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tv   Nightly Business Report  PBS  September 10, 2013 4:30pm-5:01pm PDT

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this is nig"nightly busines report" with tyler mathisen and zng zj brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort. triple digit gain. stock is up, oil is down as the u.s. attack on syria fades and president obama plans to deliver a speech to the nation. >> the dow's big facelift. goldman sachs, nike and visa are
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in the index. bank of america and hewlett packard out. what the moves mean if you're out of the shares or might want to some day. new phones, new price, new colors. apple introduces two new smart phones designed to expand the region to new markets but shares fell leading investors to wonder what it will take to juice up the stocks. that and more for tuesday, september 10th. good evening everyone. welcome i'm tyler mathisen alongside susie gharib. rally on another triple dig get gain. the s&p 5 00 scored and nasdaq closed at a fresh 13-year high for good pressure. the main reason for the gains, syria, specifically the prospect that diplomats by delay a u.s.
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military strike to attack. also drawing investor interests today big changes in the composition of the dow jones industrial average and we'll look at that in a few minutes time. meanwhile, the numbers on wall street the dow soared 128 adding above 15,000 and the nasdaq up 3 and s&p added 12. selected commodities swooned as fear premium got sweated out of prices as the march to military action against syria slowed. oil prices dropped nearly 2% today, the biggest one-day decline in three weeks there and gold tumbled nearly $23 an ounce. >> more on the developments in syria. president obama is preparing to deliver a prime time speech. he'll make a case for the threat of u.s. military action and signs of hope for diplomatic
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action. john harwood joins us with more. what will we hear? >> a different message than before the russian syrian and instead of pleaing for support in the country which was reluctant to approved military force and pleading with members of congress to support him, he's able to go and say my policy produced this breakthrough, keep supporting me but not the same urgency and that's a relief to the administration, congress and maybe some americans, as well. >> so how has this diplomatic track now changed president obama's task tonight? you bleakly reperred to it. what is different now? >> here is what is the same. what's not different is there is strong opposition within the public to go ahead with this. there was an nbc wall street journal poll released that show six in ten americans oppose the idea of going ahead. we saw those numbers reflected
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in the attitudes of members in congress, members of the senate and so the president has got to try to encourage people to help him keep the pressure on. he's making the argument and he will tonight that the credible threat of u.s. military forces, what produced this initiative but make the urging americans and the members of congress not to under cut him by denying him the ability to threaten force if the diplomatic track fails. >> so president obama makes his case tonight, john and then what happens? >> what happens is first of all, there will be a process of some sort in the united nations. there was fits and starts with that today but the president consulted with the president of france, prime minister cameron of britain and trying to move ahead with international opinion and trying to rally an international coalition in the united nations, nato and other people to advance this initiative. the votes were delayed. they were going to happen in the
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house and senate this week and next. now that will not happen. you have the president making this case and giving it probably a week or two to show that there is credibility and sincerity behind the effort. you had the syrian minister saying it will acknowledge the existence of the chemical weapons and sign the convention. that's only a first step, though. >> john harwood, thank you very much. we'll watch tonight. as we mentioned earlier, a big shakeup for the dow jones industrial average. september 23rd it will drop three of the companies and replace with three new ones. al cow what, bank of america, nike out. why and what it might mean for the stocks involved. >> reporter: the dow determines how important a stock is to the index but looking at share price, so with alcoa, bank of america trading between 8 and
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$23 a share, while companies like ibm askand chevron have tre digit tags, in favor of adding more vie verse names. visa adding the credit card giants gives color to the index, both on the new age payment technology industry and consumer habits. meanwhile, nike, which does most of the business overseas is seen for economic growth in emerging markets and goldman sachs, the dow gets insight into traditional mergers, acre sessions and deal making. >> the stock is a buy for investo investors. let's take a look. >> the last time the index added a new ticker was last september when unite the healthcare replaced kraft foods. a year later shares of united health were up 33%. a similar story for travelers and cisco systems that posted 19 and 15% gains respectively after being added to the cow in 2009.
