captioning sponsored by wpbt >> susie: fresh worries about china's economy. new restrictions on chinese banks thousands of miles away leads to an early sell off on wall street. >> tom: could the attempt to cool china's red hot recovery choke off a global comeback. you're watching "nightly business report" for friday, february 12. 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. belt tightening in china put the squeeze on wall street today. china's central bank moved to cool off its red-hot growth by pulling back on lending. >> susie: the early reaction here in the u.s. was sharp and swift selling with the dow off well over a hundred points in the early going. but a late rally helped stocks cut their losses. the dow ended down just 45 points, while the nasdaq managed to turn positive and the s&p 500 lost only three points. >> tom: susie, for the second time in just over a month, china's central bank ordered big commercial banks to park more of their deposits in reserve. that leaves less money for loans in one of the world's fastest growing economies.

but jeff everett of everkey global partners says worries about choking off growth in china and hurting u.s. companies there may be over done. >> there's always two ways to look at rate hikes. one is it is unflationary, and two it is because the economy is-- in a healthy way-- growing very strongly, and certainly the reserve rate hike we've seen in china is because the economy is growing, very health. in fact just the day before we saw very positive news on the inflation front coming out of china. >> tom: also today, we got word that the eurozone's economy stalled in the fourth quarter of last year. the region's combined g.d.p. rose just one-tenth of a percent from the previous quarter. that compares with fourth quarter growth of 5.7% here in the u.s. we'll talk more about the global economy and what it means for u.s. investors with the guy you just heard from, tonight's market monitor guest jeff everett. >> susie: some encouraging news today about american consumers and the u.s. economy. they spent more than expected on clothes, computers and other goods last month.

the government said today retail sales rose half a percent, and on top of that, they were revised higher for the previous two months. a good sign that consumers are spending again. but another report today showed a drop in consumer confidence, usually a bad sign. erika miller checks out whether the spending momentum can continue. ( cash register sounds ) >> reporter: this is the music retailers love to hear. but the tune could now be changing. economist jerry webman warns just because january sales were strong does not mean february's will be too. >> we've been snowed in now, particularly our friends a little farther south for a good chunk of the month. so, february's numbers are maybe a little bit quirky. >> reporter: he thinks the snow could also change the types of retailers posting sales. in january, most categories did well. but this month, analysts think retailers with a strong online presence will rise to the top, as bad weather keeps more people at home.

but weather isn't the only reason economists think consumer spending is not roaring back. the bigger factor is a high unemployment rate. it's true corporate profits have been generally improving, but economist steve ricchiuto does not believe that will lead to more jobs. >> what we are seeing is that a lot of that profitability is not going into hiring. it's going into what i call job- destructive m&a. and it's also going into share buybacks. >> reporter: and he doesn't think the government's massive stimulus efforts will help much, either. >> the fiscal stimulus that we've gotten is actually abating. and even the new program that they've come up with in terms of a jobs bill is a drop in the bucket. >> reporter: what happens to retail sales is critical to the economy. historically, consumer spending has been the engine of economic growth. but most economists don't think that's the case now. >> this recovery may have more business leadership than the past has-- as business makes up for shortfalls in investment-- that have really been a problem for a decade now. >> reporter: the real problem would be if consumers start drastically cutting spending. some economists like steve

ricchiutto think that's a growing risk, which could derail the economic recovery. erika miiller, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. "newswheel." reid's streamlined jobs bill is senate majority leader harry reid's streamlined jobs bill is gaining momentum. the white house today, said reid's proposal focused on tax breaks for small businesses should gain bipartisan support. but a spokesperson for the president said reid's bill won't be the only one aimed at job creation. after the market closed today, warren buffett's baby joined the s&p 500. the "b" shares of berkshire hathaway replaced burlington northern santa fe, that's the railroad berkshire bought last year. index buying led to heavy volume in bkshire shares. it was the volume leader on the nyse. and u.s. airlines are doing a better job of getting you from place to place on-time. the transportation department today said american carriers ran on schedule 80% of the time last year. that's the best on-time performance in six years. >> susie: toyota is doing yet

