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tv   Nightly Business Report  PBS  August 4, 2010 12:00am-12:30am PST

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>> this is not an iphone killer. this is not a droid killer. but this is the phone that blackberry users want. >> jeff: research in motion is billing it as the best blackberry ever. >> suzanne: what the new "torch" means for the smartphone market, its maker and the competition. you're watching "nightly business report" for tuesday, august 3. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> jeff: good evening everybody. the smartphone wars heated up today, as research in motion launched the latest salvo. suzanne, it's called the blackberry torch.
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>> suzanne: jeff, the torch has a host of new features, including the addition of a real touch screen to blackberry's traditional keyboard. but how will it stack up when compared to apple's iphone and google's android phones? scott gurvey reports. >> reporter: at&t and rim executives unveiled the blackberry torch today, declaring it best blackberry ever. for canada-based research in motion, it has not arrived a moment too soon. blackberry virtually created the smartphone market a decade ago with a revolutionary device which tied the cellphone to corporate e-mail. but, while blackberry is still number one in terms of phones in service, it has lost market share and mind share first to apple's iphone and now to phones running google's android operating system. both are seen as more modern and versatile. the new torch will be an at&t exclusive and sell for $199 with a two-year contract. it combines the company's popular keyboard with a true touch screen that corrects an
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error's lance ulanoff says made the last blackberry model, the storm, a mess. >> that was a touch press screen, because the whole screen was a button. that was a disaster, i hated it. this makes sense. the o.s. update looks very smart, and what they've done for their applications is really going to help spark interest in developing applications for the blackberry platform. >> reporter: catching up with apple and google's popular apps is critical to blackberry's future. but, morningstar analyst joseph beaulie says rim must also keep its customers in mind as it defines its goals. >> that it continues to service its core enterprise customer base, fend off the iphone in the enterprise customer base and also continue to keep consumers happy and excited about new products and not have them drift off to the latest iphone or android phone. >> reporter: a nielson survey released this week showed half
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of blackberry's current customers are considering a switch to another smartphone. ulanoff believes this new blackberry will lead many loyal customers to change those plans. >> this is not an iphone killer, this is not a droid killer, but this is the phone that blackberry users want. that i'm clear on, because i'm a blackberry user. i want that phone. >> reporter: one of the reasons for blackberry's popularity with business is its security. in fact, the united arab emirates is planning to shut down e-mail and data use of the devices, reportedly because the government can't monitor messages. rim co-c.e.o. mike lazaridis says blackberry is the only device approved for government and law enforcement use in many countries. he says the firm has no intention of changing its standards. >> it took us nearly two years to achieve that certification and accreditation. so, by meeting the international standards that 26 countries have signed up to, we are the only solution that meets those criteria. and you know that's important, because those are the standard that we meet. there has to be a standard that
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we meet and that's certainly one and we will not compromise. >> reporter: rim's blackberry torch goes on sale august 12. right now, google's androids and apple's iphones outsell the blackberries in the smartphone category. scott gurvey, "nightly business report," new york. >> jeff: a late development in tech land tonight, and it involves intel. the federal trade commission says it will detail a settlement with the giant chip-maker tomorrow morning. last december, the agency filed a complaint against intel, alleging a decade-long campaign to shut out rivals and dominate the computer chip market. while the f.t.c. can't impose financial penalties, tomorrow's settlement could be a game- changer for intel's business model. >> suzanne: the pace of consumer spending stalled in june as more americans held on to their cash, and fewer people got raises. the commerce department says personal spending was unchanged in june after rising just slightly in may. income growth was also flat in june, the weakest in nine months. but, economist maury harris is optimistic consumer spending
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will grow between 2.5% and 3% in the second half of the year >> what drives the economy forward are the incomes that have been created by recent economic activity. we have seen a pick up in corporate income and household income in the second quarter, not in every month, but in most months in the first half of the year, and those higher incomes provide the wherewithal for better spending. >> suzanne: or, perhaps, better saving, which it looks like more americans are doing. the personal savings rate grew during june, rising to 6.4% of after-tax incomes. >> jeff: consumers dipped into their savings to help drive u.s. auto sales slightly higher last month. bailed-out automakers general motors and chrysler each saw a 5% increase. but, g.m. says, factor out the brands its retiring, pontiac, hummer, saturn and saab, and sales were five times higher. ford sales rose 3%. july's biggest winners were korea's hyundai motor, which
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posted a 19% gain, and nissan, where sales were up nearly 15%. toyota lagged the market, sales there were down 3%. >> suzanne: here are the stories in tonight's n.b.r. newswheel. those worries about consumer spending kept the bulls from following through on yesterday's gains. the dow fell 38 points, the nasdaq lost 11 and the s&p 500 was down five. volume on the big board fell slightly from yesterday's pace, while volume on the nasdaq picked up. fewer buyers signed contracts for new homes in june, the national association of realtors says its pending home sales index fell 2.6%. economists say buyers moved up purchases to the spring to take advantage of federal tax credits that have since expired. september, that's the latest estimate of when the senate will vote on legislation to eliminate caps on oil spill liability. senate majority leader harry reid blamed republicans for the delay, but he's confident a spill bill will pass before year's end.
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b.p. has begun what its calling a static kill to permanently seal its ruptured oil well in the gulf of mexico. heavy mud and concrete are being pumped into the well. the process could last as long as a couple of days. >> jeff: still ahead, the word on the street is "uncertainty." despite it, some top-rated funds are making money.'s gregg greenberg joins us to explain. >> suzanne: before you buy a company's stock, you may research its sales or products. but how much do you know about its board of directors? they are the people who guide the company's overall strategy and direction. as our series "rules of the board" continues, tom hudson talks to experts about how investors can separate a good corporate board from a bad one. >> tom: when a company gets in trouble, its the c.e.o. who gets called before congress. but behind every chief executive is a board of directors, and it's the job every member of that board to be the eyes and ears of shareholders. >> they're really there to make
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sure that integrity is absolutely the number one priority throughout the organization. >> tom: nell minow is the co- founder of the corporate library, an independent research firm focused on corporate behavior. >> and that means asking tough questions and kicking the tires. to look at different divisions and it especially means being very well acquainted with anybody who might possibly be a candidate for succession in the future. >> tom: there are many ways to build a board of directors. usually, a board will include some people with industry expertise, maybe a former chief executive or two, and perhaps a representative from major shareholders or unions. ralph ward runs the "boardroom insider" newsletter. >> a lot of members of public company boards are still there primarily for name value, retired c.e.o.'s, major nonprofit names, things like
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that... and they're people, no matter how good of people they are in business, they may not really be equipped to handle that level of detail. >> tom: thanks to the accounting scandals at enron and worldcom, and the risky trades that brought down bear stearns and lehman brothers, a set of common practices for boards of directors has evolved. they include requiring directors to regularly attend board meetings and own stock in the company-- and some independent board members, meaning they haven't worked for the firm or done any business with it. still, jeffrey sonnenfeld from the yale school of management has found the makeup of a board is more important than any regulations or rules a board puts in place. >> we create these checklists which give people a false sense of comfort. much more important than this is look at the social process, the social dynamic. what's happening there? how do we confront one another constructively? how do we get the skill mixes in there? sonnenfeld suggests shareholders look at where board members have previously served. what happened at those companies during their tenure? he also says shareholders should
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ask the company what the firm requires of its directors, and you can learn a lot by how much a company is willing to disclose about what it demands of its board. but there is no guarantee that just because a company is open about how its board operates that shareholders will profit. tom hudson, "nightly business report," miami. >> suzanne: tomorrow night, tom looks at a company whose board is held up as a bad example. still, its stock has hit record highs in recent months.
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>> jeff: maybe it was the disappointing reports on consumer spending and factory orders, or maybe it's just the pause that refreshes after yesterday's 200-point dow rally. either way, the indexes notched minor losses. there were some stocks moving higher. how about health care? most health care stocks have reported better-than-expected earnings, yet the group has lagged the broader market rally. until today. take a look at pfizer. a 5.5% pop today, thanks to a healthy jump in quarterly profits, helped along by the purchase of wyeth last year. the dow component also sees full-year earnings hitting the high end of previous projections. the news lifted the stock to an 11-week high. next we have davita. this company manages over 1500 outpatient dialysis centers in the u.s.
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second-quarter profits were as expected, but executives say operating cash flow will improve nicely this year; investors liked the sound of that. that sent shares back to mid- july levels. however, shares of tenet healthcare are still in the emergency ward. did one or more of tenet's hospitals commit medicare fraud for heart defibrillator surgery? the justice department is investigating. tenet down 4.5% today. it was the worst-performing stock in the s&p health care sector. turning now to the dow's biggest loser, procter & gamble. shares nose diving nearly 4% on earnings and sales shortfall. the miss stems from promotional expenses associated with new product launches as consumers wrestle to cut corners. here is another loser: dow chemical stung for a big loss. the chemical giant restarted several mothballed plants. that effort cost more than expected, dow wound up missing analyst estimates by 2 cents a share. the stock giving back part of
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its 23% gain over the last several weeks. shares in baker hughes giving back 13%. the company warned that the moratorium on deepwater drilling in the gulf will hurt future profits. investments in africa and latin america aren't doing much, and it has a bigger tax bill after acquiring b.j. services last year. gold prices were up a fraction today. but shares of kinross gold heading in the other direction. kinross will buy red back mining. the $7 billion deal gives kinross access to mining properties in west africa. analysts were positive, but it's an all-stock-and-warrants deal will dilute current shareholders. officemax getting knocked around as well, revenues were below estimates. lots of cost cutting helped second-quarter results, but officemax says the second half of the year will be a tough one
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for the company. and finally, barnes & noble may be putting itself up for sale. the announcement, after the close, sent its stock up 25% in after-hours trading. the bookseller hired lazard to consider strategic alternatives, including a sale of the firm. and that's tonight's "market focus." >> jeff: tonight, we continue our new segment with, looking at investment ideas ranging from mutual funds and e.t.f.'s to small-cap and under-the-radar stocks. we call it "word on the street."
