tv Nightly Business Report PBS February 20, 2015 7:00pm-7:31pm PST
this is "nightly business report" with tyler mathisen and sue herera. big deal. greece and its euro zone creditors agree on a four month extension of that country's bailout and that sends the dow and s&p 500 to all-time closing highs. tech talk. as the nasdaq takes one step closer to 5,000, our market monitor has a list of technology stocks to put on your buy list. and the hunt for yields. companies are hiking dividends like madmen and four stock tips if you want now. all that on "nightly business report" for friday february 20. good evening and welcome. i'm tyler mathisen. sue herera has the evening off. well what a finish to the week for stocks. the dow jones industrial average
and the s&p 500 close at records. and the nasdaq is now within 2% points of one. why? simple. greece after weeks of posturing and brings man ship on both sides reached a temporary debt deal with euro zone creditors and that's where we begin tonight. those creditors will extend greece's loan agreement for four months. that's less than the six months greece had asked for but greece still has lots of work to do. by monday has to submit detailed measure of plans and set to expire at the end of the month at which point it would have soon run out of money. michelle caruso-cabrera has more on the agreement. she's been following the story for weeks and it is really the agreement that investors have been waiting for. what's in it, how good a deal is it for both sides? >> they finally got a deal only after the greek government caved in on nearly all demands. they said they would never be
monitored by european partners in a program. guess what? they'll be monitored by the european partners in a program. despite that the greek finance minister tried to put a very positive spin on it today. >> we are leaving behind the days when a list of reforms that greek society treated as a foreign body was imposed, but not implemented because it was a foreign body. as of today, we're beginning to be coauthors of our destiny, coauthors we want to implement which we are going to dictate, which we will discuss with our partners. >> those list of reforms that said have to be submitted by monday. here's the key question. the reforms that this government has wanted to do they're socialist reforms. they're not the reforms that the rest of europe wanted. that's the first test. >> that sounded like a lot of brave talk putting a face for a domestic greek audience on this
deal. >> that's for sure what's going to happen. you'll hear a lot set in greece trying to spin this into something positive but ultimately have to stick to a lot of things they didn't want to. if they do it's important they get 10 billion euros roughly sitting there that should have been theirs in the past if only they stuck to previous reform commitments. >> 10 billion is a lot of money but in the context of a whole country with 200 plus billion dollars worth of debt it's a drop in the bucket. is it enough? >> probably not. already talk in europe once this program ends they'll probably have to come together and figure out if they have to give greece more money because the one thing greece got today was a little bit of leniency on how much of a budget surplus they have to have. the reason they were told to have a huge budget surplus is because they have to pay back their debt. if you tell them it can be smaller, it means they're not paying back that debt. somebody has to fill that gap. >> will we be back here in four
months? >> yes. >> short answer. michelle caruso-cabrera thank you. once announced, the deal reduces market uncertainty and eliminates the risk for now the greek leaving the euro zone. finished at all time closing high. its first of 2015. that number 18,140. the nasdaq gained 31 its eighth consecutive session higher and that is its highest level in 15 years and the s&p 500 rose nearly 13 points also an all-time closing high. for the week all three major indexes up. the nasdaq gaining nearly 1.5%. well after a bumpy start to the year february has turned out to be a good month for stocks. a record setter in fact. but not just for the major averages. a closer look at market data reveals that february is on track to be a record-setting month for companies raising dividends. so far, 144 companies in the
russell 1,000 boosted dividends in the past 30 days. here to explain why and favorite stocks for income is charlie boy brinscoy at aerial. good to have you. why so many companies raising dividends right now? >> well because people can't get yields anywhere else. with government bond interest rates at 2% and cds at 0% people are trying to find yields somewhere. so corporations are giving people what they want which is yield. >> are they also acting perhaps, say, their balance sheets in better shape, nice profits but also are some of them trying to forestall the possibility that corporate activists would come in and say, hey, you need to return more capital investors, you can't accuse them of not returning capital? >> that's a common refrain of activists. you're right. people have been too conservative with the shareholders' money. when you own stock in a money that cash your building as
money, a lot of activists think demands have been hoarding the money sometimes making poor acquisitions with the money. that's a common play book. >> let's move to some of the areas that you think are really good income plays for equity investors. and i want to start with a couple of your stocks. one of them is ibm. >> right. so ibm, if you noticed warren buffett just filed what he'd been buying and he bought a lot more ibm. ibm hasn't been growing at the rate we would like but now has a very attractive dividend yield. they're in the forefront of big data with their watson computers, so we think they're very well positioned. this stock is extremely cheap, at less than 11 times earnings. a great value investment paying a high dividend. >> let's talk about that. sometimes the yield goes up because the stock price is coming down. and that's what's been happening to ibm. so is there -- >> call it an accidental high
