rebuilding new york's neighborhoods: the program superstorm sandy. in today's cover story, closing in on cancer. how big pharma is targeting the disease. as the economic picture improves, estimates on when employers will ramp up hiring. and, tablet takeover: will the rise of tablet computers mark the end of an era for pcs? first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's tuesday, june 4th. i'm angela miles. in today's first look: will the tuesday streak survive? the market has rallied 20 tuesdays in a row. on

monday, stocks sold off, then turned around to rally into the close. gold and oil also made major gains. in turkey, the stock market there plunged as anti- government demonstrations spread across the cournty. thousands have been injured. and a mass layoff is underway at zygna. the social gaming site plans to lay off 520 employees to save money. the stock sold off last night. brian battle of performance trust joins us now for an early look at what is going on with the treasury market today. great to have you on the show, brian. - it's my pleasure. thanks for having me. - so treasuries have had some volatility here, brian, mostly on the backs of when will the fed stop easing?, and, of course, the latest economic data. what do you anticipate for today? - yesterday we got bad ism data, meaning the economy is getting worse, or not growing as fast as we expected - a number as bad as we've seen since june of '09. so the market's being driven by public policy, and the thing you said, tapering. when is the fed going to taper? when are they going to stop being

involved buying bonds, trying to force rates down? so the bond market has taken that cue. we sold off 50 basis points in the 10-year in the month of may. we're holding steady about 215. the 10-year treasury is an important number, because that's the number that sets retail mortgage rates. we are at about a 4% retail mortgage rate. so, we are sort of in a balancing act - does the fed stay uninvolved, or are they going to try to force rates back down again? - what is the bond market or are bond traders predicting about the jobs number that comes out on friday? - the one number of the month that counts, the economic number, the really big one, you're right, is the friday unemployment number. we are expecting unchanged, about 165,000 unemployment numbers, and 7.5% on the rate. any number outside of that has to be a really big difference, like a 50,000 or 100,000 difference either way, to move the market, because we are really watching fed public policy

pronouncements, not as much as we are watching economic numbers. - even though you trade the bonds, as you know, it has been super tuesday. tuesdays tend to rally with the stock market. will it continue today? - yeah. you know what, let the trend be your friend. it always works. it works until it doesn't. so i think they are going to have a lot of participation there. the funny thing is, the stock market has really been ignoring this fed tapering talk. so, a dichotomy: the bond market is taking it very seriously, the stock market ignoring it. we had a bad ism number on monday, and the stock market went up 100 points. they ignored it. so, a disconnect there. either the bond market or the stock market is right, and we are going to find out who it is. - thank you brian. - you're welcome. two surveys on cancer research confirm that the shortage of cancer drugs has improved only slightly since last year. but, as our cover story explains, a number of drug companies say they are closing in on the disease and are releasing their supporting evidence this week in chicago. at the american society of clinical oncology, the largest assembly of the world's cancer researchers, bristol-myers squibb is behind two studies that show new drugs improving survivial rates for patients with melanoma. in one study, the combination of nivolumab and yervoy helped

shrink tumors in patients with advanced melanoma. merck is also showing progress with boosting the body's immune system to fight melanoma with a drug called lambrolizumab. "we can now prevent the tumor from fighting the immune system so the immune system can actively re-fight the tumor." bayer and onyx pharmaceuticals announced sorafenib can prevent the spread of thyroid cancer. "it stops it from spreading and stops it from growing. that's the positive effect we have." sorafenib is currently marketed as nexavar to treat kidney and liver cancer. expanding its use to patients with thyroid cancer could increase sales of nexavar by up to $300 million. however, shares of synta pharmaceuticals (snta) fell 34%, closing at $4.87. investors expected synta's treatment for lung cancer to show more benefits. still, if approved by the fda,

it's the first new drug of its kind in nearly a decade. "we add our drug to chemotherapy and it delays growth of cancer. it improves survivability more than with just chemo alone." today, the cancer convention known as asco wraps up with more discussion on how doctors are dealing with a drug shortage in the treatment of a number of cancers, including leukemia and lymphoma. traders and investors are closely watching updates out of asco. scott bauer of trading advantage joins us now. what drug stocks do you think are the best buy? - well, there's two of them really, and they were the ones in the news yesterday: they were merck and bristol. and, actually, between the two of those, i really love merck. we saw merck up just tremendously on very intense volume, and it broke through a major, major resistance area of around $49.

