When energy stocks look like bargains

Caterpillar and other heavy-equipment makers stand to gain from expanding mining and drilling operations.

(Money Magazine)

The Dow and S&P 500 have already risen more than twice that, besting their 2007 records and prompting the question, "Now what?"

Valuations don't suggest a snarling bear is about to pound at the door, but after a 120% run-up since March '09, stock prices clearly are no longer low.

Even the bullish money manager Laszlo Birinyi, who correctly shouted "buy" at the nadir of the financial crisis, admits that he'll "reassess" stocks when the S&P 500 gets to 1600. As of early April that was a mere 30 points away.

Related: 4 ways the market could really surprise you

One game plan for the cautiously bullish is to invest in stocks that pay dividends, especially those that have a record of growing their payouts. Dividend stocks have outperformed the broader market over time, and consistent dividend growers tend to have strong balance sheets and dependable cash flows. Investing in such stocks is a sound long-term strategy, but for now they've had a good run that you can't assume will necessarily continue.

Think cheap

So here's another option: Find a deal. Search for a beaten-down corner of the market that could be poised to play catch-up.

The prices of energy-related stocks were hit by the slowdown in global growth last year, but as the U.S. economy improves and America's energy boom gains traction, energy service firms look like a bargain.

National Oilwell Varco (NOV, Fortune 500) provides mechanical components for land and offshore oil rigs, and it stands to benefit as oil and gas exploration and production companies ramp up. The stock's price/earnings ratio is 12, less than the industry average and the market as a whole. Annual long-term earnings growth is projected to be 14%.

Caterpillar (CAT, Fortune 500) and other large-equipment companies should gain from expanded mining and drilling operations. With more than half the company's sales coming from outside the U.S., the stock has seesawed through the post-recessionary period as important markets such as China and Europe stalled. But with a P/E ratio of only 10, CAT appears to be undervalued.

"The heavy equipment segment will come back when capital spending commitments pick up again," says Ned Riley of Riley Asset Management in Boston. "The short-term disappointments have been discounted already, and the stocks are now better buys than they were before."

Related: Money 70 - Best mutual funds and ETFs

To diversify your exposure to energy services firms, look to the SPDR S&P Oil & Gas Equipment & Services ETF (XES). Holdings include all the major players, such as Halliburton and Helmerich & Payne. The fund charges 0.35% of assets, so it's an inexpensive way to buy into an inexpensive sector.

First Published: April 25, 2013: 6:29 AM ET

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The best job you never thought of

Actuary consistently ranks among the top jobs in the United States. Do you know what they do?

NEW YORK (CNNMoney)

It's in high demand, can pay six-figures a year, and your employer often foots the bill for on-the-job training. No grad school required!

It's an actuary, and for the past several years, it's been highly ranked as one of the best jobs in America on various lists, the most recent of which was compiled by CareerCast.

Despite all the good publicity, I can tell you from personal experience that most people still don't have an inkling what an actuary does.

My husband is an actuary, and when I introduce him to others as such, blank stares are common. Occasionally someone may say, "Oh, like the Ben Stiller character in Along Came Polly?"

The next inevitable question: "Can he predict when I'll die?"

So what is an actuary?

The job entails using statistics to estimate risks, usually for insurance companies. Actuaries set prices for insurance contracts and advise insurance companies just how much money they should set aside to pay out for future claims. They can also design pension and healthcare plans.

For example, an actuary may try to predict how much money an insurance company would have to pay out to cover damage from future hurricanes.

Insurance companies and insurance-related consulting firms are their largest employers, but actuaries are also scattered throughout academia and the government (they're crucial in the Social Security Administration, for example).

It's still a relatively small occupation, employing about 22,000 people in the United States, but it's expected to grow quickly. (By comparison, there are about 190,000 accountants in the country.)

The Labor Department forecasts the actuarial field will grow 27% between 2010 and 2020, adding 5,800 jobs during that decade. That's more new jobs than are expected from the economist, statistician and mathematician occupations combined.

That said, it's not an easy job to land, and it's certainly not the best fit for everybody.

The key to becoming a full-fledged actuary lies in passing an intense series of seven to nine exams, which can take between six to eight years to complete.

The good news is that employers often pay for the studies. Employers will often hire math, statistics or business majors with starting salaries around $45,000 to $50,000 a year, and then give them paid time off to study and take their exams, said Tom Miller, principal of Pinnacle Group Actuarial Recruiting.

Related: Top-paying jobs

Usually the salary increases with each passed exam. By the time all the exams are completed, the salary could have doubled, to around $90,000 a year, plus a bonus, Miller said.

