Stocks stuck on fiscal cliff treadmill

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NEW YORK (CNNMoney) -- U.S. stocks drifted lower Friday as investors remain sidelined by political gridlock in Washington.

It's been a rough few weeks for investors, as lawmakers and President Obama engage in brinksmanship over year-end tax hikes and spending cuts. The so-called fiscal cliff could harm the economy at a time when the outlook for growth is already in question.

Economic data released Friday wasn't helping matters much, with a report showing personal income remained unchanged in October, while spending declined by 0.2%.

"That's a concern because the consumer has been a pillar of the economy," said Doug Cote, chief market strategist at ING Investment Management. "The numbers were clearly below consensus and the market didn't like that."

A survey of purchasing managers in the Chicago area improved slightly in November, after two consecutive months of decline. The Chicago PMI inched up to 50.4, moving back above the level indicating growth.

The Dow Jones industrial average fell 0.1%, while the S&P 500 lost 0.2%. The Nasdaq declined nearly 0.3%.

While the Dow and S&P 500 are both on track to end the week little changed, the Nasdaq is headed for a gain of more than 1%.

Related: Fear & Greed Index stuck in neutral

Friday also marks the last trading day of November, which started off with two weeks of heavy selling. But stocks have clawed back from those steep losses over the past couple of weeks, putting the major indexes on pace to end the month right where they started.

And you can blame the fiscal cliff for that.

Speaker John Boehner said Thursday that lawmakers in Congress have made "no substantive progress." A day earlier, he said he was "optimistic" that a compromise will be reached "sooner rather than later."

The talks will go down to the wire and the outcome will either be massive spending cuts and tax increases that kick in automatically, or negotiated spending cuts and tax increases, said Keith Springer, president of Springer Financial Advisors in Sacramento, Calif.

"Either way, all Americans are held hostage by the shenanigans, yes I called it 'shenanigans,' and unprepared investors will be punished," Springer said.

Related: America's debt challenge

A few stocks were making big moves Friday. Shares of St. Jude Medical (STJ, Fortune 500) rallied after the hospital's board authorized a $1 billion stock buyback. Yum! Brands (YUM, Fortune 500) sank after the firm softened its expectations for China, predicting same-store sales in that key market would decline 4% in the fourth quarter.

Zynga (ZNGA) shares also extended their decline Friday, after tumbling 13% after-hours Thursday on news that the terms of its deal with Facebook (FB) had substantially changed.

Verisign (VRSN), the company that makes money off the .com registration, sold off sharply after it said it reached a new agreement with the Commerce Department that bars future price increases.

Meanwhile overseas, Asian markets played catch-up Friday, but were also helped by the approval of a new stimulus package in Japan and expectations of strong Chinese factory data due over the weekend. Extending weekly gains, the Nikkei rose 0.48%, the Hang Seng advanced 0.49% and the Shanghai Composite jumped 0.85%.

European stocks ended modestly higher, despite news that eurozone unemployment hit a new record high in October.

In other overseas news, the pace of economic growth in India slowed during the latest quarter. The country's GDP, the broadest measure of a nation's economic health, grew at a rate of 5.3%.

The dollar slipped against the euro, but was firmer against the British pound and Japanese yen. In the commodities market, oil prices edged higher, while gold headed lower.

Bond prices held steady, with the yield on the 10-year U.S. Treasury note edged up to 1.62%.

First Published: November 30, 2012: 9:47 AM ET

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Verisign deal blocks .com price hikes

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NEW YORK (CNNMoney) -- Verisign, the operator of the .com domain name registry for the World Wide Web, will be forbidden from regularly raising registration prices over the next six years.

The company renewed its contract with the U.S. Commerce Department on Friday, but under the terms of the new deal, Verisign will not be able to continue its practice of frequently raising prices by as much as 7% -- something Verisign did in four out of the six years covered by its last deal. Currently, registration prices sit at $7.85 per year.

The Commerce Department will need to approve any price hikes on .com registration through 2018, which it only plans to do for "extraordinary expenses related to security or stability threats."

Shares of Verisign (VRSN) fell by 15% on the news.

Verisign has been operating the .com and .net top-level domain registries since 2000 under an agreement with the Domain Name System overseer, the Internet Corporation for Assigned Names and Numbers. But Verisign's contract renewal was strongly opposed by the Internet Commerce Association, which represents website owners.

