<Show: NIGHTLY BUSINESS REPORT> <Date: April 24, 2013> <Time: 18:30:00> <Tran: 042401cb.

118> <Type: SHOW> <Head: NIGHTLY BUSINESS REPORT for April 24, 2013, PBS> <Sect: News; Domestic> <Byline: Susie Gharib, Tyler Mathisen, Jon Fortt, Diana Olick, Courtney Reagan> <Guest: Robert Shanks, Michael DuBose> <Spec: Business; Apple (NASDAQ:AAPL); Electronics; Wall Street; Housing; Real Estate; Crime; Internet; Safety> <Time: 18:30:00>

ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib, brought to you by --

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TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Apple`s influence. The company was the talk among investors and on Wall Street today. So why does this one company matter so much?

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Back home. They`re back. Why homes are once again being built without a buyer lined up in advance.

MATHISEN: And the cyber threat. What businesses and individuals can do to keep from being hacked?

All that and more tonight on NIGHTLY BUSINESS REPORT for Wednesday, April 24th.

Good evening, everyone.

Susie, you know, Apple`s numbers were out yesterday. But the company was all the talk today. It was the day of reckoning.

GHARIB: Yes, whether you were in your office, at the water cooler, and trading posts on Wall Street -- yes, everyone was talking about Apple (NASDAQ:AAPL) today -- its stock, its earnings, its iPhones and iPads and even its competitor competitors.

So, why is everyone so obsessed with Apple (NASDAQ:AAPL)? Whether you know it or not, chances are some of your money is invested in Apple (NASDAQ:AAPL). Now, the second most valuable company on the planet. And today, Apple (NASDAQ:AAPL) was one of the most heavily traded stocks in the S&P 500, 34 million shares traded hands.

Jon Fortt takes a look at why Apple (NASDAQ:AAPL) is such an important company to Wall Street and why it matters to just about all of us.

(BEGIN VIDEOTAPE)

JON FORTT, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Even if you don`t own an iPhone and have never set off in one of the glass (ph) stores, Apple`s a stock you should care about.

(on camera): Why? Because it`s owned by so many 401(k)s and pension funds for one. Nearly, 2/3s of Apple`s shares are owned by institutions, including CalPERS, New York State Pension Fund, and Blackrock.

(voice-over): Not only that, but Apple (NASDAQ:AAPL) stock movements influence some widely held index funds and ETFs, and funds like the QQQ, which tracks the biggest stocks in the NASDAQ, Apple (NASDAQ:AAPL) makes up more than a 12 percent weighting, nearly twice that of Google (NASDAQ:GOOG). That`s enough to make Apple (NASDAQ:AAPL) stock moves a concern for the whole market.

MICHAEL YOSHIKAMI, DESTINATION WEALTH MANAGEMENT: A significant percentage, and overweight percentage of the returns in the S&P 500 over the last two or three years have been because of Apple (NASDAQ:AAPL) stocks. If Apple (NASDAQ:AAPL) swoons, it`s going to impact many indices and it`s certainly going to impact many fund managers that perhaps were overly confident about the prospects of this technology company.

FORTT: Apple`s product cycle has a big influence for better or worse. Take the iPhone was introduced six years ago, smartphones looked like this. Now, here`s the latest HTC and Samsung phones, touchscreens and keyword inside. If you owned Blackberry, Nokia (NYSE:NOK) or Motorola shares over the past five years, Apple (NASDAQ:AAPL) became a pretty important stock to know about.

The iPad three years ago, a big launch for Apple (NASDAQ:AAPL)? Sure, but it was even bigger for HP and Dell (NASDAQ:DELL), which have seen their PC businesses implode.

Now, there`s a new reason to care about Apple (NASDAQ:AAPL): cash. Apple (NASDAQ:AAPL) boosted its dividend 15 percent yesterday to $3.05 per share, making Apple (NASDAQ:AAPL) the biggest dividend payer in the world.

It also authorized the massive buyback so the total cash return to shareholders will total $100 billion by the end of 2015.

ALEX GAUNA, JMP SECURITIES ANALYST: One of the problems is, yes, Apple (NASDAQ:AAPL) is managing to lower growth expectations, but it`s doing so because it`s now suddenly losing share. The smartphone market is not saturated, but Apple (NASDAQ:AAPL) now finds itself losing out to more diverse and better priced Android alternatives.

FORTT (on camera): CEO Tim Cooke acknowledged on the call that Apple`s growth has slowed and its margins are coming down a bit. What`s a lot less clear is whether investors will continue to embrace it as a growth stock. Or relegate to value territory. Either way, it`s going to be an important story to watch for more than just Apple (NASDAQ:AAPL) stockholders.

For NIGHTLY BUSINESS REPORT, I`m Jon Fortt.

(END VIDEOTAPE)

MATHISEN: And later in the program, we will look at the new strategy Apple (NASDAQ:AAPL) rival Samsung is employing, as it tries to take an even bigger share of the smartphone market.

GHARIB: More proof today that Ford Motor (NYSE:F) is running on all cylinders. The automaker said today it posted its best quarter ever in North America.

Overall, though, Ford earned 41 cents a share, 4 cents more than estimates. And revenues revved up 10 percent thanks to the rollout of all models. The strong numbers came despite huge losses in Europe.

Now, earlier today, I talked with Ford`s chief financial officer Bob Shanks and asked him what Ford has to do to keep that sales momentum up for the rest of the year.

(BEGIN VIDEOTAPE)

ROBERT SHANKS, FORD CHIEF FINANCIAL OFFICER: Well, Susie, I think we have to do what we`ve been doing. I mean, our business is a product business. And I think we`ve got great products that we have just introduced, we`ve got more coming this year.

We are managing the cost of the business well, keeping our production in line with demand and working the top line. So, I think we just continue doing that.

GHARIB: So, Bob, why all the demand for these cars? Is it because Ford is making better cars? Or is it that people just need new ones, given that the age of the vehicles on the road are so old?

SHANKS: Yes, that`s a very important point, Susie. There is a strong replacement demand element behind the industry growth in North America. And certainly that`s part of the story.

But, clearly, the consumers are responding to the product that is we have out there. A lot of that was around the new Fusion, the new C-Max and the new Escape. And part of that story is fuel economy. It`s the fun to drive element of the vehicles and they see value in the price positions that we have in the marketplace.

GHARIB: Well, as popular as Ford is with consumers, it`s Toyota (NYSE:TM) that is the number one automaker in the world. What can Ford do to change that?

SHANKS: Well, we just have to keep working our own One Ford Plan, which is working and is having great success. We`ve seen the fruit of that in North America. We`re growing dramatically in Asia Pacific/Africa, and we expect great things from that part of the region by mid-decade. We have a restructuring plan in place in Europe that`s bring that back to profitability by the middle of the decade.

We`ve got a plan and it`s working. We just keep -- we just keep on track with that. And the company will move forward.

GHARIB: To what extent is the weak Japanese yen making prices on Toyota (NYSE:TM) Corollas and Camrys, for example, more attractive to American buyers? And do you think a price war could shape up in the U.S. car market?

SHANKS: Well, we don`t know yet, because it`s only over the last six to nine months or so that the yen has depreciated to the degree that we see today. It clearly has given the Japanese competitors an advantage not only here but around the world.

So far, we`ve only seen very small, selected areas where they may have leveraged that in terms of, you know, price positioning in the marketplace. Historically, they haven`t used that in terms of heavy incentives. What they`ve generally done is to put new content on to vehicles and not price for that.

So that`s the thing that we`re looking at very closely. And we`ll be watching that goingforward. But so far, just some -- some few signs that they`re starting to take advantage of that.

GHARIB: Let`s talk a little bit about China, Ford sales and market share is increasing there. But G.M. still dominates that market. What do you have to do to catch up?

SHANKS: Well, we just have to keep working our plan. We`ve presently got seven plants under construction in Asia Pacific/Africa. Seven of those are in China, two in India. We had a 30 percent increase in our share, in the quarter in China. We actually wholesaled more Focuses in the region, most of that in China, than we did in either Europe or in North America.

GHARIB: China`s also on track to be the biggest market for luxury vehicles like BMW, Audi, Mercedes, very popular with the Chinese.

SHANKS: Right.

GHARIB: Is there a place for the new Lincoln to win over buyers of luxury cars in China?

SHANKS: Yes, we think so. We`ve announced that in 2014, we`re going to introduce the brand into China. Teams are already working to prepare for that. And we do think that we`ve got the products and we`re going to have a consumer brand experience and dealership experience that we think is going to set us apart from others.

(END VIDEOTAPE)

GHARIB: Ford shares hitting a speed bump today. They were down slightly, but the stock is up almost 3 percent so far this year.

MATHISEN: Well, Ford shares, like a truckload of other stocks today ended slightly lower. Still, the major averages did finish the day mixed. Orders for long lasting durable goods were softer than expected in March. And investors took a kind of ho hum view of mostly positive earnings reports before the bell from Boeing (NYSE:BA), Eli Lilly (NYSE:LLY), Northrop Grumman (NYSE:NOC), Dr. Pepper Snaffle, Whirlpool (NYSE:WHR) and several others.

When all is said and done, the Dow was down 43 points, dragged lower by nearly 6 percent decline and Procter & Gamble (NYSE:PG), after P&G lowered its outlook for the rest of the year. The second biggest decliner was AT&T (NYSE:T), down 5 percent. Its CFO described the economy and business climate as challenging, even though he confirmed his company`s 2013 outlook.

NASDAQ and the broader S&P 500 both closed a tiny fraction higher.

GHARIB: Some encouraging housing news. Applications for new mortgage loans rose 1 percent last week as rates on those mortgages kicked lower for a fifth week in a row. A 30year fixed rate low is now averaging 3.65 percent. Most of those new applications came from current homeowners refinancing existing loans, but at a cheaper rate.

MATHISEN: While, many of those current homeowners are staying right where they are and taking advantage of lower mortgage rates. Many would-be homebuyers are snapping up newly constructed houses, almost as quickly as they`re being built. And that`s driven some homebuilders to do something we haven`t seen since the housing bust. Building houses first on spec and then trying to sell them.

Diana Olick has more on this old new trend.

(BEGIN VIDEOTAPE)

DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Stephen Paul says he should have no problem selling this five-bedroom home in the Tony Suburb of Washington, D.C. He built it without a buyer. Something he hasn`t done much of in the past eight years.

STEPHEN PAUL, MID-ATLANTIC BUILDERS CEO: We`re monitoring the resale inventory of listings for the last 18 months. And we`ve watched that precipitously drop over that period of time and we realize that there`s going to be a demand for homes where people want immediate deliveries. And there are none on the market.

OLICK: So called spec building was more than just a four-letter word during the housing crash, it was a risk you were willing to take. But the story now is, no supply. Home listings in March were down 17 percent from a year ago, according to the realtors and some of the big builders say they`re holding back construction because they`re facing land, labor and material shortages, and because they want to keep prices strong. That has others thinking the time is now right for specs.

MEGAN MCGRATH, MKM PARTNERS HOMEBUILDING ANALYST: I think the biggest competitive advantage that builders have right now is that they have product. With existing inventory so low, they need to take advantage of the fact that they actually have something to sell.

OLICK: McGrath said big builders like Lennar (NYSE:LEN) and Dr. Horton have the great success in spec recently, because they know exactly where and what to building.

Paul says he`s targeting high end/high volume markets for most of his specs, doing mostly tear down and build projects. That`s where the risk could bring the greatest reward.

PAUL: We`ve been monitoring other builders and we`ve been noticing they have had a reluctance to start to building specs because of hesitation and concern about the market. But we see it as an opportunity.

OLICK (on camera): He also says he`s starting to see buyers who had damaged credit, even lost their homes to foreclosure three or four years ago, now back and able to buy again. That can only mean more demand amid this limited supply.

For NIGHTLY BUSINESS REPORT, I`m Diana Olick in Bethesda, Maryland.

(END VIDEOTAPE)

MATHISEN: As for homebuilder earnings, Meritage (NYSE:MTH) Home reported a strong quarter, with new orders up 35 percent. Big builders Pulte and D.R. Horton (NYSE:DHI) out with their results tomorrow and Friday.

GHARIB: And coming up on the program, Schwab hit by a second cyber attack in as many days. We`ll ask a security expert how businesses and individuals can protect themselves.

But, first, let`s take a look at how the international markets closed today.

(MUSIC)

GHARIB: In our "Market Focus" tonight, investors were busy all day analyzing a new batch of earnings. We begin with Qualcomm (NASDAQ:QCOM), the chipmaker reported after the bell profits in line with estimates, and revenues ahead of expectations. It`s a big supplier of chips that are used in Apple (NASDAQ:AAPL) devices and Galaxy phones. But with concerns about a slowdown in smartphones, Qualcomm (NASDAQ:QCOM) said it expects profits in the current quarter to come in lower than analysts` estimates.

Shares rose 1 percent in the regular session, but they tumbled more than 4 percent in after-hours.

MATHISEN: Zynga (NASDAQ:ZNGA) reported profits of a penny a share, while Wall Street was expecting a 4-cent loss. That`s the good news. The not-so good news, the social game-maker issued a very sharp warning about revenue for the current quarter. Shares were up more than 5 percent before the close, but then they dropped more than 10 percent right after that earnings` release.

GHARIB: First Solar (NASDAQ:FSLR) led the S&P all day, after selling its largest solar farm to the Southern (NYSE:SO) Company and Turner Renewable Energy. Southern (NYSE:SO) CEO said the purchase more than doubled its solar capacity.

First Solar (NASDAQ:FSLR) gained more than 11 percent today. And year-to-date is up more than 45 percent.

MATHISEN: And near the top of the Dow today, Boeing (NYSE:BA) reporting first quarter profits up 20 percent. They took no special charge for those 787 Dreamliner problems and confirmed its guidance for the year. Investors cheered that earnings news and the expectation that the FAA will clear the Dreamliner for passenger flight later this week.

Boeing (NYSE:BA) gained more than 3 percent today and is up more than 20 percent this year.

GHARIB: Yesterday`s fake "Associated Press" tweet -- the one that sent the markets into a temporary tailspin -- escalated concerns about corporate Internet security and how safe all our online accounts really are. Today, a victory for the good guys. Police in Australia arrested a man believed to be a high level member of the computer hacking ring called Lulz Security. It`s part of the larger group known as Anonymous, which has claimed responsibility for cyber attacks on the CIA, Sony (NYSE:SNE) Pictures, and even Public Broadcasting Service.

Meanwhile, online brokerage giant Charles Schwab admitted its Web site was the target of a second cyber attack in as many days, denying its clients access to their online accounts for several hours. The company says the problem has now been resolved and Schwab investors can safely trade again.

Well, with so many of those Schwab clients using mobile devices to conduct trades, another worry on everyone`s mind how vulnerable is your mobile phone to being hacked.

John Hering, a self-described hacker and now CEO of Lookout, it`s a mobile security provider, demonstrates just how simple and quick it is to gain access to your mobile accounts.

(BEGIN VIDEO CLIP)

JOHN HERING, LOOKOUT CEO: There`s a whole host of spoof e-mails. In this case, what we`ve got is an e-mail from a colleague. It says, hey, why don`t you check out this game? I have lots of programs that get sent to me. I`m sure you have lots of documents that get sent to you.

UNIDENTIFIED MALE: Now, it says lookout.com, so you think it`s from a co-worker?

HERING: Exactly.

UNIDENTIFIED MALE: Or I think it`s a from a co-worker?

HERING: And it did not come from a co-worker. If you open this file, and it`s really simple, just hit install. It will install the application, and you open it, it`s a game in this case, it might be a document. It could be a video, defending on the (INAUDIBLE) exploit that`s used. The device is now hacked. So, we`ve now hacked into the device and the control is now in my hands.

(END VIDEO CLIP)

MATHISEN: Or next guest says preventative measures are your key to protecting your identity in a cyber world. He`s Michael DuBose, managing director and leader of cyber investigations at the security firm, Kroll.

Good afternoon, Mr. DuBose. It`s good to have you with us.

MICHAEL DUBOSE, LEADER, CYBER INVESTIGATION UNIT: Good afternoon. Thanks.

MATHISEN: You know, we just saw how easy it was for somebody to hack into a phone. In the past 24 hours, Schwab has been hit twice. Should I - if I do my banking and brokerage work and my trading online -- should I think twice about doing that?

DUBOSE: Well, you should be very careful. Clearly -- well, first, mobile devices are kind of the new frontier for hackers. Wherever people choose to do their financial banking, hackers are going to follow. They follow the money, and where money is on mobile devices, they will try to hack mobile devices.

But I think overall, in terms of financial services industry, I think you need to be very careful. You need to be careful about your passwords. You need to have strong passwords. You need to change them regularly.

You also need to be careful about who is on your computer. At least the computer you`re using for your financial services transactions. If you have a family computer and personal computer that you use, you`re better off using your personal computer, because you really don`t know where your kids are going online and that type of thing. So, there are a number of different measures you can take to protect yourself.

MATHISEN: And because -- excuse me for interrupting.

DUBOSE: Yes.

MATHISEN: Because you don`t know where other family members may have been, that may have brought in introduced viruses or malware, I have to guess, even though we hear about the hacking attacks on Chase, or Wells Fargo (NYSE:WFC) or, just in the 24 hours, on a Schwab, that the greatest point of vulnerability is probably the home computer. Do -- number one, is that correct? And number two, do the kinds of off the shelf security programs, the antimalware programs that I can buy, do they do the job?

DUBOSE: Right, you`re exactly right. Just like with a company, the weakest link in either a network or a financial transaction involving a home computer is the end user, is a home computer itself.

And the anti-virus software, or the security suites that involve anti- virus software, antispyware and firewalls, they are essential. You need to install them, they need to be updated at least daily, automatically, but, unfortunately, the reality is that depending on what study you read, only about 20 of these anti-virus programs are only about 25 percent to 40 percent effective in actually detecting the malware that we`re seeing today.

MATHISEN: And so, how do I get the remaining 75 percent protection that would seem reasonably important to me?

DUBOSE: I think a lot of that has to come through very, very careful user habits. In fact, when friends ask me, how should they conduct online banking? To the extent they can afford to, I recommend that they buy a very cheap computer and only use that computer for their financial transactions. Don`t use it for e-mail. Don`t use it for online browsing, anything. And - just as a way to reduce the risk. But there`s --

MATHISEN: Two quick -- two quick questions. Do you do your banking online and your financial work online?

DUBOSE: I do, yes.

MATHISEN: And so what would the three key things that you would recommend to our audience be to protect yourself in -- against cyber threat?

DUBOSE: Right. Well, one was what I just mentioned, you really do need to have a security suite of anti-virus software and spyware.

The other is to have very strong passwords and to change them regularly. You know, the recommendation is, that you not have the same password for more than one account. Practically speaking, nobody can keep track of all those passwords, but at least have unique passwords for those accounts that are most sensitive. For instance, your bank accounts or things like that.

And I think the other thing is to reduce the use of those computers on which you`re conducting really sensitive banking transactions.

MATHISEN: Michael Dubose, thank you very much. Michael is managing director and leader of the cyber investigation unit at Kroll Advisory Solutions.

DUBOSE: Thank you.

MATHISEN: And still ahead, Best Buy (NYSE:BBY) teams up with Samsung. Will the new strategy be a win-win for both companies?

First, though, how commodities, treasuries and currencies fared today.

(MUSIC)

GHARIB: Just a day after Apple`s earnings were released, rival Samsung is looking to get a bigger piece of the smartphone market by teaming up with big box retail Best Buy (NYSE:BBY). The question is, will the strategy pay off for both companies?

Courtney Reagan tells us more about the partnership and whether it will work.

(BEGIN VIDEOTAPE)

COURTNEY REAGAN, NIGHTLY BUSINESS REPORT CORRESPONDENT (voiceover): Today in New York City, the CEOs of Best Buy (NYSE:BBY) and Samsung Electronics officially launched the new Samsung Experience Shops that will be in 1,400 Best Buy (NYSE:BBY) locations by June. If the shops are successful, this deal could be a big win for both sides.

Samsung is attempting to catapult past Apple`s smartphone dominance by taking advantage of Best Buy`s huge physical footprint. Best Buy (NYSE:BBY) meanwhile hopes to capture a little bit of Samsung`s cool factor. Two hundred of these shopping shops are already serving customers, just in time for the highly anticipated release of the new Samsung Galaxy S4 smartphone.

HUBERT JOLY, BEST BUY CEO: The feedback is extremely positive. The early results in terms of sales are also positive. Too early to quantify and be definitive, but we`re pleased with what we`re seeing.

REAGAN: Don`t forget, Best Buy (NYSE:BBY) also sells Apple (NASDAQ:AAPL) products in its stores. But these new Samsung shops will be more than twice the size of the existing Apple (NASDAQ:AAPL) shops, with an average footprint of 460 square feet. Best Buy (NYSE:BBY) is planning to put the Samsung Experience Shops in twice the number of locations of Apple`s shops.

(on camera): The Samsung Experience Shop is all part of Best Buy`s Renew Blue Campaign to invigorate its consumers, its employees and its vendors. Some question whether or not Best Buy (NYSE:BBY) will remain brand neutral and not heavily favor vendors that have a larger presence in its retail stores.

JOLY: The remuneration of the blue shirts is unchanged. So, there`s no -- they`re not incentivized for a particular vendor or another. Their focus is on customer satisfaction and the overall success of the store.

REAGAN: As the debate over how brick and mortar stores will deal with rising Internet sales continues, the CEO says with its blue shirt expertise and online price matching program, there`s no reason for consumers to walk out of the store without purchasing. Though Best Buy (NYSE:BBY) is joining other retailers in reducing its physical footprint, Joly contends its real estate is an asset and not a liability. In this case, offering vendor Samsung a 1,400 shop retail footprint in just five months time.

For NIGHTLY BUSINESS REPORT, I`m Courtney Reagan, in New York.

(END VIDEOTAPE)

MATHISEN: You know, Susie, in China, they basically -- Best Buy (NYSE:BBY) follows this model in their subsidiary, where every vendor has a kiosk within their own store, staffed by their own employees and it`s working very well. So, you go to the

Samsung counter, you meet the Samsung employee. Go to the Sony (NYSE:SNE) counter, you go to the LG counter, you meet their people there and they sale the products and they rent the space to those companies.

GHARIB: The American consumer habit is do your research in the stores and then go buy it on the Internet.

MATHISEN: That`s what a lot -- that`s been hurting them in a big way.

Well, finally tonight, Benjamin Franklin is getting a makeover. Two years after the initial target date, the Federal Reserve will put out a totally redesigned $100 bill in October. The new note will be chockfull of features designed to stop counterfeiters, including a blue 3D security strip right down the front of Benjamin there, and a disappearing holographic Liberty Bell.

GHARIB: More colorful.

MATHISEN: I hope they keep the crack in the Liberty Bell.

GHARIB: October 8th, they come out.

MATHISEN: In October.

GHARIB: I expect you to have a couple hundreds and give me some of them.

MATHISEN: Oh, absolutely.

GHARIB: That`s NIGHTLY BUSINESS REPORT for tonight. I`m Susie Gharib. Thanks for watching.

MATHISEN: And I`m Tyler Mathisen. That`s for me as well. Have a great evening, everybody. We hope to see you back here tomorrow evening.

END

Nightly Business Report transcripts and video are available on-line post broadcast at http://nbr.com. The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2013 CNBC, Inc.

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