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tv   Nightly Business Report  PBS  November 16, 2010 1:00am-1:30am PST

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>> susie: the latest retail sales numbers show shoppers are back at both ends of the spectrum. >> generally, luxury has been doing very well-- in fact, the leader in the industry. and at the other end, the dollar stores have had a very good performance this year. >> tom: as we head into the holiday selling season, we look at the health of the u.s. consumer. you're watching "nightly business report" for monday, november 15. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. the consumer keeps spending.
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tom, americans were opening up their wallets in october, giving a boost to retail sales. >> tom: susie, that report was surprisingly strong, and the nation's retailers are hoping this means a green christmas. the commerce department reported retail sales rose 1.2% in october, that follows a 0.7% increase in september. >> susie: today's results were the largest gain in seven months. as erika miller explains, that's welcome news for more than just the nation's merchants. >> reporter: when you think of retail sales, you probably think of shopping bags... and cash registers. but the big driver of retail sales in october doesn't have either. sales at auto dealerships posted their biggest gain since the last year's cash for clunkers program, up more than 5%. economist jonathan basile sees that as a particularly encouraging sign. >> that in and of itself is really a vote of confidence for consumer spending, because auto sales is one of the most credit-
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sensitive and discretionary items that there are. and that's a good sign for but industry experts are pleased that there have been four straight monthly gains. mike niemira of the international council of shopping centers says consumers are buying at extreme ends of the spectrum. >> generally, luxury has been doing very well-- in fact, the leader in the industry. and at the other end, the dollar stores have had a very good performance this year. it's sort of the middle ground that has been very uneven. >> reporter: he says consumers are slowly growing more confident about the economic recovery. in addition, the stock market has been on a tear since september, which makes people feel wealthier. but let's be clear: most industry experts are only expecting modest gains in
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holiday sales-- up 2% or 3% from last year. so what would it take to really get consumers to splurge? one possibility is an extension of the bush tax cuts. >> it looks like now congress is debating that. that's something that does need to get resolved, i think, for consumers to feel confident to continue to spend as we go into next year. >> reporter: of course, longer term consumer spending depends on a comeback in the job market. as long as unemployment remains high, many americans would rather save their money than spend it. erika miller, "nightly business report." >> tom: speaking of holiday sales, wal-mart wants shoppers to get an early jump on black friday bargains. the giant retailer said today most of its stores will open at midnight on the day after thanksgiving. in the past, those stores typically opened at 5 a.m. >> susie: our guest tonight says he's bullish on the markets, but he thinks 2011 will still be a year of volatility.
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>> hey, susie. good to be here. >> nice to have you. so volatile trading today. we had a setback last week so what is the next 12 months going to re of a basis fr consumers to keep going in a way that they've begun to recently. >> susie: well this week we're going to be getting some new economic data. we have the retail sales numbers erica just reported on but also we're going have fresh inflation numbers, also housing numbers. how do you think investors going to respond to the new evey
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thursday. they've been trending lower. i want to see them keep going down. >> susie: what are you ex now but i'm an
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optimist here. i think with have turned the corner in the job market. >> susie: that's encouraging. so that brings us back to what investors want and what they should do. you talk about the fed buying bonds. should investors also be buying bonds or getting out of bonds. what about stocks, should they be in or out and how about cash. what are you telling your clients? >> well, number one, cash
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junk bonds but now the euphemism is high-yield bond, the better quality high-yield bonds i think still offer attractive rates of return. >> susie: we have just a few seconds the gmi:-- ipo.t cyclese
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shortened which means they are much more responsive to consumer tastes. their quality is getting better. i think they're just more adaptable. they took their lumps so i'm feeling better about the u. >> always a pleasure. >> susie: we've been speaking with stuart schweitzer at jpmorgan private bank. >> tom: here are the stories in tonight's n.b.r. newswheel: wall street struggled to hold its early gains. the dow ended up just nine points, while the nasdaq fell four points and the s&p 500 was down 1.5. trading volume started the week at a slower pace than friday, falling below one billion shares on the big board and below two billion on the nasdaq. just in time for thanksgiving
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travel, gas prices continue rising, now close to their highest prices of the year. the national average is $2.89 a gallon, just three cents shy of the high set in may. and both ireland and portugal today said they don't need a bailout from the european union. but a senior member of the european central bank said talks were underway with both debt- burdened countries. still ahead, tonight's "beyond the scoreboard" looks at what's at stake for disney's e.s.p.n. as it re-negotiates its deal for "monday night football." >> susie: there is still some negotiating to do in washington, where the lame-duck session of congress got underway today. even as newly elected lawmakers came to the nation's capital, the old congress is trying to wrap up work. and that's important to anyone who's lost a job or hopes to protect their investments. darren gersh explains. >> reporter: from extending unemployment benefits to hammering out a budget, the lame duck congress has a long agenda.
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but that doesn't mean it will all get done. >> lame duck sessions are historically very unproductive. what you couldn't get done during the regular session doesn't get any easier during the lame duck session. >> reporter: one of the most contentious issues is what to do about the bush tax cuts. that can is likely to get kicked down the road. >> the tax cuts will be extended for a year or two-- all of them- - depending how the negotiation goes, then they can face thatige issues to tackle: congress m benefits beyond the six months most states now provide. but republicans are not willing to extend them for millions of workers who have already exhausted the maximum 99 weeks of assistance.
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>> the day is coming, it is not very far away, where they will say "enough is enough, and getting benefits for one-and-a- half years? that's enough." >> reporter: washington insiders will be watching the lame duck congress closely for any hints about the battles to come next year. and investors may want to watch the political body language on the budget very closely. >> if you own shares or bonds of a company that gets a check from the federal government, you have to call your congressman to understand if you are facing a cutback. you probably are. >> reporter: another sign that cutbacks may be coming in earmarks: today senate minority leader mitch mcconnell said he would back new tea party members of the senate who want to ban them. darren gersh, "nightly business report," washington.
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>> tom: a split tape for the major indices today, with only the dow squeaking out a slim gain. let's get a look in tonight's "market focus." despite the early gains, all three indices ended near their weakest levels of the day. thanks to the retail sales figures and a couple of high profile buyouts, the s&p 500 was in positive territory much of the day, but it couldn't hold on into the last 15 minutes of
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trading. in the first of the two deals, caterpillar is going after mining equipment maker bucyrus international. caterpillar would pay about $7.6 billion for bucyrus. $92 per share. it would be caterpillar's biggest ever acquisition. bucyrus saw a big pop, up 29% to close $2 below caterpillar's buyout offer. caterpillar shares also saw some buying interest, up 1% on twice its usual volume. fellow heavy machinery maker joy global came along for the ride, adding more than 7% to a two- year high. volume was more than five times normal. the other big deal came in the technology data storage business, with e.m.c. buying isilon systems. e.m.c. will spend $2.25 billion for isilon systems, or $33.85 per share. this is just the latest deal for computer data storage since the fight between hewlett-packard and dell for 3par that began in august.
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isilon closed just below the take-out price, up more than 28% on huge volume. a year ago this stock was struggling at $6 per share. tonight it is over $33. the buyer, e.m.c., dropped some, falling 1%, but on light volume. its offer did excite the market for competitors compellent technologies and commvault system. compellent added almost 6%. commvault was up almost 3%. one deal that is dead: b.h.p. billiton officially ended its $39 billion effort to buy fertilizer maker potash. b.h.p. stock rose on the news, while potash fell. the canadian government had resisted the buyout from the australia-based b.h.p. now an upcoming apple announcement usually spurs on some buying interest, but not the case today. apple has promised an announcement regarding its music service itunes tomorrow. the stock was down fractionally today, and is down 4% from its all-time high hit earlier this month. there are plenty of rumors about tomorrow's announcement,
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including a potential new subscription service to add to its pay-per music track business model, and the beatles' catalogue on itunes. facebook launched a new messaging service for its 500 million members. it's email, instant messaging and text messages in one place. director of institutional equities at evercore partners ken sena says facebook's new service may threaten aol, yahoo and google. google, where they're- peop the risk-- is gmail really provides google with a login for its users and provides them with profile data in order to provide more relevant searches. >> tom: google and aol stock each fell, while yahoo saw a fractional gain. ahead of general motors' planned stock sale thursday, ford was very active, gaining 4%. the rally takes ford to a new eight-year high, despite
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reporting a drop in european sales and market share. and that's tonight's "market focus." the stock chart hasn
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>> susie: here's what we're watching for tomorrow: quarterly results from retailers abercrombie & fitch, home depot, saks, target and wal-mart. the producer price index for october is out as well. it'll give us a look at infl "gold." alix steel reports for alix steele from will join us to talk gold consolidation trends. motorola is fine-tuning the timeline on the upcoming split of its business units. the company's co-c.e.o. today narrowed it down from the first quarter to january. the move will create two new companies. "motorola mobility" will sell cell phones and set-top boxes. "motorola solutions" will supply things like public safety radios and bar code scanners. >> tom: general motors' price range on its pending initial
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public offering revved higher today. the "wall street journal" reports the new price range is between $31 and $33 a share, up from the initial range of $26 to $29 dollars. the increase is prompted by strong demand for the stock. g.m.'s owners, including the u.s. government are expected to sell 365 million common shares on thursday, with the company itself selling 60 million shares of preferred stock. >> susie: as we mentioned,
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>> susie: as we mentioned, congress is back in session. but with just weeks to go before its holiday recess, no one expects much action on the nation's massive debt. tonight's commentator thinks that's unfortunate. she's alice rivlin, senior fellow at brookings and former vice chair of the federal reserve. she also sits on president obama's deficit commission. >> the soaring federal debt was featured in the election, but solutions were scarce. any serious plan to cut the massive debt build-up requires reining in future federal spending and raising revenues. both can be done in ways that will give us a more productive economy and keep the recovery going. but any balanced proposal for spending cuts and revenue increases runs into a buzz saw of exaggeration. witness the reception of the
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ideas that erskine bowles and alan simpson floated last week. the left screams that reducing federal spending growth will hurt the poor, the elderly, and working families. the right shrieks that tax increases will kill investment and enterprise. but if we go on borrowing, the difference between the spending the liberals say we can't cut and the taxes the conservatives say we can't raise, we will run out of creditors willing to finance our profligacy. a debt crisis could cause economic devastation for workers and business, young and old, rich and poor. it would be far less risky to cool the exaggerated rhetoric and craft a combination of spending cuts and revenue increases to bring the debt under control. the election is over. it is time to get serious. i'm alice rivlin. >> that is nightly business
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report for this monday evening, have a great night, you too, susie. >> susie: have a great night, you too, tom, i'm susie gharib. thanks for watching, everyone. we hope tov; "nightly business report" is made possible by:
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this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh >> more information about investing is available in "nightly business report's" video "how wall street works". to order this dvd, call 1-800- play-pbs or visit online at >> be more. pbs.
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