today's investment ideas. good morning. it's thursday, october 18th. i'm angela miles. in today's first look: a 21-year-old man from bangladesh is behind bars. he was arrested yesterday by the fbi, allegedly, after attempting to blow up a fake car bomb outside the new york federal reserve in a plot to disrupt the presidential election. ebay and american express are in focus today. shares of both companies fell last night on earnings reports. revenue on american express came up shy. ebay earnings were more in line with what analysts wanted to see, and that stock may stage a comeback. ibm's revenue miss is partly to blame for holding down the market yesterday. the dow perhaps could have been higher in light of a strong 15% jump in construction and spanish bonds avoiding junk status. reports say the ipad mini will be released november 2nd. and drought, frost and hail are causing one of the worst years for europe's wine grape harvest in half a century.

larry shover of sfg alternatives joins us this morning for a look at the market. larry, what is driving this market? > > right now it seems like it's not earnings, because we saw yesterday, ibm's earnings, they didn't do very well - down 5.5% in the stock, but yet the stock market still rallied. i think it's a broader focus. the european tail risk has gone away. u.s. and china numbers aren't great, but they're stabilizing. so i think people are getting their heads around the fact that things have perhaps bottomed out in the market. > > as you mentioned, ibm was a heavy weight on this market yesterday. could that continue on into today? > > it definitely could, and we'll see earnings coming out later. but right now i think the expectations are so low for the market, and i do believe that most people are looking past quarter three and maybe even quarter four, and i think more people are looking toward china and looking toward europe

for where the market is going to go next, and not really on earnings per say. > > what about ge though? this sometimes can be a market mover. the earnings are coming up on friday morning. > > ge definitely could be a market mover. but when i consider the fact that yesterday ibm went down 5.5% and the s&p and the dow continued to rally, i don't know how much impact ge could have unless their earnings were so poor and such a game changer. other than that, i just can't see it moving the market. > > larry shover of sfg alternatives. thanks for being on the show larry. > > thank you. citigroup, the nation's third largest bank, appears headed toward shrinking its operations rather than expanding them. this follows the surprise resignation of the bank's ceo, vikram pandit, this week. financial analysts expect citigroup will focus on cost- cutting and more traditional banking such as making loans. it may also shift attention overseas where the bank has fewer competitors and may charge higher interest rates. starting next month, american airlines plans to bring 1,500

new flight attendants on board. training will be in januray as the airline hustles to replace more than 2,000 flight attendants who are taking a $40,000 buyout deal to leave the company. the offer was made to crewmembers who have been with the company at least 15 years. american is attempting to reduce labor costs while in bankruptcy and has asked the courts to push back its deadline to re-organize until late january. nike and radioshack announce they are terminating their contacts with lance armstrong, and the retired cyclist says he's stepping down as chairman of his cancer-fighting charity. in our cover story, endorsement deals - is this part of a trend to move corporate image away from high-profile individuals? the clothing and footwear company nike dropped the retired cyclist who won the tour de france seven years in a row "due to seemingly insurmountable evidence that lance armstrong participated in doping and misled nike for more than a decade." the decision came a week after a thousand- page report by the u.s. anti- doping agency, which ordered armstrong's tour de france titles wiped out. "nike was likely waiting to do

this. this gave them all the reason they needed." armstrong has denied the allegations but has chosen not to fight them in court. also, armstrong announced he's stepping down as chairman of "livestrong," his cancer- fighting charity, but will remain a visible advocate. donations since august are nearly double last year's. "you're going to see the spike because it's the only way people can show their support by doing this." nike says it will continue to support "livestrong," but nike doesn't drop athletes easily. it stuck with tiger woods despite infidelities and michael vick, who served prison time for ties to dogfighting. but armstrong, who beat cancer to become an icon of cycling, is different. "tiger, michael vick - their transgressions happened off- the-field, but lance cheated at his sport." it raises the issue of risk a company takes when tying its image to a high-profile individual. "what you've seen in the past ten years, you've seen more team-oriented endorsements, gillete 'young guns,' coca-cola family of drivers -

