>> susie: the u.s. economy has been picking up speed, but experts wonder if that momentum can continue? >> rising energy prices are clearly a risk to the outlook and they are providing a headwind to the economy right now. >> tom: from higher prices to fill-up at the pump to higher prices at the grocery store. will consumers keep spending? you're watching "nightly business report" for friday, march 25. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. the u.s. economy has been growing at a faster pace than previous estimates, but consumers are becoming more gloomy. >> susie: tom, it's a mixed bag of information. let's look at the numbers. the commerce department reported today that the gross domestic product or g.d.p. grew 3.1% in the last three months of 2010, up from an earlier estimate of 2.8%. but more recent data on the consumer from reuters and the university of michigan finds sentiment fell to 67.5 in march. its lowest level in about 18 months.

>> tom: the key question for the economy now-- is how confident are consumers about spending, especially as they pay higher prices at the pump? erika miller reports. >> reporter: if you want to know the mindset of american consumers, patricia pao is a good woman to ask. as a retail consultant, it's her job to recognize changes in spending patterns nationwide. so, it may surprise you that pao does not think rising prices at the pump are making shoppers nervous. >> i think right now, everyone is kind of used to it. because this is not the first time oil has hit over $100 a barrel. it was actually more traumatic in 2007 when it started, and everybody was caught by surprise. >> reporter: she believes the urge to spend is so strong, that most americans would rather dip into savings to pay for purchases than go without. but economists are far more concerned about the impact of high gasoline prices on consumer spending. some even warn a spike in prices is the biggest threat to economic growth. according to one estimate, every

$10 rise in the price of a barrel of oil means a 25-cent increase in a gallon of gas. and if that $10 increase lasts a year, economists estimate it takes $25 billion out of the economy. right now, crude is about $105 a barrel. if it hits $120, some warn it will be a crucial test for american consumers, prompting many to change their spending habits. but economist dean maki says it's not the price that matters, it's the rate of increase. >> if we were to quickly move up to a number like $140 oil, that would cause consumer spending to start to grow much more slowly and perhaps even contract if that surge was fast enough. but if we move to that kind of level very gradually say over the next year or so then that wouldn't cause a significant or sharp slow down in consumer spending. >> reporter: there are also offsetting factors, like a rising stock market, which can make people feel wealthier. economists say it's also important to look at why oil prices are rising.

>> the major reason that energy prices have strengthened is because of very strong global demand and we think that will continue. >> reporter: all of which helps explain why patricia pao does not think any pullback in consumer spending will last long. >> i don't think so. i think if that's going to happen, we're going to see it in the next 18 months. i think for now everyone-- as you can see on the street-- everyone is kind of enjoying themselves. >> reporter: if she's right, that's good news for retailers and the american economy. erika miller, "nightly business report," new york. >> susie: here are the stories in tonight's n.b.r. newswheel: that encouraging economic data we told you about helped stocks end the week strong: the dow added 50 points, the nasdaq rose six and the s&p 500 was up four. trading volume remained light: 824 million shares moved on the big board-- 1.8 billion shares traded on the nasdaq. fresh numbers out of japan tonight on how its massive

earthquake will impact auto production. the nikkei newspaper reports the nation's manufacturers will cut annual auto production by 5% or about 400,000 units. with the japanese still trying to get their nuclear crisis under control, the united nations says its time to re- assess nuclear safety. specifically, the u.n. secretary general wants to make sure there's an international emergency response plan in place. >> susie: still ahead, investors are taking a fresh look at silicon valley's young entreprenuers. we look at what's driving the resurgence of venture capital funding. >> tom: polls show investors like the job the federal reserve is doing, but the central bank's approval rating is lower than that of the irs. that assumes you know who ben bernanke is. a separate survey finds seven out of ten americans don't know he's the fed chairman. so now that the federal reserve is going to hold regular press conferences, what will the

