America's gun stores are overstocked

Sales plunged for Sturm, Ruger, maker of the Mini-14 pictured here and a wide variety of other guns, because dealers overstocked, causing an inventory glut.

NEW YORK (CNNMoney)

Gun dealers have overstocked, and now they're just selling off the inventory that they have, without ordering much from manufacturers.

Gun sales surged to unprecedented levels following the Newtown massacre of December 2012, driven by concerns about increased federal regulations, particularly against assault rifles.

Back then, Americans were buying AR-15s and AK-47s as fast as retailers could get them, pushing up prices and creating shortages of guns and ammo.

The stores couldn't order them fast enough. But they over ordered and now there are too many guns sitting on their shelves.

Sturm, Ruger (RGR) of Southport, Conn., one of the most prominent gunmakers, reported a plunge in sales and profit this week that sent its stock into a tail spin on Thursday. Net sales over three months went to $98 million from $171 million a year ago.

The share price for its rival, Smith & Wesson (SWHC), also took a dive, as investors went sour on gunmakers.

Related: Meet the mom behind Target's gun ban

Sturm, Ruger makes a wide variety of guns, including M4 and Mini-14 military-style rifles, and sells them to distributors, who sell them to stores. It said "retailers [were] buying fewer firearms than they were selling, in an effort to reduce their inventories and generate cash."

This is quite different from 2013 and earlier this year, when Sturm, Ruger CEO Michael Fifer complained about retailers placing "grossly unrealistic" orders with his company.

Fifer called out "that guy with $25,000 worth of credit line hoping he's going to get $100 million worth of product before the surge ended."

To be sure, consumers are still buying guns.

As measured by FBI background checks, more people want to buy guns. The background checks, which are required for most but not all gun transactions, rose in September to 1.46 million, compared to 1.4 million the year before.

In fact, background checks have risen every month since March, compared to last year.

"We are assuming that inventory issues persist with distributors in the near term," wrote CRT Capital analyst Brian Ruttenbur in a market report. "We believe [Sturm, Ruger] will decrease production in 2015 and let inventory work its way through the channel."

He projected that Sturm, Ruger will "dramatically reduce" production next year to 1 million guns, from 1.9 million this year. In this way, the company can avoid having to hold a fire sale.

"We believe management will hold the line on discounts and therefore preserve margins at reasonable levels," he said.

Related: Gun violence costs taxpayers $500 million

Related: Guns welcome at Shooters Grill

First Published: October 31, 2014: 9:57 AM ET

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Honda, Takata sued over exploding airbags

NEW YORK (CNNMoney)

The suit, filed in federal court Thursday, seeks class action status on behalf of the owners of all five million Hondas affected by the recall, alleging that they've suffered inconvenience and financial losses.

It contends that owners have been hurt by having limited use of their cars as well as a decline in the resale value of their vehicles. The suit also says car owners have been told they'll have to wait months before Honda and Takata have the replacement airbags needed to repair all the cars.

Related: Fix for airbags: Deadlier than the problem?

Finally, the suit alleges that Honda knew of the exploding airbag problem as early as 2001 but delayed recalling the cars.

The law firm which filed the suit, Hagens Berman, won more than $1 billion in a settlement from Toyota Motor (TM) for the decreased value of cars with an unintended acceleration problem. It is currently pursuing a similar case against General Motors (GM) on behalf of car owners with a faulty ignition switch tied to at least 30 deaths. The firm argues that case could have more than $10 billion in damages.

Related: Honda CEO cuts pay due to recalls

Spokesmen for both Honda and Takata declined to comment.

First Published: October 31, 2014: 10:19 AM ET

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The fix for exploding airbags may be more deadly than the problem

NEW YORK (CNNMoney)

Eight million vehicles made by 10 different automakers have been recalled due to flawed airbags that can explode and hit passengers with shrapnel. The problem: The airbag manufacturer Takata doesn't have enough replacement airbags to fix all the recalled cars.

Not all the manufacturers involved have said how they'll handle the expected shortage. But Toyota has said that it plans to disable defective airbags once it runs out of replacements as it repairs the 800,000 cars it has recalled.

"It's something we're prepared to do, an indication of how seriously we take the problem," said Toyota (TM) spokeswoman Cindy Knight.

Related: Airbag recall could expand

Not everyone thinks this is a good idea, since only a small percentage of the defective airbags are likely to explode in a crash. More people could be killed due to disabled airbags than by the defective airbags, said the Center for Auto Safety's executive director Clarence Ditlow.

"You save more lives by leaving the airbags in place than you would lose lives by the airbag exploding," Ditlow said. Even if a driver is wearing a seatbelt, he said, airbags can provide life-saving protection in a crash.

Toyota (TM) says the recalled airbags are only on the passenger side of it's cars. If it disables an airbag, it will put a sticker on the dashboard advising people not to ride in the front passenger seat until its replaced. And it stressed that disabling the airbags is just a temporary solution until a replacement can be installed.

Toyota has gotten permission from the National Highway Traffic Safety Administration to disable the airbags, which otherwise would be illegal. Both Toyota and NHTSA are pushing to get owners to bring their cars in to be serviced, whether or not Toyota runs out of replacement airbags.

Bringing a recalled car in for service is always voluntary for owners. About a third of recalled cars are never repaired, according to industry estimates. But if Toyota goes ahead with its plans, drivers who bring their cars in will be told that disabling the airbags is the best solution for their problem.

Other automakers affected by the recall may also run into a shortage of replacements.

Related: Honda CEO takes pay cut over recalls

Five million vehicles made by Honda Motor (HMC) have been hit by the recall, but the automaker has declined to say whether it will disable the flawed airbags if or when it runs out of replacements.

The company is working to get enough of the replacement airbags, according to Honda spokesman Chris Martin, and that it has not yet asked NHTSA for permission to disable any air bags.

General Motors has recalled 80,000 autos for this airbag problem and the company says it won't disable them if it runs out of replacements.

"We're in pretty good shape on replacement parts at the moment," said GM spokesman Alan Adler. "But if and when we run out of parts, our plan is to give owners loaner vehicles. We would not disable the airbag."

There have been four deaths and dozens of serious injuries tied to the exploding airbags, according to the Center for Auto Safety, all in Honda and Accura cars built by Honda Motor (HMC).

NHTSA is pushing Takata to step up efforts to produce replacement bags. But Takata did not return repeated requests for comment as to when it will be able to supply enough replacement airbags to repair all 8 million cars.

Related: 566,000 Dodges and Jeeps recalled

First Published: October 31, 2014: 9:32 AM ET

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Stocks: 5 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the five things you need to know before the opening bell rings in New York:

1. It's all about Japan: The Bank of Japan has shocked global markets by boosting its aggressive stimulus program in an effort to keep the country's economic revival on track.

Japan's Nikkei index surged by nearly 5% to hit a seven-year high and stock markets around the world are rallying.

Asian markets closed with significant gains and European markets have jumped by at least 1% in early trading.

U.S. stock futures were also surging by more than 1%.

"The move by the Bank of Japan was not only unexpected, but shows the divergence between the major central banks around the globe as the Federal Reserve has just ended monetary stimulus and the Bank of Japan is speeding up the printing presses," said Angus Campbell, a senior market analyst at FxPro.

Related: Stocks give investors a big October treat

2. Stock market movers -- Starbucks, GoPro, Citigroup: Shares in Starbucks (SBUX) are taking a tumble -- down by about 3% premarket -- after the company said it expects profits will fall short of expectations during the next three months.

Shares in GoPro (GPRO) are surging by about 15% after the company reported a better-than-expected third quarter and issued an upbeat forecast for its business.

Meanwhile, Citigroup (C) shares are off by about 1.5% premarket after the company said it had to revise its third quarter earnings. The bank said profit was $600 million lower than previously stated due to higher-than-expected legal costs.

Related: CNNMoney's Tech30

3. Earnings: There are plenty of earnings to watch Friday. Anheuser-Busch InBev (AHBIF), Chevron (CVX), Clorox (CLX), and Exxon Mobil (XOM) will report earnings before the opening bell.

Overnight, Sony (SNE) reported a second quarter net loss of $1.2 billion, and the company confirmed it's on track to lose a staggering $2.1 billion this fiscal year. Shares edged higher, but missed the rally that other Japanese stocks enjoyed.

4. Economics: The Bureau of Economic Analysis will post monthly personal income and spending numbers at 8:30 a.m. ET.

The University of Michigan will report the final version of its monthly consumer sentiment index at 9:55 a.m. ET.

5. Thursday market recap: U.S. stocks closed higher Thursday. The Dow gained 221 points. The S&P 500 closed 0.6% higher and the Nasdaq moved up by 0.4%.

First Published: October 31, 2014: 6:08 AM ET

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Apple says it may lose Irish tax break

Apple warned investors it could be hit by higher taxes due to changes in Irish law

NEW YORK (CNNMoney)

In June, the European Commission started investigating whether Apple's 1991 tax deal with Ireland violated European Union laws prohibiting state aid to companies. In September it ruled against the tax deal. Ireland and Apple are fighting the decision.

In the company's annual financial report, released this week, Apple warned investors that "If the Company's effective tax rates were to increase, particularly in the U.S. or Ireland...the company's operating results, cash flows and financial condition could be adversely affected."

Related: How Apple socres its lower tax bill

Apple (AAPL, Tech30) has paid as little as 2% on profits attributed to its subsidiaries in Ireland, well below the 35% top rate in the United States and even well below Ireland's 12.5% rate. That has prompted complaints by both European and U.S. lawmakers. CEO Tim Cook was even called to testify on Apple's tax deal before a Senate committee.

Ireland announced earlier this month that it would end a key tax break for tech companies by 2020

But some experts say the change is more of a public relations move than a step that will significantly increase the taxes those companies have to pay.

Related: Is Apple the perfect stock?

First Published: October 31, 2014: 7:40 AM ET

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This 3-D scanner-printer is a flop. But the future is promising

NEW YORK (CNNMoney)

Too bad it's a flop.

The all-in-one scanner and printer, made by XYZprinting, lets you 3-D print objects without knowing how to design anything. There's no complicated software involved. You can just put an object inside, and a couple hours later, you'll have a plastic replica of that object. It's like copy and print.

In theory, anyway.

In reality, the Da Vinci AiO totally failed when we tried to scan a Matchbox car. It also couldn't master a stress ball. We finally got it to work by scanning a cube-shaped foam die.

Related: The UPS Store will 3-D print stuff for you

So even though it's just $800, (insanely cheap for this kind of technology), you might not want to rush out to buy the Da Vinci AiO.

But the technology is promising.

If 3-D scanning and printing technology improves, you could envision a day where you could make spare parts, plastic silverware and cups without going to the store.

Did you break a window latch? Just copy one from another window. Missing that sixth screw from your Ikea furniture? Throw one of the screws into the scanner.

One day... but not quite yet.

First Published: October 31, 2014: 7:28 AM ET

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Movie theaters ban Google Glass and other wearables

This man wore his Google Glass to a premiere of "Sex Tape," an act that was banned this week by industry groups representing movies and theaters.

NEW YORK (CNNMoney)

Don't even think about it, the movie industry says. It announced late Wednesday a "zero tolerance policy" towards wearable recording devices.

Hollywood has had an ongoing problem with the use of recording devices in movie theaters. Hand-held cameras have been the main culprits in traditional film theft, resulting in a black market for pirated DVDs with shaky recordings of just-released movies.

But that seems almost quaint compared to the advent of smartphones and other devices. Long-standing theater policies require that phones and recording devices must be silenced or shut off and put away at show time.

Related: Is Verizon stalking you through your phone?

At ShowEast, an industry convention in Florida, this week, the Motion Picture Association of America and the National Association of Theatre Owners updated their policy "to fully integrate wearable tech in the rules" against illegally recording movies.

"Individuals who fail or refuse to put the recording devices away may be asked to leave," it reads. "If theater managers have indications that illegal recording activity is taking place, they will alert law enforcement authorities when appropriate, who will determine what further action should be taken."

First Published: October 30, 2014: 8:33 AM ET

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US economy chugging along at 3.5% growth

NEW YORK (CNNMoney)

Gross domestic product, the broadest measure of economic activity, increased 3.5% between July and September over the same period last year, according to the U.S. Commerce Department. It exceeded analysts' expectations and offered more proof of an economy gaining momentum.

The GDP news comes on the heels of the Federal Reserve's announcement Wednesday to end its bond-buying stimulus program now that the economy is improving. Economists viewed the Fed's decision as a mostly positive sign that growth is picking up, even in the job market.

Related: Fed ends 6-year effort to stimulate economy

Analysts projected GDP growth to hit 3% this quarter, according to data from FactSet.

Consumer spending is the largest factor for U.S. economic growth, and it rose 1.8% in this quarter, a slight drop from the same time a year ago, but better than the bleak first quarter this year.

Related: 'Mediocre' growth plagues world economy

2014 had a dicey start. Economic growth dropped 2.1% the first quarter because the extremely cold winter (remember the Polar Vortex) kept many businesses and schools closed for days and people inside their homes. The weather also lowered exports to other countries. The second quarter rebounded well, posting 4.6% growth from the same time a year ago.

What's next? The IMF forecasts that the U.S. will have 2.2% GDP growth for the year. So far, the nation appears to be on track for that. It's a lot higher than Europe and other parts of the world that have been hit by geopolitics and slowing growth such as Russia.

The big concern for quarter four is holiday spending. Americans are clearly buying more, but it's still not a level investors and economists want to see to feel confident that the worst is behind.

Europe's slowdown could also be a drag for the U.S., although so far the impact has been modest.

"I think Europe by itself poses no real threat to the U.S. recovery or expansion," said Dr. Robert Shapiro, former Under Secretary of Commerce for Economic Affairs. He is more concerned that a sharp rise in oil prices could hurt the recovery.

First Published: October 30, 2014: 8:44 AM ET

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Men are buying up these $1,200 sneakers

The furry shoe from Giuseppe Zanotti sells for $1,395. Alejandro Ingelmo's Tron Leopard Bronze costs $575.

NEW YORK (CNNMoney)

Luxury spending is slumping this year, but one area continues to have a strong foothold: shoes. And while designer shoes tend to conjure up images of red-bottomed stilettos and pointy leather heels, much of the current demand is for men's sneakers in flashy styles.

Shoe designer Giuseppe Zanotti, who launched his first sneaker in 2012, said the demand for high-end kicks surprised him.

"When I started designing sneakers, I would have never imagined they would have been such a successful endeavor. I honestly think that nobody expected this boom," he said.

His line includes a high-top sneaker with snake skin print, gold-plated straps and side zippers. Another pair is a silver printed 3D calfskin high-top sneaker with black plates.

Zanotti's sneakers range from $500-$1,500, and he credits Kayne West as the first person to wear one of his styles. "That was proof I was going in the right direction." His men's sneaker sales increased 127% this year compared to last year.

Related: Why these sunglasses cost $150

Men have been a bright spot for retailers in the shaky economic recovery -- especially young men.

"They are increasingly becoming more affluent ... they have more disposable income and they're interested in attire," said Will McKitterick, an analyst at IBISWorld. He added that men's athletic shoes accounted for 29% of the total shoe market in 2014, just shy of the 31% women's non-athletic shoe sales made up. (Women's athletic shoe sales came in at 12%.)

It used to be men only strove to look good Monday-Friday from 9-5, but now they want to look stylish all the time, said Milton Pedraza, CEO of the Luxury Institute. "Men have finally caught up with women in fashion, style and desire to look good and express themselves."

Related: Rude sales people can boost luxury sales

New-York based designer Alejandro Ingelmo started designing men's sneakers for himself, and said it took a while for them to go mainstream. Now, his sneakers, which have an average price point of $500, are 60% of his business.

"We aren't talking about just a couple of guys. This is what's happening in men's fashion," he said. His customers come from different backgrounds, some work corporate jobs and want to maintain a polished looked outside the office, while others are looking for a way to express themselves.

Sneakers, even luxury ones, are often a cheaper way to make a statement than other designer duds.

The 'Jeddi Snake' shoe costs $750

And some of the loud new styles cater to men looking to really make a fashion statement.

It's about the best way to stand out in a crowd, said retail analyst Jeff Green. "Shoes have become more of an accessory, not a necessity."

He likened sneakers to a new tie. "This is why people are getting a whole bunch of them ... It's the coolest way to make a statement," Green said.

Zanotti said the men's shoe market has evolved a lot since he entered it. "It was very formal, black and a little boring from my perspective. The sneaker boom literally shook up fashion laws and etiquette," he said. "I like when I see men matching sneakers with different outfits -- from a jumpsuit to a pair of jeans to a formal tuxedo."

How to buy luxury clothes without losing your shirt

And while some of his shoes have gold leopard and neon snakeskin patterns, Ingelmo said he knows he has to walk a fine line when it comes to men's designs.

"You still want to follow some formality. You can be very creative, but you still have to follow a certain type of structure to stay within the bounds that men are used to."

First Published: October 30, 2014: 10:22 AM ET

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Apple CEO Tim Cook comes out: 'I'm proud to be gay'

NEW YORK (CNNMoney)

"Let me be clear: I'm proud to be gay, and I consider being gay among the greatest gifts God has given me," he wrote in a column in Bloomberg Businessweek.

In his column, the Apple (AAPL, Tech30) chief said that he had tried to maintain "a basic level of privacy." But he said he decided that desire for privacy was stopping him from working for the benefit of others.

"I don't consider myself an activist, but I realize how much I've benefited from the sacrifice of others," he said. "So if hearing that the CEO of Apple is gay can help someone struggling to come to terms with who he or she is, or bring comfort to anyone who feels alone, or inspire people to insist on their equality, then it's worth the trade-off with my own privacy."