diversifying risk a little bit." "accenture made a lot of money with tiger woods. they didn't lose a lot when they dropped him." for the record, livestrong contributes 82% of donations directly to cancer-related programs - more than $29 million last year. nike also licenses the livestrong brand for merchandise. the u.s. postal service has cashed in all of its chips, and congress says no more. the usps reached its debt limit of $15 billion at the end of september. now, the service is unable to borrow any more money. its reported that the postal service will be able to stay afloat in the coming months due to a rise in mail traffic for the holidays. however, many say time is running out and that congress will need to pass legislation to save the struggling postal service soon. it's a good time to buy a home, but a new study finds the purchase is out of reach for americans in some metropolitan cities. interest.com conducted a survey and found median- income households are unable to

afford a median-priced home in nearly half of the metropolitan areas in the u.s. "housing is a very local issue. there are some places, like atlanta, where in fact yes it is very affordable to buy a house right now. but if you live in new york city or san francisco or san diego, it's probably not a whole lot more affordable now than it was three years ago or five years ago or ten years ago." that was mike sante of interest.com. its ranking of pricing by city finds detroit, atlanta, and minneapolis are the most affordable options for median income families. as sante noted, san diego, new york and san francisco are the least affordable. exxon mobil is taking on a north face. the oil giant is buying canadian company celtic exploration for $3.1 billion in cash and stock. exxon is highly interested in expanding its presence in the oil-rich shale found in western canada. the deal is still up to celtic shareholders and the canadian government.

more than 6 thousand disney hoodies and t-shirts are being recalled. the clothing was sold in sets at target from october to december of 2011. the u.s. consumer product safety commission says the hoodies contain excess levels of lead, which violates federal standards. no one has been hurt. for more information on the recall, contact the children's apparel network at (800) 919-1917. in earnings news, bank of america revenue topped $20 billion, falling short of analyst expectations. the bank blames litigation fees, but says mortgage lending is strong. pepsico had a nearly 5% decline in earnings due to higher costs and money spent on ads. the soda company is catching up to coke and did not notice a slowdown in china. profits declined 12% at haliburton but were higher than expected at abbott labs. to stay that way the drug maker plans to lay off 550 workers, with more cuts next year. in ipo news, organic dairy

company white wave is pricing in shares between 14 and 16 dollars. white wave will trade on the nyse under the ticker wwav. it's a subsidiary of dean food, which perked up 13% on the news. meanwhile, the ipo for lehigh gas partners, which distributes motor fuel, is pricing shares between 19 and 21 dollars. and, bloomberg reports flash memory company violin memory has filed to go public in a $2- billion deal. amazon's kindle is making its way into classrooms. amazon has introduced a new service called whispercast that allows schools to coordinate kindles on one network. amazon said it has spent years testing kindles with grades k through 12. it's more competition for the ipad, which has been successful in some schools. talk about enterprising. within minutes of mitt romney's controversial comment that he had hired "binders full of women" in tuesday's presidential debates, content flooded the internet. binders- full-of-women became a trending topic on twitter, a facebook

page appeared with more than 200,000 "likes," and the phrase became the third-most searched item on google. one woman grabbed the tumblr name "binders full of women" and had a following of thousands within a half an hour. still to come, a movie that proves you can make a killer hit by spending very little. that's later in movies and money. but first, why a chinese business is thriving in greece. we'll hear from a reporter who is on the frontlines, next.

