tv Nightly Business Report PBS March 10, 2014 7:00pm-7:31pm PDT
report" with tyler mathisen and susie gharib brought to you by. >> thestreet.com featuring stephanie link who shares market insights with action alerts plus. the multi million dollar portfolio she manages with jim cramer. you can learn more thestreet.com/nbr. five years later, has the retail investors faith in the market been restored? and if they are tiptoeing back in, will the mom and pop investor give the bull market a second win? >> spring bounce back. with the coming thaw heat up the economy? >> shifting gears, more people want to drive luxury cars at aboardble prices and more auto makers are trying to win that business. that and more tonight on "nightly business report" for
monday, march 10th. good evening everybody. i'm sue herrera filling in for susie gharib. >> i'm tyler mathisen. welcome. we begin with good news. stocks closed near the highs today. now the not so good news. major averages all lost money today but not much, just a little. chalk it up to unsettling data from china where experts fell sharp pi and worries about rising tensions in ukraine. the dow was down triple digits at one point today but rallied late. the industrials closed 34 points lower pressured by boeing. the nasdaq down one and the s&p down a fraction from friday's record setting close. >> with the nasdaq sitting near a 14-year high it may be believe the bare market bottom was exactly five years ago but a lot changed since then. it's a bull market now, and a lot of retail investors have come back into stocks, a bit more cautious and perhaps a bit
77/kñ than they were before. jane wells has more. >> the country does what it has to to stay afloat. some people have floated the b word around. >> reporter: it was the worst of times which never seemed to get better. >> jumped in friday to take over the mortgage lender. >> reporter: jobs were lost, investments took a hit and five years after the market bottomed, people still remember their fear. >> you know, we were pretty close to a collapse until the financial system. >> the whole thing is nobody knew where the bottom was. >> reporter: fidelity surveyed investors who said five years ago 65% of them were scared or confused. nearly half lost significant assets. the average drop in fort yportf was 34% and. >> the fear took over and got me as good as the next guy. >> reporter: lamar jones runs
his business and thought he was investing wisely in evident paying bank stocks that ended up in almost nothing. >> i thought i could buy an ashton martin car and with the money i lost i probably could have. >> reporter: five years later he's back in the market and cautiously, and he's not alone. 56% of investors feel better prepared. options now comprise 40% of daily trading volumes up from 12% from years ago. however td ameriameritrade says are cautious with one foot out the door and the shorting stocks really like their position. perhaps both remember the not too distant past and better position to act if history reports itself. jane wells, los angeles. let's turn to jeff for his analysis of what is going on in the markets. he's chief market strategist at lpl financial. jeff, welcome.
we'll have plenty of time to talk about the markets. i would like to get your reaction to jane wells' report just then and talk a little bit about the sensibility of individual investors today. are they smarter? are they more judicious? too careful? >> they have been too careful. most individual investors, whether unable or unwilling sat out most of this bull market. it's really only in the last four or five months that we've started to see individual investors come back to u.s. equity mutual funds. and then maybe only because the five year rolling return has just started to turn really sharply positive. they return and feel better but only because the numbers soared into the double digits. >> jeff, that has some people worried that the individual investor set out for much of the market run and maybe getting in just as the bull starts to fatigue a little bit, but you're still longer term bullish on the
market, correct? >> yeah, we have a good year ahead. we had a great year last year. we have gains ahead. while certainly individual investors come back to the market, that can be thought of as a peak. we have mna activity coming back and ipos, too, but it takes a few years, at least a year and a half for excesses to build up. instead, what we're seeing is good earnings growth coming back this year, better economic growth here and abroad, that should support modestly high stock markets. >> are there particular sectors of mutual funds that you would suggest based on the forecast for the future? >> tyler, most of the gains are built on the consumer coming back but it's businesses that held back and may begin to be the new drivers. so look to technology and like industrials that didn't do so well today as being the leaders in the market here and perhaps
to the end to the market. >> we had a lot of volatility in the emerging markets, jeff, as you well know. would you allocate cash there? things have calmed down a bit. the situation in the ukraine not with standing or stay away from there? are the opportunities better domestically? >> a long-term investor may find better in the market and this year u.s. stock a bit more attractive. most countries this year to a world where there is a bit less money being pumped into them from the world's central bank. that's something they have to get used to, take time and volatility will come with it. >> how do you feel on actively managed funds or an approach through mutual funds or efts. >> both can make a lot of sense. we've seen the passive investing has been a big winner in recent years, particularly last year.
a very tough year for active managers. as the pace of growth begins to moderate in the market, we're at the mature stage of the business cycle where there are bigger differences between sectors and stocks. look at this year, a much broader range of performance among sectors, that's an environment where active managers can begin to out perform. volatility tends to be a real plus. give you a quick stat. when it's two points above the three-year average, volumeties above normal, active managers out per foform. >> very quickly, jeff, if you need to add yield, if you need income, how would you do it? >> high yield bonds are a great place to go for that. watch out, however, for areas like utilities in the stock market. they can be very vulnerable to higher interest rates. we expect to see over the remainder of this year. >> jeff, interesting point on the vehic vicks and how it can help.
>> thank you, chief market strategist at lpl. the latest on the missing malaysia airlines flight. there is still no trace of the boeing 777 plane that disappeared saturday an hour into it's flight from kual kuala lumpur to beijing. there are 30 ships looking and the search area was widened to a 100 mile radius from the point where it vanished. investigators are looking into five passengers who checked in for the flight but didn't board the plane, and the identities of two men who made the flight using stolen passports. we have more from beijing and what some loved ones are doing while they wait for answers. >> reporter: a few family members of the passengers aboard malaysia airlines 370 started traveling to kuala lumpur and
they will be taken to the location of the aircraft when it's found. a vast majority are still in beijing at a hotel, the makeshift crisis center. most of them say they don't want to leave china. they say they have very little confidence in the airline for not keeping them better informed and worried they will have a tougher time in malaysia because they don't speak the language and know their way around. the relatives have vented their frustrations with the chinese government, as well. the disaster coincides with the national people's congress, which is a big yearly gathering of the country's leaders and the families complained that officials have been playing down their polite. they were cite sized for what the families call a slow response. china urged malaysia to step up the search and investigation efforts, sent a working group to malaysia to assist the families.
chinese police dispatched a team to investigate the identities of the two people who traveled on stolen european passports. china confirmed no chinese passport haves been stolen. still ahead, south by southwest, the popular technology and music conference is underway down in austin. it's where big ideas are shared. innovative products are sometimes born and where today, a controversial figure was head from. details next. gasoline prices are going uprising nearly ten cents a
gollon. worries about a possible military confrontation in ukraine contributed to a jump in ethanol. the average national-wide price of a gallon of regular is now $3.51. an unfinfluential member ofe federal reserve says they may have to pick up tapering. he said that wicked winter weather slowed down the plans to taper the bond buying stimulus measures. well, daylight saving time is here. spring is ten days away. economists hope with the better weather come better data. many expect a spring bounce back. steve liesman has more. >> reporter: with pushing the clocks ahead this weekend, economists pushed their forecast for the growth.
a piece titled "winter blues should lead to a jazzy spring." it should be a winter's tale by the time the winter data rolls around. >> it's weather and inventory adjustment. so the first quarter is not going to be a good number, but i think we will see much better numbers in the next three quarters of that. >> he's encouraged by the 10 trillion dollar rise in household wealth in 2013 and what it could mean to consumer spending. goldman sachs says the weather affects should turn positive in the spring, we thoerefore continue to expect growth in the second quarter. at ubs they boosted the second quarter growth rate allowing for a weather-related snap back. the risk to the forecast seen mostly overseas. china reported a sharp drop in
experts. that could have a slowdown in the economy and the outlook for europe is uncertain. obviously, a potential negative shock that could come from a worsening of the situation in ukraine. for now, the consensus is there is a thaw coming and should heal the u.s. economy. the rise in stocks over the past two years hasn't done much to alleviate a decade's worth of problems funding public employee pension funds. roughly half of u.s. state pension plans have big gaps between what they have promised retirees and the funds they have on hand to pay the benefits as contributions have failed to keep pace with what is needed. the white house is pulling the plug on proposed changes to the medicare prescription drug program after an uproar on capitol hill. the proposal would have given insurers more leeway to limit the number of drugs they cover for medicare beneficiaries.
now this change means that medicare will continue to protect six classes of drugs requiring insurers to cover nearly all medications in those categories. now, if the change had gone through, only three classes for cancer, hiv and anti-seizure meds would be protected. administration hoped to save millions by 2018 by making the change. mcdonalds sales slump continues and that's where we begin the market focus. the world's largest burger chain said same stores sales fell dragged down by continued weakness in the u.s. mcdonalds blamed some on bad weather and changing industry dynamics. the shares fell a fraction to finish at 95.25. cahhketa will buy fyffes. they will merge together. regulator haves to approve the
combination. shares of chiquita finished at $12 even. as more merger news to tell you about. united rentals is buying national pump for $780 million that move by united is an effort to get into the rental pump sector benefitting from the u.s. energy boom. shares of united rental rose 4% to finish at 91.2 -- $91.82. signs the u.s. economy is improving and europe is stabilizing. for how ge is doing, the chief said the company is putting a lot of effort into simplifying and focussing on the industrial businesses. chairs of general electric off a little bit today at $26.04. ebay rejects activist investor carl icahn's two board nominees saying both are unqualified. icahn has been trying to shake up to push it to spin off the
valuable paypal business and accused the company of having poor corporate governance and called the ceo incompetent. today a big investor leon cooperman, chief executive of omega advisors came out in support of ichan's spin off proposal. >> they should spin off a portion of paypal, monetize it, create a value, lower the cost of capital and give them flexibility. >> and shares of ebay today fell about 1.5% to $58.22. urban outfitters beat but revenue came up short. the name sake store continues to struggle and the ceo warned about the first quarter performance. sales at other stores like free people and anthropology remained strong. a private equity firm is nearing a deal to purchase the
institutional shareholders services. the firm is known for guiding shareholders how to vote for things like merges, executive pay and the election of board members. iss has been on the block since october, and if the deal is done, incite venture partners would be the third owner in the past switch years. no terms disclosed for the latest possible deal. sue, a lot of deals are made every year at the annual south by southwest festival where what's trending in technology, entertainment and investing all seem to come together. it's where ideas are shared. gadgets are displayed, there is chicken fried steak and sometimes big and controversial people get anymore message out. josh lipton has more. >> reporter: 30,000 tech fans come to austin, texas, technologiest, engineers, venture capitalests start jups and fortune 500s looking for the next start jup. there is competitions and of course, lots of networking and
partying. startups often tip at south by southwest. the festival is a launch pad for social networking companies like twitter and four square and the online marketplace dubbed the breakout app here three years ago. >> if he were here in the united states, he would be in a solitary cell. >> reporter: the event was so big it attracted edward snowden, the nsa contractor. >> the nsa, the global mass surveillance, not just the u.s. but important because this is a global issue. they send fire to the future of the internet and the people who are in this room now, you guys are all the firefighters, and we need you to help us fix this. >> reporter: this year online privacy is a hot subject at the festival, which perhaps explains the popularity of
self-destructions chats where users post thoughts and feelings without identifying themself. they are threatening accomplished players. >> like snapchat is popular because it's quick and instant and from friends that you are close with, where as facebook you have a ton of friends, hundreds of friends. >> i feel like facebook is dying very quickly. my -- the only reason i still have facebook is because my family is still on there. >> reporter: the anonymous social network raised $21 million from venture capitalests in silicon valley. the other big top pick, wearable technology. the tiny computers on the wrist are generating attention. >> gets me back into great athlete mode. if i do a lot of stuff during the day and i log 4,000 steps,
almost 12:00, i got work to do. that forces me to get on the threat mill. >> reporter: the festival this year was the biggest yet. the ideas generated a lot of buzz and could soon find their way into your living rooms. josh lipton, "nightly business report", austin, texas. coming up, affordable luxury. sounds good, right? it's the fastest growing segment of the car industry. what are the high-end auto makers doing to win over potential customers? we have that story coming up next. sabiro the pizza chain filed for bankruptcy protection with
30 affiliate owners. it's the second bankruptcy filing in the past three years and plans to close 155 of the approximately 400 outlets to cut costs. we have an auto recall to tell you about. chrysler is recalling 25,000 jeep grand cherokees and dodge durango suvs with 2012 to 2013. there is a problem with break fluid that could make the pedal soft. jeeps and suvs are hot. america is shifting gears, buying more luxury cars. in fact, affordable luxury car sales are ex spelpected to grow times faster and many of the up scale cars will have a noticeably lower sticker price. the battle over entry level luxury cars is just now heating up and phil lebeau has the details. >> reporter: it's the latest example of luxury auto makers
trying to win over the masses, not just the well to do. the audi a-3 with the smallest starting price yet for an audi, just under $30,000. >> this is where the growth will become. this segment will go up by nearly 400% between now and 200. a lot of competitors are introducing products here. >> reporter: audi and it's rivals, mercedes, bmw, lexus and cadillac are targeting models for less than 35 grand. as brands like toyota, chevy and honda gradually raise prices, some models are going for more than $30,000 and at that price, buyers would rather drive a luxury car than a mass market model. >> i may be getting a slightly smaller car, maybe a couple less features but it's still -- that's a big draw for car shoppers who may have aspireed to a luxury brand but thought it was out of the range. >> reporter: audi has the a-3
with technology like google maps with street views of destinations and the ability to search for information by writing out keywords but giving the industry's spotty record with technology having glitches in cars, is audi putting too much technology behind the wheel? >> we know how to do this stuff, and a lot of it we've done. we've done it in the a-8 and a 6. >> reporter: when the a-3 goes on sale, it will be $29,900 but fully loaded $36,000. the growing price for entry luxury here in the u.s. phil lebeau "nightly business report." >> to read more what luxury auto makers are doing to win you overhead to nbr.com. >> that will do it for "nightly business report" for tonight. i'm sue herrera filling in for suzy. we want to remind you this is the time of year we need your support to make programs like this possible.
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