the buzz begins.... twitter reports its first earnings report today..why traders have high hopes. in today's cover story.... why smaller waistlines may improve profits at some food companies. plus...how to avoid accidentally giving hedge funds your money. and... one ceo says he created a successfull company by simply: giving the people what they want. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's wednesday, february 5th. i'm angela miles. in today's first look: turn around tuesday lives up to it's image...as we've seen more than a couple times already this year.. selling monday--turned into

buying on tuesday. yesterday the dow rallied 72 points, the nasdaw gained 35 and the s&p 13. gold lost 5 dollars and oil surged $1.18. morgan stanely pays $1.25 billion in fhfa settlement. a nearly 1 trillion dollar farm bill is on the way to president obama. the compromise measure covers farming issues for the next 5 years and reduces spending on food stamps by $8 billion. seattle seahawks celebrate with a parade today- following a big super bowl win. mark sebastian of swan wealth advisors joins us now for trader talk. good morning. the s&p 500 broke through 1745 yesterday. are we in technical trouble here? >>it was a real interesting day. we broke the 100 day moving average on monday. that's going to be a technical hurdle if we're gonna rally back. one key thing that changed yesterday was the vix. it absolutely got thwacked even though the market didn't rally which to me says maybe traders are less worried than the general public

realizes. >>critical question hereyou're a smart guy, you've been trading in this market a long timehow does one hedge their portfolio? what can the average investor do from all these big dips that we're seeing in the market now? >>looking at where the vix is relative to how big some of these moves have been, i think collaring strategies and/or some sort of protective put makes a lot of sense. if someone is sitting on a large capital gain, an alternative way to take care of that would be to sell their portfolio and buy calls. that way, they have to pay the capital gains but they are not missing out on upside. >>because of these big dramatic moves, this market is now being called a stock pickers market. what stocks would you pick? >>the names i really like are some of the underperformers from last year. i think

utilities are interesting. a lot of people priced in a 4-4.5% 10 year treasury note. we're not seeing that. if that's the case, then utilities are probably underpriced. one name i like in particular is exelon which is about $28. it has good dividend yield. i think its should be back above 30 sometime this year. >>thank you mark. >>thank you. muted reaction after micrsoft makes two big announcements -- the computer giant names a new ceo and says that bill gates is stepping down as chairman of the board. microsoft's stock closed down just 13 cents yesterday after satya nadella -- was named the new ceo. he is a 22-year veteran of microsoft. and, takes over immediately. skeptics question whether a microsoft insider will be able to innovate -- tech analyst rob enderle lays out what he thinks the company needs to do next to play catch up. "they need to fix the parts of the company that are underperforming. they need to get the next version of windows

out as quickly as possible. they need to finish the acquisition of nokia and get that company to address their smartphone shortage, and really get underneath what they are going to do with surface and their tablet situation." bill gates who is stepping aside as chairman-- will transition into product development for the company. he will also continue running the gates foundation with his wife. plenty of hype is surrounding possible layoffs at dell. reports pegged job losses as high as 15,000. however a source connected to dell tells re- code-- the number is closer to a couple of thousand. micheal dell owns the computer company and is not require to give layoff details. google has been told to move its so-called "mystery barge" out of the san francisco bay. the floating four-story vessel has been parked in the bay for months but officials say the tech giant never applied for proper permits. the company has been tight-lipped about business aboard the barge and has one off the coast of maine as well. apple, microsoft, sprint and at&t are pledging money to bring high speed internet...to classrooms and libraries. "some of america's biggest tech

companies have decided to join this effort, with commitments worth more than three quarters of a billion dollars." president obama is seeking donations from corporate america as part of his promise in the state of the union address to use his presidential powers when possible to make a difference. the president says if we expect free wifi with our coffee, we should demand it in our schools. the goal is to have high speed internet in 99% of classrooms within five years. and, the country's deficit is declining. according to the congressional budget office, the deficit is set to fall 514 billion dollars in 20-14, due to higher taxes and spending curbs. it also predicts economic growth will rise through 20-16, before dropping in 20-17 due to a shrinking labor force. a vote on extending jobless benefits to the long-term unemployed could happen this week. a bi-partisan deal is emerging that calls for restoring unemployment checks

retroactively to nearly 2 million americans that stopped at the end of the year. republicans were against the idea unless funding was available. the money may come from a pension revision on transportation bill. as of next week, foreign-owned volkswagen could see its u-s workers join the united auto workers union. whatever the outcome, the vote by 15-hundred tennessee workers will impact the auto industry. the vote which is scheduled for next thursday and friday, is the first time in 13 years that the uaw has attempted to organize workers of a foreign car company. the uaw would like to bolster its rolls with a yea vote -- while a nay vote could depress wages across the industry. factory orders fell in december- but not as much as expected. the 1.5% decline was the largest since july, however, economists predicted 1.7% drop. fewer orders for aircraft was a big part of the hit according to data from the commmerce department. the demand for durable goods - fell 4.2% but that was slightly less than the estimated 4.3%.

sixteen female employees at jp morgan will split a 1.4 million dollar settlement for allegations of discrimination. j-p morgan denies the women at an ohio call center were openly ridiculed and not given bonuses. in a 2009 lawsuit, the employees allege they were refered to as "girlie' , and pregnant women as "big fat mama" j-p-m says the men accused of improper behavior no longer work there. and that such references should not be tolerated. the cfo of target is testifying on capitol hill about the massive credit and debit card security breach at its stores during the holidays... i want to say how deeply sorry we are for the impact this incident has had on our guests - your constituents. we know this breach has shaken their confidence in target and we are deteremined to work very hard to earn it back. john mulligan made the comments yesterday to a senate judciary commiittee. tuesday's hearing was just one of several this week. lawmakers are considering legislation setting standards on how customers are are notified when their information

has been stolen. consumer groups are pushing chip enabled cards instead of the current magnetic stripe system. mulligan says target is investing in a $100 million dollar chip enabled smart card that could start in 2015. even rare good news for struggling retailer j-c penney failed to support the stock. j- c-p shares fell 10% yesterday after the retailer reported a sales gain of 2% during the critical holiday quarter. the ceo released a statement saying the company's turnaround is "on track" last month, penney's said it plans to close 33-stores and shed two-thousand jobs to save money. michael kors is wall street's latest stunner. a glowing earnings report helped pushed fashion designer--michael kors---into the billionaire bracket. profits at kors' stores in the third quarter were up 77%, on strong holiday sales. revenue also beat predictions. investors certainly showed their love for kors stock. shares hit a record high yesterday before closing above 89 dollars. in our cover story, there may be bigger profits in making food sold in smaller portions or

with fewer calories than before. that may be the flashing dollar sign behind an effort that says it's making headway in the fight against childhood obesity. conjunction with first lady michelle obama's fight against childhood obesity, a coalition of food and beverage companies--many of them well- known brands say they've trimmed their product lines of calories. according to a study by the robert wood johnson foundation, 6.4 trillion fewer calories may be found on supermarket shelves---far exeeding the goal of the healthy weight commitment foundation, fighting obesity and three years ahead of schedule. "companies are listening to the customer. but if the taste isn't there, they're going to leave faster than you can say, 'low-cal.'" one of those customers is health and wellness author kathy freston. she's leading an online petition drive to

convince mcdonald's to offer a vegetarian burger. "the argument they make is that it's good business. but you'll have to put in a lot of r&d before you can offer something healthy, tastes good and makes money at the sametime." but as for a mc-veggie, mcdonald's says " we have many menu items that can be customized without meat and still provide a source of protein." we'll continue to evolve our menu to meet the changing preferences of our customers." there was no mention of a veggie burger in the near or distant future. but a trend spotted by food industry research firm technomic might indicate otherwise. "when you talk to restauranteers, they want to stop the 'veto' vote. when you've got consumers going out, someone's going to be on a diet." one indicator that may drive menu and ingredient changes-- sales of low calorie products

are up 82%, from where they were seven years ago, according to study by the hudson institute. walmart makes a big investment north of the border. the world's largest retail chain will expand in canada -- spending nearly half a billion dollars and creating 75-hundred jobs in the process. the company says it will build 35 super- centers by early 20-15. the announcement comes just a week after target said it would build nine new stores across canada. seaworld shareholders won't vote on a proposal to create "whale sanctuaries." the sanctury idea came from animal rights group "peta" -- which owns a stake in the company. however...seaworld argues that the group needs to be a shareholder for at least a year, before submitting proposals for a vote. peta was two days short of that requirement. seaworld's treatment of orca whales was questioned in the documentary, "blackfish". the company has denied mistreatment.

in rare move, drug companies are becoming partners instead of competitors. under a government program-- 10 major drug companies suchs as johnson and johnson and bristol myers will work together to develop cures for type two diabetes and alzheimers. typically drug companies are secretive about research in the pursuit of patents on new drugs. still to come: how one man's small startup wound up doing business with popular retailers. plus...if you thought your portfolio had a nice boost from the 20-13 rally...just wait till you hear how much billionaires made. and pick pocket...how to avoid investment fees that end up in someone else's wallet. that's up next, after the break.

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.

before signing on with a financial advisor or investment firm it's a good idea to check the fine print. its estimated investors lose 30 t0 40% on their investment from hidden fees and commissions. here to uncover the truth is todd lippiatt of propeller.com thanks for coming on the show today. >>thanks for having me. >> you are a former executive from wall street so you have probably seen it all and know it all. i'm wondering how well some of these fees are hidden? >>for traditional public investments your broker has to disclose the fees they are charging and the same for mutual funds but for alternative investments, it's not so clear. >>how do you make it clear? how do you make someone see what perhaps the investment people don't want you to see? >>you need to understand how many intermediaries your investment dollars are going through. it might not be totally clear but i do believe you have the right to ask. your broker may be pooling assets and

