captioning sponsored by wpbt >> today one in ten americans still can't find work. that's why jobs has to be our number one focus in 2010. >> tom: while the president stumped for job creation in new hampshire... >> susie: but with the budget deficit on the horizon, congress is pushing back. you're watching "nightly business report" for tuesday, february 2. 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. another reminder of just how tough it is to find a job now. secretary geithner was promoting as well. >> susie: that's right, tom, they're both talking about solutions. the if the's latest plan is to boost loans to small businesses as a way to jump start hiring. >> tom: while the president was trying to pick up support for that new plan, members of congress instead were picking a parcel his budget and what he has or has not done already to get americans back to work. darren gersh reports. >> reporter: even democrats sounded unhappy with the obama administration's progress on jobs. here's arkansas's blanche lincoln taking treasury secretary timothy geithner to task. >> i don't understand it, and i guess most arkansans don't understand the vision of the administration when it comes to putting in place economic policy that works for our nation in today's economy and the economic climate today. >> reporter: administration policy would work better, the secretary said, if congress actually passed it into law. >> it's important that we bring to earth a bunch of things we are still working on up here, like financial reform, health care reform, and elsewhere, so people can plan for a more certain future. >> reporter: but republicans like olympia snowe warned the administration's plan to raise taxes on upper income small business owners would not restore their confidence. >> there is no way that they are going to move forward to job creation. who would take the risk? depending on what they are hearing coming out of washington these days, would you take the risk? would you put your money on the line? >> reporter: to help get more loans to small business owners so they can hire more workers, the president told a town hall meeting in new hampshire he wants to take $30 billion of the money lent to banks on wall street and use it to help community banks. >> all this will help small banks do even more of what our economy needs, and that's ensure that small businesses are once more the engine of job growth in america. >> reporter: that did not sit will with new hampshire republican judd gregg, who helped write the tarp law and read it back to the president's budget director. >> the law is very clear. the moneys recouped from the tarp shall be paid into the general fund of the treasury for the reduction of the public debt. it's not for a piggy bank. >> reporter: judging by the cool reception to the president's budget today, tax expert clint stretch thinks congress will find many reasons to reject the corporate tax hikes the administration is also proposing. >> it's making the investments that get people buying plant and equipment and producing jobs. and then it's the ability of our companies to compete in the global marketplace. those are all powerful kinds of issues. >> reporter: over the next ten years, the administration wants to raise an additional $400 billion from business. if congress says no, much of that money may be borrowed instead. darren gersh, "nightly business report," washington. >> susie: another big push for the obama administration: limiting the risks big banks can take. the man leading the charge: paul volcker, the former chairman of the federal reserve. today he told lawmakers those "too big to fail" banks shouldn't own or run hedge funds. he's urging them to pass what's being called the "volcker rule," a bank ban on speculative trading. volcker says limiting that kind of risky behavior will help prevent a repeat of the bailouts of 2008. here are the stories in tonight's "nightly business report" newswheel. an uptick in homes under contract led to an uptick on wall street today. the dow saw a second day of triple-digit gains, up 111 points. the nasdaq gained more than 18. the s&p 500 is back over 1,100, up 14 points on the day. the national association of realtors' pending home sales index rose 1% last month to a reading of 96.6. that marks its ninth advance in the past ten months. in tonight's market focus, a mortgage analyst tells us the biggest threat to those gains. that housing report also pushed oil prices to a two-week high. light sweet crude for march delivery jumped $2.80, or almost 4%, to $77.23 a barrel in new york trading. >> susie: big double-digit january sales gains at ford and general motors, but not toyota. ford sales revved up 25%, thanks to strong fleet sales to government and businesses. the company's market share now stands at about 16%, slightly higher than a year ago. sales at g.m. rose 14%, driven by new crossover vehicles. chrysler was down 8%. and toyota was hurt by the big recall of its popular models because of sticking gas pedals. its sales fell 16%. and toyota's market share is now 14%, the lowest point since 1996. keeping that market share from falling even farther is job one for toyota right now. but that could be tough with critics like u.s. transportation secretary ray lahood. today he said toyota was quote a "little safety deaf." lahood says the automaker was slow to realize the safety problems that led the recalls. as diane eastabrook reports, while toyota has a fix for sticking gas pedals, it may have to fix its reputation as well. >> reporter: it's business as usual in the service department of elmhurst toyota. oil changes and routine repairs are on the day's schedule. but by next week, dealer kurt schiele