NEW YORK — The stock market stayed at record levels Monday as investors remained confident that stimulus measures from the world’s central banks would help revive global economic growth.
Stocks have surged since bottoming out in a slump that stretched from mid-September to mid-October. The rally has been driven by optimism that central banks in Europe, China and Japan will take action to help invigorate economic growth outside the U.S., after the Federal Reserve ended its bond-buying stimulus program last month.
You clearly have momentum favoring stocks right now.
“You clearly have momentum favoring stocks right now,” said Russ Koesterich, chief investment strategist at Blackrock.
The Standard & Poor’s 500 index (^GPSC) rose 5.91 points, or 0.3 percent, to 2,069.41. The index has climbed for seven of the last eight days and is at an all-time high, having gained almost 12 percent this year.
The Dow Jones industrial average (^DJI) rose 7.84 points, less than 0.1 percent, to 17,817.90. The Nasdaq composite gained 41.92 points, or 0.9 percent, to 4,754.89.
On Monday, gains were led by the so-called consumer discretionary sector, which includes retailers such as Coach (COH), Urban Outfitters (URBN) and Gap (GPS). These stocks should benefit most if the consumers go on a spending spree this holiday season.
Coach rose 95 cents, or 2.6 percent, to $37.41 as analysts at Stifel reiterated their belief that the maker of luxury clothing and accessories is “doing the right things to reinvigorate the brand.” The analysts believe that the stock’s price could climb as high as $47. The stock is down 32 percent for the year.
Telecommunications stocks were among the day’s biggest losers. Verizon (VZ) and AT&T (T) slumped after analysts at Citigroup (C) published a gloomy review of the sector and predicted a tough year ahead for the two phone giants.
Verizon fell 71 cents, or 1.4 percent, to $49.50. Citigroup cut its outlook on the stock to “neutral,” predicting that the company’s earnings will come in lower than most Wall Street analysts expect. Revenue growth at the big telecommunication companies could crimped by more intense competition and higher prices for wireless spectrum. AT&T dropped 58 cents, or 1.6 percent, to $34.70.
Stocks were still riding momentum from Friday, when China’s central bank lowered a key interest rate and European Central Bank President Mario Draghi said he was willing to step up the bank’s efforts to stimulate the region’s struggling economy.
Oil fell ahead of a crucial meeting in Vienna on Thursday of the Organization of Petroleum Exporting Countries. Traders will be looking for a possible agreement to cut production to shore up prices. The price of crude has tumbled 26 percent since June as producers kept output stable while demand in Europe and other markets weakened.
Benchmark U.S. crude fell 73 cents, or 1 percent, to $75.78 per barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 68 cents to close at $79.68 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX, wholesale gasoline fell 2.3 cents to $2.033 a gallon, heating oil fell a penny to $2.395 a gallon and natural gas fell 11.5 cents to $4.151 per 1,000 cubic feet.
The slump in energy prices bodes well for the upcoming holiday shopping season, said Jennifer Ellison, a principal of San Francisco-based Bingham, Osborn & Scarborough. She predicts that any money that consumers save at the gas pump is likely to be spent, rather than saved.
The falling price of oil “affects consumers in a lot of different ways, but most importantly you’ve got more money in your pocket,” said Ellison. “That has a big impact especially at a time like holiday season when people are spending anyway.”
In U.S. government bond trading, prices edged up. The yield on the benchmark 10-year Treasury note fell to 2.30 percent from 2.31 percent on Friday. The dollar resumed its climb against the Japanese yen. The U.S. currency rose to 118.26 yen from 117.79 yen Friday. The euro rose to $1.2439 from $1.2360.
In metals trading, the price of gold fell $2, or 0.2 percent, to $1,195.70 an ounce. Silver dropped 1.9 cents, or 0.1 percent, to $16.38 an ounce. Copper declined 3.2 cents, or 1 percent, to $3 a pound.
What to Watch Tuesday:
The Commerce Department releases third-quarter gross domestic product at 8:30 a.m. Eastern time. Standard & Poor’s releases the S&P/Case-Shiller index of home prices for September and the third quarter at 9 a.m.