yielder. >> that's right. so what happens then is that yo 2% yield or 3% whatever it is it becomes a 3% or 4% yield is wiped out by the loss in capital. how do i choose wisely to avoid those? >> well you try to buy stocks that aren't going to go down by 20%. look ibm has been a wonderful stock for the last ten years. it was at 70 seven years ago and it went e way to 200. it did very well. it clearly hit a bit of a bump as they did not make earnings that management indicated. thought they'd be making $20 a share and more like 17. clearly has hit a bump. the stocks come down making the dividend yield go up. right now trading 11 times earnings even if it wasn't paying a great dividend we'd be recommending the stock. >> mr. buffet right there with you, charlie. quick thoughts on other dividend picks. stanley blacken decker western
union and lockheed. >> stanley blackendecker, in the housing play stubbornly a million homes a year. we should be at 1.5 million. that's the historic rate we've been at for 30 or 40 years and we haven't gotten back to that rate yet but now at a point where buying a home is more attractive than renting, and so stanley, which makes a lot of tools, tool sales go up. they sell to individual homeowners and to construction workers. so we think stanley stock is still relatively cheap doing well and has a great dividend yield. >> western union, people think it's a telegraph payment. it's not that. it's a payments company. >> it's a payments company across border payments company. sending money to mexico or going to russia and sending money back to the philippines. there is more traffic crash going across borders than any other time. that's a growth business. western union stock has been recovering. it's had a very nice run here
but now has an attractive dividend yield at 3%. >> quickly on lockheed? >> lockheed is building the f-35 fighter jet that all the major branches of the armed services are going to use. it really is very easy to predict their profits over the next 5 or 6 years. again, trading at a very reasonable price. we'd be recommending it without the great dividend yield but it has a spectacular dividend yield. >> ibm, stanley blackendecker, lockheed. thank you. oil prices finished the day lower. third straight losing session. crude supplies continuing to mount. rig counts declined this week making it 11 straight weeks of decreases on that number. west texas crude off 82 cents to $52.34. brent up a penny at $60.22. it was natural gas prices up 4% on below normal temperatures. how about below zero temperatures in much of the eastern part of the country?
as of this evening, no agreement between dock workers shippers out west on the west coast ports despite an earlier report to the contrary. tom perez gave both sides of the deadline today to end the month long labor dispute or take the discussions back to washington. go back to the principal's office. as jane wells reports, deal or no deal things won't get back to normal anytime soon. >> reporter: talks did continue today, but there was no deal as far as we know. despite weeks of negotiations by secretary tom perez and come to this. bb&t capital markets claim kfc flies chicken wings to china. flying them and auto makers paying to charter importers from asia to here. fuji paying extra $6 million for air freight according to bb&t. bed, bath and beyond with a
growing line of retailers saying sales may take a hit because of the warehouses and stores. another company taking a hit. master craft in oregon manufactures upholstered furniture. that's a problem to continue to ripple through the business no matter when a deal is reached. >> we lost business starting right in january. we ran out of raw materials and master craft had to lay 180 people off for 2.5 weeks in january. >> the fact is that we are working probably three days a week. which has put a real crimp in the paycheck. we work paycheck to paycheck. >> if no deal the labor secretary reportedly told both sides they must come to washington to continue talks next week. it's not clear why they can't talk through the weekend though. also an important element we do not know yet. will employers, the pacific maritime association, stop all work loading and unloading ships
for another weekend because it costs extra to do so? and they say there's no point. the decision as far as we know has not yet been made. for "nightly business report," i'm jane wells in los angeles. ever wonder how suspicious trades are detected? we will take you inside the nasdaq's secret surveillance room where no reporter has been before until now. government will grant an extension to sign up for a health plan under the affordable care act. less than a week after the original enrollment deadline passed. americans face a penalty for not having health insurance this year. this extension, which runs until april 30th gives those people
