this is "nightly business report" with tyler mathisen and susie gharib. >> cisco's big challenge, the dow component reports better than expected earnings but disappoints investors with weak forward guidance and more job cuts. >> march down, macy's considered one of the stronger names in retail, surprises the street with an earning's miss and a weak sales outlook leading to more questions about the consumer. >> cashing in, america's graying population means big opportunity for major corporations. tonight, the names investors need to know in the third part of our series ageing in america. all that and more tonight on "nightly business report" for wednesday, august 13th. good evening, everyone. on wall street, every little bit helps and a strong stock rally

today pushed the dow jones industrial average into positive territory for the year, up by a fraction but still on the plus side. but words of warning after the close from one of those dow stocks could temper the tone of trading tomorrow. cisco systems is the closely watched tech bellwether company and on its earnings conference call, the ceo issued disappointing earnings guidance and announced plans to cut 6,000 jobs. as for it's quarterly results, the computer networking equipment maker posted earnings of 55 cents a share, two cents more than estimates and revenues came in better than expected even though they were basically flat from a year ago as the company faces tough demand for its new line of high-end switches and routers. cisco shares initially rose but then reversed course on those comments from the conference call. >> cisco along with several other u.s. tech giants has always looked at china for

feature growth but now doing business with beijing is becoming more difficult and one of cisco's biggest challenges. josh lipton as the story. >> we have the opportunity to get to see what is going on in every country. >> reporter: cisco's ceo john chambers know china represents a big opportunity for the tech bellwether with an it market growing strongly. the problem is whether the chinese government is going to allow cisco to capitalize on that opportunity. china now accounts for about 5% of cisco's total revenue or some $2 billion, but business there has been tough with orders dropping quarter of quarter. what is the problem in china? call it the snowden effect. cisco executives say disclosures about the surveillance activities by the nsa are spooking chinese customers and the chinese state media is stoking those concerns saying that beijing should punish what

it calls the pawns of the u.s. government, specifically pulling to cisco, as well as microsoft, google and yahoo. analysts say china's real intention in the war of words is promoting chinese tech companies over foreign rivals. >> this is an opportunity to say we have no concerns about our products and understand how those are made and at the same time, it's a way for china to sort of promote their own products and try to drive those products forward. >> reporter: it's not just cisco in beijing's cross hairs. ibm, microsoft and qualcomm are facing challenges in the chinese market. >> american tech companies are counting on rapid growth in china with an it market there that's expected to reach $111 billion this year, but given how beijing is now acting, that doesn't look like something a lot of companies are going to be

able to deliver to investors any time soon. josh lipton, "nightly business report" silicon valley. more now on today's action on wall street. the major averages posted some sizable gains and that's despite a slump in retail stocks. investors were discouraged july retail sales stalled, absolutely no gain. this was the weakest report since january. but that increase speculation that the federal reserve won't be forced to raise rates sooner than anticipated and with risks in the middle east and ukraine quiet, the dow rose 91 points in positive territory for 2014. the nasdaq up nearly 45, a gain of 1% and s&p added 13 points. >> that weakness in retail stocks today came after macy's considered to be one of the bluest of the blue chip names in retail posted disappointing earnings and a weak full-year outlook and that happened before trading began today and when it did, shares of macy's moved 5.5% lower and took a lot of other

big retailers down for the ride, and that's leaving many to wonder, what is going on inside macy's and with american consumers? courtney regan looks for some answers. >> reporter: it hasn't been an easy year for retailers, even the stronger ones. macy's reports lower than expected earnings and sales and lowers the sales expectations for the full year. macy's executives say many consumers are still not feeling comfortable about spending more in an uncertain economic environment. >> i think macy's continueso stand above the peers. i think it's an unstable backdrop for the consumer. we have a lot of things against us. we have durable shifts. weather out of favor. so we'll see what happens in the back half. >> reporter: it's the broader economic conditions that seem to hit on the heart of what is going on with the consumer. twc's chief retail strategist says the recession may have ended but consumers are still

concerned about the cost of living, jobs, economic stability and what the future will hold. >> the future as we see it is not uncertain, but it is a bit cloud did in that we don't see a huge economic change necessarily. what we do see is the consumers holding back and trying to ensure they live is safe, comfortable life. >> reporter: wolf research says what is ailing retail isn't consumer's fault. the firm is tracking the consumer as if it were a company. wolf is calling it average joe, reporting a quarterly income statement and balance sheets. the latest economic data for average joe shows wages up 4.6%, disposable income and spending are up 4%. consumers may just not be spending those increases in traditional retail. and the shift has happened over time. the american consumer is spending on their homes, health care, education, premium food

and subscription services like cell phone and data plans, movie streaming and cable, as well as internet bills. all things not sold by traditional retailers. for "nightly business report." i'm courtney regan. wall street regulators are looking into so-called alternati alternati alternative funds. they are investigating the investment vehicle. investing in private debt or by shorting stock, their targeted for individual investors giving them access to assets that were once exclusive to wealthy investors. >> these alternative mutual funds are popular as investors poured tens of balls of dollars into them despite steep fees. alan joins us now to discuss the pros and cons of owning them in your portfolio. he's a partner with kelly haft financial. i know these funds have their backers and their pros and cons but for the life of me, i can't understand why someone would

want to invest in one of these funds at the prices they typically charge and at the performance they so far have been able to generate. >> well, look, tyler, when somebody hears the word hedge fund, it's enticing because traditionally hedge funds mean higher returns. so the higher returns to a lot of people's minds will offset the higher fees, so the performance is paramount for most investors and in audition, hedge funds in a lot of people's minds will compliment a diversified portfolio and also set class. >> from what i understand the way they work, allen, you do well in these funds when the markets, you know, correcting but you don't do so well if the market was rallying. is that the case? >> well, the hedge fund is obviously, especially in the mutual fund instrument that they can actually short the market, which you can't do in other mutual funds, but a good hedge fund will make money in an up or

down market, doesn't make a difference. >> but hedge funds, as a group, correct me if i'm wrong here, allen, over the past several years, hedge funds as a group have typically way under performed the market, which may be the point you're saying, because the market is generally going up, it's not the time most hedge funds have done well. there are exceptions, obviously. >> sure, no, listen, i would agree with that. generally speaking, hedge funds by in large under performed the market but right now, part of the alor of people going into the funds is the per sepgsz the market is due for correction. if the market is do for a correction and you want to stay in the market, where do you go right now? so a lot of people pouring money into the funds thinking that a correction is coming up and that the hedge fund should finally out perform the market. >> so who are these funds for? do you have to still be -- even though they are for individual investors, do you need a sizable portfolio, or can anybody sign up for them? >> not anymore. the traditional hedge fund will

take a credit to investors. so what these funds are trying to attract now are the main street investors that are not accredited that can put in a very small amount of money and not have to be accredited to go into them. >> all right. let me understand what these funds do. they use leverage, they invest in alternative investments, lthy short the market. give me more of that and what do they charge for the privilege of this? >> all right. so the hedge funds, there are three components, it can leverage, borrow money to increase the returns which increases the risk on the portfolio. they can use most investments and short the market. if the market is going down, they can profit from the declining market. the published fees are from 3 and 5%, but as a lot of people know, there is additional fees inside a mutual fund that aren't necessarily disclosed.

so the fees -- i've done some hard core research on some of these funds and i've seen fees as high as 7% in quite a few of them. >> real quickly, we have a little bit of time left. you've been diplomatic with the pros and cons we when your clients say we want to go into an alternative fund. what do you say? is your view? >> everybody is different. some people, i think it's appropriate for, especially those who want to diversify more, a class that doesn't exist in the portfolio right now but my paramount concern of the funds is a traditional hedge fund can do things a hedge fund inside the confines of a mutual fund cannot. i warn people listen, if you think you're going to invest into a hedge fund, you're not really in a hedge fund, you're in something that looks like a hedge fund, acts like a hedge fund but be weary of the performance. you may not get as much bang for your buck as you think you might. >> hedge fund light? allen?

