tv Nightly Business Report PBS November 15, 2011 7:00pm-7:30pm EST
>> tony: a raucous day for occupy wall street. protestors were thrown out of the new york city park they've been occupying for two months, a move that's strengthening their resolve. >> they should expect us to take it back. i mean, we're revolutionaries, they're the agents of oppression. we're both doing our jobs. >> tom: bailout burnout helped fuel the movement. now, the odds are rising that another bailout may be needed, this one for a big housing regulator. it's "nightly business report" for tuesday, november 15. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thank you for joining us. susie gharib is on assignment. a legal showdown between occupy wall street protestors and new york city police has ended with victory for the city. a judge has ruled that demonstrators right to free speech does not entitle them to camp out indefinitely in a public park. erika miller takes a closer look at what this change means to the movement.
>> reporter: occupy wall street protestors will no longer occupy the spiritual heart of their movement at night. a judge has upheld mayor michael bloomberg's ban on bringing sleeping bags or tents to zuccotti park and camping there overnight. legal analysts expect occupy wall street to appeal the decision. the verdict comes 15 hours after police evicted demonstrators from the plaza due to concerns about public health and safety. mayor michael bloomberg says it's also an issue of fairness. >> there is no ambiguity in the law here. the first amendment protects speech; it does not protect the use of tents and sleeping bags to take over a public space. >> reporter: although many protestors left quietly, some refused to leave and were arrested. >> disobey your order! disobey your order! >> reporter: it's not just new york police cracking down on demonstrations and enforcing public park rules. there have been similar moves in oakland, california, and elsewhere.
now, the question is whether the movement will start to lose momentum, or will today's legal decision drum up more public support? already a series of gatherings are already planned for thursday, the two-month anniversary of the movement. >> the whole world is watching this. >> reporter: erika miller, "nightly business report," new york. >> tom: better economic data here at home helped wall street shake off worries about europe. the dow rose a modest 17 points. technology helped lead the nasdaq higher, up 28 points. the s&p 500 rose six. trading volume remained light with just 779 million shares moving on the big board and 1.7 billion on the nasdaq. behind the move up, a drop in inflation at the wholesale level. the prices manufacturers and wholesalers pay for goods and materials fell in october by a bigger than expected three- tenths of a percentage point. also encouraging the markets, a better than expected retail sales report for october. americans bought everything from new cars to electronics last
month. the government reported retail sales rose five-tenths of 1% in october. that's after rising by 1.1% in september. the strength in retail sales suggests the economy is on solid ground at the start of the fourth quarter. and as suzanne pratt reports, it also bodes well for the holiday sales. >> reporter: a quick look at your inbox tells you the holiday shopping season is starting even earlier this year. at least that's what retailers, both online and in stores, are hoping. the question is whether earlier promotions will result in more spending this holiday season. retail expert r.j. hottovy says stores figure they've got nothing to lose. >> by getting your promotions out there, it keeps consumers focused on that holiday sale, although it may not immediately translate into a sales lift. >> reporter: today, a weekly consumer survey suggested those early emails may be working, at
least in terms of early trips to the mall. according to the data, 15% of holiday shoppers are already more than halfway done with their spending. that's the highest in seven years. still, opinions seem to swing almost daily as to just how good the 2011 season will be for retailers. today, after learning retail sales rose for the fifth straight month in october, some experts were cheerier about the coming weeks. economist joe davis says we could see more than the 3% increase in holiday sales that most retail experts predict. >> with every week that economic prospects don't worsen, it actually would suggest some stabilization in confidence, which we all know has been very fragile and tepid. and i think that has the prospect to give some modest support to a decent holiday spending picte. >> reporter: pessimists, however, point to news today from walmart that it expects fourth-quarter sales to be up only 2% at best.
the nation's largest retailer says customers remain concerned about jobs and the economy. still, others worry two wild cards could cause americans to put fewer gifts under their trees this year. >> when you look at the unresolved issues with the super-committee here in the united states, as well as the continued drumbeat of often negative headlines from europe, it does have the opportunity to weigh on actual consumer spending. >> reporter: then, there's the elusive impact of holiday cheer. for that reason, it's always tough to predict how well holiday sales will ring in the new year. suzanne pratt, "nightly business report." >> tom: jeff kleintop is the chief market strategist for lpl financial. he joins us from boston. to a structor end of the yearok for the stock market. >> i think so. consumerweakxdfá yet=their phone
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federal housing administration could run out of money in the next year. it's reserve funds are far below what's required, prompting analysts to predict a bailout could be around the corner. darren gersh reports on that possibility and a bill floating through congress that could put even more pressure on the agency. >> reporter: the federal housing administration financed one out of every three mortgage's last year. but the money backing fha's huge role in the housing market is steadily falling. a new report by independent auditors finds fha holds just $2.6 billion in excess reserves. the law requires fha reserves to be at least eight times higher. >> over half of their portfolio is underwater, by my estimation, and that leads to large expected losses down the road. and i think, for various reasons, they're underestimating losses by at least $50 billion >> reporter: fha's acting administrator says it would take
a very significant decline in home prices next year to force the agency to ask for a treasury bailout. but critics say fha is underestimating the risk by at least $50 billion. >> we should recapitalize the fha and recognize that they are taking on very high risks, and we need to pay for them and soundly finance that entity. and then, number two, i think we need to develop a multi-year plan to ratchet back and to shrink their exposure in the housing market because they are so risky. >> reporter: but congress is searching for ways to support the housing market, not cut back. and one way to do that is by expanding the fha's trillion- dollar portfolio. lawmakers will soon consider a bill to raise the fha loan limit to just below $730,000. that should help support purchases in high-cost housing markets like california, but it also means the government and taxpayers are taking on more risk if the economy slides into another recession. >> fha is another finger in the dike of the housing market,
until they eventually figure out new plumbing, and i don't expect that until easily after the next presidential election. >> reporter: the fha has never needed a taxpayer bailout, and the agency's independent auditors says, if the fha needs some cash from the treasury, it should be able to pay it back in a few years, even under a worst- case economic scenario. darren gersh, "nightly business report," washington.
>> tom: the stronger retail sales we reported on earlier and a lack of bad news out of europe helped fuel a mild rally for u.s. stocks. let's get to the action in tonight's "market focus." instead of focusing on europe, investors could focus on a batch of mostly positive economic data today regarding the u.s. economy. let's put the s&p 500 on the floor, showing we are back at the top of this narrower and narrower range the index has been in. since the october high, we've seen a series of lower highs and higher lowers, creating a wedge on the chart. weighing against the positive retail figures were results from walmart showing a drop in its profit margin. earnings were a penny less than estimates, but the company reported its first year-over-
year increase for u.s. same- store sales over the past two years. still, it's c.e.o. said it was "investing in low prices for the holidays." that led some to worry about profit margins. walmart shares weighed on the dow industrials, falling almost 2.5%. volume was a little stronger than usual. just last week, shares hit a 52- week high of almost $60. tonight, the stock is around $57.50 per share. tech stocks were in the leadership position today. the two best dow components are in that sector. hewlett-packard climbed more than 3%. this is its highest price since august. intel gained almost 3%, up to a new 52 week high tonight. one tech to watch tomorrow could be dell. shares were up 2% during the regular session, but lost most of today's gains in after hours action after releasing its latest earnings report. the computer maker was able to do better than anticipated. earnings were seven cents over estimates, even though revenues
were less than forecast. also weighing on shares after the close-- its outlook toward the lower end of its revenue growth guidance. that guidance had already been lowered in august. another tech to watch tomorrow may be apple. six weeks after the death of steve jobs, the company has a new chairman and a new board of directors member. arthur levinson, who has been on the apple board since 2000, is now the chairman. he also serves as chairman of genentech. and disney c.e.o. robert iger joins the board. steve jobs sold pixar animation to disney in 2006. apple's board had been criticized for not disclosing the health of steve jobs sooner. apple stock didn't move much after the announcement from its closing price of almost $389 per share, up 2.5% today. share's of online social networking site linkedin unhooked today. the stock fell more than 4.5% on heavy volume. the company is selling more stock, almost doubling the number of shares available to trade, including a big stake from an early investor, private
equity firm bain capital. and that's tonight's "market focus." chicago may be known as the city that works, but since the start of the recession, roughly 200,000 jobs have vanished. mayor rahm emanuel is trying to get those lost jobs back and then some. diane eastabrook reports tonight on how emanuel is making some headway against some very strong headwinds. >> we need to make chicago the best place in america to start a business, create jobs, and gain the knowledge and skills to fill the jobs of tomorrow. >> reporter: it's been nearly six months since rahm emanuel made those remarks after being sworn is as chicago's mayor. since that time, the city's gotten commitments from a variety of companies, including motorola and ford, to bring about 8,500 new jobs to the
area. emanuel's also attracted new trade shows to mccormick place, chicago's convention center, by striking deals with labor unions, making it easier and cheaper for vendors to set up booths. and next year, chicago will start phasing out a per-employee head tax on companies with more than 50 workers. former rr donnelly c.e.o. mark angelson is emanuel's deputy mayor. >> i'm still doing business. i'm just doing business for the city. >> reporter: angelson is bringing skills he honed in the corporate suite to the city's streets. among his priorities, get more small businesses up and running because he thinks that is where the most new jobs will be created. angelson thinks one way to do that is to streamline chicago's onerous licensing process. >> we'd like a new business owner ideally to be able to go online click here, here, here, here on one web site and at the end, print out a license to start a business in chicago. and we're not going to get there overnight, but that's the goal. >> reporter: that plan sounds
great to marti goyal, who opened children's boutique urba baby in the city's north side last summer. >> if you really want to be there, you've got to be in their face and get the things done and sometimes you have to be the one who follows through the process to get your store, to get your license and whatnot. >> reporter: still, there's more to jumpstarting new businesses than streamlining the licensing process, says northwestern political science professor jaime dominguez. he points out that chicago has many diverse neighborhoods and some may oppose certain types of businesses. >> you may have, for example, those residents, those associations, those organizations that are an integral part of that neighborhood being very vocal about the types of changes that are going to come about because of the types of corporations or businesses coming to that area. >> reporter: other obstacles for chicago include illinois's 7%
corporate income tax, which is one of the nation's highest. and a city sales tax that's just under 10%. dominguez thinks, as a new mayor, emanuel has done his best to make chicago more business friendly. it's now up to businesses to decide if it really is. diane eastabrook, "nightly business report," chicago. >> tom: prices and shopping are on the calendar tomorrow. we'll see the october reports on consumer prices and industrial production. retailers hot topic, limited brands and target report quarterly earnings. also tomorrow, hilary kramer is back as our "street critique" guest. email your questions to firstname.lastname@example.org. it may be a tough housing market, but one type of real estate is booming. farmland values in the midwest rose to a record high in the third quarter, according to a new federal reserve report. the price of farmland shot up 25% over the summer. that's the fastest year over year increase in more than three decades. they were boosted by crop
prices near historic highs and interest rates at near record lows. caesar's entertainment is getting ready to gamble on selling stock to the public. the world's biggest casino company says in a regulatory filing it's looking to raise up to $50 million. but that's a big drop from a year ago when it hoped to raise ten times that amount. that initial stock offering was put on hold because of poor market conditions back then. caesar's did not say how many shares it plans to sell, for how much or when. it will list on the nasdaq exchange under the c-z-r ticker symbol.
>> tom: so far, nba games have not been officially canceled. but things don't look good, and the future of the business on the hard court will likely be decided in court. in tonight's "beyond the scoreboard," rick horrow on the financial fallout from the nba lockout. >> i'm rick horrow reporting from a major toronto sports management conference. a lot of nba executives are running around trying to figure out among other things what happened with yesterday's offer that wasn't accepted. the bottom line is now it goes back to decertification. we've heard that before with the nfl. the players may decertify-- there will be no unions so they
can file an anti-trust suit, and we're going to have to same loss of control from the hands of the businessmen into the hands of the judges, like with the nfl four or five months ago. what about the cities? when you take a look at it-- portland, memphis, oklahoma city rely on these teams. the only major league professional game in town, they have to find something else to do. sacramento looking for a new arena or else the team moves to anaheim. that process may shut down for a while. and orlando, the all-star game scheduled in early february late january with $150 million of economic impact in the balance. and finally, what about the players? it's paycheck time. november 15th was to be the first day they would get their biweekly paychecks. it effects all of them but kobe bryant loses $1.1 million every pay period. i'm rick horrow.
>> tom: it's a different kind of game for europe. the worries have shifted from portugal to greece, and now to italy. the pre minister-designate there, mario monti, won support today for his new government from political, business and union leaders. tonight's commentator thinks italy pay less attention to the markets and more attention to its own economy. here's stuart kirk, global head of the lex column at "the financial times." >> how many italians named mario does it take to fix the eurozone crisis? with mario draghi at the helm of the ecb and mario monti appointed prime minister of italy, the answer is it is too soon to tell. mr. draghi has the longer-term task; the more urgent one falls on the shoulders of mr. monti. he simply must prioritize economic growth, which is italy's great weakness. but reforming italy is tougher than it looks. italy's borrowing costs are already retreating, but not by much. at an auction on monday of $3 billion worth of five-year bonds went as well as could be expected-- at a yield of 6.29%. the auction sent two important messages, though-- that italy is not shut out of the capital markets, and that the immediate threat to mr. monti's plans are
higher interest payments. there is little mr. monti can do about the markets. he should concentrate on what he can change, italy's dismal economic growth. wages and costs continue to rise, meaning italy has lost competitiveness as quickly as countries such as ireland and portugal. mr. monti must set italy's entrepreneurs free. immediate labor market reforms to address the high cost of unemployment would be a good start. italy's debt ratio is 120% of gross domestic product. merely stabilizing it at that level is not enough. it should be reduced to below 100%, for starters. economic growth will help, but mr. monti should not shy away from a wealth tax. after years of evasion and denial, italians need to start helping themselves. i'm stuart kirk. >> tom: that's nightly business report for tuesday, november 15. i'm tom hudson we hope to see all of you again tomorrow night.
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