tv Nightly Business Report PBS June 8, 2011 6:30pm-7:00pm PDT
>> tom: oil prices push back above $100 a barrel as opec ends a big meeting with a big surprise-- no change in output. that could mean higher gas prices this summer. >> if oil prices remain at the current level or move higher, we expect pump prices to go back above $4 and in many cases close to $5. >> susie: we look at why opec members can't agree and what that means for the global economy. you're watching "nightly business report" for wednesday, june 8. this is "nightly business report" with susie gharib and tom hudson.
"nightly business report" is made possible by: captioning sponsored by wpbt >> suzanne: good evening everyone and thanks for joining us. susie gharib is off tonight. a stunner out of the opec meeting in vienna. the oil cartel did not reach a deal to increase output, and the members usually agree on most things. >> tom: suzanne, this means new worries about oil supply through the summer and potentially higher prices at the pump just as they're starting to come down. july crude futures jumped on the news-- up $1.65 in new york
trading-- closing over $100 a barrel for the first time in a week. >> suzanne: talks broke down after saudi arabia couldn't convince other nations to boost production. for insight into the opec surprise, i spoke with veteran oil analyst fadel gheit and began by asking if the impasse was political or economic. >> it's a combination political and economic. the saudis and their faction don't want to see a repeat of 2008. we don't want oil prices to get out of kroll. they are convinced that speculators have taken kroll of the market and are likely to push crude oil prices much higher. at this political as well as economical. >> suzanne: we have some opecmey of supply and the white house saying there is not enough supply. who is correct? >> there is ample supply.
there is not over supply. which we don't need. what opec members don't want to increase oil production. they're saying the run up on oil prices is not the lack of supply but speculation. outside of arabia also share this view. they're trying to do their bust to burst the bubble if you will. they don't want a repeat of 2008. they're saying let's increase the production so there is no room for speculator to spread fear of potential supply disruption and obvious shortage. so, i mean it's a federal war. at the end of the day saudi arabia will single handedly increase production and make sure the rest of the market knows that to squeeze speculators out. saeufplt so, what does this all
mean for oil prices. i'm paying over $4, is that what i'm liking to play for the summer or higher. >> if oil prices remain at the same level or higher we expect prices to go back $4. many cases be close to $5. unfortunately the price of opec that want higher oil prices is short lived if the economy get derailed and the demand drives up. >> suzanne: getting back to they boosting their output. what does that do, is it more psychological or will it have a impact on prices? >> basically any increase out of owopec is going to come out of saudi arabia. all other counties have essentially maxed out they can't
produce more than they're producing. what we're saying is benefit for saudi arabia at their own expense. they increase production by 10%. they increase price by 5%. the rest of opec is hurting but saudi arabia increases production. they say saudi arabia is favoring production. you have more spare capacity then everyone and you're the ultimate winner. the effect is longer term they try to avoid repeat of 2008. >> suzanne: quickly one lastquel reserves. do you think we will tap them any reason too? >> it's unwise. it's always a option. they say in the market that washington is watching and will not let oil prices get out of kroll. >> suzanne: okay, fad hel as gr.
>> suzanne: there was good >> suzanne: and, there was some good news on the supply side in the oil markets today. exxon mobil unveiled twin oil finds deep in the gulf of mexico. they contain more than 700 million barrels of recoverable oil. exxon found the fields ahead of last year's b.p. oil disaster, but couldn't get to them until the ban on deepwater drilling was lifted. >> tom: here are the stories in tonight's n.b.r. newswheel: wall street marks another day to the downside. the dow lost almost 22 points, the nasdaq fell 26 and the s&p 500 was off five-- its sixth straight losing session. trading volume rose from yesterday's pace to just above one billion shares on the big board and two billion on the nasdaq. the federal reserve's beige book report on regional economies showed most of the 12 fed districts saw growth during the past two months, but higher food and gas prices are weighing on consumer spending. credit ratings agency fitch says
it will put its rating on u.s. government debt on watch for downgrade in august if congress doesn't boost the federal debt limit by then. moody's and standard & poor's have already warned of rating trouble, if a debt deal isn't reached. china is taking a page out of uncle sam's playbook, launching a "cash for clunkers" program to boost auto sales. owners will get up to $2,800 toward a new vehicle when they send their old one to the scrap heap. china's auto sales fell 14% last month. still ahead, should you rent or own your home? what that decision could mean for the housing recovery. also, in tonight's "street critique," hilary kramer looks for safety in a volatile market. >> suzanne: visa and mastercard shares saw heavier-than-usual volume today, which picked up in the final hour of trading. mastercard dropped 1.5%. visa stock was down almost 4%. the selling came when the u.s. senate voted to let regulators go ahead with new caps on debit card swipe fees beginning next
month. this has been a huge fight, carefully watched by investors and consumers. darren gersh explains why. >> reporter: you know we all do this. americans swipe their debit cards 38 billion times a year. what you may not know is that retailers pay an average of 44 cents to process every swipe-- or $16 billion a year. today, the senate debated whether to push back new regulations that would cap those fees at 12 cents. senar richard durbin said a delay would be a big kiss for the nation's biggest banks. >> this delay could be significant, and from the banks' point of view, the longer the delay, the better. what's it worth? $1.3 billion a month for every month they can delay it. how long would they like to delay it? forever. >> reporter: the new rules do contain a special exemption for small banks, but montana's jon tester said regulators were not confident it would work. that's why tester is pushing to
delay the new rules, which he said would force some small banks out of business. >> and i could care less about the wall street banks, they're going to do fine. but i'll tell you what, we lose the banks of our small towns of montana, or wyoming, or tennessee and you can put another nail in the coffin of rural america. >> reporter: retailers were relieved after the vote failed. the national retail federation's mallory duncan says consumers should see a difference after the fees fall next month. >> consumers can drive up and down the highway now and see that retailers are offering a discount for cash. this will now make it profitable to offer a discount for debit, for example, as we go into the future. >> reporter: the federal reserve has the final say on exactly what the fee will be and it could go as high as 20 cents. that might give banks an incentive to continue offering debit cards without charging customers more. but f.b.r. capital markets analyst edward mills thinks this
lobbying battle is far from over. he expects banks to share their pain with customers. >> they are going to want to push consumer sentiment against these regulations. the way they do it is hit someone in the pocketbook. tell their banking customers go to congress and explain to them why they are being charged $10 a month for their debit card. >> reporter: this was one of the largest battles washington has seen in many years. both sides spent millions of dollars in advertising and lobbying. but big retailers rung up a win, at least for now. darren gersh, "nightly business report," washington.
>> suzanne: tom, six straightdoa party on the floor at the new york stock exchange you can hear the music. hofplt yes, we're above the march lows suzanne. let's get with it. no cocktail music today for trading, instead it was another session of weakening stock prices, driving the major indices down to levels last seen in march. one sector market pros watch as a leading indictor is the transport sector. in a growing economy, we're
traveling more and shipping more. this is the dow jones transport exchange-traded fund since the beginning of the year. thanks to the selloff since the end of may, this fund is essentially back to where it began the year. today's jump in oil prices didn't help. independent oil and nat gas company cabot led the energy patch, up more than 4% to a new 52-week high and close to a new three-year high. money management firm canaccord upgraded shares and boosted its price target to $85 thanks to cabot's production of shale natural gas in pennsylvania. we mentioned earlier exxon's announcement it found two major deep water oil discoveries in the gulf of mexico. shares were up 1% on strong volume. exxon was among the strongest dow industrial component. other gainers inside the dow were among the highest dividend verizon gained 1.5%. johnson & johnson stock was up 1%. were among the highest dividend payers as investors seek some safety. speaking of yields, the interest rate on the 10-year government bond fell back below 3%.
bonds have rallied this month as stocks have weakened. no doubt about it. investors continue pouring money into bonds. how much money? take a look. $3.1 billion were taken in by bond mutual funds in the past week, according to the investment company institute. at the same time, investors pulled just over $1 billion out of u.s. stock mutual funds. after the close tonight, semiconductor maker texas instruments cut its second- quarter outlook. shares were down about 2% before that announcement, dropping below their march lows. they were essentially unchanged after the pessimistic forecast though. its chips go into everything from automobiles to cell phones. the japanese disaster has slowed down auto production and a big cellphone maker, nokia, has fallen on hard times.
let's roll out shares of nokia. speaking of nokia, shares hit another 13-year low, falling another 4.75%. there continues to be market speculation about a possible deal either with microsoft or samsung, but no confirmation. meantime, networking company ciena saw shares fall hard, down 16% after a worse-than-predicted quarter and forecast. and that's tonight's "market focus." >> suzanne: for generations, americans have viewed home ownership as a key to the american dream, but that view
may be changing as a result of the financial crisis. on top of that, getting a mortgage these day has become a lot tougher. not surprisingly, the rate of home ownership in the u.s. is at the lowest level in 13 years. erika miller reports on what that trend could mean for the u.s. economy. >> reporter: in many parts of the country, paying almost $3,000 a month in rent would be unthinkable. but renter lisa hanock-jasie and her husband are delighted to pay that for their one-bedroom on wall street, which they share with their dog. though home prices are down sharply and interest rates are low, there's no temptation to buy. >> we are in our 50's now. we need to save our equity. the real estate market-- we are not sure of. >> reporter: for others, home ownership is not a possibility due to tighter lending requirements or lack of a down payment. at the peak of the housing market, seven out of every 10 households owned their home. now it's closer to 6.5. experts think it will likely fall further. so what does this shift mean for
the u.s economy? experts say it's a major headwind for the housing market recovery-- a reason they think home prices could fall another 5% to 10% nationwide. that's bad news for realtors and homebuilders. but peter muoio, founder of maximus advisors, says other sectors will also be affected. >> when you are building homes you are not just building homes- - you are building communities. and you are building the retail that goes with it. you are building the schools, the office buildings that surround the new communities. so as long as we're not seeing that whole element of the housing market sort of expansion, it's going to be a drag on u.s. economic growth. >> reporter: in addition, for most families a home is their biggest investment. so as property values fall, they may have to save more and spend less. economist tom berner says that will also hurt the economic recovery. >> we saw a very moderate recovery in consumption this time around because consumer credit is not flowing freely. that will continue to curb the upside of the growth rate, one of the reasons to expect that the economy will not grow at 4%
or 5%. >> reporter: hanock-jasie says she may eventually buy a home, but not in new york. >> it's amazing what you get for $1 million here in the city. you get about 800 square feet. you can look at homes all across the country for $1 million the country for $1 million-- you are getting 5,000 square feet or 10,000 square feet. >> reporter: and these four feet would like to have a little extra room to move around. erika miller, "nightly business report," new york. >> tom: tomorrow, our housing coverage continues. we look at businesses and sectors tied to housing that are losing jobs as home prices keep falling. also we'll see april's trade deficit and weekly jobless claims. the european central bank and bank of england wrap up policy meetings. both are expected to leave interest rates unchanged. >> suzanne: money is on the way for farmers in europe after a huge e. coli outbreak. the european union will give the
growers emergency aid totaling more than $300 million. tons of unwanted vegetables are rotting in fields over fears they're contaminated with a deadly strain of e. coli. those crops will be destroyed. the source of the outbreak is still unknown, but it has killed more than 20 people. >> tom: demand is dropping for personal computers-- so says technology research firm gartner. the group cut its growth forecast for p.c. sales this year to 9.3%. it originally estimated that number at 10.5%. gartner says consumers don't want mini-notebooks known as netbooks. instead, they're buying tablet computers like apple's ipad.
as stocks have moved lower this month, investors again learn the lessons of diverisification and defense. tonight's "street critique" guest finds safety in food, electricity and telephones. she's hilary kramer, editor of gamechangerstocks.com. >> tom: hillary, your safety picks sport higher dividend yields than ponds. kft is one of your safety plays. it had a nice rally this spring
and has held onto most of it. what moves it from here. >> kraft required cadbury if they can take their oscar myer wieners you can see them become more of a international vie verse tide play. kraft will do well. we have a lot of safety in kraft. >> tom: you do like some international ideas including telephonica. tef. stock has been choppy. most of the business is in latin america not sprain, right. >> yes. telephonica is totally misunderstood. because it's a spanish based company doesn't mean their debt as a sofrpblg debt problem with spain. it could be defaulting.
at the he phonica operates in brazil a cross latin america. no matter how bad the economy is people are moving to cellphones. this is a data communications. you can't go wrong with that dividend. a great stock for your portfolio and protection. >>tom: you like a fixed line, utilities, national grid in the uk and new england in the us. a good looking stock chart. has dropped off lately but a big dividend for this utility. >> yes. 6 percent on national grid mgg. a lot of people haven't heard of mgg, it's a uk based utility infrastructure play. but they have bought up national grid via plum property, plum utilities across the united states mainly the northeast. a propertiable company. i recommend it for safety.
great utility with geographical ter toy. >> tom: let's get for viewer e-mails asking for updates. john asked us this about telvent receiving a buy out offer. does hillary recommend selling or holding? you mentioned this back on december 30th, 2009 when it was $38 change. the bye out at 40 =tkrarz. do you take it? >> take your money. take it off the table. deploy it in other opportunities. especially in this down market here it did get acquired. you have a little change for yourself. >> tom: are you selling your position in telvent. >> yes. i'm recommended to sell and take the $40. >> tom: what about the safety pick disclosures, you own those? >> no, i'm just in the process of selling the telvent. >> tom: through go, male us
email@example.com and on twitter and face book. more questions next week. our gift hillary kramer >> suzanne: that's "nightly business report" for wednesday, june 8. we want to remind you this is the time of year your public television station seeks your support. support that makes programs like "nightly business report" possible. thanks for joining us, and don't forget to support your public television station. i'm suzanne pratt. good night everyone. you too, tom. >> tom: goodnight suzanne. i'm tom hudson. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: 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 access.wgbh.org >> 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 shoppbs.org. >> be more. pbs. d
and they lived in the house. and the vase was in the house when my son-in-law's father bought it. so your son-in-law's father buys the house and this is part of the contents of the house. yes, that's part of the contents. it sat at the top of the stairs-- at the top of a spiral staircase in a hallway on a table. was it a grand house, would you describe it? it was a fairly grand house... in its own grounds. now that would make sense from a date point of view, 'cause this glass vase dates to around about 1900, maybe about 1905. so bearing in mind the age of the field marshal, - this is all making sense. - yeah. the great thing about a vase like this is that it looks different in different light. so with natural light bouncing off it, it comes alive. it's quite magical. it starts its life, as i said, at the turn of the century. it's actually austrian, because this particular piece is almost certainly made by the lurz factory.
and lurz were there making iridescent glass throughout the end of the 19th century into the 20th century. people always used to say it's poor man's tiffany, which is very unkind, because lurz were making iridescent glass before louis comfort tiffany really took it to its high point in america in the 1900s. anyway let's have a look at the piece itself, because what makes it special is it's in a nice frame. and the frame itself is german pewter, austrian pewter. and it's very organic, because this is very much an art nouveau shape. it's very much art nouveau in period. the glass itself is actually a very deep cobalt blue. the technique here is referred to as papillon glass, or butterfly glass. in other words, it has the effect almost of an iridescent butterfly wing. anyway, people collect them. lots of people love iridescent glass. and lurz and tiffany, the top of the tree.
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