Transcripts For KQED Nightly Business Report 20130123 : vima

Starter the year. Susie how about in terms of ad sales. On the call, they said that google is running on firing on all cylinders, to quote them. Can google build on that momentum . Yes. I mean if you look at their positions and other major geographies, and the fact that theyre handling the transition to mobile search fairly well, it seems like theyre in pretty good shape. One thing i point out is that the cost per click, which is metric, which a lot of investors have focused on, was down again in the Fourth Quarter, but the declines have gotten better in each of the past threequarters. Down 4 if you exclude currency in the third quarter, and down 12 if you look two quarters ago. That should help them with their momentum in 2013. Susie you mentioned mobile, and is there anything more about googles mobile strategy, and have they figured out a way to really ca capitalize on google mobile searches . Mobile is helping the volume of searches theyre getting. Their average clicks were up over 20 , once again, in the Fourth Quarter. I think theyre continuing to roll out products. And they mentioned the products theyre rolling out, or that are being rolled out in the android system, targeting the tablet, and the tablet is where theyre looking for their partners, and for their motorola to focus and get some more growth. Susie i understand that facebook came up on the call, particularly facebooks recent rollout of a graph search. What impact, if any, will this have on google . Yeah, i mean, larry page, the c. E. O. , commented a little bit on all of the investments that google has made over the years on search as their core product, and mentioned, example, all of the technology that has gone into maps, which is a very popular product. I think that is, to some extent, to indicate the most, which google had in terms of search. The fact that people used search to look for services and places, and then avertisers could reach them there. At the moment, thats not really what facebooks graph search is about. I would say in the near term, there is probably not going to be much advertising impact on googles search product from facebook. Susie as you mentioned a moment ago, investors really snapped up the shares in afterhours trading. You recently raised your target on google to 740, and after hours, it was really approaching that number. Whats your view on the stock, buy more or just sit on what youve got . Ive got a neutral on the stock because there may be some longerterm issues that may play out over the next year or so, but it looks like the topline trends, i think, were particularly important this quarter. Google beat expectations there on their core business. So certainly no reason to think that my valuation of the stock should drop after the results they posted and the pretty good profits they saw as well. Susie all right. Any disclosures to make in terms of google . Do you own it or have any personal interest in it . I do not own any shares of google. Susie all right, james, thanks so much for coming on the program. Really appreciate it. James dix of webbush securities. Tom still ahead, sales of existing houses cool off a little in december, but it was a redhot year for home sales. Whats next . Economist Julia Coronado joins us. Wall street kicked off the first trading day of president obamas second term with solid gains. Helping push the blue chips higher were better than expected results from a cautious but hopeful dupont. The dow rose 62 points, the nasdaq added eight, and the s p up 6. 5 points. Susie todays gains extend a strong stretch of stock buying, one that began before the new year. Despite concerns about corporate profits and debt negotiations in washington, investors are finally embracing equities again. Suzanne pratt reports. Reporter perhaps its optimism about a fresh start in washington, or maybe its that the economy is finally building a stronger foundation. Whatever the cause, the effect is that the dow, s p 500 and nasdaq are all are up more than 4 in the first three weeks of this year. Wall street veteran art cashin says with Interest Rates still so low, investors have a new taste for equities, particularly pension funds. Theyve got to up their risk profile, and therefore theyre going to buy stocks. And some of that money is coming in not wildly, not openarmed, but somewhat reluctantly. But this is the only road i can take. Reporter even with all the positive momentum on wall street, theres still a bit of nervousness about earnings season. Less than 20 of s p 500 names have reported, and so far the results are just okay. A close look at the numbers show 62 of companies have topped wall street expectations. Thats in line with the average since 1994 but below the 65 of the past year. Still, its the red flags Companies Like dupont are raising about this year that are getting