>> this is nightly business report with tyler mathisen and susie gharib . a alerts plus is a charitable plus port follow, online, mobile, social media, wearethestreet.com. a tsunami of change from new york to tokyo and across the

globe the world's biggest market seem to be understagoing a majo shift. >> a two-second head start, that's all it takes for some traders to get an edge over you the individual investors, and that's exactly what is happening when a closely watched market moving report is released every month. >> and districted drivers, a new study says it's not just about taking your eyes off the road but also your mind. we have all that and more on "nightly business report for wednesday, june 12th. we began with program with record highs and winning streaks. tonight a losing streak. the three-day stretch of loses for the dow so far this year and the losses not small today's 127 point decline followed

yesterday's 117 point drop and the fourth triple digit loss for the dow in two weeks. investors are increasingly worried a big multiyear change is taking hold. not just concern the federal reserve may pull back on the bond buying program sending interest rates higher, though, they have risen sharply since may, including today but china's economy may be going down bringing stocks off 10% since the peak in may, brazil down 20%. japan and europe not out of the woods and pinco says there is a 60% chance of a global recession. the dollar index which tracks the strength of the u.s. dollar touched the lowest level in four months today. at the end of another exhausting day, the dow finished down more than 126 points ending below the 15,000 threshold. the nasdaq 36 points lower and the snp 500 off by 15.

>> what do these global developments mean for your business? >> david kelly, chief global strategist at jp morgan chase. ira, let me begin with you and ask you, do you agree we're entering some kind of new era and how much risk is the global economy really facing? >> i don't think you can say we're in a new era quite yet. i do think the market is getting a little ahead and shaky thinking what policy changes might be in store. you saw a lot of volatility yesterday after the bank of japan did not give you more information about what their end golfs for their current policy of the bond buying program and the market has really been on edge the last month or so considering whether or not the federal reserve it's own bond purchase program. in fact, the way we view it, the market is actually pricing in for a very bad policy mistake by

central banks not only in the u.s. but indeed globally. >> is the market over doing it as ira suggests there? in other words, are they pricing in the possibility of not only a tapering but a complete cancelling of the bond purchases and why are the emerging markets taking it so hard? >> i think two things. first of all, i think there are genuine economic problems in emerging markets. china is growing more slowly and you can see an inflation problem in india. you got a bit of inflation problem in brazil, too. so there are growing pains there, but in the long run i think emerging markets will grow more quickly than the developed world anyways, and i would wants a sets there. markets have gone up in the united states, they are due for bull pack. you can't time that. i think that's what is going on. i don't think the rising interest rates threaten the u.s. economy. i think the u.s. economy is a very steady tortoise and will continue to grow through rising

interest rates and because of that i think long-term investors should have over equities. >> let me ask you more about that, david, in terms of what should investor do to prepare themselves for higher interest rates, all year long, even last year money managers everywhere said time to get out of bonds and put money into equities and we haven't seen that great rotation happening. is now the time? i mean, what are you doing with client portfolios? >> we don't know. what we do know is that interest rates are too low for a recovering economy. gradually the unemployment rate is coming down in the united states and as they continue the policy, getting to be a bigger and bigger bound when they try to reverse things. because of that they will taper and bring it down to 0 accumulation and that is a big change and that will push interest rates higher. so the key thing is don't try to time this. position your portfolios

correctly today so not only being over equity and under weight fixed income but within equities, a little over weight those less sensitive sectors like technology and be a little light on things like utilities. within the fixed income market, eye yield, convertibles, floating rates, treasuries and tips and corporate bonds get hurt. >> so david, we have a wonderful bored of possibilities there. he says over weight equities but what if you're not? what if your over weight bonds, yield s have been rising dramatically. when people get the end of year statements, i suspect some will be surprise. what should i do if i am over weight bonds and mortgage backed securities right now? >> we agree with david's preliminary mess. we're under weight treasuries and the market in particular. so we have shortened duration

where we're buying two-year, three-year, and five-year bonds instead of 30-year bonds. things like investments where you can get quality names with spreads and by buying those instead of treasuries you can pick up yield. i think the market you've seen over the last couple weeks presents a big problem and that's that wall street cannot warehouse as much risk as it used to be able to so bid offer spreads on bond market products so things like corporate bonds, high-yield bonds have widened quite substantially because wall street balance sheets are smaller so the amount of bonds they can buy in these sell offs are limited. because of that you go see volatility by money mangers. >> i'm sorry to cut you off. we have to leave it there. this is a complicated issue.

david kelly of jp morgan funds. decembspite the recent slid. some of the largest companies is optimistic. a third of the members expect to take on more employees and stands to increase during the same period. the group credits consumer spreading for the modest growth at this time of year. shares were one of the day's bright spots jumping more than 2.5% driven by up economists. meg whitman a year and a half into her role says despite a sharp drop of computer sells revenue could grow thanks to software, printers and computer sales. >> this is going to be a

five-year turn around to get hp returning just like it should for a company of this iconic status. as i said, you don't have to wait five years for results. we're a bit ahead of where we thought we would be in this five-year turn around and we're where we have to be. we have a long way to go. >> hp sharps have doubled since november. cisco is looking good thinks to the massive growth of internet traffic. the network equipment maker is saying a new computer router product will boost to $10 billion in the next two years. caterpillar and target have something to smile about. caterpillar the world's largest maker of earth moving and mining equipment is moving to 60 cents a share and retailer target is doing them one better raising the pay by 19% to 43 cent as share. encouraging news about housing despite mortgage loan rates edging up to a 15-month

high last week applications for new mortgages and refinancings rose 5%. so are rising rates prompting perspective home buyers to get off the coach and start hunting? that story, log on to our website nbr.com. there was good news about under water homeowners, people who owe more money on their mortgages than their homes are worth. many are now above the water line. the real estate tracking line reports the number of auto under water homeowners dropped between 10 million for the first time in three years, down from 12 million at the start of 2011. along with those rising home values, americans are also seeing a big boost in their 401 k retirement savings accounts. investment manager van guard reports that thanks to the rising stock market, average retirement saving account balances rose 10% in 2012. a prime example of how

challenging it is for individual investors to get a fair shake. some wall street traders are paying to get early access to s selected market moving information every month and it's legal. >> who are the major players in this story and how are traders getting that head start? >> good evening, tyler. cnbc obtained a document that shows closely watched number that routinely moves markets is ac accessed by a group of traders for a fee 2 seconds before out official release. a contract signed by the news and data feed service skpun ver -- and university of pich mitch, five minutes before that at 9:55 a.m. the money is distributed who are given certain headline numbers but the contract carves

out an even more elite group of clients who subscribe to the ultra distribution platform or high speed data feed offered by thompson reuters. those clients received the information in a specialized format taylor made at 95458.00. here is what tompson said routers said, details of the teared release of this data are provided openly to the customers and public and anyone wishing to trade on this data can pay for the service that best meets their data needs. now thompson reuters said it fully discloses the 2-second lead time on their website this is extremely valuable data. the contract shows they pay the university of michigan at least $1 million per year for the exclusive year to distribute it. >> you talked to tompsoner

routers. what about the university of michigan? >> they told me they believe this is carefully vetted, this contract and it applies -- follows all regulations and rules in this area and that the person who actually puts this data together told me because it's privately financed by thompson reuters thinks they wouldn't have it other wise. >> how much do they charge for this early access? >> they wouldn't tell us. they pay $1 million a year to the university of michigan but thompson reuters wouldn't tell us what they charge their clients for access to that information. presumably they are making more than a million dollars a year on it or it's not a good business. >> thank you very much. >> what do you think? still ahead on the program, not only is amazon moving into the grocery business, but it's also competing for a luketive

contract with the cia, details coming up. first a look at how some of the most widely held stocks closed today. couple big moves in different sectors. health management associates, hit a six-year high today before easing off and glen view capital p petitioned to get the fcc to eliminate or ease the provisions of a poison pill anti-take over different. up more than 11% doubled over the past year. spectra energy a natural gas

distributor jumped double digits as they see corporate restructuring leading to higher dividends down the road. they traded at four times normal volume closing up more than 11%. after the market closed, a huge deal was announced, safe way saying the sale of it's canadian operation for more than $5.5 billion in cash. shares of safe way have been down a fraction of the regular season but rocketed higher on news of the deal. a bullish comment by the company at a conference. nasco makes products sold at home depot and lows. shares of boston beer bubbled up today after gold man sacks raised the level. they significantly under estimated the success of angry orchard. this is flying off the shelves. boston beer brews sam adams.

investors raised the glass, shares gaining 5.5% and up more than 51% in the past year. well, the recent reports about the u.s. government hiring private companies to do intelligence gathering and what happens when the wrong people get access to sensitive data has not detoured some of the biggest companies from competing from the lucrative national contracts. john has more on the computing deal with the cia that has a lot of attention and putting amazon against ibm. what is the significance of companies getting into the cloud computing business with the government? >> tyler, in this deal in particular, it's a cia contract and just so that everybody has got this in prospective, it doesn't mean the cia is doing it's work and intelligence gathering on amazon's public cloud. this is more about consulting to figure out how to build kind of a private cloud inside the government for the cia. this is traditionally the sort

of work ibm would have done. they know about security. they are in tight with the government. this time amazon initially won the contract and ibm challenged that. it just shows how this move towards the cloud is shaking up the traditional structure of who gets these government contracts. >> john, tell us a little bit more about the impact on companies like ibm. >> well, for ibm in particular this is a tricky situation. the initiative they have is largely based on the idea they have these relationships with governments. they can pull a lot of different data, information in and then predict what is going to happen next, be a lot smarter about delivering software, services to customers. if you get upstarts like amazon coming in and taking some of the first order business and constructing the cloud, it makes some of ib m's other business potentially weaker down the line. >> i got to say, john, the idea

of a private cloud seems like an oxymoron but are they more comfortable with putting the data in the cloud? >> in their private spaces, yes, but i think what is also significant here is agency, government agencies at the federal or state level that have less sensitive data might be willing to put it on the cloud. are they pushing hard? it presents lots of opportunities for those folks. >> john, thank you very much. auto sales are in over drive and that's why auto makers are adding more assembly line workers and keeping some plants open around the clock and need more engine nears, designers, finance professionals and information technology experts. ford motor plans to add 800 more of those white collar workers in audition to the 2200 new jobs

previously announced by ford this year. rival maker toyota is likely not to add any more u.s. jobs any time soon. they said the company will not reach the 17% u.s. market share it held four years ago. toyota, of course, has meantime been hit by costly safety recalls and disruptions caused by the 2011 japan earthquake and tsuna tsunami. they expect the share to fall somewhere between the current 14% level and that all time high of 17% back in 2009. that was when general motors and chrysler were on their backs. no matter what car you drive, if you use a hands free talk and cell phone while driving it may be as dangerous as holding that phone in your hand. hampton pierson explains. >> reporter: 9 million motorists have some form of voice

activated technology in their vehicles and that number could increase seven-fold in the next five years but a new study from aaa says taking the mind of the driver off the road can be as risky as talking or texting on the phone. >> these are making people less able to operate or drive as safely as they would otherwise. >> reporter: a team of researchers at university of utah wired up subjects and took them out on the road in a vehicle equipped with voice activated technology for multi taskings behind the wheel. with eyes on the road and hands free, driver reaction time and ability to process information was impaired. >> as we increase the mental demands on a driver while they are driving down the road, their ability to operate the motor vehicle safely is less. >> reporter: officials are disputing that study. a statement for the alliance of automobile manufacturers says we're concerned about any study that suggests that held held

phones are comparable to the hands-free systems we're putting in our vehicles. we could be looking at a new clash between the auto industry and safety advocates. in the next five years it's estimated half of all new cars will be equipped with some type of voice recognition or hands-free technology. coming up, an airline with a big idea, all you can fly for a flat monthly fee. but will the business take off with travelers? first, though, a look at how co-mod dcoka modties, treasures faired today.

more trouble for boeings dream liner but had nothing to do with the ion battery system. japan's airline says one of the engines on a domestic flight wouldn't start and took place minutes before take off today. the engine was made by rolls royce. there were no injuries. so how would you like to pay one price and take all the flights you want in one month? well, one small airline based in california is hoping that's exactly what customers want. phil la bow as that story. >> reporter: it's a small plane and small airline with big ambitions. surf air was created by a 34-year-old wade who is charging members $1,658 a month to fly as much as they want. >> this is a flat fee all you can fly subscription. we're compared to a country club with planes instead of golf

courses and netflix of air travel. >> reporter: surf air and the planes will initially fly between burbank and san carlos, california in the valley. and soon add flights to other cities in california. on board the very first surf air flight from burbank to san carlos, there are six seats in this plane. descent amount of leg room, enough you don't feel like you're cramped inside of a small plane. so far 150 people have signed up as members of surf air. do they think they will fly enough to justify paying $1650 a month? >> if you calculate what you time is worth during the day, if you save multiple hours on waiting, checking in, parking et cetera, i think it can more than justify itself. >> reporter: historically start up airlines struggled to sore. >> history says most of them won't work and so i don't know

where they come from. i wouldn't put my pension in the idea but maybe some other people have more tolerance than i do. >> we're doing something fundamentally different. we're using planes to move people from a to b the business is different. we're selling the experience. >> one flight completed it's to see if the industry is filled with turbulence. well the u.s. golf association with the help of tiger woods, arnold palmer and paul crimer adopted rodney danger field from catty shack while we're young in an effort to speed up play. >> while we're young. >> while we're young. >> while we're young. >> while we're young. >> behind the fun, the big

business of golf is feeling some pressure, although rounds played have picked up as the economy improves, there is still 20% below the '80s peak according to the national golf foundation and one reason is slow play. duffers imitating the pain staking pros they see on tv. >> it's a serious issue and i hope the golfing public gets the message. >> we need to pick up the pace of play. >> so you'll see a series of familiar faces sweating over putts and over thinking tee shots with reminders for golfers like you and me to pick up the pace out there. >> while we're young. oh, boy. i don't see you, tyler, as a slow player. >> i am fast -- >> over thinking. >> i don't pick up the pace, i pick up the ball when i don't like the score on any given hole, but i'm all for moving the game along. >> get it going while we're young.

>> that's it for nightly business report. i'm susie gharib thanks for watching. >> i'm tyler mathisen. we hope to see you back here tomorrow evening.

hello there. welcome to "newsline." i'm catherine kobayashi in tokyo. >> the leaders of turkey's ruling party have offered an olive branch with protesters. ruling party