>> tom: drivers, start your engines. the kickoff of the summer driving season comes with more americans expected to hit the road and drivers focused on one thing: gas prices. >> suzanne: surprisingly, a lot more people also are expected to fly this weekend giving the airline industry a lift. >> we think that summer travel is going to be very good. >> suzanne: we get the outlook for the airline industry. you're watching "nightly business report" for friday, may 27. 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 >> suzanne: good evening everyone and thanks for joining us. susie gharib is off tonight. tom, summer gets off to an unofficial start this memorial day weekend and many americans are likely to hit the road. still, higher gas prices may take a bite out of some of those travel plans. >> tom: suzanne, we're definitely seeing that in the latest data on the consumer. consumer spending rose less than expected last month gaining a modest four-tenths of 1%. economists say prices at the pump continue to put the squeeze on household budgets. >> suzanne: if you're not driving this weekend, perhaps you're taking to the skies. a new survey from a.a.a.

predicts airline travel is likely to be up 11.5% during the holiday period, a healthy pick up from last year. the increase in demand comes as the airlines cope with a rather persistent headwind. >> reporter: veteran airline specialist ray niedl explains it best. >> oil is the single biggest factor by far for airlines. >> reporter: according to an industry group, jet fuel represents about a quarter of passenger airline overhead, surpassing labor. fortunately for the airlines, the price of crude oil has recently dropped. and, the cost of jet fuel moves in tandem with crude. but, experts say when crude goes above 110 bucks a barrel. watch out! that's when it could inflict serious pain to the bottom lines of most carriers. >> on a general basis $110 was the alarming point for me. when it did go above $110 i became very nervous. airlines have expressed that as a marker also, around $100 i think the airlines can live with

that. >> reporter: the reason airlines can live with $100 a barrel is they've done an excellent job cutting costs and trimming capacity in the last three years. on top of that, business travel is finally revving up, after a serious dry spell. most experts predict this year will be a profitable one for most u.s. airlines. analyst jim corridore is positive on the sector. >> we think that summer travel is going to be very good. we think the airlines are raising fairs and they can do so and they can do so because capacity is pretty much in line with demand. and, we think they're going to be able to offset higher oil prices and they've also gotten some relief from the recent drop in oil. >> reporter: beyond oil prices, the health of the economy could also create turbulence for carriers. if economic growth continues to slip, leisure and business travel is likely to suffer. but, experts say boeing's 787 known as the dreamliner could give the industry a lift when it takes to the skies this fall. >> for long distance travelers you're going to feel a lot more comfortable getting off this

airplane after a long flight because of pressurization of the cabin, the layout, the decor. and, from the airlines viewpoint they're going to like it because it's going to be 20% to 30% more cost effective than comparable airliners. >> suzanne: even if you decide to stay close to home this weekend, you might find yourself at a gas station wondering how prices got so high. federal investigators are wondering the same thing, they're now looking for signs of manipulation and abuse in the energy market. sound familiar? as darren gersh reports, it should. >> reporter: when gas prices topped $3.80 a gallon, president obama did what many other presidents have done-- he called for an investigation. >> the attorney general is putting together a team whose job is too root out any cases of fraud or manipulation in the oil markets that might affect gas prices. and that includes the role of traders and speculators. we're going to make sure that no one is taking advantage of american consumers. >> reporter: six years earlier

george w. bush did the same thing. >> here at home, we will protect consumers. there will be no price gouging at gas pumps in america. >> reporter: for almost 40 years, federal and state regulators have searched for fraud and price-gouging. but guy caruso, the former head of the federal energy information administration, says, the dozen or so investigations he can remember, all reached pretty much the same conclusion. >> they found basically that the market is responding to fundamentals of supply, demand or some external events. >> reporter: three years ago, the commodity futures trading commission launched an extensive investigation into abusive trading in oil markets. since then, a court has put one case brought by regulators on hold. the other, filed this week, charges traders with making a $50 million profit from market manipulation. economist phil verleger has been involved with oil price investigations going back to the

1970s. even if the c.f.t.c. charges are true, he says the short-term trading at issue did not have any lasting effect on global oil markets. >> if they go looking there, essentially they are looking for the smallest capillary and it has absolutely nothing to do with the price of gasoline. >> reporter: consumer advocates at public citizen say the focus on fraud and criminal wrongdoing misses the point. public citizen president robert weissman says the real problem is the perfectly legal speculative trading firms do every day. >> while they're playing this game and trying to increase their profits, they're contributing nothing to the effectiveness of markets. they're contributing very significantly to the price at the pump. >> reporter: maybe. but some academics argue speculators simply make oil markets more efficient, which is why most investigations into soaring pump prices come back months later blaming supply and demand. darren gersh, "nightly business report," washington, dc.