expects his mechanics will be working 24-7 to fix as many as a thousand gas pedals on recalled toyota vehicles. >> we're making sure that we're staffed correctly and just putting a real good process together so we can handle the customers on a timely basis. >> reporter: repairing the accelerators on thousands of toyota vehicles will be a time- consuming task for dealers and plants, but experts say repairing potential damage to the toyota brand could be a bit trickier. this morning toyota publicly apologized to consumers for the recall in a letter appearing in major newspapers across the u.s. but the apology comes a week after the recall and efforts to find a solution to the sticky accelerators dominated headlines. the question now: has one week of nearly nonstop negative publicity tainted a brand that for decades has built a reputation on quality? >> these things are always the most dangerous and tricky to manage. >> reporter: daniel diermeir teaches crisis management at northwestern university's kellogg school of management. he says if sales plunge dramatically over the next few months, toyota will know it has an image problem that needs repairing. >> that means that at every touch point the customer has with the brand, the message of quality-- superior quality as a defining characteristic of the brand-- needs to be enforced. that could be in the marketing materials, in the advertising materials, and the way the dealer talks about the vehicle and so forth. >> reporter: toyota has a strong reputation with consumers. out of nearly 40 brands, it has consistently scored near the top of j.d. power and associates' vehicle dependability study. j.d. power's john humphrey isn't sure yet if the recall will factor into its next survey, out later this year. >> clearly they've taken a hit. it will be interesting to watch how quickly they will be able to do the damage control around the brand. >> i think it's the best car on the street for the price. >> reporter: paul aller is one consumer whose confidence in toyota has not been shaken. he and his wife are interested in buying a matrix, one of the vehicles that's been recalled. >> it's a non-event to us. toyota is quality, and it's the best buy on the street as far as i can see with this car. >> reporter: experts think if that sentiment is shared by most u.s. consumers, toyota will be able to navigate around this bump in the road. diane eastabrook, "nightly business report," elmhurst, illinois. >> tom: still ahead, going bust, with many of the nation's retailers awash in red ink. some analysts think many stores may soon find themselves in bankruptcy court. >> susie: so another triple dim it day. what's going on on wall street. >> tom: certainly housing and big hopes for housing. let's take a look at that market focus, susie. hopes that housing has bottomed helped fuel the gains today, on the heels of an increase in pending home sales, as well as a surprise profit from homebuilder d.r. horton. this is the first quarterly profit from d.r. horton since housing collapsed. the company's c.e.o. still calls the market challenging, but thinks the first-time home buyers' tax credit will help the spring selling season. the stock did four times normal volume on a double-digit rise. it's now at almost five-month highs. the company controlled costs while expanding sales, and that equates to bigger profit margins. the news lifted the entire homebuilding sector. pulte homes' earnings are due out next tuesday. the remaining three-- n.v.r., toll brothers, and lennar-- already have released their results. all four rallying today. hopes are building that future home sales are coming with the uptick in december pending sales pointing to more stability. but one mortgage analyst says if more isn't done to stem the tide of foreclosures, the stability may be short-lived. >> the biggest risk to housing is the huge pipeline of properties which are either delinquent or borrowers who are delinquent or in various states of foreclosure. the number is daunting. if you look at the total number, it's about five million. so if nothing were done, then that is the number of properties that could come onto the market. >> tom: it wasn't all housing today, though. here are some earnings highlights. a familiar refrain for big oil companies: strong oil production offset by a weak refinery business. we heard the same issues with exxon just yesterday. b.p.'s problems led to an earnings miss. b.p. stock was very active with more than four times average volume, sinking 3% to a new four-month low, even as oil prices rallied to over $77 a barrel. also on the downside today: dow chemical. it was off by more than 3% on almost three times volume. over the last year, though, the stock has more than doubled from $11 a share. the fourth-quarter earnings were better than expected, driven by the two-speed world economy: strength in emerging markets and lagging growth in the u.s. and europe. but clearly, with the market up today, it wasn't just selling on earnings. printer company lexmark was making money for its shareholders, the stock sitting at a new 52-week high tonight, jumping over $30 a share on 11 times average volume. profits came in better than predicted, profit margins jumped, and the company sees a strong first quarter, stronger than analysts expected. by the way, hewlett packard stock caught a bid on the lexmark news, with h.p.q. up 1.5%. other standouts: emerson electric is at a 52-week high as management says 2010 won't be as bad as feared. whirlpool was up 8% on the forecast that home appliance sales will be up for the first time in five years. and a.d.m. rallied 5% as its ethanol business was back in the green. midweek earnings tomorrow will include two dow