noticed. Today, the largest u. S. Chemical firm tempered expectations about its business due to the slow Global Economy. Friday, g. E. Said the outlook for developed markets remains uncertain even though the conglomerate got a nice earnings boost thanks to its emerging markets business. Still, some market pros says most u. S. Multinationals are fit enough to stay in the money. You know, our companies here in the u. S are pretty lean and mean. Theyve learned how to make money in a slowgrowth environment. I dont think thats going to change, but probably Earnings Growth this year will probably be about 5 or even a little bit less than that. So, below the longterm average, certainly nothing to write home about. Reporter nothing to write home about, maybe, but enough to keep the s p 500 in positive territory. I think, at the end of the year, the market is going to be higher than where it is now. Our target for yearend 2013 is 1525 to 1575. So, you throw in a couple of percents for dividends, and, you know, that would be about a 10 year. So, were expecting another good year. Reporter before we worry about how stocks are going to do in the next 11 months, weve first got to get through tomorrow. Thats when tech heavyweight apple reports its Quarterly Results. Those come out after the bell. Suzanne pratt, n. B. R. , new york. Susie the white house says president obama wont stand in the way of the shortterm increase in the debt ceiling thats been proposed by House Republicans. The move to extend the nations Borrowing Limit for three months is set to come to a vote tomorrow. And that news has reassured markets that the risk is fading that the u. S. Will default on its debt for the first time in its history. Darren gersh reports. Reporter House Speaker john boehner said republicans were willing to suspend the debt ceiling for three months. Sending democrats to act. It has been nearly four years since the senate has done a budget. Most americans believe you dont do your job, you shouldnt get paid. Thats the basis. No budget; no pay. It is time for the senate to act. Reporter the white house called the move by House Republicans significant, though the Administration Still argues a shortterm extension of Borrowing Authority does not go far enough. What we support is a long term raising of the debt ceiling so that we dont have any doubt or uncertainty for businesses or the Global Economy about the simple proposition that the United States always pays its bills. Reporter at a house hearing on the debt ceiling debate, simon johnson, a former chief economist for the i. M. F. Warned the continuing controversy could roil Global Markets and hurt the u. S. At home. If you dont raise the debt ceiling now, or if you postpone this confrontation, if you say every 60, 90, or 100 days, were going to again have the same kind of conversation about the debt ceiling, you will continue to have this sort of spike in policy uncertainty. You will continue to undermine the private sector. You will continue to delay investment and to reduce employment relative to what it would be otherwise. Reporter the debt ceiling extension would allow the treasury to pay the nations bills through at least may 19. Darren gersh, n. B. R. , washington tom the u. S. Housing market had a quiet end to its best year since 2007. Sales of existing homes fell unexpectedly in december by 1 down to a 4. 94 million annual rate. Analysts note the drop in sales is not entirely bad news because there were fewer homes on the market. Inventories are at their lowest level in seven and a half years. Sales were up in the northeast and western u. S. While they fell in the midwest and south. For the entire year, existing home sales saw their best year since 2007. Tom Julia Coronado is the chief economist of north america, and she joins us from new york. Julia, how much more do you think housing can continue to improve without real significant increases in job gains . Well, i think that what were expecting is more pretty decent but moderate improvement in housing, and that will come with some job gains. But this is a housing recovery that is going to look a little bit different from the ones in the past. People are more cautious in their view of housing. Nobody is rushing in expecting some massive price appreciation. And there is still a lot of extra supply from the past that is going to come to the market as conditions improve. So its going to be a good story, i think, for 2013, but i think we should caution against looking at past housing booms and expecting that kind of a dynamic to take hold. Tom so what are the conditions do you see that are going to help sustain the housing growth that weve seen over the past year . Well, i think that we finally did see prices reach a point that they are in line with peoples budgets and fundamentals. Low rates are certainly helping. Rising rents are certainly helping. There still is a preference for rentals among young households, but the more rents rise and home prices fell, the more that calculus shifted in favor of housing. So i think that means weve reached truly sustainable levels in terms of home values, which means we can continue to see improvement from here. But, again, i think it is going to be slower very slow appreciation. Tom right. Going forward. Tom lets talk about the cost of cash when trying to buy a house when youre borrowing money because Mortgage Rates have continued to drop for several years. This is the year you saw Mortgage Rates drop at least enough that buyers finally stepped back in. 3. 35 at the end of last year. Is this cheap money going to continue even if the Federal Reserve begins to take back some of the bondbuying schemes that it has undertaken over the past year . Well, i think this is one reason the fed probably wont scale back their policies any time soon. These green shoots in the Housing Market are certainly something they have cited lately at evidence that their policies are starting to bear fruit, and they can and will make sure that rates stay low for a while. So i think that this is one reason that theyll keep that foot on the gas pedal through 2013 and maybe into 2014, to make sure that that really selfsustaining dynamic takes hold. Tom one of the big metrics that the Federal Reserve has is that unemployment rate. Taking a look at the Housing Impact on the economy for those jobs involved in Home Construction and residential construction, those jobs have been choppy over the past two years. 565,000 in the last month. That certainly is an improvement, but it remains half of what it was during the housing boom. Are those jobs going to come back . Right. Again, i think gradually, yes, but not to the same degree that they did before. Were not going to see the kind of frat and leveragedriven boom that we saw before. This is going to be an improvement that is based on costumers budgets, and that means that gradual improvement and a gradual pickup in hiring will ensue, rather than that sort of turbocharged boom in both building home prices and jobs that we saw in the mid2000s, and we dont want that kind of a boom, either. Weve seen that that is not sustainable, so gradual improvement, i think, is a good story. Tom gradual and sustainable improvement at this point for homeowners and new home buyers. And sustainable. Tom two key words when it comes to the Housing Market in 2013. Julia coronado along with us. Susie Credit Rating firm egan jones and its president , sean eagan, were banned today from rating certain bonds for the next year and a half. The securities and Exchange Commission says the firm and its founder, sean eagan, agreed to the 18month ban. The deal settles allegations the firm misrepresented its operations and violated conflict of interest provisions. Tom, egan jones is one of nine Credit Ratings firms registered with the s. E. C. , and it specializes on assigning ratings for corporate debt issues. Tom it really focuses on the firms ability to rate government securities and government asset back securities. We spoke with sean egan when the s. E. C. First levied these charges last april. The agency, sean, isnt calling into question your ratings. Instead, its talking about your application itself. What about the information on that application . That is the issue, and, according to the s. E. C. , we think its a paperwork issue that we. I was responsible for filling out that form. I filled it out in accordance with our lawyers guidance. They said, fill it out as honestly and accurately as possible, and i did. If i had to fill it out again today, i would do exactly the same thing. Susie it will be interesting if he really thinks that today in january. Unfortunately, egan was not available for comment tonight. Tom we have an invitation to him, however, on this first trading day on this shortened trading day. Stocks began the shortened trading week by adding to recent gains. The s p 500 didnt manage to pull itself into positive territory until the early afternoon as traders and investors digested the morning earnings. The afternoon rally pushed the index up 0. 4 to a new fiveyear high. Trading volume was 697 million shares on the big board. 1. 8 billion on the nasdaq. The materials, financial and Energy Sectors topped the gainers, each increasing 0. 9 . We are in the first of the three heaviest weeks of corporate quarterly earnings, and the focus was on chemical giant dupont today. The Company Earned 11 Cents Per Share, less than a third what they were a year ago but still four cents better than estimates. Dupont said it is seeing early improvement in its titanium dioxide business. That product is used as pigment in paint and other products. Its seen as an indication of overall industrial strength. On that note of optimism, shares were up 1. 8 . This is the stocks highest price since issuing an earnings warning back in october. Gold and copper miner Freeport Mcmoran led the gains in the materials sector, rising 4. 6 . It is the worlds biggest public traded copper miner with a big presence in indonesia. Despite a drop in production there, Fourth Quarter earnings were up stronger than expectations. Freeport called it an abnormal year at its indonesian mines. It expects production there to pick up this year. Earnings also were in play in the financial sector. Insurance company travelers paid out 669 million in claims from superstorm sandy, but that didnt hurt profits as much as analysts feared. Travelers earned 72 Cents Per Share last quarter, only about half what it earned a year earlier but more than five times estimates. Shares responded nicely to the surprise, rallying 2. 1 , pushing shares to a new high. Two items to focus on with the two big phone companies. First, a. T. T. Is expanding its wireless business. The company is buying the retail operations, subscribers, and, most importantly, the wireless licenses of atlantic tele network. The price was 780 million. A. T. T. Shares gained 0. 5 while Atlantic Telenetwork jumped 12. 3 . The wireless carriers have been looking for spectrum to expand their services. Verizon, meantime, reported Quarterly Results a nickel less than expected. Like other carriers, while it sold a Record Number of smart phones over the holidays, many of them came with heavy subsidies hurting short term profits. The stock gained 0. 9 . It hit a twomonth low last week. Tomorrow night, we will hear from apple about its holiday quarter. This quarter, the anticipation has been building for research in motion and the introduction of its newest blackberry device. Shares continue to rally, up 13 . The c. E. O. , thorsten heins, told a german newspaper the firm continues thinking about strategies like licensing its Blackberry Software or selling its hardware business. Shares of rimm have more than doubled since july. On our web site, www. Nbr. Com, theres more analysis of the stock chart. You will find it under the blogs tab. Just look for michael kahn. Three of the five most actively traded exchangetraded products were up. The Japan Index Fund saw the heaviest selling, down 1 . And thats tonights market focus. Susie a big win for the keystone x. L. Pipeline and transcanadas plan to connect canadas rich oil sands to refineries in southern texas. Nebraskas governor today gave the thumbs up for that pipelines new route through his state. Its one of the last hurdles the pipeline needed to clear before receiving final approval by the federal government. Late today, the u. S. State Department Said its review of the pipeline project has been delayed and wont be ready until after march. Tom updates tonight in three high profile investment fraud cases. First up, rajat gupta. He is the former Fourth Quarter<\/a>, but the declines have gotten better in each of the past threequarters. Down 4 if you exclude currency in the third quarter, and down 12 if you look two quarters ago. That should help them with their momentum in 2013. Susie you mentioned mobile, and is there anything more about googles mobile strategy, and have they figured out a way to really ca capitalize on google mobile searches . Mobile is helping the volume of searches theyre getting. Their average clicks were up over 20 , once again, in the Fourth Quarter<\/a>. I think theyre continuing to roll out products. And they mentioned the products theyre rolling out, or that are being rolled out in the android system, targeting the tablet, and the tablet is where theyre looking for their partners, and for their motorola to focus and get some more growth. Susie i understand that facebook came up on the call, particularly facebooks recent rollout of a graph search. What impact, if any, will this have on google . Yeah, i mean, larry page, the c. E. O. , commented a little bit on all of the investments that google has made over the years on search as their core product, and mentioned, example, all of the technology that has gone into maps, which is a very popular product. I think that is, to some extent, to indicate the most, which google had in terms of search. The fact that people used search to look for services and places, and then avertisers could reach them there. At the moment, thats not really what facebooks graph search is about. I would say in the near term, there is probably not going to be much advertising impact on googles search product from facebook. Susie as you mentioned a moment ago, investors really snapped up the shares in afterhours trading. You recently raised your target on google to 740, and after hours, it was really approaching that number. Whats your view on the stock, buy more or just sit on what youve got . Ive got a neutral on the stock because there may be some longerterm issues that may play out over the next year or so, but it looks like the topline trends, i think, were particularly important this quarter. Google beat expectations there on their core business. So certainly no reason to think that my valuation of the stock should drop after the results they posted and the pretty good profits they saw as well. Susie all right. Any disclosures to make in terms of google . Do you own it or have any personal interest in it . I do not own any shares of google. Susie all right, james, thanks so much for coming on the program. Really appreciate it. James dix of webbush securities. Tom still ahead, sales of existing houses cool off a little in december, but it was a redhot year for home sales. Whats next . Economist Julia Coronado<\/a> joins us. Wall street kicked off the first trading day of president obamas second term with solid gains. Helping push the blue chips higher were better than expected results from a cautious but hopeful dupont. The dow rose 62 points, the nasdaq added eight, and the s p up 6. 5 points. Susie todays gains extend a strong stretch of stock buying, one that began before the new year. Despite concerns about corporate profits and debt negotiations in washington, investors are finally embracing equities again. Suzanne pratt reports. Reporter perhaps its optimism about a fresh start in washington, or maybe its that the economy is finally building a stronger foundation. Whatever the cause, the effect is that the dow, s p 500 and nasdaq are all are up more than 4 in the first three weeks of this year. Wall street veteran art cashin says with Interest Rates<\/a> still so low, investors have a new taste for equities, particularly pension funds. Theyve got to up their risk profile, and therefore theyre going to buy stocks. And some of that money is coming in not wildly, not openarmed, but somewhat reluctantly. But this is the only road i can take. Reporter even with all the positive momentum on wall street, theres still a bit of nervousness about earnings season. Less than 20 of s p 500 names have reported, and so far the results are just okay. A close look at the numbers show 62 of companies have topped wall street expectations. Thats in line with the average since 1994 but below the 65 of the past year. Still, its the red flags Companies Like<\/a> dupont are raising about this year that are getting noticed. Today, the largest u. S. Chemical firm tempered expectations about its business due to the slow Global Economy<\/a>. Friday, g. E. Said the outlook for developed markets remains uncertain even though the conglomerate got a nice earnings boost thanks to its emerging markets business. Still, some market pros says most u. S. Multinationals are fit enough to stay in the money. You know, our companies here in the u. S are pretty lean and mean. Theyve learned how to make money in a slowgrowth environment. I dont think thats going to change, but probably Earnings Growth<\/a> this year will probably be about 5 or even a little bit less than that. So, below the longterm average, certainly nothing to write home about. Reporter nothing to write home about, maybe, but enough to keep the s p 500 in positive territory. I think, at the end of the year, the market is going to be higher than where it is now. Our target for yearend 2013 is 1525 to 1575. So, you throw in a couple of percents for dividends, and, you know, that would be about a 10 year. So, were expecting another good year. Reporter before we worry about how stocks are going to do in the next 11 months, weve first got to get through tomorrow. Thats when tech heavyweight apple reports its Quarterly Results<\/a>. Those come out after the bell. Suzanne pratt, n. B. R. , new york. Susie the white house says president obama wont stand in the way of the shortterm increase in the debt ceiling thats been proposed by House Republicans<\/a>. The move to extend the nations Borrowing Limit<\/a> for three months is set to come to a vote tomorrow. And that news has reassured markets that the risk is fading that the u. S. Will default on its debt for the first time in its history. Darren gersh reports. Reporter House Speaker<\/a> john boehner said republicans were willing to suspend the debt ceiling for three months. Sending democrats to act. It has been nearly four years since the senate has done a budget. Most americans believe you dont do your job, you shouldnt get paid. Thats the basis. No budget; no pay. It is time for the senate to act. Reporter the white house called the move by House Republicans<\/a> significant, though the Administration Still<\/a> argues a shortterm extension of Borrowing Authority<\/a> does not go far enough. What we support is a long term raising of the debt ceiling so that we dont have any doubt or uncertainty for businesses or the Global Economy<\/a> about the simple proposition that the United States<\/a> always pays its bills. Reporter at a house hearing on the debt ceiling debate, simon johnson, a former chief economist for the i. M. F. Warned the continuing controversy could roil Global Markets<\/a> and hurt the u. S. At home. If you dont raise the debt ceiling now, or if you postpone this confrontation, if you say every 60, 90, or 100 days, were going to again have the same kind of conversation about the debt ceiling, you will continue to have this sort of spike in policy uncertainty. You will continue to undermine the private sector. You will continue to delay investment and to reduce employment relative to what it would be otherwise. Reporter the debt ceiling extension would allow the treasury to pay the nations bills through at least may 19. Darren gersh, n. B. R. , washington tom the u. S. Housing market had a quiet end to its best year since 2007. Sales of existing homes fell unexpectedly in december by 1 down to a 4. 94 million annual rate. Analysts note the drop in sales is not entirely bad news because there were fewer homes on the market. Inventories are at their lowest level in seven and a half years. Sales were up in the northeast and western u. S. While they fell in the midwest and south. For the entire year, existing home sales saw their best year since 2007. Tom Julia Coronado<\/a> is the chief economist of north america, and she joins us from new york. Julia, how much more do you think housing can continue to improve without real significant increases in job gains . Well, i think that what were expecting is more pretty decent but moderate improvement in housing, and that will come with some job gains. But this is a housing recovery that is going to look a little bit different from the ones in the past. People are more cautious in their view of housing. Nobody is rushing in expecting some massive price appreciation. And there is still a lot of extra supply from the past that is going to come to the market as conditions improve. So its going to be a good story, i think, for 2013, but i think we should caution against looking at past housing booms and expecting that kind of a dynamic to take hold. Tom so what are the conditions do you see that are going to help sustain the housing growth that weve seen over the past year . Well, i think that we finally did see prices reach a point that they are in line with peoples budgets and fundamentals. Low rates are certainly helping. Rising rents are certainly helping. There still is a preference for rentals among young households, but the more rents rise and home prices fell, the more that calculus shifted in favor of housing. So i think that means weve reached truly sustainable levels in terms of home values, which means we can continue to see improvement from here. But, again, i think it is going to be slower very slow appreciation. Tom right. Going forward. Tom lets talk about the cost of cash when trying to buy a house when youre borrowing money because Mortgage Rates<\/a> have continued to drop for several years. This is the year you saw Mortgage Rates<\/a> drop at least enough that buyers finally stepped back in. 3. 35 at the end of last year. Is this cheap money going to continue even if the Federal Reserve<\/a> begins to take back some of the bondbuying schemes that it has undertaken over the past year . Well, i think this is one reason the fed probably wont scale back their policies any time soon. These green shoots in the Housing Market<\/a> are certainly something they have cited lately at evidence that their policies are starting to bear fruit, and they can and will make sure that rates stay low for a while. So i think that this is one reason that theyll keep that foot on the gas pedal through 2013 and maybe into 2014, to make sure that that really selfsustaining dynamic takes hold. Tom one of the big metrics that the Federal Reserve<\/a> has is that unemployment rate. Taking a look at the Housing Impact<\/a> on the economy for those jobs involved in Home Construction<\/a> and residential construction, those jobs have been choppy over the past two years. 565,000 in the last month. That certainly is an improvement, but it remains half of what it was during the housing boom. Are those jobs going to come back . Right. Again, i think gradually, yes, but not to the same degree that they did before. Were not going to see the kind of frat and leveragedriven boom that we saw before. This is going to be an improvement that is based on costumers budgets, and that means that gradual improvement and a gradual pickup in hiring will ensue, rather than that sort of turbocharged boom in both building home prices and jobs that we saw in the mid2000s, and we dont want that kind of a boom, either. Weve seen that that is not sustainable, so gradual improvement, i think, is a good story. Tom gradual and sustainable improvement at this point for homeowners and new home buyers. And sustainable. Tom two key words when it comes to the Housing Market<\/a> in 2013. Julia coronado along with us. Susie Credit Rating<\/a> firm egan jones and its president , sean eagan, were banned today from rating certain bonds for the next year and a half. The securities and Exchange Commission<\/a> says the firm and its founder, sean eagan, agreed to the 18month ban. The deal settles allegations the firm misrepresented its operations and violated conflict of interest provisions. Tom, egan jones is one of nine Credit Rating<\/a>s firms registered with the s. E. C. , and it specializes on assigning ratings for corporate debt issues. Tom it really focuses on the firms ability to rate government securities and government asset back securities. We spoke with sean egan when the s. E. C. First levied these charges last april. The agency, sean, isnt calling into question your ratings. Instead, its talking about your application itself. What about the information on that application . That is the issue, and, according to the s. E. C. , we think its a paperwork issue that we. I was responsible for filling out that form. I filled it out in accordance with our lawyers guidance. They said, fill it out as honestly and accurately as possible, and i did. If i had to fill it out again today, i would do exactly the same thing. Susie it will be interesting if he really thinks that today in january. Unfortunately, egan was not available for comment tonight. Tom we have an invitation to him, however, on this first trading day on this shortened trading day. Stocks began the shortened trading week by adding to recent gains. The s p 500 didnt manage to pull itself into positive territory until the early afternoon as traders and investors digested the morning earnings. The afternoon rally pushed the index up 0. 4 to a new fiveyear high. Trading volume was 697 million shares on the big board. 1. 8 billion on the nasdaq. The materials, financial and Energy Sectors<\/a> topped the gainers, each increasing 0. 9 . We are in the first of the three heaviest weeks of corporate quarterly earnings, and the focus was on chemical giant dupont today. The Company Earned<\/a> 11 Cents Per Share<\/a>, less than a third what they were a year ago but still four cents better than estimates. Dupont said it is seeing early improvement in its titanium dioxide business. That product is used as pigment in paint and other products. Its seen as an indication of overall industrial strength. On that note of optimism, shares were up 1. 8 . This is the stocks highest price since issuing an earnings warning back in october. Gold and copper miner Freeport Mcmoran<\/a> led the gains in the materials sector, rising 4. 6 . It is the worlds biggest public traded copper miner with a big presence in indonesia. Despite a drop in production there, Fourth Quarter<\/a> earnings were up stronger than expectations. Freeport called it an abnormal year at its indonesian mines. It expects production there to pick up this year. Earnings also were in play in the financial sector. Insurance company travelers paid out 669 million in claims from superstorm sandy, but that didnt hurt profits as much as analysts feared. Travelers earned 72 Cents Per Share<\/a> last quarter, only about half what it earned a year earlier but more than five times estimates. Shares responded nicely to the surprise, rallying 2. 1 , pushing shares to a new high. Two items to focus on with the two big phone companies. First, a. T. T. Is expanding its wireless business. The company is buying the retail operations, subscribers, and, most importantly, the wireless licenses of atlantic tele network. The price was 780 million. A. T. T. Shares gained 0. 5 while Atlantic Telenetwork<\/a> jumped 12. 3 . The wireless carriers have been looking for spectrum to expand their services. Verizon, meantime, reported Quarterly Results<\/a> a nickel less than expected. Like other carriers, while it sold a Record Number<\/a> of smart phones over the holidays, many of them came with heavy subsidies hurting short term profits. The stock gained 0. 9 . It hit a twomonth low last week. Tomorrow night, we will hear from apple about its holiday quarter. This quarter, the anticipation has been building for research in motion and the introduction of its newest blackberry device. Shares continue to rally, up 13 . The c. E. O. , thorsten heins, told a german newspaper the firm continues thinking about strategies like licensing its Blackberry Software<\/a> or selling its hardware business. Shares of rimm have more than doubled since july. On our web site, www. Nbr. Com, theres more analysis of the stock chart. You will find it under the blogs tab. Just look for michael kahn. Three of the five most actively traded exchangetraded products were up. The Japan Index Fund<\/a> saw the heaviest selling, down 1 . And thats tonights market focus. Susie a big win for the keystone x. L. Pipeline and transcanadas plan to connect canadas rich oil sands to refineries in southern texas. Nebraskas governor today gave the thumbs up for that pipelines new route through his state. Its one of the last hurdles the pipeline needed to clear before receiving final approval by the federal government. Late today, the u. S. State Department Said<\/a> its review of the pipeline project has been delayed and wont be ready until after march. Tom updates tonight in three high profile investment fraud cases. First up, rajat gupta. He is the former Goldman Sachs<\/a> board member convicted on Insider Trading<\/a> charges. Today, he asked a federal Appeals Court<\/a> to reverse that conviction because he believes the judge made a series of incorrect rulings in his case. In the stanford financial ponzi scheme, Allen Stanfords<\/a> top lieutenant was sentenced to five years in jail today. James davis was the chief Financial Officer<\/a> at stanford financial, the Company Behind<\/a> a 7 billion fraud. And finally, prosecutors today put a final tally on losses tied to the fraud at peregrine financial and its futures brokerage, p. F. G. Best. The amount 215 million. Thats how much they say was embezzled from customer accounts. Peregrines founder and former boss, russell wassendorf, sr. , has pleaded guilty to the crime, but he claims the losses were far smaller. Susie tomorrow on n. B. R. , apple. All eyes are on the tech giant as it rolls out its latest earnings after the bell. Well see if its core iphone business remains strong. Also tomorrow, the best thing you can do now to save on taxes and boost your retirement security. Details in our money file segment. The admission by Lance Armstrong<\/a> that he took performance enhancing drugs came only after Companies Like<\/a> nike, radio shack and others paid him millions of dollars to endorse their products but then dropped him. Heres rick horrow with tonights beyond the scoreboard. Reporter oftentimes, the best athletes also are the best sales people. With so much money available from endorsements, the incentive to lie and cheat is multiplied as their stardom rises. In the last few years, several highprofile athletes have been brought down by scandal golfer tiger woods with his extramarital affairs; olympic swimmer Michael Phelps<\/a> with smoking marijuana; and, of course, Lance Armstrong<\/a> with doping. In each case, the damage done to their image had the collateral effect of costing them multi millions of dollars in endorsement money. In a sense, its warranted to blame athlete lying and cheating on big paychecks from sponsors. As long as playing contracts and prize money will still be available after a scandal, from the athletes point of view, losing endorsement deals is the worst thing that can happen. Lying and cheating would still exist even if there were a way to regulate the amount of sponsor money. But theres no question that the threat of losing the big dollar sponsorship deals is a major reason for covering up the cheating. Im rick horrow. Tom finally tonight holy sticker shock, batman. A working batmobile from the 1960s Television Program<\/a> went up for auction over the weekend. The 19footlong, black, bubble topped car driven by tvs batman, adam west, sold for 4. 6 million in arizona this weekend. The batmobile was based on a oneofakind concept car by lincoln called the futura, which debuted back in 1955. Tom and, susie, you better gas that thing up quite often. The miles per gallon, somewhere between seven and 10mile per gallon to catch the criminals. Susie that is not what it was all about. It was just a cool gadget. Thats nightly Business Report<\/a> for tuesday, january 22. Have a great evening, everyone. And you, too, tom. Tom good night, susie. Well see you online at www. Nbr. Com and back here tomorrow night. Captioning sponsored by wpbt captioned by Media Access Group<\/a> at wgbh access. Wgbh. Org join us anytime at nbr. Com. There, youll find full episodes of the program, complete show transcripts and all the market stats. Also follows us on our Facebook Page<\/a> at bizrpt. And on twitter bizrpt. Tonight on spark buckle up because youre in for a behindthescenes glimpse of life in the fast lane with globetrotting members of the worlds artistic elite. Hello, everybody. In our first story, local audiences know alonzo king as the Creative Force<\/a> behind san franciscoslines contemporary palley. But hes also in demand from coast to coast. This month, ive worked with North Carolina<\/a> dance theater. The allin ailey company, the cedar lake ensemble, university of michigan, tisch here in new york. Several other places i cant remember. Then in our secretary story, dana dancer and choreographer fleming flindt was once the toast of europe. Now hes found on home in silicon valley. We have a treasure interest filled with great works that are generally unavailable to anyone else in the world and hes chosen to set these works on our company. 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