. this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com. up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr. end of an era, steve balmer, microsoft ceo and chief sales meeting, bill gates gets emotional. what is next for the software maker and who will lead it? >> do it yourself. more people are and home depot is reaping rewards raising the outlook for the third time this year. it's not the only company profiting by the trends. >> pinched by pensions. tonight we head to chicago to

see just how deep the problems run. all that and more tonight on "nightly business report" for tuesday, november 19th. good evening everyone. topping our news, three corporate giants, jp morgue chase, home depot, microsoft members of the dow index and making news today for different reasons. we begin with microsoft and shareholders meeting today but it wasn't a typical shareholders meeting. this was the final one for steve balmer who steps down as ceo next year and marks the beginning of a historic management changeover at the company. as microsoft's bored narrows the search for a new leader, the company will end a 38-year stretch where balmer and dates led. who might be next in charge. >> reporter: it was a historic day at microsoft's annual shareholder meeting, the last

meeting with steve bauper as ceo. >> i'm confident we have the right strategy in place. >> reporter: it's unclear who will replace balmer, who became ceo in january 2000. he grew the company with leaps and bounds with revenue tripling to $78 billion and he had critics who say he missed big tech trends like smart phones and social networking. microsoft stock is up sharply this year but down 25% under his watch. >> even this week is going -- >> reporter: bill gates at the shareholder meeting today gave no guidance for when a new ceo would be picked but spoke with emotion about his friend, steve balmer. >> we have a commitment to make sure the next ceo is the right person for the right time for the company we both love, and we

shared commitment that microsoft will succeed as a better place, so thank you for your support. >> reporter: top picks include ford's ceo who helped balmer reorganize and former kia ceo and they approved microsoft deal to buy the smart phone maker there are possible internal candidates like kevin turner, the coo who could make sense if the company wants a capable manager who understands the company's culture. the executive vice president of cloud and enterprise is also talked about as a potential success sore. microsoft made a point of emphasizing the cloud products. analysts on wall street have different views on what balmer's replacement should do. rick sherland argues microsoft should sell things like the xbox and focus on the commercial side

of the business. colin gillis says microsoft needs to put more resources into mobile devices. >> double down on mobile baupz there are north of 7 billion people on this planet and the way people access the internet is going to be via their phone. >> reporter: regardless who replaces balmer or their strategy, microsoft faces real challenges as it repositions itself for the post pc era. josh lipton, nightly businesserer port. >> whoever the next ceo, microsoft faces bill challenges and who to discuss them and who may best tackle them is bill george. professor of management at harvard business school. welcome back, good as always to see you. how big a fix is required at mike soc microsoft and what's the first thing the ceo needs to do there? >> tyler, i think it's substantial. steve has been there 14 years. i think it's time he move on.

maybe it could have happened sooner. it's the end of an era clearly and the first person really from the outside. i think it is time to go outside. i don't think the internal candidates are going to be selected, and i think the first thing they need to do is take a complete look at the enterprise, decide are they going to be an enterprise software, or are they going to be consumer and mobile? i would personally think they have to be a very broad did based company and get into the game. they missed out on so much of the game, so many opportunities, tyler, and i think they need somebody-- visionary and lead them where they need to go, otherwise with windows and office, that business could be at risk like ib m's business was 20 years ago. >> you say the next ceo should be a visionary. what do you think of alan of ford? is he the right man for the job? i'm sure you have your own list of candidates. who should be the ceo? >> i had the short list.

cheryl san burg and john donahoe of ebay. i think alan is arguably the best ceo in the united states today. what he's done with ford is amazing. the job is not done. i hate to see him leave ford but he leaves in seattle and i don't like the idea saying he's going to be a caretaker. they don't need that. they need somebody to be there and i hope they make a commitment to do this in the long term. it's a long-term transformation but i think alan can do it. he's a visionary and a great team leader and will use the technical team well. he's not so arrogant to think he knows all the answers. so i think he would be a fantastic leader and have bill's confidence. i think bill will be more involved going forward and i think the leader needs to have that level of confidence and to bring people together. it's way too political the same way ford was when allen went in and i think allen won't tolerate that and he'll get the team

