrial and transport markets offset weak sales to makers of consumer electronics. The shares rose 1.2 percent to $87.58.

This is one of the busiest weeks of earnings season, with 117 S&P companies expected to report. According to Thomson Reuters data, 59 percent of the 152 companies in the S&P 500 that have reported earnings beat analysts' forecasts, down from the 70 percent beat rate in recent quarters at this stage.

Amgen Inc's (NasdaqGS:AMGN - News) shares fell 1.6 percent to $68.08 and weighed on the Nasdaq after the world's largest biotechnology company said it would pay more than $1 billion to buy Micromet Inc (NasdaqGS:MITI - News), a deal that would give it access to the company's novel cancer treatment technology.

Micromet's shares jumped 32.1 percent to $10.94 and were the most heavily traded on Nasdaq.
About 7.9 billion shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq on Thursday.


3) Top financial story of the day:
More people seek unemployment aid, though increase isn't enough to disrupt downward trend

Unemployment claims rise, but so do orders for durable goods-From USA Today

The number of people seeking unemployment benefits rose last week to a seasonally adjusted 377,000, after a nearly four-year low the previous week. The long-term trend is pointing to a healthier job market.

And two other reports gave cause for some optimism:

• A gauge of future economic activity posted an increase for December, providing evidence the economy was gaining strength as the year ended. The Conference Board says its index of leading economic indicators rose 0.4% last month following a revised 0.2% increase in November and a revised 0.6% gain in October.

• The Commerce Department said orders to factories for durable manufactured goods increased 3% in December, the second straight monthly gain.

Perhaps the best evidence of that was a 2.9% increase in so-called core capital goods, such as computers and machinery. That pushed total orders for the category to a record $68.9 billion.

Economists pay most attention to so-called core capital goods because they are often viewed as a good way of gauging business investment plans.

Applications for unemployment benefits have been trending downward the past few months. Just two week ago, applications had plummeted to their lowest level since April 2008. And the average has fallen about 9% since Oct. 1.

But the week ending Jan. 21, initial claims increased 21,000, the Labor Department said Thursday. The four-week average, a less volatile measure, fell to 377,500, the government added.

Unemployment applications have been particularly volatile this month because employers have cut temporary workers hired for the holidays. The department adjusts for seasonal trends. But doing so accurately can be difficult.

Applications generally need to fall consistently below 375,000 to signal that hiring is strong enough to lower the unemployment rate.

Hiring improved in the second half of last year. In December, employers added 200,000 jobs, and the unemployment rate fell to 8.5% — the lowest level in nearly three years.

Economists forecast that the nation will gain about 160,000 jobs per month in 2012, according to a survey of economists by the Associated Press. That's up from an average of about 135,000 last year.

A better outlook for job growth has coincided with other signs of improvement in the economy.

Factory output jumped in December and consumer confidence and spending have risen. Even the battered housing market has shown some signs of slight improvement.

Still, the Federal Reserve said Wednesday that it expects growth to remain modest this year. And it forecasts only gradual declines in the unemployment rate.

The Fed predicts the unemployment rate could fall as low as 8.2% by the end of 2012. Growth will be modest: The Fed expects the economy to expand 2.5% at an annual rate this year.

The job market has a long way to go before it fully recovers from the damage of the Great Recession

Growth could slow this year. Europe is almost certain to fall into recession because of its financial troubles. And wages aren't keeping up with inflation. That makes it harder for consumers to spend more, potentially limiting growth.

Manufacturing has been a bright spot in the current recovery. U.S. factory activity has been lifted a surge in exports but economists are worried that the growth in exports could falter if overseas markets, such as Europe, show signs of slowing. Europe accounts for about one-fifth of U.S. exports.

Durable good orders have climbed more than 45% since hitting a recession low in April 2009. That has kept factories busy and helped the economy grow at a slow but steady pace.

Businesses cut back on core capital goods in November for the second straight month, which drew some concerns from economists. The Federal Reserve on Wednesday also cited the decline while warning that the economy remains vulnerable.

But December's increase in total durable goods orders bolstered the view sketched by other data showing the economy picked up in recent months. Companies are hiring more, factories are making more goods and more people are buying cars.

4) Quote of the Day from Dave Ramsey.com:

Few things are impossible to diligence and skill. Great works are performed not by strength, but perseverance. — Samuel Johnson

Financial Headline News for Wednesday 1/25

1) Phil's Financial Tip of the Day:
Another reason to have a Monthly Budget:Can You Afford That Purchase?