another recall. this time 8,000 tacoma pickup trucks are being called back for a problem with their front propeller shaft. toyota's troubles highlight a funny thing about recalls. even the best recalls are only about 75% effective. as stephanie dhue reports, if that could leave an estimated two million defective toyota's on the road for years to come. >> go ahead and make more appointments, but don't make any more for today. >> reporter: this is darcars toyota command center. from here, tammy darvish and her team have already scheduled thousands of appointments and sent e-mails to 35,000 customers. darvish says this isn't how recalls usually work. >> this is the first time a manufacturer has had their dealership representatives proactively contacting customers, rather than just sending a letter in the mail and everything. typically, with the dozens of recalls that we have with our

other manufacturers, half of the dealership is even aware of them unless they are actually working in the service department. >> reporter: so far, darcars has completed 1,400 recall repairs, including sovon mookerjee's toyota camry. >> even though the car didn't give me any trouble, so far, but you have that particular doubt in your mind. >> reporter: but darvish says not everyone is as diligent. >> many of them are even putting the appointments off a week, two weeks, three weeks-- basically, the biggest concern we have of this lagging is based on the customers schedule more than parts availability or dealership availability. >> reporter: based on experience, the national highway traffic safety administration says one in four people won't bring their recalled cars in for repairs. in a statement dot secretary ray in a statement d.o.t. secretary ray lahood said "n.h.t.s.a. won't accept half measures" from toyota, but a spokesperson refused to say how many cars must be repaired for the recall to be considered successful. sally greenberg is a consumer

advocate and a toyota owner. she says toyota should do more than just notify customers. >> toyota really ought to be thinking about incentives; the government should be talking to them; give people an extra oil change; give people an extra all-around check for 30,000 miles or what-have-you, but some way to get people in the door to make the recall much more effective. >> reporter: the problem is, no matter how effective, a recall will never be a 100% solution. the only way to do that is to keep defects from making it to market in the first place. stephanie dhue, "nightly business report," washington. >> tom: the recession brought with it dramatic cut backs in advertising spending. so much so, that television and newspaper firms are re-thinking their business models. still ahead, we talk about the changes with sir martin sorrell, head of w.p.p. group. the world's largest advertising agency.

>> susie: tgi"f," tom. quiet tond what was a volatile and busy week. >> tom: yeah, it certainly was. another peak week for earnings but thankfully a quiet ending. let's take a look at tonight's market focus. for the first time in a month, the major u.s. stock indices end the week higher than where they began. the dow saw more buyers than sellers on tuesday and thursday, enough to fuel a nine-tenths of a percent gain.

and yes, it did close over 10,000. the nasdaq saw the biggest gain among the three, up 2%. the index saw three days of buying this week, including today. the s&p 500 also ended the week higher by nine-tenths of a percent. investors clearly like the idea of two motorola's better than one. m.o.t. shares shot up to a two week high after announcing a split into two companies. next week, motorola will be among the wireless companies in barcelona talking up its android-powered devices. the company known for its trane and thermo king brands-- ingersoll-rand had weaker results and said demand for its heating and air conditioning units is picking up but also cautioned of bumps in the road. the market cooled to ingersoll thanks to a disappointing outlook. the sell-off takes the stock back to october levels and on five times average volume. earlier erika reported on january retail sales.

going back to the fourth quarter, we were spending money on burritos, sandwiches and cheesecake. the recipe at chipolte mexican grill was higher sales and better margins thanks to its first growth in traffic since 2008. panera bread increased its full year forecast with strong same store sales during the first six weeks of the year. and cheesecake factory had better than expected revenues. and how about this: all three hitting new 52 week highs today after all three traded lower in after hours last night. it was a different story at buffalo wild wings. it dropped to a four week low. customers are ordering fewer drinks and going for cheaper menu items. the week ended on a sour note for shareholders of fiber optic company general cable and computer storage firm compellent technologies. starting with general cable, a 13% price drop on huge volume. it took the stock to its lowest price since it staged a break

out back in april. the company's earnings forecast is less than half what was predicted. compellent technologies plunged by almost 25% taking it to a five month low. disappointing earnings and an analyst downgrade helped fuel the sell-off. how about some stocks ending the week on an up note? software firm skill soft has a private equity buyout offer for $1.1 billion. the offer is $10.80 per share but the market thinks a higher price could come given the closing price tonight above the offer. under terms of the deal, skillsoft can entertain other offers. thdebt collection business is a good one if you look at portfolio recovery associates. it's at a 52 week high tonight thanks to strong quarterly results. cash, call center and bankruptcy debt collections all were on the increase. this week saw a little life in the i.p.o. market with five new stocks hitting the market, but with mixed results.

mid-week we saw five new issues price. graham packaging makes plastic containers. it priced at $10. tonight up to $10.45. generator maker generac priced at $13, closing at $13.41. two real estate investment trusts, piedmont and terreno hit the street at $14.50 and $20 respectively. peidmont has had the best performance from its offer price but terreno is the weakest of the group. on thursday, internet marketing firm quinstreet went public at $15 a share. it slipped to $14.55. three fourths of earnings season is over but next week brings results from four dow industrial stocks, including kraft and merck on tuesday.

