Captioning sponsored by wpbt this is n. B. R. Susie good evening im susie gharib. Through rain and snow, but not on saturdays. The u. S. Postal service is dropping saturday letter deliveries to save billions. Tom im tom hudson. Fresh pain at the pump. American drivers see a steep jump in gas prices up 15 cents a gallon in the past week alone. Susie and the Federal Reserve says its been hit, by cyber hackers. We look at u. S. Businesses and just how safe their networks are. Tom that and more tonight on n. B. R. susie the u. S. Postal service says this summer it will stop delivering mail on saturdays, ending a service that began 150 years ago. Cutting back to a fiveday a week schedule will save 2 billion. The post office has been losing about 20 million a day, as e mail useage ramps up and mail volume plunges. Congress has required the post office to deliver six days a week, but the postmaster general believes there is a loophole in the law that will allow him to make the change. Darren gersh reports on the business fallout. Reporter first class mail is the Postal Services most profitable product. It is also a business that is disappearing at the rate of 5 a year. People pay their bills online. Its simple, its easy, its free. You cannot beat free. Reporter and the Postal Service is tired of trying to beat free. So it plans to eliminate saturday home mail delivery beginning on august 5. The move will cost 22,000 workers their jobs and may save 2 billion a year. Ut even th, will not be enough. More dramatic cuts will be needed. You cant support a system built for 200 or even 300 billion pieces, now we got 150 billion, which is still a boat load of mail. Reporter the Business Community is split on the end of saturday delivery. Many companies worry theyll pay more to shore up the postal system. Others fear the cutbacks will put them out of business. Many rural newspapers depend on saturday deliver. And greeting card giant hallmark worries small towns and Small Businesses will be hit hard by service cutbacks. But the Postal Service wont shut down altogether on saturdays. It will still deliver packages on saturday as demand continues to grow. People order goods online at an ever increasing rate and we expect ecommerce will drive Consumer Habits in that direction for the foreseeable future. Reporter fedex and u. P. S. Compete with the Postal Service, but they are also suppliers and customers that rely on mail carriers to deliver some packages. Analysts say the Postal Service would have to run into far more trouble, for fex and u. P. S. To see a biginanal bst. We dont think either u. P. S. Or fedex is interested in carrying first class mail, well i should say theyre not interested in carrying it for 5o cents a package. Theyll carry it at their normal ground and express rates and theyll deliver it on a timely manner, but to deliver something for 50 cents, thats just not in the profit mandate for these companies. Reporter congress will have the last word on saturday delivery. One in ten Americans Still have no Internet Access at home. Thats a large group of voters with a good reason to press lawmakers to keep the mail coming on the weekend. Darren gersh, n. B. R. , washington. Tom have you filled up your gas tank recently. It is costing more, a lot more. Regular unleaded jumped 15cents a gallon in a week. The National Average is up to 3. 54 a gallon. Thats the biggest one week jump in nearly two years. And as erika miller explains, prices are expected to continue to climb in the weeks ahead. Reporter winter is supposed to be the time of year when gasoline is cheap. But that hasnt been the case lately prices at the pump have risen 20 days in a row, and so far this month, prices are at the highest level for any february, ever. So why are prices rising so quickly . Part of the root of that has to do with refinery outages that weve had a series of them over the past few weeks, and that has curtailed the production of gasoline, and therefore put upward pressure on gasoline prices. Reporter there are also fears refineries will face more interruptions, as they switch from winter to summer fuel blends. Its not just refinery issues pushing prices higher. Much of the recent spike in gasoline can also be blamed on geopolitical tensions. Investors are looking at whats going on in syria revolution over there, israel bombing syria and then iran saying they will respond, that doesnt help things. So that adds uncertainty and risk to the marketplace. Reporter although the u. S. Economic recovery stalled out at the end of last year, theres hope for a rebound this year. At the same time Economic Data from china and europe has been improving, all of which could boost Global Energy demand. Triplea predicts prices at the pump will keep climbing, topping out somewhere between 3. 60 and 3. 80 a gallon this spring. But traders say if you want a quick way to know where prices are headed, watch the stock market Oil Prices Look at equity market as a proxy for demand, or future demand. We are at 14,000 in the dow, no coincidence that we are at the highs of the Energy Market as well. Reporter and the higher price of gasoline comes as workers have less takehome pay, because of the expiration of a payroll tax holiday. So will consumers be forced to cut back spending, hurting economic growth, and stock Market Performance . Not necessarily, because rising gasoline prices is usually predicated on a weaker dollar or better Economic Activity. Better Economic Activity would lead to higher earnings. Reporter wolfberg says crude prices would have to jump 10 a barrel, or roughly 10 , before theres a major hit to the u. S. Economy. Erika mille n. B. R. , new york. Tom still aad, the federal resee theatest target a cyber attack, areompanies taking cyber risks seriously . Susie on wall street today, a choppy day of trading with investors focused on