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Stocks: 5 things to know before the open

Written By limadu on Jumat, 19 September 2014 | 14.44

nyse premarkets 041714 U.S. stocks closed higher Thursday.

LONDON (CNNMoney)

Alibaba's market debut is fast approaching and Scotland has just voted to remain in the United Kingdom.

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

1. Alibaba IPO: Investors are eagerly awaiting Alibaba's debut on the New York Stock Exchange under the ticker "BABA."

The Chinese e-commerce giant, founded by Jack Ma, has made history with the largest U.S.-listed initial public offering of all time.

Shares were priced Thursday at $68, raising $21.8 billion and valuing the company at $168 billion. That's more than double eBay's (EBAY, Tech30) $64 billion market value and even tops the market capitalization of 20-year-old Amazon (AMZN, Tech30).

Friday will mark the first time individual investors can buy a stake in the company.

However, many investors are expressing caution about Alibaba.

"If the company doesn't live up to the hype then it is very likely that [market] enthusiasm will turn sour," said Chris Beauchamp, a market analyst at IG. "It needs to show real sales growth not just in China, but the U.S. as well."

2. Scotland is staying: Scotland has voted to remain in the United Kingdom after a polarizing referendum.

The pound spiked versus the U.S. dollar overnight as investors expressed relief that voting trends showed the country would stick together after a tough challenge from pro-independence campaigners. The pound was also strong against the euro.

Some Scottish investors had been buying gold in advance of the referendum as they worried the country would leave and Scotland would be forced to adopt a new currency. Gold prices were edging lower Friday.

Related: Fear & Greed Index

3. More record highs?: U.S. stock futures were all rising before the open -- pointing to new record highs for both the Dow Jones Industrial Average and the S&P 500. The Dow Jones Industrial Average and the S&P 500 rose nearly 0.7% Thursday to close at record levels. The Nasdaq moved 0.5% higher.

Related: CNNMoney's Tech30

4. Market movers: ConAgra (CAG) shares shot up by about 5% premarket after the company reported better-than-expected quarterly results.

On the other hand, shares of Oracle (ORCL, Tech30) dipped about 2% lower in extended trading after founder Larry Ellison announced he will be stepping down as CEO.

5. Global overview: Asian stock markets made steady gains across the board Friday.

The Nikkei in Japan was particularly strong as the yen weakened.

First Published: September 19, 2014: 2:43 AM ET


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Retirement savings gap widens between rich and poor

chart nest egg In 2013, households in the lowest income bracket had a median savings balance of just $13,000, while those in the top income bracket had median savings of $452,000.

NEW YORK (CNNMoney)

Last year, the typical 55- to 64-year-old household had just $111,000 saved in their 401(k)s and IRAs, which would translate into just $500 a month in retirement income, according to a report from Boston College's Center for Retirement Research that analyzed recent Federal Reserve data.

Related: Retired women: How I'm getting by

But when you break down the savings by income brackets, the numbers look even bleaker.

Households in the lowest income bracket -- those earning less than $39,000 a year -- had a median savings balance of just $13,000. Meanwhile, those in the top income bracket -- those earning $138,000 or more a year -- had a median of $452,000 saved.

And that's a gap that has widened significantly over the past decade.

America's wealthiest saw the value of their median retirement savings grow by 24% between 2004 and 2013, while low-income households couldn't even keep up with inflation as they watched their savings shrink by nearly 20%, according to the Federal Reserve's inflation-adjusted data.

Related: My biggest retirement mistake

Even more alarming: a growing number of low and middle-income households have no retirement savings at all.

Only 9% of the country's lowest income households and roughly half of middle-class families have a retirement savings account, compared to more than 90% of the country's wealthiest households, the Federal Reserve found.

Alicia Munnell, who wrote the Boston College report, said the "depressing" savings levels and rates could be a reflection of stagnant wages and lingering effects of the recession.

According to Munnell, there are ways to help workers save more for retirement, including requiring employers to auto-enroll workers into a retirement plan and increasing the rate at which employers enroll their workers.

Other factors that she says must be addressed include high fees and when savers cash-out of their 401(k)s.

"(Something's) going to have to change," she said. "The question is, 'How long is it going to take?'"

First Published: September 18, 2014: 7:02 PM ET


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U.K. markets rally as Scotland votes to stay

pound dollar 0919 The pound spiked versus the U.S. dollar as traders expected Scotland would vote to stay in the U.K.

LONDON (CNNMoney)

The pound was firmer against the U.S. dollar and the euro, recovering some of the ground lost earlier this month when surveys suggested Scotland was on the brink of ending its 307-year union with England.

Results from the historic referendum showed 55% voted against independence in Thursday's ballot, a clearer margin than expected.

Stock markets also rose, with shares in Scottish companies doing particularly well. The FTSE 100 index gained 0.6% in early trading.

"The risk of huge disruption from Scottish independence is gone. Not for good ... but for a considerable time," noted Robert Wood, chief U.K. economist at Berenberg bank. "For now markets can return to normal.

Companies and banks that had warned they may migrate south of the border if Scotland had gone it alone were quick to reassure investors and customers that it was business as usual.

"The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a 'Yes' vote," Royal Bank of Scotland (RBS) said in a statement. "That contingency plan is no longer required."

Shares in RBS gained 4% in early dealing.

A vote in favor of independence would have ushered in months, if not years, of difficult divorce proceedings over the currency, North Sea oil, U.K. national debt and Scotland's place in the European Union.

Investors feared that the considerable uncertainty would dent business and consumer confidence, hurt growth, slow job creation and hit tax revenues.

The Scotch Whisky Association had said it was concerned about how potential changes in Scottish tax and trade rules could hurt exports to international markets.

Still, market relief will be tempered by the fact that the U.K. government made big concessions in the last days of the campaign, promising to hand over much more power to the Scottish parliament in Edinburgh.

That in turn has sparked a political backlash in England, the consequences of which are unclear. And with a U.K. election just eight months way -- a vote that could lead to a U.K. referendum on EU membership in 2017 -- political risk will remain high for some time to come.

First Published: September 19, 2014: 3:33 AM ET


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Millennials are staying put at mom and dad's place

Written By limadu on Kamis, 18 September 2014 | 14.44

NEW YORK (CNNMoney)

Well, they haven't moved out yet.

They also don't seem to be in a hurry to get married, have kids -- or buy a home. And that has pushed the homeownership rate among young adults ages 18 to 34 to a new low of 13.2%, according to an analysis of Census Bureau data by Trulia.

Related: Amazing shipping container homes

And that's not great news for the housing market.

Thanks to a sluggish job market, heavy student loan debts and tight lending standards, Millennials are moving out of their folks' homes at a snail's pace. In 2014, 31.1% of 18- to 34-year-olds lived with their parents, down slightly from 31.2% a year prior.

What paints an even grimmer picture is that those who do manage to leave mom and dad's place aren't moving out to form their own households, said Jed Kelko, Trulia's chief economist. Instead of renting or buying a home, they are bunking with friends, siblings or other relatives.

In fact, the headship rate -- or the percentage of people who own or rent their own homes -- fell to 36.6% in 2014 for this group, down from 36.9% a year earlier.

Related: Best cities for Millennial homebuyers

With fewer young people renting or buying homes, fewer new households are being formed, explained Kolko.

According to Trulia's analysis of the Census data, just 425,000 new households were formed last year, a far cry from the estimated 1.2 million that would have been formed had that headship rate not declined.

"Thus, [the] Census data show that the housing market is still struggling to recover," wrote Kolko.

First Published: September 17, 2014: 6:11 PM ET


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Pier 1 Imports shares fall 11%

pier 1 imports earnings Foot traffic is down at Pier 1 stores.

NEW YORK (CNNMoney)

Shares plunged as much as 11% in after-hours trading Wednesday after the company said profit was nearly cut in half during its most recent quarter.

Pier 1 earned less despite an increase in sales compared to the same quarter last year. CEO Alex W. Smith blamed that on an increase in promotions and the costs associated with online sales. Plus, fewer people are shopping at its stores.

"The paradigm for customer shopping behavior continues to change," Smith said.

He pointed to the jump in online sales, which now make up nearly 10% of overall sales, as a highlight. But that growth is cutting into the company's bottom line in the short-term, due to investments in marketing, staff and the opening of the company's second fulfillment center.

Smith said he was hopeful that an increase in online sales can also help drive traffic at stores. About one-third of online orders are currently picked up at Pier 1 stores and about a quarter of online orders are placed at computers located in the stores.

Shares of Pier 1 Imports (PIR) are down 33% since the beginning of 2014.

First Published: September 17, 2014: 7:05 PM ET


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Alibaba IPO means a big payday for Jack Ma

HONG KONG (CNNMoney)

Ma is selling 12.75 million shares in Alibaba's IPO, bringing in as much as $867 million if they are priced at the top of the target range of $66 to $68.

That's no mean way for the Chinese entrepreneur to ring in his 50th birthday, celebrated just a few days ago on Sept. 10.

Ma's remaining 7.8% stake in the company is estimated to be worth about $13 billion. The deal values Alibaba (BABA) itself at $163 billion, slightly bigger than Amazon (AMZN, Tech30).

