Economy just muddling along

The U.S. economy grew at a 2.4% annual pace in the fourth quarter, marking a slowdown primarily driven by cuts in government spending.

NEW YORK (CNNMoney)

Overall, economic growth was not quite as strong at the end of 2013 as originally thought, according to revised data released by the Commerce Department on Friday.

Gross domestic product -- the broadest measure of economic activity -- grew at a 2.4% annual pace in the fourth quarter, revised down from 3.2% originally reported last month.

The number fell short of economists' expectations and is disappointing after faster 4.1% growth in the prior quarter.

A decline in federal spending was the largest drag on growth, subtracting a full percentage point from GDP. (If government spending had merely remained the same, the economy would have grown at a 3.4% pace.)

Given that drag, overall economic growth is "still impressive," Paul Ashworth, chief U.S. economist for Capital Economics said.

Weakness in the housing sector also weighed on the economy. Investment in residential real estate slowed for the first time in three years, according to the report.

As usual, the U.S. economy is still driven primarily by consumer spending, which picked up slightly in the fourth quarter. International trade was also a large driver of economic growth, as exports grew at a faster clip than imports from other countries.

Business investment contributed to growth, albeit at a slower pace than in the previous quarter.

First Published: February 28, 2014: 9:17 AM ET

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United canceled 22,500 flights so far this year

United has canceled 22,500 flights so far this year.

NEW YORK (CNNMoney)

That was four times as many canceled flights for United as during the first two months of last year.

United disclosed the number of cancellations Thursday night and said its revenue would suffer as a result.

Shares of United Continental (UAL, Fortune 500) were down 3% in premarket trading Friday.

Shares of Delta Air Lines (DAL, Fortune 500) were also down -- Delta is the No. 3 airline behind American Airlines Group (AAL) and United.

Chicago-based United Continental was not the only airline with weather problems, but with major hubs in Chicago and Newark, it has been hit particularly hard.

Related: Honeymoon hotspots - splurges vs. steals

Through the first six weeks of the year, flight tracker masFlight estimates that there were 75,000 canceled flights at U.S. airlines, the largest number since U.S. airspace was shutdown following the Sept. 11 terrorist attack.

JetBlue Airways (JBLU, Fortune 500), which operates 45% of its flights through New York or Boston, has also been hit hard. It warned in early January that 1,800 canceled flights the first week of the year would cost it $45 million in revenue and $30 million in profits.

Related: Delta makes radical change in frequent flier program

First Published: February 28, 2014: 8:07 AM ET

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Mobile apps overtake PC Internet usage in U.S.

NEW YORK (CNNMoney)

Mobile devices accounted for 55% of Internet usage in the United States in January. Apps made up 47% of Internet traffic and 8% of traffic came from mobile browsers, according to data from comScore, cited Thursday by research firm Enders Analysis. PCs clocked in at 45%.

The shift follows a freefall in PC sales, which suffered their worst decline in history last year.

Smartphone adoption, meanwhile, increased 39%, acording to research firm IDC. This trend will likely continue thanks to improved user experience on mobile apps and the expansion of high-speed 4G access, said Andrew Lipsman, vice president of marketing and insights at comScore (SCOR).

As of January, 55% of American adults had smartphones, while 42% owned tablets, according to the Pew Research Center.

First Published: February 28, 2014: 8:34 AM ET

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How young tech millionaires invest

Mike Zhang, 23, became a millionaire recently after he sold an online company he started at the age of 14.

NEW YORK (CNNMoney)

Wealth managers from some of the largest Wall Street firms -- including Goldman Sachs, Merrill Lynch and Credit Suisse -- started pursuing the freshly minted millionaire. Some even sent him gifts in an effort to woo his business.

But Zhang, now 23 years old, was turned off by their approach.

"When I have a rainy day, I don't want to talk to an opportunist," he said.

Zhang instead turned to Andrew Palmer, a managing director at Bel Air Investment Advisors. The two had met the summer of 2011 at an event where Zhang was being honored with an entrepreneurship award for his success as the founder and CEO of Airsoft Megastore, an online store for lifelike toy guns and plastic BBs used in simulation combat competitions known as airsoft games. It's sort of like paintball.

He started the company in 2004, when he was just 14, after returning from a trip visiting relatives in China. Zhang found that the airsoft guns and gear were selling for much less in China than they were in the U.S. He convinced his parents to let him import products from China and sell them online.

Related: WhatsApp founder: Food stamps to billionaire

After he graduated high school in 2008, Zhang attended the University of California-Berkeley's business program for a few months before deciding to drop out to run his business full-time. When he sold the company to another entrepreneur, it was generating more than $20 million in annual revenue.

Though Zhang didn't much have money to invest when he first met Palmer, the young entrepreneur appreciated Palmer's interest in his company and advice. And by the time the sale happened, Zhang said Palmer had become "a trusted advisor." So early last year, Palmer helped Zhang use a small chunk of his new wealth to start another company. Palmer is managing the remainder of it -- about $10 million.

Bel Air, which primarily manages money for very wealthy individuals, has been getting a number of new clients like Zhang lately: young, newly-made tech millionaires.

"They tend to more hands-on, engaged and interested in details than our typical entrepreneur clients," said Darrell Krasnoff, also a managing director at Bel Air. "They come to us with an engineer's approach, so we go deeper with the amount of information we give them. We show them more data, charts and graphics to show what's possible."

What are they investing in? Mostly stocks. But Bel Air's younger clients are also putting a sizable chunk in riskier alternative investments like hedge funds, master limited partnerships and real estate as well as safer, income generating assets like bonds. In other words, they are making sure their portfolios are diverse.

The entrepreneurs also like to keep between 10% and 15% of their assets free to invest in their own ventures or other start-ups.

"These young, successful clients have a mentality that the world is their oyster, that they'll continue to succeed," said Krasnoff. "Very few sell their companies and retire. Most of the time, they're on to their next project almost immediately."

To that end, Zhang recently launched RetailOops.com, software to help e-commerce companies operate more efficiently.

Related: 15 best financial sites and apps

But not all young entrepreneurs are looking to traditional financial advisors to help them manage their money. A growing number of them are also, unsurprisingly, relying on a service with roots in the tech world.

Wealthfront, which CNNMoney named as one of the 15 best financial apps and sites last year, is the fastest-growing online financial advisor. Assets have ballooned from less than $100 million at the start of 2013 to more than $650 million today.

Nearly 60% of the site's customers are under the age of 35, and many are based in Silicon Valley. The top employers of their clients are a Who's Who of influential tech companies: Google, Facebook, LinkedIn, Microsoft, Twitter, eBay, Amazon and Apple.

On average, these younger Wealthfront customers have just under $100,000 in their accounts.

"These are people who grew up on computers, they're comfortable with software, and they have a lot of wealth because their companies share it with them," said Wealthfront CEO Adam Nash. "They really like the idea of an investment system that's automated, so they can spend more time on what they care most about."

Nash, who has an engineering background, is frequently invited to tech companies to talk about how their employees should manage their personal finances.

He first did the talk at LinkedIn (LNKD) about a month before it went public. Last October, he delivered the presentation to workers at Twitter (TWTR) just before its IPO. Nash covers topics from behavioral finance theories to the benefits of compound growth. He stresses what it takes to achieve long-term investing success.

"It's not that millennials don't trust the stock market, but ... they don't think there's a way to beat the market," Nash said. "They're actually pretty realistic in their expectations. They know that the market goes up over time, but they've been through two crashes. That's why they like the idea of passive, diversified investments."

Zhang agreed. He said he's not trying to live off the money he made by selling his company.

He hopes his investments will grow conservatively -- and that he'd rather spend more time working on his latest start-up than worrying about the daily ups and downs of the stock market.

First Published: February 27, 2014: 9:14 AM ET

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Trust the private sector, not Washington, to get job training right

(Fortune)

Washington's job training is an expensive, bureaucratic, ineffective mess. Start with the more than $18 billion spent on 47 training programs across nine agencies. Job Corps alone spends as much as $76,000 per person, often to place young people in minimum-wage jobs, according to a 2012 report by Oklahoma Sen. Tom Coburn. On top of that, the nonpartisan America Forward calculates that when all workforce-development programs are included, the price tag to taxpayers is closer to $60 billion a year. Just imagine all the political interests in congressional districts with long-term addictions to those federal contract dollars. Change won't come easily.

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Ukraine crisis spills onto world markets

LONDON (CNNMoney)

Stock markets fell and the dollar, Swiss franc and gold gained as investors sought refuge in traditional "safe haven" assets.

Financial fallout from last week's removal of a pro-Russian government in Ukraine had been largely limited to the currencies of both countries.

But the crisis spilled onto world markets after armed men occupied government buildings in the Ukrainian region of Crimea and raised the Russian flag, a day after Moscow ordered massive military exercises just across the border.

"That Russia's leadership would react negatively to the overthrow of a pro-Moscow administration in Kiev is hardly a surprise," wrote Kit Juckes, global strategist for Societe Generale in London. "But the market's mood has soured somewhat at the latest developments and risk appetite has been hit."

All Europe's major indexes were in the red, with Germany's DAX suffering the most. By late morning it had lost 1.6%. U.S. stock futures turned lower, after starting the day pointing higher.

Related: CNN coverage of Ukraine

The dollar gained ground against the euro, the British pound and central European currencies, while gold was 0.3% firmer.

Three months of mass protests in the capital Kiev culminated in last week's ousting of President Viktor Yanukovych. He had sought closer ties with Moscow, angering many Ukrainians who want the country to embrace the European Union.

Yanukovych fled -- his whereabouts are still unknown -- but he retains significant support among many Russian speakers in Ukraine's east and south, including Crimea, home to Russia's Black Sea naval fleet.

The political turmoil has left Ukraine staring bankruptcy in the face. Russia has frozen a $15 billion lifeline it offered late last year. Western powers have yet to agree to emergency support to keep the economy running for the next few months while the nation holds new elections and negotiates a formal bailout with the International Monetary Fund.

Secretary of State John Kerry said Wednesday that the U.S. was considering $1 billion in loan guarantees for Kiev. But the country will need much more help than that. Acting finance minister Yuriy Kolobov said Monday that Ukraine needs $35 billion over the next two years.

Related: What next for Ukraine's economy?

Ukraine has about $13 billion worth of debt falling due this year, including a $1 billion bond in June, arrears on Russian gas imports, and about $3 billion owed to the IMF.

Its foreign currency reserves have fallen so low that the central bank has been forced to abandon support for the currency -- the hrvynia. It plunged again Thursday and has now lost over 20% of its value against the dollar since the start of the year.

Even if conflict is avoided, some analysts fear that Ukraine's depressed economy will be torn apart by tensions between Russia and the EU -- its two biggest trading partners.

"A replay of the Cold War would cause immense damage to both Russia and Europe, and most of all to Ukraine, which is situated between them," wrote hedge fund heavyweight George Soros this week. "Ukraine depends on Russian gas, and it needs access to European markets for its products; it must have good relations with both sides."

First Published: February 27, 2014: 7:56 AM ET

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Plan for the critical first decade of retirement

Michael Kitces, 36, partner and director of research, Pinnacle Advisory, argues that to safeguard your retirement savings, start with a small stake in stocks and gradually increase your equity holdings.

NEW YORK (Money Magazine)

Below advice from our fourth expert, financial planner Michael Kitces.

Big idea no. 4: Protect your critical first decade

Michael Kitces has taken a well-established idea in planning and followed it to a surprising, even wild-sounding, conclusion about what it means for your investing.

The idea is called sequence risk: After you retire and start drawing on your savings, it's not just the long-term average rate of return that matters.

The order in which those returns arrive is crucial. Retire near the start of a bear market or even just a long period of mediocre returns, and the effect of withdrawing dollars from a shrinking or stagnant portfolio is that you won't have as much to gain from a rebound. Take a person with a 5% initial withdrawal rate who retired in 1971, just in time to catch the nasty 1973-74 bear, ran out of cash in 24 years. (That's the reason planners say 5% is too high.) Then take the same set of annual returns and reverse the order so that the first 10 years are good, and in 24 years there is still 50% more money than in year one.

The obvious lesson is to be conservative when you retire -- but if you are too safety-conscious, it will be harder to make your money grow fast enough to last for a long retirement. Most financial planners -- as well as target-date mutual funds aimed at retirees -- approach this by putting investors in a moderate amount of stocks at 65 and then reducing that stake each year.

Calculator: Will you have enough to retire?

Here's the surprise: Kitces, in a paper he wrote with Wade Pfau (LINK), argues that you can protect more savings by starting with a smaller stake in stocks and then gradually increasing your equity exposure. The idea is that if you can get through the early years with your portfolio intact, you can still handle owning stocks later.

In tests of thousands of simulated markets, Kitces and Pfau found that portfolios starting with as little as 20% in stocks and increasing to 60% had a better chance of lasting 30 years than portfolios that began high in stocks and gradually decreased. The portfolios also had less severe shortfalls when they failed.

Related: Do your retirement dreams match?

The differences were not large: A rising-equity portfolio might be a percentage point or two more likely to last 30 years than a traditional approach. What's compelling is the idea that you don't have to bear so much risk during the early years. That could protect you from the angst you would experience -- and the panicky moves you might make -- if you see your hard-earned savings dwindle when you know you still have 25 to 30 more years ahead to pay for.

Reaction to the paper was strong. Finance professor Moshe Milevsky tweeted, "Sure. Why not? Let's allocate 90-year-old grandma to 90% stocks."

Kitces says he never recommended such a high stake. Milevsky tells MONEY he was being hyperbolic and agrees that sequence risk is pernicious, but adds, "Probabilities and shortfalls don't capture all dimensions of risk."

Kitces says he's enjoyed sparking a debate. "That's the inevitable reality of challenging conventional wisdom," says Kitces.

MAKE THE RIGHT MOVES

Don't be afraid to drift. It's one thing to write a paper pinpointing a theoretically optimal strategy. But as Kitces acknowledges, making a plan to increase your market risk as you get older doesn't sit right in most people's stomachs.

