this is "nightly business report" with tyler mathisen and susie gharib brought to you by -- >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort. home sweet home, what's behind the surge in prices? we just recorded the strongest annual again in years. big run for small caps. the sector soared 23% sitting below all-time highs but have these stocks gone too far too fast, or is there more money to be made? dollars and cents, who pays for

college? not mom and dad. they are paying less these days shifting more of the financial burden onto the student. that and more tonight on "nightly business report" for tuesday, july 30th. good evening everyone and welcome. i'm tyler mathisen alongside sue herrera. susie gharib has the night off. we begin with more good news about housing, specifically rising home values. the s&p home price index for may showed home prices in the nation's 20 largest cities rose 2.4% from april. that's the largest year over year increase in prices since 2006 before the start of the housing crisis. home prices in denver and dallas are now at their highest levels since the year 200. survey director robert shiller, an economics professor expects the home prices to keep on hitting higher. >> for a short-term investor there is a more sure thing in

the real estate market. i think when it's up 12% in a year and it's uniform -- well, somewhat uniform across so many different cities, it's probably going to go for another year. >> well, those rising prices are likely on the mind of federal reserve chairman ben bernanke as he arrived at the central bank. the fed is expected to keep the short-term interest rate close to 0% for the foreseeable future. what wall street really wants to hear is when the central bank may pull back on the $85 million. they are designed to keep rates lower and spark bank lending. president obama offering now republicans a deal that he hopes they can't refuse, lower overall corporate taxes, and in return, money to spend on the creation of jobs for the middle class.

that's how he puts it. here is how the president described the plan at an amazon.com warehouse in chattanooga, tennessee today. >> here is the bottom line. i'm willing to work with republicans reforming the corporate tax code, as long as we use the money from transitioning from a simple ler tax system for a significant invest mment in creating middle class jobs. >> some republicans not buying it. jude greg of new hampshire was quick to criticize the offer. >> sounds like an awful plan. cutting taxes is a great idea but redirect the revenues makes no sense at all. one of the biggest problems today is we have a tax law that incentives people. >> on wall street, stocks end the day mixed following a low volume up and down session as they look for direction.

a positive string of earnings was offset about concerns about what the federal deserve will decide to do. the dow was up 72 points for a time and ended one point lower. the nasdaq added 17 points. the s&p 500 closed a fraction of a point higher. coming up, we'll talk about a big runup and whether that can continue. a massive merger in healthcare announced today. community health systems is buying rival not for profit health management associates for $3.9 billion creating a huge national chain that cops just ahead, on course, of the healthcare system overall to provide coverage to millions more americans. shares of both companies, though, ended lower. tumbling nearly 11% at hma. a huge fine in the drug world. wyeth fapharmaceuticals agreed

pay for marketing the drug rapamune for other uses. it was okay for helping the body not to reject a transplant but they were pushing the drug for use with other organ transplants. jp morgan chase agreed to pay $410 million to federal energy regulators to settle charges traders manipulated electricity markets in california and the middle west and used improper bidding strategies that forced over payments by local agencies running power grids in those areas. the bank did not admit wrongdoing as part of the settlement and none will face sanctions or criminal charges. this is the latest example of a story "nightly business report" brought you last week involving the complicated world of banks

operate income commodities markets. you know, last week, we heard about banks that were operating storage facilities for commodities, whether aluminum, copper and others and now the settlementelectricity. >> the banks own trading paper commodities, other things in the financial markets, but they own these commodities like storage and power plants and the point has been to compliment the businesses that they already have, to perhaps give added knowledge, maybe a trading edge in some cases, or just purely as a good investment that's going to make returns. now, though, some of that is coming under question. but one thing, there is a deadline in september at which goldman sachs and morgan stanley hit a five-year anniversary of becoming bank holding companies, which subjects them to a different raft of obligations and could potentially force them to sell them off. >> congress is getting involved now and asking questions,

wondering whether or not banks should be allowed to have any role in the commodities market, physical or paper-wise. what are you hear sng. >> i'm hearing a number of things. it depends which bank and which holdings. >> right. >> there are concerns some of these business activities pass on higher costs to customers. at the metal storage business stockpiling them and keeping them in storage longer than needs to created questions. at the same time, you know, if the banks get rid of commodities holdings they will go somewhere and may go to europe and be handled by companies beyond the reach of u.s. regulators and have less transparency. there are issues on both sides with letting the banks keep businesses or allowing other competitors to come in and possibly take them out. >> when we told the story last week, who knew banks were doing this. thank you very much.

