>> this is "nightly business report" with tyler mathisen and susie gharib brought to you by -- >> thestreet.com. interactive financial multi media tools for an ever changing financial world. the dividend stock advisor guides during a period of low interest rates. real money helps you think true investing stocks. action alerts plus is a charitable trust portfolio that helps with trade by trade strategies, online, mobile, social media, wearethestreet.com. watershed moment, the supreme court rules on gay marriage and the impact on business big and small may be far reaching. >> why adjustable rate mort badges may be on the verge of a come back. >> and financial fraud. why today he's beening fought

from everyone from the manhattan u.s. attorney to a frauder. that and more on "nightly business report" for wednesday, june 26th. i'm tyler mathisen, susie gharib has the night off. the supreme court rule in two cases involving gay rights today in the historic decisions could have a massive impact, among other things, what businesses pay in benefit costs and what the federal government collects in taxes and pays out in certain entitlements. one struck down a ban on gay marriage in california. the other declared the 1996 defensive marriage act unconstitutional. that law effectively denied federal benefits to gay couples married under state laws. hampton pearson was at the seem court today and has more on today's rulings and what they mean. >> reporter: the two landmark rulings from the supreme court were greeted by cheers from the

huge crowd of mostly gay marriage supporters who gathered. the justices giving new legal options to same sex couples. it's forcing the federal government to recognize same-sex marriage in the 12 states and district of columbia where it is legal. in a 5-4 decision the justices overturned the defensive marriage act. doma that denied benefits to same-sex couples. justice anthony kennedy said doma writes inequality into the code and justice skolia said it's one to elect change, it's for a court of law to impose change but judging those who oppose it as enemies of the human race. president obama while in route to africa applauded the doma decision and directed eric holder to review all federal laws related to today's ruling. constitutional law experts say that's just the beginning of

impact in the real world. >> no so much in the workplace, for employers but employees who will benefit with social security, health insurance, state taxes. there are more than 1,000 federal laws that affect spouses and now gay coupling legally married can take care of those protections for their families, as well. >> reporter: a second ruling for california becoming the 13th state to legalize the marriage, much to the delight of cheers crowds in san francisco and the capital. a ruling struck down proposition eight which banned gay marriage in california back in 2008. the effect is to let california and other states set their own policy on same-sex marriage. that california couple that brought the marriage ban to the high court had quite a moment. a congratulations phone call from president obama outside the court just moments after the

landmark decision. >> thank you, mr. president. >> reporter: the impact of the two cases, a giant step forward for marriage equality at the state level, but the high court stopped far short of declaring same-sex marriage to be a fund mental kons tanntal constitutio >> for more on how that will impact the business community, james kline join us us. welcome. pleasure to have you here. >> thank you for having me. >> we heard about the broader issues facing american businesses as a result of this decision, but tell me what you think the biggest impact will be. >> well, we praise the court's decision. we had actually filed a friend of the court brief. i think we were the only national business organization to join that friend of the court brief asking the court to strike down section three of the defensive marriage act because it puts -- it put employers in the position of having to treat some of their legally married

employees differently than other of their legally married employees in those states that recognize same-sex marriage. >> it created administrative burdens on the employer. >> what will the biggest effect of striking down doma, the defensive marriage act, be for american companies? i understand what it will do for federal benefits and taxes and so forth, but how would companies be effected by this? >> well, for example, companies have to have different payroll functions, and administrative matters in the same state to treat some of their legally married employees differently that be others. that problem, by the way, is not totally done away with now because of course, the situation we mains essentially the same in those 38 other states that don't recognize same-sex marriage. there are a number of administrative challenges facing employees as a result of this change, even though, you know, the vast majority of the large employers who we represent were

in favor, of usualyoul obviouslg the court to strike down the marriage act and making changes in employee benefit plans now. do they have to go back and -- and ask for spousal consent in various instances where that's a requirement? to what extent will any of this be retroactive? do both employers and the employees have the right to ask the irs to refund the payroll taxes and the tax incomes on employer provided healthcare coverage that until today didn't enjoy the same tax free pay. >> so it will make it easier for american companies to be in compliance with the law, which then would make them less likely to be open to lawsuits by employees that perhaps under doma might have felt, as though,

