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tv   Nightly Business Report  PBS  September 24, 2014 6:30pm-7:01pm PDT

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this is "nightly business susie gharib. npup,ñi up and away, the bul run on wall streetc thinningñi blue chip dow index up triple digits, reversing its previous losing streak. and one of the tope1 performers today, walmart as the world's largest retailer takes direct aim at the banks making its big%])t push ever. and sam waxel is back for on for he ise1 planning an fáe1ipo for latestw3e1ñi biotech adventure, stories and more today on september 24th.
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good evening, everybody, the blue chips were up tonight, investors snapped up stocks following an ñiupbeat report onó housing. the dow gained almost aokxd 46, the s&pñi rose six points, health care stocks were one of the biggest gains, even though the oiljf prices gushedok high y with crude oil rising axd dollaa barrel, exxon and chevron were among the only three decliners in the dow. ñiwell, among the biggest walmart, shares rose about 2% after it announced an all-new 4 service. for years, walmart has put out competitors with their low-price strategy on retail goods. nowe1 it is taking direct aim a banks offering a low-cost checking acco.)p to consumers. mary thompson has more on thejf retailing giant's latest push into finance.
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>> reporter: everyonet( knows y can get almostt( anything at xdñ walmart. socks, groceries, tvs, and come the end5aof nextñ=9q!a checking account. >> the customer will be able to come to walmart and pick up that account and forxd a5a $2.95 fee purchase the starter account. >> with that fee they can open up a starter accounte1 managed green dot, a company that walmart holds stake in. >> there are no nsf fees. if you accidentallyfá bounce a check no overdraft fees, no balance requirements. >> and customers won'sá be shut out because of a poor credit history,ok meaning walmart coul be bringing a product for some 43 millione1 americans that the fdic says are either under-banked or have no
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accounts. walmart will make go-bank the latest of a growing number of financial services they provide k÷sheir customers, services lik check cashing, wire transfers and bill payment.e1 like thee1 products on its shelves, walmart prices their financial services below rivals giving clh!sjf another reason o hopefully stop and shop at their stores. >> customers who engage in our financialjf services tendw3 to it more convenient to use the one-stop shop of walmart. and will end5a up not only conducting their money services with us but tp[ going on and filling a basket according to their needs. >> as for walmart, any boost in sales will be welcome, thelp retailers struggle as the)kd low-income clients keep a tight e5(jz on their wallets even as the economy shows expansion. another dow component making news today, home depot on now showing up on credit cards
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at the retailer.çó amon t(javers has more. you know, amon i was surprised to hear the breach was even more us more about the fraudulent charges. >> yes, that isq right we talke about the banksçó today. they say it is even worse partly because the breach lastedfá for longer period of time. they say the home depot breach lasted a week, and there could be a lot of vict!ms out there. whatfá we're seeing is the chars and fraudulent activity on consumers' credit cards, from groceries, to everything you purchase, evenñi groceries bein fraudulently charged. now consumers are not seeing this damage because usually the bynks eat the damage whenq ther is a lot of activity on the
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cards. a lot of banks aree1 protecting the customers from this fraudulent attack. >> but if the banks even as you say, eat the chargese1 i can imagine some banks want to say hey, this is your problem, home depot, you ought to at least share in some of theçó costs of reimbursing these consumers. >> yes, that is right, tyler, and there is a big fight right now in a+hington, d.c. between the banks and retailers both pointinmi fingers at each other saying you're the one who should be paying for all of this damage out here. this is very, very expensive stuff. you could be talking hundreds of millions if notw3 t(qmore. so the fight now is over the liability of that. whose fault reallye1 is ñithat? and how can you trade eache1 individual charge to a particular okbreach. that is very difficult. and the retailers are saying yes, the banks haveç!ñ lot of data on what is charged.ñi you can't really say that bogus charge was due to the home depot breach. so how can you apply the charges
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to home depot??; all of thate1 is being fought o here in washington. >> you know, amon, this may not be true but seems like consumers are not as angry on this home depot newsxd as they were when they heard about target. is it because that consumers have what the so-called thing of data breach fatigue? in other words, they are tired of hearing about this, or maybe they're just too use4ñ, to hearg about breaches andñi that is ju the wayok things are? >> yes, that isçó right, you ge numb to this,fáw3 headlines are there every single w3week, it i just another bad story out there. people assume this is going on and because they're not feeling that financial pain themselves they're not getting upset about it. the problem, though, that could lead people to get careless about security. ifçó you don't 6e11 the pain yo t incentive to go out there and do everything you can to protect yourlp data. >> amon, thank you very much. and as susie mentioned yesterday, the somewhat soured