Can You Afford That Purchase?From Financially Fit

According to Merriam-Webster's dictionary, to "afford" something means that you are able to "bear the cost." But, let's say you earn $50,000 a year. Can you afford, say, a $1,500 flat screen TV or a $3,000 watch? On paper, you may earn enough to "bear the cost," but in reality, we all know there's far more to affordability than just simple math.

Consider this analysis before deciding whether you can afford it...or not.

The first, and most obvious question to answer is "how am I going to physically pay for this?" Now, this answer does require a bit of math. Start by reviewing your income versus your monthly expenses.

Can you comfortably pay for this purchase in cash after accounting for your bills and your various savings? Or, will this exhaust every nickel of discretionary income and leave you vulnerable in a financial emergency? If you can pay for the item in cash with substantial savings to spare, you may be on your way to affording it.

However, if the purchase costs more than what's left in your checking account and requires using a credit card, you'll want to think long and hard before swiping. At the least, make sure your monthly payments lie well below your means, and have a plan to pay off the entire balance as soon as possible, preferably in the next month to avoid paying interest.

From here, you also want to consider any and all short-term trade-offs as a result of purchasing the item. While you may be able to afford the TV or watch in cash today, will it mean giving up something else tomorrow in order to make the payment? For example, will it mean ditching your summer vacation plans or forgoing dinners out for a month? If you're fine with incurring opportunity costs then you may be able to truly afford it.

That said, we shouldn't rationalize all opportunity costs. If affording something means sacrificing our hard-earned savings—be it rainy day, retirement or college savings—let this be a big red flag that you simply shouldn't afford it because it's not worth it.

Finally, remember to think long-term, as well. What might be possible trade-offs in the future? For example, let's say you have enough in the bank to buy that new plasma, but if you have big plans to save up for a house or start a family in the next year or two, you may not want to afford it. After all, it may mean making an even more important trade off down the road. So while, you can afford it today, it may not be actually be worth it in the long run.

2) In the Markets today:
Blue-chip stocks raced to an eight-month high, and the Standard & Poor's 500-stock index stepped into a new bull market Wednesday after the Federal Reserve said it would likely keep interest rates low until at least late 2014.

Fed News Fuels Stock Rise-From The Wall Street Journal

Blue-chip stocks raced to an eight-month high, and the Standard & Poor's 500-stock index stepped into a new bull market Wednesday after the Federal Reserve said it would likely keep interest rates low until at least late 2014.

The Dow Jones Industrial Average rose 83.10 points, or 0.7%, to 12758.85, its highest level since May 10, 2011. The blue-chip index had fallen as many as 96 points shortly after the opening bell but shot higher after the Fed's announcement at 12:30 p.m. Eastern time.

The S&P 500 finished with a gain of 11.41 points, or 0.9%, at 1326.06, closing the day in bull-market territory—up more than 20% from its recent closing low on Oct. 3, 2011. The Nasdaq Composite led the major indexes with a gain of 31.67 points, or 1.1%, at 2818.31.

The moves came after the central bank said it expects interest rates to stay at "exceptionally low levels" at least until late 2014. Previously, the Fed had said it expected the period of exceptionally low rates to last until mid-2013. The Fed said the economy continued to expand at a moderate pace and noted the recent improvement in overall labor-market conditions, though unemployment remains "elevated."

"You can see by the reaction in the markets all over the world that tacking on those extra months was a big surprise," said Dan Greenhaus, chief global strategist at BTIG. "Clearly, the Fed is saying, 'I'm coming. Rates are going to be lower than you thought.' If you believe that equity prices are impacted by lower interest rates, then you're going to bid up stocks."

The Fed's move sent the dollar tumbling against its major rivals, pushing up commodity prices and sending Treasury yields sharply lower.

The stock market's reversal traced a pattern that has become familiar in recent days—chipping away at early losses throughout the day.

"Whatever negative tone starts the day off, we seem to climb out of the hole," said Scott Armiger, portfolio manager at Christiana Trust. "I'm not sure the market deserves to be in as good a mood as this. Earnings haven't been great, but the market is shrugging it off....It defies logic, but we'll go with it."

The Fed announcement added more complexity to a trading day dominated by corporate earnings and headlines from Europe.

Leading the day's gains was Apple, which saw its shares surge 6.2% after the technology giant reported first-quarter earnings and revenue that blew past estimates, helped by sales of iPhones and iPads that more than doubled from a year earlier. The company also provided a fiscal second-quarter outlook that was above current forecasts.

Apple's gains helped the technology sector stand out as one of the strongest sectors on the S&P 500. Utilities also surged amid a drop in Treasury rates. Financial stocks were weakest.

European markets finished with modest losses. The Stoxx Europe 600 declined 0.4%, as concerns over the lack of a debt-restructuring agreement between Greece and its private creditors and mixed economic data weighed on sentiment.

