>> i'm looking at what pe have in their hands, and for me, i wouldn't say it's light, but it's not necessarily gangbuster type spending. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening everyone, my colleague tom hudson is off tonight. with just three more days until christmas, it looks like retailers are getting their holiday wish: shoppers spending money.

consumers are spending at a more feverish pace this year. shopper trak says retail revenue was up 5.5% last weekend, that's compared to a drop of more than 6% last year. this is a crucial time for retailers, because it's traditionally when they do the bulk of their business. to get an inside look at holiday shopping trends, erika miller tagged along with retail analyst brian sozzi on a recent trip to old navy. >> me personally, this is the best part of my job. i love being in the stores, touching and feeling the product, and anything i can ascertain from my trips to the stores is very, very important. and it reflects in the investments that we make. >> reporter: what's your initial impression as you come in here? >> right now i think we're looking at maybe a little bit lighter traffic now than we'd like to expect-- i mean it's almost noon. i would expect to see maybe an extra 50 people in the store. >> reporter: notepad in hand, he starts checking out women's apparel on the first floor. >> you feel the clothing. you can feel the quality-- or if they've taken quality out. and most importantly, you look

at the tags. >> reporter: old navy contributes about 30% of the annual revenue at parent gap stores. so, sozzi is concerned not just about sales-- but profits. >> reporter: i can't believe they are making money in this location selling things for $5. >> they need a lot of traffic. that's a good observation. they need a lot of traffic to make these items worthwhile. a $5 price point is a loss leader for them. >> reporter: why don't we see more people here, given that everything is $5? >> these knit tops have become kind of a commodity-type product, where we saw the consumer replenish that a couple of months ago. and now the consumer is actually looking for trend-right product. >> reporter: as you look around and you see all the sales signs, does it look the way you would expect, or does it look more promotional than you would expect? >> this is a typical old navy type of christmas season. having strong signage of $5-type items and key promotions. for me this looks about what you would expect. >> reporter: to confirm his instincts, he talks to customers. >> how would you characterize the deals this holiday season? >> better prices. >> better prices. >> yeah, because people are

being more particular on what they're shopping-- holding on to their money. >> reporter: next, it's downstairs to the men's department. >> men are back out there shopping. they've saved up. historically men are not very interested in shopping, but we're seeing some more exciting trends out there. >> reporter: is it an economic...? >> it's a little bit of both. they really didn't shop for maybe the past two years, so they're feeling a little bit more confident. >> reporter: as he walks around, sozzi notes a subtle difference from upstairs: men are not as concerned about prices. >> i think they don't mind necessarily to splurge a little bit more, and when you are thinking about splurging at old navy, you might think along the lines of something like a performance fleece. >> reporter: in what way is old navy a good barometer of what's happening in retail nationwide? >> i think they are a barometer to a certain extent of middle america. they remain very steadfast on those budgets. little fatter than last year those budgets, but still very targeted. >> reporter: and that's exactly what he notices at checkout. >> i'm looking at what people have in their hands. and for me, i wouldn't say it's

light. but it's not necessarily gangbuster type spending. i don't think we are going back to super splurging we saw in 2007. >> reporter: and with that, he's off to another store. like santa, sozzi has plenty of lists to make before christmas. erika miller, "nightly business report," new york. >> susie: here are the stories in tonight's n.b.r. newswheel: stocks ended moderately higher despite a spike in oil prices. the dow added 26 points, the nasdaq rose nearly four and the s&p 500 was also up four points. trading volume thinned out as we move closer to the holiday. 783 million shares traded hands on the n.y.s.e., 1.6 billion on the nasdaq. oil prices climbed over $90 a barrel in new york on word of a drop in supplies. a gallon of gasoline now averages just over $3 nationwide. a new government report shows the economy recovered at a modestly faster pace in the third quarter.

