a magnificent move on wall street. the dow soars 300 points as lawmakers avoid falling off the fiscal cliff and investors jump into the market. in today's cover story, whose taxes are going up and why every american will wind up with less money in thier paychecks this year. plus, a banner year at the box office for 2012. we name the films that could earn the biggest bucks in 2013. also, is now the time to gamble on casino stocks? and americans get set to plug into supersized tvs. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's thursday, january 3rd. i'm angela miles.

in today's first look: the stockmarket's fiscal lift. in the largest one-day move since december 2011, the dow soared 309 points wednesday after lawmakers agreed on a deal to avert falling off the fiscal cliff. the 113th session of congress begins today at noon on capitol hill. 2012 was a tremendous year for the wealthy. the richest people in the world added $241 billion more to their collective net worth and buger king is playing a game of chicken with mcdonald's. instead of chicken strips, bk is testing sales of chicken nuggets. bk hopes to fowl out the golden arches. mark sebastian of option pit mentoring joins us now on the show for a closer look at the trading day. good morning to you mark. > > good morning angela. > looking at what happened last year in the market and the market being so strong, is it better to not pay attention to

anything that's coming off capitol hill lately and just pay attention to the fundamentals of trading? > > i think that makes a ton of sense. if you look at how the s&p performed relative to hedge funds, hedge funds got creamed relative to the s&p 500. why? they spent way too much time looking at macroeconomic and government things, positioning themselves, and they get caught up. i think we saw a lot of that happen last year, and we are in a perfect position for the exact same thing to happen. i think you just kind of look at those market multiples and trade them. > what are some places that you would look at? would you consider perhaps some of the gambling stocks? the the numbers from macau and all these casinos are really coming in with some pretty hot and heavy revenues here. > > especially if you are counting on china heating back up, macau is a great play. las vegas sands has a great, great presence there. wynn as well. any of those stocks. if you really think the macau picture is going to get good and las vegas itself picture could be heating up, then las vegas sands or wynn are really both

excellent plays. > what about the car companies? we are supposed to sell, what, 15 million cars in the coming year? what do you think about that? would you buy gm, ford, any of those? > > i like ford. gm is kind of a tough nut now. the nice thing about gm is it has a floor at around $27.50, because that is where they have to buy stock back from the federal government. but, until that federal government overhang goes away, i am steering clear of gm. i like ford for all the great fundamental reasons that it never actually had to borrow money. and it just keeps going higher. i think ford really has their stuff together right now. > good to have you on the show. that is mark sebastian. thanks mark. the fiscal deal between congress and president obama raises taxes on a smaller number of the wealthy than the number mr. obama called for during the campaign. it extends income tax cuts for the middle class, but allows the payroll tax holiday to expire. and only briefly did senators take up matters other than the fiscal cliff. while senators approved more than $60 billion in aid for victims of hurricane sandy, house leaders adjourned without taking action. it came after the fiscal cliff showdown in which middle class tax cuts

were extended, but income taxes on individuals making $400,000 a year and married couples making $450,000 a year go up from 35% to 39.6%. itemized deductions were capped for individuals making $250,000 and $300,000 for married couples. "capital gains only went up 5%. i actually don't think it'll change anything much. it's pretty much business as usual." the payroll tax holiday was not extended. everyone who draws a paycheck will receive 2% less after taxes than they got last year. if you make $60,000 a year, that's about $100 a month. unemployment insurance was extended for a year, affecting two million americans. "american people are still looking for work. it's picked up, but not enough." "i'm not sure that's the best solution. it helps people

survive but it's more important to do whatever helps the economy." homeowners who owe more than their homes are worth get a break. instead of paying taxes on mortgage debt cancelled or forgiven, that amount will be tax exempt for another year. "i think that's good. my folks' home was underwater and they lost it. any relief in housing is good." a lot of tax credits were extended - for wind energy, energy-efficient cars, appliances and homes, along with tax credits for child care, college costs and small business research and development. the deal also puts off for two months a half-trillion dollars in spending cuts to the defense department, and what to do about the debt ceiling, which is maxed out and has led the treasury department to suspend the reinvestment of federal employee retirement account contributions. which means that major negotiations still lie ahead on the hill. diane swonk, chief

economist at mesirow financial, is on the line with us this morning. good morning "good morning" do you think congress is merely kicking the can down the road? "absolutely. what we saw was we averted going off the cliff and going into recession. that's the good news. the bad news is we only bought ourselves 2 months. we have mandated spending cuts that are postponed only for 2 months and yet another debt ceiling potential showdown as well, which could result if done poorly in another downgrade of u.s. debt, and could have a spill-over effect on everything from pension funds to the ability of state and local govenrments raise money." diane, what will this mean for money managers? "the bottom line is it's a relief for the moment, but we need to have a road map. i think we are at a real fork in the road. if we do this right, if we get a fiscal policy and solution to our solvency, we will actually have a stronger year more to have fundamental healing in this economy than we have seen since the beginning of the recession." that's diane swonk of mesirow

financial. thank you diane. "thank you." hewlett-packard may be starting off the new year with a diet. the palo alto, california, company is considering trimming some of its assets. after 5 quarters of declining revenues, including a 45% drop in share price in 2012, ceo meg whitman says h-p may shed some units not meeting sales targets. the company recently incurred an $8.8-billion writedown of acquired software company autonomy, renewing calls from shareholders to dispose of underperforming divisions such as personal computers & printers. once again, warren buffett's berkshire hathaway performed better than the rest of the market, mostly by betting on banks. the oracle of omaha is known for his stock picking stragtegies. for 2012, buffett's berkshire class-a shares gained 17%, while the s&p 500 index advanced 13%. among the top performers in the buffett portfolio, wells fargo, american express and... there was also that $5-billion wager on bank of america. buffett

bought shares of b.a.c. at $7.14 in august of 2011. the stock now trades around $12 and jumped more than 100% last year. it's likely intel's new tv service will not be ready in time for this month's consumer electronics show. the chip- maker is creating a new video cable & streaming service that offers individual channels and even individual shows on an a la carte basis to subscribers, rather than the usual bundle of channels. the wall street journal reports that negotiations with content providers have delayed the launch of intel tv until later this year. tvs with supersized screens are heading to households. lg electronics is taking pre-orders for "ultra" tvs. the 55-inch set uses organic light emitting diodes, known as o-leds, for a sharper image. it sells for

$10,000 and will be available in north america by the end of march. meanwhile, westinghouse reportedly will roll out its ultra-high-definition tv at the consumer electronics show next next week. the screens will range from 50 to 65 inches, but there is a 110-inch model available by custom order. car rental service avis budget group is buying zipcar for $500 million. the car-sharing company saw its stock pop to $27, up from $18 yesterday. avis ceo ron nelson says the deal will enable the company to better serve consumer and commercial transportation needs. the deal will be finalized this spring. some ups and downs for boeing 737s. federal safety officials are ordering more inspections for the 737 jets. a hole tore open during a southwest airlines flight in 2009. according to reports, the faa is checking for cracks along the tops of planes. on the upside for boeing, the company has just

locked in $6 billion in orders for 60 of its 737 max jets, pushing the total above 1,000 sales. the skies are not so friendly for american airlines. according to a survey of 1,000 fliers, the airline ranked worst among airlines with the "rudest crew." american was followed by united, delta and u.s. airways in the survey by airfarewatchdog.com. the tribune company is moving toward a tune-up now that it's out of bankruptcy. the media conglomerate emerged from bankrutpcy new year's eve. sam zell took the company private in 2008 just as newspaper ad sales were plunging and the economy was tanking. industry analysts predict the tribune company will sell off its newspapers and focus on its television assets of 23 stations, plus cable station wgn america. the super bowl is still a month away but fierce competition has

already begun for network ad space before, during and immediately afterward. in fact, tv ads for the big game are nearly all sold out. cbs says only two 30-second slots remain in this year's lineup. if you are interested in buying one of them, 30 seconds will burn through a pile of money faster than many lottery winners. a half-minute of highly desirable ad time during this year's game goes for a record $3.8 million. still to come, why hollywood is counting on reeling in ticket sales from remakes and sequels this year. and bill moller joins us for the cure for the common cliff hang-over.

(woman) 3 days of walking to give a break cancer survivor a lifetime-- that's definitely a fair trade. it was such a beautiful experience. (jessica lee) ♪ and it's beautiful (woman) why walk 60 miles in the boldest breast cancer event in history? because your efforts help komen serve millions of women and men facing breast cancer every year. visit the3day.org to register or to request more information and receive a free 3-day bracelet today. it was 3 days of pure joy. ♪ and it's beautiful after a few hours of fiscal cliff free-fall, congress finally pulled the ripcord and the country has landed safely, right? not quite. even bigger negotiating challenges lie ahead. but what's this deal mean for the economy? let's talk with jeremy glaser. he is the markets editor for morningstar. no surprise, the investing community reacted with some measure of glee, at least in the short-term.

> > there is definitely some relief that some deal got done, that we are not going to see the big tax hikes, that sequestration was pushed off for a few months. but this is really just the first step. there are going to be a lot more negotiations that could be pretty contentious just in the next couple weeks. > how about the idea that we do now have some predictability with some part of the tax code, for example, the amt, that fix is permanent. > > yes, that is good news. we look at dividend tax rates being set at the same level as capital gains permanently. that is good news for investors. but we are probably not seeing the end of tinkering with the tax code. the president said that when it comes to replacing the big cuts that are planned with sequestration, he wants both revenue and cuts to come together. that could mean changes to the tax code, limits to deductions, tax reform issues that we were talking about earlier in the fiscal cliff negotiations. that could mean more changes, and certainly we haven't seen at the end of tweaks to the tax code. > jeremy, what about this issue of the overall economy? what is the impact there that you can read here early on? > > it is difficult to say for sure. i think this deal kind of

bides us some time. with sequestration, with those big cuts, if those did come into place, if we did hit the debt ceiling and had a default, had a government shutdown, that would have a profound impact on the economy. right now we are looking at slow growth for 2013. morningstar's economist, bob johnson, sees about 2% growth considering everything goes right - that means we don't hit the debt ceiling, we replace a lot of these cuts. that is not very spectacular growth. if we hit some of these other issues, the growth could look even worse, and there could be a big problem on that front if we can't handle some of these other problems. > other problems include problems in other countries as well, like for example, europe is still sputtering along. > > absolutely. europe has been quiet recently. mario draghi claimed that he is just going to do whatever it takes to keep the euro together, has kept some column. but that could blow up. there are some big elections in 2013 in europe, particularly in germany and italy. the outcomes of those could have a huge impact on if the eurozone is able to stay together, and if that is going to have an effect on the united states

economy. there are just a lot of open questions there. certainly it adds a lot of things for investors to keep in mind. > jeremy glaser from morningstar. thanks so much. > > you're welcome. coming up, we have a preview of what hollywood has in store for moviegoers in the year ahead. that's next.

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2012 was a box office smash with a record number of ticket sales at $10.8 billion compared to the record set in 2009 at $10.5 billion. our movie guy, erik childress, is here for movies and money. good to have you on the show. and will 2013 be as strong, erik? > > hollywood obviously is certainly hoping. they have already got the line-up pretty much set for the year with a number of sequels and remakes and franchises all set to sort of try and capitalize on what was successful this year, where you had stuff like "the avengers" and "dark knight" and bond and "twilight" and all these kind of movies that really made a difference at the box office. > you actually already have your predictions set for 2013 and what you think- > > based on what's on the schedule so far. > so here is your list, starting with "despicable me 2," "fast and furious 6," "the hobbit: the desolation of smaug," "the hunger games: catching fire," "iron man 3," "the lone ranger," "man of steel," "monsters university," "oz: the great and powerful," "star trek: into darkness." a

