this is "nightly business report" with tyler mathisen and susie gharib. brought to you by thestreet.com. for an ever changing financial world. our dividend stocked adviser. action alerts plus is a charitable trust portfolio that provides trade by trade strategies. online. mobile, social media. we are thestreet.com. three ceos making big headlines. first yahoo's marissa mayer. she just spent over $1 billion to buy a blog site. but will the move pay for for shareholders? >> jp morgan's jamie dimon.

shareholders vote on whether he could keep the job. >> and apple's tim cook arguing over the tax code and facing tough questions about his big pile of overseas cash. all that and more tonight on "nightly business report" for monday, may 20th. good evening, everyone. our top story tonight is yahoo, the granddaddy of internet search, older, if not bigger than google, is paying more than $1 billion for tumblr, a website that brings thousands of blogs and hundreds of millions of young users together every month. and those younger eyeballs, along with the money they could bring but haven't yet may be what yahoo's ceo marissa mayer is really after. john ford has more now on yahoo's big bet on tumblr. >> reporter: david karp is 26, a high school dropout, and now he's mega-rich. that's because karp is founder

of tumblr, the blogging site yahoo just bought for $1.1 billion in cash. >> this isn't a get rich quick scenario. karp has been working on tumblr for years. >> reporter: since she arrived 10 months ago, yahoo's ceo marissa mayer has been triegd transform the company into a must use service for everyone. to succeed, she's going to have to figure out what younger users are doing with their smartphones and tablets and what they'll want to do next. tumblr with its massive audience of more than 300 million visitors every year will certainly help. 11 months ago it topped the list of websites at 47. since then it's climbed to 41. but is yahoo paying too much? >> youtube looked expensive in

2005. this year they're going to do $1 billion in revenues. a lot of people screamed that deal didn't work out for a long time. i think tumblr is a special property and i think it will take years for it to play out, but as an investor, i'd rather have a stake in that property right here. >> reporter: one of the things mayer does as well as anyone is figure out how to translate data into better online software and services. until now yahoo's been flying blind when creating products for young people. now with tumblr's data, yahoo is instantly smarter, even if it takes a long time to make money off of tumblr directly. >> just as significant in all this, david karp chose yahoo. it's arguably mayer's biggest vote of confidence yet from a savvy techie with a lot of options. and a disclosure to share with you, cnbc, which produces

"nightly business report," and yahoo have an alliance to share and coproduce. on capitol hill tomorrow, apple and its billions of dollars stashed overseas will be in the spotlight. ceo tim cook will be grilled by senate lay makers about that and avoiding paying u.s. taxes. today we got an early look at what apple will tell the panel about keeping funds offshore and why the whole corporate tax system needs an overhall. what do you think will be the pitch from apple's tim cook. >> reporter: i think he'll have to defend himself from a report that the senate on select committee just put out this evening. the report is pretty critical of the way apple sets up its corporate tax structure overseas. senator carl levindt[

boast their company is the highest corporate taxpayer in the u.s. but what they often leave out is the second part of the story, and that is that apple is one of the largest corporate tax avoiders. it's unacceptable that apple, and they're not the only ones, but they're the most egregious offender. >> now apple is going to come into this environment tomorrow. they'll say they don't use tax gimmicks, that everything they did was legal. they'll also highlight the enormous money they do pay in

taxes, up to $6 billion last year. this year they're estimating to pay $7 billion. they'll say the particular entity the subcommittee is focused on here which is based in ireland but not a tax resident of any count, they'll say that that does not reduce their tax liability. >> so they're going to maintain that nothing they did is illegal. is what they did that lots of other companies do as well? >> reporter: well, it's something the committee says they've never seen before. they've done a lot of these investigations in companies. they haven't seen this kind of country status ever before in their investigations. they say they've talked to a lot of people who are experts in tax law who have never seen it either. this might be a first. >> thanks so much. that third ceo we talked about about the top of the program tonight, jp morgan's jamie dimon faces a tough test tomorrow at the bank's annual meeting.

there the results will be announced of a non-binding shareholder vote on whether to split the roles of chair holder and ceo which dimon holds. ahead of that vote today, jp morgan shares were basically unchanged. looking at the rest of what was going on in wall street today, the major averages inched lower. and only a whole lot of speculation about when the federal reserve will ease back on billions of dollars in asset purchases. by the closing bell, the dow was down 19 points, the s&p off a point. a different story for the russell 2000. this index of small companies crossed the 1,000 level for the first time ever. today it's up 18% so far this year, better than the major indexes. and thanks to bargain hunting, there was a huge turnaround in some hot commodities today.

