tv Nightly Business Report PBS March 19, 2010 7:00pm-7:30pm EDT
captioning sponsored by wpbt >> we are going to get this done. we are going to make history. we are going to fix health care in america with your help. >> tom: with just two days to go before an historic congressional vote on health care reform. president obama pulls out all the stops. >> suzanne: but congressional republicans insist, this is not a bill the american people want. a look at what's in the final legislation, as it heads toward a vote. you're watching "nightly business report" for friday, march 19. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program was made possible by contributions to your pbs station from viewers like you. thank you. >> tom: good evening, everyone. susie gharib is off tonight. my colleague suzanne pratt joins me. less than 48 hours to go until a vote in washington on historic health care legislation. the showdown is set for sunday on the house floor. >> suzanne: tom, democratic leaders still don't have the 216 votes needed to pass the bill. and, today both sides of the debate worked to round up votes. jeff yastine has a breakdown of
>> reporter: the health care bill expands coverage to 32 >> reporter: if the bill does pass congress, many of the provisions won't kick in until 2014. at that point, americans will be required to buy insurance or pay an annual penalty. >> i don't believe we should give government or the insurance companies in america more control over health care. i think it's time to give you, the american people, more control over your health. equity putting the health care industry on notice. he intends to do that by climbing up the corporate food
chain. >> these responsible corporate officials are ones that should be to do so, we want them out of that company. >> in a letter to congress, the f.d.a. made it clear it will also hold high-level executives accountable for corporate health care crimes. >> if you are the executive in charge, you are responsible. i think the question is whether the captain should then be executed for a mistake made in the boiler room. >> reporter: douglass and other health lawyers worry the government will now be going after what he calls corporate bystanders. or worse, executives who tried to fix problems, but are made to pay for the crimes of someone far down the corporate ladder. >> it is trying to promote
compliance. it is trying to encourage compliance. but it won't achieve that goal if there is nothing you can do to protect yourself from the risk of prosecution. >> reporter: the h.h.s. inspector general's office has the power to kick executives out of the medicare and medicaid program, effectively ending their career in health care. it's already done it: three top executives at purdue frederick, which illegally marketed the painkiller oxycontin are now appealing their 12-year exclusion calling it unfair because they were not directly involved in the crime. morris suggests more corporate officials may be joining them. >> we have been talking to some companies, even as we speak, about executives within their current power structure who we would like to know what responsibility they had when the misconduct took place, what opportunities did they have to stop the problem and why they didn't affirmatively step in and prevent the abuse of our program. >> reporter: morris says, if he is not satisfied with the answers he gets, he'll try to
have the executives involved fired. the message is clear: drug makers and health care companies caught in a fraud will no longer be able to write a big check to make problems go away. top executives will also lose their jobs and lawyers say, the may face prosecution as well. darren gersh, "nightly business report," washington. >> reporter: the health care bill expands coverage to 32 million uninsured americans. it also prevents insurers from denying coverage to people with a pre-existing medical condition. and it cuts the deficit by $138 billion over the next decade. speaking at george mason university today, president obama lobbied hard for the legislation. >> i don't believe we should give government or the insurance companies in america more control over health care. i think it's time to give you, the american people, more control over your health.
>> reporter: if the bill does pass congress, many of the provisions won't kick in until 2014. at that point, americans will be required to buy insurance or pay an annual penalty. families making less than $88,000 would be eligible for government assistance. businesses with more than 50 employees that don't offer affordable coverage will be fined. to pay for the $940 billion bill, congress plans to increase the medicare payroll tax on wealthy americans. high-cost employer-sponsored plans will be taxed as well, but at a lower rate than in the original senate bill. even with the changes, house republican leader john bayner says the plan is too costly. >> the american people do not want any part of this, and if anyone thinks the american people are going to forget this vote, just watch. >> tom: here are the stories in tonight's n.b.r. newswheel: light profit taking on wall street managed to snap the blue chip's eight-session winning streak.
the dow fell 37 points. the nasdaq dropped 16 and the s&p 500 lost nearly six points. the move lower came on lighter than normal volume. we'll look at the weekly performance in market focus. changes are already in the works for the senate's financial reform bill: banking chairman chris dodd is dropping wording that would let the federal reserve lend directly to financial firms in emergency situations. f.d.i.c. chair sheila bair called that wording quite broad, and said it allows for a backdoor bailout. boeing shares started the day higher but ended with a small loss even as the aerospace giant says it will boost production of its 777 and 747 aircraft earlier than planned thanks to heavy demand.
