The Wall Street Journal: Friday, August 23, 2013

Nasdaq in Fresh Market Failure (page A1): A technical glitch knocked out trading in all Nasdaq Stock Market securities for three hours Thursday afternoon, an unprecedented meltdown for a U.S. exchange that paralyzed a broad swath of markets and highlighted the fragility of the financial world’s electronic backbone. Nasdaq officials scrambled to figure out what happened and resume trading. They shared few of their findings with trading firms or the public during regular trading hours, sowing confusion across Wall Street and leaving many investors frustrated. The decision to reopen trading with about 35 minutes to go before the close came after exchange officials were sure that banks and brokers had enough time to prepare for securities to trade again, people familiar with the discussions said. Some hiccups persisted after Nasdaq reopened trading, though Nasdaq told traders that the markets closed normally Thursday.

Obama Proposes Rating Colleges to Curb Tuition Costs (page A2): Calling growing student debt levels a “crisis,” President Barack Obama laid out a plan Thursday aimed at reining in rising tuition costs by creating a system to rate colleges and eventually tie federal student aid to the institutions’ performance. The president called for rating colleges before the 2015 school year on measures such as affordability and graduation rates—”metrics like how much debt does the average student leave with, how easy is it to pay off, how many students graduate on time, how well do those graduates do in the workforce,” Mr. Obama told a crowd at the University at Buffalo, the first stop on a two-day bus tour. “The answers will help parents and students figure out how much value a college truly offers,” he said. Once a rating system is in place, Mr. Obama will ask Congress to allocate federal financial aid based on the scores by 2018. Students at top-performing colleges could receive larger federal grants and more affordable student loans. “It is time to stop subsidizing schools that are not producing good results,” he said.

Purchases or Promises: What Works for Fed? (page A2):  Federal Reserve officials gathering in Jackson Hole, Wyo., this week with academics, private bank economists and others will ponder a question that will influence Fed decisions in the coming months: Which of its novel monetary tools are doing the most for the economy? Is it the huge purchases of long-term Treasury bonds and mortgages, now known as “quantitative easing?” Or is it the promise to keep short-term interest rates low for a long time? The Fed is considering scaling back the first, while sticking firmly to the second. The first—the $85 billion a month in bonds it has been buying—uses the power of the Fed’s printing press. The other relies on the power of the Fed’s words. Both are aimed at holding down long-term rates, the ones that home buyers and corporations pay, and, thus, encouraging borrowing, spending and investing. Views vary widely about which works better, a disagreement that is complicating the Fed’s decision-making.

Inside a Secret Airline Club (page B1): For years, upmarket carriers including British Airways, Deutsche Lufthansa AG and Qatar Airways have used exclusive programs, lounges and perks to reward their best customers. In the U.S., United and AMR Corp.’s American Airlines have recently tried to catch up, offering unpublicized programs that afford sometimes extravagant service to those fliers incessantly at airports, like George Clooney’s character in the movie “Up in the Air,” who pursues a dream of reaching 10 million frequent-flier miles. The airlines employ teams to track these fliers’ journeys and solve disruptions before they happen, sometimes bumping coach passengers to fit rerouted elite travelers. The carriers invite these customers to expensive restaurants and professional sporting events when they aren’t traveling. At the airport, they send their mail, press their suits and sew on buttons. United said that when an elite flier once stained his shirt, an employee sent her husband to the mall to buy a replacement.

Teen Retailers Left Hanging (page B3): Abercrombie & Fitch Co.’s stock tumbled Thursday after the teen retailer said profit fell 33% on a sharp drop in sales and indicated it would continue to struggle through the current quarter. Abercrombie’s troubles stem from weaker traffic and a drop in U.S. sales, which also have been weighing on rival teen retailers American Eagle Outfitters Inc. and Aéropostale Inc. But unlike those companies, Abercrombie gave no warning to Wall Street of the expected difficulties, making Thursday’s results a surprise. Mike Jeffries, Abercrombie’s chief executive, said teens are still struggling with an economic recovery that has failed to fully include them.

Gap Avoids Retail Slump, Posts Profit Rise (page B3): Gap Inc.’s fiscal-second-quarter profit rose 25% on higher sales at the apparel retailer’s namesake and Old Navy stores, prompting the company to raise its full-year earnings outlook. The retailer has reported higher same-store sales for six consecutive quarters, bolstered by an improving product line that has tapped some hot fashion trends, including a line of colored jeans last year that were well received. Gap is facing rising competition from fast-fashion players such as Forever21 and Inditex Group Inc.’s Zara, but has managed to outperform other mall-based retailers, including Macy’s Inc. and American Eagle Outfitters Inc.

Chinese Consumers Take a Step Back, Pinching Firms (page B3): Companies as diverse as retailers and gadget makers are reporting weakened results from China, as the economic slowdown there blunts Beijing’s drive to make the nation’s consumers a bigger driver of growth. Last month, Canon Inc. cut the Japanese company’s year-end profit forecast to ¥380 billion ($3.89 billion), off 16% from forecasts three months earlier, citing in part the slowdown in China. Nike Inc. reported falling China sales in its latest results, while British supermarket chain Tesco PLC is in talks with a local company, China Resources Enterprise Ltd., about folding its 131 underperforming Chinese stores into a joint venture. Apple Inc. said last month that its revenue from the greater China region fell 14% from a year earlier to $4.6 billion for the quarter ended June 29. The figure represents a 43% decline from the previous quarter. “A lot of the China story that companies would tell their shareholders was always about 15% nominal growth in gross domestic product, 20% increases in sales,” said Derek Scissors, an expert on China’s economy at the Heritage Foundation, a Washington, D.C., think tank. “That overarching growth story has weakened.” Many are blaming China’s economic slowdown for at least part of their performance. Growth slowed to 7.5% year-to-year in the second quarter, compared with 7.7% in the first.

Wal-Mart to Grow in Sub-Saharan Africa (page B4): Wal-Mart Stores Inc.’s South African arm plans to open 90 new stores across sub-Saharan Africa over the next three years as it targets growth markets such as Nigeria and Angola. Massmart Holdings Ltd. said it will open a trial stand-alone food store in West Africa by the end of the year, in hopes of expanding to East Africa. It said it is also adding more brands from Wal-Mart stores in other parts of the world to its Africa operations, including a clothing line from the U.K. in November. Wal-Mart last year closed a deal valued at roughly $2.4 billion to buy 51% of the South African retailer, a move many industry watchers viewed as a springboard for Wal-Mart to grow across the continent. Over the coming three to five years, Massmart will open more stores in the rest of Africa, Grant Pattison, its chief executive, said Thursday. Wal-Mart and Massmart aren’t the only companies setting their sights on Africa. Companies from the U.S., China and India have poured billions of dollars into the continent, investing both in its emerging consumers market and in infrastructure deals, amid forecasts for strong growth in the region. By 2018, five of the world’s fastest-growing economies will be in sub-Saharan Africa, according to the International Monetary Fund.

Thursday’s Markets: Stocks Record a Gain (page C4): U.S. stocks rose, with blue chips snapping the longest losing streak in over a year, as investors shook off trading halts in all securities listed on the Nasdaq Stock Market due to technical issues that affected the major market indexes for most of the afternoon. Nasdaq parent Nasdaq OMX Group announced the halts at 12:15 p.m. EDT. Notices sent to traders said the technical issues were related to data feeds providing market data for Nasdaq-listed securities. One stock, Atlantic American, began trading at 3 p.m. EDT, while full trading resumed at 3:25 p.m. Nasdaq OMX shares fell 3.5%. During the halt, the Nasdaq Composite Index remained frozen at 3631.17, up 31.38, or 0.9%. The Dow Jones Industrial Average traded within a range of about 14927 to 14968, while the S&P 500-stock index held roughly within 1652 to 1656. The halts also affected the calculation of the Dow, which include Nasdaq stocks Microsoft, Cisco Systems, and Intel, and the S&P 500. The Nasdaq rose 38.92 points, or 1.1%, to 3638.71. The index added to gains after the halts were lifted. The Dow rose 66.19 points, or 0.4%, to 14963.74. It was the first gain for the blue chip index in seven sessions. The S&P 500 advanced 14.16 points, or 0.9%, to 1656.96.

Fed Seeks More Control Over Rates (page C4): A plan that has been under consideration by the Federal Reserve to borrow money from investors at fixed interest rates shows how the central bank is preparing for an eventual exit from its ultra-easy monetary policies. In the July minutes of the Fed meeting released Wednesday, officials discussed a proposal to introduce a so-called reverse repurchase program, which would let the Fed set an interest rate on securities it would sell at auctions as part of its open-market operations. Banks and other investors would then decide how much to buy. This is a departure from current procedures, in which the Fed announces the amount of government bonds it intends to buy or sell in these operations and lets the market set the rate. While this appears to be a small tweak to the Fed’s practices, the implications could be wide-ranging if the plan is adopted. Contrary to popular belief, the Fed doesn’t set outright the interest rate that banks charge each other for overnight funding. Instead, it seeks to influence the effective federal-funds rate—a widely watched benchmark—by these open-market operations, which are conducted at the New York Fed. The Fed has been planning tools to eventually exit from its easy money policies for several years. This essentially adds a new tool to its kit. The Fed wants to be sure it can control short-term interest rates and lift them from near zero when the time comes. Talk of the plan comes as financial markets are anticipating the Fed will begin reducing the extraordinary support it has provided in the form of bond purchases, known as quantitative easing.

A Breakout Band Waits to Take Off (page D4): “This is amazing! Gives me chills!” Actor and musician Kevin Bacon tweeted that message last October to hundreds of thousands of followers, along with a link to a music video by an unknown Boston band. Sung in a smoky alto by Rachael Price, Lake Street Dive’s jazzy acoustic cover of the Jackson 5’s “I Want You Back” has had more than 900,000 views since Mr. Bacon’s tweet. Produced on a shoe string—it was filmed by a friend on the street in front of his Boston home when the local bowling alley where they had planned to shoot wasn’t available—the video created an instant following for a band that has been championed by influential radio stations like New York City’s listener-supported WFUV, but ignored by mainstream radio. “When I first heard them,” says WFUV program director Rita Houston, “I immediately became an evangelist. I wanted to tell everybody. I wanted my mom to know about them.”

A Hipster Goes for Baroque (page D4): Chris Thile has never been shy about genre-hopping. In his early 20s, singing and playing with the band Nickel Creek, the mandolin virtuoso covered songs by slacker-rock heroes Pavement, picking along with a fiddler and a guitarist. And a year ago, he was onstage with his band at Bonnaroo, the Tennessee summer music festival, working the crowd with acoustic string-band covers of rock songs by The Cars, Radiohead and others. Now, he’s trying to get the same fans just as excited about classical music. For his latest record, “Bach: Sonatas and Partitas Vol. 1,” Mr. Thile, 32, has taken an approach of unadorned simplicity: It is just him, alone in a room with his mandolin, playing three suites—16 tracks in all—of works written for solo violin by Johann Sebastian Bach, the master composer of late-Baroque church music. Mr. Thile argues that the same crowds that headbang to Radiohead anthems should be just as able to get psyched for Bach or Mahler. “The great musics of the world are great for very similar structural reasons: good melody, good harmony, and a balance of feminine and masculine energy. What makes one type of music classical and one bluegrass and one folk—these things aren’t what’s important,” he said at a recent interview in midtown Manhattan. “My thesis statement would be—Bach didn’t write Baroque music. He wrote great music.” At times, Mr. Thile’s new record has the same technical “wow factor” as his work with his band, Punch Brothers. On the “Presto” from Bach’s Sonata No. 1 in G minor, for example, Mr. Thile’s fingers trace Bach’s elegant melody lines and near-nonstop arpeggios at an off-to-the-races tempo, up and down the neck of his instrument—not unlike a bluegrass fiddle tune. At other points, such as the “Allemanda” from the Partita No. 1 in B minor, Mr. Thile plays in a purely Baroque vernacular, shedding any trace of bluegrass and making his mandolin sound stately and delicate, not unlike the lutes played by Bach’s Renaissance forebears.

Running Out of Chances to Lose to Roger (page D7): For years, Roger Federer has been the most popular attraction at the U.S. Open. He has played 58 matches in Arthur Ashe Stadium, more than any other male player, and once won this tournament five years in a row. As he ages, though, his fellow pros are getting a bit nervous. “I am scared he will leave tennis and I don’t have the chance to play against him,” said Lorenzo Giustino, a 21-year-old Italian, at a small tournament in San Marino earlier this month. Giustino, ranked No. 302, didn’t qualify for the U.S. Open. “He’s a big guy,” said Illya Marchenko, a 25-year-old from the Ukraine, after his first qualifying match at the U.S. Open on Tuesday. “He was No. 1 for the longest period of time, and for me he’s the No. 1 still, even if he’s not now.” In a sport that has no shortage of legends, Federer is perhaps the most coveted opponent in history. It isn’t difficult to understand why. He has won 17 Grand Slam singles titles, more than any man who has ever played the game. His strokes have an elegance and ease that make even fellow pros marvel. He also plays at a brisk pace and doesn’t throw temper tantrums or intimidate opponents with scowls or trash talk. At worst, he might embarrass them. “That one,” Thomas Schoorel said as he recalled Federer hitting the ball between his legs for a winner when they played in Dubai in 2011, “when it landed in, I had to laugh. But I also felt pretty s—.”

Your House Is Ready for Its Closeup (page M1): Mini-movies and Hollywood-style trailers complete with scripts, musical scores and even action sequences are cropping up as a new way to pitch pricey homes and condominium buildings. According to the National Association of Realtors, 14% of sellers used video to help sell their homes in 2012, up from 9% five years ago. Mr. Hahn, director and CEO of Film House, said he shot his first real-estate mini-movie in September of last year. He has since shot nearly 10, doing about one a week since June. Real-estate agents and developers who commission the films say that perfectly lighted rooms and aspirational story lines help grab buyers, and are the next extension of a home-buying experience that has increasingly gone online. Budgets for such films are often a percentage of the home’s listing price, and can range from a couple thousand dollars to $1 million or more for large-scale productions marketing condo buildings. The cost is paid either by the listing agents or sellers, and sometimes split between them.

Cold Cash: The Effect of AC on Home Prices (page M5): Even in the winter, the air conditioner is working hard—boosting a home’s value. An analysis of property listings in 22 major metro areas found that homes with central air conditioning are offered for 13% more, on average, than homes without central air, according to real-estate brokerage Redfin. Cities in the Midwest see the widest price gap: Homes with central air are listed for 105% more than homes without central air. Of course, homes with central air may have other amenities that help bump up the list price. But AC seems to be a driving force in the decision making, according to the National Association of Realtors, a trade group. In a survey of recent home buyers released in November, central air was the No. 1 feature sought when house shopping, according to the survey of 2,005 respondents who bought a home between 2010 and 2012. Respondents who purchased a home without central AC would be willing to pay $2,520 more for a home with this feature.

 

The Wall Street Journal: Friday, August 16, 2013

Stocks’ Surge Showing Cracks (page A1): The Dow Jones Industrial Average on Thursday suffered its worst decline since June, as fears intensified that the Federal Reserve will reduce its stimulus in the fall, potentially eroding a key element in this year’s stock-market advance. The Dow tumbled 225.47 points, or 1.5%, to 15112.19. It was the second consecutive triple-digit decline, following a 113-point pullback Wednesday. After being up as much as 19.5% for 2013 on Aug. 2, the Dow now is up 15.3% this year. The big news hurting stocks was a seemingly positive report: New weekly unemployment claims were the lowest since 2007, the latest in a series of indications the job market is improving. But that reinforced fears that the Fed will decide as soon as September that the economy is strong enough for it to begin reducing its $85 billion in monthly bond purchases designed to stimulate the economy.

Rising Stars of the Little Screen Learn to Cope with Fans, Fame (page A1): To make it in Hollywood, it helps to appeal to the masses. To make it on YouTube, it helps to appeal to everyone else. Thousands of YouTube “creators”—many coming to fame through very niche talents or fan bases—filled the Anaheim Convention Center this month for the fourth annual VidCon conference. VidCon has grown from 1,500 people in 2010 to a crowd of 11,000 that believes it is possible to “make it” without leaving Google Inc.’s YouTube for a mainstream movie or television deal, said VidCon co-founder John Green.

