tv Markets Now FOX Business February 14, 2013 1:00pm-3:00pm EST
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melissa: happy valentine's day, i'm melissa francis. >> we planned the wardrobe all week for you this afternoon. >> we're not supposed to tell them that. >> thank you for joining us on "markets now," and wall street is wonders where is the love? lower despite two major deals. what's pressuring stocks? >> a fascinating look at ceo confidence, pwc's u.s. chairman is standing by. right now, he has his annual ceo survey. it might surprise you. >> calling senate's bluff on spending. lou dobbs weighs in. >> news on the stranded carnal cruise ship. the clock cannot turn fast enough. those poor people.
>> i agree. up to speed on the markets, back to the floor, annie coal -- and nicole, another sideways day. >> dow down six points, not far off the unchanged line for all three major averages. the nasdaq and s&p squeeze out gains, the dow slightly to the downside. s&p, as we talked about yesterday, right, broader average, and the dow just has 30. it moves the archings more. one thing the traders talked about from the minute i walked in this morning was europe. you see the euro lower, the dollar is strong on a day where we heard that europe is struggling with growth over in germany, in particular, that's the real big one. france and italy would be in there. when you talk about the eurozone and growth potential seeing it is disappointing and not pulling its weight, that puts a damper on things. cisco systems, a damper weighing
on the dow, one of the reason the dow's in the red, down one and a quarter percent. had quarterly numbers, and, basically, weak sales over in europe is one of the things that plagues cisco systems. it's done here today and dragging object -- on the dow. back to you. >> thank you, pricewaterhousecoopers has their survey, and turns out executives are more on the mystic -- on the mistake than last year, you compared to what? joining us is the chairman with details from the survey. you know, i sort of read through this and thought they are more optimistic. half the ceos you spoke to think the economy's going to stay flat. >> right. >> that's better than last year. the outlook then was it was going to contract. >> the reality is it's a relative discussion. are they more optimistic or less pessimistic? last year, half thought the economy was going to come down. half this year think it's
staying the same. it's a different frame of mind in thinking about the opportunities going forward. >> consumers and consumer sentiments, a lot of people think it's the new normal. they don't see the economy going back to the boom that it was before. sort of depressing, but it sounds similar. i mean, ceos are not that pessimistic, but saying it's going to be the same. >> it's the same for them, and what's interesting in this year's survey is their level of coved to grow revenues over the next year is down from last year. even though they are less pessimistic or optimistic, there's confidence to say, can i grow? >> why? >> off the fact they've looked out in the future saying this is a low growth environment. the new norm. as a result, they are all competing for the same market share, which typically, leads to pricing pressure. there's not a bigger pie growing. it's, rather, how do we slice up the pie today. >> spreeing to hear in light of the fact that the stock market is back to historic highs, but that's driven by profits of
companies saying they may not have the leverage any longer. interesting to see they feel slower growth in the brick countries, but hope coming from beyond that. >> yeah, uh-huh. this year, the brick countries historically slowed down a little. you have optimism from china in the last six months, but they are moving into the next generation being a malaysia, indonesia, africa, turkey, and the like. corporates focus on that rise in consumer for opportunities to diversify the revenue stream and go after the growth. >> fascinating. look at the consumer at home and what's going on here and holding back, they are worried about the impact of higher taxes on the consumer. 77% of the american population saw the paycheck shrink at the beginning of the year. >> yes, absolutely. there's two primary focuses. one is the debt issue. that's still the number one issue in their mind, and, second, the tax issue in terms of the uncertainty they believe it's going nowhere but north in this point in time.
that's causing them to be less confident and have uncertainty, but there's a hope to put the issues squarely on the table and get progress over the next year or so. >> how do ceos put into words how they think the debt impacts them because a lot of times that's a relationship that is hard to communicate to the average person? why does a huge government debt impact businesses? >> at the end of the day, the issue is there's so much debt on the government's balance sheet that we have to cut back on spending as well as stimulus, and when you think about the dollars injected into the system, some of that will be cut back as well. that's the concern in terms of it doesn't have a question mark on the consumer and put a question mark on how much investment is put forth. >> they are already connecting the dots saying somebody has to pay for a someday, me or my customer. interesting that 68% of u.s. ceos say building a skilled work force should be the government's top prior pickups. what is the government going to do about it?
>> they don't see the long term skill set creation to ensure stainability, and literacy or lack thereof, the big k-12 grades are the challenge. how much do i have to continue to invest to supplement what basic education and schools system, should be doing today? >> they are looking at what they have to do to fix the problem themselves? >> yeah, companies think, listen, i'm thinking about education as an extension. once they leave the crass -- classrooms, i have to work with my organization as well. >> you can't depend on the government. >> right. public and private is important in the space. >> thank you so much. so much information in a short period of time. appreciate it. >> thank you very much. >> as we expected, american airlines and u.s. airways have an $11 billion merger, creating the largest airline in the world. american shareholder own 72% of the new airline, keeping the american airlines name, and in
chicago for us today, jeff, great to see you soon, hopefully. in the past, the big mergers led to higher air fare, look the at o'hare, what do you think for prices in this one? >> it's out on that one. doug parker, the ceo of the combined company said unequivocally no, and, ncht, there's more competition. in a place like chicago with united battling with american, and look at the size of the deal. this is a huge company. as you point out, an $11 billion company now, and that compares in terms of the united continental merger, a $6.5 billion deal, and the delta northwest merger. they have a lot to compete with. the question in addition, of course, to how much is tickets cost is what about frequent flier programs? americans have a great one. u.s. airways not so much. american allows for its high
frequent fliers to have free baggage. u.s. airways no. we asked the question, is that going to continue, the american policy, is that going to continue, didn't get 5 straight answer from the folks there. they are going to be exciting new opportunities, but stay tuned. i think, in fact, we'll have to stay tuned. what about airline stocks? well, a study says that after mergers, airline stocks go up, all of them, 17%. look at today's numbers, not so much. of course, that's after the airlines actually get the merger done, and, of course, there's a long way to go before this gets done. you have regulatory approval and a bankruptcy judge to sign off on this, but, lorie, unprecedented, the creditors of american are going to get 3.5% of the new airline. that usually does not happen in a bankruptcy so a win there as least for those guys. >> appreciate you breaking it down for us. i suppose, jeff, down to three legacy carriers if it gets approval? >> amazing.
remember twa. >> going way back. >> exactly. >> always great, jeff, thanks. >> you're older than i thought. >> you out me every time we have a hit on tv on sop topic. thank you, sir. coming up tonight on cavuto, the ceos of u.s. airways and sar join neil to discuss the merger. don't miss it. it's not the only merger today. another big one, warren buffet and 3g capital teaming up to buy heinz, the ketchup giant. price tag of $28 billion, including debt, the largest food deal ever. the shares, of course, soaring today, hitting a new all-time high, and coming up at 3 p.m. eastern, warren buffet speaks on the deal with liz claman on "countdown to the closing bell," another one not to miss. >> from bad to worse. the carnival cruise ship, the
>> all right, it is time to make money with charles payne this hour. he has a texas oil and gas services stock pick. we are looking at texas sized profits here, aren't we? >> i hope we will be. you know, guys, i tray to tailor it with you guys and what's going on. >> no valentine trades? come on. >> i couldn't. money is sexy too. the stock is up. the equipment, power transmissions, and the problem with the stock has been sloppy execution. the last year, they missed a couple quarters in a row.
they really hardly beat the street, so when they do, they get a bump. that's why it's a cheap stock. every stock i like is at a 52-week high, others at all-time high. this one isn't. metrics are low. last year, they had a report bookings, backlog, everything else. ironically, though, monday, they downgraded the stock which was interesting. that worries me. this is a firm, but i love the way it's acting, broke out today, closed at 62, a major break, reverse head and shoulders, your favorite chart formation. >> you know her so well. >> turns me on, charles. >> you got lori, forget it. get her a valentine's card later won't be enough. >> that's right. that's right. all right. >> do we have time for a question? >> you saw the downgrade and didn't detour you? how do you judge? firm or analysts?
>> i have very little respect for wall street respect because they run scared. i don't know why this downgrade, but i see them upgrading stocks that are up, downgrading stocks that are down. i feel like they are late. it's bad. if it was not bad, i wouldn't have any business, but it is bad, guys, and the one to watch out for is when the stocks made a big move and downgrade it on price. like, you know, guys, that's just a cowardly out. it's a great company. run with it. i think they want to book to gain to win a contest. >> that is terrific, useful info, charlie. >> that was a great question. reverse head and shoulders. [laughter] >> as we do every 15, the markets. nicole's on the floor of the stock exchange talking about ann heiser-busch. >> consolation blondes, stz, there it is, up 37%. i mean, that is a crazy move.
index up 4.8% right now on this news, and so what happens here in order to meet all the regulations, constellation brands will get perpetual rights for corona and medona brands in the united states. it's a deal they had to do to address concerns that the u.s. justice department had. this is what we are seeing. you are seeing real gains here today, particularly for constellation brands. back to you. >> thanks, nicole. >> even more bad news for the poor passengers stranded on the cruise ship. >> i can't imagine. >> no. carnival is taking longer than expected to tow in the ship. fox is in mobile, alabama joining us now on the phone with the latest developments. when are they going to get to shore? >> caller: now it's looking like tonight. originally, we thought they'd get in between one and three this afternoon central time.
now it's well after dark. in the half hour we heard that the ship passed a buoy marking the main channel that leads into mobile bay. ordinarily, a ship under full power could make the trip in three hours, but for triumph, it's going to take anywhere from seven to ten hours, and so the passengers are going to get to spend a little more time on board their cruise ship. >> oh, my goodness, eating onion sandwiches and everything else. updates on conditions on the ship? >> yeah. well, the passengers are now well within cell range and are calling their loved ones, and so there's a handful of family and friends gathered at the cruise terminal here in mobile, alabama getting calls, text messages, and i mails. a woman heard from her daughter that they had water, but it was brownish in collr. they had no bathrooms to use. the food, she described as old
and this mother said it's been an awful trip for her daughter. another man got a text message from his girlfriend. it was a valentine's text message, but in between the "i love yous," he said that her room smelled like boat and outhouse. >> oh, my goodness. i can't imagine what this does for the cruise industry. everybody watching this thinking, i won't make that mistake. thank you so much for joining us. >> caller: my pleasure. >> the carnival ceo spoke said we can't believe we're happy about this, the least to expect to hear from the ceo of carnival. >> i thought someone else said you have to bring your first aid kit and emergency foot the next time you go on a cruise. i was like, the next time? >> tough time. >> tough. speaker boehner putting the ball back in the senate's court. getting lou dobb's take coming up. >> general motors recovery on track? taking on weak u.s. sales and the driver incentives just
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>> champion oscar is charged with the murder of his girlfriend. she was found shot four times inside his home. the police say he was home at the time, and, quote, there is no other suspects. the story is he was the first amputee to compete in the olympics winning three medals in the 20 # 1 games. reid accusing republicans of blocking of defense nomination. hagel needs support of five republicans to clear the way for an up or down vote. they are putting national security at risk to delay a vote. president lyndon b. johnson's letter are released today. lbj proposed to # the 21-year-old on their first day
in 1934. it took a courtship of 100 letters over ten weeks before he won her over. those are your headlines. roses are red, violates -- violets are blue, dear lori, now back to you. [laughter] >> happy valentine's day, my friend. >> happy valentine's day. >> lbj didn't mess around. >> no, ten weeks. >> worked quickly, good for him. there's a blistering letter cement by big u.s. banks and regulators to the e.u. blasting the new tax on financial transactions hurting investors worldwide, and you warned me, this is big news. very important. >> it's a developing story. we got the letter here, 11 countries in the e.u. are moving to assess a tax on trades around the world meaning stocks and bonds meaning it could hit your 401(k) account and not know it's happening. the e.u. is in recession, 11
countries want the new tax, and we got the letter coming from the big mutual fund companies, ici, and the big bangs -- banks. they say, look, this is a really bad idea, guys, because, essentially, it's going to hurt investors around the globe. let's go through it. what they say is essentially increased trading costs dramatically reduce financial transactions, diminish liquidity, meaning increased volatility that hurts investors, and it's job killing with historic records of jeblessness around the globe. breaking news, the u.s. treasury talking to fox business, and the u.s. government opposes this new e.u. tax. they do not support it. let's put the statement from the treasury on the screen. the problem with the dax is you don't know it's hitting your 401(k)ing the. guys, there's no ceiling on it.
it could go higher than the rate they talk about now. >> not that i support it, but the e.u. is implementing the tax to help with the debt crisis? what's the purpose? >> they need money. france, italy, germany, they need money. there are 11 countries now. the u.k. is not in on is just yet, but letter writers say, hey, wait a second, if you do the tax, that's wrecking trade treaties between the e.u. and united states. >> that's tax dollars coming from the u.s. helping them in europe? >> that's right. you won't know it's in your account. watch out. >> always great to see you. you can come back tomorrow. >> delighted to. >> natural gas prices now, sinking 5% in the latest supply data. government says stockpiles fell less than expected so that could be a sign of weak demand. it is the third straight week that the drop in supply was smaller than analysts' forecast, and now it hit its lowest level
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the new york stock exchange. nicole petroleum -- nicole petallides is standing by. taking a step on this valentine's day. >> we're not too far away. we have to call a spade a spade. however not easy to break up through 14,000, take out the all-time highs. we're hovering not too far off. look at major averages. you can see mostly red on the screen for the dow jones industrial average, which is down about 19 points right now. that is what we're watching. we've had extremely strong dollar with concerns in europe and growth prospects and that weighed on our markets today. let's look also at pepsi. here it is. up almost 1% for pepsico. pepsico came out with quarterly numbers. they're working on turnaround plan. snack and drink company, cola, gatorade and lays chips and stuff, they have done well. they have seen revenue and earnings per share do well and organic growth positive. nice turnaround story.
back to you. melissa: nicole, thanks so much. lori: thinking i want a snack. melissa: yeah. lori: or a trip to florida. climate is certainly alluring but hedge fund executives are fleeing to the sunshine state for other reasons. cheryl casone has the plum assignment in miami to tell us why. hi, cheryl. >> hello, ladies. imagine the governor of florida, governor rick scott calls you up. do me a favor. bring business into florida, hedge funds, different manufacturing companies from around the world. all you have to do is well-being nothing. that is the life of kelly who joins me now. she is head of palm beach development. you're president and ceo. walk a little bit, such a nice afternoon frankly. this is your life every day. now you have multiple hedge fund executives knocking on your door. you're not having to call them, they're calling you. >> absolutely. the story broke in palm beach county about two weeks ago. ever since that time there have been one to two hedge fund calling per day to
inchoir about the business environment in palm beach county. they already know it is a very attractive tax environment and that's why they're looking at this area. >> amazing governor scott, this public/private partnership you're working on, the entire state is pushing this through enterprise florida from the governor. i go back to hedge fund executives up in the tri-state area. connecticut, i mostly know and new york, what are they telling you is the main draw for them to do business here and set up shop in palm beach in particular. >> there are two draws. the company goes where the ceo wants to live. palm beach county has to be one of the best and safest corporate quality of life you could possibly want. second of all the tax environment is incredibly less in the state of florida. as you know we have no state personal income tax. somebody making a million dollars in manhattan is paying $147,000 in taxes that you're not paying in palm beach county. that alone can pay for a very small condo. so they like the tax savings.
they're thinking about their employees coming to this area, the families. the public and private schools and that is all very, very important to them. >> no estate tax, inheritance tax, those are things drawing people to the state. let me ask you this, enterprise florida, there is criticism in the state, local papers that this is crony capitalism. the state should not spend valuable tax dollars, florida dollars on initiatives like this. how do you respond to the critics? >> enterprise florida is not funding this recruitment hedge fund initiative. palm beach county nor the state of florida has any money in this. these are tax incentives given to companies moving their operations here. what is often not told, tax incentives today are performance based incentives. you have to create the jobs and spend money in order to draw down on those incentives. there are some clawbacks. they're not scammed. what tips the scale in our favor. when two sides are
comparable it swings it to the state of florida. there are competitive incentive packages and they make a difference. >> in the last couple of weeks the most memorable conversation we've you've had with a hedge fund executive? they don't like to be named as our viewers know what is the most interesting conversation? >> every die is very different and everyone is different but i had a gentleman telling me spent a week at the breakers. i will come over the bridge and spend time to you. i want to see all class a office space. we're looking at ocean, 10,000 square feet we have plenty of that. while my wife is on the other side, palm beach, on the island, could buy any size house she wants. the savings we will have bringing our family here is unbelievably higher than the cost of any home. for us we're looking a long-term recruitment effort for these hedge fund. you're really cultivating those relationships. >> that is the story. kelly small ridge from palm beach county. really appreciate your time. lori, melissa, coming up in
the next hour we'll talk with evan rapaport. he is exactly doing the same thing. he launches hedge funds. works with hedge funds. provides analysis and research to hedge funds. he will talk about the influx of hedge fund. that is next hour of markets now. tomorrow fox business will stay in the miami international boat show. we have 2,000 companies from around the world. 3,000 watercraft yachts and more. we'll be on some of these watercraft, ladies. we'll be out on the water all day long on fox business. back to you in the studio in new york. lori: what, two days in miami, cheryl? not fair. >> yeah. melissa: thank you so much. it is so true you hear anecdotally for flight to florida for businesses and hedge fund. so interesting to see the data on it. it is going on. tax policy impacts people's behavior. lori: we're hearing it hire. melissa: a new look for coach but investors not liking the luxury purse maker's big plans. we're tell what you is
sending shares to lows not seen since 2010. lori: lou dobbs weighs in as the house speaker calls the senate's bluff on spending. he will weigh in on that. ♪ she knows you like no one else. and you wouldn't have it any other way. but your erectile dysfunction - you know, that could be a question of blood flow. cialis tadalafil r daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough
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sandra smith with your fox business brief. a u.s. judge has accepted transocean's guilty plea deal with the justice department. and imposed agreed upon sentencing for the company's role in the 2010 gulf of mexico oil spill. transocean pleaded guilty to a misdemeanor charge and will pay $400 million in criminal penalties. shares of soda stream are on the rise as it teams up with electronics giant samsung to build a new refrigerator that dispenses sparkling water. a new model will be available come april but won't come cheap. the refrigerator is priced at more than $3800. and insurer metlife says it has received approval from the fdic and to deregister as a bank holding company. they sold $6.5 billion in dank deposits to ge. that's the latest from the fox business, giving you the power to prosper.
melissa: house speaker john boehner doesn't think his colleagues in the senate have the guts to put the president's spending plans up for a vote. speaker boehner calling the senate's bluff a short time ago. take a listen. >> the president wants more stimulus spending, there will be that we know doesn't create jobs i would expect the united states senate to go ahead and take it up. if the president wants to more tax hikes that destroy jobs then his democrat allies in the senate ought to take up. this isn't the agenda many americans are looking for and i think many in the president's own party won't support those ideas. melissa: the speaker also saying sequester will be in effect until we have spending cuts and tax reform that lead to a balanced budget. time now for lou dobbs. tough words there from the speaker. you believe it? >> i do believe him and i do think by the way it is about time he started talking that way. excuse me, i think he's exactly right. why not go to regular order?
why not let the senate move ahead if they're excited about raising taxes go for it..3 put in cap-and-trade, do it. give us a bill. we'll take it up. that is the way it works. and except they have allowed this president, this administration to get away with utter nonsense when it comes to moving forward with the people's business. they need to return to the constitution. they need to return to traditional process. checks and balances and let the, you know, let the chips fall where they may. melissa: that is so interesting. ratings came in from the state of the union address, fewest number of americans watching in 13 years. >> yeah. lori: that's a huge message. >> i think it's a message that perhaps, resonates with speaker boehner. he is, basically, if you listen very careful what speaker boehner said after all of this. we've gone through the fiscal cliff. we've gone through the continuing resolutions. we've got the sequester. we have the super-committee. all of this, he is basically
saying to the president, we no longer take you seriously. you are not treating us with respect. you are not in our opinion, regarding the laws and the conventions and traditions of the country in dealing with capitol hill. do as you will with the senate but this is way we're going to do business, mr. president. and i would think, they're very concerned right now because we have now less than, less than two weeks before sequester. the president has not even come forward with a hint of a plan how to avoid what he said himself will be onerous, devastating results, particularly for our military, and at the same time he has proclaimed to the american people that sequester will not happen. he has now moved this within such a narrow, narrow window of opportunity, to stop sequester, that, he is going to be a miracle worker if he can overcome all that he has put in front of himself. this is a disaster, if it
turns out to be that, of his own making. melissa: meanwhile, i mean if you look at the ratings as lori pointed out, americans in frustration are tuning away from what the president has to say. but we couldn't be at a more critical time. this is so important to the future of our country and our children. >> americans are not only tuning away from him, and not paying attention as you said, lori, to what he is saying in his state of the union address which was billed being a really big deal. he was going to be aggressive and come out and show us the way forward, we're watching the american people diverge from this administration and in what they think should be done. they have the opposite view on most issues that this president is taking up. they're opposite on him with comprehensive immigration reform and border security in particular. they are opposite him on gun control and the second amendment. they are opposite him on raising taxes. they're opposite him on
cutting spending. he doesn't want to cut spending. the american people by a huge margin understand that this is a government that is out of control and requires some constraint, and responsible leadership. melissa: --. lori: we would go on and on but unfortunately we have to split. >> you said we could go on and on. lori: i am curious how you see the march 1st deadline is approaching. we're looking at 11th hour similar to the fiscal cliff deal and having it be white-knuckle frustration times. tonight let's talk about what is coming up for you tonight at 7:00 and 10:00. melissa: that's right. michael boyd joins lou on the merger that created the world's biggest airline. what will that do to the future of the airline industry? >> raise prices? melissa: inevitably. but there are a lot of other nuances to it as well. so you have to watch. lori: let's watch the
markets as we continue to do. go down to nicole petallides on the floor of the new york stock exchange. coach shares are sliding. >> a tough environment for retailers in the first place. today you have coach shares hitting a new annual low, a 52-week low. down 1.1% with the changing of the guard getting ready to occur for coach. so the long-time ceo, lew frankfort, will be stepping down in january. he will stay on as executive chairman. his successor, victor lewis, who actually headed a successful expansion in china for coach, will be stepping into that place. there will be a changing of the reins in 2014. they promise a seamless change. retailers to the downside are mixed. i do see some improving when i look at retail index. so far coach today is down. they're not loving a change idea, i guess not for today. back to you. lori: nicole, thank you. general motors shares hovering to 52-week high. our next guest says, well
over the last six months. stern ag research analyst mike ward has been saying it's a buy all along. so is it too late to jump into gm's driver seat if you will? mike, great to see you. to hear you. you're joining us on the telephone. welcome to you. i know you have a buy rating with a price target of $36. what will drive gm shares to that price? >> thank you for having me, first of all. you know i think with general motors i think 2012 was another transition year and 2011 was as well. that is good news. they got through it. made over a share. they generated positive cash. all the things you would look to have in place to take advantage of a recovering economy i think are in place. lori: but things are not the ifing better in europe, right? sales there were even worse than they were before. losses deepened in europe. >> no question, europe is a trouble spot. i don't think that is a surprise but to put it in perspective, europe is a
manageable situation. about. in took two important steps in europe to mitigate the impact in 2012. they took inventory way down and wrote down the assets. both of those things, will at least help the performance aspect of it in 2013. lori: now some other analysts though are disappointed by gm's latest earnings release because they point to the fact that gm paid buyers, they offered more incentives to buyers. and so they look at that as kind of a weakness for gm. >> well, i think it's, when ever you have restructuring you have two components. you have cost component and revenue component. one of the things gm has done successfully they kept the break even point, particularly in north america in check. their break even point in north america they can make money in 11 million unit market in the united states. as the product ages, one of the things that happens, inventory gets too high, product ages and you have to discount it more. that is where incentives come into play. gm hopefully in 2013 and 14
as the revenue part of restructuring accelerates you will see it come down, particular in 2014. lori: talk about the government's interest right now. treasury owns 19% of gm. how does that figure in your outlook for the company? >> it is a overhang. gm bought back a chunk of it in december. the government intend to be out a year from now. there could be circumstances that would allow them to act sell rate the exit. we'll see how 2013 unfolds. it is an overhang until it is gone. the government pretty much left gm alone and let them run the business. most shareholders view the government stake as overhang and you still have the canadian government stake as well. lori: thank you, mike ward. $36 price target on gm. gm is trading $27 a share. thanks again, mike. melissa: valentine's day is not just hugs and kisses. it means big money as well. look at valentine's day by the numbers. the average person will
spend $130 this valentine's day? i blew that past one. $126 in candy. i blew that one past too. in total americans will spend more than 18 1/2 abou about dollars more than last year. what else could we do with the money? you could fund nasa an entire year. you could buy linkedin and even have cash left over. lori: i'm rich in love, good friends, family. don't need to spend. melissa: good for you. good for you. lori: with all the money spent on gifts today you might be surprised it hear the government might be contributing to higher costs for sweets. here is rich edson in washington to tell us why. >> we're here in washington, d.c. i walked past here last night, wow -- this is really last-minute shoppers. [inaudible]
raise the price of end product. and so they are basically saying that, what happens with that end product is it boosts the price of sugar, all those import controls. the sugar industry says you have got other governments inflating the price here because they are subsidizing in their countries. this is a statement from the american sugar alliance saying much of the pressure to hand over the u.s. sugar market to foreign suppliers is driven by large food manufacturers looking to oversupply the u.s. market, depress sugar prices and boost their own corporate profits. so candy and sugar fighting. who would think that an end
product would not be in delicious harmony. back to you. lori: a lot of action going on in the candy shop. melissa: it looked delicious. we're having audio problems there. it looked absolutely delicious. lori:. rich is pretty cute too. friendly way. melissa: there you go. coming up tonight on money, daniel roderick, president and ceo of westinghouse electric company will join me to discuss whether nuclear energy is taking a big hit with nuclear energy. that is 5:00 p.m. eastern right here on fox business. >> so the big story today, airline consolidation has been good for profit but what about for you, the flyer? airlines analyst darlene becker weighs in on what the u.s.,-american deal will mean coming up. ashley -- i've been messing up all my colleagues names today, guys i apologize. they will take you through the next hour of fox
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ashley: happy valentine's day. good afternoon, everyone, i'm ashley webster. tracy: i'm tracy byrnes. valentine's day is bringing two block bus tir corporate hookups. i have had one or two of those. ashley: i sure you have. tracy: long-awaited tie-up between american airlines and us airways. we'll tell you what it means for airline stocks and we flyers in a moment. ashley: just one or two? tracy: one or two. ashley: the eurozone economy plunging yet again. even germany's gdp turning negative in the last quarter. when will germany show any signs of recovery? we have img economist here to talk about it. tracy: regulators defending new dodd-frank mandates on capitol hill. american bank association chief, frank keating, says all the new rules are crippling america's banks. he is our special guest ahead. first it is top of the hour.
time for stocks now. we go to nicole petallides on the floor of the exchanges. nicole, we're in the red. europe and japan playing in on this now, right? >> absolutely. the europe story is the one that plagued wall street. early this morning we got in the numbers for gdp growth in germany, italy and france. quite disappointing. when you broke it down, you heard analysts and experts over in europe kicking off the morning as you watch early morning tv you hear all the folks talking. they talk about how terrible it really is. when you have the lack of growth over there in europe, you look at the global picture and the global economy becomes front and center. and as a result, we've seen the dollar very strong. the euro has been pulling back. we're seeing our markets coming under some pressure here. doesn't mean they won't bounce back because it often has. we've seen the resiliency of u.s. markets. for today, right now you do have the dow pulling back. the s&p and nasdaq are in the green.
the dow is down because of cisco systems as well. i want to talk about the a big, big deal. talk about big corporate deals. heinz acquisition by berkshire hathaway and 3g is the biggest deal ever. it is at 72.39. that is a huge, huge percentage gain for heinz. that is almost 20% gain. that is a exact premium we're seeing for this deal. and of course the stock here now with this big move hitting an annual high. so warren buffett talking very postively about this move. he is hot on heinz. back to you. tracy: thanks, nicole. we'll see you in 15 minutes. ashley: as nicole was talking about berkshire hathaway's takeover of heinz won't be warren buffett's first venture into the food business. he previously owned a chunk of kraft shares but cut his stake in 2010 after it took over british candy company cadbury which buffett called, dumb, unquote. in 2008 berkshire hathaway along with goldman sachs and jpmorgan provided financing
for mars acquisition of wrigley. you can remember back then, berkshire hathaway took a minority stake in the wrigley subsidiary. there you go. a little bit of history. for more on today's deal, tune into "countdown to the closing bell" at 3:00 p.m. liz claman will speak to the man himself, warren buffett live. we'll hear from warren buffett at 3:00 p.m. don't miss that. tracy: he is kind of a food guy, right. ashley: he is. tracy: dairy queen. ashley: he buys and likes what he knows. he likes ketchup on his fries. tracy: let's get back to the airline deal. american airlines and us airways teaming up in a $11 billion merger creating the largest airline in the world. american shareholders own 72% of the company which will keep the new american airlines name. jeff flock follows the story for us at o'hare airport. jeff, everyone want to know one thing will ticket prices go up because of all this consolidation? >> you know, i don't know the answer to that question
but i do know what warren buffett said about airline stocks. if his for bearers had known what would invest coming in airline stocks they would have shot orville and wilbur down. he is food guy, not a airline guy. you can never be sure what will happen in terms of ticket prices. doug parker, the new ceo of american, says ticket prices will not go up. there will be more competition. it will be more fun for everyone. we'll see. take a look at stocks though. i think warren buffett is the "oracle of
omaha" for a reason. take a look what airline stocks did today. even though there is some evidence that in these big mergers, these big airline consolidation that is the airline stocks do pretty well. in agenda they're not doing very well. they don't seem to like this much at all. what about the new american, the new american airlines? the us airways name, by the way goes away. it goes to the barn where brand any of and american and twa live right now.
this new american will have $239 billion in revenue in 2012. it would be 2% larger than ual. it will be the world's biggest airline and better positioned to compete with united in markets like this in chicago. it will cost about a billion dollars to do the merger. they say they will save a billion dollars in costs and 6700 daily flights, 336 destinations, 56 countries. is bigger better at this point? we don't know. tracy: jeff flock out at o'hare.
thank you, sir. ashley: well our first guest says the american-us airways deal is good for the industry but what about those flyers? helene becker is an airline analyst. thanks for being here. much speculation this does to ticket prices. you say normally not a whole lot. but when you bring number of airlines competing against each other smaller and smaller there is less chance, usually bad news for the consumer, right?
>> right. but in this case the top three airlines will still only control 70% of the industry's capacity. southwest is another 15%. and then you have a whole bunch of other airlines like jetblue, virgin america, alaska air, hawaiian and so on that will really account for rest of the industry's capacity. you have 25 to 30% of the capacity still out there. that would be low fare, low cost. so they will keep the big three honest basically. ashley: good. tracy: the thing is since deregulation about 35 years ago these airlines haven't made money. >> exactly. tracy: they almost have to raise prices, don't they, in order to start seeing green at the bottom line? >> yes. in a word, seriously, yes. the industry's been profitable now for three years in a row and we think 2013 will be the forth profitable year and in the 35 years since deregulation we never had more than three profitable years in a row which is pretty astonishing. you're right.
they never returned capital to shareholders. that really needs to change. if it doesn't change it will be very difficult for them going forward to borrow money really to fund expansion. they provide very good jobs. they're u.s. jobs. they don't outsource pilots and flight attendants and so on. so it is really important for the industry that this happen. ashley: from an investors standpoint you like united continental. why? >> yeah. when you look at the transaction that was announced today, it is $11 billion transaction. and i think delta, when i checked last was about $13.5 billion in equity value and united was 8.5 billion in equity value. arguably the united and delta root structures are going to be much structure than the route structure american and us airways will have. they won't have the big pacific division. yes, american is big on transatlantic and south america but really so are united and delta. we think if american, the
new american deserves to sell at 11 billion, united deserves to sell at least from that level because from a balance sheet perspective the united balance sheet is two years ahead of where this combined balance sheet is and so on. tracy: do you worry about union push back on this deal at all? >> no, no, we don't primarily because they negotiated a mem up did of understanding with all the unions to contemplate exactly this outcome. ashley: does size matter in the airline industry? so much has been made about how big this deal is but it really matter?. >> well, we think it does, yes. it is one of those cases where size is important and important for the corporate traveler. a lot of corporations like to keep their employees on u.s. airlines and like to get the best possible fare and these three airlines really offer service worldwide now especially with the alliances that they're all in. it will strengthen the one world alliance which was kind of the third largest, or third i guess and it
really wasn't competitive with the other two. so they have three airlines on solid footing. i think that will appeal to everybody. ashley: all right. interesting times ahead. helene becker, thanks so much for being here. we appreciate it. prices not going up. tracy: fingers crossed. ashley: keep them honest. tracy: no lost luggage. ashley: that's right. don't get me started on that. tonight the ceos of by the way of both us airways and amr will join neil cavuto to discuss the merger at 8:00 p.m. eastern. that will be great stuff. don't want to miss it. 8:00 p.m. eastern with neil cavuto. tracy: new warning from house sppaker boehner on automatic defense cuts. that is two weeks away. we have details coming next. ashley: stunning drop in europe's gdp. john lipsky will tell us about the factors hurting the european recovery. how the oil is trading today. oil is essentially flat.