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that performance isn't always the norm. in 2008 chevron, bank of america and craft saw their stock plummet the first year after being included in the dow. that move did coincide with the market lows, so it's tricky to make inferences there. but back in 2004, the last time we saw the dow pick up three new names in the same day, it was aig, fiezer and verizon finished lower after index inclusion. bottom line, today's move in the dow might be note worthy but not the only thing to consider when buying or selling. here is how the stocks involved in the changes performed today. all the ones being added at the dow, goldman sachs, nike, visa were higher and the ones being taken out, hp and alcoa finished lower and bank of america moved up by 13 cents. joining us to talk more about the changes made is david
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blitzer. he's chairman of the s&p 500 index committee. david, great to have you with us. you have been presiding over these chankinds of changes for long time. put it in perspective for investors, if they own it or are thinking of buying it, what does it mean? >> the stock, the pact they reacted today is no surprise. it puts stocks in the news and people respond. the reaction is typically very short-term. my guess is by the end of this week many not by this time next week, those reactions will be out and there won't be permanent changes, and i think the ones that were mentioned earlier, the permanent changes were the general movement to the market, much more than the stocks. what it really means to investors is the dow is a slightly different index, and i believe and we all believe here at s&p dow jones a much better
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ind index. the three stocks ha came out together were 3% of the index in terms of weight. the top stock, ibm with 9.5%. it will squeeze down to 8%. it won't be so dominant. the smallest stock instead of 4/10ths of 1%, will be 1%. so we have a better balance in the index than before and more revival indicator -- >> you have replaced, david, three lowest price stocks of the dow with three higher priced stocks. in this price-waited index which is a critical concept to appreciate here, does this change make the dow more volatile, less volatile, no change at all? >> many anything, i think it might make it a touch less volatile. you know, one point in the stock, whether it's on an $8 stock like alcoa, one point ask
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the same amount in that kind of thing. but when you have an $8 stock, you know, it tends to bounce around a lot more. if anything, maybe a touch volatile. the volatility wasn't really a concern. these are all big, well-known liquid stocks. this is not like a merging market stock where they bounce like crazy or something. we're not worried about that. >> david, when investors hear about changes like this, they start thinking like well, why didn't this company or that company get invited at the index and the two names that came up, google and apple have a huge influence on the economy and widely traded stocks. what's the story there? >> google, apple and all the other stocks, changing an inkex is not an investment recommendation, neither positive nor negative. google is $885 a share, apple i continue know but well north of
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200 or 300. google would be 28%. if we put apple into it, it would be the google apple index, nothing else. >> okay. >> that's not what we're doing. we want 30 stocks to do a nice balanced job and i think that's what we're getting this time. >> by the way, david, apple stock is around $500 and we'll talk about that later in the program, but thanks a lot, david, david blitzer chairman of the s&p 500 committee. industrials weren't the only thing that got a facelift today, so did the apple iphone. two new models, eight fresh colors, one new operating system and plastic, yep, plastic cases. all announced today with typical apple fanfare. jon fortt was there. >> reporter: well, we got the annual iphone announcement and we didn't just get the 5 s but
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the 5 c but not quite as low as some expected. the iphone 5 did arrive and it's plastic on the back five colors, but it's expected to retail for $549 unsubsidized, a lot more expensive than a number of analysts hoped. the announcement comes at a time when apple is increasing increasing competition, especially in emerging markets where brands like samsung challenged the iphone's dominance. a number of people hoped the 5 c would open up new opportunities for apple. >> it's different than expected. frame work was consistent. the big difference is the price of 5 c. we expected apple to be more aggressive. they will be more aggressive sieve with the price of the 4 s and keep the 4 around for longer. that's different. >> reporter: there weren't a lot of surprises in the announce the but interesting new features on
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the 5 s, improved camera and wireless capabilities that ties into ioss new features that allow a camera that shoots in e verse mode and with slow motion. of course, the proof of the pudding, as they say is in the eating and the buyers will get to do that in about three day when is preorders start for the 5 c. the 5 c and 5 s go on sale september 20th. once we see how china responds, a launch country pfor the first time a better read whether apple made a good decision with pricing at these levels. and when we come back, what will it take to boost apple stock? we'll have that answer coming up. but first, here are 54 companies that hit 5 2-week highs today, and here is a look at some of them.
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investors are getting excited bonds verizon is about to sale. people familiar with the offering set to price tomorrow say they are running at more than $90 billion. verizon expected to sell to finance the $130 billion buyout of vote a phone steak in verizon wireless. ten-year bonds are expected to yield 2.25% points more. boodem group and jc peen
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knee reached a deal to open up store within store boutique featuring kitchen, houseware and stationary products but the struggling retailer never delivered and is being sued for breach of contract. we begin market focus tonight with a slide in another teen retailer. urban outfitters warning sales aren't growing. it the latest in a string of week reports that cater to the age group. investors punished the stock and fell more than 10% to $38.35 and that made it the worst-performing stock in the s&p 500 today. pvh which include s brands like calvin kline, tommy hill fig gear dropping. the spending weak and recovery slow. the company ceo said the larger economy is volatile leading to erratic trends. shares fell more than 5% to $124.66. things aren't much different
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for crocks. the foot ware maker cutting the outlook siting weaker sales in the u.s. but the company expects weakness to be offset somewhat by stronger results in asia and europe. the stock fell more than 2%, $13.31 closed there. mcdonalds reporting a bigger than expected rise in global sales last night. the world's biggest fast food chain said sales rose slightly in the u.s. helped by the monopoly promotion. mcdonalds has plan s to add more value items. shares rose to $96.89. a strong earning report helped boost shares today. the retailer beat estimates reported a rise in sales, and raised it's full year earnings and revenue forecast. the store sales games, candy and other goods for $5 or less. shares soared more than 17% to $48 and change. cisco, the world's largest
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supplier is acquiring a firm to speed up the servers. it's paying more than $400 million for whip tail. this is the first time they are getting into the data storage market. cisco closed at $24 and change. amazon.com getting into the flower business. the world's largest online retailer sold flowers for years but always through third party suppliers. now amazon is selling and shipping it's own flowers through what it is calling the amazon kurated collection. citi group, credited with invent pg the concept of the supermarket style bank is doing a 180. while stunned wall street last year but calling for a breakup of the biggest banks celebrat g celebrating. well now, they say the big banks don't have to split up. if the right regulation is in place but he says firms should be able to decide on their own
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what works best. >> we have regulation that precludes investment banking operating in a way that it can be constructed, then i think we should do something different and let them split up as they figure that's the best way they can provide their services. >> and back now to apple, more now on the colorful new iphones and the pricing that will help, especially in china. will the moves put collar back in china's stock. tom is an analyst and joins us on the phone because of audio difficultie difficulties. welcome, is that an iphone or not? >> it's an iphone 5 and i look form ward to purchasing the 5 s. >> is the 5 s, a higher-end version, is that and the iphone krac, is that close enough to t
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the stock movmoving? >> i believe it is. if the you look at the progroom announce in april, that will provide support for the stock but new invasion such as the updated lineup and expanded lineup or short phones and then potentially televisions, watches, and then the next generation lineup of ipads that will drive the stock further from here. >> people are waiting for a big hit, the big invasion you talk about the tv or watch. were you wowed by anything announced today. >> from a tech logical standpoint, it's the finger point within a store and online. i thought from a technology standpoint that was the best announcement. >> as you suggest, make it much more easy and secure presumably to do a mobile payment. am i getting that right, tom? >> yes, i think you can't over
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state the easy part. so pushing your smart phone, using your fingerprint to make purchase to the buy music, make a purpose chase at amazon.com, i think that's important. >> tell us a little bit about how the phones stack up against the competition. samsung has been winning over iphone fans from the past. what about now? >> i think when the iphone came out with the 5 and samsung did the brilliant advertising campaign where they showed point for point how they had apple met or exceeded from a technology standpoint, i think that was a turning point in the smart phone category. i look at what apple is doing with the 5 s higher end and 5 c at the lower ending and reminds me with google and motorola where the android is the proficient device and moto is the main stream device. i think apple has enough to keep the apple enthusiasts happy.