more time to buy insurance and avoid that penalty. officials also said that irs forms sent to about 800,000 tax filers contained health insurance subsidy errors. well federal regulators will begin to fine japanese air bag maker takata $14,000 a day for failing to fully cooperate with an investigation into its faulty air bag inflaters. takata has been slow to respond to government demands for information on the air bags. which can explode with too much force and send shrapnel flying to drivers and passengers. the nasdaq's secret surveillance room where fraudulent activity is located. no reporter been given access until now. eamon javers went to see how it is detected and what happens once it is. >> reporter: nasdaq never allowed cameras into the secure market watch surveillance security before but opened their
doors to us exclusively how they patrol for suspicious trading. nasdaq process 4 billion messages in this maryland facility with computer algorithms with 35,000 parameters in realtime sending alerts to human analysts within two seconds of an usual trade. monitor twitter and realtime news events and running back trading ahead of announcements to watch for patterns of insider trading and conduct background searches into the personal histories of executives of public companies looking for people with history of fraud or impropriety. >> we look for abnormal behavior indicating insider trading or manipulation of the market. we investigate that and if we feel it needs to be further investigated we refer to the s.e.c. for further work. >> reporter: last week nasdaq spotted 766 incidents so serious, they forwarded them to federal regulators for further investigation and say over the
past three years, 112 cases resulted in fines and penalties. and many of those began right here in this room. for now, they can only see some trading that happens on the other exchanges globally, the technology they say is right around the corner to give access to trades in many more parts of the financial system. for "nightly business report," i'm eamon javers in rockville, maryland. well farmers are buying less equipment and that is weighing on john deere and that is where we begin tonight's market focus. the tractor maker lowered sales outlook predicting the stronger dollar hurts sales already suffering from a slump in machine demand. this is declines in cuts in tax incentives make farmers less inclined to buy new gear. despite the warning, results did top estimates and that's one reason why. shares up to $93.43.
ann said in a regulatory filing that it was reviewing its strategic options. shares popped almost 5% to $36.76. oil and gas slashed capital budget to cut back production plans for the year amid tumbling energy prices. the company also swung to a loss in the fourth quarter. still, the stock was up more than 1% to $28.06 today. rough day for shares of rocket fuel. the digital ad company loss widened sharply in the fourth quarter as costs surge that offset higher revenues. shares plunged almost 27% to $10.82. call it the new industrial revolution. billions of dollars spent on making big machines like wind turbines and oil and gas more efficient. the potential for change huge not just manufacturers but the way we work and live. morgan brennan has more. >> so go like this pull up a menu. >> reporter: it's called the industrial internet of things or
simply the industrial internet. >> it's about helping operators do what they do already in a better way. >> reporter: the concept, making big machines smarter through the adoption of smarter and big data analytics. >> in the energy space, quite clear. if i can get to total efficiency there's so much upside in what they have that, you know, small gains are big numbers. >> reporter: take this wind turbine. it's equipped with sensors connected to software that uses realtime to generate 5% to 10% more power in turn for a wind farm can boost profitability by 20%. ge has developed an operating system that posts dozens of applications catering to a spectrum of industries. there's an app that tracks oil and gas pipelines to prevent possible leaks and make factory inspections easier and faster. all with the potential to save businesses billions of dollars in down time. >> if you think about the internet of things there are
about 50 billion things that are going to come online in the next coming years and all of those assets all of those machines people interact with them in some way. so it's going to be enormous. >> reporter: right now, the industrial internet of things is in infant stages but notes it could reach $500 billion by 2020. with larger global economic impact in the trillions of dollars by 2030. analysts say the possibilities will be endless. not just for ge. >> in a way, they see the internet of things as a way to save their businesses from commodityization and competition. >> reporter: ge has partnerships with at&t soft bank, intel and cystisco to name a few but rockwell automation emerson and honeywell have been allocating resources as well. cyber security a primary issue and the not yet known effects that automation could have on the labor market and companies like ge the challenge of
monetization. so this new technology doesn't just become another cost of doing business in the internet age. for "nightly business report," i'm morgan brennan in san ramone california. as the nasdaq approaches 5,000, our market monitor said some of the biggest names in technology are retractive right now. he's jordan pozner, senior port yoel folio. people don't typically think technology stocks as value plays, but you go bottoms up. you look at individual companies, their balance sheets their income statements. and their stock prices and you found some in technology beginning with ze man tech. >> they have a good solid business in i.t. security and data storage, very positive fundamental growth still attached to them. the company decided they can actually generate some value by breaking two businesses into two
