Dow Nudges Past 13,000 Again

Matt Nesto analyzes the morning business headlines.
10:51 | 02/24/12

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Transcript for Dow Nudges Past 13,000 Again
Hello everyone I'm Stephanie -- new York and this is your morning and business report joining me now to discuss all the business headlines as we head into the weekend. Is Matt -- -- co host of breakout on our partner Yahoo! finance inaccurate to see happy Friday thank you are less effort to analyze it looks like the Dow may be heading north of thirteen thousand again today he and Dow will manage to stay and settled -- for awhile. It seems like you know there it's going to be close you know we we we had the headline the big you know thirteen thousand -- earlier in the week so we -- already have the news. If he goes you know slightly above slightly below I think we've -- you know seen that movie as they say. We need to go -- should we -- from this level we've -- stalled in the short term. And there's a tiny bit of rotation if you will in terms of what kind of stocks investors have an appetite for the more defensive stocks are -- to outperform a little bit better here in the short term than the so called cyclical stocks which have taken us to this lofty level. That's interesting all right let's talk about the big story which is crude prices right now they've now hitting nine month high. What do you see happening in the days and weeks ahead and is a market reacting at all to this. Definitely reacting to it I mean we are you getting into that scary a 110. Dollar zone and then the next -- would be -- in the 120 again we've been there before we certainly could go there again. Because of the risk in the Middle East the doesn't seem to be dissipating. After all the probability. -- of -- going away quickly I think his low so therefore the risk. Doesn't seem to be going to be going away at any time soon. And therefore the price of oil could easily continue to go higher also fueling the price of -- Is a positive thing which is this economic story. The slow and steady albeit you know modest our recovery of the economy that tends to stoke demand. We're seeing oil prices way above where they normally are in gasoline prices for this time of the year way before the peak driving season so when that kicks in that could be sort of an after burner -- if you will and sent prices yet -- death. That's a good point. CB oil companies -- in all of this are they going to be raking in the profits are dealing with smaller margins. Well I don't think -- margins are going to be going down they they will be making definitely more money of the price of crude goes up. There is a fine line it's not be easy to define at a point does Stephanie but if prices get too high then people to say enough and they start. To cut back so rental companies will Saudia you know they'd like to -- less oil to more people. But the truth of the matter is there is a -- tipping point if you will when prices at the pump. Particularly. Get shocking they will make money they're definitely participating in this. Very short term run up that we've seen in energy the energy sector for example is the best performing sector this week in the S&P 500. Okay Matt Adam moving on at ten were going to be getting into figures on new home sales and what are you going to be looking for there any expectation. It's a couple of things -- expectations for a bounce back in a sharp decline or a little bit of a decline in December so the reading should come in around 320000. Mind you. That's about a third more less than a third of where we were running before the peak. And there and it -- much further down from that we should run north of a million new home. Sales I will be looking at the price the median price of new home sales it runs about 25% above what existing. Home sale prices go web so I want to see some. Snap back in pricing there we've seen the home builders do very very well and also be looking at some of the regional anomalies in terms of how -- sales did in the northeast and the west in particular where they were strong in December despite a weaker overall headline number. Sure that's I was very telling all right another headline people are talking about this morning at fashion designer Kenneth Cole were all familiar with that clothing brand. Wants to take his company Friday to news this unusual moves. -- -- that fact I'm surprised it's not more comment it's sure good to pick in the -- be a public company to break it to be out there. But it out he battery in this is the problem -- -- is so much pressure to deliver earnings it's. Short term time horizon we're trying to be a long term business out -- -- so you know -- -- you have to answer to shareholders and it's a private business to lock the front door and say it's you know keep out -- -- they. So he already owns almost half of the company the stock is languishing in the wallets up today course because of the off free offered fifteen dollars a share in cash to stocks trading above that. Which is not atypical for these kind of deals -- -- -- you give us 15%. Premium to where the stock was just they would like you know 20% and we'll -- if somebody else and wants to pay even more so maybe a bidding war will happen. But it is not uncommon and this is a stock that as the -- offered fifteen it was trading at fifty bucks a share in the year 2000 that was its all time high so. It's been kind of a long slow wind down for. Ticker KCP can handle. I agree with -- spread doesn't have more -- number of other retailers are among the big movers this morning companies like Crocs. The gap and JC Penney tell us about them. Yeah -- Clarkson -- interest thing both are down sharply double did digits here today. They both gave weak guidance particularly -- -- make all boots and they marked they they noticed notably a sharp increase in sheepskin cost say hello. So that is their first quarter earnings they think you're going to be -- fifty percent Crocs are -- they are soft. First quarter forecast they're looking for -- like 2426. Cents. Wall Street one of the -- thirty cents so there's a big give back there -- and JC Penney's. Both pretty much got -- -- on the earnings per share. Their revenues were both there own but that was expected JC Penney were revenues were down about four point 9%. Lot of costs in the whole restructuring of JC Penney you know they have that new CEO they brought over from apple. To -- a do over their stores were talking earlier about -- new promotional non -- national strategy. So there -- some costs when you reinvent. Do we know yet and every member sales saying everything's I was on sale thing that's after talking about -- -- stay in retail Sears has announced plans to sell off stores as a way of raising cash that is Smart move and could this signal the beginning possibly of a break up. The you know it's sort of an 210. The -- ongoing battle with -- when they -- with Kmart to try to get this mega retailer. Wanted to catch fire the stock is had a great rebound. In the short term over the past couple of months it's up a 100%. In the past a few months -- it is still down. From where it was a year ago and -- way down from its all time high about 34 years ago. Is it. Did you know that a break up but we are probably are already starting to sell divisions they're selling some stores. You know we always have to look at their Canadian operations. And then they operate and -- the three businesses of Sears Kmart and Canada. So away -- they will continue to do some things but this is really a move yesterday. To show that they have the staying power to do the restructuring that they're not. That they have the cash and liquidity in the assets if you will they do have. A lot of stores over 4000 of them and then a lot of revenue over forty billion dollars in revenue which is not all that much smaller than a retailer like Amazon. So Sears is a force to be reckoned within. The people that -- -- the investors that bought it are not to -- -- -- bright people also I wouldn't bet against them as a. -- -- -- Don't bet against the old school not right we got word this morning of yet another court case between apple and -- Chinese company over the iPad trademark. How -- -- problem is is potentially for apple. It's a -- -- you know it's the company is called pro view bam it's interesting because they they they wanted to get an injunction in China is a Chinese company. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- They had filed the suit in California and that's a when you're talking about -- suddenly come to life -- they're trying to do you know get some traction there. Apple claims that they paid this company 50000 dollars in 2009. To buy the rights to the iPad name they also -- ITV which could be uncomfortable and -- web. As I understand that by remember apple has -- little problem where they have 100 billion dollars in cash that they don't know what to do with that what they pay -- dividend you know that's for another day. But the truth of the matter is they could probably make this problem go away for a fairly. In a small price greater scheme. Of thing so yeah it's a nuisance but it's not gonna sink the good ship -- times. I can't imagine it would be able to Eilat Warren Buffett releases his annual letter from Berkshire Hathaway tomorrow -- any predictions on what. Oracle will Sunday. Well I think he's got to remind people is a long term investor has a short term and I say that. -- saying the last twelve months -- two years or so. I short term performance has been horrible he's under performing since his company Berkshire -- -- was added to the S&P 500. His stock is up 4%. The S&P 500 is up 27%. 1002010. Last year the stock was down underperformed and even this year and the year to date basis. -- Berkshire Hathaway shares are up about 4% the stock market's up twice as much so. The market isn't all that interested in Berkshire Hathaway shares right now she's gonna -- some -- -- to do the area also has if you look back over the previous year he had that difficult and awkward situation where his would be successor. Was kind of ensnared in some front running on a trade they -- gonna buy that company Lubrizol Berkshire Hathaway was with this. Guy he already owned the stock when he recommended the war -- dude that turned out to be a little bit awkward then. The whole succession plan was up an air and then then the the named his son is the non executive chairman act cause another -- -- -- some focus there and of course the pollutants that the politics. Berkshire Hathaway in the buffet planned a warm Buffett's secretary I know you never used to see this kind of thing but maybe it's an attempt. To sort of a you know steer away from the lackluster performance of the stock. And you know look at other thing. President listening and -- -- legs for yeah yeah. So well he's only human -- I mean I think a lot of times we apologize to him but the fact is he's. He's a human being and it apparently a pretty Smart guy aren't we're at a time that's -- let's -- Wal-Mart look at the Dow before we let you go hovering right near thirteen thousand. Looks like it's gonna stay that way Nat -- from Yahoo! finance thanks so much have a great weekend. -- -- -- -- -- --

This transcript has been automatically generated and may not be 100% accurate.

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