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Jan. 7, 2013 at 7:35 PM
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Markets stumble Monday

NEW YORK, Jan. 7 (UPI) -- U.S. stock indexes turned lower Monday following a week of strong gains prompted by a tax deal that derailed a predicted economic downturn.

The tax code agreement reached last Tuesday that raised taxes for individuals earning $400,000 and families earning $450,000 per year or more settled immediate worries about the so-called fiscal cliff, a combined $500 billion tax increase/spending cut adjustment that was would have kicked in Jan. 1 without the new tax law. It was predicted by some to send the U.S. economy into a second recession.

But political leaders didn't deal with the spending side of the budget equation and those decisions, expected to come in March, have the potential to rattle investors.

During the weekend, Senate Minority Leader Mitch McConnell of Kentucky said the discussion on taxes was closed. President Barack Obama had said earlier spending cuts were dependent on further changes in the tax code, MarketWatch reported.

By close of trading, the Dow Jones industrial average lost 50.92 points or 0.38 percent to 13,384.29.

The Nasdaq composite shed 2.84 points or 0.09 percent to 3,098.81.

The Standard and Poor's 500 dropped 4.58 points or 0.31 percent to 1,461.89.

On the New York Stock Exchange, 1,380 stocks advanced and 1,651 declined on a volume of 3.2 billion shares traded.

The 10-year treasury note was yielding 1.902 percent.

Against the dollar, the euro rose to $1.312 from Friday's $1.3069. The dollar was lower at 87.56 yen from 88.16 yen Friday.

In Tokyo, the Nikkei 225 index lost 0.83 percent or 89.10 points to 10,599.01.

In London, the FTSE 100 index lost 0.41 percent, 25.26 points, to 6,064.58.

Growth in healthcare spending at a crawl

WASHINGTON, Jan. 7 (UPI) -- U.S. government data shows healthcare spending in 2011 grew 3.9 percent from 2010 to 2011, matching the lowest growth rate on record.

Annual growth has remained consistent since 2009, when physicians noted patients cutting costs in various ways, including delaying routine tests, pulling back on office visits and canceling or postponing elective procedures, The Wall Street Journal reported Monday.

Data shows spending slowed at hospitals in 2011, but spending rose on doctor visits and on prescriptions, suggesting patients may ready to increase healthcare spending soon.

In 2011, "things went back to normal," said Wichita, Kan., optometrist Chad Fleming.

Previously, patients had been putting off getting their eyes checked and asking with more frequency for prescriptions to be filled with generic drugs, he said.

In 2010, growth in spending on drugs slowed to a crawl, climbing 0.4 percent, because people were no longer going as frequently to the doctor, said Steve Miller, chief medical officer at Express Scripts Holding Co., a firm that manages drug benefits for 100 million people, the Journal reported.

Growth in healthcare spending was strongest in the area of specialty drugs, where there are no generic substitutes.

While spending on drugs overall rose 2.9 percent in 2011, spending on emerging drugs used to treat conditions like multiple sclerosis, hemophilia and cancer rose 20 percent, the data shows.

Enrollment in health insurance rose 0.5 percent in 2011 and total healthcare spending rose from $2.6 trillion to $2.7 trillion.

Only a few of the federal healthcare overall provisions have begun to take effect. Analysts are pointing to 2014 when big changes come through with millions more people having access to health insurance through the program known as Obamacare.

Some doctors attributed the recent uptick in healthcare spending to new jobs that include health benefits.

"Now that they finally have healthcare they're very willing to get it done, even anxious, before the next shoe drops," said Wilmington, Del., family physician Rebecca Jaffe, referring to routine tests patients had been avoiding for cost reasons.

Benefits of an MBA are sliding

NEW YORK, Jan. 7 (UPI) -- The costs of a masters degree in business and the payoff is shifting and not to a graduate's advantage, students and U.S. career specialists say.

"It was a really great program. But the job part has been atrocious," said Steve Vonderweidt, a recent MBA graduate from University of Louisville, who still has the same social service administration job he did before he earned his business degree in 2012, The Wall Street Journal reported Monday.

Data indicates the cost of a masters in business administration has soared in recent years while salaries have either stalled or fallen.

The Graduate Management Administration Council reported the median salary for the first job after earning an MBA was little changed from 2008 to 2011. The Journal's analysis done with help from PayScale.com found median pay for new graduates in 2012 was 53,900, a drop of 4.6 percent from 2007-2008.

The study looked at 186 schools and found pay had dropped for new graduates at 62 percent of them.

Student loan debt, meanwhile, jumped from an average of $55,594 in 2007 to $81,758 in 2010.

The economy is partly to blame, as "some of those companies would hire today barely in the single-digits," said Mark Peterson, president of the MBA Career Services Council, referring to companies that hired in double and triple digits in years past.

But partly to blame is also the sudden jump in the number of MBA degrees earned in recent years.

In the 2010-11 academic year, 126,214 MBAs were awarded, a 74 percent increase compared with 2000-01.

The explanation for the increase was the economic downturn that forces workers to consider going back to school, the availability of online degree programs and changes in established programs.

"An MBA is a club that is now not exclusive. You should not assume that this less exclusive club is going to confer the same benefits," said Brooks Holtom, a management professor at Georgetown University's McDonough School of Business.

Regulators soften Basel III rules

BASEL, Switzerland, Jan. 7 (UPI) -- An international committee of finance regulators in Switzerland said it would back up on new requirements imposed on banks to cushion them against collapse.

Named after the city in Switzerland that is the frequent site for many of the group's meetings, the Basel Committee in 2010 -- at the meeting known as Basel III -- increased the amount of available capital banks needed to withstand pressure from sudden disturbances, like a run on deposits or the failure of another institution, like Lehman Brothers, which collapsed in 2008.

The New York Times reported Monday the group that represents 26 countries voted unanimously to expand the definition of liquid assets, which would make it easier for banks to meet the requirements. The rules now allow a portion of the liquid assets to be made up of mortgage-backed securities. These were viewed as risky when the rules were written.

Banks also have until Jan. 1, 2019, to meet the requirements, rather than Jan. 1, 2015, the previous deadline.

"Nobody set out to make it stronger or weaker, but to make it more realistic," said committee chairman Mervyn King, the governor of the Bank of England.

The rules have no international police force to back them up -- just peer pressure. But some members of the group have complained the United States has been slow to turn Basel Committee agreements into law, as others have done.

Banks lobbied hard to soften the new regulations, which they said were so stringent, they would make it harder to lend money. Others argued banks with better protection against collapse should have an easier time lending money and would attract more investors.

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