world's most powerful central bank have to say to the american people who may not know him. darren gersh polled some experts. >> reporter: it is not exactly a news flash to say the federal reserve is not very popular right now. part of the reason for that is that the place is just hard to understand. >> i think monetary policy is quite mysterious to most people. >> reporter: alice rivlin knows that from experience. when she was nominated to serve as vice chairman of the federal reserve, she says even some of her very sophisticated, inside- the-beltway friends were unclear on exactly what she'd be doing. regular press conferences are an opportunity to change that. >> one of the problems of the fed is not just that it often has to do things that are unpopular, like raising interest rates to halt inflation, but that people don't really understand what it is, and if you don't understand what it is, then you tend to think it is a negative conspiracy or something. >> reporter: more openness will

help address those concerns, but only to a point. vincent reinhart was a senior staffer at the fed. he says part of the communications problem is that people do understand what the fed did when wall street collapsed. >> in the crisis management, the design principal was to keep the large institutions afloat and that really looks unfair. >> reporter: even though ben bernanke was a college professor, reinhart doesn't expect the fed chairman will use his press conferences to educate the public about monetary jargon like "reverse repos." most likely, bernanke's public message will be big picture. >> namely, the fed cares about inflation, the fed cares about employment. it is providing support to the economy. that, while it's true food and energy prices have risen a lot, inflation itself is pretty well anchored, expectations are well anchored, and you shouldn't be worried about the value of money. >> reporter: the most avid audience for the fed's press conferences will be found here

on wall street. long-time fed-watcher tom gallagher says investment pros will look for any instant clarifications reporters can wring from the fed chairman. >> i'm not sure the average person is going to stop what they're doing to tune in to watch the press conference. i think the ability of the fed to say we have press conferences to explain our actions will improve the perception of the fed's accountability to the congress and the public. >> reporter: and that is important. economists argue if the public trusts the fed is doing a good job running the economy, people will be less worried about inflation and they may be less likely to put off big purchases that add to growth. darren gersh, "nightly business report." >> susie: speaking of the fed, one of the fed's most candid policymakers is retiring: kansas city federal reserve bank president thomas hoenig. he will leave his post in october after nearly for decades at the central bank. hoenig is known for arguing against the fed's low interest

rate policy warning about the risks of inflation. >> susie: heading off to weekend

>> tom: stocks ended the week by continuing their recent climb even as trading volume remained light. it was the best week for the major indices in more than a month. the dow industrials rose 3.1% since last friday, thanks to the steady gains since mid-week. the nasdaq added 3.8%, putting in the best performance among the trio. and the s&p 500 rallied 2.7%. the lowest of the three, but still, it was the best week for the s&p 500 since early february. the leading sector this week and today was energy. the energy select e.t.f. added almost 1% today. oil prices remain over $105 per barrel and natural gas rallied. nat gas hit a six-week high. as prices have heated up, energy stocks have too with this e.t.f. just below its 52-week high. leading the sector was a lesser known independent energy explorer, newfield. shares jumped 4% up to the top of its recent range in the mid-

70s. two analysts upgraded their view of the stock. newfield recently announced plans to buy oil and gas fields in utah. it was a choppy week for telecom stocks with the news of a.t&t.'s buyout plans of t-mobile. competitor sprint had been seen as a loser. share tumbled over 7% this week. while shares rallied more than while we're talking about telecom, after the close tonight, the international trade commission said it will review a patent case involving eastman kodak, fighting apple's iphone and research in motion's blackberry. kodak claims the iphone and the blackberry infringe on one of

its digital imaging patents. apple and rim won an earlier ruling but tonight the full panel says it will review kodak's case. e.k. shares have had a tough year, losing almost half their value from a year ago. it was up 8% today and jumped as much as 20% after the close as the market sees tonight's decision to hear kodak's case as a good sign. rim shares were a big drag on the market falling 11% on its disappointing quarterly guidance we reported last night. this is the past 180 sessions with the stock at its lowest price since november. apple did win a round in a patent right with nokia. an initial ruling came down in favor of apple, saying its products do not infringe on nokia's intellectual property. shares were split today. apple up 1%. nokia down 1%. schweitzer-mauduint makes cigarette paper.