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>> tom on the iphone with us. and coming up, the wireless war is heating up. walmart is getting in on the action launching one of the biggest short phone trade in programs ever. we'll have details next but first, let's look at how commodities, currencies and treasuries performed today. some of the nation's best known and costliest colleges may be among the most affordable for students. according to u.s. news and world report the average student
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receiving financial aid only paid a quarter of the listed or sticker tuition price and most of the graduates at those top tier schools leave with smaller debt loads than students who attend less prestigious schools. fewer job openings in july but managed to hire more new workers that same month. the labor department reports company's advertised 3.7 open jobs in july. more good news about the housing market. core logic reports that rising home prices has significantly lowered the number of homeowners who were currently under water, meaning those who owe more on mortgages than their homes are worth. earlier in the program. we told you about apple unveiling two new iphones today. now, if you're looking to trade in an older smart phone model in ordinary tore trade up to a newer one, walmart is about to make that a whole lot easier. courtney regan as the story.
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>> reporter: apple isn't the only big company making a smart phone announcement today. walmart is announcing the largest brick and mortar smart phone trade in program in the country. just in time for consumers to trade up to the new iphone 5 s. starting september 21st, in 3600 walmart and sam's club locations, consumers can trade in old smart phones to receive an instant credit ranging from 50 to $300 that's immediately applied to the purchase of a new smart phone. >> what is great about the program is the simplicity of it. when a customer comes in and brings the smart phone they will be asked basic questions. we won't knit pick the customer on is it scratched or have stickers. we'll ask five simple questions. >> the trade in program will make it likely for me to get a new phone. >> if they offered more money back, i would go there. >> definitely would be more likely to shop at a store that would trade it.
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>> the sport phone consumer is a valuable one to many retailers and right now a great spot for walmart. while the overall entertainment category is an under performer, walmart has continuously grown the market share over the past 18 months. they aren't the only one offering a trade in program. best buy, apple, verizon and at&t offer store credit for used smart phones. ebay doesn't off the program but specifications of electronics and post when prices peak. >> when we compare this day to a month ago, we seen a 44% increase in iphone 5 listings on the platform. on ebay the average selling prielsz for an iphone 5 is $430 which is more than customers can realize with most other channels out there.
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>> reporter: ebay sellers can do whatever they want with the cash. it's not tied to a specific smart phone or retailer like others. since smart phone models are identical no matter where bought, trade in programs need to be as competitive for the prices and new devices, may the best trade in value win. for "nightly business report," i'm courtney regan. finally tonight, a new survey of the nation's best cities to which to retire and if you're thinking they are all in florida, you're wrong. the website top retirements.com says many retiring baby boomers are moving into cities where they can ditch the car, walk to storms and social events. the number five spot, ocean county, new jersey. you don't do a lot of walking there. number four, portland, oregon second place austin, texas and the best city to retire. >> drum roll. >> phoenix, arizona. >> where would you retire? >> i'm a big apple girl. it has everything, you can walk,
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transportation, theater, ballet. >> get deliveries. >> and it's hip and cool and when you get to a certain age, you want to be hip and cool. >> i like charlotte and new york city. >> i heart new york. >> yeah. >> that's "nightly business report" for tonight. i'm susie gharib and for more on all the stories we covered tonight, go to our website, nbr did the come. >> i'm tyler mathisen thanks for me as well. have a good evening everybody. hope to see you back here tomorrow night. "nightly business report" has been brought to you by. >> sailing through the heart of historic cities and landscapes on a river, you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort.
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it's time now for newsline. many people in japan have paused on the 11th day of every month ever since the disaster in 2011. they pray for the family members and friends t

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