bank on it, better than forecast earnings out of city group lists the financial sector and lead the dow to a fresh intraday high. the city's numbers set the tone for a big week ahead. >> how cyber criminals are lying in weight in your hotel. what business travelers and anyone else needs to know. >> and bang for your buck. why more of your 401(k) dollars are actually working for you and not your plan. all that and more tonight on nightly business report for monday july 14th. >> good evening everyone, corporate deal making and city group earnings lifted stocks on wall street today. the flurry of news boosted citi,

raising hopes for more strong bank earnings this week. here's a look at the closing numbers for the major averages. the dow closed back above the key 17,000 mark. the nasdaq was up 26 and the s&p added nine points. details on the better than forecast earnings from citigroup. with the bank putting those soured investments behind it, investors dove in on citi. kayla has more on what it means moving forward. >> reporter: the bank earnings may be low, but citigroup cleared it in the second quarter, with a heavy profit beat and rise in revenues too. trading activity that improved slightly in june. johnny gersbach's drop of only

15% as it happened looked relatively better. even with the drop, the bank can operate well. >> i think we spend an awful lot of time focused on what's going on in markets. so i think there are some legitimate questions going-forward as far as markets, the rest of the business, i'd say we feel pretty good about the revenue prospects. >> loans and deposits previously stashed away for bad credit. a rosie picture was clouded by a $7 billion settlement with the justice department. a $3.8 billion charge to city's bottom line, wiping away $181 million of the bank's profit. brian rogers, chairman of t. rowe price reached concerns about the costs of these settlements last week 37. >> that's the shareholder's money, i think the good news is, most of that is coming to an

end. the citigroup situation may be one of the last. after that, the bank is going to look forward and not worry about their business. >> for citigroup, it's a major legal milestone behind it. some investors like david katz say the banks trade cheaply, but isn't a buy yet. >> citigroup's book value was down 50% over that time frame. they seem to have its act together. but it's not as well run as some of these others. >> an ongoing investigation into fraud at one of its latin american units and a failing grade into the stress test. mike corbett says he's confident the bank can reverse. >> we're still operating and feel strongly this isn't an issue with our business model, strategy, levels of capitol, clearly able to generate. we feel there's more work to do between now and your end. >> a long to do list remaining.

for nightly business report, i'm kayla touche. >> here to talk more about citi and the week ahead is fred cannon. director of research and chief equity strategist. nice to have you with us. let me start by saying it seems so strange that city can deliver good news for the banking sector on the same day that it settles a huge settlement with the justice department. does city finally have its act together? >> good news in a relative sense. remember a couple things that were mentioned. the settlement had already been signaled. the $7 billion was much bigger than would have been expected a month ago. and wiped out the quarter's earnings. secondly, the expectations for the quarter have been quite diminished going, in and they got over a low hurdle, that's a good thing. city has a lot to prove, though, as was mentioned, litigation issues aren't over yet, this is a big hurdle of the mortgage

issues. we have the fx issue, the lybor issue. the idea that some settlement is getting litigation behind these big banks is optimistic. >> let's spin forward to a couple other banks. jpmorg jpmorgan, it is tougher today, season the it, or you tell me for these big banks to make money. investment banking revenue despite all the mergers isn't really blockbuster these days. what do you expect from those two. >> coming up at city, coming into the quarter, expectations really came down hard this year over year down 20 to 25%, trading activity. citi seemed to see things pick up in june, that can help them get over a hurdle. what you said is very important. making a good return on investment is very difficult. you still have these litigation issues. we like to think on wall street they're one off, at the end of the day, they do add up over

time. and there's trading activity low. these big banks are getting to be in a position where they seem very cheap, and maybe we're getting to an earnings level for these guys. >> everyone's worried about higher interest rates, the word on the street is, this is good for the banking sector. are these buys? i know you have for jpmorgan a buy on it, is it time to pick up as many of these stocks as you can? >> as you go into the back half of the year, have you to think, the fed is going to stick to their word, who knows if they're going to raise rates, they're going to stick to their word they're going to raise them. there's going to be a lot of people thinking about fed exit and financials are a good place to be, because it's the one area where higher interest rates is a good thing. that's not a good thing for most of the other parts of the economy, there are good things there. that said, truth is, as the fed mentioned last week, we don't have a good idea of what this is going to look like. it's a brave new world because

of the $4.5 trillion bank balance. >> i assume you heard brian rogers a moment ago talk about how he thinks this is getting the worst of the litigation risks behind sit cy. in terms of all of the banks, where are we in the process? are we in the seventh inning, eighth inning, where? >> it looks like on the mortgage issue, we're in the 7th or 8th inning. i think if we can get the doj settlements behind it, much better than expected, fha behind us, we have gotten over the mortgage issue, there's still a lot out there. fx is just being underscored here. what about these issues on fraud in mexico, the whole asset management liability issues and the payment systems and the issues that have been raised. remember this whole issue of bnp in these criminal charges, in the u.s., it's -- you know, let's face it the french and germans are going to look pretty

hard at the u.s. bank operations over there. >> fred, thank you so much for coming on the program, always a pleasure to have you. in addition to city's news, some companies played let's make a deal today. that also lifted investors moods and spirits. acquisitions are running nearly 70% above a year ago. for a total of almost $2 trillion in deals so far. and today brought a few more. first up, the generic drug maker myelan is buying outside the u.s. it's an all stock deal valued at more than $5 million. myelan is expected to move to the netherlands. the corporate inversion aimed at lowering its tax rates. shares of both companies finished higher. also, whiting petroleum announced plans to buy kodiak oil and gas along with 2.2

billion in debt. creating the biggest energy producer in the 3/4 formations. both companies strongly higher on the news there. >> another big takeover today, this one involves rival engineering and construction companies opinion. acon is buying san francisco based urs corp for $4 billion. the deal sent shares of both companies up more than 10%. and still, another deal that's almost there. and it's a biggie, a chicago based drug maker is offering $54 billion for shire. if approved and shire did say it's ready to recommend the deal to shareholders, the company will do what myelan plans on doing, moving its headquarters to the united kingdom in order to save on corporate taxes. stocks are higher, and so are expectations for salaries.

a new survey from the federal reserve expects median earnings growth in june to be 2.5%, up from just 2% in may. perhaps surprisingly, the increase is being driven mostly by workers who don't have a college education. >> with all those corporate deals sending stocks near all time highs again, and the nation's jobless rate down to 6.1%. there's growing concern about when the federal reserve might begin raising short term interest rates. we got more clues today about the timetable. san francisco president john williams told the wall street journal after making more progress toward unemployment goals, the central bank could begin raising its benchmark rates earlier than previously expected. rates may not be the only things rising soon. the biggest names in aviation were in england today. for the annual international air show. where strong demand for jets is very evident. executives from boeing were on hand in the u.k. and on wall

street, investors sent shares of boeing 1% higher. phil lebeau has our report. >> for those who think demand for new airplanes can't go much higher. the international air show flies in the face of conventional wisdom, airbus is launching a new twin isle plane. it starts flying in late 2017 and is already requested by airlines seeking greater fuel efficiency. >> so far, we have studied how to reduce it, so it will be more efficient regarding shoe burn, lower capitol cost, higher maturity, reliability. so we have a market of better aircraft. >> reporter: with the backlog stretching beyond 2020, shows airlines remain hungry for new airplanes with lower costs. >> below historical averages right now, there have been some other deferrals and

cancellations in the industry. i think others would have to answer to those trends, but we see ongoing strong demand. and we're going to produce to it. >> with several military jets soaring over the air show, many were hoping to see the lockheed martin f-35. the new fighter jet is still grounded while the pentagon tries to figure out why the f-35 engine caught on fire in late june. >> i'm confident they're going to go through a discipline process, they always do. they'll go through the discipline process, get to the root cause. and we're very helpful it will be in time for the aircraft to be here. >> if the f-35 is cleared to fly at this air show before the end of this week, it will be welcomed news for lockheed martin and for a program that's been criticized for lengthy delays and costly overruns. i'm phil lebeau for the nightly business report in hampshire england. coming up next, the

surprising long term trend in your 401(k), and for a change, it's good news, we'll tell you what just ahead. traveling for business can be hard and may have just gotten a little bit harder. business travelers are being warned about a new threat, cyber attacks on their personal information through hotel business center computers. ayman jaggers has our story. >> reporter: it's a familiar ritual for every business traveler on the road. stop in at the hotel business center and print boarding passes for the next day's flight. those hotel business centers could be a dangerous place to do business. because cyber hackers are trying to get into the computers there

and steal personal information about corporate executives on the road. the u.s. secret service and department of homeland security told hotel operators in a warning last week, they do this by infecting the computers with so-called key logging malwear. that's larmful software that allows attackers to copy every key stroke made by a computer's user and capture sensitive information like passwords and account data. the new warning was first discovered by a security company. >> we need to realize we don't live in a world that our information is kept private because we happen to be at our favorite hotel or a coffee shop that's got an open network. >> there really are only two ways to keep safe. >> any time a road warrior encounters a situation like that. use your own laptop or communicate in a way that doesn't share any personal information, otherwise there's really no telling what can happen. >> the hotels say they know

they're under attack. a spokesperson for the american hotel and lodging association says many hotels are already adding new layers of protection. including installing anti-virus software, using tamper proof devices, restricting access to business centers. and providing individual unique log on credentials to access business center computers. >> this is the kind of attack that can be difficult to stop, the hackers can insert the malwear over the internet or get physical access to the computers in person. with the business centers busy 24/7, can be very difficult for the hotel staff to see who's there to do business. and who's there to commit a crime. for nightly business report, i'm ayman jabbers in washington. placing a bid on fine art will soon be a click away. ebay and sotheby's are teaming up to make it easier to buy

collectibles online. they plan to broadcast live auctions from sotheby's new york headquarters that way you can bid live in realtime from anywhere in the world. the terms of the deal not disclosed despite the news. shares of ebay were down slightly today. sotheby's was up 1% to $40.9. shares of riverbed technology tumbled after the company blamed lower sales in north america because of a delay in closing some of its larger deals. following the announcement, the hedge fund reaffirmed its bid to buy that company, the stock nevertheless down 8.5% at $18.60. home depot will start selling statuses 3-d printers in stores beginningtoday. they will have the product in 12 of its locations in california, illinois and new york. customers can use the printers

to create parts like cup holders, making 3-d printing a little more mainstream. shares of stratuses edged up slightly. domestic steel producers like u.s. steel could face renewed price competition from china. the world trade organization ruled that u.s. tariffs violated global trade rules and improper ly installed products. that sent shares of u.s. steel down more than 5%. manchester united and adidas have agreed to a record breaking uniform deal. the 10-year contract will begin in 2015, when nike's deal with the soccer team expires. for that hefty fee, adidas will get free advertising on one of the world's most popular soccer uniforms, and it will also be the exclusive dristributor of te team's merchandise. shares of excel soared on

its skin cancer treatment it's developing with roche. people can live longer without the disease worsening, when combined with another treatment. according to the investment company institute, the mutual funds big trade group. nearly 38% of 401(k) assets were invested in equity mutual funds. the fees on those funds continued to drop. and more of your money went to work for you. joining us to talk more about this trend and others. is brian reed chief economist at ici. three quick questions. how much did the fees on average fall, why? and how does this translate into more money into my pocket as a fund holder? >> well, fees have dropped 30% in the last decade. between 2012 and 2013 they've

dropped 5 cents. what do i mean by 5 cents? stock in investors in a 401(k) now are paying 58 cents for every $100 invested compared to 63 cents in 2012 and a decade ago 83 cents. this means more of your money is being put to work into the market, and why this is happening is that employers are helping to drive greater competition, and the fund industry is responding. they're coming out with new share classes, new types of funds that have lower fees. and also investors and their employers are going toward more index products which tend to be lower costs as well. all this is contributing to the decline. >> are you finding that investors are putting more of their money to work possibly because of these fees we always hear that the individual investor has so much cash on the sidelines. is that cash now going into these 401(k)'s being invested?

