>> tom: oil prices tumble after the world's biggest commodity trader said crude's recent rally isn't likely to last. >> susie: u.s. stocks were dragged down by the drop in commodity prices and new concerns about the nuclear crisis in japan. you're watching "nightly business report" for tuesday, april 12. 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 >> tom: good evening and thanks for joining us. stocks fell even as oil prices dropped more than 3%. susie, one reason behind the sell-off? a goldman sachs forecast calling for a sharp drop in oil prices, suggesting investors should take profits. >> susie: tom, goldman predicts crude prices in the u.s. could get below the $100 a barrel level over the next few months. in new york trading today, may crude futures closed at $106.25- - down $3.67. now that big drop in oil was a drag on wall street. in its biggest slide in a month,

the dow tumbled 117 points, the nasdaq lost 26 and the s&p off 10. >> tom: besides energy concerns, investors were also on edge about a new batch of revised forecasts for u.s. and global economic growth and the outlook for corporate earnings reports. now among those anticipated reports this week? two of the nation's largest banks. j.p. morgan chase reports tomorrow, bank of america on friday. both are expected to show how banks, like the economy, are stuck in a holding pattern. so is now a good time to invest in financials? suzanne pratt reports. >> reporter: these days it isn't easy being a financial stock investor. sure, the cloud of uncertainty that hung over banks and brokerages from the financial crisis has lifted somewhat. still, bank stocks, as measured by the keefe bruyette index, are flat this year, lagging the overall stock market. and, first quarter earnings are unlikely to provide much of a boost. financials are expected to rank

a lowly seventh out of 10 sectors reporting results. that's due to the fragile economy and the cost of financial reforms. nevertheless, analyst fred cannon says many of the shares are undervalued. >> part of that is justified because they are a lot different today than they were before. but, some of it's not justified and we think those valuation multiples will expand for certain parts of the financials, including the large banks and some of the life insurance companies. >> reporter: before you cry boo hoo for bank stocks, consider there's another reason the shares may be worth a second look-- dividends. last month, the federal reserve allowed certain banks to increase dividends. so far, several firms have announced plans to make cash payouts to shareholders. even more are expected to join in later this year. >> they're taking the noose off the banks, so to speak, and letting them earn money and pay dividends and allowing them to grow again and be competitive. i think that has yet to be factored in to the stock prices. >> reporter: for analyst todd hagerman, it's still early in

the recovery to get jazzed about financial stocks. he's neutral on the sector because of significant headwinds. >> there remains a fair amount of capital uncertainty in terms of the level of capital that these banks are required to hold. there's ongoing uncertainty as it relates to regulatory reform and the economy itself. what is the shape of that recovery going to look like? >> reporter: the housing market remains a potentially huge headwind for financial stocks. if housing stays in the basement, experts worry about those banks with big exposure to foreclosures. suzanne pratt, "nightly business report," new york. >> susie: our guest tonight expects a short-term correction in the markets, but he's also advising his clients to buy stocks. joining us now, jeffrey saut, chief investment strategist at raymond james. >> hi, jeff. nice to have you here in new york with us. >> a pleasure. >> jeff, how deep a correction are you expecting? >> i don't think we're going to go below the

reaction interday low that we made back in, i think it was february, at the 1249 level. the major support is between 1235 -- >> susie: you're talking about the s&p which is roughly at 1314? >> that's right. >> susie: you don't expect it to get too much lower? how much lower? >> i don't think it will breach the support level at the 1300 level. this is an ordinary rest. you've got a sell out of goldman sachs, as you pointed out on oil, and the slowing of the economy news that has come out -- all it provides is investors a chance to acquire special situation and select sectors. >> susie: you were actually with the strategist at goldman sachs. from talking to them, do you agree with their forecast, and do you think it could bring down stocks and earnings -- and impact earnings over the next couple of weeks? >> i don't think it will

impactful in earnings. i think earnings are going to surprise again this quarter, and over the next few quarters. i think the goldman call was a trading call on a short to intermediate short-term basis. i said oil did look a little stretched, but with the world demand and per capita incomes rising in the developing world, i think longer term energy prices are going to be fine. >> susie: i would like to get more of your feedback on earnings. the president of alcoa came on, and he gave a very upbeat outlook for growth and demand for the rest of the year. and the stock today was down 6%. it seems like there is a disconnect from what we're hearing from c.e.o.s, at least in this case, and what the expectations of the investors are in the market. >> i think they missed a little on the revenue line. the earnings came in pretty much on target. in a world of hedge funds and fast money, they're going to hit the sell

buttons when any kind of a shortfall comes. longer term, i think the economy is still growing. even it is sub par growth. 3% growth is still okay growth. >> susie: now, we saw today, in terms of the commodities, that gold prices also came down sharply. you've been a buyer of cold, of both the -- gold, of both the metal and the mining stock. what is your view? is it time to take profits there? >> i've been bullish on gold stocks for 10 years. we've rebalanced them as they rallied. that's just good portfolio management, to trim positions on the margin. gold, like oil, was a bit stretched on the up side, and it probably comes down a little more. but longer term, i think gold and precious metals are in a secular market. >> susie: you heard our report about financial stocks -- i don't know how you feel about financials and some of the other sectors. what do you like and what do you avoid? we have about 45 seconds like? >> i have avoided banks

totally until last november and december. i'm still avoiding the large cap banks. i'm looking at smaller banks like iberia bank. i think some of the alternative energy spaces should be avoided. >> susie: all right. we're going to leave it there. thanks so much, jeff. really appreciate you coming on the show. we've been speaking with jeffrey saut, chief investment banker. >> tom: here are the stories in tonight's n.b.r. newswheel: japan's government says the crisis at a damaged nuclear plant is now the second worst in history. the damage at the fukishima daichi plant has the highest possible ranking on the international nuclear event scale-- the same ranking given the chernobyl accident in 1986. officials say cumulative radiation leaks are contaminating the air, tap water, vegetables and seawater. the u.s. trade deficit shrank in february. imports fell more than exports,

according to a government report showing a slowdown in global demand. imports fell 1.7% percent on a drop in crude demand. exports edged lower by 1.4%, led by $1 billion drop in autos and auto parts. still ahead, tonight's "word on the street" is "rebound." we'll get a prognosis for health care stocks poised to make a comeback. >> susie: more now on oil and global demand. both are on the agenda later this week when world financial leaders meet in washington. darren gersh spoke with one of those leaders, world bank president robert zoellick. darren began by asking zoellick how high energy prices around the world are impacting the global economy. >> it puts more stress on everybody's economy because oil and energy is an input throughout. what we're also concerned about is the link between energy and food prices, is much tighter than it was 10 years ago.

so you combine the higher energy prices with higher food prices, and it puts more social stress on. if you take some of the countries in north africa where you have revolutionary movements, a lot of the countries are major food im porters. so it adds to the stress. >> there is unprecedented amount of money flowing in from oil revenues. and yet, we're not seeing youth unemployment come down or development. what's the disconnect there? >> well, in some countries -- you're seeing the revenues, in egypt and tunisia, that hasn't been a big source. but if you take a country such as algeria or libya, you're right. that's what some people call the energy and the natural resources as a curse for development. it may produce a lot of money, but does it really predues jobs. one of the things we were focusing on in the past years is how to connect natural resource development to more inclusive growth, trying to make sure the revenues

are used to benefit a broader part of the population. >> a lot of americans -- you mentioned emerging market economies. a lot of americans have a lot of money invested in the emerging market economies. how worried should they be about overheating. >> i don't want to be giving particular investment advice. that's not my role. >> general advice. >> i think this is an issue that, not surprisingly, economies are often a little slower to be able to pull the punch bowl away, as william mcchesni once said. some are now acting. it is important to see where some of these can create opportunities. some may be based on supply-site bottl bottlenecks. and so over the medium and long-term, these are great growth opportunities. one of the things we've done at the bank is create