Asian exchanges were mostly higher on the back of Apple's results. Japan's Nikkei Stock Average rose 1.1% to finish near a three-month high.

Gold futures reversed losses after the Fed announcement, rising well above $1,700 an ounce before settling up 2.1% at $1,699.80 an ounce. Crude-oil futures turned losses into a strong gain, surging above $100 a barrel before finishing up 0.5% at $99.40 a barrel. The dollar, which was rising against the euro and the yen, reversed course to lose ground to both currencies after the Fed announcement.

Demand for 10-year Treasury notes surged after the central bank move, sending the yield, which moves inversely to price, down to 1.2009%.

In economic news, data on pending home sales for December showed an unexpectedly large month-on-month decline of 3.5%, while an index of home prices in November showed a 1% gain. Economists had expected pending home sales to slip 1% and for prices to remain unchanged.

In other corporate news, Boeing edged up 0.6%, after the aerospace company reported fourth-quarter results that exceeded expectations but indicated that a large pension expense would hurt 2012 earnings.

United Technologies slipped 0.2% after the aerospace and building-controls company's fourth-quarter earnings matched fourth-quarter earnings estimates while revenue missed slightly, and the company affirmed its 2012 earnings outlook.

Advanced Micro Devices climbed 3.1% after the semiconductor maker's fourth-quarter earnings beat estimates but revenue missed slightly. Fellow chip maker Altera edged up 1.1% after the company reported better-than-expected fourth-quarter results but indicated current-quarter sales would miss estimates.

Delta Air Lines surged 6.2% after posting sharply higher earnings, thanks to a double-digit increase in a key revenue metric, passenger revenue per available seat mile. US Airways Group jumped 17% after posting stronger revenues and topping earnings estimates. United Continental Holdings also benefited from the interest in airline operators, rising 5.2%.

Xerox tumbled 9.9% after the printer-and-copier maker reported fourth-quarter earnings that matched estimates while revenue was a bit shy.

Yahoo slipped 0.8% after the Internet company reported fourth-quarter earnings that were in line with expectations, while revenue came in a bit shy. The revenue outlook for the first quarter essentially matched current forecasts.

3) Top financial story of the day:
The housing market retreated in December,2011.

Pending home sales retreat from 1-1/2 year high-From Reuters

Pending sales of existing U.S. homes fell more than expected in December, industry data showed on Wednesday, pointing to a moderation in home sales after recent hefty gains.

The National Association of Realtors' Pending Home Sales Index, based on contracts signed in December, dropped 3.5 percent to 96.6 after surging to a 1-1/2 year high the prior month.

Economists polled by Reuters had expected pending sales to fall 1.0 percent. Pending sales lead existing home sales by a month or two. In the 12 months to December, pending contracts were up 5.6 percent.

A recovery is starting to emerge in the housing market and home resales have risen for three straight months.

4) Quote of the Day from Dave Ramsey.com:
Unless you try to do something beyond what you have already mastered, you will never grow. — Ralph Waldo Emerson

Financial Headline News for Tuesday 1/24

1) Phil's Financial Tip of the Day:
January is a prime month for credit-card, debt-relief, job-search and tax scams -- but you can spot scam artists before they target you.

Protect Yourself from New Year's Scams-From Kiplinger's

Read more: http://www.kiplinger.com/columns/ask/archive/protect-yourself-from-new-years-scams.html#ixzz1kPgd5VsS
Become a Fan of Kiplinger's on Facebook

2) In the Markets today:
The S&P 500 closed in the red for the first time in five sessions Tuesday, as Greece's debt-reduction talks edged toward a standoff and a raft of blue chips delivered mixed quarterly results.

Stocks mixed over worries about Greek debt deal-From USA Today

Stocks closed mixed Tuesday as investors remain concerned that a deal to cut Greece's debt might fall through.

The Dow Jones industrial average and the Standard & Poor's 500 index declined, while the Nasdaq composite index rose slightly.

At home, a slew of corporate earnings reports didn't do much to ease investors' fears:

• Kimberly-Clark (KMB), which makes Kleenex tissues, Huggies diapers and a number of other household goods, said rising costs pushed its net income down 19% in the fourth quarter.

• DuPont (DD) said fourth-quarter net income dipped as lower sales and higher costs overshadowed higher prices. But its results still beat analysts' expectations.

• The stock of coal producer Peabody Energy (BTU) was hit hard. Its results and its forecast for the first quarter fell well short of expectations.

Leading the pack of companies trading higher after reporting earnings, bag and accessories maker Coach gained more than 6% after quarterly net income rose almost 15% because of stronger holiday sales.

