Dow Hits Record, Erasing Great Recession Losses
(NEW YORK) — The stock market is back. Five and a half years after the start of a frightening drop that erased $11 trillion from stock portfolios and made investors despair of ever getting their money back, the Dow Jones industrial average has regained all the losses suffered during the Great Recession and reached a new high. The blue-chip index rose 125.95 points Tuesday and closed at 14,253.77, topping the previous record of 14,164.53 on Oct. 9, 2007, by 89.24 points. “It signals that things are getting back to normal,” says Nicolas Colas, chief market strategist at BNY ConvergEx, a brokerage. “Unemployment is too high, economic growth too sluggish, but stocks are anticipating improvement.” The new record suggests that investors who did not panic and sell their stocks in the 2008-2009 financial crisis have fully recovered. Those who have reinvested dividends or added to their holdings have done even better. Since bottoming at 6,547.05 on March 9, 2009, the Dow has risen 7,706.72 ...
Before the Bell: U.S. economy, Buffett, Best Buy in focus
Wall Street was pressed a bit on Friday as investors were set to parse personal-income and -spending and other data and awaited the start of the budget sequester. The euro is back below $1.30 after weak economic reports in Europe, including record joblessness in the euro zone. Groupon is again in focus after it dismissed its CEO; earnings reports from Best Buy, Salesforce.com and Gap are in focus. And Warren Buffett offers his yearly letter the Berkshire Hathaway shareholders, a note that’s always a magnet for investor attention.
Why Warren Buffett Loves Ketchup, Plain and Simple
For many Americans, Warren Buffett isn’t just one of the world’s greatest investors. He’s a folksy grandpa with a mysterious wizard’s touch. Everything about him—his upbringing, employees, travels, personal life, investing style, even his home decor—has been picked over for details about what exactly goes into his pixie dust. (There have been two dozen books published on him in the past year alone). Naturally, his $28 billion purchase of HJ Heinz with U.S.-Brazilian private equity group 3G Capital (owner of Burger King and a piece of Anheuser-Busch InBev) on Feb. 14 caused a lot of chatter. But the move is no mystery; it’s classic Buffett, and here’s why. Buffett lauded Heinz for good management and for making “great tasting products.” No surprise that the “Sage of Omaha” is a big burger eater. But that’s hardly enough to sway Buffett the number-cruncher. As market watchers know, he’s considered a value investor—someone who buys companies when they’re cheap—which ...
Paul B. Farrell: Time bomb to market meltdown ticks louder
The ticking time bomb gets louder as we keep watching an avalanche of predictions that echo Warren Buffett’s earlier warnings of recession, bubbles and another market meltdown.
Can the Estate Tax Solve the Fiscal Cliff?
The battle over the fiscal cliff has so far revolved around income taxes for the wealthy and entitlement reform. But there are many other ways the federal budget deficit could be trimmed that haven’t received much of the spotlight recently, and one of those is the estate tax. The estate tax has gone through many changes over the past ten years, as the tax cuts enacted early in President George W. Bush‘s first term reduced the rate Americans pay on inheritances and raised the threshold amount under which estates are exempt from the tax. The tax was briefly repealed altogether in 2010, before it was reenacted in a 2010 compromise which set the estate tax rate at 35% for estates valued at more than $5 million ($10 million for a couple), indexed to inflation. But without Congressional action, the estate tax will revert to its pre-2001 form January 1st. Under that version of the law, estates valued over $1 million were subject to an estate tax on a graduated basis from 37% to 55%, and a 5% ...