Share. That topped estimates by a full six cents. That was the positive revenue came in a bit shy of expectations. Still, big blue brought in nearly 21 billion in the quarter. If thats shy, id like to be shy. Investors were not pleased, though they sent shares lower right off the bat in extended trading today. John fort has the one takeaway you should focus on. One takeaway from the ibm call the downturn in Growth Markets was not enough to make up for stabilization in the services business. Brazil russia and china, and particularly down doubledigits. Those were markets that ibm was looking forward to grow. India was up partially. Services backlog was up to 122 billion. The first time thats seen positive growth in a couple years. That wasnt enough to make up for the trouble in Growth Markets and the stock was down after hours. For nightly Business Report im john fort. The street will be focused on ibms earnings there will be plenty of big name teks companies announcing their results this week. Tomorrow its dow components apple and microsoft as well as yahoo. Yesterday qualcomm and Texas Instruments will report. Thursday amazon and jennifer networks will announce. With all of those powerhouse names coming out. And the nasdaq sitting at an all time high tech investors should have a lot to smile about. A worry some trend is starting to reveal itself. There is a big problem in tech right now. The nasdaq 600 is up to a high. The leadership is narrow theres four Technology Stocks that matter. Google, amazon facebook and apple. Googles up 20 in july. Facebook up 10 . And apple up 3 this is just for the month of july. Its an amazing run, the problem is the market capitalization of these companies are so big, theyre disdorting the indexes which are weighted by market capitalization. The for companies have a market cap of 1. 7 trillion. The nasdaqs 100 market cap is 5. 4 trillion. The four stocks account for 31 of the value of the nasdaq 100. Four stocks. Is there a tech bubble going on . Its not really most stocks have not had huge runups this year most are not overly expensive. Apple is only 15 times forward earnings google 23 times, thats not really expensive, theres no growth in the world, so everyone is crowded into very few names like those big four i mentioned that have any kind of growth. Those stocks keep getting bigger and bigger at the expense of everybody else. For nightly Business Report at the new york stock exchange. Scott kessler joins us now to talk more about the tech sector and what this narrow leadership were seeing means for the nasdaq. Taking a look at these four stocks facebook amazon apple, google. Are there some stocks that are more fully valued or overvalued . Which do you prefer of the four. Whats important to keep in mind is that these stocks are up 20 to 50 year to date. Theres definitely some stocks that we like better than others. We have a buy on facebook. The other three bob mentioned we have hold opinions on. The way we think about it is the tech sector is valued. That doesnt mean every company in the sector is appealing to us right now. Should investors worry, they had the four horse men of the nasdaq. It was oracle microsoft, intel dennis is co. It didnt end well that time. Should we be worried know . I remember those days. What i can tell you is that its a very very different period right now, the reason to that is if you look to those four names. One could argue that the valuation for amazon is stretched at best. But the other three names, seem somewhat reasonable. And if you look at the rest of the Top Ten Holdings of the qqq etf, we see a number of names that look attractive. Look at intel, look at comcast. Look at giliad. Thats another thing to keep in mind, back in the day, the nasdaq was the tech laden or tech heavy nasdaq. Now only 50 or so is from the Technology Sector the rest is from Health Care Consumer discretion or consumer staple as well as technology. If im an investor looking at my 401 k my ira, 529 plan a number of these four tech names are in some of those fidelity or Vanguard Funds that are in my plan. Should i be concerned or is it as you say, if youre looking at a broader index, you have consumer discretion, you have some of these health care names that may help your portfolio . Sharon the way we think about it we actually have not only Equity Research but etf research as well we have an overweight opinion on the qqq. That indicates obviously that we see some value there obviously there is some concern when you see a heavyweighting toward four names. We have hold recommendations on three of those four names. Were not saying sell or anything like that if you have exposure it seems like people could take stock of what they own, its really important to understand the etf they own, as well as the underlying holding. In this case we see appropriate valuation, people have to be mindful of the appreciation weve seen which is around 10 year to date for this particular etf. Let me ask you one quick question if i might. You mentioned a couple names in the top 10 of the nasdaq 100, that you thought were attractively priced just give me one of those