game on! if you thought consumers are pulling the plug on video games, think again. in today's cover story, office makeover: the furniture of the future is here. are more americans cutting the cable cord? and, lulu low-down: how traders are positioning now that lululemon's ceo is preparing to split. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, june 12th. i'm angela miles. in today's first look: stocks on the move: rambus shares jumped 8% after the close on word the memory chip company has settled a patent case with a south korean

semiconductor company, while yum brands admits the avian flu scare in china hurt kfc sales in asia by 19%. jp morgan ceo jamie dimon is still defending the whale trade. dimon told investors at a conference yesterday there was no lying about the $6 billion loss. in his words, the bank was just wrong about stuff. wall street worries are mounting. stocks tumbled yesterday after the bank of japan disappointed traders by holding its monetary policy steady. the market wanted a change in policy. the dow fell 117 points, the nasdaq down 37, and the sp droppped 17 in volatilte trading. gold and oil also lost ground. larry shover of sfg alternatives joins us now for an early look at the market. good morning to you, larry. - good morning. - there have been a number of market disruptions out there, from the fed to unrest in turkey, and even bomb scares in this country. what do you think

is most likely to rattle the market today? - well, i think when we put it in context, let's keep in mind that the market can't be accused of anything right now except for healthy consolidation and digestion. you're right, we are worried about japan, we're worried about turkey, we're worried about the bond yield run up. but, the fact is, our market is holding up quite well given the circumstances. - holding up, but staying in a range. how do you make money with a range trade? - i think the best thing to do is do not get impatient right now, because sooner or later, the market will make its next move, so the best medicine is always slow and steady. slow and steady wins the race. - there's a report out that citigroup stands to lose some $7 billion if the dollar rallies and gains against the yen. this seems like one of those trading situations yet again with the big banks. what do you think about this story? what's your

reaction? - first of all, i hope it's not true, i hope they've learned their lesson, i hope that the taxpayers don't have to bail them out if something should go awry. but, somehow, i do not believe that they have that much exposure without being hedged properly. - larry, have a great trading day. the senate, will begin full debate today on immigration reform after 'yea' votes on two procedural measures yesterday. in an 84-to-15 vote, senators came down in favor of a motion to proceed to that full debate. on the table are the reform measures negotiated by the bi- partisan "gang of eight" senators. "the gang of eight has done their work, and now it's time for the gang of 100 to do its work. this is an extremely important subject, needs to be open for all kinds of amendments, and i, you know, fully expect that that's the way the debate will be conducted." "i am happy to hear the republican leader announce here in the senate that he will vote to move the bill forward." final passage of legislation faces hurdles in the house, where conservative republicans

oppose a path to citizenship. now on to stocks in play. starting with dole food company, shares jumped more than 21% on a buyout offer coming from the ceo and chairman of the company. david murdock, who happens to be 90, is the largest shareholder, with 40% of the stock. he is making a $1.5 billion bid for dole. the board will consider the unsolicited offer. shares of pharmacy benefits manager catamaran are facing renewed health. the stock climbed 14% after health insurer cigna said that it will renew its contract with the company. since april, catamaran shares have fallen into a slump over concerns that the company would lose business. the new contract with cigna is locked in for 10 years. cigna shares hit a new 52-week high yesterday, closing at 69 dollars. walgreens has been slapped with a painful fine. the company will pay $80 million for alleged drug violations. the dea says the company broke federal laws related to prescription painkillers, allowing drugs to get onto the black market. it is the largest settlement of

its kind. big tobacco is seeing its profits go up in smoke with the changing habits of smokers. the numbers have prompted tobacco companies to embrace electroinc, or "vapor," cigarettes. the nation's largest, marlboro's altria, and second largest, reynolds america, have both, within the past week, announced the release of an 'e'-cigarette. in 1965, 42% of u.s. men and women smoked. in 2010, that number had dropped to 19%. among current stories on electric cars, the obama administration is out with a new tool called e-gallon. it gives motorists a state-by-state look at how much it costs to drive an electric vehicle. to date, the national average is $1.14 per e-gallon. a gallon of unleaded gas is $3.63. hybrids and electric cars account for just 3.3% of the entire auto market. to drive demand, gm is offering $5,000 in discounts for its electric chevy volt. an investigation into honda's airbags is not over yet. the natonal highway traffic safety adminsitration will determine

whether to issue a recall for 2003-2004 honda odysseys. several consumers have been injured when airbags suddenly deployed while driving. the problem could affect more than 300,000 models. during the last two years, more than a million hondas have been recalled due to defective airbags. escalating prices on corn and wheat are causing farm land to become dangerously overpriced, according to analysts. the international business times reports between 2009 and 2012, corn prices nearly doubled, while wheat prices jumped one third. that level of profit boosts the value of farms. in states where the main crops grown are corn and wheat, farmland prices jumped as much as 15% just in the first quarter of this year. a coalition of groups opposed to hydrallic fracturing, the high- pressure injection of water and chemicals into the earth to free oil and natural gas, are lobbying democratic governors to reject its use in several states, while supporters of fracking say the practice could

create nearly 3 million jobs and bring in nearly $25 billion in tax revenue. opponents such as "food and water watch" say the environmental and health risks are too high. "communities that open the doors to the fracking industry will experience a higher cost of living, a greater demand on social services, and wear and tear on road infrustructure through huge and heavy trucks. it also causes agricultural damage." a regulatory bill on fracking just passed in illinois. similar bills are being discussed in maryland, arkansas and west virginia. it's all about hardware at the e3 gaming conference. despite a rise in "mobile" gaming, analysts say e3 kicks off a new lifecycle for game consoles. "we're seeing an explosion in mobile gaming and social gaming, games played on smartphones and tablets and on facebook, so those are two trends that contribute to the decline in video game sales. but if you've been at this show, then you know that it's a window to the future. and everything is cylical." sony and microsoft are going head-to-head with new releases. sony's playstation 4 prices in

at $399, and allows users to play without being connected to the internet, while microsoft's new xbox one costs $100 more and requires internet, which could be a turn-off for some users. the long-awaited ipo from perfume and beauty brand coty is expected to open for trade tomorrow. bankers predict demand to be high, and the offering is expected to net more than $1 billion. coty will not receive proceeds from the debut. the iconic company is more than 100 years old and the umbrella company for many beauty brands, including sally hansen and opi nail polishes. it also manufacturers stetson colonge and many other fragrances. the daughther of mexican immigrants who went on to earn a business degres from harvard could become the president's nominee to run the commodity futures trading commission. huffington post reports amanda renteria, a former senate aide, could replace current cftc chief gary gensler. one of the issues plaguing the commission

is how to handle high-frequency trading. the chicago board options exchange will pay a $6 billion fine. the exchange is accused of failing to "enforce or even fully comprehend rules to prevent abusive short selling." the sec handed down a $6 million fine. cboe has agreed to pay the fine and adjust its procedures. consumers now pay a yearly average of $225 in overdraft fees, and that's if they've signed up for overdraft protection. the fees have become a big source of revenue for the banks. the practice has caught the attention of the consumer financial protection bureau, which says the fee structure is abusive. last year alone, consumers paid out $32 billion in overdraft charges. in the movie "office space," the boss kept asking if employees could come in sunday. now, office workers are finding workspace designs sneaking into their homes - so they can work every day. our cover story

explores that evolution at north america's biggest trade show for the commercial office. like it or not, we're bringing more work home, largely because the internet and everything we have that connects to it comes home with us. this award- winning piece, called the harbor work lounge from holland michigan company haworth, reflects that trend. "a lot of the trends are melding things between home and the office." each year, more than 40,000 people visit 700 exhibitors and their showrooms at chicago's merchandise mart to see the latest in making work more comfortable and productive. this giant screen is the latest and biggest in conference room brain-storming. it also won "best in show." "it would be for very large projects, such as buildings or planes." a company equipped with this board would allow input from partcipants globally. "it provides a place to put everything on the cloud, and it's accessible on any device." while office furniture reflects greater emphasis on collaborative efforts, san francisco design studio mike and maaike's windowseat lounge

strives to create a refuge in busy interiors. "in an office, you could have a few of these for people to 'escape' for a moment. in a hotel, these would work in a lobby or an airport where people needed a bit of privacy in a hustling, bustling environment." these days, it's the closest thing you'll find to a phone booth. nearby at minnesota's tuohy furniture corporation, team building is a part of design. "in the working area, if your office is different, it creates some separation. but if you have a thread that connects it, it promotes a cohesive area in there." this trade show, known as neocon, is also where a lot of business deals are started. 89% of attendees plan to make purchases for their companies within the next 12 months. office space may need to expand as more employers prepare to hire next quarter. a survey by employment services giant

manpower group finds 22% of companies plan to add to staff in the 3rd quarter - the largest percentage in 4 years. still to come, we'll tune in to this year's cable show for a look at the future of the small screen. that's later on. but first, the surprising crisis that's taking the global solar panel industry by storm. bill moller joins us, next.

around the world, solar panels designed to last virtually decades are failing after just a few years. this is now starting to threaten the $77 billion global solar energy industry, which is just getting off its feet - in fact, it's

about to reach critical mass. how bad of a body blow is this? let's talk with pete kadens. he's the ceo of a solar energy company called socore energy, and you make and do installations all over the united states. - correct. - how bad is this? - it's a pretty significant issue. we're seeing significant quality control issues, not just in china, but across the board. china has the most rampant quality control issues, but as the cost curve has come down on solar, a lot of our manufacturers are trying to cut corners to identify where they can make up their gross margin deficiencies. so, it's a pretty big problem. - some of them are in negative cashflow situations, and this is one of the impetuses of this. - many, if not most, of the solar panel manufacturers in the world, at least up until last quarter, when japan came online, were in negative gross margin situations. - now, you've mentioned china. that's probably because they're the number-one solar panel manufacturer in the world. - they are the number-one solar

panel manufacturer. they're also the biggest violator of quality-control issues. now there are great companies in china - a couple - who, we believe - and we've been to all these facilities, by the way, we've toured all of them - who we believe manufacture a good- quality product and have great standards in place. but the vast majority of them do not. - a few years ago there was the drywall crisis. chinese- manufactured drywall was falling apart in homes in this country, meaning the homes had to be torn down - again, quality control. it don't have the regulatory oversight that other countries do. - yeah. what we actually see is the companies who use american standards, but even more than that, who have americans in their facilities managing and supervising production and the quality-control issues, are the organizations that we trust, and the organizations that run their processing officially. - so, pete, what's going to happen? is there going to be a shakeout in the industry? - you know, two or three years ago there were 400 solar panel manufacturers around the world. it's my prediction, and i think

many analysts agree, that in some short period of time, the next two to three years, there will be four or five manufacturers. - really? - the consolidation is going to be- it is happening. many are going bankrupt. and if they haven't gone bankrupt already, they are headed that way. - and there's going to be a flight to quality from people buying these things. - it is going to be a significant flight to quality. you are going to have four or five organizations to choose from. those organizations are going to have positive gross margins and be able to produce quality product. - pete kadens from socore energy. thanks so much. - thanks, bill. thank you, bill. still ahead, the tech and cable companies set to profit in the rapidly changing world of television. a trip to the cable show is next.

people complain about their cable bills, but the reality, according to neilsen, is that 90% of tv households pay to watch. cable programming, of course, is just one of the topics being addressed at this year's cable show. joining us this morning is sarah evans. she's a social media correspondent who's doing some snooping around for us today. good to have you on the show. - thanks for having me. - try not to laugh, but are there any signs that cable prices will come down? - no, but guess what? there are signs that we're going to get some of the coolest innovations ever that are coming out of the cable show 2013.

- there are a number of ways that are being created for people to watch tv but use their computer, verses actually paying cable. are you seeing more people cut the cord and going this route? - we're not actually seeing more people cut the cord. in fact, what's happening is, there is innovation on the ends of content providers and the cable companies. so, the little device that you probably have in your hand right now, your smartphone or your tablet device, you're probably consuming more of your content right there, and that's what cable companies are now innovating with. in fact, cox communications and cisco are releasing a new app later this summer that will do just that and will completely change the way you can view live and on- demand content. - what other cable companies or tech companies are showing leadership in this sector? - i think we see a lot of content providers actually showing amazing leadership in this sector. yesterday, the president of amc was talking about "the walking dead," and, they've learned that there is no more off-season for television. in fact, the off-season is now a primary time to target new

customers, if you will, viewers of the show, and connect with an existing audience or fan base. they have things like a back channel called "the talking dead," facebook page, twitter. people are talking more about the scope of the character, even going behind the scenes to talk to directors, producers, other supporting cast members. so, we're seeing content providers really leverage the power of social tv and partner with the cable companies to offer more interactive and robust coverage. - sarah, thanks for your time today. - thank you. coming up, lululemon stock tanked in a downward spiral yesterday. find out if buying shares of the yoga pants maker is a stretch. chart talk is next.

joining us now is tim biggam of trading block for a look at the charts on lululemon. good to have you on the show this morning. - always great to be here. thanks angie. - this chart has been unbelievable. when the yoga pants scandal happened, the stock fell apart, and then came rip-roaring back. now it's falling again. what do you make of this, tim? - really that kind of previous noise on the yoga pants was a two-day event, and certainly we more than made up for that. the stock rallied about 20% after that. this is all based on earnings and the ceo leaving, which, rumblings on what's the story behind the story here. so, earnings came out pretty much on the mark, margins a little bit less than expected - that's the real story here. but guidance going forward up here, so i kind of like the stock somewhere in the mid-$60 level here. we are looking at valuations, probably looking, they uped their guidance and confirmed probably somewhere almost $3 a share next year. so you're looking at a stock that's growing at more than 20%,

trading at only about a 22 p/e. so, certainly getting back down to a level i wouldn't mind being a buyer. - what could be some headwinds for this stock? certainly nobody saw the sheer, see- through yoga pants as being a problem when they owned it the first time around. - absolutely, or in my case would they want to see those on me. but, going forward, it really comes down to will the big names come in here and kind of squash those margins even more? what is to stop the nikes of the world, the under armours of the world, from really going into their space bigtime? so, lululemon has kind of gotten somewhat of a free pass here as far as competition. i think the big news in those margins kind of compressing going forward is prices may have to come down to stay competitive, especially if the big boys go into this space. - thank you, tim. - you bet. thank you angie. it's time for us wrap up the show. coming up tomorrow in movies and money, the new superman film is ready to take flight at theaters. will the "man of steel" turn to box office gold? from all of us at first business, thank you for watching!

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