tv First Business FOX September 25, 2012 4:00am-4:30am PDT
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in today's first look: a warning from a big cat. caterpillar officials are lowering the earnings forcast. the company expects modest global economic growth over the next few years, but mentioned the chinese economy could recover by the end of this year. yesterday stocks fell as traders and investors worried about a slowdown in manufacturing activity in china. yom kippur starts at sundown today. high holy days have been known at times to cause lower trading volumes. traders learn more today about how new ceo marissa mayer intends to revamp yahoo. she will lay out her vision for the company later today. it's expected to include yahoo's search partnership with microsoft. and a bacon and pork shortage is predicted for next year. the summer drought is blamed. john brady of rj o'brien hopes to bring home some bacon today. what are you watching in the market today john? > > i think that the market will continue to focus on events
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in europe, specifically a big day on thursday and friday as both spain and france put forth their 2013 budgets. but more importantly, investors and traders want to see a little bit more clarity as regards the formal spanish request for a bailout. there's been some tension recently between german and spanish officials regarding that formal request, and if we get a little bit of visibility on the horizon regarding that request, we think the markets probably move a little bit higher, after they put that formal request to bail out behind them. > > on to that tech mix. yesterday, we saw a sell-off in apple, some disappointment over the 5 million iphones that were sold over the weekend, and facebook fell apart. but google hit a new high. > > that's right. what you see, i think, is you're seeing sort of allocation differentials to three of those names specifically. but i think in the longer run, specifically with apple and google, i think you'll probably see higher prices continue. the fact of the
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matter is, i think with apple, specifically from a trading standpoint, the bar had been set so high in terms of unit sales that it could only disappoint. i think we saw that, but if anything, it's probably a buying opportunity for investors. > > john, oil prices are coming in, but gas prices are just so slowly trickling down in price at the pump. what do you make of that? > > i think that there's something going on in the oil market. specifically, there seems to be a whiff of deflation as regards both a slowing european and chinese economy. the commodity sector was under pressure from the start, from sunday night/monday morning's trading session. it will most likely remain under a little bit of pressure. refining margins remain rather thin for energy producers, and i think that as we sort of turn the calendar past this labor day weekend, gasoline probably stays a little bit sticky, especially given tensions in the middle east. > > thank you john. good to have you on the show. > > thank you. next week we enter the 4th quarter, the final sprint to the annual holiday shopping season. in our cover story this morning, we look at the annual holiday hiring surge which is also about to begin, and what it tells us about the overall
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health of the economy. last week, wal-mart and kohl's spread a little holiday cheer when they announced they'd be hiring 50,000 temporary workers each for the upcoming holiday season, which is coming ever earlier every year! do such big numbers tell us that retailers expect a door-buster holiday season, that overall hiring is about to take off, that the recovery finally is shifting into high gear? uh, not quite. "even though we see these companies make these big hiring announcements, you expect that from walmart, from kohl's." as for the entire retail industry, here are the overall numbers: for the 2012 holiday season, retailers expect to hire 700,000 temporary workers - that's about 6% more than last year, when retailers added a little more than 660,000 temps - nearly 2% higher from 2010. compare this to before the pre- recession numbers. in 2006, when overall employment was higher, retailers still added nearly 750,000 workers in the fourth quarter. these are the people who stock the shevles, ring up sales and then take
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everything down in january and then they're again out of a job. but it turns out temp hiring for the holidays "is" considered a bellwhether for the economy at large. so what does the 6% holiday hiring growth tell us? "when they hire more people than the previous year, they think things are looking up a bit, but we can see there's not going to be any blockbuster growth in the economy. they're not expecting that." not blockbuster, but modest economic growth through the end of the year. instead of the 6%, challenger said we'd need to see at least 10% growth in holiday hiring to declare a solid recovery underway. riots forced a foxconn factory to shut down. foxconn is famous for supplying electornics to apple and other tech companies. reports say fighting involved more than 1,000 chinese workers late sunday. it's more bad press for the apple supplier. the continuing news of labor abuse could drive the industry to make some changes. rob enderle, a tech analyst, says
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this could have an effect on apple's overall business: "this is foxconn's problem, but apple aggresively bids, which means that only someone like this can build apple's products. because they are so aggresive with how they drive down costs, apple is between a rock and a hard place as well because if they raise prices on the phones and devicies, it's very likely to lose customers to competitors. in the end, i think this is a problem for the chinese government to fix." a foxconn spokesoman declined to say whether apple's new iphone 5 is manufactuered at the plant where the fighting happened. you think the chinese will munch on american snacks and cereals? kellogg is sure hoping so. the company that makes frosted flakes, pop tarts, and rice krispies formed a joint venture to sell its wares through palm- oil manufacturer wilmar international. milk is becoming a staple in china. kellogg's hopes the chinese will see how well milk goes with cereal. general mills already has a deal to sell its cereal there. within 5 years, china is expected to become the world's largest food and beverage market.
