this is "nightly business report" with tyler mathisen and suzy guerin brought to you in part by -- >> thestreet.com. up-to-the-minute news and analysis. our service provides objective independent ratings daily on over 430 sto0 stocks. holiday cheer. santa delivers a positive day for stocks and delivers another record for the dow and s&p. so is the rally mean for the jolly man in the red suit a good swing? starting to spend. sales of big-ticket items show businesses are spending and that's a good sign for economic growth. and feeling blue. our market monitor has three blue chips that he says are must-own in 2014. all that and more for this tuesday, december 24th, 2013.

good evening, everyone, on this christmas eve. i'm suzy. tyler is off tonight. so it looks like santa started his rounds a little early today. stocks edged higher thanks to some encouraging data about manufacturing and housing and we'll have more on both those topics in just a few minutes. traders called today's gains the start of a so-called santa claus rally. that's when stocks rise in the final five trading sessions of the year and on wall street that's a bullish signal for the new year. today investors and traders spread a little holiday cheer to each of the major averages. the dow and the s&p posted new all-time highs and the nasdaq had its best close in more than 13 years. the dow rose another 63 points. the nasdaq was up 6. and the s&p added 5 points. over in the bond market, worries about whether the federal reserve would taper its stimulus and cause a sharp spike in interest rates has been a big headache for bond investors. just ahead of the fed's taper

announcement last week, investors in mutual funds pulled more than $8 million out of bonds. that makes 12 beweeks in a row d the most in one week since august. more now on that strong manufacturing data. orders for long-lasting durable goods rose a better than expected 3.5% in november. the commerce department said demand increased for a range of goods including commercial aircraft, machinery, computers and electronics. business investment and new manufacture goods saw its biggest jump since january. well, that rising demand in manufactured goods especially for autos, aircraft and heavy machinery may have led to a comeback of sorts in steel. prices are higher and so are shares in some of the nation's biggest steelmakers. morgan brennan has more. >> reporter: feel yourself for a rebound in steel? strong auto sales, the u.s. housing recovery and a flood of

orders for long-lasting manufactured goods all helping push demand higher for the hard-hit commodity. experts say global appetite for steel could grow in 2014. >> as we head into 2014, we're looking very positively at the demand side. we expect that you could see demand as much as 6% to 8% higher led by nonresidential construction. why does that matter? steel is one of the industries hit hardest. as construction ground to a halt and as the auto industry faced bailouts. nearly five years later steel has yet to recover. but stronger economic growth in both the u.s. and in europe could be leading the way for steel's long-awaited rebound. adding more proof that a recovery is here to stay. ratings firm moody's recently upping its outlook for the industry to stable. saying steel saw its bottom earlier this year. and investors seemed to agree. several steelmakers posting strong stock gains in the final days of 2013. united states steel corporation climbing more than 6% this week and up 80% over the past six

months. another industry giant ak steel has jumped more than 10% through tuesday. clocking six-month gains of 150%. these companies have been beating the street with recent earning reports, posting surprise but still modest profits and inspiring a number of analysts from cohen and company to goldman sachs to issue stock upgrades. still, headwinds persist for steel. >> steel production in china is forecast to go down. pollution controls are shutting down steel production at a rate that is considerably higher than anyone had forecast. so we think that it's going to come in for a rude awakening. >> for "nightly business report," i'm morgan brennan. >> more now on today's housing news. contracts to buy newly built homes declined more than 2% in november from the month before. but there was a big upward revision to october's already strong sales. new home sales are now running at a five-year high, but not all the housing numbers may be squaring up.

diana olick explains. >> reporter: u.s. home builders are putting up more homes. and more importantly, they're selling them. contracts to buy newly built homes were running at an annualized pace of 464,000 in november, down slightly from october, but october saw a huge surge. >> it's right. there's a huge demand. >> reporter: brian coaster is an appraiser and works with home builders polty and taylor morrison. >> i think there's a sense of urgency with people that they should have, that if you don't do it now within a couple months or within, you know, six months, rates will keep going up and up, and you're going to miss the opportunity to, you know, get a 5% or 4% rate. >> reporter: stocks of the builders surged on the day's news. this after miami-based lenar, one of the largest public builders, last week reported a 13% quarterly jump in new contracts. stronger than its peers but a sign that the higher-end new home market is recovering

nicely. the lower end, however, for both new and existing homes is slowing dramatically. investors have depleted most of the distressed housing stock and first-time homebuyers are still locked out of the market by tight credit. witness mortgage applications to purchase a home, down 4% last week and down over 10% from a year ago. this as rates moved only very slightly higher. the culprit may be higher premiums at the fha, the government's mortgage insurer and a favorite among first-time buyers. fha mortgage applications are down 25% from a year ago. so if first-time buyers are out, what's pushing the demand for newly built homes? well, some of it is still tight supply of existing homes for sale. but there may also be a new wild card in the new home market. investors using all cash are turning to new construction. it's the next step in the rental play. for "nightly business report," i'm diana olick in washington. now, even with all those new

