Lithium ion batteries have a lot of power and of course there are many types of batteries out there and hopefully a substitute can be found, but nothing is absolutely set in stone at this point. Reporter boeing might be able to design a container to prevent or protect fires caused by the lithium batteries. But if the company is forced to use older, larger batteries, engineers would have to re design parts of the 787. Investigators have reached no conclusions, but they will certainly be taking a hard look at every aspect of the 787s battery. I think that the amount of problems there have been with lithium batteries historically would have to lead one to believe that youre not going to certificating an airplane, youre not going to just say this was a bad batch, bring on the next batch until somebody figures out that it was a bad batch and why it was a bad batch and what you do about it. Reporter investigators are quick to point out they have reached no conclusions in their investigation and will look at all the possible causes of the 787s battery failures. The f. A. A. Hopes to develop a plan to correct the problems as quickly as possible. Deliveries of the 787 dreamliner are already three years behind schedule. Darren gersh, n. B. R. , washington. Carter lee is an Aerospace Analyst with bb t ,virginia. Rkets joining us carter, you were out early today cutting your investment recommendation on boeings stock from hold to underweight, essentially a sell y . Well, so you know, starting from the hold which we put on right after the initial fire we felt that the risk to the name given we knew an investigation would ensue was sufficient to go to the hold. And last night with the faa issuing a grounding order which was somewhat suspected but what i saw in that release was that we dont actually have the root cause yet so it is openended enough that we felt that it was probably better that we step to the sideline given what we dont know. Lets talk about the position that boeing is in to withstand or maybe not withstand the long investigation to Credit Rating agencies both s p and fish today said the company has the financial ability to handle problems at least for now with the 787. Boeing has more than 11 billion in cash, available credit to it and more than 4. 5 billion. So do you have financial concerns at this point . No, i mean if you look at boeings other platforms, the legacy, 737 and triple 7 platforms, both higher margin high cash generators, those platforms are also increasing in production which is providing the offset to the 787, which right now is a cash strainer but the market knows that. To that point, the 737 there are more than 2800 orders for those planes that have been flying obviously for years compared to 800 for the 787 s so that 737 really still is the moneymaker, the driver of earnings, isnt it . It s the 737 and the triple 7 wide body are the real moneymakers for boeing. And if you look at the backlogs on the 737, you know, at current rates, its almost six years. Right. Lots of big Global Demand for the 737 plane put 787 represented a lot for boeing, didnt it. It really was the new technology in place, the new Energy Savings for Global Airlines and on pace to double the number of dream liners it delivered it year. Started out in 2011 which was already late with just 346 last year, more than 80 this year. With this uncertainty what kind of threat to its earnings gross potential. Its interesting. When you talk about the dream liner and boeing, when you talk about earnings over the next two years, most analysts have this booked at zero margin so from an eps perspective there is really no impact from a revenue Going Forward it will be around 20 of revenue, so the story for boeing is not necessarily earnings, its cash generation so, the market is looking for, you know, when will the 787 turn cash positive versus accounting positive. And so that before all of this was a number sort of late 2014, 2015. So you have gone to sell here with boeing shares trading in the low 70s with this kind of headline risk call, not necessarily a financial concern. At what point would boeing share price present just a compelling value would you have to buy it . Well, for us, you know, i think probably a starting point. Well have to theres not a lot of information out there so as we sort of read the tea leaves from what the faa says how quick a fix this could be. But our read right now would probably be in the mid 60s where we would probably get interested again. All right, another 10 or 10 or 12 lower. Do you have any position in the shares long or short at all . I do not. All right, carter leake on boeing, cart certificate with bb t capital markets. Susie still ahead, from the gimmies, to ineeditnow, teaching your kids better money habits. Its tonights kids and cash. Two dynamic readings on the u. S. Economy energized the stock market today. The dow jumped 85 points, the nasdaq added 18, and the s p gained eight points. Heres what inspired investors to buy stocks Housing Starts surged more than 12 last month, hitting the highest level since june 2008. Permits for future Home Construction were also the strongest in more than four years. The upbeat december performance echoes other recent measures on housing. And, there was also good news on the labor front jobless claims fell last week to the lowest level in five years. Susie so is the slow growth environment coming to an end, or is the u. S. Economy still stuck in neutral . Suzanne pratt reports. Reporter ann lenane has sold real estate in up and down markets, what she says about todays market might surprise you. The Real Estate Market is hot. It is on fire. Reporter her read on Real Estate Market makes sense given that home sales and new construction are recovering from their recent steep declines. And, some economists believe housing will replace manufacturing as a key growth driver this year. Beyond the housing, the economy has recently been showing other signs of strength. Retail sales and Manufacturing Activity were surprisingly strong in december. Today, we learned that jobless claims are at a fiveyear low. On top of that the stock market, often considered a leading indicator of the economy hit a fiveyear high today. Were not talking about any old high, its the highest level for the s p 500 since before the financial crisis. Still, not all economists believe theres reason to celebrate, just yet. Weve been looking for moderate growth in the economy and to us that looks like what were getting. There are some components that are strengthening and some are softening but it still adds up to moderate growth economy in our view. Reporter Still Holding the recovery back are weak u. S. Exports due to soft economies in europe and asia. On top of that, there are big concerns about how much consumers will cut their spending this quarter. Thats as all americans adjust to smaller paychecks due to higher taxes. The hit to incomes are going to be a First Quarter event for the most part, so much of that effect will be felt in the First Quarter and it gradually dissipate in our view as the year wears on. Reporter so, what will it take for the economy to return to much stronger footing. Many say the answer lies with the housing market, which needs to built a stronger foundation. That brings us back to lenane and one of her listings. Its a five bedroom condo with river views. It can be yours for 4. 75 million. To be able to get 3,100 square feet in manhattan is a real rarity, especially the bedroom count because people are really having families and staying in the city. And, this apartment really speaks to that. So thats why weve had such great traffic. Reporter traffic maybe, but will it sell . Perhaps if the economy continues to show fresh signs of life. Suzanne pratt, n. B. R. , new york. Tom disappointing. That describes the last Quarterly Financial performances from two of the countrys biggest banks, bank of america and citigroup. Bank of americas profits were cut by more than half compared to a year earlier, and citigroup earned a third less than what was expected, sending both stocks down. Erika miller reports. Reporter investors werent happy with citigroups earnings, and neither was its c. E. O. We recognize that our net income today doesnt yet reflect the amount or caliber of earnings that our shareholders expect and our franchise is capable of. The Company Earned 69 cents a share in the fourth quarter, 30 cents more than a year ago. But that was far short of the 97 cents expected. Reporter citis Legal Expenses rose sharply because of a settlement it and other banks reached last week with the government over illegal foreclosure practices. Results at bank of america were also weighed down by that deal. But an even bigger hit to of b. Of a. s earnings came from a settlement with fannie mae to end a dispute over bad home loans. The bank earned 3 cents a share in the period, a big drop from the 15 cents earned in the same period last year. C. E. O. Brian moynihan tried to put a positive spin on todays results. Our strategies continue to work, were seeing growth across all the core businesses. Were seeing that momentum continue to accelerate. Reporter but for today, at least investors werent convinced. Erika miller, n. B. R. , new york. Susie our next guest says citi and bank of america investors have to be prepared for a few more bumpy quarters. Nancy bush is banking analyst at s. N. L. Financial. So nancy when are all of these mortgage problem goesing to go away. Here we are in 2013 and were still hearing from these banks will problems with mortgages and settlements and chargeoffs. You know, how many more year does we have to go through this or how many more quarters . Well, i think that it is, indeed, a very frustrating issue for Bank Investors and Bank Analysts alike. I think if we are to judge by bank of america and as we know they were the most impacted by the foreclosure issues, were about 75 of the way through the problem in its entirety. However, i think we will have dribs and drabs of these types of charges probably for the next several years, and certainly through 2013. Well, thats pretty incredible. You know, we also are dealing with lowInterest Rate environment and the one thing that we heard from many banks big and small is that they are having a tough time making money on their loans because of these lowInterest Rates so is it possible well see a fresh round of costcutting and layoffs . Well, i think all the banks large and small are involved in looking at their cost on a microscopic level right now. And thats going to be ongoing. I think the biggest programs of cost control like one bac have already been announced. We probably will hear more from city sgroup i think through the year as michael core bet gets his hands on all the issues but costcutting is going to be a feature of banking from here on out. You mentioned michael core bit, he is the new c. E. O. At city, this is his first earnings report. I know there was a lot of interest in what he said on the analyst call. Did he talk at all about his grand plan for city . Not really. I mean he was pressed by several of the questioners to speak to the sort of broader strategic issues. You have to remember hes only been there since october. Its clear that his study of the company all the aspects of the company is ongoing. He said that he would speak to the broader issues and the big plan later on. But i do think we saw a very, very different tone from him. He is very tough. He is very hands on. And it was a very different picture of city group than weve seen before. Do you think hes the right man for the job . Absolutely. Hes got lots of banking experience, dont forget hes also got a chairman Michael Oneill whos backing him up who is a costcutter and a very hands on manager as well so theres a new team in place there that is going to have a very different attitude. I know nancy you cant talk about specific stock but a lot of the bank stocks were down today even though the markets were up. Now you think Regional Banks will do better than the Big Money Center banks. Tell us why you think that . Well, the Regional Banks have their own set of issues. As you eluded to, the lowInterest Rate environment is providing huge pressure for Net Interest Margins. However its very clear that particularly the large regionals, the bank like u. S. Bank kopp, bb t, p c, phipps, third and wells fargo which i classify as a regional although a very large one, our moving market share. I mean they are seeing the lending volume that is sufficient to offset that Net Interest Income or that Net Interest Margin pressure, so you know i think that they just present a greater source of stability and american banking. Bank of america and citigroup will work through their is issues over the next several years but theyre to the going to be returning capital to shareholders, i think, at least until 2014. Whereas the Regional Banks are already had their dividends established. Theyre able to grow them. They really are the stable banks in america right now. All right, we are going have to leave it there. Do you have any disclosures to make about any of the banks weve discussed . I am an owner of u. S. Bancorp, thats my only disclosure. Okay. All right, great. Great information. Thank you so much for come on the program. Thank you. Nancy bush of snl financials. Tom American Airlines took time out today from its flight through bankruptcy re organization, to take the wraps off a new look. The carrier unveiled a new logo and an updated look for its planes. It is the first exterior make over in nearly 40 years. The planes will be silver with red, white and blue stripes on the tail. The new look comes as american awaits deliveries on 59 new planes this year, all of which will need to be painted with the new look. Susie tough talk today from the new c. E. O. At barclays telling employees to get on board with the banks push to restore its reputation or get out. Anthony jenkin jeungins took over the bank after last years rate rigging scandal and in a memo to employees, he focused on a new push for values at the bank. Highlighting respect, integrity, service, extension and stewartship. Tom jenkins also said in the future staff pay packages will be mo closely lengthed to values and ethics in an effort to not repeat past mistakes. Sounds like he is spending time with warren buffett. Tom he talked about banking become too aggressive and too disconnected from all of its stakeholders and clearly barclays has suffered under the scandal not only with banking but also with the Interest Rate rigging scandal that we saw last year. So certainly one to watch there. As it moves forward. And this might set a good example for other banks and other corporations that have been questioned about trust worthiness to restore confidence. Absolutely, some confidence certainly on wall street today with the markets continuing to climb in some kenses multiyear highs. Encouraging Economic Data pushing the s p 500 up to fresh five year highs. The s p 500 showed steady buying interest through the mid afternoon before the gains moderated in the final 90 minutes. Still, the 0. 6 gain is enough for the index to close at its highest level since 2007. Volume picked up from yesterdays pace. 708 million shares on the big board. Just under 1. 8 billion on the nasdaq. The Consumer Discretionary sector led the way, up 1. 1 . The industrial sector gained 1 . And health care up 0. 8 . Earnings were squarely in focus after the closing bell with intel. The Semiconductor Giant turned in better than expected earnings but down from a year ago. Intels biggest Business Unit by sales, its p. C. Group saw revenues fall 6 . As consumers have shifted buying habits to tablets and smartphones, it has hurt the traditional computer business. Before the news, intel stock climbed 2. 6 during the regular session. Shares were at their highest price since october. Its outlook for sales this year was slightly below what wall street analysts anticipated. Shares were down about a half percent in extended hours trading. It wont hurt operating results but higher than expected subsidy force the smart phones sold over the holidays and damage from Superstorm Sandy will. Shares have been trading near 6 month low os falling practice before tonights warning, they fell another 1 from this Closing Price and extended hours trading. Leading the Consumer Sector was media giant c. B. S. It wants to get out of the outdoor billboard business. It plans on converting its outdoor ad business in north and south america into a Real Estate Investment trust, and selling off the same business in europe and asia. The news fueled a rally in c. B. S. , as well as, in two of its billboard competitors. C. B. S. Shares jumped 7. 9 on heavy volume to a new 52 week high. Clear channel outdoor gained 6. 8 . Lamar, which also is converting to a Real Estate Investment trust, rose 2. 3 . Home builders were strong thanks to the strong increase in new Home Construction in december. Pulte group rallied 5. 3 closing over 20 per share for the First Time Since the summer of 2007. News of more homes being built helped Home Improvement retailers home depot and lowes. Home depot is less than a dollar away from a new multiyear high. Lowes close at 37 is an all time high. In addition to the less than impressive earnings from citi and bank of america we reported on earlier, capital one turned in disappointing results after the closing bell. Credit card Company Capital one pledged to return to a meaningful dividend this year. But that did not quell concerns after earnings came up well short of estimates. The company reversed higher finance charges and fees for more customers, leading to lower revenues. The stock was down a fraction before the earnings report. It was at a 52 week high last week, but shares fell more than 5 in after hours trading, falling below 59 per share. But two Regional Bank stocks rallied. The cincinnatibased fifth third rose 4. 8 to a new 52 week high. Earnings were better than forecast. Same story at pittsburghbased p. N. C. Financial, which rallied 3. 7 . Four of the five most actively traded Exchange Traded products were higher. The Financial Sector fund was the lone loser of the group, falling a fraction. And thats tonights market focus. Susie if you stumbled with a money making decision last year, and are striving to do better in the new year, use it as a teaching opportunity. In tonights kids cash, boosting your kids financial i. Q. , while building your own better money habits. Heres Neale Godfrey from the childrens financial network. We made it into 2013. Its a great time to look back at all your money mistakes youve made with your kids and resolve to change them in 2013 decide where youve been before you can know where youre going. Have all family members track every penny of spending for a week and come clean with each other. Now set goals together and agree upon what each of you can snip from your spending list. A year of designer coffee could mean saving enough money for a summer vacation. Pick your biggest goal, maybe saving for college. Take a picture of your youngster in a cap and gown and put it in your wallet next to your credit card. This will be a gentle reminder when the new gadget calls out to you in the mall. Happy new year im Neale Godfrey. Tom tomorrow on n. B. R. From higher food prices to smaller paychecks, how is whole Foods Holding up . We ask c. E. O. John mackey. And our Friday Market monitor guest says now is not the time to get too aggressive with your investments. Hes glenmede investments jason pride. Susie and monday on n. B. R. , we take a special look at u. S. Innovation. Will america be able to keep its competitive edge, through new technologies and entrepreneurship . What better place to answer that question that at i. B. M. s Watson Research center. Bernie meyerson calls himself i. B. M. s chief geek, and leads the firms efforts on innovation. Innovation determines whether a large corporation, a small corporation, a startup or an entire society survive. Its that simple. The most direct attribute you can give to a thriving entity, i dont care what scale it is small, medium, large, enormous, is innovation. The reason is fundamentally to not only see the future, but to drive it. Susie join us monday for our look at u. S. Innovation. Its our special Martin Luther king junior holiday edition. And, theres more to learn about innovation, on the n. B. R. Website. Nbru has research from harvard on competitiveness topics. It explores the tendency for firms to focus on whats worked in the past, rather than on the needs of the future. Just head to www. Nbr. Com and look for the nbru tab. Tom thats nightly Business Report for thursday, january 17. Have a great evening everyone, and you too susie. Susie goodnight tom, well see you online at www. Nbr. Com and back here tomorrow night. Captioning sponsored by wpbt captioned by Media Access Group at wgbh access. Wgbh. Org male announcer suffering with fatigue, weight gain, and joint pain as you age is simply not necessary. We now know that our genes do not determine our health. Announcer marcelle pick is a practicing ob gyn Nurse Practitioner and Womens Health expert. She is a bestselling author and cofounded the women to women clinic, where her advice transforms her patients lives every day. You actually have the power to change your health longterm. Announcer in this program, marcelle provides an easy solution to overcome hormonal symptoms, including weight gain, cravings, mood swings, and depression. Food is the game changer for your life. Announcer no matter what your age or your history, you can reclaim your body, your emotions, your energy, and your libido. I dont think youll believe how simple it is. Sometimes i dont believe it myself, and i actually see it work every day. Announcer stay with us. [applause]