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Stocks end higher following strong run in August

By WTOP Staff

ALEX VEIGA
AP Business Writer

The Standard & Poor’s 500 index delivered its fourth record high in five days Friday, ending with the biggest monthly gain since February.

The milestone-crushing run capped a week when the S&P eclipsed the 2,000-point mark for the first time. And the index ended August with a gain of 3.8 percent.

Months of solid job gains, strong company earnings and a bevy of corporate deals contributed to the rally, part of a bull market that’s been rumbling on for more than five years.

The market appeared ready for a correction at the end of July, but the downturn didn’t last long. For most of August, stocks have managed to shake off geopolitical conflicts from Ukraine to Gaza and Iraq.

“The market has a good underlying tone,” said Mike Levine, portfolio manager of Oppenheimer Equity Income Fund. “People feel like the economy is gaining some strength and the job market is getting better and corporate earnings should be pretty good.”

Even in a quiet day of trading ahead of the Labor Day holiday, stocks eked out a gain.

The indexes opened higher, but eased soon after, as investors got the news that consumer spending fell and income growth slowed in July.

Traders also had their eye on the conflict in Ukraine, as a group of European Union foreign ministers accused Russia of invading the eastern region of the country and said Moscow should be punished with more economic sanctions.

The markets began to recoup some losses by midmorning, however, when a gauge of consumer sentiment showed greater optimism in August, particularly among higher-income groups. Some better-than-expected company earnings also lifted stocks.

Overall, the indexes wavered between small gains and losses throughout the afternoon.

“We’re seeing a listless, pre-holiday market,” said Drew Wilson, an investment analyst at Fenimore Asset Management.

The S&P 500 index finished up 6.63 points, or 0.3 percent, to 2,003.37. It closed above 2,000 for the first time on Tuesday and has gained 8.4 percent this year.

The Dow Jones industrial average gained 18.88 points, or 0.1 percent, to end at 17,098.45 on Friday, while the Nasdaq composite added 22.58 points, or 0.5 percent, to 4,580.27.

Stocks rose broadly, with all 10 sectors in the S&P 500 index higher for the day, led by utilities.

The gains marked the index’s best August since 2000.

“It’s been a good August,” said Linda Duessel, senior equity market strategist at Federated Investors. “I imagine it’s the end of the month and people closing their books are saying ‘I better show I’m invested, we had a brand-new high this week.'”

Nevertheless, some investors may grow hesitant next month. September is widely considered the stock market’s worst.

Since World War II, the S&P 500 index has ended the month with a loss half of the time. Recently, however, September has been good to investors. The S&P 500 has turned in a September loss just twice in the last decade: in the depths of the financial crisis in 2008 and following a fight over raising the government’s borrowing limit in 2011.

Last year, investors saw an array of threats lined up after Labor Day, including a fight over the federal budget and a possible U.S. attack on Syria. The result? The S&P 500 gained 3 percent in September.

Elsewhere in financial markets, bond prices were little changed. The yield on the 10-year Treasury note held at 2.34 percent.

In metals trading, gold slipped $3 to $1,287.40 an ounce, silver fell 14 cents to $19.40 an ounce and copper rose a penny to $3.14 a pound.

The price of oil rose for the fourth day in a row on concerns about the escalating tensions between Ukraine and Russia, the biggest oil exporter outside of OPEC. Benchmark U.S. crude rose $1.41 to close at $95.96 a barrel. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 73 cents to close at $103.19. Wholesale gasoline rose 3 cents to close at $2.783 a gallon. Natural gas rose 2.1 cents to close at $4.065 per 1,000 cubic feet.

Among stocks making big moves:

— Avago Technologies, which makes semiconductors used in smartphones, computer servers and other devices surged $5.73, or 7.5 percent, to $82.09. The big gain came after the company reported earnings that beat analysts’ estimates. Avago rose the most in the S&P 500 index and touched an all-time high.

— Splunk soared 19.1 percent after the data management software developer reported earnings late Thursday that beat expectations. It also raised its full-year profit and revenue estimates. The stock gained $8.64 to $53.93.

— Tesla Motors and a state-owned Chinese phone carrier announced plans Friday to build 400 charging stations for electric cars in a bid to promote adoption of the technology in China. Tesla increased $5.84, or 2.2 percent, to $269.70.

U.S. financial markets will be closed Monday for Labor Day.

___

AP Business Writers Kelvin Chan in Hong Kong and Matthew Craft in New York contributed to this report.

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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