they were treated unfairly? >> employ yeareers were in comp with the law to today but it created inconsistencies with employees and they didn't like that. they sponsored benefit plans to serve employees and family members and doma in many respects impeded that ability. >> in those states, i believe there are 13, that recognize same-sex marriage, what has the experience been of companies with respect to their benefit costs when those laws went into effect? did their benefit cost increkra and if so, how much? >> they didn't increase to the employers who are already providing this coverage. obviously, that was a voluntary decision on the part of the employers. now arguably, employers in both states that recognize same s-se marriage would be required to

provide the same degree of benefits, but most of our member companies were doing that. so not so much when the states recognized same-sex marriage that it increased their cost, other than some of those administrative costs that i mentioned earlier, where by there had to be separate payroll functions and such. >> thanks for trying to clarify a complicated situation. stocks moved higher despite a down warpd division in product. the economy grew to 1.8% in the first three months in the year, a third below forecast and it was because of lower spending by consumers and businesses and a sharp drop in government spending because of those mandatory budget cuts known as the sequester. that appeared to convince investors, for today at least, that the federal reserve could

delay in interests. in the end, the dow was up 150 points, the nasdaq gained 28 and the s&p 500 added 15 to close back above the 1600 mark. another tough session, though, for gold, which fell $46 an ounce today, a fresh three-year low. gold is now down 26% this year as the dollar strengthened and investor fears about inflation have fizzled. the federal reserve needs to be more clear about what it intends to do. that's when the minneapolis fed president said today. he also expressed surprise about the recent turmoil in the markets and the runup in bond yields. after ben bernanke announced plans to pull back on the asset buying plans. >> as the economy improves, people should expect interest rates to go up because the feds should grow and that's as i say a good thing, but i think a lot of the movement and this is where i think we have to do a better job of communicating

intentions, a lot of the move is due to people thinking we'll have a higher path of the feds fund rate, then they thought for a given set of economic conditions. >> for trees asuries, they made gains today. the benchmark ten-year treasury note was up 11.32 in price at 2.56 9%. the largest manager of bond fund social securis is seeing a moore money leave. net out flows so far in june at pinc o's total exchange traded fund were triple what were they in may. $387 million yanked out so far this month. now the etf is down 2.7% year to date but still has more than $4.5 million in assets in

management. another interest rate looks to be doubling after lawmakers failed to make a compromise for stafford loans from 4.6% to 8.6% on july 1st. looked like sen tomorrows were close to a deal linking that rate on all new stafford loans to the ten-year treasury note until they hit a roadblock. mortgage applications lowered but applications to refinance existing loans, well, they were much lower. last night, "nightly business report" interest durod to a home buyer racing to buy, eager to buy quickly she's turning to a riskier type of loan, one popular during the housing boom and not alone. diana olick has more. >> reporter: alisha has been

frantically touring homes with her realtor to get her family out of the cramped temporary rental since her job transfer, she's running out of time before home prices and mortgage rates rise. >> i feel like we'll be priced out of buying. >> reporter: she's considering a risky adjustable rate mortgage. >> ideally we would do a 30 year fixed but it's depending on the end mortgage payment of what we can afford. we would have to look at an rm potentially if rates rise. >> reporter: record low fixed rates over the past several years pushed arms out of forever n. 2006 they accounted for 36% of origination. today just around 4.5% according to lender processing services. but in just the past week, the rate on the 30 year fixed surged to 4.5% and lenders like quicken loans say they are suddenly getting more requests for arm. >> over the last week or two we