the market is worried it may be shares fell hard down 8% on heavy volume. the u.s. patent office is going to take another look at a competitor's claims of infringement. one new stock hit the market this week. service source makes revenue management software for technology firms. it started at $10 per share. and saw a nice rally. and that's tonight's "market focus." >> susie: just about everyone on wall street wants a piece of facebook or anything related to

social media or cloud computing. that fervor is fueling a recovery in venture capital funding. robin mcelhatton introduces us to some silicon valley entreprenures vying for a piece of the action. >> reporter: 26-year-old entrepreneur aaron levie is always on the move. his story is a familiar one in silicon valley. >> i co-founded box in 2005 with my co-founder dillon smith. we were just in our dorms and we built the application. today we now have 135 employees, over five million users. >> reporter: levie and smith turned their dorm room dream into a fast growing start-up called box.net-- a cloud computing company. its software lets businesses share and manage documents online, or in the cloud. levie says $30 million dollars in venture capital funding helped the company get off the ground and grow fast. >> we see venture capital as really helping fund the

innovation that we're doing. certainly the innovation that is happening in silicon valley. it's a critical part of the ecosystem for building the future of technology. >> reporter: while no where near the record high of almost $100 billion dollars invested during the dot com boom... vc firms spent almost $22- billion last year. that's up 20-percent over the previous year and it marks the first rise in annual spending since 2007. the national venture capital association expects about a 10% rise this year. national venture capital association president mark heesen, says vc's are investing heavily in a few hot sectors. >> the social media sector is very hot. cloud computing is very exciting and then when you look at clean technology as a whole, i think venture capitalists see this as a very ripe, new exciting area for venture investment and then >> reporter: one of silicon valley's top money firms: kleiner, perkins, caufield and byers, has early stage investments in hundreds of

companies. partner ted schlein believes mobile internet is the next big thing. >> we believe the mobile internet is going to dwarf the regular pc internet. mobile is going to be ten times larger than the internet. >> reporter: schlein and other vc's also see a lot of growth overseas. they're investing in emerging markets, especially china and india. experts say the venture capital industry is rebounding because vc's feel more confident about the economy and the exit markets last year there was a record 420 acquisitions and 45 u.s., v.c.- backed companies went public. this year already, 50 companies have registered to go public. but schlein sees a new trend. companies are staying private longer giving vc's more opportunity to buy in. >> many later stage funds are being formed by some of the big investment banks, by jp morgan, goldman sacs as well as new investment vehicles like dst over in russia, focusing on these later stage private

venture opportunities. that didn't exist before. >> reporter: when v.c.-backed companies do go public, they can have a big impact on the economy adding more jobs and revenue. a 2009 global insight study showed venture backed companies accounted for 12 million jobs and 21% of the u.s. g.d.p. no one knows how much the recent up tick in venture capital funding will help today's recovering economy, but some see it as a sign that the venture capital industry itself is on the road to recovery. robin mcelhatton, "nightly business report," silicon valley. >> tom: here's what we're watching for next week. gary motyl is back as our market monitor. he's chief investment officer at templeton global equity. we'll also see the latest jobs numbers in the march employment report. monday, beyond the scoreboard tackles the differences in labor issues between major league baseball and the national football league.

>> susie: a cleveland browns fan is suing the nfl and its teams over the current lockout. ken lanci says the move violated his contract to buy game tickets. the lawsuit asks for damages of more than $25,000 from both the browns and the league. the nfl responded by saying it has already announced a refund policy to protect fans and the best solution is for the union to return to the bargaining table. >> tom: meantime, a lawsuit over soup is coming to a boil. today a federal judge gave the okay for a case against campbell soup to move forward. four new jersey women are suing the company arguing it made misleading claims on its labels. specifically, that campbell's low-sodium tomato soup, doesn't have significantly less soldium that the brand's regular tomato soup. the case seeks class action status. the world's largest soup maker says the allegations are without merit.