lot of sequels and remakes i have to say. > > absolutely. that's the movies that make the money. you look at the numbers this year, you'll see a number of franchises. those are the ones people go see. > if it's not broke, hollywood is not going to fix it. > > very true. > let's take a look at the numbers from last weekend. once again "the hobbit" reigns. > > yeah, the third straight weekend at the box office, over $700 million worldwide. doing even much better than i thought it was going to at the box office. could still stretch to $300 million here in the u.s. > "django unchained" coming in at $30 million, "les mis" at $27 million, "parental guidance" at $14.5 million, and "jack reacher" at $14 million. coming up this weekend there is just really one movie coming out, it's "texas chainsaw"... > > yeah. > in 3 d. > > in 3 d. > i don't even know where to go with that. > > they had the remake of "texas chain saw massacre" in 2003. then they did a prequel a few years later, and now this one, i'm not sure where it fits

onto the timeline. i think it is a present-day thing. the other two did $28 million, $18 million, so i think it might actually fight for the top of the box office slot. last january we were talking about a movie called "the devil inside," a big horror movie that opened to $33 million. so this one, i wouldn't be surprised if it opened in the high teens, maybe even around $20. or you could see "the hobbit" or i think even actually "django" take the no. 1 spot this weekend. > i would love to get your comments on what's going on with the oscar nominations. they are having a tough time doing those ballots this year. > > they added an online balloting system for the voters this year, and some people were having some problems, so they extended the deadline by a day. we have the nominations coming out next week. i don't know what that means. maybe that means "the best exotic marigold hotel" is not going to get the nominations because the old people can't figure out the ballots. i don't know. it's not as big a deal as people are making it out to be, but maybe next week we will see them nominate some really good films, and the people who can't nominate stuff, maybe they shouldn't be nominating stuff. > there were a lot of enjoyable films last year. good to have you on the show as always. > > thank you. > erik childress. just head, investors showed no fear in the market yesterday as stocks soared. why that has one trader a bit worried.

dan deming of stutland equities joins us now for a closer look at the so-called "fear gauge." good to have you on the show. the vix has fallen dramatically, dan, over the past couple of trading sessions. have you ever seen a move like this in the past? > > i tell you angie, not from a 23 level down to a 14.68 yesterday, a 35% move from those levels. that's very dramatic. i can't think of a time where i have seen that significant of a drop in that short of a period. now, i can tell you that last march, we did see a fairly significant drop in the vicks, from about 20.5 down to 14 over the course of about five trading days. so, we have seen volatility come in very quickly on moves, especially when you see the market kind of turn around, particularly off of the news that we saw with the fiscal cliff kind of temporarily being solved and the fact that the market participants appeared ready to jump in if there is any resolution at all. > usually when the vix is going down, that means the market is going to go up. but what do you think this latest move in the

vix is actually telling traders and investors? > > right. you know, we are getting up to valuation levels again that are pretty significant relative to the expectations in the marketplace. when you see extreme moves in volatility like we have seen over the course of the past week or two, i typically look at that as like the extremes in the market. so i am a little hesitant here, because we saw a very big reaction. this is a reactionary type of move. we'll have to see how it plays out. i can tell you again, like we saw the reaction in march of last year, the market was able to kind of hold those levels for about a month, but then we slowly started to lose steam into the summer, and i am a little concerned that that might happen again here. i think you are seeing possibly a little extreme in the marketplace. > good to have you on the show. that is dan deming of stutland equities. thanks dan. > > thanks angie. that does it for now. coming up tomorrow, after a hot stock market performance in 2012, why some traders are looking for a repeat in 2013. from all of us at first business, have a great thursday.