like i said, on high velocity, high volume, and based on these phase one results that they released, let's hope for everyone that this actually becomes a reality. but merck is looking extremely, extremely strong. - aren't there caveats though, when buying drug stocks? - oh, of course. i mean, just like anything else that goes before the fda, sometimes it's a crapshoot. now, this was just a phase one trial for both of these, but both look extremely, extremely promising. - good to hear! thanks scott! u.s. wheat faces increased scrutiny from asian countries. japan, taiwan and south korea are all taking measures to ensure no genetically modified or "rogue" wheat comes into those countries. this comes in the wake of modified wheat that has never been approved for human consumption discovered in a farmer's field in oregon. billions of dollars in u.s. food exports are potentially at risk. reuters reports the u.s. has nearly doubled the search

team efforts in oregon this week to get to the source of the genetically modified wheat. auto sales are picking up the pace. major u.s. automakers reported in strong numbers for may. the driving force was a continued climb in truck sales. ford and chrysler reported in double-digit gains, while gm sales rose 3.1%, with help from caddilacs, followed by toyota, with 2.5% gain. jim farley, ford's executive vice president of global marketing, tells us the demand for trucks is ramping up ford's business on the east and west coast. "the full-size truck market is expanding; ford is expanding in it. but we're also really growing on the car and crossover side, especially on the coasts. and we expect the full-size truck industry to continue that growth, given the rebound in construction on new homes." farley adds the next several months are critical for the industry, as automakers become more competitive with new models. trouble at oil refineries is

trickling down as higher prices at the gas pump. the national average for a gallon of unleaded is $3.62, up a dime from a week ago. however, in michigan, prices jumped to $4.10, up 23 cents in the past week, as aging refineries pump out less gasoline. meanwhile, in the wisconsin county of octano, investigators are said to be looking into why gas was recently selling as low as $3.39. a new program in new york will help homeowners hit hard by superstorm sandy. new york city mayor michael bloomberg told residents yesterday about the "build it back" initiative. it will help homeowners, renters and landlords repair damage or reimburse them for work already done. "we know that most families want to finish fixing their homes or get back into them, but it is true that in some cases based on level of damage and other factors that owners may want to voluntarily sell their homes and relocate. the city and state have been working together to determine when it's appropriate to offer to purchase such properties." an estimated 20,000 homes are still in critical need of repairs.

demand is on the rise for rentals. two large apartment complex owners are merging to become one super0-sized real estate investment trust. mid- america apartment communities plans to buy colonial properties trust in a $2.2 billion stock deal. combined, the meger creates a reit with a market cap of $8.6 billion. tea party organizers testify today as a new round of hearings gets underway in the irs scandal. the scandal erupted last month when word surfaced irs employees had targeted conservative political groups seeking tax-exempt status. irs commissioner danny werfel testified yesterday. "there was a fundamental failure by irs management to prevent this inconsistent treatment and ensure that it was halted once management became aware. these failures have undermined the public's trust in the irs's ability to administer the tax laws in a fair and impartial manner, and they must be corrected." a new inspector general report about irs spending is due out today. the irs reportedly spent

$50 million on conferences for employees between 2010 and 2012. those controversial security screeners are on the way out of america's airports. the scanners produced nearly naked images of passengers. the tsa is now using new technology that shows a generic body outline and targets only suspicious objects. also from the tsa, the agency's chief again defends allowing small knives to be carried by passengers. in a speech, he cited the billions of commercial airline passengers outside the u.s. who carry knives without incident. wal-mart is bringing its business model to fruits and veggies. the world's largest retailer is also the world's largest produce seller. to compete with rival grocery stores, wal-mart will eliminate many of its middle men and buy directly from farmers to get produce in stores sooner. the head of the fed, ben bernanke, shared words of wisdom with princeton grads. he caught a few laughs with his commencement speech, stating that economics "is a highly sophisticated field of thought

that is superb at explaining to policymakers precisely why the choices they made in the past were wrong." bernanke did not address what will happen come january when his term as fed chief ends. bidding is open for a chance to have lunch with warren buffett. this is the 14th year the billionaire has auctioned off a lunch for charity. the going price on ebay is currently close to $200,000. last year's winning bid was more than $3.5 million from an annonymous donor. all the proceeds go to glide, a san fransico-based organization that fights poverty. the world's top tippers hail from germany. that's according to a new study of travelers' tipping habits. germans say they tip 69% of the time, compared with americans, who leave cash at hotels and restaurants 57% of the time. still to come, is it time to ditch your desktop? how the tech industry is in for a major shift. that's later. but first, bill moller uncovers what's the hold up on small biz hiring. that's coming up.

a recovery without hiring? is that possible? most of the economic recovery boxes have been checked, but not yet jobs. can the recession really be declared over if hiring hasn't picked up? that's the question you're left with when you take a look at the numbers in the small business scorecard that

the surepayroll company puts out each month. michael alter is the ceo of surepayroll. let's go over the may numbers right now. once again, things look pretty flat. - things are pretty flat. year- over-year we are actually seeing a decline in hiring, down 1.7%. month-to-month we have seen that decline continue by 0.3%. so, hiring is certainly decelerating a little bit. - and same thing for the paycheck. - paychecks are closer to flat. we are up year-over-year .2%. month-to-month we are down 0.1%. so that, to me, is basically flat across the board. - what i thought was interesting is that you asked the question among your tens of thousands of small business clients, "what would it take to start hiring?" - right. because we are really in a jobless recovery, is what we are seeing according to our clients. and what they said, in order for us to start adding more folks, we need to see increased demand in our business - it drives us to hire; we need to see requirements for specialized skills that we don't have today that would force us to hire. and the other thing we know is we need to have

