apple on the defense: the tech leader's ceo makes a case for changing the tax code. in today's cover story, why restaurants are growing tiny plants for big profits. plus, the devastating tornado that roared through oklahoma spurs on other states to prepare for stormy weather. and, traders await testimony from fed chair ben bernanke on capitol hill. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wedesday, may 22nd. i'm angela miles. in today's first look: saks for sale? the high end retailer reportedly has hired goldman sachs to consider its alternatives, including putting saks 5th avenue on the market. the news prompted buyers of the stock after the close.

net app plans to lay off 900 workers. the network storage company's earnings slipped, and the forecast missed the mark. and, high on the fed: the dow and s&p did again. both closed at record levels. the nasdaq ends at its highest level since october 2000. stock gained on comments from two fed officials that quantitive easing is not close to over yet. larry shover of sfg alternatives joins us now for an early check of the market. good to have you on the show as always, larry. - thank you. - and what will traders be watching? definitely, i would think, bernanke has to be on the list. - you are exactly right. i think people are looking for nuance. people don't really think he is going to dial back purchases altogether, but they are booking at nuances, like what is going to cause him to

dial back purchases? what inflation level, what jobless claims level, is he going to change his mind about that $85- billion-a-month asset purchase level? - tim cook was on capitol hill yesterday talking about apple and taxes. did it take any shine off the stock? - you know, put it this way, he was on capitol hill for a long time yesterday, and really all he could say was something that would be negative for the stock. the fact that he spoke for so long, and the stock was down just a little bit, in my mind was very supportive for the company and for the stock long-term. - what are some sectors that you would look at or consider investing in right now, larry? - you know, i still like the financials and the materials. the financials would be the banks or the insurance companies. materials would be just anything with regards to the home-building sectors, because, let's face it, our economy is struggling along, it's going in the right direction. those two sectors by far will be the long-term beneficiaries of an economy that is getting better slowly but surely. - commodities are struggling as well. we have been talking to

many traders about this situation. what are the commodities telling you? - what the commodities are telling me is that we are just living in a supply world, and we just have to get used to it right now. let's keep in mind that china has made their end of the bargain very good with their demand for commodities. it is really been ex-china and asia that need to pick up the gap right now. so that has not been happening, causing most base metals and commodities to drop, with consumers looking for that demand as something that we just cannot ration right now. - larry, thank you for your thoughts today. - you're welcome. jamie dimon gets a big vote of confidence from jp morgan's shareholders. only 32.2% voted to strip dimon of his chairmanship of the bank. it is one of his two titles. he is also the ceo. after what have come to be known as the "london whale" trading losses last year, totaling $6 billion, some had argued the chairmanship role should go to an outsider. "if he had lost his chairmanship and gotten an independent chairman, that would've been a huge broadcast to the entire industry that too

big to fail, too big to jail issues are coming back. but basically what this says is investors have pretty much forgotten about the catastrophes we've been through and the game plays on now." a proposal to split the job in two got 40% of shareholder votes at last year's annual meeting. in oklahoma, damage is being assessed from one of the worst tornados to rip through the u.s. in years. in its first survey, the national weather service says winds clocked in at more than 200 miles per hour, indicative of an ef-5 tornado. at least 24 people were killed in the storm's path, including 9 children. today, storms move to another section of the u.s. "the severe weather is going to be up in ohio and pennsylvania, and storms should calm down from what we saw monday and tuesday." that was accuweather meteorologist henry margusity. warnings are already going out for oklahoma residents to be aware of scams, including

avoiding workers going door-to- door who ask for full payment up front, pressure for an immediate decision and only take cash. one crew considered legtimate is team rubicon, which brings in veterans to assist in disaster zones. relief efforts are ramping up to help victims of the devastating tornado. oklahoma senator tom coburn assured residents that "any and all available aid will be delivered without delay". president obama offered the full support of the government and addressed the severity of the situation. "we don't yet know the full extent of the damage from this week's storm. we don't know both the human and economic losses that may have occurred. we know that severe rumbling of weather, bad weather, through much of the country still continues. and we're also

preparing for a hurricane season that begins next week." corporate america is also stepping in. home depot has pledged $1 million to a weather impact fund to help those in oklahoma and the southwest in anticipation of more severe weather. red cross is taking donations at 1-800-red-cross, or text "red cross" to 90999 to make a $10 donation. tesla motors speeds up its plan to repay a government loan. the ceo says it may happen as early as today. the loan came from the department of energy and was extended to the electric car maker in june of 2009. it covered the cost of developing and building the company's model 's'. the repayment of more than $450 million will cover the balance due plus interest. a new twist in the irs scandal. lois lerner, an irs official in

