will the potential mega merger in the airline industry derail passenger airline perks. in today's cover story....currency collapse. how fed decisions are having a ripple effect around the globe. plus....why some restaurants are ditching tips. and...the new reason to worry about the housing sector. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas good morning!it's wednesday, august 21st.i'm angela miles. in today's first look: the dow drifts down, but hangs on to 15,000 for the 5th session-- the dow ended the day lower.the blue chips lost 8 points..the nasdaq added 25 and the s&p 6 gold edged up 5 dollars.

and oil slipped $2.18 in earnings after hours...shares of analog devices fell more than 2%. even tough the chip maker beat forecasts and tax software company intuit earnings met expectations with sales topped estimates. and ready to hit the road.triple a predicts-- 34 million americans will travel this labor day weekend.. the most since the recession. at the sound of the bell it's larry shover of sfg alternatives here to talk about this choppy market. good morning larry. it feels like we have hit very volatile days here. > >we have. it's summertime. we have a lack of liquidity, lack of attendance right now. let's keep in mind---we have three housing numbers coming out. we have pmi's, we have the fed speaking. so really the market's just looking for a new impetus to go one way or the

other. > >not to mention, these retailers reporting in really shake up the market as well. what do you we'll expect to hear from say target or lowe's today on the heels of home depot yesterday? > >let's keep in mind yesterday home depot---the bar was set very low given what happened with walmart. right now the bar is low and i think target is going to beat expectations given that the bar is so low and consumer spending isn't as bad as what we thought it was even a couple weeks ago. > >moving on now to the treasury market, what do you think is likely to happen there? will we see as much volatility as we now see in stocks? > >that's really hard to say. let's keep in mind that since may, the 10 year has gone up 120 basis points and at the same period of time, the s &p 500 has gone up 25 points. so, right now the treasury is finding a home. it's getting used to tapering, the expectations of tapering and at some point we're going to find a home somewhere between 2 1/2 and 3% > >larry, thanks as always. have a good one. > >you're welcome.

the plunge in india's currency has become a free-fall. the rupee, in case you've forgotten from "slumdog millionaire" has lost 15% of its value against the dollar since may.our cover story dives in and tries to catch up with the cause of it all. it now takes more than 63 rupees to match a u-s dollar. three months ago, it was 53. headlines ask: will the slide continue?it's got some half-joking that the currency's new symbol includes a slash across its throat. but it may also be the global impact of the federal reserve. "what's going on is the u.s. since we are the largest economy, as we go, other countries often go." as the federal reserve bought bonds, keeping interest rates low in the u-s, a lot of investors took their money to the international bond market. instead of 2% interest on u-s treasuries, you could get 5% in indonesian bonds and 7% in indian bonds.

now that the federal reserve may taper its bond buying, it may take away some of the incentive that drove investors overseas in the first place. in the anticipation, traders are engaged in a sell-off. "'now that the interest rates are picking up and the economy in the u.s. is better, hot money' looks for where it can get the best and safest return at the same time." there are other factors tugging at india. india's trade with its largest trading partner, china has slowed as china's economy has cooled from the double-digit growth of only a few years ago and has built india's budget deficit. as far as u-s trade, india is the u-s' 13th largest trading partner of goods, slightly ahead of taiwan. u-s india trade represents 58- billion dollars' worth of business. but its not enough to overcome the shortfall that led india's finance minister to ask the people of india to not buy gold---because it is imported and paid for in dollars--

draining india's foreign exchange reserves. for its part, india's government has raised short-term interest rates, limited indian companies from overseas investment. jp morgan chase is back in the headlines.. this time the "justice department" is investigating whether the bank manipulated u.s. energy markets. jp morgan was accused earlier by the federal energy regulatory commission of manipulating energy markets in california and the midwest. the bank settled by paying $410 million dollars. now the justice departments want a closer look according to the wall street journal.. jp morgan responds: 'we're working hard to address regulatory concerns." the bank is said to face at least 6 ongoing investigations. a hedge fund manager who was once a star on wall street-- will be fined and banned from the securities industry. the sec says philip falcone will admit to wrongdoing,be banned from the industry for at least 5 years and his fund harbinger capital partners will pay more than $18 million dollars. the

original deal for 2 years and no admission of wrong doing was reportedly considered too lax by the new sec chairwoman mary jo white and others and was toughened up. a disturbing story out of london involves bank of america. the new york times reports-- a 21 year old intern working at the bank's london office.. died just one week away from completing his internship.reports say moritz erhardt- was an exchange student at the university of michigan was found unconsious by british police last week.the bank called him a diligent intern with a promising future. unconfirmed reports say he had epilepsy and pulled three all nighters just before he died. for-profit educator, career education will pay ten-and-a quarter miilion dollars to settle a suit brought by new york's attorney general. the company has been the target of a two-year investigation and stood accused of inflating its success rate in placing graduates in jobs. $9.2 million of the settlement

will go to five-thousand former students. career education is one of the largest for-profit college coprporations in the country. it operates more than 90-campuses around the world. the number of teens working summer jobs dropped this season. according to employment trend watchers at challenger, gray and christmas.. 1.4 million young people between the ages of 16 and 19 landed jobs. that's 3% fewer than last summer when it appeared job growth in the demographic would continue to climb.instead, the economy slowed and retail sales slumped in may and june causing stores not to hire additional summer help. one thing students are increasingly learning -- how to not pay so much for textbooks.text book prices have jumped more than 80% in the past 10 years and recent studies show those numbers may be a tipping point. 34% of students report downloading materials from unauthorized sources -- that's a jump of almost 15% in just 3 years. professors also report self-publishing or using free or lower-cost web-based materials.

" i found a few teachers tried to be kind of accomodating by xeroing pages out of books, but if you didn't have a teacher that did that, you would have to go out of your way to do that." "sometimes i could see if someone else had it, but alot of the times, i ended up having to buy it and didn't end up using it that much." "if i could use the old edition, i would see if any friends had it, but i would try amazon or chegt, anything to get it a little cheaper." students told us they would often share a book or settle for an older edition to save money.on average they told us they spent upwards of 300 dollars per quarter on textbooks. the quick rise of home prices in nevada and arizona are being closely watched for potential bubble trouble. the states were hit hardest during the housing crisis. bloomberg reports homes selling in las vegas for $499,000 were half that price just three months ago. in phoenix, home prices are up 21% compared to a year ago.ken fears an economist at the national association of realtors says the

issue this time could be a case of "phantom demand" "what we saw between 2003 and 2006 was a credit bubble. people buying who didn't necessarily or couldn't sustain those mortgages, so that was the source of phantom demand. now the concern is are the investors creating phantom demand? and will they, in the next 3 to 5 years, start selling?" nationwide, home prices rose 12% compared to last year. the housing recovery helped home depot pound out one of it's most profitable quarters...the home improvement chain reported earnings and outlook that topped wall street's view of the ongoing surge in home sales...despite nailing its earnings report the stock fell ---best buy also topped estimates the stock soared 13% jcp reported another big loss-- but it was not as bad as investors had feared. that stock rallied----closing a penny above 14-dollars. the chairman of book seller barnes and noble is withdrawing his plan to buy the chain. leonard riggio first mentioned plans to acquire the chain's 675 stores back in february. this latest move calls into question the future of the book store chain on the heels of dismal earnings and ending production of its own nook tablet.