>> tom: while the stock market has had a sharp rebound from its most recent low, the dow industrials remains below its post-recession high. tonight's market monitor won't be convinced the bull market has legs until that happens. he's chuck carlson, chief executive officer with horizon investment services. and he joins us from the c.m.e. group in chicago.

why do you still need convincing? >> well, again we follow the dow theory and the dow theory looks at the performance of the dow jones industrials and transportation. the theory has been saying that this is a bull market but to reconfinger that, what i -- reconfirm that is i need to see the dow jones industrial average go above its mid february highs of around 12,400 and on the dow transports just a hair below 5300. we're real close. my guess is it will happen but that's really what we need to see closes above those mid february highs to reconfirm this trend. >> tom: we're just on the eve of earning season so that's kind 069d technicals of the market. what about the fundamentals, are you still hopeful the corporate earnings this year are going to outgrow expectations and provide that growth boost that equities are looking for. >> i think they will.

again when i look at the free engine's stock market performance especially corporate profits, i think those things are still net bullish especially on the corporate profit side. we're going to get a good view of that coming a up in about three weeks and it will be interesting to see how the market responds. what we have seen in the recent past is that the market has responded fair lay well to those earnings. they've continued to beat expectations and they will need to continue to do so if this market again is going to go above those mid february highs autopsy tom let's fake a look at what you brought along for our viewers beginning with -- technologies. the ticker symbol is a in the healthcare communication technology measurement business and it's had a nice rally. what is the cast list. >> i think the cast list earned earnings growth there. it's a indemnify play as you mentioned on both healthcare as well as technology. earnings estimates i think can be beat. the stock score's extremely well in our quadic ranking system. it's in what we think is a nice

sweet pot here where we think tech is going to continue to do well autopsy tom because of its exposure in communications does it get hurt at all with the consolidations we've seen with at&t and t-mobile. >> i don't think so. they've made testing equipment in many cases and they still neat had testing equipment on the technology side and the healthcare sign. they're going to be just fine. >> tom: like an energy place here it has so-called up stream and down stream operations that explores the stuff, produces it and then it refines it into gas gas -- gasoline. if oil prices stay or back off, do you still like the stock. >> i like it a lot. they can make a lot of money even if world price is going to stabilize between 85 and 110 somewhere in that range. they'll do just fine. also, it's an industry where i think there's still an appetite on the acquisition side on a 27-$28 billion company. when you look at the giants out there relatively exxon's got a

market cap of over 400 billion. so it's still a company that if somebody's looking to make an acquisition in that field, he sf s is going to be pretty attractive. >> tom: you like big blue, ibm here just off its all time highs it's moved away from the hardware focus from a generation ago looking international in software and services, is that the growth expectation. if emerging markets begin to get uncertain does that hurt big blue. >> maybe a little bit but i still think again when you look at their business, i like it a lot. i think they're going to see revenue growth that's better than people expect. the stock has pulled off the high a little bit during the downturn but it's a little better value. you get a bit of a dividend with the stock. all and all again technology, we like the group and i think it's one of the large tasks that's going to do extremely well over the 1 months. >> tom: let's review the picks from september 3rd. you were looking for dividend

players. intel has worked out nicely not including the dividend it has moved higher. -- labs is over and communication rodgers communication is unchanged. you still like this trio? >> we still like the trio especially for dividend investors. the dividend story hasn't quite come around as quickly as i thought it would, but i still think in terms of sweet spots in the market, large dividend pairs look pretty attractive. >> tom: ownership positions for all six of these. >> yes, we do and i also personally own them as well. >> tom: chuck carlson ceo at horizon investment. going >> susie: a reminder-- the tax filing deadline is getting close. taxes are due back at the irs in just three weeks. and we're here to help. you can submit your tax questions on our website for tax guru kevin mccormally. just go to nbr on pbs.org. and kevin will join us for a week of last minute tax tips starting april 11. >> tom: and finally, imagine

opening your cable bill and finding out that you owe $16 million. it happened to one ohio man. his monthly check to time warner is usually $80, so he was pretty surprised. he didn't think that watching the ncaa sweet 16 tournament would cost him a million dollars a team. susie, time warner blames the problem on human error and says it's working to resolve the issue. talk about sticker shock, you not. >> how about it, that is nicely business report, i'm tom hudson, have a great weekend, susie. >> same to you, tom. i hope all of you have a great weekend as well and we hope to see all of you again next week. "nightly business report" is made possible by:

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