the power of the irs to go after money stashed overseas. in today's cover story, gaga for google. investors rush to buy shares as the tech giant takes the wraps off hot new products. plus, spilling the truth on why gourmet coffee prices are set to spike. and, gatsby glams up the box office. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's thursday, may 16th. i'm angela miles. in today's first look: traders and investors will look for the record run in the stock market to continue, especially the dow, which has had a record

20 closing highs. yesterday, the dow closed up 60 points. the nasdaq gained 9 points as google soared to an all-time high, and the s&p cruised to a record finish. gold futures, however, slipped below 1400 as the dollar gained. oil inched up 13 cents. president obama pushes for integrity at the irs. he's already accepted the resignation of the acting commissioner of the agency. he's holding a news conference today. activists are at it again. this time hedge fund manager barry rosenstein is taking a stake in groupon and zynga. both stocks have been battered in the market. and the founder of tesla plans to pre-pay on the electric car company's loan from the government. todd horwitz of average joe options joins us on the show now for a closer look at the record run in the stock market. good morning to you, and what stocks and sectors are leading the charge higher? - good morning angie. you know, right now, it's like monopoly - all the stocks are going up now. especially the defensive sector has been very strong, financials have been extremely

strong recently, and with yesterday's run in google, you saw a little bit of a move there, but technology is still a little bit weak, not really participating. you are getting a big push from the defensive stocks, and you are getting a big push from the financials. - cisco's earnings came out after the close. will that give a push to the market today? - you know, cisco always under- reports and over-delivers. the stock was trading up after yesterday's close about 5%, so i think it could go up a little bit, but really if you look at cisco in general, it is only up 1.5% for the entire year. so, i don't really think that, although it's good news, i don't think it is going to have much effect or push this market much higher. - and you mentioned google, which is now in uncharted territories. is there any reason to buy this stock at these levels? - absolutely not. i think that in the overall market, if you're an investor, you're better off

observing the market and waiting for a better opportunity. obviously, if you are a trader and you are a professional, you can play around a little bit. but, for an investor, you want to sit back and observe these markets. they are totally like playing monopoly right now, and the money is flowing in freely, and we are in what we call a blowoff condition: the market just goes up, up, up, regardless of price and time. - thank you todd. have a good trading day. - thank you. investors were downright giddy about google as the tech giant opened its annual conference for software developers. the price cleared $900 wednesday - as our cover story explains, much of that as the company revealed its newest products. google's steady climb in its stock price for the past month has been fueled by expections for what the company best known as the internet's dominant search engine would announce at a san francisco conference. the audience? primarily software developers who come up with different apps on which google can then sell advertising. "the more apps you have, the more advertising you can have; and the more ads, the more money they make." google announced a new gaming service, a music subscription

service to take on apple's i- tunes, and a new online conversation app called "hangout." its commercial compresses the transformation of boyfriend to fiance into 16 seconds. despite all of this, retail analyst jim dion says google needs to push its brand more. "the average consumer doesn't know that gmail is google mail, or that android is google. products would benefit because people would know it's a big name behind it." retail analyst jim dion says google needs to push its brand more. "the average consumer doesn't know that gmail is google mail. or that android is google. products would benefit because people would know it's a big name behind it." google also unveiled an updated android operating system that cr

samsung's version. "it's going to make the phone faster, helping you to multi- task and create a better user experience." there are also updates to google's search and map platforms. the conference continues today. amazon workers in germany are on strike! the 5,000 striking union employees want more money from the e-tailer. according to usa today, workers want christmas bonuses plus extra money for working nights, sundays and holiday. amazon responds that employees at its german distribution warehouse are already paid on the higher end of the pay scale. in the u.s., there's no let up of striking fast food workers. demonstrations in new york, chicago, detroit and st. louis have now spread to milwaukee. restaurant chain workers there are demanding $15 an hour and the right to unionize. employees from mcdonalds, burger king, and taco bell all took to the streets. retail workers from chains including t.j. maxx and dollar tree also joined in.

the u.s. deficit is shrinking much faster than expected. the congressional budget office estimates the deficit will fall to about $642 billion by september - $200 billion less than predicted three months ago. until now, the federal budget deficit has topped $1 trillion every year since the financial crisis. some of the money will come from bailed out mortgage giants fannie mae and freddie mac making large dividend payments to the government this year. the economic outlook is less assuring in europe. the region's economy shrank for the sixth consecutive quarter. france fell into a double-dip recession, with president francois hollande expecting lower growth this year. analysts are not expecting any major policy shifts from euro leaders. in germany, chancellor angela merkel faces re-election in september. and the european central bank has already cut

rates to a record low. next week, european commissioners will meet in brussels to discuss boosting economic growth. the largest bank in europe is talking about letting 14,000 workers go to cut costs. hsbc set out a plan to save $3 billion by eliminating jobs, along with selling assets while expanding in faster-growing markets. bloomberberg news reports analysts view it as a sign the bank is struggling to maintain its performance. the hsbc job cuts will be worldwide. as a follow-up to the oil market manipulation investigation we told you about yesterday, regulators are stepping up the probe. bloomberg news reports an international securities commission is reviewing whether benchmark prices set for the oil market meet international standards. royal dutch shell, bp, statoil and platts, which collects and publishes oil prices, are all under investigation, and are all said to be working with investigators. the uk's office of fair trading reportedly has received no credible evidence of manipulation in the oil spot and futures markets.

a deadly fungus is spreading through coffee crops south of the border. the fungus, known as "roya," will likely kill off about 16% of coffee crops in central america - that's where some of the rarest beans are grown. traders say it will likely mean a price jolt on gourmet coffee. "where you are going to see coffee prices hold or even go up a little bit is in your higher-end coffees, such as starbucks or gevalia." that was jack scoville of price futures group. he expects lower coffee production in central america will boost production in the u.s., as many workers will likely head across the border for work. in earnings news, john deere & company got a boost from a price hike. revenue at the equipment maker is up 9% from last year after raising prices. but, the company cut its sales outlook as wet weather conditions delayed crop planting. deere stock fell $4 in trading yesterday. meanwhile, macy's stole the show. the company had higher first quarter sales and raised its dividend by 25%. analysts

say macy's has snagged customers from struggling competitors. macy's stock rallied more than a dollar. it's official: united airlines passengers will board for take- off on a dreamliner monday. the 787s have been grounded since mid-january due to battery overheating. a fix has been made. the chicago tribune reports the airline's cfo says he will be on the first flight since the dreamliners were banned from flying. when it comes to the controversial topic of climate change, insurance companies are siding with science. according to a new report in the new york times, from superstorm sandy to devastating droughts, many insurance giants believe climate change is a growing disaster threat. however, the times reports the industry has stayed on the sidelines when it comes to policy change. insurance claims for dog bites are "pawsing." state farm insurance reports claims fell by 1.4% last year, the first decline since 2010. however, the average payout increased to $29.70 from $29.30.

get ready for menu madness. a mcdonald's favorite is getting some competition. burger king will release its own version of the mcrib next week. rib mania will likely ensue, as the sandwich is available for a limited time only. meanwhile, taco bell, looking to increase its breakfast menu, is testing a waffle taco. microsoft is giving "star trek" fans a new way to brush up on speaking klingon. this is a clip from the new "star trek" movie opening at the box office tomorrow. to get in on the marketing, microsoft has upgraded its bing language translator to include "klingon" in latin and the klingon alphabet. this is the translation of we hope you think first business is the best financial news show on the planet.

still to come, is a box office underdog setting the pace for a record summer at the movies? that's later on. but first, the latest on the irs scandal rippling through washington. plus, why tax accountants are saying now is the time to fess up to any hidden foreign cash. that's next with bill moller.

it's a scandalous week in washington. today, president obama will take questions at a news conference after revealing last night he has accepted the resignation of steve miller, the acting commssioner of the irs. the president called the misconduct of employees within the irs "inexcusable" for apparently putting extra scrutiny on tea party organizations applying for tax- exempt status. "americans have a right to be angry about it. the president is saying 'i will not tolerate this kind of behavior in any agency, but particularly the irs, given the power that it has and the reach that it has in all of our lives." meanwhile, lawmakers are calling for action. house speaker john boehner told reporters he wants to know who is going to jail for the scandal. as we know, the irs has been in trouble for partiality in investigating conservative groups. now it may be about to snoop on people like you. as it did with banks in switzerland, this government agency now has a

summons to allow it to gather information on u.s. taxpayhers. jim duggan is an attorney with duggan and bertsch. who is it going after? - it is going after any non- reporting, non-disclosing u.s. taxpayer. - who has a foreign account. and i remember the big ubs scandal a couple of years ago. this is tied to that? - correct. it really was the beginning. the ubs scandal unearthed about 60,000 u.s. taxpayers that were not reporting their income taxes, and that has led to a couple of voluntary disclosure programs since then. - so a grace period allowing people to come forward, and with each of these disclosure programs - and we're into the third - the penalties still keep ratcheting up. - they do. it's really remarkable. the first program only netted about 14-15,000 people, and again, if that was a small fraction of the ubs crowd, imagine worldwide how many there are. so they came back with another one. and in the second one, the penalties were a little higher. that came to the end, they got about

another 15,000. and now we are on number 3, and hopefully they are getting more. - why aren't people coming forward? because as i understand it, eventually the irs will get all of them, because they know who they are. - yeah. i think it is fairly remarkable that people are not coming forward at this point in time, because the real risk is incarceration. and to lose your liberty over a couple dollars is a very difficult proposition. unless the people are really willing to stay out of the country or leave the country, i think they have to come forward, to come clean, pay up, and move on without this threat of being jailed. - all of this is because of a couple of acts of congress that have allowed the irs to do this. - yeah. the laws have been around for a while, believe it or not, just that the enforcement was so weak. and as a practitioner in the area, anybody who had undisclosed foreign accounts, we really could just come forward, hypothetically, anonymously,

