Apparently there are not enough people there to buy their products. Others having second thoughts about making Big Investments over in the worlds most populous country. First to sue at the new york stock exchange. We will start with the raging california wildfires. Just a few miles east of los angeles. Governor brown has just declared a drought state of emergency. More on that in just a moment. Some 1800 acres have been scorched, more than 1,000 firefighters are on the scene, and governor jerry brown is expected to speak any moment now. Heres the weather channels julie martin. Reporter the good news is the colby fire did not spread overnight. Firefighters worked around the clock to contain the fire and put out hot spots. It still stands at 1700 acres, about the size of two central parks, and as far as containment, about 30 . However, the Incident Commander on the scene tells me he does expect containment numbers to come up today, though it will still be a few days before full containment here in the foothills of the san gabriel mountains. In terms of evacuations, about 3800 residents forced to flee their homes yesterday. About half of those residents have been allowed to return home. What about the weather . Well, that will be one of the big problems today. Weather conditions expected to go downhill in terms of firefighting in southern california. The santa anas kicking back in and high temperatures expected throughout the region. Im meteorologist julie martin. Now back to you. Thank you very much. As we mentioned in the last hour, governor jerry brown has called a state of emergency of californias drought. He called the drought a state of emergency, saying this is the worst drought the golden state has ever seen since records started to be jotted down 100 years ago. He also called for a statewide Water Conservation effort. Jane wells is live in northridge covering another story for us. 20 years after the big earthquake hit there. Shell have more on that in just a second. What can you tell us about what this drought state of emergency actually entails . Reporter well, we were expecting it and we got it. Perhaps a little sooner than expected, because of these fires going on in los angeles and again, they have extended the dry windy condition and fire warnings through today. The reason why its coming now is because with this declaration of a drought, the governor is saying that the state will use less water and he is authorizing them to hire more firefighters. California actually has a little extra money for once. Heres what he said. Quote, we cant make it rain but we can be much better prepared for the terrible consequences that californias drought now threatens. I have declared this emergency and im calling on all californians to conserve water in every way possible. Now, the declaration also allows water agencies to move what supplies there are around. Permanent crops like wine grapevines, nut and fruit trees will get priority over seasonal crops, things like lettuce, tomato and garlic. There still could be a turnaround. Its only january, we could get rain, but at the moment, it isnt in the forecast. There is this huge High Pressure system off the coast which isnt moving, and the sierra snow pack which melts off and we depend on it so much for our water, at this point its only 20 of normal. Back to you. Thank you very much, jane wells. The final Housing Starts number of 2013 came in this morning showing that Home Construction slowed in december. But 2013 was the strongest year for Housing Starts since way back in 2007. 2013, builders started working on 923,000 new homes and Apartment Buildings but compared to the last ten years, that number wasnt really so great. So what will those 923,000 new projects mean for overall pricing in 2014 . Keeping in mind the employment Participation Rate is at just 62. 8 , the worst since 1978. And housing prices often follow jobs. Diana olick is live in washington. Reporter thats right, tyler, im so glad you mentioned that because it is all about perspective. Total Housing Starts in 2013 up 18 from a year ago, still the fifth worst year on record. Less than halfway back to normal. Home prices move on supply and demand, of course, so lets go ahead and get that perspective. Almost 618,000 Single Family homes were started last year. Compare that to 1. 7 million started in 2005 during the housing boom. Normal, around 1. 3 million. Now, multifamily apartment starts are surging back far faster, up 25 last year, nearly back to normal levels. Heres the really fascinating part. During the housing boom, more than 40 of those multifamily buildings were built with the intention to sell those units as condos. 