Stocks ended Thursday mostly lower, hurt by disappointing earnings news. The Dow Jones industrial average (^DJI) fell 65 points, and the Standard & Poor's 500 index (^GPSC) lost 2, but the Nasdaq composite (^IXIC) added 4 points.
Shares of Best Buy (BBY) were clobbered, dropping 29 percent. The retailer said a key measure of sales fell during the key holiday season. The company deeply discounting prices, but that hurt sales numbers. Best Buy stock was one of the market's best gainers last year, but it's off to a rocky start in 2014.
The other monumental loser today was NuSkin (NUS), which tumbled 26 percent. China, which accounts for about half of the company's sales, is investigating whether it operates as a pyramid scheme.
Herbalife (HLF), which has faced down similar charges of being a pyramid operation recently, lost 10 percent, even though its exposure to the Chinese market is not as large.
On the earnings front, UnitedHealth Group (UNH) lost nearly 3 percent, even though earnings topped expectations and enrollments jumped.
In the financial sector, Goldman Sachs (GS) fell 2 percent as earnings fell. Citigroup (C) lost more than 4 percent on weaker than expected results. But Blackrock (BLK), the largest provider of ETFs, gained 1.5 percent. Its net rose and the company hiked its dividend.
The railroad giant CSX (CSX) derailed, losing more than 6 percent as net fell due to lower coal shipments. That dragged down other rail stocks. Norfolk Southern (NSC) fell 4 percent.
In the online world, AOL (AOL) jumped 11 percent after agreeing to spin off and sell a majority stake in its local news network, Patch. (A disclaimer: AOL produces this report.) But Yahoo (YHOO) fell 2 percent after CEO Marissa Mayer fired the chief operating officer just a year after she hired him. And LinkedIn gained 7 percent, after it hired a respected Chinese executive to run its operations in China.
Finally, there's a new clown in charge at the parent company of Chuck E. Cheese. The restaurant/entertainment chain CEC (CEC) gained 13 percent after agreeing to be acquired by Apollo Group.
What to Watch Friday:
The Commerce Department releases housing starts for December at 8:30 a.m. Eastern time.
The Federal Reserve releases industrial production data for December at 9:15 a.m.
The University of Michigan releases its preliminary survey of consumer sentiment at 9:55 a.m.
The Labor Department releases job openings and labor turnover survey for November at 10 a.m.
These major companies are due to release quarterly financial statements:
After Market: Unimpressive Earnings Sink Stocks; Bad Day for Best Buy
Interest rates are low, but that's no excuse to accept 0.01 percent interest rates on your savings. Just a little shopping can find you many FDIC-insured savings accounts paying as much as 1 percent in interest, usually with no fees and easy availability to your money through electronic funds transfers. Compared to the near-zero rates that uninsured money-market mutual funds and other alternatives pay, high-interest savings accounts are a much safer way to save.
Banks still try to get customers to pay more for less, with one recent threat to charge fees for basic deposit accounts if the Federal Reserve cuts interest rates further. But many online banks not only offer fee-free options on their checking and savings accounts but also pay interest, and many have extensive fee-free ATM networks or reimbursement arrangements. If your bank follows through on threats to raise fees, taking your business elsewhere is your best move.
Bankrate reports that the average credit card charges around 16 percent in interest. That's a guaranteed money-maker for the banks that issue cards, but a big loser for those who carry balances on their cards. With many cards offering promotional interest rates as low as 0 percent, using them to get rid of high-interest cards is a no-brainer move and can help you pay your debt down faster.
Mistakes on your credit history can keep you from getting a loan that you want to buy your next home or car, but they can also have consequences you'd never imagine. Increasingly, insurance companies, apartment rental agents, and even prospective employers order copies of your credit report to see if you're financially responsible. Be sure to take advantage of your free credit check at the government's annualcreditreport.com website to make sure the three big credit-rating agencies have everything right before mistakes come back to bite you.
Payday loans have gotten more tightly regulated recently, but banks and other financial institutions still offer ways to let you get quicker access at your cash -- for a hefty fee. Resorting to short-term money fixes can land you in even more problematic situations down the road, because those solutions often create debt spirals from which it's hard to emerge unscathed. Set up an emergency fund instead and be prepared in advance for the money woes that life throws your way.
Interest rates have risen during the last half of 2013, with a typical 30-year mortgage carrying a 4.5 percent interest rate. But many homeowners still carry higher-interest mortgages from before the financial crisis. Now that home prices have risen, you might be able to refinance for the first time, and many homeowners have used lower rates to cut hundreds from their mortgage payment or shift to a shorter-term 15-year mortgage to pay off their debt faster.
Too many people never update their insurance coverage to deal with changes in their coverage needs, whether it comes from changes in family status for life insurance, health conditions for health-care or long-term care insurance, or even what types of property you own for homeowners' insurance. Don't wait for disaster to strike; check with your insurer or agent to see if your current coverage meets your needs.
In the past, investors had to pay hundreds or even thousands of dollars just to make a simple stock purchase. Now, though, the rise of discount brokers, low-fee index funds and exchange-traded funds, and freely available investment news and advice have made it silly to spend large amounts to get access to the financial markets. If you're still paying your broker too much to invest, look into alternatives that can help you avoid cutting serious money out of your retirement nest egg.
Everyone likes a tax break, and one of the best ones for you to use involves making contributions to a tax-favored retirement account. By putting money in an IRA or 401(k), you can reduce your current taxable income and save on your taxes while also preparing for the future. With 401(k)s, your employer might even chip in a bit on your behalf. Even when times are tough, finding even small amounts to save can put time on your side and make a big difference down the road.
Many investors found out the hard way this year that bonds aren't as safe as they thought, with some major bond funds posting double-digit percentage losses in 2013. Despite those losses, bonds still carry substantial risk in 2014, with many calling for imminent interest-rate hikes that would erode their value further. Even now, bond rates are so low that they don't compensate you much for their risk.
If you pay full price for just about anything these days, you're paying too much. The rise of deep-discount stores has led to falling prices at stores and shopping malls. Moreover, online tools like coupon sites, daily-deal offers, discounted gift cards, and cash-back credit-card deals can cut your costs as well. With all these tools, you won't find many situations in which you have no chance of getting a bargain on the items you want.
In the past, many young adults focused on getting into as strong a college as they could, figuring that their degree would pay them enough to make up for the costs they incurred. With college graduates facing a more challenging job environment than ever, smart students are thinking about college costs before they make a decision on a school. By maximizing financial aid and looking at lower-tuition schools with nearly as strong educational quality, you can avoid creating a big debt hole that you'll struggle with for years into the future.
If you don't have a will, a power of attorney for financial and health-care matters, and an advance directive to tell medical professionals whether you want certain life-preserving measures taken if something happens to you, then you're putting your family at risk. Many people don't have even these basic estate-planning documents, but getting them in place is easier and less expensive than most believe. Get your affairs taken care of in 2014 and save your loved ones some big future hassles.
Resolving to be more financially astute and to avoid common mistakes will help you get your finances in order more quickly. These tips should give you more money to help you meet all your financial goals.