this is night by business report with tyler mathisen and susie gharib brought to you by. >> thestreet.com interactive financial media interactive tools for an ever changing financial world. our dividend stock advisor guides and helps generate income during a period of low interest rates. we are thestreet.com. an exclusive club, google shares break $1,000 making it only the second stock in the s&p ever to do so. but what is it about google that's so important to your portfolio and your everyday life. >> market milestones, numbers are staggering, 20% of the s&p 500 hitting 52-week highs and the index itself at another new record but if earnings growth is tepid, why are stocks growing. fixing, and reselling homes

is back and sop of the biggest returns are coming in just one segment of the market. we have that and more tonight on "nightly business report" for this friday, october 18th. good evening everyone and welcome. stocks end an exhausting up and down but mostly up week with some impressive gains and another all-time closinghe s&p google shares have gone where few stocks have ever gone before breaking through the $1,000 a share barrier, the stock closed at $1,011, up 14% after blowout profits profits we reported yesterday. google is the top search engine and yahoo and youtube powers smart phones but there is a lot more to the company and where it sees growth in the future.

jon fortt has more on google and what is next. >> a banner day for google and the company has the most impressive day of trading ever rising more than 13% and closing above $1,000 per share. the last time it rose that much, 2008, a rough year for stocks when a few good days offset a year and the stock lost half the value. today's trade was about google's third-quarter earnings report and signs the company could prove to be as dominant in the area in smart phones and tablets as it was in the era of the west. as we approach the tenth anniversary of the ipo next year the company has grown far beyond the roots of a search engine. they pulled in more than $3 billion last quarter, 21% of revenue. youtube, the video site it acquired pulls in more than a billion dollars a quarter and it's android operating system has become a global smart phone power house. along the way, google has become an extension of many of our

brains. >> we're directionally challenged and trying to find different cities and google saves us. we pull up the map and find where we're going. >> i use the google stuff, i think is brilliant and help ps me a bunch with work. >> reporter: beyond the maps, video and the cloud google is a major player in retirement accounts, too. top part of fidelity and number 7 in van guard where it's in 30 founds. in so many ways, google is everywhere. >> the internet in a lot of ways becomes like electricity. it's around you all the time, always available. i think that's where google really seems to be pushing the envelope and having all your information available to you wherever you are, not sitting at a desk and sharing at a screen and pick up a phone and put it to your ear and have it around you like electricity today. >> this is a bit reminisce sent

of apple last year. it tumbled for the next nine months losing nearly half its value. we'll have to see whether google's good fortune lasts a bit longer. for "nightly business report", i'm jon fortt. >> that record high for google helped fuel another day of records on wall street, most of the major averages up by 2% or more for the week. also powering up stocks, news that china's economy grew faster than expected in the latest quarter. here are the closing digits. the dow rose 28 and nasdaq jumped 51 and closing in on the key 4,000 level and s&p 500 added 11 points, enough for a record close. stocks are obviously back on track but how long can the positive momentum last? >> reporter: everywhere you look, the stock market continues to hit new milestones, seven of the ten s&p 500 sectors traded at record levels today led by health care and consumer

discretionary, both up more than 30% this year. the rally is even broader than that, more than 20% of the s&p 500 companies are at 52-week highs, many at all-time highs. on top of that, the blue chip dow is up more than 17% this year. the russell 2,000 and s&p mid cap 400 are at all-time highs and the nasdaq is at the highest level in 13 years. but how long can this last? usually it's corporate earnings that power up stock prices, that's been happening for the past three years. but now the tables have turned. earnings have slowed, they are up only 4.3% but stocks are skyrocketing. the s&p 500 stock index is up 2 2% this year and could go higher if companies like google wow investors but the government shutdown took a huge bite out of the economy. what will the lasting effects of that be?