ICA claimed that Verisign's price hikes were arbitrary and not done out of economic necessity. The group pointed out that Verisign charges just $5.86 for the far less-used .net domain name, even though both domains use the same infrastructure and have similar operational costs.

Related story: Do Not Track is dying

The new Verisign contract is only a partial win for ICA. The organization was hoping to end Verisign's "monopoly" status.

The agreement also gives Verisign some wiggle room: The pricing restrictions could be removed if Verisign can prove to the Commerce Department that "market conditions no longer warrant such restrictions," according to the deal.

Verisign praised the new deal.

"This is an important event that provides certainty and sets a clear direction for the company," Jim Bidzos, Verisign's CEO, said in a prepared statement.

The market for services like Verisign's is growing fast. The largest-ever expansion of the Internet's naming system is in progress and will soon open the door to new domain names like .home, .inc, .blog, .book, .shop and .llc.

Separately, the global standards-setting Internet Society in June launched a new Internet Protocol standard called IPv6 that expanded the number of unique Internet addresses from 4.3 billion to 340 trillion trillion trillion.

Verisign said it is working to "meet the performance and scalability demands of .com" by upgrading its infrastructure to support IPv6 and other new specifications.

First Published: November 30, 2012: 9:58 AM ET

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The daily deals market looks bleak

It's been a grim few months for Groupon and LivingSocial, the leading companies in the troubled daily deals field.

NEW YORK (CNNMoney) -- It's been a winter of discontent in the daily deals space, with serious issues afoot at kingpins Groupon and LivingSocial.

Financial analysts have long criticized the daily deals field for its low barrier to entry and unproven long-term viability. A recent string of bad news for the top two companies in the space has only given them more fodder.

"The field is going through some growing pains," says Unaiz Kabani, data product manager at Yipit, a research firm that tracks the daily deals space.

The season's unhappy tidings began in late October, when Amazon (AMZN, Fortune 500) reported a worse-than-expected loss due in part to its investment in LivingSocial. Amazon lost a whopping $169 million on its $175 million buy-in.

Bad news hit LivingSocial more directly on Thursday, when the company announced layoffs of 400 employees, or 10% of its global workforce. The majority of the layoffs were in the sales, editorial and customer service departments.

Meanwhile, daily deals leader Groupon suffered through its own terrible earnings report. Groupon (GRPN) shares lost nearly a third of their value earlier this month, after the company reported that its third-quarter revenue growth slowed sharply. It was a plunge Groupon's stock could ill afford, bringing it well under $3 -- a shocking 89% below its IPO price just one year prior.

The stock slump led to rumors this week that Groupon's board is itching to oust company founder and CEO Andrew Mason, who did little to dispel the reports.

"Our stock is down 80% [year-to-date] ... it would be weird for the board not to be asking that question," Mason said at a conference on Wednesday.

It remains to be seen whether Mason can turn it all around and keep his job, but the success of Groupon and LivingSocial are critical to the deals field. Groupon currently holds 50% to 55% of the industry's market share, followed by LivingSocial with 20% to 25%, according to Yipit data.

Yipit used to track the dozens of monthly entries and exits into the daily deals field, but the company stopped that practice last year when the space began to thin out.

"In the long tail there might be sites going in and out, but not the levels from before," says Kabani, the data manager. "A lot of it is people realizing how expensive it is to enter and to do well. It's easy to make a website, but not so easy to get people to visit it."

Related story: LivingSocial: Things are going to get worse

After Groupon and LivingSocial, market share drops off precipitously. The list of who follows them fluctuates a bit, but Travelzoo, Google (GOOG, Fortune 500) Offers and AmazonLocal (AMZN, Fortune 500) usually round out the top five, according to Yipit. They usually hold only 5% to 10% of the market each at any given time.

Still, Yipit thinks there's room for more than one daily deals leader.

"Groupon has headed more into selling actual goods, while LivingSocial has been focusing more on local, like live events and concerts," Kabani says. "They'll all continue to overlap, but you'll see some specialization, too."

First Published: November 30, 2012: 11:39 AM ET

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The iPhone 5 & iPad mini go to China

FORTUNE -- There was mixed reaction on Wall Street to Apple's (AAPL) announcement about which new products are headed to China and when they might get there.

The key paragraph (with irritating trademark symbols stripped out):

The Wi-Fi versions of iPad mini and fourth generation iPad with Retina display will be available in China on Friday, December 7, and iPhone 5 will be available on Friday, December 14. iPad mini and the new fourth generation iPad with Retina display are currently available in 42 countries, and iPhone 5 is available in 47 countries, including the US, Australia, Canada, France, Germany, Japan and the UK.

Excerpts from the early analyst's reactions:

Piper Jaffray's Gene Munster: China iPhone Launch Slightly Earlier Than Expected. "We had previously expected both products to go on sale in China during the quarter and while the iPad timing is generally in-line with our prior thinking, the iPhone 5 will be available about a week earlier than we expected. The bottom line is that the China iPhone 5 announcement gives us slightly greater confidence in our 45 million unit iPhone estimate for December."

Topeka's Brian White: During the Year of the Snake, Expect China to Devour the Apple. "Although we expected the iPhone 5 to arrive in China in December, we were not expecting the iPad mini and fourth generation iPad to be launched in the country this year. Also, we were surprised on the upside by the fact the new iPads are now in 42 countries, while the iPhone 5 rollout seems a bit slower than expected and in 47 countries."

ISI's Brian Marshall: Quick Thoughts on AAPL's continued penetration of China. "We continue to expect the iPhone 5 will be in ~100 countries and ~240 carriers by the end of Dec (e.g., nearly 100% of their total carrier partner base). From a technology perspective, the iPhone 5 is significant as it is the first iPhone capable of running on all 3 major carrier networks in China (e.g., CHL, CHU, CHA.) Big question remains however…when will China Mobile (CHL, world's largest carrier with ~700 million wireless subs) start selling the iPhone? Our best guess is 2H13."

More as they come in.

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The cost of cheap clothes at Wal-Mart, Sears

Fires at a Bangladesh apparel factory that made items for retailers like Wal-Mart and Sears killed 112 workers last weekend.

NEW YORK (CNNMoney) -- A deadly fire at a Bangladesh apparel factory that manufactured items for major U.S. stores like Wal-Mart and Sears raises troubling questions about the high cost of cheap clothing, and whether the world's largest companies are doing enough to monitor worker conditions in their overseas production facilities.

A total of 112 people were killed and at least 200 more were injured in a fire Saturday at the Tazreen Fashions Factory, located near Bangladesh's capital city Dhaka. Two days later, another apparel factory near Dhaka caught fire. Ten people were injured after jumping from windows to escape the inferno at the 10-story building. Eye witnesses say that managers had locked the windows and gates to the buildings, which had no fire escapes, effectively trapping the workers in.

Photos of items sold at Wal-Mart (WMT, Fortune 500) taken in the Tazreen Fashions factory surfaced in the days following the fire. The retailer responded by saying that the factory was no longer authorized to produce merchandise for it.

"A supplier subcontracted work to this factory without authorization and in direct violation of our policies. Today, we have terminated the relationship with that supplier," Wal-Mart said.

Sears (SHLD, Fortune 500) also said that the factory produced merchandise for the retailer without its approval and that it has since terminated its relationship with the vendor.

On its website, Wal-Mart says it monitors undisclosed subcontracting by conducting audits and enhancing its standards for suppliers. It defines subcontracting as factories in its supply chain that weren't properly disclosed or that it didn't know about.

Sears also said that the factory violated its code of conduct.

Related: Why Wal-Mart workers are striking

Workers rights experts, however, claim that it's unlikely that retailers wouldn't know where their stuff is produced, as a matter of cost and production control.

"In order to be profitable, you have to control the supply chain, monitor quality, prices and the speed of delivery," said Scott Nova, executive director of the Worker Rights Consortium. "It's strange that a company would say they had no idea who was making stuff for them."

Wal-Mart's website says the retailer conducted 9,737 audits on 8,713 factories that supply private-label and non-branded goods to Wal-Mart in 2011. The audits, completed by what it calls accredited or internationally recognized auditing firms, are carried out every six to 24 months.

But the reports are not published online. Nor are they shown to factory workers, according to Nova.

"There's no transparency. They never publish their findings as to whether or not there's a violation, so there's not much scrutiny about the audits," he said.

The issue, experts say, runs deeper, to a conflict between selling clothes at a cut rate price versus bolstering the rights of workers.

In order to keep production prices low, Nova said that companies rely on cheap labor, which often goes hand-in-hand with low wages, poor working conditions and safety concerns.