The exams are notoriously difficult, and even among these math whizzes, it's not uncommon to fail one or two.

"These are people who have probably never failed an exam in their lives. They've gotten straight A's their whole life, and the failure rates can run as high as 60% on these exams. It's very, very challenging," Miller said.

Just go to a bar with a young actuary, and all they'll talk about is studying. The standard practice is to study 300 to 400 hours per exam.

If you can pass all the exams, the job is considered high paying and secure. One study, by the Georgetown University Center on Education and the Workforce, finds that actuarial science graduates had a near-zero unemployment rate in 2010.

"It's a great job and one of the reasons why is the stability of the profession. Demand is greater than supply, and it's been that way for 30-plus years. There's no expectation that will change," Miller said.

The few occupational hazards entail sometimes working 10-hour days, and of course, the occasional jokes about being a math nerd.

As an accountant put it to me last month -- "an actuary is someone who wanted to be an accountant, but didn't have the personality for it."

Actuaries often like to tell it the other way around.

First Published: April 25, 2013: 6:32 AM ET

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Teens (and their parents) spending hundreds on prom

Sarah Hoffer, an 18-year-old high school senior in St. Louis, spent $259 on her prom dress, which required an extra $220 in alterations.

NEW YORK (CNNMoney)

On average, families expect to spend $1,139 on prom this year -- up roughly 40% from 2011's $807 average and a slight increase from last year, according to a Visa survey.

Families in the Northeast expect to pay the most, an average of $1,528, while Midwestern families were the most frugal, at an average of $722, according to the survey of more than 1,000 parents of prom-aged teens.

With traditions like debutante balls falling out of fashion and young people getting married later in life, prom has grown in importance and people are willing to spend more on the big night, said Kit Yarrow, a consumer research psychologist.

"Prom is the new wedding," Yarrow said. "I think that every society has to have a rite of passage into adulthood for young people, and prom has become that."

The increase in prom spending is also being driven by the popularity of photo-oriented sites like Facebook and Instagram, she said. Prom is "a post-able moment" which has heightened the pressure around appearances.

While parents still foot a majority of the bill, teens pay for about 41% of the costs, Visa's survey found.

Related: I had 10 jobs before age 25

Sarah Hoffer, an 18-year-old senior at Webster Groves High School in St. Louis, saved roughly a month's worth of pay from her job at a local car wash to help pay for her prom.

Her biggest expense was a $259 vintage-inspired dress that she fell in love with online. Her mother, Martha Valenta, agreed to pay for an additional $220 in alterations.

"The dress was real drama," said Valenta, who wore a borrowed dress to her own prom. "I don't recall that ever in my youth."

Hoffer also spent $50 on a ticket, $20 on shoes, $43 on a manicure and pedicure and $35 on makeup -- bringing her grand total to $627, of which she paid about two-thirds.

To save money, she used a free trial visit for a spray tan, had a friend's mom style her hair and drove herself to prom, unlike many of her classmates who she said spent hundreds on limos and party buses.

When Patti Manoogian, from Hackettstown, N.J., took her 17-year-old son Alex Galbreath to Men's Wearhouse, she wasn't expecting to pay more than $100 to rent a tux for prom night. But the designer Vera Wang tux her son picked out cost $200 to rent.

The school requires students to ride a bus to prom, which saves on limo costs, but once she adds on the $90 prom ticket, the corsage for his date and photos, the total bill will likely exceed $400. Other parents, she said, are spending much more.

"I love the idea that the kids have an opportunity to dress up like adults," she said. "But if we could take down the competition on what people look like, I think you could get the same nice adult evening for something that doesn't cost a mortgage payment."

For some families, the costs are especially daunting.

Families with household incomes below $50,000 a year plan to spend an average of $1,245 on prom this year, compared to $1,129 for those with incomes above $50,000, the Visa survey found. And single parents plan to spend $1,563, nearly double the amount of married parents.

Related: Bieber launches prepaid debit card

Noel D'Allacco founded the nonprofit Operation Prom to provide donated prom dresses to low-income teens nearly a decade ago. This year, the group expects to distribute more than 5,000 dresses nationally.

"Years ago we used to require a copy of their parents' tax return, but ever since 2009, we stopped doing that because chances are if you are coming there is some sort of financial need," she said.

A dialysis patient awaiting a kidney transplant, Brenda Cruz has been unable to find work for years. Living on monthly disability checks of less than $1,000 a month, the Brooklyn, N.Y. resident had no clue how to afford to send her 19-year-old daughter, Rachel Gantt, to senior prom in June.

But at Operation Prom's giveaway in Queens, Gantt was able to pick out a dress for free. Cruz is still worried about paying for shoes and a prom ticket, but she is determined that her daughter not miss out.