potato chips. One name is intel. We thought they were pretty good its just that the street didnt necessarily agree and the stocks sold off. The stock is trading at an attractive pe and has a nice dividend yield. Good point to keep in mind. The nasdaq continues to rally today. Solid earnings helped all three averages close modestly higher. The Dow Jones Industrials up nearly 14 points. The nasdaq almost 9 points higher as you see there, and the s p 500 was up one point. Oil prices briefly dipped below 50 a barrel. The lowest level since back at the beginning of april. Take a look at gold prices. Falling below 1100 an ounce at one point during trading today. That folks is the lowest point in five years. In addition to tech heavyweights reporting earnings tomorrow dow component verizon is also out. Verizon isnt just a Telecom Company any more its becoming a big player in the media space. Julia takes a look at the transformation. Verizen is taking a new strategy to differentiate its service for its consumers and its company for investors. The acquisition of aol was a key step to build verizon into a media company. You look at the evolution of wireless. Its gone certainly beyond voice and data and really video is the driving factor. Many say video is the killer app of 5g which standards are now being produced. Verizon believes getting ahead of this is a very good way to position themselves longer term. Verizon is working on a new direct to consumer over the top for its mobil subscribers. Verizons responding to millennials 21 leap in digital video viewing last year. To populate this new service, verizon is signing a number of content deals, including hgtv and scripps which will offer 45 series for streaming. Plus awesomeness tv targeting millennials and vice media, which is focused on the younger audience. Verizon is also targeting with this new service. A large driver of this growth thats of the next leg of global data growth is going to be video, theyen watt to touch that and they want to have that relationship with those content players to be able to offer that service to their customers. So as they face pricing competition from on the consumer. You know all paying our bills, this is another source of revenue. When verizon reports tuesday morning, investors will be looking for details on verizons growing content play and when it will start boosting the bottom line. For nightly Business Report im julia borsten in los angeles. Theyre back interest only mortgage loans, one of the scurges of the last housing boom theyve returned but this time things might be different. Well tell you how and why. President obama plans to nominate katherine dominguez, who is an economics and Public Policy professor at the universities of michigan would represent the boards chicago region. After three weeks, green banks have reopened their doors. The step toward returning to normalcy comes as greece paid two pressing bills. About 4 billion euros to the European Central bank and 2 billion euros to the inninger National Monetary fund. Most include limits on cash withdrawals as well as money transfers still remain in place. Seeking to get back to the way things sort of once were. It was a historic day in relations between the u. S. And that island nation as embassies were officially reopened in d. C. And havana a big step in more than a half century of hostility. Theres still a long road ahead. Reporter as the protesters gathered outside, the cuban flag was raised in front of what used to be the intersection but is now as of today, that countrys embassy. Marking the official reestablishment of diplomatic relations between the United States and cuba for the First Time Since 1961. This milestone does not signify an end to differences that still separate our governments. But it does reflect the reality that the cold war ended long ago. And that the interests of both countries are better served by engagement than by estrangement. The u. S. Government marked the day with far less pomp and circumstance. The flag went up at 4 00 a. M. With no onlookers. 90 miles off the coast of florida at what was the u. S. Interintersection in havana no flag raising, no sign that this is now an embassy. Later this summer john kerry will make a long awaited and historic trip to cuba to officially raise the u. S. Flag. Its a dramatic shift in the decades longus strangement, one that demonstrates the changing opinions of cuban americans. I think the fact that the embassy is opening makes this symbolic sign of a change. That embassy would have been here in the late 70s, it would have been bombed out of resistance. The action would have been so siren thely against it. Here in the United States. Theres still a long way to go before true normalization between the two countries. Just down the street thousands of old documents. Documents that represent claims against the cuban government for u. S. Properties seized in the early 1960s. Properties like this old soda factory owned by cocacola. A bank branch belonging to chase manhattan and this Department Store formerly a woolworths. Outstanding u. S. Claims are estimated to be worth 7 billion today. According to u. S. Law, these claims must be settled before the embargo can be lifted. Just one of many challenges secretary kerry and his cuban counterpart still needs to work out. In washington, d. C. , for nightly Business Report Michelle Caruso cabrera. We begin tonights market focus with morgan stanley. Reporting a beat on the top and bottom lines. Strong growth in bond and equity trading revenue helped the bank pull off results. Shares were actually off a fraction to 40. 