>> suzanne: still ahead on the program, with stocks near their post-financial crisis highs, we look at whether small investors are stepping back into the market. >> suzanne: easy come, easy go for the dow winning streak. what happened? what's the culprit, do you think. >> tom: light volume as we mentioned. light profit taking. yohad a lot of options expirg. it is the third friday of the third month of the year. and face tit's a friday. folks want to take some profits, maybe go out to dinner tonight. let's take a look at the market focus this evening.
expirg this was a week with all three major indices seeing new highs since the near collapse back in the fall of 2008. it was the third weekly advance for the dow. the industrial put in the best percentage performance among the three, up 1.1%. tech stocks saw the smallest of the gains, up just three-tenths of a percent with most of the gains disappearing with today's selling. the s&p 500 was up nine-tenths of a percent. telecom services put in the best weekly performance. energy stocks were down the most. from a sector perspective, those linked to the global economy and the dollar dipped today as india's central bank raised interest rates and the dollar rallied. this basic material exchange traded fund saw some profit taking, after hitting a new high this week. gold miners dropped one and a half percent as a group. gold dropped almost $22, about 2%. and the energy select e.t.f.
slid as the stronger dollar also knocked oil prices back by a buck and a half. back in late february, palm warned that its fiscal third quarter wasn't looking good. with the results in, the c.e.o. has called them deeply disappointing. shareholders have to be disappointed. the stock was the most active on the nasdaq, losing almost a third of its value. the stock has dropped by 60% just since the end of january. one analyst price target was lowered to zero, calling the palm stock worthless. other handset makersmay also have gotten caught up in the market's profit taking. motorola slid 2%. nokia was off one and a half. research in motion slid just over one. volume was a tad lighter then usual for this trio. we mentioned boeing's bullish news earlier, that it was increasing production of a couple of jetliners earlier than expected. boeing's suppliers saw buyers. the biggest by market cap of these four is rockwell collins. c.o.l. shares did three times average volume, hitting a new 52 week high.
goodrich is less than $1 away from a new high thanks to today's rally. parts-maker spirit aerosystems was carved out of boeing in 2005. it jumped about 4% on the news from its former parent company. the small-cap ducommun makes components for boeing. it saw twice normal volume on today's 2% move higher. while health care will remain topic number one on washington and main street, wall street is buying the health insurers. aetna stock hit a new high as the company said its first quarter will be better than current analyst estimates. the company originally planned on a face to face meeting with analysts, but instead held a no- questions asked conference call due to what it called, quote, "the current political environment." that environment, of course, is the final countdown to a congressional vote on health care reform, as we reported earlier. managed care firms stand to gain lots of new customers if approved. united health group, wellpoint and cigna saw buyers ahead of the scheduled vote. while american financial stocks
have seen some of the most impressive gains of this bull market, european banking stocks have not. lloyds banking group did see a nice rally today, jumping 9% on heavy volume. it pledges to return to a profit this year. you can see what a ride the past 12 months have been as banking troubles have persisted. last night, we mentioned solar and that's tonight's market focus.
>> tom: from australia to hong kong, canada to south korea, gloabl stock markets are just off post-recession highs. that's the environment for tonight's market monitor. he's gary motyl, chief investment officer at templeton global equity. gary, welcome back to "nightly business report". nice to have you. >> thank you, tom. pleasure to be here. >> tom: you look for value across the globe. where in the world are you finding it these days with this bull market 12-plus months on? >> interest will, we find value in virtually every country and every market. the key for us, i think, is to drill down the valuations, determine which socks are undervalued, which have the best prospects. while you have had valuation pressure over the last 12 months we're still finding value in literally every industry and sector across the world. >> tom: across the glork knows no boundarys or sectors at all? >> absolutely. we will have an airline stock one week, a financial stock the next week, and business services following that. >> tom: we have new stock picks
as well. are you find anything areas flashing yellow or red that may be overvalued or getting there? >> we're really not finding overvaluation to any great degree, although i would say in the move in the emerging markets the last 12 months has taken some of that off the table. >> tom: we've seen china trying to limit growth, raise interest rates. india today, central bank raised interest rates. does that tell you those growth rates may top off? >> i think those countries are being quite astute here. i think they made some errors back in the 90s, and they really don't want to repeat those mistakes. so when you look at some of the moves by the governments are i think you have to give them credit. >> tom: are those areas that you find attractive for equitys? >> oh, they are. we have a fair exposure to both chinese and indian stocks. >> tom: what's your take on the global economic rebound as you see it from your position? >> well, really, from our perspective, the recovery has gained strength. if you look at the emerging markets, china, india, et cetera doing quite well. while the recovery in the united
states and europe is a bit tepid i think in total, things are back on track. you can look at things like company surveys in the united states, trucking, chemicals. you can look at the level of consumer spending which is now, in nominal terms, above the rate of 2008. overseas employment has rebounded in places like australia, japan, and china, as well as australia. >> tom: you mentioned europe. the european economy has laged the global economy. is that an area where you're still light or are you looking to put money to work thinking that it may bounce back? >> we think the recent pullback in europe does give one an opportunity. we think some of the concerns there are a bit overdone, and when looking at it from a bottom-up perspective, you've got a couple of stocks there that look quite attractive. >> tom: let's attack a bottom-up look at your last performance. here was july last time you came on board. a couple of picks were taiwan semiconductor, spanish telecom.
those just some mild gains, we'll call them, single digits. the big winner of the three, that trade in the u.s. that you mentioned back in july, no vart there, almost a 30% return. you still like any of these three? >> novartis we would not put new money into that stock. >> tom: your picks include british petroleum. shares of p.b. have been moving, along with oil. is this a global republican economic demand pick? >> this is a great total return stock, in our opinion. you have a multiple of nine times earning, dividend yield in excess of 6%, and globally diverseified. i think the recent deal with devon is extremely interesting. here is a country being very opportunistic. a strong balance sheet, good management team, and they are taking this opportunity it buy some offshore assets, brazil, azerbaijan, the gulf of mexico. they're setting themselves up for the next five to 10 years.
an excellent return in our opinion. >> tom: looking to increase reserves. your last pick is sny. how does the drug pipeline look? when talking about a pharmaceutical company, it's all about the pipeline? >> one of the reasons valuations are depressed is people are concerned with patent issues. while that will be a drag for the next two years, there is good opportunity beyond that. sunapee has positioned themselves to be a primary player in the diabetes treatment market. that's going to be an area which is going to see huge demand growth in the next 5-10 years. >> tom: diabetes is its biggest drug by revenues. any disclosures, positions in any of these stocks? >> none permanently but i hold them through the various templeton funds i own. >> tom: gary, we appreciate it. tonight's market monitor gary motyl chief investment officer at templeton global equity. >> suzanne: here's what we're watching for next week: our friday market monitor guest is mark leibovit, chief market
strategist at vrtrader.com. we'll get updates on the housing market with february reports on existing and new home sales. monday, investing in reits-- real estate investment trusts-- as we kick off "searching for yield." it's a weeklong series to help you get the most out of your investments. if you're flying british airways this weekend, you'll definitely want to call ahead. at midnight tonight, the airline's cabin crews will start a three-day strike. last-ditch talks between the union and the airline broke down with the main sticking points including pay freezes and working conditions. british airways expects to operate around 65% of its scheduled flights over the weekend. the union has another strike planned for later this month. >> tom: activist investor carl icahn wants to be a movie man. he launched a hostile bid today for lions gate entertainment. that's the hollywood studio behind the popular t.v. series "mad men" and the oscar- nominated film "precious." icahn already owns 19% of the studio and is offering $6 a share for the rest, which is three cents below tonight's closing price.
will small investors regain their appetite? erika miller went to one new york eatery to find out. >> reporter: in the heart of midtown manattan, you'll find the i.n.g. direct cafe-- a unique coffee shop run by the financial giant. dan greenshields is head of the company's online brokerage division and talks to ordinary investors all day long. >> i think the overall message is if you watch the day to day headlines, it's pretty gloom. because economic indicators by themselves are lagging. and so when you go to the grass roots, the main street investor. they're actually small businesses, individual investors, they're making investments. >> reporter: that's exactly what we heard from customers at the cafe. >> i am cautiously optimistic. >> reporter: do you think you'll be investing more into stocks this year? >> yes, i would say, yes. >> reporter: how would you describe your attitude toward stock market investing? >> i just figure, just hold on to it, and eventually they'll start going up. >> reporter: although the people we talked to are still investing
in stocks, much of america has been scared away. investors have yanked $9.4 billion out of u.s. stock mutual funds in the past 12 months. vincent deluard is a stock market strategist at trim tabs-- a firm that tracks those mutual fund flows. he is not surprised that individual investors have missed out on the explosive, year-long rally. >> people will always invest after stocks have run up. and they will always go to the sector that is the hottest at the moment. technology in the '90s. real estate stocks. banks in 2005-2006. so, the fact that retail investors have not bought anything yet, i guess that is a pretty good sign. >> reporter: in other words, he thinks retail investors are a potential source of support for the market. but jefferies strategist craig peckham does not see individual investors rushing back in for a while. >> frankly, it does boil down to what's happening on a household basis, with respect to employment and disposable income. it's difficult to put in more money into stocks.
if you are concerned about your job, and you are concerned about your own personal balance sheet. >> reporter: some analysts think it could take years of positive market gains before small investors regain their confidence in stocks. for now, many people would rather risk missing out on gains and hold on to the money they still have left. erika miller, "nightly business report," new york. >> suzanne: and finally, it'll be a beautiful day in the neighborhood tomorrow as pittsburgh celebrae classic p.b.s. kids series-- "mister rogers neighborhood." the goal of "won't you be my neighbor day" is to boost volunteerism and get people to meet their neighbors. rogers' production company is working with the city's united way chapter to promote tomorrow's event, which would have been rogers' 82nd birthday. tom, you can also watch classic episodes of mister rogers' neighborhood on the web at pbskids.org. i bet your kids are the perfect age for mr. rogers. >> tom: absolutely, you got it.
we'll all wear sweaters tomorrow and meet the neighbors. >> suzanne: it's a great look. >> suzanne: that's "nightly business report" for friday, march 19. we want to remind you this is the time of year your public television station seeks your support. >> tom: support that makes programs like "nightly business report" possible. >> suzanne: thanks for joining us and don't forget to support your public television station. i'm suzanne pratt. goodnight everyone and have a great weekend. you too, tom >> tom: goodnight suzanne. i'm tom hudson. we'll see all of you again next week. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt