this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by -- >> the street.com. founded by jim cramer, the street.com is an independent source for stock market analysis. cramer's action alerts plus service is home to his multimillion dollar portfolio. you can learn more at the street.com/nbr. what's wrong with walmart? the world's largest retailer says it won't earn as much money this year as many analysts had hoped. what the new ceo needs to do to regain momentum in sales and the stock. doozy of a deal. investors are still talking about the whopping price facebook will pay for a company that doesn't run ads and charges customers just a dollar a year.

what the heck is whatsapp and who are the overnight billionaires behind it? hewlett-packard, is the computermaker's turn around still clicking? what you need to know at any time about hp's earnings report. good evening everyone and welcome, susie gharib has the night off. a big bounce back in the markets today with the major averages gaining back nearly all of wednesday's losses. stocks got a big lift from some encouraging economic data. a private reading on u.s. manufacturing in january show factory activity expanded at the fastest pace in nearly four years despite the weather. also helping, a dip in first-time jobless claims last week, a sign that layoffs are low and inflation is in check with consumer prices risinrising .10% the s & p 500 added 11 points. a lot of the buzz on wall

street today was about two big companies that millions of americans patronize every day. walmart and facebook. shares of the retail giant fell nearly 2% today, the biggest decliner in the dow following a disappointing earnings report that showed profit down 21% last quarter from a year ago. the outlook for 2014 was tepid, too. courtney reagan now with a look behind walmart's earnings and how the company plans to attract more customers and more revenue. . well, the six-week holiday selling period did generate positive sales at u.s. walmart stores open at least a year, the beginning of 2014 has proven to be troublesome for the world's largest retailer, and it may not be temporary pain. a reduction in the food stamp program, higher taxes and tighter credit are crimping walmart's core consumer, because those issues aren't going away anytime soon the discount retailer forecasts lower full-year profits than what

analysts expect. u.s. ceo bill simon says comp sales are negative for the first two weeks of february due to the severe weather, saying at one point 200 stores were closed. simon also said tax refund activity is slightly lagging last year. >> i think we've seen the weather issue has been an issue that quite frankly is very difficult to figure out for investors as to what it means. there's about a $330 million headwind that they're facing, i think, from increased health care costs. there are headwinds all over the economy that are going to be very hard to figure out. the traditional walmart for mat may be struggling, so the company is betting on the small format, neighborhood market stores in 2014 for growth to capture consumers fill in trips. walmart is announcing it will nearly double the expansion to 270 from the previously announced 150 simon told

reporters a walmart neighborhood market does four times the sales of a dollar store. while analysts didn't think walmart's new ceo doug mcmillan would say anything dramatic on the prerecorded earnings call, at some point he will need to do something bold if u.s. store sales remain sluggish. but because of external economic precious, investors appear to be giving the retailer a pass. for now. for "nightly business report" i'm courtney reagan. onto facebook now, followingup to the breaking story we brought you last night, facebook will pay $16 billion for the mobile messaging app whatsapp, sending facebook shares to an all-time high today up more than 2%. julia boorstin now on what exactly whatsapp does, who's behind it and why facebook has hit the like button. >> reporter: with whatsapp, facebook will become the biggest mobile messaging company in the

world. whatsapp handles nearly as many text messages as the telecom industry's entire $100 billion text messaging business. the app sends text messages, photos and video to anyone else with the app. without carrier fees. it's free for the first year, then charges 99 cents annually. no word on how many users pay, and it doe not include ads. ceo mark zuckerberg stressed the importance of whatsapp's scale with 450 million monthly active users and unusually high engagement. 70% use the service every day. and its growth rate is breaking records. doubling its users in the past year. >> services in the world that have 1 billion people using them are all incredibly valuable. and from that perspective, we just think that the growth rate they have today and the monetization model that's early but promising and in place we see a pretty clear trajectory

ahead and we're excited to work together on this. >> reporter: can facebook make enough money from whatsapp. twitter has about half the monthly active users as whatsapp but its market cap is about twice whatsapp's valuation. >> the strategic rationale for this acquisition is actually quite sound. this is ultimately about grabbing more mind sharon mobile and grabbing more real estate on mobile, very limited real estate i might add also in many ways a defensive move because there is speculation that goggle had one point had wanted to buy whatsapp for about $10 billion. with one thing for sure, founder yan kum who created the service is worth an estimated $6.8 billion. quite the rags to riches story, he signed the paper work selling company against the front door of the welfare office where his