>> there's a lot of money going into 401(k)s, there's no doubt about that, i think the improving employment situation is helping investors have more cashflow in their overall balance sheets and income, and some of that is being put in the 401(k) market. to your point about the overall cash positions, we're finding that if you look at households overall, the amount of cash they're holding while total dollar amount is at a record high, the percentage of the overall financial assets of investors is at a near record low, below 15%, and this has been hovering in this area for a long time. investors look pretty fully invested right now, not only in their 401(k)'s but outside. >> so far this year, where is the fund money? and not just in 401(k)s, where is the money going? in some of your research, it indicated to me that relatively less of it is going into actively manage domestic stock mutual funds, which speaks to the popularity i suppose of

etf's and index funds. overall, where is the money going? >> we're seeing several trends. we're seeing strong in flows in domestic equity, where the pass has the strongest presence. we're also seeing very strong investor demand for mutual funds that are investing outside the united states. you know, this has been part of a trend that's really been in place for close to a decade now, u.s. investors have tried to diversify their portfolios within their 401(k)s and outside, to include more foreign investing, this would include some emerging market bond funds. in addition, we are seeing renewed investor interest into taxable bond funds as well as new flows coming into tax exempt bond funds, even though last year we saw some outflows following interest rates, money is coming back in now. >> brian is chief economist at the investment company

institute. coming up on nightly business report. putting the fun in family road trips, how dreamworks and microsoft are hoping to put an end to the infamous question, are we there yet? just as the nation hits the peak of the summer driving season, you have some good news about the cost of gas lean. prices at the pump are down an average of 4 cents a gallon over the past two weeks, that works out to $3.67 on average nationwide. they're now eight cents lower than this time last year. volkswagen is making a big investment in tennessee, $600 million to upgrade a current chattanooga factory and build a brand new research center.

the german automaker will build a 7 passenger suv there, hoping for big sales in the u.s., and add another 2,000 jobs to ramp up production. well, while one business opens another looks to be closing down. employees of the trump plaza in atlantic city were notified today that the hotel casino expects to shut its doors in september. more than 1100 people will lose their jobs. trump plaza isn't alone, it could become the fourth casino in the struggling atlantic city to close due to competition from new casinos in maryland and pennsylvania. microsoft and dreamworks decided to combine forces on a new venture. julia bors ten has the story. >> reporter: dreamworks and microsoft are teaming up to bring dragons into the world around you. it targets kids playing games in

the car, and layers in precise location based technology. four square and the weather channel, when kids fly on the back of the dragon, the game reflects the time of day, weather, and the roads and land, mas around them. >> when you get in the car and you start moving down the street, your car is represented by a cart, the actual streets and buildings around you are all transformed. if you drive by a restaurant the it will turn into a viking eatery. if it's a popular place, you'll see vikings milling about. >> the game automatically winds down when arriving at a destination to prevent battles getting out of the car. starting today, the game is available for free for microsoft devices, the tech giant is looking to showcase its entertainment tools, while dreamworks animation invests in its characters. no word whether or if it will be available on android or ios

devices. the game allows kids to explore 16 cities. >> i think it's a newer if tile area that people are starting to experiment with. we're going to be looking at introducing other experiences, not necessarily just games, and taking them to consume iconsume whether it be built directly into a car, and explore the world virtually. >> microsoft assures parents it doesn't retain location data. down the line, all that location information could be valuable for targeting ads. for nightly business report, i'm julia borsten, in los angeles. >> would you use it for your season son? >> my son uses the ipad all the time on car trips. there's one word of caution, on a windy road, use it at your own peril. >> it does look like fun, though. that's nightly business report, thank you for watching. >> have a great evening,

everybody, we'll hope to see you back here tomorrow night.

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