Stocks: Break out the champagne!

2013 has been a very good year for stocks.

NEW YORK (CNNMoney)

The final two weeks of the year are typically good for stocks, a phenomena known on Wall Street as the Santa Claus rally. Over the past 100 years, the Dow has gained in the New Year week 69% of the time, according to Schaeffer's Investment Research.

Ryan Detrick, senior technical analyst Schaeffer's, expects the momentum to continue in the near term as investors who missed the rally look for opportunities to buy into the market. While it's impossible to predict what stocks will do, "we don't anticipate anything rocking the boat," he said.

The Dow is up more than 25% and S&P 500 has gained nearly 30% so far this year. The Nasdaq has surged 38%. The Dow is on track for its biggest annual gain since 1996 and the S&P 500 is on pace for its strongest year since 1997.

Related: Are you a markets wiz?

Markets closed Jan. 1: U.S. markets will be closed Wednesday for New Year's day.

Economic reports: The economy will be in focus next week. Reports on home prices and consumer confidence are due, along with data on manufacturing activity and auto sales.

Investors will be watching all economic data closely, especially after the Fed announced plans earlier this month to begin scaling back its monthly bond purchases by $10 billion beginning in January.

Investors took the news in stride and many see the move as a sign the economy is likely just about strong enough to stand on its own.

Related: Best year ever for stock funds

The Federal Reserve's stimulus policies have been a major driver of the bull market that started in 2009. But stocks have been supported in 2013 by an improving economy and continued growth in corporate profits.

Stocks rose last week, with the Dow Jones industrial average and the S&P 500 both touching record highs. The gains came on light trading volume with many professional money managers absent for the Christmas holiday.

First Published: December 29, 2013: 9:27 AM ET

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Divvying up Mom's stuff after she's gone

You know the relationship with your sibling is more important than who owns Mom's watch. But when you see her wearing it...

(Money Magazine)

While you can name beneficiaries for such objects in a will, many people simply direct that goods be divided equally among their children. That leaves the executor, often one of the kids, with the Solomonic task of meting out heirlooms. Add in grief, resentment, and siblings' knowledge of how to push one another's buttons, and you can imagine the emotional tinderbox that results.

"Families can fight tooth and nail over every item in the house," says Toronto lawyer Les Kotzer, co-author of Where There's an Inheritance.

Use this talk to avoid a family feud.

The Ground Rules

Give yourselves time to grieve. Rather than laying claims right after the funeral, when emotions are at a peak, schedule a time a few months later when everyone can gather in person, says Marlene Stum, lead author of the book and online resource Who Gets Grandma's Yellow Pie Plate?

Leave spouses at home. "The more people chiming in, the more emotions can escalate," says West Chester, Ohio, financial planner Marc Henn.

When You're Face to Face...

1. Opening gambit: "Let's agree that this won't tear us apart."

Why it works: You know your relationship with your brother is more important than ownership of Dad's watch -- but once you see the timepiece on his wrist and realize it'll go to his sons, not yours, you may temporarily forget. "So acknowledge upfront that you may say something hurtful," says Peter McClellan, author of Inheritance Tug-of-War Stories, "and agree to forgive each other."

Related: Keep your kids from blowing their inheritance

2. Name your musts: "Why don't we all say what items are on our wish lists?"

Why it works: "It's important to figure out what's most meaningful to whom," says Stum. Asking this question (you may even want to have a household inventory handy) helps you identify which items are subject to contention. Plus, it can help you sidestep battles: Your brother may stand down when he hears how much -- and why -- your sister wants the china.

3. Decide on a process: "Sounds like it might make sense for us to take turns picking items?"

Why it works: The key to emerging with family relations intact is choosing a selection process everyone thinks is fair, says Stum. For those items with little financial value but lots of claimants, you might draw straws to establish a picking order. Heirs get to select one item at a time, and once the last sibling has picked, let him have another turn, going back up the hierarchy in reverse, says Henn.

4. Strive for parity: "I'd really like Mom's wedding ring. How about if I pay you for it?"

Why it works: Items of real monetary value, like antiques and jewelry, need special treatment. Start with an appraisal, says Julie Hall, author of The Boomer Burden: Dealing With Your Parents' Lifetime Accumulation of Stuff. Whoever wants the item can pay the other heirs for their shares via a reduced inheritance or cash. If no one wants it, sell the item and split the proceeds.

Related: How to discuss money with an ex

5. Allow both of you to lose: "Since we can't agree on who gets the clock, maybe we should sell it."

Why it works: Things that are impossible to split should be sold, says Hall. This way, both siblings feel the same sacrifice. As Hall says, "Better to lose a family heirloom than to lose your relationship with a brother or sister."

First Published: December 27, 2013: 4:08 PM ET

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Minimum wage to rise in 13 states on Jan. 1

NEW YORK (CNNMoney)

While most of the increases amount to less than 15 cents per hour, workers in places like New Jersey, Connecticut, New York and Rhode Island will see a bigger bump.

Earlier this year, New Jersey residents voted to raise the state's minimum wage by $1 to $8.25 per hour. And lawmakers voted to hike the wage by between 25 cents and 75 cents per hour, to $8.70 in Connecticut and $8 in Rhode Island and New York.

Residents in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington will see a higher wage floor due to annual cost of living adjustments.

The Economic Policy Institute, a left-leaning think tank, used Census data to estimate that the increases will boost the incomes of 2.5 million low-wage American workers next year.

Related: 2013 minimum wage, state by state

Currently, 19 states have minimum wages set higher than the federal level of $7.25 per hour. Once the changes take effect on Jan. 1, the number rises to 21.

Wage increases are also set to take place at the local level. Voters recently approved a raise to $15 per hour for many workers in SeaTac, a tiny town centered around the Seattle-Tacoma airport in Washington. A judge ruled this past week that parts of the measure were not valid: The city could impose the minimum wage for some of the affected workers, the judge said, though not all. Supporters of the increase plan to appeal.

The push for $15 an hour could soon move beyond the one small town. Seattle's mayor-elect has said he plans to also raise the city's minimum wage to $15. Washington currently has the highest state minimum wage at $9.19 per hour.

Workers in San Francisco, San Jose and Albuquerque will also see wages go up.

Later in 2014, several other locales, including two counties in Maryland and Washington D.C., will raise their minimum wages. California is set to raise its minimum wage to $9 in July.

The piecemeal increases at the local level are occurring amidst a national debate over low wages and income inequality. Fast food and retail workers have been staging protests and walking off work for more than a year, calling for better pay and more hours.

Currently, fast food workers nationally earn an average of about $9 per hour. In September, Bill Simon, president and chief executive officer of Wal-Mart U.S., said that less than half of the company's U.S. employees make more than $25,000 per year.

Related: Half of fast food workers need public aid

Workers from McDonald's (MCD, Fortune 500), Wendy's (WEN), Burger King (BKW) and other fast food joints are calling for $15 per hour. Wal-Mart (WMT, Fortune 500) workers organizing as part of the union-backed OUR Walmart aren't asking for a specific dollar amount increase, but they say it's impossible to live on the wages they currently receive.

The workers have the backing of some lawmakers in Washington. Senate Democrats have proposed legislation to raise the minimum wage to $10.10 per hour and index it to inflation.

President Obama has been throwing his weight behind the issue. Earlier this month, the President said in a speech that it's "well past the time to raise the minimum wage that in real terms right now is below where it was when Harry Truman was in office."

But such legislation has a bleaker outlook if it reaches the Republican-led House of Representatives. House Speaker John Boehner has said that raising the minimum wage leads to a pullback in hiring.

Several recent polls, however, show that the vast majority of Americans are in favor of a federal minimum wage hike. A new ABC/Washington Post poll out last week shows that two-thirds of Americans support raising the minimum wage. More than one-third of respondents said they supported an increase to $9 per hour, while a quarter more were in favor of a boost to $10.

A CBS poll conducted last month found nearly identical results.

-- If you're seeing your wages increase on Jan. 1, or if we've missed naming your town among those raising minimum wages, we'd love to hear from you. Email us.

First Published: December 29, 2013: 9:49 AM ET

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Divvying up Mom's stuff after she's gone

You know the relationship with your sibling is more important than who owns Mom's watch. But when you see her wearing it...

(Money Magazine)

While you can name beneficiaries for such objects in a will, many people simply direct that goods be divided equally among their children. That leaves the executor, often one of the kids, with the Solomonic task of meting out heirlooms. Add in grief, resentment, and siblings' knowledge of how to push one another's buttons, and you can imagine the emotional tinderbox that results.

"Families can fight tooth and nail over every item in the house," says Toronto lawyer Les Kotzer, co-author of Where There's an Inheritance.

Use this talk to avoid a family feud.

The Ground Rules

Give yourselves time to grieve. Rather than laying claims right after the funeral, when emotions are at a peak, schedule a time a few months later when everyone can gather in person, says Marlene Stum, lead author of the book and online resource Who Gets Grandma's Yellow Pie Plate?

Leave spouses at home. "The more people chiming in, the more emotions can escalate," says West Chester, Ohio, financial planner Marc Henn.

When You're Face to Face...

1. Opening gambit: "Let's agree that this won't tear us apart."

Why it works: You know your relationship with your brother is more important than ownership of Dad's watch -- but once you see the timepiece on his wrist and realize it'll go to his sons, not yours, you may temporarily forget. "So acknowledge upfront that you may say something hurtful," says Peter McClellan, author of Inheritance Tug-of-War Stories, "and agree to forgive each other."

Related: Keep your kids from blowing their inheritance

2. Name your musts: "Why don't we all say what items are on our wish lists?"

Why it works: "It's important to figure out what's most meaningful to whom," says Stum. Asking this question (you may even want to have a household inventory handy) helps you identify which items are subject to contention. Plus, it can help you sidestep battles: Your brother may stand down when he hears how much -- and why -- your sister wants the china.

3. Decide on a process: "Sounds like it might make sense for us to take turns picking items?"

Why it works: The key to emerging with family relations intact is choosing a selection process everyone thinks is fair, says Stum. For those items with little financial value but lots of claimants, you might draw straws to establish a picking order. Heirs get to select one item at a time, and once the last sibling has picked, let him have another turn, going back up the hierarchy in reverse, says Henn.

4. Strive for parity: "I'd really like Mom's wedding ring. How about if I pay you for it?"

Why it works: Items of real monetary value, like antiques and jewelry, need special treatment. Start with an appraisal, says Julie Hall, author of The Boomer Burden: Dealing With Your Parents' Lifetime Accumulation of Stuff. Whoever wants the item can pay the other heirs for their shares via a reduced inheritance or cash. If no one wants it, sell the item and split the proceeds.

Related: How to discuss money with an ex

5. Allow both of you to lose: "Since we can't agree on who gets the clock, maybe we should sell it."

Why it works: Things that are impossible to split should be sold, says Hall. This way, both siblings feel the same sacrifice. As Hall says, "Better to lose a family heirloom than to lose your relationship with a brother or sister."

First Published: December 27, 2013: 4:08 PM ET

22.16 | 0 komentar | Read More

Online shipping will never be 100% on time

NEW YORK (CNNMoney)

Consumers were outraged when UPS (UPS, Fortune 500) failed to deliver packages by Christmas this year, but some analysts say expectations were too high and promises too lofty.

Building up infrastructure to meet a level of service that's demanded only a few days each year doesn't make sense.

"It's cheaper to provide remedies than a 100% service level," said James Stock, a professor at the University of South Florida who studies marketing and logistics.

Amazon (AMZN, Fortune 500) is refunding shipping charges and giving $20 gift cards for those who didn't receive their packages on time. A spokeswoman would not comment on whether or not Amazon would be reimbursed from UPS for those costs. UPS did not respond to calls from CNNMoney.

Related story: UPS backlog means missing Christmas gifts; Amazon responds

Delivering every gift on time would be very expensive and, according to Stock, not worthwhile for these public companies. A carrier like UPS would have to buy or rent more trucks, more airplanes and build new shipping hubs.

And that money would be spent to meet demands made on a just a few key shopping days up when retailers must handle 10 times more orders than normal, said Eric Best, the CEO of Mercent.

Why was this year different?

More people shop online and it's easy to do so on-the-go. Mercent, which collects data from 550 retailers, expects a quarter of all e-commerce purchases in 2013 to be made on mobile devices, up from just 6% in 2011 and 16% last year.

Plus, consumers now expect two-day and even same-day delivery from online retailers.

Amazon, eBay (EBAY, Fortune 500) and Google (GOOG, Fortune 500), the three leading online retailers, offer similar shipping guarantees. And at the last minute, Amazon extended its free shipping deadline to Dec. 22, Best said.

These factors pushed online retail sales to jump 63% on Dec. 23 when compared to the same day last year, according to Mercent data.

Even though forecasts expected a jump in online sales this year, the industry has not experienced this peak two days before Christmas in the past, Best said.

"They may have seen late signs that more people were buying online, but you can't ramp up equipment that fast," Stock said.

Sucharita Mulpura, an analyst at Forrester, expects retailers to push back their shipping deadlines, giving carriers more time to get packages delivered to homes in time for Christmas morning, rather than expand facilities.

Carriers may ramp up if demand increases on a more regular basis, but for now consumers may just have to plan to shop online a little bit earlier.

First Published: December 27, 2013: 3:55 PM ET

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Unemployment benefits for 1.3 million expire Saturday

Michelle Marshall is about to lose her unemployment benefits.

NEW YORK (CNNMoney)

Marshall, 56, has been out of work for a year, since she lost an administrative assistant job that paid her $44,000 per year.

She started collecting $624 each week in New Jersey unemployment benefits, but the state benefits ran out after 26 weeks. When federal benefits kicked in, she collected $521.

But Marshall will stop getting these checks next week.

That's because Congress failed to extend the recession-era program when it passed a budget deal last week.

Related: 7 who are losing benefits

Federal benefits kick in after state benefits run out, and range between 14 to 47 weeks, depending on the state where a person lives.

According to government figures, the average weekly benefit check is $300.

Even the cut from the larger state check to the federal benefits was hard for Marshall. She had to consolidate her $12,000 worth of credit card debt and enroll in a mortgage assistance program.

When the benefits stop entirely, she doesn't know what she'll do.

"I imagine I will go apply for food stamps," she said. "Depending how long this goes on, I might lose my car, which will impact my ability to get a job. I won't be able to drive to interviews."

The program was first signed into law in June 2008 by President George W. Bush, when the unemployment rate was 5.6% and the average duration of jobless insurance was 17.1 weeks.

The unemployment rate climbed to more than 10% at the height of the Great Recession in 2009, and the government extended the federal benefits for the long-term unemployed.

However, thanks to a weak recovery, those benefits have been either extended or expanded 11 times, most recently on Jan. 2 .

Most states, however, have cut back unemployment benefits, as the labor market has improved.

During negotiations over the budget deal earlier this month, House Speaker John Boehner suggested he was open to an extension if the White House came up with a plan. But the provision didn't make it into the deal that President Obama signed last week.

The White House issued a statement on Friday saying senators have put forward bipartisan legislation to extend emergency unemployment insurance for three months, and Senate Majority Leader Harry Reid will bring it to vote as soon as they are back from recess.

Related: White House: Extend jobless benefits

The Obama administration has said the end of extended benefits can have a major impact on the economy.

The White House Council of Economic Advisers and Department of Labor issued a joint report earlier this month touting how jobless benefits buoy the economy, while keeping 2.5 million workers out of poverty each year.

The White House pointed out in a separate report that the expiration of benefits could reduce U.S. GDP by 0.2 to 0.4 percentage point in 2014, according to the Congressional Budget Office and a J.P. Morgan Chase economist.

The Congressional Budget Office said the cost to extend the federal benefits by another year is about $26 billion.

But Republicans have said in memos that the program has already cost $252 billion in the five years through July.

Democrats intend to make this a big issue. House Minority Leader Nancy Pelosi said Friday that the first item on Congress' agenda in 2014 must be an extension of unemployment insurance, and Senator Reid said last week he would push for an extension "after the new year." Ads by a liberal group blasting the Republicans for inaction are running this week on cable TV networks, including CNN.

Those who are set to lose benefits, like Marshall, haven't lost hope, but they are urging Congress to do something.

"Give us a little more time to try and make some plans," she said. "I can't give up. I have no one to take care of me."

-- CNNMoney's Annalyn Kurtz and Jennifer Liberto, and CNN's Brian Koenig contributed reporting to this story.

First Published: December 27, 2013: 12:54 PM ET

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Stocks: Santa rally may run out of puff

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were weak, with the S&P 500 down 0.1%, pointing to a mostly softer start to trade as the Dow eked out nearly imperceptible gains.

On Thursday, the Dow Jones industrial average closed at a record high for the 50th time this year. The S&P 500 also ended at a record high, and the tech-heavy Nasdaq marked a new 13-year high.

Dubbed the "Santa Claus rally," stocks often surge in the week between Christmas and New Year.

But Joe Tatusko, chief investment officer for Westport Resources, a financial planning firm in Connecticut, said that futures were slipping on Friday because many individuals are selling stocks to reduce their tax bills.

"It's a darn good time to do some tax loss selling," he said.

Related: Fear & Greed Index gets greedy

Markets have charted big gains this year. The Dow and S&P 500 are both up more than 20%, while the Nasdaq has soared over 30%.

The Dow is on track for its best year since 2003 and the S&P 500 on pace for its strongest year since 1997.

Several factors have helped spur gains this year including ongoing economic stimulus from the Federal Reserve, increased confidence in the economy and solid corporate earnings growth.

Related: Best year ever for stock funds

Earlier this month the Fed announced that it will modestly reduce its bond buying program in January. But many experts believe the bull market will continue for a sixth year in 2014, albeit at a more modest pace.

European markets rose in morning trading, led by a 0.7% rise on Germany's DAX. London's FTSE gained 0.5% and France's CAC 40 put on 0.6%.

Asian markets ended the week on a positive note. China's Shanghai Composite rose 1.4% and Hong Kong's Hang Seng Index added 0.3%.

First Published: December 27, 2013: 4:53 AM ET

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Many Americans feel economy isn't improving

NEW YORK (CNNMoney)

A new CNN/ORC poll released Friday showed people were pessimistic that the economy was improving. Nearly 70% said the economy is generally in poor shape, and only 32% rated it good.

Two-thirds of respondents said most of the economic news they've heard recently was bad news. More rural than urban dwellers said the economy was in poor shape.

And just over half expected the economy to remain in poor shape a year from now.

Related: Is the economy as good as it looks?

By some metrics, the economy has moved ahead this year. The stock market, for example, has surged -- the Nasdaq is up nearly 40% since January. Unemployment is at a five-year low point. Auto sales are at a seven-year high. Gas prices have dropped. And the housing sector, which dragged the U.S. into recession five years ago, is rebounding.

The Federal Reserve sees signs of strength, too. In December the central bank pulled back slightly on the stimulus that has boosted investor confidence this year.

But behind those numbers are the long-term unemployed, the under-employed and those who have dropped out of -- or never even entered -- the workforce. They're not sharing in the surging stock market, and many are about to lose jobless benefits.

Those people aren't buying big-ticket items like furniture or appliances, and some were cutting back on essentials. Thirty-six percent said they were cutting back spending on food or medicine, up from 31% in late 2008, the year the housing market collapsed.

The poll includes 1,035 adults surveyed by telephone between Dec. 16 and 19. It had a sampling error of plus or minus three points.

First Published: December 27, 2013: 6:01 AM ET

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Stocks still going strong

NEW YORK (CNNMoney)

The Dow Jones industrial average, the S&P 500 and the Nasdaq were all higher in early trading.

On Thursday, the Dow closed at a record high for the 50th time this year. The S&P 500 also ended at a record high, and the tech-heavy Nasdaq marked a new 13-year high.

Related: Fear & Greed Index gets greedy

Markets have charted big gains this year. The Dow is up more than 25% and S&P 500 has gained nearly 30%. The Nasdaq has soared 38%. The S&P 500 is on pace for its strongest year since 1997.

Several factors have helped spur gains this year, including ongoing economic stimulus from the Federal Reserve, increased confidence in the economy and solid corporate earnings growth.

Related: Best year ever for stock funds

Earlier this month, the Fed announced that it will modestly reduce its bond buying program in January. But many experts believe the bull market will continue for a sixth year in 2014, albeit at a more modest pace.

In the bond market, the yield on the 10-year U.S. Treasury note rose to 3% for a second day. That's the highest level of the year and some investors say it could set the stage for higher interest rates next year.

Shares of Twitter (TWTR) were under pressure following a strong rally this month. Twitter stock has surged some 75% in December and has nearly tripled in price since its November IPO.

Facebook (FB, Fortune 500) shares have also been on a tear this month. The social network has gained more than 20% in December, but shares were little changed Friday.

European markets rose in afternoon trading. Asian markets ended the week on a positive note.

First Published: December 27, 2013: 9:43 AM ET

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China debt grows to $4.6 trillion

China's local governments, like Anhui province, have borrowed too much in recent years, pushing debt up to $3.3 trillion.

HONG KONG (CNNMoney)

The world's second-largest economy has been struggling to arrest local government debt -- the result of easy credit and round after round of stimulus.

While it's hard to gauge the scale of the problem, a recent government think tank report may shed some light. The Chinese Academy of Social Sciences estimates local government debt reached 19.94 trillion yuan ($3.3 trillion) by the end of 2012. Local government debt accounts for most of total government debt, which is expected to have hit 27.7 trillion yuan ($4.56 trillion), or roughly 53% GDP.

The report puts local debt at double what it was three years ago, when China last conducted a nationwide debt audit. Results of the most recent government debt audit, launched in July, haven't been released.

Related story: Alarm bells ring over China's debt problem

For now, China's local government debt remains lower than that of many other advanced economies, such as the U.S., U.K., France, Japan, Germany and Spain. But what is scary is the pace at which debt has accumulated. China's increase in local government debt is part of a larger issue -- a credit explosion as regional governments borrowed to finance major infrastructure projects to combat a slowing economy.

Mushrooming credit is cause for concern as it has often been followed by financial crises in other emerging markets. In China, it has stoked fears that capital has been misallocated, and has further contributed to a run-up in corporate and government debt.

While the Chinese government has repeatedly said debt levels are manageable, resolving the problem is on its radar. Societe Generale economist Wei Yao said Beijing recently identified handling debt as a major policy goal.

At an economic meeting in December, the government "kept the prudent monetary policy stance for 2014 and set debt risk management as one of key policy tasks for the first time," Yao said.

"Given this, we do not expect China's domestic credit environment to improve anytime soon and as a result growth deceleration will probably resume."

Related story: China's bad debt breaks Hong Kong IPO logjam

Overall growth is slowing. China is estimated to post 7.6% GDP for 2013, just above the government's official target of 7.5%, state media reported. That compares with 7.8% last year, 9.3% in 2011 and 10.4% in 2010.

Reducing reliance on credit will remain one of China's greatest challenges as it seeks to find a sustainable growth path. The government was recently tested on this issue, with the central bank forced to pump nearly $50 billion into the financial system to prevent a second damaging cash crunch this year -- at the last minute. By then, China's benchmark index, the Shanghai Composite, had already tumbled for nine consecutive days.

Some analysts criticized the central bank for acting late; an earlier move could have been more effective in countering the seasonal shortage of cash. Others said the central bank's apparent reluctance to inject emergency cash is the start of a more prudent policy approach as it's one way of reining in excessive lending.

First Published: December 26, 2013: 5:25 AM ET

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Stocks: U.S. futures tilt higher Thursday

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures tilted higher early Thursday, pointing to a firm start when trading resumes after the Christmas holiday break. The Dow Jones industrial average added 0.4%, and the S&P 500 rose 0.5%.

Both indexes struck fresh all-time highs and the Nasdaq marked a new 13-year high, when markets last traded on Tuesday. The Dow hit its 49th record close this year.

On Thursday, investors returning from holiday will be watching initial job claims at 8:30 a.m. ET.

Related: Fear & Greed Index gets greedy again

Markets have certainly made big moves so far this year. The Dow and S&P 500 are both up more than 20%, while the Nasdaq has soared over 30%.

The broad rally puts the Dow on track for its best year since 2003 and the S&P 500 on pace for its best year since 1997.

This year's gains have been driven by ongoing economic stimulus from the Federal Reserve, increased confidence in the economy, solid corporate earnings growth, and more individual investors entering the stock market.

Related: China's $50 billion move to avert cash crunch

The Fed announced last week that it will modestly reduce its bond buying program in January. But many experts believe the bull market, which began in early 2009, will continue for a sixth year in 2014, albeit at a more modest pace.

Many European and Asian markets were closed for Boxing Day. Japan's Nikkei gained 1%, while China's benchmark index, the Shanghai Composite, dropped 1.6% on Thursday.

First Published: December 26, 2013: 7:21 AM ET

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Stocks: The gift that keeps giving

NEW YORK (CNNMoney)

The Dow Jones industrial average, the S&P 500 and the Nasdaq all gained in early trading Thursday. U.S. markets were closed Wednesday for the Christmas holiday break.

Trading volume is expected to be below average Thursday with many professional money managers taking the week off or working remotely.

The Dow and S&P 500 hit fresh all-time highs and the Nasdaq marked a new 13-year high when markets last traded on Tuesday. It was the Dow's 49th record close this year.

Related: Fear & Greed Index gets greedy again

Markets have certainly made big moves so far this year. The Dow and S&P 500 are both up more than 20%, while the Nasdaq has soared over 30%.

The broad rally puts the Dow on track for its best year since 2003 and the S&P 500 on pace for its best year since 1997.

This year's gains have been driven by ongoing economic stimulus from the Federal Reserve, increased confidence in the economy, solid corporate earnings growth and more individual investors entering the stock market.

Related: China's $50 billion move to avert cash crunch

The Fed announced last week that it will modestly reduce its bond buying program in January. But many experts believe the bull market, which began in early 2009, will continue for a sixth year in 2014, albeit at a more modest pace.

On the economic front, initial claims for unemployment benefits fell last week, according to government data released Thursday.

Shares of UPS (UPS, Fortune 500) and FedEx (FDX, Fortune 500) were little changed despite delays that caused both package delivery companies to miss holiday deadlines. Amazon (AMZN, Fortune 500) offered to refund shipping charges for customers who did not receive their packages on time.

Twitter (TWTR) continued a spectacular rally. Shares of the social media company were up 3%. The stock has gained 74% in December and has more than doubled in price since its November IPO.

Many European and Asian markets were closed for Boxing Day. The Nikkei gained 1%. Japan's stock exchange is up 51% for the year, making it the best performing global benchmark.

First Published: December 26, 2013: 9:38 AM ET

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25 apps you should download right now

VSCO cam is the best one-stop shop for photo taking, photo editing, photo organizing and photo sharing

NEW YORK (CNNMoney)

Sure, you know about Facebook (FB, Fortune 500), Twitter (TWTR), Instagram, Pandora (P), Yelp (YELP), Google (GOOG, Fortune 500) Maps and Netflix (NFLX). But what about the rest?

Lucky for you, we have some recommendations.

Whether you want new apps, essential apps, or apps specific to your new iPhone, iPad or Android device, we got you covered.

5 new apps

Ridiculous Fishing - There are very few games that are truly and uniquely suited for smartphones. Ridiculous Fishing is one of them. [iOS, Android, $3]

Dots - It's like Candy Crush, but better. [iOS, Android, Free]

Vine - Twitter's (TWTR) strange little video-sharing app is still figuring out exactly what it is, but it's growing legion of experimenters are beginning to answer that question. [iPhone, Android, Free]

Hangouts - After years of amassing Gmail chatters, Google FINALLY created a truly unified, cross-platform messaging solution for all its products. It also means iPhone users' days of using horrible third-party apps are over. [iOS, Android, Free]

VSCO cam - VSCO cam technically debuted in 2012, but the second generation of the app has been so thoroughly overhauled that it's essentially a whole new app. It's the best one-stop shop for photo taking, photo editing, photo organizing and photo sharing. [iPhone, Android, Free]

Related: Tips for getting started with your new mobile gadget

5 cross-platform apps

Snapchat - The self-destructing photo and video sharing app first appeared last year, but it wasn't until the second half of this year that the service really hit its stride. The fun is undeniable. [iPhone, Android, Free]

WhatsApp - This may not be the BEST chatting or texting app, but you won't find a service on more devices, used in more countries, with more active users. [iPhone, Android, Free]

SoundCloud - If you mixed the old MySpace Music with Twitter, you'd end up with SoundCloud. And it's so much better than it sounds. Follow your favorite artists, labels, publications or users, and every time they upload new music to their profile, it ends up in your music stream. This is radio for a new era. [iOS, Android, Free]

Dropbox - There's a very good chance that if you're using a cloud service, it's Dropbox. There's also a good chance that's what your friends are using too. Might as well have your account within tapping distance on your phone. [iOS, Android, Free]

Kindle - The Kindle app is not only the best and most flexible way to consume e-books on your phone or tablet, but is also great for reading other documents including PDFs. [iOS, Android, Free]

5 apps for iPhone

Google Search - Once upon a time this was maybe the most worthless app Google offered for an Apple (AAPL, Fortune 500) device. But once Google baked in its voice recognition technology and its Google Now predictive search, it's a must-have. Neither feature is quite as good as you'd find on a device like the Nexus 5 or Moto X, but it's close. [Free]

Fantastical 2 - If you don't like the stock calendar app on iOS 7 (and many don't), Fantastical may be the substitute that meets your needs. [$2 for a limited time]

Level - Level automatically sets up a daily, weekly and monthly budget for you, and then quickly and simply keeps you updated on your spending habits. [Free]

Mailbox - If you happen to be a mailbox zero devotee, you won't find a better mail client. [Free]

Figure - There is no easier way to make yourself sound like a musical genius when you have 10 minutes to kill. [$1]

5 apps for Android devices

1Weather - There's not really a great default weather experience baked into Android, so 1weather offers the best combination of usable information and clean design. [Free]

Google Now Widget - Google Now's contextual/predictive search is baked into the default search app that comes preloaded on most Android devices. But sticking the widget on your home screen gives you the info you want before you even know you want it. [via Android home screen]

SwiftKey 4 - Once you get the hang of it, gesture-based keyboards are faster and more accurate than tapping at the screen. And, though Android has its own default solution, Swiftkey is still the best of the bunch. [$2]

Aviate - The stock Android home screen is pretty good, but if you're looking for something different, give Aviate a try. It's certainly cleaner than anything you'd find on phone from Samsung, LG, or Sony. [Free]

Car Widget - If you commute to work every day, you should not be navigating your way through the normal Android UI. Car Widget puts the apps you need front and center. [Free]

5 apps for iPad

Paper - Hands down the best consumer-facing app for drawing, painting and sketching. It doesn't do everything under the sun, but it does what it does extremely well. [Free]

iA Writer - This is a no-nonsense word processor that provides minimal distractions. [$5]

Traktor DJ - If you've ever wanted to try your hand at DJing, but didn't want to drop a small fortune on the gear, just download this app and call it a day. [$10]

How to Cook Everything - Tablets are excellent aids in the kitchen and there are few books on cooking better than Mark Bittman's opus. [$10]

Superbrothers: Sword and Sworcery EP - Infinity Blade III might be the most technically impressive iPad game, but even three years after its release, Sword and Sworcery is the most original and engaging iPad game you'll encounter. [$2]

First Published: December 24, 2013: 2:11 PM ET

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Target credit card hack: The latest

NEW YORK (CNNMoney)

The discount retailer acknowledged on late last week that the hack began on Black Friday and stretched more than two weeks to December 15.

Here's what we know:

-- The breach: Malware on store point-of-sale systems was involved in the security breach. The company is cooperating with federal authorities, including the Secret Service and Department of Justice, and is withholding additional details at the request of law enforcement.

-- Where did it happen: The hack was limited customers shopping in U.S. and Canadian Target (TGT, Fortune 500) stores with credit and debit cards. Online purchases were not involved.

-- What got stolen: Hackers stole customer names, credit or debit card numbers, expiration dates and card security codes, Target said. PIN numbers, other customer information like Social Security numbers, and employee records were not compromised.

-- Target customers: The company has notified "millions" of affected customers for whom Target has email addresses. CEO Gregg Steinhafel said "the cause of this issue has been addressed and you can shop with confidence at Target."

-- Banks: Target also notified credit and debit card issuers, many of which said they were monitoring customer accounts for fraudulent activity. Chase initially set low daily withdrawal and spending limits on its cards, though it adjusted those limits late Monday.

-- Lawsuits: At least two dozen federal class action lawsuits have been filed in a handful of states alleging the retailer was negligent and did not adequately protect customer privacy.

-- State AGs: Target said its legal team held a conference call with most states' attorneys general on Monday afternoon.

-- More fallout: Target has hired a private firm to review its information security and two U.S. senators called for consumer protection agencies to investigate.

-- What you should do: Consumer watchdogs say customers should check their credit card statements, including for small purchases that could indicate fraudsters are verifying an account is still active. Customers should also contact their banks to request a replacement card -- if one isn't already on the way -- and change their PIN.

-- How to contact Target: Customers concerned about the breach could call Target, and customer service teams would be available on Christmas, Snyder said. The company said additional information would be available at corporate.target.com, by phone at 1-800-440-0680, and on Twitter @Target.

First Published: December 24, 2013: 2:58 PM ET

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Price of stamps to go up 3 cents

The price of a stamp will go up 3 cents in January.

NEW YORK (CNNMoney)

A panel overseeing the U.S. Postal Service approved a three-cent hike from the current price of 46 cents. It will take effect on January 26.

That includes a one-cent increase -- to keep pace with inflation -- approved by the Postal Regulatory Commission last month. At the time, the cash-strapped Postal Service had sought the three-cent bump.

Related: USPS to rent mail vans

The additional two cents are intended to be temporary and to recoup losses the Postal Service suffered during the recession, the commission said.

It said the Postal Service must regularly report how much money the increase brings in and "develop a plan to phase out the rates once they have produced the revenue justified by their request."

Related: Postal Service delivers Amazon packages on Sunday

But the agency is in deep trouble with the shift away from mail and to the Internet. It reported a $5 billion loss in the most recent fiscal year, and a $16 billion loss in 2012. Those losses include expensive contributions to retiree health care required by Congress.

The Postal Service has considered paring back mail delivery and expanding the more profitable package delivery to bring in more revenue.

Related: Postal Service would love to ship you beer

Customers who purchase forever stamps before the new price takes effect will continue to pay 46 cents.

--CNNMoney's Jen Liberto contributed to this report.

First Published: December 24, 2013: 5:49 PM ET

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Colleges now tying president pay to graduation, hiring rates

These days part of the annual bonus John O'Donnell, president of Massachusetts Bay Community College, receives is tied to graduation rates.

NEW YORK (CNNMoney)

And like a small but growing number of his counterparts around the country, O'Donnell has a new incentive to meet these goals: What he earns partly depends on it.

"College presidents need to be accountable," said O'Donnell, whose board of trustees recommended that, on top of his $211,150 a year base pay, he get the relatively modest maximum incentive bonus of $7,390 to reward good performance.

Taking a page from the corporate playbook, college boards like Massachusetts Bay's are beginning to tie merit raises to how well presidents meet performance targets.

Related: More private college presidents earning over $1 million

"Institutions can't afford not to have competent people in these jobs," said Stephen Pollack, a partner at consulting firm Mercer, who specializes in nonprofit organizations, including higher education.

Historically, presidential evaluations have been almost a formality, and raises often rubber-stamped, said Patrick Callan, president of the National Center for Public Policy and Higher Education.

The process appears to be undertaken "just to justify extravagant salaries, or is way too focused on fund raising," he said. In other cases, "it's like they put the presidents on trial," and every constituency -- faculty, donors, students -- is invited to weigh in, said Callan. "That's just a killer. It creates presidents who won't take risks."

The idea of tying executive compensation to specific performance goals has been drifting slowly into higher education from the corporate world. Universities and colleges are increasingly under the same kinds of pressure from parents and politicians that CEOs are from shareholders.

About a third of presidents of private colleges and universities are now eligible for so-called variable pay, or pay for performance, according to Yaffe & Co., an executive compensation consulting firm. Of those presidents, 64% received their maximum possible incentive bonuses last year, the agency said, which came to a median of $34,000 each.

Public universities are jumping on the presidential performance compensation train, too.

Related: The other reason grads are drowning in debt

This month, for the first time, the heads of the nine universities of the University of Texas System were given bonuses of up to 10% of their salaries based on their cost savings, growth in research grants, fund raising, graduation rates, and other measures.

And former Indiana Governor Mitch Daniels, who took over in January as president of Purdue University, is paid $420,000 a year with the potential to earn an additional $126,000 tied to such things as lowering students' debt.

Not all of these arrangements have been met with praise. Some critics complain that presidents should not be paid extra for doing things that seem to fall under their job descriptions -- especially with money tight.

There was grumbling when the Arizona Board of Regents voted in September to give $40,000 in incentive pay to each of the presidents of Arizona State University and the University of Arizona, who make base salaries of $475,000 apiece, plus more than $250,000 a year in other benefits.

Each is due for another $40,000 in incentive bonuses next year and up to $180,000 the year after that if they can trim the cost of employee health care, attract more students and research funding, and lower the number of dropouts, among other things.

In Massachusetts, O'Donnell and the presidents of the state's other 14 community colleges and nine state universities will be given bonuses of up to 3.5% based on their ability to raise graduation rates, close achievement gaps, and align educational programs with the needs of local employers.

Related: Community college grads out-earning bachelor's degree holders

"We're being very clear about the educational outcomes we're trying to produce for the state, with a growing emphasis on performance," said the state's Commissioner of Higher Education, Richard Freeland.

As to whether merit raises of only 3.5% of presidents' salaries are enough to drive change, Freeland said he wished the proportion was higher. "It's nowhere near as meaningful as I would like it to be," he said.

It's too early to judge how much of an impact performance-based raises will have at colleges, but they have proven effective in the corporate world, said Pollack.

"To do it well, you have to be willing to ... communicate with people at the beginning of a year about expectations and goals," he said. "If you're willing to do that and then hold them accountable, it works."

First Published: December 24, 2013: 5:51 AM ET

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U.S. airlines want to stay cell phone free

The FCC is weighing rules that would allow inflight cell phone use, but the big airlines are not moving to change their own rules - or equipment - to enable calls.

NEW YORK (CNNMoney)

Apparently, airlines feel the same way.

The Federal Communications Commission could soon allow inflight cell phone use, but U.S. airlines aren't eager change their own rules - or equipment - to enable such calls.

The five largest U.S. airlines, which account for about 90% of the nation's air travel, all say their current plans do not include allowing for calls, even though they will look at the rules once they are passed.

"A clear majority of customers who responded to a 2012 survey said they felt the ability to make voice calls on board would detract from -- not enhance -- their experience," said Richard Anderson, CEO of Delta Air Lines (DAL, Fortune 500) last week.

"Delta employees, particularly our in-flight crews, have told us definitively that they are not in favor of voice calls on board."

It's not necessarily only customer opinion that's the behind the airlines' reluctance to allow the calls. It's cost.

Related: In-flight phone calls would cost you

Cell phones may not work that well at cruising altitudes, and would require airlines to install expensive equipment, that would add hundreds of pounds of extra weight to each aircraft, said airline consultant Michael Boyd.

This wouldn't sit well in an industry where trimming costs and weight is a priority.

"Airlines aren't going to spend tens of thousands of dollars to install equipment that is just going to annoy customers," said Boyd.

Even some members of the federal agency considering the rule change aren't crazy about the idea.

"I get it. I don't want the person in the seat next to me yapping at 35,000 feet any more than anyone else," said FCC Chairman Tom Wheeler at a meeting on Dec. 12. But he said the FCC is charged with considering the technology behind the communications rules, not social convention.

Also, the Department of Transportation and Congress are both considering rules to keep the ban in place.

Related: Relaxing gadget rules on European flights

Three major U.S. airlines - United Continental, (UAL, Fortune 500) Southwest Airlines (LUV, Fortune 500) and JetBlue (JBLU, Fortune 500) say they're planning to keep bans on calls in place.

"We always leave the door open to reevaluate should there be a seismic shift in public opinion. Can you imagine that happening?" said a Southwest spokesman.

Only American Airlines (AAL)appears willing to consider it. The airline said in a statement that it recognizes this is an important issue for customers and will keep them in mind if rules change.

Some European carriers have the equipment on planes that allow for cell phone calls. Virgin Atlantic, for instance, allows up to six people per flight to use their cell phones at a time. The service is turned off when the planes are approaching the United States to comply with U.S. law.

"Passengers have responded well to the service and we find that the majority of people use it to send a brief text," said spokeswoman Olivia Gall.

First Published: December 24, 2013: 5:34 AM ET

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Record rally continues on Wall Street

NEW YORK (CNNMoney)

The Dow rose just about 25 points in early trading, and the S&P 500 and Nasdaq were also just barely higher.

But the gains were still enough to push the Dow and S&P 500 to fresh all-time highs, and the Nasdaq to a new 13-year high.

Stock markets in New York will close at 1 p.m. ET Tuesday, and markets will remain closed Wednesday for Christmas Day.

Related: Fear & Greed Index gets greedy again

Trading volumes remained extremely low, which is typical in late December through the holiday season.

While Tuesday is expected to be a tame trading day, markets have certainly made big moves so far this year, with the Dow Jones industrial average and S&P 500 both up more than 20%, while the Nasdaq jumped more than 30%.

Related: China is looking to avert another cash crunch

In European markets, the major indexes were moving higher through their afternoon trading sessions. Markets in London and Paris are set to close early, while Frankfurt was closed.

In Asia, markets were mixed.

First Published: December 24, 2013: 9:48 AM ET

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Stocks: No holding back the Santa rally

NEW YORK (CNNMoney)

The Dow and S&P 500 rose to new records early Monday, while the Nasdaq climbed to a fresh 13-year high.

The Nasdaq got a boost from Apple (AAPL, Fortune 500)'s stock surging 3%, after the company announced it had inked an important sales deal in China.

The tech-laden index also got a lift from social media company Facebook (FB, Fortune 500), which debuted as part of the S&P 500. Shares were up almost 2% in early trading as investors added the stock to their index funds.

Shares of retailers Men's Warehouse (MW) and Jos. A. Bank (JOSB) fell. Jos. A Bank rejected last month's buyout offer from Men's Warehouse.

Related: Apple inks China Mobile deal

Investors are also feeling increasingly confident after the head of the International Monetary Fund, Christine Lagarde, said her organization was much more upbeat about the U.S. economic recovery.

"We see a lot more certainty for 2014," Lagarde said in an interview Sunday on NBC. She said the IMF would raise its forecast for the U.S. economy, in part because Congress had passed a budget and the Federal Reserve decided to begin reducing monetary stimulus based on the improving U.S. job market.

Related: Fear & Greed Index stuck in neutral

The day's gains build upon a strong performance last week. All three indexes jumped between 2% and 3% last week, thanks to a huge taper-inspired rally and a stronger-than-expected reading on U.S. economic growth during the third quarter.

While a so-called Santa Claus rally may continue to fuel stocks in record territory, trading volume is expected to remain light due to the holiday-shortened week. The market is only open for a half-day trading on Tuesday (Christmas Eve) and is closed on Wednesday for Christmas.

Related: Countdown to Obamacare deadlines

In international markets, China has been grabbing the headlines as investors continue to worry about a cash crunch. However, the Chinese central bank said it had pumped liquidity into the system, leading Asian stock markets to notch up modest gains Monday.

The main European markets were moving higher in afternoon trading. The Tokyo Stock Exchange was closed for a holiday.

First Published: December 23, 2013: 9:53 AM ET

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Healthy food chain helps kids get off the streets

Erik Oberholtzer (center) with graduates from the Sustainable Life Project.

NEW YORK (CNNMoney)

Then he met Erik Oberholtzer. As CEO and co-founder of California restaurant chain Tender Greens, Oberholtzer had been trying for years to figure out how to help young people like Saurbier get back on their feet.

Last year, Oberholtzer's company started a charitable program dubbed the Sustainable Life Project. The three-month program targets young people ages 18 to 24 who are transitioning out of foster care, who may be homeless or who could easily end up in prison or prostitution.

The young people visit artisan food makers, urban farmers and food-processing facilities to learn about the sources of their food. They get culinary arts training from restaurant chefs, and they receive a paid internship inside one of the company's 12 restaurants. Those who do well in an interview get a full-time job with the company.

Related: Turning America's street guns into jewelry

Sauerbier learned about the program last January through Coventry House, a local nonprofit that helps homeless teens. The nonprofit connects Tender Greens with youth that are likely to succeed. And the restaurant chain then conducts interviews and takes up to eight students every three months.

Saurbier is one of 15 youths who have graduated from the Sustainable Life Project since it started, and one of 10 who have landed restaurant jobs.

The program changed his life. Saurbier lost 50 pounds after learning how to eat healthy and now prepares salads at a Tender Greens restaurant in Hollywood. He is now training for other kitchen jobs and working to get his GED. He wants to become a chef.

"I had seen so much pain in my life," says Saurbier. "This is more than a job. It opened my eyes to see opportunity."

Related: Startups emerge behind bars

Oberholtzer started the program at a time when many CEOs were focused on surviving the recession. But Tender Greens was in the midst of a rapid expansion. The company grew from $7.3 million and 115 employees in 2009 to $28 million in revenues and 450 employees in 2013.

Despite the challenges of fast growth, Oberholtzer felt compelled to do more to help struggling youths after volunteering to cook for the homeless on Los Angeles' West side. "You can either complain or do something," he says.

Getting the program started was daunting. Oberholtzer decided to put it under the umbrella of Tender Greens instead of establishing a separate non-profit. It's allowed them to be more flexible with the program.

"We handle it much the same way we would handle a paid intern from a university," he says.

Sustainable Life Project takes no donations and instead relies on company revenue, donated food and the time of Tender Green's staff. The HR and finance executives handle administration and chefs teach culinary and job skills. Those involved in the program spend between two and four hours a week on it.

Related: Why 'do good' businesses are blowing up

Other than the time, Oberholtzer says the program isn't costly to run. Tender Greens pays students an hourly wage for their internship and covers transportation costs for farm visits. The rest of the program is incorporated into the company's daily workflow.

Fermin Arias, Tender Green's regional chef, spends about four to eight hours a week running the program. Much of the time is spent listening to the young people and offering advice like how to dress for a job interview or how to talk to people at work.

"Some show up for interviews in street clothes with a skateboard," says Arias. "They may not do this as a career, but hopefully the takeaway is they learn how to eat right and communicate with society."

So far, the program hasn't hindered Tender Green's growth trajectory: The chain will open six new California restaurants in 2014. In fact, the Sustainable Life Project has become woven into the company culture, where employees are inspired to use their skills and passion for healthy food to bring about change. It took a lot of work to get it going, but Oberholtzer says the results have been worth it.

"These kids just want a break," says Oberholtzer. "As long as they show up and work hard, the restaurant is a family for them."

First Published: December 23, 2013: 8:15 AM ET

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Play banker to your peers

Nowadays, peer-to-peer lenders mainly use matching tools to select loans -- either one by one or in a bundle -- based on criteria like credit rating or desired return.

(Money Magazine)

Your bank makes money off borrowers. Now you have the opportunity to do the same.

One of today's hottest investments, peer-to-peer lending, involves making loans to strangers over the Internet and counting on them to pay you back with interest.

The concept may be a bit wacky, but the returns reported by sites specializing in this transaction -- from 7% to 14% -- are nothing to scoff at.

No wonder the two biggest P2P sites are growing like gangbusters. With Wall Street firms and pension funds pouring in money as well, Lending Club is on track to issue $2 billion of loans this year, nearly tripling business over last year.

Prosper recently handled nearly $50 million in loans in a month, a 300% increase since early 2012. "A few years ago I would have laughed at the idea that these sites would revolutionize banking," says Curtis Arnold, co-author of The Complete Idiot's Guide to Person-to-Person Lending. "They haven't yet, but I'm not laughing anymore." Here's what to know before opening your wallet:

How P2P works: To start investing, you simply transfer money to an account on one of the sites, then pick loans to fund.

When Prosper launched in 2006, borrowers were urged to write in personal stories. Nowadays the process is more formal: Lenders mainly use matching tools to select loans -- either one by one or in a bundle -- based on criteria like credit rating or desired return. (Most borrowers are looking to refi credit card debt anyway.)

Loans are in three- and five-year terms. And the sites both use a default investment of $25, though you can opt to fund more of any given loan. Pricing is based on risk, so loans to borrowers with the worst credit offer the best interest rates.

Once a loan is fully funded, you'll get monthly payments in your account -- principal plus interest, less a 1% fee. Keep in mind that interest is taxable at your income tax rate, though you can opt to direct the money to an IRA to defer taxes.

Related: P2P lending: What's to worry?

A few hurdles: First, not every state permits individuals to lend. Lending Club is open to lenders in 27 states; Prosper is in 30 states plus D.C.

Even if you are able to participate, you might have trouble finding loans because of the recent influx of institutional investors.

"Depending on how much you're looking to invest and how specific you are about the characteristics, it can take up to a few weeks to deploy money in my experience," says Marc Prosser, publisher of LearnBonds.com and a Lending Club investor.

What risks you face: For the average-risk loan on Lending Club, returns recently averaged 8% to 9%, with a default rate of 3.5% to 4%. By contrast, junk bonds, which had a similar default rate this year, were yielding 6%.

But P2P default rates apply only to the past few years, when the economy has been on an upswing; should it falter, the percentage of defaults could rise dramatically, says Joanna Pratt, VP of investing for consumer finance site Nerdwallet.com.

In 2009, for example, Prosper's default rate hit almost 30% (though its rate is now similar to Lending Club's). Moreover, adds Colorado Springs financial planner Allan Roth, "A peer loan is unsecured. If it defaults, your money is gone."

Some consumer advocates also think the industry needs more regulation.

How to do it right: Spread your bets. Lending Club and Prosper both urge investors to diversify as much as possible. Pratt agrees: "Resist the urge to put all of your eggs in one basket." The graphic at bottom shows how investing in more loans reduces your risk.

Related: Free FICO credit scores coming to millions

Stick to higher quality. Should the economy turn, the lowest-grade loans will likely see the largest spike in defaults, so it's better to stay in the middle to upper range -- lower A to C on the sites' rating scales. (The highest A loans often don't pay much more than safer options.)

Stay small. Until P2P lending is more time-tested, says Roth, it's best to limit your investment to less than 5% of your total portfolio. "Don't bank the future of your family on this," he adds.

More loans, smoother returns

The less you diversify, the greater your chances of losing money. Below are the average returns on Prosper based on the number of loans held.

Number of loans	Minimum return	Average return	Maximum return
50 to 99 loans	-23%	9%	26%
100 to 149 loans	-4%	9%	26%
150 to 199 loans	1%	9%	26%

Notes: Returns are annualized as of Sept. 31, 2013, and include loans booked from July 2009 to June 2013.
Source: Prosper

First Published: December 23, 2013: 10:15 AM ET

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Countdown to Obamacare deadlines

The deadlines for picking and paying for an Obamacare plan are almost upon us.

NEW YORK (CNNMoney)

There's been a lot of confusion surrounding the deadlines for applying for Obamacare -- and with good reason. Federal and state governments, as well as insurers, keep changing the dates, mainly to accommodate those blocked from completing enrollment due to technical problems.

More than a million people have signed up for private insurance in the federal and state exchanges, President Obama said Friday. And exchanges are reporting heavy interest in the days leading up to Monday.

Each consumer faces two deadlines: One by which to choose a plan and another for making a payment.

Federal exchange: As of now, if you live in one of the 36 states serviced by the federal enrollment website, healthcare.gov, your best bet for getting hassle-free coverage in 2014 is to select a policy by end of the day on Monday and pay your first month's premium by December 31.

But procrastinators and those running into technical roadblocks might get a short reprieve.

Federal officials said recently that individuals who try to sign up, but encounter a problem with the website, can qualify for a special enrollment period and gain coverage as soon as possible. The government is also "encouraging" insurers to allow people who miss Monday's deadline to still be eligible for coverage starting January 1, even if they sign up sometime in January.

When it comes to paying for a plan selected on healthcare.gov, the insurance industry trade group said last week that folks who pay by January 10 can have coverage retroactive to the start of the year. But the group stressed that coverage doesn't begin until the first payment is made. So people who wait until the 10th to pay might have to shell out for their initial medical care up front and file for reimbursement from their provider.

State exchanges: If you are applying in one of the 14 states running its own exchange, you may have a different set of deadlines.

Minnesota became the latest state to change its dates. Residents there have until December 31 to pick a plan and have coverage start the next day, exchange officials said Friday. They have until January 10 to pay.

Rhode Islanders also have until December 31 to pick a plan and have coverage start the next day. But they have to pay their first premium by January 6 and won't receive an ID card until they do.

The change was made "to make sure more Rhode Islanders are able to have health care on January 1," said Dara Chadwick, spokeswoman for the Rhode Island exchange. "There's been a lot of confusion in the messaging."

In Washington, residents who try to apply by Monday but run into problems have until January 15 to pick and pay for a plan. Coverage will be retroactive to January 1.

Other states have extended either the deadline to choose a plan or to pay the premium. Oregon and Maryland pushed back the deadline to pick a policy to December 27, with one Maryland insurer giving applicants until December 31.

Consumers in Maryland and Oregon have until January 15 to pay, while California is giving residents until January 6, Vermont until January and Connecticut until January 10.

Share your story: Are you signing up for Obamacare?

Regardless of where you live, you should call your insurer of choice to check its deadlines and, after you pay, check your enrollment status.

For those who miss the deadline altogether, don't worry. You can still get coverage starting February 1 if you pick a plan by January 15 and pay by the end of January.

Open enrollment ends March 31. The uninsured must pick a plan by then to avoid a penalty. These procrastinators would see coverage start May 1.

First Published: December 22, 2013: 10:03 AM ET

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Online retailer Overstock to accept Bitcoin

Overstock.com CEO Patrick Byrne is endorsing Bitcoin. His company is the first major U.S. retailer to do so.

NEW YORK (CNNMoney)

Byrne said customers will be able to use the virtual currency to make purchases on Overstock.com (OSTK), which sells everything from digital cameras and bed sheets to patio furniture and even cars. The company is expected to have total revenue of $1.3 billion for 2013, according to FactSet Research.

"We think there's going to be a market in Bitcoin, and we want to get in front of it," said Byrne. "We want to be the first major e-tailer that accepts them." Byrne first made comments about Overstock.com accepting Bitcoin in an interview with Bitcoin blog newsBTC and later in the Financial Times.

Overstock plans to begin accepting Bitcoin near the end of the second quarter of 2014. Byrne said the move stems partly from his background in the Austrian School of economics, which is associated with the Libertarian party in the United States.

"We're the guys who like gold," he said. "We think the monetary base should not be something that a government can create with a stroke of a pen."

Unlike traditional currencies, Bitcoin is not backed by any government authority or central bank. It exists only on the internet and is "mined" by powerful computers that solve complex math puzzles.

Byrne said he is concerned about the possibility of "bad currency wars" in the future. He said the U.S. dollar is already being undermined by the Federal Reserve's easy money policies and by overspending by politicians in Washington.

Related: What is Bitcoin?

Like gold, Byrne said Bitcoin should hold its value better than the dollar because it is "mathematically constrained" and cannot be manipulated by government authorities.

There are currently 12.1 million bitcoins in circulation, according to blockchain.info. The total number of bitcoins is capped at 21 million.

Critics say Bitcoin is at best a fad and at worst a haven for criminals looking to buy and sell illegal goods anonymously. But supporters argue that Bitcoin is a more democratic alternative to traditional currencies.

Former U.S. Congressman Ron Paul, an outspoken Libertarian from Texas, has said that Bitcoin could be the dollar's "destroyer" if it goes mainstream.

Bitcoin has exploded in value this year, rising from about $13 in January to more than $1,200 earlier this month. On Friday, bitcoins were trading at about $739 on the Mt. Gox exchange.

The currency is prone to wild swings and experts say Bitcoin will remain volatile as the technology evolves.

Byrne acknowledged that the volatility is a problem and that Overstock will need to "continually convert Bitcoins into dollars" to avoid losing money. Eventually, he said there will be a derivatives market that will allow companies to hedge their exposure to Bitcoin.

Related: Bitcoin worth almost as much as gold

In some respects, it's not a surprise that Overstock would move to accept Bitcoin. The company is unconventional. It is known for quirky ads and for shortening its name online to O.co.

Byrne also has a penchant for writing long, rambling shareholder letters in earnings reports. And he famously appeared on "60 Minutes" to complain about short sellers who were betting against his stock. He even told CNNMoney in 2003 that "When opportunities come along where we can knee the shorts in the groin, that's always good for fun and amusement. That's just icing on the cake."

But Overstock is not the first business to embrace Bitcoin.

British entrepreneur Richard Branson made a splash in November when he announced that his that his commercial space travel venture, Virgin Galactic, will allow customers to pay for their flights with Bitcoin.

China's leading search engine Baidu (BIDU) also accepts Bitcoin for certain services. And a car dealer in California recently accepted Bitcoin as payment for a Tesla (TSLA) Model S, valued at $100,000.

Bitcoin has been a particularly popular investment in China, but regulators have been cracking down. This week, China's largest bitcoin exchange, BTC China, abruptly stopped accepting new deposits. That came after China's central bank issued a warning and announced new rules for financial institutions dealing in bitcoins earlier this month.

European Union officials have also warned about the risks of Bitcoin and may consider regulating the currency.

First Published: December 20, 2013: 2:10 PM ET

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Target offers 10% discount after credit card hack

NEW YORK (CNNMoney)

"We recognize this has been confusing and disruptive during an already busy holiday season," Target CEO Gregg Steinhafel said in a statement Friday. "Our guests' trust is our top priority at Target and we are committed to making this right."

The company also provided details Friday about the extent of the hack and the information that could have been compromised.

The nation's No. 2 general merchandise retailer said cards used at its brick-and-mortar stores between Nov. 27 and Dec. 15 of this year may have been impacted.

Target (TGT, Fortune 500) said there is no indication that any debit card PIN numbers were compromised. The retailer also claimed it doesn't appear that the three- or four-digit security code visible on the face of credit cards were breached. That means that the debit and credit cards that were compromised cannot be used to withdraw cash from an ATM or to shop online.

Related: 4 things to do after your card has been hacked

But lawyer Robert Ahdoot, part of a legal team in California that has filed a lawsuit seeking class action status on behalf of Target customers, said he had spoken to shoppers who claimed thieves had used their debit card information to withdraw money from ATMs.

The lawsuit alleges negligence on the part of the retailer, and also says Target failed to promptly notify victims of the hack.

"Target has an obligation to provide adequate security for the financial information they collect," Ahdoot said. He recommended that consumers who suspect that their cards may have been compromised change their PIN numbers as a precaution.

Target spokeswoman Molly Snyder said the retailer "typically doesn't comment on pending litigation."

Target said it believes customers' birth dates and social security numbers weren't compromised. The retailer said it gave Visa, MasterCard (MA, Fortune 500), Discover (DFS, Fortune 500) and American Express (AXP, Fortune 500) the card numbers of those who may have been impacted, and that these companies will monitor the cards for fraud.

As a precaution, J.P. Morgan Chase & Co. said it was temporarily limiting ATM withdrawals to $100 a day and purchases to $300 a day for Chase customers in the U.S. whose debit cards are at risk, the company said in a letter to affected account holders.

Meanwhile, Target is also monitoring its own card, the REDcard, for potential unauthorized activity.

Steinhafel said the affected customers "will not be held financially responsible for any credit and debit card fraud."

"[T]o provide guests with extra assurance, we will be offering free credit monitoring services," Steinhafel said. "We will be in touch with those impacted by this issue soon on how and where to access the service."

To help answer questions about the incident, Target has set up a hotline for customers. Shoppers have been reporting long hold times, so Target said it will beef up its staffing.

Target didn't specify how its systems were hacked. But judging by the scope of the breach and the kind of information that criminals obtained, security experts say hackers apparently targeted the retailer's point-of-sale system. That means they either slipped malware into the terminals where customers swipe their credit cards, or they collected customer data while it was en route from Target to its credit card processors.

The retailer said it had notified authorities and financial institutions immediately after it was made aware of the unauthorized access, and had hired a forensics team to investigate how the breach may have occurred. The issue that allowed the breach has been identified and resolved, Snyder said.

First Published: December 20, 2013: 3:26 PM ET

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Online retailer Overstock to accept Bitcoin

Overstock.com CEO Patrick Byrne is endorsing Bitcoin. His company is the first major U.S. retailer to do so.

NEW YORK (CNNMoney)

Byrne said customers will be able to use the virtual currency to make purchases on Overstock.com (OSTK), which sells everything from digital cameras and bed sheets to patio furniture and even cars. The company is expected to have total revenue of $1.3 billion for 2013, according to FactSet Research.

"We think there's going to be a market in Bitcoin, and we want to get in front of it," said Byrne. "We want to be the first major e-tailer that accepts them." Byrne first made comments about Overstock.com accepting Bitcoin in an interview with Bitcoin blog newsBTC and later in the Financial Times.

Overstock plans to begin accepting Bitcoin near the end of the second quarter of 2014. Byrne said the move stems partly from his background in the Austrian School of economics, which is associated with the Libertarian party in the United States.

"We're the guys who like gold," he said. "We think the monetary base should not be something that a government can create with a stroke of a pen."

Unlike traditional currencies, Bitcoin is not backed by any government authority or central bank. It exists only on the internet and is "mined" by powerful computers that solve complex math puzzles.

Byrne said he is concerned about the possibility of "bad currency wars" in the future. He said the U.S. dollar is already being undermined by the Federal Reserve's easy money policies and by overspending by politicians in Washington.

Related: What is Bitcoin?

Like gold, Byrne said Bitcoin should hold its value better than the dollar because it is "mathematically constrained" and cannot be manipulated by government authorities.

There are currently 12.1 million bitcoins in circulation, according to blockchain.info. The total number of bitcoins is capped at 21 million.

Critics say Bitcoin is at best a fad and at worst a haven for criminals looking to buy and sell illegal goods anonymously. But supporters argue that Bitcoin is a more democratic alternative to traditional currencies.

Former U.S. Congressman Ron Paul, an outspoken Libertarian from Texas, has said that Bitcoin could be the dollar's "destroyer" if it goes mainstream.

Bitcoin has exploded in value this year, rising from about $13 in January to more than $1,200 earlier this month. On Friday, bitcoins were trading at about $739 on the Mt. Gox exchange.

The currency is prone to wild swings and experts say Bitcoin will remain volatile as the technology evolves.

Byrne acknowledged that the volatility is a problem and that Overstock will need to "continually convert Bitcoins into dollars" to avoid losing money. Eventually, he said there will be a derivatives market that will allow companies to hedge their exposure to Bitcoin.

Related: Bitcoin worth almost as much as gold

In some respects, it's not a surprise that Overstock would move to accept Bitcoin. The company is unconventional. It is known for quirky ads and for shortening its name online to O.co.

Byrne also has a penchant for writing long, rambling shareholder letters in earnings reports. And he famously appeared on "60 Minutes" to complain about short sellers who were betting against his stock. He even told CNNMoney in 2003 that "When opportunities come along where we can knee the shorts in the groin, that's always good for fun and amusement. That's just icing on the cake."

But Overstock is not the first business to embrace Bitcoin.

British entrepreneur Richard Branson made a splash in November when he announced that his that his commercial space travel venture, Virgin Galactic, will allow customers to pay for their flights with Bitcoin.

China's leading search engine Baidu (BIDU) also accepts Bitcoin for certain services. And a car dealer in California recently accepted Bitcoin as payment for a Tesla (TSLA) Model S, valued at $100,000.

Bitcoin has been a particularly popular investment in China, but regulators have been cracking down. This week, China's largest bitcoin exchange, BTC China, abruptly stopped accepting new deposits. That came after China's central bank issued a warning and announced new rules for financial institutions dealing in bitcoins earlier this month.

European Union officials have also warned about the risks of Bitcoin and may consider regulating the currency.

First Published: December 20, 2013: 2:10 PM ET

22.17 | 0 komentar | Read More

Target offers 10% discount after credit card hack

NEW YORK (CNNMoney)

"We recognize this has been confusing and disruptive during an already busy holiday season," Target CEO Gregg Steinhafel said in a statement Friday. "Our guests' trust is our top priority at Target and we are committed to making this right."

The company also provided details Friday about the extent of the hack and the information that could have been compromised.

The nation's No. 2 general merchandise retailer said cards used at its brick-and-mortar stores between Nov. 27 and Dec. 15 of this year may have been impacted.

Target (TGT, Fortune 500) said there is no indication that any debit card PIN numbers were compromised. The retailer also claimed it doesn't appear that the three- or four-digit security code visible on the face of credits cards were breached. That means that the debit and credit cards that were compromised cannot be used to withdraw cash from an ATM or to shop online.

Related: Related: 4 things to do after your card has been hacked

But lawyer Robert Ahdoot, part of a legal team in California that has filed a lawsuit seeking class action status on behalf of Target customers, said he had spoken to shoppers who claimed thieves had used their debit card information to withdraw money from ATMs.

The lawsuit alleges negligence on the part of the retailer, and also says Target failed to promptly notify victims of the hack.

"Target has an obligation to provide adequate security for the financial information they collect," Ahdoot said. He recommended that consumers who suspect that their cards may have been compromised change their PIN numbers as a precaution.

Target spokeswoman Molly Snyder said the retailer "typically doesn't comment on pending litigation."

Target said it believes customers' birth dates and social security numbers weren't compromised. The retailer said it gave Visa, MasterCard (MA, Fortune 500), Discover (DFS, Fortune 500) and American Express (AXP, Fortune 500) the card numbers of those who may have been impacted, and that these companies will monitor the cards for fraud.

Target is also monitoring its own card, the REDcard, for potential unauthorized activity.

Steinhafel said the affected customers "will not be held financially responsible for any credit and debit card fraud."

"[T]o provide guests with extra assurance, we will be offering free credit monitoring services," Steinhafel said. "We will be in touch with those impacted by this issue soon on how and where to access the service."

To help answer questions about the incident, Target has set up a hotline for customers. Shoppers have been reporting long hold times, so Target said it will beef up its staffing.

Target didn't specify how its systems were hacked. But judging by the scope of the breach and the kind of information that criminals obtained, security experts say hackers apparently targeted the retailer's point-of-sale system. That means they either slipped malware into the terminals where customers swipe their credit cards, or they collected customer data while it was en route from Target to its credit card processors.

The retailer said it had notified authorities and financial institutions immediately after it was made aware of the unauthorized access, and had hired a forensics team to investigate how the breach may have occurred. The issue that allowed the breach has been identified and resolved, Snyder said.

First Published: December 20, 2013: 3:26 PM ET

22.17 | 0 komentar | Read More

3 new arrests in Silk Road case

NEW YORK (CNNMoney)

An indictment unsealed this week in New York accuses the trio of helping to operate Silk Road, a website shut down in October that offered an anonymous place to buy drugs, weapons and other illicit products. During its two-and-a-half years in operation, prosecutors say the site handled hundreds of millions of dollars' worth of unlawful transactions for over one hundred thousand buyers.

Silk Road's alleged owner -- Ross Ulbricht, also allegedly known by his online handle "Dread Pirate Roberts" -- is currently in custody and facing charges related to money laundering and drug trafficking.

Related: Arrests in U.K. follow Silk Road bust

The indictment claims that Ulbricht paid two of the new defendants -- Andrew Michael Jones, 24, and Gary Davis, 25 -- to work as administrators on the site, while the third, 40-year-old Peter Philip Nash, allegedly worked as the head moderator for the Silk Road discussion forums. They allegedly received salaries between $50,000 and $75,000 annually.

The three men are charged with conspiracy to commit money laundering, computer hacking and narcotics trafficking. Contact information for their attorneys was not immediately available.

Jones was arrested Thursday in Virginia and appeared in court today, a spokeswoman for the U.S. Attorney's Office in Manhattan said. Davis was arrested Thursday in Ireland, while Nash was arrested Thursday in Australia.

First Published: December 20, 2013: 1:31 PM ET

22.17 | 0 komentar | Read More

Wow! U.S. economy revved up

NEW YORK (CNNMoney)

Gross domestic product -- the broadest measure of economic activity -- grew at a 4.1% annual pace in the third quarter, up from the 2.8% pace that was first reported in November.

It was the fastest quarter for economic growth in two years, according to the Bureau of Economic Analysis.

The government typically reports its GDP figures at least three times, and Friday's report is the final number for the third quarter.

"With each of the revisions, we've been getting better data and it's showing there's some better traction with the consumer than we had initially expected," said Wells Fargo senior economist Sam Bullard. "There is more momentum in the economy than we originally thought."

Larger increases in consumer spending as well as business investments in commercial real estate, industrial equipment and intellectual property like software were some of the main reasons why GDP was revised higher.

This is encouraging news, especially after economists had largely written off the previous GDP revision for the third quarter because much of the growth came from businesses building up their inventories.

When businesses stockpile goods, it can be a mixed signal. It could be a sign that companies expect demand will pick up in the future -- so they are stocking their shelves in advance. Or, it could be an indication that demand is weaker than expected, and goods are lingering on the shelves longer than planned as a result.

Friday's report showed that larger inventories still accounted for about a third of the economic growth -- and that boost could be unsustainable. Looking ahead, economists expect fourth quarter GDP to look a bit weaker, as businesses draw down those inventories.

Considering the economy also grew at a far slower rate in the first half of the year, growth will probably average between 2% and 3% for 2013 overall.

Related: The economy: What's ahead in 2014

While the economy is expected to slow in the fourth quarter, experts are more hopeful about 2014.

Economists at Jefferies & Co. expect the economy to grow 3.3% next year. That would be the biggest level of annual growth in ten years. They also expect the job market to finally replace all the private sector jobs lost in the recession.

Things are also looking up for the Federal Reserve, which decided Wednesday to start slowing, or tapering, its stimulus program in light of better economic data. Friday's strong GDP report "vindicates the Fed's decision," said Sal Guatieri, senior economist with BMO Capital Markets.

"It also suggests the economy is poised for stronger growth in the new year than the middling 2.0% pace of the past year, meaning the tapering process will continue," he said.

First Published: December 20, 2013: 9:10 AM ET

22.16 | 0 komentar | Read More