tv Nightly Business Report PBS April 5, 2012 7:00pm-7:30pm PDT
>> susie: the president signs the "jobs" act into law. >> this bill will make it easier for you to go public, and that's a big deal because going public is a major step toward expanding and hiring more workers. >> susie: speaking of companies going public, when facebook stock debuts, it will trade on the nasdaq stock exchange. >> tom: and we look at a growing trend of super-commuters. why they think traveling over 100 miles a day to and from work has big benefits. it's "nightly business report" for thursday, april 5. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
captioning sponsored by wpbt >> tom: good evening and thanks for joining us. there are more signs tonight of an improving job market. susie, the latest was another drop in the number of people filing for unemployment insurance for the first time. that means there have been fewer layoffs. >> susie: tom, everyone is hoping to get more encouraging job news tomorrow, when the labor department releases the march employment numbers. now, over the previous three months, american businesses have added more than 200,000 jobs each month. economists expect a bit more than that were added to u.s. payrolls in march. >> tom: the white house was also focused on jobs today.
president obama signed the "jobs" act into law. the bill aims to help new companies and small businesses raise money from investors. >> i've always said that the true engine of job creation in this country is the private sector, not the government. our job is to help our companies grow and hire. >> tom: supporters say the new law is about keeping up with changing times and business opportunities. critics say it carries some serious consequences because it rolls back some important regulations. darren gersh reports tonight from washington on this new direction in investor protection. >> reporter: you can think of today's white house ceremony as the high water mark for securities regulation. washington has spent a decade tightening up the rules; with the stroke of a pen, the president today peeled some back. and not everyone is happy about it. >> we're not eliminating the s.e.c., we're not eliminating the core of securities regulation. but we are pulling back on some hard-won reforms from the last
decade, and the people who worked hard to get those reforms are pretty upset right now. >> reporter: think of the jobs act like a new set of traffic rules. the law removes some accounting guardrails and lifts some regulatory speed limits, including some conflict of interest rules on research analysts. the goal is to make it easier for small companies to take the on ramp to a public stock offering, or simply to raise cash from small groups of investors. backers of crowd funding say allowing businesses to tap small investors around the country is an important innovation. >> i see it as re-regulation, not de-regulation. the laws that are covering this currently were written in 1933 and 1934, back before the telephone was widely available in most homes. with the rise of the internet and the social web, we need ways of raising money and raising capital and sponsoring entrepreneurship and innovation that match the technology today. >> reporter: and in what looked like a nod to critics, the
president promised the crowd funding will be done carefully. >> to make sure americans don't get taken advantage of, the web sites where folks will go to fund all these startups and small businesses will be subject to rigorous oversight. >> reporter: but those pushing to keep the old rules say the shift in direction is clear. >> as long as there is a deep- seated anxiety in the american public that we need job growth, and job growth comes from the private sector, the opportunity for the private sector to say, "well, if you want that, you got to loosen up on the regulation" is going to be pervasive. >> reporter: the first part of the deal is now done. washington has cut back the regulatory red tape. now, the question is whether business will deliver the jobs it has promised. darren gersh, "nightly business report," washington. >> susie: u.s. stocks were under pressure today on fresh worries that spain may have trouble paying back its debt. that as yields on spanish bonds climbed to their highest level since november.
the dow fell 14, but the nasdaq rose 12. the s&p was off almost a point. >> tom: still ahead, how much should investors thank ben bernanke and the federal reserve behind the stock market rally? tonight's "market monitor" guest worries the market is being propped up by uncle sam. >> susie: spring-time weather perked up the economy in march. some of the nation's biggest stores rang up hefty sales gains last month. unseasonably warm weather drove demand for new spring fashions, giving a boost to everyone from discounters to department stores and high-end retailers. sales at target and macy's rose more than 7%; 8% gains for nordstrom's, and retailers gap and limited brands, which owns victoria's secret, and bath and body works. but it wasn't all rosy-- higher gas prices and worries about the job market crimped sales at stores like walgreen's and bon tons. and retail analyst brian sozzi thinks consumers are still
nervous. >> i think april will look a little more realistic. if anything has been consistent during the recovery is that the consumer's been inconsistent. when they don't need to shop, they will continue to save. they will rebuild their savings and look for periods towards the end of seasons to buy-- back to school, holidays. we're not getting that consistent month to month gains. >> susie: an early easter also shifted sales to march. the holiday is this weekend, and a lot of purchases related to the holiday have already been made. and that may take away from april's numbers. >> susie: one auto maker getting a lot of attention this week at the new york auto show-- hyundai. sales of the south korean auto
maker have been skyrocketing, and in march, it posted record sales, it's best month ever. when i talked with john krafcik, c.e.o. of hyundai u.s.a., i asked him what's his strategy to keep hyundai popular with consumers. >> so john ho you would you describe consumer sentiment these days, consumer attitudes about buying a new car? >> it is the strongest consumer sentiment right now for car buying we have seen in years. they are definitely coming back, for a while the last couple of areas the industry has been kind of tearing through consumers having to replace very old cars. with we are beginning to see more discretionary purchases
coming into the market. the industry is very, very strong right now. >> susie: hyundai sales have been on fire. are you going to have to ramp up production to meet with all this demand? >> some of our plants, yes. we have a couple plant as plying hyundai products in the. is, georgia and alabama. we think when all is said and done when cars going through our dealer network we will finish 2012 with about 100,000 more retail cars going through our dealers than we did in 2011. that is great news for the american car buyer. >> susie: as you know you are getting alot more competition from the american automakers. they are really getting revved up, gm, ford and chrysler. how are you dealing with their comeback? >> you know, we respect the competition. they are doing a great job. but one of the things that hut hyundai where it is, our focus is on the customer and what can we do to please them and meet some needs that maybe they haven't figured out they have yet. we are doing that with new products like this new family of santa feys we are talking about today. >> susie: tell us about it, introdoesing it here, made in the usat is going to come up against competing with jeep cher o keerx the ford explorer. how are you going to deal
with that. >> i think when you put the whole package together, the fuel efficiency and cargo that we have, towing capability, this really interesting design which we call fluidity sculpture, you put all that package together and back it with our warranty which is still the best in the industry ten years 100,000 miles on the power train, that seems to be an unbeatable combination. it's worked for us with cars like sonata where we have you believe doed sales and elantra where we have doubled sales. we are essentially applying the fame formula to our crossovers. and santa fey has been our strongest cross over. >> susie: on the luxury side your genesis and equis not getting a lot of traction cut. make it in the luxury market. >> yeah, i think we are pulling it off in a big way. no question the again he sis car of the year in 2009 is continuing to do well am is attracting the kind of buyer we want. they are self-confident, affluent people, successful at wealth accumulation they don't need and don't require the social status symbol of a premium badge. in fact many of them don't like that. and they are buying cars like the equis or genesis to make a different kind of
statement about what is important to them. >> susie: john, thank you so much. great seeing you again. >> tom: whether it's by car, bus, or train, super-commuting is fast becoming an important shift in the workplace and the housing market. a growing number of people are choosing to live in one city and work in another far away, often traveling for hours. they're called super-commuters. some do it by necessity, others by choice. erika miller traveled to pennsylvania for a closer look. >> reporter: mike babinski is filling up his car, again. he commutes every day from his home in nazareth, pennsylvania, to a home depot in union, new jersey >> roundtrip, it's about 150 miles. >> reporter: and the rising cost of fuel is taking a big bite out of his wallet. >> it's between, on average about $500 to $550 a month. >> reporter: on a typical day, babinski spends three hours in his car. but he says it's worth it-- he and his wife stephanie and their two kids live in this five- bedroom home on an acre and a half in a good school district.
>> we wanted to get a bigger property for the kids to be able to play with their friends and run around outside. they can run outside and jump on the trampoline and run around and practice their sports in the backyard. >> reporter: the home's $270,000 price tag and low property taxes were an even bigger incentive. they say they couldn't come close to what they have in nazareth, nearer to mike's job, which he loves. >> everybody wants to have a short commute, but it's a trade of whether you are happy where your at or working ten minutes away. there's a lot of people that we know that work ten-15 minutes away and just hate their job. >> reporter: nazareth, like many communities, has seen property values fall over the past few years. but realtors say lower prices have helped offset drawbacks like long commutes. >> keep in mind, they're looking for somewhere where they want to stay 30 years and retire, so this is a major commitment. so, if they find something that they want, those things are part of the choices that they make. >> reporter: super-commuters are a rapidly growing part of the american workforce.
given the nation's high unemployment rate, many people are forced to go where the jobs are. but they don't necessarily want to uproot their families, or force their spouse to take a new job. houston and dallas top the list of super-commuting cities with 13% of the workforce, followed by phoenix, atlanta, and philadelphia. n.y.u. professor mitchell moss credits technology for making long travel times more tolerable. >> the great change in commuting-- it's no longer down time. we have wi-fi on trains and buses. we have, in the car, more information than ever before-- not just radio. we have people getting phone calls. there are physicians who don't mind driving from san diego to l.a.-- that's when they return all their calls. >> reporter: many super- commuters are also able to work from home a day or more a week. but not mike babinski, who has to work on site. >> it's hard, because we don't get to see him that much when he's working. the kids don't get to see him, really, because he's leaving
early in the morning and comes home late at night. but he tries to get to as many activities and sports practices and games as he can. >> reporter: if not, there are always weekends, when he can watch the kids do the driving. >> was it worth it? >> yes. >> absolutely! >> reporter: erika miller, "nightly business report," nazareth, pennsylvania. >> tom: the battle between two media giants, one traditional and one in new technologies, will go another round. viacom is suing google's internet video service youtube for $1 billion for copyright infringement. viacom claims it's owed money for youtube videos of viacom- owned material that aired on youtube between 2005 and 2008. an appeals court today reversed a lower court's decision to throw out viacom's claims.
the lower court had ruled youtube was protected by the safe harbor act, which says if youtube takes down a video when they hear about it, they're off the hook. >> susie: it looks like facebook will "friend" the nasdaq instead of the big board. that's the word from insiders tonight. it marks another win for the nasdaq, known as the address for tech savvy companies. the big u.s. exchanges have been competing for listings because they make big bucks by charging companies and information- seeking investors with fees. facebook's offering is expected to be worth as much as $100 billion when it goes public in may. making it the biggest ipo ever. so tom, you can imagine allots of disappointment here at the nyse about losing facebook. but big win for the nasdaq. >> tom: way, pitch battle. there is a lot of financial consequences, but also just bragging rights when it comes to new york and the financial market, no doubt about it, here, susie. we did see a business of a quiet end to a shortened
trading week. the markets are closed tomorrow. the s&p 500 popped into positive territory late this morning before settling lower in afternoon trading. it was a tough week for u.s. shareholders with the major indices finishing with three straight sessions of losses. the dow industrials fell 1.5%, thanks in large part to the stiff selloff yesterday. the nasdaq fared the best, losing less than one half of one percent. it was able to eke out a fractional gain today. and the s&p 500 is three- quarters of a percent lower tonight compared to the end of last week. this makes it the worst week of the year. we saw investors pull back from economically sensitive areas this week. european worries returned with interest rates on spanish government bonds jumping to their highs of the year, indicating the fears about european government debt. this week, the burst of the selling was seen in the energy,
financial, and materials sectors, falling by at least 1.4% each. it was a materials stock that was the biggest loser among dow jones industrial stocks. aluminum maker alcoa will cut production in an effort to reduce global supply. too much aluminum has driven down prices. that drop is expected to hurt alcoa's bottom line when it reports first quarter earnings next week. that marks the unofficial beginning for first quarter earnings season. shares fell almost 2% today down to a one-month low. but another materials company, chemical maker ppg, saw a new intra-day 52-week high. while the company isn't immune to the problems in europe, it announced it will lay off 2,000 people, most of them in europe. it also forecast better than expected earnings, before figuring in the costs of cleaning up former chemical plants. there was plenty of action in retail stocks with the march sales figures, but it was bed, bath, and beyond that was the best s&p 500 stock, thanks to last night's strong earnings report.
shares shot up 8.5%. volume was five times normal with the stock jumping to a new 52-week high. other retailers moving included t.j. maxx parent t-j-x, rising more than 2%. it raised its financial forecast, thanks to a strong march. kohl's fell more than 3%, despite a stronger showing last month. a different type of retailer, carmax, had a slightly better than expected quarter. earnings were one penny better than estimates. sales of used cards was up for the first time in three months. but shares were not; they fell almost 5%. the company saw a drop in same- store sales. over the past 12 months, each time the stock has traded close to $35, it was sold off, including today. finally, lots of volume around a biotech buyout. cancer drug developer allos therapeutics jumped 27% on a $200 million buyout offer from spectrum pharmaceuticals.
spectrum fell more than 9%. and that's tonight's "market focus." >> tom: stocks may have been knocked backward a bit this week as the federal reserve signaled it wasn't ready to push more money into the economy right away, but tonight's market monitor is cautious about the market being held up by government help. chris wolfe is chief investment officer at merrill lynch wealth management private banking. with us tonight from the new york-- welcome to the program, nice to see you. >> thank you, tom. >> tom: so is there anything wrong with the government help that is in the market and has helped push this rally to post session highs? >> you know, i think most economist was say no there's nothing wrong. in fact, that was the government's job to step in
where the private sector had stepped out. but i think where we are today is after a lot of stimulus, a broad expansion of central bank balance sheet, in the just in the u.s. but globally, we're starting to wonder how long can that stimulus last and how will the government take itself out. >> tom: so with that ahead of us are you recommending selling stocks, peeling back some of the profits that we've seen in the market? >> well, our concerns stem from kind of two things right now. one is as i indicated earlier longer term how does the government take itself out. right now it's a large measure of consumer spending and we're looking at somewhere between 5 to 7% in terms of the consumption basket being driven by government spending. and i think that's a pretty big number that we need to see come down over time. that's the first thing. and the second is, as we think about where we are headed towards the second half of this year, there's this thing we call the fiscal cliff. that's the reduction of other types of government spending that's likely to impact economic growth later this year. those two big reasons the withdrawal of government spending and really the slowdown in consumption we expect towards the second
half of the year give us a bit more pause, a bit more caution, going into the second-quarter earnings. >> that is when it comes to equities. what about that outlook when it comes to bonds? bonds obviously coming off the worst month in a long, long time in the month of march. is it overdone? >> i think you were looking at government bonds as being relatively challenged in this environment. in fact, we prefer corporate bonds relative to corporate bonds because we're looking at the ability to repay, the profitability of companies being at all-time highs and really thinking that is going to be a driver of corporate spreads relative to treasuries, u.s. government bonds in a positive way. so we still favor corporate bonds relative to government. and still very cautious on the government side. >> tom: let's bring it back to stocks because there are sectors that you like despite this environment. beginning with technology, you're using the exchange traded funds to illustrate the sector choices, xlk for this technology fund. it's trading close to 52-week highs, what is going to push tech higher. >> part of our broad view about markets is they are likely to narrow going into the second half of this year. and while technology has been really aided by
companies like apple, kind ever a big piece of that sector etf we think there is a reinvestment psychele that has begun, really over the last 18 months. and likely to continue as companies look at replacing labor with technology. we expect that trend to carry water over the course of the remainder of this area and even into next year. so i think the technology sector is lakely to broaden in terms of the earnings and revenue growth through the remainder of this year. >> tom: we have-- . >> tom: we've been talking about european worries, global concerns about china, of course. but you're not afraid to get into sensitive issues, combin beginning with industrials, xli, does it concern you when are you seeing emerging markets like china and others slow their growth? >> well, it does. and in fact a large portion of the revenue growth we've seen over the past few years has been driven by economies outside the united states. i think that's important to consider. but we also see that many of these companies are very aggressively managing their costs. not just their labor costs but their input costs. and i think that's a key feature of the story for many of the industrials going forward.
the first part is cost management, sub si diization of their income statement by balancing their operations globally and second is even though we do expect a bit of a slowdown in growth this area, there is a long-term powerful trend around rebuilding infrastructure that we think many of the industrial capture. >> tom: just 20 seconds but i want to mention energy, because you like energy as well. oil prices have stalled out around 100. but the energy stocks haven't come along lately. >> no, they haven't. big surprise from 2010 to 2011 was the big bump in energy prices. haven't seen much this year. our view is that there is a bit more stimulus coming are from outside the u.s. that should boost demand for energy prices and help some of the energy names. >> tom: do you or your clients own any of these sector etf? >> our clients do own the etfs. >> tom: watching the market, our market monitor chris wolfe with merrill lynch. >> susie: as we mentioned, president obama signed off on his latest plan to boost the economy-- the jobs act, aimed at helping small business and entrepreneurs. but tonight's commentator warns
that creating a nation of entrepreneurs is not a cure-all for our problems. he's eric schurenberg, editor- in-chief at "inc" magazine. >> entrepreneurs are our new heroes, the seal team six that's going to pull us out of recession. "shark tank" lionizes them on tv. half of all mba candidates say they want to start a business. and the president just signed a law that bends investor protections to make things easier for entrepreneurs. hey, they're job creators. they're so glamorous. a couple of things about this. first, it's false advertising. as every entrepreneur knows, launching a company is not glamorous. it's a gri, in which you risk everything on a dream you probably won't achieve. somehow, they never mention that on "shark tank." second, the glam angle brings in the wrong people. not everyone who wears skinny jeans and goes to meet-ups can do the job. it's hard. finally, the economy doesn't really need tons of new entrepreneurs, as such. we're not better off just for
having thousands of little c.e.o.s running around. we're only better off when we have real companies doing things that improve people's lives. for that, you need skilled workers as well as leaders. it's not enough to cut regulations. we need to educate kids in math and science. we need immigration policies that encourage foreign-born college grads to stay here. and we need a health care system that doesn't threaten you with ruin if you take a job with a startup without benefits. entrepreneurs are heroes. but entrepreneurship? that's damn hard work. and so is economic recovery. i'm eric schurenberg. >> tom: and finally, google's trying out a new way to make technology work for you. it's called project glass and, yes, it's the sci-fi future we dreamed about as kids-- glasses with a computer screen embedded right in the lens! it gives you hands-free access to many of the same things you'd find on a smart phone, letting you make phone calls, take pictures, and even check the weather. but they're still in development, and susie, there's no word yet on just when they'll
hit the market. no word on when they will hit the market, how much and they are not going to help you if you forget them on the couch and happen to sit on them. yes, that's happened before in my household. >> susie: tom, you can be nerdy but also hip and cool. >> tom: or just stare off into space and look thoughtful like you are being productive, i guess. that's it that's "nightly business report" for thursday, april 5. a reminder-- the markets are closed tomorrow in observance of good friday, but we'll be here with the latest job numbers. susie. >> susie: and tom, we'll also wrap up our look at the spring housing market. >> tom: good night, everyone, and good night to you, too, susie. >> susie: good night, tom. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: