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is made possible by: captioning sponsored by wpbt >> susie: good evening, everyone. tom hudson will be along a little later in the program. no dividend for apple shareholders. investors were hoping that apple would announce today its first ever dividend payment at its big annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded"we'rehinkin ry deeplabout the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who sa apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of roomor apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have moron both in a few nutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much o this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly o out of three were stl searchinfor rk. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits throu the end of the year. if the umploent te dsn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rateor a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chaistores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering thatould genera half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack ofertainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business reay goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is reallytill struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's demand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. you'll find complete show transcripts and all the market stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt.
New-yorkUnited-statesIranTexasSaudi-arabiaCaliforniaManhattanVirginiaMichiganWashingtonDistrict-of-columbiaKuwait captioning sponsored by wpbt >> susie: good evening, everyone. tom hudson will be along a little later in the program. no dividend for apple shareholders. investors were hoping that apple would announce today its first ever dividend payment at its big annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded, "we're thinking very deeply about the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who say apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of room for apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have more on both in a few minutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much of this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly two out of three were still searching for work. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits through the end of the year. if the unemployment rate doesn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rate for a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chain stores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering that could generate half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy. u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack of certainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business really goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is really still struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's demand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. you'll find complete show transcripts and all the market stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt.
New-yorkUnited-statesIranTexasSaudi-arabiaCaliforniaManhattanVirginiaMichiganWashingtonDistrict-of-columbiaKuwait captioning sponsored by wpbt >> susie: good evening, everyone. tom hudson will be along a little later in the program. no dividend for apple shareholders. investors were hoping that apple would announce today its first ever dividend payment at its big annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded, "we're thinking very deeply about the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who say apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of room for apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have more on both in a few minutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much of this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly two out of three were still searching for work. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits through the end of the year. if the unemployment rate doesn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rate for a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chain stores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering that could generate half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy. u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack of certainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business really goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is really still struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's demand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. you'll find complete show transcripts and all the market stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt. test
New-yorkUnited-statesIranTexasSaudi-arabiaCaliforniaManhattanVirginiaMichiganWashingtonDistrict-of-columbiaKuwait captioning sponsored by wpbt >> susie: good evening, everyone. tom hudson will be along a little later in the program. no dividend for apple shareholders. investors were hoping that apple would announce today its first ever dividend payment at its big annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded, "we're thinking very deeply about the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who say apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of room for apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have more on both in a few minutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much of this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly two out of three were still searching for work. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits through the end of the year. if the unemployment rate doesn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rate for a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chain stores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering that could generate half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy. u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack of certainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business really goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is really still struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's demand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. you'll find complete show transcripts and all the market stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt.
New-yorkUnited-statesIranTexasSaudi-arabiaCaliforniaManhattanVirginiaMichiganWashingtonDistrict-of-columbiaKuwait annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded, "we're thinking very deeply about the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who say apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of room for apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have more on both in a few minutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much of this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly two out of three were still searching for work. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits through the end of the year. if the unemployment rate doesn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rate for a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chain stores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering that could generate half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy. u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack of certainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business really goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is really still struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's demand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. you'll find complete show transcripts and all the market stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt. >> agatha christie is the world's most successful crime writer.
