is gm feeling the heat. the up- and-comer that could spark changes for the automotive giant. in today's cover story, separating fact from fiction when it comes to the future of bookstores. plus, are wall street's wild days over as brokers find a new way to bulk up on connections? and, lend us your ear! it's friday, which means traders unplugged is happening here! first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's friday, july 19th. i'm angela miles. in today's first look: stocks keep on rockin' to record highs! yesterday, the dow and s&p cruised to new heights

following better-than-expected earnings from morgan stanley and comments by fed chair ben bernanke. the nasdaq added on a point. gold gained 6 dollars, and oil $1.74. tech trading trouble is possible today. google shares tumbled about 5% on earnings that fell short. microsoft was also shy. its stock dropped 4.5% in heavy trading volume. detroit has filed the biggest city bankruptcy ever in u.s. history. mo-town is struggling with billions of dollars of debt. and, the latest mortgage rates declined. the 30-year fell to 4.37%. the 15-year to 3.41%. chris gersch of altimus capital joins us on the show. good to have you back with us chris. - good to be back. - and the market hit record highs yesterday, but today is options expiration day. there's a lot going on here. what do you expect?

- i think we're going to have a really scary open, actually. the s&p yesterday at the close was just something that you didn't want to be a part of if you were on the bid. i really think that the earnings that came out from google, microsoft, and even chipotle are really going to scare this market to the downside. i don't see us making new highs today. - because of those tech misses, will we have a tech wreck today? - i think there is going to be a tech wreck. i think more or less the nasdaq is going to underperform everybody else. and really, my belief is google- it's not an excellent opportunity to buy. if you are going to buy this little pullback - tons of traders have been looking to get in there - i think you buy google, short microsoft. the google office, or, it's called drive, has taken a lot of market share away from microsoft. i think we might be seeing ballmer's swan song at microsoft right now, so look for that to really get hit through the morning hours as the futures indicate. - and here's the other issue:

crude topped $108 in trading yesterday. that could actually start to slow down the economy. - i think crude hitting that $108-110 level is really the benchmark for what's going to carry us through the next two quarters. i think that we're at $108, the fact that gasoline is as high as it is is going to put pressure on the consumer.with over 87-90% of our gdp based on consumption, i really think that's going to hurt us for the fourth quarter earnings, and i would look to get a little bit of safety here in some bond plays. - chris, thank you, and come back more often. - thank you. in what may be viewed as another blow to boeing, honeywell beacons aboard boeing dreamliner jets are being linked to the 787 fire at heathrow airport last week. u.k. investigators want the emergency locator transmitter to be disabled. they describe disconnecting the beacons, which run on lithium-ion batteries, as a simple-enough process that would not ground the entire fleet. investigators caution that an overheated beacon did not cause the fire, but the

incident follows a series of fires traced to lithium-ion batteries that grounded the dreamliner fleet earlier this year. it also follows a recent crash in san francisco of a boeing 777 flown by asiana airlines. "there's just no tolerance for any kind of failure in aviation like 20-30 years ago, and the companies are feeling that." boeing shares fell in after- hours trading last night after reports surfaced a warning light came on in the cockpit of a tokyo-bound japan airlines 787, forcing the dreamliner's return to boston. gm reportedly is keeping track of tesla. as the eletric car company - and its stock - gain traction, marketwatch.com says gm's ceo has assembled a team to study tesla's strategy. bloomberg news reports gm's ceo has said "tesla could be a disruptor if we're not careful." cars.com editor kelsey mays thinks gm may not be the only one feeling the tesla threat. "they have really, really high upside potential, and it's good that gm is following them. i'm

pretty sure most automakers are following tesla pretty closely now, if they are smart at all. it's interesting that gm has been so public about it. " general motors plans to launch an electric cadillac in 2014. slow sales of its chevy volt have forced gm to cut prices. the shareholder vote on the future of dell did not happen thursday. it's pushed off until next week. it gives michael dell and partner silver lake until wednesday to either convince shareholders to accept the terms or sweeten the $24.4 billion offer to take dell private. it also allows billionaire investor carl icahn, who has vocally opposed the deal, more time to lure shareholders to his side. it's indicative of a trend of big companies letting major investors such as icahn interfere with corporations and stock prices. "i would say because it works. they're generating very attractive returns be it netflix, be it herbalife, and carl icahn has been very verbal about the returns he's seeing.

there are a lot of people who can say something, and the stock moves." that was morningstar's carr lanphier. if carl ichan wins control of the computer company, it's seen as a setback to micheal dell, who started up the company in his college dorm room. president obama is defending healthcare reform. at a news conference yesterday, the president pointed to a dramatic drop in healthcare costs in states such as california, oregon and washington, where he says the new law is already working. october 1st, all americans will be able to go online and compare prices for medical insurance plans. the president says healthy competiton will continue to drive down rates for consumers. "despite all the evidence that the law is working the way it was supposed to for middle- class americans, republicans in the house of representatives voted - for nearly the 40th time - (laughter) - to dismantle it." republicans contend individuals should get an extra year to

prepare for the new healthcare law requiring them to get insurance, similar to the delay the obama administration is giving to businesses. as immigration reform stands still in the house, some lawmakers are planning to promote the legislation on the road. late this month, lawmakers, including majority leader eric cantor, will visit new york to promote the historical aspects of immigration. meanwhile, the senate has confirmed thomas perez to lead the labor department. the vote passed 54 to 46. and, a group of bipartisan senators have reached a compromise on the student loan rate debate. after doubling to 6.8% on july 1st, a new deal ties rates on government loans to market movements. it caps the loans at 8.25%. also on capitol hill, federal reserve chairman ben bernanke wrapped up his 2 days of testimony. bernanke called out congress for failing to do more to improve the economy. he was

also asked about the student loan situation. "the amount of student debt is large - it's over a trillion dollars at this point. i think that it is not particularly likely to cause any sharp instability of the sort we saw in the last few years." the fed chief says it's a plus that students can borrow money to to get an education, which is good for the economy. the fed chair was also asked about the fallng price of gold. bernanke replied no one really understands gold prices, and he does't claim to either. he addes that gold is not a great predicter of inflation. the latest round of corporate earnings is on the upbeat side, with most u.s. public companies reporting gains. united health's second-quarter profit jumped 7.4% as more people enrolled in private and government health insurance plans. american airlines' parent amr's profits rose to $220 million from a $241 million loss as cost-cutting plans from its reorganization took effect. union pacific profits climbed 10%, boosted by price increases and higher coal shipments.

on the weaker end, phillip morris earnings fell 8% as overseas shipments declined. china is on its way to becoming a superpower - at least in the minds of people surveyed by pew research. 2 out of 3 chinese citizens predict their country will become a top player in the world economy above the u.s. 47% of americans agree. 63% of people around the world give the u.s. a high approval rating, while 50% feel that way about the asian nation. as the world awaits the royal baby, british retailers are cashing in. the u.k.-based centre for retail research expects the bundle of joy to boost retail sales in the uk by 243 million pounds between july and august. our royal watcher and correspondent fred weintraub says the bigger, better deal is for the first photos snapped of the newest heir to the throne. it could be worth millions. and news photographers are camped out at the hospital. "this is an international media story. people in london are

very quiet about it, they're not talking about it. while there is merchandise in the stores, the impression is that people aren't running into the stores and getting baby merchandise." speculation is mounting that dutchess of cambridge kate middleton is overdue. however, mum's the word at buckingham palace. as we hit high summer, it's not too late to book a trip. jeanenne tornatore of orbitz.com is here with deals and steals. good morning jeanenne, and what are some of the top destinations for late summer travel? - if you're willing to look around a little, you will find some great deals in august. i'm here in savannah, georgia - you have the city right here, the beach is just 15 minutes away, and hotel rates on orbitz from just $140 a night in august. other destinations that you should look to in august: ft. myers, florida, if you want that beach destination; the grand bahamas in the caribbean;

or look at the mountain towns out west, places like durango, colorado, winter park, colorado. also, you can still get some good deals on those big ones like las vegas and orlando, all under $150 a night. - what about the timing? pretty soon the kids will be going back to school, for instance. - we see a lot of schools going back mid-august around the country. this is why we see some of the demand fall in these destinations. so, if you really want to get some of the good deals, look for the midweek travel, monday through thursday, as we do still see a lot of the weekends fill up in some of the beach towns. but, basically between now and labor day weekend, we start to see demand drop, so you can find some good deals in some of these destinations. - and what about some comparison shopping with hotels? - what you should do when you're looking for your hotel, don't just comparison shop the hotel rate, look at what else they're going to give you - can you get free breakfast, free wi- fi? can you get resort credits that will give you some free or discounted spa services or a round of golf? all of those things add up in the end, and the hotels really put the incentives out as they start to see that they need to fill rooms

late in the season. - are you seeing any wonderful promotions out there, especially for people who want to beat the heat? - if you really want to beat the heat, i would say right now you're going to find the best deals in some of the mountain towns like breckinridge, vail, durango, out in colorado. what you should also look for are destinations that have things going on: free events, restaurant months, those types of promotions on site, because that will help you save as well. new orleans is a great example. you're not going to beat the heat there, but they do have their restaurant month in august, so you get great deals at some of the top restaurants. they have free festivals like their satchmo fest, which celebrates louis armstrong. these are the types of things you should look for, because destinations know that kids are going back to school, and they need to have these things going on to keep bringing travelers in. - thank you for helping us make the great escape. - my pleasure. forget being wined and dined. wall street's latest way to woo clients is with high-end workouts. bloomberg reports wall street salespeople are asking clients out to trendy manhattan fitness studios. some wall streeters say it's a nice alternative to dinner and drinks. still to come, summertime - and will the living continue to be easy with this season's rally? plus, why you'll want to listen extra closely to traders unplugged. but first, its not "the end" for bookstores just yet. chuck coppola has the story on why

print is making a comeback. stay with us.

ever since the rise of online booksellers such as amazon and the invention of the e-book, the death of the neighborhood bookstore has been predicted. but not so fast. as our cover

story reports, independent bookstores are growing. brad jonas, who opened powell's bookstore 40 years ago, reports business is up 10% this year, and he just opened his third location - an example of the independent bookseller resurgence. "across the country, when borders closed, that allowed the independent to begin coming back." recently, borders closed hundreds of stores. barnes & noble plans to close 20 a year for the next decade. but since 2009, the number of independent bookstores has grown. some say those big-chain closures, ironically in anticipation of digital book competition, created a void that some blame for e-book's relatively slow take-off, with fewer places for shoppers to "showroom" - browsing in a store but buying on the internet. "i think people still want to touch books and can't get that experience through digital." masi says reinvention is key to sustained business success.

powell's may be an example of that. jonas buys the last copies of a popular books' press run that he sells at a discount. it's 60% of his business. he also practices niche marketing - carrying scholarly works that he sells on amazon. in fact, online sales of hard-to-find works are behind a lot of bookstores' success. "as you sell online, you realize that you don't have to pay the mainstreet rent you did at one time." jonas says his neighbor down the block, chicago's oldest bookstore, sells on the internet to the extent that it closed its doors and plans to reopen in indiana where rents are cheaper. while the number of independent booksellers is growing, the remaining chains and amazon still account for about half of all books sold. independents are holding steady with 10% of all sales. thanks for that report chuck.

there's plenty more ahead. still to come in chart talk, mixed signals from the stock market. is it time to buy or sell? and up next in traders unplugged, banks and brokerages: which ones should you deposit in your protfolio? the real deal is next.

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i don't remember all of the blast... was over 500 pounds of explosives. [male announce their physical injuries have healed. the traumatic brain injuries - tbis - haven't. the way i describe it is you're just afraid. am i going to start forgetting things? [male announce tbi is as serious as any battlefield injury. you're just not the guy you used to be. [male announce thankfully va has made important advancements in tbi seeing it, treating it, understanding it. and they're here to help veterans affected by it. i can see that what we're doing here at the polytrauma unit is to move from survivability to thrive-ability. [male announce if you think you or a veteran you know has sustained a brain injury, get screened.

and there they are, alan knuckman and andrew keene, taking a break from a hectic week to join us from the floor of cme group for traders unplugged. hey guys. topic 1: walking on glass. the banks are strongly opposed to bringing back the section of glass steagall that would separate traditional banking from investment banking. which bank would you buy? - i have been talking about this all year long. my favorite bank: wells fargo. they have the least exposure to europe, they have the most exposure to the mortgage situation in the united states after we see all the housing numbers have been positive. 52-week highs in wells fargo. it's very tough to

play this to the short side- - any bank. follow the money. almost every bank, if you look at these earnings, it's all about earnings. it's been blow- out earnings, and it looks like they're going to continue to make money. xlf covers all the financials. that's got 10% more upside. it sold off 8% just a couple weeks ago, and nobody wanted it. now it looks like it's going to make another big move to the upside- - banks have been on fire. - banks are on fire. that is not going to change anytime soon. - what about brokerages? topic #2: ira accounts are at a five- year high. which brokerage would you buy? - they've seen a little bit of recovery. schwab, ameritrade and e-trade have seen a little bit of a recovery here. but, i think ameritrade in my opinion has more upside from a technical standpoint. but they've already had a decent move, but off extreme, extreme, extreme lows. - i've seen a little unusual option activity in internet brokers. actually, yesterday, ameritrade, amtd, is the best: 52-week high on that one. we've seen unusual option activity in that one. that one continues to go higher. i think that's the best- - it's a $26 stock and it was trading at $60 just a couple years ago. so if the retail investor is coming back- - which they are. - which they are- - amtd. - that should benefit- look for

a target of $30 here in the near-term. - topic #3: can you hear me now? costco is now the new number-one seller of hearing aids. is this stock a buy or a sell? - i'm a buyer of almost anything- - anything. anything. - and if you look at costco, it's been straight up. i'm not going to fight the market. i think the s&p is going to 1800, but that's another story. looking at it technically, costco has got about an $8 move from $116, so look for it to get to $124. still upside, but the target's only 5% higher. - costco has expanded. they're having a good business model here. you can go into the store, you can get tested for a hearing aid. this is a very similar business model to cvs and walgreen's, and their earnings have soared as well. the "take care" clinics. you can go in there, get a test for hearing, you can get a device for $500 very quickly. costco is headed higher. - a lot of profit margin in that kind of stuff. - here's your bonus round question for this week. it's all about having summer fun - or some are not. which names trade? h-o-t, s-u-r-f, t-a-n, w- i-n-d, r-r.

- which stock what? - which stocks trade? i think- - h-o-t does. - i'm not sure what s-u-r-f is. t-a-n is something. so the question is which one's *not? r-r. r-r's not. - which one is not? r-r? you say r-r? - yes. - alan, you lost again. i don't believe it. they were all names. andrew at least stuck to his guns with h-o-t. ok guys. - next time! next week! - next time. there's always next week. thanks for being on

scott bauer of trading advantage joins us on this friday for chart talk. good morning, and happy friday. - yes, good morning, angie. - do you see any sell signals in the market? some of our viewers are concerned there may be some sell signals they are

missing. what do you see as a trader? - i really follow volatility and i really follow the vix, and there's actually conflicting signals in the vix. in the short-run here - so in the next august cycle, the next four weeks, it looks like the market is pricing in a very tame market, probably this continued slow grind up. but when you go out one further month, out to the september vix futures and the vix options, that's really where the market is pricing in probably somewhat of a decline in the market, because we're seeing put premiums really much lower in september, and call premiums much higher in september, which would suggest a little bit of a sell-off. - if we did have a sell-off, would it be subdued to the point of, say, 2%, 3%, or more? - so far we've seen earnings come out, especially the big

financials, and they've been pretty good. so economically, on the home front here, earnings, at least at the start of the season, have been good. so unless some bombshell with ben and the fed comes out, any kind of sell-off, i think it's going to be very, very moderate. - people are considering either putting more money to work in the market or taking profits off the table, what would you do as a trader? what's on your mind? - you know, it all depends how long you've been in here. i'm of the mindset of you take some profits off. i don't know that i would be adding here. i don't see, from this point forward, at least through the rest of this earnings season, that the upside has a ton of likes to it. i think we do see a slow grind, but if i've been in this for the last 10, 15, 20 percent of the market, i would probably start trimming down a little bit. but not because i'm really worried about a big sell-off, just moreso because that's my risk profile. - clearly stated. thank you, scott. - thanks angie. thank you for watching today. coming up next week, trading tech: what our pros have to say ahead of earnings in apple, amazon, netflix and facebook. from all of us at first business, have a fun and relaxing weekend.

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