Designed to protect consumers against negative equity. Every day in ballot more, three water mains break on average. Tonight on Mission Critical fixing americas cities, we examine the budget busting cost of repairing the infrastructure. That and more for tonight thursday, november 21st. Good evening everyone. Ment dow closed above 6,000, a new milestone and the 40th record close for the blue chip average. Investors snapped up stocks encouraged by better than expected news in the economy, the number of people filed for Unemployment Benefits fell and produszer inflation was kept in check in october and u. S. Manufacturing bounced back in november and investors seemed to be getting more comfortable with socalled taper talk from the socalled Federal Reserve and recognize stocks can rally as the central bank reduces the stimless program. The dow surged 109 points, ending at, here is the number, 16,010 the nasdaq jumped nearly 478 and the s p 14. 48. Falling back and ending lower. Joining us now to talk more about the markets and whether or not the great rotation out of bonds and into stocks is finally underway is john manly. Chief equity strategist at wells fargo. Good to have you with us. Thank you. What are you seeing in your accounts at wells fargo . Are people developing a better appetite for equities and leaving bonds . I think they are. Its a slow process and not a onestep process, its a twostep process. I think people are beginning to find equities less scary and more attractive and they are beginning to wonder about the bond holdings. They know rates are down an awful lot and we have to realize bonds go both ways. John, im sure you and many strategist say you have to own some bonds. Are there still some bonds that are safe to own, or are you better putting your money into equitys . I think youre better off putting your money into equities. I think some corporate spreads are well praiced so we can go fr the junkiest judge. I was 27 years old when the bond market rally started. I was a young cat at that time, too, back in the 80s, if im inclined to invest in bonds, should i buy bond funnels or the individual securities, if really what i want is not to bet on the bond market but to collect income . You know, i work for a fund company. Thats the way i go. I think its important. You cant do the research and get the economies to scale for trading. You cant get the diversification. And costs are, i think, quite reasonable, certainly versus historical norms. Thats the way i go but youre asking someone a little prejudice. I want to know why investors are so reluctant to put money into stocks and today we have the dow hitting 16,000. For some they cheer it, others may say this is for reason to be scared of the stock market. Make a case why its time to rotate. I think the perception of risk many times diminishes the actual risk itself and i think thats what happen s. There is no question the stock market got pummeled and those who own stocks got pummeled with it and thats in the task and these memories linger. People look back and have 180degree deviation where they should be looking. Multiples are still very reasonable as far as equities are concerned. Earnings are rising the last time i looked and when you look at the Federal Reserve, as i mentioned, they will taper if it doesnt have a negative impact on the economy. Thats all good. John, i was speaking to an executive of a major broke craig a week ago and he said its very difficult for investors to find income today. Yes. And they are having to take on more risks to find income given the fact that Interest Rates are so low, they are higher than they were but low. Where would you tell people to go find income today . I think high quality equities are the way to go. These companies have the ability to not only increase payouts but grow earnings underneath over a long period of time. When people retire, they are looking at 15, 20, 25 years in the future. Remember, when you own a stock, you own a part of a living thing. I think it has the ability to grow and for longterm retire the its one of the few things left. John, great to see you. Thank you. Chief equity strategist at wells tar s fargo. It depends what actions janet yellen takes, shes a step closer to becoming the first woman to chair the fed. By a vote of 148 the Senate BankingCommittee Approved the nomination of the Central Banks current vice chairman to replace ben bernanke when his second term expires in january. They will vote on yellens nomination but not yet clear when. Uncle sam is closer to getting out of the auto business. The treasury sold off 70 million shares for the bailout of the au automaker. At current prices, such a sale would mean taxpayers would recoup 39 billion of the 49 billion spent to rescue the auto maker. Before the opening bell this morning, disappointing earnings from target and the stock fell sharply on the news. Profits fell 47 with fewer shoppers hitting the stores and higher costs related to expansion into canada. The company also lowered the fullyear earnings forecast expressing concerns about revenue during the shopping season. Target shares fell 3. 5 making it one of the worst performing stocks. After the closing bell, earnings from the gap, the store is upgraded and new designer collaborations selling and gap is making more money. The chain, which also owns, old navy and Banana Republic, that was a penny better than expectations. Gap also reaffirmed the full year guidance. It will boost the buy back plan by a Million Dollars. The gap is a big retailer thats overwhelming consumers with coupons, special sales and promotions this season. Thats making some analysts wonder if that strategy may backfire on those chains, and whether bargain hunting consumers will ever pay full price at those stores again. Courtney regan has more on how coupons and deals are changing the state of retail. Reporter big sales are as much a tradition during the Holiday Season as santa sliding down the chimney. Its what shoppers count on, but this year the discounts are deeper, further reaching and running longer than in years past. Promotions are great for shoppers but retailers may be hooking consumers on a has bebi thats hard to break. It trains the shopper not to buy at full price and wait for the sale. Former j. C. Penney ceo said coupons are like drugs to consumers. If thats the case, gap and Banana Republic and old navy are enabling the addiction, flooding consumers email inboxes with sale notifications every day and they are pointing out the deep discounts. 30 to 40 off in store, online or both. Macys reported some of the strongest sales of the quarter so far, but at a cost. Increased promotions drove traffic sloper in sales but merchandise margin took a hit. Weve been shouting for rooftops this year will be very different from a promotional stand point. Walmart stepped it up in more than 20 years. Operationally i think everybody in retail is being forced in someway, shape or form to react. Reporter shareholders arent going to be happy with the hit to the bottom line but then again, some profit is better than none. Retail is as competitive as its ever been as consumers are cautious about discretionary spending. Health care costs add to the pressures and while falling gas prices give the lower and mid te tier shoppers more disposable income, its not helping now. There are promotions to help attract attention and traffic but there is concern it will change Consumer Habits and what they expect. For nightly Business Report, im courtney regan. Good news about u. S. Homeowner whose have been under water owing more on their mortgages than their homes are worth. The real estate website zillow said the under water homeowners fell with 1. 4 million americans getting back above the negative equity line. For the millions of struggling homeowners who remain under water, fast rising home prices may not be rising fast enough and with the Housing Market in recovery, one company is edging bets things could collapse again and its offering what is called under water insurance. Dianna al lia olick explains. Reporter in phoenix, arizona one of the hardest hit markets of the crash, home prices are up over 40 from the bottom of 2011. That cut in half the number of borrowers that owe more on the mortgages than their homes are worth. Nationwide, millions are drowning in negative equity and some are asking could it all happen again . One company is saying yes and offering consumers insurance for that possibility. Under water mortgage protection is the first of its kind insurance product that weve created for homeowners who might want or need to move at a time when they are in a negative equity position. Reporter basically, its gap insurance from kansas based amtrust financial. It covers the under water amount, should you need to sale your home. Consumers were divided. Its worth considering if you leverage risk. I think its not a good use of money. Reporter to qualify, you must have at least 10 equity in your home now and you cannot refinance during the coverage period. The average monthly premium is between 40 and 50 and not for highend homes. Most markets will be capped of home values of 400,000. We will be there to help consumers if they end up in a situation where life happens to them and they need to sale and are in a down market. Reporter critics say its praying on consumer fear and the money might be better spent elsewhere. For consumers that start out with 10 equity and being asked to put up 4 to 500 a year in premiums, that same 4 to 500 a year could be used to pay down the mortgage which increases equity and ends up having the same effect. Reporter millions of borrowers already pay either private or government mortgage insurance that safeguards lenders. This product could protect lenders and consumers. It will begin selling the insurance in five states next month and hopes to roll it out nationwide in a year. For more on insurance for underwater homeowners, read diannas base on our website, nbr. Com. The new health law relies heavily on getting young people to