homes getting sold, applications for new mortgages fell to a 13-year low last week. the mortgage bankers association says demand dropped off when rates ticked higher following the fed's decision to taper back on its bond-buying stimulus. there are just four trading days left this year, and james expects that santa claus rally to continue right through new year's eve. he's managing executive of investments at pnc asset management group. so jim, we end this year obviously on a very high note, but when you're this high up, it makes you wonder how much higher can stocks go in the new year. >> well, that's the question on investors' mind these days, suzy, as you said, but certainly santa has delivered. ended up the year with an up day today. we do believe this santa claus rally which will go through the first couple of days of january will continue. on the backs of very strong economic data. >> so what is your outlook for 2014 in terms of how much the

major averages could go up? i mean, you're coming off a really strong year, up 30% or so. >> as you say, we have benefited from the asset purchases of the federal reserve over the last couple of years, but particularly in 2013, we'll see almost a plus 30% year on the s&p. if you include dividends, not likely we'll see that in 2014. we're more in the single-digit range, something in the 8% to 12% range, depending on how earnings go. but it will be a month year for equities, just not investors should not forecast what we've seen in the last 12 months. >> well, there's been a lot of talk among market strategists about a correction or two coming up in the new year. now, investors are always told you can't time the market, but i'm still going to ask you a question about that. if there is some kind of correction, are investors better off waiting for that pullback to happen before they put any fresh money into the markets? >> well, if you look back at 2013, suzy, investors who tried

that were not very successful. so all we got was a 6% correction. now, on average, over the last 33 years, the entry-year decline is about 14%. so in all likelihood, we'll see a decline in 2014 larger than the 6% we saw, probably something in the range of 10%, maybe to 15%, hard to predict when that would be. so i would suggest investors not try to time that market but understand what their plan is, if they're underallocated to equities, underinvested in equities, they put a plan in place early in the year to invest throughout the year over that time frame, they'll be mostly right, not likely they'll get it all the way right by trying to time the downturn. >> we've got four trading days left for this year. you talk about an investor plan, portfolio plan. what should investors be doing? is there anything they should do within this deadline time, or does it make a difference? should they be buying things? selling stocks? >> that's the question. and certainly with an up 30%

year, not likely they have as many losses in their portfolio, but certainly the first thing you should do is take any losses, see if you can offset that against any gains you have in your account. i would suggest probably not recognizing gains here in the last four days of the year. but investors should take this opportunity, if you've been fully allocated to stocks, you're now overweighted, so i'd start to take the opportunity to rebalance your portfolio. certainly opportunities in developed countries, europe, emerging markets. so to allocate away from u.s. stocks if you have been -- if you have benefited from this rally and this market. and then look at the risk in your fixed-income portfolio. this will be a year we'll see negative returns in bond indexes. look where your durations are, where your risk is and try to derisk some of your fixed-income portfolio against what we would suggest is a rising rate environment in 2014. >> a lot of important decisions you have to make.

thank you so much, jim, for coming on the program. happy holidays. >> thank you, suzy, and happy holidays to you. >> thank you so much. jim dunegan. american express agreed to pay at least $75 million in fines and to repay customers for what authorities called misleading marketing tactics and bogus billings. the credit card giant was accused by three regulators including the fdic for charging some cardholders for extra services like i.d. theft protection when they didn't even enroll in the program. amex was also charged for overstating the benefits and coverage time for an account protection product. now, this settlement is the latest in a series of actions against other credit card companies for misleading consumers of the benefits of add-on products. coming up next, it's all about the consumer. retailers are making one final push this year for the customer's dollar. and our market monitor has the consumer names for you to own for 2014. that's coming up.

in case you weren't keeping track, there are now zero shopping days left before christmas. so retailers have pulled out all the stops to get more consumers inside their stores. sara eisen has more on the final push to get a piece of your holiday shopping dollar. >> reporter: it's 4:30 a.m. christmas eve, and shirley ruiz is leaving toys "r" us with a shopping cart full of presents. >> it's very full here. we have a lot of toys. >> reporter: if you think that's early, think again. across the country, thousands hit stores before dawn because, well, they were open. >> i think it's a great idea. some people, unfortunately, have to wait until the last minute. so it's a great idea.

