>> susie: u.s. government bond prices continue soaring as investors grow worried about another slowdown in the u.s. economy. can the bond rally continue? >> we think the rally is a bit long in the tooth. there still could be some movement down in yields, but we don't think it's the great investment out there. >> tom: key to kick-starting the economy? jobs and getting the long-term unemployed back to work. how to get back in the game after six months or more on the sidelines. you're watching "nightly business report" for tuesday, may 31. 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. a bullish day for bonds today. u.s. treasury prices spiked higher on worrisome housing data. investor demand for treasuries pushed the yield on the 10-year bond down to 3.05%, its lowest level this year. tom, treasuries have been on a tear for two months now. >> tom: susie, part of the reason investors are keen are bonds is growing concern about the u.s. recovery. since hitting a high of 3.73% in

early february, the yield on the 10-year bond is now closing in on 3%. >> susie: suzanne pratt takes a look at what's behind the run-up in treasuries and what it means for investors. >> reporter: a funny thing has been happening in the bond market lately. "funny" as in "puzzling," and puzzling because treasury bonds have been rallying when they're supposed to be out of favor. but, there are explanations for investors' change of heart. first, u.s. government debt looks far more appealing, relatively speaking, when other large economies face even bigger headaches. don't forget europe has serious sovereign debt issues, and japan is now in recession thanks to mother nature. bond expert michael pond says secondly, the u.s. economy is downshifting, when it was supposed to be a lot stronger. >> investors have also become more concerned about the growth prospects in the very near-term for the u.s. because q1 was an obvious soft patch.

whether we pick up again is yet to be determined. >> reporter: the weaker the u.s. economy, the more likely it is that the federal reserve will hold interest rates near zero. that means treasury yields could fall even further, creating more profits for bond investors. today's disappointing housing data is more evidence the recovery is still fragile. the s&p case shiller home price index for 20 large cities fell 0.8% in march to its lowest level since the downturn began. prices are down 33% from the july, 2006, peak. economist anthony chan expects the housing market to remain in the cellar, at least until next year. >> when you look at the share of distressed housing, it's pretty high, and in that kind of environment with weak labor market conditions, it's very difficult for housing to rebound strongly. >> reporter: so, if you listened to the bond market gurus a few months ago and sold, is it too late to buy back in? some experts, like suvrat prakesh, think treasuries are still a good bet.

>> when you think about the alternative investments out there, i think you've definitely got to have some bonds in your portfolio, because let's not forget the prospects for stocks looks a little shaky as we approach this current round of quantitative easing. >> reporter: others, however, say if you're still hungry for bonds, you probably missed most of the latest and unexpected rally. but, clearly bond market experts have been wrong before. suzanne pratt, "nightly business report," new york. >> susie: investors might keep buying bonds if the tone of a new batch of economic data, out this week, is troubling. the big number comes out on friday with the latest employment report. economists are expecting 200,000 new jobs were created in may. joining us now to talk more about the job market outlook? john challenger, c.e.o. of challenger, gray and christmas, the global outplacement firm.

>> nice to be here. >> it is getting better. we've seen unemployment drop from above 10% now. at the 9% level. but particularly job creations pick up. we've seen three consecutive months of strong job creation. 760,000 jobs. that's what we've been waiting for. the jobless recovery is over. >> susie: in terms of people out of work for six months or more, let's look at the statistics there. so far this year, the latest number says 5.84 million fit into that category, out of work for 27 weeks, down from 6.7 million at this time a career ago. it is a slight improvement, but what's the outlook there? >> well, that has been the biggest issue during this recession, the number of people who just seem to be put out adrift and couldn't find a way back into the job market. it seems to be improving. that's almost a million jobs

that have been found by long term jobless in the last year. at the same time, the big gains recently have not really made as much impact as we'd like. just 371,000 have come off the rolls during the latest bane. so it's still a real problem. >> susie: now your firm came out with a list of tips for people in that situation, and people out of work wha, they can do to jump start their job search. let's take a look at the list here. the first thing you have, reconnect with your network. what do you mean? >> it's important to use social networks like linked in and facebook. reach into the rolodex and find people, where they've moved to. so many people change jobs. and if you don't keep up with them, like you can today, you may not be able to utilize them to help move into the new company. >> reportersusie: the second ti uncover the hidden job market.