>> susie: have you noticed that your morning newspaper is getting thinner and thinner? well, it's mostly because advertisers have drastically cut back. no one knows that better than sir martin sorrell. he's c.e.o. of the world's largest ad agency: w.p.p. it's home to ogilvy and mather, j.walter thompson and more than a hundred other big name firms. i caught up with sir martin yesterday at a c.e.o. conference in florida and asked him if he sees the ad business recovering in 2010. >> things are less worse. they've stabilized. i think as we go into 2010, stabilize means we're seeing,

top-line, like-for-like sales growing flat. >> susie: sir martin, in order to see the ad market really pick up in the u.s., what do you have to see happen? >> certainly client have to feel more confident. i don't think the confidence is there yet. if you look at corporate results whether you're talking about this last quarter or the last two or three quarters, they've what i call ugly. what it really depends on is a shifting confidence. >> susie: let's talk a little bit about the whole nature of advertising, even when confidence comes back. will traditional advertising like tv, newspapers, radio make a comeback? >> it's a big change. newspapers, magazines, radio, free television-- not so much cable, not so much satellite, not so much, obviously, internet-- i don't think will ever be the same. the industry has been reset. anybody who believes that we go back to where we were, say, 10 or 15 years ago, i think is

deluded. >> susie: so when you're siting and talking to your corporate client, are they saying, "look, i really don't want to put my money in ads in newspapers, tv, radio, i much prefer to put them online." is that what you're hearing? >> they're looking for alternatives. the new media offers-- relative to size-- low-cost too lateive. so they're willing to experiment but to a limited degree. >> susie: and what about other platforms like facebook and social media and cell phones? are corporate advertisers getting more interested in-- >> they are experimenting with that. it takes time for people to absorb the change, particularly in large, spread-out, bureaucratic, slow-to-respond companies.

and, indeed, moodia owners. >> susie: i'd like to get your take on the do-it-yourself ads. we saw them during the super bowl. some of them were very effective. do you see this as a threat or an opportunity? >> an opportunity. user-generated content is a fact of this new medium and we all have to get used to it. what you have to do is use it to advantage. you have to take these examples-- i mean, these ideas-- and try and develop them in the context of client strategies and execution, development in a sophisticated way. i don't think of it as a threat. it's an opportunity. >> susie: given the economic environment we're in how do companies even motivate consumers to spend? >> i think one of the things we have to get our minds around, particularly in the west-- the u.s. and western europe is the fact that more may not be what you're seeking to encourage

people to do. you're maybe encouraging them to assume in a much more responsible way. now, we have to do that in the west because one of our problems has been we got ourselves into trouble by borrowing too much and spending too much. we overspent. we have to learn to save, and the chinese and the brazilians have to learn to spend. >> susie: sir may or may not, thank you so much. a real pleasure talking to you. >> good to see you. thank you. >> tom: here's what we're watching for next week. our friday market monitor guest is chuck carlson of horizon investment services. also next week, quarterly results from hewlett-packard, merck and wal-mart. and the january reports on consumer and producer prices. monday, how the workings of the human mind affect our investing decisions. it's a "nightly business report" special edition: "your mind and your money." >> susie: general motors expects its market share to accelerate this year, no matter what happens with rival toyota. g.m. vice chairman bob lutz is calling for the automaker's share to be much higher than

last year's 20%. driving those numbers up: the popularity of new models like the chevy equinox and buick lacrosse. so far, g.m.'s in the fast lane: its sales were up 14% last month. >> tom: coming soon to a showroom near you: alfa romeo cars. they haven't been exported to the u.s. since 1995. today, chrysler chief executive sergio marchionne said he expects the brand to return to the u.s. within the next two years. alfa romeo was made famous in 1967 movie "the graduate." the chrysler c.e.o. also said the company is focused on being profitable, even if that means a slight drop in market share.

>> tom: from worries about greek debt to china tightening credit, this week brought global issues home for u.s. investors. tonight's market monitor guest is heavily invested overseas. he's jeff everett, founder and portfolio manager at everkey global partners. jeff, welcome back to "nightly business report". >> thank you. >> tom: we spoke-- heard a comment fru earlier about the chinese credit situation. does it change your investment focus on china at all, given the credit conditions there, tightening up? >> it really doesn't. it creates uncertainty in the

market. that's an opportunity for us, long-term investors who are nimble. but it really doesn't affect the global liquidity issue that dramatically and that's a very important point i think people are missing. >> tom: we did see some liquidity questions being asked with the greek debt issue earlier in the week. does this represent a tipping point when its to government over-leverage? >> it's certainly very close. i don't think it's the russian crise we saw in 1998. i don't think it's thailand as we saw in the late 90s, as well. it does seem that we are going to be able to contain it. the e.u. authorities want to do that. i think global leaders will want to do that. we've seen a very high agree of collaboration over the past couple of years and that's continuing. the problem sgreece is recently named a developed market, and this is really an emerging market type problem. no surprise there one of the weaker developed markets is having this issue. >> tom: because of the greek problems and some of those other mediterranean concerns we have seen interest building in the

u.s. dollar. does this threaten the u.s. recovery at all? does this change your overview of global equities? >> i don't think it does. ening one of the important things, arguably the scale started to tip late november last year. people were a little less bearish on the dollar. fearing inflation, and that is probably going to be good long term. i think they're positive on the dollar for the right reasons. they're positive for growth reasons, not as a safe haven, only, and that's a very important shift we've seen. >> tom: are you positive on the dollar? >> i'm positive on the dollar. it's all relative to other currencies. relative to some other currencys-- i'm not a currency expert-- but the way we look at countrys-- the yen is too expensive and the eurois too expensive, too, which is why we're seeing the air come out of that. >> tom: you do have ideas for us this evening, including one in china, the world's largest mobile company, china mobile. this stock has been below $50 a

share. what do you think the catalyst is for this stock? the catalyst will be two things. one, it's going to be the fact that investors i think are missing one of the world's most interesting stories. smart phones, mobile browsing, mobile internet to me is one of the single biggest best ideas you can identify for the next decade. china mobile has 500 million subscribers of their own. recent surveys said 92% of smart phone users in china are china mobile users. in fact, a competitor, china unicom, has the iphone license, but of the iphone users, 83% of them are using china mobile service. so china mobile is a winner on this. it doesn't make the whole story but it's very cash rich, very cheap-- 11 times earning. >> tom: you also like canon with it trading here in the united states under cag for the american depository receipts. it has had a nice run-up over the past 12 months. >> it's a wonderful washington

of a potentially weaker yen. the canon, interestingly, never lost money in the financial crise and is regaining profitable. >> let me correct the ticker symbol-- caj. another pick back home in the united states is a forest products company, ryn, rr renier what do you like about this one? >> they have a division called performance fibers a real estate and timber company. it has a division called forest fibers that has had record earnings. it makes the fluff pulp product that goes into cigarette filters and the like, hygiene products. wonderful story. it's sort of a growth option on a really good paper company. >> tom: so you're getting the whole thing there, the hard assets as with the. >> the whole thing with a 5% dividend yield and i would argue the stock is as much as 50% undervalued if you were to take it out and look at it on a private market value base. >> tom: of the three you mentioned any kiss des closures

to make, ownership positions? >> we own all three. we like all three. >> tom: jeff, we appreciate it. thank you for the idea. our guest this evening jeff everett of everkey global partners. >> susie: barbie's added two more careers to her long resume. and for the first time, her chosen fields were chosen by the public. she's now a computer engineer and a news anchor. toymaker mattel says more than half a million votes were cast, with the popular vote going to "computer engineer barbie." "news anchor barbie," complete with a pink suit, camera and microphone was a favorite with girls. both dolls will go on sale later this year. over the years, barbie has been barbie has been an astronaut, a ball preen aprincess, and even a mcdonald's cashier. >> tom: and now a news anchor, and i will never get mistaken for ken. put that on the record right now. that's "nightly business report" for friday, february 12. i'm tom hudson. goodnight everyone and have a great weekend-- you too, susie. >> susie: good night, tom. i'm susie gharib goodnight, everyone. we hope to see all of you again

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