Cook, who grew up in Alabama, said he has long been open about his sexual orientation, but had just not previously discussed it publicly.

"Plenty of colleagues at Apple know I'm gay, and it doesn't seem to make a difference in the way they treat me," he wrote. "Of course, I've had the good fortune to work at a company that loves creativity and innovation and knows it can only flourish when you embrace people's differences. Not everyone is so lucky."

There have been some rumors and speculation that Cook is gay. Out magazine had previously named him as the most powerful gay person on its Power 50 list.

But there are no other publicly gay CEO's at the 700 largest corporations. John Browne served as CEO of BP (BP) from 1995 to 2007, and acknowledged he was gay after he was forced to leave office. He resigned when an former boyfriend outed him. He has since written a book "The Glass Closet: Why Coming Out is Good Business."

A year ago, Cook announced support for a federal law which would have protected workers from facing discrimination based on their sexual orientation.

"For too long, too many people have had to hide that part of their identity in the workplace," he wrote at the time.

And in December at an event organized by his alma mater Auburn University, he spoke of dealing with discrimination in his life.

"I have seen and have experienced many types of discrimination, and all of them were rooted in the fear of people that were different than the majority," he said in that speech.

Related: Same sex marriage: 1 year later

First Published: October 30, 2014: 7:20 AM ET

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These countries are getting killed by cheap oil

NEW YORK (CNNMoney)

Oil is selling for roughly $83 a barrel on the global market. That's bad news for Iran, Nigeria, Venezuela, Russia, and Saudi Arabia, among others. They need the black stuff to trade at far loftier levels in order to balance their budgets.

Iran's budget, for example, is built on oil at $135 dollars per barrel, according to data from Deutsche Bank and Thomson Reuters compiled by DoubleLine Capital.

Russia has oil budgeted at $100, while Saudi Arabia will break even at $95 per barrel.

"All the oil producers are feeling it. Now the question is who can withstand it the most," said Phil Flynn, an energy analyst at the Price Futures Group.

Related: Oil will tumble to $70 says new 'bond king'

Drill or die: Flynn claims that energy producing nations will continue to pump up production because they don't want to risk losing market share.

"It's like a starring contest of who can last the longest selling oil below their budget point. Whoever can hold out longest is going to win," he said. "They're eating at each other."

In the past, the Organization of the Petroleum Exporting Countries (OPEC) would have likely stepped in by this point to urge its members to cut production, but the oil cartel has been dogged by internal diplomatic disputes and shifting political allegiances.

Geopolitical fallout: The persistently low oil prices could change the geopolitical calculations for some nations that are already dealing with sanctions over their confrontations with the West.

Branko Terzic, an energy consultant who used to serve as the commissioner of the Federal Energy Regulatory Commission (FERC), thinks the depressed prices might bring Russia to the negotiating table over its actions in Ukraine.

He's less optimistic about Iran, even though the country's economy has been crippled by sanctions over its nuclear program.

"In the past they've put ideology over economics, and it's not clear if that will change," he said.

There's speculation that Saudi Arabia is refusing to cut supply in order to squeeze Iran. The two countries from opposing Islamic denominations are vying aggressively for dominance in the Middle East.

Related: Saudi Arabia: The next big emerging market?

Budget squeeze: Low oil prices may force some governments to make tough cuts. Venezuela heavily subsidizes the cost of gasoline. A gallon usually costs drivers around seven cents, Terzic noted.

Already facing declining oil production, skyrocketing inflation, and dwindling foreign exchange reserves, the nation's socialist government may be forced to look at its budget to see what it can cut without roiling the public.

In Russia, finance minister Anton Siluanov is already talking about the need to cut spending by 10%. "The budget can not constantly have expenses that were made at different economic reality," he recently told the Russian parliament.

Related: Russia is living in an 'alternative economic reality'

Buying time: But Russia, like some other nations, is still sitting on a healthy chunk of foreign exchange reserves, which it can dip into to help buy time as oil remains low. At oil's current level, Russia can cover its budget for four years, Terzic estimated. Saudi Arabia has about eight years.

Nigeria, on the other hand, isn't as fortunate. The country can only sustain the current situation for a few months.

American energy game changer: The biggest shift in global energy markets is that the U.S. is producing an unprecedented amount of oil now. Even though America has a ban on exporting crude, the fact that it's importing less has led to a flood of foreign oil on the global market, according to Terzic.

Related: Is the U.S. holding too much oil in reserve?

"It reduces our reliance on the production in unstable areas. It's minimizing the impact that these Middle Eastern countries are having on global affairs," he said. "This is good news for all of us."

First Published: October 30, 2014: 7:12 AM ET

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Why are America's biggest businesses struggling?

NEW YORK (CNNMoney)

Investors were having panic attacks mid-month. Nearly all the gains for the year were wiped out. Now the Nasdaq and S&P 500 are both positive for October and way up for the year. The Nasdaq is up 1.2% this month alone.

But a funny thing happened during this big rebound: The Dow Jones Industrial Average -- the index representing 30 of America's largest and most well-known companies -- got left behind.

The Dow is still negative for the month.

What happened to these supposed "Blue Chip" companies?

1. Bigger isn't always better. Normally investors think of the Blue Chip names as solid, stable companies. The Dow has household brands like Visa (V), AT&T (T, Tech30) and McDonald's (MCD) that are known around the world. But lately, Blue Chip has been a bit of a euphemism for "stale."

Almost half of the companies in the Dow -- 11 of 30 -- are down more than 1% for October.

McDonald's can't quite find its place as people want healthier options. Coke (KO) is in a similar position. While rival Pepsi (PEP) (not a Dow member) has been able to leverage its snack food business as soda revenue declines, Coke hasn't figured out a new formula.

Related: McDonald's gets burned in Asia

"Businesses are competing with nimble, newer and faster companies," says Tim Anderson, Managing Director at MND Partners.

IBM (IBM, Tech30) was an especially large blow in October. It announced the sale of its chip unit for a nearly $5 billion loss and followed that up with lackluster quarterly results and little optimism about the coming months. The company cited "the unprecedented pace of change in our industry." The stock tanked and is still down about 14% for the month.

There's an identity crisis going on among several of America's large companies. Even GE (GE) is negative for the year and facing pressure to break itself up and restructure.

Despite the fact that the U.S. economy is improving, investors aren't certain that these specific brands in the Dow are going to benefit until they get their big picture strategies sorted out.

Related: How much should a young worker save for retirement?

2. The Dow is just odd. There's a reason a lot more people invest in funds that mimic or track the S&P 500 than the Dow. The Dow started in 1896. While America's economy grew, it still has a mere 30 firms in the index (compared to the 500 in the S&P or the nearly 3,000 in the Nasdaq).

And while other indexes typically weight the companies equally, the Dow is price weighted. So companies with larger share prices have more sway. That's especially problematic when IBM -- the third biggest weight in the Dow -- goes down.

"The Dow is just a very narrow index," says Russ Koesterich, BlackRock's Chief Investment Strategist. "If you look at a broader measure like the S&P 500, large cap companies are doing better than small cap during the sell-off, but the Dow is very idiosyncratic."

Koesterich thinks large company stocks actually offer some of the better bargains in the market at the moment, just not necessarily the ones in the Dow.

Related: CNNMoney's Fear & Greed Index indicates 'fear'

Some go as far as saying the Dow isn't representative of American business anymore.

CNNMoney's Paul La Monica has often asked a simple question: Why the heck isn't Apple in the Dow? It's arguably the most valuable brand in the world and its stock trades right around $100, yet it's not in "the club," while Cisco (CSCO, Tech30) and Caterpillar (CAT) are.

3. Blame the hedge fund types. The final factor at work in the Dow's lagging October performance might be traders and hedge funds.

After the big dip, many investment professionals did whatever they could to pare their losses. They looked for stocks likely to go up quickly. Those are momentum stocks -- typically tech and bio tech and smaller companies -- not the big, slow Blue Chips.

"Hedge funds, momentum funds and funds that are subject to withdrawals every six months have a real problem holding dead money stocks," said Anderson.

First Published: October 30, 2014: 7:56 AM ET

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Ferrari to split with parent company, Fiat Chrysler

LONDON (CNNMoney)

Fiat Chrysler (FCAU) announced the news Wednesday, saying Ferrari will be listed in the U.S. and possibly on a European exchange.

About 10% of Ferrari's shares will be up for grabs when it's listed on the exchanges. The other 90% of shares will be distributed to current Fiat shareholders.

"The separation of Ferrari will preserve the cherished Italian heritage and unique position of the Ferrari business and allow [Fiat] shareholders to continue to benefit from the substantial value inherent in this business" said John Elkann, chairman of Fiat Chrysler.

The high-end automotive maker Ferrari recently had a management shake-up.

It's known for capping auto production to around 7,000 per year to ensure demand consistently outstrips supply.

First Published: October 29, 2014: 9:40 AM ET

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Exploding rocket company's stock plunges

The explosion of an unmanned rocket from Orbital Sciences late Tuesday has investors running for the exits.