"I'm going to try everything I can," she said. "If that means that I can't pay rent for this month coming up so she can get her ticket, then I'm just going to have to do it and deal with the consequences later."

First Published: April 25, 2013: 6:42 AM ET

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Ford earnings rise

Ford reported improved earnings helped by a record quarter in its home market.

NEW YORK (CNNMoney)

Ford said a 20% jump in sales in North America helped it post the largest quarterly profit in its home region since the automaker started breaking out those numbers in 2000.

But the company losses in Europe more than tripled from its year-earlier loss, to $462 million. Ford has announced plans to close two U.K. plants, along with a third plant in Belgium, to try to stem European losses. But those plant closings won't take effect until later this year or in 2014.

The problems are not unique to Ford. A worsening European recession has resulted in the worst industry-wide auto sales on the continent in 20 years.

On Wednesday, German carmaker Daimler AG (DDAIF) forecast that earnings for 2013 will be below 2012 levels, after reporting a 60% drop in net profit for the first quarter. Volkswagen (VLKAF) also warned it is struggling with what it called "ongoing uncertainty in the economic environment." But it said it still hopes to match 2012 operating profits this year.

Related: Ford and Toyota feud over whose bigger

The problems for Ford weren't only in Europe. South America swung from a profit a year earlier to a loss in the quarter. But it went from a loss in the Asia/Pacific/Africa region into a narrow profit, and earnings also improved at Ford Credit.

Overall, Ford, second in U.S. sales behind rival General Motors (GM, Fortune 500), earned $1.6 billion in the first three months of the year, up 15% from a year earlier. Its revenue rose 10.5% to $35.8 billion, as the number of cars sold worldwide rose to 1.5 million.

Shares of Ford (F, Fortune 500), which have lagged broader U.S. markets so far this year, were down in early trading following the results, after being slightly higher at the open.

-- CNNMoney's Alanna Petroff contributed to this report

First Published: April 24, 2013: 7:21 AM ET

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High speed trading fueled Twitter flash crash

The Dow dropped more than 140 points Tuesday.

NEW YORK (CNNMoney)

The Dow quickly bounced back. The sharp sell-off highlights just how disruptive computer-driven high-frequency trading can be.

The S&P 500 lost $121 billion of its value within minutes.

High-speed computer trading accounts for roughly 50% of all trading. That's down slightly from a few years ago, but traders on the ground say it feels more dominant.

And mini flash crashes have become an all too familiar daily occurrence.

"This shows the Achilles' heel of a market structure that has high-frequency trading as its backbone," said Sal Arnuk, co-head of trading at Themis Trading.

Related: False tweet roils markets

Traders and analysts say that at the first sign of crisis (and sometimes in the absence of a crisis), high-frequency traders pull out of the market, leaving a void of buyers and sellers.

In fact, liquidity dried up even faster after the false tweet Tuesday than it had during the infamous Flash Crash of 2010.

Eric Hunsader, the founder of Nanex, a firm that tracks trading behavior. said Tuesday's market reaction shows that trading has become even faster in recent years.

Related: Mini flash crashes: A dozen a day

"One tweet can do more damage to our market's liquidity than the flash crash," said Hunsader. Certain trading pools were overloaded, and trades weren't reported for four minutes, he added.

Within the past year and a half, disruptions in the market marred the IPOs of the BATS exchange and Facebook.

Just Monday, Google (GOOG, Fortune 500) had an inexplicable flash crash. It only lasted a few seconds but still signals the fragility of markets in a high-speed trading world.

The SEC, Nasdaq and NYSE all declined to comment on Tuesday's flash crash.

A spokesperson for BATS called the drop a "non-issue for the trading community" and said the exchange had not received any calls from customers.

First Published: April 24, 2013: 7:45 AM ET

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Stocks falter in early trading

Click chart for more market data.

NEW YORK (CNNMoney)

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq dropped between 0.2% and 0.4%.

Investors were spooked by a report on durable goods orders that showed orders fell by 5.7% in March -- much worse than analysts had predicted.

Another batch of earnings also gave investors pause.

Boeing (BA, Fortune 500) was the biggest gainer on the Dow, after it reported an increase in profits, even as revenue was dinged by its grounded Dreamliners.

But AT&T (T, Fortune 500) and Procter & Gamble (PG, Fortune 500) offset those gains. AT&T's sales came up short, while Procter & Gamble cut its guidance.

Apple (AAPL, Fortune 500) beat expectations and announced it would raise its quarterly dividend and boost its stock buyback program. But the company still struggled with lower profits on the iPhone and iMac.