family used to collect food stamps. he's not the only one. cofounder brian ack ton is worth about $3 billion. whatsapp's only venture capitalist stands to make about $3.5 million. i'm julia boorstin in los angeles. >> what a story. how lucrative will this deal be for facebook? will it ever generate enough money to justify the price that facebook paid for it? that's what julia asked. let's get some answers now from scott kessler, the internet equity analyst at s & p capital iq. would you bet against facebook, scott? against zuckerberg on this? >> well, tyler, it's hard really to question facebook and mark zuk erburg at this point. they've both been so successful over the last year or two. the stock is up almost 150% just over the last year. however, and i say however, it does seem like even though a lot of people are rationalizing the

merit of this transaction indicating that mobile is very important to facebook and whatsapp is a leader in mobile messaging, the reality is two-fold, we think. number one, we wonder how sustainable whatsapp's growth and leadership in mobile messaging is going to be, and then secondly, $19 billion, we had to go back a long ways to see an internet deal that was valued at that level. >> what is their revenue stream here? they give away their service for the first year for nothing, and then they charge 99 cents a year. so unless they've got something else up their sleeve or intend to raise prices, doesn't that put a cap on the amount of money they can generate? >> well, tyler, the way that we think about this is on one hand it's pretty obvious. the revenue base at this point is probably small. a premium model, people sign up for free and then pay over time. but it's only a dollar a year. so even if every registered user

were paying a dollar a year right now, that's obviously only $450 million in revenue when you're talking about a $19 billion company. >> so where is the rabbit in the hat? >> i'll sorry. what was that? >> where's the rabbit in the hat? >> i think the rabbit in the hat is something that julia alluded to that mark zuckerberg kind of referenced almost as an aside, which is if you look at whatsapp and you look at the global network for sms, for text messaging, they essentially carry the same volume of messages at this point. if you look at the sms opportunity from a revenue perspective, telecommunications companies around the world are generating $100 billion a year from those services. and so over time we think it makes sense for whatsapp and facebook to look at that opportunity as well. but what's interesting is, it doesn't seem like either company

is particularly interested in monetization right now. it's all about the land grab to, as mark zuckerberg indicated, 1 billion users around the world. >> we'll figure out how to make money on it later i guess is the message there. would you buy facebook at its current price? >> so tyler, we have a hold recommendation on facebook shares. our 12-month target price is $72. basically we think facebook has done a tremendous job of executing over the past year, particularly with respect to the mobile opportunity. but we think a lot of the good news is priced into their stock at this point. >> all right, scott, thank you very much. we appreciate you being with us tonight. scott kessler, internet equity analyst at s & p capital iq. you might not guess it but a company lots of investors have loved to hate recently actually gained on that big facebook acquisition, blackberry. shares shot up nearly 4% today on investor hopes that the $16 billion buy raises the value of blackberry mess enger service,

that's the smartphone maker's mobile messaging operation which has about 80 million users. earnings after the bell from another titan of tech, hewlett-packard, where ceo meg whitman's turn around plans appear to be right in line the nation's largest computer manufacturer earned 90 cents a share. that's 6 cents better than wall street's consensus. revenues also beat the forecast, and the company even raised the low end of its full-year guidance. shares were higher during the regular trading day, rising 2.5% but little changed initially in late trading. josh lipton joins us now from silicon valley with more on hewlett-packard's first quarter results. what did you see in those numbers, josh? >> reporter: tyler, hp estimates as you mentioned, the number a lot of investors will concentrate on is the results in its personal systems business, its pc business. there revenue was up about 4% year of year. now, the consumer side of that business, tyler, that was down. no surprise there.

we all know the consumers moving to a world where they're switching from pcs to mobile devices, smartphones, tablets. but the commercial side of that business did see an increase. so maybe the pc isn't dead just yet. that would be of course good news for hp. the personal systems segment does still account for about 30% of the company's total revenue, tyler. >> josh, as so much of computing moves to the tablet format, hp had a failing tablet which they had to fold up some years ago. do you think they regret doing that now? >> reporter: well, i think, listen, if you are a believer in hp -- remember, tyler, the move that stock has had has been just dramatic. it is up about 8% this year, it's up about 80% in the past 12 months. i think that investors believe in meg's turn around. meg whitman's turn around game plan, her focus on shoring up the balance sheet, cutting costs, returning cash to shareholders. and to your point, focusing on new products. i was on the conference call.