NEW YORK (CNNMoney)

The rocket exploded shortly after it launched off the coast of Virginia Tuesday evening. Orbital Sciences (ORB) said in a statement that it will work closely with NASA and other government agencies to determine the cause of the accident.

Orbital's Antares rocket was carrying supplies to the International Space Station. Nobody was hurt as a result of the explosion.

The "mishap" -- as Orbital refers to it -- comes at a critical time for the company. Orbital was awarded a $1.9 billion contract from NASA in December 2008 to conduct eight cargo resupply missions to the space station. This was the company's third flight.

NASA also awarded a similar contract in December 2008 to SpaceX, the rocket company founded by lon Musk, CEo of Tesla (TSLA) and also chairman of SolarCity (SCTY).

Musk criticized Orbital in a 2012 interview with Wired, saying that "their rocket honestly sounds like the punch line to a joke. It uses Russian rocket engines that were made in the '60s." Musk tweeted Tuesday evening that he was "sorry to hear about the @OrbitalSciences launch. Hope they recover soon."

Competition in the corporate space race is heating up. SpaceX and Boeing (BA) have both won multi-billion dollar contracts to make "space taxis" to transport astronauts to the space station. Boeing's spacecraft will launch from a rocket jointly developed by Boeing and fellow defense/aerospace giant Lockheed Martin (LMT).

So it's understandable why Orbital Sciences investors are nervous.

The NASA contract lasts only through the end of 2016. There is no indication as of yet that Tuesday's accident changes anything. But when the original contract was signed, NASA said that the value of the contract could go as high as $3.1 billion based on "production milestones."

Prior to Tuesday, Orbital's stock had been a big winner on Wall Street. The stock was up 30% this year. The company reported earnings earlier this month that easily topped Wall Street's expectations.

The company also has big expansion plans ... and the market might be worried about how the Antares explosion will impact that. Orbital has already agreed to merge with the aerospace and defense business of ammunition manufacturer Alliant Techsystems (ATK). Shareholders of both companies are set to vote on whether to approve the deal in December.

First Published: October 29, 2014: 10:00 AM ET

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White House hacked

NEW YORK (CNNMoney)

The Obama administration is saying little about the intrusion, only that hackers slipped into the network and their tools are "not being used to enable a destructive cyberattack," according to one official.

"Certainly a variety of actors find our networks attractive targets and seek access to sensitive government information," the official said.

In the hacking world, attackers often use spying tools to steal files or monitor computer sessions.

Still, the White House would not confirm the nature of the attack -- or even when it happened.

Related story: Welcome to the Age of Hacks

It probably occurred last week, though. White House staff computers suffered outages on Friday. An Obama administration official said the White House cybersecurity team spotted the digital break-in and "took immediate measures" to stop it -- temporarily disrupting staff computer sessions.

Government officials did not say who was behind the attack but signaled that they are aware of who was responsible.

The incident -- as described by the president's staff -- is less serious than it could have been. The hacked network was meant for "unclassified" documents, those will less importance to matters of national security.

CNN's Jim Acosta contributed to this report.

First Published: October 29, 2014: 10:20 AM ET

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Millionaire tax on the ballot in Illinois

Illinois Gov. Pat Quinn, a Democrat, is running for re-election and backs a non-binding ballot measure that would impose a millionaire tax to help support schools.

NEW YORK (CNNMoney)

Prairie State voters next Tuesday will be asked whether they think the state's constitution should be changed to impose an additional 3% tax on income over $1 million. Revenue from the ballot measure would help fund schools.

The vote is non-binding. It's simply a measure of public support for the idea. So even if it passes, it's unlikely that the state's millionaires will be shelling out more anytime soon.

Some observers call the measure catnip to entice Democrats to vote in the midterm elections.

But Illinois' finances are also in bad shape.

And its fiscal woes could worsen in January, when the state's single 5% individual income tax rate is scheduled to drop to 3.75% and the corporate income tax rate is set to fall as well.

"Either we'll need to raise more revenue or cut spending," said David Merriman, a professor of public policy at the University of Illinois at Chicago.

Other states, of course, considered or enacted higher taxes on millionaires in the past decade.

California in 2012 approved a 3% additional tax on income over $1 million that will be in effect through 2018. Revenue raised is going largely to schools.

In the wake of the 2008 financial crisis, Connecticut, New Jersey and Maryland temporarily imposed a higher rate on high-income households -- both above the $1 million threshold and below.

Related: Voters to decide on raising the minimum wage

In 2010, Bill Gates Sr. backed a ballot measure that would have required Washington state, which has no individual income tax, to tax adjusted gross income over $400,000 for couples ($200,000 for singles) at 5% and income over $1 million at 9%.

Revenue from the Washington measure would have paid for middle class tax relief as well as education and health services. But it was defeated at the polls.

Some New Jersey Democrats, meanwhile, have also tried and failed to raise the tax rate on those making millions -- sometimes to offer property tax relief and other times to help the state make its pension payments. This year they proposed a 10.75% rate on income over $1 million, which is what the rate was in 2009. The top rate currently is 8.97% on income over $500,000.

At the federal level, Democrats have repeatedly floated different types of millionaire taxes.

One that's gotten the most attention is President Obama's proposed "Buffett Rule" or "Fair Share Tax." That proposal called for those making more than $1 million to pay at least 30% of their income, after charitable contributions, in federal taxes.

The most recent incarnation of that idea came from Senator Elizabeth Warren, who proposed that the 30% minimum be imposed and used to pay for a program to help student loan borrowers buried in debt.

First Published: October 29, 2014: 6:23 AM ET

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Stocks: 6 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the six things you need to know before the opening bell rings in New York:

1. The end of stimulus: The Fed is expected to announce the conclusion of its massive stimulus program this afternoon. The quantitative easing program, which lasted for six years, is widely credited with supporting the economy and driving investors back into stocks in the aftermath of the financial crisis.

In addition to the expected stimulus announcement, the Fed is also set to give more details about plans for interest rates at 2 p.m. ET. Most investors believe the first rate hike won't occur before June 2015, and many are betting it won't happen until the end of next year or later.

Any surprise announcements could have a big impact on trading.

U.S. stock futures were relatively flat ahead of the major Fed announcements.

2. Facebook flop: Shares in Facebook (FB, Tech30) are off by about 7% premarket after executives revealed plans to ramp up spending next year. Expenses in 2015 are expected to rise by as much as 75% versus the current year, which is irking investors.

Premarket data shows Facebook's fall is dragging down the Nasdaq.

Related: Fear & Greed Index

3. Earnings: Hershey (HSY), Hyatt Hotels (H) and SodaStream (SODA) are among the key companies reporting quarterly results before the opening bell.

Visa (V), Baidu (BIDU, Tech30), Weight Watchers (WTW) and Kraft Foods (KRFT) will report after the close.

4. Russia-Ukraine gas talks: Investors are keeping a close eye on Russia-Ukraine energy negotiations. Russian Energy Minister Alexander Novak and Ukrainian Energy Minister Yurii Prodan will attempt to hash out a temporary contract for Russia to deliver gas to Ukraine over the winter. This is a contentious matter since Russia completely cut off gas supplies to Ukraine a few months ago.

Related: Oil trading around $80, but Russia budgeting for $100

5. International markets overview: Major European markets are edging up in early trading.

Shares in the healthcare firm Sanofi (SNY) were dropping by about 4% in Paris after the company announced it was booting out its CEO, Christopher Viehbacher.

Asian markets mostly ended with gains. The Shanghai Composite index led the pack with a 1.5% jump.

6. Tuesday market recap: U.S. stocks closed higher at the close of the previous trading session. The Dow Jones industrial average gained 188 points, nearly erasing its October losses. The S&P 500 closed 1.2% higher and the Nasdaq was up 1.8%.

First Published: October 29, 2014: 5:55 AM ET

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382,000 Ram pickups recalled for fire risk

The recall covers Dodge Ram truck models 2500, 3500, 4500 and 5500, Chrysler said.

NEW YORK (CNNMoney)

Fiat Chrysler (FCAU) issued the recall Wednesday morning, and said the fuel heater assembly used in certain 2010-2014 model year diesel trucks can overheat. That can lead to fuel leaking and potentially a fire.

The company said there have been two reports of overheating, but is aware of no fires, injuries or accidents.

The recall covers Ram models 2500, 3500, 4500 and 5500. Most of the vehicles are in the U.S.

Chrysler said it would upgrade wiring harness terminals and, if necessary, the housing for the fuel heater.

This has been an epic year for recalls. Automakers have recalled a record 52 million vehicles, including 30 million recalled by General Motors (GM).

Related: Exploding airbag recall could expand

First Published: October 29, 2014: 8:09 AM ET

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Ebola: The making of a $1 billion drug

Researchers at the University of Utah are working on an Ebola treatment.

