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U.S. Jobs Report: What to Expect from December

The ADP employment report out today (Thursday) offered a glimpse of what to expect Friday in the December U.S. jobs report from the Labor Department.

The private sector created 215,000 new jobs in December, much more than the 133,000 jobs economists had expected, and a sharp increase from the previous month, according to the report.

The biggest gains were in the category of trade/transportation/utilities, which grew by 53,000.

Gains in construction hiring were also robust, with 39,000 positions added in December, the U.S. jobs report said.

The healthy showing in this struggling sector was attributed mostly to relief work after Hurricane Sandy. But the slow, yet steady recovery in the housing market also deserves some of the credit.

Medium-sized businesses led job creation, adding 102,000 new jobs. Large businesses followed with 87,000 new jobs.

Bucking the trend was manufacturing; the sector shed 11,000 positions while service providers increased headcount by 187,000, according to data from Moody's Analytics.

The strong showing was a surprise, given months of cautionary words from a bevy of analysts and the Congressional Budget Office.

The analysts and the CBO had warned the fiscal cliff saga would lead to massive job losses and cutbacks in business expansion, hiring and investment.

"The most surprising thing is that despite all the brinkmanship over the fiscal cliff drama and the debate about that, businesses didn't change their hiring plans. They seemed to slow up their investment spending but not on their hiring, so that's very, very encouraging," Mark Zandi, Moody's Analytics chief economist, told CNBC.

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Stock Market Today

Stock Market Today: Rally Over Already?

The stock market today (Thursday) so far has failed to continue yesterday's rally that delivered the Dow Jones Industrial Average's biggest one-day gain since Dec. 20, 2011.

After Washington announced a fiscal cliff deal Tuesday, investors raced into stocks and other risk-on trades, relieved that the country wasn't going to tumble over the dreaded fiscal cliff.

"You've just removed a huge worry from the market," Jonathan Samson, chief investment officer at Samson Capital Advisors told The New York Times.

In response, the Dow finished the first trading day of 2013 up 308. 41 points, or 2.35%. The gains also propelled the benchmark index to its highest close since Sept. 14, 2012. Volume was heavy with more than 4.5 million shares changing hands on the Big Board.

The Standard & Poor's 500 Index added 36.23 points, or 2.54%, and the tech heavy Nasdaq tacked on 92.75 or 3.07%.

Gold gained $13 to close at $1,688.80; silver added 78 cents to $31.01, and oil gushed higher by $1.30 to finish the day at $93.12.

But by 10 a.m. today, the Dow had slipped more than 30 points, or 0.23%.

Some Wall Street analysts were quick to warn that the fiscal cliff euphoria will die out by next week, and that yesterday's rise was nothing more than a short-term relief rally.

"Considering there are so many headwinds facing the economy, including the debt ceiling negotiation in 60 days, the smart money knows the bullish sentiment will be short-lived. The lesson for investors here is 'buyer beware,'" Todd Schoenberger, managing partner at LandColt Capital wrote in an email to FOX Business Network.

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Stock Market Today

Stock Market Today: Fiscal Cliff Deal Leads to Rally

Passage of a congressional measure to avert the fiscal cliff gave a big boost to the U.S. stock market today (Wednesday), the first trading day of 2013.

Right out of the gate, all three major indexes jumped. Just before 2 p.m., the Dow Jones Industrial Average had climbed 232 points. The Standard & Poor's 500 Index jumped 25 points, and the Nasdaq rose 70 as markets cheered the news.

"We are happy that we are halfway home to fixing the fiscal cliff; we figured out the revenue side and delayed the spending side," Art Hogan, market strategist at Lazard Capital Markets LLC, told MarketWatch.

The rally followed a late surge Monday, New Year's Eve, when word emerged from Capitol Hill that progress had been made in the fiscal cliff talks, sending the Dow up 166 points by the session's close.

For 2012, the Dow added 7.3%, ending at 13,104.14. The S&P gained 13.4% to finish the year at 1,426.19, and the tech heavy Nasdaq added 15.9% to end 2012 at 3,019.51.