components, cisco and pfizer. business is looking up at ann taylor. the retailer says its fourth quarter will be "substantially higher" compared to a year ago. big volume, and a big rally, with the stock up more than 17%. manpower offering 17.56 a share. the stock saw huge volume, 15 million shares up from an average of 15,000. that bid for comcast came after manpower beat the street with its quarterly results, and that's tonight's market focus. >> tom: making money from a mutual fund is one thing. hoping to change the world at the same time is something else. john waggoner is tonight's "of mutual interest" guest. he writes about mutual funds at "u.s.a. today." john, welcome back to "nightly business report". >> thanks, tom. >> tom: so these are called socially responsible investing funds. what is it and how is it different? >> it's a broad term and it encompasses funds that invest according to various strictures from political, from conservative to liberal, and religious from christian to islamic funds, and i suppose there's an irish fund but that doesn't matter. >> tom: where does the faith in money management begin? >> it's interesting because a lot of socially responsible funds do it in two ways, one way is that they don't invest in certain things so, they won't invest in say liquor or tobacco stocks. and there are others that also add what's called a positive screen, which is they try to invest in companies that say treat their workers well, or do good in the world. so there's two components to it and it's an extra screen. clearly the first screen is this company any good. and after that you try to determine whether it fits their screen. >> tom: you brought along several of these types of funds to look at, the first one pax world balance, almost a 2 billion fund. year to date up by better than 20%. it talks about sustainable investing, environmental, social and governing factors is what it looks for. >> that's right and it a long-time, one of the pioneers in socially responsible investment funds. it had kind of a difficult time in the past couple years beating its peers and that's one thing you should look at. if you want a fund that fits your point of view, you also want preferably to make money and one way to do that is to look at whether it's made money against a universe of other similar funds. >> tom: is it fair to assess these funds against benchmarks that don't have those same type of i suppose socially responsible investing themes? >> well, it depends. if you're really hard core about it, probably not. there is in fact a social investment index fund offered by van guard that you can use as a measure of your fund. but you have to realize if you're in a fun that believes that there's a junior enemy, the major oil companies are terrible things for the environment, then you're not going to do well when oil is going up and energy companies are doing well. >> tom: you mentioned faith based funds as one source of socially responsible funds. another one you brut along was the humana trust, and that means no banks and no bonds. >> that's right, because islamic principles say i can't charge interest. so they do a lot of things that pay dividends. they're got a spectacular record, they've done very well. >> tom: another one, parnassas, this promotes companies who act responsibly, that seems to be a blanket term. >> it is, although they do take their screening seriously. they look for companies that have a good record of employee relations, and over time it's broad enough to give them a lot of leeway, but generally speaking it's been a very good fund and has excellent returns over time. >> tom: those three over the last 12 months have under performed the s&p 500. the last one you want to highlight has performed about the same as the broad market, that's the new alternatives fund looking at cleaner energy. >> that's a neat fund, run by a father-son team and they started out during the first energy crisis back in the 70s and 80s looking at stocks of companies that are doing things with solar and wind. and they've had some ragged times when oil is cheap they don't do well. but when interest in alternative does well, so do they. >> tom: oil certainly is a theme either in the negative screen or the positive screen for a lot of these funds. any disclosure with those funds? >> no, i don't own any of them. >> tom: all right, we appreciate the of mutual interest ideas, my guest tonight from our washington d.c. bureau, john waggoner. >> susie: here's what we're watching for tomorrow. quarterly results from comcast, direc-tv, visa, and yum brands. and treasury secretary geithner is back on capitol hill, talking about the budget again. he'll be questioned by the house ways and means committee. also, hilary kramer is back as our street critique guest. she'll recommend some stocks she says can make you money, even in a turbulent market. a price war is under way in the online brokerage market. fidelity investments today slashed the cost of buying stocks and exchange traded funds to just under $8 a trade. they were as high as about $20. and fidelity has a special offer for its customers: they can trade 25 i-shares exchange traded funds without paying any commission. rival charles schwab got the price cutting started a month ago. that's when it lowered its online prices to just under $9 a trade. >> tom: one small step for the obama administration. one giant leap for private industry. today nasa awarded $50 million in grants to private firms for commercial space development. the bulk of the money goes to two companies, the sierra nevada corporation and boeing. nasa wants the private sector to build nasa's next generation of spacecraft. they'll carry astronauts and supplies