financial news, analysis, and today's investment ideas. good morning. it's wednesday, september 26th. i'm angela miles. in today's first look: under pressure: stocks sell off on re-ignited concerns about the debt crisis in europe. also, caterpillar's warning about profits three years from now was a big drag for the dow. changes are happening at yahoo. ken goldman has been named the new cfo as the ceo reworks the tech company. a report indicates john chambers, the ceo of cisco, may retire in 2 to 3 years, while a different report says italian prime minister mario monti won't run in elections this spring. time now for some trader talk with scott bauer of trading advantage. scott, i have a list of stocks i want you to comment on today, starting with the home builders. there's been some positive news coming out on home prices, but is there a bubble forming in homebuilder

stocks? > > let's look at two things: first, the news that came out yesterday with pricing up 1.2%. great news. i don't know where prices are up 1.2%. i know they're certainly not in my area. i talked to other friends and traders, nobody sees the price appreciation. talking about homebuilder stocks, i do think that there's still room for more appreciation in that space. they fell so far, so fast, and they're really just on the road to recovery, even though we've seen a pretty nice recovery over the last few weeks and months. > > we have to talk about those circuit breaker stocks yesterday: tesla and groupon both tripping the circuit breakers because the stocks were falling so rapidly. would you be a buyer today? > > i do like tesla here. tesla traded down almost to a major support level around $27.50, and really closed at that level. so let's see where it's going to open. i think it's probably going to get pretty stable, and i think that's a great place to start nibbling back in the stock. groupon to me is a different story. groupon is really driven by news that comes out of the media. it really is driven by public opinion. this stock is, to me,

very dangerous. it's not trading on fundamentals, it's not trading on a p/e. it's so hard to value. again, it's public opinion. something comes out that's so negative, we see it go down. we see something great come out on groupon, it goes up. i'd stay away from it. > > michael kors has been a great stock for investors. it's more than doubled in the past 12 months here. would you buy this one, or is it too high? > > no, i do like michael kors. the ipo came out at $53, which was a little bit below what the expectation was. we saw it trade up to almost $57 a few days ago, because that's where it was initially priced. but michael kors has now become the superstar of high-end retail. people don't talk about tiffany, people are not talking about ralph lauren, people are talking about michael kors. it's now the leader. i think they have an unbelievable business plan. their guidance going forward is great. i would be a buyer. > > good to have you on the show. that's scott bauer of trading advantage. > > thanks angie. in our cover story, since the first wave of apple faithful camped out for the newest iphone last week, there have been

reports of flaws or features in some of the more than five million phones sold already that may need your attention to upgrade, even though you just paid up to $400 for the phone. to a lot of people, apple is a consumer electronics religion. and a lot of them bought the newest iphone on faith. "i'm embarrassed to say, i've owned every single one of them, and now the iphone5." "i trust apple. they make quality products and stand behind them." but after more than five million iphone 5s were sold in the first weekend, a faster pace than any previous iphone, there are published reports of problems. among them: rattling handsets from a loose battery, faulty wi-fi connections, weather reports mixing up cities, a new map app that has led users in the wrong direction, and a redesigned port that requires owners to buy a new power connector incompatible with previous iphones. "they chose to sock it to their consumers, who they say they love, with a $29 part that costs $1 to produce." at&t has offered iphones since they first appeared in 2007. a

spokesman would neither confirm nor deny consumers' complaints, but told of an operating system upgrade. "i have not been given any information on upgrades. i think you have to address those questions with apple." we did ask apple in emails and by phone. we're still waiting for a response. the iphone does have a faster processor, better camera, larger screen and is thinner. the complaints may be satisfied eventually. but after how long? "i think the maps is going to be a six-month fix." "are these deal-breakers? i highly doubt it. people we've seen express no interest in this as a problem." add to that what appears to be a fight that turned into a riot at foxconn, the chinese company where iphones are made, and you wonder if the complaints, foxconn, any of it will matter. "this is not going to hurt apple or the iphone, i don't

