Still smarting over scott rebuffing my valentines proposal but i know his wife so i know why. I know why. We have a story about which stocks and wall street ratings are working and which arent. Love never means having to say im downgrading. We will name some names first to sue. Happy valentines day. Thank you. To you too, ty, and to everybody out there. This has been a terrible winter. We all know that. But now its really started to show up more and more in the economic models as economists are really tracking the impact and taking it more seriously. A survey by the philly fed cutting its q1 growth impact from 2. 5 to 2 . It believes q2 growth will pick up to 3 . It also believes that hiring will slow down so were watching that very carefully. Meantime, shares of orbitz taking off. Today shares are trading down just a fraction, you could actually almost call that unchanged. Is the terrible weather hurting the travel industry or in some cases, helping it . More with jane wells reporting on whether tourism is actually getting hurt by cancellations brought on by cold weather or helped by the increased business brought on by the cold weather, where they want to go to some place warm. First to phil lebeau in chicago with the airline side of the story. Reporter i know it probably doesnt feel this way in new york but things are gradually starting to improve, especially for those trying to fly out of the three main airports in new york city. Here are the latest flight cancellation numbers from flightaware. Com. Way down from yesterday, by the way. Cancellations, almost 2,000. We would like to see that much lower but thats an improvement compared to yesterday. Almost 5700 delays so far today. Express jet, which is the regional carrier for a number of airlines, is most impacted right now. I mentioned that the new york airports are improving. We are seeing more flights returning, fewer cancellations, but its really all over the place. The average is about 15 of the flights are canceled, but in some cases, jfk, only 4 of flights are canceled. Compare that with newark, where 26 of the flights are canceled. There you see a shot of one of the new york airports. Again, things are gradually improving. Dont look now, but february is on track to pass up january in terms of total cancellations. We asked the folks at flightaware to run the numbers. More than 60,000 cancellations so far this year. Delays, if you have been on a flight and havent been delayed, consider yourself lucky. Getting close to 200,000 yeartodate. Take a look at shares of the airlines over the last month. We have been talking about how for the most part, they have been holding up. Forget about american because thats really a trade on the merger between american and usair. They are feeling a little bit of pressure over the last couple weeks, but relative to whats been happening operationally, they are holding up fairly well and thats because as we said before, investors are looking through at the fundamentals for the airlines. They really are. Very good point. Thank you so much. Now to jane wells on what this cold weather means for the travel industry because its kind of a catch22. People do want to get out of the cold so they are probably willing to spend money to do that. But then their plans keep getting canceled, also due to the weather, right . Reporter well, yeah, but theyre not exactly booking to go tomorrow. They are sitting at home and looking at me right here in santa monica where its really like early summer. It will get into the 70s later today. Its just ridiculous. Usually this time of year, people start thinking like they do in the rose parade when they see that new years morning. Gee, i want to get out of my cold house and go some place warm. Now with the polar vortex, snowmageddon, they are really giving travel sites a boost in business. Searches for trips to los angeles as well as san diego are up over 80 . Luxury link which sells discount packages to high end destinations says trips to the caribbean have more than doubled and mexico is also up but in the u. S. , miami is the most popular search. Searches by east coast travelers to miami are up 87 . January is always probably the biggest month for the consumer leisure discretionary travel dollar. So we continue to see that trend be favorable, but having said that, we are even seeing exceptionally strong numbers year over year which i think indicates in part that the weather patterns are having a factor. Reporter what he is saying is very different this year. Its not just people from the northeast suddenly making the searches. Its people in the midatlantic and southerners, yes, southerners are becoming snowbirds. Back to you. This year, i actually believe that, jane. You know, i look at that beautiful picture of you in santa monica and the big weather story there is the drought. 70, 80 degrees out there is not a good thing. The president s on his way to california this afternoon. What does california need from the federal government . Reporter well, the farmers are asking him for money, of course, taxpayers money. This will be the president s first trip to california Central Valley where so much of our produce is grown. He is going to be offering over 100 million right away in taxpayer aid to help mitigate what his own science advisor is calling potentially the worst drought in half a millenium. 100 million in aid will be ready for livestock producers who need to find feed. California is the number one dairy state, the number five beef state. He will announce 50 million for food banks in droughtstricken areas where unemployment is volatile. He is offering federal facilities out here to immediately stop using unnecessary water, turn off the faucet and he will blame at least part of this on climate change. Im sure he will. We will cover that and i know you will, too. Thank you. Ty, up to you. Thank you very much. Im making my way over here. Whos on . Turn around. Im coming in. Im coming to get you. Take a look at steves shoes, will you . Take a look at steves shoes. Hes ready for winter. You always call me out on stuff like this. You heard phil talk earlier the weather. You heard all the stories about jane talking earlier. We are much better at forecasting the weather than we are weathers impact on the economy. I cant get from phils 60,000 canceled flights to some kind of economic number. But we did have this number today. Im calling this a weather wakeup call. Look at that. Take a look. These are the sorts of things you would expect to see, the feds Industrial Production number, if we had weather impacts. Thats through january. We were expecting plus 0. 3. Mining, thats Energy Extraction in there, too. And utility output, because its cold. You see all that right there and say you know what, theres a bigger and the fed said specifically its weather. This is from Macro Economic advisors, unusually cold temps in november, december, january will subtract 0. 4 Percentage Points from q1 gdp growth. Its very uncertain, they dont have the right metrics. One graphic is auto sales. You can see the downturn in december and january. Whats wrong with this picture . Why the blip in november, though . You got to ask phil about that. I think there were actually incentives that month. Anyway, its probably coming from the incentives but were missing february. This is a twoprong its why were talking so much about the weather on cnbc. One thing that happened, unusually cold month. Now you have the cold followed by the snow. We are better at modeling the effects of cold than we are on snow. Very hard because what we showed the last couple days, how much of the snow covered places where people live. So its really a population adjusted snowfall thing. Heres another thing to think about. Two inches of snow in atlanta is way more economically disruptive than 12 inches in the northeast. So the guys at Macro Advisors trying to get their brain around it, working with. 3 total because of the snapback idea in the next quarter which right now would be net about 50 billion of losses to the economy. Thank you very much. Thank you for waiting for me to get here. Thank you for pointing out my great come on, walk around with. Pivot, follow me, follow me. I know im out of the light, everybody. Dont worry. Its okay. I just want to show you, this is lou here. Lou, how are you . Good to see you. Tiffany is here. Lou is here. Come on over. We got dominic chu over there. Hes talking about stock pickers stocks. He is going to name names. What stocks you got for us . Lets talk about this. I love the tour of the newsroom but we will give you a tour of the sectors and industries that are having real discrepancies in terms of the stocks that are outperforming and underperforming. It means that right now, stocks dont have to trade up or down together like they did back in the financial crisis. Heres one industry you will love this. The machinery industry, the business. If i told you there was two stocks, one up 6 year to date and one down 6 year to date, and then i told you the one thats up 6 , interestingly enough in terms is headquartered in peoria, illinois. This one here is headquartered in moline, illinois. Check this out. Another clue for you. This one here, biggest name in construction caterpillar versus deere. Yes. Two similar companies. I didnt have to phone a friend on that. These two companies, similar but going in opposite directions. Stock pickers win if they had picked caterpillar. One more industry just for good measure, health care services. One company up 9 , the other down 3 year to date. Big discrepancy. This one here, headquartered in san francisco. This one, valley forge, pennsylvania. Heres another clue. This guy here just bought a german Drug Distribution company is that amgen . It is not. This one here is a merger back in 2001, two names coming together. Check this out. This is mckesson, and this one here, amerisource bergen. A stock pickers market means that you can make a difference in picking the right stocks in an overall i think if you had given me a letter or two, i might have gotten it. Or maybe a ticker. Maybe. Dom, thank you very much. Ali mcgraw said it best when she told ryan oneill that love means never have to say im sorry. For some wall street analysts, love means never having to say the word downgrade. Will that leave investors brokenhearted . Lets ask sheilla dharmarajan. It is all about love, love, love today. We wanted to do a little business spin on this whole love theme and found a couple stocks that are getting a whole lot of analysts love. In honor of that, the guys at the nasdaq actually gave me this pink heart. Lets get talking about the stocks. The first up is allegian. It makes Security Products for homes and businesses. 80 of the analysts who cover it are positive on the stock. I talked to a bunch of them this morning. They said as part of ingersoll, they didnt get a lot of attention so now theres renewed focus on growth now thats a standalone business and a great way to play the rebound in the real estate and construction markets. Another stock is phillips 66, stock up 100 all due to the shale boom. Analysts say there is more upside when you talk about the companys growing chemicals business. Reasons why people are liking phillips 66. You got to talk about heartbreak, too, because love also has heartbreak. Even wall street analysts can be fickle when it comes to love affairs. Some can end badly, they say. Like discount retailer family dollar. I talked to an analyst who has covered this stock for 28 years, just decided its time to break up with it. Hes negative on the stock thanks to this one, two, three punch he described. Declining market share, operating margins which he thinks have peaked and also, a valuation that is still high, no matter if the Company Misses its numbers. Lot of speculation it could be bought up. Nonetheless, hes still pressing a sell button. Little heartbreak in there as well. Thank you, sheilla. Nicely done. To dominic chu for a market flash. How about shares of gnc tanking, down nearly 13 . The company missed earnings and Sales Estimates for the quarter and the Company Estimates full year earnings will fall well below expectations. Gnc said bad weather kept shoppers out of stores in january, saw weak sales because of promotions. They did so well in the months before. We are seeing ripple effects. Elsewhe elsewhere, Vitamin Shoppe shares down overall. Bad day for Nutrition Supplement makers. No kidding. Yikes. Thank you. See you again in a few minutes. The sinkhole that ate the corvette museum. We have been on this story since the start. Today, we will find out who will pay for the cleanup. Plus, two big housing stories for us. Diana olick on mortgage relief and Kayla Tausche on mortgage help. Borrowing standards may be coming down. Is the Risky Business primarily known as sub prime making a comeback . A controversial plan to keep troubled homeowners at home comes to an end. Did the mortgage bailout work . How many people were able to take advantage and what now . vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. We showed you this amazing footage yesterday. Security cameras capturing a sinkhole collapse that swallowed up eight prized corvettes at the National Corvette museum in kentucky. Well, car lovers take heart, because chevrolet is stepping up. They are planning to restore all eight cars that wound up in that 40 foot wide, 20 foot deep sinkhole. The design team will manage the restoration project. Right now, experts arent sure how they will pull all those vehicles out. A chevy spokesperson says it will likely be several weeks. Ty . Thank you very much. Home loans to risky borrowers. That was of course a major factor back in the financial crisis a few years ago. Now, one of the nations biggest and really platinum banks is getting back into subprime mortgages. Kayla tausche is on the case. This is a little surprising, especially for the company thats doing it. It is, but last year around this time, ben bernanke said he actually thought the mortgage credit spectrum had tightened too far. He thought banks were doing too much to protect against some of these riskier borrowers and a lot of people werent actually able to get home loans. Now wells fargo is the first bank with the help of the department of housing and urban development as well as the fha that is starting to dip its toe back into what we would have called subprime loans. They are lowering the minimum borrowing fico score to 600. It used to be 640 which most banks see as the cutoff. Subprime is a little bit different these days. These are conforming loans so they are not giant loans. These are going to be sold back to the government and they are going to be securitized under ginnie mae. They also meet strict requirements, there are eight rules that if banks have these and a consumer defaults, the consumer can sue the bank and say you shouldnt have lent this to me in the first place. They are being very careful about this. Other subprime loans, if you are above the governments price tag for these loans or if you have a high loan to value ratio, banks will actually need to put up a lot more capital to actually underwrite that kind of loan. The rules have gotten so strict for them to actually do this. Thats why they havent been getting in there. Theyre not doing it in a huge way. Only about 1 billion a quarter in subprime mortgage originations last year. Thats compared to 625 billion in origination in all of 2005. By comparison, so theyre not really doing this in a big way. They are just starting to get back. This i think is a good thing because this has been a borrower that has been pretty much boxed out of this, refinancing, purchasing a new home in the spring selling season. Let me understand one of the things you said there. To be able to make these loans to these lesser qualified borrowers, they have to hit a bunch of tick boxes that prove that these people actually are likely to be able to pay it off, is that right . Fully underwritten, fully documented. Thats something thats different from last time around. You have to have the income that you are stating on your application. There are going to be a lot of different rules this time around. Keep in mind, 680 is the fico score the government put as the line in the sand where, if youre doing a nonconforming loan and are trying to borrow at a subprime credit score, they have to double the amount of money they are keeping on their books to back it up. Thats why banks arent doing this. Youre not in the 500 credit score range, you are only going down to 600. Its only wells fargo, the nations largest mortgage provider. Thanks very much. Lets discuss this a little more with mark calabria, director of financial regulations studies at the Cato Institute and edward pinto from American EnterpriseInstitutes International center on housing risk. Guys, if indeed subprime is back, what does it mean, mr. Pinto, for us taxpayers . I think you need to realize two immutable laws of lending. Lenders will lend as long as there is somebody willing to buy that loan or guarantee it. Second, politics will always act to weaken lending standards over time. You are seeing both in action here. All these loans will be guaranteed by fha and securitized with a guarantee from ginnie mae so you have the first thing in place, the loans will be guaranteed by the government. Secondly, you have the government saying we want you to do this lending down to hud would prefer they go down to 580 but in this case, they went to 600. These loans between 580 and 600 have about a one in three chance of foreclosing under stress, a stress event like we just went through in 2007. Why . They have downpayments that round to zero, very high debt ratios and of course, the credit is poor. Mr. Pinto, you sound like you dont think this is a good idea. How about you, mark . Well, its a question of a good idea for who. This is why i wouldnt necessarily criticize wells, because wells is under tremendous pressure. Fha and wells want them to go down to 580, to go down to even deeper credit score. Wells is caught in the middle here of the governments going to say, lets not forget it was little more than a year ago that wells had to do a big settlement with the department of justice under this fair treatment disc