sue? good year rubber and tire shot up 9%. profits more than doubled by selling more tires around the world led by a 4% increase in latin america. profits of chrysler revving higher. net income rose 16 percent, especially for pickups and jeeps. it is the eighth straight quarterly profit. and joining us now to talk more about the auto industry is managing director at googenheim securities. there is a drum beat that adds up to this, american cars are back. do you agree? >> i do agree. the market is back and americans are buying cars but the u.s. companies are competitive, the most in probably 40 years. i mean, back to the first oil crisis. >> and can that continue, john, because, you know, there is some talks that u.s. growth may slow a little bit -- excuse me, if

the fed raises interest rates sdchlt that change the scenario? >> as it relates to the market, the average age of a car in the united states is 11 years, almost 90% of americans get to work by car. the car is a necessity. the fleet is old, needs to be replaced. i think auto sales will continue to healthy. as it relates to competitiveness of the u.s. company, through the crisis they have been getting the act together in productivity, quality, design and styling and once they got through restructuring and balance sheets were better, they could plow money back into product. chrysler is selling a lot of the dodge ram and ford is selling a spectacular ford fusion and chevy got a high rate for a said d -- saedan in consumeer reports >> how has it changed, if at all? is the needle moving? >> it's moving a bit this year

they have 46% of the market. that's up for the low of 44% two years ago, but to put that in contec conte context, 30 years ago they had 40 percent of the market. that chart turned up. now that the share is up in 2010, 2011, 2012 there is sustainable momentum. >> there is talk chrysler will go public and perhaps the market conditions would make it a conducive time to do so. >> it's hard to be private. auto sales in the u.s. will probably rise for, at least a few more years, and chrysler has a lot of new product coming. there will be investor app tate when it comes. >> what have they done right apart from styling and improved quality? >> well, as it relates to all of the big three, you know, they

have completely reconfigured the plants, changed their relationship with labor, they have stream lined the product development process, so instead of six years to do a car, they can do it in three years like the japanese. they are more in sync with the market when the cars come and spent money on power train. they get more fuel economy and just as big as they were five years ago. >> the electric car movement doesn't seem to have gained as much traction that a lot of people thought it would. do you agree or not. >> it's a fact. those cars are not selling that well and two things that will get them to sell well, gas prices need to go up a lot and/or battery prices need to come down a lot. in the car the engine is $5,000 and in the electric car it's $15,000 in batteries. that's a big premium. >> thank you very much. john is senior managing director at googenheim securities.

>> we want to know what you think so we went to see if you're buying american cars. >> americans cars have gotten higher quality. >> i think there is affordable carps that are better, like the ford fiesta, focus thing. >> i probably would not consider buying an american car. >> i would actually consider another tour lose. >> the chevy cobalt, at the end of the day i went to a better price. >> i will buy an american car next time. still to come, if you build it, will they come? those investing hundreds of millions of dollars in rehabbing hold stadiums or building new ones hope the answer is yes but first a look at how the international markets closed today.

every major city has one sports arena or being built or refurbished every year but is it a good business to be in and who pays for those venues? jane wells has the story. >> i spent a couple days one night. >> nothing says classic california one night like the eagles and nothing says rock concerts like the forum. but the once fabulous forum is nearly as bad as the original in rome but men from the east have come to make it shine again. >> we'll make the forum a place where great performers will put on great shows. >> reporter:ed the madison squaur garden company is redoing

the forum in inglewood. why the forum? >> why not the forum. what an opportunity. the second biggest industry in the world under served with iconic venue. >> reporter: built in 1967 this is where jerry west played, show time with magic and koreem, and more. next january the eagles will stage three shows. >> this is only short of the holy grail, you know, for us in los angeles and it was a great-sounding room. i don't know how to explain it. it feels good. sounds good. it's intimate. >> reporter: the stadium business is tough. bankrupt detroit is selling bonds to build a venue for the red wings. washington wants to build a soccer stadium and for msg, it's

spending a billion dollars to renovate madison square garden but new york will not commit to letting the garden stay at the location beyond another decade. why come to l.a. and take on aeg? >> the staple center is so over booked, so many teams and events happening there. they believe the market can support another major venue. >> reporter: the form will have a billion-dollar impact and inglewood officials will forgive $20 million in loans if certain benchmarks are met and there is a names rights deal with chase and if all goes according to plan, the forum will return to glory days and not return into a hotel california. >> thank you for a real place to play in los angeles. action in several sectors in the market focus tonight beginning with biotech. alexion soared again today on

reports it hired goldman sachs to consider from roast far suit kills. they specialized in orphan drugs, treatments for rare diseases. alexion closed at $117.08. investors bid up shares awaiting after the bell earns and awarded with a strong quarterly performance. revenues increased 5%, profits well above analysts estimates. they concentrate on cancer treatments but makes drugs to treat other conditions, as well. volume was heavier than normal. they gained more than 1.5% to close at $111.20 a share. facebook closed in on the ipo price of $38 a share, not seen since may of 2012 as investors rekindled interest in social media following last week's breakthrough earnings report. shares jumped more than 6% to close at 37.63, just 37 cent ps away from the ipo price. volume was more than 1.5 times

the usual base. merk, pfizer has the same patent loss problems but profits jumped as it sold assets. investors traded at above average volumes. at day's end merck 48.05 and pfizer had $29.67. buffalo wild wings is confident it will achieve 17% profit growth. sounds good except the chickens but investors were expecting more before the close and then dropped further on the earnings news buffalo wild wings at $97.69 at the close. coach's stock dropped at open and down all day. they said the north american

