Why is one economist saying the move higher cant be trusted . We have that and more tonight on nightly Business Report for tuesday, november 26th. Good everyone everyone. In a year of milestones, another one was hit on wall street today. Since the First Time Since the year 2000 the nasdaq closed above 4,000. In the 13 years since, nasdaq more than any other market barometer swooped and swooned and struggled to regain the former heights. The dow and s p 500 for example, hit fresh records back in 2007 and multiple times this year, not so the nasdaq. After cresting at 5,048 in march of 2000 it crashed and spent the next decade at half the former high and after a 33 gain this year, it is still 20 below the. Com era peak. Its a marker on a markets road to recovery and todays nasdaq at 4,000 is higher than the nasdaq 4,000 13 years ago. The dow eked out a fraction l gain but enough for a fresh record close, the fourth in a row and 43rd this year. The nasdaq was up 23 pounds to finish at 4,017 and the s p 500 was up a fraction of a point. Joining us to talk more, jim, ceo at principal global investors. Jim, welcome to the program. I understand that you agree with the statement that tyler made a moment ago, that the nasdaq 4,000 is much healthierer today than it was 13 years ago. Tell us why and what mek tricks are you looking at . Yeah, the difference is that this time the market has been going up because of earnings and the fund mentals for u. S. Private sector remain very strong, and thats really what is driving the nasdaq. Some 24, 25 times the earnings, which is reasonable given the growth potential. Equities generally on about 17 times earnings online with the longterm average. At a time when the u. S. Private sector is doing well and there is good momentum, thats a reasonable place to be. So this time is different in your view, last time was a bubble, but why hasnt, jim, the nasdaq risen past its former alltime highs, the way the dow and s p have . Yeah, the difference, tyler, the dow and s p different run on fumes at the end of last decade of the end of the previous decade, 1999, 2000. They didnt run totally into bubble territory like the nasdaq. It was the extraordinary ent internet bubble when stocks were valued well away from earnings. The difference is were still in touch with fundamentals, a bubble could happen but hasnt happened yet. So how big an event is nasdaq 4,000, especially since its still 1,000 points away from the real record . Yeah, i think its a pretty big event because the real record, as you pointed out, was in 2000 and actually, the record high was 99. The last time it was above 4,000 was in year 2000, so 13 years ago, more than that. I think its a pretty big deal. Its a good sign of the recovery of the u. S. Economy, which has brought those stocks really reflect. As you look ahead, jim, to 2014, what are you expecting for equities . Yeah, im expecting another pretty good year for equities, tyler. I base that optimism on three fact tomorrows. The first is the u. S. Has got the Cheapest Energy in the world, particularly natural gas. Secondly, a tremendous record of invasion and technology. The world wants to buy the stuff that the u. S. Does, whether its in electronics or aviation or other technologies, and then thirdly, we have a Housing Market that appears to be fairly secure in a slow recovery. These fact tomorrows are really driving company profitability. The fundamentals suggest the main equity indicators might rise as much as 10 to 20 next year. Investors have gotten very used to the, you know, market milestones, rallies, but is there any wild card they should be bracing for that could happen in 2014 that could end the record run . Yeah, there is, susie and there are a number of things i would watch for. The first is when the fed taper happens, which i believe it will, most likely in the First Quarter of next year, you will likely see some shortterm volatility, maybe a 5 set back. The answer on that for equities will be to buy into the set back, not true in bonds. Dont touch those because yeiels are going up. That would be one event that might cause instability in equities. Another thing to watch for is the tenyear treasure rye yield. If the action in bonds turned into panic and you got a tenyear moving up to 4 , that would be enough to choke the Housing Market, and push the u. S. Back towards recession. I dont think it will happen, but its worth watching. And then lastly, you have to watch for any other kind of Public Policy error. In a way, the strength of the equity markets have been in spite of washington jim, im sorry, you have such good thinking on this. Im afraid i have to interrupt this interesting conversation. Youve given us a lot to think about. Thanks so much. Thank you susie, thanks, tyler. Well, earnings out after the bell from the computer giant hewlett packard, hp beat on both the top and bottom lines, expectations that is. Earnings of a buck and a penny per share topping estimates by a penny on better than forecast revenues more than 29 billion. Shares moved solidly higher on late trading with the companys forecast for the current quarter, a range of 82 to 86 cents a profit. What is the number one take away on the report today . Could have been worse, but this isnt a full turn around yet, tyler. I mean, they didnt even hit the mid point of expectations on their guidance and yet, because they seem to be to the trough and ready to turn things around, people are excited and the stock trading where it was at the beginning of august. You have to be careful because its not at all clear what the catalyst will be for growth if that comes. Pc market, probably not going to come back. The Software Business they had talked about as a Growth Engine is down. They had strength in servers and networking but not clear how much of that because dell is doing what its doing going private and confidence shaking. Jury still out. Jon fortt, thanks very much. We turn from technology now to good news for housing. Permits for new Home Construction shot up by more than 6 in october, more than a million requests, thats the most in more than five years. Economists say thats a good sign housing could pick up. There is good news in home prices. The index for september showed more than a 13 increase over the same month a year ago. Thats the biggest gain in nearly eight years. So those encouraging figures would seem to indicate a strong recovery in housing. But robert shiller, the noted economist behind that case sheller index says some inves r investo investors, may be skewing the stats. Diana olick reports. Reporter permits to build new homes in october were up dramatically from a year ago and kb existing home prices are soaring, as well. That should be good news for the housing recovery, or is it . We cant trust momentum in the Housing Market anymore. Reporter noble prize Winning Economist robert shipper points to investors as a culprit. Largescale investors bought and rehabbed over a 100,000 foreclosed Properties Like this one in phoenix. They pushed home Prices Higher but could just as easily sway the market in the of site direction. The word seems to be they are longterm investors but i suspect they are not. Reporter in fact, some may already be getting out. Institutional invest tore purchases represented 6. 8 of all sales in october, a sharp drop from over 12 in september, and nearly 10 a year ago according to reality track. Were seeing a sharp surge in supply hit the market in the biggest new era investor haven markets. Reporter in phoenix, las vegas and sacramento, california. Listings there are up 93 from a year ago and sales are down and few farer are distressed home s. I think its the invest tors lightning the load. It makes sense. Many are sitting on serious gains. Reporter some investors are realizing that the cost of carrying and constantly repairing these rental homes is more than they bargained for and if they can find better yields somewhere else, they will not hesitate to go get it. Im dianna olick in washington. Some homes have homeowners under water. Why some cities are considering using imminent domain to fight foreclosure. A stunning attack on wall street today. The Global Economic system and the idolatry of money and came from an unlikely source, pope francis. Eamon javers has more on the popes controversial comments. Eamon, i understand this was from an 84page document from the pope. Its the first major written document that weve gotten from this now pope, pope francis. This document today is an expansion on what the pope has been saying so far in his major speeches, for the first time in one place and all in writing and hes krcritical of what he seess modern market capitalism. An kperp what he said today when an elderly homeless person dies from exposure but it is news when the stock loses two points. He strike led down economics. The income gap between the rich and the poor and selfserving tax evasion and the idolatry of money and the defied market and by that hes saying folks have put way too much attention on proch fits and markets and not basic humanity, guys. Eamon in years past, weve seen popes talk about come muni nice m and capitalism but this time what is motivating pope francis and why now . This is a clearly a pope with a reform agenda and talks about reform of the church and he talks about a number of wider issues. He say s the pope loves rich and poor alike but has a special message for the rich, they must do their duty to help the poor. Still ahead from vatican concerns about the idolatry of money, will business be right or wrong in someways about that, gambling, as more takes place online we look at an industry in transition. New jersey just made a very big bet. Its the third state in the nation to allow online gambling. Proponents say it will bring millions in revenue for atlantics cities struggles casino and millions in taxes for the garden state. This new way to gamble is a