Market Wrap: S&P 500 Erases 2015 Loss as Tech Stocks Surge

Financial Markets Wall StreetNEW YORK – A tech share rally drove U.S. stocks up sharply for a second day Friday as earnings from companies including Microsoft beat analyst expectations, while health care shares rebounded from recent losses.

The gains left the S&P 500 in positive territory for the year and above its 200-day moving average for the first time since Aug. 19.

An unexpected rate cut in China added to the positive tone for U.S. stocks, which also registered gains for the week.

Microsoft (MSFT) shares rose 10.1 percent to $52.87, their highest in 15 years, after adjusted revenue beat expectations for the ninth quarter in a row.

Microsoft gave the biggest boost to the three indexes, accounting for nearly a fifth of the Dow’s gain and leading a strong rally in technology stocks. The S&P technology sector jumped 3 percent, leading gains among major sectors.

Alphabet, Google’s new holding company, and Amazon soared to record intraday highs after results beat expectations. Alphabet (GOOGL) ended up 5.6 percent at $719.33, while Amazon (AMZN) rose 6.2 percent to $599.03.

Facebook (FB) and Twitter (TWTR) also jumped, with Facebook rising above $100 for the first time.

“It’s being driven by the good earnings” from a number of companies, said Giri Cherukuri, head trader at OakBrook Investments in Lisle, Illinois. That may change the view on earnings “as people sit back and evaluate.”

“Companies with big international exposure have a big drag due to forex, but looking past that, companies are doing well.”

The Dow Jones industrial average (^DJI) rose 157.54 points, or 0.9 percent, to 17,646.7, the Standard & Poor’s 500 index (^GSPC) gained 22.64 points, or 1.1 percent, to 2,075.15 and the Nasdaq composite (^IXIC) added 111.81 points, or 2.3 percent, to 5,031.86.

Big Weekly Gains

For the week, the Dow rose 2.5 percent, the S&P 500 gained 2.1 percent and the Nasdaq jumped 3 percent.

The S&P 500 is now up 0.8 percent for the year so far and up 7.1 percent for October.

Analyst sentiment on overall third-quarter earnings has improved following the string of strong results from blue chips.

S&P 500 earnings for the period are now expected to have declined a more modest 2.8 percent, compared with a decline of 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters data.

Among other gainers, Procter & Gamble (PG) rose 2.9 percent to $77.03 after its profit beat estimates.

On the Downside

Not all of the day’s earnings news was upbeat, though.

Shares of Whirlpool (WHR) dropped 8.7 percent to $145.90 after executives said currency would subtract $2.5 billion from the appliance-maker’s annual revenue. Whirlpool lowered its 2015 expectations even as it posted higher-than-expected third-quarter earnings.

Overseas, China’s central bank cut interest rates for the sixth time since November in another attempt to jumpstart a slowing economy.

NYSE advancers outnumbered decliners 1,806 to 1,252, for a 1.44-to-1 ratio; on the Nasdaq, 1,872 issues rose and 956 fell, for a 1.96-to-1 ratio favoring advancers.

The S&P 500 posted 54 new 52-week highs and 14 lows; the Nasdaq recorded 133 new highs and 65 lows.

About 7.6 billion shares changed hands on U.S. exchanges, above the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

What to watch Monday:

  • The Commerce Department releases new home sales for September at 10 a.m. Eastern time
  • The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas for October at 10:30 a.m. Eastern time.

Earnings Season
These selected companies are scheduled to report quarterly financial results:

  • Cheesecake Factory (CAKE)
  • Hartford Financial Services (HIG)
  • Xerox (XRX)

How 401(k)s and IRAs Will (and Won’t) Change in 2016

nest full of golden eggs with...
You won’t be able to save more in a 401(k) or individual retirement account in 2016. However, you can earn slightly more and still be eligible to contribute to a Roth IRA and claim the saver’s credit. Here are the ways your retirement accounts will change in 2016.

401(k) contribution limits unchanged. The contribution limit for 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan will remain $18,000 in 2016. The catch-up contribution limit for workers age 50 and older will also stay the same at $6,000. “The pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment,” according to a statement from the IRS. Most savers don’t come anywhere near the 401(k) contribution limits. Only about 10 percent of 401(k) participants contribute the maximum possible amount each year, according to Vanguard 401(k) plan data.

IRA contribution limits stagnant. The IRA contribution limit will continue to be $5,500 in 2016. Workers age 50 and older can make catch-up contributions of an additional $1,000. Many retirement savers max out their IRA each year. Some 43 percent of IRA investors contributed the maximum possible amount in 2013, according to an Employee Benefit Research Institute analysis of IRAs.

Bigger Roth IRA income cutoffs. Workers can earn $1,000 more in 2016 and still be eligible to contribute to a Roth IRA. Eligibility to make Roth IRA contributions phases out for taxpayers whose adjusted gross income is between $117,000 and $132,000 for individuals and heads of household and $184,000 to $194,000 for married couples. “This will make a few more folks eligible for the Roth,” says Kevin Brosious, a certified financial planner and president of Wealth Management Inc. in Allentown, Pennsylvania. However, there are a couple of ways you can contribute to a Roth IRA even if your income is above the cutoff amounts. “A backdoor Roth is where you contribute into a nondeductible IRA and then convert it to a Roth IRA,” Brosious says. “Also, the IRS now allows after-tax contributions made to a 401(k) to be converted into a Roth IRA.”

Traditional IRA income cutoffs remain the same. Savers who have a workplace retirement account can additionally claim a tax deduction for IRA contributions, unless their income exceeds certain annual limits. The IRA tax deduction is phased out for singles and heads of household whose modified adjusted gross income is between $61,000 and $71,000, the same as in 2015. The income phaseout range is $98,000 to $118,000 for married couples when the spouse who contributes to the IRA also has access to a workplace retirement plan. There are no income limits for the IRA tax deduction for people who don’t have a retirement account at work.

IRA income limits increase for spouses without retirement accounts.Savers who don’t have a workplace retirement account but are married to someone who does can claim the full tax deduction on their IRA contribution until the couple’s income exceeds $184,000, which is $1,000 more than in 2015. The IRA tax deduction for spouses without retirement accounts is gradually phased out for couples earning between $184,000 and $194,000 in 2016.

Higher income limit for the saver’s credit. Workers with slightly higher incomes will qualify for the saver’s credit in 2016. Single retirement savers are eligible for the credit until their adjusted gross income exceeds $30,750, which is $250 higher than in 2015. The income limit for married couples will climb by $500 to $61,500. And heads of household qualify for the credit if their income is $46,125 or less, up from $45,750 in 2015.

This tax credit for people who save for retirement isn’t well known, with only 30 percent of workers saying they are aware of the saver’s credit, according to a survey of 4,550 workers by Harris Poll for the Transamerica Center for Retirement Studies. For people who qualify, the saver’s credit is worth between 10 and 50 percent of the amount contributed to a retirement account up to $2,000 for individuals and $4,000 for couples, with the biggest credits going to people with the lowest incomes. “Now, even more low- and moderate-income American workers can benefit from this valuable tax incentive to save for retirement,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies. “The saver’s credit literally pays workers to save for retirement. It’s a free matching contribution from the IRS.”

Market Wrap: Dow, S&P 500 Slip as Apple, Energy Weigh

Financial Markets Wall StreetNEW YORK — The Dow and the S&P 500 edged lower Monday as energy shares dropped with oil prices and Apple retreated a day before its quarterly results.

Investors were cautious ahead of the Federal Reserve’s two-day policy meeting, which begins Tuesday. The market is looking for clues on the outlook for when the Fed may begin raising interest rates.

Apple (AAPL) shares fell 3.2 percent to $115.28, making it the biggest drag on all three major indexes, while a weak outlook from one of its suppliers, Dialog Semiconductor, led a fall in other semiconductors. An index of semiconductors was down 2 percent after three days of gains.

With Apple, it’s more about their forecast and China news and any upgrades they may want to announce.

The iPhone-maker reports quarterly results after the market closes Tuesday.

“With Apple, it’s more about their forecast and China news and any upgrades they may want to announce,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

The S&P energy sector fell 2.5 percent, leading sector declines for the S&P 500. Crude oil prices slipped as global oversupply pushed fuel storage sites close to capacity. Exxon (XOM) fell 2.1 percent to $81.22, while Chevron (CVX) was down 2.7 percent to $88.77.

U.S. stocks have mostly gained in October after a weak third quarter. The S&P 500 is up 7.9 percent for the month so far.

“It’s been a pretty big move up, so we’re seeing a little bit of consolidation today,” Meckler said.

The Dow Jones industrial average (^DJI) fell 23.65 points, or 0.1 percent, to 17,623.05, the Standard & Poor’s 500 index (^GSPC) lost 3.97 points, or 0.2 percent, to 2,071.18 and the Nasdaq composite (^IXIC) added 2.84 points, or 0.1 percent, to 5,034.70.

Among the top Nasdaq gainers, shares of Ctrip.com (CTRP) rose 22.1 percent to $90.78 after the online travel firm said it would merge with Qunar Cayman Islands. Qunar (QUNR) jumped 7.9 percent to $42.65.

Strong quarterly results from tech companies have helped improve expectations for overall U.S. third-quarter earnings.

S&P 500 earnings are estimated to have declined a more modest 2.8 percent in the quarter, compared with 4.2 percent forecast at the start of the month, according to Thomson Reuters (TRI) data.

Housing Slips

Data showed new home sales fell 11.5 percent in September, suggesting a softening of the housing market. An index of housing shares was down 0.4 percent.

Among other gainers, Pep Boys (PBY) jumped 23.4 percent to $14.99 after it agreed to be acquired by Bridgestone for $15 a share.

Piedmont Natural Gas (PDM) rose 36.9 percent to $57.82 after it agreed to be bought by Duke Energy. Duke Energy (DUK) fell 2.4 percent.

NYSE declining issues outnumbered advancers 1,916 to 1,153, for a 1.66-to-1 ratio; on the Nasdaq, 1,749 issues fell and 1,077 advanced, for a 1.62-to-1 ratio favoring decliners.

The S&P 500 posted 36 new 52-week highs and 8 lows; the Nasdaq recorded 111 new highs and 73 lows.

About 6.1 billion shares changed hands on U.S. exchanges, below the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

What to watch Tuedsay:

  • The Commerce Department releases durable goods for September at 8:30 a.m. Eastern time.
  • Standard & Poor’s releases S&P/Case-Shiller index of home prices for August at 9 a.m.
  • The Conference Board releases the Consumer Confidence Index for October at 10 a.m.

Earnings Season
These selected companies are scheduled to report quarterly financial results:

  • Alibaba Group (BABA)
  • Apple (AAPL)
  • Comcast (CMCSA)
  • Dupont (DD)
  • Ford Motor Co. (F)
  • Gilead Sciences (GILD)
  • Merck & Co. (MRK)
  • Pfizer (PFE)
  • Reynolds American (RAI)
  • Twitter (TWTR)
  • United Parcel Service (UPS)

Where to Get This Year’s Flu Shot for Less

U.S. CVS Caremark Flu ShotsWith flu season about to rear its ugly head, now is the time to line up for your annual flu shot. Peak time for flu in the United States generally falls in January or February, but activity can erupt as early as October and it takes two weeks after vaccination for the body to develop the necessary antibodies. The Centers for Disease Control and Prevention recommends that everyone over the age of 6 months get a dose of the vaccine. This can be costly for an entire family, especially without health insurance coverage.

To find the cheapest source for flu shots, Cheapism checked prices at six of thelargest pharmacy chains (based in 2014 revenue from prescriptions); warehouse clubs Costco and Sam’s Club, which are known for low prices and allow non-members to use their pharmacies; and a doctor’s office in Columbus, Ohio. As of the third week of September, all the chains had a supply of the vaccine in stock, as did the doctor’s office. Some employers organize a flu-shot day for employees and spouses, with the cost dependent on your insurance and employer.

Price Breakdown. For self-pay, Costco is cheapest: $14.99 for members and non-members alike, compared with $20 at Sam’s Club. Target and Walmart price the injection about the same, at $24.99 and $25, respectively. Kroger is charging $30 this year, while Rite Aid, CVS and Walgreens cluster on the high end, at $31.99. Prices at doctors’ offices vary widely. Last year a local physician quoted $82.70 for the flu vaccine. This year the going rate is $30.


Provider Price
Costco $14.99
Sam’s Club $20
Target $24.99
Walmart $25
Kroger $30
Doctor’s Office $30
CVS $31.99
Rite Aid $31.99
Walgreens $31.99

Insurance Coverage for Flu Shots. Many insurance companies consider the influenza vaccine a preventive measure and cover some or part of the cost. Every pharmacy and the doctor’s office we contacted can run insurance information through their systems and quickly let patients know whether all, part, or none of the cost is covered. (Other doctors may not provide this convenience. The safest bet is to check with your insurance company before heading to an appointment.)

In-Store Rewards. To entice consumers to the pharmacy for a flu shot, many retailers offer in-store perks to soften the sting. At CVS, customers receive a 20 percent-off shopping pass up to $100, good for any non-sale and non-pharmacy item. The Pharmacy Rewards program at Target offers 5 percent savings on a full day of shopping with every five prescriptions filled, and a flu shot counts toward that. Each flu shot at Walgreens translates into a donated vaccine for a child in need.

Appointments/Walk-Ins. Every place we called, aside from the doctor’s office, adheres to the same policy: no appointment necessary. Just walk in and wait your turn. Most pharmacies estimate a 10- to 15-minute wait, more or less, depending on traffic. If you go on a weekend, patience may be in order. Check your doctor’s office for procedures — some require appointments and others have designated walk-in times.

Market Wrap: Stocks Climb as Fed Puts Dec. Rate Hike in Play

Financial Markets Wall StreetNEW YORK — U.S. stocks ended sharply higher Wednesday after a volatile session as the Federal Reserve gave a vote of confidence in the U.S. economy by signaling a December interest rate hike was still on the table.

S&P financials, which benefit from higher borrowing rates, shot up following the Fed statement and led sector gains. The financial index ended up 2.4 percent, its biggest percentage gain in seven weeks. The KBW Nasdaq regional bank index jumped 4.1 percent.

S&P utilities, which tend to do worse when interest rates are rising, fell 1.1 percent and led S&P sector declines.

The Fed left rates unchanged, as expected, and, in a direct reference to its next meeting, put a December rate hike firmly in play. It also downplayed global economic headwinds in its statement.

Stocks initially sold off following the statement, with the S&P 500 erasing close to a 1 percent gain, but quickly rebounded to end at the day’s highs as investors saw the statement as a sign the Fed has confidence the U.S. economy can sustain a rate hike.

“Obviously the first move [in stocks] is down, which is conventional wisdom. However, I do like the idea of the Fed having more confidence in the economy, less concerned about the global backdrop and willing to ring the bell on the long-term health of the U.S. economy with a rate hike,” said Michael Marrale, head of research, sales and trading at ITG in New York.

The Fed hasn’t raised rates in nearly a decade.

The Dow Jones industrial average (^DJI) rose 198.09 points, or 1.1 percent, to 17,779.52, the Standard & Poor’s 500 index (^GSPC) gained 24.46 points, or 1.2 percent, to 2,090.35, its highest in more than two months.

The Nasdaq composite (^IXIC) added 65.55 points, or 1.3 percent, to 5,095.69, while the Nasdaq 100 index of biggest non-financial names rose 0.9 percent to 4,678.57, just shy of a 15-year high.

Movers and Shakers

A 4.1 percent gain in Apple (AAPL) shares to $119.27 also helped support indexes a day after stronger-than-expected results.

The company sold 48 million iPhones in the latest quarter and posted a near doubling of revenue from China, allaying concerns about its business in the world’s second-largest economy.

On the flip side, Twitter (TWTR) shares fell 1.5 percent to $30.87 while Akamai Technologies (AKAM) dropped 16.7 percent to $62.91, Both reported disappointing results late Tuesday.

The S&P energy sector snapped a three-day losing streak, ending up 2.2 percent, after a sharp rally in crude oil prices .

After the bell, shares of GoPro (GPRO) dropped 15.2 percent to $25.62 following its results.

Advancing issues outnumbered declining ones on the NYSE by 2,428 to 645, for a 3.76-to-1 ratio on the upside; on the Nasdaq, 2,252 issues rose and 605 fell for a 3.72-to-1 ratio favoring advancers.

The S&P 500 posted 35 new 52-week highs and six new lows; the Nasdaq recorded 155 new highs and 82 new lows.

About 8.5 billion shares changed hands on U.S. exchanges, well above the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

What to watch Thursday:

  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases third-quarter gross domestic product.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates, and the National Association of Realtors releases pending home sales index for September.

Earnings Season
These selected companies are scheduled to report quarterly financial results:

  • Aetna (AET)
  • Altria Group (MO)
  • ConocoPhillips (COP)
  • Goodyear Tire & Rubber Co. (GT)
  • Johnson Controls (JCI)
  • LinkedIn (LNKD)
  • MasterCard (MA)
  • Starbucks (SBUX)
  • Teva Pharmaceutical (TEVA)
  • Time Warner Cable (TWC)

Ask Stacy: How Can I Curb Emotional Shopping?

Young woman holding shopping bags in armsFrom eating too much to drug addiction, sometimes we engage in self-destructive behavior. Why would we deliberately do things we know to be against our self-interest? Often we’re doing it because of an unaddressed emotional issue.

Here’s this week’s question:

How can I curb emotional shopping? When I’m in a bad mood, one of my go-to things to feel better is to buy something online. It’s always small stuff, but crap I don’t need really hurts the wallet. Any tips? -Whitney

I sat down with a psychiatrist a few years ago to discuss this issue.

The upshot? It’s one thing to surrender to the occasional impulse buy — that watch gleaming from behind the display case, or a pair of black shoes that will add the perfect dash of sophistication to your favorite business suit. But when your purchases shift from impulsive to compulsive, you might be a shopping addict.

Researchers estimate that up to 6 percent of Americans are so-called shopaholics. In our society, the phrase “shop till you drop” translates as frivolous and fun, but when spending becomes a problem, the glamour fades.

Psychologists call it compulsive buying disorder, which is characterized as an impulse-control issue, just like gambling or binge eating, and has the potential to create emotional and financial distress.

Here are seven signs of a potential problem. For a more complete analysis, check out the Compulsive Buying Scale, developed by psychologist Gilles Valence and his associates.

  • You have many unopened or tagged items in your closet. This isn’t the sweater your aunt gave you last Christmas; it’s about items you bought. Maybe you forgot about some of this stuff — boxes of shoes lining the bottom of your closet or jackets that have never seen the light of day.
  • You often purchase things you don’t need or didn’t plan to buy. You’re easily tempted by items you can do without. A fifth candle for your bedroom dresser, a new iPod case, even though yours is fine … you get the idea.
  • An argument or frustration sparks an urge to shop. Compulsive shopping is an attempt to fill an emotional void. Do you find yourself shopping to deal with a feeling of anxiety?
  • You experience a rush of excitement when you buy. Shopaholics experience a “high” or a rush, not from owning something, but from the act of purchasing it. Experts say dopamine, a brain chemical associated with pleasure, is often released in waves as shoppers see a desirable item and consider buying it. This burst of excitement can become addictive.
  • Purchases are followed by feelings of remorse. This guilt doesn’t have to be limited to big purchases. Compulsive shoppers are just as often attracted to deals and bargain hunting.
  • You try to conceal your shopping habits. If you’re hiding shopping bags in your daughter’s closet or constantly looking over your shoulder for passing co-workers as you shop online, this is a possible sign you’re spending money at the expense of your loved ones or even your job.
  • You feel anxious on the days you don’t shop. Shopaholics have reported feeling out of sorts if they haven’t had their shopping fix, and have even admitted to shopping online if they can’t physically pull away from their day’s responsibilities.

If the characteristics above sound a lot like you or someone you know, here are some ways to help kick a shopping habit:

Find a new activity. Jogging, exercising, listening to music, watching TV — any activity could potentially substitute for shopping and would be a much lighter burden on your wallet.

Identify triggers. Take note of what’s likely to send you off to the nearest department store, whether it’s an argument with your significant other or frustration after a business meeting. When these feelings overcome you, resist shopping at all costs and find a healthier way to work it out.

Remove temptation. It’s no secret that you shouldn’t walk through your favorite boutique if you’re trying to curb your spending. Try to limit your shopping trips and go only when absolutely necessary. If online shopping is your weakness, resist the urge to surf your favorite stores’ sites and even consider keeping your laptop out of reach, especially when you’re feeling vulnerable.

Leave home without it. Leave your debit and credit cards at home. Create a shopping list with estimated costs, and stick to it when you’re at the store.

Get help. If you’re still struggling with compulsive spending, don’t be afraid to ask for help. You can start with self-help books or by asking a friend or family member to help keep you in check, but it might also be wise to enlist professional help. Consider therapy, resources like Stopping Overshopping or support groups such as Debtors Anonymous.

Market Wrap: Stocks Slip as Investors Digest Fed, Earnings

Financial Markets Wall StreetNEW YORK — U.S. stocks ended slightly lower Thursday as the market digested the potential for an interest rate hike in December and some disappointing tech earnings reports.

The Federal Reserve, which kept rates unchanged at its policy meeting that ended Wednesday, downplayed concerns about global growth and indicated confidence in the U.S. job market’s recovery.

Stocks had jumped Wednesday following the Fed statement and, after a strong run from the end of September, were due for a “reprieve,” said Jason Ware, chief investment officer at Albion Financial, in Salt Lake City.

I would just say that we had a big move and this is a bit of a cooling pause the next day.

“I would just say that we had a big move and this is a bit of a cooling pause the next day,” Ware said.

The three indexes are on track for their best month in four years.

S&P utilities, which tend to do worse when interest rates are rising, were the worst-performing S&P sector, off 0.6 percent.

The Dow Jones industrial average (^DJI) fell 23.72 points, or 0.1 percent, to 17,755.8, the Standard & Poor’s 500 index (^GSPC) lost less than a point to 2,089.41 and the Nasdaq composite (^IXIC) dropped 21.42 points, or 0.4 percent, to 5,074.27.

The three indexes recovered much of the day’s losses late in the session.

Stocks were “treading water” after the Fed statement, said John Mousseau, executive vice president at Cumberland Advisors in Sarasota, Florida.

“Low interest rates have been the anchor for stock prices for a while,” Mousseau said.

Odds of a December hike increased to 50 percent from 43 percent Wednesday, according to the CME Group’s FedWatch program.

The S&P health care sector rose 0.4 percent, making it the top-performing sector, as Allergan’s (AGN) shares shot up 6 percent to $304.38. The Botox-maker confirmed it was in buyout talks with Pfizer. Pfizer (PFE) dropped 1.9 percent.

Sixty percent of the S&P 500 companies have reported quarterly results so far. Analysts now expect overall third-quarter profit to decline a modest 1.7 percent, compared with the 4.2 percent drop forecast on Oct. 1, according to Thomson Reuters data.

Movers and Shakers

NXP Semiconductors (NXPI) sank 19.7 percent to $73 after its bleak forecast. The slide took down other chipmakers, with the broader semiconductor index down 3 percent.

F5 Networks (FFIV) shares fell 9.3 percent to $110.08 after a disappointing outlook, making it the biggest percentage loser in the S&P 500 technology index.

GoPro (GPRO) slumped 15.2 percent to $25.62 after the action camera maker posted disappointing results.

Declining issues outnumbered advancing ones on the NYSE by 1,852 to 1,185, for a 1.56-to-1 ratio on the downside; on the Nasdaq, 1,820 issues fell and 959 advanced for a 1.90-to-1 ratio favoring decliners.

The S&P 500 posted 28 new 52-week highs and 6 lows; the Nasdaq recorded 102 new highs and 76 new lows.

About 7 billion shares changed hands on U.S. exchanges, about even with the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

Medicare Premium Increases: Not as Bad as Predicted

Increased Healthcare CostsThe Obama administration and congressional leaders have finally reached a tentative budget agreement that will prevent a 52 percent spike in Medicare premiums for millions of Americans.

Without the bipartisan budget deal about 17 million Medicare recipients would see their Medicare Part B premiums soar to about $160 from $104.90, USA Today reports. Instead, those same Medicare beneficiaries, who represent about 30 percent of older Americans covered by Medicare, will see a 14 percent premium increase to $120 a month next year, plus a monthly surcharge of $3.

According to The Washington Post, the 17 million Medicare beneficiaries affected by the premium increase do not have their insurance payment automatically deducted from a Social Security check. “Among this group are people who do not collect Social Security, will be enrolling in Medicare’s Part B next year for the first time, have incomes great enough that they are charged higher premiums, or are poor enough that they also qualify for Medicaid,” the Post said.

The unprecedented spike in Part B rates for the rest would have come about in order to keep the Medicare system in actuarial balance.

A provision of federal law that links Medicare premiums to Social Security benefits, which won’t increase for the third year in a row because of low inflation, is shielding the other 70 percent of Medicare beneficiaries from increased premiums.

“The unprecedented spike in Part B rates for the rest would have come about in order to keep the Medicare system in actuarial balance,” the Post explained.

A loan from the U.S. Treasury to the Medicare trust fund will cover the cost of Medicare Part B in the new budget deal, according to USA Today. The loan will be paid back over the next five years with slight increases ($3 a month) in Medicare premiums.

“The approach to financing … will allow premiums to increase more gradually, while spreading the cost over a longer period of time, and across a broader group of beneficiaries,” Tricia Neuman, senior vice president at the Kaiser Family Foundation, told USA Today.

Medicare Part B covers most health care service outside hospitals.

Although the budget deal wards off a massive increase in Medicare Part B premiums, it does little to address the long-term financial stability of Medicare.

“While we have concerns about the way in which the Part B cost-sharing resolution is paid for, we are glad people who rely on Medicare can breathe a bit easier — knowing their premiums and deductible will not skyrocket next year,” Judith Stein, founder and executive director of the Center for Medicare Advocacy, told USA Today.

Market Wrap: Stocks Climb, Led by Energy, Health Care

Financial Markets Wall Street Hewlett Packard EnterpriseNEW YORK — U.S. stocks added to their recent run with gains across all sectors on Monday, led by increases in the beaten-down energy group and the acquisition-driven health care industry.

The gains on the first trading day of the month followed the best monthly performance of the major indexes in four years in October. The Nasdaq 100 closed Monday at its highest level in more than 15 years.

Data on Monday showed U.S. manufacturing activity in October sank to a 2½-year low, but a rise in new orders offered encouragement. Elsewhere, factory activity in Germany beat economist estimates, and manufacturing in Central and Eastern Europe kept up a robust pace in October.

“The fact that we have got sturdy numbers from outside the U.S. accompanied by a relatively decent … [U.S. manufacturing] report, I think that cocktail was supportive of risk assets getting a boost,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The Dow Jones industrial average (^DJI) rose 165.22 points, or 0.9 percent, to 17,828.76, the Standard & Poor’s 500 index (^GSPC) gained 24.69 points, or 1.2 percent, to 2,104.05 and the Nasdaq composite (^IXIC) added 73.40 points, or 1.5 percent, to 5,127.15.

The S&P, which is up nearly 13 percent since hitting its lowest level for the year in August, broke through the 2,100 barrier, bringing it nearer to its all-time closing high of 2,130.82 in May.

“The upward trend that was put in place last week has continued to gain steam,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “I don’t necessarily think there’s a specific catalyst for it today. Risk appetite has clearly increased.”

As the U.S. earnings seasons winds down, investors are looking to economic data, including this Friday’s employment report, for clues as to whether the Federal Reserve will raise interest rates when it meets in December.

Movers and Shakers

The S&P energy index rose 2.4 percent. Oil majors Exxon and Chevron were two of the three biggest drivers of positive performance for the Dow after both companies posted better-than-expected results on Friday. Chevron (CVX) gained 4.5 percent to $94.96 and Exxon (XOM) finished up 3.1 percent at $85.28.

The S&P health care index increased 2 percent. Pfizer rose 3.7 percent, and AbbVie (ABBV) jumped 6.4 percent, providing the biggest boost to the sector.

Dyax (DYAX) soared 28.4 percent to $35.35 after British drugmaker Shire said it would buy the company for about $5.9 billion. The Nasdaq biotechnology index closed up 3.8 percent.

U.S.-listed shares of Valeant (VRX) rose 7.1 percent at $100.47 after short-seller Citron Research said it wouldn’t be releasing new allegations against the Canadian drugmaker.

The S&P financial sector gained 1.6 percent, led by increases from the big banks. Visa (V) fell 3 percent to $75.22 after offering to buy its former subsidiary Visa Europe for as much as $23.3 billion. The stock was the biggest drag on the Dow and the S&P 500.

Hewlett-Packard started trading after its split. HP (HPQ) jumped 13 percent to $13.83, while Hewlett Packard Enterprise (HPE) slipped 1.6 percent to $14.49.

Advancing issues outnumbered declining ones on the NYSE by 2,525 to 569, for a 4.44-to-1 ratio on the upside; on the Nasdaq, 2,217 issues rose and 628 fell for a 3.53-to-1 ratio favoring advancers.

The S&P 500 posted 25 new 52-week highs and four new lows; the Nasdaq recorded 76 new highs and 44 new lows.

To Wait – or Not to Wait – for Black Friday Deals?

Holiday ShoppingChristmas is still about eight weeks away, but retailers and many shoppers don’t seem to care. Holiday shopping is in full swing.

Gone are the days when shoppers waited until Black Friday, once revered as the biggest shopping day of the year, to hit the stores and snatch up great deals on everything from clothing to electronics. Instead, early-bird shoppers are purchasing items off their holiday lists earlier than ever.

According to a new survey from coupon destination site RetailMeNot, just 10 percent of consumers today believe that Black Friday savings are really worth the wait and 85 percent of shoppers expect retailers to start their holiday promotions before Black Friday. “Consumers in record numbers are questioning the value of offers on Black Friday,” said Trae Bodge, senior lifestyle editor at RetailMeNot. “While early bird behavior is beneficial for the strategic buyer, RetailMeNot’s offer data still suggests that deals during the five days of savings from Thanksgiving to Cyber Monday are stronger on a percent-off basis than in prior weeks.”

For example, RetailMeNot said the deepest discounts on electronics and computers — ranging from 38 to 40 percent off — can be found between Thanksgiving and Cyber Monday, and oftentimes into the first week of December.

But if you’re shopping for little ones this holiday season, RetailMeNot suggests that you “act fast and purchase toys early.” Because toy prices remain relatively stable throughout the holiday season, if you wait too long you might not have much to choose from if inventory runs low.

RetailMeNot said it’s easy to score Black Friday-worthy discounts whenever you want if you follow this simple approach:

  • Purchase a discounted gift card, which are typically sold post-Cyber Monday, at your favorite retailer and get an instant savings of 2 to 20 percent.
  • Use the discounted gift card in conjunction with a coupon code or digital rebate. “RetailMeNot users report an average savings of $20 per transaction,” said Kristen Larrea, RetailMeNot shopping expert. If you want to score even bigger savings, pay for your purchase with a cash-back credit card.

The survey also found that the most attractive promotions to shoppers are: money-back purchase options (44 percent), holiday sales (37 percent), flash-sale deals (31 percent) and door-buster offers (27 percent). Consumers said they can also be lured into stores by gift-wrapping services (24 percent) and good holiday music (16 percent).