NEW YORK (CNNMoney)

At least that's what some experts are betting on. The deadly virus has struck such fear globally that people are betting many governments will start stockpiling Ebola drugs to combat any future outbreaks.

Problem is, there is currently no cure for Ebola, though some experimental drugs have been used to treat patients in the United States recently. Major drug companies and several small biotech firms are working frantically to produce vaccines and treatments.

It's not clear if any of the companies can release a drug or vaccine fast enough to save lives on a mass scale in the current outbreak. More than 10,000 people have been infected in West Africa and close to 5,000 have already died.

Related: Hazmat suit maker hustles to meet Ebola demand

The U.S. government alone can be expected to award contracts worth more than $1 billion to companies to fund large quantities of Ebola medicine, according to a report from Credit Suisse. The analysts say it's likely that several other government agencies will be tasked with stockpiling medicine for emergencies.

The estimate stems from similar government stockpiling of drugs for other potential pandemics and viruses that could be used in a terror attack, such as anthrax and small pox.

For example, the government currently has a $1.25 billion five-year contract with Emergent BioSolutions (EBS) to supply nearly 29 million doses of anthrax vaccine, the report says.

Congress passed legislation in 2004 that authorized funding for the Department of Health & Human Services to create a strategic national stockpile of drugs and vaccines to protect against potential disease outbreaks.

Ebola was one of the viruses on the list, but was not considered a high priority at the time.

That's likely to change now.

Among the companies developing an Ebola vaccine are GlaxoSmithKlein (GSK), NewLink Genetics (NLNK), Johnson & Johnson (JNJ) and Bavarian Nordic. All four companies have worked with governments before.

Bavarian Nordic, for example, is already under contract to supply an experimental small pox vaccine to the U.S. government's strategic reserve.

Two other small U.S. biotech companies, Chimerix (CMRX) and Mapp Biopharmaceuticals, are working on "antiviral" treatments for Ebola.

Thomas Duncan, the first person diagnosed with the disease on U.S. soil, was treated with a drug called Brincidofovir, made by Chimerix. He did not survive.

Patients at Emory University in Atlanta appear to have been helped by ZMapp, an experimental drug made by Mapp Biopharmaceutical.

Other companies with promising Ebola drugs that could attract federal funding include Tekmira Pharmaceuticals (TKMR), Sarepta Therapeutics (SRPT) and BioCryst Pharmaceuticals (BCRX).

Tekmira, based in Canada, has started limited production of its drug TKM-Ebola, which will be available in early December.

A subsidiary of the Japanese conglomerate Fujifilm recently took a big stake in Kalon Biotherapeutics, a Texas pharmaceutical company that's also developing an Ebola treatment.

First Published: October 28, 2014: 10:07 AM ET

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YouTube considering paid subscriptions

NEW YORK (CNNMoney)

Google (GOOGL, Tech30) acknowledged late Monday that it is considering a subscription service that would allow viewers to skip the ads that run before many YouTube videos.

That move would dramatically change the revenue model for the video colossus. Most of YouTube's services are free, so the site largely relies on advertising to pay the bills.

"YouTube right now is ad-supported, which is great because it has enabled us to scale to a billion users; but there's going to be a point where people don't want to see the ads," YouTube CEO Susan Wojcicki said at a conference sponsored by the website ReCode, which posted about her comments.

She called a subscription arrangement "an interesting model" and added that YouTube is "thinking about how to give users options," according to ReCode.

Rumors about paid YouTube subscriptions have swirled for years. It competes in some ways with subscription video services like Netflix (NFLX, Tech30) and Hulu. But it also competes with music subscription services, such as Spotify and Pandora (P) -- some of YouTube's most popular content includes music and music videos.

Related: Google to speed up Web with smaller photos

Wojcicki didn't mention how much the subscription would cost or when it would become available.

Meanwhile, Google is facing some challenges in its advertising business. Advertisers aren't paying as much as they used to for standard mobile ads, for example.

Most Google services, like Gmail email and Drive cloud storage, are available for free. Users can pay a premium to upgrade.

YouTube does offer a paid subscriptions on a limited scale. It allows content creators to charge for access to videos they post.

Related: Where you can get blazing fast Internet speeds

First Published: October 28, 2014: 10:03 AM ET

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Costco says employees 'deserve' Thanksgiving off

Expect the parking lot at Costco to be empty on Thanksgiving this year.

NEW YORK (CNNMoney)

The warehouse retail chain will again stay closed on Thanksgiving this year, bucking the trend of retailers opening their doors earlier and earlier.

"Our employees work especially hard during the holiday season and we simply believe that they deserve the opportunity to spend Thanksgiving with their families," a Costco (COST) spokesman told the website Think Progress.

"Nothing more complicated than that," the spokesman added.

It said the same thing last year.

Related: The best time to book your holiday flight is ...

The company did not say when on Friday it would open the doors of its 468 locations, and the company didn't return a message from CNNMoney. Most locations normally open at 10 a.m. on weekdays.

It is also closed on holidays like Christmas, Labor Day and Easter.

Many retailers opened their doors last year between 6 p.m. and 8 p.m. on Thanksgiving. Macy's (M) will open at 6 p.m. on Friday this year.

Related: Amazon bringing on more holiday hands this year

Related: How Costco tries to pay workers well and make money

First Published: October 28, 2014: 10:00 AM ET

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Tim Cook: Apple Pay signup is 'fantastic'

Laguna Beach, Calif. (CNNMoney)

More than 1 million credit cards were activated to work with Apple Pay in the 72 hours following its debut, and the service is already the industry leader in contactless payments, Tim Cook said Monday during an interview at a Wall Street Journal tech conference in Laguna Beach, Calif.

"And we've got the whole rest of the world," the Apple CEO said. "We're only in the U.S. right now ... but the early ramp looks fantastic. It's sort of that 'ahh' moment. You use the phone and that's all you have to do."

Cook's optimism comes amid news that CVS and Rite Aid have both stopped accepting Apple Pay. One of the reasons? They want to keep collecting data on shoppers.

Cook drew a clear line on Apple's privacy policies.

Related: Google: Tim Cook is wrong about us

"We believe that your data is yours," said Cook. "We're not about collecting every detail about you and knowing what time you go to bed and where you spend your money, what things you searched on, none of that. We don't read your email, your iMessages. If somebody tries to get your FaceTime records, we can't supply it."

Cook acknowledged, however, some pushback from law enforcement agencies on recent iOS 8 updates (which have added further measures to encrypt data).

"I look at that and say: If law enforcement wants something, they should go to the user and get it. It's not for me to do that," Cook said.

Related: Is Apple the perfect stock?

Cook also revealed some details about the Apple Watch, including his expectation that frequent use will require the devices to be charged daily. The new watches are slated to come out early next year.

First Published: October 28, 2014: 3:24 AM ET

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Stocks: 5 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the five things you need to know before the opening bell rings in New York:

1. Twitter trouble: Shares in Twitter (TWTR, Tech30) are taking a nose-dive -- down by about 11% premarket -- after the company forecast its revenue in the final quarter of the year could come in below market expectations. Meanwhile, results from the latest quarter were in-line with expectations, and Twitter's user base continues to expand, but at a modest pace.

2. More earnings: Investors will have plenty of quarterly reports to digest Tuesday morning from companies including Pfizer (PFE), DuPont (DD), 1-800-Flowers (FLWS) and Coach (COH).

Facebook (FB, Tech30), Electronic Arts (EA, Tech30) and Marriott (MAR) are among the firms reporting after the close.

Related: Fear & Greed Index

3. Market moves: U.S. stock futures are perky as investors wait for the latest Federal Reserve meeting to get underway Tuesday.

On Wednesday, the Fed is widely expected to announce the conclusion of its massive stimulus program. Known as quantitative easing, the program is credited for driving investors back into stocks in the aftermath of the financial crisis.

The CNNMoney Fear & Greed index shows investors still feel very fearful, but fear levels aren't quite as extreme as they were earlier in October when markets were highly volatile.

U.S. stocks closed mixed Monday. The Dow Jones industrial average finished 12 points higher, the S&P 500 was down 0.2%, and the Nasdaq barely budged.

Related: U.S. is 65th in world on gender pay gap

4. International markets overview: European markets are all rising in early trading. The Dax in Germany has been a stand-out performer after posting a 1.3% jump.

However, shares in two major U.K. banks are extremely weak. Standard Chartered (SCBFF) shares are falling by about 8% after the bank posted earnings that disappointed investors. Lloyds Banking Group (LYG) stock was off by about 2.5% after confirming that it was cutting 9,000 jobs.

Shares in BP (BP) were relatively flat after the oil giant reported third quarter earnings.

Asian stock markets ended with mixed results. The main indexes in China both jumped by about 2%, but markets in India were weak.

5. Economics: The S&P/Case-Shiller home price index will come out at 9 a.m. ET. The Conference Board will publish its monthly consumer confidence report at 10 a.m. ET.