U.S. Inflation Moves Closer to Fed’s Target (page A2): Consumer prices rose broadly in July and the number of Americans filing new claims for jobless benefits fell to a six-year low, developments that could comfort Federal Reserve officials as they consider dialing back their bond purchases. The consumer-price index, which measures what Americans pay for everything from bread to medical care, rose 0.2% in July, the Labor Department said Thursday. Core prices, which strip out volatile food and energy costs, rose at the same rate. From a year earlier, overall consumer prices were 2% higher in July while core prices rose 1.7% year over year. The latest price increases were modest, but they reinforced views that inflation may be stabilizing and could dampen fears inside the Fed about inflation falling from already low levels.

Three States Get Warning about ‘No Child’ Waivers (page A2): The Education Department said Thursday that three of 40 states granted waivers from the No Child Left Behind law were at high risk of losing them, because they either have been slow to link teacher evaluations with student achievement or had adopted programs that didn’t meet federal guidelines. If they fail to comply with federal requirements by May, Kansas, Oregon and Washington state face losing their waivers from the George W. Bush-era law, which could entail a loss of autonomy over some funding decisions and changes in how school districts’ performance is judged. The Education Department granted all three states approval to continue their waiver programs for the 2013-2014 school year and asked each to submit a plan of recourse within the next month.

Philadelphia Schools Get Lifeline (page A2): Philadelphia public schools will open on time next month, city officials announced Thursday, saying they would direct $50 million to the struggling district to help close a budget hole. The cash infusion would allow Superintendent William Hite Jr. to rehire 1,000 counselors, assistant principals, aides and others who were among 4,100 employees laid off this year as part of budget cuts amid a $304-million deficit. Mr. Hite had said that if he didn’t receive funds by Friday, the district wouldn’t be able to open all its schools on Sept. 9. But questions remained over the finances of the 136,000-student district as Mayor Michael Nutter and the head of the city council offered conflicting plans Thursday on where the $50 million would come from.

Disney Tries Anew to Raise Its Score on Digital Games (page B1): Walt Disney Co. is rallying Mickey Mouse, Buzz Lightyear and more of its best-known characters to tackle a formidable challenge: bringing its digital division into the black. Disney’s technophile chief executive, Robert Iger, in 2008 grouped the company’s videogame, online and mobile businesses into a single unit, Disney Interactive. Since then, the division has racked up losses of $1.41 billion as it unsuccessfully chased one fad after another—from racing games to virtual worlds to social-network games. The fallout has included more than 500 layoffs, four closed videogame-production studios, and a raft of canceled projects and diminished ambitions. Enter “Disney Infinity,” a combination videogame and toy line that features characters from classic and new movies and television shows. It is a high-stakes effort to right the Disney digital ship, and it hits stores on Sunday in the U.S. and Tuesday in Europe. People close to the company peg the cost of making the game and toys at well over $100 million—similar to a major film production. With “Infinity,” players can create their own Disney-inspired landscapes and game levels in a mode called “toybox.” They can also bring characters, such as the tow truck Mater from “Cars” and Jack Sparrow from “Pirates of the Caribbean,” into the game by buying $13 figurines and placing them on a special scanner.

H&M Gives Ethiopia a Spin (page B2): H&M Hennes & Mauritz AB is looking to Ethiopia as a new low-cost country in which it will produce clothing, as the apparel retailer races to keep shelves stocked at a growing number of stores world-wide. The Swedish company relies heavily on Bangladesh for clothes production, and a move to Africa would expand its sourcing footprint but not replace its commitment to production in Asia. One supplier says H&M is looking to source one million garments a month from Ethiopia.

Infant Dies After Eating Soap Packet (page B3): An infant in central Florida died last week after accidentally eating a packet of concentrated laundry detergent, the state’s Department of Children and Families said Thursday. The death of the 7-month-old boy is believed to be the first associated with single-dose liquid detergent packets, which have been involved in a rash of unintentional ingestion by babies and toddlers since becoming widely available in the U.S. early last year. It heightens the stakes as consumer-products companies such as Procter & Gamble Co. try to stop the problem by modifying their packaging and warning consumers.

Facebook Tests Payments Tool (page B4): Facebook Inc. is testing a way to make it easier for its users to make purchases through retailers’ mobile apps. The new service will give consumers an option to prefill their payment information stored on Facebook with the mobile apps of retailers that partner with the social network. Facebook, however, underscored that it won’t process the payments nor compete directly with digital-payments processors such as eBay Inc.’s PayPal. “We continue to have a great relationship with our payment processing partners, and this product is simply to test how we can help apps provide a simpler commerce experience,” a Facebook spokeswoman said.

Wal-Mart: Where Are All the Hot New Gadgets (page B4): Wal-Mart Stores Inc. has a message for electronics makers: Make more exciting gadgets. The world’s biggest retailer on Thursday blamed its disappointing second-quarter sales results in part on the failure of device makers to churn out more innovative products. “Consumers will spend, but you have to give them a good reason to spend,” Chief Financial Officer Charles Holley said. A lack of refreshed products—from televisions to videogame systems—is a problem for Wal-Mart. Entertainment accounts for 11% of its $274.5 billion in U.S. net sales.

With Gmail Overhaul, Not All Mail Is Equal (page B5): For some retailers that rely on emailed promotions, Google Inc. is adding insult to injury. When the search giant overhauled its free email service three months ago, it set up algorithms to automatically siphon the flow of airfare offers and spa deals away from users’ main inboxes and into an easily bypassed “Promotions” folder. But there is another wrinkle: For Gmail users that do visit those Promotions folders, the first items they see will often be ads sold by Google. The ads are different from those that already appear inside users’ opened messages. Instead, they look like emails sitting in an inbox but are shaded yellow and feature informational “i” icons explaining their purpose. Marketers still complain that the ads threaten to draw attention away from the coupons and pitch emails they want their targets to read first.

Penn State Workers Protest Wellness Plan (page B6): Pennsylvania State University employees are protesting a new wellness program that requires them to provide detailed health information or pay penalties that can total $1,200 a year, in an unusually public backlash against an increasingly common employer practice. Employer wellness programs offering financial carrots and sticks have been growing for years. According to a survey conducted last fall by the National Business Group on Health and Fidelity Investments, 86% of employers were linking incentives to health-related activities this year, up from 57% in 2009. The most common activities were filling out health-risk assessments, getting biometric screenings and participating in smoking-cessation programs. Penn State’s program will charge employees $100 a month starting in January if they—and covered spouses—don’t fill out the health questionnaire and certify that they are having a physical exam. To avoid the penalties, employees also must get biometric screenings, including blood-sugar and cholesterol tests and body-mass index measurements.

Mom-and-Pop Pitches Draw Flak (page C1): Individual investors are pouring tens of billions of dollars into a new generation of complex investment products, and regulators are raising concerns that not all buyers understand the costs and risks. Outside scrutiny is intensifying on securities firms’ sales practices and whether so-called alternative products—ranging from certain types of mutual funds to vehicles that invest in highly indebted companies—are suitable for all of the Americans flocking to them. Some state securities regulators are focusing their examinations on alternative-product brokers, while officials at Wall Street’s self-funded watchdog, the Financial Industry Regulatory Authority, say they are planning to file civil enforcement actions by year-end. “With these things, it can be like giving a 6-year-old a circular saw,” said Brad Bennett, Finra’s enforcement chief. Most mom-and-pop investors “don’t understand the risks they’re taking.” Securities firms say the alternative products can add balance to investors’ portfolios and some protection if markets go into free fall, as they did in the financial crisis. The products also give retail investors affordable access to assets that were once exclusive to wealthy investors.

Misplaced Confidence in a Key Indicator (page C1): Unlike being thin or rich, you can be too confident. So when the Thomson Reuters/University of Michigan index of consumer sentiment hit a six-year high of 85.1 in July, the applause wasn’t unanimous. Some fretted it may presage a nasty fall. After all, the previous high came back in the innocent days when most Americans swallowed the pablum about subprime-mortgage woes being “contained.” Stocks would peak several weeks later, while the worst postwar recession was just five months off. Economists polled by Dow Jones Newswires see a further rise in Friday’s preliminary reading of the index for August, to 85.5, which might prove fodder for optimists and worrywarts alike. Confidence certainly can signal complacency. Five of the top seven readings in the history of the series came within a few months of the bursting of the technology bubble. All of the top 35 readings came between then-Federal Reserve Chairman Alan Greenspan’s “Irrational Exuberance” speech in December 1996 and the onset of the bear market in 2000. But outstanding historical periods by definition precede worse ones. And investors enjoyed years of heady gains during that period of 3½ years.

New ‘Dawn’ in Exchanges’ War on Hackers (page C3): When prices on some U.S. stocks suddenly zoomed one day last month and others unexpectedly plunged, stock-market officials set out to detect a possible computer glitch or a trading algorithm run amok. But after hastily comparing notes, exchange employees—who were participating in a test of market defenses along with bank technicians, regulators and law-enforcement officials—realized the price swings were the work of hackers wielding rogue computer code generating a torrent of erroneous buy and sell orders. The July 18 drill, called “Quantum Dawn 2,” didn’t affect actual market prices. Even so, it sent exchange officials into a flurry of action and emergency planning. The exercise underscored one of the greatest fears of exchange executives and some policy makers: That a well-funded terrorist organization or a rogue nation could pierce the financial system’s defenses and mount an attack that unleashes waves of trading losses, compromises sensitive financial data or even forces the U.S. stock market to shut down. The simulated attack, organized by the Securities Industry and Financial Markets Association and involving more than 500 people from about 50 firms and government agencies, marked the biggest effort yet by the U.S. securities industry to ward off a coordinated assault on the computer systems that underlie the financial markets.

Upbeat Economic Signals Take Down Bonds (page C4): Bond yields in the U.S. and Europe jumped to multiyear highs Thursday as a brightened outlook for global economic growth sparked a new round of concern that the world’s major central banks soon will pull back on monetary stimulus. With yields going higher again, investors also could continue to cash out of bond funds for fear of further declines in prices, traders said. When yields climb on benchmark bonds, the prices of new bonds become more attractive relative to older ones that pay much lower interest.

Recappers: The New TV Guides (page D1): Every night, legions of bloggers churn out descriptions and critiques of shows, episode by episode, from ‘Breaking Bad’ to ‘Honey Boo Boo.’ The rise of a cottage industry. If a TV series has mustered enough of a following to stay on the air, it has likely attracted scribes that churn out the episodic plot summaries known as recaps. In a reflection of how we devour and digest television now, the number of TV recaps has exploded in recent years. Unlikely outlets from political magazines to local news affiliates are publishing CliffsNotes-style summaries of “Under the Dome” and “Big Brother,” piggybacking on the shows’ popularity and thrusting themselves into competition with established entertainment sites and individual bloggers. (The Wall Street Journal’s Speakeasy blog posts recaps of about 10 shows per week, from “Mad Men” to the reality TV spectacle “Here Comes Honey Boo Boo.”) Recaps have emerged as a cornerstone of TV culture in a phase of major transition. For networks, they are indicators of buzz at a time when traditional Nielsen ratings don’t tell the whole story. Though the weekly scrutiny annoys some producers, others monitor recaps to help guide storytelling decisions. Yet the rise of recaps has most to do with the transformation of the TV audience at large. Not only are viewers more inclined to sound off online about the minutiae of their favorite shows, many are also looking for insights about a growing number of serial dramas with complex and sophisticated storytelling. The best recaps serve a dual purpose: guiding fans of a show through subtleties (or entire episodes) they might have missed, and serving as fixed hubs of discussion for readers whose viewing patterns are staggered by time-shifting. There’s also a more basic driver of recap activity: They drum up steady web traffic for the content-hungry sites that host them.

Don’t Shoot! It’s an ‘Empathy Game’ (page D1): Among the many videogames at a recent arts and games festival in Baltimore, none was more difficult to navigate than “That Dragon, Cancer.” The challenge: Getting through it without crying. The game is about war, but not the bullet-blazing variety normally associated with gaming. It’s an autobiographical story that puts players in the role of a father whose 4-year-old son is dying of cancer. As Hannah Armbruster sampled the game, using a mouse to move a pixelated dad around its hospital-room setting, her face showed none of the excited contortions that might accompany “Call of Duty.” She took gulps of sadness and at one point rubbed her forehead in disbelief. When the game was over, she said, “Whoo,” removed her headphones and left the computer. Why would anyone want to put themselves through this? “For the same reason you’d want to read a novel about something really heavy,” says Ms. Armbruster, a 20-year-old college student. “There’s something really satisfying about experiencing narratives that are outside your own experience.” More than four decades after Pong, players are tackling a range of heady subjects including cancer, depression and alcoholism. Instead of pumping adrenaline, these “empathy games” use the videogame form to tell stories that are far more personal than the Hollywood tropes most big budget games still rely on.

How Penn State Football Survived (page D8): To write his forthcoming book “Fourth and Long: The Fight for the Soul of College Football,” author John U. Bacon embedded himself with four Big Ten programs—Penn State, Ohio State, Michigan and Northwestern—in search of the sport’s old ideals as it is roiled by money, greed and scandal. In this excerpt, he offers a behind-the-scenes look at how Penn State’s team reacted to the Jerry Sandusky sex-abuse scandal last year.

 

The Wall Street Journal: Wednesday, June 19, 2013

Schools Get Reprieve on Teacher Mandate (page A2): U.S. Education Secretary Arne Duncan announced Tuesday a one-year reprieve on federal guidelines requiring states to link student test scores to teacher personnel decisions, bowing to pressure from educators who complained that they need more time to implement universal math and reading standards known as the Common Core. The decision, which would cover most states, was praised by the two largest teachers unions. To win waivers from the Obama administration from provisions of the federal No Child Left Behind law, which mandates student testing in most grades, more than three dozen states and the District of Columbia agreed in recent years to employ new academic standards by next school year. Most of them agreed to roll out new exams and link them to teacher evaluations by the 2014-15 school year. They also agreed to use test results for teacher personnel decisions, such as pay raises and tenure, by 2016. Mr. Duncan said he now will give states until 2017 to make that test-personnel link, if they apply for an extension. The decision follows a backlash against the Common Core, a set of voluntary academic standards developed by a group of governors, state school officials and other experts to detail what students should know from kindergarten through 12th grade. The standards, intended to better prepare students for college and careers, have been adopted entirely by 45 states and the District of Columbia, and rolled out in many states during the school year now ending.

Survey Finds Number of Adult Smokers Falling (page A6): Fewer U.S. adults are smoking, a new government report says. Last year, about 18% of adults participating in a national health survey described themselves as current smokers. The nation’s smoking rate generally has been falling for decades but had seemed to stall at about 20% to 21% for about seven years.

Wal-Mart’s E-Stumble (page B1): Amazon.com Inc. has become the runaway leader in online sales thanks to a network of more than 40 U.S. warehouses, some employing robotic assistants, which speeds orders to homes with ruthless efficiency. As it seeks to play catch-up in e-commerce, Wal-Mart Stores Inc. has concluded it doesn’t want to simply clone Amazon’s model since it also has to worry about supplying its stores. Instead Wal-Mart is creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, because Wal-Mart has determined it is faster and cheaper to send some shipments from its more than 4,000 U.S. stores. Wal-Mart is being forced to invent its own solution because it still hasn’t figured out how to economically deliver all its products into the hands of online shoppers, current and former executives say. It is a remarkable admission for the Bentonville, Ark., company, which became the world’s largest retailer in part by the efficiency of its supply chain. Despite countless promises to become an online force since it got into e-commerce a decade ago, Wal-Mart has fallen far behind Amazon.Last year, Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for Wal-Mart, according to trade publication Internet Retailer.

Wal-Mart: A Pro in Physical-Store Retail Logistics (page B2): Few have done better than Wal-Mart Stores Inc. when it comes to retail logistics—the art of ordering, transporting, stocking and tracking merchandise. Wal-Mart pioneered a sophisticated hub-and-spoke distribution network which uses warehouses to service stores less than a day’s truck drive away so it could remove middlemen, quickly replenish shelves and reduce costs. At its distribution centers, scanning technology tracks merchandise as it flows at 6 miles per hour on 12 miles of conveyor belts onto trucks. Some items spend less than 45 minutes in warehouses. Supply trucks crisscross the country and arrive daily at Wal-Mart’s more than 4,000 U.S. stores. Shipments are based on real-time data of shopper purchases, transmitted by the second as employees scan items at store checkouts. But with its e-commerce operations, which began in the late 1990s, Wal-Mart has been less exacting, instead relying on makeshift spaces carved out of store-serving warehouses and third-party operators to handle the load.

Unpaid Internship? Some Colleges Pick Up the Tab (page B1): The plight of the unpaid intern is improving. Not because businesses are paying more for summer helpers, but because colleges are stepping in to pay when companies can’t, or won’t, compensate student hires. Schools have long granted stipends for stints in nonprofits and the arts, where unpaid labor is common, but now they are paying the way for students to work at profit-making enterprises, including a New York money-management firm, a Washington, D.C., lobbying firm and even a General Motors Co. plant. Colleges’ job-placement rates have come under intense scrutiny as cost-conscious families, stung by rapidly rising tuition, want proof that universities can deliver on both academic and career fronts. While career-services officers say they aren’t thrilled to foot the bill, they need students to gain the skills and experience that will eventually get them hired.

Starbucks to List Counts of Calories for Offerings (page B3): Starbucks Corp. is posting its calorie counts on menu boards nationwide beginning next week, making it easier for customers to decide just how many Frappuccinos their waistline can handle. The move is, in part, an effort to get out ahead of federal menu-labeling requirements, which are expected to go in to effect this year.

‘Candy Crush’ Heads to IPO (page B4): “Candy Crush Saga” is lining up something besides jelly beans: bankers. Midasplayer International Holding Co., the publisher of online and mobile games including the popular “Candy Crush Saga”—which involves matching up columns and rows of candy items—has hired banks to pursue a U.S. initial public offering, according to people familiar with the move. The London company, better known as King, has tapped banks including J.P. Morgan Chase & Co., Credit Suisse Group AG, and Bank of America Corp., to handle a potential offering, these people said. They cautioned that the pricing and timing of any deal hadn’t yet been completed.

At Work: Just Say ‘Yeah’ (page B8): The next time you’re in a meeting and want to get people on your side, just say “yeah.” New research out of the Massachusetts Institute of Technology found that certain words seem to help participants appear more persuasive in meetings and increased the chances that their ideas would win acceptance from the group. Researchers Cynthia Rudin and Been Kim, a statistics professor and graduate student, respectively, at MIT’s Sloan School of Management, analyzed vocabulary usage and dialogue patterns in 95 meetings to see which words appeared to sway colleagues most. Among the words most likely to result in accepted proposals: yeah, give, start and discuss.

Bond Investors Head for the Hills (page C1): Signs of a stronger U.S. economy are rippling through the bond markets, sending investors and corporate leaders racing to prepare for higher interest rates. Investors have pulled money out of assets ranging from lower-rated corporate bonds to ultrasafe U.S. Treasurys in sums unseen since the financial crisis. Investors yanked $17.672 billion from funds that invest in bonds in the two weeks ended June 12, according to data company Lipper, a unit of Thomson Reuters. Trading has been volatile, and some investors have lost money after a long rally in many debt markets. Some lower-rated companies such as Yankee Candle Co. scrapped plans to sell bonds, while some others had to pay more to get their money. Others, like highly rated Wal-Mart Stores Inc., locked in funding at low rates. Some of the bonds issued by Apple Inc. in its record-setting $17 billion April deal have seen prices decline more than 8%, according to MarketAxess. Some highly rated companies have waded back into the U.S. market with sales tailored to investors’ preference for debt that matures in short time frames. Longer-dated debt is more sensitive to rising interest rates. Bond yields rise when prices fall. Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd., has no regrets over buying Apple Inc.’s 30-year bonds near the top of the market in April. He has watched them fall about 8.6% from their issue price at 99.418 cents on the dollar to 90.823 cents on the dollar Tuesday, according to MarketAxess.

Tuesday’s Markets: Stocks Keep on Trucking (page C4): Stocks pushed to the highest levels in nearly three weeks as investors awaited news on whether the Federal Reserve will pull back on its efforts to stimulate the economy. Small-company stocks were among the best performers in Tuesday’s rally. The Russell 2000 index, which tracks smaller company shares, jumped 12.15 points, or 1.2%, to a record of 999.99. The Dow Jones Industrial Average added 138.38 points, or 0.9%, to 15318.23. That extends gains in the blue-chip index to 1.6% in the past two days and just 0.6% shy of its record set on May 28. The Standard & Poor’s 500-stock index rose 12.77 points, or 0.8%, to 1651.81, while the Nasdaq Composite Index climbed 30.05 points, or 0.9%, to 3482.18.

Emerging Markets Still Offer a Lure (page C4): Some investors are betting a month of steep losses for emerging-market stocks, currencies and bonds will prove to be a temporary setback. These assets have sold off amid fears the Federal Reserve is preparing to cut off the flow of easy money that has fueled a years long rally in markets as diverse as Thai stocks and Brazilian bonds.

Beware of Investor Candy Crush after IPO (page C14): Investors that can buy into “Candy Crush Saga” are in for a sweet return. But all sugar highs come to an end. The maker of that popular mobile game, officially called Midasplayer International Holding but colloquially known as King, has just hired bankers to help it pursue an initial public offering in the U.S. Expect huge demand for King’s shares, as investors will want to capitalize on its fantastic mobile momentum. Another mobile game developer, GungHo Online Entertainment, has seen its share price jump 70-fold in the past year, thanks to the success of its “Puzzle & Dragons” game in Japan. GungHo’s revenue is expected to rise by more than 600% to 184 billion yen ($1.95 billion) in 2013. “Candy Crush” may be tops in the U.S., but for now GungHo is likely well ahead globally, as Japanese mobile game players are more likely to spend money on casual games. King recently released a Japanese version of “Candy Crush,” and it is climbing the app charts. Even so, investors should be wary of according a high valuation multiple to King stock. Mobile game players can be a fickle bunch. True, King just recently launched another game, “Pet Rescue Saga,” which is becoming popular. But Zynga had a number of popular games at one point, many of which have flamed out. Its stock has fallen 82% from its March 2012 peak.

With 31 Sharpies and Duct Tape, Tweens Say, ‘This Is Who We Are’ (page D1): Crafting is going way beyond teachers’ gifts and holiday ornaments to a whole new level of self-expression. Tweens and teens are using colored tape and glitter glue, fabric paint and Bubble Wrap to put a personal stamp on every inch of their lives, from school binders and lunchboxes to cellphones and skateboards. And after they have embellished their sneakers, glammed up bedroom walls and put 10 different designs on their fingernails, many flaunt their creations on the Internet. “They are building their own little brand,” said Paula Puleo, chief marketing officer at arts-and-crafts retailer Michaels. Personalization of everyday objects is a major retail trend this year. Companies are rolling out a dizzying variety of affordable, convenient products for kids to use to style their stuff.

At Work with Microsoft Office an an iPhone (page D2): If you asked someone on the street to name a Microsoft product they can’t live without, they would likely mention Microsoft Office, the suite that includes Outlook, Word, Excel and PowerPoint. Even Apple fans find themselves installing Office the second they buy a new Mac. IPhone owners have yearned for a way to access and edit Office documents on the go, yet Microsoft has kept this valuable asset restricted to its Windows Phones and Surface tablets. Until now. Last Friday, Microsoft released Office Mobile, a free app in the Apple App Store. This mobile version of Office lets you work on something at your desk, like a Word document or PowerPoint presentation, leave your desk and pull up the exact same document on your iPhone later. Any changes you make get saved back to a copy of the document and are there when you open it at your desk again.

The NCAA Nears Judgment Day (page D6): On Thursday, a federal judge in California will decide whether the Ed O’Bannon lawsuit merits expanding from a handful of athletes to the thousands that the plaintiffs say have been harmed by being kept high and dry from the NCAA’s revenue stream. Class-action certification also would raise the financial stakes considerably, putting pressure on the NCAA to settle.

The Wall Street Journal: Saturday, June 8, 2013

Jobs Rise Enough to Soothe Markets (page A1): Employers added 175,000 jobs in May, maintaining a pace that hasn’t brought unemployment down quickly but has been enough to ease worries of a summer slowdown after a run of murky economic reports. Friday’s report pushed the Dow Jones Industrial Average up 207.50 points, or 1.4%, to close at 15248.12, its biggest climb since Jan. 2. Investors also took heart that the latest numbers will likely keep the Federal Reserve on course to continue its stimulus effort of buying long-term bonds at a pace of $85 billion a month for now and consider scaling back those purchases later this year. The unemployment rate ticked up to 7.6% from 7.5%, but for what economists say are the right reasons: More Americans jumped into the job market looking for work, a sign that workers sense better prospects.

Merion’s U.S. Open Comeback (page A16): That the event is back at Merion, with its short course and lack of room for fans and corporate tents, stems from more than two decades of costly improvements by the club and behind-the-scenes encouragement by the USGA.

Nadal, the Lord of Suffering (page A16): The stats for the French Open semifinal match between Rafael Nadal and Novak Djokovic will say Djokovic made 13 winners and 21 unforced errors in the decisive fifth set. These are half-truths. When Nadal is on the court, tennis needs a new statistical category: the un-winner. Against any other player, Djokovic would have hit at least 20 winners, maybe more. “Whenever [Nadal] needs it, he gets [to] such a ball, which is almost impossible,” said Marian Vajda, Djokovic’s coach. There has never been a tennis player who so enjoys the chase, the pursuit of a drop shot, the lunge for a ball that seems out of reach—and also the physical pain that comes with it. After the match, in one of the great understatements of the tennis season so far, Nadal, the seven-time French open champion, told reporters: “I learned during all my career to enjoy suffering.” The moment that best defines Nadal’s 6-4, 3-6, 6-1, 6-7(3), 9-7 victory at Roland Garros Friday came in the fifth set, when he’d fallen to within six points of losing. Djokovic had just attempted his latest kill shot, clobbering another tough-to-reach ball to Nadal’s backhand corner. Nadal lunged for it and, as only he can, managed to get enough racket on the ball to float it high into the wind.

Friday’s Markets: Dow Soars as Fed Fears Fade (page B1): A Goldilocks jobs report sent U.S. stocks surging, easing investors’ fears of an imminent reduction in Federal Reserve bond purchases and allaying anxiety about the strength of the economic expansion. The Dow Jones Industrial Average posted its second-biggest gain of the year, amid a sharp reduction in the stock market’s so-called fear gauge, while the dollar gained and Treasury bonds registered a modest decline. The moves came after the government said the U.S. economy added 175,000 jobs last month, in line with what economists had expected. “Today’s [jobs report] was about as good as we could have hoped for, for the market,” said Rob Bartolo, who manages the $33.8 billion T. Rowe Price Growth Stock Fund. “It showed the economy is still kind of chugging along at the same pace it has been.” The rally ended a hectic week that included a large Dow drop Wednesday, followed by whipsaw trading Thursday in both stocks and currencies. Major benchmarks ended higher for the week, but many investors are wondering whether stocks’ consistent gains in 2013 have set the market up for a pullback. The Dow industrials jumped 207.50 points, or 1.4%, to 15248.12 and rallied into the close to log their biggest climb since Jan. 2. The blue-chip benchmark finished the session just 1.05% below its May 28 record close of 15409.39 and is up 16% this year. The Standard & Poor’s 500-stock index added 20.82 points, or 1.3%, to 1643.38. The Nasdaq Composite Index rose 45.16, or 1.3%, to 3469.22.

Wal-Mart Sets Big Buyback (page B3): Wal-Mart Stores Inc. said at its shareholder meeting Friday that it plans to repurchase $15 billion in shares, as the retailer’s rapid global growth propels it toward a half-trillion dollars in annual revenue. “I just love saying half a trillion,” finance chief Charles Holley told a stadium full of investors and employees, noting that Wal-Mart in 2012 reported $466 billion in revenue and opened 642 new stores around the world. The new share-buyback program replaces an earlier $15 billion plan begun in 2011 that had used all but $712 million of its authorization. The timeline of the new buyback program wasn’t immediately clear.

Why ‘Boring’ Stocks Have an Edge Over ‘Exciting’ Ones (page B7): In the stock market, boring is often beautiful. That is because “boring” stocks—those that have exhibited the least historical volatility—on average outperform the most “exciting” issues—those that have been the most volatile. And not by just a small margin, either. By “historical volatility,” we mean the magnitude of a stock’s price swings over a specified period. Just take Apple,  whose stock has certainly been one of the more volatile in recent years. Its shares have lost 21% over the past 12 months, compared with a 20% gain for those stocks with the least historical volatility, as measured by the MSCI USA Minimum Volatility index. Not all volatile stocks perform as poorly as Apple has over the past year, of course, and not all boring stocks have done well. But the extent to which Apple lags behind the average boring stock over the past 12 months is right in line with historical research conducted by Nardin Baker, who manages global equity at Guggenheim Partners. The firm has $180 billion under management. Consider a portfolio that invested in the 10% of U.S. stocks that had the lowest historical volatility. According to Mr. Baker, this portfolio from 1990 through 2012 did 19 percentage points a year better than the 10% of stocks with the greatest historical volatility. He says that he found nearly identical results in each of 20 developed-country stock markets outside the U.S. and in 12 emerging markets. Why would boring, low-volatility stocks perform so much better than those with the highest volatility? Terrance Odean, a finance professor at the University of California, Berkeley, who has researched the subject extensively, believes it in large part has to do with the natural human tendency to be drawn toward what is most exciting, one consequence of which is to cause volatile stocks to become overpriced. “Individual investors don’t systematically search for stocks to buy. They buy the stocks that catch their attention,” Mr. Odean said in an interview. “These tend to be volatile stocks, with big price moves, about which exciting stories can be told.

How to Save Enough to Pay for College (page B8): Want to cut your kids’ college costs in half? Stash money in a savings plan for 15 years instead of taking out a loan, new research suggests. That’s right: Borrowing, rather than saving ahead, can effectively double the amount a family ultimately has to spend on tuition, according to asset manager T. Rowe Price Group. To cover $25,000 in college costs today, a family taking out loans would wind up repaying about $35,000 over 10 years, or $288 a month, assuming a 6.8% loan rate. Instead, the parents could put about $92 a month into a 529 college-savings plan for 15 years, or $17,000 in all. (This assumes that the plan returns 6% a year and charges annual fees of 0.85%.) Any growth in 529 plans used for legitimate college expenses can be withdrawn free of taxes. If the parents then put the $35,000 saved in borrowing costs into a Roth individual retirement account, they could wind up with $100,000 in 20 years, assuming a 7% annual return, according to T. Rowe Price’s model. And those withdrawals generally would be tax-free in retirement after the holding requirements are met.

After Jobs, Fed to Employ Patience (page B14): These weren’t the jobs figures the Federal Reserve was looking for. After a couple of weeks of less-than-inspiring economic data, the May jobs report was in many ways a relief. The economy added 175,000 jobs during the month, the Labor Department reported Friday, a tad more than economists had estimated, with minimal revisions to previous months. The unemployment rate rose to 7.6% from 7.5%, but for the right reason: More people went back on the job hunt. But while the jobs report didn’t register as weak, neither did it register as particularly strong, with employment growth matching its trend of the previous 12 months. At that pace, the unemployment rate won’t hit the 5.5% that Fed officials consider optimal until 2017. That assumes the labor force merely expands at the same speed as the overall population; if an improving employment outlook pulls more people into the job pool, it will take even longer.

The Upside of Favoritism (page C3): Maybe you’ve played favorites. Maybe you’ve been the favorite. Most anyone who’s worked in an office or team environment knows that favoritism is a fact of nearly every modern workplace. A 2011 survey conducted by Georgetown University’s McDonough School of Business found that 92% of senior business executives have seen favoritism at play in employee promotions, while a quarter of executives admitted to practicing favoritism themselves. When we talk about favoritism in an office environment, we usually have in mind how preferring some individuals to others can damage the team as a whole, creating rifts and fostering resentment. In order to create a collegial and productive work atmosphere, we often hear, bosses need to treat everyone the same way. But this isn’t always the case—especially not if done right, and for the right reasons. Recent studies show that playing favorites can actually be a boon, motivating and empowering employees in ways that benefit the entire team.

Dan Ariely: Ask Dan (page C12):

  • How to Get More Tips as a Waiter
  • How Not to Get too Attached to Our Ideas
  • How to Enjoy Your Scotch Instead of Hoarding it

The Wall Street Journal: Wednesday, May 29, 2013

Home Sales Power Optimism (page A1): Home prices surged during the first quarter at their fastest pace in nearly seven years, the latest sign of a sustained warm-up in an economic recovery that has otherwise been marked by starts and stops. The housing-market revival—and an accompanying report on consumer confidence—adds new grist for a debate inside the Federal Reserve about how far to push its easy-money policies, including an $85 billion-a-month bond-buying program which has helped to keep mortgage rates near historic lows, boosted asset prices and begun to stimulate hiring and spending.

Nike Pares Livestrong Support (page A6): Nike Inc. is cutting back its support for the Livestrong Foundation after a nine-year relationship with the nonprofit that former professional cyclist Lance Armstrong created to help cancer survivors. The footwear giant is pulling the plug on its merchandise carrying the Livestrong brand, which it licensed from the foundation and used on sneakers, clothing and the famous yellow wristbands. In total, the Nike partnership generated $100 million in funds for the foundation since 2004, and during that time accounted for about a quarter of Livestrong’s average yearly revenue. The foundation said changes in its corporate partnerships won’t affect the services it provides to cancer survivors. Nike said it would continue to support the foundation in other ways but wouldn’t provide specifics. The company ended its sponsorship of Mr. Armstrong last October, citing what Nike called insurmountable evidence that he had used performance-enhancing drugs and misled the company about it for more than a decade. Earlier this year he admitted to doping, after a fierce battle with U.S. antidoping authorities.

Embattled Harvard Dean Stepping Down (page A6): Harvard University’s undergraduate dean, whose tenure has been marked by two high-profile controversies—a cheating scandal and a search of employee emails to ferret out a media leak about the cheating—is leaving her post. Evelynn M. Hammonds will step down as dean of Harvard College in July, she and the university said in a joint statement Tuesday. Ms. Hammonds, the first woman and African-American to serve in that post, will remain a Harvard faculty member, returning to teaching and leading a new program on the study of race and gender in science and medicine, according to the statement. Ms. Hammonds, who has been in the post for five years, said in a separate emailed statement that she wasn’t asked to resign and had been in talks to return to academia for some time. “The e-mail controversy was difficult but it was not a motivating factor in my decision to step down as dean,” she added.

Track Government Spending with Your Phone (page A13): With the United States drowning in runaway spending and debt now nearing $17 trillion, Americans might like to know where Uncle Sam is stashing their cash. Now they can. As long as you have the Web or a smartphone, you can track federal spending down to your own neighborhood. Be prepared, though, because the results aren’t pretty. I started a nonprofit focused on government transparency, and this March we released our transparency app, Open the Books. It’s free on Apple and Droid platforms and can be accessed on the Web at www.openthebooks.com. The app gives every taxpayer access to 12 years of federal spending. Our work was made possible by the 2006 Google Your Government Act, sponsored by Sen. Tom Coburn (R., Okla.) and then-Sen. Barack Obama. Before this legislation, federal government spending was staggeringly difficult to track. The law posted the line-by-line transactions of federal spending since 2000 online at usaspending.gov. We built our app by taking the federal government’s unwieldy text file of 100 million rows, reorganizing it and uploading it to a searchable database that allows citizens to see the ballooning federal spending and debt right in their backyards.

You’re Paying Too Much for Investment Help (page A15): From 1980 to 2006, the U.S. financial services sector grew from 4.9% to 8.3% of GDP. A substantial share of that increase represented increases in asset-management fees. Excluding index funds (which make market returns available even to small investors at close to zero expense), fees have risen substantially as a percentage of assets managed. In my judgment, investors have received no benefit from this increase in expense ratios. The increase in fees could be justified if it reflected increasing returns for investors from active management, or if it improved the efficiency of the market. Neither of these arguments holds. Actively managed funds of publicly traded securities have consistently underperformed index funds—by roughly the differential in fees charged. Passive portfolios that held all the stocks in a broad-based market index have substantially outperformed the average active manager since 1980. Therefore, the increase in fees likely represents a deadweight loss for investors. The lesson for investors is very clear: You can’t control what markets can do, but you can control the costs you pay. The less you pay to the purveyors of investment services, the more there will be for you. The quintessential low-cost investment vehicles are index funds, which should comprise the core of every investment portfolio. The high fees charged for active management cannot be justified.

The Red-Tape ‘Spaghetti Bowl’ Hurts Trade (page A15): Suddenly trade policy is in the news again after years of neglect. In April, Japan announced it would participate in negotiations toward a U.S.-led Trans-Pacific Partnership agreement. Washington and Brussels in January announced they would start negotiating a U.S.-European Union deal. Asian governments are working toward their own regional trade pact. And by the end of the year, Roberto Azevedo, the incoming head of the World Trade Organization, aims to partially resuscitate the moribund Doha Round. These efforts might breathe new life into trade liberalization after years of trade taking a backseat to other economic concerns. But there’s a big problem with the WTO and free-trade agreements generally: They are 20th-century trade negotiations, when the world desperately needs 21st-century policies. The Doha Round and the overwhelming majority of free-trade agreements are wedded to an old vision of one country producing a good from beginning to end for export to another country. Most free-trade agreements focus mainly on reducing tariff barriers. That makes these deals less relevant for a world in which a single good and its inputs can travel through multiple countries during assembly, in which tariff barriers are not the only or the most significant obstructions to trade, and in which trade in goods is only part of the overall trade picture. The defining feature of early 21st-century international trade is global value chains, or the fragmentation of production processes and lengthening of supply chains. Through outsourcing, offshoring and foreign direct investment, different parts of the value chain have come to be located in different countries. This process is most visible in manufacturing, but it is also happening in services such as finance and telecom. Trade along these value chains is the fastest growing element of global trade and plays a crucial role in employment and productivity growth. Exports depend more than ever on imports. Import content is about 40% of the total value of exports, double what it was in 1990. Services are much more important than hitherto believed. They account for about 40% of international trade on a value-added basis, double the total that shows up in balance-of-payments statistics.

Comcast Aces TV Tennis Suit (page B1): Comcast Corp., the country’s largest cable provider, has no obligation to distribute the independently owned Tennis Channel as widely as its own niche sports networks, a federal appeals court said, striking a blow against smaller cable channels hunting for viewers. The Tuesday ruling by a three-judge panel at the U.S. Court of Appeals for the District of Columbia Circuit suggests that upstart channels must clear a high bar to force pay-TV providers to carry them. The judges said the Tennis Channel failed to demonstrate that Comcast didn’t have legitimate business reasons for relegating the channel to a lesser tier. The court’s decision comes as rising programming costs are prompting operators such as Time Warner Cable Inc. and DirecTV  to take a harder line against including such channels in their lineups.

Retailers’ Dilemma: Cut Off Or Help Fix Unsafe Factories (page B1): When seemingly preventable disasters strike factories in developing countries, many retailers such as Wal-Mart Stores Inc. react the same way: by pulling their orders or threatening to cut off factories that don’t meet their safety standards. By contrast, H&M—the biggest buyer of clothing from Bangladesh’s $20 billion garment industry—has taken a highly public role in pledging to work with factories to improve their standards. The jury is still out on which approach is better.

Wal-Mart Pleads Guilty to Illegal Dumping of Waste (page B3): Wal-Mart Stores Inc.  pleaded guilty Tuesday to federal charges that it illegally dumped hazardous waste into local trash bins and sewer systems in California and mishandled pesticides in Missouri a decade ago. As part of the plea, the retail giant will pay $81.6 million to the federal government, including criminal fines for violating the Clean Water Act, community service penalties and a $7.6 million civil penalty to the Environmental Protection Agency. Wal-Mart noted that the charges were misdemeanors and that the hazardous waste in question involved common consumer products that had been damaged, spilled or returned. “No specific environmental impact has been alleged,” the company said in a statement, adding that in 2006 it created an environmental compliance program for employees at its 4,000 stores.

Apple’s Cook Hints at Wearable Devices (page B5): Apple Inc. Chief Executive Tim Cook, defending the company’s prowess as a tech trend-setter, hinted that wearable devices may play a role in future product plans. Mr. Cook, speaking during Tuesday’s opening interview at the D: All Things Digital conference, also disclosed that the company had hired Lisa Jackson, who served a controversial stint as head of the Environmental Protection Agency, to oversee the company’s environmental policies.

Freelancers Get Jobs Via Web Services (page B5): The Internet changed how people do their jobs. Now it’s fueling a generation of freelancers. Across her career, Brigitte Ebert, a mother of three in San Mateo, Calif., worked nine-to-five jobs like retail sales. Last year, seeking more time with her children, she started picking up odd jobs on TaskRabbit Inc., a website where individuals hire helpers for microtasks. This spring, an early test of a new TaskRabbit service connected her with consistent, 10-hour-a-week freelance work as office-food manager at tech startup Platfora Inc., refilling coffee cups and wrangling snacks for engineers. That service for businesses, which TaskRabbit launched last week, let Platfora shop for Ms. Ebert’s part-time help the same way it might buy supplies on eBay Inc. TaskRabbit executives hope to tap a shift in the U.S. economy toward freelance and “micro-entrepreneurial” work. They aren’t alone: websites and apps such as the digital-work marketplace Elance Inc., ride-on-demand service Lyft Inc., and handmade and vintage marketplace Etsy Inc. are growing as they connect workers with Internet-savvy employers and customers. Meanwhile, workers are building their own reputations and portfolios online at sites like LinkedIn Corp. “Five to 10 years from now, how people manage their careers and find what they’re going to do is going to look radically different,” says TaskRabbit’s chief revenue officer, Anne Raimondi. The shift toward freelancing—and the growth of Internet startups that are fueling the trend—comes as technology has automated many rote jobs and enabled a more efficient market for ad hoc projects. Firms are benefiting from lower costs to locate workers with specific or unusual skills, and workers are spotting new opportunities. The website Elance, which lets freelancers bid for jobs like programming or designing that they can complete over the Internet, has attracted more than 500,000 businesses and two million freelancers, about a third of whom are based in the U.S.

Asking for a Raise? Avoid Round Numbers (page B10): When negotiating for a salary, most of us reach for a nice, round number like $65,000. Or $90,000. Or $120,000. But, by favoring all those zeros, we may be missing an opportunity to score a better deal, according to a new paper from researchers at Columbia Business School. They found that using more precise numbers in an initial request—or anchor, as it is known in negotiating parlance—generally results in a higher final settlement. Precision conveys the impression that the job candidate has done extensive research and deeply understands the market for his services, said Malia Mason, the lead author of the paper and a professor at Columbia who teaches a course on managerial negotiations. When people use round numbers, by contrast, they’re conveying that they have only a general sense of the market rate for their skills.

First Day on Job: Not Just Paperwork (page B10): Why is the first day on the job often the worst? New employees tend to be greeted with stacks of benefits paperwork, technology hassles and dull presentations about company culture. But some companies—hoping to create a first impression that really counts—are turning to orientations that seem more collegiate than corporate, complete with co-worker networking sessions, time for new employees to tout their skills and even officewide scavenger hunts. It is the latest attempt by firms to make onboarding—the process of absorbing new hires and getting them up to speed—more effective.

CEOs Recall Being New (page B11): Even CEOs had to start somewhere. Here are first-day stories from notable figures in business and media:

  • Sal Iannuzzi: Chairman and CEO, Monster Worldwide
  • David Overton: founder, chairman, president and CEO, Cheesecake Factory Inc.
  • Mehmet Oz, M.D: The Dr. Oz Show
  • James ‘Jes’ E. Staley: Managing Partner, BlueMountain Capital Management; Former CEO, J.P. Morgan Investment Bank
  • David Liu: CEO, XO Group Inc. (The Knot)

Tuesday’s Markets: Stocks Change Their Fuel (page C1): A knotty market mystery unraveled Tuesday, as strong reports on U.S. home prices and consumer confidence sent investors rushing to buy economically sensitive stocks and dump Treasurys. The broad rally in stocks pushed the Dow Jones Industrial Average up 106.29 points, or 0.69%, to a new high of 15409.39, while giving the blue-chip measure its 20th consecutive Tuesday of gains.

When Model Borrowers Bite Back (page C4): Investors who have lent money at low rates this year to high-profile, deep-pocketed U.S. companies got a good look Tuesday at the down side of that strategy. The prices of bonds issued by firms such as Apple, Merck and McDonald’s tumbled along with U.S. Treasurys, underscoring the risk of buying high-rated corporate debt when interest rates are so low. High-rated, low-yielding debt of household-name companies has attracted strong interest because of the low perceived risk that these companies will fail to make good on their obligations. But such debt often is hit hard when U.S. Treasury bonds sell off, as they did Tuesday, and the low yields that investors receive in buying these bonds offer little cushion for the paper losses spurred by price declines. When Treasury yields rise, investment-grade bond yields tend to climb in lock step. That pushes down prices of the corporate bonds, since prices fall when yields increase. Bonds of lower-rated companies typically fall less hard because the debt pays more interest, giving investors a bigger cushion before their returns turn negative. Bonds that have longer maturities also are more sensitive to changes in interest rates. Lower-rated companies don’t issue as much longer-term debt.

Just Look Me in the Eye Already (page D1): You’re having a conversation with someone and suddenly his eyes drop to his smartphone or drift over your shoulder toward someone else. It feels like this is happening more than ever—in meetings, at the dinner table, even at intimate cocktail parties—and there are signs that the decline of eye contact is a growing problem. Adults make eye contact between 30% and 60% of the time in an average conversation, says the communications-analytics company Quantified Impressions. But the Austin, Texas, company says people should be making eye contact 60% to 70% of the time to create a sense of emotional connection, according to its analysis of 3,000 people speaking to individuals and groups. One barrier to contact is the use of mobile devices for multitasking. Among twentysomethings, “it’s almost become culturally acceptable to answer that phone at dinner, or to glance down at the baseball scores,” says Noah Zandan, president of Quantified Impressions. (A common feint, texting while maintaining eye contact, not only is difficult but also comes off as phony.) Some psychologists point to FOMO, or “fear of missing out” on social opportunities, says a study published earlier this year in Computers in Human Behavior. Young adults who are dissatisfied with their lives or relationships feel compelled to check mobile gadgets repeatedly to see what social opportunities they are missing—even when they don’t enjoy it, the study says.

The Wall Street Journal: Friday, May 17, 2013

Low Inflation Poses a Growth Test (page A2): The sluggishness of the U.S. economy is keeping a lid on inflation, leaving companies unable to increase prices and raising doubts about the durability of the recovery. Consumer prices fell 0.4% in April, the second straight month of declines, the Labor Department said Thursday. Over the past year, prices have risen just 1.7%, omitting food and energy, below the roughly 2% level that Federal Reserve officials consider healthy for the economy. While tame inflation is good news for consumers, it also reflects the considerable slack in the economy—including factories with spare capacity that isn’t being used and the nearly 12 million Americans who are looking for work but can’t find it. Until the economy starts firing on more cylinders, with more workers getting jobs and factories ramping up production, U.S. companies will find it hard to raise prices without losing customers.

Social Media Pose New Riddle for CIA (Page A10): Effective spycraft has long called for cover—a job, family or routine that would keep a government agent from drawing undue attention. Now, that calculation extends to spies’ use of social media. Only in the past few years has the Central Intelligence Agency issued standardized guidelines on how to use social media, according to one former intelligence official. The line these guidelines draw appears to be thin: Revealing too much on Facebook and Twitter risks tipping too much to the other side. But given that social media use is becoming ubiquitous, revealing too little could also arouse suspicion. “Technology is changing the spy business in so many different ways,” the ex-intelligence official said. “It’s very easy to find out a lot of information about people.” The question of how much a spy should divulge online became a touch less theoretical this week after Russia unmasked what it said was an American spy—saying it had detained Ryan C. Fogle, a junior political officer at the U.S. Embassy in Moscow, amid what it alleged was an effort to recruit a Russian officer. U.S. officials declined to say what agency employs the detained man. His family wouldn’t speak about the situation. The CIA declined to comment. Regardless, the detention of the 29-year-old Mr. Fogle, a 2006 graduate of Colgate University, makes him one of the first members of the social-media generation whose online activities could be read against allegations that he spied.

Investment into China Flattens (page A11): Foreign direct investment in China sputtered in the first four months of the year despite renewed signs of strength from the U.S. and the European Union, showing only a modest 1.21% rise from a year earlier. By contrast, China’s outbound investment showed strength, climbing 27% in the period, as Chinese companies showed increasing interest in playing a more active role in the global economy. Foreign direct investment in China was $38.3 billion in the January-to-April period, including $8.4 billion in April, for a 0.4% rise from April 2012. China has traditionally been a top destination for foreign investment, but the flows are now moving both ways.

Let Apple and Microsoft Bail Out Uncle Sam (page A13): During the financial crisis, the U.S. government bailed out banks and corporations in dire straits. Today the shoe is on the other foot. American corporations’ balance sheets and income statements are robust, but the federal government is running huge deficits and drowning in debt. Companies can return the favors that Uncle Sam showed them a few years ago and help bail out the government by repatriating profits currently held abroad. In the process, they can strengthen the economy, add jobs and provide private—rather than public—economic stimulus. Overall, U.S. corporations hold more than a trillion dollars overseas in low-tax-rate locales. There is a little incentive to repatriate these funds and incur the higher U.S. tax rate. Apple is actually borrowing $17 billion in the U.S. to fund stock buybacks and dividends rather than repatriate its own money to do so. That is one example of how ridiculous things have become. There are others.

Feds to Students: You Can’t Say That (page A15): Last week, the Obama administration moved to dramatically undermine students’ and faculty rights at colleges across the country. The new policy was announced in a joint letter from the Education Department and Justice Department to the University of Montana. the joint letter, which announced a “resolution agreement” with the university, didn’t stop there. It then proceeded to rewrite the federal government’s rules about sexual harassment and free speech on campus. If that sounds hyperbolic, consider the letter itself. The first paragraph declares that the Montana findings should serve as a “blueprint for colleges and universities throughout the country.” After outlining the specifics of the case, the letter states that only a stunningly broad definition of sexual harassment—”unwelcome conduct of a sexual nature”—will now satisfy federal statutory requirements. This explicitly includes “verbal conduct,” otherwise known as speech. Given that the letter represents an interpretation of federal law by major federal agencies, most colleges will regard it as binding. Noncompliance threatens federal funding, including Pell grants and Stafford loans. The implications for professors and students are enormous. An unsuccessful request for a date, or even assigning a potentially offensive book like “Lolita,” could now be construed as harassment. As attorney and civil libertarian Wendy Kaminer commented on The Atlantic’s website this week: “The stated goal of this policy is stemming discrimination, but the inevitable result will be advancing it, in the form of content-based prohibitions on speech.”

The Economics of a $6.75 Shirt (page A15): The recent tragedies at several Bangladeshi garment factories have claimed hundreds of lives—and focused international attention on this important but often overlooked industry. Yet greater scrutiny has not led to greater understanding, raising the prospect that any proposed solutions will have serious unintended consequences for this industry and the four million people it employs. So far, much of the discussion has focused on Bangladesh’s minimum wage law. It’s true that at its current level—even after two revisions in recent years—the legal minimum wage still isn’t enough to support a life. After working two hours of overtime per day, the average garment worker’s gets take-home pay of between $70 and $80 per month. Assuming the garment worker (80% of whom are women) is married to a rickshaw puller and has a child, the rent on a one-room home is around $40 per month. Basic food (30 kilograms of rice) costs $13 a month per adult. Vegetables and occasional meat and fish costs another $20 per adult. The cost of milk for one child is $5 per month. Those bare necessities have already consumed more than the garment worker’s wage. One problem is that in this household the garment worker is the primary breadwinner. Few other jobs in the country pay as highly relative to the skill level of the worker. Increasing the minimum wage in the garment industry to $64 per month before overtime, or even $90 as some have proposed, would certainly help such a household make ends meet. But that puts the entire burden for increasing Bangladeshis’ standard of living on a single industry that can ill afford it and needs the price support of global brands.

The Facebook IPO, One Year Later (page B1): Two weeks ago, new posters began appearing at the headquarters of Facebook Inc. The posters proclaimed: “Advertisers are users too*.” At the bottom of the page, in smaller font, was the phrase “*no srsly,” Internet shorthand for “no seriously.” On the eve of Facebook’s IPO anniversary Saturday, how the Menlo Park, Calif., company tackles revenue is one of the biggest challenges in its short life as a public company. After eight years of focusing on user growth, Facebook has pushed revenue up its priority list and restructured its business so that many of its best minds are now thinking about driving sales. Before filing for its IPO, Facebook made 85% of its revenue from desktop ads in the right-hand column of its website, with the rest coming from a payments business fueled by virtual-goods sales from Zynga Inc. games. Today, the company is experimenting with more than 10 other ways to make money, including a fledgling e-commerce store and fees that it charges users to send chat messages to strangers. Facebook has also broadened its ad business, running ads for the first time on mobile devices, in its News Feed, and creating special widgets for mobile, such as ads that promote installations of third-party applications. Facebook has also introduced products familiar to advertisers, including tools that target people based on their website visits or their offline behavior. And it has reorganized itself so project managers and some engineers take ownership of revenue targets.

Laurene Powell Jobs Goes Public to Promote Dream Act (page B1): Laurene Powell Jobs has taken on a public role, backing one of the most contentious causes in the U.S. today: immigration reform. And she is doing it using some of the tactics that her late husband, Apple Inc. co-founder Steve Jobs, employed to great effect at the technology giant. Ms. Powell Jobs has ramped up her years-long crusade for the Dream Act, which would give citizenship to young people who were brought to the U.S. illegally. She says she also wants Congress to pass “common-sense immigration reform” for the nation’s 11 million undocumented immigrants. She has commissioned polling, lobbied Congress, urged President Barack Obama to take action and funded a documentary about undocumented youth.

Wal-Mart’s U.S. Stores Feel Pinch (page B2): Wal-Mart Stores Inc.’s first-quarter profit and revenue edged higher, but same-store sales at its namesake U.S. stores fell for the first time in seven quarters. The retailer blamed a delay in income-tax-refund checks, challenging weather conditions, and the payroll-tax increase. While Chief Financial Officer Charles Holley said the second quarter was off to a healthy start, he said employment remains customers’ primary concern and “our consumer is still stretched.”

Penney Sales Yet to Pick Up After Johnson Exit (page B3): J.C. Penney Co. lost $348 million in its first quarter on top of nearly $1 billion in net losses last year, as sales continued to slide at the beleaguered retailer. The results are the last to reflect the stewardship of former Chief Executive Ron Johnson, who left the department-store chain last month after a disastrous overhaul that precipitated a 25% drop in sales in his first year on the job. He was replaced by his predecessor, Myron “Mike” Ullman, who is returning to a discount-oriented strategy to bring in customers, restoring some of Penney’s private-label brands and mortgaging the company’s property and headquarters to raise much-needed cash. Penney ran into trouble after Mr. Johnson, a former Apple Inc. executive, moved away from discounts and promotions in favor of an everyday low-price strategy that turned off consumers. Mr. Ullman is reversing that approach and needs to stop the decline in sales to return the company to profitability and ease pressure on its cash.

Pace Picks Up on Tech IPOs (page B4): A year after Facebook Inc.’s botched initial public offering, Silicon Valley’s IPO pipeline is starting to fill up again. Following a slowdown in technology IPOs after Facebook’s offering last May, companies including microblogging service Twitter Inc., peer-to-peer lending site Lending Club Corp. and software-tools startup Atlassian are among those preparing to go public, said executives and people familiar with the matter. While some of the companies are in the early stages of preparing for an IPO, others are likely to file within the next year to 18 months, they said. Any consumer technology companies that test the IPO market would be closely watched as bellwethers of demand for such stocks.

Google Glass Privacy Worries Lawmakers (page B5): Eight members of Congress on Thursday asked Google Inc. Chief Executive Larry Page to give assurances about privacy safeguards for the company’s high-profile Google Glass wearable-computing device. Thursday’s letter, signed by members of the congressional bipartisan “privacy caucus,” asks Google how it would “prevent Google Glass from unintentionally collecting data about the user/non-user without consent,” including through the use of facial-recognition technology.

Gold’s Allure Is Starting to Fade (page C1): Gold prices skidded for their seventh consecutive trading session Friday, on track to mark the precious metal’s longest losing streak in four years. Recently, gold futures were trading 0.9% lower at about $1,374 an ounce on the Comex division of the New York Mercantile Exchange. Traders pointed to the stronger dollar as a major culprit behind the latest leg of gold’s decline. A dollar rising against other major currencies is a signal that many investors have abandoned inflation concerns, especially as some Federal Reserve officials have become more vocal about scaling back stimulus measures. In the years immediately following the financial crisis, some investors had turned to gold as a hedge against inflation and a weaker dollar.

Lease Accounting May Shift (page C2): Companies might be forced to boost the amount of debt they report on their balance sheets by hundreds of billions of dollars under a proposal announced Thursday to overhaul the accounting for leases. If adopted, the changes could affect retailers and restaurant chains, which lease real estate at hundreds or thousands of locations. Other companies that may feel the impact are airlines and package-delivery companies, which finance aircraft through leases, and companies that lease printers, copiers and other office equipment. The new proposal from the Financial Accounting Standards Board and International Accounting Standards Board, which set accounting rules for the U.S. and most of the rest of the world, respectively, would require companies to add all but the shortest leases to their balance sheets as obligations akin to debt. That could have a major impact, experts said, given the estimated $800 billion in new lease contracts world-wide every year. Current rules allow companies to keep many leases off their books. That makes them look less indebted than they really are, regulators and critics say, and doesn’t offer investors a true portrait of their financial health.

Thursday’s Markets: Shares Decline on Worries Fed WIll Hit Brakes (page C4): Stocks fell from all-time highs amid concerns the Federal Reserve might tap the brakes on its efforts to stimulate growth. The Dow Jones Industrial Average declined 42.47 points, or 0.3%, to 15233.22, while the Standard & Poor’s 500-stock index fell 8.31 points, or 0.5%, to 1650.47. The S&P 500 had ended at records in nine of the past 10 sessions and snapped a four-session streak of gains. The Nasdaq Composite Index dropped 6.37 points, or 0.2%, to 3465.24.

Inventive Google Arrests Apple’s Development (page C8): Tech investors should take a page from the geeks and pay close attention to developer conferences. Watching Google’s, it is easier to understand the great rotation into the search giant’s stock. Six months ago, Apple had a market value of about $550 billion; Google, around $230 billion. Since then, as Google shares have risen by a third and Apple’s have dropped by a quarter, the gap has shrunk to about $100 billion. Before long, Google may end up as the most valuable tech company. Adjusting for cash, the companies are already neck-and-neck. What was on display at Google’s confab for coders Wednesday helps explain why: Its success boils down to innovation, building leading software and services for users and giving away most of it.

Dan Brown’s Secret to Keeping Secrets (page D6): When Dan Brown was researching his new novel, “Inferno,” a Dante-themed thriller set in Florence, he visited Michelangelo’s statue of David multiple times, and spent hours studying floor plans of Florence’s Uffizi Gallery, home to masterpieces by Leonardo da Vinci, Raphael and Botticelli. But the Uffizi and the David are mentioned only in passing in “Inferno,” and Mr. Brown never intended to use them to much effect. He visited the sites as a sort of cover, to throw people off and prevent plot points from leaking out. For Mr. Brown, who has made a name for himself writing novels about explosive revelations and codes, secrecy is paramount. So he uses a technique that he has mastered as a thriller writer: misdirection.

Why Orb Will Win the Triple Crown (page D10): This is the year. This is really, quite possibly, the year of the first Triple Crown since 1978. Because if Kentucky Derby-winning Orb can edge out from his rail post to win Saturday’s Preakness Stakes (NBC, 4:30 p.m. ET), then there is no question—barring all superstitions and acts of God—that he can win the June 8 Belmont Stakes.

Can This House Sell for $190 Million? (page M1): On Friday, a waterfront estate in Greenwich, Conn., was put up for sale. With a price tag of $190 million, it’s believed to be the most expensive home now listed on the market in the U.S. The 50½-acre property includes a 12-bedroom Victorian, French-renaissance mansion, 4,000 feet of water frontage on Long Island Sound and two offshore islands.

Hedge Fund Billionaire William Ackam and an Investor Group Are in Contract to Buy a New York Penthouse for Over $90 Million (page M2): Billionaire hedge-fund manager William Ackman and a group of real-estate investors are in contract to buy a penthouse condo in Manhattan for more than $90 million, according to people familiar with the matter.  When the deal closes, Mr. Ackman, whose Pershing Square Capital Management has made big bets on companies like J.C. Penney and against Herbalife, would be part of a group that owns the 75th and 76th floors of One57, a new luxury tower overlooking Central Park. The 13,554-square-foot condo has a two-story-high, 51-foot-wide glass enclosed “winter garden” with a curved glass roof.

When ‘Cozy’ Is the Code Word for ‘Small’ (page M3): Pop or soda? Submarine sandwich or hero? Sometimes, where you live can define what words mean. Real-estate listings are open to regional differences as well, especially when it comes to the word “cozy.” In Dallas, homes described as cozy have a median size of 1,517 square feet. That’s 62% larger than the size of homes described as cozy in New York City, with a median size of 936 square feet.

In Retirement, the Wisdom of More Debt (page M4): Conventional wisdom says homeowners should pay off their home loans before retirement. But for some affluent seniors, a mortgage may be a better financial decision. With interest rates so low, Jorge Padilla, a financial adviser with Miami-based Lubitz Financial Group, often tells clients to consider refinancing a jumbo loan to get the lowest possible rate and keep their savings in investments, where their money may earn a higher return. Other seniors are converting a primary home into a rental property and obtaining financing for a second retirement home, he added. “For high-end borrowers that usually have other assets accumulated at retirement, being debt-free is more of a matter of choice,” Mr. Padilla said. Another strategy has been purchasing a retirement home long before retirement. That second home lets borrowers take advantage not just of low interest rates but of still-reduced prices for high-end properties.

Rittenhouse Square: A Hot Spot for Star Athletes, CEOs – and a Flock of Empty Nesters (page M10): Historic Rittenhouse Square has been home to Philadelphia’s elite for more than a century. Now, a new glass tower one block away is generating some of the highest-ticket sales the city has ever experienced. Named 1706 Rittenhouse Square, the building, which has full-floor, 4,200-square-foot units on the sixth floor and above, opened in 2010. That year, money manager Theodore Aronson, head of AJO, bought the duplex penthouse for $12.459 million, breaking the city’s previous record of $7.7 million for the highest price paid by an individual for a single residence. Phillies pitchers Cliff Lee and Jonathan Papelbon own units in the building, as does Joseph Field, chairman of the board of Entercom Communications, and Craig Rogerson, chief executive of Chemtura. While downtowns are often associated with young professionals, most of 1706’s owners are older empty nesters.

 

 

The Wall Street Journal: Wednesday, May 15, 2013

Deficit Is Shrinking Quickly (page A2): A rapidly shrinking federal budget deficit is upending bipartisan talks to reach a federal budget deal, illustrating the conundrum Washington faces with an improving near-term fiscal outlook but continued longer-term pressures tied to aging baby boomers. The Congressional Budget Office said Tuesday the federal deficit is expected to shrink to $642 billion in the fiscal year ending Sept. 30, narrowing from the agency’s estimate of $845 billion three months ago and sharply lower than last year’s $1.087 trillion shortfall. The agency attributed the drastic shift to higher-than-expected individual and corporate tax payments, due in part to growth and higher rates that kicked in at the beginning of the year, and large dividend payments that mortgage-finance companies Fannie Mae and Freddie Mac plan to make to the government this year. After four straight years of $1 trillion deficits, the country’s fiscal picture is changing. A slowly recovering economy, cuts in government spending driven by periodic budget clashes, and higher taxes have narrowed the gap between what the government brings in and what it spends.

New Threshold Urged On Drunken Driving (page A3): Federal transportation-safety officials Tuesday proposed nearly halving drivers’ legal blood-alcohol limit to reduce alcohol-related traffic accidents, a move that would mean more drivers could be cited for drinking as little as one beer or glass of wine. The National Transportation Safety Board recommended states lower the legal alcohol concentration to 0.05% of a person’s blood from 0.08%, saying that drinking-related traffic fatalities have remained at about 10,000 annually despite stepped-up enforcement efforts.

Rare Golden State Gold: a Budget Surplus (page A7): For the first time in over a decade, California’s governor has projected a budget surplus. But that good news raises a question: How will the Democratic-dominated state government spend its money now that it no longer has to worry about closing a deficit? Gov. Jerry Brown said Tuesday he expects a surplus of $1.1 billion as part of his spending proposal for the coming fiscal year, which ends in June 2014. The last time California projected a surplus, in the early 2000s, most of the funds disappeared into higher spending and tax breaks. That left the state ill-equipped for the protracted downturn that began with the dot-com bust and worsened with the recession. Mr. Brown has vowed not to let that happen, preferring to put $1.1 billion into a reserve fund. His budget plan envisions this surplus even after paying down some state debt as well as boosting education spending, the latter required by state law.

Economists Trim China Growth Forecasts (page A16): Many economists are cutting their forecasts for China’s economic growth this year after a fourth month of disappointing data prompted fresh looks. At the start of 2013, investment-bank economists had high hopes a rebound at the end of last year would gather more steam. A Wall Street Journal survey of 18 economists late last year showed the median forecast for growth in 2013 at 8%, up from the 7.8% rise China’s economy posted last year. But a new survey of 12 economists this week showed that the median forecast has since fallen to 7.8%.

Wal-Mart Crafts Own Bangladesh Safety Plan (page B1): Wal-Mart Stores Inc. broke with major European retailers on Tuesday by announcing its own plan for improving safety at Bangladesh garment factories. The plan is billed as a commitment, but is different from the legally-binding pact meant to prevent disasters like the building collapse that killed more than 1,100 garment workers last month. Under its plan, Wal-Mart said it would hire an outside auditor to inspect 279 Bangladesh factories and publish results on its website by June 1. When fire and building safety issues are found, Wal-Mart said it will require factory owners to make necessary renovations or risk being removed from its list of authorized factories. In declining to go along with the other retailers, Wal-Mart—like Gap Inc. earlier this week—cited that accord’s legally binding provisions. On Tuesday, the five-year Accord on Fire and Building Safety in Bangladesh, negotiated with worker-safety groups and labor unions and some major European retail chains, drew support from at least six more retailers, including Canada’s Loblaw Cos., whose Joe Fresh clothing was found in the building’s rubble.

Google’s Music Service to Challenge Spotify (page B2): Google Inc. is set to launch a paid subscription music-streaming service akin to that of Spotify AB as soon as this week, according to people familiar with the matter. Google on Wednesday is hosting its annual conference for software developers, Google I/O, where it has previewed new music-related initiatives in past years and it could unveil the new service then, these people said. Google has signed deals with Universal Music Group, Sony Music Entertainment and Warner Music Group to give people unlimited access to certain libraries of their songs for a fee, two of these people said. Google already has an existing music service, which it launched in 2011 and is part of its Google Play digital-media store for devices powered by its Android operating system. That service only lets people buy individual songs or albums, while the new one from Google’s Android unit offers a paid subscription model to access whole libraries of songs.

Coursera Defends MOOCs as Road to Learning (page B5): Online education provider Coursera is just over a year old and hasn’t yet turned a profit. But it does have centuries-old colleges nervous. Daphne Koller, co-founder and co-chief executive of the Mountain View, Calif., company, insists Coursera isn’t looking to supplant traditional colleges. Instead, she wants the free Web courses to improve the educational experience for students at cash-strapped public schools and enhance learning for midcareer professionals and those without access to postsecondary education. And she wants to make money in the process by charging for certificates of completion, among other things. Coursera, which received $22 million in startup funding from Kleiner Perkins Caufield & Byers, New Enterprise Associates and some of its university partners, has registered more than 3.5 million users for 370 massive, open, online classes, known as MOOCs. It now has 69 partner institutions supplying content, including Duke University, the University of Pennsylvania and even the American Museum of Natural History. After an initial wave of enthusiasm from administrators, some college faculty have begun expressing concern that Coursera and its competitors will leave students with an inferior education—and kick them out of a job. Ms. Koller, 44 years old, spoke with The Wall Street Journal about where teachers fit into the new model and how long investors are willing to wait.

Wanted: Directors with More Digital Savvy (page B6): Nearly every facet of corporate life has gone digital. But many public-company boards remain stuck in analog mode. That has started to change. Boards worried about their scant digital expertise are scrambling to recruit newcomers who can advise management on strategies for mobile devices, social media and data analytics. “The avalanche of digital activity is making directors conclude they are increasingly ill-equipped in the boardroom,” observes Tuck Rickards, a managing director of recruiters Russell Reynolds Associates Inc. Digital directors, who are sometimes decades younger than many of their colleagues, weigh in on marketing strategy, business alliances and even recruitment, several company leaders say. The shift has made digital experts like Jeffrey F. Rayport hot commodities in U.S. boardrooms. Dr. Rayport, an operating partner of private-equity firm Castanea Partners, taught the first digital-strategy course at Harvard Business School in the 1990s and later ran the digital-strategy arm of consultants Monitor Group. He says he now fields more than a dozen feelers a year.

Tuesday’s Markets: Ho-Hum, Stocks Hit Another Record (page C5): Stocks climbed to fresh records, as investors continued to bid up shares geared to an accelerating global economy. The Dow Jones Industrial Average advanced 123.57 points, or 0.8%, to 15215.25, finishing at a record for the 19th time this year. The Standard & Poor’s 500-stock index rose 16.57 points, or 1%, to 1650.34, its eighth record close in nine days. The Nasdaq Composite Index added 23.82 points, or 0.7%, to 3462.61. Topping the list of advancers were financial, energy, materials and industrial stocks, on a day when all 10 of the S&P 500 sectors ended in positive territory. Those sectors are most closely tied with an improving global economy and stand in contrast to several months of outperformance by stable, less economically sensitive sectors.

ABC Wades Deeper Into Mobile Stream (page C18): Walt Disney’s ABC is thinking outside the four-cornered, single-screen box. On Tuesday, it became the first major broadcast network to let viewers live-stream programming onto iPhones and iPads. It will do so for local stations in New York and Philadelphia and plans to release the new app in more markets this summer. ABC is aiming to attract viewers who are increasingly growing accustomed to watching shows online. Indeed, North American bandwidth consumption on mobile devices has increased to 20% of overall usage on fixed broadband networks from just 9% last year, according to BTIG Research. Meanwhile, ABC’s prime-time ratings are down 9% from last season in the demographic most valued by advertisers. The other three major broadcasters have experienced similar declines. Given that, the question for broadcasters may be: What took so long? One reason for hesitancy: the difficulty in getting local stations’ permission and securing the rights to stream each market’s unique combination of network, local-station and syndicated content. This differentiates ABC from Disney’s other networks, ESPN and Disney Channel, both of which already offer live mobile streaming. But broadcasters may also be dragging their feet for fear of disrupting the traditional model of collecting revenue from advertising and fees from pay-TV providers to carry their signals. ABC has found a way around the latter by requiring live-streamers to be pay-TV subscribers.

Walter Mossberg: Apps Raise the iPad’s Aptitude for Real Work (page D1): There’s a popular myth that Apple’s iPad and other tablets are simply media-consumption devices, unsuitable for productivity applications. That’s just not so, and this week I tested a variety of office suites for the iPad for mini-reviews of their capabilities. In fact, I wrote and edited this entire column on an iPad using the most popular paid iPad app, the $10 Pages word processor by Apple. Not every productivity task is optimally done on tablet software, of course. Writing a plain text document like this one isn’t the same as creating a large, nuanced spreadsheet. For complex documents, I still recommend using a PC or Mac. And then there’s the problem with typing on a tablet’s virtual keyboard. If you’re going to use your iPad for longer documents, I suggest using a Bluetooth keyboard. I used a physical keyboard to write this, though I usually am fine with the on-screen one. Despite these caveats, iPads and other tablets are being used every day for productivity tasks once reserved for laptops. Every time you reach for your iPad to read, or tap out, a work-related email, that’s productivity. Every time you make or change a business appointment on an iPad calendar, that’s productivity. And there are way too many tailored productivity and business apps to list here, including apps for salespeople, contractors and doctors. There’s a major gap, though: Microsoft Office. The software giant doesn’t yet offer a tablet-optimized version. So there are iPad apps that attempt to emulate the features of Office and can import and export files in Microsoft’s Office formats. They generally don’t offer all of the features of Office and don’t always offer perfect fidelity with PC and Mac versions of Office. But I have found they are fine for the basic documents most people create or edit. And all can open and edit Office-type files attached to email, using the iPad’s “Open In…” command. You just touch the attachment icon for a bit longer than usual and a grid of compatible apps to use for editing appears. Here are my impressions of some of these apps.

How Could a Sweet Third-Grader Just Cheat on That School Exam (page D1): The line between right and wrong in the classroom is often hazy for young children, and shaping the moral compass of children whose brains are still developing can be one of the trickiest jobs a parent faces. Many parents overreact or misread the motivations of small children, say researchers and educators, when it is actually more important to explore the underlying cause. A growing body of research suggests responses for parents, adjusting strategies in subtle ways by each age.

Breathe, Relax, Repeat: Devices for Inner Peace (page D3): Breathe in energy and positivity. Breathe out distractions and bad feelings. Envision a calm place and let yourself go there. Who are you kidding? You’re probably racing to or from work along with hundreds of other people and the anxiety level you feel is indescribably high. You may want to try to meditate or center yourself in stressful situations like these, but never actually remember to do it. This week, I tested two sensors that might help: the $99 HeartMath Inner Balance Sensor for iOS and $119 Tinké by Zensorium. Each device plugs into Apple’s iPad, iPhone or iPod Touch, and digitally monitors heart rate and breathing patterns, offering on-screen coaching to get you into a calmer zone.

The Wall Street Journal: Saturday, May 4, 2013

Job Gains Calm Slump Worries (page A1): Employers kept hiring at a steady pace in April and the government revised up job tallies for February and March, easing fears that the economy is tumbling into a spring slump and propelling blue-chip stocks to record highs. Nonfarm payrolls rose by 165,000 last month and the jobless rate ticked down to 7.5%, the lowest level since December 2008. The Labor Department also significantly raised hiring estimates for the two prior months, by a combined 114,000 jobs. But the job gains in April, which were tilted toward the retail and business-services sectors, come alongside mixed signals for the economy almost four years into the recovery. While the housing and auto sectors are accelerating after years of industry turmoil, other major sectors are showing signs of trouble. In short: The Federal Reserve is looking for more broad-based and sustained job growth before easing up on its easy-money policies. Still, investors were cheered. The Dow Jones Industrial Average rose 142.38 points, or 1%, to 14973.96, crossing the 15000 mark for the first time. The dollar strengthened against the yen. Crude oil hit a one-month high and copper surged almost 7% in its biggest gain in 18 months, reflecting improving investor sentiment after weeks of deepening worry about growth. Meanwhile gold futures faltered and the price of safe-haven Treasury bonds fell.

The Global Garment Trail: From Bangladesh to a Mall Near You (page A1): As foreign retailers embraced Bangladesh’s cheap and speedy garment-making prowess, Bazlus Samad Adnan sensed there was a moment to be seized. “There’s money in the air,” friends of the entrepreneur recall him saying. “You just need to know how to grab it.” Mr. Adnan and a friend set up a small garment factory, New Wave Style, behind a slum outside Dhaka in 2006, just as foreign clothing giants swept into Bangladesh, enticed by rock-bottom labor costs. Within a few years, his company was doing work for top international brands, such as Italian retailer Benetton Group SpA. Today, Mr. Adnan is in jail and at least 500 people are dead after last month’s collapse of the eight-story Rana Plaza—one of the worst industrial accidents the world has seen. Bulldozers on Friday pushed at the rubble, uncovering more corpses. Pressure is now mounting on some of the biggest purchasers from Bangladesh, including Swedish retailer Hennes & Mauritz AB and Wal-Mart Stores Inc. of the U.S., to scale back their exposure to the nation. Benetton was one of New Wave Style’s latest customers. It was a relatively small client, but in March, just before the building collapse, New Wave Style had completed a Benetton order for 185,000 or so cotton shirts, according to numbers from Benetton and one of its Indian suppliers. At first, the Italian company denied having any relationship at all with New Wave Style. That initial confusion exposes the complexities of a global supply chain in which retailers assemble sprawling networks of contractors and middlemen—Benetton, for instance, has 700 suppliers, an executive said—to sew their clothes and seek an edge over rivals. These vast networks give retailers flexibility for last-minute orders and lightning-fast turnaround, which are imperative in a fast-fashion era where the latest look can rocket from the runways of New York or Milan to the factories of Asia in no time. The tangled networks also make it difficult to assess blame when something goes wrong.

Looking for a Super Jovial Place? You Might Want to Skip This Town (page A1): This picturesque enclave on the eastern end of Long Island has lately been fretful about happiness. The cause of distress: a national magazine, Coastal Living, named Sag Harbor as a finalist in a contest to crown “America’s happiest seaside town.” Debbie Rudoy, owner of Life’style, an upscale women’s boutique on Main Street, was elated. She sees a bonanza in a win for Sag Harbor, with tourists pouring into a village cherished by the likes of John Steinbeck. “Wouldn’t it be wonderful if Sag Harbor would be recognized as this cool indie town that has design and style and great coffee?” she says. But others are less than buoyant to have the moniker foisted upon them. “Is Sag Harbor a happy place? No, Sag Harbor is not about happy,” says Mia Grosjean, president of Save Sag Harbor, a preservationist organization. “Do we really want millions and millions of people here? Maybe Main Street would really like it, but would the residents like it? I am not sure.”

Autism Linked to Environmental Factors (page A3): Researchers at an international conference on autism Friday presented three new studies lending strength to the notion that environmental influences before birth play a role in the risk for the condition. In one study, pregnant women who were exposed to certain levels of air pollution were at increased risk of having a child with autism. Another presentation suggested that iron supplements before and early in pregnancy may lower the risk, and a third suggested some association between use of various household insecticides and a higher risk of autism. The causes of autism, a developmental disorder that involves social-skill problems, among other symptoms, aren’t well understood but are thought to be multifaceted. Genetics likely account for about 35% to 60% of the risk, many researchers say. But some experts and parents believe that nutrition and other environmental factors may also play a role, especially as the rate of autism in the U.S. appears to have climbed sharply over the past decade. The new studies showed only associations and couldn’t prove causality, and each factor itself likely accounts for a small portion of the risk for autism, researchers say. But the results, taken together with previous work—showing an association with factors like the flu and the use of certain medicines in pregnant women, for instance—provide more evidence that environmental factors affecting the womb, including what we eat and where we live, are meaningful in terms of autism risk.

Cross-Country Solar Plane Begins ‘Milestone’ Flight (page A6): A solar-powered airplane left Northern California on Friday for the first leg of a planned cross-country trip that its co-pilot described as a “milestone” in aviation history. The Solar Impulse — considered the world’s most-advanced sun-powered plane — left Moffett Field in Mountain View just after dawn. Its creators said the trip is the first attempt by a solar airplane capable of flying day and night without fuel to fly across America. It plans to land at Sky Harbor airport in Phoenix, Dallas-Fort Worth airport in Texas, Lambert-St. Louis airport, Dulles airport in the Washington area and New York’s John F. Kennedy airport. Each flight leg will take about 19 to 25 hours, with 10-day stops in each city.

Risky Business: The Quiz That Could Steer You Wrong (page B1): Last year, the Financial Industry Regulatory Authority, which oversees how investments are sold in the U.S., began explicitly requiring brokers to assess how much money clients can accept losing. As a result, you might have been asked to fill out a “risk-tolerance questionnaire” recently. Many of these questionnaires are unhelpful at best and harmful at worst, say experts on investing and the psychology of risk. Fortunately, there are ways to do better. Such questionnaires typically ask a handful of questions: how old you are, how much money you have, when you plan to retire, what you would do if the market dropped by 10% and so on. That might be useful if your risk tolerance were an integral part of who you are, no more changeable your IQ or your shoe size. Nothing could be further from the truth. Your behavior isn’t determined solely by who you are; it’s also a function of the situations you are in.

U.S. Spends to Promote Rock Music Abroad (page B3): The federal government has helped American exporters sell telecommunication systems to Macedonia, tractors to Chad, and elevators to Japan. Now, the U.S. government is helping push a different kind of export: rock music. For the first time, the U.S. government’s trade arm is stepping in to help the music business, funding trade missions to Brazil and Asia in recent months for the heads of a dozen independent music labels, which make up one-third of the U.S. music market and represent acts such as the Black Keys and Sonic Youth. Indie labels see big opportunities in Latin America and Asia—and visiting in person pays off, especially in markets such as Japan, where fans favor foreign artists that spend time in their country engaging with locals and making TV appearances.

Wal-Mart Ads Tout ‘American Success Story’ (page B3): Facing criticism over bribery allegations, worker protests and conditions at the foreign factories that make its goods, Wal-Mart Stores Inc. is aiming to burnish its image with a feel-good advertising campaign that depicts the retail giant as an “American success story.” Airing for the first time on Saturday during the Kentucky Derby, the ads—reminiscent of those purchased by political candidates—come at a time when some branding experts say Wal-Mart’s reputation among more educated consumers is declining, even though its sales remain steady. Titled “The Real Walmart,” the multimillion-dollar campaign is an attempt to correct the misperceptions of people who “don’t know the whole story” about the Bentonville, Ark., chain, Bill Simon, the head of its U.S. division, said in an interview. “We want to talk directly to the public and tell them the whole story, not just what they read about,” Mr. Simon said. The campaign, the company’s first purely image-based ad push in several years, features national television spots and a website in which customers, store employees and truckers share their warm feelings for the discount retailer. It targets what Wal-Mart calls an “opinion leader audience,” such as viewers of Sunday morning news shows, and will air through the summer. Ads highlight job opportunities at Wal-Mart, as well as the company’s efforts to sell more fresh food. They feature footage of the company’s massive distribution centers and 53-foot rigs to tell the story of how Wal-Mart gets goods to customers at low prices.

Friday’s Markets: S&P Tops 1600; Dow Milestone Just a Tease (page B5): Stocks rallied to new highs, briefly sending the Dow industrials above 15000 and pushing the S&P 500 past 1600, after April job-growth data handily beat expectations. The Dow Jones Industrial Average rose 142.38 points, or 1%, to 14973.96, after touching an all-time intraday high of 15009.59. It closed at a record. The Standard & Poor’s 500-stock index, meanwhile, pushed through the 1600-point level, 13 years after it surpassed 1500. The index rose 16.83 points, or 1.1%, to 1614.42. The Nasdaq Composite Index climbed 38.01 points, or 1.1%, to 3378.63.

Mother, Can You Spare a Room? (page B7): As an expected 1.8 million college graduates descend on the real world this month and next, many of them will move back in with their parents. The trend is keeping the graduates from assuming responsibility for their own finances. Parents, meanwhile, are finding themselves stuck caring for children, sometimes for much longer than they planned, with no exit plan in sight—often damaging their own financial health and retirement savings. Financial advisers say hosting an adult age child back at home can cost between $8,000 a year to $18,000 a year, depending on how much parents are shelling out for extras like travel and entertainment. Financial advisers and industry experts say there are many ways parents can protect their finances if their kids move back home. Parents should be firm with their kids, say advisers, by making them pay for rent and other expenses if possible, setting a limit for how long they are allowed to stay, and avoiding the temptation to offer extra financial help, like loans. According to the most-recent U.S. Census Bureau figures, 22.6 million adults between the ages of 18 and 34 were living at home with their parents in 2012, about 32% of all people in that age group. That is up from 18 million, or 27%, a decade ago. The percentage of young adults between 18 and 24 years old living with parents has increased the most, to 56% in 2012 from 51% a decade ago.

Don’t Pay High Fees for Index Funds (page B9): You might think that a plain-vanilla index mutual fund is synonymous with low fees. But some such funds are charging expenses that might make even a high-turnover momentum-fund manager blush. The indexing revolution has been a boon for investors. Big fund companies have launched many nearly identical mutual funds and exchange-traded funds that track indexes such as the Standard & Poor’s 500. With nothing to compete on but price, that’s meant ever lower expenses for investors. According to an April report from the Investment Company Institute, a trade group, stock-fund investors on average paid 0.77% in expenses in 2012, or $77 per $10,000 invested. That was down from 0.79% in 2011 and from 1% a decade ago. A big part of that change has been the rise of passively managed mutual funds and ETFs. For example, the Vanguard 500 Index Fund charges merely 0.05% a year—or $5 for every $10,000 invested—if you have at least $10,000 to invest. Yet some companies that run S&P 500-tracking index funds apparently haven’t gotten the memo. More than two dozen such funds have a share class that charges at least 10 times as much as Vanguard Group does. A handful charge more than 1% annually, or more than 20 times as much, according to investment researcher Morningstar. Take the Rydex S&P 500 mutual fund, which, like Vanguard’s fund, simply seeks to replicate the returns of the S&P 500. But to do so, Guggenheim Investments, which runs the fund, charges a whopping 1.51% in annual expenses in one of its share classes. About 0.25% goes to “12b-1” fees, which often go to financial advisers who put their clients into it. Just to get into the Rydex fund, new investors must pay an upfront commission, or “load,” of 4.75% of their total investment, or $4,750 on a $100,000 investment. To put that in perspective, someone who five years ago invested $100,000 in the Vanguard fund would now have about $126,000. Someone who invested in the Rydex fund would have $111,000, including the upfront commission.

Overheard: Will the U.S. Adopt Global Accounting Standards? (page B14): Sometimes what isn’t said can be as important as what is. In a speech Friday, Securities and Exchange Commission Chairman Mary Jo White stressed the need for international cooperation on a host of issues. Among them: setting accounting rules. She said U.S. regulators are “active participants” in establishing accounting standards used globally, and U.S. rule makers are working closely with international counterparts on bringing U.S. and international accounting rules closer together. What she didn’t mention: that after long delays, the SEC still hasn’t decided if U.S. companies should do a complete switch from U.S. rules to the global ones. It still is unknown when or if the SEC will make a decision on that front. But Ms. White did highlight a stumbling block. “The promise of global accounting standards fades if there is not consistency in their application, implementation and enforcement.” Also left unsaid: It is questionable whether that will happen any time soon.

Why I Froze My Eggs (page C1): Between the ages of 36 and 38, I spent nearly $50,000 to freeze 70 eggs in the hope that they would help me have a family in my mid-40s, when my natural fertility is gone. For this baby insurance, I obliterated my savings and used up the money my parents had set aside for a wedding. It was the best investment I ever made. Amid all the talk about women “leaning in” and “having it all,” the conversation has left out perhaps the most powerful gender equalizer of all—the ability to control when we have children. The idea is tantalizing: Once you land the job and man you want, you can have your frozen eggs shipped to your fertility clinic, hand him a semen collection cup and be on your way to parenthood. You mitigate the risk of birth defects by using younger eggs, and you can carry a baby well into middle age. At a time when one in five American women between the ages of 40 and 44 is childless—and half say they would still like to have children—egg freezing offers a once-unimaginable reprieve.

The Ethics of Egg Freezing (page C2): Is there anything ethically troubling about healthy young women freezing their eggs for later use? Proponents argue that it is merely another choice on the growing menu of fertility treatments. Thanks to freezing techniques, women’s eggs are no longer a finite resource with a built-in expiration date. And like contraception, egg freezing further levels the playing field with men, allowing women to have children when it suits them rather than when biology demands. Because egg freezing requires the use of in vitro fertilization for future pregnancies, its widespread adoption would also likely increase the use of preimplantation sex selection and genetic diagnosis, practices which pose a range of ethical dilemmas. If your eggs are getting thawed out and fertilized in vitro, why not be certain you are getting just the child you want by choosing its sex or making sure she isn’t genetically predisposed to, say, depression or cancer? Many of the fertility clinics that market egg-freezing services already offer options for screening. As a cultural matter, the emphasis on parental control in egg freezing could lead to subtle shifts in our attitudes about having and raising children. Control changes our expectations. If you order shoes in brown leather and receive them in pink suede, you’re rightfully annoyed. But human beings cannot be made to order, at least not yet, and they are rarely born at convenient times and without physical imperfections. Egg freezing offers yet another technique of control in the process of having children. The more control we have, the more we expect the end result—the child—to turn out the way we want it to, and the greater our disappointment when he does not. Assuming there are no long-term health risks to egg freezing, none of these ethical challenges justifies banning or restricting the practice. But individual choices have broader consequences, and a society in which young women routinely freeze their eggs could develop very different attitudes about children and the arc of a human life. The danger lies not in a particular technology but in how it might allow us to indulge our hubris and pretend that we and our families are not subject to the relentless march of time.

The Analogical Animal (page C3): Once you start to look for analogies, you find them everywhere, not just in the metaphors and other figures of speech used by politicians. It is by way of analogy that human beings negotiate and manage the world’s endless variety. We would make an even grander claim: that analogies lie at the very center of human cognition, from the humblest of everyday activities to the most exalted discoveries of science. we all depend on a never-ending stream of very simple analogies between everyday things, and these mini-analogies follow on the heels of one another all day long, day in, day out. A common piece of folk wisdom says that analogies, by their very nature, cannot be relied on—yet in order to survive, we all depend on this incessant stream of mundane analogies. The making of analogies allows us to act reasonably in situations never before encountered, furnishes us with new categories, enriches those categories while ceaselessly extending them over the course of our lives, guides our understanding of future situations by recording what happened to us just now, and enables us to make unpredictable, powerful mental leaps. The attempt to put our finger on what counts in any given situation leads us at times to seeing hidden links between situations despite enormous differences on their surface, and at other times to drawing crucial distinctions between situations that on first glance seem nearly identical. Analogy, one can say without exaggeration, is the very fabric of our mental life.

Daniel Akst: Week In Ideas (page C4):

  • The Allure of Headgames: What’s an effective way to recruit 21st-century engineering talent? Try a postcard or some other offbeat technique.
  • Moderation via Explanation: When people anywhere on the political spectrum hold extreme policy opinions, merely asking them to explain how the policies work leads them to moderate their views.
  • When Delivery Is Special: Having groceries delivered can involve lower carbon-dioxide emissions than driving to the supermarket.
  • A Shape-Shifting Screen: Who says a touch screen has to be flat? Researchers have developed a screen that is on the level—until you get your hands on it.

Google Glass: An Etiquette Guide (page D1): These high-tech specs with a built-in computer have the geek world abuzz, but wearing them in polite society requires decorum. Here, an open letter to very early adopters.

  • Always remember: You have a camera on your head.
  • Use voice commands only when you need to.
  • Don’t use Google Glass to make phone calls in public.
  • Give it a rest sometimes.
  • Don’t be creepy.
  • Let people try it on.

Rules of the Driverless Road (page D2): After Google Glass, cars will drive themselves one day. Goodbye, road rage; hello, highway flirting. Here, Dan Neil’s guide to road manners. Strictly speaking, etiquette should not enter into the driving equation. The road is a chaotic and dangerous place. The only thing that makes it survivable is the observance of universally understood rules of the road—rules that anticipate and regulate almost every traffic interaction. The flow of traffic should not and cannot depend on the emoluments of courtesy or the vagaries of hand signals. In fact, attempts at etiquette invariably muddle things, as when some well-intentioned idiot with the right of way waves to another driver to go first. A decade from now, things might be different. Assisted- and automated-driving technologies—onboard systems that steer and navigate, maintain safe following distances, avoid collisions and react more quickly than a human driver ever could—are working their way toward the mass market. These technologies will, in essence, change the status of the person in the left-front seat, from driver-operator to passenger-occupant, or perhaps something even more passive and disengaged, client-fare. How will unoccupied drivers interact now that their attention isn’t rigidly fixed on the road? Automated driving would seem to promise a new social space of some sort, and that will require new conventions of mannerly behavior: etiquette.

Shop ‘Til They Drop: The Next Generation of Personal Shoppers (page D3): Personal shoppers are no longer just a privilege enjoyed by ladies with envy-inducing retail budgets. A picky customer puts four services to the test.

Forget-Me-Not Gizmos (page D12): A new breed of Bluetooth gizmos enables you to attach to stray possessions to make them chirp on command. The products all work essentially the same way: They are small sensors that can be put on a key chain or slipped into a bag. When an item goes missing, you use a smartphone app to tell the sensor to play a sound, thus alerting you to the item’s whereabouts. Most of these gizmos, like the hipKey and Proximo, work in reverse, too: Pressing a button on the sensor will make your smartphone ring—even if the volume is turned down. Unlike calling your phone or using Apple’s Find My iPhone service, neither a cellular nor Internet connection is required.

Threat to Printed Page Escalates (page D12): The new Aura HD, from the Canadian company Kobo, is the first e-reader model that rivals the printed page. The biggest improvement is the screen—it displays text at 265 dots per inch (dpi), compared with the Kindle Paperwhite’s 212 dpi or the Nook SimpleTouch’s 167 dpi. While the differences between the numbers may seem relatively inconsequential, the Aura HD’s higher resolution makes text markedly sharper. The screen is slightly larger, too: 6.8 inches diagonal instead of the 6 inches that are standard today—a subtle increase that fits considerably more words on each page. The Aura HD also offers unprecedented control over how text is displayed. While many people may be content reading 12-point Helvetica, bibliophiles will appreciate the ability to fine-tune font weight, line-spacing and even the sharpness of each character. The Aura HD has other best-in-class features, like remarkably even lighting (the illumination of the lighted Kindle and Nook models is splotchy, by comparison) and, thanks to a zippy 1-GHz processor, faster page-turns and a more responsive touch-screen. For those who have invested in e-books from Amazon or Barnes & Noble, switching to the Aura HD won’t be easy. Most e-books purchased from each store are only viewable on that brand’s devices. (Hopefully, this will change; six years after the iTunes Store launched, it began selling music that could be played on any device, not just iPods.) But Kobo’s store is just as sprawling as its competitors’, with over 3 million titles. The Aura HD costs $170—more than the top-of-the-line Kindle and Nook models (both $119). For those who don’t just read books, but devour them, it’s a premium worth paying.

The Wall Street Journal Wednesday, April 24, 2013

Apple Snaps Growth Streak (page A1): Apple Inc. quieted fears that its gadgets have lost their edge, reporting strong demand for its iPhones and iPads, but posted its first profit drop in a decade and signaled that new products may not arrive as quickly as investors hope. For the quarter ended March 30, Apple reported a profit of $9.55 billion, or $10.09 a share, down from $11.62 billion, or $12.30 a share, a year earlier. Analysts had projected a per-share profit of $10. Revenue rose 11% to $43.6 billion. The company sold about 10 million more iPhones and iPads in the latest quarter than it did a year ago, underscoring the resilience of its franchise amid competition from Samsung Electronics Co. Sales of iPads were especially strong, with unit sales jumping 65%. Worries about waning demand have sent Apple shares down more than 40% from their peak in September 2012, and the pain has been broadly felt: The stock is one of the most widely held in the U.S., and nearly a quarter of all U.S. mutual funds own it, according to Morningstar Inc. Apple said it plans to return more than twice as much cash to investors than previously planned. The moves, designed to return $100 billion in cash by the end of 2015, include stock buybacks and increasing quarterly dividends. A less-positive undercurrent in Apple’s results is a squeeze on gross profit margins, an important measure in the efficiency of the company’s operations. The figures came in slightly lower than analysts expected, as the company’s product mix shifted to cheaper devices like the iPad Mini.