>> i'm sorry, what? >> hedge fund light? >> exactly. >> allen, thank you very much for your help on this. >> thanks for having me. and coming up, why companies like google, verizon and campbells soup are working in the landlord business. that's next. well, the old cliche is correct, nothing is certain by death and taxes. 20 companies in the s&p paid no taxes, none, one mirk. also on the list, general motors

and the medical device maker therma fisher. for a full list of the companies, head to nbr.com. other big corporations are taking advantage of a different kind of tax break. low income housing credits and they are benefitting by financing new and reconstructed apartment buildings. kay kay kayla tausche has the story. >> reporter: it looks like any other 240-unit apartment building. the difference, it was built with money from google. google plugged $28 million into the harvard area complex in 2011 as part of a tax credit program that has grown in popularity since the financial crisis. >> the housing credit program is the last legitimate tax shelter, a way to manage your corporate tax rate, bring down the tax rate, increase the after tax earnings. >> reporter: it's the low income housing tax credit, it lets companies fund multifamily

housing units buying credit from state governments with a portion of the tax value and writing off the full value. in 2013 they cost 93 cents for a dollar of credit. because the government pays off this bond-like investment, there is no extra cost passed to the renter, hence how housing becomes affordable. over the course of the three decades the policy has been in place, the policy cost more than $92 billion in tax revenues but built nearly 40,000 complexes. that's one reason it was one of the only tax credits. banks and insurers are behind most of the new bills. by law, they must reinvest in areas they have branchs and depositors, many times these are big cities but companies started chasing deals after the recession with interest rates near zero, the cfo searched high

and low. soon companies like apple, verizon and united health care found themselves in the housing industry. of the non-banks, google has been the most active doing more than a dozen deals since the crisis from massachusetts to iowa to its home state of california. joe hagan who matches funds with affordable housing developers says google and other companies liked the tax credits social mission we the bottom line is hagan says, it has to have the right return. a google spokesperson confirms the investments are led by the treasury department and the company is doing more and more and getting what he call add healthy return. for residents like those at charles view, that return means lower rent. for "nightly business report", i'm kayla tausche. sea world say the shares tank after reporting disappointing quarterly results. the theme park operator missed on both the top and bottom lines and it is forecasting a drop in revenue and earnings for the entire year compared with 2013.

the company says its attendance was hurt by questions about the treatment of captive orcas, killer whales. the stock tumbled 33% to 18.90, that's the lowest level ever. deer's profit slumped and expecting weak sales ahead. it trimmed the outlook and will cut production. the stock was off to $84.49 and canadian solar rallied on strong earnings, the solar panel maker reversed a year ago loss by posting a quarterly profit as it sold more products at higher prices and expected shipments to rise further in the current quarter. shares 24% higher to $31.03. fast food chain noodles and company saw shares slide after the late earnings report. it announced lower than expected quarterly profits, hurt partly

by a drop in same store sales. the stock was lower after hours by as much as 18% during the regular session. the stock was down slightly to $25.21. shares of aol moved higher to move 3 million through convert b bonds. this is the first time since it was spun off back in 2009. now there is speculation that aol is planning a big acquisition. the stock was slightly higher to 4 2.46. weak earnings and a lower than expected forecast, the maker of diagnostic tests partly blamed the termination of the contract with insurer horizon blue cross for the disappointing guidance. the stock tumbled 7.5% to $36.04. you should expect to pay more for your health care coverage, starting in 2015 a study from the national business group on health says the nation's largest employers project health benefit costs will rise 6.5% next year and

they plan on shifting more of that increase on to employees. more than half the companies surveyed will increase the number of high deductible plans they offer to employees. well, as corporate america shifts health care costs to workers, many of the same companies are catering to big changes to the customer base. as we continue our series ageing in america, we look how some companies and sectors are benefitting from a rapidly ageing population. dominic chu has the story. >> reporter: when it comes to retirement, more americans are choosing to control more of their own destiny including how they want to live out days as they get older. long gone are the days staying with your kids and grandkids was the only option. >> we have services that address not only the senior but his or her spouse, family, care giver, to give them the support they need. so that they know they are not

