>> susie: from unrest in libya to uncertainty in japan, how the unknown is coloring the outlook for oil prices. >> tom: and we get the latest from japan, one week after its deadly earthquake and tsunami. you're watching "nightly business report" for friday, march 18. 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. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. president obama put libya on notice today saying the u.s. and its allies are ready for military action. tom, the president's message was aimed at libyan leader moammar qaddafi. >> tom: susie, speaking at the white house, president obama said qaddafi must end the violence and pull back troops from towns under attack. >> let me be clear, these terms are not negotiable. if qaddafi does not comply, the resolution will be enforced through military action. >> susie: ahead of the

president's warning, libya said it's ceasing all military action and will begin talking with opposition groups. that came after a vote at the united nations calling for a no- fly zone over the country. not surprisingly, oil markets were volatile today. crude prices closed down 35 cents to settle at $101 a barrel, off their high of $103. as suzanne pratt reports the oil market is coping with a long list of issues. >> reporter: in the past week much of the world has been fixated on japan, with one exception. the global oil market is paying much more attention to bubbling conflict in north africa and the middle east. oil trader john woods says right now all eyes are libya. >> you look at qaddafi like, "all right, listen, we're going to go in there and start bombing you if you don't knock it off." all of the sudden he says, "okay"-- oil drops three bucks, but no one really believes him. >> reporter: and, traders worry supply disruptions won't end with libya. trouble is brewing in bahrain,

iran and saudi arabia all big suppliers of oil. oil expert john kilduff says conflict in any of those countries would have a huge impact on crude oil prices. >> if we see the situation in saudi arabia in particular worsen, if the protests in the eastern region escalates, all bets are off. we could easily see $150, $200 oil on escalating fears there. >> reporter: still, traders say oil prices would be much higher today if there hadn't been the earthquake and tsunami in japan. yes, in the short-term japanese demand for diesel fuel to power generators is expected to pickup. but, experts predict overall japanese oil demand will be constrained for months if not years. >> stepping back you have to accept the fact that their economy is going to be damaged from this. that they will be knocked off their block for a while and it will take some time to come back. >> reporter: experts also predict energy markets worldwide

will be extremely volatile this year, not mention dominated by the headlines. >> it's tough to talk about a technical market because you can throw that stuff pretty much out the window. you have to pay attention to the news. >> reporter: all of the turmoil in the middle east comes at a particularly bad time for u.s. consumers. we are just weeks away from peak driving season, which will fuel demand and undoubtedly prices at pump. suzanne pratt, "nightly business report," new york. >> tom: japan remains in flux tonight as engineers battle to cool spent fuel rods at the dai-chi nuclear power plant. they hope to get power back on line at the plant's reactors over the weekend. while the nuclear situation unfolds moment by moment, japan continues its massive rescue and recovery effort. lucy craft reports from tokyo. >> reporter: it's been one week since japan's nightmare began, and tokyo's normally bustling streets are darkened and quiet. a draconian energy conservation

campaign-- triggered by the nuclear plant crisis-- has made travel difficult and forced the country to turn down the lights. to save electricity and because of continuing powerful aftershocks and anxiety over the threat of radiation contamination, leisure and entertainment has been sidelined. shopping malls are deserted. customers are staying home in droves, glued to their tv sets and the ongoing power plant disaster. how that drama resolves itself remains uncertain. what is likely is that japan-- one of the world's top nuclear power nations-- may be at last abandoning its love affair with atomic energy. japan's conservative party leader said this week that siting future plants will be "extremely difficult," a conclusion the center-left ruling party called "extremely obvious." lucy craft, "nightly business report," tokyo. >> susie: here are the stories in tonight's n.b.r. newswheel:

stocks rose on the libyan cease fire and a move by the fed to loosen its grip on the biggest u.s. banks. darren gersh will have more about the fed and banks in a moment. the dow rose almost 84 points, the nasdaq added seven and the s&p 500 was up five. as for trading volume, almost two billion shares moved on the big board over 2.5 billion on the nasdaq. an f.d.a. panel says removing menthol cigarettes from the u.s. market would make americans healthier. but the panel did not recommend a ban. menthol flavor attracts younger smokers and makes it harder to quit smoking. and it's popular: about a third of u.s. cigarette sales are menthols. we'll have more on how the decision played out on tobacco stocks in market focus. a wisconsin judge has put on hold a law stripping collective bargaining rights from the state's public workers. the judge wants to review a challenge to the law before it takes effect. still ahead, when it comes to

highly skilled jobs, companies say its not easy finding talent. we look at one solution. >> tom: remember bank dividends? they're back. the federal reserve has given some of the nation's biggest banks the okay to pay investors more for their investments, at least for those banks that passed a financial stress test. some analysts think those dividends are heading higher. but as darren gersh reports, there is a limit. >> reporter: federal regulators did not sound the all clear on banking today. the stress test results were more like a cautious "so far, so good," according to analysts like karen shaw petrou. >> it is a signal that the banking system is beginning to get off the mat. i don't think it is anywhere close to up and running yet. >> reporter: since the crisis brought the industry to the brink of failure, the federal reserve says the nation's 19 biggest banks have almost doubled a key capital ratio from 5% to more than 9% of assets-- a $300 billion swing. regulators found big banks have enough capital to survive a

