this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by. >> thestreet.com, featuring herb greenberg who reminds investors that risk is real. with herb greenberg's reality check researching stocks in terms of risk. you can learn more at thestreet.com/reality check. new high, the s&p 500 closes above 1900 for the first time ever. and our market monitor guest has three stocks he says will gain 25% in 18 months or less. rebound, new home sales rise, so do home building stocks. so is it time to invest? and the pressure is on for drug companies to lower their prices and leading the push is the nation's largest pharmacy

benefit manager. we have all that and more tonight on "nightly business report" for friday, may 23rd. good evening, everyone, and welcome, who says not much happens in the markets on a friday before a long holiday weekend. despite light volume the investors pushed the s&p 500 to a new record closing high, closing at 1900 basically on the button for the first time ever, stocks got a big boost from better than expected home sales last month and we'll talk housing in just a moment. for the week the u.s. markets had their biggest gain in a month. each gained more than 2% this week. the dow transports closed at a fresh all-time high today and here is how the major averages finished for a friday, heading into the holiday. the dow up 63 points now higher for the month of may, nasdaq up you 31 and the s&p added eight. and tyler just mentioned there looks to be a spring thaw

in the u.s. housing markets, sales of rebuilt homes recovered shooting up a better than expected ñi2.4% following two months of sharp decline, d.r.horton and lenard jumped 4%, so is it time to invest in the sector? joining us to answer that, bob bruska, chief economist with fact and opinion. bob, i know you're not optimistic for the outlook for houses, tell us why? >> we have a lot of head winds in the housing sector, first, unemployment rate is low not because people got jobs but because they dropped out of the labor force, they are not going to buy houses. we have an economy not growing that fast. a lot of banks are careful. they have gotten their hands burned in the past by lending in the housing industry given some

of the government policies. they're wary, the housing finance is not there. we had a hard time getting new first-time home buyers in. they just are not able to qualify. as a result when they try to buy a house at a much higher mortgage rate than people with the best credit ratings. these are head winds you have to face if you're a new home buyer. >> you were with us last fall, at that time you were pretty optimistic about housing. how does your mood on housing compare today to what it was then? >> sure, real quickly, i mean we upgraded a lot of our stocks back in early december. as we saw the momentum above the normal pace for normal sales, we downgraded in march, now, this is very local specific markets not particularly the whole nation plus we had some cold weather. i would agree that the first-time home buyer is a much

smaller percentage of sale, they call it one quarter to relative percent. jeff bay, which does about 75% of mortgage production wants to play ball with the banks, i feel better than i did with the stocks in march. >> and also just to add in what i think is a positive development we saw mortgage rates this week dropping across the board, the 30-year mortgage is down to 4%. >> yes, mortgage rates have come down a little bit. but really they're changing at a pretty low level right now. i don't think they're changing much and i don't think this drop is going to cause peopletolo to over the affordability level. some of the agencies, they're -- the way they're going to deal with banks, the banks have to be careful because they are wary, they have been burned in the past. there is good news for home buyers in the future.

you have to be wary, the banks thinking this will be a new regime. it is still a very difficult world out there for lenders. >> bob, when i hear you say you're not optimistic about housing and you see a lot of head winds for housing, does that mean you think that the prices will fall a year from now where they are today. and how would you answer the same question? >> yeah, i don't think you will have much gain or you will have a decline, house prices increased a lot. new home sales are lower year-over-year. i think the housing sector will improve a bit, not by much. >> will, do you agree or disagree? >> i would disagree, sentiment will die for housing. if that happens, all bets are off. that is the first point. second point here is i do believe we'll see improvement and we'll see moderation. that is natural, because

inventories come back to the market. if you look at the percentage within the next two months that is not a bad thing. we need moderation, and that is good for housing. >> will, i know you are just starting to recommend a few of the home builder stocks, which ones do you like and why? >> we recently upgraded d.r.horton, we thought we were getting a bottom in terms of sentiment for the stocks, and more importantly the regional diversification is a little different, that is where it is choppy and that is what we're worried about. these guys have national exposure and they should benefit in the second half which a lot of people are focused on. >> all right, gentlemen, thank you very much. have a great weekend. appreciate you coming on the show. one of the biggest gainers in the s&p 500 today was the computer giant hewlett-packard, shares up about 6% after earnings late thursday were

pretty much in line with forecasts in the first quarter. and the nation's number one pc maker announced plans to cut 11 to 16,000 jobs by october. they explained the newest job cuts at under-performing units are all part of her multi-yearry structuring plan. >> remember, we're managing the porlt of businesses -- portfolio, some businesses are declining, some holding their own, some growing quickly. if we can continue to grow the fast-growing businesses, maybe it will turn out the way we hope. >> hewlett-packard says the job cuts will save an estimated billion dollars in two years. and another american company changing, time warner is spinning off its storied magazine publishing division forming a new company called time inc., and that will begin to trade on its own next month. morgan brennan has more on what

is behind the move with the media giant. >> today was the last day you could buy time warner stock and expect share news this company, as well. time warner will have 23 magazines including people, fortune and its namesake, time. experts say it will allow time inc. to focus on a sweeping re-design. >> for time inc., this frees them now to pursue what is best for them in terms of corporate strategy, capital strategy, and you have a built-in shareholder base because you're spinning this off obviously out of the time warner holders. >> the emerging company is already making big changes, announcing it will change its offices for lower manhattan in the world trade center and it is experimenting with unprecedented ads, running them on the front of time magazine and sports illustrated. this marks the seven-year

restructuring. the parent company can focus exclusively on tv and movie content. namely warner brother studios, tv network like hbo, cnn and tbs. time warner is following in the foot steps of other giants. like viacom and cbs and news corp and 21st century fox. >> it puts them back in a place where the dynamics no film production and distribution and television production and television distribution are much more interesting to investors. much less capital intensive in many cases. and certainly investors have responded very favorably in each of these companies to these different dynamics. >> the question now will be whether timing can stand on its own and attract investors because the publishing industry continues to struggle as more

people abandon hard copy in favor of the web where they can access the same content for free. for "nightly business report," i'm morgan brennan. harsh words from russian president vladimir putin and president obama at the annual forum in st. petersburg, russia. putin admitted that the encroachment into the ukraine is already affecting the economy. >> an apparent softening of the russian president saw the ruble spike to a high. but the president had harsh words for mr. obama in the white house effectively criticizing mr. obama's comments saying that the russian president was on the wrong side of historyñi over th ukrainian crisis. >> who is he to judge, seriously? he wants to judge people.

why don't he get a job and work somewhere? >> i asked president putin about his view on the sanctions that had been imposed on russia. he again very unhappy with the sanctions and said that they had had an impact on the russian economy. >> these sanctions are absolutely illegal, unlawful. and of course, they decrease -- they make our relations worse. we are now hearing about the third package of sanctions and i have a question. in that regard, why? >> the message that will come out of the president's comments today that he will respect the choice of the people when it comes to the presidential elections on sunday in the ukraine. this is jeff cutmore for "nightly business report" in st. petersburg. and still ahead, the price is wrong. what one of the largest pharmacy

benefit managers is doing to get drug makers to lower the high price of specialty drugs. we told you last night about the new hepatitis c drug called sovaldi, costing 3,000 per treatment. there is an uproar over that. one of the largest benefit managers is launching a campaign to get the drug manufacturer to lower its price. bertha coombs has more. >> reporter: they're in the costs when they priced the hepatitis c drug sovaldi as a

thousand dollars a pill he called it down right unfair. >> if you look at the price of treating hepatitis c it went from five or six years ago to $25,000 to then there were some newer drugs that came out at $50,000, they're taking a premium on a premium on a premium and we believe it is not explainable. >> the risks will double in the u.s. this year and increase 200% in 2015 and 2016. >> the cocktail to treat the patients is going to cost well north of $100,000 per patient. we have 3 million patients in the united states that have hepatitis c. that would be $300 billion to treat them all. >> dr. miller has launched a crusade to get insurers and health plans to push them for a new price and hold out for new drugs due next year. >> if a product comes out that is less expensive we'll move our markets to that. >> gilead defends their

position. in countries like britain, with universal health systems the drug maker has discounted the price. drug industry consultants say the chance u.s. regulators will pursue the same strategy is slim. >> i don't think our country is ready to stem the drug negotiations and drug regulations to that extent. >> but with more high priced drugs in the pipeline when more americans are getting health coverage some say it could be a matter of time. >> there are a number of breakthrough cancer therapies that will likely come to market in the next few years. it will place a huge burden on payers. >> some drug makers have joined miller's coalition and vowed to find a solution. gilead is not one of them. >> dr. miller says the pharmaceutical industry has an opportunity to work now with

payers. if not they may well find themselves dealing with government control. bertha coombs, "nightly business report," st. louis. and shares fell after morgan stanley issued a warning about the teen retailer. that is where we begin the focus. the firm's analyst questions the company's ability to stay in business even through next year since it has been burning through cash amid mounting losses, late yesterday, the retailer reported the sixth straight quarterly loss and issued a weak outlook. the stock fell 20% to $3.40, that won't even buy a t-shirt. and shares of aruba reporting estimates topping consensus, analysts at j.p. morgan said the gross margins were below estimates and the firm reiterated its underweight rating on that stock. aruba down to $17.89. shares of ctc therapeutic

fell after they recommended the conditional marketing of the md disease. that lets people with the disease get treatment, the stock surged to $23.30. and google reporting a deal to buy sky box imaging for a million, sky box specializes in recording landscape pictures and video. shares of google were up to 563.80. and our market expecting noise and volatility. he is don wardell. good to have you with us, you expect volatility to pick up? it has been very, very low over the last month? >> well, i guess the important thing to know, like you said, fundamentals will get you from point a to b. there are always going to be bumps in the road like we experienced in the past few

months with the polar vortex, and striking fear with mark participants. >> you have a couple of stocks you believe will do well that you just described. you said three things are guiding them, and tell us why you like ameriprise. first, stocks have to have three things, dividends, valuation and fundamentals, when all three of those come together like they do for ameriprise, the company's dividend is very attractive to other asset managers, some folks say it is a life insurance company and historically that is true it has been. but they are growing, the company is going to get a higher multiple for that better return business. we really expect the productivity to improve and we also expect very solid flows to begin the asset management business.

so we really think there is a material upside in the stock in the next two years. a second stock you like in fact you think that the other two can grow is signa, why? >> well, signa is one that can experience volatile empty. as the market gets comfortable with the move, to, the exchanges market, we bring all these people into the health care system. you know, this is a company that is going to do great things. their dividend is smaller at this point. we expect that to grow over time. they have done a complete restructuring of the business by selling non-core assets and buying back shares. we believe the ultimate earnings power this company is well above this street has modelled. the companies, whether it be united, or aetna, or et cetera, we believe they will rate higher as they get more stability and

more consistent quarterly reports. and that is why we believe that signa can do very well at this point. >> and closing today at $58, tell us why you like it a and where do you see the stock. >> ingersol rand is an industrial company, the company has roughly 2% dividend yield. the valuation is you know, in line with its peers. but we believe the fundamental story is the expected cycle in front of us for construction, whether it be residential or non-residential. inger ingersol makes air conditioning equipment. we believe their products are great and believe we're on the front end -- we're beginning to see that the grass green shoots of a non-residential construction cycle. we believe that housing will continue to build. they will do non-core things there like moving businesses out

and buying back stock. got a ton of cash to grow the dividend and buy back stock. we're really encouraged by what we see there and believe ingersoll will do well in the coming months. >> any stockins that i do own, assume you have others as well. >> my ownership is through the ownership of the mutual funds, yes. and coming up on the program, the benefits available to service members and veterans that many don't know about. that story is next as we head into the memorial day weekend.