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analsts fear an economic slowdown in china could cause nike to run into trouble. according to marketwatch, analysts say china represents 30% of nike's operating profit. in june, the athletic gear company shocked wall street with lower-than-predicted profits due to a decline in demand in china. nike reports earnings thursday. toyota, the pioneer in hybrid electric technology, is scaling back plans for all electric cars. two years ago toyota said it was going to come out with a battery-powered mini car. this week, toyota's vice chairman says the electric cars do not "meet society's needs." it's not scrapping the idea, it'll just have what they're calling an "extremely limited release" of just 100 units in the u.s. and japan. toyota is putting its creative and engineering prowess behind prius hybrid- type cars. by 2015, toyota will be selling 21 hybrid models. it's dream time for united. the airline's first dreamliner from boeing arrives in houston this week. united ordered 50 of the new 787's. the airline will
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start flying the aircraft domestically to select united hubs initially and then will use the dreamliner on international routes in europe, asia and africa later this year. wifi is not flying high with the airlines. only about a third of domestic flights offer wireless access, according to one study. virgin america and airtran have it on all their flights. not so with larger carriers. delta has it on 65%, while southwest only offers wifi on a little more than a third of its flights. for american, it's just 22%, and a mere 8% of u.s. airways flights. and united airlines? might as well pack your laptop or smartphone. only on 5% of its flights can you get online. the word "free" is becoming very rare at banks. greg mcbride of bankrate.com joins us via skype this morning with an update. good morning. how many banks are left that offer free checking, for instance? > > it's down to 39% angie, and that's among non \-interest accounts. it's down mightily from 76% in 2009. that was the
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peak. so we've seen a very sharp drop, not only in terms of the availability of free checking, but we continue to see consistent increases in the old standbys, everything from atm fees and overdraft fees to monthly service charges and balance requirements on checking accounts. > > do you anticipate backlash from consumers like when bank of america first attempted to raise fees, there was a big groundswell that happened? what you think is going to happen here? > > this trend has not gone unnoticed by consumers. in a poll conducted by bankrate.com, nearly three out of four americans say they would consider switching financial institutions if their checking account fees increased. and most significant was that it was highest, at 82%, for the highest-income households. those also happen to be the most profitable households for banks. so, i think that's why you see a lot of these fee waivers, but those are also the customers that banks could ill afford to see walk out the door. > > and yes or no, do banks
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still blame regulations? > > yes. definitely. two regulations in particular really changed the landscape over the past couple of years. > > greg mcbride of bankrate.com. thanks greg. > > thanks angie. you have a discover card. you might be in line for a refund. discover will refund $200 million to more than 3.5 million customers who were duped by the company's telemarketing. this is according to an investigation by the consumer financial protection bureau. the credit card company misled people into thinking additional products were free when they opened new accounts. restaurant/arcade chain dave & buster's will soon be back in play in the market. the company seeks to sell 7.7 million shares for around $12 to $14, which is lower than expected. shares will trade on the nasdaq in its up coming ipo under the ticker p-l-a-y. reports say dave & buster's also plans to expand with smaller versions of its restaurant. the company traded publicly from 1997 to 2006, but was then purchased by private investors. according to ernest and young, the ipo market was stronger in this year's third quarter than last year's.
