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Stocks end mixed; S&P closes near all-time high

By WTOP Staff

STEVE ROTHWELL
AP Markets Writer

NEW YORK (AP) — The stock market got back on track in the second quarter.

After a bumpy start to the year, the Standard & Poor’s 500 index resumed its upward climb in the March-June period. The index rose 4.7 percent, versus a 1.3 percent gain in the first three months of the year.

As the weather improved this spring, investors received more encouraging news about hiring and manufacturing. Investors sold stocks in January as they worried about the impact of an unusually harsh winter on the economy.

Stocks were also propelled higher by a turnaround in some of the riskier parts of the market. Internet, biotechnology and small-company stocks all rebounded after dragging the market lower in March.

Company earnings, already at record levels, continued to grind higher. Even an escalating conflict in Iraq that pushed up oil prices in June wasn’t enough to stop stocks from rising.

“I’m not seeing anything that’s going to derail the overall upward climb of the market,” said Karyn Cavanaugh, senior market strategist with Voya Investment Management. “The economic backdrop is getting better, so companies will make even more money.”

The Standard & Poor’s 500 index fell 0.73 points on Monday, less than 0.1 percent, to 1,960.23, just two points from its record close of 1,962.87 set June 20.

The Dow Jones industrial average fell 25.24 points, or 0.2 percent, to 16,826.60 and posted a gain of 2.4 percent in the quarter. The Nasdaq composite rose 10.25 points, or 0.2 percent, to 4,408.18, rising 5 percent in the quarter.

Stocks flickered between small gains and losses on Monday, keeping major indexes close to record levels, as investors assessed the latest data on housing.

Home builders rose following news that the number of Americans who signed contracts to buy homes shot up in May. The National Association of Realtors said its seasonally adjusted pending home sales index rose 6.1 percent to 103.9 last month. It was the sharpest month-over-month gain since April 2010.

Gains for home builders were led by D.R. Horton, which rose 75 cents, or 3.1 percent, to $24.58.

Utility stocks also did well. The sector rose 0.8 percent, making it the biggest gainer of the 10 industry sectors that make up the S&P 500 industry.

The group has climbed 16.4 percent this year as bond yields have fallen, forcing investors to look elsewhere for income.

General Motor was among the day’s losers.

Trading in the automaker’s stock was briefly suspended in the afternoon after the company announced that it was recalling at least 7.6 million more vehicles dating back to 1997 to fix faulty ignition switches.

Perhaps the biggest surprise for investors in the second quarter was a strong rally in government bonds.

At the start of the year, most analysts and investors had expected bond yields to rise as the Federal Reserve gradually cut back on its economic stimulus and wound down its bond-buying program and the economy improved.

Instead, the opposite has happened. Bonds have rallied, pushing yields lower. Bonds have gained as inflation stayed low and as some investors remained skeptical about the long-term strength of the economy.

The yield on the 10-year Treasury note, which falls as bond prices rise, dropped to 2.52 percent on Monday from 2.54 percent on Friday. It had started the year at 3 percent.

Joe Hieder, a regional managing principal at Rehmann Financial, a wealth adviser, said he was surprised that long-term interest rates were still moving lower. He noted that the low rates could continue to encourage people to buy homes. They’re “a benefit to everyone, potentially except the retirees that are living on fixed income.”

Among other stocks making big moves:

— Pittsburgh-based PPG Industries announced plans to buy Mexico’s Consorcio Comex for $2.3 billion. The maker of paints wants to bolster its business in Mexico and Central America. PPG Industries rose $6.10, or 3 percent, to $210.15.

— MannKind, a bio pharmaceutical company, jumped 96 cents, or 9.6 percent, to $10.96 after the Food and Drug Administration on Friday approved Afrezza, a diabetes medication to help patients control their blood sugar levels during meals.

— Allergan fell after the company updated investors on the status of some of the key drugs that it is developing. The drug maker said the FDA had raised issues about a drug that is being developed as treatment of migraines in adults. The stock dropped $4.73, or 2.7 percent, to $169.20.

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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