Ford (F, Fortune 500) also reported a jump in earnings, helped by sales in North America.

Related: High speed trading fueled Twitter crash

Shares of Juniper Networks' (JNPR) fell more than 7% after the company projected "continued weakness" in its earnings outlook late Tuesday.

Shares of Yum Brands (YUM, Fortune 500) jumped more than 6% after the fast-good restaurant operator reported earnings that topped Wall Street's low expectations.

Related: Fear & Greed Index, Drifting into neutral

Even with the errant tweet, U.S. stocks finished higher Tuesday.

European markets rose in afternoon trading, supported by continuing talk of a ECB rate cut following weak eurozone data. The Ifo German business climate index for April was weaker than expected.

Asian markets ended higher, with Japan's Nikkei adding 2.3%. Hong Kong's Hang Seng added 1.7% and the Shanghai Composite increased 1.6%.

The dollar rose against the euro and the Japanese yen, but fell against the British pound.

Oil and gold prices jumped.

The yield on the 10-year Treasury stayed flat at 1.70%.

First Published: April 24, 2013: 9:57 AM ET

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Reduce the steep cost of diabetes

Diabetes is expensive to monitor and control. Here are some ways you can save money on your medical expenses.

(Money Magazine)

Some 26 million Americans suffer from the disease, in which sugar builds up in the blood: 7 million of those are undiagnosed. Another 79 million are prediabetic, or at risk for developing the ailment.

Says Dr. Ron Loeppke, vice chairman of U.S. Preventive Medicine: "It's a national crisis."

And a costly one; diabetes patients can spend as much as several thousand a year out-of-pocket on treatment, says Loeppke.

If you have the disease or are in a high-risk group (have a family history of the illness and/or are overweight), try these strategies to keep the costs in check:

If you don't have diabetes...

Take precautions. Make sure your doctor includes a blood-sugar screening in your physical; insurance will pick up the tab in almost all cases.

Related: Crack open your own genetic code

High-risk patients should get screened at least once a year, says Philadelphia-area primary-care doctor Charles Cutler.

And move more: In people with prediabetes, losing 5% to 7% of body weight and getting 150 minutes of exercise a week decreases the risk of developing diabetes by almost 60%, according to the Centers for Disease Control.

Struggle with your diet? Ask your doctor for a prescription to see a nutritionist -- if you've been diagnosed as prediabetic, your insurer may cover the cost.

If you have diabetes...

Stick to older meds. Drug companies are touting new medications such as Januvia and Onglyza, designed to control blood sugar, but the drugs that have been around for years are just as effective for most people and often have fewer side effects, according to a 2011 report by the federal Agency for Healthcare Research and Quality.

Related: 10 things to know about health insurance

Those who have a large co-pay for name-brand drugs or are on a high-deductible plan might pay a couple hundred dollars a month for the latest meds, while drugs such as metformin and glipizide are sold as generics and usually cost under $20 a prescription.

Save on supplies. Private insurance generally doesn't pay for the home monitor, lancets, and testing strips needed to test blood-sugar levels multiple times a day.

Opt for the monitor that uses the cheapest testing strips, says Cutler, and order supplies in bulk from online wholesale supply firms.

Pay for supplies with pretax dollars via your work flexible spending account or see if you qualify for a medical tax deduction (you get a break on costs that exceed 7.5% of your adjusted gross income).

Seek support. Studies show that diabetics who join support groups better maintain normal blood-sugar levels.

Almost every large employer offers some sort of chronic-illness management program with access to nurses and support classes, according to the benefits consulting firm Towers Watson. Most major insurers do as well. Call your HR department or insurer and ask.

First Published: April 24, 2013: 6:11 AM ET

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High speed trading fueled Twitter flash crash

The Dow dropped more than 140 points Tuesday.

NEW YORK (CNNMoney)

The Dow quickly bounced back. But the sharp sell-off highlights just how disruptive computer-driven high-frequency trading can be.

High-speed computer trading accounts for roughly 50% of all trading. That's down slightly from a few years ago, but traders on the ground say it feels more dominant.

And mini flash crashes have become an all too familiar daily occurrence.

"This shows the Achilles' heel of a market structure that has high-frequency trading as its backbone," said Sal Arnuk, co-head of trading at Themis Trading.

Related: False tweet roils markets

Traders and analysts say that at the first sign of crisis (and sometimes in the absence of a crisis), high-frequency traders pull out of the market, leaving a void of buyers and sellers.

In fact, liquidity dried up even faster after the false tweet Tuesday than it had during the infamous Flash Crash of 2010.

Eric Hunsader, the founder of Nanex, a firm that tracks trading behavior. said Tuesday's market reaction shows that trading has become even faster in recent years.

