Money Minute: Will Stocks Soar Again in 2014? Fiat Buys All of Chrysler

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Investors are hoping 2014 brings as many happy returns as 2013 did.

Last year was a banner year for investors and you didn't have to be a market pro to do really well. If you put your money into an index fund at the beginning of the year and just left it there, you did very well.

Wall Street stocks new york stock exchange
Seth Wenig/AP
For all of 2013, the Dow industrials soared 3,472, or 26.5 percent. It was the Dow's fifth straight yearly gain. The S&P rallied nearly 30 percent and the Nasdaq outdid them all, jumping 38 percent. Nine out of 10 of the stocks in the S&P 500 gained ground last year.

Recapping Tuesday's trading, the Dow Jones industrial average (^DJI) rose 72 points, closing at its 52nd record high for the year. The Standard & Poor's 500 index (^GPSC) rose 7, and the Nasdaq composite index (^IXIC) gained 22 points.

The big question now for investors is: will the rally continue? As always, opinions vary widely, but the consensus estimate of market pros is for a gain in 2014 of 6-to-8 percent, with some bumps in the road along the way.

Learn to say Chrysler with an Italian accent. The Italian automaker Fiat has agreed to a nearly $4.4 billion deal to acquire the 41 percent of Chrysler held by a UAW health care trust. That means Chrysler won't be going pubic after all. The deal gives Fiat total control and it values Chrysler at more than $10 billion.

Google (GOOG) has slashed the price of its flagship phone, the Moto X. It now costs $399 for the 16 gigabyte version, down from $550. That's much cheaper than most of the other high-end smartphones on the market.

Do you remember the commercial for the Samsung Galaxy showing people meeting on the street and bumping their phones together to transfer information? Well, the company behind that technology -- named Bump -- was acquired by Google a few months back, and now Google is shutting down the service. It apparently wanted the people behind it more than the technology itself.

-Produced by Drew Trachtenberg.


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23 Comments

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Iselin007

These car company purchases use to take place alot that's how the American Auto Giants grew so large. I use to see a ( Henry J ) parked at the Menlo Park Mall in Edison, a Packard at a car lot in Woodbridge, and a LaSalle at a Gas Station in Colonia NJ. It's amazing when you think of all the car companies that merged. Today you have to go to an Auto Museum if you want to see those cars.

January 02 2014 at 5:17 PM Report abuse +1 rate up rate down Reply
Anna

Upon the opening of markets in Europe, the deal price and the strategy was met with glee by the Italian market that pushed up fiat stock up in the low double digits before US markets opened. Chrysler's cash flow if it remains stable over the next year or two, will provide Fiat, which will be globally the 7th largest automobile OEM, the liquidity necessary to execute its restructuring and realignment plan. Excess capacity in Europe will remain an overhang for many firms with production in the EU, but if unemployment can be reduced by 20% in laggard countries like Spain, Portugal, Greece, and France, the uptick in demand can make the hard slog in the European Market worth it in 2016. One can only hope, but I would also put some money behind the trade in Fiat, as well as airbus, and select Industrial Names that can see profitability growth that exceeds overall market expectations in late 2014 and well into 2015. I congratulate the UAW Trust, which owned 41.5% of the post reorg. entity for monetizing its investment at such an attractive valuation, and taking the risk of continued cash flow generation at above historical norms, out of the Health Trust. Profit optimization over a 7 year time horizon is easy when you don't have claims and/or bills to pay in the meantime.

January 02 2014 at 4:18 PM Report abuse rate up rate down Reply
michael

now all they have to do is build an inexpensive 2 or 3 cylinder carbon fiber or plastic car on a simple boxed frame with an extendable 2 seat to 4 seat 1960 style austin healy body... keep it simple rear wheel drive is fine..45 mpg is fine..top speed of 85 is fine...cruize speen of 70 is excelent...price tag of 10-12 k undercuts everybody and sales will soar...just give an 80k warranty...keep it simple...

January 02 2014 at 4:08 PM Report abuse rate up rate down Reply
Mike

Will be interesting to see how Fiat deals (or doesn\'t deal) with the unions now that they have total control. Any bets that some jobs will be relocated?

January 02 2014 at 4:07 PM Report abuse rate up rate down Reply
Robert Brooks

What, you gotta problem with your Jeep? You ain't got no problem with your Jeep...I SAID you ain't got no problem with your JEEP!...Bruno, show him the door.

January 02 2014 at 1:42 PM Report abuse -3 rate up rate down Reply
llmoss13

Another bail out success Obama will be remembered for.

January 02 2014 at 1:22 PM Report abuse -3 rate up rate down Reply
1 reply to llmoss13's comment
Iselin007

Maybe Willy's will reform?

January 02 2014 at 5:24 PM Report abuse +1 rate up rate down Reply
jrb359

I hope they keep all the Chrysler designers and don't make their cars look like a Fiat!

January 02 2014 at 12:20 PM Report abuse -3 rate up rate down Reply
2 replies to jrb359's comment
michael

1960 austin healy bug eye sprite plastic body on solid boxed frame 2.5 by 1 3/4 boxed steel...removeable hardtop also available rear wheel drive preferably a 50 hp GEO Metro 3 cyl engine...selling price about 10-12 k brand new.....sales will soar again....americans will drive again...americans will be able to afford to drive again...45 miles per gallon whooooRaaaah SEMPER FI

January 02 2014 at 4:13 PM Report abuse rate up rate down Reply
Iselin007

Wouldn't you want to see a Fiat Van or Pick up?

January 02 2014 at 5:28 PM Report abuse rate up rate down Reply
tjstieg

Real question is whether Fiat will put up with UAW shenanigans now that it owns 100%?

January 02 2014 at 12:20 PM Report abuse -2 rate up rate down Reply
1 reply to tjstieg's comment
michael

They will have to move out of detroit and reopen up in South Carolina, Mississippi, Georgia, Alabamma, maybe Tennessea

January 02 2014 at 4:15 PM Report abuse rate up rate down Reply
1 reply to michael's comment
Iselin007

They could move to New Jersey because we sure could use the jobs. That would entice the 30,000 people who had dropped out of the Laborforce in this state in November 2013 to comeback.

January 02 2014 at 5:32 PM Report abuse rate up rate down
jimmy_branch

Dodge is junk should have let them go under - I got rear ended by a Dodge driving moron and as I drove away I watched them trying to pick up the pieces of that Ram Truck piece of junk.

All of the Auto companies can make up their phony numbers because in the fairy tale land of the Government backed Auto Industry no business that supports the consumption of oil can fail.

As unemployment benefits disappear - Marijuana shops pop up so the 1% can add to the destruction of America - it's truly the lawless wild west, at least for the 1%.

January 02 2014 at 12:04 PM Report abuse -4 rate up rate down Reply
1 reply to jimmy_branch's comment
michael

most of the new dodges are junk buit the old slant six was great the dodge dart ..is ok today however just to freaking expensive...Read my lips there just are not tha many rich americans anymore in the nation...all the manufacturing jobs are gone the EPA made sure of that ...maybe when America was a working nation and everybody was working in manufactureing jobs and had affordable transportation and could afford to surviove a winter in the north ...maybe back then there were some better off americanbs that could afford those kind oif luxury American guzzelers...not today my friend...we need inexpensive small gas saving easy tio repair cars that are printed out on your 3d printer..so simple

January 02 2014 at 4:24 PM Report abuse rate up rate down Reply
jdykbpl45

Flying like a brick today.

January 02 2014 at 12:02 PM Report abuse +1 rate up rate down Reply