According to preliminary results, the S&P 500 index fell 1.5 point to 1,314. The Nasdaq composite rose 1.5 point to 2,785.

The Dow lost 37 points to 12,671. It has risen or fallen less than 100 points in 13 straight trading sessions, the longest stretch of calm since March and April of last year.

Among other stocks making large moves:

• Zions Bancorporation (ZION) fell 8%, the most of any stock in the S&P 500, after the Salt Lake City bank reported income that fell far short of Wall Street's expectations. At least one analyst downgraded the stock.

• Hard disk drive maker Western Digital (WDC) led gainers in the S&P after reporting that its results handily beat Wall Street's expectations. The stock jumped 6%.

In Europe, the Greek stock market was down 5.5%. Stocks were down less than 1% in Germany, France and Spain and closed higher by 0.1% in Italy. The FTSE index of leading British shares was down 0.9%. The euro fell 0.5% to $1.2619.

A deal with bondholders is considered critical to the stability of Europe's financial system. Greece currently has far more debt than it can ever pay back and investors fear that if the country defaults it could trigger a financial panic. Banks that hold Greek debt have already been asked to take a 50% loss on those investments — and some think even that writedown isn't big enough.Time is running out for politicians and banks to mend the problem; Greece has several billions euros in debt due in March.

After 10 hours of talks Monday, the finance ministers of the countries that use the euro drew a line in the sand: Greece will pay less than 4% interest on the new bonds creditors will get in a swap meant to cut Greece's debt by about €100 billion ($130 billion). The private holders of the debt made their own stand over the weekend, saying they had given leaders their most generous offer, though they did not detail what it was.

The negotiations involve a delicate balancing act between getting a deal large enough to ensure that Greece can someday dig out from under its pile of debts but not so harmful to banks that it scares investors off from investing in any eurozone debt.

Politicians are also aware that European banks are under tremendous pressure because of the amount of government debt they hold and the banks have seen their stock prices crash and their sources of funding dry up during the crisis. Late Monday, S&P downgraded the credit ratings of two major

French banks, Credit Agricole and Societe Generale. They confirmed the rating of a third major bank, BNP Paribas, but the stock prices of all three plummeted Tuesday, underscoring how fragile all financial institutions are.

Rupert Osborne, a futures dealer with IG Index, said the negotiations with Greece were particularly weighing on bank stocks, but that the declines seen Tuesday could have been worse.

"Some would say the market is being surprisingly patient regarding these ongoing negotiations — but if this lack of progress ends up being a recurring theme it seems unlikely that traders will continue having such a sanguine view," he said.

Compounding these concerns is the poor state of Europe's economy and worries that the eurozone is slipping back into recession. Even relatively positive results from two economic surveys released Tuesday were not enough to ease those worries.

January's manufacturing purchasing managers' composite index rose to 48.7 from 46.9, according to Markit, a financial data company. The services PMI rose to 50.5 from 48.8. Both surveys, which are considered indicators for growth, beat the expectations of analysts, but experts warned they are far from good news.

"Worrying elements remain in the purchasing managers' surveys and we suspect that it is still more likely than not that the eurozone will suffer further contraction in the first quarter of 2012 which will put it back into recession," said Howard Archer, an analyst with IHS Global Insight.

Concerns about the state of the economy even tempered oil prices, which had been skyrocketing after European leaders announced they would stop buying Iranian oil in an effort to pressure Tehran into resuming talks on its nuclear program.

Benchmark oil rose 18 cents to $99.13 in electronic trading on the New York Mercantile Exchange.

Earlier in Asia, Japan's Nikkei 225 stock rose 0.2% to 8,785.33 despite the central bank cutting growth forecasts for the fiscal year ending March 2012 and the following year because of a slowdown in overseas demand and the strong yen.

Australia's S&P/ASX 200 closed little changed at 4,224.20. Indonesia's benchmark was up 0.1% at 3,994.91 and India's Sensex was 1.5% higher at 16,997.35 after the Reserve Bank of India lowered cash reserve requirements for commercial lenders.

3) Top financial story of the day:
After Months of Volatility, Investors Puzzle Over Stocks' Sudden Gentility

All's Quiet on the Dow. Too Quiet?-From The Wall Street Journal

It's an eerie calm.

After last year's gut-wrenching swings, U.S. stocks have been surprisingly tranquil in 2012. The Dow Jones Industrial Average has moved less than 100 points on all but one day this year. And most of those moves have been higher.

The upshot has been a 4% gain for the Dow this year. The closely watched "fear gauge," the CBOE Market Volatility Index, has fallen 20%, to levels unseen in six months, and the Nasdaq Composite has risen 6.9%.