New-yorkUnited-statesIranTexasSaudi-arabiaCaliforniaManhattanVirginiaMichiganWashingtonDistrict-of-columbiaKuwait captioning sponsored by wpbt >> susie: good evening, everyone. tom hudson will be along a little later in the program. no dividend for apple shareholders. investors were hoping that apple would announce today its first ever dividend payment at its big annual meeting. with apple sitting on $100 billion in cash, shareholders have been clamoring for a dividend. this was the first question from the floor to c.e.o. tim cook at the meeting held at the company's headquarters in cupertino, california. cook responded, "we're thinking very deeply about the question. the board wants to do what's best for shareholders. please have patience." looks like investors are holding out-- apple shares surged almost $4, closing at $516.39. >> susie: our guest tonight thinks apple stock could hit $585 this year. he's scott sutherland, research analyst covering wireless for wedbush securities. scott, nice to you have with us. >> great, thanks for having me, susie. >> susie: so what is holding apple back from paying a dividend? item reluctance? >> i think maybe two things. one, there is a process they have to go through. and i think they're being very methodical about it. and second i think historically steve jobs had been resistance to a dividend. high profile, he would rather have cash on the balance sheet and possibly those two reasons are making them very meticulous about this. >> susie: but even if apple paid a dividend there within plenty of money left over. what are they going do with a hundred billion dollars in cash? >> yeah, i mean, plenty of cash. tim cook has said it several times now in the last few weeks they have plenty of cash. this he have only done small acquisition. they built up the supply chain and data centers so i do think they have plenty of cash. not all is done without-- most of it is not but they have plenty to pay -- >> after meeting today what did tim cook say about new products, as you know people are just waiting for a new version of the ipad and the iphone. what did he say about any of that? >> you know, they really never talk about new products, apple is very secretive about that. they leave that to the analysts and reporters like us. you know there were some questions about the connected tv and video services, so they did talk a little bit about that and about working with facebook. but clearly we have all speculated an ipad 3 will come out in early march, later this year, an iphone 5 and fully integrated tv which is already hinted at in steve jobs's book. those are three major products that we're looking for. >> susie: from what you have been hearing about the new tv, is it going to be a game changer? >> i think this could be a game changer. i think what really we should lack at is not the 99 box but fully integrated tv. a lot has been talked about about how it changes the interface and user experience. i think most importantly, any time apple brings something out to the media world, and remember apple heritage or steve job heritage in the media industry with pixar, he understands that model. i think they have the potential to change the way we consume media through the tv set. i think that would will be the most interesting part. >> susie: there is a lot of excitement waiting for that and also still a lot of excitement about apple stock. let's talk about it. so you have a target price of $585 on it. what do you say to critics who say apple is overpriced even at 516 where it closed today. >> well, i think first of all the critics have been wrong so far. apple showed accelerated earnings growth last quarter. we could see them 2013 well over $30, take out that cash of a hundred billion dollars, and it trimmed ten times-- still very anably valued. as long as eerntion keep going up valuation doesn't lack that stretched. i think some people are just saying that stock can't go up this much or this long forever. there is a lot of international and market share growth for apple still to go. >> susie: so for somebody who has not invested in apple, stand on the sidelines saying too late at this praise, dow still think it's worth it to buy shares at this price? >> i think it can go higher than 585. i think they have the platform in i cloud for the next ten areas to build off all these connected devices. they have single digit market share in mobile phones, and pcs and they're just getting into the connected tv market. i think there is plenty of room for apple to go higher. i think it's a nice core holding for a blue chip investor. >> susie: we'll leave it there. scott, thanks so much for coming on the program. >> great, thank you. >> susie: real quickly do you own the stock or any disclosures. >> i do not own this stock and -- >> okay. thanks for filling us in. we've been speaking with scott sutherland, research analyst covering wireless for wedbush security. on wall street, stocks advanced, thanks to encouraging news about the job market and some big moves by select retailers. we'll have more on both in a few minutes. the dow rose 46 points, the nasdaq added almost 24, and the s&p up about six points. also moving higher today-- oil prices. in new york trading, crude futures spiked to a nine-month high, closing at $107.83 a barrel, rising $1.55. prices have surged almost 10% just since the beginning of february. joining us to talk more about the outlook for oil and gasoline prices, john kilduff, oil analyst and founding partner at again capital. hi, john. >> hi, susie, good evening. >> susie: so how much of this oil price rise is the fear factor of tensions in iran and how much of it is about the u.s. economy growing and improving. >> i think you can ascribe about 10 to $15 per bar told the iranian crisis as we areary experiencing it. the situation is as intense as i can recall it. and there is a hair trigger atmosphere emerging here. and the markets are really nervous. this week's depar ture of the international atomic energy agency, inspectors from iran set us off this new higher level. and the bad news, the worst news is that you can tack another dollar on to that settlement from this afternoon and anything trading tonight, crude oil in new york has gone up almost to 109, over in europe it's about 125, almost. so while there is some underpinnings to the higher price from the good economic news we've been getting in the u.s., the employment data especially, a lot of this is fear. >> so where do you see oil prices, west texas intermediate oil prices going over the next three months or so, at 109 now, you said. >> given the advances we've seen now, when you look at the charts and try to figure out where the next stop is, for new york crude it's last year's highs that we're hitting april of about 115 a barrel. that international brent crude price likely to go upwards of $135. so there is more ahead of us here as we get not height of the driving season in the springtime so what does all this mean for consumer spending. we have seen gasoline prices in some prices already at $4 a gallon. some people saying you get to $5 by summer. what does this mean for consumer spending. >> well, it's going to be horrific for consumer spending. we're going to first see consumer sentiment, consumer confidence drop. you'll see the university of michigan number fall precipitously as these price goes higher. consumers are going to have to divert their spending away from the stores, away from their vacations. away from the other activities and other purchases, tvs on down into the gas tank. and this is worse than a tax hike because this is a transfer of wealth from the u.s. to other oil-producing countries. so the knock on effects here are significant and with this upwards of $20 a barrel price rally we've seen, really since just december t could shave as much as $1, excuse me a full percentage point off gdp now as we look ahead if the prices sustain themselves. >> so that would definitely unravel the u.s. economic recovery. but let me ask you, john, what is the best-case scenario, worst-case scenario going on from here. let's say that tensions cool off that there is some kind of diplomatic solution with what is going on in iran. what is the best case, worst case of what happens. >> in the best case, a diplomatic solution could come as a bolt out of the blue. in these situations it's incredible what luck can happen, the climb down that can occurring, very easy to sim they are down. will you see oil prices drop at least $10 to $15 a barrel, get back down towards the lower 90s f not 90 a barrel. the worst-case scenario, though, to use the parlance of the region this is the mother of all supply destruction fears. are you talking about 30% of the world's oil transitting just off iran's coast. it's saudi arabian oil, kuwait oil, southern eye back oil, a major source of western oil, friendly western country oil, that is irreplacable. and the shock to the system would be extraordinary. and those price was soar upwards of $150 a barrel until they could sort out how quickly it could be resolved if supplies could be resolved. >> susie: real worrisome situation, thank you, john, for coming in and analyzing it for us. appreciate it. and we've been speaking with john kilduff of again capital. as we mentioned, fresh improvements in the labor market. new claims for jobless benefits held steady at a four-year low this week. but there are new rules affecting how long out-of-work americans can collect those benefits. as darren gersh reports, those rules could have a big impact on millions of families. >> reporter: when washington state and connecticut surveyed workers who had exhausted the maximum 99 weeks of jobless benefits, the results were disturbing. the national employment law project's maurice emsellem says roughly two out of three were still searching for work. >> it's not accurate to say that folks are hanging out on benefits and that they could find work whenever they want it. the fact is folks who have run out of the benefit still can't find work. >> reporter: around three and a half million people now qualify for extended unemployment benefits lasting up to a maximum of 99 weeks. under the agreement congress struck to extend unemployment benefits, beginning this summer, the maximum benefit will fall to 79 weeks. in september, that will fall to 73 weeks in states with high unemployment rates. but in most other states, the maximum benefit will fall to 63 weeks or less. the heritage foundation's james sherk says it makes economic sense to gradually reduce unemployment benefits, which can encourage some workers to search for jobs that may never come back in hard-hit industries like automobiles or construction. >> when you have too long of a benefit, it encourages workers to search for jobs that they are unlikely to find, and spend a lot of time looking for those jobs-- jobs in your same city, jobs in the same salary range. >> reporter: economists have debated how much extended unemployment benefits might add to the unemployment rate. most come down to a small impact of roughly half a percentage point. this also remains a very tough labor market. as labor market researcher gary burtless points out, for every job opening, there are still four unemployed people looking for work. >> if a long-term unemployed person collecting unemployment benefits turns down a job, there is a lot of people waiting in the queue. >> reporter: while it trimmed back the benefit, congress approved emergency unemployment benefits through the end of the year. if the unemployment rate doesn't fall sharply by december, congress may be debating this issue again in december. darren gersh, "nightly business report," washington. >> tom: still ahead, its not necessarily changes in regulations or taxes that's going to spur on a faster economy. instead, it's demand for more of these, cardboard boxes. so says the c.e.o. of