can lawmakers agree on a budget? when will the federal reserve taper stimulus and will it temp appetites for risk. >> answers for where the market is heading and whether she sees this good streak for equities continuing. she's chief investment strategist at charles swab. the numbers are tepid which begs the question, did the market get ahead of itself? >> i don't think so ty. earnings powered ahead at a faster pace, the prices went up. the pe came down as the market was doing well. so far this year we've actually been in an expansion evaluation mode, in other words, prices are moving up faster than earnings. we're still on a forward earnings basis though, inexpensive relative to the long-term norm and the conditions for continued evaluation expansion are there. it's a missed perception a

slowing in earnings growth automatically means problems for the stock market. we're in the later stage expansion. >> i want to ask you about google but i know you can't make recommendations on individual stocks but what is google hitting a thousand, that big round number mean for market direction and investor confidence? are we getting a little bit ahead of ourselfs? >> i don't think so from a market perspective. i think google is certainly a approximate see for technology. it's a proxy for the nasdaq and as you mentioned, it's at a 13-year high and closing at 4,000 and years ago it was unthinkable we would get to the 5,000 level peak. we have to remember technology was really left out of the last bull market from 2003 to 2007 so it's been a very long drought in terms of this love affair for technology, and we may start to see the seeds of that, and i

think that's a good thing. we think the technology sector is extremely attractive right now. anything that drives a little bit more of that enthusiasm for the sector, given the evaluation is very strong i think is a good thing. >> in someways, liz ann the environment for stocks is about as perfect as it can be. you have reasonable but slow growth, not run away growth, virtually no inflation to speak of and low interest rates, there is no competition from bonds. so i wonder why individual investors haven't been buying with both hands and fists on -- in this market. what are investors telling you and telling schwab? >> there is a tremendous amount of skepticism and bullishness. in economic terms and market terms was so severe and came not that far after of course the last bubble burst into 2,000 and that muscle memory really hangs

around for quite some time. what we're hearing is much more concern about the macro, a lot of sideline money looking for the next shoe to drop but to your point, tyler, this environment that confounds a lot of people because we don't have strong economic growth. we used to call this goldy locks. that's the environment you want to see in the grinding higher slowly pulling investors in getting them more emotionally attached to the market. if you had straight shot up 1998-type environment that would be more concerning. i love the wall of worry, and when that starts to dissipate and that enthusiasm turns into u forya, that's when you are cautious. a banner day for general electric today, the best performing stock in the dow. shares of general electric jumped 3.5% to $25.55, a

five-year high. investors brought up the stock on better than expected quarterly earnings. profits fell by 9%, but earnings per share came in at 40 cents and beat estimates. revenues were down slipping 1% to $35 billion but the company reported a record backlog with orders rising 19% and gave investors a lot to look forward to. >> one of the country's biggest investment banks reporting third-quarter earnings, profits doubled to nearly a billion dollars thanks to an increase in stock sales and trading revenue. james gorman said the plan to focus on individual clients and to sell off non-core assets like a stake and insurance broker are paying off. shares ended 2.5% higher today. another fine for jp morgan chase, it's agreed to pay the federal housing agency a whopping $4 billion in

penalties. "the wall street journal" said they reached that for miss leading the mortgage agency for risky home loans it bundled up and sold as securities during the housing boom. less than the 6 billion the housing agency was looking for. if you've ever been slammed by overdraft fees by your bank, help may be on the way. bank of america is planning to offer a type of checking account that will prevent customers from going over account balances when making an atm withdraw or automatic online payment. another setback for the troubled rollout of washington's online health care exchanges part of the affordable care act. some big health insurance companies got faulty data from the marketplace, enough to hamper their ability to even handle the modest number of enrolling that signed up so far.

spouses reported as children, missing data field and questionable eligibility determination. still ahead, home flipping is back in a big way and this time it's different and big returns coming in the very highest ends of the housing market. first, a look, though, how the international markets closed today. home foreclosures on the decline mortgage rates are relatively low and home buyers focussing on construgting more modest homes. buyers that flip houses are entering a new market super high-end homes. diana olick has the story. there is a lot more than a coat of paint going into this

los angeles home. >> we'll take down retaining walls and studs and build up with an architectly designed home that flows. we really take the extra time to order the finishes that higher-end customers respond to. >> reporter: because high-end customers are nicolaus' bread and butter. his company american coastal properties, specializes in buying, remodelling and flipping multi million-dollar homes. >> in the hotter markets like california, you have unique situation where a highly desirable neighborhood and people want to come in and there is no supply, no inventory. >> reporter: whether than go through zoning and tax issues with a total tear down, they seek out homes in sought after locations they can get at a slight discount because they need work. >> this really came out great. >> reporter: this bought this one for $735,000, redid it inside and out and listed it for