The Dow on Monday dipped 11.66 points, or 0.1%, to 12708.82.

So why aren't more traders happy? It is too quiet, says investor Dennis Gartman, author of the widely read Gartman Letter and self-proclaimed market bull.

"We are antsy," Mr. Gartman wrote in his Friday letter. "We are becoming a bit concerned about the too-severe ascent that is taking place."

The recent market moves bear an ominous resemblance to the rally of April 2011, investors say. Back then, investors also were becoming more optimistic about the strength of the U.S. recovery, and worries about Europe for the time being had been shelved. The Dow for the year peaked at the end of April. The months that followed were among the most tumultuous in recent memory.

As 2012 approached, there was one thing almost all investors and traders agreed on: Volatility would continue.

Instead, stocks have, for the most part, steadily ticked higher. Again, the U.S. economy appeared to be finding its feet. And many felt they had positioned themselves for future debt troubles in Europe.

Money is again flowing into U.S. stock mutual funds, although at a slow pace, helping nudge stocks higher. The U.S. is benefiting from a flow of money out of Europe. While some of that is moving to emerging markets, many investors are also directing their funds to the U.S.

In the past two weeks, $6.4 billion of global investor cash has flowed into U.S. stock funds, at a time when $1.5 billion has been pulled from European stock funds, carrying on a trend that began in early December, according to fund-flow tracker EPFR Global.

Traders point to one important change in the market: Stocks are again beginning to move independently of one another other. For the past six months many of them moved in lockstep—rising and falling together. But that correlation has dropped to 15%, down from 74% in August, and is the lowest since last April, according to Bank of America Merrill Lynch.

Still, much of the recent gain depends on the U.S. economy continuing to recover and European officials continuing to make progress in easing the region's debt crisis.

Barry Knapp, chief equity strategist at Barclays Capital, says he is concerned the market calm represents the "eye of the storm." He suggests that the best investors can hope for is a "flattish" market.

Economic growth will likely remain tepid, he says. The big risks, though, are further instability in Europe, he says, as well as missteps by China in its attempts to ease an economy some fear may be headed for a hard fall.

Michael Clarfeld, portfolio manager at Legg Mason's ClearBridge Advisors, acknowledges the risks but says he remains optimistic. Mr. Clarfeld says the European Central Bank's decision to offer a three-year lending facility to European banks in mid-December proved a turning point, removing for many investors the possibility of contagion rippling through the global banking system.

"It doesn't mean that there aren't still problems that need to be solved, but the lending facility may take away the panic," Mr. Clarfeld said.

Stock-market strategists at Brown Brothers Harriman are tweaking their approach "to reflect the decline in market volatility," said Sam Burns, an equity strategist there.

Coming into the year, Mr. Burns had focused on companies with relatively low debt, figuring a conservative balance sheet was essential in a rocky market. But he has since shifted course, buying companies with strong sales growth, a more aggressive approach for the calmer market. The firm also has been picking more economically sensitive companies, such as technology and retail stocks.

"We had been focused on more traditional 'quality' metrics, but now volatility's come down," he said. "High volatility and bearishness had been key supports" for his previous preference for "high-quality" companies, "but, as volatility has eased, we no longer see strong evidence to support those factors outperforming."

He says he now expects the lull in volatility to remain for some time: "Investors may have become more thick-skinned. It definitely takes more to move the needle after the turmoil we saw in recent months."

4) Quote of the Day from Dave Ramsey.com:
Be miserable. Or motivate yourself. Whatever has to be done, it's always your choice. — Wayne Dyer

Financial Headline News for Monday 1/23

1) Phil's Financial Tip of the Day:
If you're only going to use something once in a while, don't pay full price when you can borrow it for a lot less.

10 Things You Should Rent Instead of Buy-From Financially Fit

It may be a buyer's market when it comes to real estate, but there are still many things you're often better off renting.

Of course, there's no substitute for ownership if you truly need an item for repeated use, but if you're only going to use something once in a while, why pay full price when you can borrow it for a lot less?

For Americans on a budget, here are 10 examples of when renting might be the more cost-effective choice.

Designer Dresses

Designer gowns and dresses were once out of reach to most of us, affordable only to glitzy celebrities and those with a healthy cushion of disposable income. Now thanks to some hip rental companies, women with more modest means can wear red-carpet-worthy pieces for a fraction of the retail price.

Wear Today Gone Tomorrow rents out dresses and accessories by top designers, many for 90% off the retail price, such as this Kay Unger strapless silk ruched dress for $57 for a seven-day rental (retails for $570). Just keep in mind that the company tacks on a $10 cleaning fee for all dresses.