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sales on homes, now surging to the highest levels in six years shooting up (ac:u% from the sa month a year ago on a wave of buying in the northeast and out west. that didn't, though, seeme1 to help thew3 sharese1 on the biggt shares of kb homes really got hit more than e15% after sales were short of forecast. they blamed weather delays and troubles for some would-be buyers in securinge1 mortgages. and two federal bankfá presidents
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make sure the policy-makers getw ú cf1 o >> before the fed raisewk rates we should have confidencee1 tha we don't pay all penalty in the zero balance. we should be very patiente1 inf adjustinge1 the monetary target. even to balance the risk to our objectives. >> he is quote, very uncomfortable with calls to raise interest rates sooner rather than later. >> with the possibility of a rate hike on the way, however are paying close attention to the financial sector which has 1 out-performed the dow this year, not just the money center banks. regionals have been strong but the same can't be said for thee insurers. morgan brennan explains theçó outlook for both. >> with the possibility of an interest rate hike on the horw:&n some investors are betting on a regional bank stock for big returns.% companies like pnc financial and
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u.s. bank corps ars3 among theo names that fuelled the rally in the financial sector thist(e1e1, citigroup,ju %- they aree1 not affected by the regulatory changes. analysts say itçó means these stocks stand to gain from higher #f$nterest rates. >> we betq+eñi the out-performance from the stocks this month is ae1çó reflection the short-term interest rates will go up in 2015 and that in our view 2014 is an ideal time for investors to begin toxd accumulate shares of regional banks. >> atlanta-based sun trust bank is one tope1ok pick among analy they will benefit from the housing market in qflorida, he looks to the midwest which enjoyed a stronger economic recovery for regional winners. >> our top pick in the midwest is third, we think it will grow
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above pace in the industry andç that the xdbank's high-level profitability is not re flekted. >> others are lookingeiitjuçó examples such as insurance companies, names like jen worth lingering concerns ont( the wat% long-term care. analysts expect the stock price to rise more than 30% over theo next year. and afflac could offer similar returns. >> i think they're coming to5ase that insurers are just like banks. that they will benefit significantly in thee1u rising interest rate environmenu, >> like all stocks, regional banks and insurers could face banks and ininds in the coming as well. there is a possibility of ae1e1 natural disaster whichok insure the short term, and for the ráq the possibility that people won't deposit as much money choosing to put more of their hard-earned
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cash to work in other investments. for "nightly business report," i'm morgane1 brennan. still ahead, a blast from the past, sam e1waxel, the man o went to prison for insider trading along with martha stewart is back. and he has plans to take his new firm public. regulators are reportedly investigating whether bond giant pimco artificially pumped up one of itse1 returns. the securities and exchange commission is looking at whether >!q investments at discountede1 pricesq and the used higher valuations when
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calculating the value of the holdings. that could make it seemok like e fund made more than it did. somebody who knows all about the securities and exchange is sam waxel, who served time in prison for the same scandal that sent martha stewart to prison. waxel has been raising new fund fos a buy oh detect and planning his newfá return to wall street sort of. >> reportmr) sam waxel is ready for his second act, the details of the first are well known, he founded the cancer drug and served time in pr579 for insider]/> trader charges and emerged inr2009. he then founded ñ company, cadmen has been at part of his settlement with
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the sec, he accepted a permanen1 bar frome1 acting as añr directr officer with any public company. because of the bar, sam waxel won't be ceo. his brother, harty will be ceo. he is likely to face scrutiny from the sec, but jacob frankel, a white collar crime analyst said he expects waxel to be careful about jeopardizing anything. >> given his track record and given his desire for the newfá drugslp coming to market i woul say that investors are certainly willing to give him a e1chance. certainly the more finanaç15jñinded will remember that it gote1 acquired. it was very successful and a lot of people made money. >>i] lilyok paidlp 6.5 billion e company in 2008.
