ringing in the year of the snake: can wall street avoid the bite of tradition? in today's cover story, the country will tune in to watch the state of the union address tonight. a preview of what the president may say about the economy. behind-the-scenes of silicon valley. how the original start- ups paved the way for tech giants. and, gambling stocks are currently in the money. but, why you might want to think before betting big. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's tueday. february 11th. i'm angela miles. in today's first look: pump up the volume: stocks traded slightly lower yesterday in the lightest trading volume day so far this year with just 2.6 billion shares trading. the

norm is closer to 3.5. oil was the big gainer on the day. aldi is the latest focus of a horse meat scandal in the uk. horse meat reportedly showed up in some beef lasagne and spaghetti sold at the chain store. it's fat tuesday, and a new report shows mardi gras adds to the economy in new orleans by plumping up home values. time now for a trader talk. it has been a really long time since we have seen a major sell-off. larry levin of trading advantage joins us on this tuesday morning. happy tuesday to you. where is this correction everybody keeps amerwith a deadly disease. talking about? > > it is probably i guess a long way away, since that these markets, especially the stock i was one of them. my disease was obesity and after consulting with my doctor, indexes that i trade here at the cme group, they seem to continue to grind higher i received the effective treatment i needed. regardless of good news, bad news, just keep moving up and up please join the obesity action coalition and up on this low volume. to acknowledge obesity as a disease visit obesity action dot org to sign an open letter > is there any way that market timing will work in this pledging your support current market?

> > if we get that pullback and for more information about how to talk to your doctor that everybody wants, then i about weight loss and treatment options. think you can time it, because i together we can make a choice to end obesity now. think that pullback will be short-lived and everybody will step in and buy - you'll have to a public service from the obesity action coalition. step in quickly. but you'll have to wait for a pullback if you want to market time. > what is behind the latest oil spurt? oil rallied like nuts yesterday. > > that was a little bit interesting. usually we see in the summer the oil really rally and then in the winter months kind of come off. we talk about the driving season in the summer and everybody using more and more fuel to get around. that was a little bit of a surprise. as far as the technical trade, i would look at the $100 level. that is what everybody has been watching right now, and i would buy it above there and sell it below. but, it is a little bit of a mystery to most oil traders that i know. > what are you watching in the market ahead of the president's speech tonight? > > i am just going to watch there is a very speculative the overnight session and see play happening in the gambling where the market trades once it opens. i really like to watch the markets when any politicians sector. matt shapiro, president are talking in the overnight session. you can usually get of mws capital, joins us now for some good movement in there. > that is larry levin of a look at some of these stocks. trading advantage. thanks larry. > > thank you. good to have you on the show. > > thanks angie.

if president obama's second innaugural speech was any > just to set it up, the indication, tonight's state of the union speech may be less carrot on a string and more sharp stick poking at congress governors of nevada and new to get over gridlock. in our jersey have been talking about cover story, the public's wish online gambling, and it is list of what they hope they hear - and what they expect to hear. this year, it's still "the sparking rallies in a number of economy." stocks, including zynga and "you will hear about jobs and some others. what are you watching? how to grow the middle class." > > absolutely. what a "i'd like to have less phenomenon. we talked about regulation on business so we zynga late last year as sort of the $2.50 stock that could could get back to making money." double, and look what has "i think he should work more happened: about $3.70 with the private sector and yesterday. i guess you're going help them, regardless of to get some sort of poker online minority requirements." but there's also a lot more on the public's mind. application potentially on your "i'd like him to quit playing handheld. so that is a good bet, politics and fix something. but it is up so much, you have don't extend it forever, like to have your money on the right they have been." horse, but be careful. for "i definitely would like to hear him address gun violence. instance, another big stock is it's out of control." international game technologies, "gun control, and a confirmation that we're going to keep the healthcare plan." about $16. $4-billion company. yes, some people think that it has its business in lots of even though obamacare was signed into law and upheld by the supreme court, details left different parts of the gambling industry, but we really don't know exactly how this is going unresolved make it vulnerable. to shake out. remember, it is just one or two states, and a lot of localities are "i'd like him to quit playing politics and fix something. uncomfortable with internet don't extend it forever, like

gaming. they have been." > if they open the door to online gambling, this could be huge, and that is what is sparking this. but are there but for many, the anemic economic recovery trumps everything. other stocks that you would buy "i think he will try to shame in this arena? the republicans into more > > the big traditional gaming government spending. our infrastructure is decomposing. stocks are las vegas sands and wynn resorts, wynn being the only one i invest in. they make we need to build up these most of their money, of course, sectors." on the in-person gaming: the hotels, the fancy restaurants during the presidential address, the white house will and clubs. so, i think for them, internet gambling is going to be a sideline. so it is tough to find the right stock. provide an enhanced version of remember, you can put your money the speech with charts and on a zynga, or on an international game technologies, other information as the but you don't know which one is president speaks. it's available going to finish in the money. at whitehouse.gov\sotu, > thanks for the insight. that is matt shapiro, president of for "state of the union." a mws capital. thank you. > > you got it. panel discussion at the same website will follow the speech. that's it for now. coming up tomorrow, love and money: tips on how to fight less and love passengers who were stuck on more when it comes to what's in the ocean in a carnival cruise your wallet. from all of us at first busines, ship are heading home. thank you for watching! carnival's triumph was adrift in the gulf of mexico sunday and

monday following an engine fire. fortunately, no one was hurt. back on shore, traders are closely watching the stock. "a couple of retail players in the option world in carnival have recently put on a bearsish put spread, where they are looking for the stock to move down to the $35, $34 level by april expiration. if the stock cannot break through this resistance area of $39, that probably is the last stop for carnival.' scott bauer of trading advantage also points out carnival stock caught a strong wind from investors over the past year and also rallied in the wake of the ipo by norwegian cruise lines. not a done deal, at least not yet. the boards of both american airlines and its expected merger partner, u.s. airways, pushed back planning meetings with no specific date set to sit down. according to reuters and other outlets, those meetings will still likely take place mid- week. final approval of the merger, if it does come to pass, lies with the justice department, which is expected to give its consent.

an etf explosion is happening. average investors are pouring billions of dollars into exchange traded funds - those are funds that trade like stock, but instead of one stock are a basket of companies. ed gjertsen of mack investment securities joins us via skype. what's prompting this? > > hi angie. i think it's more than just individual investors. it's also institutional investors that are throwing billions into etfs. it's a remarkably convenient and flexible way to invest in the market. > is this good? what are caveats? > > investors have to really be careful - not only individual investors, but also professionals like myself. there are a couple of tax implications that might be hidden within the etfs that you are not familiar with. we're used to getting 1099s, or investors are, and a lot of these etfs are k-1s. so nothing will irritate a client more than getting a k-1 well after they have already applied for their income tax. > what are your favorite etfs? > > ah, that's a great

question. there are so many etfs right now, that's the great thing behind this big push, is that there's so much flexibility from an advisory standpoint, that we can put money pretty much anywhere in the world very simply and very efficiently. > thanks ed! as people all over the world celebrate the begining of the year of the snake, investors are a little nervous. the chinese lunar new year was celebrated this past weekend, and historically, any year named after the snake sees poor stock market performance. in fact, the s&p index has been snake-bit, with losing records during years named for the snake. of course, there's a flip side. the best stock market showings have been during years named for the pig. according to capital i.q. research, the s&p has risen 78% in those years. the next one is in 2019. some "eye-opening" numbers are being revealed about credit report errors. a recent study by the ftc finds 26% of consumers have at least one mistake on their credit report. 21% of the consumers who challenged those mistakes were

able to fix their credit backgrounds. 5% of those people saw credit scores improve. you can check your credit for errors once a year, for free, at annualcreditreport.com. it was a signature piece of obamacare, allowing adult children to stay on their parents' health insurance plans until the age of 26. now, a new poll shows that the number of young people without health insurance has dropped ever since that part of the plan went into effect in 2010. gallup says that by the end of 2012, 22.7% of americans between the ages of 18 and 25 had no health insurance, down from 24.5% at the begining of the year. on a related note, the federal government has recovered a record $4 billion in healthcare fraud and abuse. after a move to ban super-sized sugary drinks, new york mayor michael bloomberg is shaking up the food industry over salt. the mayor says americans eat twice as much salt as we should.

80% comes from restaurants and packaged foods. he's been able to get 21 companies to reduce the sodium. "kraft reduced sodium by 18% in sliced cheese. subway lowered sodium in some of its most popular subs, the club and italtian bmt, which happens to be my favorite." starbucks, oscar mayer and velveeta are among other companies cutting back on salty foods. coffee, tea or mountain dew? those are the morning beverage choices the pepsico company wants for consumers. this month, pepsico is rolling out a new drink called kickstart. it's a breakfast drink with mountain dew flavoring and 5% juice, plus a shot of caffiene. the drink has less caffiene than energy drinks but also gives pepsico a boost into the energy drink market. maker's mark is changing up its recipe. the liquor is facing such high demand across the globe, that makers has plans to water down the bourbon,

reducing the alcohol level by 3%. fans showed "distaste" for the decision on facebook and twitter. however, the company insists its booze will taste just the same. putting ads on player's jerseys pits nba owners against fans. the issue will be put to a vote when the league's board of governors meets in april. owners are reportedly leaning toward allowing small ads on jerseys in exchange for an anticipated $100 million in revenue for the nba. still to come, a new film takes us inside the world of silicon valley before the days of bill gates and mark zuckerberg. that's later. but first, bill moller has the scoop on suprising deductions for people who work from home. that's after this "in the know" message.

there's been a lot of unhappy tax news of late, especially for the super wealthy. but here's some really pretty good news for anybody who works out of their home. the irs has changed some of the rules, and now millions of home-based businesses will have an option regarding their business deduction. kristie arslan is president and ceo of the national association for the self-employed. how big a deal is this? > > it is a very big deal. over half of all small businesses in the united states are actually home-based businesses. and we also know that a lot of larger companies are moving more and more toward telecommuting for their employees, so a lot more people are working from home these days. > so what exactly can they now deduct? > > there has always been a home office deduction, but the issue with the deduction is that it has been very complicated and confusing and often a compliance burden trap for someone who is self-employed or a small business owner trying to take that deduction. so what the

irs and department of the treasury has done, and what we at the national association for the self-employed have long advocated for, is the option of a simplified deduction. essentially what is currently happening now is, as long as you qualify for the deduction - and the qualifications have not changed - you now have the option to simply check the box and take a deduction of up to $1,500, a standard deduction. no longer do you have to go through the calculations of measuring your room, taking a portion of your utility costs. you can simply take the standard deduction option and save yourself 44 hours of paperwork burden to figure out that home office deduction. > i bet a lot of people haven't even heard about this. do companies typically tell their employees that this new option is available? > > well, most often this deduction is taken by entrepreneurs, so they are self-employed business owners and small businesses who work out of their home. but, for those who work for big companies, if you do work at home and your home is your primary place of business - you

do not have an office in the location where your corporation is - you can qualify for this deduction. i am not quite sure how many companies are educating their workers on this, but it is a valid deduction for people who work for a big company but work at home. so they should look into it and speak to their account. > very good. kristie arslan. thank you so much. > > thank you for having me. thank you bill. still ahead, we'll travel back to a time before facebook and google. the fasinating story of how silicon valley got its start. that's next.

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a new film airing on pbs offers a fascinating look at silcon valley before the go-go days of the internet boom. filmmaker randall maclowry of the new documentary "silicon valley" is here via skype. good morning to you. how far back does your film go? > > good morning and thank you for having me. our film starts in the mid-50s. that is the time when a gentleman byt the name of william shockley, who was one of the coinventors of the transistor, moved to california and set up shop. and along with him he brought some of the best young minds in science and engineering at the time, and from that group of people, about a year after shockley started, they broke off and started their own company, kind of the first prototype of start-ups that would be followed many times over in silicon valley. robert noyce was sort of the leader of that group, and they were wildly successful with fairchild semiconductor, and

that led to many other companies starting from there. noyce and his colleague gordon moore started intel, which of course did very well, and then our film kind of wraps up in the early '70s once intel has been founded and is kind of off and running. > after making this film, what are some comparisons you see from those early founders compared to, say, the mark zuckerbergs of the world or leaders of today? > > the one thing i would say about today's silicon valley and what came out of these early years - and i think is a real offshoot of bob noyce and his colleagues, specifically - is, there's a business culture that has evolved in silicon valley that generates from that time period, and it's really one of the much more egalitarian and democratic models. these guys were coming out of the typical business model of a hierarchical east coast model where there is a real division between management and work force, and noyce in particular really wanted to break that down

and allow his employees to feel that they were connected and really valued within a company. at intel they went so far as to have no offices, just cubicles. if you look at facebook today and zuckerberg and their set-up, it is very much that same more open set-up that really did start in those early years with noyce and his colleagues. > they really shaped the corporate culture that we see right now, it sounds like. > > i think there is a real foundation to some of the companies today in terms of how they run their companies. if you look at the fact that intel had no executive dining rooms, no executive parking spaces. they really wanted it to be more about what you can bring to the company as an individual, and he really wanted to cultivate innovation and let his engineers working for fairchild and for intel feel comfortable to run with their ideas and feel like they were contributing in that way, and they weren't going to be sort of stymied by management or following certain- not that they didn't follow rules, but there was really this opportunity in the sense that what they were bringing as

individuals was really valued and they really wanted to sort of exploit that and to foster that innovation. > congratulations on your film. that is randall maclowry. he is the maker of "silicon valley," airing on pbs' "the american experience." good to have you on the show this morning. take care. > > thank you very much. coming up, traders are taking big bets on gambling stocks. find out if it's worth your risk after this.