separate companies. we think that will actually unlock some value. the companies been improving operating performance and continuing to improve going forward. stock is relatively inexpensive at around 13 times next year's earnings. pays a nice dividend yield of about 2.3%. and we think that stock is probably worth closer to $30 in the current trading price in the mid 20s. >> because you mentioned they're going to split the company into two parts, it coincides with one of the other themes. sort of the appeal of internal restructurings if you do it inside it can achieve the same goals. second choice is microsoft. >> microsoft has been under some external pressure from some external shareholders but the big management change there a year ago, satch and na dell has made a lot of improvement there. everybody knows what microsoft is but don't really realize that the enterprise business which is continuing to be very, very
strong is really the crux of the business. and microsoft is actually leading a lot of the move to the cloud. on a valuation basis, the stock is cheap at 14.5 times next year's earnings. pays a nice dividend. we think the stock is dramatically undervalued because of pause that happened in the december quarter earnings. we think that will resume and we think the stock is actually better valued probably at $53 a share. >> let's move on to number three which would be kwaul come. a dominant chip for mobile devices. the space everybody wants to be in but over the past year the stock is down. why do you like it now? >> we've liked it for a while. kwaulcoms had issue with an anti-trust investigation that settled at a lower cost than was expected giby the market well within their ability to pay. the company throws a tremendous
amount of cash, dominant and will remain strong. on the balance sheet today, it has $19 a share in cash which is more than a quarter of the stock's value. throws off the dividend of about 2.4%. trades if you adjust for the cash at ten times this year's earnings we think the stock should trade above $90. >> jordan thank you very much. great analysis of three very interesting companies. jordan pozner with matrix asset advisors. the big money behind hollywood's biggest night.
the big business of hollywood will be on display at this sunday's academy awards. but behind all the glitz and glamour, there's real money at stake. julia boorstin takes a look at what an oscar is really worth and whether the race for that coveted statue is actually a losing business. >> reporter: with front runners boy hood and birdman grossing $25 million and $36 million respectively this year could have a massive impact. the smaller the box office performance of a nominated film the bigger its boost from oscar attention. best picture winners gross nearly $14 million more at the box office after winning than fellow nominees. that's according to an ibiz world studies from 2009 to 2013 but even the losers cash in.
oscar nominated films remain in theaters on average about twice as long. and oscar attention can boost home rentals as well. >> i think the immediacy of the online component will give some of these films that are now available on demand a bump literally on oscar night. >> reporter: this year's nominees are the lowest grossing group since the academy expanded the number of films that could be nominated to 10 back in 2009. an effort to include more box office hits and draw more viewers to the telecast. >> military age male. >> reporter: with one film that's been a really big hit, ""american sniper"" this year's telecast could suffer lower raltings when four films topped $100 million at the u.s. box office. >> a lot of people say, why aren't there more block busters in the mix for best picture and i could argue, it's not the box office awards. it's what are the best movies in that particular year? >> did i do something to disrespect you? >> not yet. >> reporte two of what the
academy think are the best movies "birdman," a total of 20 nominations more than any other studio with the best position to cash in. the film with the least to gain car win, "american sniper." an oscar win unlikely to make much difference. those studios spend millions of dollars to campaign for the prestige of an oscar win. the investment doesn't always pay off. rather than that many studios have the success of "american sniper" or the block busters that never make it to the red carpet. for "nightly business report," i'm julia boorstin in los angeles. finally tonight, whether an actor takes home gold or not, they will still feel like a winner with all the free swag they get after this sunday's academy awards. all the best and supporting actor and actress nominees and the best director nominees get a gift bag worth about, get this
$160,000 double what they were valued at last year and the giveaways will make you green with envy. some of the free bees include night at a villa, a psychic reading and a suction light. it is hollywood rk after all. that's "nightly business rep i'm tyler mathisen. have a great weekend everybody. see you monday.
gwen: the difference between talking and doing when it comes to terrorism, immigration and running for president. tonight on "washington week." >> all of us have a responsibility to refute the notion that groups like isil somehow represent islam because that is a falsehood that embraces the terrorist narrative. gwen: a war against terrorism devolved into a war of definition. >> these aren't animal lovers. these aren't environmental advocates. gwen: why this war is about so much more than boots on the ground. at home, a federal judge in texas halts the president's immigration reform plan delaying action in 26 states. >> we cannot fail our fellow texans. we must do what the f