new york city may be america's financial capital by new york state has a long standing reputation of well, not the easiest place to do business. now governor andrew cuomo has launched a multi-million dollar effort to change that and if it works it could bring the already fierce competition between states to a whole new level. scott cohen has more. >> why is our arizona-based company relocating manufacturing to upstate new york? >> the ad campaign alone is costing $15 million to look like businesses are flocking to new york. the value tech is one of their stars. >> i think there is a new edge to new york in wanting to be competitive and wanting to attract high-tech companies and i thought let's have fun with it. >> value tech which makes supplies for high tech manufacturing is only bringing about 25 jobs to a work force of nine million, the overall job growth from last year is behind

national average and new york ranks highest among the states, high tax, regulation and high stress. governor andrew cuomo has set out to change that but even his hand-picked economic development commissioner, the man behind the ads, admits they are not there yet. >> there is no doubt they're a work in progress. >> but simply by talking the talk, new york is plunging itself into a competition that is increasingly intense. state finances across the country have largely recovered from the recession but job growth still has not. that means the states are bringing a lot more fire power into the fight for a handful of jobs. >> governor cuomo. >> why more jobs and businesses move to texas than any other state. >> no state has been more aggressive than texas running ads in six states including new york. now new york is fighting back. >> we're the economic capital of the country, so it is

understandable that the governors would come here with a mission to get the companies to move elsewhere. >> new york's newest weapon? a tax break that partners with companies moving to the state. governor cuomo says he would like to partner with them. >> we don't take any time off. >> the game is on among the states. now if only the jobs will follow. scott cohen, "nightly business report." and finally tonight, just ahead of the memorial day weekend when the nation honors its fallen soldiers, sharon epperson takes a look at some of the benefits available to active duty and retired members of the u.s. armed forces including ones that many veterans may not even know about. >> the attacks on the world trade center and pentagon changed matt colvin's life and his career, he joined the u.s. air force on that day. >> i joined in september 11, 2001. and that just really set me on a

course for a quick move into the military. i had already known that that is where i wanted to go. but it just solidified my past. >> he rose to staff sergeant after six years of military service. after returning to civilian life like many veterans he went to colle college. >> without the gi bill i never would have been able to take advantage of college. i would have had to take out the loans and be in the same situation as many with this looming debt. so i thank the gi bill for that. >> the military offers active duty servicemen, members and their families some of the most generous benefits around. while most know that the military can help to pay for college there may be other benefits that are not on their radar. >> when i got out of the service i was not aware of any of my benefits except for the gi bill. and that is really sad and that is what a lot of veterans go through. they're only aware of one or two of their benefits.

>> michelle served in the u.s. army for five years and after college worked at ibm before setting on a new mission. now vice president of a counseling agency she educates service members and veterans about benefits that can protect their financial future. >> many of them are hurting. a lot of them don't know the benefits they qualify for. many of them when they leave the service they're not even aware they should go through the service and figure out what the benefits are. >> some of them include benefits on home loans, no down payment or insurance premiums and limits on clothing costs, as well as programs to assist veterans with job training, small business loans and franchise opportunities. >> there are so many organizations out there that want to help veterans. reach out to one of those organizations and let them help you through the process. but always know that you're not alone. >> veterans can find out which benefits they're qualified to receive at military.com. the government veterans affairs department and also get help

from nonprofit organizations. taking the initiative to learn what assistance is available is critical, says colvin, who now works in new york helping the veterans navigate the maze of resources and benefits available to them. i'm sharon epperson, for "nightly business report." >> that is "nightly business report." i'm susie gharib, thank you for joining us. and i'm tyler mathisen, have a great weekend, everybody, we'll see you back here on monday night.

gwen: the escalating scandal at the v.a., tackling chinese cyberhacking., tuesday's winners and losers, and the great society 50 years later, tonight on "washington week." >> if these allegations prove to be true it is dishonorable. it is disgraceful. and i will not tolerate it. period. gwen: new allegations of cooked books, long wait times and widespread mismanagement at the department of veterans affairs angers lawmakers on both sides of the aisle. >> what is taking place today in america's veterans administration may be the most egregious case of friendly fire in the history of the united states of america. >> there was no urgency. mr. president, we need urgency! we need you to roll up our sleeves and get into these hospitals.