the price of silver plunged to a 2 1/2 year low before bouncing back. gold started higher and ended at more than $19 higher at $1,883. >> and tonight the generic drug maker activa will increase its profits. this is the second major acquisition in the past two years, which competes against larger companies like teva pharmaceuticals. activus rose to a new high, $127.15. >> here's a way to win approval of a pending deal, offer to pay special dividends. shareholders of plains exploration today approved the takeover after both companies sweetened the deal with two

special dividends. the takeover is expected to close at the end of the month. freeport rose, and plains exploration surged almost 7.5% to $48.94. chesapeake energy has a new ceo, and he's a top executive from a rival firm. robert lawler will fill the post advocated. lawler inherited a company with $13 billion in debt and the challenge of low natural gas prices.u0pn chesapeake closed higher by more than 2% to $20.80. that long winter translated into a good quarter for campbell's soup. the company is forecasting stronger earnings for the full year. campbell's also attributing the gains to new products but did report weak results in its v-8

juice business. campbell sou1ñ to $45.78. >> and web sense is going private. this making of softwares to protect companies against data theft has agreed to be acquired by vista partners at a 29% premium over friday's closing price. they close at $24.76. >> still ahead, some call sac's president one of the most successful traders of his time. first a look at a handful of stocks that closed today at all time highs.

the billionaire hedge fund manager steven cohen of sac capital advisers, one of wall street's most successful players, may also be facing criminal charges in a wide-ranging government investigation into his firm. kate kelly has been following the story for us. kate, who is steve cohen and why does he get so much attention? >> reporter: as you just mentioned, tyler, he's one of the most successful hedgemo fun managers in the world. he manages $15 billion. also by head count his hedge fund is one of the largest out there. employs more than 1,000 people in stanford, connecticut. and because of the money they manage and their style, they're

accounting for a major percentage of the market volume every day. it may only be 1% or 2% on a given day, but that's a signature chunk. >> why does this matter for individual investors? why should they care about what happens to him and his firm? >> why it matters to an individual investor is more symbolic than literal. there's a feeling that the class divisions are widening, that hedge funds like sac get away with all sorts of illicit behavior, or enjoy a more competitive tax rate on investment gains. although hedge funds were not considered to be accountable for the financial crisis, i do think there's a perception they might be cowboys, taking risks that others can't, and in this case the government is reining in on what they believe to be a pattern of illegal behavior. >> haven't there been multiple investigations of his firm? what have they yielded and

what's different now? >> you're absolutely right, tyler. this particular set of cases has been going on since 2009 and follows on the heels of a another series of cases with the galion cases. so we've had a number of years of investigations of nine current and former sac employees having been implicated in terms of allegation of insider trading. four pled guilty, two settled, one was found guilty and two are awaiting trial. steve cohen has been implicated himself. >> we're going to be watching this unfold. thanks so much, kate. while steve cohen knew he was being investigated by the feds, that's not always the case. now many taxpayers are worrying about what flags they may be

sending to auditors. more on how you may be a target no it. >> reporter: if you're 1 in 100 americans who's been audited, you know it's painful. but you may not know the irs is using new tactics to zone in on tax evasion. >> everyone is concerned about the irs. >> i'm honest about everything. i don't worry about it too much. >> reporter: the good news is there's some things you can avoid doing so you don't become a statistic. first, don't go bragging on social media about nonpayment or underpayment of taxes. sounds simple but you'd be surprised how many people do it. second, if you're buying or selling something online, don't exaggerate and declare a different value on your tax return. they could easily find a discrepancy. consider information posted online to be public. there's no reason to think the irs isn't poking around on the web. this was always known to people in the tax community that the irs, like everybody else in the

21st century, was monitoring online, says a professor another cardoza law school. third, don't claim noncash deductions on your tax return that aren't reasonable, things like cars and clothes. if the amounts seem too high, the irs will take notice. last, don't file information that's not going to match up with what others file about you. yes, they do cross check. >> keep all the receipts and just don't over do it. don't try to make huge deductions. >> reporter: the irs's new practices are raising some eyebrows, especially in light of its most recent scandal over targeting conservative groups. the agency is so secretive about what's going on that it erodes public confidence. meanwhile, wealthy taxpayers are

a target because the amount recovered by the irs is greater if any issues are found. according to irs data, taxpayers making $1 million or more are 12 times more likely than the rest of the general population to face an audit. a healthy dose of consumer spending has played a big role in the economic recovery. but a new survey says those spending ways may be coming to an end. more on the survey and why consumers may be cutting back on spending. >> reporter: high gasoline prices forced many americans to cut back on spending. but lower gas prices aren't leading to more spending. gas prices have risen to $3.65 for the national average. but they're lower than a year ago and 14 cents below this year's peak. spite the sliding prices, 80% of

americans have not increased their discretionary spending according to a bank rate survey. but last spring when prices were more than a nickel high on average, more than half of those surveyed said they had decreased their nonessential spending. now the gasoline prices are lower, and they haven't ran back up their purchases. the problem is consumers just don't have spare cash to throw around. >> household budgets are still very tight. even though we've seen a drop in gasoline prices here in 2013, it's not translated into additional consumer spending. only about 1 in 6 americans has increased their spending due to the declining gasoline prices. >> reporter: the payroll tax increase, 2 percentage points higher than last year, has hit many hard. >> i think it's had a large impact in 2013. you can look at the modest increases in gasoline prices, but they don't make up for as

