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tv   First Business  FOX  October 24, 2012 4:00am-4:30am PDT

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etwork, with over 30,000 hot spots. at&t u-verse high speed internet. now on our newly expanded advanced digital network, a connection your whole house can count on. ♪ what's behind the market slide as stocks stage a deep sell off? in today's cover story, bank of america is accused of race discrimination. how that could effect some american neighborhoods. plus, timing is everything when it comes to landing holiday travel deals. and, why one trader says he is prepared to turn bullish after today's fed announcement. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, october 24th. i'm angela miles. in today's first look-- a facebook bounce. the stock
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soared above $21 after the close after exceeding wall street's expections on earnings. the social network also reveals having 1 billion monthly active users. reports say sirius xm radio ceo mel karmazin is stepping down next year. troubled social game company zynga is cutting 100 jobs. dow chemical is cutting 2,400 jobs. and investors may still be reeling from stocks getting slammed yesterday. the dow sold off 243 points with dissapointing earnings news from dupont weighing down the blue chips, and the nasdaq slipped below 3,000 for the first time since early august, while oil continues to slide. tim mulholland of china-america capital joins us this morning. tim, what's behind the big drop in the market? > > i think there's concerns of global economic growth, and namely earnings have been disappointing, especially in the top-line growth side.
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there's been about 140 companies that have reported so far in the s&p 500. about 60% of them missed on revenue. so that adds concern on the earnings front as well as in the global economic growth front. > > and is that what is troubling oil as well, with that slide? > > that contributes too. materials were weak, the weakest part of the market sell- off, as well as the energy. and of course crude oil. but also remember the fact that iran is coming to the talks, nuclear talks, with the u.s., which i think also maybe took a little bit of the edge off of crude prices as well. > > the speculators. ...the alleged speculators. let's move on- > > you can't blame it on the speculators. > > it's just a lot of premium. they love the premium, let's put it that way. > > right, right, right. > > let's move on to china. what's an update there? > > i think in china what you saw, many people think we've seen the worst, the bottom trough of economic growth in the q3 gdp which was released earlier in the week - 7.4%. they think that's probably a bottom. as we come into some encouraging signs, they're still expecting some stimulus as far as infrastructure projects, lowering reserve requirements and so forth. they're looking for some sort of intervention. however, i wouldn't get too excited about that part because i think that china is really looking to rebalance that economy in favor of domestic consumption, and exports have become a smaller part of their
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gdp growth anyway, contrary to popular belief. but i think they don't want to really be dependent on the rest of the world, and i think they're looking inward, and that's a rebalancing that everybody wants to see. and we'll see if it happens. i would think that you're going to see, when the new government gets in place in november and into december and the first quarter, i think we are going to see some policy action, and my thinking is you're going to see the private sector moving forward more, which i think would be a very positive sign. > > thanks tim. have a good day. in our cover story, a coalition of fair housing organizations is accusing bank of america of allowing foreclosed homes to fall into disrepair in minority neighborhoods while better maintaining foreclosures in white neighborhoods. an investigation of more than 500 foreclosed homes owned or managed by bank of america found those in minority neighborhoods were maintained poorly while forclosures in white neighborhoods were kept in better condition. in 13 cities, foreclosed takes on the appearance of forsaken - broken windows, trash, overgrown lawns. in indianapolis, fair housing groups found b of a foreclosures twice as likely to have broken doors or locks in minority neighborhoods than in white ones. "if there's mattresses and trash on the lawn, no home-buyer will want it, but it'll be perfect for an investor because they pick up everything." a coalition led by the national
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fair housing alliance says b of a's lack of maintenance is discriminatory and violates the fair housing act. "we should not be seeing strong african-american and latino neighborhoods flipped into investror properties. it doesn't help families." in a statement, a bank spokesman said "we strongly deny nfha's allegations and stand behind our property maintenance and marketing practices. bank of america is committed to stabilizing and revitalizing communities that have been impacted by the economic downturn, foreclosures and property abandonment. we actively address the needs of such communities..." real estate brokers say the problem intensified when the housing bubble burst. the sheer number of foreclosures in minority neighborhoods has been hard to keep up with. "it's at the point when the owner leaves that it becomes vacant and trash gets dumped, people break in, steal copper." a bank of america spokesman turned down our request to elaborate on bank policy. he did point out that the group
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has held three news conferences on this subject in the last four weeks. hedge funds and other large investors continue to hunt for homes and apartment buildings. investment funds are taking advantage of areas where home vaules are still low and foreclosed properties are plentiful. recently, fannie mae sold a bulk of foreclosed homes to investment companies. while it could help stablize nieghborhoods, some fear a glut of rentals could hurt them. reports say ben bernanke could soon bid farewell to the fed. the new york times is reporting that fed chair ben bernanke is telling friends he may not stick around for a third term at the fed. his position is dependent on election results. mitt romney has said he will not re- nominate bernanke if elected. the times says if bernanke does not accept a re-nomination, obama's top picks for the job are former treasury secretary lawrence summers and the fed's vice chairwoman, janet yellen. bernanke's term is up at the end of january 2014.
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the federal reserve delivers its decision on interest rates this afternoon. traders highly anticipate the fomc will leave rates at historic lows. however, there's always a possibility the statement from the fed could be a market mover. bill baruch of iitrader.com says if the fed talks about gdp as a measure of when or if to stimulate the economy, it could be a bullish sign for the market. "if you've been a bear because you think the gdp is going to be poor and the economy is poor and now if they use that as a target, then that means they are going to have ease for a longer period of time, because the gdp is poor. so now the reason you've been selling kind of gives you reason to start buying. and, that's why i'm looking to buy at these levels." the fed anouncement happens today at 2:15 eastern. a new study is diagnosing the u.s. with a looming doctor shortage. the association of american medical colleges
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estimates 90,000 doctors will be needed by 2020, up from earlier estimates of about 70,000. in addition to the new healthcare law, it's said baby boomers will require more care, and that nearly 1/3 of doctors plan on retiring within the decade. the study also found certain states could be impacted more by the shortage. currently utah, arkansas, and mississippi have the fewest doctors, while massachusettes, maryland, and new york have the most. the roche drug company is facing allegations of failing to disclose side effects of 19 drugs used by patients in the u.s. the drugs include avastin and herceptin, used in cancer treatments, and tamiflu. regulators apparently have 80,000 consumer reports of adverse effects. a spokeman from roche says that patient safety is of paramount importance, and the company is providing more information to regulators. apple products are losing some weight. yesterday apple unveiled its highly anticipated ipad mini. the mini's screen is 7.9 inches. prices start at $329 for a 16gb version. pre orders
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begin friday. apple says it has sold more than 84 million ipads since the product was launched in 2010. meanwhile, apple launched a thinner macbook pro, along with slimmer imac. u.s. regulators, google and car companies could speed up talks on self-driving cars. volvo car corporation sponsored a forum yesterday in d.c. google is at the forefront of providing technology that allows cars to drive without humans. volvo hopes to remain in the driver seat ahead of other car companies by bringing its self- driving cars to the market by 2020. "it's so much about 'safety is our core value,' and we are the safest cars in the world, so we really need to be the pacemakers in autonomous driving as well. but just to be clear, when we talk about autonomous driving, we don't talk about people sitting in their cars and taking a nap." that was dr. peter mertens of
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volvo. he adds that insurance companies may offer discounts to drivers with cars carrying self-driving technology on board. chevy volts are being checked for motors that could shut off while driving. general motors is updating software on approximately 4,000 chevy volt plug-in hybrids. the shutdown only affects 2013 volts, and only those that are programmed to recharge at specific times through the delayed charging function. brakes and steering still work when the motor shuts off, and it restarts after two to five minutes. ally financial is accelerating efforts to pay off its government bailout. ally is the former finance arm of gm. the firm is selling its canadian auto finance unit to royal bank of canada for $4.1 billion of interest to taxpayers. a chunk of that money will be used to pay off ally's $17.2 billion bailout. ally has already paid back the treasury $5.8 billion. target is taking a new aim with its credit cards. the retailer
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sold its credit card portfolio to td bank for $5.9 billion. from here, td bank can underwrite, fund and manage risk for future target credit cards. the retailer will, however, continue to earn a majority of the profits from credit card users. supervalu may be getting a new owner. reports say cerberus capital management is working on getting $4 to $5 billion in debt financing to bid for the grocery store operator. other investment firms are also interested in buying parts of the business. cerberus wants the entire company. supervalu owns jewel-osco, save-a-lot and albertson's chains, and has struggled to compete against walmart and kroger. this week's earnings are a mixed package. 3m missed analysts' expectations, and its cfo has a "cautious outlook." dupont also missed the mark and is laying off 1,500 workers across the world. it also cut its 2012 profit outlook. meanwhile, the quarterly profit at ups matched estimates, but is lower than a year ago. the company is uncertain about the upcoming holiday season. ups execs are also concerned about
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the fiscal cliff talk on capitol hill. a well-known hedge fund operator is parking money in new york. john paulson of new york hedge fund paulson and company will donate 100 million dollars to the central park conservatory in new york city. paulson grew up in queens before graduating from harvard business school. still to come, why election season is having an effect on some travel prices. that's later on. but first, how to cool your spending on winter heating bills. that's next with bill moller.
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everybody knows, winter's a'comin', and no matter what part of the country you live in, there is always more you can do to winterize that home of yours. you do it of course to save energy, but more importantly, to lower your heating bills! but we're not going to be talking about the usual techniques right now. let's talk with lou manfredini. he's host of housesmarts tv. he's also the author of the
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"house smarts" book series. he has some rather uncommon, surprising, but cost-effective suggestions such as... what is this? rearranging the furniture? > > bill, it's the easiest thing to do that costs zero money whatsoever. when you think about our systems in our home, whether it's forced air or radiator heat, we put furniture over these vents, or we put an armoire up next to a radiator. and when we do so, it forces the overall heating plant to work harder to get the room to the temperature that you set it at. so when it does that, that means we use more energy. by simply moving that furniture away so those vents are exposed or that radiator can actually breathe, you would be amazed at how much more comfortable you will be, and, bottom line, how much you save on your energy bills. > > not just the exhaust vents, but i've seen people with the intakes blocked as well. i would assume that would have the same negative effect on the hvac system. > > absolutely, and that negative that you talk about,
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it's drawing that air in, and if it can't draw it efficiently, it can't heat it efficiently, and that's where the energy loss is as far as using too much energy to heat and/or cool your home. > > all right, so evaluate your home and decide where maybe to move your furniture to open up those intakes and exhaust vents. now what is this lou? the smartphone, you're saying this somehow can save energy too? > > well, what's happened with a lot of the programmable thermostats now, those alone will help you save money. but now with the smartphone application, you can adjust and manipulate your thermostat from your wifi connection, wherever it may be. it's simple, it costs nothing to do, and the thermostats are only about $100 that you purchase. they connect with your wifi system, and now you have total control. and even if the furnace goes out, it will tell you that and send you a message saying that something's wrong, you need to have someone go take a look at it. > > now doors and windows, aren't they the biggest leakers in a house typically? those too, obviously, need to be attended to. > > yeah, this is the area of greatest loss inside a home. i've spent the last 10 years working with marvin windows and doors. i install them in the homes that i build. i'm a big wood window fan. i always have been. because i think it's the best value-added proposition. you get the most flexibility as far as your ability to paint or stain the interiors, the high- performance glass has all the characteristics you want from energy savin
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welcome to the solar generation road trip. if you want to know how solar energy is working for america, you have to go out and ask america. we're talking to people from coast to coast who are using solar power every day. from a few panels on a homeowner's roof. to large solar plants with enough utility power for a whole town. solar energy is working for america now. saving us money, creating new jobs and giving our world a brighter future. go solar! welcome to the solar generation
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time now for some insider tips on how to get great travel deals. clem bason, the ceo of hotwire.com, joins us now. good to have you back on the show. > > thanks for having me. > > let's talk about the holidays. are there still deals out there for thanksgiving? > > there are, but not for long. right now we see prices up anywhere between 0 and 5% from last year depending on where you're flying to. but that's going to get worse every day starting now as you approach
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the thanksgiving holiday. so, i would say kind of use halloween as your bogey. if you can get your booking in before then, do it. after that it's going to start to get really pricey. > > where are the best deals? > > right now we're seeing a lot of good deals for flights in and out of major cities, actually. d.c. is a little slow right now, prior to the election. boston is really good as well. and if you're looking for a little sun, orlando is actually solid. > > what about europe? > > europe is great. not for flights - they've cut capacity for flights, so the prices are still a little high. but if you're looking for a hotel in europe, you're saving double- digit percentages over last year pretty much across the entire continent. > > and that euro has been fluctuating. i know our viewers know all about that. > > it has, and fluctuating
