Clearing up the cloud (9/12/14)

Higher Treasury yields, a strong dollar, and next week’s Fed meeting kept investors at bay and sent the markets lower.

The Dow fell 61 points, with 26 of its 30 components declining; the S&P 500 Index lost 11; and the Nasdaq declined 34. Decliners led advancers by four to one on the NYSE and by two to one on the Nasdaq. The prices of Treasuries weakened. Gold futures slipped $7.50 to close at $1,231.50 an ounce, and the price of crude oil dropped $0.56 to settle at $92.27 a barrel.

For the week, the Dow was down 0.75%, the S&P 500 Index decreased 0.96%, and the Nasdaq declined 0.30%.

In Earnings News:

-       Darden Restaurants, the parent company of Olive Garden and LongHorn Steakhouse, announced a first quarter loss of 14 cents a share versus a profit of 32 cents a share a year ago. Excluding one-time costs, adjusted earnings were 32 cents a share. Revenue increased 4%, but it was offset by an 11% increase in costs. Darden’s shares (DRI) fell 1%.

-       Ulta Salon Cosmetics & Fragrances posted second-quarter earnings of 94 cents a share, as same-store sales rose a stronger-than-expected 9.6%. The company also forecast earnings and revenue growth in the 20% range. The stock (ULTA) climbed 17%.

In Other Business News: 

-       Consumers are more positive about the economy now than they have been in over a year, according to the University of Michigan/Thomson Reuters consumer-sentiment index. The preliminary data for September came in at 84.6, up from 82.5 in August. The increase was due in part to rising stocks, lower gas prices, and a stronger job market.

-       Confirming the positive outlook from the consumer-sentiment index, retail sales increased 0.6% in August, and July’s number was revised upward from essentially no growth to 0.3%, according to the Commerce Department. Excluding automobiles, a typically volatile segment, sales rose 0.3%. The data was in line with expectations and hints that consumers might be on better footing than originally thought. For more information, read Dr. Brian Jacobsen’s analysis.

-       Preorders for Apple’s iPhone 6 and iPhone 6 Plus became available this morning, and the phones were selling at a record pace, although the company declined to provide specifics. Individuals looking to purchase the iPhone 6 Plus are already looking at a four to six week delay. Analysts expect the company to sell 65-75 million units. Apple’s stock (AAPL) gained 0.2%.

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In light of the recent celebrity hacking scandal, today’s Daily Advantage is a little bit of a PSA on what the cloud is and how to protect your own information.

These results of a 2012 survey from server manufacturer Citrix give us some insight into the understanding the average person has about the cloud:

·      When asked what the cloud was, a majority of respondents (29%) replied that it was a fluffy white thing, something in the sky, or something related to the weather. (Not knowing the context of how the question was asked, I can’t really fault these people. I know what the cloud is, but I also have my fair share of blond moments, so I’m fairly certain I would reply the same way.)

·      When asked if they use the cloud, 54% said no. (Presumably, at this point in the survey, we’re all on the same page and know we’re not thinking about “rain” or “shade”.)

·      22% of those surveyed have pretended to know what the cloud is, but over half believe everyone else is pretending too.

·      25% think one of the benefits of the cloud is keeping embarrassing videos off of a computer’s hard drive. Um, I believe a number of celebrities would beg to differ.

So, what is the cloud? 

Cloud computing uses the internet to transfer your files and data to a network of servers. These servers fill massive data centers located throughout the world. Your information lives on these servers rather than on your computer’s hard drive, meaning you can access it at any time from any location (provided you have an internet connection). For example, of you started watching a movie on Netflix on your phone, you could pick up right where you left off days later on a different device.

FYI…you’re using the cloud, whether you know it or not. Over 90% of computer users access the cloud in one way or another through apps like Yahoo Mail or Facebook. And many health care providers and insurance companies store your information there, as well.

What can you do to keep your information safe? 

First, create strong, unique passwords for each service you use. Then, take advantage of two-factor authentication if it’s offered. Two-factor authentication means you enter your normal password, and the website or app will send a second code to your phone. When you enter that code into the system, you’re verifying your identity. 

Are the security issues and extra precautions worth it? Absolutely, if you want to sync your Candy Crush game across devices so you can always pick up where you left off. Wait, that’s not a good example. How about backing up important family pictures, music, books, and documents in case your computer crashes? Probably worth it. So in the immortal words of Hill Street Blues…“Let’s be careful out there.”