the nation's top stock cops look to learn the lessons of missing the bernie madoff rip-off. can the securities and exchange commission be more pro-active in hunting down fraud? plus, can retailers pass the back to school test? we look at the winners and losers in the retail world.. as parents and kids gear up for the new school year. and....the latest harry potter movie makes its way to theaters...why fans and studios are expecting a lot from the boy wizzard...these stories and more all ahead on this edition of first business. bahoric compound caught a bit friday on tap as the dow jones industrial average rallied almost 7 percent and a few weeks old loans and it is if three for friday as we hear from three financial companies in the u.s.. if a couple of them here bank of america and city group to set the tone for the market had one friday in looking ahead to next week if the date malcolm

plans that will continue to support with caterpillar 3 m and coca-cola as the dow breaks above six month highs. we have to get too big of america and general electric that third one is a big financial company despite it has is birds and aerospace and industrial utilities. the back to school season.. is the next big test for retailers as they struggle to survive in this recession. and the expectations are pretty low - with consumers still hanging onto their wallets.. reluctant to spend as they see continued job losses... the dominance of discounters... will continue with this year's back to school season... experts say walmart.. and target.. are likely to be the big winners.. as consumers reign in spending. the average family is expected to shell out just under 550 dollars for school merchandise this year.. compared to 594 last year.. that's down about 7% and this time.. you'll see retailers push the discounts early..

you go into malls.. 75% off sales.. spread of electronic cell phone coupons.. reaching every corner of consumer market right now the top 3 categories for back to school season.. are supplies, electronics and clothing... and it's the school supplies.. that will be the biggest draw.. we expect what's going to happen is the necessities drive spending.. and secondary categories... apparel and electronics some predict the middle tier retailers like kohls and jcpenney .. may have a tougher time bringing in consumers... because they don't offer basic school supplies. kolhs and the like..you'll need to generate an extra trip for clothing. without some of the paper filler.. it will be tougher to get folks in the door.. so my expectrations.. they would suffer more than discounters. as this recession drags on... most analysts are doubtful we'll see a strong rebound in

consumer spending any time soon. you keep looking at retail numbers.. bad weather.. excuses.. fact is sales are bad.. not evidence right now that we all want upside.. but no evidience that it's coming experts say job losses and housing prices are 2 factors that are likely to influence the way consumers feel and until we see those stabilize consumers are not likely to go back to the shopping stores in any big way. the fate of lender c-i-t may be sealed before the end of the day. the company has been struggling, facing a billion dollar bond payment next month and it has been unable to get help from the government. c-i- t stock has fallen below one dollar a share over bankruptcy worries as the company gave its bondholders a day to come up with rescue financing...to the tune of $2 billion to $4 billion dollars, according to reports. while c-i-t is not a huge bank, it has been an active lender to small businesses that use their inventories as collateral without government help, c-i-t may be allowed to become one of the biggest financial failures since lehman brothers collapse last year. with new data showing foreclosure filings on the rise... it is sparking renewed criticism that president obama's homeowner rescue plan.. is

falling way short of expectations. a top treasury department official told congress that so far about 325-thousand 3 month trial modifications have been offered to homeowners - but those numbers are not on track to meet the intended goal... which is to help about 4 million homeowners get loan modifications. even democratic lawmakers are now expressing extreme disappointment.. connecticut senator chris dodd called the lack of progress "disgraceful." for several weeks now, housing counselors have complained about hitting a brick wall when dealing with loan servicers... those complaints include files getting lost... and general incompentance on the part of lenders and banks..when it comes to handling applications. starting in august, the obama administration plans to release montly data on how many modifications are being performed by each lender or servicer.