charge of requests for tax- exempt status, will reportedly take the fifth at today's congressional hearing. deputy treasury secretary neal wolin is set to testify. yesterday, tea party groups protested outside irs locations in several u.s. cities. protestors in chicago had this to say: "it's the abuse of power. they feel they have the power to do this to these groups, and people are not being treated equally." "they give liberal groups such a wide berth. they don't even care about the liberal groups like media matters that give money to political causes. they say they're not political, but they really are political." meanwhile, on capitol hill, lawmakers grilled former irs commissioner doug shulman, who led the agency from 2008 to 2012. stabenow: "but why didn't you know when you were there?" shulman: "i- i agree that this is an issue that when someone spotted it, they should have run up the chain and they didn't. and why they didn't, i don't know." shulman contends he was not

responsible for the controversy and regrets it happened when he was at the helm. as federal reserve chairman ben benarnke heads to capitol hill today to talk about the economy, the wall street journal reports traders are concerned about comments in a fed paper regarding high-speed trading. it calls for trades to be executed every half-second, versus the current steady stream of computer trading. high- frequency prefer high speeds, saying it adds liquidity to the market. the fed paper argues it blocks out average investors. a bill that will help approve construction of the keystone pipeline is expected to pass the house today. the legislation would speed along the construction process of the pipeline's northern route. the plan is heavily supported by house republicans. however, today house democrats will offer up amendments to the legislation including an export ban on oil transported through

the pipeline. the white house threatened to veto the bill. tomorrow, officials from caterpillar and the united steelworkers' union will be back at the negotiation table attempting to pound out a deal. union workers rejected the company's 6-year contract back in april. caterpillar at the time was proposing to freeze wages and offer less job safety to senior workers while offering bonuses to new workers. the two sides stopped negotiations may 8th. cruise cancellations have put carnival in rocky waters. the company has issued its second profit warning in three months. it now expects 2013 revenue to be down 2-3%. shares fell more than 4% in trading yesterday. carnival's stock has taken a hit due to some major mishaps on several cruises. best buy is still losing money, and investors are responding by sellng the stock. shares fell nearly 5% yesterday. best buy lost $81 million last quarter. the new ceo who joined the electronics company last august

blames costs related to the retailer's turn-around. a protest at gap's annual shareholder meeting over worker safety: this comes in the wake of the collapse of a bangladeshi clothing factory last month that killed more than 1200 people. gap clothes were not made in that factory, but the company imports more clothes from bangladesh than any other american company. gap has refused to sign an international agreement to improve safety at factories. in what appears to be a public apology tour, the ceo of abercrombie and fitch has agreed to meet with a teen body-image activist. the ceo, mike jeffries, told an interviewer that his company's brand is "aspirational" and therefore isn't interested in selling clothes larger than size 10. that quote ignited a backlash. now, jeffries says he will meet with activist benjamin o'keefe, who wants the retailer to stop discriminating. microsoft is hoping its new x- box has enough of an x factor with gamers. the brand-new game console, microsoft's first in 8 years, hit the market this week. gamer stocks have slid considerably given the market filled with tablets and smartphones. however, microsoft is partnering with the nfl and steven speilberg to help develop cutting-edge content. the console, dubbed xbox-one,

will be available by christmas. the computer that beat out a human on jeopardy has a new job! ibm is putting "watson's" technology to work in customer service as an engagement advisor. it's expected the "brainy" computer will be able to assist with customer service calls in the reatil, banking, and insurance industries. still to come, growth prospects for the restaurant biz - new steps toward sustainability. that's later on. but first, could major changes be ahead for apple and its stash o' cash? that's next.

the senate is going after close to $1 trillion in money that is untaxed and housed offshore, and for now the focus is on apple. "it is completely outrageous that apple has not only dodged full payment of u.s. taxes, but it has managed to evade paying taxes around the world." "we don't depend on tax gimmicks. we don't move intellectual property offshore and use it sell products back to the u.s. to avoid taxes. we don't stash money on some

carribean island." tim cook, the ceo of apple, also told the senate panel the u.s. tax code failed to keep up with the digital age, and it's past time for a simplified corporate tax code, one that has a reasonable tax on foreign earnings, allowing for a free flow of capital back to the u.s. david elyashar of horwich- coleman-levin joins us on set this morning. good to have you back here. is tim cook correct? do we need a better tax code for corporations? - certainly tim is correct in that companies like apple are disincentivized from bringing back foreign earnings back to the united states, because the corporate tax rate is so high at 35%. - and when tim cook tells the senators that apple does pay its taxes - for instance, he said that apple paid $60 billion last year - is he being truthful, or is apple evading the tax laws here? - what tim is saying is that domestically in the united states, they are paying their fair share of tax. but certainly they have opened up

foreign subsidiaries abroad to fund operations and manage them, and it's their prerogative to open up foreign operations in the lower tax jurisdictions abroad. - right. so one of those places happened to be ireland, which the senators uncovered. but do you think that there will be fall-out for other corporations? do you think just having these senate hearings will maybe put pressure on corporate america? - i don't. and that is really because what companies like apple are doing is perfectly legal, and it makes perfect business sense for a lot of these companies to open up foreign subsidiaries to run their foreign operations. and in apple's case, they actually sell over half of their products abroad. - do you think we'll see any changes in the tax code any time soon, david? - well, you know, we have in the past, and there have been tax holidays where as a courtesy, the united states has let companies, as a onetime courtesy, bring back money to the united states tax-free. so we could possibly see that

again in the future. - david elyashar. good to have you on the show this morning. thank you. - thanks for having me. still ahead, why more restaurants are turning to tech to keep diners happy. that's straight ahead.

where can you find 33 different ice tea makers, 9 different sneeze guards, competing pancake batter dispensers -

you get the idea. it's our cover story's take on what's new at the 94th annual national restaurant association show. what's new? restaurants using smartphones, tablets and apps as much as you are. if there's a wait, a host using "buzztable" will text to your smartphone information that may keep you from moving on to another restaurant. "you can check your waitlist progress, you can see what specials are selling, get reward coupons. it really keeps people engaged and reduces walk- aways by 45%." another trend that's growing - micro-greens: not fully-grown plants, but sprouts of fennel radish, carrots with just as much flavor available for harvest in a fraction of the time, space and cost. carts with a week's supply are replenished as needed by amb- eco, which opened its doors three months ago in the chicago suburb of des plaines, illinois. "we're not claiming to provide all the produce a restaurant needs, just the expensive ones, to cut costs from a purveyor." along with a lot of discussion about where the restaurant industry is headed. culinary schools are now half filled by

women. and there are helping hands along the way. "the james beard foundations can connect women with other chefs, and i can name two other groups that help women enter this industry, where they can gain advice from people 'already there.'" this year, america's restaurant industry is projected to reach sales of $660.5 billion - that's up 3.8% from last year. and it's a figure that directly affects one out of every ten people who work in this country. mcdonald's is making news on a couple of fronts. a gospel singer is suing mcdonald's, saying her voice was ruined by glass in her chicken sandwich in 2010. there's no response from the company. also, a report claims researchers at the university of california discovered subway has more

calories than you might think. while total calories at the sub shop are slightly lower, the average subway sandwich contains 784 calories versus 572 at mcdonalds. after billions spent trying to find an effective therapy for alzheimer's disease, inexpensive vitamins may hold more promise. a new study shows evidence that a vitamin cocktail of b-6 and b- 12, along with folic acid, may delay the onset of alzheimers and dementia by slowing the atrophy of the brain's gray matter. the study was partially funded by a swedish vitamin- maker and a vitamin patent- holder. coming up, a trader who suspects a slowdown is in the charts for a couple of hot home-builder stocks. we'll be right back.

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home depot turned in very strong earnings yesterday. joining us now is tim biggam of trading block. hi to you. is it a foregone conclusion that loews will report strong earnings as well today? - probably. that is the way the market reacts. it doesn't matter if they report strong earnings, i guess is the real case. but, if it's cannibalization or if it's industry-wide, it will be fairly interesting see the comparative

numbers. so, certainly, home depot, nice numbers, top and bottom line, guided forward a little bit. if loews can match that, then i guess you say the industry is kind of back, at least red-hot for the time being. - home depot is gaining strength, tim, because of the housing market recovery. do you buy into that? is that a reason to buy the stock? - i think it's almost a little too red-hot here. it's almost "the housing market non- recovery." a lot of it has to do with people saying, "hey, i'm stuck here for a while, let's go out and put some money into the house." but, the stock's up almost 80% year-to- date, or year-over-year, getting a little ahead of itself in my opinion, looking at a mid-20 multiple. so, great numbers, but will it continue to grow at that pace? that is the real question going forward. - would you buy loews today, or wait until the dust settles? - absolutely wait until the dust settles. i am a firm believer in look forward to

prices where you think prices should be, not look backward at how things have been doing. so, as always, i am a little more cautious. wait until after the numbers come out and react accordingly. - you are a contrarian on this, but both of these stocks have been huge winners for investors, so why should it stop, why not just take a gamble here? - that's exactly what you are getting into with these high- multiple deterrents from investing into speculation. when you start to get to extremes of p/e multiples, now you are looking it's going to go higher just because it's going higher. so, as a value guy, i shy away from stocks that are going up just because they are going up. - i still believe in this housing recovery, tim. gotta tell ya. - absolutely. - good to have you on the show this morning. have a good trading day. - thank you angie. that's a wrap for today. coming up tomorrow, "star trek" was a "universal" winner at the box office over the weekend. but how will the rest of the of summer play out for the film studio? find out thursday. from all of us at first business, thank you for watching.

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