Ahmad,
Hard to say exactly what the issue is without having more information, but it looks like your "nameslist" variable is only using the file name, and is not including the full path to each file. Unless that folder containing your txt files is on your Matlab path, Matlab will not be able to find them with just the filename.
Take a look at defining nameslist as follows and see if it solves your problem.
nameslist=strcat({olddir.folder},filesep,{olddir.name}); % FULL file name, including folder
Also, it looks like you need curly braces to access your fileread command, like so:
y= fileread(nameslist{1}); % nameslist is a cell, so get text using curly braces
Paul Shoemaker