alone in taking care of the senior. >> reporter: of course, as the demographics of our nation change, so will the companies that stand to benefit. senior living communities like this are gaining in popularity as companies look to capitalize on the ageing population. among the biggest companies in america that provide senior living communities are brooke dale and america's corp. the two companies are in the process of merging, that combo would be the biggest owner and operator of senior housing with nearly 113,000 units in over 1100 communities. shares of both have staged tremendous stock market rallies over the last five years. >> the number one advantage is the socialization aspect. when you're around other people, your brain is going to be more active. you're going to be healthier. >> reporter: another option growing in popularity is the use of home caregivers. among the companies that provide those and health services for

the ageing are the groups, many americans are opting for this option instead of going straight to retirement community. >> with the boomers being such an independent age, they really are going to want to be ageing in place on their own terms and so we really see that trend of, you know, using home care services just going up and up. >> reporter: many of the companies in these industries are merging. that could be a sign that more deal action could happen in the future, so investors may want to take note. for "nightly business report", i'm dominic chu in new jersey. and tomorrow, the fun part of retirement, how one couple who saved wisely now has the time and money to enjoy themselves in the final part of ageing in the america series tomorrow. >> coming up, a bird, a plane, no a classic comic book and how much it's expected to sale at auction. that's next.

amazon is taking direct aim at paypal and square coming out with a swiping payment device called amazon local register. you can find it on a mobile app and brick and mortar stores and amazon plans on charging small businesses lower fees than the other system. shares of the online retail giant were up 2% today. >> here is a chance for anyone to become a super hero, at least invest but it will take a lot of money to do it. morgan brennan reports. >> reporter: comic books aren't just for kids, at least not the rare ones. take action comics number one,

the 1938 issue marks the debut of superman and with him, the entire super hero goenra. the last one owned by nickelous cage popped $2.1 million, making it the most expensive sold but starting this week, another copy is hitting ebay's auction site and experts think this one could set a new record. >> action comics number one, historically is the most significant book of all comic books. many consider it the holy grail. >> reporter: the market is growing as more investors approach it like art and stamps. >> probably 20 years ago, comic books weren't seen in the same light as today. i think the ad vemovies, increa view of prices, realized prices at marketplace have really helped to galvanize customers,

bidders, people looking for alternative investments to find comic books. >> reporter: it's gearing up for a big offering of its own. detective comics where batman made his debut by the person creator bob cane are expected to fetch six figures. they are commanding super sums, as well. >> the biggest price was about 600,000, 650,000 a couple years ago for amazing spiderman cover. those prices have definitely been going up. >> reporter: buyer beware, collectors warn the majority don't turn a profit. many deappreciate in value. the key is collecting rare issues focused on the debut of a famous character or important plot twist and the older, the better. the 1930s and 40s are considered the golden age of comics. also important, the books need

to be in descent condition, no touchups, sealed in plastic and don't think about giving ate read. for "nightly business report", i'm morgan brennan. >> did you see the cover price on those, 10 cents. >> and now millions. >> now they are going for millions. that's "nightly business report" for tonight. i'm susie gharib. we want to remind you this is the time of year your public television station seeks your support. >> i'm tyler mathisen, we hope to see you back here tomorrow night.

>> feeling run down? >> sometimes when i stand up, my blood pressure suddenly drops. >> has life been short of a laugh, low on excitement? >> aren't you gonna check his bum? >> maybe you could do with a good pick-me-up. >> ow! >> perhaps you need to see a doctor. >> it is...[indistinct]. >> have no fear. a cure is at hand. doc martin is back. >> actually, i prefer dr. ellingham. >> [giggling] >> yes, martin clunes is returning for a new series as the grumpy g.p. who tests the patience of his patients. >> i can feel that. >> ae'