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tv   Nightly Business Report  PBS  May 2, 2012 4:30pm-5:00pm PDT

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>> this is n.b.r. >> tom: good evening. i'm tom hudson. susie is on assignment. is job growth slowing? there are new worries about hiring. with facebook getting ready to sell stock to the public, diane eastabrook reports on how social media is changing the corn belt. and from the small screen to the smaller screen, as more americans go online to watch t.v., are the advertising dollars headed there too? that and more tonight on n.b.r.! we begin with jobs. a new report from private payroll firm a.d.p. says the economy added only 119,000 jobs in april. darren gersh joins us with the latest. >> reporter: tom, that a.d.p. number is a big slowdown from
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the job gains we've been seeing. and it raises concerns about what's ahead. is this a slowdown or a slide? for now employers are still hiring. >> it's not terrible news, but we'd like to see it stronger, cause we want to bring that very high unemployment rate down. >> reporter: a big surprise in the a.d.p. report-- manufacturing lost 5,000 jobs in april. one explanation may be factories hired during a warm winter the people they would normally hire in the spring. >> part of what you are seeing here is a little bit of a blip. manufacturers remain a little anxious, i think quite frankly about some of the things that they are seeing-- higher energy prices, europe continuing to be a big question mark. we saw the impact in march. factory orders fell-- 1.5%. the sharpest drop in three years. >> reporter: all this may convince some economists to look for an even softer april jobs report from the labor department on friday. that's the downside. on the up side: auto sales are
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solid and surveys show banks are more willing to lend to businesses. add it up and most forecasters still expect modest, if not spectacular growth in coming months. >> i don't think what we are seeing is signaling doom in any way, but what we want to see is job growth picking up, us really entering a sustained job recovery, robust job recovery and that's what's looking a little bit more iffy in these numbers these days. >> reporter: but iffy isn't much fun when you're looking for work. darren gersh, n.b.r. washington. >> still ahead, getting a nice payback from owning stocks. can dividend investors expect to see bigger payouts in the coming months? "nightly business report" is brought to you by:
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captioning sponsored by wpbt >> tom: the weak reading on private payrolls held back gains on wall street today. the dow fell almost 11 points, the nasdaq bucked the trend, rising a little over nine, while the s&p lost three. helping to add a little fizz to today's trading, word that pepsico is upping its dividend. it's the 40th straight annual dividend increase for the beverage and snackfood giant. and, as suzanne pratt reports, pepsico is not alone in returning billions to shareholders. >> reporter: from big blue, to johnson and johnson, to apple, corporate america has fallen back in love with dividends. 401 companies in the s&p 500 now pay dividends. that's the most to do so in more than a decade. what's even better is the amount of cash shareholders are getting. s&p predicts 2012 will be a record year for dividends checks at $278 billion. the previous record came in 2008.
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and, investors could see even more in the coming months. >> companies are only paying out about 30% of what they make. historically it's 52%. so, even if earnings stalled a bit at this level, they still have plenty of room to go and plenty of cash. >> reporter: here's a shocker, apple and its juicy dividend pushed technology into second place for sectors making big payouts. historically, dividends were considered stodgy. so, most tech stocks didn't do them. but, clearly, times are changing. >> these companies are large. they have cash flow and they are paying. 79% of the dollar values of technology does pay. the big one that does not pay at this point in time is google. >> reporter: paying dividends is a corporate finance decision. some companies prefer to stash their cash for m&a activity, stock buybacks, or to reinvest in their business. but, dividends are also seen as a vote of confidence in the market and future business.
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>> just as everyday investors were nervous in the midst of the financial crisis and decided to sit on cash, essentially companies did the same thing. once everyone realized that the world wasn't actually going to come to an end, they began deploying that cash and spending that cash and i think we're seeing that partly through higher dividends. >> reporter: most dividendews comes during the first half of the year, usually connected to annual meetings. still, more firms are expected to up their dividends this year particularly if corporate profits and the economy hold up. suzanne pratt, n.b.r., new york. >> tom: distractions-- that's what chesapeake energy c.e.o. aubrey mcclendon today called the controversy surrounding his personal stakes in energy wells. he apologized to investors. the latest issue is a report from reuters that mcclendon ran a $200 million hedge fund trading the same energy commodities produced by chesapeake, while he also was running the company. this adds to worries about conflicts of interest inside the chief executive's office at
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cheasapeake. mcclendon has come under fire for financial arrangements giving him ownership stakes in cheasapeake energy projects. he used those stakes to borrow more than $1 billion from banks and private equity firms doing business with chesapeake. questions about mcclendon's financial dealings have fueled big swings in chesapeake's share price. the stock sank more than 14% today. fadel gheit has followed chesapeake for several years as an analyst with oppenheimer. you have known mr. mcclendon for a long time r. you surprised by his reaction to these concerns about his financial dealings? >> i actually had a meeting with him a couple weeks ago when the newest head caved and he said that he was in alignment with the shareholders and he is basically putting his money where his mouth is. other allegation i can't comment on it because i cannot verify any of these things.
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but i can tell you the fact of the news after this crashed, but because of the sharp decline in natural gas prices, they built their fortune on a debt, it all the fundamentals suggest that natural gas is the fuel of the future, it's cleaner, cheaper than oil, we have plenty of it. but obviously nobody has expected that we'll see -- i never thought that could be possible. so this is a company that's really got the brunt of the clients in natural gas prices. >> tom: i'll ask you about the fundamentals of the company, but split from that there's a huge reputation al risk here. as an analyst someone looking into chesapeake, are you satisfied with chesapeake's response so far and mcclendon's personal response? >> no. as an snafl, as an investor,
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as an analyst, as an investor, i would urge aubrey to disclose as much as he can, obviously he has legal counsel. but we definitely need to build shareholders value on good reputation, and also confidence. the worst thing is for the c.e.o. of a company that, to lose the confidence, because nothing he's going to do going forward is going to matter until he proves that these allegations are not right. >> tom: can he, should he stick around as the chief executive? he's already given up the chairmanship position. should he stick around as chief executives as he answers these allegations? >> well, if these allegations are true, i think you'll probably have no option, he would probably be forced to step down. but again, he will have to
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think what is best for the shareholders, you know, being, they are obviously he said this morning it's a distraction what's going on. but he should pay full attention to the story, the value that was lost. the company lost 25% of its value in four weeks. so obviously there was urgency here for everything to get corrected as soon as possible. otherwise the,... >> tom: what's your rating on chesapeake with the low natural gas prices? >> unfortunately we have outperformed, because we believe in the asset based and i do believe that he's a very smart man, he likes to take risk. sometimes too much risk. but his track record has been very strong, growing a company from nothing, but now
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obviously things came down pretty hard because of the collapse of natural gas. if we didn't have $2 gas, if we had $5 gas, nobody would have raised the issues, but if these issue, valid and true, then there has to be some meaningful changes in the way this company is run. >> tom: we'll leave it there. an equity equity with oppenheimer, thank you, fadel. >> tom: the television business is becoming less about the t.v. screen itself and more about any screen-- computer, smart-phone or tablet. this is the up-front season for
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broadcast and cable companies, when they pull out all the stops hoping to sign up advertisers. but as erika miller, explains, traditional television has some significant competition for that money this year. >> reporter: gone are the days when you had to watch t.v. on television. many teens and young adults are trading the small screen, for an even smaller one. >> i usually spend about two hours on my computer on my iphone watching a t.v. show or something. usually i'm on moving around the city, so i get it anywhere i can. >> i watch probably about 95%-- maybe even more, of the stuff that i watch online, on my computer, or on my phone. >> reporter: men aged 18-34 spend more time streaming video than watching live tv. youtube has grown from a place to watch quirky home videos, to one of the biggest media companies in the world. offering its own unique content. >> here at the beacon theater, youtube will be trying to woo advertisers tonight by giving them the first-look at new original programming.
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>> reporter: for the first time, you tube, hulu, a.o.l., google and microsoft have teamed up to court advertisers in a digital version of upfronts. that's television's annual ritual of showcasing its fall line-up in the spring with hopes of getting advertisers to buy ads in advance. >> overall, the category online video is growing for advertisers. they are spending more money in that channel. how ever they're also spending more money with traditional tv advertising. >> reporter: the digital outlets aroffering plenty of star power: katie couric has a new series on yahoo!. >> hi, everyone and welcome to katie's take. >> reporter: and heidi klum has a deal to offer fashion tips on a.o.l. but make no mistake, broadcast and cable are not going away. that's still where most people watch their favorite shows. >> they're still loyal to their t.v. screens and what's in the living room. and also there are live events
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that will always be television, the olympics. for example, coming up this summer. the superbowl in january. >> reporter: and many digital die-hards find other reasons to keep the boob tube: >> it's actually hooked up to my xbox, which i use for online streaming. i use it for video games. stuff like that. >> reporter: erika miller, n.b.r., new york. >> tom: online video sites like that was two cents better than analyst expectations, and the upcoming feature, madagascar 3, to boost results through the rest of the year. that film is due out next month.
