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DailyFinance.com · Fri, Oct 25, 8 a.m.

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Al Behrman/AP
By Jessica Wohl Procter & Gamble's quarterly profit met Wall Street expectations Friday helped by growth overseas, cost cuts and a lower tax rate, and the world's largest household products maker maintained its financial forecasts for the year. Shares of P&G (PG) slipped 0.8 percent to $80 in premarket trading. The maker of Pampers diapers and Tide detergent said it still expected 5 percent to 7 percent growth in earnings a share this fiscal year, excluding restructuring charges. The company abandoned quarterly forecasts earlier this year.
It still expects organic sales, which strip out the impact of currency changes, acquisitions and divestitures, to rise 3 percent to 4 percent this fiscal year. P&G said it had earned $3.03 billion, or $1.04 a share, in the first quarter ended on Sept. 30, up from $2.81 billion, or 96 cents a share, a year earlier. Core earnings per share, which exclude restructuring charges, fell 1 percent to $1.05 and met analyst expectations, according to Thomson Reuters I/B/E/S. Sales rose 2.2 percent to $21.21 billion, topping Wall Street forecast of $21.04 billion. Organic sales rose 4 percent. Such sales were up in every category except health care, where they were flat, due in part to a pet food recall. %Gallery-185205%

 

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DailyFinance.com · Fri, Oct 25, 7 a.m.

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J. Scott Applewhite/AP
By ANDREW TAYLOR WASHINGTON -- On this, GOP budget guru Rep. Paul Ryan and top Senate Democrat Harry Reid can agree: There won't be a "grand bargain" on the budget. Instead, the Wisconsin Republican and the Nevada Democrat both say the best Washington can do in this bitterly partisan era of divided government is a small-ball bargain that tries to take the edge off of automatic budget cuts known as sequestration. Official Capitol Hill negotiations start next week, but Ryan and Reid both weighed in Thursday to tamp down any expectations that the talks might forge a large-scale agreement where several previous high-level talks have failed. Long-standing, entrenched differences over taxes make a large-scale budget pact virtually impossible, according to lawmakers, their aides and observers who will be monitoring the talks. Republicans say they simply won't agree to any further taxes atop the 10-year, $600 billion-plus tax increase on upper-income earners that President Barack Obama and Democrats muscled through Congress in January. Without higher taxes, Democrats say they won't yield to cuts in benefit programs like Medicare. "If we focus on some big, grand bargain then we're going to focus on our differences, and both sides are going to require that the other side compromises some core principle and then we'll get nothing done," Ryan, who chairs the House Budget Committee, said in an interview Thursday. "So we aren't focusing on a grand bargain because I don't think in this divided government you'll get one." In an interview Thursday with Nevada public radio station KNPR, Reid, the Senate majority leader, agreed that a large-scale grand bargain wasn't in the cards. "They have their mind set on doing nothing, nothing more on revenue, and until they get off that kick, there's not going to be a grand bargain," Reid said. "We're just going to have to do something to work our way through sequestration." Ryan, his party's vice presidential nominee a year ago, and Senate Budget Committee Chairwoman Patty Murray, D-Wash., are two of the key congressional figures in the talks. They both say they're seeking common ground between the sharply different Republican and Democratic budgets. Common ground, however, is a much different concept than compromise. It involves finding ideas upon which they can agree rather than compromising principles such as Republican opposition to tax increases or the unwillingness by many Democrats to consider cutting future Social Security benefits by decreasing the annual cost-of-living adjustments. Instead of a broad agreement encompassing tax hikes and structural curbs on the growth of benefit programs like Medicare and Medicaid, Ryan says he's seeking a "smaller, more achievable objective." The talks, he said, also will focus on alleviating another upcoming round of automatic spending cuts and replacing them with longer-term cuts. Sequestration mostly hits so-called discretionary spending, the money approved by Congress each year to run agency operations.
Ryan wants to cut autopilot-like spending on entitlement programs like Medicare to ease sequestration's effects on both the Pentagon and domestic programs. "I think we all agree that there's a smarter way to cut spending" than sequestration, Ryan said. "If I can reform entitlement programs where the savings compound annually ... that is more valuable for reducing the debt than a one-time spending cut in discretionary spending." The automatic spending cuts are required because a 2011 deficit-reduction supercommittee failed to reach an agreement. The cuts would carve $91 billion from the day-to-day budgets of the Pentagon and domestic agencies in 2014 compared with the spending caps set by a 2011 budget deal. The Pentagon would absorb almost 60 percent of the cuts. While the first official meeting of the larger House-Senate negotiating team is scheduled for next week, Ryan and Murray have been talking already. Republicans are looking at a bushel basket of cuts to Medicare health care providers contained in Obama's budget. They also have voiced support for curbing Social Security cost-of-living adjustments, an idea Obama has backed, but only in the context of a broader deal in which Republicans would allow tax increases. That proposal won't fly in the current talks. There are also several supercommittee ideas like curbing Postal Service cost overruns, making federal workers contribute more to their pensions and raising premiums on higher-income Medicare beneficiaries. Democrats, meanwhile, are wary of using cuts to Medicare and other entitlement programs to ease cuts in the defense budget. Negotiators still might explore curbing generous military retirement, health care and prescription drug benefits as a way to restore cuts to readiness and procurement of weapons systems. "Congressional Democrats and the White House, rightly in my view, don't want to use domestic entitlement cuts to offset easing or eliminating the defense side of sequestration on top of the nondefense discretionary side," said Robert Greenstein, president of the Center on Budget and Policy Priorities.


 

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DailyFinance.com · Fri, Oct 25, 7 a.m.

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By Alexei Oreskovic and Gerry Shih SAN FRANCISCO -- Seeking to avoid a repeat of Facebook's much-maligned public debut, Twitter revealed more modest ambitions, saying its initial offering would raise up to $1.6 billion and value the company at up to about $11 billion. The valuation was more conservative than the $15 billion some analysts had expected for the social media phenomenon, potentially attracting investors who might consider the money-losing company's listing price a better deal, with room to rise. Twitter had signaled for weeks it would price its IPO modestly to avoid the sort of stock plummet that spoiled Facebook's (FB) coming-out party. It said Thursday it intends to sell 70 million shares between $17 and $20 apiece, raking in up to $1.4 billion for the company. If underwriters choose to sell an additional allotment of 10.5 million shares, the offer could raise as much as $1.6 billion. Twitter's offering will be the most high-profile Internet IPO since Facebook's May 2012 debut, when the social network giant's shares fell below their offering price and didn't recover until a year later. Still, the modest pricing doesn't obscure questions about Twitter's profitability. "The fact that the valuation is lower than expectations, I think was smart by the underwriters. I think it will help the pop," said Michael Yoshikami of Destinational Weath Management. "But in the end, even for $11 billion, the question is can they come up with earnings to substantiate that number? And it's unclear that they're going to be able to do that." At a roughly $11 billion valuation, Twitter would be worth more than Yelp (YELP) and AOL (AOL) combined, but only a fraction of tech giants like Google (GOOG) and Apple (AAPL), worth $342 billion and $483 billion respectively. Facebook's market value is now $128 billion. Roadshow Reckoning Twitter and its underwriters begin a two-week road show to woo investors next Monday in New York, with stops in Boston and the mid-Atlantic region before touching down in Chicago, San Francisco, Los Angeles and Denver, according to a source familiar with the offering. "They're trying to price this for a very strong IPO, ideally creating the conditions for a solid after-market," said Pivotal Research Group's Brian Wieser, who valued the company at $19 billion. The company could choose to raise the price of the offering during that period as it gauges interest. Twitter is expected to set a final price on Nov. 6, according to a document reviewed by Reuters, suggesting that the stock could begin trading as early as Nov. 7. Sam Hamadeh of PrivCo, a private company research firm, said Twitter could raise the price range and also the amount of shares being sold. But, he added, "Raising both the price and the size was Facebook's fatal mistake." Twitter's debut will cap seven years of explosive growth for an online messaging service that counts heads of state and major celebrities among its 230 million active users -- but still operates at a loss. Twitter will sell roughly 13 percent of the company in the IPO and will have 544,696,816 shares outstanding after the offering.
That figure could rise given the exercising of options, restricted stock units and the issuance of shares for compensation after the IPO. The company plans to list its stock under the "TWTR" symbol on the New York Stock Exchange. Among the biggest Twitter shareholders selling in the offering is Rizvi Traverse, a fund managed by secretive Connecticut-based investor Suhail Rizvi, who has quietly amassed a 17.9 percent stake in Twitter with the help of Silicon Valley investor Chris Sacca. Rizvi's stake will fall to 15.6 percent of total shares outstanding after the sale. JPMorgan Chase (JPM), which obtained Twitter shares through Rizvi and Sacca, will see its stake fall to 9 percent from 10.3 percent. Twitter co-founder Evan Williams, the largest individual shareholder, will reduce his stake to 10.4 percent from 12 percent, while chief executive Dick Costolo will emerge with a 1.4 percent stake, compared with 1.6 percent currently. Co-founder Jack Dorsey will also sell shares, as will early venture capital investors Spark Capital, Union Square Ventures and Benchmark Capital. Fractured Ownership Because many early shareholders, including Williams, previously sold parts of their stake to other investors like Rizvi, Twitter's relatively fractured ownership structure looks markedly different from the likes of Facebook and other tech companies dominated by their founders. When Facebook went public last year, founder and chief executive Mark Zuckerberg kept 57 percent of the company's voting shares, thanks to a scheme that gave him twice the voting power of ordinary shareholders. Following Twitter's IPO, Costolo will be under pressure to improve its money-making ability. The eight-year-old company more than doubled its third-quarter revenue to $168.6 million, but net losses widened to $64.6 million in the September quarter, it disclosed in a filing earlier this month. This month, Twitter secured a $1 billion credit line from its underwriters including Goldman Sachs (GS), Morgan Stanley (MS), JPMorgan, Bank of America Merrill Lynch (BAC) and Deutsche Bank (DB). In recent months the company has aggressively introduced a number of new advertising products, including packages with broadcasters CBS and ESPN that show ads on TV and Twitter simultaneously for the fall TV season. Twitter has also sought to deepen its relationships with news organizations, which provide much of the content shared on the network. The company said Thursday that it hired NBC News digital executive Vivian Schiller as the head of news. -Additional reporting by Olivia Oran in New York and Poornima Gupta in San Francisco. %Gallery-187678%

 

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DailyFinance.com · Fri, Oct 25, 7 a.m.