First Published: October 28, 2014: 5:53 AM ET

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Feds sue New York City for Medicaid fraud

Federal prosecutor Preet Bharara is suing New York City and Computer Sciences Corp. for Medicaid fraud.

NEW YORK (CNNMoney)

The top federal prosecutor in Manhattan announced a lawsuit against the city and a contractor, Computer Sciences Corp. (CSC), for allegedly orchestrating a multi-million dollar billing fraud scheme that lasted about four years.

The city and the company are accused of filing tens of thousands of "false claims" to Medicaid, allowing them "improperly to obtain millions of dollars of Medicaid reimbursements."

Preet Bharara, the U.S. Attorney for the Southern District of New York, is accusing the city and the company of using computer programs to automatically alter billing data for Medicaid patients.

For example, the city and the company used computer programs "to circumvent the requirement that Medicaid be billed after private insurance coverage had been exhausted." Many of these claims involved the state's early intervention program for children under the age of three with developmental delay.

Related: Jersey Shore's Situation indicted for tax fraud

But Rich Adamonis, spokesman for Computer Sciences Corp., said that his company and the city did nothing wrong.

He said the company did not submit any claims for early intervention program "for which the City of New York was not entitled to be paid" and the city was "properly reimbursed" for services in accordance with federal and state laws.

The suit didn't specify a dollar amount. It was filed under a law that can require damages to be paid back threefold.

First Published: October 28, 2014: 7:43 AM ET

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Paying thousands before health insurance even kicks in

NEW YORK (CNNMoney)

That's because more employers are offering consumer-directed health plans, which usually come with high deductibles. In 2015, 81% of large employers will offer at least one of these plans, up from 63% five years earlier.

Consumer-directed plans typically carry deductibles of $1,500 for individual coverage, more than three times higher than traditional policies, according to the National Business Group on Health.

And these plans will be the only choice for a growing number of workers. The share of larger employers offering only consumer-directed policies is jumping to 32% for 2015, up from 22% this year.

Deductibles are soaring for traditional insurance policies, too.

Deductibles for individual coverage at all firms have jumped to $1,217, on average, up 47% over the past five years, according to the 2014 Kaiser Family Foundation/Health Research & Educational Trust report. In high-deductible plans, they have hit $2,215.

Employers say they want more accountability, and higher deductibles force workers to take a larger role in their own care while shifting more of the costs to them.

Share your story: Are your health care deductibles going up?

Participants in these plans often have to pay more out of pocket -- not only for deductibles, but for doctors' visits, labs and procedures too.

On the plus side, they benefit from lower monthly premiums. Also, many employers contribute to savings accounts to help workers cover these costs. Annual checkups and preventative exams, such as colorectal screenings and mammograms, are free, as mandated by Obamacare.

Wells Fargo (WFC) switched to only consumer-directed plans in 2012. This year, the bank's employees can choose between two high-deductible policies -- one at $2,000 and the other at $3,000.

Doing so helped Wells Fargo keep plans affordable and allows it to offer a broad network of doctors and hospitals, said spokeswoman Richele Messick. "It gives them greater visibility into the cost of care and how they spend their health care dollars," she said.

Related: 5 ways you pay more for health insurance

Wells Fargo contributes up to $1,000 to workers' accounts, depending on their salary and the plan they choose. Employees can also earn up to $800 by participating in corporate wellness programs, including health screenings and quizzes.

For many, however, high-deductible health plans are a burden. They are nearly twice as likely to skip going to the doctor when sick or injured as those with traditional plans, according to a recent survey by the Associated Press-NORC Center for Public Affairs Research. Also, they are more likely to have difficulty paying other bills and to have decreased the amount they save.

Medical care has become more costly for the Vance family under a high-deductible plan.

Melissa Vance has had to go back to work. Her husband's employer just jacked up the family's deductible from $0 to $5,000. The Columbia, S.C., couple has four children with chronic conditions that require frequent lab work and costly medications.

Last year, Vance estimated she paid $2,000 for the family's health care. This year, the tab will likely surpass $10,000, which she said will take them years to pay off.

"I have a stack of bills I haven't even opened," said Vance, who now works part-time as an administrative assistant. "I get nauseous every time I look at them."

First Published: October 27, 2014: 6:26 AM ET

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Stocks: 4 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the four things you need to know before the opening bell rings in New York:

1. Banking bonanza: Investors are expressing their dismay after the European Central Bank revealed that 25 financial firms failed an extensive health check. Shares in about a dozen European banks are tanking Monday morning, with Ireland's Permanent TSB bank tumbling by 24% and Italy's Banca Carige falling 18%.

However, shares in the Greek bank Eurobank are rising by about 10%, even though it also failed the tests -- investors were expecting even more dire results for this particular firm.

"[The ECB] gave the European banking system a reasonably clean bill of health," said Kit Juckes, a market strategist at Societe Generale. "The ECB [is] observing [that] only a smallish number of banks have to raise a modest amount of capital. It's either a reassuring or a naive picture of the banking system, depending on how you want to read it."

Most major European markets were declining by about 0.5% in early trading.

Part of the decline was related to a new report out of Germany showing economic conditions in the nation continued to deteriorate in October.

Related: Fear & Greed Index

2. Market moves: U.S. stock futures were barely budging from their Friday closing levels.

At the close of trading last week, the Dow Jones industrial average jumped up by 0.8%, the Nasdaq rose by 0.7% and the S&P 500 added 0.7%.

Gold prices were declining slightly and oil prices were up a touch.

Related: Fed set to finally get out of the market

3. Earnings: There will be plenty of quarterly results to sort through Monday.

Allergan (AGN), Merck (MRK) and Citizens Financial Group (CFG) will be reporting earnings before the open.

After the close, we'll hear from Twitter (TWTR, Tech30), Buffalo Wild Wings (BWLD), Crocs (CROX) and Denny's (DENN).

4. Economics: At 10 a.m. ET, the government will release data on September pending home sales.

First Published: October 27, 2014: 6:03 AM ET

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Hazmat suit maker hustles to meet Ebola demand

NEW YORK (CNNMoney)

Lakeland (LAKE) said late Friday that it is raising $11.2 million through a private placement stock sale.

The company said it was doing this, in part, to support "the increased demand for Lakeland's safety products due to the Ebola crisis."

Lakeland priced the new shares it is selling at $10 apiece, but has been trading at more than $13.

Related: The Ebola stocks

The stock has been on a wild ride, dropping 22% last week but rising 75% over the last month. It edged up 4% in premarket trading Monday but made only slight gains after the bell. The stock plunged 14% on Friday. Stock activity was flat prior to the Ebola outbreak.

Lakeland is based in Ronkonkoma, New York, not far from New York City, where there have been several Ebola-related scares. There is also a medical worker currently quarantined nearby in New Jersey.

The current outbreak has killed more than 4,900 people in West Africa.

First Published: October 27, 2014: 9:09 AM ET

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Stocks: 4 things to know before the open

Click chart for in-depth premarket data.

LONDON (CNNMoney)

Here are the four things you need to know before the opening bell rings in New York:

1. Banking bonanza: Investors are expressing their dismay after the European Central Bank revealed that 25 financial firms failed an extensive health check. Shares in about a dozen European banks are tanking Monday morning, with Ireland's Permanent TSB bank tumbling by 24% and Italy's Banca Carige falling 18%.

However, shares in the Greek bank Eurobank are rising by about 10%, even though it also failed the tests -- investors were expecting even more dire results for this particular firm.

"[The ECB] gave the European banking system a reasonably clean bill of health," said Kit Juckes, a market strategist at Societe Generale. "The ECB [is] observing [that] only a smallish number of banks have to raise a modest amount of capital. It's either a reassuring or a naive picture of the banking system, depending on how you want to read it."

Most major European markets were declining by about 0.5% in early trading.

Part of the decline was related to a new report out of Germany showing economic conditions in the nation continued to deteriorate in October.

Related: Fear & Greed Index

2. Market moves: U.S. stock futures were barely budging from their Friday closing levels.

At the close of trading last week, the Dow Jones industrial average jumped up by 0.8%, the Nasdaq rose by 0.7% and the S&P 500 added 0.7%.

Gold prices were declining slightly and oil prices were up a touch.

Related: Fed set to finally get out of the market

3. Earnings: There will be plenty of quarterly results to sort through Monday.

Allergan (AGN), Merck (MRK) and Citizens Financial Group (CFG) will be reporting earnings before the open.

After the close, we'll hear from Twitter (TWTR, Tech30), Buffalo Wild Wings (BWLD), Crocs (CROX) and Denny's (DENN).

4. Economics: At 10 a.m. ET, the government will release data on September pending home sales.

First Published: October 27, 2014: 6:03 AM ET

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Paying thousands before health insurance even kicks in

NEW YORK (CNNMoney)

That's because more employers are offering consumer-directed health plans, which usually come with high deductibles. In 2015, 81% of large employers will offer at least one of these plans, up from 63% five years earlier.

Consumer-directed plans typically carry deductibles of $1,500 for individual coverage, more than three times higher than traditional policies, according to the National Business Group on Health.