to the international space station. >> susie: take a good look at the retail shops in your town and your neighborhood. many of them could be closing their doors this year. merchants all across the country are still struggling to survive. take searle, the trendy boutique in new york city. as erika miller reports, it's open for business, but it's been operating under bankruptcy protection for almost a year. >> reporter: come to this searle boutique on madison avenue at lunchtime and you'll see plenty of women browsing and, more importantly, buying. to find out how business is going, i spoke with founder steve blatt and his stepson rick weinstein, the company's director of sales. would it be too much to say that you are cautiously optimistic? >> hmm. "optimistic" is not the right word. "cautious" is the right word. i'm just proceeding from week to week with a plan against last year and the year before, and trying to exceed what we've done. >> reporter: what they've done is shifted the distribution of merchandise. saks and bloomingdale's have been selling searle clothing for decades. now the internet is the company's fastest growth area. >> internet sales are very important to the business. the web site is also a form of advertising. so today, people are comfortable going to the web site first, familiarizing themselves with the product, and then perhaps even ordering online or coming to the store themselves and buying it at the store. >> reporter: that's not the only change. searle built its reputation selling shearling coats. now it also wants to be known for trend-setting women's clothing. but these days, getting fashion right is not searle's biggest business challenge. >> we cannot get financing. in bankruptcy, people don't really want to give you financing-- not only bankers, but hedge funds and so on. bankruptcy is a stigma. >> reporter: it's a stigma that may be spreading despite the fact that many merchants have made strides improving their balance sheets. retail consultant howard davidowitz specializes in store turnarounds and restructurings. he dismisses any possibility of fewer bankruptcies this year. >> oh, no, no! we are going to close-- in the first half-- 10,000, 12,000 stores. we're going to have massive store closings. all you have to do is walk down madison avenue, and you'll see the shape we're in in store closings. >> reporter: but it's not just luxury boutiques that are in trouble. davidowitz says most of those closures will be smaller neighborhood stores. among the big chains, experts say zales jewelry is one of the most at risk for bankruptcy after losing money for seven straight quarters. also named is borders, which is facing stiff competition from discounters. and finally, blockbuster. it is closing nearly a thousand stores as customers turn elsewhere for entertainment. but it's important to point out that filing for bankruptcy protection does not mean going out of business. a chapter 11 filing can often provide a fresh start for building a better business without debt. and that's not the only potential upside. >> from the retailers' perspective, the strong will get stronger-- and they should. and the weak, who are overleveraged to start with, who were never that good to start with, are falling out. that could make for a stronger retail industry. >> reporter: for its part, searle hopes to be among the survivors. >> retailing is very funny. if you have the right things at the right time-- hopefully at the right price-- you will succeed, no matter how difficult it is. >> reporter: best-case scenario: the company hopes to emerge from bankruptcy protection this spring. erika miller, "nightly business report," new york. >> susie: while many americans point to newly robust g.d.p. growth and say the recession is fading, many of the nation's top economic bloggers say. not so fast. the kauffman foundation just surveyed 200 of them, and found many think things are worse than they appear. commentator tim kane did the study for kauffman. he's their research fellow. >> with the u.s. economy suffering through the longest recession in modern history, tension in the capitol is rising. tension is also rising between economic experts. get four economists in a room, and you're likely to get eight different opinions. and yet, one of the main complaints you hear from economists is that the media doesn't understand them. seriously. acrimony gets all the headlines, consensus gets the footnotes. to find the consensus, i recently surveyed 200 leading economics bloggers. first, the bad news. 33% say we're still facing recession, versus 7% who say the economy is growing. in fact, half think the u.s. economy is doing worse than official statistics show. the only things expected to grow robustly are inflation, interest rates, and budget deficits. the good news is that there is a clear consensus for action. seven out of ten economists say the federal government is simply too involved. tax cuts, especially on payrolls, are recommended. what about the budget deficit? the debt-to-g.d.p. ratio in the u.s. is now 90%, an unacceptable risk according to our panel. three ways to cut the deficit had overwhelming support: medical entitlements, social security, and defense should all be on the chopping block. political experts will be quick to dismiss all this because spending cuts are unpopular. but think about this. if congress has been doing what's supposedly popular, why is its approval rating at an all-time low? i'm tim kane. >> that's "nightly business report" for tuesday, february 2. i'm susie gharib. good night, everyone, and good night to you, tom. >> tom: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. 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