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these are banner times for television stations in swing states where they're charging a lot more for political ads. the campaigns are spending about twice what they did in 2008. in colorado springs, a 30-second spot that cost 300 to 500 dollars is now 7,000 dollars, according to a report by npr. and in ceder rapids, iowa, ads cost six times what they did four years ago. still to come, how a small business can do business with the big dogs. we'll take a pit stop at the nascar track to see. but first, could gas credit cards end up draining your wallet? find out why the cards are causing a stir with consumers. that's next.
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some motorists are fuming over gas credit cards. jen waters of marketwatch.com joins us with the reason why. good morning jen. the credit cards are supposed to give motorists a break at the pump, but what did you find? > > you can get a break at the pump. it could be 6¢, it could be 10¢ of a gallon, which could be good in itself. but these are a lot like retail cards - your favorite department store or your favorite clothing store - they have very low limits,
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they have very high interest rates. but unlike a retail card that can give you a special deal here or 50% off there, gas cards can't give you that kind of deal. so, they're very limited in their use. > > how high are those interest rates on the credit cards? > > these interest rates can sometimes be higher than the default rate on your regular credit card would be. they generally run in the 20 to 25 percent range, usually a good 10 percentage points ahead of what a general-purpose card would be. > > are some gas credit cards better than others? > > you know, there are two kinds of gas credit cards angie. you've got one that's your gas-only card. so you get an exxon or a bp card, and you can only buy gas on it, and only at those specific stations. and they'll have certain limits on how much of a discount they're going to give you. the other is a co-branded, and that would be, say, a bp card or an exxon card
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that is also a visa or mastercard that you can use at other stations- you can use anywhere, for that matter. but then they have restrictions on them in terms of how much you have to spend. on the exxon visa card, for example, you have to spend like $300 in non-fuel purchases before you get those gas rewards. so, you're better off just having a general- purpose card. > > these credit cards, jen, seemed to pop up all over the place when the gas prices started to go higher. will the cards become less popular as prices fall? > > i think some of these gas companies are really looking to see what it is their customers want from these cards. people who these cards could benefit are the people who go to the same gas station every week in the same town and they don't really vary from that. you can then get 10¢ off a gallon of gas. that might be worth it. but i see some of the gas
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companies pulling back on those kinds of co-branded cards, for example, because they're finding that their customers only want the gas-only cards, and really, that's a very limited population, and i think those gas companies are just trying to serve that limited population as much as they can. > > good to have you on the show today. that's fascinating. that's jen waters of marketwatch.com. thank you. > > thank you. still ahead, lessons for small businesses in how to "do" business with much larger enterprises. that's after this.
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you're a small business, really small. you have a big idea though. to make that happen, you've got to sell that big idea to a much bigger entity, and that's the story in a nutshell of jhe production group, in convincing nascar enterprise to let little jhe run most of their opening ceremonies and more. jay howard runs jhe. what do you do in a nutshell for nascar? > > hopefully we're providing a memorable experience for the fans, from the time they arrive and sit in their seat until the green flag drops. > > so that's all the pre-event stuff, concerts and sideshow events and such? > > in racing, it's the pre- game and the halftime all rolled into one.
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> > how did you convince nascar you were able to do it? you were a very small player. > > out of college i had an opportunity to go to work full- time for a racetrack, and did exactly what we do now. i started my own company, had one track as a client, and only had myself as an employee for seven years. finally, we got some traction to do what you just said, which was to convince others to jump on. > > let's talk about some lessons that other people who are small might be able to do to link up maybe with a much larger player. you were telling me earlier, passion is the number one thing. > > any entrepreneur, hopefully, has picked a scope of work that they're passionate about, that they get up every day excited to go to work and wanting to know every day how they can make it better, not just for themselves, but for their staff. it's got to drive you. > > you also say "be on your company, not just in your company." what do you mean by that? > > an entrepreneur coach i hired about 10 years ago, that was lesson one, and i think it is for many entrepreneurs. you want to do everything, be in the middle of everything, think for everybody, write down detailed plans for what
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everybody does every day. > > so as you were running this little company and putting on these big events, you were dealing with every little aspect, answering the phones yourself and everything else? > > everybody has probably done every portion of their business, but if you continue to try to do it all, especially for your staff, you're going to suffocate your growth. > > you also say "people, product, profits." > > it's very simple. it sounds simple. get the right people. you'll get your product right. if you get your product right, you're going to create an opportunity for profit. with that profit, hopefully you can hire more great people and start the chain all over again, and we've been very, very fortunate to continue to hire great people, and it's fed our business well. > > when you were going through this process over the years, did you make this up as you were going along? was it a lot of trial and error? > > both. your greatest lessons are probably the ones that were the most expensive, because you remember them the longest. i think you continue to learn every day, because you don't know what you don't know. > > i've talked to a lot of entrepreneurs that came up with great ideas. i think you too should probably write a book about what you've learned. > > if my memory serves. > > jay howard, thanks so much. > > thank you.
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we're checking in now with scott bauer of trading advantage to get his take on carnival cruise ahead of earnings. good morning scott. > > good morning angie. > > this stock has done quite nicely for investors over the past couple months or so. it's trading near 52-week highs. what is your anticipation? > > we see earnings later today, and expectations are actually pretty rosy for the stock. but let me just tell you that over the last few days there's been some interesting options activity. maybe it's just people taking money off the board because they've ridden the stock so long, but there's been a flurry of put buying activity. now, if there is some sort of bad news, or if they
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lower expectations, lower guidance, $32 and then down to $30 is major, major support in this stock. i would not expect it to fall that far, but we are, like i said, seeing a flurry of put buyers on the $38 line, the $36 line, all in october. so it's all an earnings play right here. > > the last earnings did not go well for this company. profits were down about 93%. but yet, this stock, somehow, doesn't completely sink. > > no. [laugh > > bad pun, i know. > > no, you're right. the chart is showing a very bullish trend right here, and i don't see any reason that that's going to stop. like i said, my guess is that this flurry of put buying activity is just some big investors is that have probably been long the stock, maybe even from that support line down at $30, all the way up here. we've seen this 25% appreciation almost in the stock, like you said over the last few months. > > scott bauer, good to have you on the show today. have a great trading day. > > you too angie. that's it for today. coming up tomorrow, a shopping alert. the best items to buy now as prices "fall." from all of us at first business, have a tremendous tuesday.
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. an overnight house fire sent four people to the hospital including a police officer. we'll tell you how everybody is doing. several law enforcement agencies are searching for a burglary suspect. the latest on the developing story coming up. plus information surrounding a santa clara help mentorry principal arrested on drug
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charges. what else they discovered inside his home. all ahead on the morning news. good morning. what's the weather going to be like? >> a little warmer. we want summer to told on. temperatures by the coast won't change too much. it cooled down yesterday but it will go up today a bit. it's about 60 degrees up to 70 degrees. >> >> reporter: we're up to a decent start for our morning drive. if you are driving up to the willow pass grade on highway 4, it's bone a nice drive with no major problems. interstate 880, traffic looks
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good. 4:29. in nevada an officer was hurt while chasing bon a burglary. three agencies are trying to find that person. >> reporter: good morning. we're on pel mare rye drive -- bell mary drive here in nevada. to the right here you can see a patrol vehicle with a spotlight flashing. they are searching for a burglary suspect that they believe was trying to break in a substation here nearby. you can see the substation here talking about. this started around 2:45 this morning with a call to the police about two suspicious men wondering the grounds. when the police arrived, they chased one suspect
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