this is nightly business report with deal tyler mathisen, and susie gharib. brought to you by street.com, our dividend stock adviser guides and helps to generate income during the period of low interest rates. we are the street.com. apple shines but not enough

to stir investors. why, and what is ahead. >> slamming the brakes, some of the top selling cars in the u.s. are no longer being recommended by consumer reports 6789 we'll tell you why and which cars are on the list. >> no love for apple tonight, the company said it apple shares fell more than 2% in the after hours trading, apple earned $28 a share, more than 28 cents expected. on those results. so john, seems like there was a disconnect between what apple reported. how shall thing -- >> a little bit of a decision connect. it has been on quite a run, as far as the gross margins go, on the conference call, apple managed to say there were a few things here, lower priced ipod, which is a pretty good level, we'll have to see how the new ipads are selling. >> youilling to consider are ne gingrich -- i assumed it was a failed reference. >> talking to -- if it is about the money, the revenues okay return. >> on wall street today, what change there wasp enough to send the s&p 500 to an all-time closing high, the dow jones also finished at a record, and at the start of earning season, the s&p has gained 6% as three out of four companies reporting profits have passed estimates. industrial production stocks helped to off set the pending home sales, we'll talk more about the soggy housing numbers in just a moment. here is a look at the numbers, the dow fell one, nasdaq up three, the s&p a big winner, up two points.

a big drag on the stocks today, shares of the drug maker fell 2 and a half% after reporting profits fell after the third quarter. more on the challenges that merck has been facing, and what they're doing. merck's competitors came running through the doors, the giant drug maker has taken a sales hit. down 53%, merkk's patent expired in 2012, the new seller down 5%, merck's star since it came on the market still did $1.4 billion last quarter, but the sales have been dented by competitors. >> the big concerns are by far

the diabetes franchise which has been mentioned, 13% of revenues, probably close to 15 or 16% of profits, they're a very high margin business. >> and the animal health products which usually help the numbers are down 2%, it has been a while since merck has had a new blockbuster drug and the company's problems became more apparent this month when they said they're cutting jobs to help reduce costs by $2.5 billion. but the cuts could already affect the drugs being added to the scrap heap. >> we have had big disappointments in research and development. they have gone over targets that have not played out well. >> merck has hopes on a new cancer treatment. it is getting accelerated

reviews on the hepatitisc reports. and toyota has work to do on the top auto sales. global sales reached 1.74 million vehicles and out-paced gm. gm sales rose by 5% from a year ago. toyota gets more good news from consumer reports, along with not so good news. they're out with the most reliable lists of car brands, toyota's luxury division tops the list followed by acura, but tour's reputation for quality took a big hit when they pulled the recommendations for three of the vehicles. covering the automotive industry, you know, phil, it was a really fascinating list to see a lot of japanese brand news the

top ten list, how big a deal is that? >> it could be potentially a big deal, sue sooe, what we're talking about is the recommended or are not recommended list from consumer reports. there are five models that consumer reports came out today and said we are no longer recommending these. when you look at the list, what stands out, the top selling models from toyota, honda and nissan are all on the list, with regard to toyota and camry, toyota cites poor crash test results when they do the tests for the safety. it is no longer recommended along with the other toyota models from consumer reports. as for the accord and the nissan ultima, both of them scored too low in the latest reports on the survey reliability for them to qualify for recommendation. by the way, they are the best selling cars for honda and

nissan, not a good day for the japanese automakers when it comes to recommendations from consumer reports. >> that is amazing to me, as you mentioned, the accord and camry have been recommended for so long. let's turn to ford, four out of five of the least reliable. have the big three taken a step back and why is ford so low? >> they're all struggling with conne connectivity and information systems. the systems have had a lot of bugs in them. they're not functioning as people expect them to when they buy the vehicles. that is why ford ranks 26 out of 28 brands in the latest consumer reports. the bottom line is, with these electronic issues, with the combination of some of them not

functioning as well as they should, saying i'm not getting the help i need from the dealer or automaker so i know how to use these systems, as a result, people say i spent 30 or $35,000 on a car, and i can't have it read back my e-mails. >> another problem is when they're not doing well in crash tests. so what impact will these ratings have on the car sales? >> i don't think a huge impact, think about it. the camry, when all the huge issues accelerated, the camry is one of the biggest selling vehicles. thank you so much. >> phil lebeaux reporting from chicago, for more on the reliability study go to our website. and what this could mean for the value of your home.

a significant setback in the housing recovery in september, pending home sales, deals with a sign but not yet closed fell much more than expected, 5.6% last month, making them head down for the fourth month in a row. real estate experts say high rising prices kept buyers on the sidelines. that news sent shares to home builders down today, all lower by a fraction. shares of the builder hovnanian fell more than 2%. >> and joining us to talk about stocks and homes, home building

analyst at city. bill, welcome to the program, what is your take on this report? is this the beginning of the downward trend? >> well, thank you for having me, the pending home sales have been down for about three to four months, month over month, in the prior month, we saw existing home sales up, because transactions were actually declining. basically transactions were happening more quickly. what is happening here, what we're seeing is a seasonal decline, but we can't deny that the pace of recovery in housing is in question. we saw slowness regionally. i think we'll have a better idea of what the recovery may come to. we'll get a few speed bumps along the way. >> does this slow down pending sales, pressage a slow down in actual sales in the months looking forward? >> as we went back to past few months to slow down the current pending home sales index, it

actually was not reflected. increase is in existing home sales, the transaction was actually declining, it was easier to get a purchase mortgage through the channel as opposed to heavy re-fi, which was declining, as it gets towards the year end, it typically slows's one thing we have to take into account, in october, fha was down 4% of its staff. fanny and freddy also, with regards to the irs, they were shut down. there was a slowdown in july for at least a new residential demand. so we are slowing a bit, but there are hiccups that cause it to be worse than one might see at first blush. >> and will, when you look at the reports, not bad, they were pretty good. you have a couple of stocks that you are recommendin ing dr hort

tell us why you like those. >> you are exposed to the west, primarily california. las vegas, phoenix, those marketings are getting possibly frothy, on the basis of william lion land is probably 20% below that. so there is more value in the book. on brookfield residential properties, similar, there are three analysts to cover that company as we know it. a year back, the company gave us the undiscounted book value, which was a little over 4% per share, from that perspective you may have a doesn't over the next four years with residential properties. on dlhorton, i believe they will come back. we are seeing some evidence of that. in the past few months. so that is one of the key drivers there. >> as you look at the data that

came out today and as you analyze the numbers, home prices have been rising year over year about 12% for most of this year. do you think that is sustainable? what do you think they're going to rise over say the next 12 months? >> i tend to think they will be more of a moderated pace. we have existing home sales inventory, meaning supply, about five months today. so that will apply, continue to see price increases, i think it will get more gradual. cull it down to a more single digit pace. >> all right, thank you, will randall. and the s&p has had double digit gains in the past four years, should be enough to attract the individual investors in the market, right? wrong. more on why the little guy remains wary. >> reporter: on wall street, the stock market keeps moving up,

giving rise to the fear it will soon go down. >> it makes me nervous it will go the other way. >> reporter: even as the dow marches to 16, and the s&p remains high, they pull money from stock funds making modest trades at discount brokerage. >> we're really a whole scenario, not likely to invest, not seeing a whole upside, why not ride really just profit? >> from may until august this year, they found stock prices until september of this month. weekly figures suggest another monthly out-flow. and the exodus continues for october. but recent data for charles schwab show that they're up 13%, both firms saw a decline for the

activity. though the recent data marks the choppiness, marked by the recent budget battles, the fears retreat. stocks rose to record highs, a number that looks alluring to investor pat willis. >> i am actually trying something on my own. >> reporter: other investors are content to ride the wave until the tide goes it. >> for me, it is neutral, i'm a trend-following investor, so as long as it is going up, i'm on board. >> for nightly business report, i'm mary thompson. encouraging words from j.c. penny chairman sent shares higher, allman reaffirmed that the retailer expects positive sales in the third quarter and says that sales trends are improving. penny is scheduled to announce third quarter results on november 15.

the stock went up to almost 39. the reports that drug maker dendrion is looking for a suitor, coming after the sales of the prostate cancer drug, the stocks went up to $2.81. sales of biogen, the ms drug, topping analyst estimates, giving that drug a boost. they reported better than expected earnings and raised its four-year estimates. shares rose a fraction to $254.43. and edward life sciences reporting earnings, investors were disappointed with the u.s. sales of the nonsurgical artificial heart valve and the week guidance. the stock plunged to 73.24. shares of cf industries climbing after mosaic announce they would

buy the companies phosphate business, the deal sent the shares up to 1386. mosaic up about one and a half percent. and liberty global selling its international content division to amc for about a billion. they will help to expand the outreach and distribute popular shows like "breaking bad" overseas, shares slipped to 1690. liberty global was up to 81112. >> are you happy with your job? if not, things may get better as you get older. a new study byñr the associated press and the center for public affairs research finds that nine out of ten workers age 50 and older say they're either very or somewhat satisfied with their job.

and the results cut across all gender, race, education and income levels in the survey. >> i'm happy, i'm happy, i promise you. a lot of those older workers may need to keep working, more and more people over the age of 50 are accumulating more debt. and in order to pay it down they're saving less for retirement. >> reporter: it sounds like a lot of money, american workers stash away over $300 billion, including employer's matching contributions into 401(k) accounts and defined benefit plans every year. but it still may not be enough. >> i think i may like to put more away for my spending money, towards my 401(k), if i could. >> i don't really put that much into 401(k). i don't have that much left over to put for savings. >> reporter: that is the new reality, the majority of americans with 401(k) accounts or other employer sponsored accounts are spending faster than they're saving for

retirement. that is according to one organization, hello wallet. the money spent to pay down debts has risen 20% in the last ten years. >> i save for retirement, i put away as much as i can, but not as much as i would like to. >> reporter: the problem is, most closer to the age of 50 are closer to retirement. >> it is a remarkable stat. you would expect most people at that point to be de-leveraging, paying off their student loans or already paying off their student loans. >> reporter: the study found that people spent an average of 22% of their income paying down debt. the result is that these workers only have about two years of retirement income saved, not much of a save in the last 20 years, but americans are living

longer and typically need about 17 years of income after age 65. increasing the savings contributions is certainly an important step in building assets. but financial advisers say it is crucial to pay attention to the other side of the ledger also. >> take a look at not only your savings retirement, but look at the net worth statement, the balance sheet. how much do you own, versus how much do you spend? and look at the cash flow, in order to ultimately reach your retirement goal. for nightly business report, i'm sharon epperson. and for more information on how to reach your retirement goals, log onto our website. after 40 years, why is mcdonald's cutting ties with the product that almost every american uses.

heinz catsup. an update now on negotiations over insider trading charges between the government and the hedge fund acc capital. a settlement with the firm is expected to be announced as early as this week with the company likely to pay at least a billion in fines and admit guilt related to the charges. that would mean that sac would no longer be able to manage public money. quarterly earnings at burger king were a whopper, earnings soared and came in higher than analysts' estimates, thanks to reducing costs and selling more restaurants to franchise owners. burger king also released its

dividend. and they released items like a bacon ice cream sunday and burger with fries already on it. they see sales of the crinkle cuts, shares jumped. and burger king arch-nemesis, one reason that mcdonald's is now making a big change in which catsup it buys, and it has a lot of people talking. >> reporter: for over 40 years, heinz and mcdonald's has gone together. but they are no longer cutting the mustard for mcdonald's. >> i'm surprised, did they make a deal with somebody else? >> the world's largest restaurant chain by sales is ending its partnership with the catsup manufacturer, citing management at heinz, oh, the plot thickens, turns out they're

partners with burger king. one could argue what is good for heinz is good for burger king, and that is not good for mcdonald's. but is dropping heinz really that good for sales? let me think. hold on, i'm still thinking. >> anticipation ♪ ♪ is making me wait ♪ >> actually it is not that big a deal business wise. mcdonald's has already reduced the use of heinz, only using it in two markets, minneapolis and pittsburgh. plus, it uses it internation internationally. so where is mcdonald's getting their catsup? it has a variety of suppliers, and most people will not notice the change. but mcdonald's is squeezing out heinz just as burger king promotes new french fries, and

while many have tried and failed to launch the popularity of burger king fries, perhaps many hope that the catsup will help it catch up. and finally, the ellis island museum opened today ahead of the one-year anniversary of superstorm sandy. it has been closed since the storm flooded the island, filling the basement archives and computers used to research the records. ellis was home for about 12 million immigrants entering the united states and sits right next door to the statue of liberty. the $28 million restoration project is still continuing. and recapping our earnings investments, investors initially sold on the future market pressure but shares have since erased those losses. >> and we'll see how they do tomorrow. >> we will. i'm susie gharib.

and i'm tyler mathisen, thank you for joining us, we'll see you tomorrow night. nightly business report is brought to you by street.com, multi-media tools for a financial world. our dividends stock adviser guides and helps to generate income during a period of low interest rates. we are the street.com.

>> welcome to "film school shorts," a showcase of the most exciting new talent from across the country. experience the future of film, next on "film school shorts." "film school shorts" is made possible by a grant from maurice kanbar. celebrating the vitality and power of the moving image. and by the members of kqed.