60 were rentals. Today, 92 of all multifamily construction is intended for rental. Rental demand, huge. Just look at the Home Ownership rate. Still on the decline and expected to fall even further in 2014. Now, one more thing before i get to prices. Total Housing Starts are rising, but housing vacancies, the number of empty houses in the u. S. , still far higher than normal. Whether theyre owned by banks, investors, whatever, they are empty and unused. So lets add it all up. Single family starts up but anemic. Single family vacancies still high. Multifamily rental, huge. So what does all this mean for home prices . Well, they jumped dramatically last year, we know that. That gave a lot of folks back their home equity and you can bet some of them are going to put their houses on the market this spring, increasing supply. Add that to as we pointed out, the weak employment and wage growth, and if we want to hold on to those price increases, well, maybe we dont need to build so many more Single Family houses. I think you are absolutely right on that one. Thank you very much. All right. Lets go to dominic chu for a market flash. Check out shares of anheuser busch. The stock is at session lows after reuters reported the company is in advance talks to buy south koreas oriental brewery. The report said the companies are aiming to finalize a deal before the end of this month so bud certainly taking it on the chin today. Thank you very much. The video Game Industry showing new signs of bouncing back and breaking out. December not a bad month at all. We have some big winners. Julia . Reporter for the fifth consecutive month, total physical video game shares grew thanks to new consoles. Sonys new ps4 and Microsofts Xbox 1 drove console sales up over 50 in december with xbox 1 leading annual hardware sales. Despite nintendo projecting an annual loss on weaker than expected holiday sales, the nintendo handheld device was the topselling game device of december. But all that money going into new consoles meant people didnt spend quite as much on games. Game Software Sales fell 17 last month. Still, activision walked away the big winner. Its call of duty ghosts was the bestselling game for the month and the second bestselling game of the year. Taking the years top spot was grand theft auto 5 which is on its way to become the biggest game in the grand theft auto franchise. These physical game sales are just about half of the total video game business. As people spend more on apps and digital content. Tyler, back to you. Thank you very much. Jim cramer, the mad money man, has take 2 interactive ceo on big show tonight at 6 00 and 11 00. He will be with jim tonight. Meanwhile, dominic chu has been doing some very specific digging on nintendo. What did you find there . Interesting. Remember last time we spoke to you, we told you the market value was bigger than that of media and Electronics Giant sony. Even with the bad news on nintendo that julia just talked about, that is still the case. Nintendo is bigger. As of today its worth around 20 billion and you compare that with sonys market cap of around 17. 5 billion. Like julia said, nintendos handheld device was a brighter spot, but if you dig a little more into the wii gaming console, they cut their forecast for those consoles by, get this, nearly 70 . Talk about getting it wrong. They are struggling to compete with the likes of the xbox 1, play station 4 and the companys president apologized to shareholders but also said theres no immediate Senior Management changes that were coming, at least in the short term. Still, this new loss forecast means nintendo will be poised for its Third Straight annual loss. Sue, back to you. Thanks very much. It seems theres an apple story every day. Today, it falls in china. Apple launching its iphone on china mobiles network today. Shares of apple are down about 1. 25 and they are down about 1 over the month, period. Cnbcs eunice eun was with tim cook in beijings financial district. Reporter after six years of negotiations, china mobile is finally selling apple iphones at its store. Apples ceo tim cook marked the occasion by visiting an apple store in beijing, handing out iphones to some lucky customers. Both the 5s and 5c, those phones were actually autographed. A lot of people here still believe that apple is going to get a boost from this deal. The company has been facing some stiffer competition from cheaper smartphone rivals, but now apple is going to get access to china mobiles vast network of 760 million subscribers. Fantastic for apple to be launching with china mobile today. We have long wanted and waited for this day to come, and im so happy that its come today. Today were bringing the best smartphone to the Fastest Network and the Largest Network in the world. Reporter the two Companies Say they have received over a million orders for the phones. Some analysts wonder if this new partnership is going to be the catalyst that apple needs to maintain its iconic status here for the long term. Back to you guys. Thank you very much. In the last year, shares of apple are up about 9 versus the rest of the nasdaq 100. Apple is underperforming by a wide margin there. The last on the power shares qs up about 31 compared to apples 9 . Analysts still very interested in apple. Out of 46 analysts, 38 have a buy rating, six have a hold and there are two sells. Ty . As apple moves in, a lot of companies it turns out are moving out in china and people, too. Robert