Rent the Runway also lends out dresses by more than 100 designers, including Vera Wang, Missoni and Diane von Furstenberg, plus accessories such as jewelry and shawls.

Both companies send the rental dress of your choice by mail, and Rent the Runway throws in a second size for free just in case the first one doesn't fit.

Tools

While everyone should probably own a basic toolbox, when it comes to bigger power tools that you may only need for a special project, you can save money by renting.

The Home Depot rents out a variety of tools for the occasional home repair or maintenance project.

For instance, I can rent a 20-inch gas chainsaw from my local Home Depot for $63 a day — a good value, considering that buying one from the store can cost from about $200 to $570, according to HomeDepot.com.

[See also: Turn your passion into your career ]

You can also rent a carpet cleaner from most Home Depot locations for $18 for four hours, or $24.97 for the day. According to HomeDepot.com, most carpet cleaners at the store cost $150 or more to purchase.

Handbags

Like dresses, you can rent designer handbags for a considerable amount less than the retail price.

If you're wondering when it makes more sense to borrow a bag than buy one, consider these situations:

You have a special event, such as a wedding, that may call for a specific color or style to match your dress, but you don't want to spend a bundle on something you may not wear again (how many "lilac" colored outfits do you normally wear?). Or say you're looking to dress to impress for a job interview, date or charity function. Or you want a new handbag for this season, but don't want to spend too much and get stuck with a bag that may end up in your closet when the season changes.

Bag Borrow or Steal rents out handbags by hot designers like Tory Burch, Prada, Michael Kors and Fendi on a weekly, monthly or seasonal basis. Another service is Handbag Envy, which rents bags for the week or month by designers such as Louis Vuitton, Chanel and Gucci.

Caskets

The only thing spookier than a funeral is the price tag that comes along with it. Purchasing a casket alone can cost an arm and a leg, with the average metal casket priced at $2,295 and the average wooden casket costing $2,865, according to the National Funeral Directors Association.

Believe it or not, though, buying a casket isn't your only option — many funeral homes actually offer casket rentals for the funeral services, which can save you a good amount of money. Rental caskets look like any other to the casual observer, but inside they contain an insert where the body is placed that is removed after the services.

"You normally don't see rentals used with burials — they're typically used for cremation," says funeral director Michael Krill, spokesperson for the NFDA and owner of three funeral homes in northwest Ohio. Krill adds that rentals at his funeral home, which are included in package deals, can save customers about $800-$900.

[See also: Secrets Customer Service Reps Don't Want You to Know]

Textbooks

As if college tuition fees aren't high enough these days, the cost of books can also make a dent in your savings. According to the College Board, books and other course materials at a four-year public college cost students $1,168 on average for the 2011-2012 academic year.

One way to save money is by borrowing textbooks by services such as CampusBookRentals.com, which rents new and gently used textbooks for a good amount less than the cost of buying the book new and, in many cases, used. For instance, the Longman Anthology of British Literature, Volumes 1A, 1B and 1C rents for $23.13 for the semester — about a third of its list price of $66.67.

Other sites that offer book rentals include Half.com and Chegg.com.

Camping Gear

Ahh, the great outdoors. Many of us daydream about spending more time with Mother Nature, but few of us get around to actually going on regular camping trips. For those who can only go camping once or twice a year, it's probably best to rent your equipment.

The popular sporting goods store REIREI, for instance, you can rent a four-person tent for $45 the first day and $10 for every additional day — which equals $55 for a weekend. Meanwhile, most four-person tents on REI.com cost in the $200 and $300 range.

Trucks

When it comes to that occasional home improvement project that requires you to transport a heavy load, it's probably not worth it to buy your own pickup truck — and you certainly don't want to risk damaging the car you already own.

The Home Depot lets you rent a pickup truck for $19 for the first 75 minutes, or $69 for a day, which is available at most of its retail locations. All you'll need is a driver's license, a valid vehicle insurance card and a major credit card.

Parking Spots

One of the most frustrating things about driving is finding a place to park, especially in a busy city or a congested town square. Luckily, there are a variety of services out there that allow you to rent spots, often at a rate significantly lower than commercial car parks or on-street meters.

You can book a spot with the click of a mouse through sites such as ParkatmyHouse and Craigslist — whether you need a spot on a daily, weekly or monthly basis.

Bikes

If you only go biking once in a while, or are an avid cyclist but don't feel like transporting your bike every time you travel, renting could be a good option.

You can rent bikes at low rates from services such as RentaBikeNow.com, which partners with more than 250 bike shops around the country to help people find a bike near their current location. Just head to the site and choose your state from the drop-down menu, and a list of bike shops that offer rentals will appear on a map, allowing you to find the nearest one. Simply click the bike shop you're interested in, choose the date(s) you want to rent, and make your reservation. Your thighs will thank you.