the 2.6% revision was higher than the 2.5% estimated last month, but it fell short of market expectations. also missing expectations, sales of previously-owned homes. the nation's realtors say sales rose 5.6% last month, but on the positive side, prices inched up for the first time since august to a national median of70,000. >> be honest with yourself, what do you think your abilities are to pay this back? >> reporter: still ahead, in tonight's money profiles, questions you should ask to avoid unmanageable debt. >> susie: like many of us, congress is scrambling to wrap things up before christmas. this afternoon, president obama called the congressional session of the past few weeks "a season of progress for the american people." as darren gersh reports, lawmakers have surprised many with a spurt of last-minute

productivity. >> reporter: how is congress like a college student? it left a lot to the last minute, and is now working around the clock to catch up. and that joke, says economics professor donald marron, has consequences. >> the number one feature of our tax code now is that every significant portion of the tax code has a big temporary tax cut in it. individual income taxes, corporate income taxes, payroll taxes and the estate tax. all of those have some significant feature that expires in the next year or two. >> reporter: to be sure, one reason this congress has pulled so many all-nighters is that it has been very productive. from banking reform to the start arms control treaty to "don't ask, don't tell." it's a long record of lawmaking, says i.s.i. group's andy laperriere. >> between the health care bill, the stimulus bill-- lots of other things, you have some pretty far-reaching proposals. obviously, one of the problems for the democrats is that a lot of that was unpopular, and so they lost the house as a result, along with the weak economy. but in terms of getting things done, they got a lot done.

but not everything. the fight over fiscal spending, says former congressional budget director rudy penner, has been pushed off to march. >> here, the fiscal year is about a quarter over and the civil service doesn't really know for sure what they're going to have to spend this year. it makes it very hard to plan. but they are used to it. we seem to do it every year. >> reporter: another issue that seems to come around every year is a vote to increase the nation's debt limit. many new republican members of congress have promised to vote no, which will make this issue one to watch closely in the new year. darren gersh, "nightly business report," washington.

>> susie: despite that spike to $90 oil we told you about, stocks still hit fresh two-year highs today. those gains come thanks to more deal-making and merger talk on wall street. let's take a look in tonight's "market focus." we've seen the big financials rallying in recent weeks, but today regional banks were in the spotlight. many rose on takeover speculation, and actual news. gulf coast banker whitney holding is being taken over by hancock holding. it's a $1.5 billion all-stock deal. whitney shares surged on the news, up 29%-- a gain of over $3.

hancock will repurchase all of the treasury's tarp warrants on whitney when the deal closes. several other regional banks also rose on takeover talk. bancorp south, regions financial, synovus and suntrust all rallying on hopes consolidation will continue in the industry. takeover rumors also swirled around office depot. much of it was sparked by a company filing with the s.e.c. office depot entered a new "change of control agreement" with its top three executives, which spells out how they'll be paid in the event of a takeover. investors responded to that. office depot shares jumped 9%, a gain of 44 cents. morningstar analyst joscelyn mackay calls the office supply retailer a prime takeover target, but says she expects the buyer to be a private equity house, not a competing chain. office depot would not comment on the takeover chatter.

investors also pushing a couple of retailers higher on solid earnings news. first, bed bath and beyond heading to infinity and beyond in after hours trading on a 25% jump in third-quarter profits. the housewares retailer earned 74 cents a share, well above estimates. and then bed bath also upped its fourth-quarter outlook saying consumers have finally started to spend more on their homes. shares came into this earnings report just below a 52 week high at $47.67-- bed bath stock was up over 6% in after-hours trading. the company's board has approved a plan to buy back $2 billion worth of stock. fellow retailer walgreen also in with strong earnings. the drug chain earned 62 cents a share in its fiscal first quarter, well above last year's 49 cents and 8 cents ahead of estimates. shares of walgreen rose over 5% on those results.

and finally, shares of arena pharma on a diet, losing 11%. the drug maker met with regulators and will try again next year to get its experimental weight loss drug approved for use in the u.s. it's called lorcaserin. the f.d.a. rejected the drug in october. arena shares had traded as high as $8 a share this summer. and that's tonight's "market focus."

