<Show: NIGHTLY BUSINESS REPORT> <Date: April 30, 2013> <Time: 18:30:00> <Tran: 043001cb.

118> <Type: SHOW> <Head: Nightly Business Report> <Sect: Business> <Byline: Susie Gharib, Tyler Mathisen, Seema Mody, Diana Olick, Phil LeBeau, Kayla Tausche> <Guest: Art Steinmetz, Neil Irwin> <Spec: Apple (NASDAQ:AAPL); Business; Stock Markets; Wall Street; Economy; Housing; Girl Scouts; Children> <Time: 18:30>

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: Ibonding with

investors. Apple (NASDAQ:AAPL) grabs Wall Street`s attention by doing something it hasn`t done before: borrowing money, lots of it.

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Housing bubble? Home prices are climbing. Inventory is falling. But is the fear of an overheating housing market overblown?

MATHISEN: And smart cookies. What the Girl Scouts are doing to teach the young leaders of tomorrow the art and science of money management.

All that and more coming up tonight on the NIGHTLY BUSINESS REPORT for Tuesday, April 30th.

Good evening, everyone.

Susie, another milestone day in a month full of them.

GHARIB: And, you know, Tyler, they say on Wall Street that April is the best month for the Dow. And this April stuck to that tradition, not just for Dow, but all the major averages ended the month up with gains, up almost 2 percent, and the S&P 500 reaching a new all-time high.

The markets got a lot of help from a 3 percent jump in Apple (NASDAQ:AAPL) shares, a strong reading on consumer sentiment for the month

of April, and more good news about housing. And we`ll have more on Apple (NASDAQ:AAPL) and housing in just a moment.

The Dow has now made gains for 16 Tuesdays in a row, and today those blue chip stocks and the NASDAQ both ended 21 points higher. The S&P 500 added four to close at yet another record.

And looking at the market`s scorecard so far for 2013, the Dow has soared 13 percent. The S&P is up 12 percent. And the NASDAQ is higher by 10 percent.

MATHISEN: Apple (NASDAQ:AAPL) wowed at investors today, and not because it unveiled a new iPad or an iPhone. It is launching a massive corporate bond deal, $17 billion. That is the biggest non-bank corporate bond issue ever and Apple (NASDAQ:AAPL)`s first debt offering in 15 years.

Seema Mody joins us now from the NASDAQ.

Seema, why are they doing it?

SEEMA MODY, NIGHTLY BUSINESS REPORT CORRESPONDENT: You know, Tyler, the capital raised via Apple (NASDAQ:AAPL)`s bonds will be used to fund the company`s enhanced dividend and payout plan, which, of course, was announced last week. My reporting shows that Apple (NASDAQ:AAPL)`s bond sale closed at $17 billion, the largest ever for a nonfinancial firm.

It looks like Apple (NASDAQ:AAPL)`s 10-year fixed rate bond, which is really what investors are focused on, will have a yield of 2.4 percent. This would be below its stock dividend yield of 2.8 percent, but higher than the yield of some of its peers in the technology space, including Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and IBM. Keep in mind, these numbers are subject to change.

Just stepping back, though, for a second on what the Apple (NASDAQ:AAPL) bond means, Morningstar (NASDAQ:MORN) analyst I was speaking to made a good point -- fixed income investors, by definition, don`t really have exposure to Apple (NASDAQ:AAPL) today. In other words, this issuance will give Apple (NASDAQ:AAPL) exposure to new class of value investors. And that`s perhaps one of the reasons it`s being well-received by the street.

Susie, back to you.

GHARIB: Yes. Thank you so much, Seema. Seema Mody reporting from the NASDAQ.

Now joining us for more on Apple (NASDAQ:AAPL) and the market, Art Steinmetz. He`s chief investment officer at Oppenheimer Funds.

So, Art, you heard our report just now from Seema. And this was the

talk of the day, all about Apple (NASDAQ:AAPL). From what you know about this deal, does this make sense?

ART STEINMETZ, OPPENHEIMER FUNDS CHIEF INVESTMENT: Well, for who? For Apple (NASDAQ:AAPL) or for the investor? It certainly makes sense for Apple (NASDAQ:AAPL). They have transitioned from being a growth company to a value company over the last few years.

What Apple (NASDAQ:AAPL) doesn`t seem to have in the pipeline right now is a lot of blockbuster growth ideas. But what they certainly do have is enormous amounts of cash on hand and enormous cash flow generation. That makes it a reasonably safe bet for bond investors.

And, of course, they would like to continue to increase their dividend. And they start to get a little constrained by the fact that so much of their cash is offshore. It`s overseas, and they can`t repatriate that without the big tax hit.

So, this is something that makes sense all around.

MATHISEN: Art, you wrote a few days ago that you think stocks, U.S. stocks specifically, are ready to stand on their own two feet. Why do you -- why do you say that, and what does that mean?

STEINMETZ: Well, it means that the U.S. economy and indeed the

global economy outside of Europe continues to show reasonable signs of growth. You know, and stock investors are terrified about the removal of support by the Fed -- you know, the withdrawal of monetary accommodation. And it`s something that always causes enormous amounts of volatility and consternation when it happens. But, remember, when that happens, it`s typically because the economy is growing reasonably, at a reasonably good clip.

This is sub-par growth by the standards of past recoveries to be sure, but it is growth and it is durable. So I think that the stock market is not overvalued by any means. I think it`s reasonable to expect a pause and a correction. But that isn`t something that would keep me on the sidelines.

GHARIB: Let me ask you something about this Wall Street legend that they say fell in May and go away. I think the statistics go back to World War II, saying that if you sell your stocks in May and then come back in October and re-buy, that you will do better. Given the momentum in the markets that we`ve seen so far this year, do you think that legend will hold true? And what should investors do?

STEINMETZ: You know, it`s a -- it`s a sporting call. You know, we`ve seen it really to a greater or lesser degree in each of the last two years. But, you know, that`s not -- you know, that`s not analysis. That`s like correlating the stock market to who wins the Super Bowl. It`s

certainly possible.

But investors shouldn`t pull -- you know, get out of the market, but I`m not too worried about that because retail investor, small investors aren`t in the market. They`ve been pouring their money into highly safe bond funds, things that might invest in Apple (NASDAQ:AAPL). And taking on interest rate risks instead of equity risks is certainly not the way to go right now.

And, you know, who could time it with any sort of precision? If I had the strong ability to call the bottom, I would say, yeah, I would get out right now, and then I`ll call the bottom perfectly and get back in.

But who has that kind of depth ability? And retail investors who are still very, very scared, there is so much fear out there, certainly wouldn`t do that. People would use, if I say there is a correction coming tomorrow, people might use that as an excuse to stay on the sidelines, to stay un-invested. And, of course, that`s been such a harmful strategy for the last few years.

So, you know, even though there are corrections happen, markets fluctuate, I wouldn`t use that as an excuse not to prepare the right longterm financial plan.

GHARIB: All right. Thank you so much for your thoughts, Art. Art

Steinmetz, chief investment officer at Oppenheimer Funds.

STEINMETZ: Thank you.

MATHISEN: As we mentioned, there was more good news today about housing. The S&P Case-Shiller Home Price Index for February showed the prices 20 biggest cities shot up 23 percent. That`s the biggest year-overyear since 2006, the height of the housing bubble. Prices rose in all 20 of the measured markets for the second month in a row, and that hasn`t happened in eight years.

But with some prices rising so quickly and a tight supply of available homes on the market, some worry now that we may be entering a new housing bubble.

Diana Olick has more.

(BEGIN VIDEOTAPE)

DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): As home price gains head toward double-digits, some are raising concerns that they are rise together far too fast.

DAVID BLITZER, S&P 500 INDEX COMMITTEE CHAIRMAN: I would not call it a bubble. I`ll admit a bubble is one thing you don`t see when you`re in

it. You only see it after it bursts.

OLICK: But is it really a bubble? Looking back on the index to the bubble years, the biggest annual jumps were in 2004 and 2005 when values rose as high as 16 percent a year. Prices were fuelled by cheap and easy credit, which does not exist today, and by speculators who bought and flipped homes with no skin in the game. Values are still 30 percent off those highs nationally, despite recent gains.

But when you look at some local markets, the jumps do seem too high. In Phoenix, prices up 23 percent from a year ago. Again, you have to put that in perspective. From the peak of the housing boom to the trough, home prices in Phoenix fell 56 percent.

Despite the huge gains, they`re still down over 40 percent from that peak. The gains only looked so big because they`re coming off a much lower number.

Put the Phoenix story next to Dallas, where home prices are now just 2 percent from their all-time high. Does that make Dallas a bubble market and not Phoenix? Well, not if the gains are backed by a good local economy.

ERIC BELSKY, HARVARD JOINT CENTER FOR HOUSING: Both the fundamental price to income level and when you layer in mortgage interest rates, I

don`t see any market being, you know, that frothy or that inflated now.

OLICK (on camera): One concern is that these big home price gains are being driven by abnormally low supply and not by strong economic growth. Should the higher prices tempt more homeowners to list their homes for sale or tempt investors to unload the properties they bought, the home price gains could easily slow down.

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

(END VIDEOTAPE)

GHARIB: Tyler, I think it`s interesting. Diana was talking to a gentleman that was saying you don`t know you`re in a bubble until you`re in it -- you know, until you`re out of it.

MATHISEN: Until it bursts.

GHARIB: Until it bursts. And, you know, anecdotally, we hear so many stories in this area at least of people, you know, going to see a house and then it goes into like an auction phase. So you get this feeling that there is a craze.

MATHISEN: Things in my town are selling the day they come on the market.

GHARIB: Exactly.

MATHISEN: The weekend they come on the market.

GHARIB: Exactly.

MATHISEN: But I think it`s a good sign. It indicates to me that people are feeling more secure in their jobs and their incomes and credit is more available, but not to the same extent it was back in `06 and `07 when we had the so-called liar loans that were so prevalent.

All right. To "Market Focus" now.

And Pfizer (NYSE:PFE), which reported lower than expected profits and trimmed its outlook for the rest of the year. Pfizer (NYSE:PFE) blamed the bump in the road on poor sales over in Europe and the strong yen lowering sales in Japan. Pfizer (NYSE:PFE) occupied the Dow basement all day long, losing 4.5 percent.

GHARIB: Investors cheered Best Buy (NYSE:BBY)`s decision to sell its stake in a European joint venture. Now, even though Best Buy (NYSE:BBY) is taking a loss on that sale, investors saw the move as a renewed focus on improving the U.S. business and raising cash for the retailer. Best Buy (NYSE:BBY) was a top performer in the S&P 500, gaining more than 7 percent

to almost $26 a share.

MATHISEN: IBM shares made up ground today as Big Blue announced a $5 million stock buyback and a 12 percent dividend increase. For much of the day, IBM led the Dow 30, closing up almost 2 percent.

GHARIB: Well, a snail mail needs decline, so does the need for postage. And so, Pitney Bowes (NYSE:PBI) first quarter profits plunged 57 percent and the company slashed its dividend in half. Investors dumped the stock. Shares fell more than 15 percent to $13.67.

And shares of Nuance got crushed today after it missed estimates of quarterly profits and revenues, and reported a loss, blaming weak demand and stiff competition. Nuance makes the software that powers the Siri feature on iPhones. Now, the dismal report could trigger action by activist investor Carl Icahn, who bought a big stake in the company earlier this month.

Despite a stock buyback program announce today, Nuance lost more than 18 percent of its values, closing at $19.

MATHISEN: And coming up, a manufacturing renaissance? From the Rust Belt to the Deep South, we`re looking at the new face of manufacturing in America.

First, though, a check on how the international markets finished the day.

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MATHISEN: Good news for drivers. AAA says its springtime gasoline prices haven`t been this low in three years. Right now, prices at the pump are averaging $3.51 a gallon nationwide. That`s down 13 cents during the month of April alone. And things may get even better this summer. AAA says gas prices could drop to as low as $3.20 a gallon by mid-summer if current trends of lower crude oil prices, full production at refineries and weak demand continue.