Furniture

If you're decorating a house you plan on living in for years to come, we won't argue with you if you choose to buy your furniture. But if you are hosting a special event at your home that requires some additional seating and tables, are living somewhere temporarily or are selling and want to stage your home with fresh pieces, renting might make the most sense.

Cort provides a host of stylish choices, including sofas, accent chairs, dining tables and rugs, as well as complete sets for your living room, bedroom and dining room. This living room set, for instance, includes a sofa, accent chair, cocktail table, end table and silver tear-drop table lamp for $265 per month.


2) In the Markets today:
Blue-chip stocks finished in the red for the first time in five sessions, while the broader market was flat, as investors watched Europe for developments in its debt crisis.

Wall Street rests after rally; bellwether earnings ahead-From Reuters

Stocks finished almost flat on Monday as investors took a break from a recent rally, awaiting earnings from bellwethers such as Apple later in the week.

The S&P 500 is up nearly 5 percent so far this year as an improving U.S. economy has bolstered investor optimism. The Dow and the S&P 500 both had their best weekly performances in a month last week.

"Investors are reserved after a mixed bag of results. Many companies have announced sluggish results, portraying a cautious environment going forward," said Robert Lutts, chief investment officer at Cabot Money Management in Salem, Massachusetts.

"The expectations are very moderate in the market, so a little bit of good news could lead to a significant pop in a stock."

According to Thomson Reuters data, 15 percent of S&P 500 companies have reported earnings, and just 59 percent posted results above Wall Street's expectations. That percentage trails the average of about 70 percent, though the rate is expected to improve as the earnings season gathers steam.

Among the 117 S&P 500 companies expected to report earnings this week is tech company Apple Inc (NasdaqGS:AAPL - News), due after the closing bell on Tuesday.

The euro-zone crisis remained in the background for the market but has had less of an effect on stocks lately. Germany and France pushed for a deal between Greece and its private creditors, and the two said they still were dedicated to a new bailout that Athens needs by March to stave off default.

The Dow Jones industrial average (DJI:^DJI - News) slipped 11.66 points, or 0.09 percent, to end at 12,708.82. But the Standard & Poor's 500 Index (SNP:^GSPC - News) inched up 0.62 point, or 0.05 percent, to close at 1,316.00. And the Nasdaq Composite Index (Nasdaq:^IXIC - News) dipped 2.53 points, or 0.09 percent, to end at 2,784.17.

TEXAS INSTRUMENTS UP LATE

After the bell, Texas Instruments Inc (NasdaqGS:TXN - News) shares rose 2.5 percent to $34.00 after reporting higher-than-expected fourth-quarter revenue.

In addition to Apple, a number of Dow components are due to report earnings on Tuesday, notably Verizon Communications Inc (NYSE:VZ - News), Travelers Companies Inc (NYSE:TRV - News), McDonald's Corp (NYSE:MCD - News), DuPont (NYSE:DD - News) and Johnson & Johnson (NYSE:JNJ - News).

Wall Street's agenda includes the Federal Reserve's first policymaking meeting of the year, which will begin on Tuesday and conclude on Wednesday with a statement. The Fed is likely to say that it will not start raising interest rates again until the first half of 2014, more than five years after cutting them to near zero, a Reuters poll of leading Wall Street economists showed.

The U.S. central bank will begin a new practice of announcing policymakers' interest-rate projections when this week's meeting ends on Wednesday.

During Monday's regular session, Halliburton Co (NYSE:HAL - News) shares fell 2.1 percent to $35.44 after the world's second-largest oilfield services group warned that the deep slump in U.S. natural gas prices could cause near-term disruptions that pinch first-quarter earnings.

On a positive note, Chesapeake Energy Corp (NYSE:CHK - News) gained 6.3 percent to $22.28 after it said it will reduce dry gas drilling and cut production in response to natural gas prices falling below "economically attractive" levels. Natural gas companies' shares were among the day's best performers, with an index of those stocks (NYSE:^XNG - News) rising 3.6 percent.

Research In Motion Ltd (Toronto:RIM.TO - News)(NasdaqGS:RIMM - News) fell 8.5 percent to $15.56 as analysts were skeptical about the resignation of the BlackBerry maker's co-chief executives.
Sears Holding Corp (NasdaqGS:SHLD - News) fell 3.3 percent to $47.39 after rising as high as $54.76 in what analysts said could be a short squeeze.

The stock is the most shorted stock in the S&P 500, according to Data Explorers, with 94 percent of shares available used to sell short. The retailer has been the best-performing stock in the index for the year, up more than 50 percent.

