this is "nightly business report" with susie gharib and tom hudson. soox*ud good evening, everyone. my colleague, tom hudson is off tonight. the dow broke its winning streak after some disappointing economic news today. investors had been buying up stocks on a steady stream of upbeat news about the economy, but not today. inflation at the consumer level rose 4/10ths of a percent in february. high gasoline prices accounted for most of the increase. the biggest disappointment is a significant drop in consumer confidence. the university of michigan index in march fell to the lowest level this year. it's a sign that consumers are worried about high prices at the pump, and could scale back on spending. the major averages closed mixed. the blue chips lost 20. the nasdaq fell a point, and the s&p edged up a point. the dow rose almost two and a half percent on the week. the nasdaq gained over two percent, and the s&p 500 added 2.4% for the week. in the bond market it was the worst week since july. prices went down, and yields went up. the yield on the 10 year rises to 2.3%. joining us now to talk about all the of this, william gross, the founder of the world's largest bonld fund. that's to talk about. >> hi, susie. >> susie: so what a week for treasuries. is the bubble finally bursting for treasuries. >> i don't >> you mentioned yields moved up. >> they're relatively inert. so of like our 15-year old cat at home. rocky still looks good, he just doesn't move around much. they've increased by 25 basis points due to a stronger u.s. economy, and i think the fear of the fed tightening, and the lack of quantitative easing after june. >> susie: let me go back. a lost of people say it's dangerous to be in treasuries right now. what's your view. is pim doe buying, selling or holding on treasuries? >> we sold a few in the past few weeks. the treasuries is dependent on the federal reserve. and there's no doubt, susie, that yields are artificially compressed. and ther compressed because the federal reserve has been buying them in the hundreds of billions of dollars. basically over the past three to four months, the fed has been buying all of the long treasuries that have been issueed and perhaps 75% of the 5 to 10 year treasuries issued. so without the fed in terms of their check writing, treasuries are vulnerable. we continue to see the fed writing checks. >> susie: so what is the fed going to do, because the economy has been improving, and they say they're going to keep interest rates low for the next couple of years. no indication that they're going to pump more money into the economy, the squalled quantitative easing and qe 3. what do you think the fed is going to do? >> i think the fed will have a quantitative easing. the 2 expires at the end of june. central banks not just in the united states, but around the world have been writing checks to the extent of 500 billion to a trillion dollars worth of checks and money supply over the past six months. that's really, susie, what has been pushing equity markets and pushing risk markets over the past six months. the inevitablity of easing and check writing, i think it continues until it's obvious to all central bankers and the fed that the economy is on stable ground. that's perhaps 12 to 24 to 36 months away, if at all. >> susie: i lot of economists are talking about the fed raising interest rates on concerns about inflation. could both of these scenarios happen? >> it could happen. one federal reserve board member is in favor of higher interest rates now. but the core of the fed, bernanke and bill dudley, they basically have a sense that the fed needs to continue to be supportive, and that inflation can rise above two percent which it has in recent months and still permit a very easing federal reserve over the next several years. we have a repressive financial environment that promotes low interest rates at the expense of savers, and i think we need to get use to that for a long time. >> susie: thank you so much, bill. appreciate you coming on the program. >> thank you, susie. >> susie: have a great weekend. we've been speaking with william gross, founder and chief investment officer of pimco. still ahead, i'm eric ca miller at a store. i'll tell you why retailers are likely to see more green than usual this st. patrick's day. >> susie: long lines and lots of hype. a new apple product has gone on sale from tokyo to london to new york. the faithful lined up to buy the new ipad. how big of a deal is it? as darren gersh reports, the ipad is a big business indeed. >> reporter: just look at all these people standing in line. they've made the ipad a huge business. so huge, if it weren't part of apple, the ipad alone would be a much bigger business than amazon, maker of the kindle fire. the ipad is also more than four times bigger than p.c. maker dell. that's the conclusion of tuck finance professor anant sundaram. >> here we are talking about a product that potentially is disrupting the p.c. industry and who knows where this is all headed. >> reporter: to show you the math, we pulled out-- what else-- an ipad. professor sundaram figures the average profit on an ipad at $153. if apple stays on track to sell 60 million ipads this year, that will bring in profit of $9.2 billion. now, take that $9.2 billion and multiply it by apple's 15 price/earnings ratio-- a measure of value based on profits-- and you get a market value of the ipad as a standalone business of $138 billion. even for a finance professor, that's a lot of money. >> i myself was astounded. >> reporter: now analysts at i.d.c. say the latest ipad may have a slightly lower profit margin because the high- resolution screen costs more to make. but i.d.c. agrees the future is bright for ipad. and sundaram, who owns apple shares, believes there's room to grow. >> we're talking about opportunities that are huge in education, in health and perhaps the biggest of them all in enterprise. >> reporter: you have to wonder, after adding a better screen and 4g, what can apple do next to keep people lining up for ipads. that's not a problem now, but it could be two or three years from now. darren gersh, "nightly business report," washington. >> susie: there could be a tonic for a high price at the pump. replace gasoline with cheaper natural gas. chrysler and general motors are already moving in that direction. they plan to roll out pickups later