international paper. >> susie: some good news for car shoppers. rates on auto loans have plunged to historic lows, many in the mid-single digits. what's more, there's been a significant improvement in the number of borrowers qualifying for loans. and as erika miller reports, the improving access to credit is helping to drive auto sales. >> i think i got a great value, it's an awesome car. i love it, and there's nothing i would do differently. >> reporter: alan bass is a happy man, zipping along the streets of manhattan in his new ford edge. what made his dream possible was a sharp drop in auto loan rates compared to when he last looked three years ago. >> 4.5%. back then, it was like 24%. >> reporter: and unlike last time, he didn't have to wait weeks for approval. >> within 20 minutes, i was approved. >> reporter: gary flom, head of the manhattan automobile company, says he's seeing an across-the-board credit thaw. at his dealership, loan approvals are back to where they were before the financial crisis. >> just to give you an indication-- back in 2009, less than 70% of all applications that we sent in were approved. and in 2011, over 80% of the applications we sent in are approved by the financial institutions. >> reporter: it helps that auto loan rates have plunged nationwide. the average rate for a new car is 5.2%; 6.2% for used cars. but it's important to keep perspective. although auto loan rates are at record lows, not everyone can qualify. and that keeps the dream of driving a new car out of reach for many americans. >> the rules of the road are that you have to have good credit, you have to have proof of income, and you have to bring something to the closing table other than your smiling face. specifically, you are going to need money for a down payment. >> reporter: but there are other factors that could help rev up auto sales. employment has been improving. and there's plenty of pent-up demand, because the average age of cars and trucks on the road is now at a record 10.8 years. >> the consumer is tired of being tired, so to speak, and people have been putting off getting that new car for several years now and they want a new vehicle. >> reporter: for his part, gary flom is forecasting a 10% jump in revenues this year. >> we are ordering more inventory in preparation for 2012, and the consumer is coming back. >> reporter: and many of those consumers coming back are finding low interest rates aren't the only reason to trade up. >> it's amazing. it's got all kinds of different features that i never had before. the technology today is, like, completely different than three or four years ago. >> reporter: erika miller, "nightly business report," new york. >> susie: that good news on the u.s. job market gave stocks a nice lift today. let's take a look at tonight's "market focus." retail names were in the spotlight as a number of big chain stores rang up mixed quarterly profits. the s&p retail index rose to an all-time high on those earnings. target was a standout, reporting higher than expected profits during the holiday quarter. sales got a boost from the growing popularity of target's credit and debit cards, which give shoppers a 5% discount. shares of target added almost 3% to close at $54.50. a different story for competitor kohl's. its stock fell 6% after the company issued a 2012 profit forecast that fell short of estimates. customers are balking at kohl's attempts to pass on higher production costs. it was a similar problem for grocery store operator safeway. it reported a 6% drop in profits as it struggled with rising food and fuel prices, as well as cost-conscious shoppers. safeway shares fell 7.5% to close at $20.95 and there was a lot of interest in sears today. the company reported a fourth quarter loss of $2.4 billion. but it also unveiled a plan to sell 11 stores, as well as a rights offering that could generate half a billion dollars. investors applauded those initiatives, ignored the earnings trouble, and the stock gained almost 19%, closing at $61.80. but some analysts are still guarded on the outlook for sears. >> longer term, i don't know if this company's around in five to seven years. its a bold statement, but i also think its something very common sense. when you are a retailer and you don't invest in your business for the past ten years, it all comes home to roost. >> susie: dow component procter and gamble also detailed big plans today-- it's cutting 5,700 jobs, or more than 4% of its workforce. it's all part of a goal to reduce costs by $10 billion over the next four years. investors bought up shares of the consumer giant, the stock adding 3%, or $2, to close at $66 and change. over in the pharmaceutical sector, investors have big hopes for the vivus's new diet drug, qnexa. it's expected the fda will green light the new prescription weight-loss drug, the first diet medication to gain approval in more than a decade. shares bulked up on the news, surging nearly 80% to close at $18.73. and, finally, a.i.g.-- after the bell today, the bailed out insurance giant reported a nearly $20 billion profit for the fourth quarter. a tax benefit and the increased value of a.i.g.'s stake in asian insurer a.i.a. group helped fuel the better than expected profit. shares gained 3% in after-hours trading. it gained over 1% during the regular session. and that's tonight's "market focus." >> susie: "made in the u.s.a." has been a strong point for the american economy. u.s. exports have been growing, adding to the optimism in the manufacturing industry. international paper makes packaging, paper and cardboard boxes, much of it made in the u.s. but as c.e.o. john faraci told tom hudson, exports alone won't kick-start the economy. >> the u.s. isn't an export driven economy, our economy is large, it's consumer driven, and so for us it's either kind of job growth, that we can have and should have and i think eventually will v we've got to see the consumer get more confidence about