this is "nightly business report" with tyler matheson and susie geling. brought to you by -- >> the street.com, interactive inab inable multimedia tools for an ever changing financial world. our stock adviser guides and helps generate income during a period of low interest rates. real money helps you think through ideas for investing and trading stocks. action alerts plus is a charitable trust portfolio that provides trade by trade strategies, online, mobile and social media, we are the street.com. long road back. the nasdaq hits a 12-year high. what's driving it? and are there reasons to buy unloved old tech? housing hot water.

why two big banks are being targeted by the new york state attorney general for not doing enough to help troubled borrowers. >> a berkshire bear. did the lone short seller at weekend shareholder meeting convince any of the loyalists to dump the stocks? all that and more tonight on "nightly business report" for monday may 6th. good evening, everyone. tyler, not a whole lot of drama in the market today compared to what we saw last week. >> a little bit refreshing in its quiet not. it's really not a big trading day and no big swings, in fact. the dow traded in the narrowest range in more than eight months today. the major averages ended mixed. the dow closed just five points lower, and a different story, though, with the s&p 500. it was up three point, just enough to extend the record-setting gains made on friday following the stronger than expected april jobs report. take a look at the nasdaq which rose 14 points today and that landed it at a fresh 12 and a

half year high on the renewed strength of technology stocks like apple, up nearly 2.5% today. but as seema moti tells us, apple isn't the only company helping drive this year's run-up in the market. >> the nasdaq is trading at levels we haven't seen since aol bought time warner. that was in 2001. it's been a long road back. for the first three month of 2013 defensive sectors like health care and consumer staples led the s&p 500 and dow jones industrials to new highs. however, as defensive stocks like johnson & johnson get more expensive, we're seeing this rotation of capital like technology which make ups a large component of the nasdaq composite. better-than-expected earnings from technology corporations have also helped tech outperform. according to thompson reuters of the tech companies that have reported thus far, 69% have beat their estimates. lastly, deposited economic data from gdp to job, that's a big

plus for tech. brian marshall is telling me, as companies feel better about their business outlook they will in turn hire more people which ultimately should lead to more spending on i.t. among the tech stocks fueling the nasdaq over the past month, apple shares staging a major comeback, although shares still trading below the september 2012 hive 7.05 a share. biotech heavy weights, regeneron pharmaceuticals. for "nightly business report" i'm seema modi. >> shares up 25% so far this year. microsoft founder bill gates took a swipe at rival apple, touting his company's windows 8 software it works with tablets like the ipad and the pc which is still a big driver for revenue. the windows 8 really is revolutionary in that it takes

the benefits of the tablet and benefits of the pc and it's able to support both of those. surface, surface pro, you've got that portability of the tablet, but the richness in terms of the keyboard and microsoft office of the pc. so you say pcs are a big market. it will be harder and harder to distinguish products whether they're tablets or pcs. microsoft is trying to gain share in what has been dominated by the ipad-type device. >> and now for more on the microsoft and the health of the technology sector, let's welcome daniel ives, he's with senior capital markets. you heard mr. gates say windows 8 is revolutionary. is it revolutionary, and if it is why isn't it selling better? >> he might be getting ahead of itself. it's a very strong potential

product and obviously a big product cycle for microsoft and it's pretty underwhelming and it's come out more like a snail rather than a rocket ship in terms of, you know, expectations since the launch in october. >> but microsoft's business is really business, isn't it, mr. ives? it's not so much the consumer as it is dependent on enterprises buying its software or buying new productses for computers? >> that's fundamentally it. remember, 90% of profits come from core windows office. enterprise is the core competency for microsoft and again, they're definitely the slower option out of the gate for windows 8 in terms of the upgrade cycles. microsoft's stock has done well. a lot of the optimism in terms of how it's going to perform and we are so are far from what we've seen. it's definitely been slow out of the gate and that's been

disappointing blows to microsoft. >> yet as you point out the stock is up by 25% or so so far this year. do you like the stock at these prices. would you buy it? are you buying it? >> there's more hoping that there's some activism in the name, and i think that helped drive shares in terms of something strategically that could happen. that point in the near-term, i wouldn't hold my breath, i don't think anything will happen in the near-term. personally, look, microsoft, the run-up here and i think we have a price target and it got a little ahead of itself and now they talk the talk and they need to walk the walk in terms of windows 8 sales and in our survey work and all of the anecdotal data, they're hitting a single when most people expected a home run for windows 8. >> let's talk a little bit about the broader pc market or the market for desktops and laptops