frank and sara eisen are teaming up together on the story. Sara, you get to go first. I have the Company Angle for you. The china promise. It was the holy grail of Consumer Market opportunities, losing a bit of that allure, at least for a growing number of American Companies. Take news scan, just the latest facing a chinese investigation into allegations its operating an illegal pyramid scheme related to direct marketing methods. Keep in mind, chinas news biggest market with more than 30 of total revenue, came out and said there will likely be a negative impact on china revenue but too early to know whether our previous guidance will be affected. Thats not the only one claiming a growing presence in china comes with issues. Financial headaches. Across industries, multi nationals like avon, revlon, qualcomm and even young brands are dealing with challenges. There are challenges when it comes to demand and there are challenges that come to regulatory crackdowns. We will go through a few examples to show you. Avon dealing with a u. S. Bribery probe tied to allegations of bribing chinese officials to get licenses to sell its products. Avon recently reported a sharp dip in revenues for china, said its reputation is being hurt. Revlon Just Announced its exiting the country all together because it just found that the weak demand wasnt worth the operating costs there. Glaxosmithkline dealing with anticorruption investigations since last july, that it bribed hospitals and doctors and officials. Third Quarter Sales for them took a big hit, drug and vaccine sales falling more than 60 in china and even yum brands which has built the most successful foreign brand in china with more than 600 pizza huts and kfcs around the country has been dealing with backlash over alleged use of growth hormones and antibiotics by two chicken suppliers. We have seen it hit the yum stock and sales over the last year. December numbers just out showed softer numbers for specifically pizza hut. So problems there with demand and problems with the reputation. Wrap it all up, companies and investors have to be aware, there is a growing risk of getting a piece of that massive middle class which is estimated at 300 Million People and growing and that risk seems to be growing, tyler. Sara eisen reporting. Now to robert frank. It turns out that many people in china are trying to get some of their money out. They are trying to escape. Thats right. Luxury sales are falling fast in china. Its not just because the wealthy are spending less. Its because they are actually fleeing china. The report says luxury spending in china fell 15 , last year. Thats the biggest decline in more than five years. Spending on gifts which is a huge part of luxury spending, that fell an even bigger 25 . The slowing economy is of course one reason, but a bigger worry is that the chinese rich are simply taking their money and themselves to other countries. 64 of chinese millionaires have either emigrated or have plans to emigrate. A third of the Chinese Super rich, people worth 60 million or more, have already left. Bentley motors last week blaming its slower sales last year in part on quote, the migration of High Net Worth individuals from china. So where are the rich chinese going . The u. S. , luckily for us, is their top destination. We can see that with Real Estate Sales in seattle, san francisco, here in new york. They are also going to europe, canada and australia. So the chinese are still buying, but the rich are buying their bentleys in seattle rather than shanghai. Fleeing is believing, i guess. Why are they leaving . What are they afraid of . This is the key question. Some say they are just diversifying their risk. They want more overseas exposure. Everyone off the record tells me they are worried about the government crackdowns on corruption and any kind of clawbacks where the government tries to seize their wealth, putting it overseas makes it safer. Quarantines it. Robert, thank you very much. Robert frank reporting there. Sue, down to you. Similar situation in russia these days as well. Check out royal dutch shell. It issued its first earnings warning in ten years. The reason . A mix of lower production, higher costs and a weak performance by its refining division. The stock is up 1. 25 . Its shares have underperformed most of the other Major Oil Companies in the past year, being up only about 1 compared to its peers. Tough session for General Electric as well. It reported a profit of 53 cents a share that matched the street expectations but disappointed investors by failing to meet its full year profit margin goal due to delayed wind turbine deliveries and poor Energy Management results. The stock is up some 25 over the past year but today, its off 2. 5 . And target hitting a new 52week low as it tries to recover from its massive credit card breach. The stock is off 1. 25 at 60. 03. Next week the airline sector, a full schedule of reports are due out and phil lebeau is live with that in chicago. Reporter this is a sector in the sweet spot. Take a look at the airline index. We referenced this at the top of the show but its been a heck of a year for the airline index. In particular, when you look at the last three months, its had a nice move as well. Whats driving the stronger Airline Earnings . First of all, greater load factors, more planes, more full than ever before. Passenger revenue will also be going up in part because there are more full planes, higher fares and fees. Combine the two and you should see strong margin numbers. Jet fuel at the same time has moderated. In fact, the jet fuel prices, if they stay in this range, you are looking at 2014 being very strong for the airlines. The first report coming next week will be from delta. Delta did already raise its Fourth Quarter guidance when it comes to operating margins. In the Fourth Quarter, delta was previously expecting operating margins of 5. 5 . Now they are expecting them to be closer to 8 or 9 . Remember, they report earnings on Tuesday Morning and that kicks off a slew of Airline Earnings that we are going to see. You cant beat that move in the last year. Look at that stock. Redhot and a lot of people are saying 2014, at least in the beginning, looks like it will start that way for them as well. That was a really nice chart. Very nicelooking chart for delta. Thanks, phil. Another big story, of course, the markets. Dominic chu has been working on how retail may be a bellwether for almost Everything Else in the market. Well, retail hasnt done all that well this year. It was not a great Christmas Season for a lot of them. Its not been a great 2014 either. So will Everything Else fall as retail is falling as well . Thats up next. Thats two minutes away. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premium Care Maintenance included. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Shares of Elizabeth Arden plummeting after the Company WarnsSecond Quarter earnings will be lower than analysts had estimated. It withdrew as well its full year forecast. The company didnt discount as heavily as its competitors last year and apparently hurt by poor holiday sales. Sue . The Retail Stocks are among the worst performers to start 2014, but what does that mean for the Bigger Picture for the equity markets . Dominic chu is on that case for us. So they did help lead the way for the stock market last year upside here, but now they may be poised to lead to the downside as well. Consumer discretionary stocks are a focus for many traders and heres the reason why. The folks issued a note to clients this week highlighting retail stock underperformance. You can see it here. Take a look at this chart. The line green is the s p 500. The other one in blue is the s p 500 retail index. That divergence, that gap has traders worried. Put another way, this chart is the ratio of Retail Stocks versus the broader s p 500. It goes up when Retail Stocks are outperforming and it goes down when they underperform. Check out the righthand side. Thats where we are right now. The retail rollover that youre seeing on that righthand side is a possible caution flag. Take a look at the longer term chart. The analysts went back 20 years and plotted this relationship between retailers and the s p 500. They note that retailers rolled over to the downside prior to the market corrections in 2000 and in 2007. That underperformance we showed earlier only looks like a small blip on that chart over there. Longer term. So there hasnt been a complete turn yet but still, its one of the many tea leaves traders are trying to read as we sit near these record highs in the stock market. Back to you. Thank you very much. Here joining me on the set at post nine, bob pisani and cnbc mark analyst kenny polcare. Dom made a compelling case that the broader equity markets may follow whats going on in retail. Do you agree . I do agree. I got to tell you, theres a lot of signs along the way talking about a correction but certainly retail and that gets you that speaks directly to the health of the consumer, and then where you think the mindset, the mindset of the consumer is at, then where the market is at. The markets at a place where we have been talking about this back and forth. It doesnt really know where it wants to go which is why were stuck here. Its looking for a little direction and is willing to grab on to anything, transports will be an issue, retails are certainly an issue. So people need to be paying attention. I was going to bring up transports because that traditionally is the harbinger of where the stock market is going to go. Companies that are reporting earnings in line and slightly better are doing fine. If you have any kind of problems, you are getting killed a la g. E. A la the retailers he was talking about. Were about 10 through the earnings season. 