>> tom: here are the stories in tonight's n.b.r. newswheel: stocks moved higher on positive comments about economic growth coming out of the g-8 summit in france. the dow rose 38 points, the nasdaq added almost 14, and the s&p 500 was up five. trading volume light ahead of the holiday weekend: 688 million shares on the big board, 1.6 billion on the nasdaq. the dow was down in two of the week's five sessions for an overall loss of one half of 1%. the nasdaq was also lower on the week, but just barely down just two-tenths of a percent. the s&p 500 ended the week with a net loss of two-tenths of a percent. the g-8 said the strengthening global economy will help its member nation's cut their debt. specifically, the group's european members vowed to fix their financial woes. the g-8 also announced $20 billion in aid for egypt and

tunisia to promote democracy. late today, the u.s. treasury said that while china's currency remains substantially undervalued. that nation is not manipulating its currency. still treasury wants beijing to do more to level the playing field. the u.s. housing market continues to struggle as fewer people signed contracts on to buy homes last month. the national association of realtors says u.s. pending home sales tumbled 11.6% in april. >> tom: still ahead, growing a family business. tonight's all in the family looks at how the family behind spring-green lawn care is tending to business. and tonight's market monitor finds value stocks in europe, uranium and finance. he's mark skousen editor of forecasts and strategies. >> suzanne: paypal sued google less than 24 hours after the web giant launched "google wallet." that technology turns your smartphone into a virtual wallet. the company claims osama bedier, a former paypal executive, now at google, stole secrets related to paypal's mobile payment technology.

the suit also claims google violated employment contracts by recruting bedier and former paypal exec stephanie tilenius. both were at yesterday's google wallet news conference. in response, google said quote, "silicon valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities." google also said the company will defend itself against the action. >> tom: while its u.s. network has already been restored, sony plans to re-start its playstation video game network in japan and other parts of asia this weekend. it's been more than a month since the network went down following what's believed to be the world's largest hacker attacks. 100 million users were exposed to identity theft. sony says it's making consumer data protection a full-time, company wide commitment.

>> a little bit of mild buying interest today on this friday. so let's go ahead and get you updated with tonight's market focus. stocks go into the long holiday weekend on an up note on light trading volume. all ten major stock sectors were higher. holding the gains in check was healthcare. this sector exchange traded fund was flat holding steady after falling from this 52-week high a week ago.

this is a year to date chart and healthcare is the best performing sector so far up about 13%. remember, it was the worst stock sector last year. pharmacy benefits manager medco saw the biggest losses among healthcare stocks today falling 9%. while the overall market volume was light, medco volume was seven times its usual pace. next year, the company will lose its contract with health insurer blue cross blue shield association to provide mail order and other pharmacy benefit coverage for federal employees. this is a big contract covering more than five million government workers and retirees. it brings in more than $3 billion a year in revenue. picking up the business will be c.v.s. caremark. it gets a three year deal beginning in 2012. c.v.s. stock didn't see a huge tick higher, but with this 1.7% rally, it takes shares up to their highest price since the

middle of 2008. separately, johnson and johnson was among the strongest health care and dow industrial stocks thanks to it's almost 2% jump, bringing it to a two week high. investment bank u.b.s. raised its price target to $80 per share-- a day after the company announced it had 11 new drugs that will go for regulatory approval in the next three and a half years. financials were the strongest sector today. the stock of the nasdaq o.m.x. group led the way. goldman sachs calls the stock a buy. back in early march, when shares were in the upper $20s is when the nasdaq first started talking about making a buyout bid for the new york stock exchange to counter the offer from the deutsche borse. shares were around 26 when it abandoned those plans. among the weakest financial stocks insurer aflac. morgan stanley downgraded its opinion to equal weight after looking at its japanese business.

this is the lowest price since labor day. a couple of technology movers semiconductor maker marvell popped above $16 per share for the first time since early april up 11%. despite a weak first quarter it raised its outlook. camera phone chip maker omni- vision dropped nine percent after failing to increase its guidance. the market saw several new stocks hit the tape. russian internet search engine yandex started at 25. freescale semiconductor is once again a publicly traded company. it came public at 18 per share. canadian energy firm lone pine resources began at 13. and spirit airlines cut its i.p.o. price to 12. and that's tonight's market focus.

>> suzanne: break out the fertilizer and weed killer. spring is here and summer is on the way. for more than 30 years spring green lawn care corporation has been helping homeowners keep their yards lush and dandelion- free. for most of that time, the hofer family has been at the helm. in tonight's all in the family segment, diane eastabrook says treating franchisees like family is spring green's green thumb. >> reporter: franchisees are the face of spring green lawn care corporation. and company chairman tom hofer can tell you something about each one. the pictures of all 75 franchisees grace a wall at spring green's headquarters outside chicago. >> jim richards has been with us a long time. his brother-in-law actually bought a spring green franchise

in 1979. >> reporter: hofer ran spring green for more than 20 years before turning over the reins to his son ted last year. father and son know what it's like being a franchisee-- both have been there, done that. >> as a franchise owner you do everything, so when i was a franchise owner with spring green i got my hands dirty every day. >> reporter: tom hofer bought one of the first spring green franchises back in 1977. his college fraternity brother started the company. a decade later hofer became chairman and c.e.o. in 2002, then 26-year-old ted bought a ups store franchise. he sold it in 2005 to work for his father. the younger hofer says owning another franchise was a great spring board to spring green. >> it got me a lot closer on the day to day side of things. you know waking up each morning and realizing i got to focus on my business from the start of the day to the end of the day.

>> reporter: in the years before ted became c.e.o. he did nearly every job at spring green from treating lawns to answering phones. >> thanks for calling spring green lawn care. this is sharon. >> reporter: ted got the idea for this call center while working out in the field. >> if we could answer calls it would ease the time burden on a lot of our franchise owners at night. >> reporter: so, during the day when franchisees are typically out of the office, customer calls are routed here. ted's goal is to grow spring green's annual revenues from $36 million to $100 million over the next decade. prospective franchise scott garcia is part of the plan. the north carolina man visited company headquarters recently for a meet and greet. >> we're certainly excited that you're looking at taking the opportunity of taking it to the next step an becoming a franchise owner and we're certainly looking forward to it. >> reporter: while adding new franchises is a priority, so too is helping existing ones. >> just as important and probably more important is growing our existing franchises, so a lot of things we're doing

on a day to day basis is putting tools together that ultimately help our existing franchise owners grow their from a three truck operation to a five truck operation to ten trucks. >> reporter: staying ahead of the competition is also important. the hofers carefully track other lawn care services, posting their rivals' promotional materials on an office bulletin board. the hofers say they're happy being the driving force behind spring green, but they're even happier letting their franchisees be the company's face. >> knowing that a business is locally owned and operated is a big deal. >> reporter: diane eastabrook "nightly business report," plainfield illinois. >> tom: here's what we're watching for next week. our friday market monitor guest is stephen wood chief market strategist for north america at russell investments. and we'll get an update on the job front with may's employment report. speaking of jobs, we look at long-term unemployment and why some people have such a

difficult time finding work after being on the sidelines for so long. >> suzanne: in a first, a federal judge in virginia has struck down a u.s. law banning direct corporate campaign contributions to candidates. the decision gives companies the same rights as individuals, allowing them to directly support their favorite candidates. the case involved federal charges against two men alleged to have made illegal donations to hillary clinton's campaigns. the case is expected to end up before the u.s. supreme court. >> tom: a government tax break for private businesses in cuba? under new guidelines announced today, cuban companies that hire between one and five workers will not be subject to payroll taxes this year. another measure allows cafes to serve up to 50 customers at a time. eateries had been limited to 20 people. these are efforts to spark private enterprise in a country where the government still employs about four out of every five workers.

>> tom: while borrowers may love them, low interest rates are worrisome to tonight's market monitor. he's mark skousen editor of the market letter "forecasts and strategies." back with us. nice to see you, welcome back. >> tom, it's good to be

back. >> tom: we have one month left, exactly now, the federal reserve's bond buying program. so what's wrong with these low-interest rates? >> you know, i was against the qe 2 and all of that from the very beginning. and the problem is low-interest rates are a reflection of an anemic recovery. yes, the patient is feeling better. but look, when gdp growth is only 1 to 2, maybe 3% maximum, when other countries are growing much faster, especially in asia, we're obviously doing something wrong. and we need to see more economic growth. and that means i think we need to cut taxes, especially corporate taxes. we need to unburden business because business is concerned about obama care, the financial regulations. these are all burdens that are keeping the great recession with us. >> tom: but mark, wouldn't higher interest rates choke off a key source of capital for companies? >> actually, i think it would show a genuine

prosperity. because this is a very unnatural situation. zero percent interest rates. the banks are looking good. they're reliquifying but they're not really loaning out money to small business which is one of the keys to economic growth. so i actually think that an increase in interest rates would be a reflection that we're going back to normal, that we're getting real economic growth. and that would be a very positive thing and pull us out of this slump that i think we've been in since the financial crisis. >> tom: i want to get to your new picks. but finally on this idea of interest rates, the low-interest rates have helped out stock prices. maybe kept the economy afloat, a nem anything your words but it has clearly helped out the bull market in equities. >> well, i think that's more a reflection of corporate profits beating expectations and really doing well. and why? because corporations largely cut expenses rather than really growing the economy. so real interest rates really need to start rising in my opinion.

>> tom: all right. let's get the new picks. ccj, ticker symbol on a canadian uranium producer. big drop back in march thanks to the disasters in japan. what are your expectations for this one? >> well this is a great recovery story. this is very similar to the recovery in bp after their disaster. and we're seeing the same thing as a result, uranium prices fell sharply. camoco fell 40%, it is stabilizing and starting to move back up. uranium prices are rising. and china and india, the two big drivers of nuclear power have said they're full steam ahead. they are going to continue to expand their nuclear power. so this is all very positive for c ca, moco. >> you also like europe in the form of a spanish telecommunications provider, telephonica, tef, it clearly has had a choppy time as the spanish competent has telefonica is growing, over 70% of telefonica is in

latin america, outside of spain. it has a great rising dividend over 9% at this time. that suggest a very cheap stock. and p-e ratio is under 8. so i think this looks really good to me. >> tom: dividend and value play. back in october you were last with us, you had a couple of picks in some different areas, rare element resources, a rare earth mineral miner, up 21%. sea drill, deep-sea drilling up 18%ing dow still like these two? >> well, i like sea drill better. i think, you know, sea drill looks like it's still very cheap and could continue to expand. but rare elements, that is very volatile. i think we're going to take our profits on that. even though it was up 4% today and could move substantially higher. >> tom: taking profits on rare element, do you own the four that we mentioned. >> i only own rare elements. i'm actually keeping that in my own portfolio even though i'm recommending that we

sell it on your program because it's too volatile for every six months am but for me, the speculator i'm staying in. >> tom: our market monitor is mark skousen with forecasts and strategies. >> tom: monday is memorial day and with the u.s. markets closed, we present a special edition of n.b.r.-- young entrepreneurs. we hear from one guy who started his company while in college and sold it to google for millions of dollars. and how a university launched a unique program to help ignite the entrepreneurial spark in its students. >> there's some kind of little gleam in their eyes and its hard to not notice that when you meet them because once they start talking about their concept, it's that dream they have that they don't want to let go by another day. talk about that gleam in their eyes and how to fulfill that dream on monday. >> i'll certainly be tuning in. that's nightly business report for friday, may 17th.

i'm suzanne pratt. goodnight everyone and have a great weekend. you, too, tom. >> tom: have a great weekend suzanne. i'm tom hudson goodnight everyone. we hope to 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