Smiley Faces for Holiday Bargain Hunters; Small Firms Think Small Indeed About Retirement; Par-tay! Profits Have Companies Raising a Glass of Cheer
Smiley Faces for Holiday Bargain Hunters
Good news for Wal-Mart is usually good news for cost-conscious consumers. But bad news for the nation's largest retailer is even better. That's because the Bentonville, Ark.-based chain, facing disappointing sales, has launched a major price war to get holiday shoppers into its stores. Already, the company has trimmed prices on more than 10,000 items. "In order to shore up sales, Wal-Mart is undergoing its most aggressive pricing campaign ever in major holiday categories such as toys and electronics," says the brokerage Bear Stearns. That's in part to make up for lackluster revenues. Indeed, sales at Wal-Mart stores open at least a year have grown by only 3 percent so far this year, below expectations. Meanwhile, rival Target recently saw its stock hit a new 52-week high. Given how price-conscious consumers are these days, Wal-Mart's strategy just may work. If so, it could end up sparking a decent year for holiday sales, analysts say.
Small Firms Think Small Indeed About Retirement
Fortune 500 companies like General Motors and IBM-which are transitioning away from traditional pensions and toward cheaper 401(k) plans-are considered the Grinches who stole retirement. But small businesses, which employ about half of all private-sector workers, may be just as culpable. A survey from the online brokerage ShareBuilder.com finds that nearly two thirds of the nation's small businesses fail to provide workers with any retirement benefits. And only 14 percent offer workers access to a 401(k). Many cite the small size of their firms and financial instability as obstacles to offering such benefits. But overall, just 17 percent of firms surveyed said they feel a strong obligation to offer retirement benefits. "There are millions of small businesses in this country, and the idea that 63 percent of those we polled offer no retirement benefits is alarming," says ShareBuilder Chairman Jeff Seely. "Given the rising cost of healthcare, uncertainty about Social Security, and longer life expectancy, it's imperative that America's small-business owners understand their crucial role in addressing the looming retirement crisis."
Par-tay! Profits Have Companies Raising a Glass of Cheer
Attention, cubicle dwellers: The corporate holiday party is back. And this year, companies plan to get down. Nearly 80 percent of companies are planning to hold an office holiday party, according to a survey of human resource executives. About a third of those firms plan to boost their party spending, by an average of 16 percent, reflecting a good year for corporate profits. "Companies are definitely in a party mood," says John Challenger, president of the outplacement firm Challenger, Gray & Christmas. "It would not be surprising to see the return of some late-1990s, dot-com-style parties," he says. Now, if only those dot-com-size bonuses would make a comeback.
Post-Vote Jitters; Of Bulls and Bears
With the elections over, investors should brace themselves for a bumpy ride on Wall Street. Traditionally, November and December are among the best months for stocks. Since 1945, the U.S. stock market has shot up 3.2 percent on average in the last two months of the year, according to Sam Stovall, chief investment strategist for Standard & Poor's. But the final two months of election years have been marked by another trait as of late: big jumps in volatility that mean either feast or famine for stocks. For instance, while U.S. equities jumped 13 percent in November and December of 1998, they tumbled 8 percent in the final two months of 2000. Most recently, equities soared 8 percent after President Bush's 2004 re-election. If history is any guide, stocks should either continue to surge ahead or take a sharp turn for the worse in the coming days.
Of Bulls and Bears
While investor confidence grew in the first half of this year, those bullish feelings have diminished recently. This week, Wall Street learns the mood of the investor class, as State Street is scheduled to release the latest results of its investor confidence index.
This story appears in the November 27, 2006 print edition of U.S. News & World Report.