this year that run on nat gas. as we report, an abundance of the cheap fuel is begining to transform to transportation industry. >> reporter: just west of downtown chicago, peoples gas is finishing work on a natural gas fueling station for its utility trucks. >> we'll be able to fill one there and also one up here on each side. >> reporter: project manager mike wyrick admits the company is also hoping others will eventually fill up here too. >> we expect a number of other businesses including yellow cab, over the road truck haulers, other industries with bigger vehicles. >> reporter: natural gas has been fueling fleet vehicles like this one for about a decade. in fact right now there are about 100,000 of these vehicles cruising streets around the country. but americas glut of natural gas could make it the fuel of choice for all kinds of cars and trucks. michael duoba is an engineer at argonne national laboratory's center for transportation research. he thinks powering big trucks with nat gas is a no brainer. >> they consume the most fuel. so, per installation, per fueling station that makes the most bang for the buck. >> reporter: truck maker navistar agrees. it's introducing a medium duty truck that will run on compressed natural gas or c.n.g. and a heavy duty over the road semi that will run on lng or liquefied nat gas. eric tech-- president of navistar engine group-- says with natural gas prices currently half that of diesel-- the cost savings for big truck buyers could be significant. >> you look at a truck that will travel maybe 100,000 miles in a year. they could see fuel saving up to $35,000 and that's comparable to what the upcharge for this system would be on their truck. so, in one year they could pay back the complete cost of the system that they buy. >> reporter: but convincing truckers to switch from diesel to natural gas won't be easy if they can't fill up on the road. that's where clean energy comes in. the texas based company is the nation's largest provider of natural gas for the transportation industry. chief marketing officer james harger says clean energy plans to install lng fueling pumps at 150 pilot flying j truck stops across the country by the end of next year. >> we've designed them to be spaced about every 250 miles so that trucks can run coast to coast, border to border. >> reporter: both peoples gas and clean energy are convinced if they build enough fueling stations---car and truck makers will build more natural gas powered vehicles. and if gasoline prices continue to top 4 dollars a gallon--- they might not need much convincing. diane eastabrook "nightly business report" chicago. >> susie: little convincing was needed to get investors interested in stocks this week...as the s&p 500 posted its best week in three months. let's take a look at tonight's market focus. ---(anim/vtr) this week's rally was fairly broad-based....but three sectors were most popular. financials led the way, gaining a hefty 5-point-9 percent. bank stock investors were cheered by those fed stress test results, dividend news and an improving economy. the good economic news also lifted industrials and techology, both adding about 3 percent this week. financials, industrials and tech are also this year's top performers. bank of america passed its fed test, and today the stock extended its rally. word that b of a's deliquent loans fell in february helped push it higher. the shares topped both the dow and s&p 500 today, jumping more than 6 percent, but rising more than 20 percent this week. not long ago, it was a $5 stock. energy companies were also big winners today, as crude oil futures gained more than 2 dollars in new york trading. shares of noble, diamond offshore and national oil well varco each gained about 4%. offshore driller transocean rose more than 4 percent as at least 3 analysts raised their price targets on the company. turning to natural gas, there's a deal in the making. atlas resource partners has inked an agreement to buy the natgas reserves from carrizo oil & gas. the reserves are located in the texas barnett shale, and the deal is worth just under $200 million. atlas resource partners jumped nearly 32 percent to 28.30. while carizzo rose a modest 1 percent. there was also heavy buying again today in the beleaguered coal sector. consol energy and peabody energy each climbed about 5 percent. ---ots--- meanwhile, analysts at lazard capital urged clients to plant cash in fertilzer stocks as farmers gear up for spring planting. shares of mosaic and potash corp of saskatchewan jumped more than 4 percent. packaging firm rock-tenn was under pressure today, after management warned second quarter earnings would come in below analysts forecasts. maintenance issues at a canadian containerboard mill and pricing pressures on exports are expected to hurt profits. the company predicts earnings won't improve significantly until q-4. that's when major mill projects will be completed and $400 million in cost savings will kick in. shares in rock-tenn lost 4 percent to close at 68.53. and, finally, it was a perfect day for perfect world. the company is the developer of the popular online game, "legend of martial arts." last night it reported a respectable 32 percent jump in 4th quarter revenues. today the stock, which trades adrs, gained a powerful 28 percent to settle at a 6-month high. turning now to our market monitor desk, he says he's bullish about the market, but not pretty bullish. he's chris, a portfolio manager at wish asset management. nice to have you back. >> hi, susie. great to be here. >> susie: you know, we had a lot of milestones this week in the market. what is your outlook overall for stocks? >> while the bull market is three years old, i don't think stocks are overvalued here. so i think the s&p 500 will reach 1460 by the end of the year, and the dow 14,200 which as long as earnings meet forecasts should be fine. while that's modest additional gain from here. for the year that would be a 15% gain which by historical standard size quite good. susie, what you and i talked about the last time on the show, stands, i encourage investors to focus on income as the primary means to generate growth, and high yield bonlds are a great place to be. >> susie: talk about the bond yields in a moment. i want to ask you about treas reaps. what's your view on treas reaps? is it still an investment to have in the portfolio