as we mentioned a trio of financial juggernauts or at least one financial juggernaut to report earnings at friday's opening bell, all we've got dan deming over at the chicago board options exchange. and we've certainly seen some followthrough off the interest of buying intel goldman sachs, j.p. morgan, can it continue on friday you think? it's possible tom. it's getting long on the tooth here as we we've kept up four consecutive days here of pretty significant moves on the high side, all but it could certainly continue. expiration friday today has caused how to keep the market trend a little bit higher. we'll see what happens. but right now the market looks like it's a pretty positive territory particularly if you look at the tech sector. the intel news watching google and ibm no doubt after their numbers came out thursday. despite the rise of the overall stock prices here we see a fairly decent level of fear in the market don't we? yes it's comedy in but it's stay elevated. look at the moves this week, we've had a couple of moves between 1 and 2% or

even more. and even today we're still seeing moves over 2 percent. so the vicks is fairly valued here. and not to mention the fact that i think this most recent up move in the market really caught a lot of traders off guard and i think that through some stops there earlier in the week and that's why you saw the veeck stay day even though the market was rising. there still some concern about the ability of this market to deter rise at this point. dan will leave it there. best of luck on friday didn't get along with us over the chicago board options exchange. still to come movies and money...time warner looks to cash in on the latest installment of harry potter...we check in with our movie industry analyst for

insight. but first...the securities and exchange commission...and how it's changed since the bernie madoff scandal.

the nation's top stock cops have been criticized for not doing enough to protect investors from the excesses of investment banks and for missing the bernie madoff ponzi scheme. but the securities and exchange commission could play a bigger role in policing the market, if the white house is successful in changing and expanding regulation. we sat down with merri jo gillette, the regional director of the chicago office of the s-e-c. in the wake of the maid of scandal with the office one of the exercises to and we did was to pull the closing mimosa on every single case that we closed but now brain in action in the two years prior to that these were and what investigations that close with no action against the targets. yes. we just went back with a fresh look and look at them and ask ourselves to questions one

would we've reached the same conclusion based on will be what the time based on what we know now? in the present and to what is the downside risks for investors if we're wrong? a dollar figure assessment if we close did and we were wrong how much harm total to investors? was this exercise a reaction to the criticism that the sec other offices may have missed some of the whistle blowing that happened against me of in years past? i wouldn't say it that way it was a management decision that i made that i wanted to make sure that we were being as prudent as we could. we did that at the most senior management level to allow the staff to continue working on current investigation and also because the senior level uc the broadest number of cases in have the most information to make those judgments an informed way. what was the result of this exercise? the results in this office was that we reform the

decisions that we made previously in other words we didn't we open those matters that we had closed. which hopefully was right you never know when one of those things is gonna jump out of the woodwork in by you but using our best information and judgment that was what we came out. we really didn't know going into would we have selected people to engage in exercise with me as people quite thought would not be afraid to come back and say i believe we should we open this one. he's been a long time with the sec and the couple, offices the chicago office is the agency to be active can become more proactive is that impossible? are asking that is really the question of the day. i think that maybe we are asking that question in various stock decisive ways within the agency. i think it's imperative that we do that even where we are 0 we are trying to think about ways that we can try to be

more proactive and some of that is going to require that we perhaps restructure some of the ways that we've worked day-to- day which stopped a personnel and reporting lines. some of this is bringing in an expertise so folks with the industry expertise perhaps can brainstorm with people who have the enforcement and regulatory expertise to develop strategic ways to get into industry sectors get our calls and to new products at figure out what and where to look in the tools to use to find and develop the cases we've been unable to find in the past successfully or were we just have been off basis. robert m. improper per pop at coming up monday, we'll talk about how the securities and exchange commission has changed its response and if it can handle the new workload. i don't think the sec has ever claimed that it could prevent

fruad. it tries to deter fraud. it tries to stop it when it finds it. it tries to that's coming up monday. online items consumers pull in the reigns for this back to school season...as the recession continues to weigh on wallets...online... what shoppers and retailers are doing to weather these tough times. and...how likely are americans to go back to those bad spending habits after the recession...find out our website, firstbusinessx.com. and straight ahead on the show... can the latest installment of the harry potter franchise deliver for both movie goers and investors...we'll find out after the break.

after an eight-month wait, the boy wizard looks to hit it big for time warner shareholders, counting on another blockbuster harry potter film as that franchise offers up its sixth movie. david sikich is back with us. time warner is the home of the summer blockbuster: the dark knight last year and hopes are harry potter this year. but this was originally due out over the holidays last year. why such a long way? first of one brother service at the top of market share ranking every year for a few reasons. the release more police than anyone else it 20 more prepared to and from other studios and they are known as the studio to most of blockbusters. if the like to have for a year. and their aggressive for which because we take care rawlings' put the first book out in 1997 the right they're passing on the deal making the deal for all of the movie rights for all of the

movies. in regards to the lady looked at and long-term. there were going to come up in november and moved it to july the movie would have been finished as unusual because they don't like movies to wonder and $50 million to sit on a sideline. they want to get that out there but they saw a giant opening on the same week had dark and i opened last year and there were pretty light of blockbusters in the summer they couldn't pass up the really upset a lot of the fans but the huge pent-up demand just creating more demand from this was one to be the biggest of the mall. it's going to cost between three and 400 million is one of be a huge movie in that franchise this is the sixth film as we mentioned these are billion dollar defense taking collectively in the united states as well as worldwide. this has been an absolute guarantee moneymaking machine with five previous ones process and how to address 75 domestically 900 million worldwide is gonna be passing and spawned. and the next couple of weeks passing going by $5 billion so it's been

tremendous for them. this is do they take a look at the top film franchise this is in the united states is up there stunt was is up there this is the sixth here report from a one put on top of all those. at the same time getting good reviews and that's going to be too big blockbuster success also a mother will review the movie which is much smaller coming out this is and i rack warm monday he would know what talking about this thing called a hurt locker. it's really the two extremes in the marketplace one absolute guarantee the other one very risky. iraq's star with the movies this summer this is one of the worst summer is for independent movies in many years. away we go with 7

million koppell has now forced to in its growth on at 300,000 there's a couple of positive like to say they have the best reviews of the year alongside and they started strong and it was 70 bidders is both a little over a million dollars but from this point on its going to get difficult because like to say is another are wrecked based movie in the seven talked for moviegoers all of them have been disciplined or have been failures. the distributor is trying to come program but they're facing a lot of hurdles and not the least that people audiences want lighter fare is just seems like going around fourth of july was very risky but they want to try something different. take a look at the top three grossing worth beyond last year's mufti's have been close to blockbusters and these are coming from major studios. caught this one from the

independent at the twilight studio as it is. talk to us about the marking of this is really unique. with their time doing is they're trying to stress that is action packed this suspense filled the top and the newspaper calling it the best action movie of the here and tells a story of a squad and bad that one of the most dangerous jobs in the world disposing of gross side bombs before they're able to go and premier trying to not selling as a direct film but it still is and is a difficult thing to overcome because the fact of the matter is is that the mind set is very hard to overcome once people are thinking this way and all of them have failed coup they are doing their best to convince people to go to see but is an action film that were

found. it remains to be seen is a tough market would harry potter. especially in the summer. i will leave it there david sikich walking the movie industry for us. and a couple of big dow component sector report earnings bank of america nt and how they stack up against the dallas coming up in chart talk next.

just as the doubt jones industrial average is trying to surpass six month highs which the dow holding at around 8700 we get a couple of big earnings report from some big components bankamerica and g e on friday. i think these two companies have got to come along for the rife with about to break out to new highs 888050 or so it should be above those last highs than we saw back in early to make or june is made up opa-locka lost.

let's take a look at bankamerica down 6% from year to date so picked worst performer than the overall balance which is pretty much flat on the yourself and of america down 6% ge is the worst dow component as far as parents if you today is down 23%. it's been a rough ride for general electric back in february 50% just the last 12 months and you can see after topping at or around 14 get the level springtimes back in may and may and in june again seemingly is going to run up there and get over that for people to forgive them for their performance. let's take a look at bankamerica it had a really strong rebound since march but then it stalled out and really has been very flat since about may can't seem to get above their $14 more. gonna be significant but higher goals for bank of america over the past six months to look at that get

up in april after the stress test of wills able to move to new highs in early may at the 14 all of which is or remain a significant area to watch as we move after these latest earnings numbers. don't forget next week we have even more dow components reporting with caterpillar. and coca-cola. we'll leave it there let us know how things are in your neck of the was comments at first business x. c o m we'll see you online for back here next time. car car