>> susie: in the last few weeks we've talked a lot about the pick-up in mergers and acquisitions. it's a subject that's also on the mind of tonight's "street critique" guest, hilary kramer, editor of gamechangerstocks.com. suzanne pratt talked with hilary, and began by asking if the deal-making will accelerate in the new year. >> suzanne: 2011 will be the year of impersonators, $the trillion of cash on the sidelines. the projections for $3 trillion of deals. and i see that happening starting in the first quarter. >> suzanne: you have a trio of stock tips. and the first one is sinovis. it is a bank that was in the news today, as was the whole sector. >> this is a stock that could easily double in acquisition scenario. any big bank that wants to get into the southeast, will go for this

$2 billion bank that has a loyal customer base and the southeast. >> suzanne: and your second pick is g.o.i.. >> i love that one. it's a satellite imaging company. it is up 65% since then. i still see it as an acquisition target. they serve national defences all over the world, and agriculture. the way we're going is satellite imaging. it could be acquired by lockheed martin because we fight worse through reconnaissance, and not through fighter jets. >> suzanne: and your final pick for 2011 is paxel. >> p.r. x. l. is in a very fast growing area that serves pharmaceutical companies. and parasel is some of my core holdings. that i see $30 a share on.

>> suzanne: last week you and tom spoke about social media. you had taradine, and apple, and super media. super media not so good. >> super media could be acquired the same way groupon had an offer. there is real interest in super media because of the web-based social to business to consumer network they've developed. >> suzanne: and we've got a little bit of viewer e-mail. we have had a couple of people write in about dendrion, and mike asked if you til still like the company, and do you think dendrion will get the buyout? >> i do believe it will go to $60 a share. and provenge, which works on prostate cancer has many applications for a number of cancers. >> suzanne: and we have consumer mail regarding

buydo, and the question is from mabel is whether you still like it? >> i love buydo. there is opportunity there. this is the google of china. but since i've recommended it, since then it is at least a double. so take your money off the table if you bought it on my recommendation. >> suzanne: hilary, do you own all of the stocks we talked about today? >> yes, i do. except by buydo. that one i sold. >> suzanne: if you have a question for hilary, you can follow her on thestreet.com. >> susie: here's what we're watching for tomorrow: november's reports on new home sales, durable goods and personal income. our market monitor guest is thomas j. herzfeld, president of thomas j. herzfeld advisors. also, the maker of fantastik, pledge and windehas been a family-run business for 124 years. now, s.c. johnson wants to be known for more than just its products.

>> susie: there's going to be big economic fallout from that big snowfall in europe. a leading economist in germany says fourth quarter growth there will be down half a percentage point due to stalled construction projects and freight shipments. the economies of britain, france, and belgium could also take a hit. the nasty weather has grounded flights, stopped trains, and stranded hundreds of travelers. a product recall tonight that could affect you if you are a diabetic. abbott labs is taking back almost 360 million test strips used to check blood sugar levels. the f.d.a. says the strips may show falsely low readings, which could be dangerous to your health. there are six brands being recalled, including precision x- ceed pro, precision x-tra, optium e-z and reli-on ultima. &&&&&&&&&&

retirement is supposed to be a time of relaxation and leisure. but for many americans, that's simply not the case. a recent university of michigan law school study found people 65 and older are the fastest- growing group filing for bankruptcy. in tonight's "money profile," tips on how to avoid unmanageable debt. benno schmidt met one retiree who learned the hard way.