european leaders left athens on good terms yesterday before heading into a critical meeting today about greece. members of the so-called troika report the cash-strapped country is making progress toward obtaining another bailout. greek officials say they will run out of money next month without more aid. the troika, made up of officials from the imf, european commission and european central bank, meet today to talk about the status of greece. meanwhile, greek workers are set to stage another round of general strikes. the financial crisis in europe is providing an opportunity for china. liz alderman, a writer with the new york times, joins us this morning via skype with a report on a chinese shipping

company. good morning to you. > > good morning. > > how successful has this shipping company, known as cosco, been so far in greece? > > it's an interesting story. this chinese basically state- run shipping company came in here about three years ago in a $500 million deal that ever since then has been a model for the country, because what they did is they bought half of piraeus port, which is an ancient port in greece and one of the most important ports in the southern mediterranean. what they did was they basically took an operation that had been effectively lagging under greek ownership and completely turned it around. > > have the the greek people been welcoming of this? the chinese work way is much different from the european way, let's say. > > the chinese have an extremely efficient working practice. as one spokesman there put it to me, they basically run their business by showing

that they work 24/7, that has actually rung alarm bells, though, among a number of greek workers, particularly unionized workers, reporting that they believe that this chinese company is basically bringing chinese third-world labor standards to greece and really to europe. > > i'm curious about that. how does that work with wages for instance? > > the company, cosco, took pains to try to integrate itself here in greece, to show that they were not an invader and to try to persuade greeks that they were not coming in here to basically sort of lower working standards in a bid to get higher profits. > > what is your reporter's sense on this story? how much of a foray will china make into europe? > > as the chinese captain who runs cosco told me, europe had, for a long time, enjoyed a number of protections. they started spending a lot of money that they didn't have, and now they're paying a price. so what

is going to have to happen going forward is that probably europeans are going to have to go back on a number of protections, moving somewhat in the direction the chinese are, which is perhaps to say lower wages, less protections. but europeans certainly, and certainly here in greece, are going to be fighting back against a wholesale backslide toward, again, what many see as the possibility of stumbling into third world working conditions. > > liz alderman of the new york times. thanks so much for your reporting today. > > thank you for having me. still ahead, our movie critic is calling it the "go to" halloween movie. we'll get a review, next.

o'

it's turning into a thrilling weekend at the box office. our movie guy, erik childress, is here now. guess what? i saw "argo." > > congratulations. > > loved it! great recommendation. > > thank you. > > talk about a heart-pounder. make sure you know the person next to you, because you will be grabbing them during the movie. i guarantee it. > > certainly by the end. it starts off kind of funny, it's kind of satiric a little bit. then the movie kicks into high gear in the second half, and the last half hour is really nail-biting. > > but what happened? "taken 2" came in number 1. that hurt me. > > it did a little bit. "argo" is definitely a superior film. but "taken 2" didn't quite make the drop that i was expecting it to do. of the 16 movies that have made $40 million or more

opening weekend, it had like the sixth worst drop, so it was kind of in the middle of the pack. but "argo," which we're going to talk about now, is going to be a real word-of-mouth sensation. > > absolutely. oscar written all over it. > > there's going to be a lot of oscars, and this is one of the rare films to get an a+ from cinemascore, which is sort of this independent marketing company that sort of surveys moviegoers and whatnot. only 18 films have received this a+ rating, and this is a list that includes "titanic," "the avengers, 9 best picture nominees, and 4 winners. so, this is going to be a huge number. > > i walked out of the theater so proud of ben affleck. i don't even know him, but ben, i'm proud of you. let's take a look at the other numbers. "taken 2," as you mentioned, $21 million, "argo" at $19 million, "sinister" $18 million, "hotel transylvania" hanging in there at $17 million, and "here comes the boom" at $11 million. coming up this weekend... tyler perry in a suspense film. this is new. > > yeah. this is new. this is the first, not counting his cameo in "star trek," the first time he's sort of branched out from his own brand and whatnot,

and he's taken over a role made famous by morgan freeman, of all people, in "kiss the girls" and "along came a spider." alex cross, this james patterson character. it did very well for morgan freeman: $60 million, $74 million. i don't know if tyler perry's fans are going to care to see this movie. it's very violent for a pg-13 movie. it's absolutely horrible. it's a very bad movie. and tyler perry not in the dress doesn't do as well as him in the dress. > > along with "alex cross" there's "paranormal activity," and the numbers are astounding. > > they really are. > > this is what a box office and a movie studio would want to see. > > if there was like a stock on "paranormal activity," you should just buy long, just go with it, because the three previous movies in this series have only cost the studio about $8 million. > > that's low. > > worldwide gross, over $576 million. these movies, they cost nothing, and they make everything. and you're probably going to see that again this weekend. it's probably going to do at least $40 million. could do as much as $50 million, which the last one did, and it's