Alibaba's executive vice chairman Joe Tsai is also selling shares in the IPO that will net him as much as $289 million. His remaining stake in the company is estimated to be worth as much as $5.4 billion.

Related: Meet four kings of Alibaba's online retail empire

Ma and Tsai made their fortunes by building Alibaba into a tech behemoth that does just about everything. The firm runs China's two most popular online shopping sites, Taobao and Tmall, and operates a network of services that allow consumers to process payments, buy movie tickets, get lunch delivered, or invest in a money market fund.

A former English teacher, Ma is something of an unlikely billionaire. He flunked his college entrance exams, was rejected by Harvard, and was snubbed by most people when he first started talking about building an Internet business in China.

Related: Alibaba: All you need to know

But he proved them all wrong, and Alibaba is now on the brink of what could be the biggest IPO in history.

Ma and Tsai are now putting some of their wealth towards philanthropic efforts. In April, they established two trusts funded by share options worth about 2% of the company. The funds are planned to benefit environmental, medical, education and cultural causes in China.

Related: 5 risks for investors buying Alibaba shares

Also poised to win big in the Alibaba IPO is Masayoshi Son, Japan's richest man. He is CEO of telecoms group Softbank (SFTBF), which has seen the value of its original $20 million investment soar to about $54 billion.

Softbank doesn't plan to unload any shares in the IPO.

Yahoo (YHOO, Tech30) will sell shares worth as much as $8.3 billion. Its remaining stake could be worth about $27 billion.

First Published: September 17, 2014: 10:13 PM ET


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Top 20 colleges with most billionaire alumni

Written By limadu on Rabu, 17 September 2014 | 14.44

billionaire college University of Pennsylvania tops the list of colleges with the most billionaires as undergraduate alumni, according to a Wealth-X and UBS report.

NEW YORK (CNNMoney)

According to Wealth-X and UBS's "Billionaire Census," University of Pennsylvania tops the list of 20 schools with the highest number of billionaire undergraduate alumni. The rest of the list reads like a laundry list of Ivy League and prestigious U.S. universities.

Some schools beyond the ivory tower of U.S. higher education, like University of Mumbai and Moscow State University, made the cut.

To be sure, not all billionaires went to fancy internationally recognized schools. In fact, 35% of billionaires didn't graduate from college.

It's also worth noting that while these schools top the list, the 2,325 global billionaires received bachelor's degrees from more than 700 universities across the globe.

Take a look to see which schools have the most super rich alums.

billionaires schools

First Published: September 16, 2014: 11:05 PM ET


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Billionaire boom: Where the money is now

billionaires text A new report from Wealth-X and UBS found that the global population of billionaires is at a record high.

NEW YORK (CNNMoney)

That's a 7% jump from 2013, according to the 2014 "Billionaire Census" from Wealth-X and UBS.

So who is your standard billionaire? According to the report, the typical billionaire has about $3.1 billion, is 63 years old, and did not reach the $1 billion threshold until their late 40s.

Almost 90% of them are married, and on average, have two kids a piece.

They like to hang with other billionaires: They have relationships with nine ultra-high net worth individuals, three of whom are billionaires.

They're mostly male: Just 286 of them are women.

They're self-made: About 87% of male billionaires have at least partly made their wealth themselves. Though it's a different story for the women -- just 35% made it themselves. For the rest, it came through inheritance.

They own a lot of stuff: The typical billionaire owns four properties, each worth an average of $23.5 million. About 35% of billionaires have their own private philanthropic foundations, and one in thirty billionaires owns a sports team or a race horse.

Education isn't required: Not all billionaires have a wall full of degrees. In fact, the report states that 35% of global billionaires do not have bachelor's degrees.

For those who did go to college, University of Pennsylvania tops the list of schools with most billionaire undergraduate alumni.

Unsurprisingly, Harvard, Yale and University of Southern California follow, but University of Mumbai and Moscow State University aren't far behind. However, 16 of the top 20 are in the United States.

And where do they live?: Nearly 35% of the world's billionaires are concentrated in 20 cities, only two of which are in the United States. Despite that, the U.S. has the highest number of billionaires, accounting for close to 25% of the world's total billionaire population.

billionaire cities

This year alone, there were 57 new American billionaires.

First Published: September 16, 2014: 11:02 PM ET


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Occupy abolishes $4 million in other people's student loan debt

NEW YORK (CNNMoney)

Marking the third anniversary of the Occupy Wall Street movement, the group's Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

In total, the group spent a little more than $100,000 to purchase the $3.8 million in debt.