04. Hasbro was the best performer in the s p 500 today about the toy maker benefited from Strong Demand for its boys and preschool division projects. Particularly because of the popularity for its Jurassic World and star wars themed toys. Shares topped 6 to 83 and 15 cents. And halliburtons Second Quarter earnings plunged more than 90 as the Oil Services Giant revenues fell on soft demand. Despite that earnings topped analysts estimates. Shares were higher to 42. 70. The egg producer missed on both the top and bottom lines, but still shares rose slightly to 54. 10. A deal to buy united technologys sikorski unit. The company that makes black hawk helicopters. Loks heed will sell or spin off 6 billion in other Information Technology services and businesses. Lockheed up almost 2 today. Ut was off a fraction at 110. 48. Pay pal saw its shares jump in the companys return to the nasdaq. The Payment Service Company Began trading as a separate firm following its spinoff from ebay and the sale valued pay palate more than 50 billion. Shares up almost 5 1 2 today. Sun edison are buying vivid solar. A Solar System Company for nearly 2 billion. Another one of sun edisons spinoffs plans to raise more than a billion dollars in its initial public offering. Sun edison up slightly today to 31. 66. Teraform fell. How about vivid . It surged 45 to 15. 75. And shake shack announcing plans for a secondary share offering. Stockholders will sell up to 4 million shares of the burger chain, and the company wont receive any proceeds from the sale. Shares tumbled initially in after hours trading. At the end of the regular session, shake shack was 3 1 2 higher to 54. 79. Tyler, they were the villains of the last housing boom even deemed toxic by the Consumer Financial protection bureau. Now as diana olick tells us interest only mortgages are making a comeback these are not your fathers loans. This is what happened to millions of borrowers who took out no money down interest only loans during the last housing boom. Those loans all but disappeared, given only to very wealthy customers by big banks. Now, they are returning to the masses in a slightly different form. Michigan based united whole sale mortgage the second largest Mortgage Originator announced today it will start offering an interest only nonjumbo loan product. I think its opening the door back to hopefully its responsible lending giving people choices. A lot of the rules have changed, where people are scared of lending in some respects. I dont think thats the right way of doing it i think that this is bringing it back to the masses. Giving it to Mortgage Brokers who can give borrowers options. There are strict qualifications. Borrows must put 50 down. They must have at least a 720 phico score. They must pay no more than 42 of their income on debt. And after 10 years, they must start paying principle. Perhaps most important, they must be qualified to pay not at the starting rate but at the Monthly Payment the loans will carry when they adjust higher. The rate to start is the same as the 30 year fixed but no principle added. The difference would be 300 to 400 a month, literally in their pocket they dont have to pay. Critics are concerned these loans will largely be used for refinances in which case the borrower would not have to put 20 down only prove that the home had 20 equity in it at the time. Home prices fluctuate. It may be true the consumer finds themselves in the loan. In reality, in subsequent years, during the interest period, they find that the value of their home is not as high any more. Theyre under water. While it is likely home prices will crash that much again. Never say never. Like she said for nightly Business Report im diana olick in washington. Never say never. Our next guest says annuities are the only way to assure you wont outlive your retirement savings. What are annuities and are they the right investment . Our guest is roger ferguson. Hes with us now from new york city. Roger, good as always to have you with us. We appreciate it. Lets go and talk a little bit about annuities and whether todays annuities are better than yesterdays annuities. Annuities were high cost low return and usually not recommended for those reasons. The answer is that there are some annuityies that still fit that classification. There are some that are probably too high cost for sure. Some that are relatively opaque. My company, we try to do lower cost annuities that are probably more appropriate for many of your listeners. The real message here i think is yes, the annuities may well be the right answer for many middle income americans as they try to look for guaranteed income for life. But they have to choose ones that have properties that are what i would describe as consumer friendly. Lower cost relatively simple. And backed by a really strong balance sheet, such as the one that we have right now. Roger, does it matter whether they are fixed or variable annuities, immediate annuities or deferred annuities . Which ones should people be looking at . The answer is theres room for each one of those, okay. A fixed annuity is what one would select if youre trying to think about, how youre going to get guaranteed income for life. To deal with those fixed predictable expenses no one can avoid. The basic food and shelter, a variable annuity may be the answer if youre prepared to have your monthly income fluctuate up and down. You wouldnt use that for food and shelter expenses. You may choose a variable annuity for those things you can choose to have or forgo, in the immediate versus deferred room for both if youre interested in income day one, after you retire, you want to go with something more immediate. If you think you have enough of a nest egg, but youre worried about out in the future what your income might look like you may want to defer annuity payments until youre 65 70 80 years old. The answer is again, know your risk tolerance, know your individual needs and select your product based on whats right for you and your familys needs. How much of your portfolio would you devote to annuities. No more than 25 to 30 . But now theyre being offered in their 401 k plan the Treasury Department has made that announcement last fall to expand the exposure in 401 k plans allow consumers to have annuities there. How much is enough . How much is too much. Its right to have an annuity in the option in the plan. All of the data show if theres an annuity option in the plan that people are saving for and thinking about as theyre saving for retirement. Theyre much more likely to choose the annuity option when they get to retirement. The answer of how much you should annuitize depends on different circumstances. You want to annuitize all of your savings . That doesnt seem like the right answer. It depends on what you need again to take care of those fixed demands that youre going to have through retirement. Numbers like 25 30 35 may be in the ballpark for many people. If i buy an annuity for you or another provider at age 55 i give you that money hoping its going to be there when im 75 i pass away at age 70 what happens to that money . It depends on what you do with the annuity. There are some that are called two life anewities, allows you to save for yourself and an heir maybe a spouse or a child. All that is built into the annuitization. And so theres no reason to fear if you choose that kind of annuity that your life savings will suddenly disappear if you should have an untimely death. Nk that you for being with us. Roger ferguson of tiaa craft. Thank you very much. The new city that could pave the road for the future of the auto industry. Thats next. The great atlantic and Pacific Tea Company which controls the a p Supermarket Chain has filed for chapter 11 bankruptcy. This is the grocery chains second filing in less than five years. And finally tonight, a look inside a city where the only cars on the road are selfdriving. And where else would a place like this be but in michigan . The epicenter of the auto biz. Phil lebeau has our story tonight from ann arbor. It looks like a hollywood set, but this is not a movie. Its m city. A new Research Site where Auto Companies will test and refine selfdriving cars. And the technology that goes into them. We want to make this as realistic as we can, especially for a dense complex urban environment where lots of things are happening, and the sensors on the vehicles have to recognize the situation straightaway. No hands . Were still driving. Drive features should be offered by several automakers within two years. With audi mercedesbenz and gm among many vehicles that will steer, accelerate and break on their own. But google and its selfdriving prototypes have made the Silicon Valley a hotbed for autonomous drive technology. Sobering thought for Auto Executives in southeastern michigan. I think it is bringing this to the table in terms of people are interested in this i think certainly thats the case. Im really pleased. Silicon valley pushing so hard because its really making what its done is to wake up the industry here in michigan. Initially the auto companys and tech firms doing research will be focusing on selfdriving cars and vehicles talking to each other, theyre also working on developing smarter infrastructure using radar like this in order to develop smarter street signs so that the roads are safer. Smarter cars for a new era in autos. Coming from a part of the country that put america on wheels. Phil lebeau nightly Business Report ann arbor, michigan. That is nightly Business Report for tonight. Thanks for watching. And im Tyler Mathisen thanks for me as well. We will see you back here tomorrow night. Announcer imagemakers is made possible by the members of kqed. [ bang ] [ alarm blaring ] [ explosions ] woman [ breathing heavily ]