And the next hot stock, biotechs are risky but can be very rewarding. Now theres a way to find out which companies are working on potentially groundbreak new treatments. We have all that and more tonight on nightly Business Report for tuesday, january 14th. Good evening, everyone. Tylers on assignment tonight. Well, what a difference a day makes. Stocks surge higher today, rebounding from mondays selloff. Investors were encouraged on news of stronger than expected retail sales in december, and that lifted shares of some of the nations biggest chain stores. Also powering the rally better than expected earnings from two of the nations biggest banks, jpmorgan and wells fargo. That gave a boost to financial stocks. Well have more in just a moment. By the closing bell the dow added 115 points, the nasdaq jumped almost 70, regaining all of mondays losses and more. And the s p was up about 20 points. Thats its biggest gain for the year so far. More now on Jp Morgan Chase and wells fargo. Both banks posted Quarterly Earnings that beat analysts forecasts. Jp morgans net income would have been higher if the bank didnt have to pay billions in legal fees and settlements for past wrong doings. Profits at wells fargo were a record 5. 4 billion on the modest beat of a dor per share. Even though mortgage lending was cut in half cue due to rising interest rates, Interest Income from a boost in customer deposits rose sharply. The banks chief Financial Officer is optimistic about the future. What were seeing is good growth reflecting an improving economy and our ability to go ahead and take share from many of our competitors. Despite the upbeat comments, shares of wells fargo and jp morgan were both relatively flat today. Now, tomorrow we hear from bank of america and then later this week citi group, Goldman Sachs and morgan stanley. Here to give us a more analysis on those Bank Earnings and a look ahead to next week is fred cannon, director of Bank Research at the firm keefe gill let and woods. Fred lets start with jp morgan. Its been going through a tough time. It had all those legal problems, settlements, writeoffs. As you look ahead to 2014, are things going to be better . And what does it mean for the bank and the stock . Look, i think on jp morgan things are going to get a little bit better. But its still a tough road for them ahead. I think we have to look at the results today and say yes, they beat but remember after the Third Quarter earnings estimates have come down for the company. So i think it was a solid quarter. I think overall, though, revenue environment for these big banks is still pretty challenging. But you are recommending jp morgan. It is one of the stocks on your buy list. If someone puts in fresh money at 57 a share how will they do this year . Just fine. We dont think its necessarily the biggest grower in terms of stock price across our universe but it should be solid. Whats happening is that the dark cloud thats been over jp morgan for about a year and a half now is beginning to break up. Its not going to be clear skies, but it will be less cloudy. What about wells fargo . Clear skies for that bank . It reported a big drop in mortgage activity. Whats the outlook there . The outlook for wells fargo is to grow earnings 10 a year no matter. What i think theyve proven they can do it again. Its a very diversified company, very strong in the u. S. While it has the same issues in many ways as the big banks like jp morgan, it has less of them and doesnt have those big derivative exposures that face increasing regulatory hurdles this year. Wells fargo should be just fine. Give as you preview of what to expect from other banks. Bank of america reports tomorrow, citi on thursday. Whats going to be the tone from their earnings . Pretty much the same of what we heard today . I think theyve basically gotten the estimates. The companies have kind of gotten analysts down to where they want them. After the Third Quarter, earnings estimates came down two reasons. Number one is what you mentioned, suze, organize. Under a lot of pressure as rates rise fuel refinancing. Secondly, the Capital Market activity. Fourth quarter is never a big time for trading. A lot of guys go on vacation especially with that wednesday christmas holiday. But i think expectations are pretty much in line with what they should deliver. Tell us about citi. It is on your buy list. Why do you like it at 54 a share . We like it because it is building book value. And its trading right at book value. Its excellent restructuring story led by this management team. Theyre reorganizing the company to reinvest where to make money, make it simpler, make it smaller. We think going to get good news from the government on capital return this year that should be a big benefit to stock. You also like some smaller regional banks. It would be nice to go over those real quickly. You say they have a lot going for them. We have a list here. Why do you like like signature and Silicon Valley bank and pac west . Whats the upbeat on this. We encourage investors to not look at those big banks. We think the banks under 50 billion in assets not household names but still very strong banks as being where you can really get some revenue growth. Remember those topline guys, theyre making money but theyre not really growing revenues. Signature and Silicon Valley bank out in california, signature right hour in new york, theyre growing loans 20 plus a year. You dont hear anything like that at the big banks. So thats unique. Some other ones are prosperity in texas and pac west out in california. Theyre able to do mergers and acquisitions that are very accretive to earnings. Fred, thank you so much. Always a pleasure having you on the program. Great to be on, sue suzie. Time warner is rejected rival Charter Communications 61 billion bid. But charter isnt giving up. Its going hostile. Taking the offer directly to shareholders. Charterss ceo says combining the companies would create value through joint sales and marketing as well as cost savings and technology consolidation. Were not there at the moment. Were making this offer to shareholders and asking shareholders to get involved. All of our options are open. But we think if shareholders look at the offer that we have and Ask Management to engage, the shareholders will recognize that the offer is a good offer and that it actually creates more value than the alternative. Time warner cable did say it would consider an offer of 160 a share by charter. Thats far more than the current bid of 132. 