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tv   Nightly Business Report  PBS  October 14, 2014 7:00pm-7:31pm PDT

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. this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by. the street.com, featuring stephanie link who shares her investment strategies, stock picks and market insights with actionalerts plus, the multi-million dollar portfolio she manages with jim cramer, you can learn more at the street.com. and one of the most ugly days in years, prices drop more than 4% as traders continue to search for a floor in prices. sliding in the nasdaq and s&p 500, the dow jones industrial average closing just slightly lower. wilbert than expected earnings from one of the biggest
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company's intel, change it? and formidable growth in the earnings reports, they may have to settle for something else. all that and more tonight on "nightly business report" for tuesday, october 14th. good evening, everyone, stocks on wall street stabilized after a three-day selloff, but in the oil market prices fall, the biggest one-day drop in two years on the same day the international agency once again lowered the global demand for next year. so if you want to understand the impact of a weak global economy just look at the prices, domestic crude oil fell over 4% closing over $82 a barrel since 2012. brent crude oil closed at the lowest level since 2010, tyler? all right, so why is oil
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lowering so much, there is a concern for investors who own oil-related shares. here is the founding partner with again capital, you again? >> back. >> nice to have you here. very simply stated why are prices falling as much as they are, as fast as they are? >> it is a one-two punch, tyler, part of it is the slowing economy in europe where the demand for oil is key. the wheels are coming off opec, there is a battle for market share, they're looking at the abyss. we'll keep pumping and fighting for market share, this is the saudis and kuwaitis, saying this. >> in the past they might have cut production? >> in the past, just last year the saudis cut production about a million barrels a day. they're not doing it yet, i think because they want to send a warning to russia and also
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what they're doing in syria. the shale miracle, what we have been experiencing, a big part of this. and the saudis are drawing a line in the tar sand saying you know what? we can produce much cheaper than you, let's see how long you can old on. >> so john, you're on record saying you may see the oil prices going into the 80, high, or 70 range, will that hurt businesses or consumers? >> it is fantastic for businesses or transportation companies, wonderful for the consumers, just like when the gasoline prices spike it hurts consumer confidence. people buckle under and sort of you know, just stay home and staycation. they will hit the road now, just in time for the holiday shopping season where the extra dollars will be spent at the mall. it is incredible stimulus. people will get nervous because of the falling oil prices and the slowing economy. the recession, i have to tell you the big part is the surge in production, not the economy. >> i want you to elaborate on
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the point you just made. this is a shot across the bow with the shot against the saudis to u.s. oil producers in north dakota. you can't keep up with us as we drive the price down? you can't get it out of the ground profitably enough. >> that is right, a bit of a history lesson here, the saudis did this in 1998, when venezuela was looking to sell more oil here at the expense of the saudis, saudis taught them an expensive lesson and got oil back down below ten a dollar. sail thing here, the saudis saw their u.s.-bound exports fall to the lowest level in years, we're not importing any west african crude oil right now, that is nigeria and libya, they're worried. fighting for market shares saying we're trying to drive you out of business. >> so opec, the big oil cartel has a big meeting next month,
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what headline may we expect from them? >> the big headline is they will stand their ground and not cut production. the big thing, history repeat s itself, the same thing happened, they didn't cut. >> very quick point on the oil stocks, the services company, the exploration and producing, what will happen to their shares? >> you have to stay away, this could put them under, and potentially, some of them are very highly leveraged. a lot of borrowing because of the slow oil price, you have to get out. >> thank you very much. >> despite lower oil prices and influential federal reserve policymaker is downplaying risk and focusing instead on u.s. inflation. john williams, president of the san francisco fed says the central bank should only delay
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an interest hike next year if inflation or wage growth fails to pick up. >> stocks out of the gate with a bang, closing with a whimper, and what the pros say is a sign of a fragile market, the depend 143 points early in the session ending about six points lower. the other key barometers can finish in the green but gave back the morning's bigger gains. nasdaq was up by 13, the s&p was up by three. and on the benchmark ten-year treasury, felt a 10.206%, if you like to go to the thousands place holder there, the lows closed just last year, and they say that the ten-year u.s. treasury bonds now have reached their lows of 2.2%, gunlot also said that a move under 10% on the year could be a game-changer for the fed in terms of interest policy. >> turning to earnings, solid
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third-quarter earnings from intel, which got help from increased demand for personal computers. the chipmaker earned 66 a share, more than a penny from analyst estimates. revenue came in better than expected and about 8% higher than a year ago. intel's chief financial officer stacey smith said there were several factors for the results. >> we're benefitting from a couple of things here. we have great technology that is coming into the pc segment, growth at the high end, lower priced systems are bringing back share from tablets. and we're starting to participate in a wider range of devices. and then our data center business is benefitting from growth with all the clients connecting to the internet. >> intel shares got an initial bump higher in late-day trading, morgan brennan has more, morgan you know our question, what is the one take-away you see from intel's earnings? >> yes, a good question, the
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investors were really watching intel's numbers very closely, because not only does it kick off numbers for the sector, intel is the biggest chip maker in the world. in the past week we've seen a dramatic selloff in the chip stocks after another semiconductor company, micro chip warned about the collection coming from the entire industry, intel said no, that is not the case, intel is forecasting sales that are higher than analysts' current expectations. what is even more interesting, intel's stronger numbers are tied to a rebound in demand for personal computers which have suffered over the past several years with the advent of apple's ipad. seeing the strong demand even in the current quarter for those chips. that is a relative positive commentary about intel's chips but also something that is like live going to push the entire semiconductor group higher tomorrow. and also potentially push
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microsoft shares higher because microsoft's operating systems tend to run on intel's consider -- micro processers. >> morgan brennan. and today, three of the nation's biggest banks reported their latest quarterly earnings with mixed results and investor reaction, shares of j.p. morgan chase slightly lower today, citigroup got a pop, wells fell, kay kaylatasche has more. >> the companies are reporting few signs of growth, citigroup, and wells fargo, j.p. morgan saw the profits fall in nearly every unit. much of the growth coming from
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loans to high clients in asset management. any signs in banking were wiped out by a billion dollar legal charge the company signalled would likely go toward a future currency trading settlement. over at san francisco-based wells fargo, the mood was tempertempe tempered but better. they met expectations mostly because they cut costs to offset mortgage businesses chugging along at a good pace. this time, it had less of the money to release. citigroup had had a bit more, which helped boost the bottom line, along with the above average trading levels and the surprise profit level at the bad bank. not all of citigroup is rosy. the ceo acknowledged mexico, the biggest growth bet is getting costly. >> i think we've made meaningful changes in mexico. >> among the changes?
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dissociativing with one unit of the business where more fraud wassen covered. a federal investigation is ongoing. city is also shuttering the consumer business in 11 countries including six countries in latin america. fred canon said those ambitions had been dragging the stock. >> we keep expecting a real lift. is this really the beginning of the lift? maybe, but remember, city has an awful lot of the global exposure, folks are concerned about it today. >> global risk, once the hallmark of big banks will now be front and center, as bank of america, goldman sachs and morgan stanley results come out this week. also out before the opening bell today, johnson & johnson, third quarter earnings shot up nearly 60% thanks to stronger pharmaceutical sales and sales of the new hepatitis c drug. but a stronger u.s. dollar and
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weaker euro could hurt more in the quarter, so shares fell today. still why more and more americans are getting in over their heads when buying a used car and why that is so troublin troubling. the ebola crisis is getting some help, kind of from social network. facebook founder mark zuckerberg and his wife plan to donate $25 million to the cdc foundation to help fight the ebola outbreak in west africa and anywhere else that it becomes a threat.
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and in the fight against ebola president obama said that more needs to be done. >> the world as a whole is not doing enough. there are a number of country that s that have the capacity that have not stepped up. those of us who stepped up will have to do more because unless we contain this at the source it will continue to pose a threat to individual countries. >> he went on to say that the u.s. health care system is strong enough, that an ebola epidemic here is in his words highly unlikely. >> just three weeks to go before the mid-term elections and things are really heating up in one of the nation's most contested senate races. john harwood joins us with more on the battle between kentucky mitch mcconnell and allison grimes. so john, mcconnell and allison grimes had their only debate, what happened and why is this
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race so important? >> what happened is a really high quality debate, with both candidates talking about strong points, grimes talking about change, moving mcconnell out, mcconnell saying she would be a tool to democrats hostile to kentucky. take a listen to the sound bites. >> senator mcconnell's 30-year record is grid lock, partisanship that cost this country a 30-day shutdown, we can't afford to go that route. i'm an independent thinker. >> the senator's campaign has been designed to deceive people into thinking she is something she is not. it is pretty obvious given where her support comes, all the anti-coal activists in the country, that she is going to do their bidding. >> this race, susie, combines two things, one, the battle for
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partisan control and the senate republican leader. but also the effort by conservatives especially in coal states to fight back against the administration's climate change agenda. >> most people thought the risk from mr. mcconnell would come from his own party from the right. does this democratic candidate have a chance to beat him? >> she has a chance, mcconnell has a better than 50/50 chance, this is a close race and of course both sides are focusing on turnout. they can change the shape of the electorate, both in kentucky and nationally that is what this last three weeks is going to be about. >> john, let's just say she pulls it out of -- how would that change? >> it is a big step not just for mcconnell, th're planning on picking up a bunch of seats.
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if they lose mcconnell that will be a harder climb for them to get there. and it could affect those hoping for a new agenda out of the senate, they will be frustrated. and domino's pizza, that is where we again the market focus, the chain on the top and bottom line, sales rising more than expected. shares popped 11% to $84.11. mixed quarter for wolverine worldwide, they topped the consensus estimates, the maker of the brands lowered their sales outlook for the year. the stock rose 79 cents to 25.44, the fda recommended that the drug maker chantix keep a black box warning on the label.
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the controversial treatment has severe side effects, including suicidal thoughts and erratic behavior. shares off just a penny at $38.46. some executives are shuffling at signet jewellers to tell you about. the ceo has resigned and announced he will step down from the board, and will be received by the current ceo. shares fell to $104 and 32 cents. as we told you, semiconductor efforts fell harder, a few of those chip makers have turned around, thanks to an upbeat forecast from skywerx solution. they cited strength across all the businesses. the promising outlook sent shares of skywerx up 6%, two others rose by more than 3%. airlines bounced back today
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part of the rise being because of the sharp decline in oil prices we just told you about. that in turn would put prices on jet fuel much lower, following a turbulent month for the airlines, american airlines surged more than 10%, continental, jetblue, as you see, all sizeable gains, and cfx reported better than expected revenues this on an increase in freight value across most of the markets, shares are up with reports that canada pacific is interested in a merger. although the ceo didn't comment on it he did tell investors that business is strong across the board. >> we saw growth across all the markets, the ag was good, automotive was up 8%, even the coal business up 7%, we saw broad gains across most, mys.
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>> cfx stocks rose initially, and after-hours trading, during the regular day shares were up to 32.61. and owners feeling less buoyant today, the federal reserve found that owners are now expecting to see a slight pullback in both profits and sales in the current month. and car buyers may be feeling less optimistic as well. that is because even used cars have surged in price over the last three years making them less affordable to more and more americans. phil lebeau joins us from chicago with more on the trends in the used car market. this is really fascinating. a new study says that the average used cars now are so expensive that many people will become over-extended paying for them. what is going on? >> well, a couple of things are happening here, susie, the study done by rc cars.com looked at about 20 billion used cars for
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sale last year in the 50 metropolitan areas. people are taking out longer loans, not putting down the proper down payment and they really are stretching more than they probably would like in order to make the used car payments. >> so phil, what are the ideal guidelines used for buying used cars? >> well, for a long time everybody said look, it is the 2014 rule, tyler, you want to put down 20% for the vehicle you're buying, you don't want to pay the loan off in more than four years or pay more than 10% of the monthly income. well, unfortunately, few people are taking out loans that last more than four years, the average loan is about 5.5 years, they are sometimes spending more than 10% of the loan when paying off the vehicles. >> does this mean that people are going to lose their cars? >> you would think so people want to hang onto the cars if at all possible, even if they want
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to stretch. we're not seeing the repossession as well as the delinquent rate, really shoot up that much, they remain historical lly low. people are saying what does it take to get the payment, does that mean a 7 or 8-year loan? fine. >> thank you so much, phil, phil lebeau, reporting from chicago. and coming up next, the six-month grace period with federal student loans coming to an end, before you check, there is a payment option you may not be aware of. details right after this. pimco, the worlds largest
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fixed income asset manager says it is not changing anything. scott mather, one of the pimco managers running the total return fund says the fund is well positioned and that investors should not change the strategy with the sudden departure last month. >> no, we're not changing the fund, as you know it is a team process here at pimco, i and my colleagues have been involved in forming the investment themes which are at work in the return fund. >> pimco said the return fund saw more than 30% outflows in september, about 10% of the total assets. okay, new grads, the time is almost here for many of you to start paying back your student loans for 2014 graduates. the grace period is about to expire. it is time to get a financial plan. sharon epperson looks at
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repayment options and the consequences if you don't pay. >> it is the bill that i don't like looking forward to when it comes. >> reporter: for this man, managing means managing his own expenses, most of them. he admits needing help on one of his biggest bills, his student loans. >> i owe like -- my -- it is going to be -- i realize i'm going to be paying for the rest of my life. >> reporter: turner received a broadcast degree in journalism in december, his salary as a radio producer in new york covers rent, utilities, groceries and transportation each month. but not all of his student loan payments. >> my bill can go anywhere from 400 to $600, depending on which bill i'm looking at. i'm on a payment plan, my mom set it up. i contribute as much as i can. my mom kind of helps me with the rest. >> the real problem when borrowers get out of school this
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income is probably the lowest it will be throughout their lifetime. their student loan debt payments are the highest they will be throughout their lifetime. they're really facing a cash flow issue. they don't have enough income to pay both their debt payments and afford just standard living costs. >> underemployed or unemployed, many graduates may be unsure of how they will pay back their student loan debt. so some don't, most are unaware of their options such as asking for forebearance, and a payment plan such as pay as you own. they cap the total loan payment. or refinancing private loans to extend the term and reduce the student rate. many loan borrowers are struggling, adding significantly to the cost of their debt. of the total federal loans outstanding about one in every five dollars is past due, and
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nearly one in 14 college loans are in default. >> they essentially get 16 to 25% collection costs tacked on to the student loan principal. so if the average borrower has $30,000 of student loan debt when you add 16 or 20% to that they are racking up huge costs when they fail to make the payment. >> failing to make the payment increases your debt burden even more. turner, who started to pay back his student loans this summer doesn't want to miss one payment. >> ou ms it, it is like any other bill, it becomes like a pain, a strain, and bill collectors calling you, saying where are you? >> most importantly he knows the consequences could be severe. for "nightly business report," i'm sharon epperson. finally, mercer ranks the
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country with the top spot, denmark, and australia, among the first, china the u.s. get a grade of c in the 25 country index, not so good. that is "nightly business report," i'm susie gharib, thank you for joining us. and i'm tyler mathisen, thank you for joining us, we hope to see you right back here tomorrow night. >> "nightly business report" has been brought to you in part by. >> the street.com, with stephanie link who shares her insights with action alerts plus the multi-million dollar portfolio she manages with jim cramer, you can learn more at the street.com/nbr.
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everybody's doing it, come on! >> narrator: belva stone may seem like an ordinary 27-year-old but three nights a week, belva dabbles in the pre-orderal, instructing other young women in the ancient art of poi. tonight we visit the frontiers of the dance world, where fire dancing is just one of many ways that the ancient and contemporary are merging to create new forms of bodily expression. in our first story, we explore the mesmerizing art of butoh, with ledoh, one of the bay area's leading practitioners. >> there's something about the rawness in it, and something that hits us in the gut.

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