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Americans are spending a boatload of cash to celebrate Halloween this year. Business intelligence firm IBISWorld projects about $7.5 billion in total spending on Halloween this year; the National Retail Federation is a bit more conservative, pegging Halloween spending at just under $7 billion. The NRF says that this means the average person celebrating the holiday will spend about $75 on decor, treats and costumes. That's not nearly as much as you're going to spend on Christmas gifts, but it's still a chunk of change. So what can you do to dial things back a bit? Let's take things one at a time. The Costume. Clearly, this is the big expense, accounting for $2.5 billion in spending, according to the NRF. (Included in that figure is $330 million spent on pet costumes, which we find delightful.) As we explained earlier this week, the best way to save on your costume is to skip the costume store altogether. Go to a pop-up shop and you're likely looking at spending $40 to $50 on a costume in a bag; make one from scratch with items from your closet and the thrift store, and you can conceivably keep it under $15. Whether that works for you depends a lot on what you (and you children and pets) want to dress up as. The top two most popular costumes are "witches" and "Batman" characters, with vampires coming in third. A witch costume can come together with an old black dress, some green face paint and a ratty old broom; a vampire is likewise easy to pull of with face paint and dark clothing. Batman (or another member of the Bat-Family) is going to be a bit more tricky; if you don't have the DIY skills to put together a convincing Batsuit, you might need to swallow your pride and hit the costume store for a proper cape and cowl. The Candy. There are two big variables here: How much foot traffic you expect at your house, and how much you want to impress your trick-or-treaters. For the first consideration, you want to buy in bulk as much as possible without overdoing it; the last thing you want is to have to run to the drugstore at 8 p.m. because you're running low on candy. On the other hand, you don't want to overdo it and wind up with an excess of goodies destined to jump-start your winter over-consumption.
As for the latter concern, you can't go wrong with basics like Reese's and Snicker's; cheaping out and getting a giant bag of Tootsie Rolls isn't going to impress the neighborhood kids. As far as we're concerned, you might as well spend a few bucks extra to get the good stuff -- candy isn't expensive. (Besides, you know you're going to eat some of it yourself. Make it worth the calories.) If you want to switch things up a bit on the candy front, you might consider hitting up your local Asian market and getting some of these strange foreign candies. They're a bit pricier, and you might risk confusing some of your young visitors with offerings like "Matsuya Soft Milk Candy," but hey, Halloween is supposed to be weird. The Decorations. There's really only one decoration you absolutely need, and that's a decently carved Jack-o-Lantern. Last week, we looked at the dos and don'ts of buying a pumpkin, and found that you should be able to get a decent gourd from the supermarket for $10 or less. As for carving it, a jigsaw is ideal; if you don't have one, spending an extra $5 for a decent pumpkin-carving kit might be better than relying on kitchen knives. As for other decorations, you might find some good DIY ideas on sites like Pinterest. Just be warned -- while it's cheaper than buying ready-made decorations, getting too enthusiastic about the homemade spiders and scarecrows could lead you to spend more on decorations than you normally would. "We're projecting decoration expenditures to grow by 6.5%, and we attribute that to the continued prevalence of websites like Pinterest and home decoration blogs." So if you can resist going totally overboard on making your house haunted, the total savings add up: All told, you're looking at around $10 for a pumpkin, $15 for a costume, and maybe another $10 to $15 for a decent-sized stash of candy to give out to trick-or-treaters. That's about half of what the average reveler is going to spend on Halloween this year. Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama. We are showing you how to eat, drink and be scary this Halloween season. Read more on Halloween on AOL:

 

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DailyFinance.com · Fri, Oct 25, 7 a.m.

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The new Disability Access Service system at Disney World and Disneyland isn't making many guests happy in the Happiest Place on Earth. Disney's new program for physically and mentally handicapped guests replaced the more useful, yet widely abused, Guest Assistance Card program that was shuttered on Oct. 9. I predicted the change would be trouble, covering the news earlier this month. And Disney (DIS), too, knew that it would be a rough transition. The previous service offered no-wait access to theme park rides and attractions for disabled guests and their families, making vacations that would still be difficult somewhat easier. However, unofficial disabled "tour guides" got into the act, charging vacationers a pretty penny for the expedited access their disability passes provided. Wealthy but ethically bankrupt families bragged about using them to bypass the long lines endured by the masses, and a wave of outrage sank the old program. How Disney Blew It My family hit all four of the Disney World parks this past weekend with my special needs son, and DAS didn't win high marks. I blogged about Disability Access Service -- how it works, how it doesn't, and how it can be gamed -- and have concluded that it's the worst of both worlds. Though Disney reportedly worked with advocacy group Autism Speaks to come up with a plan that would meet the needs of families with children on the autism spectrum, the new system is more inconvenient for the families that need it, yet can still be circumvented by those willing to abuse the platform in the first place.
Guests running low on moral fortitude can have everyone in their group take out the new pass and have several reservations open at the same time. It's also easy to forge return times with the system in its current state, though that will change once automated kiosks are brought online. If someone's willing to lie having about an ailment to get the pass, they're not going to flinch at loading up on them or scribbling in desired return times. A common complaint from non-disabled visitors to Disney parks was that, using the Guest Assistance Card, disabled adults or families with special needs children were able to go on significantly more rides over the course of a day than an ordinary park guest could. The spirit of the American with Disabilities Act of 1990 was to create a level playing field: It wasn't supposed to tilt things in the other direction. However, that assumption misses a key point: Many families with special needs children can't stick around at the park for a full day, due to their physical and mental challenges. There are few children on the autism spectrum, for example, who could handle the highly stimulating environment of a theme park for more than a couple of hours at a time. Why Not Pay by the Ride - or by the Hour? One simple solution would have been to return to the days of the individual ride tickets. Disneyland in California and the Magic Kingdom in Florida used to charge low admission prices, then guests would pay separately for tickets to the rides. A system under which people paid based on how many rides they went on would turn today's expensive Disney smorgasbord into a more reasonable deal for a special needs family that might be able to enjoy just two or three rides before having to exit the park. A slightly more complex solution that would dovetail with the new Disability Access Service would be to offer hourly passes. Some smaller, regional parks already charge less for admissions later in the day, knowing that guests won't have as much time to enjoy the park. Why couldn't Disney offer a similar choice for guests who can't stick around as long? Whether it's a matter of physical challenges or having to catch a flight back home later in the day, giving guests the option to buy time in the parks in hourly blocks would help deflect some of the groundswell of protests about the new Disability Access Service. Tracking hourly passes might have been a challenge in the past, but Disney's already moving toward individual guest bracelets that track in-park activities and monitor reservations. Disney scanners can now show when someone arrives at Disney World or Disneyland and when they leave. Here's hoping Disney doesn't stand pat with this solution, when better options exist that would meet the needs of disabled guests without being so easily gamed by the unscrupulous. Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our newsletter services free for 30 days.

 

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DailyFinance.com · Fri, Oct 25, 7 a.m.

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Andy Cross/The Denver Post via Getty Images
By Tom Sightings Those of us who are retired know it's hard to live on a fixed income, especially since low interest rates have squeezed extra income from savings accounts down to a trickle. The alternative is to lower our expenses. No one wants to give up the things they enjoy, whether it's a membership to a fitness club, a trip to the mall or a warm home in winter. But sometimes we're paying for things we don't really use. Here are seven ideas for saving money without feeling any pain: 1. Insurance. Have you ever joked that you're worth more dead than alive? Then maybe you don't need life insurance, especially if your kids are grown up. Also, check the deductibles on your auto and home policies. You can save by increasing your deductible from $250 to $1,000. And if your kids are no longer driving your car, the chances of getting in an accident are diminished. If your car is over five years old, consider going without collision insurance. Since you're no longer commuting, maybe you can sell off an extra car as well. 2. Food. Do you find yourself scraping vegetables into the garbage, or throwing out moldy bags of unidentifiable leftovers from the back of the refrigerator? Approximately 25 percent of the food we purchase goes to waste, according to the U.S. Department of Agriculture. The answer? Serve smaller portions. Store leftovers efficiently and keep them in the front of the icebox. Eat leftovers for lunch, or put leftovers on the menu for dinner. Also, resist the call of bottled water, and turn to the kitchen faucet. 3. College tuition. Scholarships are increasingly difficult to obtain. But one way to save money is to send your children to a state university rather than a private college. According to many experts, there is no advantage to a good, but second-rate private college over a state university when it comes to landing a job or gaining admittance to graduate school. If your children insist on a private education, have them apply to several schools to see which ones will offer them the most money. 4. Vacation. When you're retired, you're flexible. Fly mid-week when air fares are cheaper, and go on vacation during the shoulder season when rates are lower.
Many Florida vacation spots offer discounts until the season heats up at Christmas. Take advantage of destinations close to home, and save on airline tickets and car rentals. Use some of the savings to pay for a nicer hotel. Or check out websites offering alternative accommodations, such as Airbnb or Cyber Rentals. And don't forget, you can always go visit the kids. 5. In your community. You already pay taxes to support your library, so instead of buying a book or DVD, go borrow one. Many communities offer adult education classes, ranging from foreign languages to ballroom dancing. Don't hesitate to get a senior discount at the movies or state park, or an America the Beautiful senior pass for national parks. You don't have to be at the office from 9 to 5 every day, so go out to lunch instead of dinner to get the same benefit at a lower cost. Play golf on weekdays instead of weekends for a lower rate. 6. Go green. Those of us who grew up in the 1970s learned how to turn off the lights and dial down the heat. But maybe we forgot during the energy glut of the 1980s and 90s. So remember, sometimes you can open a window instead of turning on the air conditioning. Change your light bulbs to energy-efficient bulbs. And remember, according to government figures, it costs 40 to 50 cents per mile to drive your car. So maybe you can downsize your gas-guzzling SUV to a gas-sipping hybrid. But even with your old jalopy, you can save on gas and wear-and-tear by sticking to the speed limit and batching your trips. 7. Now you're the boss. You used to pay for the premium cable package, because the kids insisted on it. Maybe you don't need that anymore. Downgrade your cellphone service if you don't use the minutes. Cancel your membership to the swim club if you're not using it. Look through your credit card bill. What are you paying for that you no longer use? Now is the time to cancel the charges that are there for your kids, and focus on the activities that are important to you. Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement and other concerns of baby boomers who realize that somehow they have grown up.


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DailyFinance.com · Fri, Oct 25, 6 a.m.

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By Dunstan Prial Shares of Amazon.com rose more than 8 percent in after-hours trading after the Internet retail giant reported better-than-expected third-quarter earnings. The shares were up $26.75, or 8.05 percent, at $358.96, an all-time high. Amazon.com (AMZN) reported a loss of 9 cents per share on revenue of $17.09 billion. During the same period a year ago, the company reported revenue of $13.81 billion. Analysts had forecast a loss of 9 cents per share on revenue of $16.7 billion. The company also projected revenue for the key fourth quarter, the busiest for all retailers because it includes the Christmas holiday and buying season. Amazon said it expects revenue of $23.5 billion to $26.5 billion, with a midpoint below the $25.9 billion in revenue the Street is expecting. Despite seeing higher revenues, the loss in the third quarter was the third consecutive quarterly loss for the company, which is expanding into new sectors and building new facilities.
Amazon in the past few years has doubled the amount of warehouse and processing facilities it operates. Founder and chief executive Jeff Bezos has stuck to his plan of growing revenues through expansion and by providing lower prices than many of his Internet retail competitors. That strategy has paid off with investors even as the company has lost money in recent quarters. Seattle-based Amazon's shares reached a new all-time high on Tuesday and have risen more than 45 percent in the past 12 months. "It's been a busy few months -- we launched a new Paperwhite and new Kindle Fires to positive reviews and surprised people with the revolutionary Mayday button -- average Mayday response times are just 11 seconds." Bezos said in a statement.

 

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DailyFinance.com · Thu, Oct 24, 5 p.m.

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The best time to work on your lawn is actually in the late fall. Here are some tips on how to prepare the land to survive the cold winter months and get a quick start in the spring. Late fall is the perfect time to put in some work on your lawn is because it's generally when grass stops growing. However, it's also before the ground freezes so you can work with the land. To prepare, you'll first want to seed any bald patches you see. Next, use fertilizer to help with new growth and discourage weeds. Finally, you'll want to aerate your lawn to help with the absorption of fertilizer. It's as easy as that. With these simple steps, just a little work now will help promote a healthy green lawn in the spring, and, ultimately, save you money next season.

 

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DailyFinance.com · Thu, Oct 24, 5 p.m.

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Stocks closed higher Thursday, propelled by another dose of strong corporate earnings, this time from Ford, Southwest Airlines and others. It's one of the busiest weeks on Wall Street for corporate earnings. Roughly a third of the S&P 500 will report results, including some of the world's best-known companies. For investors, this week has also been a welcome return to business as usual. Wall Street has been focused for weeks on what's going on in Washington, with the government shutdown, the near-breach of the nation's borrowing limit and questions about what's next for the Federal Reserve's massive bond-buying program. So far, corporate earnings have come in pretty much as most money managers expected. Companies are reporting bigger profits, but most of the growth has come from cost-cutting, a trend that hasn't changed very much since the financial crisis. "We're in a slow-growth economy and companies need to do everything to boost earnings," said Brian Reynolds, chief market strategist at Rosenblatt Securities. The Dow Jones industrial average (^DJI) rose 95.88 points, or 0.6 percent, to 15,509.21. The Standard & Poor's 500 index (^GPSC) added 5.69 points, or 0.3 percent, to 1,752.07, roughly three points from the record high of 1,754.67 it reached on Tuesday. The Nasdaq composite (^IXIC) was up 21.89 points, or 0.6 percent, to 3,928.96. Among companies reporting earnings, Ford (F) earned an adjusted profit of 45 cents per share - a record for the third quarter - as sales rose 12 percent to $36 billion. The Dearborn, Mich.-based automaker sold 1.5 million cars and trucks in the period, up 16 percent. Wall Street analysts had expected Ford to earn 37 cents per share, according to FactSet. Ford rose 24 cents, or 1.5 percent, to $17.76. Southwest Airlines (LUV), the nation's largest domestic air carrier, reported sharply higher earnings. Southwest said it had an adjusted profit of 34 cents per share, up from 13 cents a year ago. Southwest rose 61 cents, or 4 percent, to $17.02. AT&T (T) fell 65 cents, or 1.8 percent, to $34.63. The telecommunications company said late Wednesday it had an adjusted profit of 66 cents in the third quarter, a penny above analysts' forecasts, however revenue fell slightly short of what analysts expected. Two technology giants, Microsoft (MSFT) and Amazon (AMZN), reported results after the stock market closed Thursday. Both beat analysts' expectations. Amazon rose 5 percent and Microsoft jumped 6.5 percent in after-market trading. Wall Street also had some positive news out of China. A Chinese manufacturing index rose to a seven-month high in October, suggesting continued momentum for the rebound in the world's second-biggest economy. With the S&P 500 trading near a record high and corporations finding it difficult to increase their sales, several market watchers have said they aren't sure how much further stocks can go from here. There are signs that stocks are getting expensive. Investors are currently paying more than $16 for every $1 of earnings in the S&P 500, up from $14 at the beginning of the year. "We're at this stage where we need to start to see the fundamentals improve," said Quincy Krosby, a market strategist with Prudential Financial. In other corporate news:
  • Visa (V) rose $4.02, or 2 percent, to $202.91. The payment processing company raised its quarterly dividend by 21 percent to 40 cents per share.
  • Xerox (XRX) plunged $1.12, or 10 percent, to $9.61 after the company cut its full-year outlook and missed analysts' estimates.
What to Watch Friday:
  • The Commerce Department releases durable goods for September at 8:30 a.m. Eastern time and wholesale trade inventories for August at 10 a.m.
  • The University of Michigan releases its latest survey of consumer sentiment at 9:55 a.m.
These major companies are due to release quarterly corporate earnings:
  • AON (AON)
  • Lear (LEA)
  • Newell Rubbermaid (NWL)
  • Procter & Gamble (PG)
  • Sherwin-Williams (SHW)
  • United Parcel Service (UPS)
  • Weyerhaeuser (WY)
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DailyFinance.com · Thu, Oct 24, 3 p.m.

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Following almost four days of closures, Bay Area Rapid Transit trains started operating again Tuesday morning, after representatives for striking BART union workers reached a tentative deal with BART management on Monday night. And although both sides still must formally approve the agreement, workers appear to have won a 15.38 percent raise over their four-year contract, in exchange for concessions that include an increase in their monthly medical insurance premiums of about $50, and agreeing to start contributing a portion of their pension costs. The BART strike is just the latest example of clashes between state and local government employees and the cash-strapped cities, counties, and states that employ them. Newly energized by what many will see as a win, government workers around the country might well follow suit in efforts to defend themselves against a rising tide of municipal bankruptcies and other financial threats to their security. Cities Under Siege Just 90 minutes east of San Francisco, the city of Stockton, Calif., is just one of many local governments dealing with huge financial problems. Last year, Stockton became the largest city in the U.S. to file for bankruptcy, holding that dubious honor until July 2013, when Detroit took the crown. In Stockton, current and retired city workers have found themselves at the forefront of controversy over the rights of government employees. The city has trimmed its workforce by about 30 percent, with dramatic reductions even to essential services such as its police department. However, Stockton's proposed bankruptcy plan last month included full payments to the California Public Employees' Retirement System, thus pitting pension recipients against municipal bond investors and insurance companies, as well as other creditors of the city. Not so say those retirees will get off unscathed: Health benefits promised to former city employees will be affected by the bankruptcy. But some say that even with that concession, the plan unfairly favors former workers at the expense of both current workers and other interested parties. Showdown in Motown Meanwhile, in Detroit, officials have laid even more of the blame for the city's financial troubles at the feet of former government employees.
A report last month from The New York Times showed that retired city workers actually received billions of dollars in extra pension payments. Even some current employees received supplemental income, and families of deceased workers sometimes received cash payments according to the report. Outside analysis by actuarial experts found that these excess payments to workers, retirees, and their families cost Detroit almost $2 billion between 1985 and 2008. More broadly, state and local governments clearly benefited from the strong economies of the 1990s and mid-2000s, with investment gains bolstering pension plans and rising property values bringing in more tax revenue. Yet home prices and the stock market both plunged in the late 2000s, and that eliminated any financial cushion that state and local governments enjoyed prior to the Great Recession. More Struggles to Come As governments and government workers draw battle lines in their respective states, cities, and towns, many are waiting for the next shoe to drop. Harrisburg, Pa., tried to file for bankruptcy protection, but its request was denied. Pennsylvania's insolvent capital city continues to work on its finances through a receivership proceeding; the latest proposal to lift it out of the hole involves leasing out its parking system and selling a power plant that converts waste to energy. In California, Fresno has faced credit-rating downgrades that cite its weak finances after expansion plans that didn't pan out as well as local officials had hoped. The Philadelphia School District had to borrow $50 million just to open its schools on time this year, and with a deficit of more than $300 million in its $2.35 billion budget, the district hopes to get workers to agree to cuts in pay and benefits under their labor contracts in order to close the gap. Still, the pressure on governments to find ways to keep essential services running is immense. As a result, it's easier for government officials to make decisions that are geared more toward short-term patches rather than long-term solutions. In the wake of the BART strike, more state and local government employees might recognize the leverage they have, only increasing the difficulty that government entities face in balancing the needs of their constituents against the limited financial resources of their taxpayers. Your city might well be the next to see government employees take action to defend themselves against the next swing of the budget ax. You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+.

 

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DailyFinance.com · Thu, Oct 24, 2 p.m.

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In America, there are two important calendars: there's the regular, Gregorian calendar, with its twelve months and 365 days. And then there's the retail calendar -- the schedule of how and when we are supposed to spend. The retail calendar is a little less predictable than the Gregorian one. Some of its dates -- like Christmas, Black Friday, and Valentine's Day -- are absolutes. They signify major shopping events and big cultural occasions, when people exchange gifts, shoppers stay up all night, and roses double in price. But other dates are more variable, shifting according to weather and region, politics and fashion. For example, while mid-October is more than two months away from Christmas, many retailers believe that isn't too soon to start pushing Christmas gifts. Some customers, of course, disagree, and the battle between the two has defined autumns for years. The same back-and forth holds true when it comes to seasonal retail. For example, in temperate climates, winter coats are usually on shelves by mid-October, at the latest. Of course, cold weather sometimes takes a little longer to arrive; thus, even though you may still be wearing T-shirts and shorts well after school is back in session, when that first fall chill comes and you find yourself realizing that summer is over, stores are already prepared, with cold weather gear on the floor. There's a lot to be said for following the retail calendar. For example, if you buy an overcoat in October, you have your pick of the litter. Store shelves are covered in the latest styles, in a rainbow of colors and a plethora of sizes. On the other hand, that incredible selection and convenience comes at a cost: If you find the perfect coat in October, you'll most likely pay full price to take it home.
Over the course of winter, stocks dwindle and prices fall. By February -- the official start of retail's spring season -- most stores are offering nice discounts on their winter coats. By March, those coats still on the racks are discounted to bargain basement levels. By then, the selection won't be all that impressive. Crazy coats in unfashionable colors will be available in all sizes, while the style you want in the color you desire will only exist in double extra large and extra small. Of course, if you wear one of those outlier sizes, the world can be your oyster at that point in the cycle, but if you're more toward the middle of the range, you'll have to search far and wide to find something suitable. But success means that when next winter rolls around, you won't need to buy when prices are at their peak. And then, of course, there's the obvious caveat that your clothes may be a bit out of style. As with anything else, however, this varies a bit. And it's less of an issue for some of us than others. While the "YOLO" T-shirt your teen has her eye on will (hopefully) look pretty dated a year from now, khakis and duffel coats never really go out of style. If you manage to luck into a good price on a clothing classic, you should be able to wear it for years. There are also ways to game the shopping cycle. For starters, it's not all that hard to find a breakdown of the retail calendar, which can give you a good idea of when the prices on your favorite items will drop, and when you can expect them to sell out. And other sites, notably WiseBread, offer predictions on where the sweet spot will be between low prices and low selection. You can also use online stores to extend the retail calendar a little longer. After all, while your local retailer may be out of a particular style or size of your favorite garment, their website may still have it in stock. And, given that many retailers now ship for free, you may be able to get exactly what you're looking for, even if you're buying late in the season. Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

 

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DailyFinance.com · Thu, Oct 24, 1 p.m.

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Scott Eells/Bloomberg via Getty ImagesBillionaire investor Carl Icahn
By Jennifer Ablan Billionaire investor Carl Icahn fired his latest salvo at Apple chief executive Tim Cook on Thursday, urging the iPhone maker again to initiate a $150 billion buyback through a tender offer -- but pledging to keep his own stock out of it. In a public letter dated Oct. 23 but published on Icahn's new investor-focused website Thursday, the famously outspoken activist repeated calls for deep-pocketed Apple to use surplus cash to buy back shares. He said a $150 billion move could ratchet the stock to an all-time high of $1,250 over three years. Icahn also revealed he had increased his stake by about 22 percent to just over 4.7 million shares since dining privately with Cook in September -- underscoring his belief that the stock is undervalued. "Irrational undervaluation as dramatic as this is often a short-term anomaly. The timing for a larger buyback is still ripe, but the opportunity will not last forever," Icahn warned in his letter, issued alongside the launch of his new website, Shareholders Square Table. "While the board's actions to date ... may seem like a large buyback, it is simply not large enough given that Apple currently holds $147 billion of cash on its balance sheet, and that it will generate $51 billion" of earnings before interest and taxes, based on Wall Street estimates. Icahn jumpstarted discussion about the pace at which Apple is returning cash to shareholders in August, when he tweeted he had taken a substantial position in the company. He has since kept Twitter followers informed of efforts to meet with Cook, and reiterated his view about the need for a $150 billion share repurchase. On Thursday, Bill Gross, co-chief investment officer at PIMCO and a prolific Tweeter, said via Twitter: Icahn's new website, the launch of which was plagued with early glitches that barred access, seemed intended to further his goal of attacking underperforming corporate boards. It carries a quote from Icahn himself on the home page, from Texaco's 1988 annual meeting: "A lot of people died fighting tyranny. The least I can do is vote against it." Analysts have said Icahn's newfound interest in Apple is helping improve sentiment on the stock. Icahn had argued as early as in August that it could be worth $700 with a larger stock buyback program. Apple's (AAPL) shares were up 1.1 percent at about $531 at midday. The company this week announced a new line-up of iPads for the holidays, along with plans to offer Mac users free operating and work software for life. Icahn's latest proposal for Apple outlines a tender offer in which he himself won't participate. In a tender offer, a company offers to purchase some or all of its investors' shares. Though tender offers usually come at a premium to the current share price, Icahn wants Apple to borrow money to make its offer at $525 a share, the level at which shares of Apple are currently trading. In the letter, Icahn revealed he now owns 4.73 million shares of Apple stock, up from a previous total of 4 million.
That means he owns nearly $2.5 billion worth of shares of the iPhone maker. Apple is already in the process of spending $100 billion through 2015 on share buybacks, as well as dividend payouts. But Icahn believes Apple should increase its share buyback program and spend $150 billion on its share buyback. "Per my investment thesis, commencing this buyback immediately would ultimately result in further stock appreciation of 140 percent for the shareholders who choose not to sell into the proposed tender offer," Icahn said. "Furthermore, to invalidate any possible criticism that I would not stand by this thesis in terms of its long term benefit to shareholders, I hereby agree to withhold my shares from the proposed $150 billion tender offer," Icahn said. "There is nothing short term about my intentions here." -With additional reporting by Soham Chatterjee in Bangalore.

 

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DailyFinance.com · Thu, Oct 24, 1 p.m.

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Bank of America said Thursday that it was cutting 1,200 to 1,300 mortgage jobs because of declines in refinancing activity and an improvement in its portfolio of delinquent home loans. The employees are based in divisions that handle processing new mortgages and service home loans that are past due, a spokesman said. They received notice this week that their positions were being eliminated. News of the layoffs was first reported by the Wall Street Journal. The newspaper also said Bank of America (BAC) was looking to cut 3,000 mortgage jobs by the end of the year. The spokesman couldn't immediately confirm that number. The second-largest U.S. bank laid off more than 9,000 full-time employees in the third quarter. Finance chief Bruce Thompson said on an Oct. 16 conference call with analysts that the reductions were concentrated in the unit that collects payments on current and delinquent home loans, the unit that makes new home loans, and in many of the bank's branches. Bank of America made $22.6 billion in home loans in the third quarter, down 11 percent from the second quarter. The number of mortgage applications the bank had received but not yet processed fell 60 percent from the end of June to the end of September. Also, mortgage loans that were delinquent by more than 60 days fell by 94,000 to 398,000 in the third quarter.
The bank expects a further decline to below 375,000 by the end of 2013. Rising interest rates have curtailed mortgage refinancing since the spring. The interest rate on a 30-year mortgage stood at 4.39 percent in the week that ended Friday, according to the Mortgage Bankers Association, down from a high of 4.80 percent in September but above the 3.59 percent rate in early May. Bank of America expects to make fewer home loans in the fourth quarter and will look to cut more mortgage jobs, Chief Executive Officer Brian Moynihan said on the conference call. The Charlotte, N.C.-based bank isn't the only lender to lay off staff in response to a slowdown in refinancing. Wells Fargo (WFC), the largest U.S. mortgage lender, said on Oct. 17 that it was cutting 925 mortgage jobs. That comes on top of the 5,300 Wells Fargo mortgage employees that were notified that they would be laid off in the third quarter. %Gallery-183453%

 

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DailyFinance.com · Thu, Oct 24, 1 p.m.

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Protecting the financial security of your kids is just as vital as keeping them healthy and making sure they get an education. Yet for many families, the pressure of keeping up with current expenses pushes one strong tool for doing that -- buying life insurance -- to the bottom of the to-do list. A 2013 survey by life insurance and financial services association LIMRA found that 30 percent of U.S. households have no life insurance at all, and 50 percent think they need more life insurance. The LIMRA survey found that among consumers who say they need to buy life insurance, 86 percent say they haven't purchased it because it's too expensive. And more than half of those surveyed said that everyday expenses like food, clothing, transportation, and energy costs limit their ability to save for the future, or to buy life insurance even when they know they need it. Keeping Your Household Afloat What would it cost to keep your household running if your income suddenly went away? That's the basic question you need to ask when trying to figure out your life insurance needs.
"The financial contributions you make to your household are critical to the security of your loved ones, and extend well beyond your income," says Damon Bates, vice president of MassMutual's U.S. Insurance Group. "However, many people are uncertain about how to measure their financial contributions, which makes it difficult to determine an appropriate amount of life insurance." There are some broad rules of thumb when it comes to figuring out how much life insurance you need. According to the CUNA Mutual Group, a company that provides financial services to credit unions, one of those guidelines is that you should buy life insurance equal to five to seven times your income. But the key is getting the right coverage for you and your family -- not some generic family unit. There are helpful online tools that can help you get more customized answers:
  • The LifeHappens.org life insurance calculator, like many others, compares potential expenses and your savings, such as the need to cover final expenses for a funeral and for ongoing income to take care of your family. The calculator looks at your outstanding debt including your mortgage; the need for college savings; and how much your family needs for living expenses measured against your current savings, investments, and retirement funds.
  • CUNA has a calculator on its website to help you get a more individualized estimate of your life insurance needs.
  • MassMutual's Lifetime Economic Value tool measures all of the economic contributions you'll make to your family over the course of your career. Via a simple calculation -- requiring just your age and income -- it generates a broad life insurance estimate. (For example, a 40-year-old making $60,000 and planning to retire at 65 would need an estimated $1,151,761 to protect his or her family.)
The more information you provide for any of these tools, the more accurate its estimate will be. Coverage should include more than simply replacing earned income, says MassMutual's Bates: "It [should] also include other items of financial value that are vital to maintaining your family's standard of living, like benefits that your employer provides, retirement plans, and personal service that you provide for your loved ones. These benefits and services, less the value of what you would personally consume, are meaningful and measurable components of your lifetime economic value." Unfortunately, there's no actual magic formula that simply tells you how much you need to buy, but these online calculators can help you match what you need with what you can afford to pay for life insurance. Michele Lerner is a Motley Fool contributing writer.

 

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DailyFinance.com · Thu, Oct 24, 12 p.m.

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WASHINGTON -- Average U.S. rates on fixed mortgages dropped this week to their lowest levels in four months, a positive sign for the housing recovery. Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 4.13 percent. That's down from 4.28 percent. The average on the 15-year fixed loan declined to 3.24 percent from 3.33 percent. Both averages are the lowest since June 20. Mortgage rates have been falling since September, when the Federal Reserve held off slowing its $85-billion-a-month in bond purchases. The bond buys are intended to keep longer-term interest rates low, including mortgage rates.
And a slowdown in hiring in September makes it more likely that the Fed will continue its stimulus into next year. Mortgage rates tend to follow the yield on the 10-year Treasury note. The 10-year note traded at 2.50 percent Wednesday, down sharply from 2.61 percent last Thursday. To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
  • The average fee for a 30-year mortgage ticked up to 0.8 point from 0.7 point. The fee for a 15-year loan declined to 0.6 point from 0.7 point.
  • The average rate on a one-year adjustable-rate mortgage fell to 2.60 percent from 2.63 percent. The fee rose to 0.5 point from 0.4 point.
  • The average rate on a five-year adjustable mortgage dropped to 3.00 percent from 3.07 percent. The fee was unchanged at 0.4 point.
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DailyFinance.com · Thu, Oct 24, 11 a.m.

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Here's a quick rundown from the world of business and economics this morning: the things you need to know, and some you'll just want to know. o. Remember the Chance card in Monopoly: "Bank Error in Your Favor, Collect $200"? Well, for years, some pension plans have made errors in favor of retirees, overpaying them to the tune of thousands or tens of thousands of dollars. Now, they're demanding the money back -- with interest -- and they're slashing those retirees' pension checks to recover it. o. The word on the street is that the Obama administration "will delay enforcement of the Affordable Care Act's health insurance mandate," the Wall Street Journal's Marketwatch reports. But it's only technically a delay. The enrollment deadline won't change from March 31, 2014, but there will be a six-week or eight-week grace period to give insurers more time to process those applications. So if you sing up in time, but your coverage doesn't start until late April or May, you won't have to pay the penalty. An official announcement is expected later Thursday. o. Thanks to a combination of the fracking boom and advances in horizontal drilling, the United States has raced past Russia and Saudi Arabia to claim the title of world's largest producer of hydrocarbon fuels -- i.e.: oil and natural gas. The U.S. now produces 14 percent more of its own energy than it did in 2005. IBTimes unrolls its maps to explain what fueled the transformation.

o. The FBI and the U.S. attorney's office are weighing an unusual deferred prosecution agreement with JPMorgan (JPM) over allegations that the bank abetted Bernie Madoff's Ponzi scheme, ignoring obviously suspicious signs and allowing fraudulent fund transfers. If the deal is made, the government would suspend criminal charges against the bank, but impose a fine and other concessions. Though they are a common tool for prosecutors, this would be the first time major Wall Street bank has ever been subjected to this type of agreement. o. In other banking news, a jury in civil court has found Bank of America liable for fraud over a slipshod mortgage origination program that cost Fannie Mae and Freddie Mac millions in loses when more than half the loans defaulted. The program, called the Hustle, sped through mortgage applications with only cursory attempts to check for fraud, lies or other issues in the paperwork. The Hustle, it should be noted, was used solely by Countrywide Financial, and a bank spokesman pointed out that it was suspended months before Bank of America (BAC) bought the troubled lender. o. And finally, sold! to the highest bidder: the Navy's first supercarrier, the U.S.S. Forrestal. Price: 1 cent. The 1,067-foot long ship, which was decommissioned in 1993, goes to Texas-based All Star Metals, to be scrapped and recycled.

 

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DailyFinance.com · Thu, Oct 24, 11 a.m.

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Josh Reynolds/AP
NATICK, Mass. -- Boston Scientific Corp. plans to shed as many as 1,500 jobs worldwide, or 6 percent of its workforce, in an effort to cut costs. The company also said Thursday that its CFO is leaving. Boston Scientific is promoting its corporate controller to replace him. The Natick, Mass.-based medical device maker had already announced up to 1,000 job cuts in January in response to limited growth prospects in certain markets and taxes related to the health care overhaul. That's on top of a 2011 cost-cutting plan that included the elimination of 1,200 to 1,400 jobs. The company has about 24,000 employees. In the newest plan, it said it will eliminate 1,100 to 1,500 jobs during the next two years through attrition and layoffs. It hopes to trim annual operating expenses by up to $200 million and invest some of the savings in initiatives that will bolster its growth. Boston Scientific (BSX) shares fell 38 cents, or 3.1 percent, to $11.91 in morning trading. The stock has been trading around five-year highs. Boston Scientific hasn't posted a net annual profit since 2005, the year before it made a massive, $27 billion dollar acquisition of implantable defibrillator maker Guidant. The purchase has weighed on the company's balance sheet ever since, even as demand for the heart-zapping implants has declined. Boston Scientific has also spent years addressing legal allegations about Guidant's handling of problems with its devices. Last week the company agreed to pay $30 million to settle Justice Department allegations that that Guidant knowingly sold defective heart devices to hospitals that implanted them in Medicare patients from 2002 to 2005. The company said sales of implantable defibrillators and pacemakers improved slightly compared to last year.
Boston Scientific and its competitors have suffered through a broader, multiyear slump in use of the heart-shocking devices following a series of recalls that affected all of the major manufacturers. Defibrillators monitor the heart for dangerous irregular heartbeats and use electrical jolts to shock it back to a normal rhythm. Boston Scientific on Thursday reported a third-quarter loss of $5 million, or break-even per share, compared with a loss of $664 million, or 48 cents per share, in last year's quarter. If one-time items are excluded the company said it earned 17 cents per share. Its revenue was unchanged at $1.74 billion. Boston Scientific said sales of urology and women's health products, endoscopy products, and neuromodulation devices improved. That countered a decline in sales of heart stents and other products. The company said CFO Jeffrey Capello will leave Dec. 31 because he wants to find a broader management position. Capello has been Boston Scientific's CFO since March 2010. Daniel Brennan, Boston Scientific's corporate controller and senior vice president, will become its new CFO. %Gallery-193406%

 

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DailyFinance.com · Thu, Oct 24, 10 a.m.

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Mark Lennihan/AP
WASHINGTON -- The number of Americans filing new claims for unemployment benefits fell less than expected last week as California continued to process a backlog of applications caused by computer problems. Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000, the Labor Department said Thursday. Claims for the prior week were revised to show 4,000 more applications filed than previously reported. Economists polled by Reuters had expected first-time applications to fall to 340,000 last week. A Labor Department analyst said claims from the backlog in California were still working their way through the system. Technical problems as California converted to a new computer system have distorted the claims data since September, making it difficult to get a clear read of labor market conditions. A 16-day partial shutdown of the federal government also pushed up claims in recent weeks as furloughed nonfederal workers applied for benefits. Claims filed by federal employees fell 25,939 in the week ended Oct. 12.

More: Can An Employer Force You To Quit?

The four-week moving average for new claims, considered a better measure of labor market trends, rose 10,750 to 348,250. The number of people still receiving benefits under regular state programs after an initial week of aid fell 8,000 to 2.87 million in the week ended Oct. 12. The so-called continuing claims data covered the October household survey week from which the unemployment rate is derived. Continuing claims increased between the September and October household surveys, suggesting a rise in the unemployment rate. But the government shutdown which lasted through the survey period could have affected the gathering of responses and resulted in a smaller sample from which to construct the jobless rate.


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DailyFinance.com · Thu, Oct 24, 9 a.m.

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Winners and losers in the telecom wars. That's one of the top money stories you need to know Thursday. AT&T's quarterly profit edged up by 5 percent. The company also added more than 360,000 new contract subscribers. That's not bad, but it's less than half the number reported last week by chief rivals Verizon (VZ) and T-Mobile US (TMUS). AT&T (T) stock has also underperformed the broader market. It's up just 5 percent this year. Also reporting today: Ford (F), 3M (MMM), Southwest Airlines (LUV) and United Continental Holdings (UAL). And after the close we'll hear from Microsoft (MSFT). Of course, the numbers and the outlook are important, but investors want to know about the plan to succeed outgoing CEO Steve Ballmer. One of the leading candidates in the rumor mill is Ford chief Alan Mullaly. He has refused to respond to the speculation so far. On Wall Street Wednesday, the Dow Jones industrial average (^DJI) fell 54 points, the Standard & Poor's 500 index (^GPSC) lost 8, and the Nasdaq composite index (^IXIC) dropped 22. The World Series is now underway, but the two most valuable franchises are nowhere to be found. According to Bloomberg, the New York Yankees are worth $3.3 billion, and the Los Angeles Dodgers are valued at $2.1 billion. The Boston Red Sox, which won Game 1 last night, are tied for third at about $2 billion. But the team's opponent, the St. Louis Cardinals, is way down the list, valued at just over $800,000. On average, teams are worth about a billion dollars, up 35 percent from Bloomberg's previous estimate. Much of that increase comes from TV contracts and the ownership of regional sports networks.
Kevin Mazur/WireImage
And more than four years after his death, Michael Jackson is as popular -- and successful -- as ever. The King of Pop tops the Forbes list of top-earning dead celebrities, bringing in $160 million last year. In fact, that's more than any living celebrity made this year. Most of the Jackson windfall comes from a Las Vegas extravaganza that makes as much as $250,000 a show, and the "Immortal" world tour. Second on the list of dead celebrities is Elvis, at $55 million, followed by Peanuts creator Charles Schulz, Elizabeth Taylor, Bob Marley and Marilyn Monroe. %Gallery-189563%

 

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DailyFinance.com · Thu, Oct 24, 8 a.m.

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DEARBORN, Mich. -- Ford is raising its full-year profit guidance after a strong third quarter that saw improving sales worldwide, including in past trouble spots like Europe and South America. Ford (F) earned $1.3 billion, or 31 cents a share, down 14 percent from a year ago. The decline was due to special items, including a $250 million charge for restructuring in Europe. Without those, Dearborn-based Ford Motor Co. reported a pretax profit of $2.6 billion, or 45 cents a share. That was a record for the third quarter. Revenue rose 12 percent to $36 billion. Ford sold 1.5 million cars and trucks in the quarter, up 16 percent. Shares rose in premarket trading. The company increased sales and gained market share in each of its regions thanks to an influx of new vehicles. "The breadth, the depth and the quality of the growth is very encouraging," Ford's Chief Financial Officer Bob Shanks told reporters Thursday morning. In Asia, where sales of the new Kuga and EcoSport SUVs have been strong, Ford's pretax profit more than doubled to $126 million.
In South America, where Ford had been plagued by currency issues and dated products, the new Ranger pickup and revamped Fiesta helped increase pretax profits by $150 million to $159 million compared with a year ago. In North America, Ford earned $2.3 billion, the same as a year ago. Ford's share of the market rose, but that was offset by lower prices and discounting on the F-Series pickup, which is now older than rival trucks from General Motors (GM) and Chrysler. In Europe, Ford's pretax losses were halved to $228 million. The company said it now expects to lose less than the $1.75 billion it lost in Europe a year ago. Ford beat Wall Street expectations. Analysts polled by FactSet forecast earnings of 37 cents on revenue of $33.6 billion. Ford previously said it expected its full-year pretax profit to be equal to or higher than its $8 billion profit in 2012. Now it expects to exceed that. Ford also expects lower European losses. Ford shares rose 66 cents, or 3.7 percent, to $17.52 in premarket trading. %Gallery-193406%

 

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DailyFinance.com · Thu, Oct 24, 8 a.m.

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Andrew Harrer/Bloomberg via Getty ImagesHealth insurance executives gather Wednesday ahead of meeting with White House officials to discuss glitches that have hampered enrollment at the HealthCare.gov website.
By Dan Mangan Leading insurance company CEOs met Wednesday at the White House with top Obama administration officials to discuss solving the serious tech problems afflicting the new federal "Obamacare" insurance marketplace, specifically the ones that are drastically crippling enrollment. In a statement after the meeting, the White House said, "We are collaborating very closely with the insurers to address problems we have witnessed in what are called '834' forms and in direct enrollment." Those 834 forms contain information about individuals that insurers then use to officially enroll that person in health care coverage. CNBC and other media outlets have extensively detailed how many if not most of the 834 forms being transmitted each night to insurers from HealthCare.gov contain corrupted or questionable data that prevents people from being enrolled quickly, or even at all. But the Obama administration to date had been vague about the specific issues plaguing HealthCare.gov. "We haven't seen any improvement in the 834s," said a top executive at one of the 13 insurance companies whose CEO was at the afternoon meeting with embattled Health and Human Services Secretary Kathleen Sebelius, White House Chief of State Denis McDonough, Director of Centers for Medicare and Medicaid Services Marilyn Tavenner and top Obama adviser Valerie Jarrett. "The data's pretty bad," the executive said. And even if the data was not corrupted, the number of enrollments the insurers are getting from HealthCare.gov is "pretty low." The White House said, "To that end, we have worked with the insurers and the 'alpha teams' we jointly established, made up of insurers' technology experts and CMS technology experts to iron out kinks in both the 834 forms and in direct enrollment." This is part of the "tech surge" President Barack Obama described earlier in the week. The administration now says the plan is "incrementally improving performance at HealthCare.gov."
"These 'alpha teams' are working side-by-side to correct challenges as soon as we see them," the White House said. "The teams have been meeting virtually with CMS and [lead HealthCare.gov contractor] CGI and with the tech teams associated with operations leaders on the industry." The meeting came as testimony was being submitted to the House of Representatives Energy and Commerce Committee, who will hold a hearing on the troubled rollout Thursday. In that testimony, CGI identifies early problems in another contractor's software as a cause of some of the initial problems. That contractor, UnitedHealth Group (UNH) unit Quality Software Services also said there were late changes to the registration process that also caused problems. A spokesman for America's Health Insurance Plans, the industry's trade group, after the meeting said, "This was a positive and productive meeting in which the CEOs were able to provide on-the-ground perspective of how open enrollment is proceeding." "Our industry is committed to working with the administration to help ensure individuals and families are able to get the health care coverage they need," said AHIP spokesman Robert Zirkelbach, whose president and CEO Karen Ignagni attended the White House pow-wow. Also there were Aetna (AET) CEO Mark Bertolini, Humana chief Bruce Broussard, Chet Burrell of CareFirst, Patrick Geraghty of Blue Cross Blue Shield of Florida, Jay Gellert of Health Net, Daniel Hilferty of Independence Blue Cross, John Molina of Molina Healthcare, Michael Neidorff of Centene, James Roosevelt of Tufts Health Plan, Scott Serota of the Blue Cross Blue Shield Association, Joseph Swedish of WellPoint (WLP) and Bernard Tyson of Kaiser Permanente. The session came a day after Jeffrey Zients, the former acting director of the Office of Management and Budget, was assigned to oversee the round-the-clock, frantic push to correct the many software problems on HealthCare.gov, which is being operated by HHS. Zients' appointment follows scathing criticism of HHS' handling of the rollout of the site by both Republican opponents of Obamacare and supporters of the health-care reform effort. The appointment was seen as the White House taking a leading role in solving the problems, which threaten to cripple the president's signature legislative victory. On Tuesday night, Sebelius, who has rejected Republican calls for her resignation, told CNN that Obama had not been told about software problems with that website until after it launched Oct. 1, when those problems began making headlines nationally. Time to delay? The problems at HealthCare.gov have led to renewed calls for a delay of the so-called individual mandate, which requires nearly all Americans to obtain some form of health insurance by 2014 or face a tax penalty. Earlier on Wednesday, U.S. Sen. Jeanne Shaheen (D-N.H.), became the first leading Democrat to call on the Obama Administration to extend the open enrollment period of the Obamacare insurance policies past March 31. Several other senators quickly followed suit, and CNN quotes one Democratic party source as saying every Democrat running for office next year will support that idea, which so far is being rejected by the White House. But also on Wednesday, an HHS official told CNBC.com that it is currently "exploring options" to resolve "a disconnect between the open enrollment and the individual responsibility time frames in the first year of the marketplace." That disconnect is the fact that the Affordable Care Act allows people to enroll in coverage until March 31, 2014, but effectively requires people to sign up and begin paying for coverage by about Feb. 15, 2014, in order to avoid the tax penalty. "The administration is working to align those policies and will issue guidance soon," the official said. White House press secretary Jay Carney said the Centers for Medicare and Medicaid Services, the HHS division that is operating HealthCare.gov, will begin giving reporters regular briefings about the site. That development comes after three weeks of news stories that were critical of the site, and which often contained little new information from HHS other than statements that the problems were being addressed. Insurers, including the ones attending the White House meeting, are hoping that enough younger, healthier people enroll in the plans being sold on HealthCare.gov to offset what is expected to be a flood of older, sicker people who previously have been unable to obtain affordable insurance because of their pre-existing conditions. If not enough people enroll in the plans, insurers could actually lose money on selling the coverage, and be forced to significantly raise prices for 2015, which could in turn dampen adoption of the Obamacare plans by many people. HealthCare.gov is selling insurance from competing plans to people in the 36 states that are not operating government health insurance marketplaces on their own. The North Dakota online publication Inforum on Tuesday quoted a Blue Cross Blue Shield of North Dakota spokesman as saying just 14 state residents have signed up with that insurer, the largest in the state, since the Oct. 1 launch of HealthCare.gov. Only six other people in North Dakota have signed up with other carriers, according to Inforum, which noted that means an enrollment rate of less than one person per day. Blue Cross Blue Shield official James Nichol, speaking at a public meeting in Fargo on Monday, revealed that earlier that same day the federal government had asked the insurer not to reveal enrollment figures. The Washington Post on Tuesday reported that CMS director Tavenner earlier that same day had told directors of state Medicaid agencies that HealthCare.gov is still not able to electronically enroll people in Medicaid, which is the government health insurance program for many poor people. CMS had said right before the launch of HealthCare.gov that Medicaid electronic enrollment would be delayed until Nov. 1. But now, Tavenner reportedly told the Medicaid directors there is no set date for it to begin working. In addition to the electronic hurdle for Medicaid applicants, Spanish-language applicants still cannot enroll in Obamacare insurance electronically, and are being referred to HealthCare.gov's toll-free customer service phone number to enroll.


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DailyFinance.com · Thu, Oct 24, 7 a.m.

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Patricia Cassidy/APPatricia Cassidy with her dog, Doodles at a her veterinarian's office in Chattanooga, Tenn., last June.
By SUE MANNING LOS ANGELES -- All that's left of Doodles are his ashes, a clay impression of his paw and a whole lot of questions owner Patricia Cassidy has about his mysterious death. Doodles is believed to be one of 580 dogs in the U.S. that have died in the past six years from eating pet jerky from China. Baffled by the cause and seeing another surge in illnesses, the Food and Drug Administration reached out to owners and veterinarians Tuesday to help it find the poison behind the sickening of at least 3,600 dogs and 10 cats since 2007. Within hours of eating the suspect jerky, pets lost their appetite, became lethargic, vomited and had diarrhea and other symptoms. The strips made of chicken, duck, sweet potatoes or dried fruit were sold under a variety of brand names. There was a decrease in 2007 after some products were voluntarily removed from the market, but the FDA said it didn't want to conduct a recall without a definitive cause. Those products included Milo's Kitchen Chicken Jerky Treats and Chicken Grillers, made by Del Monte, and Waggin' Train and Canyon Creek Ranch dog treats, made by Nestle Purina. But in the years since, the FDA has gotten complaints from pet owners and veterinarians who have seen repeated cases of kidney failure, gastrointestinal bleeding, and a rare kidney disorder, the FDA said. The FDA's Center for Veterinary Medicine has run more than 1,200 tests, visited pet treat manufacturing plants in China and worked with researchers, state labs and foreign governments but hasn't determined the exact cause of the illness. Testing is complicated because the poison may have come from the manufacturing plant, shipping, transportation or anywhere along the way. Scientists have to know what they're looking for to test for it. "I grew up watching 'Quincy' and 'CSI' and they have given us this look at forensics -- you put samples in and answers come out the other end," said Dr. Tina Wismer, medical director of the Animal Poison Control Center of the American Society for the Prevention of Cruelty to Animals. It doesn't work that way." That's little consolation to Cassidy in Chattanooga, Tenn. Doodles died Sept. 9 at the age of 6. In just three months, he turned from a vibrant 16-pound shih tzu into a frail, 6-pounder who couldn't eat or drink and had so little left in him he could only vomit yellow bile. "He was such a loving little guy and so cute. Every day my daughter will say, 'Mom, I don't know when the holes in our hearts will be repaired.'" Cassidy promised Doodles she would wage war as long as it took to get the products off store shelves or, at the very least, labeled so people know it might be deadly. The jerky mystery is the worst case of tainted pet food from China since 2007 when there was a nationwide recall of food made by Menu Foods and 1,950 cats and 2,200 dogs died.
Kidney failure caused all of those pet deaths and the poison was found to be tainted melamine from plastic packaging in the wheat gluten. About 150 brands of dog and cat food were recalled and included some of the biggest names in pet food. A federal grand jury indicted two Chinese nationals and the businesses they operate, as well as the U.S, company ChemNutra Inc. and its CEO for their roles in importing the poisonous products. A class-action lawsuit awarded more than $12.4 million in compensation to pet owners whose pets died from the poisoned food. Veterinarians can only tell pet owners they don't know what's causing their animals to get sick and that's hard to do, said Dr. Karl Jandrey, an emergency and critical care vet at the Veterinary Medical Teaching Hospital at the University of California, Davis. They have treated several dogs for what they believe was poisoning from the treats, but no patient has died, he said. Dexter, a 3-year-old, 19-pound miniature schnauzer also survived, but it cost owner Rich Phillips of North Richland Hills, Texas, about $1,200, he said. In April, Dexter started throwing up and couldn't stop. He spent the night at an emergency clinic and the next day at the vet's. Test after test was inconclusive. The dog was given an IV and anti-nausea medicine and sent home. That's when Phillips saw the package of chicken jerky treats and knew that was the cause. "We were lucky we caught him quick," Phillips said. Dexter had only had about two of the treats and has been fine ever since that night. No one knows how many treats a pet has to eat before it starts getting sick, said Dr. Amy Bowman, regional medical director for Banfield Pet Hospital in Reston, Va. "Some say it's a single serving, some say the whole bag," she said. Her advice is to avoid jerky treats if the label says it comes from China. There are all kinds of healthy treat substitutes, including apples, uncooked green beans and carrots, she added. A lot of pet owners transfer food and treats into other containers at home to keep pets and pests out, but Wismer suggested keeping labels with lot numbers and manufacturers. Imported pet food is inspected when it arrives in the United States but only randomly and to check for things like mold, Wismer said. Dr. Barry Kellogg, senior adviser to the Humane Society Veterinary Medical Association, called for increased testing and stricter guidelines on labeling of imports. If only part of a product is from China and it is put together here, labels don't have to say made in China, he said. -Writer Mary Clare Jalonick reported on this story from Washington. %Gallery-187704%

 

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DailyFinance.com · Thu, Oct 24, 7 a.m.

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Joshua Roberts/Bloomberg via Getty ImagesFormer Countrywide executive Rebecca Mairone testifying before Congress in 2010.
By Nate Raymond NEW YORK -- Bank of America was found liable for fraud Wednesday over defective mortgages sold by its Countrywide unit, a major win for the U.S. government in one of the few trials stemming from the financial crisis. After a four-week trial, a federal jury in New York found the bank liable on one civil fraud charge. Countrywide originated shoddy home loans in a process called "Hustle" and sold them to government mortgage giants Fannie Mae and Freddie Mac, the government said. The four men and six women on the jury also found former Countrywide executive Rebecca Mairone liable on the one fraud charge she faced. The U.S. Justice Department has said it would seek up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. But it will be up to U.S. District Judge Jed Rakoff to decide on the penalty. Arguments on how the judge will assess penalties are set for Dec. 5. Any penalty would add to the more than $40 billion Bank of America (BAC) has spent on disputes stemming from the 2008 financial crisis. "The jury's decision concerned a single Countrywide program that lasted several months and ended before Bank of America's acquisition of the company," Bank of America spokesman Lawrence Grayson said. "We will evaluate our options for appeal." Marc Mukasey, a lawyer for Mairone, called his client a "woman of integrity, ethics and honesty," adding they would fight on. "She never engaged in fraud, because there was no fraud," he said. Wednesday's verdict was a major victory for the Justice Department, which has been criticized for failing to hold banks and executives accountable for their roles in the events leading up to the financial crisis. The government continues to investigate banks for conduct related to the financial crisis. The verdict comes as the government is negotiating a $13 billion settlement with JPMorgan Chase (JPM) to resolve a number of probes and claims arising from its mortgage business, including the sale of mortgage bonds. Risky Loans The lawsuit stemmed from a whistleblower case originally brought by Edward O'Donnell, a former Countrywide executive who stands to earn up to $1.6 million for his role. The case centered on a program called the "High Speed Swim Lane" -- also called "HSSL" or "Hustle" -- that government lawyers said Countrywide started in 2007. The Justice Department contended that fraud and other defects were rampant in HSSL loans because Countrywide eliminated loan-quality checkpoints and paid employees based on loan volume and speed. The Justice Department said the process was overseen by Mairone, a former chief operating officer of Countrywide's Full Spectrum Lending division. Mairone is now a managing director at JPMorgan. Amy Bonitatibus, a JPMorgan spokeswoman, said, "We are reviewing the decision." About 43 percent of the loans sold to the mortgage giants were materially defective, the government said. Bank of America bought Countrywide in July 2008. Two months later, the government took over Fannie and Freddie. Bank of America and Mairone denied wrongdoing. Lawyers for the bank sought to show the jury that Countrywide had tried to ensure it was issuing quality loans and that no fraud occurred. The lawsuit was the first financial crisis-related case against a bank by the Justice Department to go to trial under the Financial Institutions Reform, Recovery and Enforcement Act. The law, passed in the wake of the 1980s savings-and-loan scandals, covers fraud affecting federally insured financial institutions.
The Justice Department, and particularly lawyers in the office of U.S. Attorney Preet Bharara in the Southern District of New York, have sought to dust off the rarely used law and bring cases against banks accused of fraud. Among its attractions, FIRREA provides a statute of limitations of 10 years and allows the government to bring civil cases for alleged criminal wrongdoing. Virginia Gibson, a lawyer at the law firm Hogan Lovells, said the Bank of America verdict was a "big deal because it shows the scope of a tool the government has not used frequently since its inception." Gibson and other lawyers say any appeal by Bank of America would likely focus on a ruling made by the judge before the trial that endorsed a government position that it can bring a FIRREA case against a bank when the bank itself was the financial institution affected by the fraud. The case was one of three lawsuits in New York where judges had endorsed that interpretation. Banks have generally argued that the interpretation is contrary to the intent of Congress, which they said is more focused on others committing fraud on banks. Bank of America's case was the first to go to trial, a rarity given that banks more typically choose to settle government claims instead of face a jury. But Bank of America had said that it "can't be expected to compensate every entity that claims losses that actually were caused by the economic downturn." In a statement, Bharara said Bank of America "chose to defend Countrywide's conduct with all its might and money, claiming there was no case here." "This office will never hesitate to go to trial to expose fraudulent corporate conduct and to hold companies accountable, particularly when it has caused such harm to the public," Bharara said. %Gallery-183217%

 

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DailyFinance.com · Thu, Oct 24, 7 a.m.

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Every October, hundreds of Halloween pop-up stores emerge in malls and empty storefronts across the country. Meanwhile, existing costume shops hire a ton of seasonal employees for the Halloween rush, and drugstores and other retailers dedicate an aisle or two to costumes and candy. At every one of these establishments, you'll find a variety of ready-made costumes in bags, not to mention fake weapons, mustaches, wigs and other accessories. But when it comes time to choose your costume, we'd urge you to skip the Halloween store and head for the thrift shop. "No costume-in-a-bag has ever won a costume contest," scoffs Melissa Massello, founder of DIY and frugal living site Shoestring Magazine. "If you go the DIY route, you're much more likely to get the cash prize or gift certificate." Even if you don't care about winning costume contests, there's another good argument for skipping the costume shop: It's a lot cheaper to put your costume from scratch than to buy it ready-made. Consider one staple costume: The old-timey gangster. This one usually consists of a large-fitting, pinstriped suit, some manner of fedora or other brimmed hat, and perhaps a fake tommy gun. Throw in a wide tie with a thick knot, and perhaps a cigar, and you're all set.
I visited a large costume shop here in New York, and found a whole section dedicated to the gangster look. Its offerings were pricey: One costume cost $60, and another came in at $70. The bag contained only the suit -- no tie, tommy gun or hat was included. Then I headed over to the Salvation Army thrift store, which happened to be next door. There were plenty of ill-fitting suits on the rack, and I found a nice pinstriped one for just $24. But that's not all: Most of the store is 50 percent off on Wednesday, so the actual price was just $12. And unlike the polyester "suits" from the costume shop, these were real garments, meant to last, albeit used ones that probably needed a good dry-cleaning. If I'd decided I liked the look of the suit, I could've even had it tailored after Halloween and entered it into regular rotation in my wardrobe. The mass-produced "gangster" costume, by contrast, looked unlikely to hold up to multiple wearings. That's just one example. Another would be the classic Super Mario costume, which consists of a pair of blue overalls, a red shirt and a red hat. At a costume shop, you're looking at paying about $40 for this costume. (That's also what you pay for a "Pete the Plumber" costume, a shameless ripoff of Nintendo's beloved character.) But again, there's no need to buy a costume in a bag when it can be assembled from clothes found at any thrift store -- how much would it really cost to buy a pair of overalls and a red shirt at your local Goodwill? If you do decide to go the thrift store route, there are a few things to keep in mind going in. Things are about to get very busy. "October is like Black Friday for thrift stores," says Massello, who has a tradition of making her costumes from scratch. "At this point, a week away, they're starting to get picked over." Get there before the weekend rush if you can, but keep in mind that you might need to hit multiple stores in the area to put together your full costume. Plan ahead, but be willing to improvise. Massello recommends doing Google Image searches of your costume beforehand and putting together an itemized list of what you need at the store (and what you can provide from your own closet). But if you still haven't decided on a costume, or you're not sure that you'll find every element you need, your best bet might be to go in with a few costumes in mind and hope that inspiration strikes while you're browsing the buck-a-pound box. Remember to clean what you get. There's one advantage that a costume in a bag has over a thrift-store creation: It doesn't need to be cleaned first. Make sure you leave enough time to clean your purchase. "You need to assume that nothing has been washed at a thrift store," Massello says. "If you're buying the day before, don't buy something that has to be dry-cleaned." Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama. We are showing you how to eat, drink and be scary this Halloween season. Read more on Halloween on AOL:

 

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DailyFinance.com · Thu, Oct 24, 7 a.m.

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By Stephanie Steinberg ST. LOUIS -- Three numbers can affect everything from securing a mortgage or loan to how much interest you'll pay when you're approved for a house. And while they're just three numbers -- that typically range from 300 (very bad) to 850 (very good) -- there's a lot of information and regulations behind them. But don't worry, if a thing or two about your credit score has left you scratching your head, you're not alone. "Consumers look at their credit report and they're like, 'I don't understand it. I don't know what it means,' " says Gerri Detweiler, director of consumer education for credit.com and host of Talk Credit Radio. To clear up the confusion, several credit experts spoke at FinCon, a financial conference in St. Louis last week, and debunked misconceptions about credit scores. Here are 10 common things consumers tend to get wrong about their scores. 1. The credit bureaus Experian, TransUnion and Equifax evaluate my credit score. The three bureaus generate credit reports, but they have nothing to do with judging your credit score or advising lenders whether to approve or deny an application. "The credit report does not rate your credit," says Maxine Sweet, Experian's vice president of public education. "It simply lays out the facts of your history." So who determines what your credit score means? Companies such as FICO and VantageScore Solutions evaluate your credit risk level -- what lenders use to decide how risky it is to give you a loan -- based on your credit report. Separate scoring models have been developed to help businesses predict if a consumer will make payments as agreed, and the credit score is just one factor used in the model. 2. There's only one type of credit score. There are actually many different scores. For example, FICO has several models with varying score ranges. "If you get your FICO score from one lender, that very likely won't be the same score that you would get from another lender, even though they're using the FICO model," Sweet says. Consumers shouldn't focus on the number, she adds. Instead, look at where your score falls on the risk model and what influences that risk. If a lender declines your application or charges you a higher fee because of your risk, it will disclose factors that are negatively impacting your risk, Sweet explains. "Those factors will tell you what behavior you will need to change to change your credit history," she says. 3. When I close a credit card, the age of the card is no longer factored into my credit score. The only way you lose the benefit of a card's age is if a bureau removes the account from a credit report, says John Ulzheimer, credit expert at CreditSesame.com. "As long as it's still on a credit report, the credit scoring system still sees it, still sees how old it is and still considers the age in the scoring metric," he says. Take Ulzheimer's father as an example: He uses a Sear's credit card he opened in 1976, which is the oldest account on his credit report. "The assumption is if he were to close that card, he would lose that decades-long history of that card and potentially lower his score. That's not true," Ulzheimer says. However, there is one caveat: The score would be lost after 10 years (see No. 4). 4. A credit card stops aging the day I close it. Even when you close an account, the credit card still ages. For instance, if you close an American Express card today, the card will be one year older a year from now. And as explained above, you won't lose the value of the card's age. "Not only does it still count in your score, but it continues to age," Ulzheimer says. However, a closed account will not remain on your credit report forever. The credit bureaus delete them from credit reports after 10 years, according to Sweet. There's just one exception: "If the account is in a negative status, it will be deleted at seven years because we can only report negative account history for seven years," she says. 5. I need to carry debt to build credit. To debunk this, Detweiler points to her friend who went through a divorce and lost his home in the process. He wanted to rebuild his credit so he got a secured credit card with a $500 limit.
According to Detweiler, he only made the minimum payments because he thought it was good for his credit score to have debt. In reality, he hurt his credit by maxing out the card and carrying debt. As Detweiler says, her friend made a big mistake. "You can pay your balances in full and still build good credit," she says. 6. Medical debt is treated differently on credit reports. Credit bureaus do not discriminate when it comes to medical payments. Typically, medical bills are not reported to a bureau unless the bills are sent to a collection agency. When that happens, "medical collections are the same as any other collections," Detweiler says. "They are a serious negative. The more recent they are, the more it affects your score." 7. A credit repair company can only remove inaccuracies to improve my score. While it's true credit repair companies help you get inaccurate information corrected on your credit report, they can sometimes go one step further. "The real core competency of a credit repair company is to get stuff that's negative removed from your credit report -- whether it's accurate or inaccurate," Ulzheimer says. 8. So that means a credit repair company takes illegal action to fix my score. No, what they do is perfectly legal as long as they follow a federal statute called the Credit Repair Organizations Act. Every state has its own version of CROA. "It is a law filled with teeth," Ulzheimer says. For one, companies must disclose that they're going to take actions you could technically do yourself (at no cost), and they can't charge you until after the services have been rendered. They also can't guarantee anything, Ulzheimer says. "If they say, 'I can have that bankruptcy deleted, guaranteed,' that's a violation of the Credit Repair Organizations Act." 9. My utilization rate doesn't matter. Utilization is an important measurement in the credit scoring system. "It can wildly change your score in a short period of time in either direction," Ulzheimer says. He explains it as the percentage of the credit cards you're using at any given time. To calculate your utilization percentage, divide your credit card balances by your total credit card limits and multiply by 100. "The higher that percentage, the fewer points you're going to earn in that particular category, depending on the scoring system," Ulzheimer says. "The lower the percentage, the better it will be for your score." The credit score tracking website KreditCarma.com recommends that consumers shouldn't exceed 30 percent. 10. I should avoid new store credit cards because they'll hurt my score. You've likely been asked at checkout: "Would you like to open a store credit card and receive 20 percent off your purchase today?" For some consumers, it's a good idea to say yes. "That's a great way for many people who might not qualify for other kinds of cards to get a credit card," Sweet says. A store credit card can help raise your credit limit, improve your utilization rate and boost your overall score. Of course, you shouldn't sign up if you'll be tempted to use the card every day, Sweet says, "but don't just automatically assume it's a bad thing before you open that account."


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DailyFinance.com · Thu, Oct 24, 7 a.m.

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Even if you don't know what "salmonella" is, if you cook chicken, you're watching out for it. It's the bacteria most commonly associated with food poisoning from poultry -- which makes it a big part of the reason home cooks are cautioned to disinfect surfaces, prepare and serve food on different plates, and make sure that chicken is cooked all the way through. Recently, those standard warnings have gained fresh relevance as a new outbreak of especially virulent salmonella has been reported in the U.S. food supply. In other words, if you like to eat chicken, this might be a good time to reconsider what kind you buy, where you buy it from, and how you prepare it. Given how much effort we go through to avoid it, the actual danger presented by traditional salmonella is surprisingly small. The nasty little bacteria causes an estimated 80 deaths per year in the U.S., largely among people who are already immune-compromised. And, while salmonella causes thousands of food poisoning cases each year, the majority are minor: Only about 20 percent of victims require a hospital visit.
But the new outbreak, which has been given the name salmonella Heidelberg, is especially virulent. Of the 338 reported cases, 42 percent have required hospitalization, more than twice the usual level. And 15 percent of victims have developed blood infections, compared with a usual rate of around 5 percent. To make things worse, several strains of salmonella Heidelberg are antibiotic-resistant, which complicates treatment. The recent budget madness in Washington has been another factor helping Heidelberg along. Normally, the Centers for Disease Control often uses PulseNet, a network of laboratories, to track outbreaks like this one. Unfortunately, PulseNet was closed for two weeks on October, shut down along with the rest of the government's "non-essential" services. Complicating matters further is that, while the infected poultry was largely produced by California-based Foster Farms, a chicken processing company, it has been sold under a variety of names and in a variety of forms. Costco, for example, has recalled thousands of pounds of rotisserie chicken, rotisserie chicken parts, chicken soups, wings, and other products -- many of which were sold under its in-house Kirkland brand. Kroger (KR) has also had massive recalls. So what can you do? This would be a good time to pick a different entree, especially if you live in California, where most of the cases have been reported. If you can't bear to take the versatile birds out of your diet, you might want to shift to organic or free-range chickens. Or, at a minimum, stay away from rotisserie chicken until the CDC informs us that this outbreak has passed. In a broader sense, though, this might be a good incentive to examine where your chicken comes from. After all, this is only the latest in a series of poultry problems, and more are on the horizon. Between chickens from China, cutbacks in USDA inspections, recent revelations about the unappetizing ingredients in chicken nuggets, and the discovery of arsenic in our chicken, there are plenty of reasons to give factory-raised birds the boot. Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

 

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DailyFinance.com · Wed, Oct 23, 5 p.m.

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Stocks fell Wednesday as investors weighed disappointing earnings from Caterpillar and several chipmakers, and falling oil prices hurt energy stocks, ending the S&P 500's four-day streak of record highs. The Standard & Poor's 500 index (^GPSC) surrendered 8 points, or 0.5 percent, to 1,746, the Dow Jones industrial average (^DJI) lost 54 points, or 3.5 percent, to 15,413 and the Nasdaq composite index (^IXIC) gave up 22 points, or 0.6 percent, to 3,907. Earnings from two Dow components underlined how mixed the corporate reporting season has been, with investors concerned about revenue growth and company forecasts. Caterpillar (CAT) was one of the biggest decliners on the S&P, slumping 6.1 percent to $83.76 after the heavy-equipment machinery maker cut its full-year outlook for a third time and its profit missed expectations. That sent shares tumbling by their most in a day since September 2011. On the upside, Boeing (BA) surged 5.4 percent to $129.02 after reporting a rise in adjusted profit and raising its full-year forecast. The aircraft maker also announced plans to increase production of its trouble-prone 787 Dreamliner jetliner. About a third of S&P 500 companies have reported thus far, with 66.3 percent topping profit expectations, a rate that is slightly higher than the historical average.
Roughly 54 percent have beaten on revenue, below the 61 percent long-term average. Semiconductor stocks dropped 3 percent a day after Broadcom (BRCM), Altera (ALTR) and RF Micro Devices (RFMD) joined Intel (INTC) and Texas Instruments (TXN) on a list of semiconductor companies that have unveiled underwhelming quarterly forecasts this past week. In commodities trading, oil prices continued their downward slide. Benchmark crude for December delivery slipped $1.22, or 1.2 percent, to $97.08, while gold lost $8.60, or 0.6 percent, to end at $1,333.90. More Stocks in the News:
  • A unit of Samsung Electronics could become the biggest shareholder of Corning, the maker of scratch-resistant Gorilla Glass used in many mobile gadgets. Corning (GLW) shares jumped 14.1 percent to $17.52.
  • Shares of Cree (CREE) slumped 16.9 percent to $61.77 after the maker of light-emitting diodes forecast current-quarter earnings below analyst estimates.
  • Safeway (SWY) rose 8.2 percent to $35.58 following a report from Reuters late Tuesday that "a handful" of buyout firms, including Cerberus Capital Management, are exploring a deal for all, or part, of the supermarket chain.
  • Netflix (NFLX) shares rose 2.4 percent to $330.24 following a large sell-off Tuesday when billionaire investor Carl Icahn cut his stake in the company, taking profits from the huge run up the stock has seen since he bought in last October.
  • Shares of C.R. Bard (BCR) jumped 7 percent to $135.80 after the medical device maker's third-quarter results surpassed Wall Street estimates.
  • Panera Bread (PNRA) slipped 5.7 percent to $153.15, after the restaurant operator acknowledged that quality has fallen at its stores. It also cut its outlook for the year.
  • Repros Therapeutics (RPRX) tumbled 27.7 percent to $17.12 after the company delayed its filing for marketing approval of its testosterone replacement Androxal for several months.
What to Watch Thursday:
  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims and the Commerce Department releases August data on International Trade.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates; the Labor Department releases job openings and labor turnover survey for August; and Markit Economics releases preliminary findings for October from its survey of purchasing managers in the manufacturing sector.
These companies are scheduled to report quarterly financial results:
  • 3M (MMM)
  • Altria Group (MO)
  • Amazon.com (AMZN)
  • Express Scripts Holding (ESRX)
  • Ford Motor (F)
  • Microsoft (MSFT)
  • Southwest Airlines (LUV)
  • Starwood Hotels & Resorts Worldwide (HOT)
  • United Continental Holdings (UAL)
  • Zynga (ZNGA)
-Compiled from staff and wire reports.

 

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