together, the right people on the bus so to speak and people will fade away and -- >> you're talking bill, as though he has the job. would it shock you if he doesn't get it? the first thing you said is it needs to be an outsider. they only had two leaders in the lifetime and both were really inception to the company. >> yeah, and frankly, tyler, if you want to do a transformation, you need to go to the outside. i'm a great believer in the inside. i think shame on the whole team there for not grooming people. elop is an inside outsider but i'm not sure whether he can pull it off. i would say malali has the strength to pull it off, pair up with tech kis so i think people would be more involved. no, he doesn't have the job for sure, but he hadn't turned it down yet, either. >> real quickly, half a minute left, look forward like five, ten years, what will microsoft

be like in your crystal ball? >> well, there will either be an enterprise company focussing on the business b to b and a state of decline or an innovative company going after all aspects, everything they missed and trying to get in the game with apple and google into the device game and particularly into the mobile game, as well. they got to be there and put their stamp on it. they have to get innovative and get ahead of the game. they always come in right now a day liate and a dollar short an that's not good, with these other things. they have to move forward aggressively and turn the talent loose where they need to go. i'm hopeful this will be a major transformati transformation. we need them to do well globally. >> great to see you. former ceo of med tronic. microsoft shares slipped and so did the dow ending a

four-session winning streak. stocks wavers between gains and losses staying at a narrow trading range after a mixed bag of retailer earnings and outlooks. the blue chip dow lost nine and nasdaq down 17 and s&p off by three. one of bias ggest gainers, e depot to touch an all-time high. they zoomed as remodelling projects caught fire. net income rose to the world's largest do it yourself chain now expects full year earnings to be 24% higher than 2012. later in the program, we'll tell you how small businesses are also getting in on the next. the other dow stock making news today, jp morgan choice, the nation's biggest bank reached a record 13 billion-dollar settlement with federal and state authorities for misleading investors about

bad backed mortgage securities it sold. this payout covers fraud conduct both acquired by jp morgan in 2008. eric holder said the conduct helped quote sew the seeds of the mortgage meltdown and there st is no excuse for the behavior. >> it's hard fought and had to be met, other wisy would simply file a lawsuit. this is not something jp morningen sign add check and said this is a good deal for us. this inflicts pain on that institution. >> the deal is the largest settlement ever between the department of justice with one company. >> so what will this record-breaking settlement mean for jp morgan chase and shareholders and what about the possibility of criminal charges for the bank? kayla taushe is here, do they

have other issues and what about the matter of criminal charges? >> tyler, this was the biggest elephant in the room for jp morgan. they said this was eliminating the biggest piece of outstanding litigation but eric holder said in an interview with nbc news that you just clipped, the criminal charges, the probe is on going that probe isn't over. this only settles civil charges and other issues, hiring practices in china, potential manipulation of the energy market and a host of other things. >> everything at jp morgan but you know, over the last couple years of the financial crisis, we've been reporting on other banks that had charges brought against them. are there more charges against other banks? >> this is the first big thing that the president set up of

2012. this is the tip of iceberg. he didn't know why jp morgan went first but there has to be a first mover but currently there are at least nine other banks being investigated across the country, goeattorney again roll and prosecutors in new york, georgia, jersey looking to figure out exactly what went wrong and what banks were on the hook. >> this is $13 billion there are other settlements that went into the billions, as well. where does this money go? >> it's interesting. if you look at the settlements, so far banks have paid a total of $85 billion. that's according to snl financial and adding to today's settlement from jp morgan and other banks. if you look at that, just about a third go to consumers in the form of mortgage modifications or other type of consumer relief but there is a sizable chunk about 10 billion that goes

straight to the regulator and treasury and you don't see where that goes. >> kayla, i don't know if you can answer the question but a lot of the charges brought against jp morgan are a direct result of the acquisition made against washington mutual. jp morgan was forced by the government to buy it. how fair is this whole allegation? >> well, washington mutual, as well as bear sterns, a po politically sensitive issue. washington mutual is concerned and they might still do that. now, of course, the attorney general in california who led this settlement said the bulk of the wrongdoing came from legacy jp morgan mortgage banking activity. >> fascinating. >> but if you look at what jp morgan is actually paying fannie and freddie, three out of the four billion there is related to bear sterns and washington mutual. it depends how you slice the pie and what side you choose to believe. >> kayla, thank you very much.