close to 2 million. it's riskier because it's priceyer but demand is there. >> you see foreign buyers coming in, all cash buyers. >> reporter: with so few homes on the market, some are canvassing older popular neighborhoods like this one and ringing doorbells to see if anybody wants to sell. >> it's a bigger up front risk and on the back end you have usually fewer buyers, but the pay off can be bigger. the average gross profit on a high-end flip is about $240,000, compared to about a $55,000 average profit on the lower end. >> it does make the backyard pop. >> reporter: american coastal, which is for now, just in southern california will flip between 30 and 50 homes this year. that thanks to a 50 million dollar infusion from colony capital and the family office. >> we're looking at properties from 1 million dollar in

acquisition price up to, we just purchased one for 9$9.5 million >> reporter: they will spend 50 to 100% on remodelling but will see high teens and low 20s returns. this could be a home office back here. >> reporter: that won't last long. for "nightly business report", i'm diana olick in washington. >> more on the trend on high-end flipping on nbr.com. earnings and more earnings, that's where we begin tonight's market focus. honey well reported in line with analysts but weak demand for products and slow economic growth prompted the firm to cut the full year revenue forecast. the company blames the weak results to supply problems and the see quest ration. it fell to 84.58. schlumberger reported a better than expected rise in its quarterly profits.

the company benefitting from increased offshore drilling in north america and growing international demand. schlumberger topped estimates for eight quarters. the stock popped 3% to 93.99. demand for drilling helped baker hue's bottom line. they beat the forecast siting healthy demand from the middle east and asia. the stock spiked 7% to $55.5. a rebound in the housing market, the company makes air conditioners, refrigeration units saw an increase in demand as more homes are bought. intuitive surgical will come in at the lower half of its forecast range. shares dropped almost 6% to

$376.52. and the power company nrg energy plans to pay $2.6 billion to acquire the assets of the bankrupt unregulated power producer edison mission energy, the deal will nearly quadruple nrg's wind generation capacity making it the nation's third largest producer of renewable energy. if approved, nrg expects the deal to close in the first quarter of next year. the stock climbed to $29.30. our market monitor guest tonight has these words of advice for invers to, buy good quality stocks and stay away from risky investments. he's game s chairman of mark capital. a pleasure to have you on. >> thank you. >> you heard our reporting, all these market records, google hitting a record $1,000 price. can it keep up the momentum or

are we getting into a dangerous territory? >> we'll revisit washington in a few months, that at some pound the fed is going to begin the taper and that there is speculation in the credit markets. many people would say as bad as 2007 because the fed pushed people out the risk curve. you can stay in but you have to stay in with quality stories, with good balance sheets and either good income or earnings stories. >> jim, we began the broadcast tonight with a story about google. do you own it? would you buy it? it was up 13% today. >> it's hard. look, i don't own it. if you wanted to own it and you had a four or five year outlook you would buy it and make money but intuitively it reminds me of apple when apple hit 700 that people tend to get over excited and most people who study the company have a value of about 880 to 1200.

it's in the middle of the range. if you didn't own it, you can buy half but i would wait for a correction to buy the rest. >> you mentioned apple and that's a recommendation for tonight. let's talk about apple. it's at $508 a share and creeping back up. why do you like it at this price? >> okay. so it's in the middle of a new product flow, many of which look exciting and has a tremendous amount of cash. the evaluation is not high, roughly $45 of earnings next year and some very smartest people in the industry are buying it so i like the company. the company of the people buying the stock. i'm not sure it will get back to 700 but i'm not sure why it couldn't get to 600. >> let's talk about an old favorite, general electric not on many people's buy list now but on yours now. >> they are reducing immediamed increasing margins and growth rate.

so you get a 3% dividend on a 1. 0, i think the stock could go up 10% so you get a 13% total return with good quality in ge. let's talk about morgan stanley which reported earnings doing very well. the stack has been climbing all year as you look at this chart here at 29.69. what is attractive here? >> mr. gorman changed the complexity of the company, lowering the volatile parts of the business, increasing exposure to money management, asset management, high margin and stable so the profitability of the company is increasing, and it's got about a 27-dollar tangible book and estimates next year are for 2.65 so i could see the stock going up to 34 or so. let's take your last choice, which is not one i'm familiar with tcp capital ticker tcpc. what do they do and why do you like them? >> business development corporation and an reit.

