tv Nightly Business Report PBS November 5, 2009 6:30pm-7:00pm EST
>> paul: the arrests keep ming from anotheredge fund founder to a former moy's analyst-- precutors today charged 14 more people as t biggest hedge fu-related, insider trading case continues to grow >> susie: the he of the powerfulenate banking committewants to replace the alabet soup of bank regulators with brand new one. but at's not even close to what the oba administration wants. >> paul: cisco c.e.ojohn chambers sees theconomic recovery gaininground, and his upbeat outlook lighta fire und wall street, sending the dow up triple digits coming up, ouronversation with john chambers. >> susie: then, e droid is almost here. 's verizon's latest move to inva apple's turf. look at the droid as the sma phone wars heat up
th program is made possible by contributio to your pbs stion from viewers like you. thank you. captioning sponsored by bt >> susie: good eveni, eryone. one of the biggest insider- trading cases in yrs got even bigg today. feral prosecutors filed iminal charges against 14 investment professionals, including a former moody's analyst, an execive at atheros commications and the founder of increment capital. thosfirms had no comment. today's arrests are expansion of the invesgation into galleon group, a mor new york hedge fund prosutors say the alleged ringleader is a foer galleon ployee, and the fraud he help commit netted $20 million in improper profits. the s.e.c.'s enforceme director says the suspectsad access to insi information, and didn't hesitatto use it. >> we expose the apparent ea
with whi these wall street ofessionals, corporate insiders, analysts and lawye disregardethe rules and their dues to clients and shareholders for kkbacks and easy profits. their misconduct teatens to undermine e confidence upon which r capital markets depend. we take that threat serisly. >> susie: so f, five people have pleaded guilty. among th, hedge fund managers in msachusetts and california, alg with the witness at e nter of the case against galln founder raj rajaratnam. >> paul: there's a sit emging over how best to clean up the financialector. re-writing the nion's financial rubook is a top priority of prident obama and democratic lawmake. but with far dferent plans emergingn the house and the senate, getting a bill on e president's desk will be neasy ta. stepnie dhue reports. >> reporter:t took the federal
resee 14 years to use the power itad to rein in predaty mortgage lending. senate bankingommittee chairman chris dodd ys if they didn't use it, they ould lose it. and that's one rson he wants to replace the ahabet soup of bankegulators with a brand new one. >> i'd like to begin tre, otherwise what you gets charter shopping. you create within your finanal institution definition of urself that allows you to pi the regulator, and so u pick the weakest regulator, t one that'soing to let you get away with murder on this stuff, a then y end up with the kind of messes you did. >> reporter: that apoach is at odds with legislatn the house is writing. thhouse bill puts the federal reservin the driver's seat, supervising the rgest financial rms. but dodd thinks that dsn't do enough to change theystem. >> wwant to go back and look at wt went wrong, where were e gaps, and there were huge gaps. one, the... there was no regulation, and two, wre there waregulation, but there were no cs on the beat. >> reporter: dodd does sport a new consumer fancial
protecon agency, which is also being championed by thhouse and the administration. how silly it is that. if you b toys for your children, and they're wrong,ou can call somebody and fix it you n take something off the market, yet somebody aolutely ri you off on a credit card or overdrt fee, you can't call anody and that's got to stop. >> reporter: but the banki industry wants to put a stopo that new consur watchdog, ying it's the wrong approach the banking coittee's raing republican, chard shelby says itcritical to keep consumer protectionith the regulator who ovsees safety and soundness of banks. >> i belie that any consumer protecti should be in the same office under the same ro with a regulator that deals with l oft. >> reporter:here's one broad area of agreement-- lawmaks want tougher, more effecti regulation. but gettg there is the hard part a could take until the end of the year,ut analysts say obably longer. stephanie dhue, ightly business rort," washington.
