>> this is n.b.r. >> susie: good evening. i'm susie gharib. j.p. morgan may have known about risky trades two years ago. we talk with the senator who invited c.e.o. jamie dimon to capitol hill tomorrow. >> tom: i'm tom hudson. what's at risk with greece's weekend election? the outcome may decide whether the country sticks with the euro. >> susie: and our small business series continues. how a global bank is helping entrepreneurs. >> tom: that and more tonight on "n.b.r." >> susie: another black eye for today reportedly it was warned two years ago that traders made bad bets that cost j.p. morgan $2 billion in loss and now they're mounting.

erica himmer reports. >> reporter: it was a month ago that j.p. morgan revealed its bad derivatives bet. at first, the bank pegged its loss at $2 billion, but now there are estimates as high as $5 billion. that would be roughly a quarter of its earnings last year. j.p. morgan wouldn't comment on the losses. also, there are reports that alarm bells went off about risky trading at the firm's london office as much as two years ago. investors are clearly nervous. j.p. morgan shares have dropped nearly 20% since the losses were revealed, slicing roughly $30 billion in market value. but analyst jim sinegal sees 50% upside for the shares. >> they only have to make $13 billion a year in order for that stock to be at ten-times earnings right now. i think they are going to make considerably more than that, so the stock does look cheap to us. >> reporter: but it's clear c.e.o. jamie dimon's stellar reputation has taken a hit as investors worry about lack of oversight and risk controls. there could also be fallout for all banks in the form of tighter

regulations. >> this is going to be a big setback for them and probably going to tip the pendulum back towards a stricter interpretation of the volcker rule. >> reporter: investors are hoping to get more insight from jamie dimon tomorrow when he testifies before the senate finance committee, but dimon has already said he won't provide a tally on the losses from the bad bet. erika miller, "n.b.r.," new york. >> susie: still ahead, does facebook lead to more business for companies? a new study out today tries to answer skeptics. "nightly business report" is brought to you by: captioning sponsored by wpbt

>> tom: at jp morgan has brought the rules of banking back in focus as many rules are still waiting to be rewritten. senator bob corker is a republican and called for the trading loss. senator, welcome to nbr. the bank has absorbed the losses. share holders have gotten hit. isn't that the way it's supposed to work in a free market. >> absolutely. jp morgan earns that two times each quarter. it's not a question of challenging jp morgan to what's happening. no doubt the stockholders have taken the hit. what's happening tom is rules are being written by regulators to specific things, one is the voelker rule and it's a great opportunity to understand the difference between a propriety trade which all america's agreed is not going happen in the financial institution and that of a hedge. >> tom: is there anything about

the way you understand this trading strategy, anything about it that should be illlegal? >> what appears to have happen sunday over times they doubled down and tripled down it became a propriety trade and the question is, tom, how does a regulator know the difference. you know, are there some kind of measures that are put in place in the front end to gauge this because as it appears this thing morphed from one kind of a trade to another. >> tom: to the point of regulators in front of your committee last week in fact you had a regulator admitting his agency did not perform austin peay to expectations. are more rules as you're requiring more regulators and funding for the regulators? >> i think we ought to have some overall standards. i certainly think the best is capital candidly. au as you mentioned the jp morgan shareholders ate it and it

wasn't a problem because of the capital. >> tom: is it time to separate commercial and investment banking as it was for the better part of a generation. >> i think jamie dimon should talk tomorrow about why the highly complex institutions are necessary today. why should all of these things be combined in the matter that they are because tom what i think you'll see over time is people looking in the rearview mirror and wondering whether we did the things we should have done to cause our financial system to be safe and sound. >> tom: senator bob corker along with us of tennessee. thank you. >> susie: now, ahead of that hearing, j.p. morgan's stock rallied, up almost 3% as financial stocks were among the strongest. the major indices regained what they lost yesterday on comments from the president of the chicago federal reserve bank

repeated his support for more economic help. the dow surged 163 points, the nasdaq jumped 33, and the s&p rose 15. >> susie: the clock is ticking towards this sunday's crucial election in greece, and already european leaders are considering back-up plans in case greece decides to leave the euro. but european union officials are quick to add that they aren't making plans for an actual exit. and, as darren gersh reports, the greek election this weekend may not settle the question of whether greece stays or goes. >> reporter: in greece, the polls shows voters are deeply divided-- so divided, the election on sunday could leave the winner with a weak majority in the new parliament or, even worse, unable to form a new government.

if that happens, there's a slight possibility another election could be called. >> i'm sure many greeks will be really enraged since many of them are fed up with the politicking and the games that have been played all these weeks, if not years and decades, on their backs. >> reporter: recent polls show the coalition of the radical left with a slight lead. known as syriza, the party plans to nationalize banks and renegotiate the terms of greece's $130 billion euro bailout by the european union. syriza's conservative new democracy party opponents say syriza would force greece out of the euro. even so, both parties say they do not want to bring back the old greek currency, the drachma. >> both sides are accusing the other of leading us to the drachma, so, in a way, that makes it totally consistent that 90% of the people don't want to go out of the eurozone. and both parties accuse the

other that their recipe will lead us out of the eurozone. >> reporter: staying in the eurozone means greece will have to convince the country's lenders in germany and at the international monetary fund that greeks will continue to take their economic medicine. >> so they ask for us to do some structural changes that will improve our economy and eventually our competitiveness and our infrastructure, and we will be able to pay back our debt eventually. >> reporter: but for a country burdened with high debts, no real exports and mired in its fifth year of recession, "eventually" could be a long time. >> there is no good choices left. i think exit will be a disaster in the short run, but staying in the euro just drags this out forever. there is no end to it. as a long-run matter, greece doesn't have a viable future inside the eurozone. >> reporter: but that's a conclusion that, at least for now, greek voters appear unwilling to accept. darren gersh, "n.b.r.," washington.

>> tom: facebook pushed back at critic who say the company ads don't work. it shows it affects bottom lines. as companies struggle to tap into facebook they try to answer what is facebook to a business. gm pulled facebook advertisement saying they weren't effective and a poll showed one in five facebook users has ever bought after seeing an ad on the site and one report shows it can pay off for big name brands. people who liked starbucks on facebook and friends bought something at a starbucks 38% more often friends of fan of target were 19 percent more likely to buy than fans who were not friends. and it had a rough road and tonight it's below $28.

the commission report was released the facebook's quiet period came to an end. gian fulgoni is the co-founder of comscore. welcome back to nbr. you found unpaid advertising for starbucks on facebook for instance led to more in-store buying. doesn't sound like of of an endorse manimen endorsement to pay for advertisement. >> they built an electronic version of word of mouth which has long been known to influence people's behavior and choices of brand. so a brand can communicate the message to their fans and to theiren from and the the average fan has 100 friends and you have that and the persuasion because fundamentally i think a message that comes from a friend of yours is more persuasive to you

than if the message comes from the brand. >> tom: gian, is that the issue for facebook to take your results the word of mouth and essentially begin to charge companies more and more money about the getting the words higher up on friends of their corporate facebook customers? >> yeah, in a sense that's right. i think when an advertiser pays facebook they can make sure the actual reach of that message to the fans is prominent and larger than would if it was just organic. >> tom: what does the study mean for other forms of online advertisement like banner adses or video ads and other paid-for-engagements. >> it's clear banners as well as rich media with animation and movement and then video are all capable of moving a needle in terms of sales. now, if there was any additional

evidence needed the trade body for the publishers online released the numbers for the first quarter in terms of online spending up 15% versus a year ago well north of $30 billion. >> tom: the study from facebook coming from comescore and gian fulgoni is the head of comscore. >> susie: "can you hear me now?" verizon wireless wants its customers to hear their new shared-data plan. the plan allows users to put additional devices, such as tablets and ipads, under one contract and pay one flat fee per device.

this is a big shift in cost structure for verizon. its competitors, sprint nextel and t-mobile, currently offer unlimited data plans but do not allow customers to add multiple devices. shares of semi-truck maker navistar took a hit today after an environmental protection agency ruling was knocked down by a federal appeals court. the rule would have allowed navistar to sell heavy-duty diesel engines even though they do notomply with pollution standards. it is a win for the company's competitors, which fought the rule and spent hundreds of millions to meet e.p.a. standards. >> susie: lots of winners on wall street today. the markets took off wiping out all the losses from yesterday. look at the dow components all but one united technologies were in the green. good day for a lot of investors. >> tom: more optomism in the market with not a lot of news ahead of the greek election.