much as folks who live paycheck to paycheck were damaged by the peril tax. >> reporter: the bank rate survey found about a third of consumers feel less comfortable about their savings than a year ago. >> when gas prices are still relatively high, it's added little oomph to the economy. >> consumers are very, very cynical about gasoline prices. they've heard that the u.s. is in the middle of an emerge boom with more crude oil production than we've seen since 1992. a lot of refining. and yet the prices they're paying are about what they paid in the last two summers. >> reporter: despite the slide in gas prices over the past months, consumers are still cutting back, driving less and taking shorter trips. for "nightly business report," i'm sharon epperson in new york.

>> for savers, new concerns about annuities. now that private equity firms are becoming involved in the annuity business, new york regulators are examining whether they are taking too many risks with investors' money. subpoenas have been sent to big name company. mary thompson is following the story and joins us. this is such an important issue for many of our viewers and investors across the board. so what are they investigating? >> the probe right now is informational essentially. what they're concerned about is you have private equity firms which tend to have a short-term focus on their investment, three to five years, buying into these annuity businesses which of course are geared toward the learning term investor. so it's informational. the office wants to see what kind of strategy the private equity firms have with these annuity businesses, and are they aligned with the strategies,

with the needs of the annuity buyer. >> should i be worried if minute is managed or owned by a private equity company? >> some private equity firms have been in this business for a long time and done a good job. it used to be 7% of the annuity business was held by private equity but has moved up to 30%. so because of the increased interest, they want to get ahead of it. the regulators want to make sure m4eed to be put in place, they'e there so someone with an annuity isn't hurt. >> so let's say you have an annuity and you're getting your monthly statements. how do you know if a private equity firm is involved in it now? >> the best thing would be to call the company itself and ask what the ownership structure is. but some people may not know because it won't be apparent from your statement so you have to do a little research. >> thank you so much.

coming up, we'll take you onboard the first dreamliner flight since the jet was grounded four months ago. but first, a look at how some widely held stocks closed today. it's been a devastating week for tornadoes in the nation's mid-section, and late today, a milk just outside of oklahoma city. you can see it in this video, countless flattened homes and businesses, cars and trucks tossed around and left in piles on the sides of roads. tornado watches and warnings have been extended through 10:00

tonight central time in oklahoma and parts of missouri, kansas, arkansas and texas. >> major devastation in those parts south of oklahoma city. well, it has been a long and costly four months for boeing since its signature 787 dreamliners were grounded worldwide after smoke conditions were found in two aircraft. since then a faulty battery system has been diagnosed and fixed and the dreamliner has been cleared to fly again. today united airlines put one back in service. our reporter was on the second flight and tells us why there's a lot riding on the return of the dreamliner. >> reporter: a low-key send-off for the return of the dreamliner with united airlines. >> we are delighted to have the 787 back in service. it's a terrific airplane. our customers love it and we're pleased to have it back up. >> reporter: united putting the 787 back in thä-x air caps a

four-month p.r. and financial headache for the airline. it cost united millions of dollars. >> we waited a long time to get it back up. it's important for us because we have a lot of new routes we'll be flying, either existing routes or new routes for this airplane. >> reporter: investigators still don't know the root cause of two dreamliner fires last january, but they were definitely in the lithium battery packs which prompted a redesign by boeing. it includes more space between the battery cells that canúeaz÷ hot, putting the unit in a fireproof steel case. and running ventilation outside the 787 just in case the new battery system catches fire. >> we are confident in the hairplane. safety means everything to÷f us. it's in our dna. it's why we get up in the morning. >> reporter: boeing may be confident in the redesigned dreamliner, but what about

passengers? do they think twice before taking this flight? >> no hesitation at all. i knew they'd be really careful. >> pretty confident now because they've had an opportunity to work on those kinks. >> boeing does such a great job with their airplanes. they had a problem but they got it fixed and are very confident in what they've done. >> no one has died on a 787 or been injured on a 787. the problems are serious, this have been addressed and i think that the 787 will go on and prove itself to be a very, very successful airplane. >> reporter: united believes

was sold in the largest jackpot in u.s. history. the lucky ticket was bought at a grocery store and so far the winner has not come forward. if that winner is smart, he or she is lining up a lawyer, a financial planner and an accountant right about now. i hope that person is a viewer of "nightly business report." that's "nightly business report" tonight. i'm susie gharib. thanks for watching. >> have a great evening, everybody. >> announcer: "nightly business report" has been brought to you by -- >> thestreet.com. interactive financial multimedia tools for an ever changing

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