just going to be huge again. > > and the movies are timed to halloween, correct? > > yes, absolutely. and there is nothing to challenge these movies right now. so as long as- this movie sort of supplanted "saw," the "saw" series, as the go-to halloween series. and now this one has taken over, and until something comes along, they're going to keep making big money. > > good to have you on the show today. > > thank you. just ahead, president obama and gop presidential contender mitt romney make their way into chart talk. stick around.

time now for some chart talk, and alan knuckman of one stop option joins us. alan, you are a guy who always tells us what's really going on - and this is unbelievable, but traders actually are trading the election. so explain to me how you buy shares of obama, you buy shares of romney, and what the charts are saying. > > first i want to emphasize the price prediction model here - and that's what these markets do, they are a price discovery mechanism. they take all of the

information and they distill it into a fair equilibrium price based on the buying and selling information. so, looking at the election, there are some overseas unregulated markets where you can put money down on a candidate, and it's interesting how you can apply the same techniques we use for our markets to something like this that is simply politics. > > let's take a closer look at that. let's pretend like mr. romney, mr. obama are an actual technical chart. so, is there resistance in this chart right now? are there breakouts? are there breakdowns? > > that's the amazing thing. you can apply those same techniques - it's kind of a self-fulfilling prophecy. if everybody is looking for these same turning points, these same levels, to buy or sell, it feeds upon itself. so if i look at the overall uptrend that we saw in mitt romney, it had a really sharp breakdown in september, a severe breakdown from 40 down to the 20 level. we talked about this a couple of weeks ago, how romney was a buy based on those charts because he was oversold and had a big break, and it was bound to come

back to that trendline - as markets often do, they came back to their breakout points. that's exactly what happened. > > he was a buy. he did a great job in the debate. and if you bought low, you made money, right? > > exactly. it bounced right to that 40 level, then hit a level of resistance, and now after this second debate we're seeing that romney's down 5%, and has trailed down to 35%. so it will be interesting to see that if romney can't get above that overall trendline that we've seen for the past year, which is at that 40 level, he's probably not going to win. so it's in the charts. it's not what you think, it's what you see in the charts. just like everything we do here at the marketplace. > > and people are making money on this. traders are making money on this as we're going along here. > > exactly, you put money down, you're buying shares of one candidate verses another; and again, it's an unregulated market - overseas, it's a probability market. but it's amazing how it's a great predictor of future outcomes. > > alan, what will they think of next? good to have you on the show. thanks for enlightening us, and you'll join us tomorrow for traders unplugged. coming up tomorrow in traders unplugged, the real deal on how traders are making money on the housing comeback. we hope you will join us. from all of us at

first business, have a great thursday! . good morning, we are on the east bay, the disturbing discovery prompting an investigation. a candidate for oakland city council experienced this problem first thing overnight. a reporting of a large

media or explosion in the roadway. >> the explanation of that bright large flash of light in the east what i last night. it is coming up on ktvu channel 2 morning news. good morning. steve said it would cool down. for the weekend, skies are clear, especially for some, it is still warm, 70s and 80s. here is sal. good morning traffic is doing well around the bay area, right now we are still looking good, let's look at interstate 880 north and southbound, that traffic is moving relatively

well. also 101 approaching the 880 split. 421, let's go back to the desk. we are on the scene of breaking news, a body was found after a house fire. firefighters first responded around midnight where they found one victim. alex savage is there and police have set up an active crime scene, good morning alex. >> yes, the house where this is blocked off, you can see by alameda sheriff's deputies, it is now considered a crime scene. one person was found dead inside and investigators are trying to figure out how they died. this began with reports of small fire here. the fire was put out quickly and one person was found dead inside the house. the fire appeared to be