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and tonight's word is uncertainty. joining us to talk about market uncertainty, and how some top- performing fund managers are capitalizing on it, is gregg greenberg, staff reporter at >> great to be here. >> jeff: year-to-date, the s&p 500 is up just one half of 1%. so what strategies are fund managers finding that actually work and a sideways market like this? >> i think the key is, even if it is a range-bound market, a good fund manager can find a way to make money. even in a place like europe, where there is goes to be austerity, and they'll be driving for growth, a good fund manager can still get you some dollars. >> jeff: talk to us about some of the fund managers you've been chatting with. one is lumus sales? >> i spoke to matt egan, and that's a 14 million star. he says we're going to
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have slow growth. he is putting his money into corporate bonds. he likes the banks, like citigroup, and bank of america. he says they've cleaned themselves up. and he also liked ford motor, and the cash-rich industrials. so there may be a slowdown, but he says a good way to play it is through corporate bonds because a lot of the companies are cash rich. >> jeff: who else. mark of intrepid capital. >> that's a five-star fund. he says even if there are problems in the economy, you can still find great stocks and companies that capitalize on this problem, companies like rent-a-center. if people aren't going to be buying furniture, they can rent them. there are opportunities, and he'll find them under any rock, even in a down economy. >> jeff: you mentioned europe, and your next fund manager finds some gems there, too. >> madeline matlock, she
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is under weight europe, but when i spoke to her this week, she said even though europe is going through lots of problems, and you just have to watch the tv and the riots in southern europe, but she likes see mans, and they benefit from a week euro. and she likes novartis. and they have generic drugs. so she is still finding great stocks. >> jeff: gregg, do you own any of these funds? >> i do not own any of these funds. >> jeff: you can read more about gregg's article on >> absolutely. >> suzanne: here's what we're watching for tomorrow. quarterly results from bankatlantic, c.v.s. caremark, news corp, pulte group and time warner. and, a.d.p. releases its national employment report for july.
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also, we'll see if money manager michael farr is still bearish and get an update on his ten stock picks. he's our "street critique" guest, and author of "a million is not enough." >> suzanne: the posterchild for the subprime mortgage meltdown is settling up with some shareholders. countrywide financial will pay $600 million to end several class-action suits. shareholders accused the former mortgage giant of hiding mounting risks and loose lending standards during the housing boom. but, countrywide's problems aren't over. the firm and former c.e.o. angelo mozilo are still being investigated by the s.e.c. and the justice department. bank of america bought countrywide's mortgage assets in 2008. >> jeff: reading, writing and reductions. states are cutting hundreds of millions of dollars from pre- kindergarten budgets. that means fewer slots for children, and layoffs for teachers. the national institute for early education research says states are slashing nearly $350 million from pre-k programs next year, and more cuts are on the horizon as federal stimulus money dries
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up. >> suzanne: there's been a lot of talk in the last week about uncle sam's bailouts and their ability to save us from a depression. still, many americans are upset we spent billions to rescue banks. but, tonight's commentator says the bank bailout known as tarp will end up being a bargain. he's allan sloan, senior editor
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at large at "fortune." >> if you pay attention to the political news, you keep hearing tarp attacked as the bank bailout. but if you pay attention what's really going on, you know that tarp isn't the real bailout. in fact, the bank part of tarp is likely to show a profit to taxpayers. it was a bailout in the sense that it gave banks cheap capital, but in the end, interest and stock profits mean the taxpayers will come out ahead. the real bailout is the stuff that you don't see, and that didn't have a dramatic congressional vote, the way tarp did. the fed keeping short term interest rates at almost zero is a huge, huge subsidy to banks and investment houses. it's a big reason they're now making so much money, and it's a huge penalty to america's savers and retirees, whose income on money market funds and short- term cds is almost nothing. the program under which the federal government guaranteed debt issued by banks and financial companies was an enormous bailout, but you don't hear political complaints about that, or about the programs that let institutions borrow cheaply
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from uncle sam using crummy collateral. these things are the real bailout. compared to them, the banks' tarp money is barely a rounding error. if politicians are going to attack the bailout, they should at least attack the right parts of it. but that would involve understanding, rather than grandstanding. i won't hold my breath waiting for this to happen. i'm allan sloan. >> suzanne: that's "nightly business report" for tuesday, august 3. we want to remind you this is the time of year your public television station seeks your support. >> jeff: support that makes programs like "nightly business report" possible. >> suzanne: thanks for joining us, us, and don't forget to support your public television station. >> suzanne: i'm suzanne pratt. goodnight everyone, you too jeff. >> jeff: goodnight suzanne. i'm jeff yastine, we'll see all of you again tomorrow evening. "nightly business report" is made possible by:
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this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt
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captioned by media access group at wgbh >> more information about investing is available in "nightly business report's" video "how wall street works". to order this dvd, call 1-800- play-pbs or visit online at
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