While the group is unable to purchase the majority of the country's $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game.

Related: U.S. government to Corinthian Colleges: Forgive $500 million in student loans

This debt Occupy bought belonged to 2,700 people who had taken out private student loans to attend Everest College, which is run by Corinthian Colleges. Occupy zeroed in on Everest because Corinthian Colleges is one of the country's largest for-profit education companies and has been in serious legal hot water lately.

Following a number of federal investigations, the college told investors this summer that it plans to sell or close its 107 campuses due to financial problems -- potentially leaving its 74,000 students in a lurch.

"Despite Corinthian's dire financial straits, checkered past, and history of lying to and misleading vulnerable students, tens of thousands of people may still be liable for the loans they have incurred while playing by the rules and trying to get an education," a Strike Debt member said in an email.

Then on Tuesday, the company was hit with a lawsuit from the Consumer Financial Protection Bureau over allegations of predatory lending practices. The lawsuit demanded that Corinthian forgive the more than $500 million in outstanding student loan debt that its students had incurred since 2011. Should the court rule in the CFPB's favor, that means the debt Occupy bought and abolished would have been forgiven anyway.

Related: States, federal government cracking down on for-profit colleges

Corinthian Colleges spokesman Kent Jenkins said the school stands by the "high-quality" education its students have received and disputes the CFPB's allegations. He noted that Corinthian's default rate is lower than other community colleges and its graduation and job placement rates are higher.

Levia Welch, 32, enrolled at Everest College in January of last year. She had been struggling to find a job without a high school diploma or GED, so she signed up for an 8-month career training and GED preparation program at Everest. She took out several loans to pay for the program, and as it came to an end, she says administrators told her she wouldn't be able to get a GED unless she stayed in the program longer -- which meant taking out even more loans.

Related: 40 million Americans now have student loan debt

Eventually she gave up, saying the classes weren't helpful and were just putting her deeper into debt. She dropped out in May with nearly $18,000 in debt, spread out between four or five loans. She paid off one small loan of $636 while she was still in the program, and she has been looking for jobs so that she can pay the rest off. But without a GED, finding an employer to hire her has been tough.

"I just wanted to move forward in life but I didn't get that," she said. "I feel like I'm a victim."

Then, last week, she received a letter from Strike Debt saying it had abolished one of her loans of $669. While this means she still owes more than $16,000 in federal and private loans, the letter was a nice surprise.

Related: Big protests are coming to Hong Kong's financial district

The money Strike Debt uses to buy debts comes from a pool of about $700,000 it has received through fundraising events over the past few years. Before starting on student loan debt, the group abolished more than $15 million worth of emergency room bills for thousands of people.

Because the group realizes that abolishing all of the country's student loan and medical debt would be an impossible task, it is turning its attentions to a new platform called The Debt Collective as a way to bring debtors together so they can negotiate debts with creditors -- or refuse to pay them entirely.

"Debt is the tie that binds the 99%, whether you are a student delinquent on your student loans or a parent struggling to pay healthcare bills," Strike Debt member Ann Larson said in a statement. "Being forced into debt for basic social services is a systemic problem."

First Published: September 17, 2014: 12:14 AM ET


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Heineken rejects takeover in bid to stay independent

Written By limadu on Senin, 15 September 2014 | 14.44

HONG KONG (CNNMoney)

Heineken (HEINY), which also produces Amstel, Tecate and Dos Equis, has been controlled by its founding family since 1864, and is Europe's largest brewer by volume.

The Dutch brewer said in a statement that it hopes to preserve the company's "heritage and identity" by remaining independent.

Heineken is an attractive takeover target in an industry that has seen major consolidation in recent years as Anheuser-Busch InBev (AHBIF) and SABMiller have used mergers and acquisitions to build beverage empires.

Related: The world's most popular beer is ...

AB InBev is currently the world's largest brewer, a status reinforced by its 2008 purchase of Anheuser-Busch.

The producer of Stella Artois, Corona and Budweiser owns or has a major stake in six of the world's top 10 beers by volume, and has continued to snap up brewers. Last year, regulators signed off on the company buying the rest of Grupo Modelo in a $20 billion deal.

Related: Get ready for craft beer with a Latin twist

In bidding for Heineken, it's likely that SABMiller was attempting to shield itself from a potential AB InBev takeover.

Together, Heineken and SABMiller would rival AB InBev in size and influence, and a merger could help lower distribution and brewing costs.

Heineken is likely to face additional pressure to agree to a sale in the future. Along with Molson Coors, the brewer is one of the few family-controlled firms left in the business.

First Published: September 15, 2014: 1:06 AM ET


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