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Stocks slip, leaving S&P 500 down for September

By WTOP Staff

MATTHEW CRAFT
AP Business Writer

NEW YORK (AP) — A suddenly stormy month on the stock market came to a quiet end on Tuesday. Major indexes drifted to a slight loss, leaving the Standard & Poor’s 500 down 1.6 percent for September, its third monthly drop this year.

The market spent Tuesday wavering between minor gains and losses, but there were big moves beneath the surface. Crude oil prices plunged, dragging down Chevron and other oil and gas companies. Ford Motor fell after cutting its profit forecast, while eBay jumped after announcing plans to spin off PayPal.

Trading has turned choppy over recent weeks. Lingering concerns over conflicts around the world, corporate profits and the strength of the global economy have all played a role, said Robert Pavlik, chief market strategist at Banyan Partners. Investors are also wary of the fact that some of the market’s worst swoons have happened in the months of September and October.

“People are unsure at this time of the year,” Pavlik said. “We’re heading into October. Like September, it’s another typically bad month for the market.”

The Dow Jones industrial average fell 28.32 points, or 0.2 percent, to 17,042.90. The S&P 500 slipped 5.51 points, or 0.3 percent, to 1,972.29. The Nasdaq composite lost 12.46 points, also 0.3 percent, to 4,493.39.

Despite its bad reputation, September has actually been mostly good to investors. Before this year, the S&P 500 turned in a September loss just twice over the past decade: during the financial crisis in 2008 and again following a fight over raising the government’s borrowing limit in 2011.

This month looked to be different. The S&P 500, the main benchmark for mutual funds, reached a record high on Sept. 18, supported by news of stronger economic growth in the U.S and reassuring words from Federal Reserve officials about keeping interest rates low. Turbulence hit the following week as investors began questioning whether the stock market was overpriced. Some warned that the market had been calm for too long.

“It’s like when warm currents and cold currents converge, you get a lot of waves and turbulence,” said Jack Ablin, chief investment officer at BMO Private Bank. “We’re now at a point where we have sharply different opinions in the market. It’s a tug of war.”

EBay jumped 8 percent on Tuesday, the biggest gain in the S&P 500, following news that it plans to spin off its PayPal payment service into a publicly traded company next year. Carl Icahn, the billionaire investor, had been pushing eBay to make just such a move. EBay’s President and CEO John Donahoe will step down after overseeing the split. Ebay jumped $3.97 to $56.63.

Benchmark U.S. crude plunged $3.41, or 3.6 percent, to settle at $91.16. More evidence of plentiful supplies have pushed prices down. Oil has also been dropping as the value of the U.S. dollar rises against other currencies.

Pro-democracy protests continued in Hong Kong, a major world financial hub. Thousands of peopled blocked streets in the business district and surrounding streets. They want the Chinese government to allow open elections for Hong Kong’s top office, whereas Beijing wants candidates to be vetted by a panel dominated by supporters of the mainland government.

Hong Kong’s Hang Seng Index tumbled 1.3 percent. Tokyo’s Nikkei 225 was down as much as 1.5 percent before ending the day with a loss of 0.8 percent. China’s Shanghai Composite Index added 0.3 percent.

In Europe, a new batch of economic reports furthered speculation that the European Central Bank might provide more support for the region’s economy. The annual inflation rate dropped to 0.3 percent, the weakest rate since October 2009. The report added pressure on the ECB to start a more aggressive stimulus program through large-scale purchases of bonds.

Major markets in Europe ended mixed. France’s CAC-40 rose 1.3 percent, while Germany’s DAX gained 0.5 percent. Britain’s FTSE 100 slipped 0.4 percent.

Back in the U.S., Ford’s stock fell after an executive said late Monday that the car maker will fall short of its earnings targets this year. Bob Shanks, Ford’s chief financial officer, said record profits in North America aren’t enough to offset trouble in South America, where Ford expects to lose $1 billion this year, and Russia, where falling sales and a steep fall in the ruble took the company by surprise. Ford fell 32 cents, or 2 percent, to $14.79.

In other trading, U.S. government bond prices headed lower. That nudged the yield up on the 10-year Treasury note to 2.50 percent from 2.48 percent late Monday. Bond prices and their yields move in opposite directions.

Gold fell $7.20 to settle at $1,211.60 an ounce, silver fell 51 cents to $17.06 an ounce and copper dropped 5 cents to $3.01 a pound.

In other energy trading, Brent crude, a benchmark for many international oils imported by U.S. refiners, dropped $2.53, or 2.6 percent, to $94.67 a barrel in London.

On the NYMEX, wholesale gasoline dropped 11 cents to $2.587 a gallon, heating oil fell 5.69 cents to $2.647 a gallon and natural gas slid 3.3 cents to $4.121 per 1,000 cubic feet

___

AP Business Writer Joe McDonald contributed from Bangkok.

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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