"That is a classic short squeeze. There have been headlines all over the name now for the better part of a month or so, and it's largely been quite negative," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

Trading volume was at about 6.6 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, in line with the daily average of 6.68 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 2. In contrast, on the Nasdaq, about six stocks fell for every five that rose.

3) Top financial story of the day:
Biggest Hurdle Is Rescuers' Insistence on Low Compensation for Creditors That Participate in the Bailout

Talks on Greek Debt Hit an Impasse-From The Wall Street Journal

A crucial week of talks on the restructuring of Greece's debt passed with no agreement, and discussions appeared to languish over the weekend, leaving Greece in an uncertain state and with a loudly ticking clock.

Greek politicians and negotiators for the main Greek creditors' group, the Institute of International Finance, met into the wee hours of Saturday morning but came up with nothing. The IIF's two chief representatives left Athens later Saturday, for what their spokesman described as "longstanding personal appointments." It wasn't clear when they would return, although some discussions continued by phone over the weekend.

The impasse reflects the complexities of the giant restructuring—which proposes to cut around €100 billion ($129.3 billion) from Greece's €350 billion debt mountain—and the web of competing, colluding and diverging interests among the many parties to the deal.

Meanwhile, Italian Prime Minister Mario Monti on Sunday said the country is moving forward with plans to spin off Eni SpA's natural-gas business, adding that he has "very high" expectations that euro-zone countries will eventually agree to pool their debt through jointly issued bonds.

People close to the Greek talks, which are expected to continue in some form this week, said the largest hurdle is now the insistence of Greece's rescuers, the other euro-zone countries and the International Monetary Fund, on low compensation for creditors that participate in the restructuring.

There is obvious sense in that: The rescuers, especially paymaster Germany, will be lending Greece the bulk of any money it gives as compensation to creditors. With their parliaments restive, Germany and its allies want the cost as low as possible.

So does the IMF, which has committed an unusually large sum to Greece and is wrestling with internal rules that prevent it from lending more to a country that has little realistic chance of reducing its debt to a controllable level.

The rough outlines of the restructuring are clear: Greek creditors who hold around €200 billion in Greek bonds will be implored to exchange those bonds for new ones with half the face value. The new bonds will also mature decades in the future, meaning those creditors bear the not-insignificant risk of lending money to Greece for a very long time.

To sweeten the deal, euro-zone countries will lend Greece roughly €30 billion that Greece will earmark for creditors. Discussions have centered on Greece using that money to dispense cash or high-quality short-term notes from the euro-zone bailout fund to creditors in lieu of some of the new bonds.

The people close to the talks said the creditors and Greece were close to agreement Friday on the interest rates to be paid to creditors on the new bonds, which would average just over 4%. But while Greece and its creditors are nominally the parties to the negotiation, Germany and the IMF have considerable weight. These people said both pushed for a lower coupon, with the IMF insisting it not exceed 3.5% on average.

No deal can go ahead without Germany's and the IMF's say-so. That is because Greece doesn't have the money on its own to provide the sweeteners. Nor, even after the restructuring, could it finance its hefty budget deficits and repay other debt not subject to the exchange without help.

The interest rate is crucial for several reasons. First, Germany and the other countries will have to lend money to Greece to pay it. The new Greek bailout currently being negotiated covers roughly the next three years of financing, and the rescuers would like the package to be as small as possible. Hence, negotiators have discussed a rising coupon that starts off low and gets higher in later years—beyond the horizon of the immediate bailout.

Second, a lower rate makes it more likely that Greece's debt will be bearable in the long term, a key issue for the IMF.

And for creditors, holding a Greek bond is risky. They thus want to get as much interest as they can, as soon as possible.

The progress, or not, of the Greek talks will be a central topic at Monday's meeting of euro-zone finance ministers in Brussels. The European authorities had wanted a restructuring deal to be in hand before the meeting, which would enable finance ministers to evaluate it. Now, the hope is that it will be complete before a summit of European leaders Jan. 30. But the delay has made the timetable very tight.

The package of sweeteners could well require another meeting of finance ministers to put in place, and the full new bailout perhaps another. Actually effecting the debt exchange will take several weeks, and Greece and the EU haven't yet approached what could be the toughest hurdle: Forcing reluctant creditors to accept the deal.

On March 20, Greece must repay €14.4 billion to bondholders. It doesn't have that money. Either the exchange is completed and those bondholders agree to—or are forced to—accept new debt that matures in a generation, or it isn't and the rescuers must decide whether to lend Greece money to repay or let the country default.

4) Quote of the Day from Dave Ramsey.com:
Fortune favors the brave. — Publius Terence