scenario where unemployment climbs back to double digits and the economy falls back into recession this year. banks that cleared the regulatory hurdle can now use some of their money to reward their investors. a move seen as a key step in healing the financial system. >> to make new loans, you have to have new capital. to have new capital, you have to have investors, to have give them something for their money and that's dividends. >> reporter: five banks announced dividend hikes today. j.p. morgan, wells fargo, u.s. bancorp and state street say they'll also buy back some of their shares. but the good news has its limits. the federal reserve has effectively restricted dividend payouts to 30% of earnings and those dividends may face more risk than in the past says morningstar's jim sinegal. >> if the economy starts to turn down again, i think regulators have given themselves a lot more leeway now to tell the banks to pull back and not pay out so much.

>> reporter: sinegal expects the strongest banks to raise dividends in the coming year. the payouts are still well short of the levels in the boom years, but credit suisse analyst moshe orenbuch says regulators are now drawing distinctions based on performance. >> there are going to be haves and have nots among the banks. some will be better than others. the fed actually tried hard in the last stress test in may of 2009 to sort of keep everyone on an equal footing and so i think the stronger banks will actually do better as a result. >> reporter: one big investor has some reason to be happy with the results of this stress test. warren buffett injected capital into goldman sachs at the height of the financial crisis. goldman today got the okay to buy out that investment, handing buffett a roughly 70% return on his investment. darren gersh, "nightly business report," washington.

>> tom: the week ended with a day of gains for the major indices after a volatile week. let's get to tonight's market focus. this week was marked by nuclear fears in japan and more tension in libya, putting investors on edge. for the week, the dow industrials fell 1.5%.

the gains today and yesterday were not enough to make up for the losses earlier in the week. the nasdaq dropped 2.7% from a week ago. the nasdaq remains in negative territory for the year. the s&p 500 fell 1.9%. consumer staple stocks were the biggest drag on the index this week. leading the sector gains today, financials. this e.t.f. bounced more than 1% with volume triple its normal pace. big banks took the lead after the federal reserve gave many of them its blessing to hike dividends and start stock buy- backs. as darren reported earlier, j.p. morgan was among the first to announce a dividend increase and stock buyback. j.p.m. led the dow industrials with this 2.7% rally. it brings the stock back to where it was trading a week ago. other banks stocks jumping-- sun-trust up almost 5%. goldman sachs up almost 3%. bank of america shares, though, were up just a fraction.

it did not request permission from the fed to raise its dividend. caterpillar continued adding to recent gains. we're looking at a 90-session chart. this week, caterpillar was the best performing dow jones industrial component. the most recent low came a day before the japanese disaster. today caterpillar said global dealer sales were up 59% in the three months ending in february. cigarette maker lorillard popped 11% on seven times its usual volume even though a food and drug administration panel said removing menthol cigarettes from the u.s. market would help public health. the panel did not recommend banning menthols though. about 90% of lorillard's sales are from menthol cigarettes. starbucks is the latest consumer company to raise prices.

shares were active even though they moved very little. its hiking grocery store coffee bean prices by 12%, blaming speculators. and just one new stock this week. cornerstone on-demand priced at $13 per share. but since its first trade was over $19, the stock closed down today. cornerstone is a human resources software provider. and that's tonight's "market focus."

>> susie: our market monitor tonight says his biggest concern is what's going on in the middle east, not japan. joining us now, richard steinberg president of steinberg global asset management. hi, rich. >> >> susie: start by talking about how it's impacting the investment strategy. >> qaddafi said he would take a step back from annihilating the rebels, and the oil took a step back, but he's no fool. he did this to give himself a break. if we really end up with an increased problem in libya, and oil spikes, it could really create disruption in the market. right now we think there's about a 15% premium because of the libyan saudi problems. so it's something we're watching very closely. >> susie: you have five stocks you're still recommending in this environment.

let's get to it. you have ford. ford motor, which is one of the stocks you recommended a year ago on the program. why do you like it? >> they're clicking. it's amazing. when you make cars that people want to buy, earnings go up. they're going to earn $2, and we have a 24 target. they're just interesting the sweet spot. >> susie: nice move on that from $14. tell us about icon. itra? >> itron makes the smart meters that go on the side of your house for electricity and natural gas and for water. and it's an efficiency energy play. they're going to earn $4 next year. it's really cheap. and we think there's a lot of upside to that, an $80 target >> susie: hewlett packard is on your list. why recommend it. >> we think the market is overreacting. they have a new ceo that's a show me ceo.

but 7.5 times earnings to buy a great name cheap. >> susie: and the target price? >> we have a $55 target. >> susie: so room to grow. california us about cit. financial services. john thain has been the ceo there for a while. >> it has a $46 book value. it's a prearranged brments. they have lots of earning power. the credit cycle is just begining to turn. and there's 20% upside. >> susie: and the fifth stock you recommend is nestle. we know what they make. why do you like it? >> peoplwhen people are stresse they eat chocolate. we think faeb% upside. it's a great global brand. we think they'll have a lot of leverage to their earnings. and it's a name, especially with rocky innocence europe, you can buy cheap right now.

>> susie: let's go over the four stocks you recommended a year ago. international assets holding, ford motor, loews companies and an etf for korean stocks. all of them up from a year ago. what are your thoughts? you told me about ford, what about the others. >> we own international asset holdings, we continue to hold it. we've taken some money off the table in korea, especially with what's going on in japan, it's probably something we'll reasuft to buy back. and loews, we've owned it, and it hasn't done much. we're being patient, and we'll see how the housing cycle turns. i don't own any of these names we mentioned, but our firm owns them all. >> susie: you answered all the questions quickly and gave us a lot to think about it. have a great weekend. >> and our prayers go out to the people >> susie: all right. thank you so much. we've been speaking with richard steinberg, president of global asset management.

>> tom: here's what we're watching for next week: chuck carlson returns as our friday market monitor guest. he's the c.e.o. of horizon investment services. we see the latest on february's new and existing home sales and quarterly results from tiffany, walgreen and best buy. monday, beyond the scoreboard looks at how the renovation of madison square garden is costing basketball and hockey fans. >> susie: former goldman sachs board member rajat gupta is firing back at the securities and exchange commission, claiming the agency deprived him of his rights. gupta says regulators denied him a jury trial and unfairly ruined his reputation when they charged him in connection with the raj rajaratnam insider trading case. gupta is accused of telling rajaratnam about goldman earnings and the $5 billion berkshire hathaway investment. gupta, who's also the former head of mckinsey denies all allegations of wrongdoing. >> tom: meantime, i.b.m. will pay the s.e.c. $10 million to settle bribery charges.

i.b.m. was accused of giving cash to south korean and chinese government officials for more than a decade to get computer contracts. regulators say the payments, including trips and meals, broke federal law. i.b.m. did not admit or deny guilt. the settlement must still be okayed by a federal court judge.

>> susie: here's a dilemma for the job market: not enough job openings, and where there is an opening, often there aren't enough highly skilled workers to fill the job. to get around that problem some companies are following a centuries-old tradition: apprenticeships. anna olson takes us to northrop grumman's apprentice school for shipbuilding. >> reporter: kimberly jarvis is learning how to build parts that fit into aircraft carriers and nuclear submarines. >> this is a theory class we go through the apprenticeship program where we learn how to put different angles and bends into the pipe. >> reporter: jarvis is one of more than 700 students enrolled in northrop grumman's apprentice school. apprentices in this program are full-time, paid employees who also take academic classes at the shipyard and local community colleges. >> i realized that i could be a better asset to the company

coming through the apprenticeship program, and so far, it's going awesome. >> reporter: the apprentices here are learning skills like pipe fitting and surveying-- skills that, for many, could lead to long term jobs. 70% of all northrop grumman apprentices are still with the company 15 years later. >> we remember when there were apprentices learning to be gun smiths and working with leather and do all of the things that were necessary in colonial times. i would tell you that it's not much different today. >> reporter: everett jordan, a former apprentice, is now director of a program that began in 1919. he says students learn leadership skills and the know- how to produce highly specialized equipment for the defense department. >> it's a great opportunity to select the best and the brightest and continue to educate them in craftsmanship, scholarship and leadership to >> reporter: the obama administration has discussed the need to expand apprentice programs like this one across the country. but so far, many companies have been unwilling to invest in training. apprentice graduates like andrew balarabe say employers might want to start. >> i think it should, should be

contagious. other companies need to realize, hey, let's have these old guys that are getting ready to retire, let's train the young guys. >> reporter: balarabe used to be a mechanic, but didn't see a career in it. now he's an accomplished welder finishing his associate's degree. >> i see myself staying with this company for a very long time. i have a bright future. >> reporter: northrop grumman doesn't require workers to stick around after training. instead, the company says it creates competitive opportunities that entice them to stay. apprentice grad jerome hashagen says that philosophy works. >> it builds loyalty to a company where you're not just job shopping all the time, looking for another company that pays a few dollars more an hour. it just becomes part of you. >> reporter: that kind of future is appealing to many, so much so the company gets 100 applications a week for the program. anna olson, "nightly business report," newport news, virginia.

>> tom: just a reminder: you catch us online at n.b.r. on pbs.org. there you can comment on our blog or watch any programs that you may have missed. or you can follow us on twitter at "biz report" or my personal feed @hudsonnbr. if tweeting isn't your thing, friend us on facebook at "biz report." >> susie: that's "nightly business report" for friday, march 18. we want to remind you this is the time of year your public television station seeks your support. >> tom: support that makes programs like "nightly business report" possible. >> susie: thanks for joining us and don't forget to support your public television station. i'm susie gharib. have a great weekend everyone. you too, tom >> tom: goodnight, susie. i'm tom hudson. we'll see all of you again next week. "nightly business report" is made possible by:

this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org