GHARIB: Lower energy costs helped consumers and businesses, but today, we learned that a key indicator of manufacturing in the Midwest slumped to its lowest level since 2009. The Chicago purchasing managers index of business activity contracted for the first time in three years.

So, is this a sign that American manufacturing may be slowing down, or just taking a spring-time pause?

Phil LeBeau has more.

(BEGIN VIDEOTAPE)

PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): American manufacturing is at a crossroads. After adding a half million jobs over the last two years, hiring has plateaued. And a new report shows small manufacturers are pulling back.

BILL PHELAN, PAYNET PRESIDENT: What we see is there is a slowdown in small business manufacturing in America. And, actually, the trend actually went negative last quarter.

LEBEAU: PayoNet tracks more than a trillion dollars in small business loans and contracts. And while it sees an overall slowdown for small manufacturers, there are some areas enjoying a boom in business, including companies supplying industrial machinery and transportation.

PHELAN: I`m optimistic because these businesses have figured out a way to reinvent themselves and become relevant, stay relevant.

LEBEAU (on camera): So where are manufacturers adding jobs across America? Well, here in the Midwest there has been a renaissance in industrial machinery. And there is strength in tech firms on both coasts. But the big boom is in the Deep South with transportation companies.

(voice-over): This week, General Electric (NYSE:GE) opened two plants in Mississippi and Alabama to supply components for aircraft engines. Ultimately, those plants will hire 550 workers.

DAN MECKSTROTH, MANUFACTURERS ALLIANCE FOR PRODUCTIVITY: We believe in manufacturing employment will continue to grow for the rest of the year because we expect to see manufacturing production to -- well, for the year as a whole, to grow 3 percent.

LEBEAU: Building jobs at a time when American manufacturers are looking for their next leg of growth.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.

(END VIDEOTAPE)

MATHISEN: Manufacturing is one thing the Federal Reserve looks at very closely. And today, Central Bank policymakers began their two-day meeting. It`s expected the Fed will keep borrowing costs low, but a bigger question seems to be whether the Fed will keep pumping more money into the economy through its bond-buying program.

Meanwhile, the parlor game has started in Washington and on Wall Street over whether Fed Chief Ben Bernanke will stay for another term, and if not who might replace him.

Our next guest is the author of "The Alchemist: Three Central Bankers and A World on Fire." Neil Irwin is also an economics columnist at "The

Washington Post (NYSE:WPO)."

Neil, welcome. Good to have you with us.

NEIL IRWIN, AUTHOR, "THE ALCHEMIST": Thanks for having me.

MATHISEN: The Fed is meeting today and tomorrow. The economy is not growing very fast, 2.5 percent. The March jobs number was terrible. And yet, I don`t see virtually anyone who thinks that the Fed is likely to expand its bond buying program to stimulate the economy.

You`re in that camp. Why not?

IRWIN: Yes. You know, they`ve been doing $85 billion in bond purchases every month, trying to pump money into the economy, keep mortgage rates low. And they`re going to stay the course on that.

If you remember, just a few weeks ago, after that last meeting, some of the officials were talking about tapering off the purchases. I think the bad data has been enough in to end that talk of tapering. But at the same time, they want to try to keep this economy afloat and pumping money into the economy.

GHARIB: Neil, to the point that Tyler mentioned just a moment ago, a lot of Fed watchers are speculating next year at this time, Ben Bernanke

will not be presiding over the Fed at these meetings and that they`ll have -- that President Obama will name a replacement you. You said in your book that you didn`t think Bernanke would serve another term, a third term.

Do you think he deserves one?

IRWIN: I think he deserves one. He has had an impressive track record of fighting crisis, trying to keep -- you know, at a time that Europe and Britain have had recessions, double-dip recessions since the crisis, we have not. I think that`s in large part thanks to the work of the Federal Reserve under Ben Bernanke.

At the same time, you know, history is going to judge. Whether -either Bernanke or his successor unwind this massive intervention they have done to try to prop up the economy, that`s going to be the ultimate test whether history views Ben Bernanke favorably or not.

MATHISEN: Do you think he wants another term? And if he doesn`t, who might succeed him?

IRWIN: I think he`s pretty tired. It`s been a long seven years of crisis fighting. I think he`s happy to go back to an academic life, maybe write a book. That said, you know, there is some candidates out there that are really ready to take the reins. There is Janet Yellen, the vice chair. She is who gets most often talked about as a leading candidate.

Some others are less widely talked about, Roger Ferguson, former vice chair under Alan Greenspan, Larry Summers has the resume for it but is a polarizing figure. I think President Obama will have plenty of options as he starts to weigh this decision in the months ahead.

GHARIB: Well, it does sound like Janet Yellen is the front-runner from the people we`ve been hearing from.

Tell me, do you think when it does come time for the Federal Reserve to pull the stimulus out of the economy, and let`s say she is the Fed chief, what kind of job do you think she`ll do? Because it`s a very tricky -- it`s a very tricky exit strategy to have to execute here.

IRWIN: Yes, you know, the politics -- the technical stuff is one side. Can you raise interest rates? Can you sell off this bond portfolio they`ve accumulated? Three trillion dollars a huge task.

But have I more confidence in their ability to handle the technical aspects than I do just making the right decision. When do you begin this exit? When does the time come that inflation is a risk, financial bubbles are a risk, and now is the time to raise interest rates to sell off this bond portfolio? That`s going to be the trillion dollar question. That`s the big challenge for the next Fed chair is getting that moment right and getting the pace and the timing right of that exit.

MATHISEN: I read yesterday that Chairman Bernanke is not going to be attending the traditional Jackson Hole Summit of central bankers this summer, in August. Do you read that as a tip that he is not going to be re-nominated or may choose not to be re-nominated?

And I recall it was right around that summit in 2009 that the president did re-nominate him for his second term.

IRWIN: Right. I have a scene in the book President Obama called Ben Bernanke over to the White House in August 2009, the Wednesday evening right before Bernanke flew out to Jackson Hole.

But it was secret for several dates. And Bernanke, it was only announced when the president was on vacation the next week in Massachusetts.

Now, you know, the question this year is how quickly does the president move on finding a new nomination, whether it`s Ben Bernanke or someone else.

It will clearly be somewhere around that time, late August, September. You don`t want to wait too long because you have to get the person confirmed before Bernanke`s term ends in January of 2014.

So, it`s a big job and I think it`s really the biggest decision Barack Obama has to make this year.

MATHISEN: Neil Irwin, thank you very much.

IRWIN: Thanks for having me.

MATHISEN: Neil is the author of "The Alchemist" and the columnist for "The Washington Post (NYSE:WPO)."

And tomorrow, we`ll speak with former Federal Reserve governor, Randy Kroszner, about the Fed statement and the health of the economy.

GHARIB: Still ahead on the program, banking budgets and badges. Why the Girl Scouts is no longer just about selling cookies.

But, first, a look at how commodities fared today, including gold, which had its worst monthly performance since December 2011.

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MATHISEN: Admit it. It is hard to resist buying Girl Scout cookies, especially when you know you`re supporting a great organization. This year, sales of thin mints and Samoas and all those other treats are going to approach record levels. But just how much does that young sales force

really know whereby the money comes from and then, where it goes and what to do with it?

Kayla Tausche joins us now to explain.

Kayla, do these girls have any idea about the amount of money they`re actually making?

KAYLA TAUSCHE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Tyler, each girl knows when she personally sells a lot of cookies, but can`t really fathom how big the overall organization has become.

Today actually marks the end of this year`s season, which is only a couple of months long. Thousands of troops of young girls will sell in total more than 200 million boxes of cookies, called America`s youngest sales force, earning nearly a billion dollars, all before it`s time to start their homework.

(BEGIN VIDEOTAPE)

TAUSCHE: How much do you think all of the Girl Scouts selling Girl Scouts cookies every year?

UNIDENTIFIED GIRL: Hmm.

UNIDENTIFIED GIRL: Three million.

UNIDENTIFIED GIRL: Nine million.

UNIDENTIFIED GIRL: Eight thousand?

UNIDENTIFIED GIRL: I think a lot. Ten million or so?

TAUSCHE (voice-over): OK. So they`re not good with numbers yet. That doesn`t stop these Manhattan Girl Scouts and others like them from hauling in close to $800 million in cookie revenues over a span of just eight weeks. It`s more dough than some S&P 500 companies will see in an entire year.

A remarkable feat considering it looks much like it did a century ago, door-to-door, in-person, and offline.

ANNA MARIA CHAVEZ, GIRL SCOUTS OF AMERICA CEO: It`s the first time in 13 years that we actually updated the boxes was this year.

TAUSCHE: Now, Girl Scouts CEO Anna Maria Chavez is doing the unthinkable, taking the business online.

CHAVEZ: In this economy and this business environment, most companies have an e-commerce platform. They have Web sites. They`re able

to trade on the Internet. So, right now, we`re at the front end of that design. You know, we`re looking at a couple of years. We probably have a prototype next calendar year for girls to test out.

CROWD: Girl Scout cookies for sale!

TAUSCHE: This year`s on track for some $790 million in sales for Girl Scout cookies, yet another record revenue figure, making it America`s number two cookie brand behind the Oreo.

(on camera): If you could sell cookies online do, you think people would buy them?

UNIDENTIFIED GIRL: Yes.

TAUSCHE: Now, the sales force, 3.2 million girls strong is getting an upgrade too. New financial literacy initiatives and badges like business plan, cookie CEO, and my portfolio are versing troops in the ways of Wall Street. Chavez hopes that means a starting point for the next generation of female financial leaders, thin mints and beyond.

(END VIDEOTAPE)

TAUSCHE: Girl Scout cookies already have a cult following, which web sales could grow exponentially pass that billion mark. Even as a recent

study found a majority of Girl Scouts themselves reported not feeling very confident making financial decisions. Now, the program is trying to teach them those lessons too.

GHARIB: Well, it`s obvious the Girl Scouts have really become very modern. But how are they going to teach these girls the financial lessons?

TAUSCHE: They`re doing it in very hands-on ways. When I was speaking with Anna Maria, she said that there had recently been an event where they took the girls to talk with a mortgage banker to talk about what a house actually costs and how long it takes you to stave off for something like that.

MATHISEN: A lot of cookies, Kayla.

TAUSCHE: They have a badge where you learn how to build good credit. And they`re telling parents that you should bring your daughter and you should help her -- help you make transactions so sees what things are costing you and how you pay your bills.

MATHISEN: You mentioned in the piece how Girl Scout cookie sales compare with Oreos. How about other brands? If they weren`t just selling four months a year, they`d be even bigger obviously.

TAUSCHE: That`s right. And Mondelez, which is the old Kraft

(NYSE:KFT) Foods, has pretty much a stranglehold on the cookie market. Oreo, the number one grossing cookie, over $1 billion in the U.S. If you include international sales, that`s goes over $2 billion. Chips Ahoy!, a little over $500 million.

But Girl Scouts at nearly $800 million. If you annualize that revenue, considering they only sell January through April and each troop only has eight weeks to sell, you would be well beyond that Oreo number.

GHARIB: Looks like a whole new crop of entrepreneurs.

TAUSCHE: We will see. No doubt they`re going --

GHARIB: Thank you so much, Kayla.

Well, moving along here. And, finally tonight, thousands of new college graduates are about to enter the job market in the next few weeks. So which degrees will command the biggest salaries for the class of 2013?

Now, according to a survey by the National Association of Colleges and Employers, the top earning majors coming out of college: petroleum engineering, computer engineering, chemical engineering. Do you catch the pattern here?

And rounding out the top five: computer science and aerospace

engineering.

And apparently, Tyler, the salaries for petroleum engineers $93,500.

MATHISEN: Wow. That`s just amazing.

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

MATHISEN: And I`m Tyler Mathisen. Thanks from me as well. Have a great evening, everyone. We hope to see you right back here tomorrow night.

END