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tv   Nightly Business Report  PBS  November 25, 2010 1:00am-1:30am PST

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>> tom: the malls are ready, are you? >> we cut out all the adults. we're only doing our kids and nieces and nephews. so for the grown ups, they are out of luck this year. >> tom: the holiday shopping season is upon us. a look at what's different this year for shoppers and the nation's retailers. you're watching "nightly business report" for wednesday, november 24. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. my colleague susie gharib is off tonight. as the nation prepares to go shopping this weekend, investors were buying up stocks. the dow popped 150 points higher, wiping out yesterday's losses. while shopping on the day after thanksgiving has become almost as much a tradition as eating turkey leftovers, this year both retailers and shoppers have a new game plan for black friday. erika miller reports. >> reporter: 'tis the season for decking the malls. not just with seasonal decor, but also with sales signs. this gap at a mall in new york city plans to open at midnight on black friday.
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district manager benny paulino says everything will be half price until 10 a.m. >> i think we're expecting a little more traffic than the previous years. i think we haven't been as promotionally driven in the past as we are this year. >> reporter: but many of the best deals will not be at the mall this year. they'll be online. retail analyst roxanne meyer says stores are using social media like facebook and twitter to drive traffic to their sites. >> it's a much more profitable dollar to get that incremental dollar online versus in the stores. the margins of that channel are significantly higher. and the avion. the appeal is saving time and money. >> i'm doing a lot of investigating. i'm going online. i'm finding out literally the best value and where i can get things at the best price. >> reporter: there is also expected to be a change in the way consumers pay for purchases.
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shoppers are expected to use less plastic, and more debit cards and cash. many households want to reduce debt and avoid hefty credit card fees. but there is one type of plastic you'll see more of: gift cards. the national retail federation says they are the most requested gift this year, and 77% of shoppers plan to buy them. >> now i know some people don't like some things you buy. give a gift card and they buy whatever they want. >> reporter: some merchants are also expecting shoppers will splurge more this year-- on themselves. >> it's about buying that special gift, but it's that special gift for yourself. >> reporter: but make no mistake, many families will be doing whatever they can to stay on budget. >> we cut out all the adults. we're only doing our kids and nieces and nephews.cizw so for the grown ups, they are out of luck this year. >> maybe i spend less money on each gift, but do more gifts.
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>> reporter: in spite of all the changes, holiday spending overall is expected to stay about the same as last year. the national retail federation estimates shoppers will spend an average of $688 each on gifts, up $7 from last year. erika miller, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: it was a day of thanks for wall street investors. the dow rose 150 points, the nasdaq added 48 and the s&p 500 was up 17. as expected, lighter trading volume ahead of the holiday. just 829 million shares moving on the big board and 1.6 billion on the nasdaq. adding to today's gains, a big drop in first-time jobless claims. they were down by 34,000 in the last week to 407,000-- well below the 435,000 filings economists expected. federal agents made an arrest in the government's massive insider trading probe. 56-year old don chu of primary global research was charged with conspiracy to commit securities fraud.
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prosecutors allege chu arranged for his firm's consultants to get and give inside information on publicly traded firms. no comment from chu's attorney. former house majority leader tom delay was convicted late today on money laundering charges. a texas jury deliberated 19 hours before finding him guilty. prosecutors say the congressman used his political action committee to illegally funnel $190,000 in corporate donations to texas political races. delay maintains his innocence and says he will appeal. he faces a possible sentence of up to 99 years behind bars. still ahead, we sit down with the head of gammon gold and ask how the gold miner's outlook is panning out. there are more than 6,000 banks in the u.s. while big ones may be household names-- j.p. morgan and bank of america-- most americans bank at smaller ones. those are the banks the fed hopes will make loans, with its
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welcome report". >> thank you. >> tom: better than three weeks finish'slñ latest credit some s of improvement in the business climate. >> tom: you mentioned your area. let's give folks a little background. u. c. is headquartered in central illinois, the finish says it's the 148th largest bank in the u.s. by assets with 3.5 billion. 43 brnch else illinois and indiana also in florida.
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orders pick up for customers that we have. >> tom: okay. >> and it's still very soft demand. >> tom: i want to look it your poile, because it tells the sorry of where first busey puts its money to work in its
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community. about 14% are commercial loans, 8% destruction, but 2/3 concentrated in residential mornls and commercial real estate mortgages. what kind of cth us that also finance their plant and equipment with us. it's still a very weak sector, but as i said i think we're and trying to attract customers and loan them money. obviously banks tighten --
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>> tom: how are they doing that, by loosening credit standards? because can interest rates possibly go any lower in downste illinois, and there was some improvement in ton employment. so it sounds as though we're the insights, our guest this evening, van dukeman, c.e.o. of first busey.
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>> tom: for the last few months, we've been reporting on how the government is pressuring companies that commit health care fraud. regulators have already forced one firm to sell off a division accused of ripping off medicare. now they've kicked a drug company leader out of the health care business altogether. as darren gersh reports, corporate leaders are getting a clear message. their career could be at risk. >> reporter: in march, ethex, a subsidiary of k.v. pharmaceuticals, pled guilty to charges it failed to tell the
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f.d.a. the company had mistakenly made morphine tablets executive not convicted of a crime to be effectively kicked out of the industry. at the h.h.s. office of inspector general, greg demske says this case sends an important message. >> the message is: if you are a corporate executive at a company that does business with federal health care programs, including pharmaceutical and device manufacturers, one of the things that you should consider in addition to profits is that-- if you take an action that could cause harm to patients or cost the taxpayers money-- then your career, your livelihood in that industry is at risk as well. >> reporter: in other words, you'll be kicked out.
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>> could be, yes. >> reporter: and so you'll go after companies, no matter what size they are? >> we look at a series of things. was the person aware of the conduct that was taking place in the corporation? what was that person's position and authority to take action? what did they do when they learned of the conduct? did they disclose it to the government? there's not a prohibition or a bar on us pursuing people at the top of the very largest corporations. >> reporter: federal regulators have been frustrated by a string of big drug companies that have become repeat offenders, committing medicare fraud again and again. to stem the multi-billion dollar losses to taxpayers, the government demanded companies beef up their compliance. but now it is putting the industry on notice. senior executives will be held personally responsible.
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are... i think is short-sighted. >> reporter: but demske says his office is doing what congress wants it to do. >> congress has given us this tool and it said where individuals are in positions of responsibility at corporations that engage in criminal conduct, we have the authority to kick them out of the health care industry. >> reporter: and that means more industry executives may soon be spending a lot more quality time with their lawyers. darren gersh, "nightly business report," washington. >> tom: u.s. stocks head into the thanksgiving holiday with a broad-based rally, making up for yesterday's sell-off. let's get you updated in tonight's "market focus." with so much focus on shopping,
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online retail stocks were among the market leaders. amazon shares added more than 5%. tonight this is a new all-time high, and on heavier-than-usual volume. erika mentioned earlier how online holiday shopping is expected to see a double-digit jump compared to last year. amazon wasn't alone, and ebay were up 3.5% each. overstock remains below where it was trading before disappointing earnings a month ago. ebay, though, is only $1 away from a two-year high. the retail holders exchange traded fund includes retailers with big online stores. it is at more than a four-year high tonight. the jeweler known for its blue boxes, tiffany, has been seeing lots of them go out the door. and more expected to. earnings easily topped estimates in the past quarter. sales of items over $500 were up, as well as its international
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business benefiting from weaker dollar. tiffany stock jumped to an all- time. volume was three times its average. tiffany also upped its outlook just two days ahead of black friday. industrial stocks also were among the market leaders, especially machinery stocks. interesting trio: maker of peter-built semi-trucks, paccar, was up 4.5% to a new 52-week high. cessna airplane builder textron added 4%. and engine maker cummins hit a new 52-week high. ag-business giant deere and company is known for giving conservative financial guidance. for instance, the quarterly profits deere reported today were twice as big as the company originally predicted. here are the digits. earnings per share were 12 cents over estimates. but it was its disappointing outlook that hit the stock a little. shares were fractionally weaker, but volume was strong. now deere says new engine exhaust regulations will increase its costs. analysts, though, think strong corn and soybean prices will help deere's business.
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we mentioned in the newswheel the better-than-expected drop in unemployment claims. good news. and we saw several temp hiring firms jump today. staffing stocks up. monster worldwide's almost 10% rally was enough to make it the best performing s&p 500 stock today. this is a two-year high. robert half international and manpower were each up at least 3%. finally, the patent fight between two tech giants, apple and motorola, will go in front of the u.s. international trade commission. apple claims motorola's smartphones illegally use six of its patents, including technology for touchscreens. apple has sued, but so has motorola. each claiming their patents have been infringed upon. the commission agreed to consider apple's claims. each stock was up a fraction. and that's tonight's "market
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>> tom: it has been a record year for gold, with prices hitting a new record earlier this month-- over $1,400 an ounce. the metal is now trading at $1,375 an ounce. with prices at these levels, gold miners are bullish, canada's gammon gold included. suzanne pratt sat down with gammon's c.e.o., rene marion, earlier this week. she began by asking him what's driving up gold prices. , gold is priced in u.s. dollars and with this quantitative easing all the u.s. government is doing is devaluing its own currency. the main consumers of gold are off shore. so if the currency gets devalued then the price of gold has to go up.
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the second reason is that, you know, a lot of the international regulations around gold have been eased. for example, china individuals are allowed to buy gold. so what you see is a huge demand for gold, which is also driving the price up. >> but we're walking -- talking about investor demand for gold. and that's been a huge part of the runup in gold prices. this isn't necessarily people buying it because they want to make jewelry out of it. this is investor demand. >> as an individual, okay, you can either purchase gold stock or e. t. s., when you see negative interest rates, negative interest rates, you know that the devaluation of the currency is you're losing money every day you hide money under your mattress. so why not buy physical gold or stocks, okay, and get an appreciate areas -- on appreciation or at least try to hold your money.
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i prefer buying stocks, obviously, that's my business. but when you buy stocks, when gold goes up 1%, stocks tend to go up 3 to 4%. so you can actually get an leverage to the gold price. >> that brings me to the next question, which is what is your outlook for gold prices in 2011? up? >> always, have to be bullish. i think with the $600 billion of quantitative easing, too, you'll see further pressure on gold to go up. so when i take a look at gold, i'm a strong believe they're we'll see $1500 by mid next year. and then you take a look at silver, an interesting one too, because it trades along with gold as money, but it's also as strong in industrial fabrication purposes. and as the economy starts increasing fabrication, which we're seeing right now, you're going to see silver continue to go up. so it's kind of both sides of
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the equation. so silver in $30 an ounce next year as an average is not unreel isic. >> by 2015, will we see a continuation of this really quick movement upward or will things start to>z moderate somewhat? what is your outlook longer term for prices, both for gold and silver. >> i believe you'll see a fairly linear improvement in the price of gold. people are batting around the 2,000 to 5,000 range an ounce. silver, i think what you'll see is continued growth on that. you have to remember it was back in the late 70s when silver was at $50, so it's nowhere near its all-time high, yet gold is at its all-time high. >> thank you for joining us. >> thank you very much. >> tom: here's what we're watching for friday: our "market monitor" guest is mark luschini of janney montgomery scott.
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and, we'll see if the holiday shopping season starts with a bang or a whimper. tomorrow, the markets are closed secrets of successful family firms." the final phase for settlements has begun for the b.p. oil disaster. people and businesses getting cash can opt for a lump sum payment, if they agree not to sue b.p. or other firms involved in the spill. the other option? smaller payments every three months. but doing that leaves open the chance to sue the oil giant for further damages. about 450,000 claims were turned in between mid-june and yesterday's deadline. a mixed report card on the obama administration's stimulus plan from the congressional budget office. the american recovery and reinvestment act put between 1.5 and 3.5 million americans to work during the third quarter of this year. but the cost of the legislation is going up. the c.b.o. now says it will total $814 billion.
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originally, the cost was pegged at $787 billion. it's not only holiday season, it's also open enrollment season for health care insurance and
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those flexible spending accounts. while those accounts can offer big savings, few people take advantage of them. in the "money file" tonight, why f.s.a.s are a good idea. here's manisha thakor, co-author of "on my own two feet: a girl's guide to personal finance." >> suppose you're in the check- out line at the pharmacy with a basket of essential items. right before you pay, the person behind you says, "hey, would you like a coupon for up to 40% off that purchase?" would you say yes? interestingly, four out of five americans who receive that exact same offer every year say no. what am i talking about? flexible spendin that enables you to use pre-tax prescriptions to braces and eye glasses. and paying with pre-tax dollars saves you money. here's how. you go in for your annual eye
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exam. the bill is $100, but your insurance doesn't pay for vision care. if your tax rate is 33%, you'd have to earn $150 to pay for that $100 visit because uncle sam would collect $50 off the top. if you use an f.s.a., however, you only have to earn $100 to pay for that $100 out-of-pocket expense.çw% that's why flexible spending accounts are so powerful. to find out if you are eligible for an f.s.a., check with your h.r. department today. i'm manisha thakor. >> tom: finally, if you don't have to pay for dinner tomorrow night, you have another reason to be thankful. this year's thanksgiving meal costs a bit more. the american farm bureau federation says the average cost of a turkey day dinner is up more than 1%. the total price of a meal for ten people? $43.47, including leftovers.
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that's 56 cents more than last year, but $1 less than what shoppers paid two years ago. >> tom: that's "nightly business report" for wednesday, november 24. i'm tom hudson. good night everyone, we hope you all have a wonderful thanksgiving. "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 hs >> 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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