All that and more on nightly Business Report for tuesday, january 7th. Good evening, everyone. Bitter cold temperatures across the country in all 50 states, even hawaii, forced millions of americans into hibernation today. Freezing temperatures with below 0 wind chills shut down many companies, stopped trains, grounded planes and caused Power Outages for thousands of homes and businesses weather experts say the dramatic drop in temperatures today, as much as 15 degrees below zero in some sections of the midwest, may be the coldest day in the u. S. In almost 20 years. Its a phenomenon they call the polar vortex. One beneficiary of this deep freeze, natural gas. For the second day in a row, demand hit a record. Prices pulled back late today on hopes the cold snap will soon end. Jackie deangeles has more. Reporter yeah. Its cold outside. Teeth are chattering from the plains through the upper midwest and all the way to the east coast. Wind chills, though, are negative 20 or so. Reporter new york city hit a record low of 4 degrees. And even atlanta was feeling the sting of single digit temperatures. All anyone wants to know is when will it warm up. The question on everyones mind, is this a very limited event . Reporter to cope with the falling temperatures, most of us are turning up the heat and wondering what the next fuel bill might look like. Im worried about this weather having an impact on my heating bills. Its cranked up all the way. Im absolutely concerned. Its already high because i have Young Children who dont know the difference between heat and cost. Reporter it will make heating more expensive and cost of fuel more expensive because of usage. Reporter natural gas which heats most u. S. Homes is up more than 20 in todays chill september demand to record highs, up 30 from a day earlier. Heating oil also more expensive. Up about 2 in two months. But the weather may take a turn for the better. A lot of cold that we had early this week, by this weekend and early next week its a distant memory. Were talking about 15 to 25 degrees above normal for most of the consuming region from the midwest to the east coast. Reporter now the question becomes, what happens to gas prices if the weather does warm up. Weve certainly noticed how quickly gas prices rise when Oil Prices Spike and they seem to decline a little bit less quickly when oil prices drop. Today it seems traders hearing forecasts for warmer temperatures in the weeks ahead were thinking about take some profit from the run up in natural gas prices. This morning, buying that gas to me seemed tantamount to going to buy a snow blower in the middle of a blizzard. Seemed like the timing is wrong. It would expect gas to be at 5 already and its not. Reporter even if the raw material costs begin to come down, consumers have to wonder how quickly it will translate into savings at home. For nightly Business Report im jackie deangeles. Joining us now to talk more about how this extreme weather is affecting businesses nationwide is scott burnhart, president of planalytics, a business that tracks weather for businesses. Do you have any estimates about the Overall Economic impact plus or minus of this weather weve been having . And how does it as a weather incident compare with others of recent memory, whether its a hurricane or a super storm or a tornado . Well, sure. And thanks. This is certainly a significant event as jackie just mentioning. Its the entire east coast, all the way back through the midwest, all the way back through the rockies. All 50 states showing freezing temperatures. This is a significant significant weather event. We havent seen anything this big from a weather perspective since sandy. It is epic. Wonbig, but its certainly a significant event affecting over conservative estimates are 150 Million People. And to follow up on what tyler was asking you, do you have a number to put on the cost, Economic Impact of this . And how much longer do you think this cold snap is going to last . Well, thats two sides to that. Yes, certainly the estimates are at 5 billion and rising. This event is not over yet. Were still calculating the numbers. Were still right into it. As you walk outside right now in new york city, youll be reminded its still cold out there. So this event is still happening, still going on. Estimates are passing 5 billion. What happens, its a slowdown. Things stop moving. Airlines stop being able to operate efficiently. Schools are closed in chicago. People that can be left home are staying home. People essentially are not going outside and thats a cost. There are obvious beneficiaries, i would think, the snow melt makers, the shovel makers and so on and so forth would be beneficiaries. Maybe the home depot that is sell those kinds of goods would win. Are there other unexpected pockets where companies or businesses benefit that i might not think of . Well, certainly usually when i mention them oh, yeah of course. But things like Convenience Stores are always going to people if they have to go out want to go out as quickly and conveniently as possible. Restaurants that deliver. Anything Online Shopping goes way up. People essentially cocoon. They do their best not to go outside. But they still want to be entertained. Theyll do video on demand, Online Shopping, things of that all get a significant spike when people cocoon, when they stay indoors. Stay warm and stay out of the cold. Most people can deal with this kind of situation. They know its a few days and then its going to go back. But in terms of looking at this in the bigger picture, its been 20 years since theres been an event like this in terms of cold weather. We go through this, is that pretty much it . Or could this kind of cold weather keep coming back . Is this a change in weather patterns . No, not really. I mean, depending on your question, certainly winter isnt over