52 companies have reported in the s p 500. The earnings are not that bad. We are up about 9 , believe it or not. Whats a concern is a lot of them are not beating the numbers. Only 50 of those 52 companies are beating traditionally twothirds beat. So a lot of people are kind of falling short of the numbers so far. Thats causing a problem for the market, because anybody who is falling short is getting killed. I dont mean just best buy. I mean just look at the stream of companies that goes to the health of the consumer and the fact that the consumer is not as confident. Thats the disconnect between wall street and main street. I agree, which is why i think you see the markets struggling, not knowing which way to go. I think we hit that 1850, we clearly hit resistance. We tested it two or three times. Theres plenty of supply there so the buyers back off. There needs to be this correction we have been talking about. Not necessarily this massive correction, 15 or 20 . I dont think thats happening. I do think we will look at somewhere between 5 and 8 correction, would be healthy and actually welcomed. We had some positive comments on europe as well. They are punishing that stock. 2. 5 to the downside. Its not like they missed on anything dramatically. They are saying the cost cutting was the main way they got through. It wasnt really a lot of top line growth. We have been doing this for a long time. Thats not news. Are investors using this as a source of cash to get ready as they wait for this correction to come and they are going to take some cash out of the stocks that have done well and maybe disappointed a little bit. G. E. Up 25 . All right, guys. Thank you very much. Lets send it back to dom. Check out whats happening with blackberry shares. They are moving higher, have been all session long but were at session highs and reaching them on some positive comments from citron research, saying a heavily shorted stock makes for good Investment Opportunities at times and the situation seems to be applying to blackberry. It set a minimum price target of 15 a share but still, citron known often for their short calls making at least one call on the upside perhaps for blackberry. Back to you. Nice 4. 5 gain for that stock. All right. Michigan as you probably know has one of the highest unemployment rates in the entire nation. Well above the national average. Now we will see how one startup is creating jobs by digging through the rubble in detroit. Quite literally. Back in two. I need proof of insurance. Thats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. 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A lot of investors concerned about whether the company can truly have a big impact in the mobile market. Apple also weighing down the index here as well. Its interesting, there was a lot of momentum in apple stock leading up to the big china mobile announcement. Now that the company has actually launched its phones in china, we are seeing the stock pare back a little. Microsoft also weighing down the index as well. One big bright spot of green at the nasdaq is a Company Called alumina, near record highs after it announced two new genome sequencing products yesterday. On that note, biotech has also generally been a very good source of strength today. Take a look at stocks like gilead, in the green today. There are a lot of questions about biotech heading into the new year whether it can continue the boom. We are seeing an increase of 4 this week alone. Sue . Thanks, sheila. Appreciate it. Gold markets getting ready to close. Sharon epperson is tracking all the action for us. Hi, sharon. Reporter we are up about 11 right now at the close, above the 1250 mark as traders square their positions ahead of the three day weekend. Of course, the floor will be closed for trading on monday for the Martin Luther king jr. Holiday. We are looking at gold prices that have had some solid gains so far for the start of 2014, up about 2 or so, and well see if these gains hold as Traders Await the fomc meeting. The big gainer here in the precious metal market has been silver, and silver coin sales have been very strong this year as well. Looking at nearly double the amount sold so far in january as what we saw in december. A lot of folks very interested in owning some silver for the start of this year. Back to you. Thanks, sharon. To Interest Rates right now. Rick santelli is tracking the action for us at the cme and covers currency, Interest Rates, the whole thing. You trade it, we cover it. Thats cnbc. Thanks, sue. We had some important data out today, maybe we had a weak jobs report a week ago but its a bit of good news that we crossed the hiring threshold of job openings of four million, as you see on this chart. Close to six years since we have seen it, march of 08. If you look at the two day chart or one month chart of ten year note yields, couple things should jump out at you. We are one basis point down on the day, three basis points down on the week, 20 basis points down on the year, and within a basis point or two of closing at the lowest yield since december. Now, if we want to switch gears a bit and look at foreign exchange, look at the dollar index since last friday, the 10th. Its up about twothirds of a cent. It really is coming into 2014 with horsepower but many thought and still think its predicate order the notion of higher rates. That hasnt materialized. Want to pay close attention to that relationship. Tyler, back to you. Thank you very much. Michigan is of course suffering with one of the highest unemployment rates in the nation. Detroit hit especially hard. There are abandoned homes throughout the city, many of them being demolished. In brooklyn, a company has found a way to capitalize creatively and create jobs at the same time. We began as an ecommerce shop where we produce, design and sell our own products and we primarily focus on paper goods but the one thing that ties everything that we do together is the intention to encourage mindful living. We embarked on this project called the reclaimed frame. We worked with several different organizations in and around detroit and michigan, and we have been focusing on all the abandoned buildings. Rather than demolish those homes and buildings, we have worked with organizations like reclaim detroit to deconstruct the buildings, salvaging the wood and putting it into products like the reclaimed frame. We set our goal of 17,500. I think less than a week, we had already surpassed our goal, raised 49,248. One of our partners was able to hire eight new people as soon as we issued the first p. O. And they are continuing to hire more as they go. The frame costs 44 to buy. After receiving more than 45,000 in preorders on kickstarter, thats 45,000, holstee has sold more than 1700 frames to date, raising more than 60,000 to help urban ashes and help reclaim some of detroit. Just one stray campfire spark is said to have caused a fire that has now burned 1700 acres out in southern california. Governor jerry brown has just declared a drought emergency in that state. Plus, 20 years after the northridge earthquake, is that state financially prepared if another one strikes . Are the individuals there protected . We are live back in california in two minutes. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Is your tv powered by coal . Natural gas . Nuclear . Or renewables like solar. And wind . Lets find out. This is where americas electricity comes from. A diversity of Energy Sources helps ensure the electricity we need is reliable. Take the energy quiz. Energy lives here. Wildfires still burning across 1700 acres east of los angeles. Officials say the fires are about 30 contained, and at least some of the thousands of residents forced to evacuate are slowly returning to their homes and their businesses. Jane wells joins us again live in southern california. Reporter the red flag warning that was posted yesterday has now been extended through saturday here as we continue to have these dry windy conditions. Fortunately for the fires, if you look at the video, the firefighters have done an amazing job, mixed with a little luck, in containing that and keeping that fire from spreading even though there was a flareup this morning. Five homes damaged, more than a dozen five homes destroyed, excuse me, more than a dozen others damaged, three people, two of them firefighters with injuries and three people now in custody on 500,000 bail each for accidentally letting a campfire apparently get out of control. At the same time the governor has declared this state of drought which allows the state to hire more firefighters. What does that mean . We talked about what it means for farmers. For ranchers, if you look at how dry it is for some of the cattle ranchers, they are telling me at the california cattlemens association, not much. Their relief would be in the farm bill if it passes but its of course sitting in washington going nowhere. Not a lot of relief for them, money to buy hay which the prices of hay are going way up. Im sure it is. Let me turn to you, growing up in california, there is no shortage of natural disasters, and that includes the states vulnerability to earthkwquakes. Its the 20th anniversary of the northridge quake which we know caused billions of dollars in damage. Talk to me about insurance policies because its gotten so expensive. Are people able to get those policies or is it really prohibitive . Reporter they can. The point is is it worth it. Im in your old neighborhood, this is where the northridge meadows Apartment Building was, where 16 people died. Im standing on an area that the usgs says basically its ten Million People, 100 fault lines that have been quiet pretty much for the last 20 years. Theres a better than 50 50 chance that we will have a catastrophic earthquake in california that will kill thousands of people and the people of l. A. Should be cautious, because earthquakes are just around the corner. Is anybody in there . Reporter now, when the northridge quake struck, here it is, it killed 57, left 125,000 people at least temporarily homeless, caused the first big l. A. Housing collapse, literally. A lot of people walked away from their homes as total losses. Back then, 40 of homeowners had earthquake insurance. That number has plummeted. Its stunning for a lot of people to realize that 90 of the homes out here in california have absolutely no protection for earthquake. We were sitting in the living room and suddenly everything started shaking. It was cool. It wasnt cool. Reporter the state says fewer than a million residents have quake insurance which averages 800 a year. Mines a lot higher, has a very high deductible and not part of a standard homeowners policy and what about other quake preparedness . Really popular item are the power failure lights. Reporter Jeff Edelstein near ground zero for the 94 quake in van nuys, says business has picked up only a little. There is still the state of denial. Its california, people deny the disaster is going to happen. Its been 20 years. It already happened. Thats what they think. Reporter the governor is hoping to use some of the states surplus to better map the fault lines in the state. Back in 94, the fault that caused this quake we didnt even know about then. By the way, this morning in the valley, there was another earthquake. Not a big one but it woke up a few people. Back to you. Really frightening. It looks like its very windy out there. I can tell from your live shot. Thats certainly not going to make it easier for the firefighters. Reporter no, it is not. Jane, thanks so much. Appreciate it. In todays Yahoo Finance question of the day, we asked given the uptick in natural disasters, should all homeowners be required to have Homeowners Insurance . 37 say yes. 54 say no. It should be up to the homeowner to assess the risk. 9 say the government should pick up the bill. Thats interesting. Yeah. Wow. Crazy. All right. Washingtons 1. 1 trillion spending bill not music to the s. E. C. s ears. Congress taking away half of the 50 million the agency was expecting for technology upgrades. What impact will this have on security . Thats coming up next. vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Some stocks in the news for you. Forest webb upgraded to outperform from neutral at Credit Suisse with a target increase to 85 from 60. The firm believes forest labs is in the early stages of a multiyear recovery. Department store operator dillards initiated as a buy with a price target of 110. American express upgraded to positive from neutral at susquehanna. The Credit Card Company reporting q4 results last night. Its profit was about a penny below estimates but it did more than double from a year ago. Ty . Washington slashing funding for the securities and exchange commission. The s. E. C. Losing roughly half of the 50 million it had set aside for technology advancements. The decision is part of that 1. 1 trillion spending bill that Congress Approved on thursday. John harwood and scott cohn have been following the s. E. C. s technology initiatives. Let me begin with you, john. What did the s. E. C. Want to use the money for, and why did they lose it . The reason they want the money is because they know that they are undermanned, undergunning for the job that theyve got in front of them which has gotten bigger since doddfrank, so technology was designed to streamline some of their operations as they oversee American Companies and that runs squarely into the idealogical divide in washington and the practical divide over how big or small government should be. Republicans have been pushing to limit the size of government. They dont like regulation as much as democrats do and therefore, you ended up with a compromise where democrats managed to get republicans to drop some idealogical provisions that would have prevented the s. E. C. From doing certain things in regulation, and in return, republicans agreed or insisted on some cut in the funding for that modernization program. So it was basically a horse trading over what can be regulated, what cant, and the price of that was a cut in the amount of money. Scott, what does the s. E. C. Say about how this is going to affect their ability to do their jobs . Well, potentially it could have a huge effect. All you have to do is look at what theyve done with Technology Since the big black eye they got after madoff and stanford. They get about six terrabytes of data at the s. E. C. Every month which they say if you print that out would fill up the rotunda of the capitol. Last year, i got some unique access inside what they have been doing with technology. Its not just analyzing that data, theres a lot of it, but also looking at different types of trading patterns, anomalies. If a hedge fund has too consistent of a performance, they can analyze that. They can compare the backgrounds of people and try to link inside traders. Thats what they have been able to do with this money thus far. One thing we know about technology, its not static. Technology keeps on going. They got to stay ahead of the criminals. The other thing going on is that the Justice Department has been dealing on the criminal side with huge budget cuts with sequestration. Theyve had a hiring freeze for u. S. Attorneys for some time and replaced people. They cant do the travel they used to do. So theyre looking at whats going to come out of this budget deal but basically, the whole mechanism of securities enforcement has been handicapped. I guess the concern here is as john pointed out that the s. E. C. May not be able to keep up, may not have as Good Computers as some of the Investment Companies they are supposed to monitor. Right. We know again this is a technologyheavy industry. Everybody is not only increasing their technology but the amount of data that flows and the amount of data that the s. E. C. Wants to try and go through. If they dont have money to upgrade their computers, to keep up with wall street, to keep up with the crooks, the answer is obvious. Let me ask you a somewhat random question for which you may or may not be prepared or have the answer. The bill that was passed yesterday, 1. 1 trillion, carries through the rest of this fiscal year until september 30th, i gather. When by your recollection is the last time we had this kind of spending authorization this early in a fiscal year . We havent for at least five years. Right. Passed a budget with appropriations levels and Appropriations Bills that go through the end of the year. Now, this does not represent the passing of all the individual Appropriations Bills. They are hoping that the return to regular order as a result of this deal will let them do that. So some of these cuts could be adjusted in the next fiscal year. Theyre not necessarily set in stone for both years of this budget deal, but this is a start. It just is an illustration, the plight of the s. E. C. Is just an illustration of the pressure on Government Agencies domestic spending all across this government. John, thank you very much. Scott, thanks to you as well. Interesting reporting there. Sue, down to you. A big earnings week starts on tuesday. Seema mody is getting ready for it. A lot of big names are on my list, including netflix. We are getting you ahead of the game in two minutes. Power lunch back in a flash. Stacys mom has got it goin on stacys mom has got it goin on stacys mom has got it goin on [ male announcer ] the beautifully practical and practically beautiful cadillac srx. Lease this 2014 cadillac srx for around 319 a month with premium Care Maintenance included. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. The calendar is packed with more earnings next week so get ready. Seema mody is following the ones you need to watch. Thats right. 31 Companies Representing about 8 of the s p 500s market cap have already reported earnings averaging a 7. 1 jump in earnings and a. 5 rise in revenue. The health of the consumer really in focus this week. We heard from American Express saying Consumer Spending climbed while best buys discounting strategy really failed to bring in more buyers. That was one of the big losers in yesterdays trade. Investors will also get a read on the consumer next week as well with Johnson Johnson reporting on monday, best known for brands like bandaid and tylenol. Fast food giant mcdonalds on thursday, then we hear from starbucks on friday. For these two companies, analysts will focus on sales here in the u. S. As well as overseas as both consumer giants have been expanding their presence in emerging markets. Technology will also be in the spotlight this week. Expect reports from heavyweight ebay, microsoft and netflix. While netflix was one of the best performing stocks in 2013, this is the chart from last year, this year the online streaming company has had a lackluster start to the year, down about 10 . Analysts say subscriber growth will be the key number to watch when netflix reports. 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Chuck vo standing by your word, thats what matters the most. All right. Lets bring you up to date on the markets. The Dow Jones Industrial average is in the green compared to most of the other indices. Were up 60 points on the dow. The s p just a fraction to the downside but that broader index is indicative of a market that is struggling in todays trading session. The nasdaq composite is up a third of a percent or about 13, almost 14 points on the trading session. In terms of the top s p 500 winners today, Electronic Arts is up a full 11. 75 on the trading session. American express after its numbers last night up about 4. 66 and expedia is traveling, up about 4. 25 . I want to show you something on the wall here about the dow today. It is up about 60 points but only nine of the dow 30 are in positive territory, and which nine are they . They happen to be among the most expensive dow stocks, visa, exxon, chevron, Goldman Sachs and remember the dow is a price weighted index. When a big high price stock goes up, it has much more power to move the index. That will do it for power lunch. Have a great weekend. Street signs begins now. Hello, world. We have two words for you. Jessica alba. Yep, the star is on street signs today. She has got a big new business and she is here to talk about it. Hello, everybody. Welcome to street signs. Your other big stories on this friday, can the dow end today higher for the year . Stocks holding up despite some monster blowups this week. The big mystery around Online Shopping that were trying to understand. And it may be the year of google glass as mandy