an asset corporation. we're drawing sovereign funds and pension funds to create investment in these private sector countries. in the near term, i think these are issues that one has to watch closely. >> right now the world bank estimates that about a billion people go hungry. over the course of this economic difficulties that we've had over the last couple of years, how have the poured fared? and has the developed world and the world done enough to address their concerns? >> well, they fared with great difficulty, and, no, the world hasn't done enough. it really i in pinges on nutrition. in the late '90s, when you had some of the problems in east africa -- frankly, you can lose a generation. if you don't get proper tuition, particularly in

nine months to two years, you really impede growth. >> have we lost generations and other countries? >> i think in this crisis, while we've had some increase in hunger and malnutrition, i think we've done a lot better. one of the reasons i remain concerned about this is with the rising food prices and the low stocks for many commodities -- not rice, but many others, but in the meetings, we are saying you need to put food first. >> robert zoellick, thank you for your time. >> my pleasure.

>> tom: well, the >> tom: the major stock indices spent the entire trading day in the red, led lower by energy stocks. let's get to tonight's "market focus." the sell-off in oil, the start of earning season and the heightened concern over the nuclear situation in japan conspired to push stocks down. to give you an idea of where the market is, here's the past 90 sessions for the s&p 500. a nice rally through the early part of the year, topping in february, this drop in march came in the days after the japanese earthquake. we then rallied, but were unable to break out to new highs. instead, the index has turned back and is at a 2.5-week low.

now as i mentioned, energy stocks led the losers today. the energy select exchange traded fund saw volume more than double on this 3% decline. big volume today as well. the $74-to-$75 level is one to watch as that's where buyers came back after the sell-off in early march. dow stocks exxon and chevron fell 2% and 3% respectively. independent gas and oil company pioneer was the sector's worst stock, falling 5%. leading the dow lower was alcoa, on the heels of its first- quarter results last night. the stock shed 6% on heavy volume as sales growth didn't match expectations. aa shares among the most traded today. s&p raised its outlook on alcoa bonds, looking for its finances to continue to improve. that did not help out the stock today. the drop in oil prices helped out transportation companies, especially airlines. these companies have been fighting higher fuel costs with higher fares and lowering capacity. here's the last 180 sessions for united continental.

now we see here, today's pop of almost 6% comes just two days after hitting its most recent low late last week. delta, alaska and u.s. airways also saw some relief rallies. additionally, the commodities futures trading commission is pushing ahead with rules exempting airlines from new derivative requirements. those rules were included in the financial reform law and require derivative-traders to put up more collateral to cover any losses. airlines won't be required to do that, though. also seeing some relief? walmart. here's the past 90 sessions. been pretty volatile. it climbed more than 1% to its highest price since late february, when it dropped after its last earnings report. a store executive said higher- income shoppers are returning. despite the commodity sell-off, agri-business giant monsanto added 3%.

trying to break out of this downward trend we've seen. speculation centered around a buyout of monsanto, but the rumored buyer, german chemical giant b.a.s.f., said it has no plans at all to buy monsanto. meantime, tyco international jumped more than 7%, up to a new high. new 52-week high. bloomberg reports french company schneider electric is considering making a bid. and that's tonight's "market focus."

>> tom: a big battleground in washington over federal spending is health care. after lagging the stock market over the past couple of years, the industry is playing catch- up. that brings us to tonight's "word on the street," "rebound." gregg greenberg is a reporter at thestreet.com. >> greg, why the buying interest in health care this year, especially with all of the uncertainty that is still out there? >> well, health care was the worst performing sector in the s&p last year. so i think a lot of it is valuation. so far this year, the s&p is up about 5.3%, and the health care is up 6.3%. which is second only to energy, which everyone would expect, which is up 14%. >> tom: andp the other part of that health care story is dividends. because some folks are getting yield dividends from some of the health care plays? >> it is not easy finding yield in this market. high yield has done exceptionally well. and the other plays you can find it, i suppose, is in health care. >> tom: johnson & johnson, you can see the

trend has been lower as it has been wrestling with recall after recall and growth worries. what's the trajectory? >> i think it is still negative for the year. however, a lot of fund managers are telling me they like the stock more and more. the issues of quality control is more blocking and tackling than anything wrong with the company. and these are things they can fix. >> tom: pfizer p.f.e., has been out there a long, long time. it has been rallying nicely with expectations that the pipeline is going to look okay in terms of its new brand of drugs. is that what you're hearing from fund managers? >> absolutely. pfizer is off to a real flying start. it is up 17%. they bulked up with the acquisition of wyath. they are slimming down and getting back to the core, and they've got a good pipeline, from what people are saying. we're really watching pfizer. seems like it is doing well. >> tom: it seems like another valuation play.

and finally, another medical devicetomy you're finding people are warming up, n.d.p. kind of in the middle of the trading range over the past 12 months. what's the catalyst. >> a lot of people shyed away from the medical devices during the obama medical care, but it is coming back. a lot of people who put off elective surgeries are now coming back and doing some elective surgeries. i don't know if getting a pacemaker or taking care of your heart is elective surgery, but they're coming back to medtronic. >> tom: how about disclosures -- >> i don't own anything. >> tom: there is a link on our website as well. our guest with word on the street is gre gregg greenberg with thestreet.com.

>> susie: here's what we're watching for tomorrow: president obama outlines his plans for reducing federal debt. the federal reserve issues its beige book survey of regional economic conditions and we'll see retail sales for march. also tomorrow, hilary kramer is our "street critique" guest. email your questions to streetcritique@nbr.com. it's back to basics for cisco systems. the company is dumping some of its consumer operations, including its flip video camcorder line. as a result, 500 jobs will be cut and the firm will take a $300 million charge in its fiscal fourth quarter. cisco spent a lot of money to build a consumer brand, but it just hasn't worked out. last week, c.e.o. john chambers said the company would cut back in several areas to stay profitable. >> tom: on the road again. that's where business travelers are going this year thanks to an improving economy. the global business travel association says just over $60 billion was spent on work- related travel in the first three months of the year. and here's something to know if you're hitting the road: this year, the average business trip

is expected to cost $551. >> susie: less than a week to go until your federal income taxes are due in uncle sam's hands. we're here to help with our series of last-minute tax tips.

tonight, there's good news, and bad news, about the homebuyers' tax credit. here's kevin mccormally, editorial director of "kiplinger's personal finance magazine." >> the first time home buyer tax credit is causing a lot of confusion and grief this year, not to mention some real anger. first, for folks who bought homes last year and had binding contracts by april 30: if you haven't done so already, its time to file the form 5405 to claim your prize. the tax credit will reduce your bill by as much as $8,000 if you're a qualifying first-time buyer, or by as much as $6,500 if you're a longtime home owner. there's a lot of paperwork to send along, so much so that you can't file electronically if a 5405 goes with your return. but the hassle's clearly worth it. if the credit is more than you owe the i.r.s., you'll get a check for the difference. the grief and the anger come from another group of taxpayers who have to deal with the form 5405-- folks who claimed the

credit for a 2008 home purchase. back then, the new-buyer credit was just $7,500, and it wasn't really a credit. it was a loan, and it has to be paid back starting this year. affected taxpayers have to add $500 to their tax bill this year and for each of the next 14 years until uncle sam recoups every dime. to add insult to injury, the i.r.s. has had trouble processing returns that include repayments, and that usually means slowing down refunds. the tax agency says it has straightened things out, but there are a lot of unhappy taxpayers. the head of the i.r.s. isn't all that happy either. he has asked congress to never again put his agency in the position of making loans to taxpayers and then making them give back their tax break. i'm kevin mccormally. >> susie: just a reminder, you can ask kevin your tax questions on our website at nbr on pbs.org. but you can only submit them until tomorrow, so if you need answers, get going now. >> tom: finally, move over barbie. there's a new doll on the market

and she's flying off the shelves! here it is. it's the princess catherine engagement doll. she's made and sold in europe for about $57. only 10,000 are being produced. the company that makes it has high hopes that the doll will go on sale in the u.s. next week. and if you're not able to find this doll, don't despair. susie. the princess catherine wedding doll is coming out in may. >> well, of course every little girl is going to want the one with the wedding dress. >> tom: maybe even some of the big girls, too. thank you for joining us. i'm tom hudson, have a great night. >> same to you, tom. i'm susie gharib. hope to see all of you tomorrow night.

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