And these plans will be the only choice for a growing number of workers. The share of larger employers offering only consumer-directed policies is jumping to 32% for 2015, up from 22% this year.

Deductibles are soaring for traditional insurance policies, too.

Deductibles for individual coverage at all firms have jumped to $1,217, on average, up 47% over the past five years, according to the 2014 Kaiser Family Foundation/Health Research & Educational Trust report. In high-deductible plans, they have hit $2,215.

Employers say they want more accountability, and higher deductibles force workers to take a larger role in their own care while shifting more of the costs to them.

Share your story: Are your health care deductibles going up?

Participants in these plans often have to pay more out of pocket -- not only for deductibles, but for doctors' visits, labs and procedures too.

On the plus side, they benefit from lower monthly premiums. Also, many employers contribute to savings accounts to help workers cover these costs. Annual checkups and preventative exams, such as colorectal screenings and mammograms, are free, as mandated by Obamacare.

Wells Fargo (WFC) switched to only consumer-directed plans in 2012. This year, the bank's employees can choose between two high-deductible policies -- one at $2,000 and the other at $3,000.

Doing so helped Wells Fargo keep plans affordable and allows it to offer a broad network of doctors and hospitals, said spokeswoman Richele Messick. "It gives them greater visibility into the cost of care and how they spend their health care dollars," she said.

Related: 5 ways you pay more for health insurance

Wells Fargo contributes up to $1,000 to workers' accounts, depending on their salary and the plan they choose. Employees can also earn up to $800 by participating in corporate wellness programs, including health screenings and quizzes.

For many, however, high-deductible health plans are a burden. They are nearly twice as likely to skip going to the doctor when sick or injured as those with traditional plans, according to a recent survey by the Associated Press-NORC Center for Public Affairs Research. Also, they are more likely to have difficulty paying other bills and to have decreased the amount they save.

Medical care has become more costly for the Vance family under a high-deductible plan.

Melissa Vance has had to go back to work. Her husband's employer just jacked up the family's deductible from $0 to $5,000. The Columbia, S.C., couple has four children with chronic conditions that require frequent lab work and costly medications.

Last year, Vance estimated she paid $2,000 for the family's health care. This year, the tab will likely surpass $10,000, which she said will take them years to pay off.

"I have a stack of bills I haven't even opened," said Vance, who now works part-time as an administrative assistant. "I get nauseous every time I look at them."

First Published: October 27, 2014: 6:26 AM ET

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Ferrari's invitation-only supercar

LONDON (CNNMoney)

The Ferrari Sergio, produced in partnership with Italian design firm Pininfarina, is a car that's so limited and unique you have to be invited by Ferrari to buy it. The automaker is creating only six Sergios and they're estimated to cost millions each.

Ferrari told CNNMoney it pre-sold all six vehicles to deep-pocketed die-hard Ferrari fans in the U.S., Europe and Asia. If you haven't received a call from Ferrari yet, you're out of luck.

Ferrari, which is owned by Fiat (FIADF), has built a world-class name for itself based on its reputation for exclusivity. It capped production at 7,000 cars per year to ensure demand consistently outstrips supply, making its cars all the more desirable.

However, after a recent management shake-up, the company said it will ramp up production by 5% this year to ensure its waiting list doesn't get out of control.

While vehicle output may be increasing, limited production cars like the Sergio help Ferrari keep its exclusive edge.

Related: Ferrari recalls 3,000 cars for entrapment danger

The automaker also offers a "one-off" program where rich car collectors can buy a completely original car that they help design themselves. Each car costs millions.

"It's as far removed from mass production as you can get," said Ferrari spokesperson Jason Harris.

Ferrari has only created about a dozen of these bespoke cars since the "one-off" program launched a few years ago, but it said the program is gaining traction, which could be helping the company's bottom line.

Ferrari reported record revenue in the first six months of this year, up nearly 15% compared to the same period in the previous year, even as it sold fewer cars. Profits for the period also rose by 10%.

Musician Eric Clapton helped design this original Ferrari. It's one of a kind and estimated to be worth millions.

Clients who signed on to buy the new Sergios have made their commitment before the road-ready car design has even been finalized. Ferrari engineers still haven't figured out how to craft a vehicle that is based on a whimsical concept car that was designed without a windshield and side mirrors.

The concept car was on show in London this month. Deliveries of the six Sergios are expected in 2015.

Related: Steve McQueen Ferrari sells for $10.2 million

Related: Lamborghini Huracan: So good, why spend more?

First Published: October 27, 2014: 4:57 AM ET

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Fed set to finally get out of the market

NEW YORK (CNNMoney)

The Federal Reserve is expected to close a chapter in history this week and announce the conclusion of its massive stimulus program. Known as quantitative easing, the program is widely credited with driving investors back into stocks in the aftermath of the financial crisis.

"I think to some extent quantitative easing has provided an assurance to investors that (has) kept them optimistic," said Bruce McCain, Chief Investment Strategist of Key Private Bank in Cleveland, Ohio. "Now we're going to have to see whether investors can ride without training wheels."

While there has been some chatter on Wall Street that the Fed would delay the expiration of stimulus due to concerns about weak growth and dangerously low inflation abroad, most analysts envision the central bank halting its bond purchases next month as previously signaled by Fed Chairwoman Janet Yellen.

"She hasn't wavered, everything she's said she's going to do, she's done it," stated JJ Kinahan, Chief Strategist at TD Ameritrade, of Yellen. "Her job is not to make the stock market go up. It's to keep the economy stable, and in her view the economy is strong enough."

Fed Chief Janet Yellen is preparing to get off the road of economic stimulus.

Then there's the question of interest rates. About a month ago, investors were trying desperately to guess when the Fed would raise it's key interest rate, which has been near zero since the recession.

But now, those worries about feeble economic and inflationary growth around the world have lead to conviction on Wall Street that rates will stay low for the foreseeable future. Most investors believe the first rate hike won't occur before June 2015, and a good chorus are betting it doesn't happen until the end of next year or later.

Related: Rich-poor gap 'concerns me': Yellen

Of course, the Fed isn't the only game in town this week.

Earnings continue to be on the forefront of investors' minds as they try to gauge how corporate America is faring.

Coming into earnings season, there was anxiety in some corners of the market that the slowdown in Europe could reverberate to U.S. multinational companies that derive a good chunk of their profits from overseas.

Related: Just how sick are Europe's top banks?

So far, however, those fears have yet to materialize.

Caterpillar (CAT)and 3M Company (MMM), two Dow components considered economic bellwethers for their ties to the global construction and industrial sectors, reported stellar results last week and raised their outlook for the rest of the year.

As for the firms that haven't done as well, such as McDonalds (MCD), Coca-Cola (KO), and IBM, (IBM, Tech30) Kinahan believes their woes are specific to their individual situations rather than the economy as a whole.

Related: Investors pour out of Coke

And he noted that CEOs have sounded confident on their quarterly conference calls. "They see North America, particularly the U.S., as being able to hang in there and hopefully help the rest of the world start to grow," he said.

Oh, and what about Ebola? Most market observers say not to freak out, even though the first case of the virus has been confirmed in New York and the disease did spook the markets a few weeks back.

Rather, McCain feels that investors' initial jitters had less to do with Ebola itself and more about overall unease in a market that hadn't taken a breather in quite some time.

"There's that tone of cautiousness that makes us more vulnerable to Ebola or ISIS scares," he asserted. "But they don't have a lot to do with the economic situation."

First Published: October 26, 2014: 9:49 AM ET

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Winners and losers in Europe's bank stress test

Some banks are still feeling the effects of the last financial crisis.

LONDON (CNNMoney)

All told, 25 banks failed the test, although 12 have already taken steps to shore up their finances.

Italy suffered the worst count: 9 of the country's 21 banks examined failed the test. Italy is Europe's fourth-largest economy.

Greece and Cyprus, southern European countries that required international bailouts, were next. In each country, three of four banks examined did not pass muster.

Five of the Italian banks and one Greek bank have since covered their shortfalls.

Only one of the 25 major banks in Germany, Europe's strongest economy, failed the test, but it has since raised sufficient capital.

Officials at the European Central Bank and European Banking Authority had been poring over bank finances for a year, and testing whether the banks had the strength to withstand a nasty shock, such as a spike in loan defaults or unemployment. More than 6,000 analysts reviewed and re-evaluated nearly all -- 81% -- of the banks' assets.

The aim was to weed out the weaklings that are hobbling Europe, or that could spark a new financial crisis in the event of another long recession.

Now the sickly banks will be forced to submit remedies, including possibly raising more money from investors.

The total shortfall was €24.62 billion, or about $31.2 billion.

Related: 'Zombie' firms threaten China's economy

The health of the financial sector is of vital importance for the eurozone, since growth has evaporated again and the specter of deflation looms.

Most European companies rely on bank finance, unlike their U.S. peers who are more likely to issue bonds. Banks with shaky foundations are less likely to take risks with their lending, therefore potentially stifling investment and growth.