overstock-dot-com tweaks its plan to compete head-to-head with amazon. last month the struggling online discounter announced that it would sell books at least 10% cheaper than amazon-dot-com's prices.however, overstock has since altered that offer and will instead, match amazon's book prices permanently. regulators are sniffing out investment scams now that medical marijuana is legal in nearly 20 states.. the financial industry regulatory authority -- better known as finra-- says potential investors are being pitched by fax, email text,tweets and infomercials.finra warns investors are promised they can double their money with shares

of stocks tied to medical marijuana- --which may turn in to pump and dump scams. a free way to check if an investment is legit is by going to this website at finra.org to search for broker information and background. consider it a "high-end" trend.the no-tipping policy is popping up more and more at posh restaurants. such as michelin-rated alinea in chicago. the restaurant banned tipping in exchange for a service charge, which is then split-up amongst the entire staff. the policy may be more accepted at a restaurant where waiters are pulling six figure salaries. however, not everyone in the service industry is jumping quickly aboard the no-tip train. anthony citriglia is a bartender. "being a server or a bartender you are a very personable person, and if you make a table feel great, they're probably going to give me more money than what i think my employer would give me, a flat rate, off of every single table." with hourly pay that hover near minimum wage, citrigila says he

relies on tips--often more than 20% of a diner's bill to make a living.alinea's owner tells us the no-tipping policy is a legal issue -- enabling chefs and servers may be considered "professionals" by the u.s. government. still to come: weighing in on what the plan to create a mega airline will mean for frequent flyers holding air miles... plus....why home building stocks are catching a second wind.... also, see if you can guess who is the wealthiest congressmen on capitol hill... the answer after the break..

the annual list of the wealthiest lawmakers on capitol hill is out.. and california republican representative darrell issa tops the list by the hill newspaper.issa made his money with the viper car security system -- earning around 355 million dollars,last year. representative michael mccaul of texas is noted to have a net worth of at $101 million.on the senate side-- democrat mark warner of virginia-- has a portfolio worth 88-million dollars. massachusetts senator elizabeth warren is reportedly worth 3.9 million.

signing up for your company's 401k plan is a quick way to build up your own portfolio.but a new survey shows americans are feeling confused and overwhelmed by the process.we have dave gray-- head of the 401k client experience at charles schwab on the line with us this morning.good morning.why are americans feeling so much angst about their 401k accounts? > >i can understand that because if you are uncertain as to how to invest and yet you know that this is your largest or primary source of retirement income it certainly makes sense that it would cause some stress. one of the key things we found in a survey is that americans are really accepting responsibility for their retirement future but the key item here as well is that they're uncertain how to make the most of it. retirement plans are often more confusing to individuals than health care benefits. and i think what that comes down to is that folks really just need help in their 401k to invest better. > >what are some of the best way for workers to maximize

money savings through 401k? > >i think there's really a couple key things to maximize your 401k. the first thing is save and save more. essentialy you want to make sure that you're saving at least up to whatever the employer matches in your retirement plan. you don't want to leave any money on the table.take advantage of that employer match. another good thing to do in savings is every year increase your savings by 1%. a great time to do that is when you get a cost of living adjustment from your employer. it makes it such that you don't really miss that additional savings. and then the other key idea for maximizing your 401k is take advantage of that professional advice. have a professional determine your asset allocation for you and manage your retirement account on your behalf. we find that when individuals utilize professional advice, their investing confidence actually doubles than when they're on their own. > >while it can be good to speak with a professional

shouldn't investors also consider their own ideas about investing? > >i think a great professional advice approach really involves the individual providing input to the professional advisor about their own retirement goals---their expectations of how they want to live in retirement and their ability to save at this point in their life. it really is a cooperative effort and i think that is one of the best ways for an individual to really own their retirement future. > >thank you for talking with us this morning. that was dave gray of charles schwab. kodak's plan for emerging from bankruptcy has been approved by a federal judge. the iconic photo company's plan means it will emerge as a new company with a different focus -- commercial and packaging printing.a kodak attorney told the court that the company is now very different from the one in introduced generations to home movies, snapshots--and also filed for bankruptcy protection last year. coming up.... help around the trader plays that could build up your

portfolio...thats later. but first...is there an expiration date on your frequent flyer miles if american and us air merge? the answer, is coming up next.