she focused a lot on that, whether it's private cloud or also mobile devices, the new fablets they're selling in india. >> josh lipton, thanks very much. still ahead, will the white house budget due out early next month be less about austerity and more about more spending? an early look into the administration's fiscal plan. an update on the deteriorating situation in ukraine after a new round of deadly violence shattered a short-lived truce. the european union has called for tough economic sanctions against the government, including a freeze on assets, a

ban on visas and restrictions on the export of anti-riot gear. back here at home, the latest on the nation's biggest municipal bankruptcy ever, detroit's state-appointed emergency manager is expected to file an adjusted rundown of how the city will treat the $18 billion of debt an its other outstanding obligations as it attempts to exit bankruptcy protection. well, janet yellen is es expected to be back on capitol hill next week testifying before the senate banking committee on the state of the economy. the new chair of the federal reserve was on the house side last week but had to postpone her senate date until next thursday after a snowstorm paralyzed washington, d.c., even shutting down federal government offices. meanwhile, on capitol hill, republican lawmakers reacted negatively to a white house budget memo outlining what will be in the president's spending plan when he submits it early next month. the president won't propose

altering the way social security cost of living adjustments are calculated. that controversial change would have slowed the growth of benefits, reducing the federal debt. john harwood joins us now from washington with more on the sudden change from president obama. john, tell us more about this latest proposal and why pick this particular battle. >> reporter: well, republicans were not surprised by this, tyler. and the reason the president made this choice in his budget is that they basically abandoned -- both parties have -- the prospect of a grand bargain. when the president last year in his budget put out there the idea of limiting these cost of living adjustments to social security, that was partly to lure republicans into talks on a bigger deal that would include some tax increases. republicans said no to the tax increases, now democrats are saying some of the spending cuts that you wanted, we're not going to do, either. the white house is saying that this is still on the table if republicans want to resume those negotiations, but nobody expects it because of the deal that paul ryan and patty murray struck.

we're in calm waters now on the budget. everybody's gearing up to campaign. >> and the spending plan presumably is going to queue on the administration's part more closely to traditional democratic values, right? >> reporter: absolutely. both parties have agreed spending will be a little bit higher than was called for before under the terms of the sequester cuts. they've relieved it for defense and for nondefense to be offset by some longer-term cuts. but yes, we are out of the phase in which both parties are concentrating so heavily on austerity. this is why republicans didn't in the end put up much of a fight on raising the debt ceiling last year. >> is there going to be some additional spending? if so where and where does the money come from? >> reporter: the administration is going to propose spending on things like manufacturing centers, which the president's only been able to fund so far with existing moneys in his approved budget. hasn't gotten republicans to go along. but he's going to propose some revenue increases, things that would tighten up, for example,

the ways in which international corporations shift profits around to limit their u.s. taxes. they tighten up on that, raise some revenue, use those to democratic priorities. but of course this budget is going to be about posturing and laying out priorities, not actually passing it. because that step would require the republicans and democrats to agree on a tax reform plan. that is very, very unlikely to happen. >> john harwood, thanks very much. john reporting from the capitol tonight. we begin tonight's market focus with a round up of today's after-hours earnings. price line the online travel agency posted a better than expected results as it booked more hotel stays, airline tickets and car rental reservations. but its profit and revenue outlook for the current quarter lagged estimates. still shares were up initially after hours. the stock ended the regular section a fraction higher at $1283. nordstrom's earnings topped estimates but sales during the holiday quarter came in light sandbagged by higher markdowns. the luxury retailer's guidance missed expectations as the

company said its planned entry into canada will continue to weigh to profit. shares ended the regular session up a fraction at $59.44. groupon's revenue jumped 20% on strong demand for discounts, but the daily deals web site forecast little profit growth in 2014 because of increased investments. that disappointed investors and sent shares lower after the results. the stock ended the regular session up 2.5% however however. at $10.28. marriott's fourth quarter profit plunged 17% on lower revenue, in part because the quarter was shorter than it was last year. the hotel operator was one of the few consumer-oriented companies that didn't blame its decline on the bad weather. earnings came in higher than estimates and the ceo was pleased with the quarter despite the decline. >> what we saw in the fourth quarter was about 5% same store rev par growth, which is quite healthy sign that the economic recovery is continuing primarily

in the united states but also actually better performance in some important markets around the world. >> shares rose slightly today to $51.79. shares of con, the strong and home appliances retailer, got slammed in today's session. the chain cust its profit forecast for this year and 2015 citing weaker sales growth and higher bad debts. the ceo said cold weather and higher energy costs seem to be affecting some customers' ability to pay off their debts. the stock fell today nearly 43% to $31.89. apple is the new microsoft, at least that's what one ba barclays analyst says. it slashed -- saying shares won't move much over the next year or so. >> what we see is a trading range where apple will be buying back stock in the 500 range really hard. but the next big thing might not be enough to break apple out of the high 500. that's where we're coming from.

we've done an anally versus microsoft. i think it's okay to say a trading range stock. >> the analyst also said as an investor, apple's future products don'tpr really excite him. shares were off 1% today to $531.15. well, after laying low for a few months, activist investor nelson pelz has renewed his crusade to split up pepsico. in a memo to the board, the head of trifunda's manager outlined a plan to spin off its slow growth beverage unit to faster growing brands fritos and doritos. investors are bubbly over rival coca-cola. despite a weak earnings report this week, coke is raising its quarterly shareholder dividend about 9% to more than 30 cents a share. separately, the company's chief financial officer, gary fayard,

said he'll retire in may after being at coke for more than 20 years. shares closed up about .5% today. coming up, why wall street is suddenly falling in love with the wild west. that story next. a man, a plan, a canal. panama. it was back to work today on a multibillion dollar project to make the 50-mile-long panama canal wider to fit bigger ships. that follows a two-week work stoppage on the century-old waterway after a financing dispute between the panamanian government on a consortium of european construction companies.

the project is expected to be finished next year. well, a possible setback for another huge construction project. a nebraska court voided the governor's decision to allow the long-delayed keystone xl pipeline to pass right through the cornhusker state. instead, the court sided with landowners saying allowing the pipeline which would bring crude from canada to texas, they said it violates their property rights. while keystone's outlook is uncertain,he forecast for american farms is looking a little dimmer. the usda said plantings of major crops like wheat, corn, soy beans and rice will decline a bit this year despite expectations that total acreage would rise. while farmers prepare for the spring planting season, investors are finding value in a different type of land, ranch land. morgan brennan takes a look at how some private equity funds are putting big money in ranch land far from the canyons of

wall street. >> reporter: who says investing just has to be about stocks and bond? for one private equity fund, the real returns lie in something much more majestic, the great outdoors. sporting ranch capital is a private equity fund that restores rundown ranches and then sells them for a profit. the premise is simple. buy a property in need of tlc at a desirable location, rehab the rivers into trout fisheries and resell as a trophy retreat. >> the more water the property has the more valuable it becomes. we can almost double the value of a property by creating an a plus trophy fishery. >> reporter: it's gone the attention of energy maven t. boon pickens. and returns could be big. the low to mid-teens after management takes its cut, those numbers plus freedom from equity market turbulence is why wall street is getting increasingly creative with alternative investments. >> these are tangible, finite

assets and diminishing display. if you eliminate a 20% down quarter, again we are in hard assets. >> reporter: new private equity funds have been launched for everything from farmland in the midwest to high-end resort housing in the south. and when it comes to ranch land, srcm isn't even alone. baretooth capital is restoring land in this niche market. these are a preview of the next big wave of alternative investments, much like the explosion of single-family rentals on wall street. it's pretty easy to see the appeal. investors get to own something tangible that's in short supply. and with so many people still reeling from wall street's last meltdown, that's an opportunity many can't pass up. for "nightly business report," i'm morgan brennan near park city, utah. well, it's the biggest gift ever to harvard university,

billionaire kenneth griffin is donating $50 million to its alma mater to benefit scholarships. he started that hedge fund in his dorm room. finally tonight, there is one lucky person out there who's about to make lot of new friends. there was just one winner in last night's powerball drawing which ballooned to a jackpot of $425 million. that's the sixth biggest on record. the winning ticket was sold at a chevron station and convenience store in milpedis in northern california. the store owner received a jackpot of his own. $1 million for selling the ticket. that lucky man or woman will take home $242 million in lump sum. for california residents, there are no state taxes on lottery prizes. that's "nightly business report" for tonight. i'm tyler mathisen. thanks so much for watching. have a great evening, everybody. we'll hope to see you right back here tomorrow night.

"nightly business report" has been brought to youin part by -- >> the street.com. founded by jim cramer, the street.com is an independent source for stock market analysis. cramer's action alerts plus service is home to his multimillion dollar portfolio. you can learn more at the street.com/nbr.

explore new worlds and new ideas through programs like this, made available for everyone through contributions to your pbs station from viewers like you. thank you. welcome to classical rewind. i'm martin goldsmith, and this is my music. tonight we're going to take you back with some real oldies from the 16th and 17th centuries. we'll meet many of the great masters and tell their stories. i promise you an exhilarating ride. along the way you're likely to hear melodies that you know but perhaps you don't know why. tonight meet the masters, next on pbs. ♪