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tracy: house speaker john boehner attacking the president's plan for more tax hikes and warping about defense cuts at that could be coming soon. peter barnes in d.c. has more. hey, peter. >> trace, that is right. the speaker responding to the president's state of the union address on tuesday. he gave a press conference finally today. he said in is he agreed with very little that the president proposed on tuesday, the new stimulus measures, higher taxes, trying again an climate change. the speaker said if the president wants action on these items the senate should take them up first. but he said it is an agenda he feels not many americans are supporting and that many senate democrats won't support either. and he said that house republicans will not act first to stop the sequester.
the $85 billion in automatic spending cuts that kick in on march 1st. >> the sequester will be in effect until there are cuts and reforms that put us on a path to balance the budget over the next ten years. period. >> as you know, tracy, half of those spending cuts would be in defense, in pentagon spending. trace? tracy: certainly will. tell us what is going on with chuck hagel to be the next defense secretary. we're hearing that is on rocky ground, huh? >> a lot of high drama in that today. tomorrow democratic leader harry reid scheduled a vote on the nomination and republicans are threatening to filibuster it. now this would be the first time that in history we believe that, if it is successful that a cabinet nominee will have been filibustered. some republicans want more information about benghazi which senator hagel testified on. they want more information about some controversial
speeches that he may have made. and there is, though there is some talk that perhaps, while they try to work through the process, and avoid the filibuster vote which could be embarrassing they might end up delaying it until congress comes back from its recess. trace? tracy: drama in d.c. peter barnes. who would have thought. ashley: just for a change. tracy: who would have thought. ashley: thank you. it is coming up quarter past the hour, we'll check back with nicole now on the floor of the new york stock exchange. desperately trying to get back to even on the dow, nicole. not quite making it yet. >> if you take cisco systems out you might have a chance. let's look at two names on the move. both names have down arrows. talking about weight watchers and whole foods. i will get to whole foods in a moment. both face intense competition. weight watchers was one of the things they noted was competition in the weight loss category. they don't see as many people coming to meetings in north america and united
kingdom. that is another factor that plagued the company in their quarterly report. jpmorgan cutting their price target lower than where they are at this point. the stock is down 17 1/2%. they say they have done a lot of market but it hasn't been that effective. whole foods talks about a projection a little weaker. what they are trying to get into the other consumer. the consumer paying top dollar for organic foods. but the rest of the folks. in doing so they bring value and discounts. they're not certainly squeezing out margins the way they hope and they're facing intense competition and rising costs. back to you. ashley: nicole, thank you very much. we'll be back in 15 minutes. tracy: coming up, escape from new york, if only. wall street power players are moving to florida and it's not because of the weather although i'm sure that adds to it. cheryl casone finds out the real reason live ahead from my favorite city, miami. ashley: tough assignment.
more bad news on europe's economy. what does it mean for president obama's planned trade pact with the region? former imf managing director john lipsky is here to talk about that next. first as we do at this time every day, let's look how the dollar is moving right now. guess what? the dollar is up against some of these currencies, including the euro. the euro is down against the dollar at 1.3141. we'll be right back.
tracy: we have breaking news from mobile, alabama. coast guard officials are saying that the disabled cruise ship, docked off the coast of alabama is now not moving because of a broken toe line. fingers crossed. the people on board are not in total mutiny right now. ashley: they have four tugboats pulling this thing. one of them broke, the carnival cruise ship triumph due in sometime tonight now. quicker to jump overboard and swim it. tracy: pull up a bunch of dinghyes to put people in? why not? ashley: i can not imagine the horror stories on board. anyway we'll continue to follow it. talking about horror stories, the euro soempb -- eurozone economy plunged at fastest
pace in four years showing the crisis gripping the region is far from over as g20 finance ministers get ready to meet in moscow this week. who better to talk about this than john lipsky, managing director at the mf. and now at johns hopkins university. thanks so much for joining us, john. look, we got the latest numbers out of the eurozone. obviously not great. the zone as a whole contracting by .6%. we're not out of the woods yet. you were instrumental in crafting aid packages for greece and portugal and ireland. is there a way out of this mess? is this a broken structure going in? >> oh, no, not at all but there's no illusion that reese storing sustained growth across the eurozone, in fact in the global economy in general will require additional efforts and especially in europe it is not going to be easy and it is not going to be quick. there is certainly a clear way forward.
ashley: they can coordinate on the central bank level, when it comes to fiscal policy, 1 governments trying to agree on a set of rules is very, very difficult, isn't it? >> yes, but they have reached some very substantial agreements to create new instruments, new institutions over the past two years. the challenge has been very big and as you said at the outset the numbers chrak clear they're far from out of the woods. but they have a clear path forward. ashley: is this part of the reason though, these problems, that the obama administration has been dragging its feet just a little bit trying to get a trade pact together with the european union? there is hope they get some sort of free-trade agreement in place by june but it seems to me it is a pretty complicated issue. >> it is indeed and there are some areas that will be difficult to negotiate if there is going to be a significant agreement, for example, in agricultural policy. there may be some
discussions with regard to treatment of financial sectors in both areas. but these are the two major economies in the world. if you can produce some additional progress in trade liberalization, that certainly offers a benefit for growth on both side. it also, if there were to be an agreement between the u.s. and the e.u., it could open a way to final solution on the doha global trade round and that would be more important indeed. ashley: we have the g20 getting together in russia this week. it seems the hot topic is the currency wars and i'm sure a lot of attention will be put on japan but they're not going to shed any tears, are they? they're quite happy to devalue the yen because they need their exports to get a boost. is there anything the g20 can do on that issue? >> well, as you've seen through the verbage in the press, the statement by the g7, subsequent clarifying statements and leaking of a
potential draft statement by the g20 there is concern less that someone important, perhaps, japan, begins actually intervening in currency markets. that would be crossing a red line and could cause some real problems that could generate market volatility, could be damaging. so i suspect there's a bit of conflating in the public discussion what's going on. it is one thing to want your currency to be a bit lower. it is another thing to actively intervene. that would be unacceptable to everyone's partners. ashley: we'll be following the g20 carefully. thank you so much. john lipsky, with johns hopkins university. thank you very much. >> thank you. tracy: all right. while the market may not be making much headway this week some individual stocks are actually making some big moves. from zillow to pepsico, sandra smith has a look at some of today's winners in today's trade. >> hey, tracy, ashley. here is the muted action we're seeing in the broader
stock market but if you look at individual names we have really big movers. look at zillow. we all know the website. you can look for properties in your neighborhood online. it is up 11% after spectacular earnings after the bell last night. revenue is up 73% for the company. what is really key, they had 46 million unique visitors in the month of january alone. that was a record for the company. remember they make their money on advertisements on their website. over half of those that visited in the month of january visited on their mobile devices. this was just huge for them. by the way if i bring up a year-to-date chart, spectacular 57% year-to-date performance. so we're looking about a month and a half of gains there. zillow is really on track. by the way their outlook was really positive as well. pepsico, all of us are drinking more pepsi apparently too. their earnings were really good. not quite the spike we saw in cillo's trading but pepsi is up 6% this year, right in line with the broader market. getting a nice boost today. it beat earnings.
its earnings are up 17%. what is really key here, ashley and tracy, they're delivering on the turnaround plan. this is stock a lot of analyst like at 72.15 a share. the average price target of analysts is 77 bucks with an overweight rating. they like pepsico, zillow, by the way analysts are not hot on. price to earnings over 200 is really, really pricey. so pepsi might be the better one of those two to look at. tracy: good stuff, sandy. i check zillow and go puke in the bathroom. i realize the value of my home is falling. it is so bad. ashley: thanks for that image. that's great. coming up one big money strategist says the market's recent pause is healthy. haverford's hank smith shares his strategy for playing the pullback next. tracy: before we head out, the dow is down 7 points. let's take a look at some of the winners on the s&p 500. constellation brands up and
♪ ashley: the heat map of the dow 30 right now, just below the water mark, boeing moving higher, alcoa higher, a few on the lower side, walt disney, dupont naming three. >> cisco bringing the dow down. more about the markets, block buster, corporate deals, and a drop in jobless claims not enough to lift stocks. how do you play the market's pause? chief investment officer joining us now.
hank, look, these deals, i think, both of them are one off that they are not a sign the market turned around; right? or off to the races by any stretch. there's decent economic data, but pulling back. do you get in the market here? >> well, certainly. i think, first of all, it's healthy to have a pull back. we can't have returns like we did in january and annualize them as much as we'd like that. that's not realistic, but, so, pauses are healthy. it's -- this is not occurring on high volatility. you don't see the vix spiking. that's good. they need to be taken advantage of. remember, they are still have a ton of cash on the sideline and money market funds and in short term bond funds, we've only seen the very beginning of cash starting to move back into equities, and that's one of the reasons we're so positive on this market because we think that trend can continue and fuel the stock market for not just
2013 for several years to go. >> thank you. seems to me investors are suffering from vertigo here. markets close to all-time highs, we've seen the volumes really drop off. i mean, what are you telling your clients right now? >> well, look, we are -- we remain optimistic on the markets. the fundamentals are good. remember this past decade of no returns and even the past five years was not a decade of no fundamentals. we had good earnings growth confirmed by dividend growth, and, today, we have very attractive evaluations. as long as you have a reasonable time frame, you are a long term investor, don't be fraid about gain investments in the market today. >> talked about corporate profitability so much, part of the reason they look good, but the big reason profitability is up, interest expense is down; right? interest rates are so low.
what if they turn? what does that do to corporate america, and then, therefore, the market overall in >> well, that's part of it, but, look, they are not earning anything on the pelethra of cash. it's about productivity. that's just not head count cutting. it is also taking advantage of technology, so we're in a world today in which profits are so important and managements are so attuned to profits, and i think that is good for shareholders. >> it's interesting. you are bullish saying we can see the double digit returns, hank, that we saw last year, but picking sectors, you're defensive, aren't you? why is that? >> we'll, we're a combination. the reason is we live in a below average growth rate, blowout economic growth rate, and that's not going to change. threats head winds like
deleveraging, such as overregulation, fiscal policy, if you will, but there's tail winds too -- housing, energy, the auto sector, consumer confidence is picking up, so bsh bsh -- but it adds up to a below 3% world. you need balance in defensive sectors and offensive sectors like industrials as well. >> keeping the food theme today, texaco and mcdonalds your pick, a sure thing at the end of the day, i need a soda and a burger for the kids for lunch. >> and you get a better than bond yield with the stocks. they pay dividends higher than what they pay on their own ten-year debt. you can have your income and be assured you're going to get an increase in income, and i say that's having your cake and being able to feet -- eat it too. >> soda. >> right. >> fat analogy.
hank smith, thank you so much. >> good stuff. >> good to be with you. >> breaking news, one story's that is not getting attention is the rise in energy prices. oil closed 30 cents at $93.3-- $97.31 a barrel. whole sail prices up 17% in three months. that's going to eat away at the consumer pocketbook. >> most certainly is. >> new york's high prices driving away some of wall street's biggest wallets. cheryl casone catching up with them in sunny, low tax florida next. >> before we break, time to check the ten and 30-year treasuries. dow down nine points right now, fighting to get up. ten year yield down five, basis points at 2%. 30-year's down five as well, 31.8%. we'll be right babe.
♪ >> this is your fox business brief, shares of heinz soaring after warren buffet and 3g capital are teaming up to buy the keechup maker including the debt. they say heinz will remain headquartered in pittsburgh. liz claman speaks with warren buffet about the story on "countdown to the closing bell" here on 3 p.m. eastern.
