this is nig"nightly busines 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. blue chip bonds, verizon sales a boat load of bonds but as the big money piles in, should you follow? >> cooling off, applications for home loans plummet. refinancing activity falls. are rising mortgage rates growing. a great divide, the income gap between america's rich and

poor is the widest since the great depression and growing. what triggered the spike and what can be done about it? that and more for "nightly business report" for wednesday, september 11th. the dow has done it again. three days in a row of triple digit gains. the s&p up seven straight days, the longest winning streak since july. the closing numbers, the dow soared 135 and the nasdaq down four and s&p added five points. over in the bond market, u.s. treasury bonds rallied after an auction on the benchmark ten-year note attracted the highest demand in six months. $21 billion worth sold at a yield at 2.94%, the highest uncle sam paid in two years. >> susie that pail in comparison to verizon's history making corporate bond offering today. the biggest ever on wall street. the giant sold $49 billion worth of bonds today and incredibly,

that was only about half of what investors were willing to buy. it will use the proceeds to help finance the purchase of vote a phones, 45% stake in those two companies, verizon wireless joint venture. david faber joins us with more on the massive side of this deal and you've been following the deal for months, really. what does this say and why is it so important? does it say about verizon? >> there is demand for bonds from good corporate borrowers, the likes of verizon for quite sometime. it's been an underlying story not just for the bond market but the equity stock market. we've seen so many corporations issue bonds, well-received and interest rates that historically we've never seen anything like them. with the move up in rates, they used a lot of money to buy back stock and helped the market. in this case verizon using the money to buy back -- buyout the

40% of verizon wireless they don't own. it's incredible that number, we've rarely seen a number that large in one day. so many viewers who may be investing in bond funds for example, they are stepping up and saying i want some of that, please bring it on i want as much as i can get. >> you said a lot of blue chip corporate borders and we saw apple did that and did an offering but it was a lot less than what verizon is offering. there have been a lot of comparisons and apple, verizon offering 5.2%, bigger premium than apple, 2.4%. why all the differences? >> verizon offered across the spectrum so they went from as little as three years to 30 years, susie. they hit all sorts of durations. apple borrowed at the low in may i believe when the ten-year bond was 1.6% and the best timed issue in the history of issuing ever.

we're up, of course, over 100 basis points on the ten-year treasury yield and borrow at a spread to that. v v verizon is a great credit and much of the money was overseas so they decided to borrow here. >> verizon is going to pay something like $130 billion to buyout the 45% -- >> that's correct. >> where does the rest of the money come from? >> they are using stock. they are using their own stock to purchase the remainder, so they will issue verizon shares and vote a phone will take in this roughly, let's call it $60 billion. they sold much of the debt in cash. so $60 billion in cash and the same in stocks, that's the consideration for what, by the way, is the third largest deal of all time. third largest deal. >> real quick question, any risk? any chance this vote a phone verizon deal doesn't go through and what would that mean for an

investor? >> you have nothing to worry about for an investor. the risk of the deal not happening is extremely low because verizon controlled verizon wireless. if the fcc and doj ways in, there is no change in control and they may view it positively because you don't have a foreign buyer any longer. >> david, thanks, great to have you with us. >> my pleasure. our next guest says the verizon bonds look great today but might not be the best opportunity a year from now. kathleen, thanks for joining us. you heard us talking with david favor who is saying the smart money is slowing into the verizon bond. tell us why you think investors shouldn't follow suit. >> it was a very hot deal, and very much in demand, and i think it speaks to there is an ap title for looking for yield but

where the rates are headed, do you want to hold on to a bond yielding 520 today if treasuries are also going to be yielding 5% three years from now? >> all right. so i got to ask the question, kathleen, did you go in and buy some of these bonds today? >> i'm an investor to really takes a long-term view. so again, i have a longer time horizon and i think there are better sources of income and total return out there in the marketplace today. >> like what? what are you saying -- and also, you know, so you are a long-term investor. you get the 5% -- going back to the first point. you still get your 5% at the end of the, when that bond comes due, you didn't lose any money? >> right, but the point is if you hold it to maturity, which is ten years from now, talking about the ten-year bond they did as david mentioned have many different offerings but i'm talking about the ten year. so you got to hold on to it for ten years to realize that 5%, 5,