50. A court ruling today could impact those cable tv and internet operators over something called net neutrality. A panel of judges said that not all internet traffic should be treated equally. Julian boorsten explains. Reporter the federal Appeals Court ruled the fcc may not block or limit certain kinds of internet traffic or tell Internet Service providers how to prioritize the data they send over their pipes. The court siding with verizon which argued that the rules mandating net knew neutrality violated its constitutional rights. This is a win not just for verizon but all Internet Service providers, including at t, Time Warner Cable and comcast. The losers, Companies Like netflix, youtube and espn which stream a lot of content online. They may have to pay more to get their content to subscribers. And customers may have to pay more to internet providers or isps for premium services, like video streaming or skype. This is bad for consumers because it allows the Company Connected to the internet to pick winners and losers online. They get to decide which once you get to visit and which ones work and you dont get to visit and dont work very well. Reporter the issue is complicated and the battle is far from over. The fcc fears consumers will have higher broadband bills and startups will be at a disadvantage. Representing youtube, netflix and others, the Internet Association issued a statement saying it quote supports enforceable rules that ensure an open internet, free from government control or discriminatory anticompetitive actions by gatekeepers, saying it will work with the fcc and providers. As part of its deal to buy nbc universal, a bye by the open internet rules until 2018. Verizon says todays decision wont impact customers ability to access and use the internet, saying its committed to providing competitive choices. Well see what customers say when those choices include a pricier option. For nightly Business Report im julia borsten in los angeles. Comcast as julia just mentioned is the Parent Company of cnbc which produces nightly Business Report. Some of the same internet providers have joined a growing list of Tech Companies both big and small aiming to take over your living room. Now looking to control your entire home. John fort has more reporter first there was the personal computer, then the ipod, smartphone and tablet. Now are we entering the era of the smart home . Google ceo larry page seems to think so. His company Just Announced plans to buy net labs which makes futuristic thermostats and smoke detectors for 3. 2 billion in cash. Nets ceo tony fidel comes to google as part of the package. Hes best known as an apple competitive who oversaw development of the ipod and iphone. Were trying to reinvent unloved products, products that you use every day or you may ignore every day and try to bring them into a modern era. Reporter nest isnt alone trying to crack the code for the connected home. At the Consumer Electronics show in las vegas last week, other startups including smart things showed off do it yourself technology. Locking doors, controlling lights, setting your coffeemaker to brew you a cup when you wake up. But are all these Smart Sensors putting privacy at risk . In terms of your home or office where you put these sensors were going to flood our world with sensors. So are you personally in your house . Is somebody else . Is your wife . Is your maybe somebody that your wife would rather you didnt have in the house there . Could be where are your children . Theres all kinds of privacy implications for this. Reporter the question is whether nest or any other company is truly close to figuring out how to make Home Appliances not only smarter but easier to use. Samsung, apple and others are also interested in moving beyond smartphones. So chances are over the next few months there will be quite a few tech heavyweights knocking on your door. For nightly Business Report im john fort. Two u. S. Senators want some answers from target about its massive data breach during the holidays. Senators Claire Mccaskill of missouri and John Rockefeller of West Virginia are asking the retailer to provide details from its own internal investigation about the hacking of millions of debit and Credit Customer accounts. As we told you last night, General Motors was close to announcing a dividend. Well, now its official. Starting in march, the automaker will pay a Quarterly Dividend of 30 cents a share to stockholders of record as of march 18th, 2014. And still ahead on the program, 14 states will hike the minimum wage this year, putting more cash in the pockets of some workers. Who are the winners and the losers . Thats coming up next. U. S. Lawmakers are a step closer to approving a more than 1 trillion federal budget, a bipartisan deal would keep the lights on in washington and finance federal agencies everywhere through the end of september. John harwood joins us now from washington with more on all of this. You know, john, one democratic senator said that this deal