tv Nightly Business Report PBS September 24, 2010 6:30pm-7:00pm PDT
>> susie: a solid rally on wall street today as the market mood turns more positive. >> the worst is probably behind us. the concern about a double dip is over and that now we should take advantage of the favorable seasonals in particular now that the mid term elections will soon be over. >> tom: the blue chips surge nearly 200 points, closing out a fourth straight week to the upside. you're watching "nightly business report" for friday, september 24. 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 >> susie: good evening, everyone. the bulls are back on wall street. tom, investors were enthusiastic on some encouraging economic news: orders in august for things like machinery and computers were stronger than expected. >> tom: susie, this is the fourth week in a row that the major stock averages were positive and in a big way. let's run down the numbers from today's action. the dow jumped almost 200 points. the nasdaq added 54 and the s&p 500 rose 24.
those indexes were up roughly 2% each. these are four month highs for the indices. today's gains came on heavierina billion shares on the big board and over two billion on the nasdaq. >> susie: the dow is up more than 8% for the month, the best september gain in 70 years. s&p's chief investment strategist sam stovall says investors are less worried about the u.s. slipping into another recession. >> we're getting better than expected economic data which is making investors believe that we are now moving further and further from the deflation and double digit precipice and as a result that pushed share prices out of the 100 point range we've been experienced since april of this year and now i believe from a technical perspective we're going to challenge that april 23rd high. >> susie: while stocks are having a break out september, the housing market remains stalled. fewer new homes were sold than expected in august, confirming that housing has yet to recover.
purchases were unchanged, matching july as the second worst month since 1968. as suzanne pratt reports, it could be 2012 before housing market conditions get back to normal. >> reporter: at halstead property in hoboken new jersey, there's only one word to describe business: inconsistent. a stone's throw from manhattan's stronger real estate market hoboken offers buyers everything from modern condos to historic brownstones. halstead broker eugene cordano says hoboken housing is trending in the right direction, but it's not there yet. >> conditions have been somewhat up and down. it has been fits and starts of activity and slow periods. >> reporter: beyond hoboken, many towns and cities are coping with residential markets that aren't even close to stabilizing. new home sales are close to record lows. sales of existing homes are hardly much better.
sure a government tax break gave the sector a temporary boost late last year and into 2010. but, once the credit expired this summer, foreclosures continued to flood the market and sales cratered again. in past economic recoveries housing has led the way. economist jonathan basile says conditions this time are very different. >> some structural unemployment, high unemployment and the inability for people to come back into the job market and then gain that confidence to start buying a home again. >> reporter: basile says another problem: home prices have been falling, something that most americans haven't experienced. experts say prices need to level off and even move up before the market can start to improve. and, the unemployment rate needs to drop perhaps below 9% or even 8%. >> things will turn when we get more sustainable job growth that brings the unemployment down in a steady fashion to levels that
are more palatable for the general population. in our view, to be honest, it's not in the next 12 to 18 months. >> reporter: in hoboken, sellers are starting to see value. and that should encourage sales. >> we need to move that inventory. we need to get that inventory that's sitting there for six or eight months, either off the market or sold one way or another because obviously real estate is about supply and demand. >> reporter: as for the record low mortgage rates, experts say they have helped to put a floor under home prices. without those low rates the housing market would be even more depressed. suzanne pratt, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: demand for durable goods fell 1.3% in august, but if you look deeper into the commerce department's report. you'd see a big jump in companies buying equipment up over 4%.
china's biggest credit rating firm was hoping to set up shop here in the u.s. but today the securities and exchange commission denied dagong global credit rating company's bid to become a nationally recognized ratings firm. the department of justice today reached a deal with some of the biggest names in tech land to end certain non-compete hiring agreements. justice says the agreements eliminated competition in the market for highly skilled workers. now adobe systems, apple, google, intel, intuit and pixar will drop their no-poaching agreements. >> tom: still ahead, market monitor mark leibovit is shedding his bear suit with the recent stock rally. but he still likes precious metals too. he's chief market strategist at vrtrader.com >> susie: norway's central bank is suing citigroup. the reason: citi allegedy misrepresented its financial condition in the years leading up to the financial crisis. as a result, norway's top bankers say they lost more than $800 billion on citi stock and bonds between 2007 and 2009.
the central bank claims citi specifically made misstatements about its exposure to sub-prime mortgages and other toxic assets. citi says the suit has no merit. meanwhile, it looks like citi's c.e.o. will be getting a fatter paycheck. vikram pandit has been getting $1 a year for the past two years. now, the bank's board of directors said it would boost his salary. the raise they say will be quote, "commensurate with the job of c.e.o. of citi." pandit had vowed to keep the one-dollar salary, until citi returned to profitability. >> tom: meanwhile, a big shakeup this afternoon for the credit union industry. federal regulators seized three wholesale credit unions and moved to shore up billions of losses on risky mortgage backed securities. those wholesale firms don't deal directly with the public, instead they serve as sort of a banker's bank, investing for retail credit unions and providing them with check clearing services. to help pay for the rescue, the
national credit union administration says it will issue up to $35 billion in government backed bonds. the agency says the plan won't costs tax payers any money. óóçóçóçó >> tom: while the country struggles with getting americans back to work, one sector is adding jobs: health care. the bureau of labor statistics says the medical field has added, on average, about 20,000 jobs a month this year. that kind of job growth is getting noticed. and as jeff yastine reports,
even people from sectors ravaged by the financial meltdown are taking a new look at careers in health care. >> reporter: you'd think it was a sale at macy's, but this sea of humanity is seeking something different: jobs in the medical field. this recent job fair in miami was mobbed as employers, like hospitals and nursing agencies, look to fill positions. and that's the attraction for people like brian tulowiecki. >> hi my name is brian. i'm a registered nurse, i have a year of experience. are you folks doing any hiring at all? >> reporter: tulowiecki is a former stockbroker. after a decade in finance, he switched careers, went back to school, and got his nursing degree last year. >> the reason i chose nursing was that i knew there would be a lot of opportunities for work. the work was stable, the income was stable.
coming from a financial services background where it's commission-based, that was one of the things i was looking for. >> reporter: his timing couldn't be better. financial-sector employment has fallen 9% since 2006. healthcare employment is up more than 6% since then. in south florida, baptist health is a good example of the hiring wave going on nationwide. cory heller is the human resources director for baptist, which runs seven hospitals with 14,000 workers. >> we're seeing very strapplica. on average, we're seeing about 1,000 applicants a week apply for positions at baptist health. we end up hiring about 130-135 a month, and that's been a consistent trend for 10 months running. >> reporter: still, there are some rough edges to the healthcare job picture. take nancy martinez. >> so just go online and
>> reporter: she just got her nursing degree. but hospitals want r.n.s with experience. >> it's a little difficult for us right now. there is competition. a lot of the friends who graduated with me are looking for the same position, and we all have the same credential. so there is a tough competition. >> reporter: does that make you worried at all? >> of course, because i really don't know when i'm going to get a job. hopefully soon. >> reporter: another problem: there are thousands of nurses and technicians who would normally be retiring right now. but the bad economy has them staying on the job. dade medical college c.e.o. ernesto perez thinks that's a short term situation. >> it's a logjam, but it's a logjam that in the not-too- distant future. the dam is going to be burst. we're looking at 1.8 million people in medicaid, that will impacting the state of florida directly by most estimates. when you look at that, we're going to be needing nurses, technologists, physicians.