Related: 10 Best Places to Retire

Keep in mind, though, that if markets do well in your early years, even a small amount in stocks will grow your portfolio. Once that happens, you may feel more comfortable owning more stocks. (If markets don't do well? You'll be glad you were conservative.) You don't even have to pull the buy trigger: Kitces notes that if you simply forgo rebalancing, your equity stake is likely to drift up over time.

You can start with a guaranteed income. Kitces says some fairly popular, conservative retirement strategies actually work as well as they do in part because they create the opportunity to own more stocks later. For example, if you put a portion of your assets into an immediate annuity with a payout that covers your basic expenses, you can allow stocks to take up a larger portion of the portfolio left over as their value increases.

Michael Kitces's mind, and his thumbs, rarely seem to take a break. He's a power tweeter with more than 12,000 followers. He also writes a financial planning blog called Nerd's Eye View. A theater minor in college, he serves on the board of a local improv company. Kitces says his mission is to "shine a light on long-held assumptions" about investment and income strategy.

On the pages that follow are four big ideas from some of the retirement-planning world's sharpest minds:

Forget the 4% withdrawal rule: Wade Pfau, professor of retirement income, American College (LINK TK)
You'll spend less as you age: David Blanchett, director of research, Morningstar Investment Management (LINK TK)
Plan to pay for future health costs: Carolyn McClanahan, president, Life Planning Partners (LINK TK)
Plan for the critical first decade: Michael Kitces, partner and director of research, Pinnacle Advisory (LINK TK)
Social Security is the best deal: Alicia Munnell, professor of management, Boston College (LINK TK)

First Published: February 26, 2014: 9:20 AM ET

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Social Security is the best deal

Alicia Munnell, 71, professor of management, Boston College,

NEW YORK (Money Magazine)

Below, advice from our fifth expert, Alicia Munnell, one the nation's leading retirement researchers.

Social Security benefits

For each year you can put off collecting Social Security, your annual benefit grows.

NOTE: Assumes benefit of $25,200 at 66. SOURCE: Social Security Administration

Big idea no. 5: Social Security is the best deal going

Just nine years ago President George W. Bush was leading a push to allow workers to direct a portion of their Social Security taxes into a personal account. By doing so, the thinking went, you could earn higher returns by investing in the stock market compared with what you would receive with Social Security.

You don't hear much about ideas like that these days. "Since the financial crisis, we have seen a sea change in how people view Social Security," says Alicia Munnell, the head of Boston College's Center for Retirement Research. "Social Security paid benefits, paid them on time, and they didn't go down."

Calculator: Will you have enough to retire?

Munnell is a former Clinton administration hand and was never a fan of Bush-style private accounts to begin with. It's clear, though, that the politics have changed. While Munnell has argued for keeping Social Security mostly as is, Sen. Elizabeth Warren (D-Mass.) is calling to expand the program's benefits instead.

Don't hold your breath. But it's a good bet that Social Security isn't going anywhere. And Munnell says you should get smart about how you use it.

What Social Security calls the full retirement age is 66 for those born between 1943 and 1954. (It gradually moves up to 67 for those born later.) If you claim at 62, the earliest possible age, you'll receive 25% less than at 66. But "full" retirement is just jargon left over from old Social Security rules that have since changed. Now, for each year you defer to age 70, your benefit keeps increasing until it is 76% more than if you start at 62.

"The best-kept secret in America is that the real full retirement age is 70," says Munnell. Actually there may be an even better-kept one: Munnell's group has shown that today's low rates make waiting on Social Security a particularly good deal.

Related: Do your retirement dreams match?

Basically, it beats the alternative investment. Each year you hold off from claiming is like buying an annuity: The money you give up now comes back to you later as extra lifetime income. For example, you can get 8% more inflation-adjusted pay if you wait until 67 instead of collecting at 66. That compares with a 5.4% real income from an annuity.

MAKE THE RIGHT MOVES

Work, if that works. Not everyone wants to work longer, but it makes waiting to collect easier. It can increase your payout further if more peak-earning years go into the benefits equation.

Use savings, carefully. You may be able to defer claiming for a year or two by tapping your portfolio for more income. "As long as you don't overdo withdrawals, this strategy makes sense since you end up with higher lifetime benefits," says Christine Fahlund, senior financial planner at T. Rowe Price. When waiting doesn't work: If you can't do without the cash. Or if you think you won't live to 80, since in that case the extra income doesn't add up to as much.

Related: Best Places to Retire with a nice nest egg

Couples have more options. The strategies get more complex for married couples, since one of you may qualify for spousal benefits or receive a payout as a surviving spouse. If you both don't want to wait until age 70 to file, a calculator like the Social Security Benefits Evaluator at troweprice.com can help you decide which spouse should file and when. With the right strategy, you can get some income now as well as a higher benefit later.

Extending your career gracefully

Work is a bigger part of what used to be considered the retirement years: One-third of people 65 to 69 are in the labor force, up from 22% in 1990. More years of pay can help make it easier to reach your retirement goals, but what if you can't keep your job as long as you'd like? Or you just hate it? Here are some strategies to manage the late phase of your career:

Use online tools to stay sharp. Lynda.com offers online courses on business skills such as online marketing or using software tools. You can also get tips on networking or transitioning to freelance. The site costs $25 a month.

Ask for flexibility. If you still like working but the hours and office politics are wearing thin, talk to your employer about telecommuting or going part-time on a trial basis. "Bosses are more willing to make accommodations than you might expect," says career coach Bobbie Jo Hunter. Now is a good time to ask: Employers are still cautious about staffing up, but the improving economy gives them an incentive to hang on to experienced people.

Early in her career Alicia Munnell headed research at the Boston Federal Reserve. In 1993 she became an assistant Treasury secretary and later joined the Council of Economic Advisers. She then moved to Boston College, where she founded the Center for Retirement Research. Her 2004 book, Coming Up Short, was one of the first to sound the alarm about the flaws of 401(k) plans.

On the pages that follow are four big ideas from some of the retirement-planning world's sharpest minds:

Forget the 4% withdrawal rule: Wade Pfau, professor of retirement income, American College (LINK TK)
You'll spend less as you age: David Blanchett, director of research, Morningstar Investment Management (LINK TK)
Plan to pay for future health costs: Carolyn McClanahan, president, Life Planning Partners (LINK TK)
Plan for the critical first decade: Michael Kitces, partner and director of research, Pinnacle Advisory (LINK TK)
Social Security is the best deal: Alicia Munnell, professor of management, Boston College (LINK TK)

First Published: February 26, 2014: 9:21 AM ET

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Plan to pay for future health costs

Carolyn McClanahan, 49, president, Life Planning Partners, and former ER doctor, works health care costs -- which can vary widely -- into retirement planning.

NEW YORK (Money Magazine)

Below, advice from our third expert, Carolyn McClanahan, a financial planner and former ER doctor.

Savings needed for a married couple to pay for health care

And one item that really moves the needle is how much you spend on prescription drugs.

50% chance of having enough, with typical high drug costs	90% chance with typical high drug costs	90% chance with high drug costs

NOTE: Typical drug cost is median; high is 90th percentile. SOURCE: EBRI

Big idea no. 3: Plan health and wealth

In general, putting in the effort to do the right things now will make your retirement easier to pay for. Max out your 401(k), invest in lower-cost funds, diversify, and keep your debt low, and it will all add up to more income later.

But other things you know you ought to do -- hit the gym, eat right, make sure you see the doctor regularly -- actually make your retirement plan more complicated. Good health means you are going to have to save more. "There is a cost to living longer," says Carolyn McClanahan, a former ER doctor who now works primarily as a financial planner in Jacksonville.

Working health costs into your plan isn't simple. "The numbers vary widely based on your need for health care services and how long you live," says Paul Fronstin of the Employee Benefit Research Institute.

McClanahan argues that health doesn't have to be a complete unknown, though. She asks her clients a few simple but important questions. "Have you ever spent a night in the hospital?" opens the door to discussing big medical issues that might affect how long you live.

To get a feel for your longevity, McClanahan suggests using an online calculator such as Livingto100.com.

McClanahan then asks clients what medications they take. A man who is typical in how much he spends on prescriptions needs $122,000 saved to pay all out-of-pocket health expenses if he wants to have a 90% chance of having enough. A woman needs $139,000. Note that this number isn't how much you'll spend (that's actually more); it's how much you have to have already saved by 65.

Calculator: Can you retire early?

But it can be more. If you think it's likely that you'll use a lot of expensive meds -- for example, if you already have several chronic conditions -- you should consider these numbers: Among men, the high prescription spenders (the 90th percentile) need to set aside a further $50,000 of their nest egg from the start. For women, it's $56,000.

McClanahan says she also tries to address a more sensitive topic: How are you likely to respond to health crises near the end of your life? The costs can be large: The average person has out-of-pocket expenses of $39,000 in the last five years, and the top 10% spend $89,000 or more.

"When faced with a terminal illness, do you want to do everything you can to extend your life? Or will you just want palliative care? There's no judgment," she says. "But if you don't know how you'll react, you should be saving more."

MAKE THE RIGHT MOVES

Protect your health care dollars. In addition to dictating how much money you'll need, your health affects the shape of your spending and your investment strategy. If you know you have high fixed medical costs, you can't assume you'll be one of those retirees David Blanchett (LINK) says decrease spending.

Related: Do your retirement dreams match?

From the outset, you'll need to be conservative with your spending -- and your portfolio. "You can't afford to take risks with your money," says McClanahan. A healthier retiree can afford to be a more aggressive investor, because she'll have more discretion over spending in bad years. The extra return also helps fund those additional years.

Hedge against longevity. Immediate fixed annuities can, for a lump sum, guarantee a lifelong payout. But since today's low interest rates mean payouts are small, McClanahan suggests buying in chunks over time. You will get more income, especially if rates go up.

Carolyn McClanahan says her career switch from ER doctor to planner began when she and her husband tried to find an adviser. "They were mostly salespeople who wanted to sell expensive mutual funds," says McClanahan. Frustrated by the lack of good advice and wearying of 12-hour ER shifts, McClanahan went back to school part-time. She still volunteers as a physician.

On the pages that follow are four big ideas from some of the retirement-planning world's sharpest minds:

Forget the 4% withdrawal rule: Wade Pfau, professor of retirement income, American College (LINK TK)
You'll spend less as you age: David Blanchett, director of research, Morningstar Investment Management (LINK TK)
Plan to pay for future health costs: Carolyn McClanahan, president, Life Planning Partners (LINK TK)
Plan for the critical first decade: Michael Kitces, partner and director of research, Pinnacle Advisory (LINK TK)
Social Security is the best deal: Alicia Munnell, professor of management, Boston College (LINK TK)

First Published: February 26, 2014: 9:23 AM ET

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China currency weakness shocks investors

HONG KONG (CNNMoney)

For years, investors have viewed the steady appreciation of the Chinese currency as one of the few things in life they could count on. Indeed, it's gained about 10% since the middle of 2010.

But markets have been shocked in recent days by a sudden change in direction -- the yuan has fallen 1% against the dollar over the past six days.

One dollar now buys 6.12 yuan, up from a low of 6.04 in late January.

That may seem like a small move, but it's significant for a currency that is tightly controlled and allowed to trade only within a narrow range.

Analysts see the hand of the People's Bank of China in the reversal -- but it's not clear exactly what the central bank is up to.

The move could be part of an effort to put the squeeze on "hot money" -- a term used to describe cash drawn in from foreign markets where interest rates are low, and invested in Chinese assets in the hope of much higher returns.

"The [central bank] could have felt these inflow pressures were excessive and were based off aggressive appreciation expectations, which it has now managed to curb," HSBC analysts wrote in a research note.

Related story: Beijing loses billions as rich skip taxes

The authorities may also be laying the groundwork for a more flexible exchange rate in the long term, especially as Beijing pushes ahead with economic reforms aimed at giving markets a great role in the economy.

Signs of economic weakness could also be contributing to the currency's decline. Factory activity has stumbled in recent months, setting off alarm bells about the pace of growth. And investors remain worried about the risks building in the country's shadow banking system after a period of rapid credit expansion.

Related story: Chinese snap up fine art for use in laundering schemes

The yuan's decline, should it persist, will prove a major headache for investors that were betting on the currency's steady rise.

Financial products that depend on the yuan's appreciation -- including some complicated derivatives -- are popular with investors in Asia. The bets had been rock solid, but investors are now likely rushing to sell.

The most likely scenario, however, is that this abrupt shift will soon reverse. And investors should be better prepared next time the currency hits a speed bump.

"We think that this week's heartburn about China's currency management is a sign of things to come," Eurasia Group analysts said.

"As Beijing gives up the reins of its currency and the domestic banking sector, however slowly, by definition its ability to smooth the business cycle with currency interventions and stimulus will diminish."

First Published: February 26, 2014: 5:36 AM ET

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Apple fixes security flaw for Macs

Apple issued a security fix for Macs four days after hole was patched for mobile devices.

NEW YORK (CNNMoney)

The software update patches a security hole in OS X, the operating system for Apple computers. It comes four days after the same bug was fixed for iPhones, iPads and iPod Touches, which run on iOS software.

The issue was first disclosed on Friday when Apple (AAPL, Fortune 500) released the security patch for mobile devices.

Security experts said there was no evidence hackers discovered the issue before Apple disclosed it, but Mac users were potentially vulnerable since then.

Left unfixed, hackers could potentially read private communications sent over Apple devices, including emails, instant messages, social media posts and even online bank transactions.

Related: BlackBerry unveils new Q20 phone

Those communications usually happen over secure channels. But an error in Apple's code could allow hackers on the same network as the user to view private information, security expert Dmitri Alperovitch told CNNMoney.

So for the most part, Apple users were vulnerable when using an unsecured network at places like a coffee shop or airport.

The software update was issued for both Mavericks and Mountain Lion versions of OS X. Older versions were not vulnerable to the security hole, according to an Apple spokesman.

First Published: February 25, 2014: 8:23 PM ET

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Stocks: Holding steady as earnings flow

Click on chart to track premarkets

NEW YORK (CNNMoney)

Barnes & Noble (BKS, Fortune 500), Target (TGT, Fortune 500), Abercrombie & Fitch (ANF) and TJX (TJX, Fortune 500) are all set to release earnings before the market opens.

Then, after the close, Baidu (BIDU) and J.C. Penney (JCP, Fortune 500) will report results.

U.S. stock futures were ticking higher ahead of the opening bell.

Among the companies set for gains when the market opens is Anheuser-Busch InBev (BUD).

The global brewer, which makes popular beers including Budweiser and Stella Artois, reported better-than-expected fourth quarter results and outlined plans to boost sales during the upcoming FIFA World Cup in Brazil.

Meanwhile, Credit Suisse (CS) shares could slip after a Senate report released Tuesday outlined how the Swiss bank helped clients hide billions from the IRS. The bank's executives will appear before the Senate Wednesday.

Shares in First Solar (FSLR) are set for a big fall after reporting earnings that missed expectations. The stock was down by roughly 15% premarket.

Gun company Sturm Ruger (RGR) reported gains in sales and profit after the close Tuesday.

Related: Fear & Greed Index, still greedy

In economic news, data on January sales of new homes will be announced at 10 a.m. ET Wednesday.

Investors are also awaiting testimony from Federal Reserve Chair Janet Yellen on Thursday, which is likely to affect market sentiment.

U.S. stocks slipped slightly Tuesday. The Dow, S&P 500 and Nasdaq all fell modestly.

Related: CNNMoney's Tech30

European markets were broadly lower in morning trading. The FTSE 100 in London was declining by roughly 0.4%.

Asian markets ended with mixed results -- the main indexes in Australia and Japan moved slightly lower while other markets posted gains.

The yuan has been dropping in recent days, shaking confidence in the typically robust Chinese currency.

The price of Bitcoin continued to slide following the shutdown Monday of leading exchange Mt. Gox.

First Published: February 26, 2014: 5:29 AM ET

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Detroit reaches deal on retiree health care

Protestors oppose cuts to healthcare coverage for city of Detroit retirees.

NEW YORK (CNNMoney)

"We're happy we're able to reach any agreement short of protracted litigation," Nowling said. "Things are starting to move in the bankruptcy case and we think it's moving in a positive way."

The cost of providing health care coverage for retirees accounted for about half of the $11.5 billion in unsecured debt that the city cited in its July 18 bankruptcy filing. The plan presented by Orr calls for using the bankruptcy court process to slash those debts to $2 billion.

Related: $330 million deal could save art in bankrupt Detroit

The tentative deal only covers the cost of health care, not pension benefits, which also could be cut in the city's bankruptcy reorganization. Pension benefits have some protections under the Michigan state constitution, but it is not clear whether those protections mean anything in the bankruptcy court process. The retiree health care coverage has even fewer legal protections.

The city has provided health care coverage to retirees who are not yet eligible for Medicare that is similar to what active employees get. It has also offered a supplemental Medicare policy.

In October, the city announced plans to end health care coverage for retirees not yet eligible for Medicare. Instead, those retirees would get a $125-a-month stipend to buy coverage on their own, either through the Obamacare exchanges or a current employer.

Michigan governor offers $350 million bailout for Detroit pensions

But first because of problems with the Obamacare web sites, and then at the request of mediators, the city delayed cutting those benefits. They were due to take effect March 1.

There had been a hearing in bankruptcy court set for Feb 3, to hear a legal challenge to these benefit cuts. But on Friday, mediators in the case announced the two sides had reached an agreement and that the legal challenge would be dropped.

Details of the agreement still need to be worked out, according to Nowling. And it will need to be approved by bankruptcy court judge Steven Rhodes.

Rhodes has already rejected a previous agreement between Orr and two major banks that hold city debt, the Bank of America (BAC, Fortune 500) and UBS (UBS). That agreement was also backed by mediators, so it's not certain that Rhodes will approve the deal.

Spokespeople for the city's unions were not available for comment Friday.

First Published: January 31, 2014: 2:41 PM ET

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Will Obama's pledge get the unemployed back to work?

NEW YORK (CNNMoney)

But actually hire them? Their pledge doesn't go quite that far.

On Friday, the White House unveiled a pact signed by 300 companies that have agreed to implement new best practices intended to stamp out discrimination against the long-term unemployed -- generally defined as those who have been out of work for six months or longer.

"Because they've been unemployed ... so long, folks are looking at that gap in the résumé and they're weeding them out before these folks even get a chance for an interview," Obama told CNN's Jake Tapper in an exclusive interview Thursday.

The companies pledge not to post job ads that discourage applicants who are unemployed. For example, in some cases, job listings would use language such as "applicants must be currently employed.'

They also agree to review their procedures so they don't inadvertently discriminate against applicants with long gaps in their résumés, and they commit to cast a broad net in recruiting.

The question is whether these steps will have any meaningful effect. Will they lead to jobs or even help remove some of the stigma that the long-term unemployment face?

Related: 'I just want a job'

Jamie May and Lena Rouse know that stigma first hand. Both have been unemployed for over a year now.

