Money Minute: What's Next for the Dow? Pangs End for 'Hunger Games' Fans

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Is the Dow's rise above 16,000 the beginning or the end?

It took the Dow Jones industrial average just 139 days to climb from 15,000 to 16,000. The big question for investors is: Does that signal the start of a new round of buying or the end of the rally?

Dow Milestones: What's Next
March 1999 10,000 Up 8.7%
May 1999 11,000 Down 3.2%
Oct. 2006 12,000 Up 2.5%
April 2007 13,000 Up 3.7%
July 2007 14,000 Down 6.3%
May 2013 15,000 Up 1.3%

The WSJ Market Data Group tells us that in the month after topping other milestone levels since 1999, we've seen the Dow continue to gain four times, and lose ground on two occasions.

What do the pros say? Basically, anything you want to hear. Some predict the Dow will rise to 20,000. Others say we're in another bubble that's about the burst.

Wall Street
Richard Drew/AP
The Dow (^DJI) rallied 109 points Thursday, closing at 16,010. The Standard & Poor's 500 index (^GPSC) gained 14 points and the Nasdaq composite index (^IXIC) rose 48.

UPS (UPS) says it will raise most rates by nearly 5 percent. That applies to ground delivery of packages as well as some air and international service.

Microsoft (MSFT) first new Xbox video game console in eight years is now on sale. It's designed to be more than a game player by connecting with your cable box to enhance TV viewing and other entertainment options. It costs nearly $500. That's $100 more than Sony's (SNE) PlayStation4, which sold more than 1 million units when it debuted last Friday.

"The Hunger Games" movie sequel also debuts Friday, and it's expected to ring up big box-office sales for Lions Gate Entertainment (LGF). The movie will be seen in 65 countries, including China. The original "Hunger Games" movie took in nearly $700 million in ticket sales.

And Pandora Media (P) may be hitting a sour note with investors. The music streaming service is set to decline even though earnings met expectations. But Pandora rival Spotify raised $250 million in new financing that will allow it to expand into new markets. That will add competitive pressure to Pandora.

-Produced by Drew Trachtenberg.

6 Popular Tax Breaks That Could Disappear in 2014
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Money Minute: What's Next for the Dow? Pangs End for 'Hunger Games' Fans
Usually, if borrowers have part of their debt written off or forgiven, they have to treat that amount as taxable income. But in the aftermath of the housing market's implosion, homeowners who defaulted on their mortgages and had their bank write off or forgive part or all of their loans weren't required to claim the forgiven amount as income. The Mortgage Forgiveness Debt Relief Act of 2007, which created this provision, has been extended before, but now, with home prices recovering somewhat, the incentive to preserve this provision is starting to fade. That makes it more likely that the mortgage-debt forgiveness provisions might not get renewed for 2014.
Federal tax law has allowed taxpayers to deduct state and local income taxes for years, but for the 57 million people who live in states that don't charge income tax, those provisions didn't provide any relief. That changed in 2004, when lawmakers allowed taxpayers to choose instead to take a similar deduction for sales taxes. The provision, which was originally slated to expire at the end of 2007,  has been repeatedly extended by Congress. Over the years, it has provided $16.4 billion in deductions to affected taxpayers.
Teachers from kindergarten to high school are allowed to deduct up to $250 for money they spend buying supplies for their classrooms. This deduction's available even to those who don't itemize, making it more valuable than most deductions. According to figures from The Tax Institute at H&R Block, more than 3.6 million teachers took advantage of this provision in 2010 to deduct $915 million in expenses. This deduction has been extended regularly ever since its initially scheduled expiration in 2005, so, even though it's on the chopping block again, it's a pretty good bet that lawmakers will let the tax break survive into 2014.
Under current law, employers may allow their employees to have pre-tax money taken from their paychecks and directed to paying for parking expenses or the cost of public transportation. But for years, the maximum amounts for public-transportation expenses were only about half what car-commuters could take for parking. In 2009, lawmakers equalized those amounts. In 2013, that meant that $245 a month worth of commuting-related expenses could be paid for tax-free, whether that meant a transit pass or parking fees. But after a last-minute battle at the beginning of this year to extend the benefit retroactively to 2012, transit-riders are once again facing the expiration of the provision. In June, three lawmakers introduced the Commuter Parity Act to make the provision permanent, but the bipartisan proposal is stuck in limbo in the House Ways and Means Committee.
These provisions allow certain taxpayers to deduct between $2,000 and $4,000 of qualified educational costs. This provision was also retroactively reinstated for 2012 at the beginning of this year. The difference, though, is that other tax breaks also exist for educational expenses, including the Lifetime Learning Credit and the American Opportunity Credit. (You have to pick either the tuition and fees deduction, or one of the two education credits. You're not allowed to double-dip.) Those tax credits makes it less crucial to extend the tuition deduction, although it's still a better deal for many people: The Tax Institute at H&R Block says that 2 million taxpayers used it to write off $4.36 billion in expenses in 2010.
Since 2006, taxpayers could claim a credit on certain expenses for remodeling their homes to make them more energy efficient. Currently, the maximum lifetime credit amount is $500, but amounts were higher in the past, and more than 43.5 million taxpayers have claimed an average of more than $765 using the credit.
Congress commonly waits until late in the year to extend expiring tax provisions like these, as well as others not mentioned above, such as the exemption for charitable IRA distributions, deductions for mortgage insurance premiums, and the higher immediate write-off amounts for small-business equipment purchases.

Lawmakers often use what's known as a tax-extenders bill to pass all the extensions in a single package. Earlier this month, WOTC Coalition President Paul Suplizio said that a seemingly unrelated Medicare-payments bill was probably the first step toward a year-end tax extenders bill that would cover expiring tax breaks like these.

And, just as millions of Americans procrastinate until April 15 to file their taxes, we can expect lawmakers to wait until Dec. 31 -- or beyond -- to decide the fate of these tax breaks.
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