>> reporter: as for our stock broker turned nurse... he shook a lot of hands, and talked with a lot of people, and he's convinced he'll soon find a nursing job. >> without a doubt. i always i'm very glad i made the decision, right around the time when i was 40 to pursue that career in health care. >> tom: we mentioned at the top of the program, wall street resumes its september rally. let's get right to it with a look at tonight's "market focus." it's four in a row for the major averages, four weeks of weekly gains. for the dow industrials, the week was bookended with the rallies that added to the gains
up 2.4% for the week. the nasdaq was up two out of the five sessions this week, but the gains easily out-paced the losses for the nasdaq to tack on 2.8%. and the s&p 500 saw a similar pattern with the rallies on monday and friday adding just over two percent for the week and taking the index to its highest close since mid-may. with the third quarter coming to and end next week, the gains today were led by two sectors that are expected to see some of the best earnings growth. the industrial stock exchange traded fund jumped almost 3% as investors seem to get more comfortable that the u.s. economy won't be slipping back into a recession. industrial earnings this quarter are forecast to grow 43% compared to a year ago according to thomson-reuters. financial stocks also are forecast to show big profit as some may be positioning themselves ahead of those results due in the weeks ago. the financial e.f.t., while up more than 2.5% today has yet to
break out of its most recent range like the broader market. this market focus on economically sensitive stocks and financial companies is reflected in the three biggest percentage gains of the dow. caterpillar, alcoa and bank of america led the way for the index. caterpillar volume was twice its usual pace on this move to a new 52-week high. technology stocks were moving nicely, with two of the five biggest gainers of the s&p 500 semiconductor stocks. micron technologies and advanced micro devices were those two up around 7% each. semiconductor test equipment maker teradyne also was a stand- out up 6%. a.m.d. may have helped spark the rally. it lowered its third quarter outlook, not usually a cause for a rally. but since chief competitor intel cut its guidance last month, a.m.d. dropping its prediction was seen as just a matter of time. last night, we mentioned how for-profit college stocks were
moving in anticipation of an expected announcement today from the department of education. announcement was that the department of ed will delay the specifics regarding graduation and student loans. it was a mixed reaction from the group. strayer and devry saw nice rallies while corinthian and career education fell. the so-called gainful employment rule will decide if a school can still get access to federal student loans, based upon graduation and student loan repayments. the rule is xt year. with the stock market rally this week getting attention don't forget about gold. another new record high today. $1,298.10 was the close. at one point, prices hit $1,300 an ounce today. as the market improved this week, we saw a pair of initial public offerings. sci-quest was the big winner, coming public today at $9.50 per share, closing at over $12. this is a software company focusing on procurement in
education. health care and government. the second i.p.i. was core-site realty at $16. today it added 1.5%. it is a real estate investment trust that owns data centers. and that's tonight's "market focus." >> susie: the recession may be over, as we learned this week, but the u.s. is still struggling with a slow recovery. and americans still want answers on how we got into this economic mess. tonight we introduce a new segment: "inko-nomics with david gillette."
david's an award-winning illustrator and essayist at twin cities public television. tonight, he tries to answer the question, "who's responsible for the mess we landed in?" >> hi, everybody, here is the story with the economy: sometimes it goes up, sometimes it goes down. of course, lately it has been mostly down. and we're told that even the smartest people and ot planet aren't exactly sure why this keeps happening. well, i have a confession to make. it is me. this guy right here. it is my fault. my name is david, and i'm the unidentified market variable that destroyed your way of life. i know it is hard to believe that someone en my position could devastate the global market place. the first investment i ever made way during college. the s&p 500. about 48 hours later, the entire technology sector goes up in a mushroom cloud of ridiculous expectations, and the
stock market reacts accordingly. coincidence? i'm not so sure. how about real estate. a few years later, i bought my first home, and apparently, considering my timing, i picked up that free pen they give you at the title agency, and stabbed it so deep into the housing bubble, i triggered the greatest recession since the days of the ticker tape. from here on out, i'm playing it safe, bonds, c.d.s, and a into frills cash savings account. now i'm told my reduct tans to spend has destroyed the auto industry, and liquidated the newspaper industry, and somehow made the people of greece hate their government. i've never been to greece. i get it, it's me. i'm here to make things right. to all of my friends in washington, it is time for a robust regulatory package that personally removes me from the sector. until then, all i could offer is transparency. david has been hearing
good things about gold. i suggest you modify your portfolios accordingly. >> tom: here's what we're watching for next week: our friday "market monitor" guest is gerald buetow chief investment officer at inn-ee- alta capital. on the economic calendar, we'll see the second quarter final g.d.p. estimate and september auto sales monday, with so many small investors sitting on the sidelines, we'll look at what it might take to get them back in the stock market. >> susie: the c.e.o. of nbc universal will step down after comcast takes control of the company later this year. jeff zucker today confirmed widespread speculation that he'll leave the media giant once corporate parent general electric completes its deal with comcast. in an email to employees, zucker said he'll stay in his job until the deal is completed. comcast's chief operating officer, steve burke, is expected to take the reins at nbc-universal. >> tom: sears plans to open
dozens of toy shops inside its stores, just in time for the christmas shopping season. the pop-up toy shops will be in sears' key markets like chicago, washington d.c., new york, new jersey and big cities in california. they're aimed at parents of two- to-five year olds. toys-r-us has already announced plans for 600 temporary stores and 10 f.a.o. schwarz pop up stores this holiday season.
a spring time bear is waking up to a more bullish outlook for the stock market. he's mark leibovit, chief market strategist at vrtrader.com and he's tonight's market monitor, joining us from phoenix. welcome back to n.b.r. >> tom: welcome back back. >> same here, tom. thank you for having me. >> tom: so what makes you shed some of that bear skin from the springtime. why do you think stock prices can move up to these levels. >> we're taking a seasonality point of view, and here we are into the fall, and traditionally we look to buy any type of pullbacpullback for the september, october time. plus you have the election coming up in november. we just broke out of the trading range we've been in in the last three or four months. 1010 on the low end and the s&p up to the 1100, trading back and forth.
we broke out to the up side here. i think overall, the market is telling us in the months ahead, i'm trying to make a multi-month forecast, and we're probably going to go higher. we have to be on guard, tom, because sometimes we get the sharp pullbacks in october, and this current rally is running out of steam on volume, even though it was very impressive today. i'm not flip-flopping on you, but watch the numbers. if you see a little reversal pattern in october, you have a little better buy point. >> tom: let's take a look at the year-to-date chart. you mentioned the most recent range. you can see we've broken out to the upside this week. a high in april. 1220, and the july low of 1010. where do you think a fair value is on this move for the next several months? >> i use what i call a swing count. how much we ranged from high to low. it measures up to just where we were in the april/may area, the 1220 area, which is the same
prediction i made back in march, when we were in the previous interview. the forecast model was warning us earlier in the year, watch out, there is going to be a correction. sure enough, it topped out a little earlier than we expected and the volume reversals which i used, and we had the sharp sel selloff, and we are. if we can go through the 1220s, maybe it is a new ballgame. let's wait and see if we get there. >> tom: you mentioned your model and your forecast for the dow jones industries was looking for a pullback, and it came a little earlier, but it looks like volatility will be the name of the game according to your model? >> i think it will be be the name of the game for the next several years. i think the markets are very jittery. we have alternate markets such as the gold markets and commodities, which are taking a front seat to stocks. i think stocks are going to be a real play here for traders. >> tom: okay. well back in march you mentioned your previous
role in that seat in phoenix. you liked the vanguard e.t.f., and it is down by 1.5%. and north palladium, p.a.l., up 1% since the springtime, and the canadian fund, with gold and silver, there is the big rally, up almost 20%. you still like these to hold on. >> i would. the b.t.i. is a total stock market index. if you're not in it, i would wait for a pullback. the s&p is in a challenge. the march, april top, the e.p.i. is a good way to do that. the play on palladium has been showing life here, particularly platinum and the metals, that is a poor man's play. and c.e.f., i love that. that balance between silver and gold. it started in canada. this is a big picture play. i think gold is going.
if we get a pullback in october in gold, i would buy that. >> tom: in 20 second, you like i.a.u., one of the gold e.t.f.s that hold the precious metal. do you trade it or hold on to it? >> it could be both. what i like, versus the g.l.d., which so many people talk about, which is $120 stock, this mirrors the price of gold and the $12 stock. it is something the average investor can buy, and still buying quality and don't have to commit as much capital. >> tom: how about disclosures for what we mentioned here tonight? >> i own and trade all of them. >> tom: it is mark leibovit, chief market strategist at >> tom: that's "nightly business report" for friday, september 24. i'm tom hudson. goodnight everyone and have a great weekend. you too, susie. >> susie: good night tom. i'm susie gharib have a good weekend everyone. we hope to see all of you again monday night. "nightly business report" is