May feels she's being discriminated against for two reasons: The gaps in her résumé and her age (she's 56). But in interviews, employers just keep telling her she's overqualified.

"The discrimination is very covert. It's not blatant, but that doesn't mean it's not there," May said. "When I first read about the 300 companies, I thought 'it's just a bunch of talk'."

Rouse would prefer to see the White House push for tax credits for hiring the long-term unemployed.

"A pledge sounds like a waste of time," said Rouse. "Businesses are for-profit. If there are concerns about higher costs with hiring the long-term unemployed, then we should find financial incentives to make the long-term unemployed the preferred hires."

Companies like Boeing (BA, Fortune 500), Dell, Walmart, (WMT, Fortune 500) Apple (AAPL, Fortune 500), McDonald's (MCD, Fortune 500)and Ford (F, Fortune 500) have already taken Obama's pledge. But the White House also made clear that signing it didn't mean the 300 companies were discriminating against the unemployed.

It's more about sending a message, said Mike Evangelist, a policy analyst with the National Employment Law Project.

"I think it's an important first step," he said. "You're talking about changing attitudes, but it's not going to directly create new jobs."

When reporters asked just how many people would be helped by the pledge, the White House wouldn't answer that question.

"This pledge is saying that those who are long-term unemployed should get a fair shot," Gene Sperling, director of the National Economic Council, said on a conference call Thursday.

Are you unemployed? Share your story with CNNMoney

As of December, about 4 million Americans were counted as unemployed for more than 27 weeks. Efforts backed by Obama to extend a federal program providing jobless benefits to that group fell flat earlier this month in Congress.

New Jersey, Oregon and the District of Columbia already have laws in place, prohibiting job ads that discriminate against the unemployed. In 2011, the President tried to get Congress to pass a nationwide law, prohibiting discrimination based on unemployment status. Bills were introduced in the Senate and House, but little progress was made.

First Published: January 31, 2014: 2:36 PM ET

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What Americans think about Obama's myRA plan

NEW YORK (CNNMoney)

But not everyone thinks the new plans are a great deal. The accounts, which will launch in a pilot program later this year and will eventually be available to any worker who gets paid through direct deposit and earns below a certain threshold, has elicited a wide range of reaction.

CNNMoney heard from dozens of readers about the president's plan. From disbelievers to eager savers, here's a sampling of where America stands on myRAs:

"Why would anyone consider giving a broke and bankrupt government any more of your money? That's foolish," said 62-year-old reader Steve Keller.

Related: What you need to know about Obama's 'myRA' retirement accounts

Yet, people from a range of ages and financial situations expressed enthusiasm for myRA, saying they would sign up immediately if able. Some don't have access to workplace savings plan, while others said they like the idea of supplementing their savings with the account, which would allow them to save up to $5,500 a year until the account balance reaches $15,000.

In previous years, 36-year-old Grand Prairie, Texas resident Angel Malone had both retirement and other savings set aside. But after weathering four months of unemployment last year and taking a significant pay cut, Malone now says she has less than $1,000 in savings.

Malone, who as a contract worker doesn't receive retirement benefits, said myRA could help her start saving again.

"Being able to start it with a small contribution (is) very affordable at this point for me," she said. "These days anything saved is a help over $0."

Many readers were worried they would not have enough money to live on in retirement and hoped the new plan could help their situation.

"I'm going to be pretty much dependent on Social Security. But I would like to continue saving," said 67-year-old Kathryn Riss, who stopped saving for retirement after losing her job in 2008. While she found a new job in 2009, she now earns around a third of what she used to and doesn't receive retirement benefits.

She and her husband keep the modest savings they do have in money market accounts, which earn less than 1%. The myRA, on the other hand, will invest in government savings bonds and provide returns of around 2% to 3%, depending on interest rates.

Riss said they would like the security and slightly higher returns that the government-backed accounts would offer. "We don't want something that's really volatile and where there's high risk," she said.

Related: Will you have enough to retire?

But other readers weren't sold. Alaska resident John Baumeister, 43, said he would never put his retirement savings in an investment with such a modest return. While Baumeister receives pension benefits from his job as a firefighter, he also invests in a traditional Roth IRA.

"2% interest is pathetic," he said. "Inflation will swallow your buying power at that rate."

Torrington, Conn. resident Dave Elwell is 24, earns a modest income as a mason's apprentice and receives no retirement benefits, making him the target audience for the myRA program.

Yet, in Elwell's opinion, "myRA is little more than worthless" for a young saver due to the minimal returns.

Instead, he said he will continue to contribute 10% of his pay to the Roth IRA account that he set up around six months ago with an online broker. Elwell said he splits his savings among five mutual funds, which are heavily invested in stocks and have been earning double digit annual returns.

"(Obama is) making it seem like people can take money and put it in this account and really have something special," he said. "But after inflation, what will that really be worth?"

First Published: January 31, 2014: 2:50 PM ET

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