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usually in a good way if you're heading over from the u.s. and wanting to spend. > > the dollar has been getting stronger, that's true. smartphones are coming into play these days with travel. what is hotwire doing with smartphones? > > we have a mobile website, so if you go from your browser, you get to a special website just made for your phone. now we also have a new app for your iphone as well. we are now doing, if you count tablet and smartphone together, on any given day, over 20% of our hotel bookings come through these devices, so it's a big part of our business. we want to make it as easy as possible for you to just kind of click and book no matter where you are. > > are people getting better deals that way? > > they are, because our discounts at hotwire get better the closer that you get to your trip. so if you book on the day of check-in, you will get the very best discount, because that hotel wants to sell that room and not leave it empty. so yeah, that's when the best stuff is there. > > always great to have you on the show. clem bason of hotwire.com. > > thanks for having me. up next, why investors might want to "huggy" kimberly clarke stock. chart talk is next.
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handbags and diapers are coming into play in chart talk for us. let's bring in scott bauer of trading advantage. good morning scott. > > good morning angie. > > kimberly-clark comes out with earnings today. of course, they make diapers. what is your play here? > > we will see that come out in a little bit, and, you know, if it weren't for the fact that all of these big s&p 500 companies were reporting negative earnings, i would actually be fairly bullish on kimberly-clark. the stock has been hovering in this $85-$86 range. $87.50-$88 is some real near-term resistance. if we can push through that, there's really nothing above that. so i would expect that the stock on any sort of positive announcement probably trades through $90. downside is very limited, but i really would look
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for the upside move through $90. > > we will watch for that. and coach made a major move yesterday. what do you think about adding this stock to somebody's portfolio at these levels? > > you know, the high-end retailers just got obliterated over the last couple months with the slowing world economyies, this that and the other. and coach just came out and blew away expectations. not only was their earnings great, but their guidance was fantastic. so we saw coach actually trade up to its near- term resistance right around $60. this thing does have the possibility to head back up toward $70, $75. > > that's interesting too, because everyone talks down the economy, but really there are some people out there spending and having no problem with it. monster, on the other hand, has lots of issues. very sad. we had the report yesterday about the fda death possibly linked to the energy drinks. what do you think about the stocks, scott? > > you know, even before that we saw goldman come out a few days ago and remove them from their conviction buy list. lots of negativity there. the
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problem with monster here is that with earnings coming out in a couple of weeks, there's no bottom. there's no near-term support anywhere here. so this thing really could trade in just a very small range leading up to earnings, but any sort of negativity with earnings - and again, throw out the fda, throw out what goldman said - any sort of negativity here, and i don't see a potential bottom here anywhere in the next 10, 15, 20 percent. > > thanks for your time today. that's scott bauer of trading advantage. that's it for today. coming up tomorrow, the latest film featuring denzel washington is getting pushback from the airline industry. find out why thursday in movies and money. from all of us at first business, have a great wednesday.
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the stage is set the countdown to the world series begins. we'll tell you how buster posey is feeling heading into tonight. the big boost to restaurants and retailers around the city thanks to world series. big task ahead of contra costa county authorities as they work to clean up a deadly plane crash. and it's already forming. the line for the new ipad mini.
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it's all ahead. good morning. thank you for waking up with us on this wednesday morning october 24th i'm pam cook. >> and i'm brian flores. big game today. i don't know what it's called. a word series of something. >> yes. welcome brian. >> it's great to be here. >> i've warned him about the 280 we don't say the. >> we don't say the we say 101. this will be it after this morning most of it will clear out of here. remembers end of game seven it will not be like that for game one. highs in the 60s. here is sal. steve, good morning. welcome brian. let's take a look at some of the pictures we've had. it's been raining in the last

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