a fresh face on capitol hill is proposing landmark changes for student debt. in today's cover story, why drug costs are dropping dramatically. plus, moms at one company say they are forced to choose between babies and the boardroom. and, consumer reports gives tesla its best rating ever. what the glowing review could do for the stock. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, may 10th. i'm angela miles. in today's first look: traders are already shrugging off yesterday's sell-off. stocks fell thursday. the dow hit a record high, but pulled back. the s&p ended a string of

record closes. gold and oil also edged lower. in earnings after hours, priceline turned in profits that were 34% higher than last year, but the forecast fell short. molycorp had a loss that was better than expected - shares rallied hard in heavey volume after the close. facebook is said to be in talks to buy isreali mobile satellite navigation start up waze for $1 billion for its mapping service. it would become facebook's biggest aqcusition to date. and mconald's is cutting the quarter pound angus burger from its menu as beef prices reach a 10-year high. scott bauer of trading advantage joins us now for an early look at the market. and, there was a pullback yesterday, but as a trader, are you surprised we haven't seen more sell-offs? - everybody is expecting this 5% pullback. i don't see that happening. but i do see, over

the next maybe week or too, as earnings really come to a close, the market just settling down a little bit. - reports are out that amazon is trying to come out with some smartphones, including a 3d screen; and microsoft is getting into the tv business. would you buy either of these stocks? - i really like amazon. amazon just keeps reinventing themselves, product after product. they, to me, are almost like apple a few years ago, when you could get excitement over these new products. i think ever since amazon reported earnings, they have had this pullback, traded in a pretty tight range here, in the $250 range - we saw it up a little bit yesterday. i really like that stock. microsoft, if you just go off past history here, trading in the $32 handle. boy, that is really the top end of the range, where this thing has traded over the last 10 years. so, in a global economy, great stock, but i don't see much in the way of appreciation in the short run for microsoft. - the dollar is above the yen for the first time in four years. what do you make of that? - you know, i think it is going to continue. the greenback here

had hit some lows. it is on its rally back, and i really think that it is going to continue and just get stronger. - well scott, it's not take your kids to work day, but we wanted to show your son and his friend on the air. we have some family values here on the show, and they are great looking kids, and i'm sure they're smart as well. - thank you very much angie. they are very happy to hear that. it's been a big week for banks. against the backdrop of angry protesters, bank of america's ceo brian moynihan told shareholders in charlotte, north carolina, the bank has turned a corner and is on the path to higher earnings. a few dozen demonstrators showed up outside the meeting. "bank of america funds coal to $3 billion a year, and i needed to speak out." "i'm hopeful, because there were so many speaking eloquently about the issue, that we were heard." protests were subdued compared to last year's volatile scene that ended with arrests. then there's jamie dimon, ceo of jp

morgan chase, who will fight to keep his postion as chairman at an upcoming shareholder meeting. investors and regulators are criticizing his handling of a $6-billion loss. now the state of california has just filed a lawsuit against jp morgan alleging unlawful debt collection involing robo- signing. the sec is banning a former star on wall street from working with clients. philip falcone, who ran harbinger capital, is agreeing to a 2-year ban from doing business as an investment adviser. he will also pay an $18-million fine. however, he will not admit nor deny accusations that he misused client money. among them, he allegdly manipulated the price of high-yield bonds. it was the headline that shocked wall street this week. attorneys for former enron president jeffrey skilling have struck up a deal with the justice department. upon approval, skilling's prison sentence could be shortened by 10 years. enron's collapse led to financial turmoil for former employees & investors. the justice department says

skilling's deal allows victims to collect more than $40 million in restitution. until now, the government has been unable to distribute that money due to the status of the case. we turned the microphone to you for reaction. "as someone who invested at that time, he should rot in jail. he took advantage of people and couldn't have cared less." "no, i don't think he should be released early. he ruined peoples' lives. he wants out? i don't think so." a federal judge will rule on whether to shorten skilling's sentence june 21st. a new study shows americans are making stunning sacrifices to pay off student loans, and senator elizabeth warren believes she has a solution. a new survey from the american institute for cpas finds 60% regret choosing student loans

to finance their education. 41% delayed retirement savings, 29% delayed buying a house, and 15% put off marriage. this week, elizabeth warren proposed her first bill in the senate. it calls for students to be able to get the same near-zero loan rate that the federal reserve makes available to big banks. "the same banks that destroyed millions of jobs and nearly broke the economy. that isn't right." critics of the warren bill believe it's one more way students will get loans and not be able to pay it back. interest rates on students are set to double to 6.8% in july if congress doesn't act. americans currently owe close to a trillion dollars in student loans. greece is confident that its economic recovery is near. the country's finance minister says he sees recovery from 2014 onwards. unemployment numbers will likely take longer to fall while the country focuses on debt reduction. it was also noted that greeks will not have to worry about new austerity measures. greek bonds are at the lowest level since the

country's default last year. another tragedy has hit bangladesh. a fire at a sweater factory has taken the lives of eight people. reports say the building's stairwells were not constructed properly. it follows last month's collapse of a garment factory that is still claiming victims. the death toll there has risen past 900 workers. in november, 112 people died in a factory fire. the incidents are all shedding light on worker conditions in the country, which is now the second largest apparel maker in the world after china. in our cover story, for the first time in 55 years, americans spent less on pharmaceutical drugs in 2012 than they did the year before. the reason - many drugs went off the patent cliff, allowing much cheaper generic versions to hit the market. a number of blockbuster drugs went off the so-called "patent cliff" in 2012. two of the

biggest: cholesterol-lowering lipitor and heart drug plavix. drug companies such as pfizer in the case of lipitor had their patents expire, and consumers could buy generic versions that were as much as 90% cheaper than the branded version. "it wasn't so much that people were spending less, but prices were down dramatically." it's the end of a roughly 15- year ride upward for investors. so are new drugs in the pipeline, or are we in a trough waiting for the next batch to compete development and gain regulatory approval? "we are in a trough, but the back-end of the trough. we expect growth to reaccelerate in latter 2013 and into 2014." many see the growth coming from specialty drugs that are expensive and treat rare or complex conditions. "alzheimer's, oncology, anti- bacterial drugs have enormous potential. but is there one, now? we haven't heard of it." another factor for pharma investors to consider: the impact of healthcare reform.

"about 20-30 million people will gain healthcare access in the next two to three years. that is a massive amount about to hit the market." damien conover at morningstar predicts as a group, pharmaceuticals may grow as much as 5% annually, with dividend yields of close to 4%. the financial crisis did more than damage portfolios. a new study shows a whopping 93% of financial advisors experienced post-tramatic stress disorder following the economic fallout in 2008. symptoms include sleepless nights and intense feelings of anxiety or fear. as the market swings to new highs, the study says many advisors are changing investment strategies in order to avoid getting caught in a downward spiral. the report did not

menton the health conditions of their cleints. quintiles is joining the team of strong ipos this quarter. stock in the drug-testing firm opened at $40, shot up 11% mid- day, and closed around $42. quintiles leads a line of companies going public this week in a surging stock market. other offerings that priced include residential mortgage company pennymac, financial services inc., and biotech company receptos. barnes and noble stock gets a boost from reports of the possible buyout of its nook. microsoft is reportedly offering $1 billion for the digital assets of the bookseller's entire e-reader business, including nook tablets. it's drawing interest from analysts and investors. barnes and noble stock shot up

15% on the news. wrigley is taking its energy gum "alert" off the market. the company stopped sales of its caffeinated gum on fda concerns of caffeine-related health problems. wrigley says it's pulling the gum off the shelves "out of respect" for the fda's investigation into energy food and drink products. a trendy retailer is running into controversy over its sizes. abc news reports popular chain store abercrombie and fitch does not sell women's clothing in extra large. the store's competitors, such as h&m, sell sizes up to 18. at abercrombie, the largest size is 10. abercrombie did not return our calls for comment. we're spending more moolah on mom this mother's day. we'll spend $20 billion on gifts this year, 11% more than last year. the national retail federation says mom's day has morphed. it's increasingly become less about mom, and more about all the women in the family. meanwhile, merck is being sued for discriminating against moms. kelli smith, a former employee of merck, is suing the company for a hundred million dollars. she says women are

discouraged from advancing their careers at the company and are told they have to choose between motherhood and moving up. she says the drug-maker retaliated against her for drawing attention to women's issues. merck denies her claims and plans a defense. still to come, why a taco joint is getting a run for its money on wall street. but first, in favor of outsourcing: why our next guest says the practice could help our economy. bill moller explains after the break.

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the word is "outsourcing." you certainly know what it means - sending our jobs overseas. we're told it's bad for the economy. but is it really? author daven michaels states in his new york times bestseller "outsource smart" that, on the contrary, it's not only good for the economy, it's good for employers, it's good for entrepreneurs, in fact. so where are we getting it wrong in our conventional wisdom that it's not good? - you know, bill, it's common in a year of elections and so on and so forth for everyone to rally behind outsourcing being bad. but i actually take a contrarian view. today, entrepreneurs are in what i call outsourcing 3.0, and entrepreneurs are actually now outsourcing like the big

companies have been doing. and as a result, they are actually finding success in this economy. - does there have to be infrastructure, though, to support smaller businesses and sole proprietors doing this? - you know, actually today, it is really easy for them. basically entrepreneurs are outsourcing to india, the philippines, eastern europe. they are finding inexpensive labor that is actually allowing them to do their internet marketing, their social media, their telemarketing, and, what i call the bs, the busy stuff. and it's actually making a huge difference in their businesses. - well, small businesses or large, how is it good for the overall economy that a lot of people are doing this? - sure, exactly. let's say that you are a u.s. entrepreneur, and you start to outsource overseas, and maybe you never even had any employees, it was all on you. but now you can actually afford employees. so then you begin to thrive, you begin to spend more money in your local economy. you source goods and services in your local economy. you hire people in your local area, you pay taxes in your local economy. and this is great for the entire nation.