Twitter Hoax Sparks Swift Stock Swoon (page A1): A short-lived hoax on Twitter briefly erased $200 billion of value from U.S. stock markets on Tuesday, underscoring the vulnerability of financial markets to computerized trading programs that buy and sell shares without human intervention. A tweet purportedly from the Associated Press just before 1:08 p.m. reported two explosions in the White House and that President Barack Obama had been injured. The posting sent the Dow Jones Industrial Average tumbling roughly 145 points in an instant. Minutes later, the AP said the tweet was a fake resulting from hacking by an outside group, and the White House confirmed there were no explosions. But traders employing so-called algorithms that automatically buy and sell shares after scanning news feeds—including posts on social media sites such as those run by Twitter Inc. and Facebook Inc. —had already taken action. The two-minute selling spree left many traders stunned and dismayed, even though the market quickly recovered the losses afterward.

Blood Test Aims to Detect Autism (page A5): To cut through some of the mystery of mental disorders, which largely are defined by how people behave, scientists are seeking clues lurking in blood and saliva. The latest initiative is a clinical trial of a blood test that may distinguish between kids with autism and those with other developmental delays. The 20-site, 660-patient project, expected to be launched Wednesday, is thought to be one of the biggest studies to date to examine a biological marker for autism-spectrum disorders, which affect one in every 50 children in the U.S. The blood test aims to speed the diagnosis of autism, a condition characterized by poor social interaction and repetitive behaviors that can be hard to recognize when a child is very young. The average age of diagnosis in the U.S. is about 4 years, older than is optimal, according to experts, because therapies are more effective when begun early.

Job Hunt Moves to Mobile Devices (page B8): Technology-research firm IDC has predicted that mobile devices will overtake desktop and laptop computers as Americans’ preferred method for accessing the Internet by 2015. And as Web traffic migrates to smartphones and tablets, employers are rushing to develop mobile versions of their career websites, apps with interactive career content such as games and workplace tours, and simplified versions of job applications that can more easily be completed on a hand-held device. Companies and recruiting experts believe mobile recruiting will help them engage candidates who may otherwise fall through the cracks: lower-wage and younger workers who may not have computers at home but are glued to their smartphones, as well as the coveted passive candidates—people who are already employed—who might casually explore their options while they are off the clock.

Dream Job: Actuary? (page B8): Pete Rossi can count on one hand the number of weeks of the year that he works more than 50 hours. The rest of the year, his job as an actuary with the Department of Defense provides a good living with minimum stress, he says. That partly explains why actuaries have the best jobs in the U.S., according to a new survey by CareerCast.com released Tuesday. Biomedical engineer was No. 2 and software engineer, the top job of 2012, came in at No. 3. Careers that ranked the lowest included enlisted military personnel, lumberjack and newspaper reporter. Actuaries put a financial value on risk—for instance, the chances of a hurricane destroying a beachfront home or the long-term liabilities of a pension system. In a world awash with risks of the natural and man-made variety, the profession is booming, says Tony Lee, publisher of CareerCast.com. In addition, he says, “there’s a severe shortage of actuaries,” so wages are rising. The median salary for actuaries in 2010 was $87,650, according to the Labor Department. This year, several professions geared toward serving the financial and health needs of an aging population made the top 10, says Mr. Lee, including audiologist, financial planner, and physical therapist. As for the worst job of 2013? Newspaper reporter bumped last year’s loser, lumberjack, for the ignominious distinction.

Wal-Mart Gets Dibs on Superman (page B9): Wal-Mart Stores Inc. and Warner Bros. struck a deal making the retail chain the only place to buy tickets to the first U.S. screenings of the next Superman film, “Man of Steel.” The partnership, which the companies said was the first of its kind, will provide the Time Warner Inc. studio with free advertising at more than 3,700 Wal-Mart stores. Wal-Mart, meanwhile, is looking to draw customers through its doors with events on the day tickets become available, May 18.

‘Target’ Funds Vulnerable to Rate Rise (page C1): Millions of workers saving for retirement risk losing part of their nest eggs if interest rates jump. The cause for concern: target-date mutual funds, designed for investors who lack the time or expertise to balance their investment portfolios. The funds typically increase their bondholdings with the approach of the target date, which is pegged to the investor’s expected retirement year. In theory, more bonds should make portfolios safer, because bonds tend to be less risky than assets such as stocks. But if yields rise and bond prices slump, as many experts predict, the funds could suffer losses.

Taking the Reins to Cut Down on Risk (page C2): It isn’t easy for workers with target-date mutual funds to guard against the risk of bond losses. The best way to reduce bond risk might be to abandon a target-date fund altogether and build a new portfolio from scratch with separate stock and bond funds, some experts say. That will entail regularly revisiting the portfolio to rebalance, but some experts say the effort is worth it. The first step is to understand bond risk. Bond prices, which move in the opposite direction of yields, likely will fall most sharply on bonds that are further from maturity. A five-year bond will typically lose more value than a one-year bond if the two issues have the same credit quality. Bonds with lower yields also are more vulnerable to interest-rate increases.

Accounting Board Taps Chairman (page C3): Russell Golden was named chairman of the Financial Accounting Standards Board, putting him at the center of the debate about how much the U.S. should change its accounting rules to reflect the standards used in most other countries. The biggest issue facing Mr. Golden, as it has been for Ms. Seidman, is “convergence,” the push to bring U.S. and global accounting rules closer together. FASB and its global counterpart, the International Accounting Standards Board, have been trying for years to eliminate major differences between U.S. generally accepted accounting principles, or GAAP, which U.S. companies follow, and International Financial Reporting Standards, or IFRS, in use in most of the rest of the world. But those attempts have been marked by delays and sometimes disagreements between the two rule-making bodies. Some of the key projects on which the two boards are trying to agree, including new rules on revenue recognition and lease accounting, still haven’t been completed, nearly two years after they were originally slated to be done. The Securities and Exchange Commission has yet to make a decision on whether to shift U.S. companies over to the global rules altogether.

Tuesday’s Markets: DuPont Powers Dow Rise (page C4): U.S. stocks ended a tumultuous day with strong gains after a false tweet briefly sent financial markets veering on Tuesday, underscoring technology’s role in tightly linking global markets. The Dow Jones Industrial Average briefly plunged Tuesday afternoon before finishing with a gain of 152.29 points, or 1.05%, to 14719.46. Oil also briefly dipped, while U.S. Treasury bond prices soared, after a tweet from the Associated Press’s Twitter account claimed that there were two explosions in the White House and that President Barack Obama had been injured. Markets quickly swung back after the Associated Press said on its corporate website that its account had been hacked. The White House confirmed that there had been no incident. At the height of the confusion, the blue-chip Dow plunged by about 145 points between 1:08 p.m. and 1:10 p.m. Eastern time, following the erroneous tweet. But stocks soon recovered. The momentary scare came on a day of broad gains for the market, the third-straight advance for the major U.S. large-cap benchmarks. The blue-chip Dow finished near the day’s highs, while the Standard & Poor’s 500-stock index added 16.27 points, or 1.04%, to 1578.78. All 10 sectors of the index finished in positive territory. The Nasdaq Composite, meanwhile, advanced 35.78 points, or 1.11%, to 3269.33.

Nike Aces $1 Billion Offering (page C4): The password to view Nike Inc.’s online presentation for its first bond sale in 10 years was a play on its popular slogan: “justdoit2013.” On Tuesday, investors obliged. Buyers sprinted toward the $1 billion offering, allowing the athletic-apparel maker to borrow at cheap levels. The yields on 10-year and 30-year debt were the lowest of any unsecured corporate bond deal for those maturities this year, according to S&P Capital IQ LCD. The yield on the 10-year debt was 2.269%, 0.58 percentage point more than comparable Treasurys. The 30-year debt offered a yield of 3.641%, or 0.75 percentage point more than Treasurys. Bond prices move inversely to yields.

Apple in Danger of Losing Its Cool (page C14): Turns out Apple can’t buy investors’ affection with ever-bigger share repurchases. They still care more that the tech giant keep its edge in profits. And to do that, Apple still needs to keep its edge in technology.  Apple’s financial results for the fiscal second quarter ended in March were overshadowed by an announcement that the company is drastically increasing the size of its stock-buyback program, to $60 billion from $10 billion, as well as modestly increasing its dividend. Even so, its shares gave up initial, post-earnings-release gains in late Tuesday trading. That is because the company’s financial performance was a mixed bag. Yes, revenue was slightly higher than analysts were expecting. But the company posted its first year-over-year quarterly earnings decline in a decade. And its gross profit margin of 37.5% was at its lowest level in over two years. A reason for that is that more customers are purchasing cheaper, older versions of the iPhone as well as iPad Minis that don’t generate as much profit as traditional iPads. And there may be more pressure on profit if Apple continues to struggle with product innovation.

Is This How You Really Talk? (page D1): It is hard to hear the sound of your own voice. But that sound may affect other people’s impressions of you even more than what you say. A strong, smooth voice can enhance your chances of rising to CEO. And a nasal whine, a raspy tone or strident volume can drive colleagues to distraction. “People may be tempted to say, ‘Would you shut up?’ But they dance around the issue because they don’t want to hurt somebody’s feelings,” says Phyllis Hartman, an Ingomar, Pa., human-resources consultant. New research shows the sound of a person’s voice strongly influences how he or she is seen. The sound of a speaker’s voice matters twice as much as the content of the message, according to a study last year of 120 executives’ speeches by Quantified Impressions, an Austin, Texas, communications analytics company.

How Does a Successful CEO Really Sound? (page D3): How do you project success? For men, it takes a strong–but not angry–tone; a confident–but not arrogant– demeanor; and a commanding–but not intimidating–physical presence. New research suggests it may also help to have a nice, deep bass.

Walter Mossberg: Galaxy S 4 Is a Good, but Not Great, Step Up (page D1): I’ve been testing the Galaxy S 4 intensively for four days and while I admire some of its features, overall, it isn’t a game-changer. It’s an evolution of the prior model and despite some improvements, it still is especially weak in the software Samsung adds to basic Android. I found Samsung’s software often gimmicky, duplicative of standard Android apps, or, in some cases, only intermittently functional. I urge readers looking for a new Android smartphone to carefully consider the more polished-looking, and quite capable, HTC One, rather than defaulting to the latest Samsung.

The Smorgasbord That Thinks It’s a Weight-Loss Plan (page D1): By the time Gary Shor gets home from work at six, he has had breakfast and three lunches. Forty-five minutes later, he’ll eat dinner. Yet he weighs about 30 pounds less than back when he was eating only three meals a day. Mr. Shor belongs to a small but dedicated group who, heeding popular nutritional advice, has traded in the traditional breakfast-lunch-and-dinner lifestyle for a daylong stream of mini meals. Some fans think eating a little bit throughout the day will promote weight loss. Others want to battle hunger during long work hours or avoid sodium and additives found in many packaged foods. Popular weight-loss advice often promotes eating mini meals as a way to regulate appetite, increase the sense of satiety and even help keep metabolism revved up. Dietitians emphasize the importance of controlling calories. Mini meals appear to be especially attractive to young adults and teens, including the group marketers call “millennials.” Researchers say there is conflicting scientific evidence as to whether eating frequent small meals has any specific weight-loss benefits. A 2011 study published in the journal Obesity followed 50 people who were asked to exercise at least 200 minutes a week and to eat from 1,200 to 1,500 calories a day. They were divided into two groups, one eating three meals a day and the other eating six. People in both groups lost similar amounts of weight. But the group eating six smaller meals reported feeling less hungry, says Hollie Raynor, associate professor at the University of Tennessee, Knoxville who conducted the research. “We cannot say one or the other was better,” Dr. Raynor says, adding that in other research she has found normal-weight individuals tend to eat more often each day than overweight individuals. Heather Leidy, assistant professor of nutrition at the University of Missouri, in Columbia, published a 2010 review of eating-frequency studies in the Journal of Nutrition and says they show consumption of fewer large meals may be slightly more beneficial for weight loss and satiety. On the other hand, she notes, eating fewer than three by skipping meal times is a known cause of weight gain.

 

The Wall Street Journal: Monday, November 26, 2012

Early Sales Pay Off, for Now (page A1): Retailers reported a big jump in consumer spending over the Thanksgiving weekend as shoppers flocked to stores, snapped up online discounts and, according to some merchants, paid repeat visits to the mall. But the overall increase wasn’t as robust as last year’s. And some indicators showed a decline in spending at stores on Black Friday itself, leading to questions about whether retailers’ new tactics are simply shifting spending to different days and sales outlets. Merchants with strong Web presences were positioned to be the big winners: for the first time, more than half of consumers said they shopped on the Internet over the weekend. Online spending on Friday alone topped $1 billion for the first time, according to the data-analysis firm comScore Inc.

Singer Gets Down to Business (page B6): In her professional life, Grammy-winning pop singer Alicia Keys has worked with such stars as rapper Jay-Z and rocker Jack White, but to help market her new music, footwear and online products she’s drawing from her life as a new wife and mother. On Tuesday the 31-year-old Ms. Keys will come out with “Girl on Fire,” her first album for Sony Corp.’s RCA Records. The new release features contributions from such performers as rapper Nicki Minaj, singer Frank Ocean and singer-songwriter Bruno Mars. Ms. Keys also recently collaborated with Adidas AG’s Reebok brand on a new line of sneakers that is rolling out around the world, with a follow-up collection due next year. Ms. Keys and her production company, AK Worldwide, this month worked with Bento Box Interactive on “The Journals of Mama Mae & LeeLee,” a storytelling app targeted at young children that is meant to spur a love of reading. After co-starring roles in such movies as “The Nanny Diaries” (2007) and “The Secret Life of Bees” (2008), Ms. Keys for the first time is executive producer of a feature film, “The Inevitable Defeat of Mister and Pete,” and is writing the score.

Chill Out on No. 1 Notre Dame (page B8): How surreal and funny it is to witness the renewal of hatred toward Notre Dame, suddenly bursting with life, as if a primordial creature has roused from the ocean. How long has it been since the Fighting Irish were properly despised? The emotion hasn’t had relevance for years—during recent down years it just felt like a pile-on—but now, amid a surprising and historic South Bend season, it’s being dusted off for a loud revival. Irish fans might be offended, but they shouldn’t be. There’s something amusingly passé about the hostility. Hearing someone complain about Notre Dame in 2012 is like having someone call you on a rotary phone and tell you all the reasons you shouldn’t like Air Supply. Of course, it’s inevitable. Despite years of inconsequence and occasional ineptitude, the Fighting Irish remain college football’s most recognizable (and polarizing) brand, the team that your Mom, your cat and your Crazy Uncle Billy have an opinion about.

Fear Gauge is Showing Little of It (page C1): On the floor of the Chicago options exchange, those who trade in fear have seen little but calm. Unlike the rocky ride in the stock market since the U.S. presidential election, the Chicago Board Options Exchange’s Volatility Index, or VIX, has registered tranquility. For four months, the so-called fear gauge of financial markets has traded below its two-decade historical average of 20, its longest such streak in more than five years.

Big-Box Stores Wrestle E-Commerce Gorilla (page C10): Forget Cyber Monday. This year, it’s Cyber Two Weeks. Major retailers like Wal-Mart, Target and Best Buy are extending online sales in both directions from the Monday after Thanksgiving, the biggest online shopping day of the year in the U.S. by sales, according to comScore. But for many big-box stores, their online tactics during the holidays have the same goal as during the rest of the year: Take market share from Amazon.com. Indeed, Amazon, whose global revenue from retail totaled $46.5 billion in 2011, is the gorilla in the e-commerce room. By comparison, Wal-Mart has said it expects to do over $9 billion in global e-commerce revenue in fiscal 2014, beginning in February. Amazon sells many of the same products as big-box stores but can undercut them on price due to lower overhead. It also uses computer algorithms to adjust prices in real time. Traditional retailers often can’t move as rapidly because online prices must match those in stores.