spending some of their discrisary income. we export more than 20% of what we make, in fact, we're finishing investment in virginia right now, about $80 million to create over 100 jobs. and almost 100% of that product will be exported. >> what hurdles are you finding to get that product to international markets. >> i wouldn't say there are any hurdles. we have to keep on investing in infrastructure. we have to be cognizant of not overregulating. the things that we all know about, taxes, regulation, lack of certainty and investing in infrastructure so that we keep our manufacturing base competitive, investing in education, all those things are things we need to keep on doing because we don't keep on getting better at those, we'll fall behind. >> international paper occupies a really unique place in the u.s. economy, a paper-maker, raw materials maker, basic materials maker. what is your business and your pipeline for the year tell you about the u.s. economy? >> well, i think our core grated packaging is the best one because it serves so many end uses, it is focused on the commercial print market but our packaging business really goes into every nondurable, every durable segment. and what we're seeing is a recovering but far from fully recovered economy. if we kind of add all the sectors, you know, some have returned to their prerecession peaks but overall our packaging business is about halfway recovered. so still about 12 to 15%, now up maybe 5 to 6%, and so we see is a fairly slow but gradual recovery. eventually we get back to where we were but it is to the going to be a d curve at all. >> do you see that growth as sustainable? >> i do. in fact i see some upside because 20% of our packaging goes into durables. which is really driven to a great extent by housing. and housing hasn't started to recover at all. i hope we're in the 7th inning of a housing, of getting to a point where we start to see housing recover. when it does that will have a huge impact on unemployment, on jobs because so many jobs are related to the housing market and also stimulate a segment of our customer base, 20% of our customer base which is really still struggling with low levels of activity. i just say it's one of the things to me that underscores the resilience of the of the u.s. economy, the fact you can have a housing market which is so important, that is dropped by 60, 70%, stay there for four or five years and we still got growth in this economy. >> when we speak to executives, your colleagues. we always hear about regulations, holding back business, holding back hiring and investment what do you say to those colleagues? >> i think that's overemphasized it is an issue but to me what's holding back investment and employment is not regulation and uncertainty, it's me hiani tsdemand. i mean this is fundamentally, people will build cars if there is demand for cars. we'll make packaging if our customers need packaging. as i said earlier the economy is 70% driven by the consumer, whether we like it or not. the consumers in the process are still deleveraging so things like the payroll package extension i think are very good because they put more money in the consumers pockets and enable them to delever, get their financial house more in order and ultimately spend some of the decision connectionary income on goods and services. and that's what creates jobsment we know how to hire. we don't need tax credits to hire people. we need orders. and you know that's going to come as businesses are, know how to create jobs. what we need is our customers to want to buy and then we can respond to the demand small. >> john, thanks. john faraci. >> susie: distinguishing between "wants" and "needs"-- it's a tough budgeting lesson, even for adults. but its not hard to teach, if you start early. with tonight's "kids and cash," here's alisa weinstein, author of "earn it, learn it". >> let's say you've begun your kids financial education, and she now knows the three classic money buckets: saving, sharing and spending. you put a portion of your money in your piggy bank, your savings account, or your pillowcase for later use. you donate a portion to a worthy cause of your choice. and the rest of your money goes straight to whatever you want. and that's great. but there's a fourth bucket many parents don't consider-- it's "needs"-- mostly because what needs would a four-, seven-, or ten-year-old have? as parents, its our pleasure, and our legal obligation, to provide food, clothes and shelter for our kids. but understanding that adult spending money must be divided into needs and wants is a major part of financial education. and it can be taught without requiring an eight-year-old to contribute to the water bill. kid-sized needs include things like school lunches, birthday presents for friends, haircuts, and as kids get older, try extracurricular activities and clothes. all you do is transfer the responsibility of purchasing these things from our budgets to their budgets, and that's great practice they'll need for the real world. i'm alisa weinstein. >> susie: we've got more tips for teaching your kids the abcs of finance on our web site. look for alisa's "kids and cash" blog on our web site, nbr.com. >> reporter: i'm diane eastabrook in chicago. tomorrow, i'll tell you how trucking companies are shifting into high gear, thanks to an improving economy. >> susie: that's "nightly business report" for thursday, february 23. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org susie: join us online at nbr.com. there, you'll find full episodes of the program. wndu'll find complete sho transcripts and althete rk ma stats on our facebook page at bizrpt. and don't forget to follow us on twitter @bizrpt. vo:geico, committed to providing service to its auto insurance customers for over 70 years. more information on auto insurance at geico.com or 1-800-947-auto any time of the day or night.
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