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and they are knownq for making can hee1 do it again? cadmen will file the paperwork then the market will decide. general motors is steering a lot of its efforts to the far east, theq automaker says it expects to sell more than three million vehicles in china for the second year in a row in 2014 with sales of top tier brands like cadillacxd andi] buick, forecast to grow byq 40%, gm wil launch new models in the next coming year in the asian market. and blackberry out with a new device called the pass port which has touch5a screen technology, a full keyboard and a very distinct shape about the size of your fápassport. the shape wille1 help others re their spread sheets and documents, investors not
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impressed sending shares a half a cents lower today. and apple'sfá recent sales may have set records but they're pulling the plug on the new released ipad. along with some blocking some phon% calls some users say the patch interferes with apple's touch fingerprint security system. apple will advise people on what to do as quickly as it can. citizen's financial makes its debut today and we begin focus there. the company, which is the u.s. banking uuu of the royal bank biggest e1ipo after alibaba, of course, raisig about $3 billion at the first offering even thoughi] shares were predicted below the expected r closed higher more than e17% tok
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23.08. ^!zret cyber trading today a big hite1e1e1 with investors. th meátarly 6 million andawq price 16 apiece, well ab'6i the expected range. the ceoq said that cyber securiy offeringst( are unique. >> they introduce a new layer of security that actually protects organizations on the inside. billions have beene1 spentok on trying to keep attackers out. our customers, we help them defendok frome1q attackers who it onto the network or are att c)r'g from the inside. this is an opportunity to go and u$at have brought us here. and look at the shares that went up 87% to 21.93. reportsehwhat pfizer are in talks about a possible merger, this comes after they abandoned their $114 billion bid for astrazeneca which would have
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allowed them to have ae1 $30e1 billion deal. shares up to 3% to $248. and e1hasbro has inked a de with disney on the blockbuster p)jm, e1frozen, the toy maker wl also make dolls based on other 1 classics, like cinderella, beauty and the beast.xd shares of hasbro rosexd toe1 50 and reporting a wider loss ts expenses rose but ider loss the results were mixed. revenue climbed topping estimates and the season ticket sales were ahead of where they were last year. despite that ÷ stock just more than a percentage point to 86.04. and walgreensw3 looking to sell theok infusion service
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implements, that is whent( you salese1 shares up slightly to 62.50. and stars putting itself up for sale, the movie cable channel has obtained an investment firm, one possible taker could be 21st century fox, shares of stars popped to çó$31.23. and a deal isfá a deal, another setback for oil giant bp. a federal judgee1 ruled that business owners canxd keepfá thi payouts they received from bp after theñr gulf oil spill hurt their businesses. bp warranted that a flaw gave money to some businesses makigw questionable claims and that some should be forced to return those funds. nd big'c risks that one
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small software company had to make in order to grow and how it could be a model for others. the second part of our series,f law business matters is straight ahead. uyale beats harvard, not at football but at thee1 endowment close to 40% return, topping penn, dartmouth and evenxd harvard,w3 their returns werefá supposed to be just 15%, i would take it, pretty good. size fáe1matters, even in the i
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league, thee1 biggest of all u.1 schools, far bigger than yale's $24 billion portfolio. school debt crisis may not be as bad as it is now. a new study shows that u.s. student loan debt has reached an all-time high oq $1.2 trillion, up 84% since the 2008 financial downturn. but there is also some good news about student loans. the department of education reports that defaults on those loans havet( declined in the fit few years after they cameçó due >> and some graduates looking to pay off the loans may be tempted to become entrepreneurs in the turns out it ise1 becoming more difficult for small business owners to set upxd shopt( selli pot. kate rogers takes a look. >> reporter: starting a marijuana business may seem like an opportunity to cash in, but entrepreneurs meeting in new york this week seem to agree. breaking into the business can
