tv Nightly Business Report PBS January 4, 2010 6:30pm-7:00pm EST
>> i think people argoing to have to feel more mfortable th their job is more stable, the roof over their he is stable, they can take care o their family. susie: the head of the new york stock exchang duncan niederau says investor coidence will come once we have consumer confiden. >> tom: and at theew york stock exange, a show of vestor confidence, for today at least. the bluehips rack up a triple digit gain, wered higher by the nation's factori kicking intoigh gear. you're wching "nightly business report" for monday, january 4. "nightly biness report" is made possible by:
susie: good evening everyon wa street kicked off 2010 with a ray, the dow surged over 155 points, the nasdaq ros39 and the s&p 50jumped nearly 18 >> tom: susie, gd economic news tggered the buying. investorwere encouraged by an beat report from the institu for supply managent, showing facty orders ramping up, jo ramping up, and prices starting to head up asell. >>usie: comforting comments from fed chiefernanke yesterday also helped, implyg there's no hurry to ise interest rat, at least for no ubs strategist mike ry expects stocks to coinue to move high from here. >> moving in antipation of what ty believe will be a moderate but staechbable onomic recovery. they'rmoving in anticition they're moving in anticipati
of an earnings rovery that shouldave earnings returning towards trend-- not immeately, but slowlyeturning towards trend. d also an environment that remains fairly benigfrom an inflatiostandpoint. >>usie: the head of the new york stock exchange to me he's also optistic about the stock market in 2010. i talked to duncan nierauer right aftethe opening bell rangere at the big board and i asked him for his rket forecast. >> i tnk we're in such a better place than we were a year ago that it's hard not toe optimistic. so i'm very constrtive about ere the market should go om here. we looat ourpo pipeli, it pretty solid. i thinyou have corporate earnings continuing torow and i ink you have a lot of the uncertaintyhat was really prevailing at this time last year, is out of the way. so i'm pretty optimtic. >> but duncan i hav been talking about a loof market strategis, even traders right here on the floor. and they're talking abou a cotruction for 2010. i happen to not agree. it's easy to predict the constructionecause we're , the dow's up 60% since march, s&p is up more than
that, nasdaq isp 80% since march. thendices are up a lot so i think is right texpect a correcti the the market feels fairly valued to me. it doesn'teel overvued. i think people will be much more focus on the economy because i think corporate earnings a going to delivered goods this yr. >> you get askedhis a lot. is it safe put my money in the stock marke everybody is still aaid abou putting our money in stocks. whatill it take to restore investor confidence? >> i thinkt's about how they feeas a consumer first. so i'm going tbe watchin the consumer confidence metrics and w the economic recovery is going 010. because i think that is what people will focus their atntion on. so i tnk people are going to have to feel more comfortable that their job is moretable, the roof over theirheadis stabl th can take care ofheir family and then i ink it is a necessary -that is a necessary stepto take before we ar going to have people feel tter and come back to e equity markets. >> let's talk a little bit about financia regulatory refo. the american public is looking to congress to pass
new rules that hopefly will preven the financl system fm breaking dowin the future. what dow like the most. what don't you like? >> i think aot of what you are goingo see from the sec is directionally crect its going to be a lot around mart structure. i don'know if it is necearily going to be in the category of eventing a crisis. i think the besthing that has been tked about is on the occ derivative,more central cleari, more transparency. the thing i'm most worried about the on the rulatory side is talkof a transaction tax which i think uld be have negative implications for vumes and the cost of trading for retail investors. >> and this transaction tax would ben trades of stocks and options d futes. isthat a tax really jus going to be pass on to investors? >> tt's my view. i'm tually writing a piece right now that i'm going to be distributg in the next couple of weeks. and amonthe points iake isne of the points you justade, which is it's absolutely a pass-throh tax. this idea, the way it's be packag, to sell it to main
stet that it is a tax on wall street it is not aax on wall street its a tax on main street it will ow down to the retail investor. it wl flow down to the mutual fund holder it is not going to bpaid for by wall street. >> dunca how do you rate president -- rate presint oa's performance inerms of his positionn things like banks, financl refor, ecutive compensation? >> i would sum it this way, 've been very pleased withhe words thate and the treasury secretary have spoken. weave given them kudos for the measureshey -- appear to be ready to take. think now in 010 the proof is in the pudding. are they actually gng to cay out what they say they are going too and follow through? >> what do you tnk the president needs do in 2010 that will store confidence in american businesses and the marke? >> what the esident needs to do is what he started to do a few weeks ago whh is call the banks in together and say cries ace verte you guys ar well on the road to cover.
your pfitability shows that. plea start leing to sml and medium sized institutions and fro our vantage point, the credit market itill predominantly osed to all and mediu siz enrprises and we think it's critical that he apply presre in the right places to get that credit flowing eely again. >> you mentioned elier out ipo there a lot of buzz about a flurry of ipoussnd the nyseand nasdaare lobbying hard to get those listings. how much oit will come your w. >> we operate in aery compitive environment. for the listings. we w more than our fair share. we have d i'mery confident will ctinue to do so. the pipeline we've got coming in the next few months dramatically is tilted ou way. >> this first trading week >> susiethis first trading week of the year, we're talkg to the leadersf the nation's biexchanges: on wednesday cra donohue c.e.o. othe c.m.e. group in icago and on thursday, rober eifeld c.e.o. of the nasdaq omx.
>> tom: here areome of tonight's her big stories. they put ay the hammers and the nails at building sites november. a dropff in both homebuilding and commeral projects led to a 0.6% drop in construction spending. that'she 7th straight month on the downside. swiss dr maker novartis is eyei complete control of eye care company alcon. today, nartis announcing plans to take over alcon. it's ping nestle nearly $39 billion for the 77% stake alcon that nestle owns. me good some bad in what ban of america's new c.e.obrian moynihan ss for the future. forecaers at the bank predict the ecomy will grow more than 3% this year. but that slow pace also ans the unemployment ratwill stay high. and wah out, above! the world's tallt skyscraper is now open in dubai. at 2,717 feet, the burj alifa is named forhe leader of neighboring u dhabi which pitchein $10-billion to bail dubai out of its financi
crisis. an elution of thinking for the fed chairman. that's how polital economist togallagher today aracterized this weekend's remarks we told yoabout from fed chrman ben bernanke. bernanke sailow interest rates were not to ble for the housing crisis, a lackf regulation was stephanie dhue spoke with gallagher about the message the d chairman delived. >> reporter: bernanke sa sometimes the feshould use interest rate pocy to address bubbles, do u see the fed making a move to addre emerging marketsr commodities? that is a change on his par monetary shouldn't adjust at all, now i thinkentral, should >> the monetary policy shouldn't adjust for bubbles at aluntil it is time to pick up the pieces. now i ink thecentral banking communy is moving toward a view that the central bank shou be worried about the velopment of the asset bubbles.
imarily know that regulation is th preferred approach but there are some circumstances in whi motary policy can ay a role. that does reflect a bi of an evolution. thinking along wh the central banking community during the course ofhis bubble, this boom-bu cycle. so ihink that that has en a shift on his part. >> reporter: bernanke says tt low interest res weren't the reon for the housing bubble - do you see that as defense of the eenspan fed or a defense of the current fed? >> durg the time period it was really a defense of the d and his own role iit, i think. and i think thate's on prty good grounds in argug that the monetary policy was not being reason for the using bule. he defende the fed's record pointingo a defensie calculion on wherethe fed funds rate should be it wasn't very far from that and he was responding to a lot of criticis thhe
fed had unusually low-interest rates for a ng period of time. and that's what fed the housing bule. instead he presented some calculations thasuggested th it was the development of alternative mortges thatroduced very lo inial monthly payment and that thatystems what le to the using bubble as both the borrower an lender believed th home prices would connue to rise and they wod never have to pay the higher mogage payments that would be due late on. >> now bernanke faced aot of cricism as he has gone before the senateto keep s job. do you thi he'll be an effective at have kate for reform? >> well, i don't think th views of theed chairman are in the especially important part of the ouome of this debate. there ia lot of interest groups that are affected by is. and they are fighting ver hard on is. d i think it's hard for any fed airman to really have aaterial impact on thoutcome of that debate. and bottom line for
investorlooking at rnanke talking aboutasset bubbles and interest rates, y change here? >> no, i thought especially if you take bernanke's and cohen's spches together, there wasn't lot of guidancen where interest rates are headed the near-term. but i think that you he to assume, you have t read ose speeches as sugsting not anything is -- nothing is going to haen any time soon. >> andot any time soon, not rst quarter, not cond quarter. >> i thi that the fed is likely to ise interest rates in the third quarter. and i thingiven how far away that is, stil six months away athe earliest, it's hard be ry specific on that i think that probably the important acon for the fincial markets, en more tn the rate hike wille when they change the language, the guidance they are ging the rkets on interest rates. right now they are promising to keep interest rates more or less at zero for an extended period of time. when that gets dropped it is probab when markets srt to react and ris ago se will probly perform more
poorly. en that happens. and i suspect that is a second quarter event, a again, sonot anything y time soon. >> tom gallagher, >> reporter: tom gallagh, thanks so muchor joining us. >> tomstill ahead, can google do for mobile phones at it's done foreb searches and vertising? the tech titan gets rey to ft the curtain on its own smart phone. >> sus: tom, it's freezing here in w york and around the cotry i know that's something you're looking at your market
focutonight. >> that cold snap pushin around energy, en orange ice prices, ps we will talk about bettin ona and some new highs today for the first the year for some big ch names in our market focus. t that arctic cold ai grippi >> tom: tharctic cold air ipping much of the country i sending energy pces up to pricesot seen since october. energy also getting a bot from today's beer than expected nufacturing numbers. crude oijumped to over $80 a barrel. inddition to the cold weather, a weaker dollar may ve helped. a breaout over $83 for oil would ke it to post-recession highs. natural gas so catching fire th the cold snap. anwith the freezing temps reaching down into floda, orge juice futures were jumping,ut ended with only about halfhe gains seen eaier in the day. watch those oj price as futures haveoubled in the past year. speaking of that sprise in manufacturg activity, it's eling some hope that the job picture may finally see me improvement.
the decemb jobs reports are due t friday and the job gains are pected to be seen in mporary work, as has been th case over the pa four straight months. and temp hiring stks are moving. manpower, robertalf international, kellyervices and spherion are hitting mul- week highs ahe of friday's jobsata. early on, 2010 is lookg a lot like 200 with last year's leaders pushing high. information technolo was the best performing ctor throughout 200and the big guys continue to hit pricesot seen in about a couple years. so longer term charts to look at here. sco stock is breaking out on the upside, runng after $25 a shar a price last seen in the summer of 2008. volume was strger than normal today's move higher. microsoft continues to fin buyers ove$30 a share.
today's buying tes microsoft a level shareholders haven' seen in two year the rally in the stocks is helpful for many gwth fund mual investors as these stocks nd to be popular with those kinds of fds. intel stk also getting in the ac jumping to its highest price since october. brerage firm baird upgraded it, callinintel a value and defensive idea. and coinuing to echo the idea that businesses will be ying new couters in 2010. the action in ese three stocks comes just a feways before the beginninof t big consumer electrics show, which spotlights tectrends in the mang. speaking of ich, watch apple ock as the wall street journ tonight quot sources as saying the compy will unveil a long awaited tablet computer at t electronics convention. it meares 10 to 11 inches and would ship out in marc at over $214 share, apple stk is at all-time highs. with the market breaki out to post-recsion highs, some market leading secrs have seen
mixed performae. thanks to that int move, the semiconductor exchange tded fund is leading the way fo technology, above the rae in december. but the economally sensitive transportation exchange aded fund remains below newighs. perhaps held in checby the oil price pop. d financial stocks have turn up butemain below their october highs. betting on gaming in the n year as a couple of gambng stocks see big buyg volume. las vegas sands mps more than ni percent on twice its average daily volume. ubs thinks thetock should see 0 a share in the next year. it also raisedts rating on wynnesorts and the stock responde up on bigger than usual volume. the ubs price target heris $76. the analyst likes bothasinos based not what happens in vegas buwhat could happen in macau, china. while the vegas revees are predicd to be flat, ubs thinks gaming in macau is trackg better than expected. and that's our mket focus.
>> susie: coulgoogle have i- phone envy the tech blogs are aing that questiononight as we wait for an announcement tomorrowrom the internetiant. google is expected to unwrapts own entry intohe smartphone maet. but as usualexactly what the company is up to is less tn clear. scott gurvey reports. >> reporter: the google one is one of the wst kept secrets in an industry that doesn't kee secrets very wel since the web sitengadget got its nds on what google is calling the nexus one. editor-in-ief joshua topolsky says the response has been extraordinary. >> the reaction about is phone
has been kind of insane. it's phenomenal. and since we put up our nds-on post there's been a ormous amount of trfic with people coming to the siteo see the pictures and hear what whad to say about the phone. >> reporter: theig question ogle will face at tomorrow's unveiling is, "why google's andid operating syem already appears on scores of phones incling the motorola oid. recentlyntroduced by verizon wireless. the nexus phone does n appear toake any major improvements on the droid. angene munster, technology analyst at piper jaffraysays google's unkwn motives are alming the industry. >> if they putut a phone that shows all the go things that andrd can do i think their rtners well be happy to see that, they come out and actuly try to grab market share d aggressively price this i tnk it's going to create quite a high lel of friction between allhe players in thearket. reporter: rumors about google marketing plans have industry blogs on fire. price points range from 00 to free. t-mobile mayffer the phone packaged with a o year contractor $200.
sales of conventional mobi phones have been dropping sie the economy taed. but apple's iphone hasemained a strong seller throughouthe downturn. and michael gikas of conmer reports, says interest in smt phones is jumping as the enomy covers. >> sales of smartphones ep going up andhe number one reas is people want these extra features. and they're gointo pay more for em too. nojust for the phones but they're going to be pang higher monthly premiumfor data pls and text messaging and all sorts of otherhings. >> reporr: the google phone is said to work only on gsm networks. gsm is found in many countes overas but in the us. the nexus one willnly work on the mobile system. sct gurvey, new york. >> tomorrow we'll get a look at the housing sector when the national sector of realtors release pending ho sales for november.
factory orders for novemr will be releaseas well. also we' see how u.s. aumakers fared in december and hear from some carealers for their ke on what will drive the auto industry this yr. >> susie: while we won't kno about general mors us sales untitomorrow its sales in china are revving up. the automaker ys last year it ld a record 1.8 vehicles there. that's up 67%. the top selling bran in china were bck and chevrolet. heing things: a government program to defray the st of buying fueefficient cars and trucks. some of those progms are now being ased out, but gm thinks its sales in china aretill on trk to keep growing down the road. >> tom: until weake a profit, i won't ke a paycheck, that's what the new head of ctinental airlines td employees today, jeff smisek took t top job friday. after larry kener left to join private equity firm. smisek says e tone for busine is set at the top, so if eryone wants better pay and benefits, the businesseeds to make money. that's not happening now. continental is deein the red,
economy'prospects. 20 won't be a great year that wod be inappropriate given that unemployment will liky remain in the dole-digits through much of the ar but it will feel pretty gooafter what we havbeen through. jogrowth is set to resume in the next few mths, and will be strongnough to meaningfully bring down unemployment year's end. this optimism is based on th belief that the deral reserve will not raise interest rate anytime soon, and that the oma administration a congress will pride more temporary help to unemployedorkers and hard pressed state and local governments. a stronger glol economy and softer u.s. dollar wl also fuel a reval in export growth. selling what we oduce to the rest of the world wille the principasource of long term growth, anthis growth driver will kick in next year. while the economy wi make its way ck next year, it won't come roaring back. businesses a no longer panied, but they remain cautious and will below to hire and iest. a lack of edit is weighing
avily on those small businesses svital to the job chine. the ongoing foclosure crisis also thrtens to push house prices even lower. the wrongs that led to t fincial crisis and great cession are being slowly righted. with a bit morhelp from policymakers, the cuent recovery will evolve into a lf sustaining expansion in 20. this imark zandi. >> tom: sot's a new year, and as youan seen, we have some nefeatures at nightly business report, t me show you around our new home base. 's called a "virtual set" and chances are you've seethem bere, this one was created by our graphic artists and is controlled by a systemf computers. if y were here in the studio with me, you'd see i'm actuay standing on a big green backdr, the set and other elements are added in ou control room, movingo this type of electric set up lets us give yocritical analysis of news stories, stock maet information and data, in new ways.
it helps us make infortion visual, interesting and ea to see at a glance. and it helps you conne with our conten in a clear and ncise way. so while there may be fewe stock quotes, the will be more anysis. >> that's it, beautil. >> beaiful and clearly the presentation has changed, the faces have changedut some things will ver change here at nbr. >> you look reallyood against that genback ground, yeah, aryou right. the good stuffnd the important stufis still here. same machine that weave had in the past 30 years. we want toducate and empower you, our viewers,o thatou can make better financial decions. soeep watching. and it's great to start out on a day with th dow hittinnew 15 month highs, how about th. >> we'll call the tom hudson effect. >> yeah,ight, okay, youl be about the only o that calls it that, ybe you and my mom. >> tom: that'snightly business report" for monday, januy 4. i'm tom huds. goodnight everne and goodnight you too susie. >> sus: good night, tom. i'm susie gharib