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BOSTON • The Federal Reserve is making it increasingly hard for investors to earn anything, unless they’re willing to accept plenty of risk. Ben Bernanke and his Fed are playing the role of adviser, encouraging Americans to get a little more adventurous by shifting savings out of low-yielding bonds and putting it to work in stocks.

The latest nudge came last month when the Fed said it doesn’t expect to raise its benchmark rate until late 2014, at the earliest. Rates have been near zero since December 2008. The latest extension means borrowers can expect another three years of low-cost loans and mortgages.

It’s more bad news for savers and retirees depending on investment income, particularly when there’s 3 percent inflation. Investors who value earning stable returns from Treasury bonds end up with little more than satisfaction that they’re faring better than people keeping money in savings accounts.

Consider that investors committing to lock up their money for a full decade were only being paid 1.8 percent for buying U.S. Treasurys last week. And yields have turned negative for investors trading 10-year Treasury Inflation-Protected Securities, or TIPS. On Wednesday, the yield was negative 0.28 percent. In essence, investors are willing to pay Uncle Sam to borrow their dollars for 10 years, because the opportunity to minimize losses is attractive compared with other options.

Here’s a look at three relatively low-risk alternatives to generate some income in this environment:

DIVIDEND STOCKS

Dick Bristol, 74, a retired Air Force major from Biloxi, Miss., counts on dividend-paying stocks for his retirement security. His investment portfolio is nearly 100 percent in stocks that make regular payouts, and he and his wife count on a few hundred dollars of dividends coming in each month quick payday loans.

Of course, dividend-paying stocks are not immune from market drops. And companies often cut dividends when the economy skids. But Bristol is convinced the potential returns are worth the risks.

“Keep in mind that if you invest in something that’s earning 1 to 2 percent, you’re losing out to the 3 inflation we’ve got now,” Bristol says. “Over the long run, nothing pays like dividend stocks.”

HIGH-YIELD BONDS

These bonds are issued by companies with credit problems. High-yield investors expect higher returns because there’s a greater risk of default. And they’ve gotten them recently. Mutual funds specializing in high-yield bonds have produced an average annualized return of 19 percent over the last three years.

Anne Lester, lead manager of JPMorgan Income Builder, has recently been adding to the fund’s holdings in high-yield bonds. They now make up 44 percent of a portfolio. Corporate default rates remain low and high-yields are attractively priced compared with Treasurys and other bonds, Lester says.

MUNICIPAL BONDS

Investments in the bonds of state and local governments won’t make you rich because returns are generally low. But muni bond interest payments are exempt from federal taxes. That protection may extend to state taxes if the munis are issued by the state in which the investor lives. Investors can pocket attractive returns even after taxes, because the tax hit can be sizeable for those in higher income brackets.

“Munis give an investor opportunity,” said Jim Colby, a muni bond analyst with Van Eck Associates.

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The St. Louis region is set to have its newest public company debut.

Post Holdings Inc., the branded cereal business unit of Ralcorp Holdings, will be spun off as a separate publicly traded company after markets close Friday. The spinoff was announced last July.

After the close of trading Friday, Post will replace Comstock Resources Inc. in the S&P MidCap 400 index.

Post’s brands include Honey Bunches of Oats, Grape Nuts, Raisin Bran and Pebbles cereals. Post Holdings is based at 2503 South Hanley Road in Brentwood.

Once the separation is completed, Post will trade Monday on the New York Stock Exchange under the “POST” ticker symbol. Bill Stiritz, chairman of Ralcorp, has been named Post’s new chairman and CEO. J. Patrick Mulcahy, Ralcorp’s vice chairman, will serve as chairman of the board at Ralcorp after the spinoff finalizes business card.

In filings with the U.S. Securities and Exchange Commission, Post signaled it will make changes to its marketing and pricing to grow sales and regain market share. Post’s market share in ready-to-eat cereals dropped from 14 percent in 2008 to 12 percent last year, according to a research note issued this week by Alexia Howard, an analyst at Sanford C. Bernstein & Co.

St. Louis-based Ralcorp Ralcorp Holdings acquired the Post cereals business from Kraft Foods in 2008 for $2.6 billion. Ralcorp is spinning off Post to concentrate on its private-label cereals, pasta and other baked goods. After the spinoff, Ralcorp will retain up to a 20 percent ownership stake in Post.

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Battered by the strong yen and supply disruptions from Thailand’s floods, Honda said Tuesday that its net earnings in the October-December quarter tumbled 41 percent to 47.6 billion yen ($625 million) and projected a sharply lower full-year profit.

The Japanese automobile and motorcycle maker forecast it would earn 215 billion yen for the fiscal year through March, down nearly 60 percent from the 534 billion yen it earned the previous fiscal year.

Honda had scrapped its earnings forecast in October, when it reported its previous quarterly results, because the flooding in Thailand _ a key Asian production hub for Honda and many Japanese companies _ made the outlook too uncertain.

Honda stopped making cars at its automobile assembly plant in Ayutthaya, north of Bangkok, in October after it was damaged in the worst floods to hit Thailand in 50 years. The company said in a statement that it was making progress on draining the plant of flood water and cleaning up equipment, and that production was expected to resume by the end of March.

The flooding also disrupted the output at many Honda suppliers in Thailand, forcing it to reduce production as far away as the U.S. and Canada. Honda said production in neighboring Asian countries interrupted by the problems in Thailand was expected to return to normal by April.

All told, the problems related to flooding in Thailand have cost the company 260,000 vehicles in lost production worldwide, according to Tomohiro Okada, a company spokesman.

Quarterly sales slid 8 percent during the fiscal third quarter to 1.942 trillion yen.

The strong yen, which erodes Japanese exporters’ foreign earned income when repatriated, also ate into the company’s income. Declines due to unfavorable exchange rates accounted for 33.6 billion yen, or nearly half, of the 73.1 billion yen drop in net income before taxes reported the same quarter a year ago, Okada said.

A bright spot for the company was its motorcycle business, amid strong demand in emerging markets. Motorcycle sales rose 6.3 percent during the quarter to nearly 3.1 million units.

(This version CORRECTS Corrects impact from currencies in paragraph 8, adds lost production of vehicles from Thai flooding in paragraph 6, adds details about growth in motorcycle business)

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The U.S. economy is growing at 2-3 percent but still faces big challenges to repair damage wrought by the financial crisis, Treasury Secretary Timothy Geithner said on Friday.

“I think if you look at the Fed’s forecast and the consensus of private forecasters, people are pretty clustered in that area but it is still dependent how the world unfolds. We’re still repairing the damage done by the financial crisis,” Geithner told the World Economic Forum.

“On top of that we face a more challenging world. We have a lot of challenges ahead in the United States.”

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Greece’s prime minister will hold new talks with representatives of the country’s private sector creditors on a crucial euro100 billion ($129 billion) debt writedown.

Lucas Papademos will meet late Thursday with Charles Dallara, managing director of the Institute of International Finance, a banking lobby, and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas.

Greece is hoping to conclude the negotiations by the end of this week, despite disagreements over the terms of the deal.

An IIF statement Wednesday said the goal is to agree on all outstanding legal and technical issues as soon as possible.

The private debt writedown is a vital part of a new bailout for Greece, which has been surviving on international rescue loans since May 2010.

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Strong corporate earnings reports and the lowest unemployment claims in almost four years gave investors more reasons Thursday to take risks on stocks, and the market continued its quiet but solid January climb.

The Dow Jones industrial average gained 45.03 points to close at 12,623.98. The Standard & Poor’s 500 index added 6.46 points to close at 1,314.50. Both averages are at their highest since July.

Volume was slightly above average. The market has been subdued this year: The S&P has moved up or down 1 percent or more only twice, and the Dow has moved 100 points only once, a 179-point gain on opening day, Jan. 3.

But the gains have been steady. The S&P has closed higher 12 of 14 days, and all three major averages have recorded healthy advances for the young year _ 3.3 percent for the Dow, 4.4 percent for the S&P and 7 percent for the Nasdaq composite index.

Investors appear ready to believe that the economic recovery is for real and getting stronger.

“The market is screaming loud and clear,” said Doug Cote, chief market strategist with ING Investment Management. “Prices have lagged fundamentals, and now they’re catching up.”

After the market closed, Google stock plunged more than 10 percent after its earnings per share badly missed Wall Street expectations. Intel and Microsoft rose slightly in after-hours trading after more encouraging reports.

In a sign of a bigger appetite for risk, investors moved money out of U.S. debt, a haven during the stock market’s volatile second half of 2011. The yield on the 10-year U.S. Treasury note increased to 1.98 percent from 1.90 percent Wednesday.

The market was led by industries that tend to perform best when the economy is getting stronger _ consumer discretionary stocks, financials and industrial companies.

Of the 10 categories of stocks in the S&P 500, the only one that lost considerable ground was utilities _ a safe play for investors during turbulent times and the best-performing category last year.

Cote said the market’s gains could accelerate as investors begin to focus more on economic fundamentals in the United States instead of worries about their exposure to risk.

And the economic news Thursday was good: The number of people seeking unemployment benefits plummeted last week to 352,000, the fewest since April 2008 payday loans guaranteed no fax. The decline added to evidence that the job market is strengthening.

U.S. consumer prices were unchanged last month, a signal inflation is under control. In the housing market, a third straight increase in single-family home building in December was offset by a drop in apartment construction.

France and Spain also held successful bond auctions, easing concerns about the debt crisis in Europe. As global risk factors subside, Cote predicts that markets will see “a strong snap-back rally.”

Bank of America rose 2 percent and Morgan Stanley rose 5 percent after reporting encouraging financial results. Bank of America returned to a profit in the last three months of 2011, while Morgan Stanley’s loss was much less than forecast.

Renewable Energy Group Inc., the nation’s largest producer of biodiesel, edged up 10 cents to $10.10 on its first day of trading. It was the first initial public offering of stock this year.

Trading was halted in shares of Eastman Kodak, the iconic photography company, after it filed for Chapter 11 bankruptcy protection. Kodak could not find a buyer for its trove of 1,100 digital imaging patents.

The Dow’s gain for the day amounted to 0.4 percent. The S&P’s came to 0.5 percent. The Nasdaq added 18.62 points, or 18.62 points, to close at 2,788.33.

Among other stocks in the news:

_ eBay Inc., the online auction company, rose 3.9 percent after it beat Wall Street earnings forecasts and gave a healthy outlook for the year.

_ Southwest Airlines Co. rose 3.1 percent after it said its fourth-quarter net income and revenue jumped. Southwest said it expects strong revenue in the first quarter too, based on passenger-booking trends.

_ Johnson Controls Inc., an auto parts and building equipment maker based in Milwaukee, fell 8.8 percent. Its profit and revenue fell short of Wall Street forecasts. It also cut its forecasts, blaming weaker auto production in Europe, a lower euro and poor demand for batteries.

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Stock prices are being increasingly influenced by the trading of exchange-traded funds, with real estate investment trusts as well as energy and consumer companies most affected, according to a Goldman Sachs Group Inc. study.

REITs and energy companies accounted for eight of the top 10 firms in the Standard & Poor’s 500 Index whose trading volume was most driven by trading in ETFs, Robert Boroujerdi, a Goldman Sachs analyst, and three colleagues wrote in a paper released Friday.

Consumer retailers accounted for the five most affected companies in the Russell 2000 Index, which tracks small-capitalization stocks.

ETFs bundle together investments in a particular market index, such as the S&P 500. Unlike mutual funds, they can be traded during daily sessions just like stocks.

They have come under increased scrutiny over whether their trading has increased market volatility and correlation between individual stocks business card. The growing impact of ETF trading on the price movements of individual stocks has discouraged some companies from publicly listing ETFs.

Correlation between the share prices of companies within the same industry groups has increased as ETF assets and trading volume have soared, the study said. Higher correlations indicate that stock prices are rising or falling in tandem.

The Goldman Sachs analysts also estimated the impact of ETFs on the trading volume of individual stocks. Smaller companies were more affected. Among companies belonging to the Russell 2000 small cap index, three had more than 60 percent of their volume driven by ETF trading., led by Houston-based retailer Stage Stores Inc. at 66 percent.

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Commodities may rebound from their first retreat in three years as developing economies shore up global growth, driving demand higher at a time when raw-material producers are already struggling to keep up.

Precious metals will advance 27 percent or more, industrial metals at least 17 percent and grains 5 percent, according to the median estimates in a Bloomberg survey of 143 analysts, traders and investors. Nine of the 15 commodities covered by a similar survey a year earlier reached their predicted highs in 2011, with another five no more than 4 percent away.

The Standard & Poor

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President Barack Obama will nominate Harvard economist Jeremy Stein and Jerome Powell, an investment banker and former Treasury official, to the two empty seats on the Federal Reserve’s policy-setting board of governors.

The White House’s pick of candidates, who have Democratic and Republican credentials respectively, may help speed their nomination through Congress amid a sluggish economic recovery that has failed to put a major dent in the unemployment rate, now at 8.6 percent.

While neither has laid out detailed views on monetary policy, Stein wrote a paper earlier this year suggesting he would back the Fed’s unconventional efforts to keep down long-term borrowing costs, which have been controversial in Washington. The Fed for over three years has adopted an array of radical measures to keep interest rates low and spur recovery.

Stein, who previously worked for the Obama administration as an adviser to the Treasury secretary and a National Economic Council staff member, specializes in stock price behavior, corporate investment and financing decisions, risk management and capital allocation inside firms. He declined to comment on his nomination.

The choice of Powell, who served at the Treasury during President George H. W. Bush’s term in the late 1980s and early 1990s, could be aimed at mollifying Senate Republicans. They blocked Peter Diamond, a Massachusetts Institute of Technology economist, saying the Nobel prize winner was not qualified for the job and was too sympathetic to government intervention in the economy.

Powell is a lawyer by training and worked at Dillon, Read and Bankers Trust Co. after leaving the senior Bush administration and before joining Carlyle Group. His knowledge of financial markets could help him fill the gap left by Kevin Warsh, a former Morgan Stanley executive who acted as Chairman Ben Bernanke’s point-man for crisis negotiations cash advance america.

FULL BOARD

However, Powell’s financial industry background may also be a source of criticism from analysts who already see the U.S. central bank as being too cozy with Wall Street.

Powell is currently a visiting scholar at the Bipartisan Policy Center in Washington, focused on federal and state fiscal issues. He was not immediately available to comment. Both Stein and Powell had already been flagged in various press reports as likely nominees.

In response to a deep recession and financial crisis, the Fed slashed interest rates to near zero and sharply expanded its balance sheet to $2.8 trillion to keep the economy afloat. Some analysts worry the Fed’s asset purchases could make it harder for the central bank to tighten monetary policy when it decides the time is right.

If Powell and Stein are confirmed, it would be the first time since April 2006 that all seven seats on the Fed’s board are filled. The term currently filled by Elizabeth Duke, the last remaining George W. Bush appointee on the board, is to expire at the end of January, though governors can choose to stay in office until a successor is confirmed.

Senate Banking Committee Chairman Tim Johnson, a Democrat, welcomed the most recent nominations.

“With the fragile state of the U.S. economy and a looming European debt crisis, Chairman Johnson believes it is imperative that our financial regulators operate at full strength,” his office said in a statement. “Chairman Johnson is committed to moving these nominations though the Banking Committee in a timely manner and is looking to schedule a hearing soon.”

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