>> reporter: poring over loans he cant repay, manuel espinoza's hopes for a new career are on hold. >> i lost my job, i aimed to look for another career. i chose mathematics, teaching, because my background is in engineering. i wanted to work, i wanted to work! >> reporter: a once highly paid construction supervisor in south florida who painted as a hobby, espinoza went back to school in his mid-60s. he expected to pay for it with thousands of dollars of federal student loans. then he discovered, to his horror, he was refused the cash. >> its a pain. i feel frustrated, demoralized, disappointed, because i didn't expect this missed chance. >> reporter: like millions out of work in the great recession, espinoza didn't want to wait meekly for something to open up.

he hoped to broaden his horizons, attending this school, and did just what experts suggest: learn something new. now he's trying to learn how to pay off a debt he never thought he'd have. so, the lesson for others struggling with debt? author kerry hannon stresses financial fitness: don't take unrealistic loans when starting second careers, or, worse, to pay off money already owed. >> be honest with yourself, what do you think you abilities are to pay this back? >> reporter: hannon says financial fitness means paying bills on time, not opening new credit cards to juggle debt, and not closing down existing cards, which can hurt your credit rating. her mantra: pay down debt. if you do have debts, be they medical, credit card, or, in espinoza's case, educational loans, here's the bitter pill: >> you may have to start back slowly. you may have to take whatever job is available. >> reporter: brutal, right? maybe not. hannon says a.a.r.p.'s website

has suggestions for part time jobs to help pay off debt-- less fast food attendant or custodial, and more nonprofit or entrepreneurial. elaine king is the president of the financial planning association of miami dade county. she says one option to pay down debt is to borrow from your 401k, providing you pay it back in five years. because if you cannot pay it, then its going to be considered a tax distribution and then you are going to be charged at the highest rate. and what about the dreaded "b" word-- bankruptcy? watch out, it is not a magic solution. >> student loans are not exempt, so if you file bankruptcy, you are going to be on the hook for those student loans. >> reporter: and while your credit card debt may be forgiven in bankruptcy, alimony payments won't. that leaves reverse mortgages or even friends and family as options.

but careful here. unpaid loans can destroy friendships, and tax families. >> more than four hours i feel tired, yeah, it's a lot of concentration. >> reporter: it's hard right? >> it's hard. is hard work! >> reporter: student debt is normally good debt, an investment in the future. but espinoza's debt has forced him to market his other talents. >> photograph has no life; i have to give life to the landscape through the painting >> reporter: and just maybe find a new career while doing it. in miami, benno schmidt, "nightly business report." >> susie: fixing economic problems today and tomorrow. our commentator has thoughts on both. he's glenn hubbard, dean at columbia university's graduate school of business and former chairman of the council of economic advisers under president george w. bush. >> it looks like we have a tax deal for the short run. what we should hope for in 2011? that thinking about the long run is back in style. there is hope: after repeated stimulus packages to revive the

economy, more serious discussion is emerging in washington about long-term structural challenges facing our nation. stagnating wages for too many americans, rising health care costs, and large federal deficits and debt that threaten our financial future-- these problems did not start with the financial crisis of 2007 to 2009, and they will not fix themselves as the economy recovers. the recent proposal from the fiscal commission to reduce deficits and debt offers a chance to restart long-run growth. by putting government programs on a sustainable footing and lowering future tax burdens, such a proposal helps the economy today as well. and tax reform that can help the economy shift away from more consumption today to more saving and investment for tomorrow will lower the chance of future financial crises and promote today's job creation. 2010 was another year of the short run in policy, calling to

mind john maynard keynes' quip that, "in the long run, we're all dead." perhaps, but 2011's hopeful shift to our future brings to mind henry david thoreau's admonition that, "in the long run, we only hit what we aim at." i'm glenn hubbard. >> susie: and finally tonight, it's a holiday wish for millions of people: starting the new year with a job. employment firm challenger, gray & christmas is trying to help. the firm will offer free job search advice on december 27 and 28 from 9 a.m. to 5 p.m. central time. the telephone number is 312-422- 5010. a new component of this year's call-in will be job-search counselors dedicated to taking calls from current and former military personnel. if you missed the number, you can find it on our website. that's "nightly business report" for tuesday, december 21. i'm susie gharib. thanks for joining us. have a great evening. we hope to see all of you again tomorrow night.

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