new businesses created out there, and those new businesses will start to hire workers, which is another way to drive more of a jobs-based recovery. - interesting. it's this big loop, all these little things have to be in place before hiring can take off. now there are challenges with hiring. - certainly. one of the key questions is, how do you find that first worker? especially if you are starting a new business or you are adding to your business, how do you find the right skills, how do you figure out what the right salary is? how do you really define what you need in that next employee? and that's a real challenge. as a matter of fact, we are doing a tweet chat tomorrow at noon eastern at @surepayroll talking all about hiring your first employee. - you also ask, as you do each month, about optimism. and that's at something like a five-year high now. - yeah, optimism is up at 75%, so 3 in 4 are optimistic about the future. five months in a row of strong optimism. the highest we have seen in two years. and that is what really allows us to say we are in a jobless recovery. because our clients are saying, "hey, things aren't so bad anymore. we're looking at the world, we're optimistic about the future, we're seeing some revenue growth in our business, we're seeing some greater profitability growth, because we are able to

grow our revenues without adding workers." so it is not a bad time for small business owners, but it is a tougher time for those people looking for jobs. - demand just hasn't hit that trigger point to really start putting out the call for new people. michael alter, thanks so much. - thanks for having me. coming up, pcs are being written off by the torrent of tablet sales. what does this mean for those old-line pc makers, and who are the companies to watch? angela miles will be back with that in just a moment.

americans are hooked on tablets. research firm international data corp., better known as idc, predicts by 2015, tablet computers will outsell desktops and laptops. ryan

reith, an anlayst with idc, joins us this morning. good morning to you. happy to have you on the show. are you surprised by the speed this is happening? - you know angie, we are not, because i think it is really driven by two different factors. it is this consumer move toward mobility overall, and also the declining price of tablets. we've seen them drop significantly since the introduction of the first ipad three years ago. - which leads me into this: apple did come out with the first tablet. they have been showing a lot of leadership. so what about the others? what about dell and hewlett? could they go extinct? - i think we have seen a lot of the pc oems - and dell and hewlett are two of those - trying to get into the mobile space, the tablet space, being the primary focus. but i think we have seen some others get in

there before them. apple certainly has a strong hold on the market, and i think amazon has done some pretty incredible things too in terms of driving price down to a really tough point for competition. - i am sure you cannot give investor advice, but which computer companies do you think have the greatest chance of maybe giving apple to run for its money? - what we are seeing right now, from a pc perspective, lenovo has seemed to do a lot of the right things. they have maintained their focus and share within the pc market, and they have also started to move into the mobile world. i think that is really what's critical right now. so i think they are probably the #1 that we're watching, but, this week some of the taiwanese companies are making some pretty good announcements as well. - great to have you on the show. that is ryan reith of idc. thanks. come back soon. - thank you. before we head to the break, we wanted to take a moment to let you know today is the last time our traders will appear atop the chicago board options exchange trading floor delivering reports to you. "the booth," as we call it, will be demolished to make way for progress. the cboe booth that still bears the name of the forerunner of this show, smo - stock market observer - is also the first place where i

started my career as a finanical journalist, and it holds great memories for traders appearing on our show. here's what they had to say. "well, it's been great in this booth, and we'll really miss it here. it's kind of an oasis, actually. i've spent many hours up here before a hit, looking on the computer doing research, making some phone calls, and it's kind of like a little home away from home, a little oasis from the frenzy of the trading floor." "to come up here, it's been a nice diversion to come up here and reflect on the day." "actually not many people know that we're secluded up here in this booth." "over the past few years, there were some bad days in the marks during the flash crash. i remember coming up and doing a hit." "oh, i tell ya, one thing i hated the most - and you can relate to this - how many times did i complain about the wires being all criss-crossed when i got up here from the person who was here before me? so that was something that always drove me a little nuts, when i got up here after a frustrating day and then had to detangle the wires." "being a trader down here since 1989, i'm going to be sad to see it go.

matt shapiro, president of mws capital, is back with us now. matt, i want to talk about this market. there was a big sell- off, as you know, on friday. it shook a lot of people up. and then a big rally on monday. so, what should conservative investors do? - well, for the first time we have seen shifting sands, and with the interest rates changing so much last month, it caught a lot of actually conservative investors off- guard, because they lost as much as 2% in income accounts filled with bonds and utility stocks, real estate, all those conservative kind of names that people were going into. now, obviously yesterday we had a really good day. the market came back some. interest rates stabilized a little bit. so what i am advising investors is, don't be deterred, and, honestly, lots of these income kind of stocks have come down for the first time in a few

months two really good levels. - you also have a stock play that you're watching. tell us about that, matt. - well, one of these income kind of stocks, master limited partnership, el paso pipeline partners, moves 10% of the natural gas in the united states, principally in the rocky mountain region, and also in the southeast and louisiana of the united states. it's part of the kinder morgan empire, and it pays almost 6%. so these are the kind of stocks that investors, especially conservative investors, have been liking. but, of course, they were a little whipsawed, especially at the end of last month. - good to have you on the show, as always. that is matt shapiro, president of mws capital. thanks matt. - thanks angie. that's it for today. join us tomorrow. the ceo of the dallas patriots will be here, revealing how he became a multimillionaire by the age of 25. from all of us at first business news, have a great tuesday!

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