seen the arm production double because folks are actually looking at it and saying to themselves, i have a 30 year fixed rate that's gone up to 4.5% range and i can look at a seven year or ten year adjustable that would have a half to 3/4ths less. >> reporter: they are often blamed for the housing crash and the rates were based on the assumption home prices would only go home. their dell link see rate is twice that of fixed rate loans but quicken ceo says the loan product is fine since its harder to qualify. >> it gives you certainly and a lower rate and has nothing to do what took place in the '07, '08 time frame. >> reporter: while some are considering arms, some are being forced. they signed contracts to buy homes before rates hiked and now need the lower rate to close. >> for more on the move into

adjustable rate mortgages, log on to nbr.com. we have the results of a new report, but first, a look at how some of those widely held stocks closed today. unveiling windows 8.1 and introduced the free update to the much criticized windows 8 operating system saying the company pushed too hard to get the customers to buy the more modern looking interface which worked well on mobile devices but not so well on desktop

users. thi they think customers will be happy this time. >> what you'll see and as we demonstrate 8.1 windows, a heck of a lot of movement, responsiveness coming to the market in a rapid, rapid time frame. >> microsoft was one of the best performers on the dow today up 2.5%. retail and media in the market focus. amazon expanded the licensing deal with pbs to the prime rewards. they will be able to stream past seasons of children's programming from pbs. shares gained more than 2% closing at $277.57 up 23% over the past year. apollo group, the for profit education company was a bottom dweller today. investors sold off the company because of enrollment declining ps and other problems.

apollo lost 10.75% today to close on $17.39. shares dropped 51% in the past year. bed beth and beyond had profits more than 4.5%. the company said it's comparable stores sales increased 3.4% and restated the guidance for the year. shares had gained 1.7% during the day to close at $70 on the button and they moved up in after hours trading. pay checks, the payroll company for smaller businesses reported a flat quarter and missed estimates because of a charge to settle a tax issue. >> revenues up 6% and the company is looking for 8 to 9% profit growth in the new fiscal year. shares gained almost a percent in the regular session but dropped off after that report was released. general mills posted a 13% increase in profits and increase in revenue, as well, but gross margins shrank because of raw materials and the company

trimmed the profit outlook. general mills traded in our range. they closed.5% lower at $48.10. an american business owner held hostage, the workers said they haven't been paid for months and the company is moving to india. today he says he's not planning on pulling up stakes even after his ordeal is over. >> i got a lot of machinery. i've got 100,000 square feet of facility, you know, so i'm stuck here and, you know, i think it's in the best interest of the local area here. it's definitely in the best interest of the people that i employ. for us it's come to some sort of solution. >> starnes says he hopes negotiations will bring his

captivity to an end. our technology was the best, our manufacturing second to none, but now there is rising concern that international competitors are closing the gap fast. jane wells has more. >> reporter: u.s. defense companies remain the 800-pound military go military military gorilla in mobile arms trade. that's a study by ihs defense which says trade has risen more than previously thought reaching $73 billion, a number it expects will more than double by 2020. they say the biggest explosion in global trade the world has seen. the number one category for trade is jet aircraft, the hardest segment for most to develop domestically so they need to buy from the outside. this is why the number one exporter is laquid martin

growing to $6.4 billion. boeing in second at $5.6 billion but russia's united air draft and israel, israel manufacturers will be exporting more unmanned aircraft than the united states at the end of the year and brazil on the rise selling trainer aircraft and builting markets in africa. south korea is one to watch, while still a relatively small player, it is growing quickly and for china, a huge player, the report says nevertheless the outlook isn't as rosey as you might expect. china does well selling products to countries like pakistan and bangladesh and jane's defense says it does not do well in markets where it has to compete with the west. in fact, the report says some chinese surveillance systems sold to south american companies had been returned. still ahead, remember this guy, why enron's former chief

financial officer andy fastow is talking about fighting fraud. but first, how stocks, bonds and commodities all faired today. >> well, it looks like there is something to smile over at kodak. the bankrupt seep approved the plan to structure it into a business. kodak's credit doors will vote on that proposal in the next few weeks, ty? >> there is likely nothing but smiles coming from the ceo of the drug distributer because regulatory filings that showed he secured a staggering $159 million pension, which by the way, is far and away the largest pension package on record, more than double the $74 million

package. since he began running the company in 1999 the results are good. the stock prices more than tripled out performing the market. with that money let's hope he's a good tipper which would be good news for starbucks employees in new york state. a court there ruled today starbucks have to share any tips they get with their shift supervisors. the new york state court of appeals ruled supervisors do much of the same duties as those coffee servers and both jobs are part time and the borworkers deserve the money and the full-time managers of those starbucks will get nothing. a new report by the counsel on foreign relations says u.s. oil and natural gas companies are increasingly at risk of cyber attacks and those malware hackings can lead to costly outages at pipelines, refineries, drilling platforms. the energy industry was hit by

more targeted attacks from april to september last year than any other industry. vicious malware and computer viruss aren't the only attacks computer companies have to worry about. financial fraud is a constant worry and it's worse when they don't have money to lose and that could explain the record attendance this week at a conference of fraud attenders in los angeles. >> reporter: there's the latest technology for spotting fraud. >> so these are all the cables you need. >> reporter: workshops how to detect it. >> all crimes are uncovered by tips or accidents. >> reporter: a famous fraud frighter, manhattan u.s. attorney. >> the job of the fraud fighter is more difficult than ever. >> reporter: and former frauder andy fastow, it was to get into his head. >> what he is limited to doing is coming in front of our people

and talking about his thought process that led him to commit the fraud. >> reporter: formed in the wake of the 1987 stock market crash, the fraud examiners is now a global organization, and it's annual conference, a wbig attraction. >> in effect, if an organization has assets, they have a fraud problem. >> reporter: no wonder attendance this year set a record. >> business is good? >> yeah. >> so business is great and booming. >> reporter: they are selling tools that scrape data from smart phones. >> the data, applications, delete the messages, delete face time calls. >> reporter: they will send your company phony invoices to put your account's payable department to the test. >> we're hoping to save a lot of money and cut some of the waste. >> reporter: to put everything in prospective, there is this traveling fraud museum from a 1940s chain letter to this, a

promotional cigar box given away to clients of bernie madoff. for attendees that come from all types of businesses and companies their goal, compare notes. >> i know what is going on in the indums industry hestry bett myself. >> reporter: fraud fighters will never run out of things to talk about. hope francis named a new commission to look into the vatican banks governing structure a mid charges of corporation and a new investigation into a money laundering ring there. the bank not only handles millions of dollars to run the vatican's operations and charitable works but manages the pension system for thousands of vatican employees. and finally tonight, christi's auction house in london sold elizabeth taylor's very first wedding dress to an

anonymous buyer for twice the estimate, $187,000. the oscar winning actress wore the dress which included 25 yards of satten and a 20-inch waist at her 1950 wedding conrad nicky hilton junior. >> congratulations to susie gharib who today received a gracie award for her profile sometime ago of harvard university's first woman president. >> so well-deserved. she does a fantastic interview every time. >> yes. >> that will do it for us on "nightly business report." suzy will be back here tomorrow. >> and i'm tyler mathisen, great to be with you. thank you-all for watching. have a great evening everybody, see you back here tomorrow. "nightly business report" has been brought to you by -- >> thestreet.com. interactive financial multi media tools for an ever changing financial world. our dividend stock advisor guides and helps generate income

during a period of low interest rates. real money helps you think through ideas for investing and trading stocks. action alerts plus is a charitable trust portfolio that provides trade by trade strategies, online, mobile, social media, wearethestreet.com.

tonight on quest -- from the time an embryo is three weeks old the heart never stops working to keep us alive. but if children are overweight, they double their risk of heart disease later in life. >> individuals who have obesity from childhood, have old blood vessels in their heart. >> heart disease kills more americans than any other cause of death -- more than cancer, car accidents or aids. on this quest special, meet a teenager fighting to lose weight. >> i really would like to get under 200 pounds. >> then, find out how the chances of surviving a heart attack depend on how fast you get to the operating table. >> there's an adage that we use in cardiology that "time is muscle." >> and finally, see how doctors may one day be able to rebuild damaged hearts with a single injection.