States at a record pace. Are these unproven Companies Adding more risk to your mutual funds . We have all of that and more tonight on nightly Business Report for this monday, april 21st. Good evening, everyone. We hope your holidays were good and good is the word for stocks today. The dow and nasdaq and s p each ending higher for the second week in the row. Its the first time weve seen that this year. The blue stock volume with the year lightest and stocks did trade in the narrowest range of the year as well. The dow when all is said and done, up 40 points and s p up 27. Halliburton helped to push Prices Higher and profit reports lately have boosted stocks so far this earning season. But its early. This week, about a third of the s p 500 companies will report their latest quarterlies and dominic chu takes a look at what investors will be looking for. Reporter 11 companies will report earnings this week as well as 150 companies in the s p 500. Its going to be the busiest week of earnings so far this season but some reports will be skr scrutinized more than others. First up is mcdonalds. They will report on tuesday before trading. Known as a barometer of spending across the globe. For that reason, investors look behind the earnings and sales numbers. They will be focused on things like growth and comparable sales in east region they operate in. In 2013, those sales open at least a year that grew by. 02 of a percent. On wednesday, keep a close eye on apple. Not because its the biggest publicly traded company in america as measured by market value. Investors will be checking out whether the market for smartphone products remains in tact. Its also a story about growth and innovation. Apple has long been seen as a leader of bringing hot new products to market. Can it keep up the new product momentum . And then there is gm in particular. It reports on thursday and investors will be looking for General Health in the global auto market. Car sales in america are showing signs of life but growth in key markets like china will be a huge focus. Investors will also be listening closely for any comments regarding the Ongoing Investigation into its ignition switch recall and what kind of an effect it may or may not have on future sales. Of course, every Earnings Report from every company is important in some way but these are three big ones to pay close attention to in the heavy week of earnings. For nightly Business Report, im dominic chu. Just after the closing bell, earnings from netflix, the Worlds Largest streaming video service, which added another 2. 25 million new subscribers in the past three months. The company made 53 million in profit last quarter taking in a better than expected 86 cents a share, topping estimates by 3 cents. Revenues were right in line with the forecast. That was enough to send shares initially higher after the report. Seema mody joins us more on netflix numbers. What is your takeaway . Susie, investors take a close eye on netflixs subscriber growth, they added 2. 25 million new donmestic streaming customes in the first quarter. All eyes are on the reach outside of the u. S. , the International Subscriber base expanded by more than analysts had been projecting and International Growth could potentially continue to be a driver going forward. Netflix, in fact, mentioned that its expanding into new european markets and the International Segment is on path to achieve profitability this year. Something else to keep note of, netflix plans to increase the u. S. Prices by a dollar or two for new members only. Existing members stay at current pricing. Its 7. 99 in the u. S. This will you a low them to acquire new content and deliver a better streaming experience. Of course the question tomorrow will be what analysts are saying about how this will impact future demand. Seema mody, thank you very much. All right. David garrity is going to join us to talk about Tech Companies when they report later this week. Hes a principal with gva research. David, welcome. Lets start with netflix. What did you think of the earning report and what do you think of the stock of these prices . Netflix is 25 off its high. The fact that its trading up after hours is bringing in line the numbers and showing that the correction in the stock for the time being is halted. One question that we have about the 2 increase for new customers is, is this a charge that is going to be passed through to cable providers as the issue of Net Neutrality becomes an issue in the u. S. David, we have a lot of tech earnings coming out this week and big names that everybody always looks at. We have apple and microsoft on wednesday and thursday of this week. You have a buy rating on both of these companies. What do you like about them and if an investor had money, new money to put to work, which one would you choose . Wed put new money to work in microsoft versus apple. In the case of microsoft, we have a new ceo in charge of the Cloud Computing business and the company can accelerate the growth. Investors dont know him as of yet and hes been leading the highest growth areas in the company and we think theres a lot of positive news to come from the first Conference Call that the new ceo is going to give us on thursday. From that standpoint, theres a potential that stocks get up to 48 looking out over the next 24 months. Apple on the other hand has been a significant invoe vnovator. The new iphone 6 will come out in september. That makes the stock a bit sluggish near term. Lets talk about facebook. In terms of their driving their revenues from rmobile mos likely continues. In december it was 60 and we think it gets to over 56 in march. Facebook is cavalier in how they are using their cash and stock to bid up businesses such as whats app and ocuvus vr, businesses