what do you mean? >> 80% of shobs come from referrals and reaching out to people and asking them if they might introduce you to the boss at their company that you might work for. they come through people kinds of job search work. so it's so important not to get caught behind the computer, e-mailing out resumes hoping that someone is going to call you. >> susie: all right. going down back to our list, reset expectations. you're talk tlg iing there in t of financial expectations, right? >> i think there is particularly true for the long term jobless. there's 6.5 million who aren't count as unemployed but want a job. so it's crucial to get back into work. from there, prove yourself, look for raises after you've been there six months or a year. ask for incentive pay. but you've got to get back to work. you can't stay unemployed. >> susie: quickly, step

outside your comfort zone. what's your advice? >> well, everybody is uncomfortable with going to a network event and introducing to strangers and going to people you haven't seen in 10 careers and telling them you're out of work. vu to do that. it's crucial in your search. >> susie: it's so tough, isn't it? thank you for the helpful advice. really appreciate it. >> thank you, susie. >> susie: and we've been talking with john challenger, ceo of challenger, gray and christmas. >> tom: here are the stories in tonight's n.b.r. newswheel: new hopes for another bailout of greece helped u.s. stocks move higher. the dow rose 128, the nasdaq was up 38 and the s&p 500 added 14. trading volume starts the week with 1.5 billion shares on the nyse, and 2.5 billion on the nasdaq. while e.u. officials have ruled out a total restructuring of greece's debt, euro-zone finance ministers will decide on a

second bailout for greece by the end of june. that would be on top of the $157 billion emergency loan greece got last year. listen up cell phone users: the world health organization says radiation from mobile phones could increase the risk of certain types of brain cancer. a w.h.o. working group suggests labeling cell-phone use as "possibly carcinogenic." speaking of cell phones, sprint nextel today asked the f.c.c. to block the pending merger between at&t and t-mobile. sprint claims the $39 billion deal will harm competition and consumers. still ahead, high-end goods at high-end prices. tonight's "shoptalk" looks at why the hermes mystique works. >> susie: president obama is turning to an energy executive with environmentalist credentials to be his ambassador to the business community. john bryson is the president's pick to be commerce secretary.

bryson was an advocate for renewable energy as c.e.o. of california-based edison international. the president also noted bryson's role in founding the natural resources defense council, a leading voice on environmental issues. >> in this new role, john will be able to draw on decades of business experience across a range of industries, from his role on the boards of major companies like disney and boeing to his leadership in the clean energy industry. that's the expertise that will help us create new jobs and make america more competitive in the global economy. >> susie: bryson's first challenge will be winning senate confirmation. senate republicans have threatened to block the appointment of a new commerce secretary until the administration submits free trade agreements with colombia and panama.

>> tom: investors had to digest the weak housing numbers and as well as the possibility of another new bailout for greece. folks are in a buying mood. let's update you. it was a strong close for stocks, shrugging off the sour home prices report. today's trading started out strong but ended stronger. this is today's activity for the s&p 500. this jump came in the last 20 minutes of trading.

ended with a 1% gain. technology stocks led the way. cisco was among the best dow industrial stocks with this 2% gain. trying to break out of this pattern. cisco stock has been stair- stepping lower over the past year as it has brought down expectations over the past several quarters. apple moved up 3%. steve jobs is due to deliver a keynote address next week when apple unveils new software. he has been on a medical leave of absence since mid-january, when shares were at $348 per share, or about $1 above tonight's close. meantime, mobile phone maker nokia warned phone sales will be significantly lower than expected. it blames lower selling prices and sales volumes. tonight's price is the lowest price of nokia's u.s. shares in 13 years. two drug giants settled their differences over an epilepsy drug. no details of the settlement between pfizer and teva pharmaceuticals, but pfizer rallied 2.4%, up to a new 52- week high. it was the best-performing dow

industrial component today. teva shares were up a fraction. also in the drug business, optimer pharmaceuticals is the first drug maker in a generation to get f.d.a. approval for a medicine to treat the intestinal infection known as c-diff. shares jumped almost 12% on almost 10 times its average volume. c.e.o. pedro lichtinger is waiting to see how big the market may be. >> there are 450,000 patients that are reported as having this disease. there are significant number of other patients that are not reported. so estimates take it as high as three million patients. >> tom: no pricing for that medicine announced yet. monday mergers were delayed because of memorial day. chemical company ashland will purchase international specialty products for $3.2 billion. shares jumped 11% to a new 52- week high. easily. we're seeing continued buyouts in utilities. the biggest electric utility in vermont-- central vermont-- will

be bought by the canada-based fortis, paying $35.10 per share. shares of c-v jumped more than 40% on the deal. just below that deal. the total price tag comes in at $700 million, including debt. power of a different sort-- solar power equipment stocks saw some buying. as german chancellor angela merkel said she wants to abandon nuclear power by 2022. l.d.k. solar, j.a. solar and first solar all rose. finally, the summer movie season is underway. dreamworks animation may be wondering, "kung-fu panda 2," where are you? it was a disappointing opening weekend. for what was supposed to be a big blockbuster. the stock fell almost 4% to a new 52-week low. and that's tonight's "market focus."

>> tom: national home prices have fallen back to a level last seen in 2002, but homebuilding stocks are showing signs of life. tonight's "word on the street"? "builders." david peltier is a portfolio manager at thestreet.com. >> david peltier is a portfolio manager, and he joins us now. david, always nice to see you. welcome back. i have to sku. in the past year, fashional home prices as we reported on down more than 5%. but the home builders exchange traded fund is up 9%. please explain this. >> that's a good question. often time the stock market discounteds what's going to happen several months in advance. so if anything, stocks already bottomed in the housing

market. the key phrase is potential, right? >> exactly. >> tom: with that in mind, vu a couple of ideas, you think are queued up for rallies, begining with beazer homes. this chart looks nasty down 15% over the last year. bzh hasn't reported a profit. why do you like this? >> it's started to bottom out that. bottom is correlated with the fact that the ceo in two other company insiders recently purchased about 45,000 shares of the stock on the open market. this is something i like to see when a company's fundamentals may be on the turnaround. this is a sign of confidence from management. >> tom: certainly insider buying. there's one reason to buy the stock because you think it's going higher. but fundamentally, do you see value? >> that's tough. the stock has a book value of $4 per share. this is usually a floor for the stock. and the stock is trading just

above that. when you look at the company they're not expected to be profitable for several quarters. this could cut into the book value. >> tom: hovnanian is another on your list. hov is the ticker. it's a weak got that has gotten weaker. it lost half of its value over the past year. why do you think it's finding a bottom at 2.60? >> that's the problem. i don't think it is. we talked about the book value at beazer. hovnanian has negative book value. there aren't any hard assets behind the stock to suggest it could find a bottom any time soon. >> tom: some of these home builders had success because of tax credits in years past. do you see that coming forward? >> i think we're running out of the low hanging fruit when it comes to the potential for quality of earnings when you look at these stocks. they're going to strug toll generate real earnings, and could be several quarters if not a few years out. >> tom: do you own either of

these names? >> no, i don't. >> tom: you can read david article at at the street.com. our guest is david peltier with the street.com. >> susie: here's what we're watching for tomorrow: an update on auto sales-- were they strong or weak last month, given high gas prices and a shortage of japanese vehicles? also a look at manufacturing-- the institute for supply management's releases its may index. and hilary kramer is our "street critique" guest. email your questions to streetcritique@nbr.com. toyota is moving forward as it rebounds from the disasters in japan. the automaker said today it expects to resume production at 90% of normal global capacity next month. that's much faster than it previously predicted. toyota was initially short of 150 different kinds of parts because of supplier problems, but with more producers coming back online, that list has been cut to 30 parts.

>> tom: former media mogul conrad black finds out next month if he'll go back to prison. the u.s. supreme court has refused to take a second look at black's fraud and obstruction of justice convictions. a year ago, the high court ruled in black's favor on one issue, but today's move has the former owner of the "chicago sun times" and "daily telegraph" of london looking at more time behind bars. he's been free on bail for nearly a year after serving 2.5 years of his original 6.5-year prison term.

>> susie: despite near-zero yields, people continue to plough cash into money market funds. jon waggoner thinks he knows why. he's the mutual fund columnist at "u.s.a. today." >> life is full of mysteries. how were the pyramids built? if ants are so strong, why don't they break into houses and steal our sugar cubes? and why is there $2.7 trillion sitting in money market funds? the popularity of money market funds is indeed an enigma. the average money fund yields 0.02%. if you invested $1 million at that rate, you'd earn $200 in the course of a year. and the industry's reputation for safety was shattered when the reserve fund collapsed in september, 2008. so why do people love money funds? convenience is one reason. if you sell a stock or a mutual fund, its nice to have a parking place for your money while you decide what to do next. and most money funds will also let you write a check against

your account, just like a bank account. safety is a big reason, too. earning nothing is better than taking a loss. and despite the reserve funds woes, it's the only money fund to collapse in the past decade. more than 400 banks have failed during the same period. finally, there's asset allocation. if investors have learned anything in the past 10 years, it's that there's a world of difference between a portfolio that's 100% stock funds and one that's, say, 20% in cash, 20% in bonds and 60% in stocks. money fund yields aren't likely to rise any time soon, and new regulations to ensure their safety will, most likely, reduce yields. but despite yields that would fit into an ant's shoebox, they're still a good place to keep your idle cash. i'm john waggoner. >> susie: for the first time in four years, wealthy consumers plan to increase their spending this year. in today's shoptalk, erika miller profiles french luxury retailer hermes, which has been doing well despite the soft economy.

>> reporter: it's rare to see a craftsman stitching a bag by hand these days. but for 14 years, pierre grosperrin has spent his working hours punching holes, threading needles and carefully restoring vintage hermes leather goods. >> i use only one thread, so if i pull on one side, the stitch doesn't move. >> reporter: before hermes was a luxury brand, it was a workshop. the company was founded by theirry hermes back in 1837, crafting harnesses for french noblemen. the u.s. president of hermes, bob chavez, says that equestrian heritage is still very much a part of the company. >> we always love to say a horse was our very first client. every last element of it is taken into consideration. all for the comfort of not just the rider, but also the horse, which is very important. >> reporter: whether it's a saddle or a purse, the merchandise can be more than a status symbol.

>> people like to make smart investments in the stock market. people like to make smart investments in their home. and i think people like to make smart investments in the products that they are going to purchase and keep for quite a while. >> reporter: that may explain why customers sometimes remain on a waiting list for years to have the privilege of buying an iconic birkin bag. they range in price from about $6,000 to $150,000. strong demand is reflected in 25% revenue growth last year. profits surged 44%. the stock, which is majority owned by the hermes family, has gained about 60% in the past year. at first it may seem strange that luxury retailers like hermes are doing well at time when the economy is struggling, but studies show wealthy americans are more optimistic about the recovery than others down the economic ladder. retail consultant candace corlett explains why. >> the hermes shopper has had the good fortune of being less impacted by day-to-day price increases-- gas prices, food

prices. they are not as impacted by wiggles in the economy that make even upper-middle-class shoppers struggle. >> reporter: but there has been a shift in mindset, prioritizing quality over quantity. >> instead of buying two or three things, i think they are willing to wait and a little bit longer to make the investment in the piece that is going to be the best quality that they can find and something that will last them a long time. >> reporter: however, hermes also faces challenges, like weak sales in japan, a key market, after the devastating disaster in march. in addition, hermes has been fending off interest from the parent of louis vuitton, l.v.m.h., which is a minority shareholder. at the company's u.s. headquarters in new york, bob chavez said he hopes the hermes family remains in control. >> working with a family has a lot of personal touches, and

it's something that's innate in our culture, and something that emanates from the hermes family itself and from paris. >> reporter: so, lets' check out hermes. craftsmanship and strong resale values are reasons for strong sales. in addition, customers are looking for quality. but success has attracted an unwanted suitor, rival l.v.m.h. make no mistake, this is a company that takes great pride in tradition and heritage. though there have been many changes in the world in the past century, it still takes over 18 hours to craft a single bag. erika miller, "nightly business report," new york. >> tom: our website won't be updated tonight, we'll post as soon as we can. that's "nightly business report" for tuesday, may 31. 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 >> be more. pbs.