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
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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
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