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tv   Nightly Business Report  PBS  November 15, 2014 1:00am-1:31am PST

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report" with tyler mathisen and susie gharib. brought to you in part b brt by >> the, featuring stephanie link who shares her investment strategies, stock picks and market insights with action alerts plus the multimillion dollar portfolio she manages with jim cramer, you can learn more at the four weeks of gains and in that month the dow industrial average has popped almost 9%. which sectors have bounced back the most? as stocks gain, oils slide and crude has fallen for seven straight weeks. the longest such streak since 1986. will lower prices force companies to merge? and one year later, health care enrollment under the affordable care act begins tomorrow and this time around there are changes, challenges,
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and still some unanswered questions. all of that and more tonight on "nightly business report" for friday, november 14th. good evening, everyone. welcome. i'm tyler mathisen. susie gharib is off. tonight, much of the country is seeing the first blast of winter and today stocks acted as if they were frozen in place. the dow, nasdaq and s&p with little change but who's complaining? for the past four weeks, all winners felt like a month at the beach following an early autumn stretch. the dow down a modest 18 points but the nasdaq was up by 8 and s&p 500 ended a fraction of a point higher but that was just enough to mark the index's 41st record close this year. for the week, the dow rose a fraction and s&p edged a little
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higher, as you can see there. bob pisani with more on what has been dragging the markets higher since the lows just a month ago. >> it's been an up and down week for the stocks with only fractional gains with the major indices but we're essentially back to historic highs. the market has been led back by sectors that had the biggest decline earlier in october. health care and tech stocks had a great year going into october but they got hit between october 8th and the bottom on the 15th. now, that made sense. in a broad market decline, the leadership stocks are the ones that get hit the most. intel, for example, was up 34% going into october but it dropped 7% in the first half of that month. but since then, both tech and health care recovered all their losses in our essentially right back at historic highs. that period in early october corresponded to a big drop in
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oil so an additional 10% in october. that put pressure on energy stocks and here's where the story is different. energy stocks have not recovered like the rest of the market has because oil took another leg down just as the rest of the market was bottoming in mid-october. that has limited the recovery in energy stocks. they are only up 5% since the bottom on october 15th. for "nightly business report," i'm bob pisani at the new york stock exchange. >> a very important vote with the house overwhelming a bill that would resume construction of the long-delayed $8 billion keystone xl oil pipeline. supporters in the senate say they have enough votes to pass their own version of the bill o okaying the pipeline next week. the president has stopped short of issuing a veto threat, per se but today he opposed a bill that
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circumvents the approval process controlled, oddly enough, by the state department. the u.s. is producing more oil at the same time global demand for crude is weakening. that led the international energy agency to predict that oil prices, which tumbled 3% this week will fall even further. today, domestic oil did spike. $1.61 a barrel closing just below $67. this marks the seventh weekly loss in a row for west texas crude. well, despite today's gains, oil prices were down about 3% this week with west texas intermediate even touching a four-year low and trading under $75 a barrel for a time. now, this steep price decline is spurring some interesting discussions within the industry. jackie deangeles has more. >> reporter: oil prices in free fall. down 30% year to date. the main issue, a global supply. trying to gain market share and
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opec players are keeping production levels stable not wanting to lose shares. some analysts and traders are predicting that prices could fall even further. talk of $50 a barrel working its way through the pit. >> realistically, i see it trading as low as $65. the reason i say $65, at that point banks will stop giving loans for new exploration and companies will find it hard to operate with those low prices. >> the s&p 500 energy sector, the worst performer over the last three months, was a drop of more than 10%. amidst this backdrop, oil service companies halliburton are in merger talks, coinciding with costs and if prices go lower from here and stay there. >> it's an interesting time to try to put two of those companies together.
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oil prices have been on the decline. i would have to imagine that halliburton is looking at this as an opportunity to consolidate at a time when oil field service stock prices have declined about 25 to 30%. so maybe they are thinking they can get a better valuation opportunity here. >> i'm sure some companies are finding it difficult to operate profitably with these prices and i would expect more m & a if prices remain low. >> all bets could be off. for "nightly business report," i'm jackie deangeles. a double shot of strong economic data out today. the commercial department says retail sales rose more than expected in october as americans have bought more cars and shopped for more items online. and a new reading on consumer sentiment in november is at the highest level since 2007. the news with a little less favorable across the pond, gross
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domestic product in the 18 nation eurozone grew by two-tenths of 1%. the countries hit hardest by the debt crisis are seeing the fastest growth, including greece and spain. and president obama is in australia at the kickoff of the g-20 leader summit. organizers are preparing for world leaders and are bracing for protesters out in force today. here is more from brisbane. >> reporter: there are a number of key issues here at the g-20 in brisbane, tired economic growth and security. that's after reports that there are russian troops moving into ukraine. uk prime minister david cameron talked about this in a press briefing early on on friday saying that sanctions are on the table if russia refuses to
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cooperate. now, aside from security, tax evasion is also key. very high up on the agenda but climate change tony abbott has said economic growth and climate change essentially go hand in hand. tony abbott has conceded to have one paragraph on climate change in the final communique. the security for this event involves 5,000 police and 1,000 australian defense personnel. back to you. >> and that was oriel morrison reporting from brisbane. it's that time of year again. enrollment opens on the affordable care act. bertha coombs has more. >> reporter: president obama's new hhs secretary, sylvia
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burwell, says that the online is ready. >> we have put in tests and contingency plans and tested everything from end to end. >> reporter: despite the disastrous launch of open enrollment a year ago -- >> clearly the end-to-end testing was not sufficient. >> reporter: 8 million americans enrolled in plans for 2014 after a massive fix of this year, the online application is shorter, there's more information up front. the small business shopping portal will launch after a one-year delay and more insurers are offering plans. united health care is selling plans in 23 states this year, up from five a year ago. >> certainly from everything we've heard from hhs, their expectations is that this would be a much simpler experience for consumers. the functionality seems to have worked well this week.
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>> reporter: and investors are confident they can make money on the exchanges even with older enrollees who use the services. >> we've gotten to the point where they are signaling that this could be and is a profitable business. >> reporter: but new headwinds loom for aca. the supreme court is going to hear king versus burwell, a case challenging the plan subsidies in 36 states on health healthca and a new republican majority in congress is not likely to legislate a fix. >> i think both of the things coming together makes it challenging. >> reporter: but near term, the focus will be on enrollment numbers. already, the obama administration has tempered growth expectations. even if these exchanges work properly, there will be a challenge to get people to sign up during open enrollment which
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will be shorter this year, four months instead of six. according to the kaiser family foundation poll, 90% of young people surveyed were not aware that open enrollment was today. bertha coombs, "nightly business report," new york. >> and to talk more about what we've learned about the affordable care act and what you need to know is cici, managing director with pwc research institute. good to have you with us. is it going to work this time? >> it's going to be better. >> better? >> yes. >> won't work necessarily for everybody but basically the shut down of the system that occurred last year won't occur? >> we feel much more con if i dent. the government feels much more confident. >> what is new or different this year? what should people expect when they logon? >> the best news for consumers
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this time around, tyler, is you're going to be able to window shop. they can logon to and they can start doing comparison shopping without putting in all of their information and starting to enroll. that was a big problem last year where people didn't really get to shop before they got locked into a choice. >> that's right. i remember trying to logon and you had to log in and get all set up and some of that process was buggy, to put it mildly, before you could start to really go and look at different plans to see which one would work. what, if anything, do we know about pricing this year compared to last year. >> our institute has tracked all prices in the 50 states. the average premium for individual plans is 5.6%. but there's wide variations. you can actually get cheaper plans and you can see big increases. so people really need to shop around and that's most important, tyler, for the people that signed up last year because we're noticing a trend where
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folks that bought the lower-priced plans last year are seeing the biggest increases. >> the so-called silver plans? >> the silver plans. >> and what was it, gold, silver, bronze? >> it's like the olympics, bronze, silver, gold and platinum. >> and platinum being the highest priced one? >> iuh-huh. >> let's talk about the success and failure of the program so far. are more people covered by insurance than a year ago and who are they? >> yep. >> the young people that insurers wanted to make sure they were there to help them with their risk pool? >> we have about 10 million people who have health insurance todayho did not have it a year ago. a big jump. we also have a few million more that have gotten in prior to that if they were under 26 and signed up under their parents' plans. so significant increase in terms of newly insured in this country. young people did okay. not fabulously. but they did okay. and that's pretty encouraging
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sign. the other big gap right now are hispanics. >> who have not signed up that were expected? >> uh-huh. >> let's go back to the question of pricing and the point that was raised in bertha's piece over the subsidies. how big of a threat to this entire affordable health care act is that supreme court case? if the subsidies are ruled unconstitutional, is the whole system going to collapse? >> well, the fight in the supreme court is over just the federal exchange. so you're looking at about half of them in the court. but i think existential threat is absolutely correct, tyler. if you wipe these away, we have 85% of the people who enrolled a year ago qualified for subsidies. in most incidents, the people who got a subsidy paid 24% of the published premium price. >> so they were paying $80 a month as opposed to $400 a
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month? >> very significant for the consumer and the insurer. >> cici, thank you for coming in. we'll check in with you as the system goes along, the year goes along. great to have you with us. still ahead, looking for stocks that could see double- j double-digit gains. ♪ virgin america has really lifted off as a publicly traded company with shares soaring more than 30% in today's trading debut. the ipo marks the latest move by an airline to crash in on the sector's surging popularity with investors. but a virgin america likely to fly high like other airline
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stocks have this year? phil lebeau has our report. >> reporter: a soaring debut for virgin america. a rousing opening passengers on virgin america flights toasting champagne as they watch the ipo live on tv. >> we'll come out of this with a very strong balance sheet and liquidity position and debt coverage position. an extremely day for our company. >> reporter: over the last eight years, virgin company has gone from losing money to turning a profit in 2013. along the way, the airline based in san francisco has primarily focused on cross country flights that emphasize passenger service. one example, on virgin america, you order food and drinks from your seat instead of waiting for the drink cart to go down the aisle. >> there's a niche for a carrier like virgin because, frankly, people out there are brand
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oriented. >> reporter: but they face stiff competition from established airlines, delta, american, united and even jetblue are pushing this on trans continental flights as they try to win over the most lucrative customer, business travelers who frequently fly from coast-to-coast. business flyers generate 40% of virgin america's revenue and the ceo believes he can keep those customers. >> if you look at our first class, for example, we have eight seats up there. it's a small cabin. it's an intimate cabin and a controlled cabin. it's more like a private flying experience than having 30 or 40 flights on united and american. >> airlines are enjoying one of the most profitable years ever with some stocks, like southwest, more than doubling over the last 12 months. well, virgin america shares climb even higher? that depends on whether bookings
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remain solid. for now, virgin america and investors are toasting a big day for the little airline. phil lebeau, "nightly business report," chicago. an activist hedge fund takes a stake in mcdonald's sending shares higher. according to a filing out today, jana partners now holds the position in the purchaburger ch worth more than $81 million. shares almost 1% higher today at $96.21. the accounting issues at hertz are worse than originally thought. the car rental giant says it will restate its 2012 and 2013 earnings. this is in addition to restating its 2011 results which we already knew about. shares tumbled to $21.69. shares of graham holdings went higher after the announcement of a separately traded company.
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investors cheered the breakup of that company. it has, of course, sold its washington post newspaper unit last year to amazon's ceo. holding higher at $887.87. pandora surged. this is the first purchase by any pandora insider since its ipo more than three years ago. the stock was up 16.5%. it closed at 21.51. it's never too early to be thinking about stocks that will do well in a rising interest rate environment. he's derek booten, ceo with lucilla capital. good to have you with us. do you think rates will go up any time soon and, if so, how much? >> i don't think so, tyler. i think we're looking at mid- to
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late 2015. any type we see a hype we may see the fed off their dovish stance, we see more weakness in the gdp, whether it's labor or housing. i don't think we're going to see any moves until late 2015 or so. >> but these stocks that you're going to mention to us, beginning with mxp semiconductors you think would be good for the current environment and would benefit or withstand? >> mxp is really about apple pay. i can't say enough about apple pay. all of the excitement of the iphone 6. i think it's going to transform the world much the same way itunes did in the music world. what we're seeing right now is the semiconductor provides the chips for the phone that communicates with the retailers. should alibaba do anything with
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this, it will really take off. i think they are well-positioned and have a lot of room to run here. >> let's move on to another one that has been a hot company, gillead sciences. you have it priced at 140 over the next 12 months. why do you love it? >> i love it because of the massive pipeline of drugs they have coming out under review right now, both hiv drugs, cardiovascular, they've gotten a lot of talk right now about their hepatitis c drugs. they are leaders in the industry first to market. there's 11 million treatable patients with hepatitis c. i see this stock taking dominance in the market. >> let's move on to number three and that would be dow chemical. >> dow is more so than any of the competitors leveraging national gas and shale oil production. it's a gas rich company.
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you probably saw them increase the dividend by 14%. they are doing well and responded to criticism out there about being in unprofitable business lines. they are focusing on really strong, high value chemical and service sales. >> overall, derek, do you like the market and think where it can turn higher? >> i absolutely do, tyler. we see the spottiness in the market like in gdp as i talked about but these are just opportunities to get the dollar back in the market. we sold in october with a 10% drop. i think we're on the road with some bumpiness, 3 to 5% corrections depending on what happens overseas, what happens in some of the earnings reports but we're in this santa claus rally and i think it will take news a strong first half of 2015 and then we'll finish off in hopefully high digit percentage growth in 2015. >> well, ho, ho, ho.
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derek looten, thank you. >> thank you. how the freelance company is changing the way that companies hire and americans work. ♪ and finally tonight, have you ever thought about becoming your own boss working for yourself, maybe even as a freelancer? millions of americans do it with the so-called freelance economy growing every year and changing the way that america works. sharon epperson has more. >> reporter: kyle davidson has been on many adventures but one most meaningful came after he left living social, online deals
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for its subscribers. >> i wanted to refocus the core business, refocus their strategy a little bit and decided, as a result, to craft deals on snowboarding, skiing, rafting, wine tours and other trips when his job came to an end he embarked on a new adventure, launching his own business, creating an online marketplace designed specifically for consumers seeking active excursions. he hired a bunch of freelancers to work with him, mostly members of his old team. >> i hired a lot of my staff, we hired 23 freelancers and we call them group leaders. they are our guides on our trips and every single one is a freelancer. >> reporter: there's been a dramatic increase in the number of people working for themselves over the past decade. about 53 million americans are doing freelance work today. that's about one-third of the
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entire u.s. workforce. according to a recent study commissioned by the freelancers union. >> the whole landscape is changing. the digital age has played a huge role in that. if i can have access to that from anywhere, why wouldn't i work with freelancers? it only makes sense for a ceo and anybody running a company to do that. >> reporter: for davidson, having a freelance staff is essential for his business. >> it's much easier to have a larger staff because you have more flexibility in terms of scheduling. the more people we have, the more options there are for who can work. >> reporter: it provides more options for businesses large and small. >> it's going to change the way that corporate america works, that the small business landscape operates because you have access to different kinds of people on shorter term assignments. the working environment is changing from thinking about long-term careers to what we did in the past to thinking about work on a project basis. >> reporter: changing the way that americans work and the way that companies hire.
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for "nightly business report," i'm sharon epperson. >> and that is "nightly business report" for tonight. thanks for watching. i'm tyler mathisen. have a great weekend, everybody. we'll see you back here on monday. >> "nightly business report" h been brought to yo, featuring stephanie link who shares her market insights with action alerts plus, the multimillion dollar portfolio she manages with jim cramer. you can learn more at"nbr."
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gwen: from immigration to energy, from climate change to the politics of politics, the post-election world is spinning like a comet. we'll try to find a place to land tonight on "washington week." gwen: they're back! >> we're going to fight the president tooth and nail if he continues down this path. this is the wrong way to govern. >> this is not get-even time. we want to move on to the next congress with a record of accomplishment. >> i had maybe naively hoped the president would look at the results of the election and decide to come to this political center and do some business with us. but the early signs are not good. >> i'm here as long as my members want me to be here, as long as there's a reason to be here. gwen: did congressional leaders learn the lessons of this