and get a settlement and be done. that has since changed. so the laws are now being enforced. in 2010 there was an act called fatca, the foreign account tax compliance act. and that really has set the stage for the irs to say, "we want to know everything you have, we want everything offshore disclosed, and if you don't, you are presumed criminal." - james, real quick, do you have examples of people being strung up by the irs as sort of examples of what could happen to you if you don't come forward? - it's not that people are being strung up as an example, it's that you're going through the voluntary disclosure program. if you go through the program, and you just take their rules as they are laid out- - you pay the penalty. but if they find you- - if they find you - this is the key issue, bill - if they find you first, the voluntary disclosure program does not apply to you. and therefore what we are seeing now is as each of these acts comes down, you are not going to be able to come forward first. - jim duggan, thank you so much. - thank you. still ahead, the latest plot twist at the box office. why it means big money for one studio this summer. that's next.

busy times at the box office. a billion-dollar hit, "great gatsby"'s great opening, and fox film studio is set for an epic summer at the box office. our movie guy, erik childress, joins us on set this morning. good morning to you. and "gatsby" performed better than a lot of critics thought it would, including yourself. why is that, erik? - i think while we were all sort of looking at "who wants to go see 'the great gatsby?'" we sort of overlooked a very key demographic that is very underserved during the summer, and that is women. i think they went out for the glitz and the glamour and the spectacle and dicaprio and all that. maybe

and now are going to get an f on their book report because of it. but i think that's the reason why. - always good to read the book then see the movie. let's take a look at what else happened over the weekend at the box office: "iron man 3" coming in at number one. have we hit the billion-dollar mark? - we are over $950 right now. - there you go. "the great gatsby," $50 million; "pain & gain," "tyler perry" and "42" coming in at a virtual tie at $4 million. coming up this weekend, "star trek into darkness." a lot of controversy on this one. a very late screening for critics. and what are critics saying? - most critics aren't being subjected to screenings until the night it opens in imax, which was yesterday, wednesday night. the reviews of the movie so far have been pretty positive. it seems like paramount might have hedged their bets and sort of walked away from the table, got their positive reviews and then left the rest of us in a lurch. privately, a lot of people are saying a lot of negative things about the movie. it is going to be curious to see, when it comes out, if those negative reviews impact it at all. - what should people see this weekend? - "mud." matthew mcconaughey and reese witherspoon. it is the

only movie in theaters worth seeing. - okay, coming up this summer, lots to talk about hero with fox having some potentially big hits. "epic," that could be one. - yeah, "epic." well, they've got the second biggest hit of the year right now with "the croods." they had a big animated film that had the benefit of having two months with no family films out there in the marketplace. this film has one month until "monsters university" comes out, so i think it could do just as well. - "internship," a.k.a. "wedding crashers reunion." - not a direct sequel, but owen wilson and vince vaughn. vaughn's last films haven't done too well, but i think with the summer boost and the advertising, i think this could do $75, maybe even $100 million. - what about "the heat?" - "the heat" is a film that i think is going to be a very served by women this summer. sandra bullock, melissa mccarthy, it's from the director of "bridesmaids." mccarthy is very hot right now- - oh, she's got a great name right now. - and bullock had a hit right around this time with "the proposal" a few years ago, did $160 million. i think "the heat" could do that well. - also on the fox list, "turbo." - "turbo." mid-july animated film with a lot of animated competition. in front of"despic-

men?" - another "x-men" film. hugh jackman is returning to his role. i think this one will get a boost because of that. the last couple of "x-men" movies have done ok at the box office for fox. i think this is will do just about that. - and "percy jackson." - and "percy jackson." no one is going to mistake this with the "harry potter" series. the last film didn't even do $100 million, so i think this one might do in the $60s. - erik, thanks for coming on the show. - thank you. still ahead, shares of lululemon were headed for the floor during the see-thru yoga pants drama. why the stock is now an upward- facing dog, next in chart talk.

and now for chart talk with matt cavanuagh of cmz trading. he's here to talk about lululemon. this is a stock that we talked about heavily when they were dealing with that see-through yoga pants problem. and matt, you told us it was a buy signal. you were right on. - yeah, this is one that worked out, but i tell you, more often than not, when people are running for the gates, as long

as nothing has changed, there's still a good story there, a good staple brand for a staple company that you get to buy on sale, more often than not, you are going to be rewarded. so when others are panicking, sometimes it's best to step in. - is it too late to buy the stock at these current levels? - well, i don't like the stock nearly as much here. i think there are a lot of good things that have happened. obviously you have seen the stock run up over 30%. some of the short interest has come in. but i think that, really, if you are going to enter new positions, wait until a sell-off. it is expensive, but they could continue to surprise on the upside. but i think we test $75 again on the downside, and maybe you get in there. - do you see any other lululemon-esque stocks out there for our viewers? - i tell you what, i would love to find some more, and if i do, you will be the first to know. - thank you, matt, and have a great trading day. - thanks. that's a wrap for now. coming up tomorrow, it's traders unplugged. reasons for and against becoming extremely bullish on the stock market. join us as our traders get real. from all of us at first

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