small part how the entire gaming industry and were betting this is taking place, is rapidly changing. Reporter its an industry in transition. Two years ago, the Obama Administration cleared the way for states to legalize online gambling. Today, new jersey joined nevada and delaware as the only states that allow it. Though, that number could jump to 21 within the next five years. I think internet gaming, slash gambling is an inevitable thing. States need revenue. Gambling does that. You dont need to build big casinos, its true the web. Reporter while they dont expect much of an impact it could signal a change is on the horizon. U. S. Casinos generate revenue s of more than 37 billion last year, up nearly 5 from 2011 the and the highest figure since 2007 but the states leading that growth might come as a bit of a surprise. While gambling meccas like las vegas and Atlantic City are the top, in 2012 they grew 1. 5 in nevada and fell 8 in new jersey. The big winners . States that opened new casinos like kansas and maryland, and each saw triple digit jumps. Gambling brings a lot of tax revenues and jobs and good paying jobs and that is the lure for states. Reporter the gaming industry paid 8. 6 billion in taxes last year and a hand full of states driven on by the promise of new jobs and a share of that tax revenue are considering expanding gambling. New york approved a proposal to open four casinos upstate and pennsylvania leg slay tomorrisl approved a number of bars across the state to allow it. With those changes taking place in Atlantic Citys backyard, its no wonder new jersey is an early adopter of online gambling. For nightly Business Report, im brian sullivan. If you were betting on making big money from a merger or acquisition this past year, the winnings may be disappointing. Companies taking over other companies paid just 19 more on average than their acquisition target trading price one week before the deal was announced. That was the lowest take over premium since 1995. The suit wars continue with mens warehouse howevering to buy jos. A. Bank and thats where we begin tonights market focus. They turned the table with a 1. 5 billiondollar proposal to acquire the smaller rival thats been trying to take it over. The combo would create the fourth largest mens apparel retailer. Shares of the chain surged, mens ware house to 50. 60 and joe sita. Bank rose 11 to 56. 29. Tiffanys shined in todays training. The jewelry maker solid quarter was driven by strong sales in china. Tiffany upped the full year forecast. Shares jumped more than 8 to 88 and change. It was a different kind of story at dsw. Shares tumbled after the foot ware retailer reported improved sales for the latest quarter but still below analysts expectations. Investors were disappointed by the modest outlook. The stock dropped to 44. 95. A big jump at hormel thank y you thanks to a boost in turkey sales and more. The Food Producer will continue to deliver strong results. Well, there have been significant flood inflation over the past few years, certainly on the jennyo turkey sides. I do feel heading into the next year were in more of a benign environment that should allow consumers to enjoy the products and we intent to support those. The stock popped nearly 6 to 44. 95. Susie, workday, a provider of web based Human Resources software forecasting revenue well above expectations. They reported a big jump in Quarterly Sales helped by strong growth in subscriptions. They compete with sales force and or kill and shares are 82. 60. Barnes noble reporting an 8 drop. Sales fell across all of the businesses, including stores, the nook e raeaders and books ad cut costs. Todays closing prices reflected growing fears here. The stock dropping about 6 to 15. 45. Investors have been pressuring the struggling teen retailer aeropastale to close itself. They said no way. A shareholder rights plan in case a stockholder buys it. The stock closed nearly 2 lower to 10. 03. And declining sales in the Boston Proper catalog business dragged chccos, up to 18. 65. Here is good news for retailers. Mod dees expects americans to spend more money, as much as 5. 5 more than a year ago. Moodys says there is demand from gaming video consoles and what it calls an easing up of worries about fiscal uncertainty s. Thats good news ahead of this weeks black friday shopping shop palooza. Since thanksgiving is an american holiday, many retailers are giving the sport of black friday and cyber monday shopping an international flavor. Reporter from china to russia to mexico, they may not celebrate thanksgiving but Global Consumers are coming to know what the day after means. 50 off cashmere sweaters thanks to border free. Black friday and cyber monday are the two days, the highest days of sales from all the way around the world. Its an interesting way to export american retail culture. Reporter they work with Many American retailers like j. Crew and knee mneiman marcus. Once an order is place, they step in to help facilitate shipping, taxes and terrace. Macys. Comnd bloomingdale ships to more than 100 countries. They realize black friday and cyber monday is busy everywher. Sacs say sales in post thanksgiving events. The retailer expects the same this year. They say Significant International sales are done in canada, australia, russia, the middle east and asia. So why the International Demand for american retail . Its not just a price thing and selection thing but a combination of the two. The number three reason iscentl the united states. Coming up, some cities are considering using imminent domain to fight foreclosure. But could the Program Actually hurt the home owners its designed to help . The u. S. Banking industry continued its turn around over the just completed third quarter, pulling in 36 billion in profit. But the fdic says thats less than banks took in during the same period a year ago and the first time thats happened since the financial crisis in 2009. An auto recall, ford recalling 161,000 brandnew ford escape suvs because an engine cylinder head can crack and leak oil and could cause a vehicle fire. This is fords seventh recall this year for the 2013 escape. How Many Americans are worried about their jobs and the economy . Apparently, a lot. A new survey by the Washington Post shows that more than six in ten American Workers are worried about losing their job, thats the highest level since the survey began in the 1970s. The newspaper says that anxiety is highest among lowincomes workers. A lot of americans worried about losing their homes and in one California City plagued by f foreclosures, official haves a way to keep struggling homeowners in their homes by invoking the right on imminent domain to take over the properties. But will it work . Jane wells takes a look. Reporter Jeffrey Wright walks through a bankowned home in california, a city the mayor said had 1 sthouz foreclosures last year and planned to use imminent domain to buy under water mortgages isnt going down well. Any time you have an involuntary and hostile set of circumstances, there is likely to be adverse consequences. Reporter he holds a list of 624 homes they are targeting to buy from banks at current market values and refinance to be affordable. The mayor says it will keep people in the homes and save richmond millions in fees. Were seeking voluntary purchase and if they dont sell voluntarily, well utilize Legal Authority of imminent domain. This is, again, a last record. Reporter no bank has volunteered, but the city counsel doesnt yet have the votes to force imminent domain. Critics say many of the targeted homes are in nice neighborhoods, two on this street and loans arent dell link went. Judges have sued and there isnt a plan yet. Other cities are considering using imminent domain but dont want the expensive lawsuits. Boston massachusetts looked at it and rejected it and North Las Vegas examined it and decided that was not for them. Reporter now richmonds mayor is talking to california cities and wants to form a joint Powers Authority to take on banks with more cloud. Weve waited for the banks, federal government to step in and provide a solution. It hasnt been forthcoming so the city is doing this, this common sense fix. Reporter Jeffrey Wright believes theix is in if the plan passes. Investors wont want to make loans in richmond and giving false hope to homeowners, one that pulled out of a short sale. There is a high likelihood this person may very well lose their property when they could have sold it on a short sale because they are waiting on a program that is not up and running and may never be. Reporter it may not be up and running here but with cities still trying to solve the crisis five years in, it may get going somewhere. For nightly Business Report, im jane wells. And thats nightly Business Report for tonight. Im susie gharib. Thanks so much for watching. And thanks from me, as well. Have a great evening everybody and well see you back here tomorrow night. Stay dry, stay out of the rain. Nightly Business Report has been brought to you in part by. Thestreet. Com, up to the minute Stock Market News and in depth analysis. Our quant Rating Service provides object tifz ratings daily on over 4300 stocks. Lean more at the street. Com nbr. Y on over 4300 stocks. Lean more at the street. Com nbr. The following kqed production was produced in high definition. The day a young carlos baron met pablo neruda, his life changed. Carlos baron its a live thing that were playing with. Its not just a historical thing in the past. Now he returns to his chilean homeland with a play, a troupe, and a vision for what theatre can be. And here in Yosemite Valley julia parker preserves a tradition of her native american ancestors. Julia parker you want to touch the basket . You can touch a basket. How can you tell a story that most people coming into the valley are not really aware of . 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