let's take let's take a look at what else is happening with stocks in tonight's "market focus." a day of optimism helped stock prices recover after monday's steep drop. it took about and hour and a half before the s&p 500 found its footing today on the heels of chicago federal reserve bank president charles evans saying again he supports more help for the economy. that pushed the index up for the rest of the session, closing at its highs of the day. volume was modest-- 721 million on the big board, 1.6 billion cross on the nasdaq. the materials sector led the way higher, up 1.8%. financials and industrials were close behind, up 1.7% and 1.6%, respectively. now, airplane maker boeing saw some lift after an investment firm said boeing is making its dreamliner planes faster than anticipated. shares jumped 3.5%, rising to a one-month high. the dreamliner was delayed coming to market and has experienced production delays, but investment company sanford bernstein is optimistic about the rate of production.

just yesterday, boeing announced plans to sell 1,000 jets this year, a target that wod make it the plane maker in the world after losing that title last year to airbus. the move of technology companies toward paying shareholders continues. after the close tonight, dell said it would begin paying a quarterly dividend. dell will begin paying eight cents per share per quarter. at tonight's closing price, that gives the stock a 2.7% yield. it may be a ray of sunshine for beleaguered dell shareholders. shares hit a 52-week low during the session today before finishing up about 1% to just below $12 per share. with tonight's dividend announcement, the stock rallied another 3% from this closing number in after hours action. another tech stock that has had some tough times, texas instruments found buyers today, up 2%. the semiconductor maker updated its quarterly financial outlook right around the mid-point of its previous prediction. in other words, no real surprise, but it was taken as an encouraging sign of business stabilizing.

we have a closer analysis of texas instruments stock chart with technical analyst michael kahn. you can find it under the "blogs" tab at www.nbr.com. much has been made about facebook's disappointing performance since its stock sale, but a company closely tied to the web site has fared even worse. video game maker zynga gets most of its business through facebook. the stock was very actively traded today, falling to a new post-i.p.o. low below $5. the nasdaq halted selling the stock short trades that profit if it goes lower. the number of daily active users fell by more than 8% in may. another relatively new stock, though, continues to show strong business trends. clothing designer and retailer michael kors had a much stronger than anticipated quarter with profits doubling from a year ago. it also increased its financial outlook, helping push the stock up 7.7%. volume was ten times normal. shares went public in december at $20. it has more than doubled since. in our exchange traded fund market flash, gains across the board. among the five most actively

traded e.t.f.s., the emerging markets fund was the strongest, up 2.1%. and that's tonight's "market focus." >> susie: many small businesses remain pessimistic about the u.s. economy. the national federation of small businesses says its optimism index in may was sitting at a historic low. now, while this reading doesn't project good employment growth, small businesses are some of the best job creators in the u.s. over the next six months, u.b.s.

will be mentoring 20 small firms in chicago and los angeles. and as diane eastabrook reports, the plan is to help those firms get bigger and better. >> reporter: common ground is bursting at its seams. in eight years, the chicago advertising and marketing firm has morphed from two employees to 80 and outgrown its office space. >> who's in that meeting? >> reporter: ahmad islam and sherman wright started the company with $300,000. now, with clients like miller, coors and nike, revenues should top about $20 million this year. but common ground's growth has brought challenges. >> we know what we know and we know it very well, and the things that we don't know we need to align ourselves better with people who know it better than we ever could. >> reporter: enter steve smith. >> this is alice pollard. alice pollard is the v.p. of finance. >> nice to meet you, steve smith. >> reporter: smith is a wealth manager at u.b.s. the bank is partnering with the chicagoland chamber of commerce to mentor ten small minority- owned businesses so they can grow and hopefully add jobs. >> i might be able to provide some feedback in terms of

business structure, in terms of where they're trying to go. >> reporter: u.b.s. launched its small business advisory program last year in new york as a pilot. it was a way for the bank to give back to the communities it serves, sort of a philanthropic project for commerce. >> this will be a model that every bank of any size in america should adopt as part of its business model. >> reporter: last week, former president bill clinton gave the program a shout-out at his economic conference in chicago, where the c.e.o. of u.b.s. group americas joined him on stage. bob mccann says u.b.s. wants to make good businesses better, and that doesn't necessarily mean loaning them money. >> you can have the greatest idea in the world, but if you don't have access to both intellectual capital and financial capital, you're not going to be able to deliver it and execute it. >> reporter: islam and wright do strategic planning every year and have consistently met growth targets, but keeping on that trajectory is getting harder.

>> you know, for me, i'm not a money person. i got a degree in journalism. my background is marketing and advertising. so i welcome them coming in because it helps me become smarter as a businessperson as well as my organization become that much healthier. >> reporter: smith will mentor islam and wright for six months, but the bank hopes its guidance will help common ground for decades to come. diane eastabrook, "n.b.r.," chicago. >> susie: tomorrow, wall street will be watching capitol hill. as we've been reporting, j.p. morgan c.e.o. jamie dimon will be testifying about his bank's huge trading loss. also, a look at housing: the housing market may be slumping, but home renovations are surging. find out what's behind the boom in home improvement. >> tom: dutch bank i.n.g. will pay a record $619 million fine to settle a sanctions evasion case. the bank admits they secretly moved billions of dollars through the u.s. banking system on behalf of cuba and iranian customers.

the fund transfers are a violation of u.s. sanctions against both countries. the treasury department adds the bank deliberately deleted information about thousands of transactions. and while the treasury department is getting that big i.n.g. penalty payment, that's a fraction of the almost $16 trillion national debt. today, todd buccholz stopped by our new york studio and shared his idea for tackling the country's debt. he's the author of "rush: why you need and love the rat race." >> america has been the land of the game show since groucho marx dangled a toy duck in front of the faces of contestants. whether we're watching "let's make a deal," "deal or no deal" or "the price is right," at some point, just about all of us have screamed at a contestant, "don't be stupid, take the money!" that's how i feel about the u.s. treasury market. the government has racked up trillions of dollars of debt, $5 trillion alone since president obama moved into the white house. we don't know how we're going to pay it back, and yet the world is willing to lend us long-term money at less than 2%. so why not give our kids a break

by taking the deal and issuing 100-year bonds, locking in today's puny rates? corporations do it. disney issued "sleeping beauty" bonds and the market scooped them up. instead, recklessly, the treasury borrows short-term funds that must be rolled over. one of these days, when the government tries to roll over that paper, rates will have jumped much higher and the world's financial system will look at the u.s. taxpayer and announce: "game over, you lose." i'm todd buchholz. >> susie: whether or not golf is your game, a lot of business gets done on the golf course. a fifth of u.s. golfers are women, and more businesses are going after them on the links. rick horrow spoke with mike whan, commissioner of the ladies professional golf association. >> you've been in this position for a while and you can get to see an overview of the entire business of golf. what's the biggest challenge you've had facing the lpga?

>> i started in january 2010. the world is different than it is today. we're not back to 2007 just yet but i was surprised with just how frozen the marketing budgets were in 2010 and you know, as you know, sports sponsorships are an easy thing to assess when the business isn't well and so i walked in at an interesting time in business and to be talking about sports sponsorships. >> number of sponsors up, dollar-value up. give us a report card. >> we learned a lot. companies that lived through 2009, 10 or 11 are either smarter or gone. we had to get back to what's important. today if you're an lpga player and were going to sign up at an event first thing you'd get is the customer profile sheet who's paying for the week and what do they want you to say and what should you post?

they're all things that matter in today's world so if it wasn't for the person writing the check we'd be playing for a set of callaway irons and we like to lose the word sponsorship and use the word partership because it means we're in this as my wife would say for the long term. >> and sponsorship is fine but it means long-term sustaining in another form, television. where are you today and in the future. >> we start a ten-year agreement with the golf channel. it's a ten-year deal and gives us a home. i think you'll definitely see an intermix where you'll see us playing in other coutries just one time to create interest in that country for a few years and then be able to move to other coutries and then the last i hope you'll see in the next five years is an are yo a renewed ne exposure and that's what i'd like to see fixed before i'm

gone. >> mike whan of the lpga. finally, burger king summer special to give you something to chew on. the bay con sundae desert, vanilla soft serve, fudge, carmel and ba bacon. it's part of the push to win back customers and reverse a sliding market share here, susie. how about it a 510-calorie treat with ice cream and bacon. can you mark you down for one? >> susie: i like the vanilla and fudge and caramel but the whole thing is weird. >> tom: agree. >> susie: thanks, tom. good night everyone. thanks for watching. that's nightly business report for this tuesday june 12. you see you all back here tomorrow night. "nightly business report" is

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