changes at the top: yet another irs official steps down amid the scandal turmoil. in today's cover story: sunny skies for the airlines. why passenger attitudes are improving. change of tune: how youtube may hold the answer to musicians who lose money to illegal downloads. plus, it's been one year since facebook went public. how to cut your losses if you went all in early on. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, may 17th. i'm angela miles. in today's first look: stocks take a break. the major indices sold off marginally

after jobless claims came in higher than expected, and housing starts fell more than anticipated. gold dropped another 12 dollars and oil moved up 76 cents. jcp is losing more money. the retailer's earnings after the close showed a loss of $348 million, topping the $163 million dollars of last year. and chicago's fed says farmland prices in the midwest rose 15% first quarter because of strong demand. larry shover of sfg alternatives joins us on this friday morning. larry, this is a teflon market. why is it that even negative economic news doesn't stick? - yeah, it doesn't stick. yesterday, three bad numbers, and the market just didn't care. i think it is because there's a reason for stocks to rally if there's tapering talk, and there is a reason for stocks to rally if there is more easing talk. so, good numbers, bad numbers, it really doesn't matter until there's a bigger catalyst to move the market. - however, gold is tarnished. why is that happening? - i think there are two reasons: yesterday we had a cpi

number for april that came out weaker than expected, so that is a short-term relief for gold going down. secondly, there is a lot of momentum with people selling. people are scared. at some point it's going to hit bottom: 1300, 1325 is probably a good place to start buying it. - what do you anticipate for the market today off of earnings coming in from companies such as dell and autodesk? both of those stocks sold off after the close. - they did, and i don't think it really matters right now. the big catalyst comes next week on the 22nd when we have the fomc meeting with burnanke's speech, and also the bank of japan coming out with their rate decision. so until then, i think the narrative is just going to remain the same. we're going to grind higher, maybe grind a little bit lower. but keep in mind, we are up 16% for the year right now. - are traders paying close attention to companies that could benefit from what's

happening in japan? - well, i think they are. people are looking at insurance companies, financials that would benefit. but, keep in mind, they have to hedge their currency risk, because although the nikkei might be up 45% for the year, the japanese yen is down about 27% for the year. so, you are not getting all that gain and loss you had your exposure. - larry, thank you for your thoughts today. - you're welcome. hearings are good to go today on capitol hill, with a congressional committee probing for answers in the irs scandal. steven miller, the acting commissioner who recently resigned from the internal revenue service "under pressure" is expected to testify. reports say miller was aware irs employees purposely gave extra scrutiny to conservative groups applying for tax-exempt status. and an irs statement says another official, joseph grant, commissioner of the agency's tax-exempt and government entities division, willjunerd. yesterday,

president obama named daniel werfel as the new acting commissioner of the agency. werfel, controller of the white house budget office, heads to the irs next week. during a news conference yesterday, the president told reporters he sees no need for a special prosecutor to investigate the irs scandal. he believes the congressional and justice department investigations will be sufficient to figure out what happened. in bangladesh, 300 garment factories are reopening today after closing for three days over safety concerns. last month a factory collapse there killed 1100 people. worker unrest has rippled throughout the bangladeshi garment industry. a manufacturing association said factories have been cleared for adequate safety. meanwhile, in cambodia, three workers died following the collapse of a celiing in a garment factory. in our cover story, a new survey finds airline passengers happier this year with their flying experience than last year. are we just getting used to the new normal, or have there been significant improvements? among airlines, low-cost carriers are still the

favorites. "when i'm flying southwest or sun country, they seem to work harder, and i like them for that reason." but traditional carriers are gaining in customer satisfaction. "i was very surprised that united was very good." baggage fees, however, still carry... baggage. "i accept it, but i'm still annoyed. i have to be honest with you, i am, i am." "i'm pleasantly surprised that overall satisfaction is up, although we don't like paying for baggage or the aisle seat. i think that we've wrapped our heads around the 'new normal' in the travel industry." in short, we're getting used to it. but that doesn't mean there haven't been improvements. of all north american-based carriers, we're most satisfied with jetblue and southwest. "jetblue moved away from ny as its base, expanded and got out from under that jfk bottleneck." also, it probably helps that jetblue doesn't charge for that first checked bag.

here's the rest of the list from jd power and associates' survey. alaska was the highest traditional carrier. on the bottom, u.s. airways, which just merged with american. "i think people who are checking in online or at a kiosk are happiest in the survey." - what do you look for? "cost." a lot of us will be price- shopping soon. the trade group airlines for america predicts slightly more passengers will fly this summer than last year, including a record 27 million international travelers, reflecting pent-up demand after the recession. "right now, it's gonna be a big money-making summer for almost all the airlines." lastly, airline employees who greeted passengers with a smile helped their airline score at least a hundred points higher in jd power's customer satisfaction survey. and that costs nothing. american airlines is pl

allow passengers that do not have rolling suitcases to jump near the front of the line. less luggage on flights is a way for american to reduce boarding times. here's a tip: you may be able to check your bag free of charge at the american gate. woes are adding up at walmart. cash registers are slowing down at the world's largest retailer, according to the latest earnings news. same-store sales fell 1.4% in the first quarter, and company execs expect flat to 2% growth for the current quarter. blame is being placed on higher payroll taxes, delayed income tax refunds, and cold weather for putting a damper on shopper spending. in trading yesterday, walmart shares fell more than a dollar. standard and poors is taking warren buffett's berkshire hathaway down a notch. the ratings agency downgraded its

credit rating from aa+ to aa. while calling berkshire "an excellent business profile," s&p lowered the rating because of the congolmerate's dependence on core insurance operations for dividend income. s&p famously downgraded berkshire to a "negative" outlook after warren buffett squabbled with the agency in 2011. former bp exec tony hayward is back on top - temporarily. he's the new interim chairman of mining company glencore xstrata, three years after resigning as leader of bp. hayward took heat for the deepwater horizon disaster in 2010. his appointment is part of a reshuffling of top management jobs at xstrata as the company cuts costs. jpmorgan shareholders have a surprise in store. as shareholders vote whether to strip jpmorgan ceo jamie dimon of his chairman title, the results are on lockdown.

typically shareholders can get an update on the votes as they come in. however, the new york times reports the firm totaling up the votes is keeping them secret from some shareholders until tuesday. the firm says it's because of a request from a wall street lobbying group, pension fund shareholders, calls the practice unfair. a couple of drug stocks are getting a shot in the arm from promising cancer treatment results. bristol myers squibb stock is up 31% this year. the company saw positive results from a two-drug combination that helped reduce tumors in patients. and swiss pharma company roche holdings tested a single drug, which also reduced tumor growth. that stock is also up for the year. the ipo market remains brisk. this week homebuilder william lyon homes gained 2% in its opening day of trading thursday. tableau software debuts today under ticker symbol "data" on the new york stock exchange. the company has a market cap of $1.7 billion after upping its price target ahead of its opening day. and happy "public" birthday to

facebook. the social network became a public company one year ago oy 38 per share. stock last closed at $26. coming up on the show, a trader offers ideas on what investors should do if they are waiting for the stock to go above its ipo level. results are disturbing from a round of safety crash tests of suvs. out of 13 popular compact suvs on the road, only two passed the safety test. the insurance institute for highway safety rated the subaru forester the safest, while the mitsubishi outlander sport was deemed "acceptable." the ford escape, buick encore and jeep patriot were among those rated "poor." the new test targeted the front of smaller suvs, a catagory which is growing in popularity on the roads. super soccer star david beckham plans to hang up his cleats. beckham is retiring as a professional athelete. he ends

his career after assisting the l.a. galaxy to consecutive championships, plus a host of championship wins overseas. beckham turned 38 this year. the forecast is sunny for summer jobs. 3 out of 10 employers plan to add jobs this summer season. while that's unchanged from last year, more employers are hiking hourly pay to more than ten dollars per hour. the most in-demand jobs are in leisure and hospitality, manufacturing, information technology and retail. still to come, checking in on america's balance sheet. that's later in traders unplugged. but first, nearly all of the music obtained by consumers is downloaded illegally. next, we hear one musician's plan to amp up profits. stay with us.

the head of warner brothers television unit will resign. bruce rosenblum will leave warner bros. after 25 years with the company. rosenblum was passed over for a promotion to run the entire entertainment unit of time warner earlier this year. warner bros. suffered a loss following this year's flop, "jack the giant slayer." the company is now shuffling its tv and home entertainment business. now on to controversy in the music industry. the recording industry association of america finds that 95% of all music downloads online are done illegally. john seda, artist and founder of bornamusician.com, is here this morning. good morning to you, and clearly this is a huge

problem. so are artists behind the scenes maybe saying that they're feeling ripped off because of this problem? - yes they are. yes, they do feel that way. their intellectual property is being used without their permission. but there was also a time where people felt that this was the way, like the new generation of musicians coming up believe that this is the way, because nobody taught them any differently. - realistically, is there a way to fix the problem? - yes there is, because most of the websites out there today are not fan-based. the only site that is fan-based is youtube, or vimeo, right? but the cool thing that youtube came up with is that they developed a watermark system, so that when people upload their music to sell, and anybody used their music, let's say without their permission or the artist uploading their music video, they get paid 60% more in the united states and 40% more in europe than they would normally get going to youtube direct, which is the same playing field as the major labels. so, we

definitely have made a major breakthrough, and i am hoping that more sites follow in the steps of youtube. - what are some other ways that perhaps musicians do feel like they are cheated? - well, the problem is a lot of this stuff happened because, when the change of product came over from cds to digital, there was no way to control it, and nobody ever put a lot of time until steve jobs came around and he branded itunes. the major labels fell asleep at the wheel. so, when there was a lot of controversy and a lot of people trying to come up with new ways, but the bottom line was they were promoting free music, and look what's happened: it didn't work. free music does not work. - thank you for your thoughts today. that's john seda. he is founder of bornamusician.com. thanks again. - thank you. still ahead, some traders have very high hopes for the market going forward. we'll break down the bullish predictions next in traders unplugged. then later, a potential way to make money on facebook if you bought the stock on ipo day a year ago.

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about your weightd yo t. together we can make a choice to end obesity now. a public service from the obesity action coalition. at the ready to talk about explosive moves in the stock market, alan knuckman and andrew keene join us from the floor of cme group for traders unplugged. topic 1: what's up? there are wild calls on this market. some people are saying s&p 500 - 1,900. maybe we see the dow at

20,000 by 2020. is now the time to become very, very bullish on this market? - i don't think so just yet. i am more long than short in my book, but i always have short positions on, i am always short the global growth stocks. gld is one i am short. su i am short. so i don't mind being in some short positions. i'm being long in consumer staples. being long google is the right play right now. being long some other plays in the real estate market as well. banks. - i would like to point out that the small stocks have led this rally. we have got the russell 2000, which is up 16% more than the rest of the market. so, looking at the russell, technically speaking, you could see a move up to 120, and that is about 20% higher than we are here. so, technically speaking, there is still a lot of upside left. - topic 2: gov-mint. the deficit is shrinking, due in part to the government making money on the bailouts, of all things. is this a gimmick, or is the u.s. actually getting its fiscal house in order? - i think it is also a good sign, they made $51 billion off the student loan program.

you're going to say, "oh, that's terrible." well someone had to make the money. they backed the loans, so instead of the banks making the money, the government made it. that's nice, and the dollar is at the highest level since mid-2010. so somebody is doing something right. - obviously the government knows what to do, they let bear stearns fail and then they took a piece of gm. look at gm right now, 52-week high. that stock continues to go higher. aig has been on fire as well. so the government seems like they know what they are doing. is it a scam? kind of, yes. but they basically can pick and choose what companies they want to save and what they don't want to save. - and the deficit is going down, so i think things are getting better from the fiscal standpoint. maybe people don't believe, but you look at the paper, it's true. - topic 3: window into microsoft. is there a trade here, or is this a buy and hold? - as much as alan thought i was going to come in here and say microsoft is a short, it is going to go out of business, i can't say this, because the stock is way too strong to the upside. but if you look at the surface, it only sold 1 million units, when the ipad sells about 16.5. so i think they have some problems - windows 8 as well. but if you look at the chart, it is way too strong to

short. so the only play i have on right now is to be flat, flat or long in microsoft. that's it. - the stock traded between $32 and $24 since 2009. that target has moved to $40, so we have had a quick run-up here recently, but there's still about 15% more to go, and i think that stock has finally come to life. there is a reason that bill gates is one of the richest men in the world. for a reason. - i would rather be long yahoo or google instead of microsoft, but they all look very strong on the charts. - time for your bonus round question: what dessert has become so popular it was recently used by a professor as an economic indicator? - ice cream consumption? - i am going to say sundaes. - cupcakes. - the cupcake. - that's a good one, because those things are 4 bucks a pop. - i am glad you liked it. first business news continues right after this.

it was just about a year ago we

were highly anticipating the opening day of facebook. joining us now is trader tim biggam of tradingblock. good morning, happy friday, and what a year it has been at him. - absolutely. happy friday to you, angie. and certainly facebook, since the ipo price at $38, about two weeks later, ran right straight down to $26. since then, the stock has been pretty much sideways. so, this stock is just kind of chopping around here. we'll have to wait and see if it breaks out to the upside any time soon. - that is just the question. i know a lot of average investors, those were the heavy buyers of this stock, and they are feeling very stuck. is there any hope that they will be able to get their money back at least? - i think facebook will probably be a grinder higher here. certainly the froth that we saw at the ipo is out of the stock here, and really came out rather quickly. going forward, i

think it will probably grind higher. i don't think it will get back up to anywhere near $38 over the next year or so, but a 10% or 15% return certainly could be in the cards. maybe putting it at somewhere around $30 or so next year. - is there any way to make money on this stock if somebody is holding this for the long- term until it goes back to that level? - absolutely. selling some call options against the stock is always something i like to do on stocks that seem to have a defined trading range here. so, it is a way to bring in some income, although you are capping off your upside, so that's the trade-off here. but given the fact that facebook doesn't look to be popping anytime soon, i think selling some calls against that might bring in some additional income as you wait for that slow grind higher. - tim, great to have you on the show, and thanks for the information. have a good weekend. - you too. thank you angie. it's time for us to close up shop for this week. coming up next week, how some mortgage lenders may be tricking consumers into skipping the fine print. from all of us at first business, thank you for watching, and have a great friday!

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