>> it's more than good weather. executives to florida, i just go because, just cuz. low taxes and cheaper property values attract hedge fund executives to the state as well. cheryl casone is live from my favorite place in the world, miami beach, south beach, actually, florida. hey, cheryl. >> well, tracy, i should have brought you with me, next time. i have to tell you, when you
look at the state of the florida economy right now, and all the attention that florida is getting, it's pretty surprising. the fact is because of the low tax environment, no personal income taxes paid, one of seven states that do that. many businesses want to come here, in addition to the tristate area, those businesses want to come here, and hedge funds want to come here. two people joining me who know about that, sitting next to me, kevin, the ceo of hedge co, and brent, the president and coo of hedge coach. welcome. >> thank you. >> i want to say, you were telling me, evan, between 2009-20 # 13, the influx of hedge funds setting up shop in west palm beach where you are is astounding. what's the numbers? >> absolutely, it's substantial. there's a 20% growth year over year from 2009 and 2013. the first three quarters this year, 56 funds started up, a record for the last five years. it's been substantial. >> you know, also, i would say,
brett, you got here, what, eight months ago? >> correct. >> he got you to move from new york. >> that's right. >> what clenched the deal for you? >> sure, i did 17 years on wall street, and it was really a two-pronged approach. from a personal side, i actually wanted to see my family. i wanted to have a healthy marriage, know my wife, know my children. i was leaving my house at 4:30 in the morning, between midnight, and missing my children grow up. i did not want to pass on that. more important, professionally, there's institutional growth here in south florida, and evan built a business that was attractive, an institutional background that leveraged the skill set and relationships and be on the cutting edge of growth going on here in florida. >> talk about funds operating in florida, and you're tracking their performance, and they are doing well, double digit returns; right? >> absolutely. >> we track 8100 funds in total, about 38,000 active users on to
the data base for source funds for the portfolio. >> are investments changing, you think? hedge funds do you want like television, but glad you are here. >> there's pension funds in the hedge fund world, more endowment, more sizable allocations from the institutions and worth active in our space. >> where do you see the industry going in florida now that you're on the ground. what's next? >> rapid growth like eluded to, 20% year over year growth. i think that number's going to continue to grow and substantially larger than that 20%. >> all right. evan, brett, both of hedge jco, gentlemen, thank you for being here on a lovely sunny day. you are used to that. speaking of your wife, i'll let you go home. tracy and ashley, that's all for today, but tomorrow on fox business, we're not done with the city of miami. the miami international boat
show kicking off today, we'll be out on the water tomorrow. we're going to be talking about ceos, executives, brokers, buyers of these multimillion dollar boats, yachts, fishing boats, you name it. it's out there. we were out there yesterday. these boats are amazing, guys. it's quite a day. fox business, all day tomorrow, miami international boat show, back to you in new york. >> thank you, i've been to the boat show, it's so fun. enjoy it. ashley: time to hit the beach, nice. suntan lotion too. a new report suggests the world's biggest brands are basically funding illegal download websites. what? well, these are the same sites that are the bane of hollywood's existist. dennis kneale has more. interesting story, dennis. dennis: accomplices to piracy? at&t, amazon, toyota, samsung, walmart, 31 brands singled out
in the report by the university of southern california's innovation lab. it seeks to publicly shame these big brands into blocking ad flow to pirate sites, thereby, cutting off the pirate's only source of revenue. the report calls out the ten worst offenders on online ad networks that pay millions of dollars in ad money to the pirates. the biggest name is yahoo at number three with a bullet. google was listed last month, but cleaned up its act. i'm waiting to hear back from yahoo on that fact, by the way, and brands and addnet efficient make sure they don't run on porn sites. why not block pirated sites too? the reason may be the brands don't care about online piracy, and that wrinkled the force. the labs director, john taplin, a former music manager, music producer, media banker, despises
them, and calls them parasites and saying publicly shaming them is a better way to put pirates out of business and industry wide voluntary effort. media companies overreached pushing the sopa and pipa laws that would have let government shut down google or anyone else for sending you to a pirated sites. forget the feds. industry reenforced shame is the better way to go. ashley: maybe here's right, but they are there for a reason. get eyeballs. dennis: they do. ad networks say it's less than big sites, and it's about the money. once their clients, advertisers say, stop this, it will stop of the the question is whether brands do that. ashley: interesting stuff, thanks. tracy: stocks every 15 minutes, nicole's on the floor of the new york stock exchange, fallen a bit, down 10 points now. >> that's right. slightly to the downside, vix is lower, and dollar exceptionally
strong on tough news from europe. angry's list, talk about -- angie's list, up 25% today, that is a huge move. the quarterly results and outlook, and, actually, posting a profit of over $2 million, $2.4 million. in the same period a year ago? they had a loss of $5.9 million. significant year over year gains and talk about growth prospects that look good. the analysts jumped on board. it's a buy. back to you. tracy: thanks, nicole. i never used it. coming up, banks regulators defending dozens of new rules mandated by dodd-frank, but the american banking association has a way different view. ceo and former oklahoma governor frank keating weighs in next. ashley: today's winners and
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tracy: top banking regulators testified today, and one of the hot topics? the state of dodd-frank, which the next guest says is 9,000 pages of rules and regulations making it harder for community banks to do their job and lend people money. former oklahoma governor, frank keating, the president and ceo of the american bankers association. governor, tharngs for being with
us right now. >> my pleasure, tracy, thank you. >> this is killing the community banks because, i mean, you got basal3, you name it, stuff coming on on the little guys in a point where they are ready to lend, aren't they? >> they really do. banks have never been health departmentier. they have a -- healthier, they have a lot of capital, and lending willingness. there's a mountain slide, if you will, of rules and regulations coming from washington. you mentioned dodd-frank, 9,000 pages of proposed and final rules, and the average community bank has 37 employees so that's, you know, stacks upon stacks of daniellesteele novels. 20% is come pliement, not good for lending. obviously, we believe in regulations, it's appropriate, safety and soundness is essential, but sometimes enough is enough. tracy: yeah, and reading
danielle steele novels is enough to kill you. the little guy is hurt, didn't do a lot to prevent the big guy from getting in trouble. look, we're not hearing about too big to fail or all about all the things that we're supposed to be preventing from the 2008 financial crisis; right? >> well, hopefully, too big to fail problem will firmly and finally be solved. title ii and dodd-frank is a part of that, and, hopefully, it works. the reality is you mentioned bazal3. european friends say, what? should just apply to the international lending market place, but it's applied to every bank in the united states. that's enormously suffocating, also, extremely difficult. we hope there's relief there, but, again, the community banks of this country, that do really most of the lending, keep body and soul together from sea to shining sea, if you don't have community banks, the communities blow away. those are the ones that ought to be loosened up on.
let us have the opportunity to lend, and, of obviously, banks f all sizes are important for the success of the united states. we have to make sure we have regulation that's smart and not excessive. tracy: do you propose getting rid of dad-frank all together? >> no, i think the election showed dodd-frank would not be repealed, but should be reformed. the bipartisan policy center, doing the rivlin panel i was on, the housing commission, there's a dodd-frank commission, people of both parties, academics, former regulators looking at what needs to be changed to be competitive and lend and get the economy moving again so hopefully in the next several months there's an examination of things you talk about, particularly, some of what's coming out in qualified mortgage and reality mortgage and the consumer financial products bureau. tracy: switching gears a little bit and talk cyber security, a really hot topic. banks getting hacked left and
right. i mean, really worry -- worrisome for banks, isn't it? >> it is. my background is in fbi, justice, and treasury official, but it's important to recognize that denial of services is one thing, if i try to get online and can't, but it's something else if there's criminal conduct which basically shuts down the financial system. that's something that should frighten all of us. i'm pleased that the president did present an executive order. the private sector is working closely with the government. it's good now for us to know that the treasury department is in charge, and we can work together to reduce the likelihood of these kinds of attacks and make sure that if they do occur we're able to fend them off. this is serious stuff. tracy: certainly is, and hopefully, everyone is paying attention to it. thank you, sir, for being with us. >> thank you, tracy.
ashley: new video of the disabled carnival cruise ship, triumph, and the coast guard says the ship is not towed because of a broken line. they are trying to tug the ship, four days now after a fire disabled the engines. the scene on board is described as barbaric for the more than 4,000 passengers and crew. the triumph, not the name we think of right now, had been expected to reach alabama tonight, but there's no word on how the latest delay will affect its arrival. hasn't been cruising and have no desire. tracy: not good pr. dow down trying to turn green, but liz claman has the last hour of trading. john chambers, and billionaire investor, warren buffet. teaming up with 3-rbgs did capital to buy heinz for $28 billion.
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