yet. Theres still plenty of weather out there still to be had. Its beginning of january. Theres still plenty of opportunity for this. That said, this is a significant, significant cold. Unlike anything as you said in 20 years. This is very unlikely to repeat. But thats not to say were not going to see some significant weather before spring. Very quickly, bird seed sales rise . Thats correct. People are trying to do their best to help Mother Nature out a little bit. And some of the storm prep, they run to the Grocery Store but they buy the bird seed. All right. Scott burnhart, thanks very much for being with us tonight. Thank you. Well, despite that recordbreaking cold weather making its way as far south as the sunshine state, Citrus Growers association of florida had some good news today. The overnight temperatures hitting the heart of floridas citrusgrowing region stayed just above the freezing mark and will not stay around long enough, leaving orange, grapefruit and other crops unharmed. Good news in the markets, too, which saw the welcome return of some sizeable gains today on positive economic reports. The nations trade deficit fell to the lowest level in four years in november as u. S. Exports hit a record high on strong overseas demand for u. S. Made autos, aircraft and heavy equipment also helping increased Domestic Energy production meant less demand for imported oil. With that, stocks rallied. The dow today gained 105 points, the nasdaq was 39 points higher and the s p 500 added 11. One day after janet yellinwas confirmed as the next share woman of the Federal Reserve one of her colleaguesic issued a warning about the costs of the slow economic recovery. Boston fed president Erik Rosenman says the economy is still far from where it need to be, especially regard, the jobless rate and inflation tar guess. He says theres plenty of evidence to justify the fed keeping its stimulus plans in place. An update on a story we reported here last night. Jpmorgan chase is taking responsibility and agreeing to pay a settlement of 1. 7 billion to victims of bernie may madoffs massive ponzi scheme, turning a blind eye to what the justice september were obvious signing of money laundering. The bank will pay another 350 million to federal banking officials to settle civil charges. U. S. Attorney preet parara of new york city the lead prosecutor in the case says the banks failed and failed miserably in his words to head off wall streets biggest ever swind el, even as it the bank exited madoffrelated position that is put its own capital at risk. Jpmorgan never filed a single suspicious activity report in the united states, and never raised a concern to the banks antimoney Laundering Department in the u. S. In other words, the bank connected the dots when it mattered to its own profit, but was not so diligent when it came to its legal obligations. No individuals at the bank were charged with any wrongdoing, but the bank itself faces two felony criminal counts for violating the banks secrecy act. Those charges are deferred for now and will be lifted in two years pending the payments and reforms of jp morgans antimoney laundering practices. With todays settlement, the grand total of fines that jp morgan has paid is about 20 billion. But investors dont seem to mind. The banks stock has soared in the past year, rising almost 30 . So do these big fines really matter . We turn to john coffee for some answers. Professor of Securities Law at Columbia University. You know, jack, its not just jp morgan were talking about here. Its sort of a pattern, whether its another financial institution, another bank, they get the fines, their stocks still go up. So it makes you wonder, do these fines really change anything . Well, im afraid they are not the optimal means of deterrence. When you impose a fine on a large public corporation, youre really imposing it on the shareholders. And the shareholders of jp morgan are very numerous, very dispersed, very diffuse, and they cant take collective action. Now, jp morgan had a Controlling Shareholder 20 billion in fines would clearly motivate a response. But if youve got millions of shareholders who cant take collective action, management remains in control and arent being measurably affected by shareholder dissatisfaction. Thats i think the fine strategy has to be seen as second best. Not ineffective but second best. What would really work is being able to focus the penalties more on individuals. Either individually or collectively. So why, john, dont prosecutors or regulators at the fcc go after individuals . I assume its because individuals fight the charges because either their career or their freedom is at risk. Obviously you cant have bad behavior without individuals committing it. I agree with you fully. But let me give you the three basic reasons why its very hard to prosecute individuals. American criminal law insists on proof of will fullness. Not simply that you were negligent or you should have known better but that you willfully aided add abetted the fraud or sought to cause it. Thats a very High Standard because we dont want to send people to prison very easily. Thats reason one. Reason two, if you look at our large corporations, the organizational structure there is extremely decentralized and its hard to hold people at the top liable for decisions that were made echelons below at operational levels which arent really monitored by management. Thats whats different in these bank cases from say enron and world co worldcom. There we were dealing with decisions cook the book decisions made by Senior Management. Here where we deal with security centralization, you cant say the general knew all about that. Finally the worst reason, enforcers and regulators would rather settle than fight because their risk reverse and its easier to get a settlement from the entity which will almost always settle than fight the government. The condition for that settlement may sometimes be that you dont go after the individuals. And thats the bargain that im afraid is sometimes there. So understand those circumstances, do you think that there is going to be in change in corporate cultures, corporate behavior, even individual behavior, given all of these fines that were seeing and settlements everywhere . Oh, some change. Remember whats probably most effective here is that Senior Management in a company like jp morgan has been very embarrassed. And that embarrassment is a form of deterrence. And theyre probably going to insist on more compliance. The problem is always the compliance works well during a stormy period. But once you get back into a bubbly market, the Compliance Officer gets a good deal less respect. So i think there are changes. I think the government is definitely getting tougher. And i think management has been embarrassed. But i dont think shareholders can enforce tougher law compliance on management. Well have to leave it there. Thank you so much. John coffee, law professor at Columbia University with us tonight. U. S. Attorneys office in new york city had a doubly busy day today. Jury selection began in the Insider Trading trial of matthew mark tomah, a onetime portfolio manner at steven a. Cohens hedge fund. Hes one of a current or former s. E. C. Employees facing criminal charges for using proprietary information from clinical drug trials to trade millions of dollars worth of pharmaceutical shares. Prosecutors in new york city call it the most lucrative Insider Trading scheme in u. S. History. More fraud allegations involving civil servants. More than 100 consider rent and former new york city workers including dozens of policemen and firefighters have been charged with faking psychiatric problems in order to get Social Security disability benefits. Officials say the scam dates back more than two decades for some of those take noon custody today. Still ahead, legislation to renew jobless benefits clears a senate hurdle. But what are the odds a real deal gets done . Fords ceo allan malaly subject of numerous reports he was leaving to run microsoft will take at the automaker at least through the end of this year. In an interview with the associated press, he said he wanted to end all of that microsoft speculation. The federal trade commission is throwing its weight around today, cracking down on bogus claims from Companies Pushing weight loss products. The agency is fining four companies for using deceptive advertising to sell dubious diet aids. A Company Called sensa has to repay 26 million to consumers after claiming that sprinkling a powder on food will make the pounds go away. Other targets include skin creammaker locitan, supplement maker lean spa and hcg diet direct. It sells hormones that it promises will kick start weight loss. We begin tonights market focus with an upgrade and downgrade in the health care sector. Deutsche Deutsche Bank buying. Citing margin risk deutsche bng cutting humanas rating to sell from hold because of what it says are above average risks facing the company. Making it todays best performing dow component. Humana meanwhile fell flatly to 100. 5. Eli lily expects a slump in both profits and revenue this year. That forecast is still in line with estimates. Lily said the loss of drug patents are to blame. Shares were down there slightly, ending at 51. 19. Pharmacyclics late stage trial from the companys leukemia treatment was stopped early because the therapy met starting goals. The stock climbed almost 20 today to 125. 90. J and j shares also higher by 2 to 94. 29. Netflix fell today after Morgan Stanley downgraded its shares. The Video Streaming Service was the Top Performing stock in the s p last year, but Morgan Stanley cut its rating to under weight to equal weight because of competition from hulu and others. Shares fell. Michael kors took a hit, citi downgraded from neutral to buy. They cited the companys high stock price and concerns about slower sales for access richlt the stock dropped to 78. 94. Sonic said its quarterly profits surged 34 , and thats thanks to solid sales growth and lower costs. The drivein restaurant chain also said its looking to expand to competitive markets in the northeast and california. Shares popped more than 4. 5 to 20. 15. And shares of cocacola ended a little bit higher today, something a lot of analysts predict we will see a lot more often in 2014. After years of declining soda sales here in the u. S. , the company is focused on emerging markets and new products and has seen shares regain a lot of their fizz. Sarah eisen has more. Reporter coke was not a star in 2013, lagging most of its dow peers with a paltry return of 12 . Archrival pepsi returned 21 for the year. Will 2014 be better for coke . Some analysts say yes. While the Company Blames recent troubles on everything from economic slowdowns to bad weather, its the International Story that has most analysts excited about its future. Most of coke sales come from outside the united states. And the Global Economy seems to be on the upswing. According to Jonathan Freeny of Johnny Montgomery scott, 700 Million People will join the global middle class by 2020, that will cause sparkling beverage volume to double in the next 10 to 15 years. If whats happened in the past happens in the future with carbonated soft drink consumption hand in hand with Economic Growth and a lot of these hot places where people would love to have a cold coke with more spending money, this will be a great stock and a great growth opportunity, almost regardless of what happens in developed markets. Reporter a boost could come sooner. In brazil where coke ace lead sponsor of this years world cup. And if history is any guide, results from the tournaments in south africa and germany show those marketing dollars actually translated into higher sales. The real sweetener for investors, though, may come from new drink with Natural Flavors and lower calories. Its been six years since the launch of coke zero, and innovation is something the industry has been working on. To be sure, there are real concerns. The threat of soda regulation, uncertainty about the Global Economy and the prospect of a stronger u. S. Dollar all pose a risk to cocacola. But that isnt stopping many from betting that in 2014 you cant beat the real thing. For nightly Business Report im sarah eisen. Lawmakers took a big step to reinstate jobless benefits cut off to millions of long term unemployed americans two weeks ago. The senate including six republicans siding with democrats voted to limit debate on the bill to renew those benefits. A final vote is still pending. But the white house president obama fresh off a twoweek vacation in hawaii, pleaded with lawmakers to pass the bill and rejected arguments that Unemployment Benefits lessen the motivation to find a job. The longterm unemployed are not lazy. Theyre not lacking in motivation. Theyre coping with the aftermath of the worst economic crisis in generations. John harwood joins us now from washington. John, what are the odds this bill passes the senate . Whats next . I still think theyre not great, tyler. One hurdle cleared but theres big other hurdles to clear both in the senate as well as the house. Republicans even some of those who voted for cloture today to move the bill along are insisting on paying for the extension of Unemployment Benefits. Thats 6 billion for three months, 25 billion for a year. And its not easy for the two sides to agree on how to do that. We could remain in a stalemate long term throughout this election year. And still, john, this was a surprise, wasnt it . The way the vote turned out . Reporter it was. There had been a lot of talk about the fact that republicans had dug, in democrats would not be abe to get the votes they needed to end this filibuster. What we dont know yet is whether that reflects a longterm erosion in the republican position and theyre going to come to democrats and extend or whether they were simply falling back to a different line of defense and didnt want to appear like they werent willing to talk about it, debate the on the floor. The senate is one thing, the house is another. What might happen there . Reporter well, the house is saying that this is going nowhere unless president obama steps up with what they call a serious plan to pay for this and include some incentives for jobs. Some of the things that republicans have proposed to go along with this, though, like delaying the individual mandate on obama care are clearly nonstarters. Other things include things like the Keystone Pipeline which the administration hasnt taken a position on yet. A lot of nuances in this debate. Thanks a lot, john. John harwood reporting from washington. And coming up on the program, fromwarable technology to gadgets in bars, what the major tech players are betting will be the next big thing. In las vegas today it was the kickoff of the annual Consumer Electronics show. Its where technology and Media Companies show off their latest musthave devices. So what are the big trends . And what hot new gadgets will we all be seeing and even buying later this year . John ford takes a look. Reporter smartphone lenses, watches, appliances. This is the Consumer Electronics show where the worlds biggest tech brands and quite a few upstarts come to Court Retailers and cut deals practically everyones already got a smartphone and flat screen tv. But now the companies that won on your wall and in your pocket want to take over your car and the rest of your mobile life. Wearable technology, smart watches and activity trackers. Just like there are lots of watches right now, theres going to be a gamut of really functional, almost phonelike things to wear to small Light Fitness related things. Reporter in the car, google is teaming up with audi, gm and others to put the android operating system on the road. At t and onstar are making cars into wifi access points. Were really excited about the new growth businesses that were getting into, like the connected car, digital life. Reporter and theres a lot of fun stuff. This 70 smartphone lens brings fish eye and wide angle views to your photos and videos. Ihelp for your phone and ilock that turns your gaze into the key that unlocks all your passwords. Bottom line, its not about the phone anymore, its about Everything Else your phone can control. For nightly Business Report im john ford. Finally tonight, some photographic proof that no matter where you may be in the u. S. Continental u. S. , that is, it is nearly impossible to escape the bonerattling temperatures from the socalled polar vortex. Take a look at this satellite image from nasa showing that massive weather system covering what appears to be the entire eastern half of the nation from canada all the way down to Central Florida an arctic blast that is almost out of this world. But very much here in this world tonight. They say its around most of the time. Its stable. But theres a crinkle. Thats nightly Business Report. Have a great polar vortex, everyone. Well see you back here tomorrow night. Nightly Business Report has been brought to you in part by the street. Com. Up to the minute stock market, news, and indepth analysis. Our Rating Service provides objective, independent ratings daily on over 4300 stocks. Learn more at the street. Com nvr. Generous support from. Over 250 cities in 40 countries. Including one youll never forget. We know why you fly. Were american airlines. This time, were in the south of france, mixing roman ruins, fine wine, a little van gogh, and even a french bullfight. Get ready for not a year, but an exhilarating half hour in provence