they don't pay earnings but pass along to shareholders. big banks are not lending much to companies anymore because of regulation and capital constrengths. this is one of the highest quality ones. they have a wide variety of industries they lend to a high quality medium sized and sit on the top of the balance speed with senior debt, variable rate and almost a 9% yield. i met with management this week. this is quality 8.5, 9% yielder and selling close to book value and i think they can grow the book value and income stream over time. so it's not without risk. if you went into a 2008 period, these stocks would not do well but i think we're in a stable economic environment. so in the sweet spot that we're in, i think it would be a good total return stock. >> sounds good, jim. any disclosures to make? >> i own tcp for myself and my clients and we own the morgan

stanley and g.e. bonds for my clients and myself. >> thank you. >> thank you. and coming up next, video gaming was a sector in decline so why is it suddenly powering up? first, how commodities, currencies and treasuries performed today. the 16-day partial shut down of the government had a big impact on shopping when americans pulled back on spending during the few days of the work stoppage. shopper track reports sales fell 7.5% in the first week of october compared with one year ago. but sales of video games are booming. they shot up 27% in september. they got a huge boost from the

highly anticipated release last month of grand theft auto five. and as julia boorstin tells us, the video game industry is making a big come back. >> reporter: the record-breaking launch of grand theft auto five was a game changer for the struggling video game business. the demand for the game, five years since the last one in the franchise paid off big time. game maker reported a record $1 billion in sales for the game in just its first three days. thanks to that hit, total september game sales surged more than 50% from a year earlier. over half of the sales were grand theft auto. >> the high-quality games are selling as well as they ever have, really better than they ever have. the concentration of the top of the industry has become enormous. >> grand theft auto last month, bode well for competitor's big game watchers this fall. people are willing to pay $60 for the biggest brand console

games. >> it looks really cool. >> call of duty, yeah. >> more excited about call of duty. >> reporter: it's a crowded follow with creed for black flag and electronic arts battle field four launching october 29th. a week later call of duty gohoss is expected to be the second biggest game of the year and could top grand theft auto five. in contrast, consoles suffered last month and hardware sales falling 13%, no surprise as consumers wait for sony to launch the ps 4 and microsoft to introduce the xbox one. >> xbox one definitely because we've grown up with the xbox. >> i hope my parents spend a lot of money for christmas. that would be the best option. >> it's been a long time since these current consoles we have out launch and there is demand for something new and you also have a lot of great looking software coming out over the next year, which i think will

support demand. so i'm pretty optimistic that this cycle will get off to a very good start. >> and while september's big gains are about physical sales, this next cycle is increasingly about digital, which accounts for about half of all consumer spending on games. for "nightly business report" i'm julia boorstin in business. we know the identity of the person who bid nearly a million dollars to buy the car turned submarine that james bond drove in the 007 classic "the spy who loved me." it's the billionaire co-funder plans to take the movie property, which doesn't even work and turn it into an actual car that drives on land and then becomes a submarine in water just like in the movie. and if there is one guy, susie, who can do that, it will be him. i can't imagine there is a lot of demand for cars like this. >> you've done a test drive on the tesla, when this is reality you can test drive it but you need a wet suit apparently.

>> we'll go out in the hudson and do it together. >> that's "nightly business report" for tonight. i'm susie gharib. thanks for watching. >> thanks from me, as well. i'm tyler mathisen. have a great weekend. we'll see you here on monday night. "nightly business report" has been brought to you by. >> we are 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. we are thestreet.com.

gwen: government at its most dysfunctional, who's way, which highway? we examine the fallout from the tonight ondown "washington week." >> there's a deal and that deal america hope, but it doesn't get us out of the mess we're in. >> we have taken what little american public had in this institution and our institution of the united states shookss and once again it. gwen: the government reopens. >> welcome back, everybody. gwen: the debt ceiling is raised. some republicans and some democrats are actually talking one another. >> we're going to find the two -- the common ground between that we both can vote on and that's our goal. gwen: but has the latest crisis permanentlyton broken? >> let's be clear. there are no