"On one hand, brands are telling factories to improve conditions, but on the other hand they're telling them they need lower prices," he said. "They have workers at factories making 18 cents an hour to keep prices down, but they recognize that the consequence are egregious situations like this fire."

While retailers contend with competing interests, local governments also play a role in why these issues aren't addressed. According to Charles Kernaghan, director of the Institute for Global Labour and Human Rights, the Bangladesh government is anxious to hang on to the apparel business because it is a huge part of the country's economy.

"It is such a poor country and so desperate for jobs that they ignore the most minimal labor rights standard," he said. "It's as if everything has to give way just to maintain these garment jobs. There's a fear that the labels will flee and go to another country."

Workers rights experts say that the government turns a blind eye to buildings with no fire safety standards, filthy factory conditions and pitiful wages.

Bangladesh's ready-made garments make up 80% of the country's $24 billion in annual exports, and the country has about 4,500 garment factories that make clothes for large global stores including Gap (GPS, Fortune 500), H&M (HNNMY), Wal-Mart, J.C. Penney (JCP, Fortune 500), Tesco (TESO), Carrefour (CRERF) and Sears. The country is on track to surpass China within the next eight years as the largest apparel manufacturer in the world, Kernaghan said, because the cost of labor is so cheap.

Retailers are well aware of the fire hazards in Bangladesh factories. The fast fashion Swedish global clothing export H&M and J.C. Penney were quick to distance themselves from the Tazreen Factory fire, saying it didn't make their clothes.

But they both said in separate statements that they recognize fire safety as a serious issue in Bangladesh apparel factories. J.C. Penney said it joined a coalition of international retailers last year to develop training materials for factories on fire safety standards. And H&M said it is offering an educational film on fire safety awareness, which will reach 4,500 exporting garment factories in Bangladesh, with around 3 million workers by 2013.

First Published: November 30, 2012: 5:26 AM ET

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What's my retirement 'number'?

NEW YORK (CNNMoney) -- What number do we need to hit to retire comfortably? $1 million, $2 million, more? -- Jim Rodgers, Madison, Wisc.

Your question is timely: Mutual fund titan Fidelity recently released its estimate of how much people should have in savings to retire. The Number: eight times final salary.

That figure caught my attention because it's a lot lower than most targets you see. Just last month MONEY recommended you shoot for a nest egg of 12 times your income by retirement.

These numbers vary for many reasons, which I'll get into below. But the real issue here is that no single figure can possibly reflect your specific financial circumstances. At best this kind of number is a ballpark estimate for how much you should save, not a substitute for planning. Before you use one as even a rough guide, though, you should know what goes into it.

Fidelity assumes retirement at age 67 and figures your savings must last 25 years. We reckon you'll retire at 65 and want your savings to support you for 30 years. Those two more years on the job, which can boost your Social Security check by 15% to 20%, plus the fact that your savings don't have to last as long, shrinks your target.

Related: Why high-income savers need to put more away now

Another variable is how much you'll draw from your savings. Fidelity aims to provide 85% of your after-tax income, an approximation of what you were actually spending. After estimating how much Social Security will provide, the number crunchers calculate your withdrawals. With a $75,000 salary at retirement, you'd need to take just over $35,000 from your savings the first year.

This methodology seems reasonable to me, but then things get tricky. Pulling $35,000 from a $600,000 portfolio ($75,000 times eight) represents a withdrawal rate of almost 6%. To have a reasonable chance of your savings lasting 25 to 30 years, most advisers suggest something closer to 4%.

When I asked Fidelity senior vice president Steve Feinschreiber for the probability that a portfolio would last 25 years starting with a near-6% withdrawal rate, he estimated it "very roughly" at 70%. A Morningstar retirement-income calculator put the likelihood at about 50%.

Related: Can I afford to retire early?

Finally, the higher your income, the less of your salary Social Security will replace and the more you'll have to withdraw. In fact, Fidelity concedes that with a six-figure income your target might have to be higher than eight.

To be safe, I'd recommend you shoot to save 10 to 12 times your salary. Better yet, use an online tool like Fidelity's own Retirement Income Planner or T. Rowe Price's Retirement Income Calculator to get an estimate of your retirement readiness.

Look at The Number if you want. Just don't pin your fortunes on any single one.

First Published: November 30, 2012: 12:28 PM ET

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Super-talented employee driving you crazy? How to deal.

FORTUNE -- Dear Annie: I've never seen this problem addressed in your column, but I can't be the only one struggling with it. About six months ago, I got this great new job leading a team of 18 software developers and designers, and everything's going great, with one exception. One of our most talented people is also the most difficult and unpredictable. He has terrific ideas and often comes up with elegant solutions to challenges that have other people tearing their hair out. He's also the brain behind two of our biggest hit products.

However, he's not at all interested in project deadlines, he's dismissive of other people's ideas, and he's so absorbed in his own work that he misses a lot of meetings, so he's never quite up to speed with the details of what's going on. I want to keep him here (he's already changed jobs four times in eight years, and I know for a fact he gets other offers all the time), but his prima donna act is bad for the whole team. How can I get him to play well with others? — Baffled Boss

Dear Baffled: Ah. Sounds like a textbook example of what executive coach Katherine Graham Leviss calls a high-maintenance high-performance (or HMHP) employee. "These people tend to be visionary, big-picture thinkers. They're independent producers, and they're very driven, but they're not process-oriented. They're focused on results," she says. "Once they have a mental image of the outcome they want, they go after it without regard to how what they're doing affects teammates."

Leviss runs XB Insight, a coaching firm that specializes in taming HMHPs for Fortune 500 companies and the National Football League, and she wrote a book you might want to check out called High-Maintenance Employees: Why Your Best People Will Also Be Your Most Difficult…and What to Do About It.

MORE: Fortune's Blue-Ribbon Companies

"HMHPs are tremendously valuable if properly managed," Leviss says. "And luckily, they're highly coachable. One thing this personality type can't stand is feeling out of control. So once you create an awareness of the problems an HMHP's behavior is causing, he or she is likely to feel a sense of urgency about getting back on top."

How do you do that?

1. Set up consistent processes and guidelines. "If there's no process in place, HMHPs will create their own," says Leviss -- and that can lead to chaos. But don't let an HMHP determine what the process is going to be, even though he or she will probably try. Instead, assign designing the structure of a project, including deadlines, to "more methodical, step-by-step team members who are good at that."

2. Assign them tasks they can "own." This is largely a matter of turning an HMHP's outsized ego to your, and the rest of the team's, advantage. Since these are people who want to put their own stamp on their work -- and since "they're usually highly technically proficient," Leviss notes -- put them in charge of the part of each project where they can shine the brightest.

To bring out an HMHP's best performance, Leviss says, make it about him. "Instead of saying, 'The team has to get to X result by such-and-such a date,' focus on his part of it: 'In order for the team to get to X, you have to produce Y.'" Then stand back. "It's usually pointless to tell an HMHP how to get there," says Leviss. "He or she will just try to find a better way, and they usually can."

3. Make your expectations clear. Sit down with your HMHP for a frank discussion of exactly what isn't working, and don't hesitate to be blunt about it. "You don't need to 'sandwich' your remarks with praise, as you might with other employees, because HMHPs already know they're extremely talented," Graham Leviss says. "So get right to the point: 'Here's how what you're doing -- skipping team meetings, for instance -- affects everybody else, and here's what I need you to start doing instead.'

MORE: How HP's Meg Whitman is passing the buck

"We do this kind of coaching with NFL athletes," she adds. "It takes a little while for new habits to form, but hold people accountable and remind them of the changes you've said you want to see."

4. Provide as many learning opportunities as you can. High-performance employees get bored more easily than others (which helps explain why they tend to change jobs so often). They also "like to feel that they're on top of the latest, newest, hottest" trends in their field, Leviss notes. So be on the lookout for cutting-edge training, interesting conferences, and other learning experiences you can offer your HMHP. Whatever the cost, it's lower than the price of replacing him.

5. Keep the challenges coming. Leviss, a self-confessed HMHP, writes in her book that, having changed jobs six times by age 30, she had an epiphany: "I loved my job when I was working on new projects or new problems…. It was the thrill of something new that kept me going…. Most high-maintenance employees are unhappy when a project is over and they don't have another one in sight."

This eventually motivated her to start her own company, but you probably don't want your HMHP to do that in this case -- so make sure he never runs out of fresh puzzles to solve. A definite upside of having HMHPs around: One of their defining characteristics is that they don't know the meaning of the word "overwork."

Good luck.

Talkback: Have you ever worked with, or tried to manage, an HMHP? Do you think you are one? Leave a comment below.

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