20% annual return. now interest rates are going to be who knows where ten years from now. they could be at 8%. they could be at 10 and you might not be so happy to have that 5.2% bond. the question really is as david pointed out is verizon a good credit and are you getting paid for that risk today as well as a year from now? >> do you think ver rise season a good credit? if i'm comfortable with 5.2% as a benchmark yield and i'm comfortable with the idea i'll hold the bond for that whole time, would that be something that you could counsel someone to do? >> well, i'm a bond manager and i'm looking at all the opportunities. i would ask whether you want to hold that bond for ten years and if you're going to hold it and go to sleep and not worry about it at all, sure. it's not a bad investment today.

going to do, what the industry fundamentals will do. there is a lot changing in technology that may potentially change that credit risk, and so you might actually demand more than a premium that yields 520 in the current market and demand more years out. >> one quick question, we don't have much time left. are bonds a good investment overall, forget about the verizon thing for a moment? >> high-quality bonds and treasuries have a lot of interest rate risk right now which should be a concern for investors. fixed income and looking for other sources of income is available in other secotors lik high yield, convertible bonds, and other non-u.s. issuers that offer good yield advantage right now. >> okay. fair enough. thank you so much, kathleen.

kathleen gaffney portfolio manager. another big story of the day, apple looks like a lot of investors and analysts sowered on that stock which recorded the worst one-day decline since april closing well below $500 as you see there. the reason, no wow factor over the new iphones or operating system unveiled yesterday, along with concerns that the plastic backed iphone 5 c is still too costly for emerging markets like china and an expected deal with china mobile to sale the iphone in china didn't happen. feeling the bite from apple, some suppliers like chip makers like qualcomm, cirrul logic and sky works, all were lower today. tyler a completely different story at facebook today. shares of the social networking giant hit an all-time high today

this comes 15 months after it's initial public stock offering. the stock closed at 35.04, a gain of more than 3%. some analyst say the boost was sparked by speculation over chief operating officer's visit this week to china that could lead to an expansion to the biggest market of the world. you throw around the world disruptor a lot, especially in technology, a big conference that deals with the disruptors is going on now. what does it mean to be a disruptor and why should investors care? julia boorstin tells us. >> reporter: a disruptor, the company that invites with technology to challenge stablished companies and business models. two of the biggest, facebook changing advertising and net flex are thriving trading at all time highs. facebook ceo mark zuckerberg and marissa mayer taking the stage here at this conference.

as 3,000 entrepreneurs and investors hope to follow in their footsteps. >> this is an extraordinary event. the olympics for some of the best technical athletes in the world. the company, the best of investors, influencers and entrepreneurs. >> reporter: the most powerful internet companies unveil the next steps and to hear from twitter box and drop box facing questions about their ipo plans. >> we don't have a timeline for it. we are really still focused just on building the market like moving into the enterprise is a big focus for us now. >> reporter: established companies setting the gold standard, the question is how the now startups are disrupting or shaking up established industries. like pinterest for art, planning to eventually launch a new art market. >> people around the world below 50 k is our market. >> reporter: tackling the $500

billion mens market, branded connects people who hate to shop with people that love to to become their personal shoppers. >> i know the pain men have when they go shopping, and i have that pain, too. there is nothing online at the moment, there is no market meter. everyone has tried it, always goes for the fashion customer. the majority of men are not fashione fashioners. >> reporter: now we'll see how this shakes up the bar business. for "nightly business report" i'm julia boorstin in san francisco. we turn now to the market focus segment, and we begin with a company that shookup the video industry netflix. it's launching in the netherlands. it operates in 4 1 countries and has more than 37 million customers around the world. after a big run, one wall street firm decided it was time to downgrade to neutral and that

pressure shares dropping to $308.30. netflix still the best performing stock this year up 230%. general motors will soon move a big shareholder, the u.s. government. the treasury department said in the august report to congress it sold over $800 million worth of gm common stock last month but did not disclose the price per share. that will be revailed later. taxpayers are still in the hole for more than $14 billion. today gm shares fell almost % to $36.35. restoration hardware got hammered today. the home goods retailer is linking the loss to stock awards given to the chairman and ceo. the company is planning to close mall stores in favor of bigger showrooms. shares fell to $67.04. feeling the sting of the digital world, international paper is shutting down a paper

bill in portland, alabama next year. 1100 workers will lose their jobs. more consumers are using e-mail and other alternatives reducing demand for the paper products. the company made a separate statement announcing a $1.5 billion stock buy back plan and boost to the quarterly dividend. shares of ip closed fractionally higher at $49.36 the finish there. mirk has the experimental drug for an up front fee of $50 million. the deal will help astrazeneca. the drug is being tested to treat certain types of ovarian cancer. it rose almost 2% closing at $50.50 and america up to $48.14. the gap between the wealthy and poor is the biggest in the

century. why is that and what does it mean for the economy? first, how the international markets closed today. yesterday we told you about changes coming to the dow jones. tonight the s&p 500. after the close of trading on september 20th, advanced saic are out. they will be replaced by vertex pharmaceuticals and the electronic instruments maker. they will move into the s&p mid cap index. a bit of a caution light in the housing market today. americans aren't applying for home loans. mortgage applications fell 13.5% with refinancing plummeting 20%

as interest rates rose slightly higher. the slowdown in mortgage requests means a lot of bankers are losing jobs. citi group is closing a danville, illinois office dedicateed to mortgage refinancing. 120 employees will lose their jobs there. jm morgan laid off more than 2,000 workers since august. they are part of a long-term pairing back of the mortgage origination unit will that let go 15,000 workers by next year. joining us to talk more about the housing market is anthony khan, chief economist at chase. welcome back. good to have you with us. we have rising rates, layoffs in the housing departments of many banks including jp morgan chase and a fall off on mortgage applicatio applications. are the best days behind it? >> i really don't think so, tyler. i think the housing market will cohe recovery.

go. remember that at this point, prices when you look at one of the most accurate ways of measuring housing prices are still down about 23% from the peak in may of 2006. so, i think that given all the demand that's certainly built up over the past couple years, housing has a ways to go. >> prices have been rising, maybe not from 2008 levels, interest rates are going up. the only thing not going up are people's wages. do you think that it's getting to the point that people are being priced out of the housing market? >> i think you're going to see some of that and it's unrealistic to expect that the trends in housing won't slow down a little bit because mortgage rates are picking up, and some people, of course, will get priced out of the market and initially when interest rates rise, what you see is a lot of people on the fence just jump off the fence and start buying houses before rates go up significantly, and now since rates have been going up and have gone up, you'll see a

little bit of a slowdown but not a collapse in housing market growth. >> so what i'm hearing you say, anthony, is that perhaps those price rises that have been averaging 12 and 13% according to k shiler, that those price rises are likely to slow but not disappear and certainly not turn into declines. do i got you right? >> absolutely, 12%, 13%, those are unsustainable and bounce back because prices drop so sharply. we probably will move into a face over the next couple years where prices will probably be going up somewhere to 4, 6 or 7% on a year to year basis and that's healthy because that will prevent another bubble from brewing any time soon. >> anthony, most are expecting the federal reserve policy makers to taper back on the stimulus plans at the meeting next week. there is also, you know, we see mortgage rates going up. you put this together, is the economy really going to start

slowing down a bit here? >> i think the tapering will occur precisely because the economy is actually showing some acceleration. the federal reserve is not tapering or cutting back on the asset purchases because they are worried about inflation and trying to slow down the economy, but rather, they are reacting to the fact that the economy next year will probably grow a lot faster than this year. so does that in itself take some of the air out of the balloon? of course. it will slow down but there are other moving parts that i think will push the overall economy to grow somewhere in the neighborhood to 2.5 percent or 3% over the next year or so. things are getting better. >> anthony, we'll leave it on that positive note. a troubling assessment, though, of the nation's first state. moodies an lit ticks that tracks economies says every state in the country is currently out from the risk of falling back into a recession except for

delaware. why is that? it hasn't seen a big return from the industry. while most states have recovered from the great recession, as susie told you. new figures show the income gap between the richest and the rest of the country widened to a new record last year. hampton pearson has more on the nation's growing income inequality. >> reporter: the wealthiest americans enjoyed quite a come back from the 2008 recession. according to a new study the richest 1% of americans are collecting the biggest share of household income since the roaring '20s. economists analyzing internal revenue service data found the top 1% of american households, those with income above $394,000, earned 19% of the total household income last year and the top ten percent with household income exceeding $114,000 captured a record

48.2%. they say it's setbacks for the main stream economy. >> we had declining union and erosion of the minimum wage. we've had increasing trade. we've had our federal reserve that prioritizes low inflation over low unemployment, and we've had also, the policies financial regulation. policies have really rigged the economy in favor of the top 1% at the expense of the bottom 90%. >> reporter: but the authors of the study point out, incomes fell three times farther for wealthy americans than average households during the financial crisis and progrowth advocates say taxing the rich or income redistribution are not the answer. >> we do support is creating the conditions that allow those lower people on the ladder to move up, reducing taxes, reducing regulations, allowing people -- allowing companies to hire more people. >> reporter: the report also

says it was tax policy here in washington that caused the spike. wealthy americans cash income dividends in 2012 to avoid higher taxes this year. for "nightly business report," i'm hampton pearson. coming up, wall street remembers the tragedy that happened on this day 12 years ago. americans everywhere marked the 12th anniversary of the september 11th terrorist attacks. president obama, biden and their wives commemorated date with a moment of silence on the lawn at 8:467 this morning, that's the exact time the first plane struck new york city's world

trade center in 2001. in audition to the sites of the attacks in new york, washington and pennsylvania, moments of silence were held in the business world including the new york stock exchange, chicago and new york. 12 years ago, fitzgerald teeters on the binge of ex tings. more than 600 employees killed. it survived thanks in part to the generosity of other firms. now at the annual charity day, the firm honors the memory of those who perished to help canter give back. marry thompson has the story. >> what are you doing? >> reporter: canter fitzgerald charity day turns tears into laughter. >> i would be mike tyson. >> or i could be bill cosby. i'll give jell-o pudding to everybody if i raise the money or the president of the quite, if there is any indication, yes, we can raise money. >> reporter: bringing stars like

actor jamie foxx to light up an emotional day for the firm. celebrities ranging from comedian whoopee goldberg to sarah hues execute trades whose commissions go to charity. >> unfortunately, we know what pain is so we want to go out and reach to people suffering in a way we understand and show them love. >> reporter: ceolutnick's firm traded. 658 employees died. on this day, traders gave commissions to a fund supporting victim's families and over 100 charities. among the celebrities answering phones and taking trades, funny man billy crystal. >> yes, i'm good. okay. >> reporter: and actress

juilanne moore. former new york city mayor rudy . >> evil, tremendous number of people losing lives, on the other end, tremendous courage, heros, in this particular case, taking something bad and turning it into something good. >> reporter: it was a good day according to sean mathews. >> we think we've at least met last year, which was a great year at $12 million. our customers really participated with us. we're really excited and happy. >> reporter: canter giving back every year on a day it lost so much. >> $12 million. that is doing good out of something bad. >> and really turning a tragedy into something good and that's magic of reinvention. >> they paid for college education of a lot of kids by raising this money. >> anyhow. >> that's "nightly business report" for tonight. i'm susie gharib.

to learn more about the stories we covered tonight, join us online at nbr.com. >> thanks for me, as well. i'm tyler mathisen, have a great evening everybody and we hope to see you 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.

welcome to nhk, it's thursday, september 12th. i'm catherine kobayashi in tokyo. the people at the fukushima daiichi nuclear plant have another problem on their hands. fi officials say the levels of radioactivity in a storage