new concerns about the outlook for europes economy, and a new batch of corporate earnings. With more than half of the companies in the s p reporting, Quarterly Results have been better than expected. Still, by the closing bell, stocks were virtually unchanged. The dow rose seven points, the nasdaq fell three, and the s p added nearly a point. Susie while the stock market is flirting with new record highs, bill gros is worried out the future. The founder and cochief Investment Officer of pimco, the giant bond fund, has just come out with a gloomy forecast, warning investors of a credit supernova. Susie that sort of sounds like a scifi movie. But reading your report, youre trying to tell investors to stay out of the bond market. Really interesting because you run the worlds biggest bond fund. What are the dangers that you see . Well, i wanted to draw attention, susie, to the credits and the potential negative aspects of it and i called it a super nova. Credit meaning Government Debt and corporate debt and household debts, it could be Student Loans or mortgages or credit cards, expanded from 3 trillion in the 70s, to about 56 trillion now. And normally investors and economists assume the more credit, the better. But ultimately, there are negative aspects to it. And one of which is higher inflation. The second of which is rather unhistoric and low returns on savings. We have bond yields in the 1 to 2 category, where historically, they would be 3 to 4 . There are negative aspects to this credit expansion which the fed is engineering. Susie but youre still in favor of some bonds. You say the tipps are okay, the inflation protected bonds. That would be okay if you really have to have some bonds in your portfolio. Is that what youre saying . I think so. Investors often talk about a stock market not being a stock market, but a market of stocks. And a bond mrket is a market of bonds. To the extent you can talk about an inflation protected bond, a tipp, and keep it short. So you have defensive protection. Prices wont go down very much. Keep your investments outside the united states, perhaps brazil or mexico are even italy, with higher yields as opposed to what we see in the united states. And ultimately, defensiveoriented bonds that can protect principle in addition to providing an Interest Rate that is acceptable. Sie waned to pickup o putting your money outside of the country, because you talked about australia, brazil, canada, but youre not a big fan of u. S. Stocks. Thats kind of interesting because it is coming at a time when individual investors, at least, are just getting comfortable about putting money back in the stock market. Theyre looking forward to an upside in the markets. Youre not seeing much upside. 5 you say in u. S. Stocks for this year . Weve already done that in january. We have done that. Weve got a 12month return. One month, according to our forecast. Were buish on stoc to the standpointhey can go up, if they can provide an attractive return relative to inflammation. 5 to 6 . But we suggest, relative to historic proportions, to the doubledigit returns that stock investors grew used to in the 90s, and perhaps to some extent in the early 21st century. That were fot going to get there simply because Interest Rates are so low, the return on stocks and bonds is just not of historic proportion. What were suggesting is beore conservative. Adjust your expectations to 5 to 6 , as opposed to the 9 to 10 you thought you were going to retire on. Susie the other thing you say is investors should start transitioning their money, to use your word, something you can sink your teeth in. Im quoting. This is your report. Put your money in gold. Tell us why and how should investors do that . Well, sinking your teeth into that gold coin, when you bite on it to make sure it is real. And oth comdities is what was talkg about, and youre absolutely correct. To the extent this credit super nova, this expansion in credit, produces 2 to 3 inflation, and going into the future. Then you want to own something that is protected against credit expansion, that you cant reproduce. And that, of course, is gold, commodities to some extent, oil, something you can sink your teeth into and that cant be produced at a gargantuan proportion. Susie it is a fascinating report. Thank you so much for coming on the program. My pleasure. Susie our guest tonight, bill gross, founder of pimco. Susie shares of ralph lauren surged almost 6 today after the upscale retailer reported robust results for its holiday quarter. The 28 increase in profits was better than wall street expected. And, one of the reasons behind those robust results also was a surprise. Suzanne pratt reports. Reporter this is a large part of Ralph Laurens manhattan retail presence. Two magnificent stores on opposite corners in one of the worlds most expensive zip codes. But its not whats happening in ralph laures u. S. Stos tat is getting attention today. Its the pickup in the luxury Retailers Business across the pond that has some people scratching their heads. The iconic american brand today credited the eurozone in part for its strong earnings. The company also issued a rosier forecast for this year, saying its European Business is probably better than we expected. But, retail expert Howard Davidowitz says dont be fooled europes economy is still in the toilet. Laurens business is unique. Ralph lauren is gaining share. Why . The best product development, they have the must have fashion. And, theyre selling to an audience, the top 20 of income earners who have money. Its a good place to be. Reporter europe wasnt a good place to be for lauren last year. Sales and profits suffered as shoppers throughout the region broadly cut back on spending. And just last month, tiffany said its holiday sales tarnished due partly to weakness in europe. And, the luxury jeweler