tv Nightly Business Report PBS October 21, 2011 1:00am-1:30am PDT
>> suzanne: it may be a cash machine, but microsoft fails to inspire investors. profits continue growing but the stock still trades about where it was a decade ago. we look at what it will take to boost the stock. >> tom: then, talking tough on trade to boost the u.s. economy. >> i want to see fair trade policies, and if they're not going to be fair, you cut it off or you tax the hell out of them. >> tom: coming up, our interview with real estate mogul donald trump. it's "nightly business report" for thursday, october 20. 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, everybody. susie gharib is off tonight. i'm joined by suzanne pratt in new york. it's solid sales for microsoft in the company's most recent quarter. >> suzanne: tom, firms are buying microsoft's office and server software, and that business offset weak consumer demand for p.c.s. microsoft earned 68 cents a share in its fiscal first quarter, in line with wall street forecasts. revenues, however, were a bit better than expected, coming in at $17.3 billion.
>> tom: microsoft shares traded slightly lower after-hours, despite the solid numbers. still, some wall street analysts think the stock's a buy. erika miller reports. >> reporter: a lot has changed in the world in the past decade, but not the price of microsoft stock. it was trading in the mid-20s back in october 2001, and it's about the same price today. part of the blame in recent years is weak p.c. sales, as consumers line up to buy ipads and smart phones, instead. but many analysts on wall street believe now is a good time to buy microsoft shares. s&p has a $35 price target. >> why we like microsoft today, more so than we would have liked them years ago, is because of what they have in the pipeline now. most importantly, we think is going to be windows 8. >> reporter: although the new operating system isn't expected until the middle of next year, analysts are betting it will be used in dell and hewlett packard tablets. investing in microsoft is not without risk-- the biggest is
slowing sales growth for desktop computers. but the bulls point to intel's better than expected third quarter earnings this week on the back of strong p.c. demand. and finally, there are rumors microsoft could make a bid for yahoo, something it first did back in 2008. but this time, the speculation is microsoft would partner with a private equity firm in going after yahoo. the goal would be to combine microsoft's search engine, bing, with yahoo search. >> so you combine yahoo and microsoft's search business, and you are looking at potentially a 30% market share in the internet market, relative to google's 64% to 65% market share. >> reporter: and if none of these reasons are tempting enough to buy the shares, analysts point to the 20 cents a share quarterly dividend. it works out to about a 3% yield, one of the highest in the tech sector. erika miller, "nightly business report, new york.
>> suzanne: a zigzag day for wall street as investors fretted about this weekend's european summit and whether it will solve the region's debt crisis. french and german leaders issued a joint statement pledging european union leaders will have a bailout plan in place by wednesday. meanwhile, thousands of protestors surrounded the parliament building in athens today. lawmakers there debated and passed new austerity measures, including more cuts to the state workforce. stocks held to a tight trading range. the dow rose 37 points, the nasdaq lost five, and the s&p 500 was up five. u.s. oil prices closed slightly lower, off 81 cents to $85.30, despite the belief that oil will soon start flowing from libya now that moammar qaddafi is dead. brent crude was up, adding $1.37 to almost $110 a barrel. still ahead, building the energy efficient house of the future. tonight's "planet forward"
brings you the winner of the solar decathlon. >> tom: tomorrow, the u.s. will have new trade deals with south korea, colombia and panama. supporters say the agreements will help create or keep 70,000 new jobs. a bright spot for the american economy has been international trade, with made-in-america exports growing. but in tonight's "how to fix the economy," donald trump tells us america needs to take a stronger stand against china while also working to strengthen the dollar. >> well, we're not a respected nation anymore. the world is sort of laughing at our leadership. we make bad deals with other countries. we don't make any good deals. colombia is an example, a small trading partner. they made $4 billion off us last year. >> you don't like the south korea trade deal? >> i don't like any trade deals that they make. i think every deal they make is subject to renegotiation where you could make tremendously better deals. you could make a deal-- i mean, when i look at deals, when i look at all of the deals that have been made over the last number of years, they're all bad. we don't make money with any of
them. it used to be the opposite. years ago the united states was this power, respected, and we sort of took advantage of everybody else. now everybody else is taking advantage of us. >> tom: we have seen exports recently increase to their highest level ever. doesn't that-- >> except, except every country we deal with we have deficits. we have deficits with everybody. as an example, the greatest of all, china. $350 billion we're going to lose with china. that's not a partnership. what kind of a partnership is that. they're taking our jobs. they're manipulating their currency and i know you report a lot because i watched the reporting on it. >> tom: let's talk about the domestic economy and stoking domestic demands so we're not exporting goods. we're actually feeding our own economic growth. how do you diagnose that problem? >> well, i think we have a problem but i don't think you can talk about one without the other because we bring in so much from outside, in particular, china. but we bring in so much of the
goods, the thngz that we used to make we bring them in. >> tom: would you prefer to see more protectionist trade policies? >> no, i want to see fair trade policies and if they're not going to be fair you cut it off or you tax the hell out of them. it used to be we made money from everybody. now we lose money with everybody. and that's why we have deficits the way we do, and that's why we're we're doing so badly as a country. >> tom: is the trade policy the answer? >> i think the trade policy to me is just a huge problem, and it's never discussed. if you look at the republican-- i'm a republican, but if you look at the republican debates, how often do you hear the word "china" mentioned? in my opinion it's the single biggest problem we have. you can't take care of medicare-- which is a great thing, medicare-- you can't take care of social security-- also great. you can't take care of medicaid if you're going to be a poor country and we're a poor country right now because everybody is doing a number on us because our leaders aren't smart enough to know what's happening. >> tom: one of the things that's been driving
international trade, not policy but trade has been the drop in the u.s. dollar. >> right. >> tom: it has helped make those american goods more competitive overseas. would you like to see the dollar weaker? >> i would like to see it stronger for other reasons, including the inevitable inflationary problem that will hurt us soon. >> tom: that could hurt products overseas. >> it could. i would like to see a stronger dollar-- look, there are advantages to weak dollars and there are advantages to strong dollars. but overall, in terms of the strength of a country, you're better off with a strong dollar. >> tom: you'd like to have freer trade but a stronger dorl. >> i'd like to have fair trade. i don't want to go trade with a country that is doing a purposely weak currency in the case of china, i mean, really weak. look, we should be taxing chine and chinese products 41%. >> tom: i will ask you a couple of questions about real estate. you're putting money to work in the real estate market. you must be pret bullish? >> i've been buying over the last two years.
i was very lucky eye don't know if i was smart or lucky-- but i evaporate bought a lot the last three or four years but the last couple of years i've been buying a lot of real estate, and they been, thus far, very good investments. i bought, i think, at the bottom of the market. we'll see what happens. i'll let you know in about fiefs year. with the way the country is going maybe i should have waited. >> tom: thank you very much.
>> kind of quiet. hard to believe after the last few days. lots of fears and worries. >> two e.s-- europe and earnings. let's go ahead and get folks updated with tonight's market focus. the major stock indices finished mix on the latest european pledge to have a bailout plan in place next week. the ups and downs of the dow jones industrial average highlight the uncertainty for investors. this chart shows the past ten sessions. it has closed in opposite directions in each of the past ten sessions-- up one day, down the next. the movers in the dow today reflect the broad market. financials and basic material
stocks were strong. j.p. morgan was the best dow stock today, up almost 3%. alcoa was the second best, up almost 2%. caterpillar gained almost 1.5%. dow stock at&t was among the laggards, falling a third of a percent. shares have yet to recover from the drop since late august when the department of justice sued to block its buyout of t-mobile. at&t's quarter came in just as expected, but revenues fell short of forecast. subscriber spending was held back ahead of the newest iphone release earlier this month. while at&t saw customers hold back spending, waiting for the new iphone, nokia continues to see its handset sales drop. but investors instead are looking ahead. nokia shares gained more than 6%. volume more than tripled as the company continues shifting strategy to focus on low-end phones instead of smart phones. sales of sic model phones were up. technology was the weakest sector, pushed down by computer
maker dell, down more than 5% on heavier than usual volume. we mentioned the microsoft earnings earlier in the program, and dell has been anticipating better tablet sales when microsoft releases a new windows computer operating system. meantime, there's some concern flooding in thailand could hurt access to hard disk drives, a key component. the problem in thailand may lead to higher prices for disk drives, which helped those stocks out today. finally, copper, known as the metal with a ph.d. in economics, thanks to its many industrial uses around the world. prices fell 6%, and now threaten to take out the low from earlier this month.
promises from europe to have a debt solution next week did nothing to ease concerns about metal demand, and just added to worries about slowing demand from china. and that's tonight's market focus. >> suzanne: any idea how many big u.s. companies now use social media for marketing? our next guest says it's about 60%. he's zach clayton, founder and c.e.o. of three ships media, a digital marketing firm. tonight, he joins us to talk about using social media to grow your business. ram., welcome to the pr >> good to be with you. >> so, make the pitch. what do you tell clients when they ask you why social media? >> the way that their customers consume information has completely changed across the last 10 years. they are crazy if they don't change the way that they start to listen to their customers online and then ultimately communicate and market to them. so there's a big opportunity for companies that sort of close the
gap between the way they communicated with customers then and the way customers are consuming information now on digital media, web sites, mobile tablets, and social networks. >> is it cheaper for them to use digital media than traditional marketing tools, do you think? >> absolutely. and i think c.e.o.s in this type of economy are keen to look at ever single expense they have. they're finding digital marketing offers a much more efficient way to reach customers, and there's other benefits. digital marketing gives them an opportunity to sort of listen to customers talking about their product, to gain new ideas, to help them improve the way they run their operations, their customer service. so the benefits start with marketing, but they ripple out far beyond that to the rest of the company. >> so give me an example of a company that's come to you and has asked for your assistance in using digital media, social media. give me a great example, if you
can. >> i'll give you a fun one because i'm doing this company's race this weekend. tough mudder was a business that didn't exist two years ago until two british guys decided that what-- that their needed to be an alternative to marathons and they have created one of the fastest growing races in america. it's a military-style obstacle course, and this weekend, 20,000 people will converge on a sleepy ski town in virginia, wintergreen, and they'll run through electric wires. they'll take ice baths. they will-- they will climb monkey bars. and run through mud. it's the ultimate combination of tough and fun. and tough mudder is sort of a new-age company. they realized from the beginning that if they created a great experience, their customers would share it online. facebook's their best marketing
channel, and when you think about it, suzanne, it makes all the sense in the world. there's just not much friction anymore when it comes to how you share a picture or video or how you talk about a company or an experience you really like. and so tough mudder today, more than a million facebook likes, and growing very, very rapidly. >> that's a a great example, but is there and chance the use of social media is a fad, do you think? >> i really don't think so. if you rook a look at internet consummittion today, americans are spending 30% of their time online on facebook. has essentially become a clone of the internet. it is an internet unto itself, where your personal identity is layered on. 250 million photos will be posted on facebook today. i think two or three years ago, people were asking, is this here to stay? and now all the smart money is just how-- on how fast can companies really adopt it and get business value from it.
>> >> some great suggestions. thank you for joining us this evening. >> a pleasure thank you for having me. >> our guest zach clayton of three ships media. >> tom: here's what's on the schedule for tomorrow: it's another busy day for earnings. we'll hear from general electric, honeywell, mcdonald's, schlumberger, and verizon. speaking of earnings, our market monitor guest thinks the prospects for stable quarterly results trump growth. he's randall eley, president of the edgar lomax company. >> suzanne: more than two million americans should have received education tax credits last year but didn't. a watchdog group says the mistake cost taxpayers more than $3 billion. a report out today finds those tax credits were awarded to people without social security numbers, people in jail, and went to some unable to prove they went college. the internal revenue service contests the findings, saying they're overstated and based on a flawed analysis.
>> tom: speaking of tax breaks, the irs is increasing many to keep pace with inflation. the standard deduction will increase $300 to nearly $12,000 for married couples. head of households can claim an $8,700 deduction; that's an increase of $200. tax brackets will also edge higher. starting next year, a married couple earning over $70,000 would move from the 15% rate up to 25%.
>> tom: a recovery in housing may remain elusive, but that hasn't stopped innovations for our homes. this fall, we took you to a contest of colleges to build more energy-efficient homes using new techniques and technologies. planet forward, our partnership with the george washington university social media project, has the contest's official winners, and our viewer's favorite. here's frank sesno. >> reporter: the department of energy's recent solar decathlon, lean green design teams from around the world, produced some winning ideas. >> third place, new zealand... >> reporter: ...with their innovative drying cupboard that can dry six bath towels in an hour and a half. >> second place, purdue university. >> reporter: ...featuring a biowall that filters air as it
cycles through the house. >> first place, university of maryland... >> reporter: ...complete with a liquid desiccant waterfall. it uses a salt solution to absorb moisture and reduce air conditioning. those were the department of energy's top winners, but we staged our own contest, asking the planet forward audience, the teams themselves, and you to rally for a winner. from vermont, middlebury college got the nod. >> solar decathlon was a really amazing experience for our team, especially since we were the underdog, as an undergraduate liberal arts school. >> reporter: they call the house "self-reliance," a two-bedroom family home. >> our design demonstrates that an environmentally friendly home can be comfortable for a family. >> reporter: the d.o.e. agreed-- middlebury came in first in market appeal. they also fared well in what's called energy balance: triple-pane argon-filled windows that let more heat in than they let escape; cellulosic insulation that is
composed of 80% recycled material; and an interactive energy monitoring system that gets homeowners involved with their energy use. on affordability and sustainability, the innovation was through the looking glass. >> one of the most unique innovations in self reliance is the integrated greenhouse wall in the kitchen. we have these huge windows that look out into the garden, and the idea is that they can grow seedlings and fresh herbs that they can pull from the shelves and put onto their plates. >> reporter: we visited the solar decathlon with real-world homebuilder don ferrier. after middlebury's online win, we bounced their innovations off him. hiss comments-- great insulation, windows and doors and air tightness, all fundamentals of a high-performance home. >> frank joins us now, we should point out a proud alma mater of middlebury college. of course, that didn't put them over into the winner circle. >> let's be really clear eye did
absolutely nothing. i merely was standing on the sidelines. but the home team did win. >> tom: congratulations. a couple interesting points came out of this whole contest. one was the focus on first energy savings to that point in that piece. it's something we can all learn from, insulation and energy savings can really drop down the bottom line for household budgets. >> that's exactly right. 11 inch thick in the walls, 21 inches thick in the ceilings. they used cellulose material for the insulation which is 80% recycled materials so sort of green in its own way. think of it this way-- all these houses had two main things, tom-- one was energy creation-- that's the solar panels -- the other is energy savings, as you pointed out, big empsis on insulation up and down. >> tom: to that idea here, what about the cost of these homes? we've reported already on some of the techniques and construction technologies but what about the end cost? >> well, the cost on this particular house, middlebury college's house, these houses
are 1200, 1300 square feet, the ones that were participating, but middlebury's house was about $250,000 to build. so that's not out of ballpark for what you'd pay fair regular house. they say there's basically a zero energy footprint if you're up in vermont. vermont is real cold in the winter so if you can be generating what you use, that's a pretty good thing. you're going to shell out some dough to get that thing. >> tom: sounds like it. what did bthis particular home? does it get torn down? >> torn down! can you imagine! they're shipping it back. it becomes a dorm. but there's a catch. if you live there you have to be prepared to take the energy tours coming through. >> tom: i think their mom and dads might like it. you have to keep the dorm clean. frank, good stuff. we appreciate the tour. >> thank you very much, and thank you to the voter voters wo weighed in.
>> suzanne: when it comes to teaching your kids about money, why not take a hands-on approach? tonight's "kids and cash" has some suggestions for getting your children engaged in the process. here's alisa weinstein, author of "earn it, learn it." >> my grandma was an artist, and i so enjoyed looking at her work as a kid. it's probably how i learned that if you want to make something abstract easier to understand, add a visual. a great tactic when you're trying to explain adult stuff to children, including fiscal management. parents talk about goal-setting and budgeting, but these terms mean so little to our kids, until they can see them on paper. so why not involve your child in a budgeting exercise. lets say you're planning his birthday party. maybe he's saving his money for the new toy-of-the-month, or you're buying the week's groceries. grab a sheet of paper and, together, write the process down. start with simple goal-setting-- have your kid write his goal. then, three or four steps he'll take to get there. then, create a budget.
you can even make separate columns for estimated and actual spending. and yes, you can do this on the computer-- i'm an old-school pen-and-paper kind of girl. but the idea's the same, so just do whatever's easiest for your family. either way, i bet you both find your budget sheet to be a work of art. i'm alisa weinstein. >> tom: you can follow nbr >> that reminds me, my kids get their allowance tonight. >> i'm a day late on mine, suzanne. >> suzanne: that's "nightly business report for thursday, october 20. i'm suzanne pratt. good night, everyone, and good night to you, too, tom. >> tom: good night, suzanne. i'm tom hudson. good night, everybody. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program was made possible