>> tom: creating jobs, stimulating the economy and reducing debt. what policy priorities will president obama highlight in tomorrow's state of the union? expect to hear this theme: >> we are competitive... global competition... more competitive... >> susie: we'll preview what's being called the super bowl of speeches. you're watching "nightly business report" for monday, january 24. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. all eyes will be on president obama tomorrow night. that's when the president will deliver his second state of the union speech. and tom, there's a lot riding on what he tells the american people. >> tom: susie, the president will discuss a wide range of issues, but with all the concerns about jobs, the deficit and the weak housing market, the economy is sure to top the list. >> susie: here's darren gersh with a preview of what to expect. >> reporter: in a youtube preview, the president made it clear obama the pro business centrist will be standing before congress tomorrow night, and the key focus will be restoring american competitiveness. >> to do that, we're going to

have to out-innovate, we're going to out-build, we're going to have to out-compete, we're going to have to out-educate other countries. that's our challenge. >> reporter: if that competitiveness agenda sounds familiar, it should. the country has been talking about it, off and on, for more than 20 years. howard rosen began working on competitiveness policy in the early 90s. >> the problem is that competitiveness and these long- term issues need to be addressed consistently over time, not just when we're having these short- term problems. >> reporter: rosen says the key indicator of competitiveness is investment in factories and equipment. and that's why the president will talk about cutting the deficit to free up money for businesses to invest. the president will also talk about overhauling the inefficient tax code business leaders say makes them less competitive. the general thrust says rosen is to get back to an economy that doesn't simply trade things, but makes them too. >> the problem in this economy is that, for too long, we have been creating money and not enough wealth.

that's what we need to do. we have to make wealth, not just make money. >> reporter: of course, by talking up investments in education, roads and research, the president hopes to make it harder for congress to cut them. but political analyst chris krueger says this budget battle is just beginning. >> you may hear a lot of grandiose ideas on spending, but also keep in mind that the congress is not going to be cutting any checks any time soon. >> susie: joining us now to talk about this more is washington bureau chief darren gersh. you know, darren, all this talk about competitiveness sounds good but it seems that what american people really want to know is that does competitiveness lead to jobs. >> reporter: well, that is basically what the debate is about. now competitiveness does lead to jobs over sort of the medium to long-term but you'll notice that the debate has shifted. we've gotten away from this idea of stimulus immediately creating jobs, government

creating jocks to how to create jobs over the longer term. now the president of course will argue that cutting research and development will cost jobs right away. >> susie: so what is the republican response likely to be to the president's speech? >> reporter: you know, susie, that's very interesting. because paul ryan is going to be giving the response to that. he's a budget hawk. he's going to be talking about how government is going to have to no longer create jobs. and the way you create jobs is you create jobs by cutting government and allowing the private sector to do it. >> susie: all right. and what about social security. any thoughts, is that topic going to come up in the president's speech? >> very interesting. we thought that was going to be part of it now the president looks like he is going to avoid endorsing those deep cuts that the budget commission talked about. instead he's going to talk about sort of general generic helping social security, shoring it up but not in the immediate term cutting deeply. >> susie: you know, darren, a lot of people are sayinging that the themes that will be in president, in the state of the union speech tomorrow night is not

only going to be the themes for 2011 but it is going to be a preview of the themes president obama is going to be campaigning on in the 2012 presidential election. it seems a ways away but already it is beginning. >> reporter: it is washington. the presidential campaign never ends. it's starting up earlier than ever. but you know the president does have to get through the immediate term. he's got to get through a bruising budget battle that will happen right away. so while this is going to lay out the themes the president will campaign on, right now he has to get through the immediate issues, cutting the deficit, fighting with congress over that, and that fight over the debt ceiling. going to be a huge battle. >> susie: that is a huge to-do list. >> reporter: absolutely. >> susie: thanks, darren, our washington bureau chief darren gersh. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks rallied higher today on investor optimism over this week's earnings. the dow rose nearly 109 points,

the nasdaq gained 28 and the s&p 500 up 7.5 points. volume on the big board and the nasdaq backed off friday's pace. the u.s. economic recovery is taking hold. so says a new survey from the national association for business economics. 82% of economists surveyed expect the economy to grow between 2% to 4% this year. about one third say hiring has improved at their companies, and 6% say workers have been laid off. a legal victory for j.p. morgan chase. the u.s. supreme court says the bank did not have to give written notice before raising credit card interest rates on customers who defaulted on a payment. the law has since been changed and now requires banks to give advance notice when raising rates because of default. >> it's like having a high end boutique online, and who doesn't want a deal? >> tom: it seems lots of people do! in tonight's "shoptalk," we'll show you a new trend in retail that's attracting lots of high- end bargain hunters.

>> susie: if you're keeping score, the dow is close to revisiting an old milestone. in the last two months, the blue chip index has jumped almost 900 points or 8%. while some market pros say stocks are headed for a correction, many say there's momentum for another move even higher. suzanne pratt reports. >> reporter: guess what? the dow is now just a stone's throw away from 12,000. the blue-chip index was last at that milestone in the summer of 2008, right before the financial crisis hit. after plummeting below 7,000 in march 2009, the dow has bounced back, gaining a stunning 83%. so has investor psychology fully recovered from the lehman brothers bankruptcy and the stock market's violent collapse? n.y.s.e. specialist jonathan corpina says not quite. the fear is still in this market, but i think investors are starting to feel a little more comfortable with the market

and the market structure. >> reporter: experts say a stronger-than-expected u.s. economy and solid corporate profits are behind the most recent push higher in stocks most agree the market is ripe for a correction, but strategist jim awad says it will be a pause that refreshes. >> we're in the sweet spot of the economic recovery with low inflation, growing economy, growing earnings. so, if there is a correction, it will be just a correction. absent any bad news out of reporter: europe on sovereign debt, experts predict u.s. stocks will ultimately gain ground this year. >> investors who have not been paying attention to this all of the sudden see that the dow is trading at 12,000, they're going to feel like it's time to get back into this market. so, that's what i mean when i say the market wants to move higher. >> there is clearly momentum based on the domestic u.s. economy continuing to be better than expected and gaining momentum. if there's a surprise, it will come from outside the u.s. >> reporter: here's a tidbit of good news for all of the bulls out there.

history shows that how the s&p 500 index performs in january tends to predict the direction of the stock market for the year. so far this january, the s&p 500 is up more than 2%. suzanne pratt, "nightly business report," new york. >> tom: 40 million people, hundreds of millions of dollars, and it all comes down to one game. tonight's beyond the scoreboard,

our look at the business of sports, begins with the big business between television and the n.f.l. rick horrow is a sports business analyst and c.e.o. of horrow sports ventures. cbs with the jets and steelers, 31 share, third of all televisions in america were watching the jets and steelers, is this the biggest, most lucrative television contract there is? >> by far, and most of the televisions in the new york area had unhappy viewers watching them but they watched it. and they bought advertising. we we'll get in that in a second. the bottom line is it is a 20 billion total tv package and so significant that they can actually front money for the next round of television dollars that will cash the owners in a position to impact how the negotiations will go for the next round. >> tom: to that point, rick, fox gets the super bowl this year. this is a $4 billion deal. it actually ends this year, as a matter of fact. 21% of all nfl television money comes from fox. how does all of this shape the strike negotiations?

>> well, because they will get money up front. why do these networks pay an extraordinary amount of money, 106 million people watched the super bowl last year, even more than a mash episode and it is not how many t is who is watching. you realize 47% of us, the next day at the watercooler talk about the game but 58% of us talk about the commercials. and 67%, two out of every three women would rather miss a few plays in the game than miss the commercials. that's what this is all about. >> tom: it is all about celebrity endorsements as well. on to the next topic. some new research out from asymetrix, a research firm finds celebrity endorsements don't necessarily work. so how is a company supposed to know if the extra money they pay for the celebrity to endorse that product is thrown away. >> almost 12% of these have a bump above 10% which is the reason why you hire these endorsers. but that means 88% don't. so the bottom line is they take a risk and the contracts today are shorter, they're smaller and easier to terminate so the risk is smaller. >> tom: one success from the pittsburgh steelers, new

super bowl player in the head and shoulders, this was an ad singled out that actually worked. what's the difference. >> the difference is the guys got really good long hair. look at that commercial. and it resonates with the viewer. it's funny, to 9 point. he is humble and what i am doing riingt now is working on growing my hair. >> tom: good luck to you, i tried that as well. all right let's move on. comcast this week due to close on its purchase of nbc universal. comcast knows sports, it owns the philadelphia 76ers and flyers. what does it need to do to make a run after espn and disney. >> to do exactly as they are doing. they have 11 regional cable networks versus the golf channel and nbc has the nfl and nhl a fairly formidable combination if they get together. >> tom: comcast and disney both are shareholders of-- nice returns over the past year, 40% and 30% respectively. what does espn need to do to defend itself. >> they have that one family of networks, you have now comcast, nbc and fox. i think what will happen is