that arent making money as of yet and dont even have revenues. David, tell us about amazon. Its reporting on thursday. The stock is down a little bit from its peak. What is your feeling about amazon and the stock . In terms of amazon, were looking at a quarter where the company is going to have earnings of 15 cents a share. Its going to be the Second Quarter in a row where the company has been profitable. Some of the concerns have been since weve seen weaker economies overseas outside the u. S. , is amazon going to be able to make their year over year Revenue Growth . If they dont get that, stock obviously is still trading at a fairly high multiple and could be vulnerable to a pull back and we could see a correction off the twoweek high. David, thank you. Appreciate it. General motors is flat today even after documents leased by government safety investigators show the automaker waited years to recall more than 300,000 saturns with steering problems. The correspondence shows that gm received thousands of complaints in the ion model. Ford is making recession plans. Ford will make the chief operating officer its next chief executive when 68yearold alan malowi retires later this year. Ford will make the announcement official as early as may 1. Fields has been seen as the successor. Meanwhile, allen malowi was at the beijing auto show as they invest heavily in the Fastest Growing car market. Eunice has more. Reporter chinas economy is gearing down. But you wouldnt know it. Car makers wowed the crowd all aimed at the countrys first time auto buyers. The Economic Development of china. Reporter ford has revved up its business here. The latest auto giant has marketed the compact focus to young chinese, turning it into a best seller in china. Now the Company Hopes to reinvent the lincoln image, no longer a car for your grandpa but a status symbol for aspiring chinese. Were investing in a lincoln and i think i would characterize it as all of the technology that ford brings to bear, plus the elegance and plus its affordable. Its affordable luxury. Thats what people want today. Reporter despite the austerity drive, drivers still like the larger cars. I think we have good timing in terms of the entry that were bringing into the market and away from the luxury segment, the suv is growing quickly. Reporter with such a crowded market, the u. S. Automaker is investing big. 12 billion over the next three years. It says so far recalls in the u. S. Are not hurting its solid image in sales in china. We havent seen any impact and i havent heard a lot of discussion around that in my couple days here so far but clearly what were doing in the u. S. Is were putting the customer in the middle of everything were doing. Were working very quickly to address and repair the vehicles involved. Reporter moving quickly is key for a company where consumers are not loyal to one brand and have too many choices. For nightly Business Report, im eunice in beijing. Still ahead, do you want to invest in startups . More and more investors are doing it. Leaving investors wondering if they are more riskier than they thought. Prices at the pump have shot up to a 13year high and are 13 cents more a gallon than a year ago. Gasoline rose 9 cents over the last two weeks reaching a nationwi nationwide average of 3. 69 for regular unleaded. With the nations demand for gas and oil rising, theres another setback for the long proposed Keystone Pipeline. There are more delays to bringing fuel from the oil fields of canada to refineries along the gulf of mexico. Reporter delayed again. A long awaited state Department Decision on whether to proceed with construction of the Keystone Pipeline is on hold again. More than 2. 5 million comments have been recorded online. The issue giving cause once again for pause as the Obama Administration extended the review of the Environmental Impact studies. Opponents of the studies are saying that the pipeline will increase carbon pollution, using some of the worlds dirtiest oil. Keystone is critical for the transport that is safer and the 1700 mile pipeline would result in countless jobs. Still, others are saying the decision to delay has more to do with politics than the pipeline itself. Especially if novembers midterm elections are a little more than five months away. I think the decision was politically motivated. The state department could go ahead and evaluate without Nebraska Supreme Court issuing a ruling and this is a Decision Making process that goes post in the november election. Reporter Mitch Mcconnell of kentucky calls keystone the single greatest shovel ready project in america but adds that the president simply is not interested. According to the state department, this pipeline will add over 40,000 temporary jobs which includes construction jobs throughout the midwest as well as all of the support services, including pipeline construction, food services, hotel, revenues that are going to support these workers. Reporter even democrats like senator Mary Landrieu says its nothing more than a delay. Crude will get to wherever it needs to go and that will happen one way or another. Its a matter of supply and demand and right now there is plenty of both. In breaking news, late today an activist investor teams up with a Pharmaceutical Company to mount a takeover bid and thats tonights market focus. The head of pershing bill ackerman is looking to buy the company that makes botox. The deal is said to be slightly more than 40 billion. The hedge fund has built up a 10 stake in alergen. The regular session was closed up 6 at 142 a share. Shares of sirepta therapeutics with the food and Drug Administration to get the muscular dystrophy drug approved. Late last year the company needed to do a late stage trial of the drug that affects children and after meetings with the agency the company worked out a strategy for what the ceo calls accelerated approval. We have an opportunity to provide Supplemental Data over the course of the next six to eight months that will strengthen a potential new drug application. And so we are very optimistic as we sit here today of the prospect for a potential accelerated approval. Shares closed at 33. 98. Thats a gain of about 40 . And pfizer has approached its british rival with a 100 billion takeover bid according to press reports but the uks sunday times said that the offer was rebuffed and no comments from the drug giants. Shares of pfizer are up. Reports that there are mergers of barrick way down and the deal would have combined the worlds two larger gold producers but the talks didnt result in an agreement. There are reportedly still hopes that the deal could be revived. Meanwhile, shares of barrick fell down to 20. 78. Hasbro swung to a profit in the first quarter. The toy maker saw costs fall and sales in the girls products category surge. Earnings topped estimates but revenue fell short. Investors overlooked the revenue myth and shares were up to 55. 66. And halliburton post an earning beat on the top and bottom lines. The provider is calling for a 25 jump in earnings for the current quarter, thanks to a recovery in margins in north america and growth overseas. The estimates, by the way, is right in line with expectations. Still, shares spiked more than 3 to 62. 92. Reports say that square, the mobile payment startup may be on the auction block. The wall street journal said that the cash strapped company has been in talks with several deep pocketed tech giants about being acquired including google, apple, and ebays pay pal division. But they denied having any talks with google. So there. How do you feel about your Mutual Fund Investing in Silicon Valley startups . You may not know it but according to a report in todays wall street journal, your fund could have some share of newbies if your money is managed by blackrock, fidelity and here to talk about the rewards is stacy francis. Stacy, first of all, how common is this with Mutual Fund Families and should investors be worried . Well, you know, its becoming more common and in fact last year we saw 16 deals closed by the big four that you mentioned. This year to date were at 13. Its looking like its going to be a banner year. Should you be concerned . Yes, you should be concerned. The average per person investing in a mutual fund has it in their retirement. They are investing in a mutual fund because they want longterm growth and income, not necessarily jet rocket propelled growth with a lot of risk with it. But but just to take the other side of the argument here, my assumption is, from what ive heard about these positions, is that they are really relatively small in any individual fund and obviously if they pay off as a facebook as twitter did and i believe some of those funds were investors early stage in there, they can do really well. Well, you bring up a very good point. Typically you cannot go over 15 in something liquid like this, according to the icc. Were looking at most a 15 stake. The only thing i would say, to be very careful of, a lot of these investments are in hightech startups and it really is reminds me of those years, if we all remember, many decades ago, in the 1990s. Its interesting, janice and fidelity were two of the largest offenders and its not necessarily with the market, our biggest concern is that investors dont understand that this is what is being put in their mutual fund. If one of your clients said, were worried about, this how can you find out if your future youll fund is making these kinds of investments . Those investors that have investors that work for them that are helping them, you have an easy way out because that is the responsibility of that financial adviser. However, if youre on your own, theres a couple things you need to do. Number one, go to morningstar. Com. See all of the listings of the Current Holdings of that mutual fund that is public information. That is for you to know. Also, when you get your report and get the proxies, i know its a big, thick document. Its easy to put it in recycling. Look for words like adVenture Capital, pre ip investments. Cant you call the fund and ask if they have any early stage or Capital Investments . Yes. Definitely call the fund as well. A lot of the Mutual Companies are getting high marks for consumer education. So give them a call. I will tell you that this is not something that they are really publicizing and trying to put out there on the front pages either as we saw. Some of their stocks actually have been gotten some hits and thats because this is not necessarily good news. Real quickly, just have half a minute. For years, a lot of individual investors are saying, how can i play Venture Capital . How can i get in ipos . Now isnt this a balanced way, a safe way of getting into those, you know, new offerings . Yes. There are actually mutual funds that you can buy that focus specifically on this part of the market. That is where i would go to get that exposure. Better than buying, you know, a few shares of facebook through your discount brokerage. Its better to get a larger exposure. Again, know what you are buying and there are great, great, great technologyfund oriented stocks out there that focus on stocks. Again, know what youre buying. This is not what you want in your longterm investing. Good advice. Thank you so much, stacy. Stacy francis of francis financial. Coming up, did consumer backlash cause General Mills to reverse its legal policy . An update to the story that we told you about last week. Thats next. A big reversal from General Mills, the cereal giant. They