shows American People that we can compromise. So in the spirit of this compromise, what did the democrats get out of this in terms of sweeping changes and what did the republicans like . Reporter well, nobody got sweeping changes in this legislation. What we got is a return to normal governance. The benefits that democrats can point to the most are the relief of some of those sequester cuts that they found so harmful to some of their domestic pry other tis as well as some defense priorities. What republicans can claim is while giving some relief, the spending revenues are lower than what democrats and president obama wanted. It is a middle result that stops the drip toward deeper and deeper cuts within the budget at a time when the economy is recovering. But it hardly returns to the spending, the free spending ways that many republicans have been concerned about. But theres still always something to complain about. What got left out in this deal . Reporter some republican idealogues are upset because policy dictates that were included in an earlier version of the negotiated deal, things that would impair the obama administrations about to pursue its obama care goals, to to pursue its environmental goals were stripped out as too controversial. What democrats are complaining about, they simply think there isnt enough funding for pry otherities they think are important. There isnt money for example for the president s universal preschool initiative, something he announced in his stateoftheunion address last week. The deal also did not include the extension of unemployment benefits, something theyre still arguing about on capitol hill. Always something to argue about. It does sound like they are going to approve deal. What are the next steps here . Reporter well, the next step is to get it through both the house and the senate. It sets the stage for the big decision, susie, on whether or not going to lift the debt ceiling without a crisis. Most signs indicate they are. Well believe it when we see it. Absolutely. John, thank you so much. John harwood reporting from washington. The minimum wage has gone up in more than a dozen states since the start of the year. The hope that workers at the lowest income levels would have more money to spend. But how might those wage increases Impact Companies . Sarah eisen reports. Reporter on january 1st, 13 states boosted the minimum wage. New jersey workers got the biggest raise, 14 . To 8. 25 an hour. In california, the minimum goes up to 9 an hour in july. And in los angeles the city council may propose a measure that would force hotels to pay workers at least 15 an hour. So where does that money go . One analyst says beer, energy drink and Tobacco Sales should see a bump. A company like lorilard which makes newport cigarettes stands to gain. Its not all good news because higher labor costs may force some companies to raise prices. We believe the minimum wage will go up. So theres no point fighting that. Reporter listen closely to Dunkin Donuts ceo. Youd expect a 1 increase in prices. But we are going to put it on differentiated products where were clearly different. Certainly breakfast sandwiches are one example. Reporter other ceos are focused on the positive. More money in consumers wallets. The more income, the more eating out. Obviously were sensitive to how our cooks and servers and employees are doing. Reporter how much will lower income consumers have to spend . Congress already cut back food stamps. Still debating longterm unemployment benefits. Now add higher prices to the mix and you can see why minimum wage is such a hot topic. We want to make sure that every american is able to benefit. Reporter the president continued his steady drum beat today, backed up by economists including seven nobel prize winners. Calling for congress to approve the fair minimum wage act which raises the minimum wage by 95 cents a year for the next three years to 10. 10 an hour by 2016. About 17 million workers would see salaries grow from about 15,000 a year to 21,000. We have to get to the right minimum wage in this country where people can live a decent life for the hard work they do. But its clear to me that todays numbers not working. Reporter the wall street pros and economists theres a fine line between adding the right amount of spending power to the economy on the one hand and forcing businesses to draw back any hiring plans they may have on the other. For nightly Business Report im sara eisen. Turning now to tonights market focus segment we begin with boeing on news it has another battery problem. Japan airlines grounded one of its 787 dream liners in tokyo after white smoke was spotted outside the plane and warning lights indicated a possible battery problem. Boeing said the problem was discovered during maintenance. The incident comes after boeing had six battery issues that led to previous fires. Shares fell a fraction to 140 a share. There are reports out today that microsoft is ditching its windows 8 operating system and releasing a brandnew windows 9. The 8 software was introduced a year ago and suffered from heavy criticism by consumers. Reportedly the new version will be announced in april. Shares rose more than 2 to 35. 78. Indell gtel got an update t neutral and the firm more than tripled its price target on the stock. The analyst said he was quote making a leap of faith on pcs in the year it 2014 and the companys ceo. That raised share prices. Tesla automaker delivered 6900 model s said dance in the fourth quarter, 20 more than estimates. The Company Expects global sales and Service Locations to double this year. Tesla stock rose nearly 16 to 161. 27. Shares of game stop took a major hit today after the company warned of a profit miss because of weak holiday sales. The video game