tv Nightly Business Report PBS December 16, 2013 7:00pm-7:31pm PST
this is "nightly business report" with tyler matheson and susan. brought to you by. >> the street.com. stock market news and in-depth analysis and our service provides objective, independent ratings dale owe over 4300 stocks. learn more at the street.com/mbr. markets rally. the economy showing signs of strength and that put investors in a buying mood one day before the start of a critical fed meeting and a budget vote in washington. what a difference a year makes. growth in the economy. agreement in washington, but are investors really out of the woods? and losing focus, google buys another robotics company. so why is the king of search diving head first into an industry that seems so far
removed from what it does best? all that and more tonight on "nightly business report" for monday, december 16th. good evening, everyone. investors kicked off the new week on wall street in a buying mood. stocks rose sharply thanks to a string of positive economic reports. industrial production came in stronger than expected. worker productivity during the summer quarter troez a four-year high and manufacturing in new york state unexpectedly rose this month. all of this comes just a day ahead of the federal reserve's final and crucial approximately see meeting of the year. policymakers could decide it could wind down the fed's stimulus measures because economic data like today's batch continue to improve. chairman bernanke will announce the fed's decision on wednesday. now ahead of all of that, here's a look at the market's closing numbers today. the dow jumped almost 130 points. all, but three of the 30 dow components were in the green today. the nasdaq rose 28 and the s&p added 11 points breaking a four-day losinging streak.
another reason for today's rally beyond those improving economic fundamentals could be the likelihood that tomorrow the senate would follow the house and pass a two-year budget agreement. what a change that would signal from holiday time just a year ago. that was when the so-called fiscal cliff was on everybody's lips. remember that one? washington was squabbling over the prospect of big automatic budget cuts and the simultaneous exploration of the so-called bush-era tax cut, a double bham they many thought would send the economy into recession. john harwood joins us now from washington. let's start, john, by talking about the vote tomorrow in the senate. will it pass, by what margin, could there be any snags? >> i do think it will pass, probably with just barely over the 60 votes needed to end debate. it's not the final passage vote, that could be different from the vote tomorrow. the vote tomorrow could be the one to stop the potential fill bust tore invoke what they call cloture on the debate.
nearly all of the democrats and the small slug of republicans are going to make up that majority. the vote will probably happen between 10:30 and 11:00 and that will set the stage for a vote on the final passage, probably late on wednesday. >> so, john, what are the chances for compromise on other issues that are facing washington lawmakers and could we still see a big debt ceiling fight down the road? >> probably not too great are the chances that this is going to lead to other compromises. really what you had were democrats and republicans agreeing not to do anything big, produce the most modest agreement possible and then see if they can get the votes for it. they did get the votes overwhelmingly in the house and there's been nervousness in the senate. i don't think this will necessarily make them feel like they can tackle big challenges and you do have the issue of immigration and both parties political reasons to move forward on that and we'll see whether they can get that done. >> john, just stay with us because we'll continue this conversation and we want you to join our next guest as we talk
more about how and how much the political and economic climates have changed since this time a year ago, and whether the positive momentum can continue into 2014. and to do that we welcome josh feinman, he's chief economist at deutsch asset and wealth management. >> so you heard what john was just saying. how much better off are we and is the economy doing better and will it continue into the new year? >> i think we're doing quite a bit better and the contrast is pretty substantial, particularly in washington. as you said earlier, we were heading into 2013 with a big fiscal headwind. substantially weakened growth this year, heading into 2014 is very different. the fiscal drag from washington will be significantly attenuated and when you combine that with diminishing headwins in the private sector, a lot of things have been holding us back in this recovery and seem to be diminish asking that should pave the way for stronger growth ahead. >> josh seems to be suggesting that the economy is healing just
a bit. is the political climate in washington healing or is it a bit of a mirage? >> only a little bit, tyler. i think the biggest difference between last year and this year is that the economy and the labor market are recovering more substantially than they were then. remember, the only reason they got a deal to resolve the fiscal cliff to raise taxes on people with incomes over $400,000 was because you had a sort of damocles hanging over the congress in the form of tax cuts that were going to expire for everyone, and that's what forced the limited action they did there. congress isn't doing all that much right now, but you can't deny the fact that by simply getting out of the way, by not putting more drag on the economy either through crisis or through fiscal drag, washington is at least letting the economy heal itself and not interfering. >> josh, this whole thing about having the fiscal problems somewhat stabilize now raises
the question of what happens when the federal reserve begins this taper process. could that interrupt this healing process? >> i don't think so. >> i just want to echo, i think that's exactly rid about washington. just him getting out of the way and stop being a drag on the economy is a major plus. less of a negative is a positive. i think if the economy continues to improve, i do think they're going to be slowly stepping back from the bond-buying purchases and i would emphasize the word slely and i think they'll be re-emphasizing while they scale back asset purchases and i think they'll be re-emphasizing. this is not a tightening of monetary policy. they'll keep rates short term for a long time. they're not going do anything to get in the way of the recovery. on the contrary, they'll want to do everything they can to encourage the recovery so they can get back to the dual mandate to get employment and inflation back up to levels that are consistent with their target. >> john, let's talk a little bit about the next chairman of the federal reserve.
presumably that will be janet yellin. there will be a vote after the first of the year, you tell me. is that likely to be an acrimonyious vote and are there any hitches in the process with respect to ms. yellin or the vice chair which we think might be mr. fisher. >> nothing, tyler, is without acrimoniy in washington these day, but i do think it will be relatively small with janet yellin. she is a popular choice. i think you will see her confirmed for the chairmanship of the federal reserve, probably the end of this week. i was told the vote might come on saturday. i think they would like to get that done before the end of the year as part of a feel good push at end to get the thing accomplished and because of what we know about janet yellin and her tenure at the fed as vice chair, i think she can can continue in the vein of ben bernanke in the way the market would like.
>> let me throw the last ye to you, it sounds like the stars are aligned to have a good 20 train. i know you're an economist, but what do you think will happen in the stock market? >> think the economic backdrop is improving and i think we have the best chance since the first cracks began to appear in the foundation in 2007. our best chance of shifting into higher gear in terms of growth and that should create a positive backdrop for financial markets. >> that's a good conversation with both of you. thank you so much. josh feinman, chief economist at deutsch asset wealth management and to our john harwood from washington. thank you, gentlemen. as the federal reserve gears up for the final policy meeting of the year, the central bankers will celebrate a milestone. the fed's 100th anniversary. ben bernanke along with alan greenspan and paul volcker took time today to reflect on their terms leading the central bank. >> improved communication can help our policies work better whether through the disclosure
of the stress test results and by helping the public and the market better understand how monetary policy is likely to evolve. >> president woodrow wilson signed the federal reserve act into law a century ago this coming week, but it took another 11 months for all 12 federal reserve banks to open their doors. j.p. morgan chase may number some hot water again just as the bank is finalizing a $2 billion settlement for turning a blind eye to obvious signs of fraud in bernie madoff's massive ponzi scheme. federal authorities are looking into whether the bank tried to impede the department's investigation into madoff's misdeeds. the treasury's inspector general's office says j.p. morgan is contesting a subpoena that was issued earlier this year. >> the u.s. appears to be flushed with crude. a new forecast from the energy energy administration expects domestic oil output to surge to nearly 10 million barrels a day by the year 2016 and that would be an historic high thanks to the sharp rise in shale oil
extraction, but it's not just oil coming out of that shale boom. so is natural gas and the supply could last for decades. >> sharon epperson has the story. after reaching a near-record level, a new government report shows u.s. oil production may start to plateau in a few years. while the rise in natural gas output would continue for decades. u.s. oil production is expected to level off and start to decline after 2020 according to the u.s. energy information administration and the natural gas output will steadily increase through 2040. many analysts agree whether that gas surge is here to stay. >> there's no reason to believe given what we think will be the improvements in inefficiencies in drilling and extraction that we'll see a big slowdown in production of either natural gas or oil any time soon. >> it turns out it's easier to get natural gas molecules through natural cracks and tight shale form eggs than it is oil,
which is helping to fuel the gains in production. gains that are needed to meet the increase in demand. demand from electricity. the energy department says the main source of power generation in the country will shift from coal to natural gas by 2040 and the demand in export. the u.s. will become a net exporter of natural gas in 2018, two years earlier than the government's previous forecast. given by gas transported by pipeline to canada and mexico, as well as liquefied natural gas exports. so does more supply mean lower prices? not necessarily. the energy department says natural gas prices will continue to climb in the coming decade, but as the growth in net exports slows, so will the rise in prices. for "nightly business report" i'm sharon epperson. ahead on nightly business report, a sprint to the finish. americans have one more week to sign up for health plans on the insurance exchange e but are the
numbers meeting expectations as the deadline nears? general motors is pumping money into some of its u.s. factories and something the automaker says wouldn't have been possible without uncle sam's bailout. outgoing gm ceo dan akreson announced plans to invest more than $1 billion in several u.s. assembly plants protecting or creating up to 1,000 jobs. >> this will bring our four-year total of announced investments in the u.s. plants to more than $10 billion. we're investing it and it will keep paying dividends to the american public that supported this company in its darkest hour. >> the plants are in flint and
romulus, michigan, toledo, ohio and bedford, indiana. google is pumping a lot of money into its businesses and it's not for its search engine or youtube or the self-driving cars it's working on. instead, google just bought a company that makes robots for the military and it's not google's first foray into robotics. so what is the internet search giant searching for and is the company potentially losing focus on what it does best? josh lipton has more. >> fast, agile and lifelike, these are robots that can scale hills, gallop through parking lots and run like cheetahs and now they're owned by google which bought boston dynamic, an engineering company in massachusetts that makes the robots. the robots have become internet sensations. the big dog which is the size of a small mule to climb muddy
trials and carry 340-pound loads and a youtube video of big dog has been watched 15 million times and then there's cheetah which is shown running on the treadmill at 29 miles per hour and that's faster than olympian usain bolt. the new york times first reported the acquisition noting that it is the eighth robotics company google has bought in just the last six months. its robotics efforts are being led by andy rubin, the executive who led the development of an droid, google's operating system. google isn't talking about the acquisition or its purpose, but suggests that the robotics efforts are aimed at manufacturing like electronic assembly. >> this is not just a small side project for them anymore. >> ben schachter in says the internet giant is trying to take advantage of the long-term opportunity of the robotics industry. >> all of the things we saw as kids in the movies are what they're trying to make become a reality now. the fact that they put andy
rubin in charge of this, a man that has had a very successful path with google and android means a lot. it means they'll invest heavily in this and they'll take a long-term track, and they believe it's a very real business. >> google's rivals see the benefits of the technology. amazon's rollout of 1400 robots at its warehouses from the company it bought last year called kiva systems could save it $900 million a year according to analysts at the capital markets. google is certainly steering far and wide from its focus search, but larry paige, its ceo has talked about the importance of what he calls moon shot, big, bold ideas that can seem like sci-fi thrillers. analysts also point out that google only puts money to work in businesses that it thinks can be profitable and generate at least $5 billion in revenue in a reasonable amount of time. josh lipton, "nightly business report". we begin tonight's "market focus" with a big buyback.
boeing announced a $10 billion share repurchased and a 50% increase in its quarterly dividend. after today's closing bell the company said the move came because of strong operational performance and an increase in cash flow and confidence in the future. shares popped initially in after hour, but the stock ended the day slightly high more $134.72. pfizer is hiking its quarterly dividend by 5% which will be payable to share holders in march. word of a collaboration with siemens made a buzz today. siemens will make diagnostic tests for pfizer for patients who are most likely to benefit. shares are unchanged at $4.25. archer daniels midland is raising 26% and buying back 18 million of its shares. the company cited strong cash flow and expected earnings improvement in 2014 as reasons for the change. the stock rose a fraction to $40.66. aig is selling its aircraft
leasing uniity in an effort to focus on its share holdings. the dutch company will buy the aircraft unit called international released finance corporation for $5.4 million. aig has been trying to shed the unit and today, ceo robert bonn moshe says he's happy with the deal. >> they paid us in cash and in stock. so, therefore, we wound up owning 46%, but what you actually accomplished here was an ipo and a merger all at once and you get the accounting treatment so that we can write it once to market which is very important. >> shares of aig up 1% to $50.28. a $6.8 million deal in the semiconductor industry. the chipmaker avago technologies will buy lsi corporation and the deal helps avago get into the storage business and create a company with about $5 billion of annual revenue and that sent shares of lsi up 38.5%.
it popped 10% to $50.10. internal reaudit of more than three years' worth of herbal life's financial results found no material changes and that sent shares of the supplementmaker much higher and this is good news for the company which has faced criticism over its business product you are and its leadership. the stock today up 9.5% to $74.83 and shares of cubist pharmaceuticals surged after the positive result surfaced for the company's antibiotic. abdominal defenses in late-stage trials and cubist said it will file a you in drug application with the fda next year. the stock up about 6% to 66.51. president obama is turning to some of the biggest names in tech to assess the progress already made at the health care.gov website.
among the bold faced names heading to the website tomorrow, marisa mayer of\cheryl sanberg of facebook and google executive chairman, eric schmidt. >> americans have one more week to sign up for a new health insurance plan for those online exchanges. one more week, that is, if you want coverage to start january 1st and new numbers from federal and state authorities now point to a big surge in new members as we approached that deadline. bertha coombs has more. from day one of open enrollment, the exchange has seen strong interest in affordable care act plans with more than 45,000 enrollments in the first two months and in the first two weeks of december, enroll ams in the new york state of health has more than doubled with more than 3300 people a day signing up for coverage and that's well ahead of projecti s projections. covered california has been signing up residents at a pace of 7100 a day, reporting more
than 156,000 planned elections through the first week of december. that's 46% high are than the total for october and november. kentucky, the only southern state operating its own exchange saw its plan section number jump 25% for the totals for the first two months. putting together the latest figures from the state-operated exchanges and the ones you see in blue, it now appears that national enrollment is close to 540,000. that's not including december enrollment numbers for the 36 states operating on health care.gov, the red ones that you see here. the obama administration won't release december data until next month and the front-end projects, health officials that the back end enrollment happens more smoothly. the error rate on those transfer forms is now under 1%. on friday, kathleen sebelius
said they are working closely to make sure those transfers are not correct. >> they have a system with insurers that they call the n34s, the end information to insurance companies is working extremely good. >> we will doubly check and match because we want to make sure everybody is connected. >> still, even with the massive surge in enrollment this month, the numbers are still likely to run well below the original projection of 3.3 million enrolled by the end of the year. pwc health research institute ceci calmly says the more important number now is the demographic mix. they need to make sure that they have a lot of young, healthy people enrolling. bertha coombs, "nightly business report". do those antibacterial soaps we all use really work? maybe not. federal regulators say antibacterial soaps don't appear
to have any germ-killing powers and may even have health risks. so the agency is proposing a new rule giving the soap and body washmakers one year to prove claims that their antibacterial products are safe to use and actually kill germs. coming up, who is the most highly compen say theed private university president? harvard? yale? and the person's total pay may surprise you. ♪ ♪ it's no wonder the price of college keeps going higher. a new study from the chronicle of hoyer education shows how much some private university presidents are taking home. the numbers may really, really
rock you. a record r 42 private college presidents saw their total earnings top $1 million in 2011, the most recent year available. median total compensation was more than $410,000. who made the most? well, let's give you the top three. in third place, marrist college president dennis murray who took in $2.7 million. next was the president of northeastern university, joseph aun who made $3.1 million. topping the list, the head of the university of chicago, robert simmer whose salary, deferred compensation for staying on the job and one-time payments totaled $3.4 million. finally tonight with just over a week to go before christmas, a lot of americans are getting back to nature. real christmas trees are making a comeback, not only against artificial ones, but also against the economic downturn. jane wells has the story. >> it's been oh, canon bummer for christmas tree sales in recent years, but in 2013, santa
may have come early. >> thank you. have a good day. >> tree sales are up after falling 20% last year. the isi group says tree sales jumped 16% the weekend after thanksgiving and while winter storms slowed things down, overall december sales are up 7% from a year ago. >> the fact that they have a real tree and you can't replace having that fresh aroma in your house. >> perhaps it's a sign of economic improvement. for joe lee, it's just a good excuse for a family outing. >> we cut down the tree and my wife makes special cookies that we only eat once a year while putting the ornaments on the tree. >> it comes at a time when the industry is pushing for a self-funding, government-run checkoff program to fund a promotional campaign. past check ooff programs includ got milk and what's for dinner. it would force growers to pay 15 cents per tree sold into the
fund. why do it? apparently buying one of these is not most consumers' first choice. >> a harris poll showed last year 56% of americans bought fake trees and usually plastic ones from china. only 17% bought real ones and checkoff program was stalled after being called a tax and then it was stuck in the farm bill which isn't going anywhere. growers have been complaining about delays since last may, long before christmas. >> it just seems incredible that we've gone through the process and have done everything right and we still don't have a program so, yes, that's very frustrating. >> frustrating, but maybe not so urgent now as more americans are apparently returning to rituals of christmas past realizing that nothing can stand in for the real thing. for "nightly business report," jane wells, new york. >> love the real tree. >> i love the real tree and i went and cut one and this time i just bought one. >> that's good. you just have to decorate it. >> i'm susie gar ebb, thanks for
joining us. >> i'm tyler matheson. have a great evening, everybody. we hope to see you tomorrow night. "nightly business report" has been brought to you in part by -- >> the street.com. up-to-the-minute stock market news and in-depth analysis. we provide objective, independent ratings daily on over 4300.com/mbr. ♪ ♪ ♪
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