i think it's awesome. i think it's awesome we're here. >> reporter: kohl's locations like this one have been open 24 hours since early friday morning. select macy's stores as well and toys "r" us opened its says stores early saturday morning. its flagship store in times square has literally been open since december 1st. the question is, is it going to pay off in what appears to so far being a pretty lackluster shopping season? >> there will at least be that one person who has free time at 3:00 in the morning. but in general, i don't think it's helping retail. it's adding labor hours and potentially hurting margins. >> reporter: macy's says our shoppers love that we give them options, especially with late-night and early-morning hours. the former ceo of toys "r" us says it's a winning strategy. >> the shoulder hours like from midnight to 2:00 a.m. or from 5:00 a.m. on are actually quite busy. if you compare that for stores setting up all night to an average day in the middle of february, these are really busy hours so they are profitable. >> reporter: part of that 24/7

convenience is what's driving more shoppers online this season. online sales the weekend before christmas surged 40% this year compared to last. 20% of that came from mobile. keep in mind online sales only make up 6% or so of total retail sales. that means brick and mortar retailers are pulling out all the stops. even if it means staffing a store in the middle of the night. in new jersey for "nightly business report," i'm sara ei n eisen. shares of tesla surged higher. that's where we begin tonight's market focus. regulators reaffirmed the five-star safety rating of tesla's model "s" for 2014 despite recent incidents where three of those models caught fire after crashing. and those fires are still under investigation. tesla shares popped 5% to $151.25. la quinta has confidentially

filed for ipo. it's seeking to raise as much as $4.5 billion in the offering. the price and numbers of shares won't be known. shares of blackstone ended the day slightly higher to $31 and change. there are also reports out today that the carlisle group is close to pulling off a deal with johnson & johnson to buy j&j's blood unit. it's a transaction that could be worth about $4 billion. the health care giant has been looking to sell the division since it's a small player in a market led by big rivals like roche and siemen's. shares were up slightly to $92.06. w.r. grace has finally reached an agreement with bank lenders. that was the only remaining appeal left in the company's bankruptcy settlement. the chemical maker will now emerge after a 12-year stay in bankruptcy. it filed for chapter 11 back in 2001 after an asbestos leak led to lawsuits. shares to $98.53.

cal amp posted solid profit in sales and beat analysts' estimates when it reported quarterly results today. but shares of the satellite technology provider tumbled after the company disappointed investors with the weak profit outlook. the stock plunged 7% to $25.63. baxter is recalling two of its injectable solutions after it found particles in the products. the health care company has warned of blockages and organ damage but it says it hasn't received any reports as of yet. despite the news, baxter shares rose a fraction to $69.06. and time warner reached a distribution deal with viacom just a few days before the old contract was supposed to expire. the deal with viacom which is the parent of nickelodeon and mtv is in sharp contrast to time warner's battle with cvs last summer. you'll remember that difficult negotiations led to a blackout of cbs programs on time warner's system. slirs were up a fraction on the

news. time warner cable also rose 1% to $134.04. as we continue our special week of market monitors, our next guest says if you want to know how the stock market will do in 2014, follow the mood of the american consumer. joining us to explain, james lowell, chief investment officer of adviser investments. hi, jim. nice to have you with us. >> great to be here. >> so tell us about your investment strategy. what's the connection between the american consumer and how stocks are going to do in the new year. >> we pay a lot of attention not to what consumers are saying but what, in fact, they are doing with their money. that has been a bellwether recipe to figure out ways to profit not just, i think, in 2014 but also over the last five years when at any given moment people were writing off the u.s. consumer. it also has a positive ripple effect around the globe. we think we're seeing european consumers turn a corner in an early-stage recovery there. and we think if we get

early-stage recovery in europe and a midcycle stage recovery in our own economy here, that's going to lift the emerging markets with the worst performing markets in 2013. by focusing on what the consumer is doing, by focusing on what they are buying and where they are buying, we think we'll be able to figure out ways to profit from it. >> that's great. and you have three blue chip stocks that you think are must-owns for 2014. let's go down them quickly. you have american express at the top of your list. tell us why you like it, and at $88, can investors still make money on this? look at that chart, it's really had a great year. >> it's had a spectacular run this year. it is, though, i think going to still have some success in 2014. probably not as spectacular as it was in 2013. but i wouldn't be surprised with a 15% gain, it is a direct reflection of not just consumer spending but small business spending and also the overall lending environment in which it finds itself as increasingly favorable. we think american express is likely to benefit. >> okay, great. you have home depot also on your

list. tell us why you like this. also it had a good year and it's trading at $80 now. >> one of the reasons we like home depot a lot is that it's not just where homeowners go to upgrade or take care of their own home, but it's where local builders go to build the one to five houses that they build. and we think we are going to continue to see a housing recovery. we know there's low inventory and pent-up demand. the risk, of course, is rising mortgage rates. we think in this environment, with moderately faster growth in 2014, that will help offset even the total certainly higher mortgage rates. >> all right. and your third blue chip is ford. you're bullish on this one. what's your attraction to ford and why ford, not gm? >> excellent management at ford. i think offsets what will likely be a net good year for gm for all the car sales and manufacturers going forward. but ford in particular because of that excellent management i think is going to have a better handle on how to drive profits. we also like the fact that ford is likely to benefit significantly from a slight

turnaround in europe. we saw the first consecutive months of net car sales in europe in both october and november. we think that trend continues in 2014. so we like ford both as domestic play on a strong u.s. consumer but also as a stealth play on the reemergence of a european consumer. >> it's $15 trading now. if you buy it now, what can you expect by next year at this time? >> i would say in the 18 to $20 range especially if the no risks so sort of impose themselves on this economy that we think we're headed into in 201437. >> terrific inspect any disclosures to make, jim? >> we don't own any of those individual stocks, either myself, family or firm but they are certainly inside the mutual funds and etfs that we do own. >> thanks so much. have a happy holiday. >> you, too. >> jim lowell of adviser investments. and coming up on the program, it's been a banner year for stocks as we've been telling you, and shares of yahoo! were a standout. more than doubling so far. but that's not the only reason why company ceo marissa maier

was a difference maker this year. that's next. we continue now our week-long series called "the difference makers." these are profiles of some of the most important people in business and finance over the past year. and the impacts that they've had. and over the last 12 months, the influence that marissa maier has had on floundering yahoo! has been tremendous. jon fortt has the story. >> reporter: you could hardly do better than marisa maieer has done in 2013. shares closed above 40 bucks a share earlier this month. to p up that in perspective, aside from two months around eight years ago, the stock

hasn't seen those levels since the year 2000. why the rally? by her own admission, previous management invested in ali baba and in yahoo! japan which have seen their values skyrocket. there's more to it. in 2013 maier established herself as both a hands-on product executive and the most marketing savvy ceo in silicon valley, all but forcing investors and employees to believe in yahoo! again. >> vince lombardi was a phenomenal coach. one of his priorities were god, family and the green bay packers in that order. and mine are god, family and yahoo! except i'm not that religious, so it's really family and yahoo!. >> reporter: productwise, she managed to build and buy some interesting properties. in may she paid just over $1 billion for tumblr, a sought-after social media darling. earlier in the year she bought a company more notable for its

17-year-old founder than for its actual technology. yahoo!'s results where it counts in the company's revenue, maier is not moving the needle yet. search advertising is holding its own, but the core disdisplay ads is stagnant at best. she says she needs time to launch new products which will draw bigger audiences which will lead to higher sales. and investors seem to be listening. she's putting a fresh face on what lots of people had begun to see as a stodgy company. her face. there is that "vogue" spread and she began hosting earnings calls as live video, something a less te telegenic ceo might avoid. she'll have to deliver on those top-line results and avoid product stumbles like last year's fantasy sports outage and this month's yahoo! mail fiasco since yahoo! needs every loyal user it can get. for "nightly business report," i'm jon fortt.

a wake-up call about coffee. the price of coffee beans plunged this year, but the cost of that cup of joe barely budged. big coffee sellers who have been brewing up higher profits all year long say there's a good reason for that. kate kelly explains. >> reporter: coffee's had a rough time this year, at least in commodity markets where contracts pegged to the value of beans grown around the world trade. thanks largely to oversupply from brazil, an important source, commodity prices have dipped almost 20% so far in 2013, and some traders think we are either at or near a bottom. partly as a result, shares of the big coffee sellers like starbucks, dunkin' donuts and green mountain have ral i wil d rallied huge but they didn't pass on the savings to consumers, at least not all of them. statistics show in the u.s. alone the price of coffee fell only about 7% in the average city. and some coffee drinkers are a little upset by that. >> it's a little frustrating. you know, obviously when you buy a lot of coffee from mcdonald's and starbucks, they are getting

it cheaper and you don't see anything, it's a little upsetting. >> we're a big coffee culture. lots of people drink coffee. people like it. if there's the market there and people are buying it, then they don't need to compete with prices. >> reporter: mike nugent who trades coffee and other agricultural commodities says to consider the process involved with buying large quantities of coffee beans in the first place. >> when you go to buy your cup of coffee, you say, well, coffee prices are at multiyear lows, how come the price is not going down, that assumes that those coffee -- that coffee in your cup was purchased the day before yesterday. it wasn't. it may have been contracted two to three years ago at a higher price. it may have been stored. for years. and financed for years. >> reporter: perhaps that explains what dunkin's supply chief said that many have locked in coffee prices that will bring

stability and favorablity to their markets. what that means to the average joe is not exactly clear. for "nightly business report," i'm kate kelly in new york. >> and that's our report. be sure to tune in tomorrow for our holiday special, "2013 o the year that was." have a very happy holiday. >> "nightly business report" has been brought to you in part by -- >> thestreet.com. up-to-the-minute stock market news and in-depth analysis. our service provides objective independent ratings daily on over 4,300 stocks. learn more at thestreet.com/nbr.

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