>> susie: good news tonight r homebuyers and people t of work. esident obama is expected to sign a bill tomorrow that wi expand the homebuyers tax edit seven months, and extend unemployment benits as much as 20eeks. the house passed t $24 billion package today. the senate okad it yesterday. >> paul: a bigger an expected drop in weekly jobless befit clms helped wall street stage a sharp openg rally. buyers were so motivated by a solid mp in third quarter oductivity and higher octobe retail sales. the dow was up80 points by 1:00 p.m. with theasdaq up 46 points the mark went on to close at the day's st level thanks to buyers aaid of missing out on the rally. the dow jones soared03.82 points to 10,005.96. the nasdaqaulted 49.80 to 2,105.32. the s&p 500 jumped 20.13 1,066.63.
inhe bond market, the 10 year note lost 32 to 100-26/32 tting the yield at 3.53%. >> susie: shares of ciscrose most 3% today, on an upbeat foreca for tech spending. the network gear maker expts revenues ithe current quarter to grow as much as 4%,nd c.e.o. john chambe says the recoverys quote "gaining mentum." en i talked with chambers toy, i asked him to explain the trends he's seeingn tech ending. >> the firstuarter of this ye the calendar year we sa it feels like the bottom. second quaer of this calendar- calendar year we
said it looks like a tipping quarr starting up and this quter was kind of the proof point so in the rly phases of the recovery. but our biness parameters in ter of order rates is in the u.s. are head in the right way in a very strong quaer-over-quarter and yr-over-year direction. >> john s this tech spendg broad-based or are things just good at sysco? i think it ll be cisco. >> i ts at this isbroad based. it really speaks to many of th businesses and governmenthave done as much as they can on cutting expenses. they now need to think about how do you growthe top line or how do you deliver your serves, not with jus incremental costs to those so now theyre saying ho do i really, what i want to lo like as i come out of is economic slowdown so those ars of chnology that really tie to productivity,health care, education, broadband buildout ihink will do very well overhe next three to fiveyears. >> i know yo talk to ceo all the time who e your customers. are they sounding more upbeat about economic
conditions o and are they beginning to see that business is getting back to normal? >> well, ba to normal would be too strong a statemen i think will you see most ceos more optimisc the second half of this lendar year than they werthe first half. and mo of them believe that the recovery is starting. ey will probably watch how this nex quarter goes fore they sethe budget for next year. so that goes bk to my comment earlier, whilehe trends are in th right way t is still frale and still uld come off cose. but if i had to bet, acquiring four compani in the last mth alone, we have got our foot off t brea we got iton the gas pedal. we're hing again. wee optimistic about the future but we'reot naive that there a still bumps in the roathat could get us off track. >> you mentied that the u.s. ecomic conditions are good watch. about the rest of t world? >> well,he u.s. economic conditionsnd good but ty are improving in the rht way if i can putalance on that our large customers
just oneuarter ago were creasing their orders with us year over ye by 20%. this quarterhey incread it yeaover-year by 10%. in terms o the rest of t world, i think china, india or in pick up steam and doing a very good job. latin america, vies by country. bazzl doing pretty well. mexico tied the u.s., a little bit more challging. europe was perhapshe biggest surpri. i felthat eure would lag behind the u.s. by two and maybe three quarters. we saw some go trends in northern europe, southern europe still kind of challenged. let me talk to you a little bit about competition. ibm and hewlett-packard used to be scopartners but not any more. ashey try to catch this wave of tech spending, is that going to make things diffict for cisco, are we going to s a clash of the tech tans? >> the exciting thingbout wh cisco is doin is if yolook down to the consumer levele're competing against very good companies like apple. steve jobs actually brought our flip produ on stage the other day and said it is
e first time he has ever done that and said here say very good company, but we're going beat them. that is a good compliment and a shot across the bow you begin to think aut where were going in t data cter. clearly we'll be taking on some vy good companies liket hp and an ibm. yobegin to think about ere we are going in traditional communicatio. you still got alcatel, lucent, norl, et cetera. we will t lack for competitn in everyrea. crosoft collaboration. but we're often viewed as a company, we move into a maet. we usually bome the number one player. we will see how successful we can be in these new markets. and the competition f you haven't got good competitors you probablyren't in th eatest market. >> real quickly,our stock itp today. yoalso announced are you ying back $10 billion of shar. what is the rationali behind tha >> well, if you ally think about where we are go approximatg in the future and webelieve our growth rates can be with the proept caveats 12to 17% ye-over-year ought to be our measurements, our gross margins ar improving wch
means our financia controllers aren very good shape. than y are optimistic about the future of the coany over the next ve to ten yea. if you believe that,ou ought to be bing back your own stock andhat helps your sharehders use the5 billion dollars in ch that we've accumulated and positied ourselves well for this economi turn around. >>ll right, john, thank you so much. enjoyed lking to you. >> uh-huh, susie it is fun as alws, thank you for havinge on your show. >> paul: it's nostar wars, but therare droids involved and the batt is just as tough. scott gurvey reports. >> reporter: wn this verizon wireless store in manhtan closes for the day, employee will not be going ho. they'll spend the xt few hours setting up displays and wille- open at midnig. that's whedroid arrives. >> what the world is that? >> reporter: the motora droid
is a smartphone, a cegory where productsre distinguished by applicaons they offer beyondimple calling. e droid runs google's new android operating system, hee e name. the reason for the he, says s&p anyst todd rosenbluth, is that cusmers with smartphones spend more on hardwarend data services. >> smartphon are growing at a faster pace th traditional handelds or traditional phones ansmartphones are now becoming more than 15%, 20%, % of the customer bas of the u.s. carriers anderizon, in paicular, is really focused on growing that customebase. although nia and research in motion blackberry lead the smartpne segment, verizon has been running commercials targeting appls iphone-- sold exclusively byt&t. the ads have noted tngs the iphone can not do. verizon executive davismall sayshe ads serve a purpose. >> we believe customershould be fully infmed about their purchase decisionsnd a 3g device is only as good as e network it's riding on. , a little bit of fun.
but i thk it also opens up consers eyes to the power of thnetwork and what we have versus some of the other networks that are out the. >> reporter: people who ha tested the droid have en writing generally favoble reviews-- finding it to short of an iphone killer, b a credible competitofor customers o prefer the verizon network,nd google's chief droid erick tsg says more imovements are on the way. >> at google, continue to push the envelope and ke the navition, you will see other new apps going forward >> reporter: in spite ofhe cession, mobile phone use is growing. botherizon and at&t e adding about a million consumera month. scott rvey, "nightly business report," new york. >> susie: some hopef signs for retailers heing into the ucial holiday season. many chain stores today rerted better than excted sales for october. off-price and discount retairs generally fad the best: sales at t. maxx rose by 10%.
but ev some department stores and luxury retailers beat exctations, suggesting consers may be loosening the purse stris. there's still plenty of pessimism about holiy 2009. retail expert britt beem says the day after thangiving will be a crucial test. >> i am predictinghat black friday will be the biggestlack friday in the history america, by fa because that's when consumers knothat the biggest and besteals on big ticket ims. so t question is: will retailers carry forward at big deal strategy on black friy into theext four weeks of december. and they w't. >> susie: beemer is predicng retail sales will down nearly 3% this holiday season slitly worse than last year. he also thinksids will feel the pinch th year as more parents ll back on spending-- something that hasn't en the case in recent years. >>aul: susie, we'll see some
>> pl: while tonight "street critiqueguest is still waiting he's todd harron, founder and c.e.o. of "minyanville." todd, weome back to n.b.r. >> it's great to be here, paul. you've been bear anybod recent visits but we're stilheaded higher, much higher today at's your take on this rrent market? >> well, i am looking at the markethrough a chnical context, paul. and looking at it through that lens we broke the uptrend inoth the s&p and the ndx, the uptnd for
from t march lows. we broke those and he been tring sideways since then. this past pport is future resisten. s&p,075 a nasdaq ndx 1750 should be a resistence leve resistence levels in thearketplace. >> now you bught along a chart so we can graphically see the technical breakdown on the standarand prs 500. what is it tling investor >> they say the end is your friend and ts is o context th which to mease risk. i'm looking at thi once we broke, it becomes resistence. if we get back up through it we areooking at 1120 on the s&p which is a lel i have been eying all year that is the downtrend from the highs in the october 26007. a 50 retracement of the entire decline and that to will serve as resisnce so we have some layered sistence in the s&p and on the nasdaqnd i think that warrants a little caution going into year-end. >> tell us a little bimore about the nasda tech heavy speaking of tech we heard some very upbeat comments on the economy from cisco's
chief executive officer john chambe what do you make of his optimism i >> well, you know, i think fundamental analysiss another metric and it's one metric. and think that warrants respect. but you know, i don't think that the financial crisis is necessarily disappeared. i think it simply chged shape and iis entering into a new socioeconomi realm, if you wi. you know, in that i think warrants caution as not necessarily on a trading basis but just through a broar lens. ihink paul one the great misperceptions in history is that the crh caused the great depression when it reality, the great pression caused the crash or social mood andisk appetites are wt shaped financl markets. and i think that is going to continue to contin for a while for the foreseeable futu. >> it just have 30 seconds left but has crisis rlly changed our habs when it comes to money? >> wl, i think so. and i thk thathis is wee entered into, from an e ofonspicuous consumption into an e of
austerity. and i think snding habits and social mood again are chging. and i thinthat is a oces a plonged process. if you look at what has gone onver the last ten years the market it has been stagnantverall. theris going toe great rally,pretty nauseous decles but i tnk capit presvation will serve consumers in great ste. once we get throhhis there will be fanttic opportunitie we jus have to get through it to go through it. >> thank you. >> and condition gratlations on the lifetime myaward hievement. that i fantastic. >> thank y, my guest is dd harrison, ceo of >> susie: tomorr, our friday market monitor gue is david darst, chi investment rategist at morgan stanley ith barney. >>usie: fannie mae will let troubled homeoers become renters as a new way to avd foreclosur "the deed for lease" progr was lled out today. here's how it work the owner transfs the deed to their property to nnie, and then res the home back for up to a year. the option is avaible to
mortge holders who don't qualify for e administration's an modification programs. >> paul: a.a.r.p.-- e nation's largt and most influential associatn of older americans-- endorsed the health careill in e house of representatives. the lobbying group says e bill improves benefits for senior e american medical associati also threw its support behin the bill today. the doctor group says the plan is consistent with itsoal to expand medical cerage to the un-insur.
>> susie: as we mentiod, vezon wireless' new "droid" phone hits the market tomorr. we've told you what itill mean to the comny, but will consumerlike it? r answers to that, and other tech questions, wee introducing new segment from "the miami herald" tonight called "cache and care" >> hi, bridget carey her and this week veriz companies own a touch-screen smart phone that thecan proudly show offn public. it's the new motorola droid, thfirst rizon phone on google's an drd mobile separating testony system, it's 199.99 after rebate and two ye contract. 16gigabytes memy and a mera with a flash and this
gps navigation system with voice search funion. so i wouldsay map o gas station or navigate to t "miamierald" and it will give you spoken directions. now if su have seen other an oid phones, the interface is pretty much similar u have these three customizeable home seens for icons, wome ets and lots of app, to play with in the an droid sto it slides open to reveal a fl qwerty keyboard but the skisre flat so i found myself typing slow with my nails but it ges you an option to use an on-screen keyboard so you get the best of both worlds. >> it is solid art phone. from the "miami hera" i'm bridget rey. >> susie: that's "ghtly siness report" for thursday, november 5. i'm susie arib. goodnit everyone, and good night to you, paul. >> paul: goodnht, susie. m paul kangas wishing all of you the best ofood ys. "nightlyusiness report" is made possible by: