racing to new records: why the stock market is gaining momentum. in today's cover story, workers making less are being asked to pay more for insurance. and, how england's new little prince is already a money- making machine. also, is apple facing a slowdown? plus, the new hot stock our trader says has better appeal. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's wednesday, july 24th. i'm angela miles. in today's first look: the dow make it to its 28th recording-breaking close today. the blue chips were up 22

points, the nasdaq down 21, and the s&p slipped by 4. gold was up 6 dollars and oil 14 cents. apple tops estimates: the tech giant reported earnings and revenues that were better than expected after the close. iphone sales reached a record, but ipad sales came in short. the sec is accusing a texas man of running a bitcoin ponzi scheme. he allegedly raised $4.5 million from investors in multiple states. what's tap in to the trading mind of mark sebastian of option pit mentoring. good morning, mark. - good morning, angela. - 1700 is within sight for this s&p 500. what do you think? - i think we're going to trade there. we've seen market volatility really fall off at the last 20, 30 points of this rally. that shows me that the market is starting to really buy into this. and we're back into kind of the april, may,

early-june portion of the market, where we had this slow crawl higher. a low-volume market is one that's going to tend to creep higher, and i think that's what we're seeing. don't be surprised if we trade over 1700, if not close over there, this week. - and what about earnings? which earnings in particular are you really emphasizing with clients? where do you think you could make some money this week? - amazon looks really interesting. that seems to be where all the excitement has moved, out of apple and into amazon, which has seen a huge rally in the stock, and a huge pop in option volatility. i think there's going to be tons of ways to play amazon going into their earnings. - are there any stocks that you would sell as the market goes higher? - you know, i think the financials have really outperformed tech. i would be looking to maybe rotate out as earnings end. tech's had a really abysmal earnings. as earnings end, i would be looking to roll back into tech and out of the financials, because goldman and bank of america and j.p. morgan have done so well during this earnings season. - thank you, mark sebastian. - thank you, angela. boeing reports earnings today in the wake of turbulence. monday's hard landing at la

guardia airport that injured 10 was a boeing 737 aircraft. add to that the lithium ion battery woes the company has weathered with its new 787 dreamliner. despite these troubles, the street expects boeing to post earnings of more than 4% over last year. despite the bumpy begining for the dreamliner, the company's other aircraft are turning hefty profits. we talked to morningstar analyst neal dihora, who expects a positive earnings report for the same reasons boeing stock is doing well. "the stock is doing well because the negative issues are sort of behind them. the 787 cost overruns, delays, grounding - it's all behind them. looking forward is delivery on the five-plus years of backlog that they have already booked." dihora was bullish on airbus as well. it too has close to a five-year backlog of orders for new planes. banks owning commodities - it's an issue generating scrutiny, from the public, congress and the federal reserve. in 2003, the fed decided there was little risk in allowing banks to purchase physical commodities such as aluminum and oil. but now critics contend the banks are hoarding commodities,

driving up prices and manipulating the market. we turned to lina khan, a policy analyst at the new america foundation, who just published an article on the subject. "i think the average american should at least be very concerned that we currently don't have the capacity to know whether the banks own railroads in this country, whether the banks own airports in this country." goldman sachs reposnded to the outcry, saying, "we hold an inventory position in a particular physical commodity for the purposes of meeting the needs of our clients or as a hedge for positions in commodity futures or derivatives we assume as a market maker." congress has scheduled hearings this week, and the fed says it is revisiting the issue. a wall street watchdog is bidding farewell. deputy treasury secretary neal wolin will leave the white house at the end of august. wolin was with the administration throughout the financial crisis, and was the longest-

serving deputy treasury secretary. his next move has not yet been announced. president obama is on the road again. today he will present his fiscal agenda in illinois before moving on to other midwest states. he's expected to talk about the economy, jobs and immigration. "it will be a pretty good speech, but as we've learned, i've given some pretty good speeches before and then things still get stuck here in washington." the president made those comments monday to former campaign supporters where he asked for the public's help in moving his agenda forward. one of the issues he faces is getting congress to raise the debt ceiling. house speaker john boehner says they won't do it without real cuts in spending. cisco says it will buy security company sourcefire in a deal worth $2.7 billion. cisco says in a statement that sourcefire "aligns well" with its broader plans. sourcefire's specialty is security software for both corporations and government. the deal is expected to be completed before the end of the year.

an american is detained in shanghai, china. the chinese government is going after employees of drug companies that may be involved in bribery scandals. in the latest case, employees with astrazenca were questioned, and one is being detained. u.s. officials are working on the case. a british employee of glaxosmithkline was recently detained in connection with bribery allegations. if one california republican has his way, you may no longer get mail delivered to your door. representative darrell issa, who chairs the house oversight and government reform committee, has introduced legislation that would move the postal service away from door- to-door delivery and toward curb-side or cluster boxes. delivering mail is the postal service's largest fixed cost at $30 billion. ending door-to-door delivery would save $4.5 billion each year. in our earnings watch, ups reports customers are putting the brakes on expensive shipping options. the delivery company posted profits that came up shy. chemical company dupont turned in a 12% decline in earnings

for the second quarter and is considering the sale or spinning off a chemical unit. radio shack topped revenue estimates, but losses widened as the electronic retailer struggles to turn around. and investors have an appetite for wendy's. the stock rose to a 5-year high on a better-than- expected profit. wendys is also introducing a pretzel burger and selling 425 stores to franchise owners. taco bell is canceling kids meals. the chain says it will instead focus on appealing to millennials. meanwhile, a new national effort is helping restaurants expand menus. the national restaurant association says more chains are offering healthier options for kids. it's not just chains jumping in on the trend. "we also have independent restaurants participating, along with museums and theme parks. it's really become a nation-wide movement." that was joy dubost. earlier this year, a study by the center for science and the public interest found 97% of kids' meals were of poor nutrition quality. dubost says if that study were done today, the data would reveal healthier numbers.

the pressure is on at dell. today, shareholders are expected to vote on whether they should go along with founder michael dell's offer of $13.65 per share to take the company private. billionaire investor carl ichan is proposing a deal that pays $14 per share and keeps the computer company publicly-traded. the wall street journal reports a special dell committee is making last- ditch attempts ahead of the meeting to sway investors to take michael dell's offer. in today's cover story, if you're a blue-collar worker without any college, you may be quoted a higher auto insurance rate than someone with more education. the non-profit consumer federation of america found five insurance carriers that it says use education and occupation as factors in determining insurance rates. in chicago, for example, one carrier quoted a factory worker with a high school diploma more than $1,000 a year for car insurance - 21% more than a college-educted plant supervisior in chicago would pay.

"if they are rich and earning more, that doesn't mean they are safe drivers." "if it actually is a reliable predictor, then that stands for itself." 10 companies were studied in 10 states, and according to the cfa, five apparently used education and occupation as rate factors. they include geico, progressive, liberty mutual, farmers and american family. the five that did not include state farm, allstate, usaa, nationwide and travelers. "i don't think education should have anything to do with it. driving record yes, but not education." in a statement, progressive said "it includes non-driving factors that have been proven to be predictive of a person's likelihood of being involved in a crash." and a trade association of insurers says using education and occupation as factors was justified after

state-level reviews. but stephen brobeck, executive director of the consumer federation of america, disagrees. "the practical impact is that it discriminates against people of color, who are disproportionately have lower incomes." the consumer federation of america wants to expand a low- income auto insurance program that began in california. it's where minimum liability coverage can cost just $300 a year. another expensive part of life, the burden of paying for college, has shifted post- recession. parents used to contribute the most, but last year, they were surpassed by scholarships and grants, according to sallie mae. the student loan corporation says many families don't have the money they had before the recession. insurance companies have an eye on upcoming storms. three to six major hurricanes are expected during this year's hurricane season. following massive devastation caused by superstorm sandy, insurers are warning homeowners that flood

insurance is not covered in a typical insurance plan. dr. robert hartwig of the insurance information institute says looking at patterns can help designate what kind of coverage is necessary. "we should look for events that have a combination of types of loss. we have loss from wind, for example, as we've seen in all hurricanes, but also coastal inundation and river and lake flooding like we saw with sandy." meanwhile, an unexpected economic impact of the storm is hitting the jersey shore - there's a baby boom! birth rates are up 34%, of so-called "sandy babies." donations are dropping at livestrong. the non-profit was started by famed cyclist lance armstrong, who later left the charity following a doping scandal. livestrong collected $22 million in 2012, down 8.1% from 2011. the charity said it's pleased with its performance. still to come, two days old and already in the money: a look at

the enormous wealth awaiting the royal baby, later on. plus, apple re-action: how that stock is likely to trade today. but first, how investors are getting into gear as detroit's finances fall flat. first business continues after this.

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detroit's entrepreneurs are staying put. despite a historic bankruptcy filing, start-ups can see the light at the end of the tunnel. census data reveals that business investments have increased after hitting a low point in 2010. a hearing today could determine whether detroit's emergency manager can move forward with the historic chapter 9 bankruptcy filing. skyping with us this morning is eric scorsone, an ecomomist at michigan state university. good morning to you. - morning. - at the crux of this case is employee pensions. if this chapter 9 happens, what does it mean for city workers and people who are retired? - one of the reasons the city has declared bankruptcy is the issue of its underfunded pension systems. based on the filings so far, detroit is

stating it does not have enough resources to pay those pensions over time. so the issue now is, in court, can the city move forward, because the michigan constitution protects public pensions. the issue now is whether a federal court is going to override that protection. people will still get some pension. there are assets in the pension system. the question is, it's underfunded, so how much adjustment does there have to be? we don't really know, because there'll be a lot of debate over what is the level of underfunding. - do you think by any chance that this chapter 9 filing was brought on because it would go after these pensions? do you think there's something going on here? - actually, even a bigger part of the problem, arguably, is the retirement healthcare benefits, which are actually estimated to be almost twice as large as the pension problem. there's really no doubt that both employees and retirees are really the city's main creditors, and a lot of this bankruptcy is going to revolve around who gets how much money

out of this. - why is this case so critical to the rest of the nation? - many cities right now, for a variety of different reasons, have underfunded pension systems, and as i said, even more importantly, have really provided almost no funding for their retiree healthcare benefits. so cities like chicago face many of these same problems. so people are wondering, given michigan's constitutional protection of pensions, which is considered one of the strongest in the country, if this is overridden, this could have big implications for public pensioners around the country. - right. chicago was recently downgraded because of a $19 billion shortfall. but there are other cities the s&p is watching: cincinnati, minneapolis, portland, and santa fe. thanks so much for being on the show with us this morning. - thank you. car companies are in overdrive to create new products. british car-maker bentley is building the world's most expensive suv.

it will go on sale in 2016. ford and toyota are ending a 2- year partnership to develop hybrid pickup trucks and suvs and at chevrolet, the plan is to spice up car colors. usa today reports the chevy sonic will temporarily come in new colors, such as magenta. coming up, why traders are nervous about apple's stock. that's later, in chart talk but first, royal riches: a peak into the financial future of the baby prince. that's next.

the royal bundle of joy is captivating the world. our royal watcher, fred wientraub, has his eyes on the dollar signs. good morning to you. - good morning to you. - so does this baby boost tourism? - this baby definitely boosts tourism, because when you look at $480 million that will be coming in because a royal baby was born, that's good for the u.k. what makes this different

than some of the other royal occasions like the jubilee, like the wedding of katherine and william, there was a bank holiday, so people took a day off. they took either a friday off or a monday off, which meant no business. here, the baby was born, business continued. that equals money. - what about merchandise? what are you seeing in london? - you're seeing a lot of merchandise in stores. people want- if the baby, if the royal prince can have this, my kid should have this. i think that's the mentality of what people and merchants are going for. - how much does this baby stand to inherit? - this baby could inherit $1 billion. by the time the baby takes the throne, which could be 50, 60 years from now, it will be significant amounts of money, because the royal family is worth tremendous amounts of money. but don't lose sight of the fact that they pay a lot for their services, meaning that they're out doing different charity events, three to five per day, generating millions of millions of pounds. so the criticism that they're

freeloaders and that they just take from the government, i don't think is accurate. - what about the cost of bringing up baby? will there be nannies? it sounds like william and kate like to keep things right at home. they like to do things themselves. - if you believe what you read, this will be a different age of parenting. so where queen elizabeth had more nannies, and prince charles has even said, "i didn't see my mother at times for six months at a time," i don't think it will be like that with william and kate. - good to have you on our side of the pond. thank you, fred. - nice being here. just ahead, peeling back the details of apple's earnings. and, what traders expect from the stock today. chart talk is next.

andrew keene, president of keeneonthemarket.com, breaks down the earnings for us this morning. good morning andrew. what is your expectation of how apple will trade today after earnings last night? - we talked about it last week, and i told a lot of my traders in my trading room that i didn't think apple was going to make a big move. it was implying a $20 move on the at-the-money straddle. it was down about $7 yesterday. it looks like it's getting some of that back, but still stuck in this trading range between $420 and $440. i don't think apple is going to move very much. i was telling everybody, lower-than- anticipated movement. - what do you think about panera bread? this one tends to be a

mover on earnings. - it actually moved a little bit more than the measure-move target. i sold iron condor, so i sold some put spreads, so i actually get long panera at the recent lows, which is around $172. i'm going to have to revisit that to see if i want to stay in that trade. it sold off pretty hard and then bounced back a little bit. i want to see how it moves today. - domino's pizza is also on your list. - yeah, this has been one of the greatest charts that i've seen, and then yesterday it got absolutely slammed. it had great earnings, good year-over- year growth. they came in and reported better earnings on the top and bottom line, but the stock sold off really hard. it got up to $64, then it sold off about $6. i actually bought it yesterday at $58.80. i think i could leave a stop under yesterday's low or under $56. i love dpz long-term. - what about pepsi? we heard disappointing news from coca- cola. will it be a different story for this stock? - it should be interesting. we've been talking about mondelez possibly getting bought out by pepsi. they need to grow their brand. pepsi isn't really as earnings trades as much as the other ones we've mentioned. i'll be looking to

get long pepsi on a pullback. right up here around this $86.50 level, i just want to be on the sideline, but on a pullback, i would look at it. - what do you think about the pepsi story? pepsi has more going than just soda. soda drinking is down. americans are weening off of soda. what do you think? - they're in so many different brands. they also own frito-lay as well, so they're in the snack business. they're international. as we see commodity prices going lower, this should help pepsi a lot. with corn prices going lower, that's good for their snack line. so pepsi is doing the right things. they're getting news about buying mdlz, so i've been trading mdlz to the long side. it should be interesting. international growth story. looks great on the chart. i'd rather buy it on a pullback. - thank you, andrew. - thank you. that's all the time we have for today. on the show tomorrow, find out how warner brothers is conjuring up millions at the box office, and why the claws are out at fox films. we hope you will join us. from all of us at first business, thank you for watching!

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