There's a popular expression here on Wall Street when things are going well: A rising tide lifts all boats. And that was certainly the case Friday.
A bullish jobs report sent stocks sharply higher: The government said 203,000 jobs were created last month, and the unemployment rate dropped to 7 percent. That's the lowest it's been in five years.
The Dow Jones industrial average (^DJI) rallied 198 points, snapping a five-session losing streak. The Standard & Poor's 500 index (^GPSC) jumped 20 points, and the Nasdaq composite index (^IXIC)
It was a broad-based rally with the number of gainers swamping the number of losers. But despite the big gains, the Dow and the S&P both ended their streak of eight straight weekly gains.
Financial stocks, technology, consumer and industrials led Friday's advance.
%VIRTUAL-article-sponsoredlinks%Intel (INTC) was a big winner, up 3 percent after Citigroup (C) raised its rating to 'buy' from 'neutral.' Its analyst says corporate demand for PCs is stabilizing. Other blue chip gainers: Procter & Gamble (PG), Travelers (TRV), Boeing (BA) and United Technologies (UTX) were all up about 2 percent.
But Apple (AAPL) lost 1 percent after hitting a one-year high on Thursday.
Once again, a number of retailers found themselves in investors' cross-hairs after issuing disappointing outlooks for the holiday shopping season.
American Eagle Outfitters (AEO) dropped 9.5 percent.
And the discount retailer Five Below (FIVE) ended the day -- you guessed it -- 5 percent below where it closed on Thursday.
Sears (SHLD) lost nearly 4 percent after saying it would spin off its Lands' End division.
Meanwhile, J.C. Penney (JCP) dropped 8.5 percent on word of an SEC inquiry into its finances. And Barnes & Noble (BKS) is under the SEC microscope, too. The agency is looking into the company's earnings restatement from back in July, as well as allegations from a former employee about improper accounting practices. The bookseller's stock fell 12 percent.
And InterOil (IOC) plunged 37 percent after agreeing to sell a majority stake in two gas fields, apparently for far less than investors had expected.
What to Watch Monday:
(There are no major business news events scheduled.)
-Produced by Drew Trachtenberg.
6 Popular Tax Breaks That Could Disappear in 2014
After Market: A Rising Employment Tide Lifts All Stocks
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.
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.