- so, if there is a net loss in overall jobs, there is a net increase in many other areas. - that's true. i mean, right now bill, it is innovation. things are changing so rapidly. but yes, as a result now, entrepreneurs are thriving. now, does everybody win? no. is it a perfect system? absolutely not. but it is innovation. and as a result, businesses are thriving. there are casualties as always, but you know, people have to be entrepreneurs. - briefly, you've got to be smart about it, too. you can't outsource everything. - that's why the book is called "outsource smart." but actually, just so you know, you can outsource just about everything. the key is systems, putting systems in place. - daven michaels, thank you so much. - my pleasure. thank you, bill. still ahead, our traders tell us what could end the bull run in the market. that's next in traders unplugged.

in this week's traders unplugged, joining us from the floor of cme group, alan knuckman and james rameli. good to have you guys here today. topic #1, because we are good to go: are you a bull or a bear, and what could possibly happen to change your mind about this market? - i am very bullish, as we all know. i am a son of a psychologist, so i am looking at this from that standpoint. i am not going to give up on the bull run until all the bears finally give up and want to be buyers. - right, so alan is talking about a price action approach here. i want to look at something a little more fundamental. i am also very bullish this market. however, we do have this debt ceiling issue coming up. september 20th is the deadline. the house of representatives voted today on which creditors they would and would not pay if they hit the limit, so i don't think there's any chance of a halfway civilized agreement being reached by the deadline. - ok. the politics of this are nonsensical in the first place, but i want to put a spin on this: we've got to remember there's a lot more upside left in the stock market, because the vix as it stands right now is low, but it's still 25% above where it was in 2007. so, the vix can go a lot lower,

meaning the volatility can get a lot less, and the stocks can get a lot higher. - topic #2: billionaire george soros is said to have made $60 million off the aussie dollar. what currency would you buy? - i am not looking to buy any currency right now. i think the best trade out there is the aussie dollar short. i think the aussie is the new yen. we saw the yen get hammered today. i think that trade is getting crowded. the economy in australia is faltering. 10% of their gdp is tied to mining. they have reduced consumer demand. they are going to have to continue to cut the rate from 3% to 2.75%. they are going to have to step it up and do more. the aussie is going lower. - seven cuts in 18 months. theirs is the only economy that didn't get impacted by the fiscal crisis, so they are in the driver's seat here, and if you look at the materials and mining sector, that has finally turned the corner, made a comeback. they are going to benefit from that. but i think a better benefactor would be canada. the canadian dollar has

gone above $.995. near-term target, if they can get to $1.01, is back to $1.05. so i think oil, materials, o canada! - topic #3: short-sighted? fund mangers say they don't like chipotle. in fact, there is some shorting going on. is this a stock that you would short too? are you biting? - shorting stocks is a dangerous game because you can get in that squeeze. i am not a big fan of chipotle as far as the burritos go or even the stock, because it is priced at $340 a share. if it had mini options like amazon or apple, there might be different ways to play it, but i think i am somewhat limited because it is such an expensive stock. - i think chipotle is getting ready to test those recent highs. the stock hasn't traded in bearish territory since november of 2012. i like the stock here. the space is great- - it's still burritos! - fast-casual dining is growing at 13% year-over-year, compared to fast food, which is only 3%. - the analysts said their biggest competition is a taco truck that pulls up in front of their store. - let's take a look at our a bonus round question for today, and it has to do with dear ol' mom, because of course mother's day is on sunday. and it's a toughie, so take your time here guys. the question is, which country spends the most on mother's day? is it brazil, the u.s., or france? - u.s. - i have to go with u.s. - it is brazil. - wow. - exactly. happy mother's day,

and thanks for being on the show today. - thank you. - first business news continues right after this.

tesla is on a tear. mark sebastian of option pit mentoring joins us now. mark, is it too late to get in on this ride? - that was a huge move yesterday, but i don't think so. yesterday looked a lot like partially great earnings and partially a big short squeeze. when you get these big short squeezes, typically the stock is going to ease off a little bit. we saw a huge move, but i think you will be able to buy tesla back for about 10% less than its current cost in a couple of days, latest a couple of weeks. - consumer reports is loving the model s tesla. is that something that traders consider when they are looking at this stock? - you know, not as much. i think people are going to care where the sales are, where the volume is, what their production is. can they meet demand? one of the things i'm worried about with this company is not

whether people want to buy the model s, but whether they can supply enough model s's for the number of people that want to buy them. - what about that $95 price target? could it get to that level? - yes, but that is an exorbitant p/e, so they would have to have some real carry- through, and earnings not just be from epa credits like this one primarily was. - what about priceline? this company had earnings after the close. slightly beat. is this stock a buy? - you know, it's an interesting one. it is kind of near its all-time high. it's not moving quite as much as maybe we would have expected. but, i think this is one, especially with the merger with kayak, which could move a lot higher. i think this is one of the real strong growth companies as the economy improves, and they are really well-situated in the travel industry. - mark, thank you for your thoughts today. - thank you. it's the end of the show for us. coming up next week, a stock picker will be here with ideas to plump up your portfolio with small-cap stocks he says are in for a big bounce. from all of us at first business, have a great friday.

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