sign up but many first time insurance buyers are finding if they can log in, the choices are huge and baffling. Blah ever blah. A big victory for apple in a Patent Infringement lawsuit against samsung. A california jury ordered them to pay apple 290 million for copying patents from the iphone and ipad without apples consent. As you recall, a previous jury awarded apple over a billion dollars in damages but a new trial was ordered and the judge threw it out saying the jury miscalculate what samsung owed. One bank says it shouldnt have to pay anything for selling bad mortgages. Bank of america was found guilty of selling defective mortgages to fannie mae and freddie mac but the bank said under applicable law it should have to pay a Million Dollars at most in the husz l fraud case, in the hospital the 863 million that the Justice Department seeks. Mobile ads and a boost in listeners helped pandora grow revenue by 50 and thats where we begin market focus. The company swung to a loss as it spent more on content sales and marketing and caused shares to fall initially. Pandora closed the regular trading day at 29. 68 up 4 . Fewer shipments and lower sales hurt perry ellis in the third quarter. The retailer posted a 3 million loss, more than expected. They blamed the numbers on weak customer spending but the forecast stayed in tack. Shares rose to 15. 4 2. David ianhorn says he sees Growth Potential in the name. Earnings will be better than people think. Next year 3. 50 a share, next year maybe 4. The stock is 19 something today and at that point if you get a reasonable multiple, not a market multiple but a nonmarket multiple that shows stability of that improvement and we can do well. The stock popped more than 6 on the comments to 19. The 19. 9. Carl icahn acquired hologic. In response the company adopted a shareholder rights plan to protect itself from hostile take overers. The sent the stock to 22. 70. Activists are pushing for change at garden restaurants, the parent of red lobster, oliver garden read by baring ton capital to break up the eateries. In the latest attempt they hired an Investment Bank to review. The stock was up more than 1 to 53. 57. A buy back boost sent shares of Johnson Controls to a high. The auto maker said it would raise the buy back program by more than 3. 5 billion on a stronger outlook. The Quarterly Dividend got a bump up. The stock surged nearly 4. 5 today to 50. 35. An update on the Affordable Care act in the most popular state, california, cover california says that since the october 1st kick off, nearly 80,000 californians have enrolled through the states online exchange. Data shows that more than 1 3rd were age 55 to 64 showing that so far more older adults have signed up for the new plans than younger ones in the age 18 to 34 group. Switch weeks after the launch of healthcare. Gov online marketplace people are having a hard time gaining access to the website but once they log on and see the Insurance Plan choices, they still have to choose which one suits them best. Bertha coombs joins us on challenges facing young people buying insurance for the first time and find pg it confusing. Its daunting for a lot of us. Were used to buy iuying insura during open enrollment. It can be tricky. For millions buying for the first time on the new health exchanges, there is a learning curve and in some cases because there are too many options and not enough too ma many choices. 30yearold michael chad wick is over due for an mri screening after having a benign tumor removed back in college. In a couple years ive been making too much money to qualify but not making enough with my other bills to afford health insurance. Reporter 28yearold katy has put off dental surgery and insurance for the same reason. I cant save up the money. Reporter the freelancers are exploring on the states exchange. Its the first time they are buying insurance and finding sorting through the differences between deductibles, outofpocket cost and copays is overwhelming. Here is a dental. Reporter katy found more than 70 options, those with lower deductibles in dental were pricey. This is 374 and the tax subsidy i get is 64. Reporter shes looking for a dental supplement for about 2 20 a month. Catastrophic, im not spending that amount of money. Reporter he wonders about high outofpocket costs. Physical, if i get the flu and want to see a doctor, i got to pay 50 . Reporter there are people that help sort through that. Mike found katys catastrophic choice is a good one. As we dug deeper, as long as she stays in the network, the first three visits to the doctor every year are free. Reporter for mike who needs access to mri screenings, he thinks a mid range plan will have more. Hell have a higher payment to the Insurance Company but when he uses the insurance, the payments will be more affordable. Reporter erik johnson says most state and changes dont have the same comparison tools on plan costs leaving most people to guess. They are basically as accurate as throwing darts. Reporter that could be costly for mike and katy and the government taxpayers that will foot the bill. Weve calculate if you actually do websites right and include the kinds of things that help people make better choices, every year you can save the government, that is us, 9. 5 billion. Thats a very big chunk of change. Johnson says california has one of the best calculators of the new exchanges. In the meantime, news from the golden state. The board that covered california decided against president obamas insurance fix and will not let insurers fix cancelled plans. They are joining massachusetts, new york and this is where the enrollment is going well so they dont want to disrupt that. Bertha coombs, appreciate it. Coming up, a look at baltimores leaky infrastructure and the money being washed away with it as Mission Critical, fixing American Cities continues. Google is coming out with something new. They will offer a Prepaid Debit Card so you can pay at stores and withdrawal cash from atms. Its called the wallet card because its tied to a Smart Phone App that works like paypal. The card will be free with no monthly or annual fees. Shares of tesla have taken a pounding after a series of battery fires but owners of tesla still love their cars and a new consumererer port says tesla model s received the highest Customer Satisfaction rating of any car the magazine surveys in years with owners giving the score 99 out of 100. Wow. All this week nbr looked at troubled finances of big American Cities. Today, we looked at baltimore plagued by leaks, not leaks of information but water leaks as it faces a massive funding gap for insfrastructure projects. Reporter all this water and this and this isnt from a storm. Its from broken water mains. They call Baltimore Charles city, but the water system is c cursed. Reporter Stephanie Blake is the mayor. We had huge brokes. Intersections are gone. Reporter on average, three breaks a day. Every day in the city, somebody you know is dealing with a water main break. Reporter in this 284yearold city, the typical water main break like this is more than 70 years old. Replacing them costs around 2 million a mile and baltimore has 4,000 miles. Then there is the other end of the system. The water is 99. 9 water. Reporter environmental regulations keep piling up he says but the money to pay for them does not. So youre striking a balance. Yeah, you want to make sure that the water is as pure as it can be and we want to be as economical as we can be. Reporter every improvement the feds and state demand like this billiondollar facility is covered by rate payers, this in a city with short issues, blight, crime, the budget. Everybody wants clean water. Everyone wants the environment to be pristine but were not growing money trees down in the basement of city hall. Reporter baltimore budgeted 3 billion for capital improvement, which seems like a lot except the need is closer to 6 billion and nationwide, the estimates of water and sewer infrastructure needs are closer to 700 billion and as cities try to make ends meet, they are cutting basic Services Like police. In the final part of the series we travel to new jersey where they laid off 1 3rd of the police force with predictable results. To read more about repairing ballot marchs infrauk stur tour e head to our website. Bad news if youre sitting next to those who love to talk. The commission is proposing to let passengers use their cell phones on board planes, as long as the planes are above 10,000 feet. This comes after airline regulators loosened up restrictions on tablets and e readers. Finally tonight, talk about taking a wrong turn. This jumbo jet to haul cargo around the world landed at the wrong wichita, kansas airport tonight, 8 miles from where it was supposed to be. The trouble was the plane was so big and the airport runway so short, day were worried the jet might not be able to leave. The runway was a half mile shorter than the faa standard but there you see the aircraft did take off safely and hopped over to the right handing field. You can bet those pilots have a lot of explaining to do. They sure do, tyler. Thats it for us, im susie gharib thanks for joining us. Thanks from me, as well. Im tyler mathisen. Have a great thursday night, see you tomorrow. Nightly Business Report has been brought to you by. Thestreet. Com, up to the minute Stock Market News and in Death Penalty analysis. Our quant ratikwaunlquant ratine ratings daily on over 4300 stocks. Learn more at the street. Com nbr. Kevin today on ask this old house. Ill show you a hightech kitchen faucet with a userfriendly installation. Have water coming down this way, and then this side is pitched, so it helps wrap the water around here, and it all gets concentrated and goes into the backyard. If you dont have good drainage, a little rain can do a lot of damage. Im going to show you how to fix it. Its yellow, its flexible, and it has two steel hooks. What is it . Well, lets say i got to get in the corner. [laughter] kevin thats next on ask this old house. Or, on the wall