this is "nightly business " with tyler mathisen and sue herera. >> wal-mart with the world's largest retailer reports a big earnings miss and said it has a lot working against it. total recall. takada nearly doubled the size of its already massive airbag recall making it one of the largest consumer product recalls ever. >> cleaning up wall street after the legislation, new legislation and billions in fines, a new study shows little has changed. all of that tonight on "nightly business r for tuesday, may 19th. good evening, i'm sue herera. >> andgriffeth. tyler mathisen is on assignment.

but weh results from wal-mart and home depot. both of barometers of consumer spending and the world's largest retailer reporting sluggish retail and a profit outlook for the current quarter below expectations home depot has a solid quarter and raised the full year forecast as a matter of fact. sending shares of wal-mart lower by 4%, making it the worse stock within the dow jones nux. courtney has more tonight. >> the world's largest retailer didn't have the world's greatest kwrt. the first quarter profit fe slightly shy and so did those open less than a year. and the job programs for employs

and investment in e kmer -- commerce cut into the quarterly profit but it is still growing and traffic came in positive for the second straight quarter. still, analysts say wal-mart has work to do within the company as well as balancing skpernal factors. >> when your business is driven by grocery more than anything else if grocery is more than 50% of the business now, you to lead with a compelling of fresh food and i don't think they're doing that as well as they could or should be doing and others are. >> but even if wal-mart gets grocery right, there are bigger issues that wal-mart and others have to contend with. >> there are structural changes in which the consumer spends money over the past year or two and they are putti t disposal dollars at other areas

than at retail. >> april retail and var consumer reports are showing consumers are spending outside of apparel and retail dike dining out, digital downloads and auto and home imp helps show home depot, with a strong spring quarter, the most whether or not seaso the revenue at sales of stores more year exceeded expectations. and a continued housing market recovery are behind the successful quarter. >> there is a macro piece to it and home depot is executing perfectly. and just as wal-mart problems are internal and skeshal.

i'm court near megan. and housing starts rose to a 7 year high, a gain of about 20% from a month earlier the highest reading since november of 2007 and the commerce department reporting that new application for building permit increased about 10%. later in the program we'll take a look at the new technology getting home bielders excited in t stricken california. and hope over all economic growth in the second quarter following the weak start to the year as steve liesman first t there may be a big problem with the way government has been calculate first qur growth and now more and more economists are agreeing. >> a big debate has erupted in the economic world over u.s. gdp is reported correctly, showing first quarter growth has been

persistently smaller than the other quarters. and citing cnbc in research said current first quarter growth would be at 1.8% not the gove reported 0.2% aptd that is prompted economists to down play the recent weakness and focus on other economic data. >> the unemployment data are sending the right message, in other words the economy is better thant the gdp numbers suggest. >> and barkleys finds growth at 2% by using alternative seasonal adjustments saying factors things over in europe and severe weather can be part of the problem but say it is more systematic and simply put this means seasonal patterns that remain even after adjusting for

seasonal patterns which the government does when it reports gdp. in response to the story in april, the agency that compiles the gdp report said it is stutying the issue and hopes to announce changes in july. >> we're reacting to data that is not really capturing the true informingly economy. >> there was weakness in the first quarter but no seasonality but they only went back ten years it. could be the first quarter is really weak but the mounting evidence is that the weakness is overstated somewhat by something wrong in the government's data. for "nightly business report," i'm steve liesman. >> well that puzzling first quarter data was one of the topics being discussed at the iconic conferenc which brings together influential entrepreneurs and put together

by cnbc which produced this program and inc. media and tyler mathisen was there. >> among the entrepreneurs i talked to was mark cuban. and i asked him about the controversy involving the gdp numbers and whether where he sits atop many businesses he sees the economy as weak as the number portray it to be. >> when it is not so great you look at yub own numbers and compare them to the macro numbers and so you have to take into consideration that the gdp macro and whatever is happening there we can counterbalance it with effort on our side. but when you see the number it kind of sets expectations so when we saw the .02 we thought are things slowing down and does that affect other things. and the shark tank and the maz, i want them to sell more. but knowing now that the number

reflects what it felt like i think it doesn't so much chan companies do but it changes investments and perspectives that i had. >> later this year if interest rates go up does that make a difference to you? >> no. it is not going to bounce them 5%. maybe a quarter percent or a -- >> and nothing is capital in that person. >> even the ones that are, the arena, the 1% isn't going to change how i do business or move 1%. >> one of the sub-plots of the conference today were the questions about whether the tech market was overvalued with nasdaq at levels not seen since the year 2000 and we remember what happened then. the general consensus is this time it is different, that the

businesses that are trading on the market on nasdaq and elsewhere actually are real businesses with real revenues and rell profits and -- real profits and that is why many of them believe this time it is different. back to you. >> thank you, ty. kate rogers spoke to small business owners about the challenges they are facing and she'll bring us that story later in the broadcast. meantime to wall street investors didn't make big moves today, perhaps as they await the merchandise of the reserves last minuting. but today the dow jones finishes at 18,312 and the nasdaq fell by eight after coming within ten points of the high and the s&p fell a point. so no clg high there today. despite stocks sitting high some levels have not been seen

since 2008. according to a bank of america merrill lynch poll less confidence have has been seen in corporate profits and investors are lowering their risk following the selloff and increasing cash positions. the settl betwe banks and regulators over currency manipulation is expected to come tomorrow. banks will plead guilty to charges their manipulated the multi trillion dollar currency market and paid billions to settle the matter. three chinese professors are accused of economic espionage. they are conspiring to steel money from avago and sky work solutions. they develop technology from the military and other companies. >> takada are saying airbags

they made in 34 million vehicles ar detective and announcing the largest recall ever. the fault a airbags have been associated with at least five deaths. phil lebeau has the story. >> it is a massive recall linked to five deaths and more injuries. on suppliers in the world has agreed to replace 33.3 millionaire bags most of them built between 2002 and 2008. >> lives are at stake. our job to protect them and that is why we are doing what we are doing today. >> the airbags being replaced could shoot shards of metal when deplayed and why that happens is unclear. humidity is believed to be a factor. takada said repairs will focus on older vehicles in states with

high humidity but making millions of replacement ago bag inflators and getting them into vehicles will likely take many years. >> i think the big question is how long is this going to take? nobody knows that yet it. could be some years. >> by agreeing to a nationwide recall takada ends a long and costly battle with the department of transportation but the legal problems are far from over. the u.s. department of justice a criminal investigation looking into how they hasn'tled the airbag recalled. phil lebeau, "nightly businechicago. and still ahead, what has ch after record finds and stringent new rules for wall street a new report says -- not as much as you would think.

a tennessee man and his family raised almost $200 million for a cancer charity and then allegedly spent the money on themselves. a lawsuit was filed in all 50 states an the district of against four cancer charities run by the members of the same family. insting parents, the overwhelming money benefited the individuals, their family and friends and the fundraisers their hired to solicit contributions. they spent money on cars, vacations, cruises, college tuition, gym membership jet ski outings and sporting events and

concert tickets and dating site membership ty vilitied state and other regulations. is going to pay $25 million to settle allegations that it submitted false claims to the u.s. government. according to the court documents released by the de justice ups covered up reports it was late to d packages keeping customers from being eligible for refunds. and paypal will resolve allegations it illegally signed up customers for unwanted credit products. the consumer protection bureau said they made them use paypal instead of other products. and bad behavior still exists on wall street and those erns half a million dollars a

year have witnessed or have firsthand knowledge of wrongdoing in the workplace. and jordan thomas jarrier of the whistleblower service and with the s.e.c. enforcement division. >> thank you for having me. >> what type of activity are we looking at here? >> the service look at all wrong doing in the survey and what we find is troubling. we see that wall street and fleet street appear to have lost their moral campus and aren't looking very hard for it. >> after the '08 financial crisis there were regulations put in place, supposedly a lot of watch dogs and whistleblowers started to come forward but you think there is confidentiality issues that preventing people

from reporting wrong doing, is that correct? >> that is correct. one of the big surprises of the survey was that large percentages of the financial se asked to sign secrecy policies and secrecy agreements that expressly prohibit them reporting wrongdoing to law enforcements and they are in sid yens because they keep state, federal and law enforcement in the dark about all forms of misconduct whether it is corporate fraud, environmental crimes or public safety issues. this is something that effects, when you are looking at over 500,000 dollars income people more than 25% of financial service professionals, so this is a significant law enforcement problem and one that the s.e.c.

and other domestic and international authorities are likely to be concerned about and wish to address. >> why do you think this is? i've been covering wall street for many years and this has been a chronic problem for years. even now in the post dod frank era which contained a number of regulations and now you are fighting with the survey they are still having problems containing this type of behavior. why is it having this problem? >> i believe at its core wall street and fleet street has not established a culture integrity. we're doing the right thing and speaking about the wrong thing is the norm. people rep our survey that they feel pressure to engage in illegal and unethical behavior and they talk about the compensation plans andin sent

vising them to -- incentivizing them to engage in illegal behavior and they would engage in illegal insider training if they could make $10 million and get away with it. >> all right. troubling numbers from jordan thompson. thank you. >> thanks for having me. the bargain hungry consumer helped post strong results. the parent of chains like t.j. maxx and others reported a rise as more consumers visits stores. and t.j. maxx hikes its forecast and rose to $69.19. and red robin saw earnings rain 20% and raised guidance for sales and sales surged to $84.14. dick's sporting goods beat

estimates and revenue was in line but same-store sales was lower than expected. the stock was off 5% to $53.43. etsy delivered a big loss in the first report since going public. the online craft market place earnings were below estimate and revenue was in line with kons census. shares were down 19% in after hours trading, but before the close it was up 2% to $21 per share. and the food and drugs administration has approved johnson and johnson latest schizophrenia treatment and it is the longest dosing intervention available and shares were a fraction higher to close at $193.96. and a plan to split into two, a company will separate government focus from commercial

technology into two firms and reported earnings that slipped and shares popped on the split news and the stock was off slightly on the earnings news and regular trade closed at $67.66. california drought is giving way to new technology for the home and home builders are all over it. but will it be enough to keep the housing recovery rolling in that state that des fratly needs more homes. diana olick has some answers from lancaster, california. >> they look like two man hole covers on the side of a house but what is going on underneath a in-home recycling system could be an answer to how to save water in zrout stricken california. it is to save the water efficiency and there is no way o it the way we can and it

is just as important or more important than solar panels because there is no substitute for water. >> it is brand new technology from australia baits nexus e water. they pulled in used soapy water from the sho or the laundry, not toilet water and pulls it through the system and cleans it and the result is water that can be used for irrigation for flushing toilets. the company claims it can recycle two-thirds of all of the water used in your home. k.b. home announced it will be standard in 50 now hems in the san diego community. new developers say this will make drought a nonissue for housing. >> we'll put together a plan that deals with water, hopefully once and forever. and we're going to see in 20 years that we're talking about drought as something that we all can live through. >> hadad is behind a huge

development in irvine and they recycle their own water through purple pipes in the ground. >> irvine has been way ahead in thinking. >> but there are 400 water districts in the state and not all are fortunate. and builders are concerned the state will restrict new construction. it is hard to get your approvals in california already because of the traffic and the schools. and now the no-growthers will add water to the mix and make it more difficult to get approvalals. that could lead to higher home prices in the priciest state for housing. for "nightly business report," i'm diana olick, in lancaster, california. coming up where small business owners find the secret to success.

here is what to watch for tomorrow. minutes from the federal reserve april meetings are out, and from target sales force and lowe's on the agenda for wednesday. and the treasury sect h a message for lawmakers. jack lew would say to veto any trade bill that contained enforceable rules manipulation and pushed back against lawmakers intent on putting some rules in that legislation. when it comes to starting a small business it takes a bright idea and a lot of hard work. and many small business owners face a number of big challenges before they find success. kate rogers has more from the

iconic conference in chicago. >> one of the things that we've been working on is the relationship between research entrepreneurs, talent money and creating an environment in the city of chicago. >> from silicon valley to main street america, entrepreneur are feeling optimistic but launching a business comes with big challenges including funding, growth and acquiring talent. >> finding the right sales people because for sales that can be very very challenging. >> biggest challenge is the right partnership for the next step. >> at the first ever iconic conference from inc. and cnbc entrepreneurs gathered in chicago to hear from those who have taken the leap and made it big, even the most successful entrepreneurs faced headwinds because having an idea is one thing and bringing it to light is an entirely different

challenge. mark is a cospounder from spa hero and was surprised how long his app took to launch. >> we thought everything was going to happen much faster than it did and we would launch the website and the app and it took a long time to do both and the biggest challenge was how long it took to get going. >> sharon is from moxie jean. they resell gently used children's clothing online. her otheral business model couldn't get off the ground. >> we std as a differ business model which was a subscription service and we got rid of that and went to straig resale and within weeks we had five times as much as the old model did in five months and that is when we said uh-huh

we're on to something. >> and just like she did, some entrepreneurs here are waiting for the aha-moment. >> i give them a lot of credit because it is tough. good luck. that does it for "nightly business r for tonight. i'm shoo. thanks for joining us. >> i'm bill griffeth. have a great night. we'll see you tom

"revolutionaries"... >> one of the ways to serve society is by providing new technologies, new ways of thinking, and provided them to society. i truly believe that this is one of the pillar on which societies should build universities. >> israel today is often described as a start-up nation. the engine of israel's innovation is the technion institute of technology, which is now more than a century old. we explore the heritage and impact of the technion with the university's 16th president, professor peretz lavie.