issued only a modest profit forecast for this year, citing Global Economic uncertainty. So, whos right about europes economy . Is the region still in dumps, or is it starting to improve. Response to third question after false start were expecting that europe will likely remain in recession pretty much for most of this year. But, the good news in that is that it does look like that its already starting to bottom out. While we do expect to see declines in regions, we are seeing the bottom, and thats a positive piece of news. Reporter another positive is that northern parts of europe are showing more economic resilience. If that trend continues, ralph lauren may be right about its upbeat forecast. Suzanne pratt, n. B. R. , new york. Tom the new york times, the wall street, and even the Federal Reserve have all been the targets of thieves in the past week, using key keyboards. The Federal Reserve said it was hackers exploiting a temporary vulnerability in a websi vendor product. The products were not affected, and the security hole was not affected. The fed is not saying what information was taken. An online hacker group says it was behind it to access information on 4,000 bank executives. In the past six months, they have disrupted website from bank of america, and even sonys video. George tubin is with us tonight in boston. Are companies, george, taking bersecurity seriousoda thats go question. I think unfortunately, the answer depends. Some companies are. Certain industries that have been hit, and have had issues lately over the past couple of years, like retailers, some of the Payment Processing sites, banks, certainly defense companies. But i think as a whole, unfortunately, in the u. S. Companies are not taking it seriously enough yet. Tom you know, initially we saw denial of service attacks. Essentially hackers trying to shut down a website. Are they becoming mor fef nefarious . Yes. And costumers cant get to the website, and that company cant service their costumers. Thats one level of attack. What is more nefarious, the more dangerous attacks, are those that go after company data and Company Information and actually steal money. Tom obviously, cash money has a value, even if it is cyberoriented. But what else are the hackers after and what is the value and who is the buyer of it . We have seen these hackers shifting their attacks from financial institutions, costurs of financial institutions, where obviously theyre after money. Theyre breaking into accounts and wiring money out of the country or out of these bank accounts. And now we see more focus on large enterprises. Looking at intellectual property and looking for secret information or confidential information they can use to sell on the black market, maybe to thirdworld countries that are trying to develop products and services to compete in the world market. And get the competition by getting this very valuable information. Tom george, you work with big corporations all of the time. Are they putting more financial resources, spending more money buying services, software and hardware . Some are. There is a saying in the security business that nobody really believes they have a security problem until they have a security problem. So unfortunately, once the company is breached, thats when they invest a ton of money and look to bolster their defences. Sometimes companies that are associated with that company in the market will sort of take a cue an theyll move forward as well. But for the most part, we do see a lot of the industry really not making sufficient investment in this place right now. Tom george, well leave it there. George tubin, cyberprevention company, trusteer. Weve got more about protecting your data from hackers, just log onto nbr. Com, and look for the nbru tab. Our partners at wharton have the latest on the legal concerns and costs of cyber security. Susie the airline said its earnings could take a 7. 5 million hit because it is a big user of those dreamliners. Tom and boeing shares are about back to the level they are before all of the controversy over the lith theej batteries with the dream drierlinerthe tom e saw a mixed finished for te major dicein a list less seion. The s p 500 was back to trading in a very narrow range. The index rallied from its morning weakness into the early afternoon, only to repeat that pattern, to end higher by a fraction. Volume held steady, just under 700 million shares on the big board. Just over 2. 1 billion traded on the nasdaq. The major sectors made very small moves, highlighting the low volatility today. The telecommunications and utility sectors had the biggest gains, but they were up by less than 0. 5 . With no economic headlines, the stock market focused on earnings. Media giant time warner among those. Earnings were up considerably from last year, and seven Cents Per Share above estimates. The company accomplished this en thoh revenues were most at the strength came from its Networks Like t. B. S. And t. N. T. The stock rallied 4. 1 on heavy volume to a new 52 week high. The Company Raised its dividend and announced a new stock buy back plan. Fellow Media Company news corp could see some selling pressure tomorrow. After closing up a fraction, the stock was down by almost two percent in extended hours trading. The company also saw strength in its cable t. V. Business last quarter, as well as, its broadcast television stations. Disney shar ros0. 4 after last nightbeer than expectedarnings. The stock hit a new high during the session today. Ralph lauren continues to benefit from the consumer appetite for luxury brands. Earnings jumped from last year, and Beat Estimates by a nickel per share. It saw a strong Holiday Season in the u. S. , and improving sales in europe. The strong earnings helped push the stock up 5. 9 . Volume more than tripled with shares at their highest price since ma