The Conference Board releases the Consumer Confidence Index for November at 10 a.m.
Hewlett-Packard (HPQ) reports quarterly financial results after the market closes.
Ideally, you’ve been tracking your spending all year. What were your spending patterns? Did you go over or under in a certain category? Take a look at what you actually spent versus what you had budgeted for. Do you need to change your expectations? Review your financial goals from last year and consider whether they will work for you in the coming year and make the necessary adjustments. If you paid off a loan, see if you can redirect that money into a paying off another debt or adding to a savings or retirement account. Don’t let the money get eaten up by miscellaneous expenses. If you don’t have a budget, start one now. Mint.com, Level and Check are all good free budgeting tools with features to help you create a budget from scratch, track your spending and set financial goals.
1. Look over your spending
You’re entitled to one free yearly credit report from each of the three major credit reporting bureaus: Equifax, Experian and TransUnion. If you space the reports out, you can get one every four months. Get a report now so you know where you stand before heading into the new year. Look over your report and check for errors or negative information. If your credit history could use some improvement, make 2015 the year you get back on track.
2. Order your free credit reports
That means checking your balances, interest rates, and cash back or other rewards. Call for a rate reduction if you think you might be paying too much in interest. Make a large payment if you are carrying debt and have extra cash in the bank. If you can’t pay down a chunk of the debt you accumulated this year, create a debt repayment plan that will get it down next year.
3. Get your credit cards in check
Making just one extra mortgage payment each year can cut your loan down by years, saving you thousands in interest. Also, making an extra mortgage payment means you can claim an extra month of mortgage interest deductions in 2014. If you can’t afford an extra payment, make January’s payment before the first of the month. If the payment gets credited before Jan. 1, 2015, it will still be tax-break-eligible for 2014. You’ll be covered for your January payment and you’ll get an additional tax benefit.
4. Make an extra mortgage payment
If you haven’t already, make a contribution to a 401(k), individual retirement account or SEP IRA if you are self-employed. You can contribute up to $5,500 to a traditional or Roth IRA – $6,500 if you’re 50 or older. A 401(k) pre-tax contribution must be made through a payroll deduction, so talk to your payroll administer now before it’s too late. Some people put off making IRA contributions until April’s tax deadline, but you’ll be missing out on up to six months of potential investment growth. Don’t wait – just do it now.
5. Contribute to a retirement account
Look over your health, life, homeowners, renters and car insurance plans. Do you need to adjust your coverage, premiums or add any dependents? Do you need to purchase new coverage, like life or disability? Did you get married, have a baby or buy a house? Do you have any changes coming in 2015 that you need to plan for? Those life events all trigger insurance changes. P.S.: If any of those are yeses, you might need to change your W-2, too.
6. Review your insurance plans
It’s time to finally automate your bills and savings. The more you can automate, the easier your finances will be in 2015. Automating helps you pay your bills on time and maintain a regular savings plan. This is also a good time to cancel any automatic subscriptions you aren’t using: video and music streaming, magazines, premium subscriptions, etc.
7. Automate everything
Recent fluctuations in the stock market might have left you unbalanced. Take a minute to make sure you aren’t too heavily weighted toward one asset class. This will help you remain on track to reach your retirement goals by rebalancing to match your target allocations. If you have losses in any taxable account holdings, you might want to consider tax-loss harvesting to offset any gains or ordinary income. You can also consider tax-gain harvesting to reduce longer-term capital gains tax rates. If all this sounds overwhelming, talk to your retirement plan administrator or a certified financial planner for assistance.
8. Rebalance your portfolio
If are going to itemize deductions on your 2014 tax return, consider making a charitable contribution to a cause you believe in. The donation must be made to a qualifying organization and the tax benefit only saves you a fraction of what you donate, but you’ll be supporting a good cause.
9. Make a tax-deductible charitable contribution
If you have a Flexible Spending Account for health care or other qualifying expenses, now is the time to submit any outstanding claims. You can only carry over $500 from one year to the next, so get those claims in now. This is the perfect excuse to make those doctor appointments you’ve been putting off all year.
10. Drain your Flexible Savings Account
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