going into a fund of hedge funds in which case they would invest directly in a hedge fund. each one of those intermediaries takes an asset management fee and sometimes even a performance fee from your return. >>how much should it cost to invest or can it be done free of charge? >>not free because what you have to understand is with some of the fees you're paying for assets. what we at propeller are trying to do is bring direct access to the investor to disintermediate this market a bit and to give a lot of the return back to the individual investor. >>when you say alternative investments, is this the area where it does become fuzzy and those hidden fees mostly show up? >>not so much because we believe in total transparency. we let everyone know exactly how much we're making and exactly how much we're passing through and you can choose to invest with us or not. >>todd lippiatt of propeller.com thanks for coming on the show today. >>thanks for having me. some ceos walked away from 20-13 as big winners. 20 executives who have large stakes in their s&p 500 companies made a combined 80 billion dollars in investment gains. that's according to a study by the wall street journal. the ceos whose value in their own companies increased the most include: mr. warren buffett, amazon ceo jeff bezos and facebook's mark zuckerburg. all reportedly had net share gains of around 12 billion dollars. thanks chuck! coming up...is ralph lauren still in style on

wall street? and do traders have great expectations for twitter's first ever earnings? plus... "seeing green. how one ceo has capitalized on going eco friendly. that's next with bill moller!

more and more environmentally friendly products are going mainstream. costs are coming down, performance is going up and the number of choices are increasing. one of the leading companies in the consumer products category is earth friendly products. john vlahakis is president of the company whose cleaners, soaps & detergents are sold in costco & other retailers in the us & around the world. it is a family business and it was your dad who started it. >>my dad started the company in '67. i joined the company out of college and then after grad

school i started the earth friendly products brand in '93. >>even in '93 it was not fully and broadly adopted yet. so to go clean and green was a bit of a risk. >>i was a risk but i don't think it's quite mainstream yet either but we're gaining. >>you are also a market leader. is that because of patents you have taken out or recognition of the brand? >>i think our success has been based on price. we're trying to provide a low cost green alternative so when the consumer makes the decision to try our product they are doing it on a cost effective basis. >>isn't it true that the performance has been going up? a lot of people felt that if i buy this product i'm going to have to compromise. it's gonna cost more, it's not gonna perform as well. >>absolutely not. >>that was the case though. >>you are correct, there was a lot more water in those products in the old days but now they are much more effective. >>you do a lot of r&d and earlier you told me that most of the good ideas you get are from your consumer. >>the consumers have been great. we had an orange oil based product that people thought they could use to kill ants in their home which was never the intent of the product

to begin with. they do have some great ideas and good feedback. the best feedback we get are from our consumers. >>how do you keep an edge in the marketplace? >>a lot of it is watching the way the market trends. right now there is a big push for non- gmo products. they want our ingredients to be non-gmo, so nothing that we have can be genetically modified. we're working with a third party certifier to ensure that and to provide that to the market. so it's another choice that consumers are asking from us in terms of the product which means changing the ingredients and doing some research. >>you are second generation. is there going to be a third? >>i hope there's a third. i have three kids and i have some siblings who have some children and i hope they do come into the business. >>fascinating. john vlahakisthanks so much. >>thank you. still to come-- twitter reports its first earnings after the close today. a trader sets us for what to watch...next in chart talk.

james ramelli of keene on the market.com is here to guide us through today's earnings news. good morning james. >>good morning. >>let's start with ralph lauren, a name that has become synonymous with the olympics. michael kors, by the way, had great numbers. so what does this mean for rl? >>rl is going to report here and they are historically a strong stock on earnings. the stock has rallied 5 out of the past 8 quarters with an average move of around 4.5%. that's pretty much in line with what they're implying now. they're

implying around a $13 move to the upside or to the downside. looking at the chart we really see a breakdown in january. the stock has come off from its opening print of the year just below 180 quite a bit here with an upside target of 68 for earnings. i think on a risk to reward basis it sets up better for me for a long. we saw kors report great earnings. i think that's good news for rl. i think the stock heads higher on earnings. >>what about estee lauder? will things get pretty or will they get pretty ugly? >>actually when you look at the historical move in estee lauder it's pretty mixed4 for 4. it ralled 4 times and sold off 4 times over the past 8 quarters. it moves on average around 3.5%. we've seen a lot of bullish activity in estee lauder throughout the first part of january. a lot of out of the money call buying by institutional block traders. however, those trades haven't really quite panned out yet. we've seen the stock sell off hard amidst all of this uncertainty in the market. however i think that those signals are still going to hold true and that this stock will head higher on earnings. >>we're all ears for twitter. earnings come out today. what do you expect? expectations are high as you know. >>expectations are high. but

what we have seen here is that over the past 2 weeks as we have seen such shakiness in the market, that twitter has held up relatively well. this is one i would have expected to come off a lot more. the strength in twitter leads me to believe the stock could head higher on earnings. it's about $9 off of its highs, just below $75. that's about where they are implying the stock can go by the end of this week. i think they come out with beat on top and bottom line and this stock rips higher. on a risk, reward basis, i do not want to be getting short twitter. i want to look for cheap out of the money call spreads ahead of earnings. >>it is a break it or make it night for twitter. thank you james. that wraps it up for now. coming up tomorrow in movies & money-- why a three peat winner at the box could be toppled by a new toy story. from all of us at first business. have a good wednesday!

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