this is "nightly business report" with tyler mathisen and sue herera. fabulous february stocks finished the month with solid gains of 5% or more. will the bulls continue their march into march? downsizing dill lem ma. pending home sales may have risen this month but the numbers still relatively weak and baby boomers could be part of the reason why. ticktock. the house tries to avoid shutdown of the homeland security department but it is turning out to be no easy feat. all that and more tonight on "nightly business report" for friday february 27th. >> good evening, everyone. the bulls came out of the cold in february and heated up the stock market. the dow jones industrial average and the s&p 500 had their best february since 1998.

both indexes closing at record highs a handful of times this month and the nasdaq inched ever closer to what we thought we'd never see again, 5,000 and it wasn't just stocks. oil which had been on a downward trajectory may have found a floor scoring biggest monthly gain since 2009. so for the month, blue chip dow index rose more than 5% nasdaq gained 7% best month since january of 2012 and s&p 500 rose about 5.5% and all this came despite a pullback today with the dow falling 81 points to 18,132. nasdaq down 24 points to 4,963 and s&p 500 lost 6 points. dominic chu looks at what was behind the february surge and some of the big events that loom ahead. >> reporter: after a rough start to 2015 in january, the market staged a comeback. and now, this is one of the best februarys on record.

at certain points we hit historic highs for both the dow jones industrial average and the s&p 500. even the nasdaq composite is inching closer and closer to records we haven't seen since the internet stock bubble back in 2000. so does february's positive momentum give some investors a better feeling about the rest of the year? >> absolutely. i mean i think in some ways february is the new january and, you know having a great february is a wonderful way to start the first quarter. we certainly expect the momentum to continue. >> reporter: recent history is siding with the bulls. according to market data and analytics firm kensho, march has been positive for stock investors over the past 20 years. on average during that span both the dow and the s&p 500 have gained north of 1.5% and have been positive at least 70% of the time. but historical performance is no guarantee of future results and big unknowns still remain. >> i think right now the biggest risk for the market is a policy mistake on the part of the federal reserve.

there's so much attention on the fed right now, when they will raise rates, how quickly they will raise rates. so the communication strategy has to be spot on in order to set market expectations around that. we have some good historical precedent that suggest if we don't get good communication out of the fed, the markets can get very volatile very quickly. >> reporter: interest rate policy isn't the only worry. there's issues like greece's financial woes falling energy prices and geopolitical hot spots in ukraine and the middle east. so if the rest of 2015 is anything like the first two months of the year we could be in for a very bumpy ride. for "nightly business report," i'm dominic chu. >> art hogan here to discuss march. was january the anomalous month or february what do you think? >> when you look at the way we ended the year, probably pulled in some of the gains in january for the month. really finished for the bang

last year. november and december very strong. not surprisingly we started off on our heels and really didn't quite get started until february but what's even more intriguing is how much bad news or how many sort of concerns we worked of febr and markets had a terrific month. when you think of like a daily worry about greece russia ukraine, volatility in the energy markets, although we seem to be in a bottoming pattern but we certainly saw a great deal of volatility and worked our way through an earnings report season that saw 13% of the s&p 500 come under a lot of pressure. concerning the geopolitical concerns we had and the fundamental concerns february was a fantastic month for us and hopefully we're off to a good start in february to kick back in next week. >> but those concerns are not really going to go away in march. so what do you think are the fundamental drivers of stocks as we go into this new month? >> well sue, you bring up a good point but i think some of the hurdles are at least on page two of the new cycle. so for example, we're not

worried about -- we've got a deal that is putting the worry behind us. and when you think about russia/ukraine the cease-fire seems to be working and what's really going to kick in we've already seen what happens with low energy prices on the negative side. we've seen rig counts coming down energy companies reporting lackluster if not bad earnings. we haven't seen kick in to a t extent is the positive influence which is consumer spending that continues to pick up. it starts in restaurants and work into specialty apparel and see things we haven't seen in the first part of this year. consumers are getting used to lower energy prices there's more of them working. we have the highest level of consumer confidence we've in about ten years. >> art, i saw some numbers today forecasting second quarter corporate earnings and the comparisons to last year were not going to be particularly good. largely because as you pointed to a moment ago, energy

companies are not having favorable comparisons. can the market keep moving higher if the overall earnings growth isn't there? >> well i tell you this and i think that's very true. if you look at the downward revisions we see into the s&p 500 earnings, in large part, it's coming from two of the ten sectors. it's financials who still don't have managers' margins yet. we have a flat yield curve, so it's difficult to make money as your typical regional bank or typical financial. the other piece of the puzzle is energy and that's going to co energy earnings are a drag on the s&p but remember the energy sector of the s&p is 13% of it. when you think about that you've got the bulk of the s&p which benefits in large part from the lower energy prices that we probably see earnings estimates go higher as we work our way through the year. my guess is we're probably overdone in pullback and estimates on balance. >> where would you put money to work art? i know consumer discretionary is one area you've liked in the past. do you still like that and would you stay domestically oriented

or would you perhaps go overseas and maybe look at europe as some are doing right now? >> sue, those are two great questions and we still like the consumer facing stocks. sonic, cracker barrel, jack in the box. madden shoe. and versus selling in ewe roiuroseuros, we look at exposure to europe. in terms of european multiples, it looks very balanced. 65% allocated equities, look at 15% to 20% of that being put in europe stocks. they're getting stimulus as we speak. their qe kicks off in march. multiples are reasonable and probably want to do that on an etf basis versus a single stock basis. i think europe will make a great deal of sense this year. some outperformance and moved

from u.s. markets. i think there's a lot more to come. it's a rational expectation to face europe this year. >> great to see you. art with wonderlick securities. tried and failed to pass the bill for homeland security. the clock ticks at midnight when the funding runs out. john harwood has been covering the story from washington. as you correctly predicted last night, this one is going to go down to the wire and it's going to be tense. >> reporter: it is sue. and this is a stunning repudiation for house speaker john boehner from his own members, more than 50 of which voted against the short-term funding proposal that he had come up with as an answer to what the senate has done. there's going to be more back and forth. the house is figuring out what its plan b is going to be but this is going to be very difficult and it's a bad sign for getting further things done in the congress like corporate tax reform. one of the things fueling

republican willingness to let this happen is that the belief that homeland security isn't really going to stop because so many are emergency employees. here's senator orrin hatch, the chairman of the senate finance committee when i talked to him about the consequences of not funding the department. >> dhs will completely run. there's not going to be a loss of personnel or a loss of time. some of the executives will have to work and get paid later. but it is essentially self-funded. anybody who wants to make a big fuss about that doesn't understand the budget doesn't understand the mechanism of dhs, department of homeland security. >> and i think he's right. this is more political repercussions than security repercussions which is why republicans are trying to find a solution tonight. >> new congress but some things stay the same. you referenced a plan b.

you said the house is trying to come up with it. do we have any idea what the outlines of a plan b would be or do they have them? >> reporter: they don't have one. and the senate has a plan which mitch mcconnell put forward as a way out of the box they're in which is to pass what they call a clean homeland security funding bill through the end of the fiscal year but if john boehner couldn't pass a three-week extension of funding, he certainly can't pass with republican votes an extension through the end of the year. what that means is boehner is if he chooses to do that, and that's one out f him this evening if he chooses to take it he'll have to get republican votes, count on democrats to pass it and would be a further embarrassment embarrassment what about the president? he said if the bill comes to his desk he'll sign it but some of the disarray gives him ammunition. >> reporter: no question about

it. the bill he said he would sign is the three-week bill that's gone down. that's not an option. the only live vehicle at this moment is the extension through the end of the year. democrats want that. mitch mcconnell put that forward as the leader of senate republicans. if the house takes it up it will pass but it will pass with democratic votes and that's something john boehner would like to avoid if he can avoid it. >> thank you so much for walking us through that. john harwood in washington. to the economy now which slowed more than initially thought in the fourth quarter as business investment sedesell and widened. goods and services expanded at 2.2% annual pace. that's revised down from the 2.6% pace estimated last month. the president of the federal reserve bank of new york urged caution on raising interest rates in a speech today. bill dudley cited uncertainty about the sustainability of the economic recovery.

meantime fed vice chair ted fisher and exclusive interview with steve liesman said he sees a rate hike sometime this year. >> yeah i think there's a pretty high probability that this is the year. we're very close on unemployment and inflation is in a situation where it's low because of oil prices but we expect it to go up once this effect wears off, which it should do in a couple months. so it's about time. >> it's about time. fischer defended the central stimulus program saying it played a crucial role in turning around a weak economy. some not to hot news of the midwest. economic activity in that region unexpectedly contracted tumbling to a 5.5 year low. according to the purchasing managers index, the port strike and harsh winter had a negative impact homes came back to the

market in the country signing more contracts to buy existing homes than they have in a year and a half. the national association of realtors monthly index of so-called pending sales deal signed but not yet closed an indication of future closings. rose 1.7% last month. despite the gain the numbers still roughly weak and one reason is a lack of homes for sale. supply is limited by several factors but one directly related to downsizing baby boomers. diana olick exexplains. >> reporter: betsy freelander and mike clipper have a 3 story colonial in suburban bethesda maryland for nearly three decades. raised their boys in it but with them gone they're looking for a new lifestyle. >> i think we want a more urban life. downtown where we could walk to everything, i think that was a preference for us. >> reporter: after an exhaustive search of condominiums and town homes in downtown washington,

d.c. and bethesda they learned a tough lesson about this new lifestyle. it has become incredibly expensive. >> we were shocked because we thought we would be able to sell our house, put a little money in the bank and buy something we could be comfortable in. >> reporter: everything she said was so tiny. >> we couldn't even figure out how mike could watch tv and i could be asleep at the same time. >> reporter: so they gave up like so many baby boomers are now doing which is causing an even bigger problem. you see, downsizing baby boomers were supposed to fuel the nation's anemic housing supply dramatically making way for much needed new buyers but listings now down 9% from a year ago and two of these coming on. so the houses that were waiting to come on the market for the young families trying to move into the good school system and the neighborhood aren't coming on. real estate agent jane fehr weather said half cannot afford

to to. >> they're adding almost a million dollars to the price in order to buy less space for a lot more money. >> reporter: boomers like betsy and mike are now aging in place. >> i think we feel healthy now, but i don't know, you know if ten years from now, if one of us has trouble walking the steps. >> reporter: they know all too well they can't do that forever. for "nightly business report," i'm diana olick in washington. still ahead, two companies in the news this week are two stocks monitors suggest you buy. we'll talk about why up next.

former aig ceo ben moeshay died today, undergoing treatment for lung cancer. he was the ceo from august of 2009 until last september. hoping to steer the company back to profitability after the financial crisis. he was 70 years old. a lawsuit filed against apple and that's where we begin tonight's market focus. ericson is alleging apple infringed on its pa tens and asked the international trade commission to block apple products in the u.s. apple filed a complaint against ericson last month. ericson up a month to $12.93 and apple, 1.5% to $128.46, the

downside there. purchased 4 million of shares of the stock. the ceo paid about $25 million for the shares. purchased at average price of $4.92. shares sprinted to $5.12. >> monster beverage after reacting to the energy drink's strong earnings to continuing international sales growth. monster also said that it and coca-cola have expanded some aspects of their strategic partnership. and that boosted shares of monster up 13% today. they finished at $141.12 but coca-cola, coke there owns 16% stake in monster. it was up 2% to $43.40-and carl icon suffered first annual loss since 2008. icon enterprises said the collapse in oil prices was the main culprit, however, the

performance of apple shares which is the fund's largest holding helped mute the impact of falling oil. icon enterprises off nearly 2% today to $97.67. now to our market monitor who's positive on equities with the stock picks he said will benefit from the strong u.s. economy. eric wristabin, with chief investments. talk to me about your view of stocks for the rarmdemainder of this year. >> we like stocks. we think they'll be higher at the end of the year. if you look to trade this they may trade sideways until we see first quarter earnings because the market is very concerned, particularly by u.s. stocks. ability to weather a strong dollar and worried some of the weakness outside of the united states is going to actuall affect u.s. companies more than anticipated. we don't think so. that's why we think we'll be higher at the end of the year. >> what about interest rat this week is whether or not we see a rate hike this

year. stanley fischer weighed in with steve liesman and say that's probably the year. does that worry you or do you think the market h factored that in? >> well no it doesn't worry me. it's actually what we're expecting. we think it's going to be in the third quarter. we think that the combination of better employment and wage pressure are going to start pushing inflationary pressures into the marketplace. mr. fischer obviously talked about the fact that the commodities, deflationary forces are subsiding and wage takes over and the fed will move in the summer. >> eric let's get to some of your picks here. one, a cyber security company. the other, a victim of a cyber security hack. let's start with the security company and that is proof point. pfpt at 56.78. >> they're a small company. they're focused therefore mostly on the u.s. market. you talked about the cyber problems that a lot of companies

have had. cyber security is a growing industry. proof point is growing in market share in that growing field and we think because they're domestically focused, no dollar effect we think there's a rosy future and probably a takeover target. >> let's talk about target now that you mentioned target. that's also on your list. why do you like it? >> well one of the reasons is it didn't have a great year last year. a lot of stocks had a tough year last year. we think that with a combination of lower fuel prices giving the consumer more spending money along with the fact that more consumers are employed because employment is significantly better that's going to lead to consumption. we think the target being domestically primarily focused retailer is going to do well and well-positioned for the kind of people who are going to spend in 2015. >> your third choice is southwest airlines.

for having mr. postpostponed. does that kind of p well it came off a relatively low base. it obviously was a better deal a year ago, but we think it has more to run. we think energy prices will stay relatively low for a long time. two, it's clear consumers as earlier guests say are spending money on experiences. dining out is one of them. travel we think is going to be the other one. we think a direct beneficiary is a major carrier with no dollar revenue exposure to speak of. i think we'll do well with that stock. >> eric thank you very much. eric ristabin russell investments. start-ups not just flocking to san jose but less expensive areas and where they go the venture capital money foll

well we're about a month into tax season and the average federal tax refund see if you can guess, 3120. it's paid out 125 billion in refunds so far. roughly equal to last year's pace but the trend may not continue. statistically, it's the early filers who tend to be those expecting a refund so they get in early. >> when you think tech start-ups, you probably think of san francisco or san jose but

those see new competition on the other side of the bay and as josh leadership ton reports, where start-ups go, capital follows. >> reporter: the real estate market is now so red hot in san francisco it's motivating start-ups to move to the city across the bay. oakland. the difference in the cost to rent space is huge. the average asking rent the $34 per square foot. that's nearly 50% less than downtown san francisco. property managers in the bay area say that difference is a big draw for start-ups. >> definitely cost is a pro. it's sunnier in oakland. i think that's a good advantage and has a real authentic feel. so we have a lot of open space. a lot of brick. a lot of old buildings and and i

think the start-ups like the open space offered. >> where start-ups go capital investments follow. nearly 100 billion companies in oakland last year according to the money tree report. that made oakland the seventh most popular spot in the nation for vc investment behind seattle and ahead of chicago. start-ups like catriscity said there's another attraction of calling oakland home the camaraderie of the tech community here. >> you also get a tight knit community. so we have parties here on our patio for the local start-up scene, the support of oakland start-ups. and even bigger companies like apps and pandora, which is next

door. >> reporter: still, there's challenges before becoming the next tech hub. the most glaring problem is crime. oakland has the highest robbery rate in the state of california according to the latest data available from the fbi. so no surprise, the pool of tech companies in oakland is still small. but economists think more start-ups are coming to oakland as surrounding cities become just too expensive. the average asking rent in downtown san francisco is now more than double the national average. for "nightly business report," i'm josh lipton in oakland, california. >> finally tonight, the dress made famous by the internet. have you seen it heard about it? sparking a social media debate whether it's blue and black or white and dwold. it's now a hot seller for the company that makes it. the british clothing company said the 300 dresses on the web site sold out in a half hour this morning but they were able to find other inventory. traffic to the site has soared and this morning they got 150

calls in 45 minutes. is it white and gold or blue and black? what do you think? it's all green with a birmingham. i saw white and gold. >> you did? >> i did indeed. >> i saw it as blue and black. how could you see it as white and gold? well to each his own. that's "nightly business report" for tonight. i'm sue herera. have a great weekend. >> same for me. i'm tyler mathisen. we hope to see you right back here on monday night. >> how could you see white and ?

♪ it's all right, it's okay ♪ ♪ doesn't really matter if you're old and grey ♪ ♪ it's all right ♪ ♪ i say it's okay ♪ ♪ listen to what i say ♪ ♪ it's all right, we're doing fine ♪ ♪ doesn't really matter if the sun don't shine ♪ ♪ it's all right ♪ ♪ i say it's okay ♪ ♪ we're getting to the end of the day ♪ morning, sleepyhead. rise and shine. nancy?