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Stocks move higher on earnings, acquisition news

By WTOP Staff

ALEX VEIGA
AP Business Writer

Stocks shook off last week’s doldrums and finished sharply higher Monday, driven by a round of corporate deal news and strong earnings from Citigroup.

Investors cheered AECOM Technology’s $4 billion acquisition of engineering and construction services company URS Corp., sending URS’ stock up 11.6 percent and AECOM 8.6 percent.

Citigroup rose 3 percent after the bank turned in better-than-expected results and disclosed it has agreed to pay $7 billion to settle a federal probe into its mortgage securities business. JPMorgan Chase & Co. and Goldman Sachs, due to report earnings Tuesday, also got a lift.

All told, the three major stock indexes notched their second gain in two days. That’s a turnaround from last week, when the Standard & Poor’s 500 index lost 0.9 percent, its worst showing since April.

Concern about Portugal’s Espirito Santo International, which reportedly missed a debt payment last week, harked back to issues that spawned Europe’s debt crisis.

On Monday, investors appeared to be reassured any problems would be contained.

“Investors are saying if this Portugal thing really isn’t significant from an impact standpoint, and the earnings are coming in good … stocks ought to be going higher,” said Phil Orlando, chief equity strategist at Federated Investments.

The major indexes rose in premarket trading as investors digested Citigroup’s earnings. They opened in the green and held steady through the entire session.

The Standard & Poor’s 500 index rose 9.53 points, or 0.5 percent, to 1,977.10. The index is down 0.4 percent from its most recent all-time high of 1,985.44 set July 3.

Nine of the 10 sectors in the S&P 500 rose, led by energy stocks. Utilities fell the most.

The Dow Jones industrial average added 111.61 points, or 0.7 percent, to 17,055.42. The Dow is down slightly from its July 3 record of 17,068.65.

The Nasdaq composite gained 24.93 points, or 0.6 percent, to 4,440.42.

The three stock indexes are all up for the year.

The yield on the 10-year Treasury note rose to 2.54 percent from 2.52 percent late Friday.

With the market trading near all-time highs, investors will be focused this week on a large number of corporate earnings, including quarterly reports from General Electric, Google, Bank of America and Johnson & Johnson.

So far investors like what they see.

“We got started off with a very good report out of Citibank this morning,” Orlando said. “And economic news this week — retail sales, capacity utilization, housing data, confidence data — is all supposed to be pretty good.”

Citigroup rose $1.42, or 3 percent, to $48.42.

Several other big investment banks also rose. Morgan Stanley added 40 cents, or 1.3 percent, to $31.81, while Goldman Sachs rose $2.20, or 1.3 percent, to $167. JPMorgan Chase climbed 49 cents, or 0.9 percent, to $56.29.

Recent data point to an improving U.S. economy after a slow start this year.

Employers added 288,000 jobs last month, the fifth straight month of gains above 200,000. And the national unemployment rate slid to 6.1 percent, a 5 1/2-year low.

More people with jobs means more paychecks, which could boost consumer spending and growth.

“You’re starting to stack up some fairly impressive jobs numbers,” said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. “There’s a lot of momentum to this market.”

That momentum is helping drive corporate deals. On Monday, generic drugmaker Mylan said it agreed to buy Abbott Laboratories’ generic-drug business in developed markets for $5.3 billion. Mylan’s stock added $1.04, or 2.1 percent, to $51.24, while shares of Abbott gained 52 cents, or 1.3 percent, to $41.82.

Meanwhile, Kindred Healthcare said it would pay $16 per share to buy up to a 14.9 percent stake in Gentiva Health Services. That’s just short of the 15 percent limit imposed by a shareholder rights plan that Gentiva’s board adopted earlier this year. Kindred climbed 36 cents, or 1.5 percent, to $24.74, while Gentiva gained 39 cents, or 2.5 percent, to $16.21.

In other deal news, Kodiak Oil & Gas agreed to sell itself to Whiting Petroleum in an all-stock deal. Kodiak rose 68 cents, or 4.8 percent, to $14.91. Whiting jumped $6.04, or 7.7 percent, to $84.58.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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