that run the windows operating system and extend out to that microsoft ecosystem which includes or traditionally lly included microsoft, dell and hewlett-packard. what do you make for the overall demand for computers as opposed to tablets. >> it's pretty dark days for pcs. it's the first time in a decade when pcs declined and we were modeling a high single digit decline this year. part of it is there's a huge cannibalization effect on tabsts and again, the best days for pc's in the rear-view mirror and this gets into the whole old tech versus new tech and when you talk about the companies that are attached to pcs that's kind of been the anchor on the ship in terms of where spending is, just given the cannibalization in a negative pc environment. windows 8 was supposed to be the catalyst to stop that. so far, it hasn't.

>> we've heard this story before, haven't we, mr. ives when microsoft comes out with a new operating system. it was windows 7 not long ago and before that, other iterations of windows. do they bank on windows for too much and have you always been hearing how the windows phone was going to be a big transformational product and apart from nokia, it hasn't been a big hit either, has it? >> there's always been the optimism, but fundamentally, if you look back they've been pretty disappointing product cycles. >> some of the functionality and part of it is the enterprise adoption and a lot of -- they put a lot of cards into windows 8. windows 8 was supposed to be the end all be all at least so far from the enterprise, on surface it's in been very slow and i think to move a stock higher, you need to see it and that's

focused on over the coming quarters. >> dan is with fbr capital markets. >> great to be here. >> even after the market records this year including today's for the s&p 500 there are still some stocks that many consider to be undervalued. jackie deangeles takes a close look at bargain shares that may be ready for their own rally. >> a bull run on wall street, the dow recently above 15,000 and the s&p 500 trading above 1600. some investors want to continue to ride this rally, others wondering if it's too late to get in, but the fear that some stocks might have run too far, too fast. >> what investors are worried about is that we're at all-time highs in the stock market and there's still the overall economy and consumers who sometimes invest are feeling the uncertainty in their own situation and they're looking at it and they're not sure what to do. >> where can investors find value? >> the good news is that there are hidden gems in the s&p,

names poised to move higher even in this market and they were found among the worst-performing large-cap sectors since november market lows, technology and energy. >> what makes these names desirable? they look relatively cheap and are poised for growth and based on a metric when wall street calls the price-to-earnings ratio. >> p-e helps you judge how the company is valued. companies with high p-es, they're expected to grow a lot. >> the s&p gems have current p-es sitting below their five-year averages. they also have p-es that show growth potential. they include apple, intel and yahoo. gems in the energy space, exxon mobil and hess. with respect to the technology name, growth and future performance lies heavily on the shoulders of their ceos. apple's tim cook and yahoo!'s marisa meyer both have taken center stage as they look to execute a new vision. >> brian will be taking the helm on may 16th. for "nightly business report,"

i'm jackie deangeles. >> when it comes to finding bargain stocks there's no one like warren buffett. the billionaire investor is the driving force behind the success of berkshire hathaway and its shares hit a new record high today at $164,000. berkshire's stock was just one of many topics that buffett talked about at his company's annual meeting this weekend where some 40,000 shareholders converged on omaha to hear from the oracle of omaha. >> this is warren buffett at 82, just a year after his cancer diagnosis. he still made the rounds at the berkshire hathaway meeting. >> that was like a perfect fit for me. >> with energy and enthusiasm. >> i'm not sure if i'm allowed to shake your hand or not. >> thank you. no charge. >> making time for fun with billionaire buddy bill gates. >> he's doing it slightly better than i am.

>> warren, what's your favorite part of all this? >> i like it all. >> not only did buffett have the stamina for all this, he also took questions from shareholders for an amazing six hours. >> buffett was asked how the fed will unwind his massive stimulus. he says it's a huge experiment, but the world won't come to an end. on fixing health care, he said it's the single most important thing to keep the u.s. competitive and on the big craze, he's not buying it. >> what do we sell these for? >> but at this lovefest that buffett calls woodstock for capitalists. >> if you have any left over and you mark them down, call me and i'll buy one. >> not everyone was feeling so warm and fuzzy. >> bushing share is too big to prosper. >> doug cass is a money manager who is shorting stock. hand picked by buffett to be the bear at the meeting to ask the tough questions and in buffett's words to spice things up. >> he used to hunt gazelles and

now he's hunting elephantses that are pricier. >> it's unusual to invite shareholders to a meeting but he's hard leet typical ceo. >> sure. we wanted to get softball questions i could get my kids to ask me questions or something. >> even buffett is worried about berkshire's stock particularly because he's had such a nice run-up this year gaining more than 20%. he told shareholders if the markets continue to rally, berkshire shares would be likely to trail the s&p 500? >> how do you feel about it? i wish we didn't, but, you know, it's going to happen particularly if you get five straight-up years including what looks like a pretty strong year. >> but money managers at the meeting were positive about buffett and berkshire. >> i think he and charlie are pinching themselves. they are so excited about how well many of berkshire's businesses are doing and it's beyond their wildest dreams. i still think that buffett and munger are at the top of their game. i love it that they have the

cash. the businesses are doing fine and quite frankly, we just don't think the valuation is stretched here. >> berkshire is the monster cash flow machine it's always been. decentralized and bubbling up cash from the bottom and it looks perfect to me. >> still, there's been a course of criticism about the ample cash in berkshire's war chest. almost $50 billion of untapped money and heinz was the only large acquisition this year. no wonder there's so much talk about a dividend, but buffett is reluctant. >> we think that reinvesting a dollar creates more than a dollar value and if that's the case people can do better since significant premiums of those dollars. >> that's okay with shareholders. they own berkshire because they believe in the oracle of omaha. >> we've done it for 60 years. can't argue with success. >> i am very impressed with warren. i like his down to earth style. >> but as for doug cass, he's still bearish on berkshire.

>> there was nothing at all. there was nothing incremental that would make me more positive and less concerned, less cautious. >> his biggest worry, who will run berkshire after buffett is gone? buffett knows the answer, but won't reveal the name to the public. and for now, he's calling the shots and has no plans to slow down. >> no second thoughts about making it easy a little bit? >> oh, no. no. i'm having fun every day. >> he's really amazing, tyler, and as you can see from that story it's like a carnival atmosphere and it's also like getting an mba degree. you learn a lot. >> how did he pary with doug cass when he was on stage with the short seller's questions. >> the questions were tougher than were asked in the past and at one point he said you haven't convinced me to short the stock. keep trying. >> $100 billion worth of ping-pong at that table. welcome home. welcome back.

coming up, why the new york attorney general is taking aim at two big banks for not doing enough to help troubled borrowers, but first, a look at some selected stocks that hit all-time highs today. a check on the international markets. ♪ ♪ ♪ two very different energy companies lead the market focus

and anadarko reported first-quarter profits and revenue above estimates and the company increased full-year sales and volume's guidance. anadarko produces in the gulf of mexico among other places. shares of the company gained more than 1% during the day and went higher earnings report. >> also reporting solid earnings, first solar posted first-quarter profit, turning around a loss from a year ago, but they still missed estimates. the company credits the improvement on the strong demand for its power plant projects which it sells to utilities. shares of first solar gained 3.5% in the regular session and seesawed in after hours. >> humana and unitedhealthcare were ng moo the top performers today as a j.p. morgan analyst took advantage of the medicare advantage business through 2015. he rated both companies overweight despite potential reimbursement cuts from the government. investors sent unitedhealthcare up 2.5% and humana followed with

a gain of just over 2%. >> shares of bank of america and mbia spiked as the two firms agreed to settle a dispute over faulty mortgage bonds dating back to the housing boom. mbia provides insurance to the financial services industry. bank of america will pay $1.5 million in cash and provide mbia with a $500 million credit line. investors recognized the deal was good for both sides and bank of america gained more than 5% leading the dow winners and mbi arose more than 45%. all of the major banks rallied today in a range from about half a percent to more than 2%. >> and speaking of banks, new acquisitions today against two of the nation's biggest for ignoring last year's 49-state settlement to help struggling borrowers by dragging their feet on hundreds of new financing requests. >> bank loans still carried on bank's books are haunting the housing recovery.

diana olick explains. >> in new york today state new york stock exchange eric schneiderman accused two of the nation's largest bank, wells fargo and bank of america of reneging on a deal to help millions of troubled borrowers. >> this enforcement action which is the first taken under the settlement is based on 339 individual complaints from new yorkers against these two banks in just the last six months. >> the charges stem from the $25 billion settlement that came out of so-called robe owe signing foreclosure abuses. it directs the banks to modify loan, forgive mortgage principal and improve significantly the way they treat or service their customers. specifically, the banks must respond to customer applications quickly. j joyce harden says she and her husband have been trying to get help from wells fargo for years.

>> i hope they help us and help other people like me who are suffering. >> the lawsuit comes just as mortgage delinquencies are starting to improve dramatically. fewer borrowers are falling behind on their payments for the first time and those already behind is dropping, too, for several reasons. >> fewer inflows of new-problem loans, progressions of loans through the foreclosure process and since january 2010 over 3 million modifications taking place all of which are removing loans from that delinquency pipeline. >> the number of borrowers who owe more on their mortgages than their homes are worth also fell down 39% from a year ago to around 9 million according to lender processing services. still, these underwater borrowers have a far higher rate of default than those who still have equity in their homes. >> are we out of the foreclosure woods yet, not by a long shot. weir seeing the best number since 2007, but remember, 2007

was a pretty awful year for foreclosures. >> i'm diana olick in washington. >> here are some of those numbers diana referenced. today there are still roughly 5 million borrowers either behind on their mortgages or in the foreclosure process. >> still ahead on the program. a major event rattled wall street exactly three years ago today. do you remember what it was? the answer just ahead, but first, a look at commodities, treasurys and currencies and how they fared today. ♪ ♪ ♪

u.s. treasury plans to settle its remaining stake in general motors which would require the government's bail out of the u.s. auto sector in 2009. separately general motors is recalling 38,000 chevrolet malibu, buick lacrosse and buick regal sedans because of a defective battery control that could stall the engine or cause a fire. for more details go to our website mbr.com. shares of general motors were down slightly today to $31.82. >> we asked a moment ago, do you remember what rattled wall street three years ago today. the answer is the so-called flash crash that sent the dow jones industrial average 1,000 points lower in just the blink of an eye before the markets recovered most of those losses. >> bob pisani looks at whether

anything has changed. >> it's been three years since the flash crash and regulators have made several changes to stop trading. the most important changie change is new circuit breakers that would act like a break in the market during a period of rapid drops and still allow stocks to trade within trading bands. >> if a stock trading at $10 suddenly dropped 9% to 9.50 that stock would halt trading for five minutes before trades could be made below that price, but would permit to keep trading above 9.50 or 10.50 above or below the last price, essentially establishing a trading ban for the stock. another change, the elimination of so-called stub quotes. during the flash crash, some stocks sold for as low as one cent because market makers were allowed to place extreme low-ball bids. that's all been eliminated and now quotes to buy or sell stock seem to be within a certain

percentage of the market. >> these moves taken together might not prevent another flash crash, but the hope is it will go a long way toward reducing the severity of any price swings. the idea to make sure you have some support for the market in times of stress. >> no matter if it's a software glitch or people putting bad orders, the circuit breakers are designed to help the market catch its breath. for "nightly business report," i'm bob pisani at the new york stock exchange. >> some steps have been taken to mitigate these types of thing, but so long as the machines keep getting faster and more powerful and i don't think we, limb nated it and it's all about market credibility and as scary and risky as it was you have to look on the other side of the equation. the dow is up 42% since -- >> three years ago. >>al righty. >> fennelly tonight "fortune" magazine is out with the annual list of the world's biggest companies by revenue. walmart has reclaimed the top spot this year from exxon mobil

which dropped to number two. rounding out the top five, two other oil giants, chevron and phillips 66 and warren buffett's berkshire hathaway. we've been talking about him. apple, the world's most valuable company cracked the top ten coming in at number six and facebook joined the exclusive club for the first time, tyler at number 482. >> you look at those numbers and you realize how big berkshire hathaway is, bigger in sales than apple which we make so much noise is about. >> if you count it on profits, it's number two after exxon, which is amaze happening. >> and if you count it by market value, it's back at number one. >> that will do it for tonight's edition of "nightly business report," i'm tyler math son. thanks for watching and tyler will be right back here. see you tomorrow. "nightly business report" has been brought to you by -- >> the street.com, interactive,

multimedia tiles for an ever-changing financial world. our dividend stock adviser guides and helps generate income during a period of low interest rates, options, profits helps educate beginning and sandy options traders. action alerts plus is a charitable trust portfolio that provides trade by trade strategies. online, mobile, social media, we are the street.com. ♪ ♪ ♪

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