president and coo will leave at the end of august and will sell a brand back to it's founder. investors sold off on six times the normal volume. coach closed down almost 8% at $53.30. fertilizer stocks in the u.s. and elsewhere had a rough day because a cartel that supported the price of potash a key ingredient collapsed. investors fearing lower prices got out of the stocks big time, shares fell sharply on high volumes, mosaic ten times normal and potash 12 times normal and intrep mid 40 times higher. another area of the markets, the small cap stocks. small cap stocks have been on a tear this year producing large returns with the rest of 2000 adding to the year to date gains and recent record highs. is the runup coming to an end? let's ask christina hooper

investment strategist. nice to have you on "nightly business report." >> thanks for having me. >> i believe you think the small caps have a little more room to run. tell me why. >> we think over the long term small caps make a great choice because we're an environment of financial oppression and will be there for a long time and that ness tatds moving out on the risk spectrum. having exposure to a different variety and increases small caps. >> over the shorter term, we're excited about small caps. we do think there is positive aspects of small caps, namely typically in a rising rate environment, small caps out per formed. that's typically coupled with an economic recovery. one thing being overlooked by investors today is the fact that companies are sitting on record levels of cash, and typically a

way that deploy the cash is through mergers and acre sessions. >> quick question and followup, if i might, christina. you used the phrase financial repression. what does that mean? >> is that means an environment where rates are held artificially low and we're in that environment and we anticipate we'll continue to be in that environment for years to come. there is an affixuation of yield to come. >> in some of the research i was doing this afternoon, i was struck by the fact that there is some sort of nexus between how domestic small companies fair and how the emerging markets share. can you probe that for us or what the theory is it? well, it seems that investors who are looking for growth, either favor emerging markets or small caps or at least that's the theory behind it.

i would argue there is so much cash sitting in -- on the sideline sitting in cash, sitting in core fixed income that could easily move into both emerging markets and small caps that it's not an either or proposition. >> have there is enough fuel to fuel both? >> absolutely. >> what about the dividend for small caps? >> well, we think investors need to look for yields in all kinds of places, and if they are moving out on the risk spectrum and having exposure to risk assets like small caps, they should be looking for dividend income in small cap stocks. that's why we're excited about dividend paying small caps. >> what percentage of a typical investor's portfolio should be in small companies and is there subsectors you favor right now? >> well, there is no one percentage because it really depends on an investor's risk profile, but we think there needs to be a diversification of

risk assets. there might be tactical allocation among different risk classes but there also needs to be long-term exposure to areas like small caps. in terms of areas within small caps, showing a lot of attractive values right now, so for example, industrials, ma r materials, those areas have attacktive evaluations. >> we'll leave it there. christina hooper, investment strategi strategi strategist. >> thank you. tuition is rising and parents aren't willing to pay as much for college as they used to. what is a student to do? that story next. first, how commodities, treasuries and currencies performed today.

it is a big day for a tiny college in kentucky. center college, danville, kentucky with fewer than 1400 students and boast knoest known hosting a presidential candidate last year received one of the largest gifts given to a school, stocks worth $250 million from the a. eugene brockman trust. the school will set up 40 scholarships in science, computer science and economics. with the exception of those deserving students at center college, tuition bills nonetheless are skyrocketing forcing big changes over who is paying for college and it's not necessarily mom and dad anymore. a new study shows that parents are no longer paying for the majority of college tuition bills that burden falls on

students who often have to find their own resources and more are getting free help. sharon epperson has the story. more and more students are searching for and finding free money to pay for the college tab. >> i looked into a school basically that could supply the most money. >> there are a lot of institutions that are publicly funded that offer affordable ways to go to college. >> reporter: for many families, cost is the top criteria when choosing a college. >> she'll go online and looking at any and all scholarships she can find. >> reporter: the burden of who pays is shifting to the student as parents foot a smaller portion. >> we can't afford to send her and her sister paying the whole thing, so she's going to have to pick up some of the tab, as well. >> reporter: a student's ability to find free money trumped contributions from parents these days. a study finds scholarships and grants are the top sources for

paying for college. >> we're seeing grants and scholarships pay for 30% of an under graduate education. so parent income and savings that have fallen to 27% of the share of college cost. >> reporter: six out of ten families have done an online scholarship search in the proce process. experts say finding resources to pay for the entire college career is essential. >> make sure you look at the sources, develop that plan and make sure that the student is successful in achieving that degree. and join us tomorrow right here on "nightly business report" when we begin the three-part series how to navigate long-term care covering everything from when to buy insurance, to what it pays for to how to pay for it and tell us which stocks you would like our market monitor guests to discuss this friday. click the link on our website, nbr.com to submit the question

and don't forget to tell us where you're from. >> absolutely. that will do it for "nightly business report" for tonight. i'm sue herrera. thanks for watching. susie gharib will be back tomorrow. >> i'm tyler mathisen. thanks from me, as well. we'll see you right back here tomorrow night. "nightly business report" has been brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures. viking river cruises, exploring the world in comfort.

you can build your app on the next platform. he joined as chairman and ceo in 2001. tonight smit talks about the plans as a computing revolutionary. major funding for revolutionary is provided by the intel corporation. >> let me start