Related: Mini flash crashes: A dozen a day

"One tweet can do more damage to our market's liquidity than the flash crash," said Hunsader. Certain trading pools were overloaded, and trades weren't reported for four minutes, he added.

Within the past year and a half, disruptions in the market marred the IPOs of the BATS exchange and Facebook.

Just Monday, Google (GOOG, Fortune 500) had an inexplicable flash crash. It only lasted a few seconds but still signals the fragility of markets in a high-speed trading world.

The SEC, Nasdaq and NYSE all declined to comment on Tuesday's flash crash.

A spokesperson for BATS called the drop a "non-issue for the trading community" and said the exchange had not received any calls from customers.

First Published: April 24, 2013: 7:45 AM ET

19.33 | 0 komentar | Read More

Ford earnings rise

Ford reported improved earnings helped by a record quarter in its home market.

NEW YORK (CNNMoney)

Ford earned $1.6 billion in the first three months of the year, up 15% from a year earlier.

Ford, second in U.S. sales behind rival General Motors (GM, Fortune 500), said it made a pretax profit of $2.4 billion in North America -- the best performance in the region since the automaker started breaking out its numbers in 2000. Sales in North America rose jumped nearly 20%.

But the company lost $462 million in Europe, more than triple its year-earlier loss. Ford has announced plans to close two U.K. plants, along with a third plant in Belgium, to try to stem European losses. But those plant closings won't take effect until later this year or in 2014.

The problems are not unique to Ford, as a worsening European recession has resulted in the worst industry-wide auto sales on the continent in 20 years.

On Wednesday, German carmaker Daimler AG (DDAIF) forecast that earnings for 2013 will be below 2012 levels, after reporting a 60% drop in net profit for the first quarter. Volkswagen (VLKAF) also warned it is struggling with what it called "ongoing uncertainty in the economic environment." But it said it still hopes to match 2012 operating profits this year.

Related: Ford and Toyota feud over whose bigger

The problems for Ford weren't only in Europe. South America swung from a profit a year earlier to a loss in the quarter. But it turned a loss in the Asia/Pacific/Africa region into a narrow profit, and earnings also improved at Ford Credit.

Overall company revenue rose 10.5% to $35.8 billion, as the number of cars sold worldwide rose to 1.5 million.

Shares of Ford (F, Fortune 500), which have lagged broader U.S. markets so far this year, were down in premarket trading following the results, after being higher earlier.

-- CNNMoney's Alanna Petroff contributed to this report

First Published: April 24, 2013: 7:21 AM ET

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German downturn bodes ill for eurozone

A decline in private sector output in April and falling car sales suggest the German economy is slowing again.

LONDON (CNNMoney)

Financial data provider Markit said its initial purchasing managers' index (PMI) reading for German manufacturing and services fell to a 6-month low of 48.8 from 50.6 in March, pointing to the first contraction in output since November.

The reading for the eurozone as a whole was unchanged at 46.5, indicating a drop in activity for the 19th time in the past 20 months. New business in manufacturing and services in the eurozone suffered its steepest rate of decline since December.

Renewed concerns about the outlook for southern Europe following the messy Cyprus bailout at the end of March may have contributed to subdued business confidence.

Markit Chief Economist Chris Williamson said the data reflected a weak start to the second quarter and suggested the region's downturn could intensify rather than ease in the months to come.

"Worryingly, the rate of loss of new business gathered further momentum, suggesting that activity and employment could fall at steeper rates in May," he said.

"The renewed decline in Germany will also raise fears that the region's largest growth engine has moved into reverse, thereby acting as a drag on the region at the same time as particularly steep downturns persist in France, Italy and Spain," Williamson added.

Related: China manufacturing expansion slows

French private sector output continued to contract in April, although the pace of decline slowed.

Markit said its April PMI data pointed to a contraction in the eurozone economy of 0.4%, compared with 0.2-0.3% expected in the first quarter of the year.

The International Monetary Fund cut its 2013 forecast for the eurozone economy last week, saying it expected gross domestic product to contract by 0.3%. The European Central Bank is slightly more pessimistic, predicting a fall of 0.5% this year.

European policymakers continue to predict a gradual recovery in output in the second half of the year but are coming under growing pressure to relax a policy of austerity that has contributed to a sharp loss in domestic demand.

Recession in Germany would remove one of the few sources of eurozone growth at a time when the global outlook is also deteriorating. New car sales in Germany fell by 13% in the first quarter of 2013, suggesting a loss of confidence among consumers as well as businesses.

First Published: April 23, 2013: 6:19 AM ET

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