♪ ♪ ♪ ♪

♪

the merger of american airlines and us air is causing a scare among frequent fliers.joining us now is chris lopinto of expert flyer. good morning. is it true that american gets top marks for its frequent flier program? > >good morning. great to be here. yes, that's true. the american advantage program is not only one of the oldest but the most favorative among frequent fliers. > >what happens if this deal goes through? this merger happens? is there any chance that fliers will lose some of their mileage? > >well, no they definitely won't lose any of their mileage. what will happen is that if the merger goes through

the miles will be retained and if someone has an account with both us airways and american they'll be combined into one account. what may happen however, which happens over time in general, is that the miles that are retained are worth less and you may be able to do less with them depending upon what happens post merger. > >how should passengers prepare? is there any way to prepare? > >the advice that we generally give---and this holds true whether there is a merger or not---is don't wait. use your miles now. what happens is that over time there is mile inflation where airlines give out tons and tons of miles. especially through credit card purchases. so there's a lot of miles out there---more miles than ever. chasing fewer frequent flier seats than ever so you have this inflation effect. so our advice is always to use your miles now when you can---don't wait. because it's going to get harder over time and there's going to be--- especially if there's merger consolidation---less frequent flier seats over time. that's what generally happens. > >at the of the day, is this

merger good or bad if you're holding frequent flier miles? or not even holding mileage? > >i guess it depends on which program you're coming from and what your point of view is. it may be good for travelers in the sense that now they'll have more routes and more flights in order to redeem their miles on. but you're also competing against more people who are a part of the other program competing for those routes so there are two ways of looking at it. the other thing to consider is us air miles program and the it. the other thing to consider is us air miles program and the american advantage program i'm going to pass chemistry, and i'll take it from there. i'm going to do what makes me happy. i'm going to work hard. be independent. live large. make the most of every opportunity. i knew i wanted to go to college. but figuring out how to pay for it? i didn't have a clue. the u.s. department of education has over $100 billion. and that's a lot of money. to help students pay for college. and the free application?

you mean the fafsa. i did it online. it was easy. i'm never giving up on my goals. i will make a difference. i'm going to find out how to pay for college. i'm going to college.gov.

tim biggam of trading block joins us now for chart talk. good morning tim. and the

retailers have been giving investors big clues as to what's going on in the home sector. what do you see in toll brothers which reports earnings today? > >we've seen toll brothers come way off the highs. almost 20% or so. actually underperforming housing stock s whichcertainly have gotten hit here once that tapering talk came on but right around that 30 level it bounces off twice back in june and november. looking for the bounce again here so i kind of like the valuation down around these levels. that 31 level seems to be an attractive level to get long in. > >this has been a trader's play and here's the reason why: we had a big buildup on some of these homebuilding stocks and then it was too late to get in. eventually they did come back down though. so is this the second wave? > >absolutely and i think it highlights that patience does pay off and chasing never seems to work out too well so certainly down and around these levels i look for the stock to head back up around that mid 35 level---tapering more than factored in in my opinion. i don't think interest rates are

going to sky high from here and toll being at the upper end is certainly the most immune to an increase in interest rates as well. > >what other stocks in the homebuilding or housing sector do you like tim? > >i kind of like dh horton around these levels here. certainly that has kind of a more mid tier kind of exopsure. i would avoid some of the lower end names. but overall i think housing given the fact that it's been a really big underperformer here is kinda looking attractive to me as a value guy. > >thank you as always. that's tim biggam of tradingblock. have a good trading day tim. > >thank you angie. we've come to the end of the show for today coming up tomorrow in movies and money the budget back story on the butler and how it could effect all of hollywood. from all of us at first business.. have a great day and thank you for watching..

>> now, a paid presentation for the amazing new sheer cover studio mineral makeup, giving you radiant, flawless-looking skin in seconds. hosted by brooke burke-charvet, with special appearances by stars of "csi: miami," "scrubs" and "hall pass," "the young and the restless," and "the bachelorette." brought to you by guthy renker. imagine if you could make any flaw on your skin instantly disappear. what if you could have that beautiful, air-brushed glow that the celebrities have? and what if you could do it all in seconds, with just the touch of a brush? soun