The rally in the stock market today came as investors breathed a sigh of relief that at least a partial deal had been reached.

"What's been hanging over the markets for the last couple of months has finally been released. The rally today (Wednesday) is 100% about the end of the fiscal cliff, and people are buying with both hands," Sean Kelly, a managing director at Knight Capital Group, told CNN Money.

But many analysts cautioned that gains in the stock market today were nothing more than a rally based on relief over the fiscal cliff deal and said the gains may be short-lived.

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Hot Stocks

Stocks to Buy in 2013: Don't Miss the New Developed Market Leaders

When looking for stocks to buy in 2013, many investors turn to the markets that outperformed the Standard & Poor's 500 Index in 2012.

For example, they might like Germany. The MSCI iShares Germany Index Fund (NYSE: EWG) soared more than 32% in 2012.

That's far better than the 15% gain from the S&P 500. It's also much stronger than the 15% gain from the iShares MSCI EAFE Index Fund (NYSE: EFA), which tracks developed-market equities in Europe, Australia, Asia and the Far East.

But amid slowing growth and frothy equity valuations, German stocks appear unlikely to continue such performance in 2013.

That's why investors should check out these other developed market players ready to soar in 2013. They're all expected to deliver gains that could rival Germany's explosive 2012 profits.

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What the Fiscal Cliff Deal Could Cost You

A fiscal cliff deal sailed through the Democrat-controlled Senate late in the night on New Year's Eve in an 89-8 vote.

The proposed deal then headed to the Republican-controlled House on New Year's Day, expected to meet at least some opposition from a party that has lobbied during most of the fiscal cliff negations for no tax increases at all. It went through with a 257 – 167 House vote.

At the deal's forefront was maintaining tax cuts for singles earning less than $400,000 and couples earning less than $450,000. The tax increase marks the first time in two decades that rates will rise for the wealthiest Americans.

While it does save millions of middle-class taxpayers from increases, workers will still feel the pinch because the payroll tax holiday has expired.

Also saved were benefits for some two million unemployed workers who were on the brink of losing their federal checks.

The measure postpones the biggest and thorniest part of the fiscal cliff deal until March, when Congress will again have to wrangle over steep spending cuts that were set to kick in on Wednesday to defense and other industries.

Plus, nothing was resolved regarding the $16.4 trillion debt ceiling that we reached Monday.

Here are a few major changes that will hit your paycheck and savings.

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Your Money

Possible Tax Changes for 2013 Trigger Stock Selling

Anxiety about tax changes for 2013 among investors holding high-yielding dividend-paying stocks has led to a selloff, driving down stock prices.

It's almost certain tax rates on dividend payments will rise, possibly by as much 43.4% for those in upper income brackets.

Some investors could be spared from the dividend tax, depending on the outcome of fiscal cliff negotiations. U.S. President Barack Obama has said he wants to increase the tax on those earning $400,000 or more, while Republicans have suggested raising the tax on those earning $1 million or more.

But even if you're not hit by higher dividend taxes, you could see the prices of stocks you own plunge because of a selloff by investors worried about the higher tax rates.

Two sectors – telecoms and utilities – have been especially hard hit.

Utilities could be the worst-performing sector in 2012, up only 2% through November compared with the Standard & Poor's 500 gain of 15%. Telecoms have slipped 5% to 6% just in the past few months.

Some larger investors in the telecoms sector may have been simply riding momentum and quickly sold out.

Sam Stovall, chief equity strategist at S&P Capital IQ, told CNBC "some of these groups will be and have been beaten up because a lot of these investors were riding the momentum wave for high yielders."

But the selling has been pretty consistent in recent months. From August-November, the top 20% of dividend-paying companies in the S&P 500 underperformed the index by about 3%.

Vadim Zlotnikov, chief market strategist at AllianceBernstein, told the Financial Times, "You can't argue that the threat of higher taxes is not important to investors."

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Investing Tips

Investing in 2013: Best Bets in an Uncertain Economy

If you're planning on investing in 2013, economic uncertainty probably will be a factor in deciding where to put your money – but some sectors stand out as solid prospects regardless of the economic climate.

Here's a breakdown of the best sectors for your money in the New Year.

Hot Sectors for Investing in 2013

Silver: With economic uncertainty expected for the near term, gold is typically considered the best hedging choice.

But, as Money Morning Global Resources Specialist Peter Krauth pointed out in his 2013 silver price forecast, silver actually provides more potential for appreciation – and at a far better starting price.

Krauth says the white metal, currently selling for around $30 an ounce, could move to a new high of $54 an ounce in 2013 – and not just because of its hedging value.

Investment demand for silver should continue to increase, driven by the creation and expansion of several silver-backed exchange-traded funds (ETFs) and increased minting of silver coins.
Industrial use of silver is expected to grow even faster. That's largely due to the use of silver in solar panel manufacturing, which consumed 60 million ounces in 2012.

Solar panel usage is expected to grow as a result of U.S. President Barack Obama's emphasis on alternative energy and increased demand from Japan, which has made a major shift away from nuclear power in the wake of the Fukushima nuclear power plant disaster.

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The Fiscal Cliff

What if There's No Fiscal Cliff Deal?

Just hours remain for Democrats and Republicans to come up with some kind of fiscal cliff deal to avert the $600 billion in tax increases and spending cuts that are set to kick in tomorrow, Jan. 1.

With both parties still at odds, a tumble over the cliff looks likely.

The only thing that's likely to happen is a very rushed deal that fails to deliver significant changes to the pre-programmed tax hikes and spending cuts.

There were small signs of optimism out of Washington.

"The discussions are going very well," Republican Sen. Bob Corker told CNBC's "Squawk Box" early Monday morning, adding though that the agreement probably won't include significant moves on deficit reductions.

But Senate Majority Leader Harry Reid, D-NV, maintains that a deal is not likely.

"There is significant distance between both sides," Reid said Sunday night.

Lawmakers reconvened today (Monday) and will remain holed up on Capitol Hill perhaps late into the night.

Here's what to expect if we fall off the fiscal cliff.

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Hot Stocks

Facebook Stock: Time for a Dividend in 2013?

Down about 42% from the $45 high after its initial public offering, Facebook stock (Nasdaq: FB)needs a way to keep investor interest into 2013.

How about paying a dividend?

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U.S. Economy

How a Port Strike Would Slam the U.S. Economy in 2013

In the final hours to reach a deal, progress was made today (Friday) in averting a port strike that could cripple most major ports along the U.S. East Coast and Gulf Coast.

A federal mediator Friday announced a temporary solution: The strike, scheduled to take effect Dec. 30, will be delayed until Jan. 28 unless dock workers and management agree on payment issues.

"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," George Cohen, director of the Federal Mediation and Conciliation Service, said in a statement.

But, if negotiators representing longshoremen on one side and shipping companies and port terminal operators on the other can't come to an agreement by Jan. 28, 2013, a port strike could cripple the U.S. economy, which may already be hobbled by falling off of the fiscal cliff.

In today's just-in-time, minimal inventory world, a dock strike would mean that stores would quickly run out of certain non-perishable imported products including clothing, shoes and electronics.

For example, Wal-Mart Stores Inc. (NYSE: WMT), which relies heavily on goods imported from China, could fail to receive merchandise on time, particularly on the East Coast. And auto manufacturers, especially those such as BMW that assemble cars in the U.S. from imported kits, could quickly find themselves running out of parts.

Given the uncertainty surrounding the fiscal cliff and how it has weighed on economic activity, "The last thing the nation needs right now is a strike that would shut down the East Coast and Gulf Coast ports," Jonathan Gold, vice president for supply chain policy at the National Retail Federation, told The New York Times. "This will have a huge ripple effect throughout the economy."

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