still ahead on the program, how much of the health care exchange system is left to be developed and the official answer to that question during a hearing today. as lawmakers in washington prepare to hammer out a federal budget, the treasury se secreta says a big spending agreement is unlikely. jack lew said unless republicans embrace an overall of the nation's tax code and agree to increase revenues, a comprehensive multi year fiscal deal is not likely. there wasn't a lot of agreement today at another house hearing on the botched rollout of the healthcare.gov website.

several testified about security flaws in the online marketplace but henry chow assured lawmakers the site was secure and mostly complete but the team hadn't finished the payment system for consumers to buy insurance. >> 30% of the systems are left to be developed, not 70% and that 30% represents the payment aspect and acounting aspects of making payments in the marketplace for all marketplaces, not just facilitated marketplaces and that functionality has to be in place for the january 1st effective date enrollment. >> in other words, no one has to pay for new insurance policies bought on the website until coverage actually begins on the first day of the year. from health care wows to a healthy housing market, as you mentioned earlier in the program, big gains on home sales and remodelling helped sales and profits last quarter. it's not the only company

profiting from the trends. diana olick has the details. >> reporter: before most homeowners get started on this, they probably would like to do this, peak inside their neighbor's renovation. i would help them decide what to do and whom to hire to do it. now they can. >> we really know what your neighbors specifically have used and we can even show you the products near you. you're not viewing projects that happen around the country. you view projects that are millions of dollars, completely out of your price range. >> reporter: it's about three months old. the brain child building his own house. you put in the zip code and the site shows you what contractors, architects, even plumbers are working in your area and you can see inside. homeowners have to give their consent but they don't give names or addresses. it's like getting neighborhood

word of mouth without talking to neighbors. >> the only things that existed in the past are review sites. some of paid, some are free where consumers go in and read third party reviews. sometimes they are real, sometimes they are not real. >> reporter: going up against sites like pinterest and diy that have taken research to a new level, remodelling professionals are still trying to catch up. >> right now it can be frustrating because we don't know which social media sites are the best ones to be using. >> reporter: architects bruce went worth are on several sites and give current and potential customers more confidence in his services. >> social media worked well with the within site in terms of validating expertise and your company's experience level and if other homeowners are recommending us or using us for their home remodelling, it

reinforces the whole reputation of the company. >> reporter: and it's especially timely. home remodelling jumped 14% in september from a year ago and projects are more extensive and expansive. there is a downside to taking a home renovation out onto the front porch or internet, a bad renovation can get just as much traffic as a good one. i'm diana olick in washington. a tough holiday outlook weighed heavily on shares of best buy today. the retailer warned competitive holiday promotions could hurt. it reported a return to profit and beat wall streete estimates and the stock had the worst day of the year down 11% to $38.78. tjmaxx and marshalls owner tjx said it's holiday season is off to a good start. the discount retailer saw a 35%

increase in earnings driven by more value conscious consumers help beat wall street estimates. shares up 1%, $63.12 the close there. weak consumer demand weighed on dicks sporting goods. they saw better than expected sales but profit came in plat because the company had to cut profit and spend more on marketing. still beat estimates but shares fell a fraction to $56.14. americans are shifting towards fresh foods which isn't helping campbell suits. the quarterly profit fell 30% as the soup and v 8 beverage sales declined. the company cut the full year outlook. campbell's stock plunged to $39.25. sells at metronic improved. they said earnings beat estimates as business units performed better but stocks fell

slightly to $57.93. office depot shares fell sharply after big investors store board value cut the stake in the company. according to a filing, the fund reduced the original positions around 14.5% to 8%. so office depot stock tumbled 3% to $5.23. and united continental announced it plans to cut costs by $2 billion a year by 2017. in furloughs have been are you ported yet as part of the cost cutting plan. the ceo says they aim to burn less fuel, increase productivity. >> with this cost saving revenue and we announced a minimum $700 million of additional answer larry revenue that we'll generate and our growth. we're confident that we will be performing well financially. we expect to earn multiple. >> shares popped 4% to $37.80.

another dow come upon innocent out. johnson & johnson has agreed to pay about $2.5 billion to settle thousands of lawsuits from individuals allegedly injured by artificial hip implants. the settlement would compensate an estimated 8,000 patients. chicago's confidence is bushed to the breaking point by pensions. what our series mix critical, fixing america's cities continues. and entinternational econom group cut growth through next

year and says the u.s. will get much of the blame if the recovery details. the organization for economic corporation and developments says the threat of another round of binrinks men ship could hamp growth around the globe. china's eco monomy is growi fast. widely criticized, china's accept trel bank vowed to converting the u 1 into comparable currencies allowing for freer movement of capital against china's boarders. that's something the trading partners have been demanding. the city of detroit can use currency right now. the bankrupt city could pay nearly twice as much in interest on a 350 million dollar loan from barkley's capital than previously disclosed. the higher fee was revealed in a letter made public this week after a judge ordered terms of the barkley's emergency

financial deal unsealed. meanwhile, officials in another bankrupt municipality, jefferson county, alabama approved a plan to exit chapter 9. they agreed to increase the 1.8 billion-dollar bond to attract more investors after initial demand was weak. finally tonight, the second in nbr's week-long series looking at the tough economic issues facing some of the american cities. tonight, a proud city on the great lakes is being pushed to the breaking point by pensions and we're not talking about detroit. scott cohn has more from chicago. >> reporter: chicago likes to think of itself as a world class city, but it also has a world of problems. ♪ ♪ >> the big story, the mass shooting in chicago. >> reporter: chicago is the murder capital of america, 500 last year and this year isn't

turning out much better. >> he was fine and who were you to take her from me? >> reporter: gun violence is epidemic. >> it's happened again, an innocent child is shot, this time at a park while celebrating the 4th of july. >> reporter: it doesn't help there are 1700 fewer police officers on the street than there were five years ago. >> we know the problem. >> reporter: that's the mayor, a former white house chief of staff last month unveiling the latest budget with a 338 million dollar short fall. that's an improvement from a year ago but from every step forward, one thing keeps tugging chicago's sleeve, pensions. >> we cannot allow the future to become a stark choice between a pension payment or police officer. a pension payment or a parks program. a pension payment or a school principal. >> reporter: the city and state are scrimping on the six pension funds for years. now the funds are $27 billion

until the red, that's nearly eight times as bad as detroit. the city owes $400 million by june and members are in no mood for concessions. >> we're not interested in having a conservation about us making sacrifices and by us, i mean people that work their entire life to be promised a mention and have it cut by a third. >> reporter: the mayor's office estimates chicago has half the funding it needs. some private estimates are lower than that but in some cities where things don't seem so dire, they may not be as good as they seem. our next report, miami, we'll take a close look at the municipal bond market, renowned for safety may not be so safe after all. scott cohn, "nightly business report", chicago. chicago is not alone. pension problems plague other cities, as well. to read more and see if your city is one of them, head to nbr.com. >> that's it for us, "nightly business report" for tonight. i'm susie gharib, thanks so much

for watching. >> i'm tyler mathisen, thanks so much from me as well. see you right back here tomorrow night. "nightly business report", has been brought to you by. >> thestreet.com, up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr.

>> the following kqed production was produced in high definition. >> behind these walls is the legendary crown point press, and it's a magical place for the artists who get to work here. >> kathan brown: i think you're putting the artist in a position to do their best work. >> for the last two decades, one group has been synonymous with latin jazz in the bay area, the machete ensemble. >> john santos: you do it because it is an honor to be a part of that transition. [ ♪music ] >> and marga gomez takes to the stage, this time on spark. [ ♪music ] >> major funding for spark is provided by the william and flora hewlett foundation, supporting creativity and innovation in the arts since 1967. the james irvine foundation, expanding opportunity for the