Major players such as Deutsche Bank (DB) and Santander (SAN) were among the test subjects.

The results of the health check come just weeks before the European Central Bank assumes responsibility for supervising the eurozone's biggest lenders, a move intended to reduce the risk of future bank failures.

First Published: October 26, 2014: 7:26 AM ET

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Taxes and spending: What happens if Republicans win the Senate

The Senate race in Iowa, in which Republican Joni Ernst is running against Democrat Bruce Braley, could help the GOP retake the Senate majority in the midterm elections.

NEW YORK (CNNMoney)

That would put Republicans in the lead on key budget issues that have been the source of hair-raising drama in the past few years: taxes, spending and the debt ceiling.

What then?

CNNMoney asked seasoned political and policy analysts to give their take.

The most likely scenario, they say, is that Republicans will end up acting more centrist-right than Tea Party-right.

First, they know the next presidential election is right around the corner.

Remember last year's government shutdown -- forced by far right lawmakers and disparaged by Republican leaders?

"The GOP has to show they'll govern and get things done ahead of 2016 to better compete with Hillary Clinton," said Greg Valliere, chief political strategist of the Potomac Research Group.

Second, any Republican majority in the Senate could be slim, falling short of the 60 votes needed to prevent filibusters on key bills.

"If they put forth really radical legislation, the Democrats will have a blocking minority," said Corey Boles, senior U.S. analyst for Eurasia Group.

Related: CNN coverage of the 2014 midterm elections

Taxes: Republicans have been calling for tax reform every chance they get, as have Democrats. But that doesn't mean much.

"The odds of successful tax reform next year are incredibly low," Chris Krueger, a policy analyst at Guggenheim Partners, wrote in a research note.

Eurasia Group analysts agree, but think if there's any chance for it, it's slightly better under a Republican-controlled Congress.

No one believes both individual and corporate tax reform would get done in the next year or two.

But if there's any at all, odds favor corporate tax reform. This despite the fact that tax experts think it's ill-advised to do so on its own, since it won't account for the large partnerships and other business entities that file under the individual income tax code.

Politically it might be dicey too, said William Hoagland, senior vice president of the Bipartisan Policy Center and formerly a top Republican staffer on the Senate Budget Committee for years. That's because Republicans would like to lower tax rates for U.S. corporations, which voters may see as giving a break to big business but not average Americans.

Spending: Come mid-December, the current crop of lawmakers will need to reauthorize spending to avoid a government shutdown. Everyone expects them to do so.

The question is for how long. If they do it through the end of fiscal year 2015, which ends September 30, that "would signal a continued freeze on the budget wars," Krueger said.

But if it's only for a few months, and the Republicans come back as the Senate majority in January, that may "signify the return of governing-by-crisis," he said.

In either case, Congress will also have to pass a budget for fiscal year 2016, which starts next October.

So lawmakers will have to decide what to do about the statutory spending caps imposed by the 2011 budget deal.

"The caps are very, very tight," Hoagland said.

But there likely will be bipartisan pressure to lift them as demands grow to address the wars in the Middle East and to contain Ebola, among other crises, he noted.

Debt ceiling: The 2011 fight over the debt ceiling -- which sets a cap on the nation's borrowing limit -- brought the country to the edge of default, shook markets and earned the United States its first credit downgrade from Standard & Poor's.

It also yielded the deal that created the spending caps and the broad budget cuts known as the sequester.

Since then, lawmakers have gone to the mat several times as subsequent short-term compromises to raise or suspend the debt ceiling faced expiration.

The latest such compromise suspended the borrowing limit until March 15, 2015. But because of "extraordinary" measures that Treasury can take to keep the country's borrowing below the ceiling, lawmakers likely will have until June or July to settle the issue.

In recent years, some conservative Republicans demanded spending cuts that match or exceed any increase to the borrowing limit.

But as the majority party, Republicans may not want to take it so far, especially since it will be nearly impossible to come up with enough palatable cuts.

Yes, they may still demand something from President Obama in exchange for raising the limit, but it's likely to be much less than a dollar-for-dollar offset, Hoagland said.

And Obama may be pressured to go along if it is presented to him in a so-called budget reconciliation bill, which only requires 51 votes to pass.

First Published: October 26, 2014: 10:02 AM ET

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NYC tabloids keep a straight face on Ebola

NEW YORK (CNNMoney)

In the hours before Spencer was diagnosed he had gone bowling, rode the A train and stopped by a meatball shop. But there was not a single pun to be found on New York City newsstands Friday morning. No hysteria and no sensationalism.

Instead newspapers like AM New York went with just the facts. The free daily's front page simply said "Ebola in NYC" and showed a picture of Spencer in a hazmat suit while caring for victims in West Africa:

"We didn't want to be alarmists," said Pete Catapano, executive editor of AM New York. "Obviously it's a scary subject... We wanted to be very direct, very straight-forward."

Related: Syracuse University disinvites journalist over Ebola fears

The Daily News also took a tempered approach with its front page:

The New York Post (which is infamous for its outrageous covers) was a little more brash with its "Ebola Here!" headline, but did stick to just the facts:

"A subject like this... people make jokes about it. That's not our place to do that," Catapano said. "We just wanted to be very respectful, and let the story speak for itself."

Related: EU pledges 1 billion euros to fight Ebola

First Published: October 24, 2014: 5:39 PM ET

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The Ebola stocks: Effect of an outbreak

NEW YORK (CNNMoney)

Some people have considered canceling visits to big theme parks and have aired worries about whether airports and public areas are safe zones.

It's no wonder that investors are assessing Ebola's impact on the economy. Stocks of companies that make drugs that treat the virus have had a wild ride.

It's no small issue. Ebola has killed nearly 5,000 people, mostly in West Africa. The deadly virus has killed one person in the United States and on Friday, a doctor in New York City became the fourth person to have tested positive for Ebola in the country.

One trader, Dave Lutz of Jones Trading, has compiled a list of stocks that are either directly impacted or could be affected by the spread of Ebola.

Canadian biotech firm Tekmira Pharmaceuticals (TKMR)' stock surged in September after the FDA authorized the company's drug for patients with Ebola in the United States. Shares have since pulled back. The company has started limited production of its drug, TKM-Ebola, which will be available in early December.

BioCryst Pharmaceuticals (BCRX) is another small biotech company working on a drug that could be used to treat Ebola. Its stock has been on a roller coaster ride lately.

NewLink Genetics (NLNK) is working with the World Health Organization and other agencies on an Ebola vaccine. Its shares have surged 57% in the past month.

Companies that make protective equipment for healthcare workers or provide services to governments have also seen gains. Lakeland Industries (LAKE) said in September that it was boosting production of the protective suits in response to growing demand. It's stock has surged 76% in the last four weeks.

Alpha Pro Tech (APT) also makes protective equipment for healthcare workers. Its stock jumped 5% on Friday alone.

Some investors believe the airline industry is also vulnerable to the outbreak. Concerns about air travel rose this month after a Dallas nurse, who treated an Ebola patient, flew round trip between Dallas and Cleveland before being diagnosed with the virus.

Though airline stocks were hurt earlier in the month, they are now near all-time highs after reporting record setting profits.

Cruise ship operators have also been in focus after a healthcare worker who handled Ebola test samples was quarantined on a cruise ship earlier this month. Shares of both Carnival (CCL) and Royal Caribbean Cruises (RCL) have been under pressure recently.

Hotel chains could also be at risk if worries about Ebola cause people to curtail their vacation plans.

Hilton Worldwide (HLT) and Starwood Hotels (HOT) are on Lutz's list...

...as are amusement park operator Six Flags (SIX) and movie theater company Regal Entertainment (RGC).

First Published: October 24, 2014: 4:39 PM ET

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25 of Europe's largest banks fail stress test

Some banks are still feeling the effects of the last financial crisis.

LONDON (CNNMoney)

All told, 25 banks failed the test, although 12 have already taken steps to shore up their finances.

Officials at the European Central Bank and European Banking Authority had been poring over bank finances for a year, and testing whether the banks had the strength to withstand a nasty shock, such as a spike in loan defaults or unemployment.

The aim was to weed out the weaklings that are hobbling Europe, or that could spark a new financial crisis in the event of another long recession.

Now these sickly banks will be forced to submit remedies, including possibly raising more money from investors.

Related: 'Zombie' firms threaten China's economy

The health of the financial sector is of vital importance for the eurozone, since growth has evaporated again and the specter of deflation looms.

Most European companies rely on bank finance, unlike their U.S. peers who are more likely to issue bonds. Banks with shaky foundations are less likely to take risks with their lending, therefore potentially stifling investment and growth.

Major players such as Deutsche Bank (DB) and Santander (SAN) were among the test subjects.

The results of the health check come just weeks before the European Central Bank assumes responsibility for supervising the eurozone's biggest lenders, a move intended to reduce the risk of future bank failures.

First Published: October 26, 2014: 7:26 AM ET

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