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be an uphill battle, megan sanders runs the company which makes xdplant-based substances colorado, some of which aree1 cannabis. >> the personalt( banks are shutting them down, it is almost impossible to keept(e1 the pers u0q affects every part of your life. >> getting your hands on r licenses,e1 figuringfáfá out ho staying in line with tight restrictions are all tough for businesses looking to start up. the rules are often different from state to state. also prepare to be audited and know that your affected tax rate could be as high as 70%. according to this new york lawyer. >> there is also a p2nvrárjz of the irs code which prevents entrepreneurs in this business from deducting their business expenses so they pay a very high tax rate. and then finally there is the
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uncertainty affected bye1 the controlled substances xdact. >> that said, marijuana controlledj profit.ñi others say if all legalize the cannabi[@mbid,çó their collecti take could be more than $3 million, that ÷ is generating such a buzz these1 days. kate rogers, "nightly business report." and more on ebq(reneurs who open small businesses this íu(j th of them won't survive. one report estimates only a third of small businesses will be around in ten years, in the second segment of our report, small business matters, sharon epperson discusses the5a small businesses, not just to usurviv, but to ut(zvpthrive. >> reporter: entrepreneur jason
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freed says starting a business ómo business. small businessesi] often lose focus, even successful ones, hir 37-year company was well known in tech circles, forging many software products. >> we have been in business for 15 years, you begin to amass things over a period of time, larger and larger. you do more things, build more products, expand the product line. there is always more stuff happening. >> reporter: out of the products offered, one stood out, base camp. >> so this is base camp, that is a tool for teens working related to a particularq produc in one central place on line. you have a collection of all the the outstanding dealsq and note you need do to get the job done. >> over the years it has becomf >> they were responsible for 80% of their revenue, 90% of their
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growth. was the star product. so they had to make a decision as an executive team. are we going to spread our focus and try to create a range of products or are we going to focus on this core product that is doing so well? >> and freed did justñ@that, stream lining 37 signals to focus on their most successful product and they changed the company's name to reflect thatçá product. >> reporter: in february 2014, 37 signals became face camp. >> we decidede1 at the moment o having a greate1 business let's make this decision now so we can gete1 focused just on one thing which is base e1camp, whiche1 ir most popular product. that is what the customers use the most that generates the most revenue ande1 e1profits. >> at 15 million people using the product they're continuing >> yet even with the increasing popularity with the flagship product, the company decided not to expand. >> they have turned over
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hundreds of offers and are doing everything possible to keep their business at a certain level scale. when you own your own company you call the shots. >> for us it is not aboutt( chasing huge numbers, we're not here to ipo or sell the company or hit numbers to impress investors. it is really,ñc3 really hard to more than one thing well. >> reporter: just focusing on one fáproduct, one service that you're really goodrat may be your company's most important selling point.ñc3 and freed hopes base camp's e1 singular focus will be the key to his company's continued e1÷t. i'm sharon epperson, for "nightly business report." ande1 sharon looks at a decision made for a small and finally tonight, india celebrating a giant mankind lea1 into space, an indian space craft orbittedw3 around mars
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the price tag, a mere $74 million, a fraction of the cost that mars spent. itúce&= cost less than $100 millione1 oscar-winning moviee1 about gravity, about astronauts stranded in e1spawt÷ cf1 o >> so i wasi] looking to see wh it wasçóxd so cheap for them be] thejf simpleok design. the people costs are much lower. >> than scientists here. >> that is "nightly business report" tonight, i'm susie gharib, have a great evening. and thank you from me as well, i'm tyler mathisen, we hope to see you back here tomorr
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