they all will be incredibly competitive in the years ahead which is really good for the viewers. you've got three juggernauts, not just two. >> tom: we always appreciated it, rick horrow the c.e.o. at horrow sports ventures. >> susie: so tom, from the excitement of football and super bowl to the excitement of what was going on here at the new york stock exchange and watch wag was going on with the dow and some strong earnings during the day and talk about things that happened after the bell, more earnings that could set the tone for tomorrow. >> tom: susie, the bear fans and jet fans went from disappointment to those that were invested in the stock market to elation today with the nice rally that we saw. and looks like that we saw some after-hours buying interesting thanks to earnings. so let's go ahead and roll tonight's market focus. >> tom: a day of nice stock gains led by technology stocks, particularly semiconductor makers. we start with the semiconductor holders e.t.f.

here it is. it rallied 2%, continuing the climb we've seen since its late august low. intel announced an additional $10 billion buyback. but it was chip maker nvidia that again led the way, adding another 11%. this is a 90-session chart. we can see the share price really ocming along. there's new speculation it may have a 3d chip for mobile devices. after the close, focus shifted to texas instruments. fourth quarter results came in a penny better than expected. orders, though, were down. texas instruments stock came into this report adding more than 2% today to just below its 52-week high. since august, t-x-n is up more than 40%. despite the upbeat forecast

tonight, shares were down 2% in after-hours trading. watch technology tomorrow. texas instruments wasn't the only tech stock weaker after the close. software firm vmware lost 3% during the session and another 5% despite beating estimates and an upbeat outlook. american express came into its earnings report tonight down a fraction. it didn't come along on the dow ride today. shares have been unable to get above $46 since may. the stock added 1.5% to today's loss after its earnings. those earnings were three cents short of estimates. still, cardmember spending hit a new record during the quarter. and a record for the full year. monday lived up to its reputation as a merger announcement day. this time in consumer packaging. rock tenn will buy smurfit stone. rock tenn will pay $3.5 billion in cash and stock. the deal values smurfit stone at $35.65 per share. it comes seven months after

smurfitt-stone emerged from bankruptcy. while smurfitt stone had a huge jump, so did the buyer, rock tenn. this 4% jump for r-k-t is a sign of how much the market likes the combination. no surprise that other packaging stocks saw a bump today. temple inland added 5%. mead-west-vaco was up almost 4%. international paper closed up 3%. one other deal, this one for genoptix, a company focused on diagnosing blood cancers. here's the last 52 weeks, nice big range here. the stock shot up 26% on word of a offer from novartis for $25 per share. shareholders have been on quite a ride over the past year, from over $38 in april to the low teens in september. finally tonight with this rise. j.c. penny jumped 7%, but it hasn't been able to break above $35 for the better part of two

years. it will add activist hedge fund manager william ackman and chairman of real estate investment trust vornado, steven roth, to its board. >> tom: and that's tonight's "market focus." >> susie: private sale websites are all the rage when it comes to shopping for discounted luxury goods. sites like gilt, rue la la, and zulily are becoming a major force in retail. their customers pointed and clicked to nearly three quarters

of a billion dollars in sales last year, and those numbers are expected to keep growing this year. in tonight's "shop talk," erika miller gets a behind-the-scenes look at how these sites are transforming retail. >> reporter: she's only three months old, but lilly brody is already a trendsetter. that's no surprise, because mom lauren also likes designer clothes. but don't assume the brodys spend a fortune on their wardrobes. they have a secret: members-only websites offering discounts of up to 70% off. >> it's really easy to browse. it takes no time at all. i'm always finding new brands. things you wouldn't find at children's place or gap or a big department store. it's like having a high-end boutique online, and who doesn't want a deal? >> reporter: think of these sites as online sample sales. gilt groupe and rue-la-la offer designer clothing. zulily sells children's products and one kings lane offers home

decor. there are more than 70 other private sale sites nationwide. it's one of the fastest growing segments of retail thanks to a flood of venture capital funding. the most popular sites have millions of members and do hundreds of millions of dollars in annual sales. most customers are invited to join by friends, although anyone can request membership. zulilly cofounder mark vadon explains why his site isn't open to everyone like, say, amazon.com. >> our brands we work with like it being a password-protected website. they are giving us really great pricing for our members. but they don't want that pricing to show up elsewhere on the internet-- in price comparison engines and things like that. >> reporter: for gilt, there's also another reason for being invitation-only. at the company's warehouse in brooklyn, founder alexandra wilkis wilson says her site wants an image of exclusivity. >> the best new york city sample sales are actually invitation- only. so we wanted to emulate that model and make sure people who

love fashion, who are in the know, get invited to join gilt groupe. >> reporter: private sale sites really took off during the recession, when there was a glut of retail inventory. but over time, the business models have evolved. gilt, for example, says designers now also rely on the site as a marketing tool. so you won't just find last season's dregs-- many private sale sites now offer current merchandise. retail strategist john long says the next step is offering items not found elsewhere. >> this should remind you of outlets, which started out as overage locations for excess inventory. and now most products that you find in outlets is being developed exclusively for that outlet-- has never seen a full line retail store. >> reporter: gilt is hoping to differentiate itself by becoming a lifestyle brand. it has expanded into men's, children's, beauty and even home products. instead of using stock photos, every item is shot fresh-- so

gilt looks more like an online magazine than a discount retailer. >> we take tremendous pains to take beautiful photography. we shoot everything on models. we style them. we put hair and make-up to make the models bring the clothes to life, to bring the accessories to life. we actually have a very editorial feel. we inspire people. some people look at our site for fashion inspiration even if they are not going to make a purchase at that moment. >> reporter: so let's check out private sale sites. they offer discounts of up to 70% off for members-only. in addition to last season's leftovers, many now offer current merchandise, but a shake out is coming and differentiation will be key to survival. if you're thinking of shopping this way, lauren has some tips. buy at the start of the sale, because the best deals go fast, and be aware that returns aren't always allowed. >> with baby clothes especially, size is always an issue.

in certain brands, i know she wears six months. in certain brands she wears three months. in certain brands, three months swallows her. >> reporter: then again, returns are not a concern for certain customers-- especially the ones that would rather play than shop. erika miller, "nightly business report," new york. >> tom: here's what we're watching for tomorrow: we'll have quarterly results for 3m, boeing, j&j and verizon. the federal reserve's interest rate setting committee begins a two-day meeting. we'll also see november's s&p case shiller home price index. and our "word on the street" is "commodities." thestreet.com's energy expert, dan dicker, has tips on how to invest in commodities and commodity e.t.f.s. >> susie: neither rain, nor sleet nor gloom of night keep the postal service from its appointed rounds. but lack of money might. it is closing thousands of post offices in a bid to save cash. the shutdowns will begin in march, if congress approves, in places easiest for local

communities to lose. the u.s. postal service is awash in red ink, down a record $8.5 billion in fiscal 2010. >> tom: and the winner is... toyota! new sales figures show it is still the world's biggest car maker. but just barely. g.m. is a very close second. toyota sold just under 8.5 million vehicles around the globe last year, and that's despite recalling more than 8.5 million vehicles for production problems. it's the third straight year the japanese company has taken the top spot.

>> susie: health care reform is in a new state of limbo. house republicans voted to repeal it, but that bill has no chance of passing in the senate. in the midst of so much uncertainty, tonight's commentator wants washington to go a different route. 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. >> last week, the u.s. house of representatives voted to repeal the patient protection and affordable care act, signed into law by president obama last march. given the president's strong defense of the health care law, the house action is theater, right? not necessarily.

many economists have voiced concerns that the law will increase the nation's already runaway spending on health care, and will raise health insurance premiums for the typical family plan by about 10%. while the new law emphasized coverage, it largely ignored costs. and high and rising costs reduce coverage and health cares value for insured households. from a budget perspective, the congressional budget office estimates that the law's new health care entitlements will raise federal health care spending by $1 trillion over the next ten years. next time, the house could start by replacing the act with rules that will allow market incentives to demonstrate their effectiveness and by asking president obama to seek a second opinion. i'm glenn hubbard. >> tom: that's "nightly business report" for monday, january 24. i'm tom hudson. good night everyone, and good night to you too, susie. >> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night.

"nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >>