Clothingmaker. We have all that and more tonight on nightly Business Report forthursday, march 20th. Good evening, everyone, and welcome. Winter is over and spring has sprung. Sort of. And for their part, stocks sprang as in sprang back from yesterdays losses. The chill that fed chief janet yellen put into stocks yesterday when she hinted that Interest Rates might rise sooner than expected next year was all but gone today. Got a boost from better than expected economic data. The Philadelphia Fed reported a boost in Business Activity in its region this month. A private reading on leading Economic Indicators was higher in february. Even though jobless claims rose by 5,000 last week, the increase was less than expected. So the dow was up by about 108 points. The nasdaq and s p both added 11. But even though stocks ended higher today, the threat of rising Interest Rates is still worrying many investors. What does it mean for their stock portfolios and for their fixed Income Holdings . Dominic chu has more on what a hike in rates if it happens could mean for your investments. Reporter for many economists and investors, rising Interest Rates are a sign that markets are getting back to normal again. But if Interest Rates rise there are going to be benefits and drawback. For one thing higher rates means that bond prices go lower. Be sure to keep an eye on that part of your portfolio. That leaves the other big asset class, stocks. What were seeing is a lack of commitment on the part of many investors to the stock market, even though we are five years into this bull market. And what wed advocate is for investors to recognize the importance of remaining invested despite shortterm turbulence. Reporter so where are the attractive places to invest in the stock market . The places that actually benefit when rates are on the rise . I think the sector thats going to benefit most from a rising Interest Rate environment is definitely the financials. Reporter the thinking is that traditional lenders like commercial banks can borrow at cheaper rates in shortterm markets and then lend that money out at hire rates to customers. The wider that gap, the more profit for banks. Then theres the Technology Stocks, some of which have compelling cases for investments. You look at cisco, intel, microsoft, these really old stocky Technology Stocks that havent moved in years are now starting to pick up because people are saying well hey, i kind of get the best of both worlds here. Theyre companies with no debt, so they dont have to borrow if Interest Rates go up. Im actually getting a really high yield if im looking at some of these over 3 . Reporter not everyone believes that were destined to see a steady march higher for Interest Rates. Economic concerns still linger. Barely 1 inflation in the u. S. , even lower in europe and falling. So its really hard to make the case that the fed is going to be raising rates aggressively. Reporter thats why many Financial Advisers are telling their clients to spread their bets and build diversified portfolios with exposure in all different kinds of asset classes. For nightly Business Report, im dominic chu. Joining us now to talk more about rising Interest Rates and what it could mean for your investment is brian jacobson. Hes portfolio chief strategist at Wells Fargo Fund management. Brian, welcome. Good to have you with us. Thank you. Did you think yesterdays comments by janet yellen were kind of pants on fire moment the way the markets did or was it an overreaction . I think that it was kind of an overreaction by the markets. This was her first press conference. Some of her responses seemed mudded. I think she could do a better job in communicating with investors. That will come with time, though. It appeared the fed is being overly what we call hawkish, too concerned about perhaps inflation down the road and they might start hiking rates sooner than everybody else was expecting before going into the meeting. In a lot of the analysis today, brian, if you look at what she said if the economy does improve, if the fed continues taper back on its stimulus in a gradual basis and Interest Rates go up slowly and steadily, is there any reason this should be traumatic for stock investors . Absolutely not. And actually in fact, given that janet yellen effectively said that by the time the asset purchase winds up, which might be in the Fourth Quarter of this year, that it would take another six months at least before we would actually see the fed start raising rates. There were a lot of ifs and buts surrounding her forecast saying they might start hiking rates in about six months. It all depends upon the inflation outlook. The fed right now theres not much they can do to help support the labor market so theyre shifting their attention more on inflation. That really doesnt look like theres a lot of pressure, building to drive that much above what their target is. Cant slightly higher inflation be good for stocks, and cant slightly higher Interest Rates actually benefit some types of stocks, some categories . Thats correct. And actually slightly higher Interest Rates across the board could probably be beneficial for a lot of the stock market and even the fixed income market. All depends upon the parts. When Interest Rates rise, its important to note they dont rise uniformly. That is, you dont see treasury bills rising at the same pace as you do a 30year treasury or corporate debt. So we dont oftentimes see all the rates rise together. In fact, if you looked at how the market reacted to Janet Yellens comments, the 30year treasury, the yield on that actually dropped. So even though we saw 2year treasuries go up in yield, 30year treasuries went down, it could actually be pretty good for investors who are in some of the longer duration securities. So brian, if you want to make some changes in your portfolio, what areas should you go into . You heard dominics package. He was talking about financials and also Technology Stocks. I know those are big areas. But do you agree with that and also what else would you add on the list . It all depends on the context. I disagree with the financials. Mainly in this environment banks are effectively borrowing for very low interest, effectively for free and lending at a higher rate. When Interest Rates do begin to rise, i dont think were going to see those lending rates rise as quickly as the banks borrowing rates. So it could actually result in a crimping of their profits. So from my perspective i would actually be shying away from some of the banks because i think their profits are going to be hit a little bit. Information technology tends to be a very good area. You dont have very highly leveraged firms there. And oftentimes when rates rise its because Economic Growth is picking up. And thats good for information Technology Stocks. Very quickly on dividendpaying stocks, might they sort of lose some of their mojo if Interest Rates go up very quickly. They can. Interest rates when those go up, dividendpaying stocks tend to act a little bit like bonds in that case where Interest Rates go up prices drop. That would be an area i would be underweighting, like utilities and telecomes whamplgts. What do rising Interest Rates mean for buyers and sellers . Sales are at their lowest level in 18 months. And today there was more troubling news. Sales of existing homes edged lower in february, down. 4 . Diana olick has more on the outlook on this first day of spring. Reporter there were still several inches of snow on the ground as realtors toured a bethesda, maryland home this week. It will be nice when the flowers are in bloom. I think one of my buyers im working with is going to wait just to list their house because theyve been working so hard on their landscaping. Theyd like it to look pretty. Reporter while spring will bring flowers, it could also bring higher Mortgage Rates. A year from now, my guess is theyll be up 50 to over 100 basis points. Reporter rates bumped up slightly yesterday after the fed adjusted its outlook for Interest Rates overall this year. Once consumers recognize rates will not be falling but going up and the fed chairwoman has clearly indicated Interest Rates would be rising, i think people will be making their homebuying decision less on rates but on the credit accessibility, what they are comfortable with financially. Reporter affordability is weakening. Home prices rose 9 in february from a year ago according to the realtors. Largely due to a lack of supply. Theres a lot of people that want houses but theres not a lot of houses to buy. So a lot of them are going very quickly. You get the escalation clauses. Sometimes you get more than asking price. Reporter even though Mortgage Rates are historically low, getting that rate is tough. Mortgage credit still very tight. So its hard for that firsttime home buyer to get in the market. Reporter the lack of younger buyers who rely on getting a mortgage are a big part of the reason the housing recovery, which was juiced last year by investors, has been slowing down now. Home prices are rising faster than jobs and wages, and Mortgage Rates went from 3. 5 last year to 4. 5 now. As the weather gets warmer, more listings will come onto the market. Thats pretty certain. More listings will take the pressure off prices and unleash some of that pentup demand. What is less certain, though, whether those who may want to buy a home will be able to afford a home. For nightly Business Report, im diana olick in washington. Now weve taken a look at what a hike in Interest Rates could mean to your investments and to the housing market. So after more than five years of a record low federal funds rate, what would a rise in rates mean for savers . Hampton pearson takes a look. Reporter for longsuffering savers, the likelihood of rising Interest Rates more than a year from now wont make up for returns that have been less than the rate of inflation since the fed began its zero Interest Rate policy in 2008, leading economists say the yellen fed turn around wont happen overnight. Chair yellen has made it very clear from the federal reserves perspective its going to take a very long time even after they begin raising Interest Rates to get them back to what anyone would consider normal, let alone what savers would consider normal in terms of a saving rate. Reporter for example, according to bankrate. Com, about the best you can earn is a little less than 1 on a 25,000 money market or savings account. Once they start to move higher, in all likelihood its going to happen pretty slowly and over an extended period of time, provided that the economy continues to chug along. Reporter the best advice for savers, anticipating a higher rate environment in 2015, dont get locked into longterm fixed rate products in what could be a rapidly changing environment a year from now. For nightly Business Report, im Hampton Pearson in washington. Some discouraging data about the job market and longterm unemployed, a New PrincetonUniversity Study finds that only 11 of americans who have been jobless for more than six months will ever retain steady fulltime work. 3. 8 million people, thats about 37 of all out of work americans, are considered to be among the longterm unemployed. Now to the crisis in ukraine, be president obama announcing new sanctions against russia targeting specific russian officials and a russian bank. Over that annexation of crimea. But the white house admits now the impact could actually hurt the global economy. This is not our preferred outcome. These sanctions would not only have a Significant Impact on the russian economy but could also be disruptive to the global economy. However, russia must know that further escalation will only isolate it further from the international community. Well, eamon javers joins us now from washington with more. The president targeted among other russian officials russian cronies, he says, of mr. Putin. Who are they . Reporter thats right, tyler. First of all he targeted 16 russian officials but also four people that the Senior Administration officials briefing reporters today called cronies of vladimir putin. These are some of the postpews tin oligarcs who have risen to power underneath putins rise in russia. The question is whether all of them have assets in the west that can be frozen by the sanctions. Just before air time tonight we learned that one of them may have dodged some of the impact here. Thats gnady temchenko, founder of a Global Commodities trading firm. It does about 93 billion in annual revenue. It is a huge outfit. He apparently sold all of his shares in gunvar just yesterday in anticipation of these sanctions. The gunvar group posted a statement to its web site tonight. It looks like there is a big financial chase going around the world as some of these oligarcs try to move assets ahead of what the u. S. Is doing. Another thing president obama said is this could impact the russian economy. Which sectors of the russian economy could be sanctioned if the u. S. Goes forward on all that . Reporter important to point out in the sound bite what you just played what the president is talking about there is the possibility that the United States will take sanctions on specific sectors of the russian economy. They havent done it yet but they have the authority as of today to do that. That could include things Like Minerals and mining, energy, Financial Services and the like. Thats another sort of tool in the u. S. Tool kit here that they could use if they want to scale up the sanctions, guys. When we slap russia they typically slap back. Have they done that, if so how . Reporter they did that in mere minutes today, announcing sanctions of their own on u. S. Officials. White house officials, members of the United States senate. That was largely laughed off here in washington. There arent that many u. S. Senators who have Bank Accounts in moscow. But still, the symbolism was there. The russians are trying to say hey, youre going to sanction our guys were going to sanction your guys. Thats how it works. Eamon, thank you so much. Eamon javers reporting from washington. Still ahead on nightly Business Report, why coal . Once shunned as dirty and expensive may be on the verge of a comeback. Solid earnings from nike after the market close today. The Sports Apparel giant and one of the newest members of the Dow Jones Industrial average posted earnings of 76 cents a share. That was 4 cents above analysts estimates. Revenue also came in higher than expected, helped by rising sales in china and a big jump in europe. The company said global orders for its merchandise are soaring ahead of the world cup soccer championship in brazil this summer. Shares rose initially after the report was released, and then in the regular session nike closed at 79. 27. It was up slightly. 30 of the nations banks went under the federal reserves socalled stress test to see whether theyd survive another downturn. Zion bank didnt reach the Tier One Capital environment. It says it well come up with a new plan to raise the necessary capital. Hewlettpackard upped its dividend. The tech companys board approved a 10 hike and the increase is expected to start in may. Separately at the companys annual Shareholder Meeting yesterday, Ceo Meg Whitman hinted hp might enter the 3d Printer Market in june. Shares of Conagra Foods maker of ketchup and Healthy Foods surged. But its packaged Foods Company continued to struggle and sales just missed wall street estimates. Still conagra shares were up 20 . A jump in Home Deliveries and selling prices, earnings jumped almost 35 , revenues surged 38 , but the home builder said its still too early to predict the strength of this selling season. And Arkansas Court tosses out a 1. 2 billion ruling against johnson johnson. The lawsuit accused the drugmaker of improperly marketing its antipsychotic drug risperdol and concealing its risks. The judge overturned the ruling saying the law didnt apply to pharmaceutical companies. Shares were up a fraction to 94. 12. Symantec the maker of the Norton Antivirus Software fired its ce