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>> tom: eece is no longer in default. at least according to credit rating agency standard and poor's. s&p upgraded greece's debt rating and improved it's long- term outlook to stable. the better credit rating doesn't mean greece's debt situation is healthy. it's new rating is triple "c," which is considered highly speculative, highly risky. >> tom: it was the less than encouraging news about hiring in europe and here in the u.s. that provided for a mixed stock market. while hiring seems to be slowing here, the unemployment rate in europe is at a 15-year high. after falling to its low of the day in the first hour of trading, the s&p 500 worked its way off that bottom to end with a just a quarter percent loss. trading volume rose on the big board, 779 million shares, while it was a little lighter on the nasdaq: 1.8 billion.
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leading the losers, the energy sector fell more than 1.5%. financial stocks also pressured the market, down 1%. and the more defensive utility sector was down more than a half percent. with job worries, come concerns about less energy demand. oil and natural gas fell, putting pressure on producers. coal company alpha natural resources shed more 5.5%. natural gas explorer range resources was down almost 5%. and oil producer marathon fell more than 4%. the job market may be soft but we continue using mastercard and visa. the two payment system giants records stronger than expected profit growth in their latest quarters, visa's earnings were nine cents better than anticipated. visa cardholders swiped their cards 13 billion times in the past quarter, up 8% from a year ago. and the dollar amount of those swipes was up, too. mastercard's earnings also came in stronger than forecast. consumers spent more, increasing
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card payments grew faster overseas than compared to the growth in the u.s. despite the better earnings, shares of both visa and mastercard fell about 1%, perhaps reflecting some of the broader market worries about job growth slowing. we saw some action with clothing retail stocks. first a buy-out deal. charming shoppes is the target of ascena retail, which runs the dress barn brand. it's an $857 million buyout, giving charming shareholders $7.35 per share. charming closed just shy of that price. the deal puts together two brands concentrated on the plus- size clothing market. ascena shot up 10%, a sign the market likes the deal. teen retailer american eagle outfitters is at a new 52 week high after boosting its profit outlook. it's confidence comes after it sold more clothes at full price last quarter, similar to the story we heard last week on n.b.r., when we spoke with the c.e.o. of lands' end. american eagle stock shot up
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almost 17%. we saw more confidence coming from drug store and pharmacy benefits manage c.v.s. care- mark. earnings were better than expected thanks to an extra day due to leap year, and an early start to allergy season. the company raised its profit outlook for the year. shares rose almost 3%, closing at a new 52 week high. c.v.s. said it gained business from walgreen after walgreen left a rival pharmacy benefits network. green mountain coffee roasters is on pace for a big wake-up call tomorw for investors. shares lost almost half their value after the closing bell tonight. the stock closed around 49 and a half, but was below $21 per share in after hours trading. the company cut its profit forecast after selling fewer of its single serve k-cut coffee packs last quarter. our exchange traded fund market flash. the small cap russell 2,000 and nasdaq one hundred funds beat the weaker market to end with small gains.
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and that's tonight's market focus. >> tom: the year's most anticipated and one of the biggest stock offerings could happen in less than two weeks. facebook hopes to start publicly trading its stock on may 18th according to the wall street journal. the deal could value face-book at $100 billion. leading up to this stock sale, we've spent the week looking at the facebook economy. tonight, social networking from the farm. facebook and twitter are becoming virtual town halls where farmers swap information about what they're going to plant, the weather, and pest
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problems. as diane eastabrook reports this back and forth on social media is starting to move the grain markets. >> reporter: in northeast, iowa twitter is transforming the bucolic landscape. after farmer chris barron checks out his rain-soaked fields. >> this mostly came i think in the last three days. >> reporter: he sits perched at his desk, tweeting about how his newly planted corn crop is shaping up. >> i can kind of give reports on, okay here's where we are on planting. here's crop conditions and those kinds of things. so, they get a fundamental sense of what the situation is. >> barron started tweeting from his farm about six months ago and already has about 300 foer about 100 commodity traders. >> reporter: many traders in chicago's grain trading pits got turned onto twitter a few years ago when the c.m.e. group started using that site and facebook as marketing tools.
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but soon traders were using social media as a sort of virtual trading floor where they could use real-time information from farmers, seed companies and grain processors to buy and sell futures contracts. >> you want to buy one out of stop at what price? >> reporter: commodities broker joseph vaclavik follows about 200 farmers on twitter, including chris barron. >> i'm looking at it not constantly, but i'm glancing at it throughout the day. >> reporter: vaclavik says the tweets he gets from farmers enhance the information he gets from the usda and news services. and often tweets are more timely, like last winter when south american farmers tipped him off about a drought there. >> to actually hear first-hand from these guys that yeah there's a problem in my field because it hasn't rained in 30 days that a different story, that's different information that i think is really good. >> reporter: barron says he's still learning about twitter and separating good information from bad. but he thinks the technology could help him become a better farmer simply by giving him a better view of his world.
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>> it's easy for us in agriculture to look out our window and say it's raining today, it must be raining everywhere. >> reporter: here in iowa there's been a lot of rain over the past few days, even the last week, but other parts of the midwest have been relatively try, like illinois and ohio. so these farmers these days have a lot to tweet about. tom? >> tom: thanks, diane, some of that rain keeps those farmers inside where they can tweet and post on facebook. but what have you seen or heard about planting season so far with what we've seen as an unusually warm spring? >> well, some farmers actually got off to a fairly early start because we had a very warm march. so some were able to get their corn in the ground early. beans are starting to get under way. so right now here in iowa they've got about 50% of the corn crop in the ground, it's a little better in some states. so this is expected to be one of the biggest harvests this year, they're looking at planting about 96 million
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acres of corn. so this is going to be probably one of the biggest bumper crops since the great depression. >> tom: you talk about big supply and that will have to equal good command, and we've seen that. soybean prices in the teens, corn prices have perked up cently. both with a lot of international demand. i have to imagine that optimism is pretty high in the heart land. >> reporter: they're very optimistic, and keep one thing in mind. we're looking at five months between now and the harvest and a lot can happen, you're from iowa, you know that weather can turn on a dime. so while parts of iowa are wet right now, there are parts of central illinois that are dry, and a lot can happen between now and harvest, so we are likely to see some very volatile commodity prices. >> tom: if you don't like the weather in the midwest, just wait five minutes. i have to ask you, with all this tweeting and posting going on from the farm field, are they watching the day-to-day movements, the volatility in the crop prices
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as well? >> they are, they keep a close eye on what grain prices are, that's very important, they are great businessmen and they are watching it every day. >> tom: absolutely. thanks, diane estabrook, in central iowa tonight. tomorrow on n.b.r.: as facebook prepares to go public, silicon valley prepares to welcome a new crop of millionaires. and you can brush it on, you can roll it on. we meet the people behind kelly moore paints. in tonight's "money file," why we save money may be more than just saving for a rainy day. here's manisha thakor, author of "on my own two feet: a modern girls guide to personal finance." >> t.s. eliot once asked: "where is the knowledge we have lost in information? to my surprise, hearing this
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question made me think about money. while there is a plethora of financial information available to us, it often feels sadly, cut off from the process of life and living. for instance, push a few buttons on an hp12c calculator and you'll see that by age 65 a dollar you saved and invested in your 20s will be worth five times one you save an invested in your 40s assuming a 7% compound annual rate of return. while figures like this are interesting, they are often not enough to inspire action. why? those figures do not touch our souls. they tell us how to get more money but not why. so why are we saving? i have come to view saving as a form of self-care that goes far beyond simply creating an emergency fund and preparing for some well-deserved rest in retirement. to view saving as a physical manifestation of respect for the way we've spent our life's energy. in a sense, by saving we are saying we want to lengthen the time over which we will
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experience the joy that arises from our hard-earned earnings. i call that the quiet wisdom of savings, and hope you'll find it a gentle but powerful motivator. i'm manisha thakor >> tom: and finally tonight, if you ever wanted to attend harvard but couldn't afford it or didn't have the grades to get in, you're in luck. harvard's teaming up with m.i.t. to launch ed-x-- offering classes to the masses online and they're free. classes start this fall, while there are tests and homework, you won't get an actual ivy league degree, just a certificate of mastery. >> tom: good night everyone. we'll see you online at nbr.com and back here tomorrow night. "nightly business report" is brought to you by: captioning sponsored by wpbt
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captioned by media access group at wgbh access.wgbh.org >> join us anytime at nbr.com. there, you'll find full episodes of the program, complete show transcripts and all the market stats. also follows us on our facebook page at bizrpt. and on twitter @bizrpt.
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