or move out? >> i don't think investors should avoid the fixed income sector. there are great opportunities in high yield bonlds and emerging market bonds and investment grade bonds on the financials that still pay attractive yields. >> susie: let's go down the list. begin with your first recommendations. s&p bank, etf. tell us why you like this? >> this is a diversified index of both regional and large national banks. government regulators are burning banking industry really into something representing a utility industry, but they're still going to make money and earnings growth is going to drive share prices higher. they've run up recently, but i think earnings growth will propel it higher. >> susie: you were talking about good bopped funds to go into, and investor -- a new etf. wisdom treat emerging corporate bond fund. emt. why do you like this one. >> it invests in bond funds in emerging market countries. it's all in u.s. dollars, so there's no currency risk. pot tential for share price appreciation, as long as investors realize the bonds are more risky than u.s. companies. this fund will do well and pays a 5% yield. >> susie: and you like a real estate fund, ticker sim bowl. rit. why do you like this one. >> it pays a seven percent dividend, trade 12% discount. >> susie: you covered all the bases. we appreciate that. any dpis closures on your ownership of the funds? >> i always eat my own cooking. i own them all. >> susie: real pleasure having you. have a great weekend. >> thank you, susie, you too. >> susie: senior portfolio manager at western asset management. when it comes to higher education schools are footing more of the bill. state and local government funding for public colleges has fallen to a 25 year low. now those governments doled out an average of $6300 per student last year. five years ago it was $7,000 per student. earlier this week we spoke to the chancellor of penticton higher education, and don cavenaugh told us shifting more of the burden away from the state isn't working. >> if the state wants an educated citizenry and workforce they need to invest in that. to shift that without thinking through how are we going to do that, is going to be problematic. >> susie: after aggravating the drop in funding, more people are in school, which means there's less to go around. college attendance typically goes up during a recession. and this time is no different. it's time for the friday feature. author and educate lou heckler. >> i've been thinking about resistance. not resistance like the occupy wall street movement, although that may be part of it. like many business people, i fly a lot. just recently i was on a commercial airliner that got all the way to the end of the assigned runway and then had to go around because the wind shifted. of course, a plane can't take off unless it's into the wind because, as the pilots say, what you push against lifts you up. you've heard other versions of that, like "what doesn't kill you makes you stronger." i have to admit when i hear that one, i sometimes want to throttle the person who said it. but, i can see that times in my life where i have been the most challenged have made me stronger. dr. jerry bell at u.n.c. chapel hill once said in a seminar, "ask your staff a key question: is there anything i'm doing that is keeping you from being as good as you'd like to be?" i took his advice and one of my people said, "yes. when you ask a question, it's not really a question. it's more like a statement you want us to agree with." i felt he was pushing against me and i didn't feel lifted up. i asked for examples and got some from several staffers. hmm. they were right. it was important i knew that, and really learned and did something about it. so when you meet resistance, instead of fighting it? see where the truth is in what others say. it might just give you a lift. i'm lou heckler. >> susie: as you know, st. patrick's day is tomorrow, and with it comes parades, parties, and lots of spending. the nation's retailers are likely to ring up 4.5 billion dollars in connection with the holiday up 10% from last year. as erika miller explains, it's more than the luck of the irish boosting spending this year. >> reporter: the greenest of holidays could be a little greener this year. more americans that ever plan to celebrate saint patrick's day, according to a recent survey. for bars and restaurants, it helps that the holiday falls on a saturday, because st. patrick's day is the second booziest holiday after mardi gras. men are expected to spend roughly 40 bucks apiece celebrating. women? less than $30. average it out and spending per adult should be about $35. >> saint patrick's day spending usually falls in that $33 to $36 range. and it has since 2007. so it's a pretty recession proof holiday. >> reporter: but it's not just bars and restaurants that are expecting a booming business. saint patrick's day is often considered the kick-off of spring, so many people start stocking up on plants and garden supplies. at this new jersey lowe's store, assistant manager tom harrigton says the unusually warm weather is motivating spenders. >> being that spring is breaking early, the weather has been great, they are starting to plan already and get color outside in their yards. >> reporter: he says shoppers have also been eyeing barbeques and lawn mowers. and we all know that even though shoppers may walk in seeking seasonal items, they usually to walk out with a whole lot more. >> the foot traffic has been much better. people are out there, they're looking at stuff. we're trying to get as much out in front of them as we possibly can. >> reporter: clearly, apparel stores are sell a lot of green clothing and accessories. for all the optimism about st. patrick's day spending, it's still a relatively minor holiday for most retailers. easter, for example, is much bigger. americans typically spend 3 times as much celebrating it. erika miller, "nightly business report,' new york >> susie: that's it for us on nightly business report on friday, march 16th. we want to remind you, this is the time of year that your public television station seeks your support. thanks for joining us tonight. have a great weeksxend happy st. patrick's day. i'm susie ib. tom and i will see all of you again next week. nightly business report is made possible by:
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