believe so." retail analyst jim dion says apple has a good track record for replacing lemons manufactured in its product line. pilots with american airlines will meet today to consider going back to the negotation table with the airline. american passengers have been dealing with delays at the airport. the airline has been forced to cancel up to 5% of flights daily and reduce the schedule through october. some of that has to do with pilots calling in sick, although it's said to not be part of an organized effort. american airlines issued a statement last week saying the its ready to re- start negotiations with pilots. pilots remain frustrated with aging aircraft, maintenance issues and futures wages from the airline. negotiations continue with nfl referees who have been locked out this season regarding disputes over contracts. predictions are the dispute will continue for weeks. however, fans and critics are calling for a swift resolution. the issue reached a boiling point on monday after a

controversial call was made to end the seattle seahawks versus green bay packers game in favor of seattle. the nfl later acknowledged the wrong call was made, but still stands. a strike by unions in greece could bring the country to a standstill today. teachers, lawyers, doctors and even journalists have already walked off the job. they say enough is enough as workers face another round of cuts to salaries, pensions and benefits in the wake of the government attempting to resolve its massive debt crisis. "international creditors are negotiating with the government about the next austerity measures. at this time, it looks as though the coutnry is going to have to make some really big cuts, and of course the people on the streets are not happy about that. the government workers are not happy because they are likely to be the focus of the cuts, and that is starting to manifest itself in civil unrest - and i think there's a good chance these strikes are just the beginning." that was jack ewing of the international hearld tribune.

the greek government is planning $15 billion more in austerity measures to pay for money owed to private contractors and get access to loans from the european union and imf. meanwhile, protests are also flaring up in spain over another round of austerity measures. police baracaded madrid's parliament yesterday, in order to block thousands of protestors who sought to surround the building. the demonstration turned violent, as police in riot gear clashed with the thousands who showed up to protest. the country's government will reveal its 2013 budget tomorrow. within the plan, austerity measures that include a freeze on pensions and new taxes. the government also plans to eliminate certain tax breaks. spain is intending to cut 60 billion euros from its budget by the end of 2014. back in the u.s., more signs of a recovery in the housing market. home prices are up for the third month in a row. record low mortgages, a surge in home sales and fewer foreclosures pushed prices up 1.2% in july. the s&p case shiller index notes over the past year prices are up 16% in phoenix, one of

the hardest-hit areas by the housing collapse, and 6% in minneapolis and detroit. however, prices dropped compared to last year in atlanta, new york, chicago, and las vegas. staples will shut down more stores. the chain will close 15 stores in the u.s., and 45 stores in europe. staples is attempting to cut costs in order to invest in its online and mobile business. it hopes to save around $250 million by 2015. toys 'r' us begins hiring 45,000 holiday workers this week. that's 5 thousand more than last year. the retailer joins walmart, khol's and target in hiring seasonal workers. it's predicted holiday sales will jump 3 to 4% this year and stores are starting now to expand staff to get into position for shoppers. a manager at target had this observation about job hunters. "we definitely see a lot of applicants that need extra money for the holiday season and

are looking to pick up an extra job or so. but we are also continuing to see people that need employment and are looking for anything temporary that could turn into a permanent position." toys r us kept on 15% of seasonal workers after last year's holiday season. toys 'r' us is counting on a new tablet for kids to spruce up holiday sales. but now, the retailer is being sued. toy company fuhu claims toys 'r' us stole key secrets to make the toys 'r' us tabeo tablets. a fuhu spokesperson says tabeo has a similar look and identical applications to its "nabi" computer. toys 'r' us sold "nabi" in the 2011 holiday season. ahead of the christmas holiday, americans will take the cobwebs off their wallets to do some big-time spending on halloween. the national retail federation predicts consumers haunting the hallowed halls of retailers will spend a record $8 billion. the average person will spend $79 on decorations, candy and costumes for people and pets. that's up from $72 last year.

estee lauder is launching a new product line in china. it's called osiao, a skin care line that contains chinese plants such as ginseng, and is designed specifically for chinese consumers. estee lauder will launch the line in october to help sliding sales and plump up its recent restructuring program. the cosmetic company will bring the line to other asian markets if sales are strong in china. the tesla car company admits there are some "hiccups" with its latest electric car. according to the company, new equipment and supplier delays are leaving the model "s" 4-5 weeks behind on deliveries. tesla also says it's holding suppliers to high standards. the car maker's original goal was to deliver 5,000 model "s" cars by the end of the year. that has now dropped to around 3,200.

coming up in the show, find out what big-ticket items are good buys this season. that's later on. but first, weather watchers turn to new technology to predict the forecast following this summer's drought. bill moller has that, after the break.

@p@po'

the nation's drought is spurring new innovations in biotechnology. reports say

scientists are working on modifying a corn crop that would have the ability to survive a drought. agricultural companies have been investing hundreds of millions of dollars into the trials, according to the chicago tribune. it doesnt stop at corn. the agricultural business wants the agenda to include soybean, cotton and wheat crops. it's not just a matter of coming up with better seeds and farming practices. weather forecasters have to do a better job at anticipating patterns associated with this drought that's gripped the world's agricultural heartlands. if patterns have changed, not only will new farming systems and seeds need to be developed, new methods in weather prediction will be also needed. one solution, called "precision agriculture," uses predictive analytics. let's talk with lloyd treinish. he's an ibm scientist & global expert on weather prediction. lloyd, give us the thumbnail explanation for this. > > well, precision agriculture or precision farming is about having better information for farmers to schedule their various operations. weather is

a key component of that. the idea is that we connect precise weather forecasts to those farming operations. > > that's the theory, but has it been proven? is it an actual data-crunching system that's being used here? > > well, it's a combination of advanced computing technology from ibm and advanced software, but also sophisticated mathematics and the science behind meteorology. we used data from many sources - data coming from the national weather service, data coming from farms - to predict not just the weather, but how that weather impacts farms. > > lloyd, tell me, what exactly does this do? what does this information do for, say, the farmer? > > well, instead of getting a generic and fairly vague weather forecast, we can provide a detailed forecast of when and

where it might rain tomorrow on the farm, and more importantly, how that would affect the operations. so when i talk to farmers, one of the things that they tell me is a big challenge, especially in the drought-stricken season, is irrigation. they want to be much more efficient at using water, and they want to schedule that ahead of time. that's dependent on where and when it will rain tomorrow - the temperature, the humidity. the idea is that we not only predict the weather, but we can predict the schedule of the irrigation, where and when the water would need to be applied. > > is this being rolled out now, being put into use? > > well, we've actually started in other applications, so it is being used operationally by electric utilities to predict outages and restoration efforts. we're using it in... there are cities, like rio de janeiro, that use it to predict the forecast and big floods, the impact of mudslides on citizens. we're now applying that technology and bringing it to the farm. > > lloyd treinish from ibm. thank you so much. > > thank you.

the leaves are starting to fall, and so are prices on some big- ticket items. find out how to find the best deals this season, next.

get out your wallet and start you internet search. jeanette pavini, who writes the buyer beware column for marketwatch.com, is here via skype this morning, and she says there are 5 items you should shop for in september. good morning to you.

> > hi, good morning to you. > > i was surprised to see large appliances are on your list. now is the time, though, you say. > > now is absolutely the time. they're getting out the new models to put them in the stores, so they're going to clear out last year's models. and i will tell you that you can save probably up to 50% on something as simple as last year's model having a different color handle or something along those lines. also, ask for open box items. those are things that were brought back to the store, may not have been used, but didn't fit in the person's house, and boom, you can save, again, up to 50%. > > you also have luggage on your list now that travel season is wrapping up. > > we're in between travel seasons. we're done with summer travel, but we're right before holiday travel. now is the best time to get a deal on luggage. make sure you get lightweight luggage, because those baggage fees can definitely add up. so you don't want to end up paying a lot of baggage fees. > > and grills. that seems like a no-brainer. > > yeah, it is. what's

interesting, in a high percentage of households in the country, they still kind of grill through fall, and then into springtime, so this is the best time to get the grills. there's a wide variety of them, and if you order them online, always be sure that you get a coupon code so that you save even more. > > bicycles made your list as well. > > again it's the models. the new models are going to be coming in, so they're clearing out. the thing about a bicycle, if you are going to be riding seriously, make sure you get well fitted for the bike, because you could end up actually hurting yourself if you're not riding the bike that's perfectly fit for your body. > > traditionally september is a great time to buy a car. is that true this year? > > you know, you're right and that the new models will be coming in, so they will have deals. but, really, the time to

save on a car now is when they're offering the 0% financing or low financing, because you can save, if you're going to be financing your car, you're better off waiting until that deal is there, rather than just because it's last year's model. so, it's really the financing these days as to where you're going to save the most. so it doesn't have to be september. > > good to have you on the show today. that's jeanette pavini. > > thank you. still to come, signs investors may be comfortable with the current market. chart talk is next.

dan deming of stutland equities joins us now. you're a vix guru. what is the vix telling you dan? > > angie, it's interesting right now. we're kind of seeing the vix, yesterday, pop up fairly significantly, trading through that 14 level all the way up to 1453, up about 9%. so really, the market kind of saw its first real test after a couple weeks of consolidation. we saw reaction in the vix. we saw the vix up fairly significantly. we also saw some pretty firm buying of options in the front months in the vix as we moved toward the end of the day yesterday.

> > overall, what does that mean in plain english? are people comfortable with this market dan? > > right now you look at the vix down around 15, historically that's pretty low. so you have to say yes, people are pretty comfortable with this market. but that also can lead to explosive moves in the vix, which we have seen over the course of the last couple of years. right now, if you look at the realized volatility, the vix is actually trading a little bit over realized volatility. but like i said, we got our first kind of real test yesterday, and we did see some significant buying in the front months, and we saw the front month future up as much as the vix casj, so that tells you there is some concern on the short end of the curve there. > > so stay on your toes in other words. > > that's correct. > > good to have you on the show. that's dan deming of stutland equities. have a good trading day dan. > > thanks angie. we are out of time for today. coming up tomorrow, it's a movies and money day. our critic breaks down the horse race at the box office, and a new film that could shake things up. from all of us at first business, thanks for watching.

this is supposed to be a furniture business but maintenance worker were shocked about what they found inside. we'll tell you what police dragged out of here. a little girl kidnapped from an elementary school campus. we will tell you about the security changes that could be coming and the important meeting with police and district officials. dozens of laptops stolen

from facebook's former offices in palo alto. the suspect was very familiar with the old campus. it's all ahead on the ktvu channel 2 morning news. good morning. thank you for joining us on this wednesday, september 26th i'm pam cook. steve paulson matching me in pink this morning. how is the weather? >> i got the memo. we do have really quiet pattern. there is some fog there. yesterday though temperatures kind of settled in. 60s and 70s and 80s. guess what we are carrying yesterday right into today. here is sal. steve, good morning. traffic is doing pretty well around the bay area as we go to some of the live pictures. you will see the traffic does look good on the san mateo bridge. it's a nice drive all the way over to the peninsula. also this morning we are looking at interstate 880 in oakland and that traffic is off to a good start. let's go back to pam.

only on 2 san jose police seize dozens of pot plants from a business on charter park drive. ktvu channel 2 reporter janine de la vega is on the scene where she just talked to police about this raid. >> reporter: that is right if you take a look here the sign says online furniture isbuy.com. if you look through the windows you can see a desk and flowers in there. that appears to be a front for an indoor marijuana grow. here on the ground you see bud blood. some sort of fertilizer. police told me they found hundreds of marijuana plants growing inside. this all happened about 10:15 last night. police say someone doing maintenance check on the building discovered the indoor grow. it was pretty elaborate and there was a lighting system in there. the maintenance worker called police. about ten officers arrived. they found hundreds of marijuana plants that were six