>> susie: stocks surge on new hopes europe can contain its debt crisis and a strong start to the holiday shopping season. >> you have a consumer that is willing to spend as long as its a good deal and the retailers are planning their promotions very carefully. >> tom: the latest spending surge in stores and online this cyber monday. it's "nightly business report" for monday, november 28. 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. investors returned from the holiday weekend in the mood to buy. stocks rallied today on optimism about strong holiday retail sales and word that european leaders are making progress on resolving the debt crisis. tom, policymakers there are working on new rules to enforce budget discipline in the region. >> tom: the latest effort would have countries give up some of their budgets to a central authority. the developments in europe were a big factor, susie, in helping u.s. stock indices break their losing streak. the dow jumped 291 points. it had been up as much as 330

earlier in the session. the nasdaq rose 85 and the s&p added 33. also late today, fitch ratings >> susie: said it's keeping the united states' aaa rating intact, but revised the outlook to "negative." the agency said the changed outlook reflects the failure of democrats and republicans to agree on a deficit reduction plan. our market guest says today's burst of stock buying is the beginning of the santa claus rally. he's jeff saut, chief investment strategist at raymond james. hi, jeff. >> good evening. >> susie: so tell us about this sant clause rally and why you are so bullish. >> well, there's a number of reasons i'm bullish. if you look at the technical side we've been in a selling stampede the last of 19 sessions as of last friday. and they typically don't run much more than 17 to 25 sessions. you would compress stocks to where the mcclellan overbought oversold oscillator was as oversold

as it was at the august 8th and 9th lows. and the news backdrop is not as bad as i think the media is pretending it. the best walk around indicator of the u.s. going into a recession is foot traffic in the casual dining space. and foot traffic has actually been rising, not declining. declining foot traffic would tell you that the consumer with the most discretionary spending of all being casual dining was worried. and right now the u.s. consumer is to the worried. so i'm in the camp that says no recession. earnings continue to surprise on the upside and the world is profoundly under invested in u.s. equities. >> susie: interesting, your thoughts about the consumer, because we hear from so many economists who come on the program who say that the outlook for the economy is weak, that the consumer is cautious and frugal and now we just reported about this negative outlook on u.s. debt by fitch rating service. so how do you factor in all of those kinds of bits of

information into your forecast? >> well, it's not just the u.s. consumer. if you look at rail car loadings and intermoddal loading, they've been very strong over the past four or five weeks. if you look at the port traffic in bound and out boud it's still very strong. if you look at the states that have reported tax receipts, 46 of the states have reported tax receipts up year over year, albeit from a low base, up almost 12% year over year. these are not the kind of readings you see going too a recession. we could, i guess, talk ourselves into a recession but right now as i read the numbers, it doesn't look like a recession to me. >> so what's your investment at that time gee, nice rally today. are you buying into these rallies? i mean what is your strategy? >> actually told people to raise cash back in march and april and we started putting that cash back to work on august 4th. and a lot of the cash was put back to work between august 4th, august 8th, august 9th and especially on

october 4th when we made the undercut low. >> where do you see the opportunities, jeff? where are you investing? >>. >> technology is yundz valued as it has been the past couple of decades and the highest return on equity. continue to like the energy space with per-capita incomes rising and emerging and frontier markets. we think energy has the wind behind its back. >> you didn't see anything about retail stocks or financials which were very strong today. would you buy these or stay away? >> i actually have been telling people the good stock market up until the past seven or eight trading sessions, there's a really good r squared or corelation between a decent stock market and stronger christmas sales. so i think you're going to have pretty strong christmas sales and we have been recommending names like wal-mart for the past few months and extra, extr. >> susie: do you own any of these stocks, any disclosures. >> absolutely i own them. >> susie: okay, that is a good sign. jeff, thank you so much for come on the program. we really appreciate it. >> seasons greetings.

>> susie: same to you. and we've been speaking with jeff saut, chef investment strategist at raymond james. >> reporter: shoppers spent an estimated $52 billion during the period, up from $45 billion last year. >> tom: the momentum is expected to continue today as a record 123 million americans plan to shop online on this cyber monday. but it's clear much of sales lately are due to hefty promotions as well as early opening times on black friday. erika miller takes a closer look at the outlook for the season, and retailer profits. >> reporter: best buy's bricks and mortar stores do far more business than its website. 95% of the company's u.s. sales are done at a register. but like many retailers, best buy offered deep online-only discounts today. michael vitelli is president of the americas for best buy. >> our plan is to double our online business in the next three to five years, and we are on track to do that because the shopping experience, and shopping on your phone, or

shopping online, is clearly what consumers are doing more and more. >> reporter: which explains why nearly eight out of 10 retailers offered a special deal for cyber monday. promotions are plentiful both online and at the mall this holiday season, but analyst jeff klinefelter still thinks profit margins will be strong. >> we're expecting stronger pricing, and that's really going help drive comp store sales, which ultimately are going to drive profitability for the retailer. >> reporter: like last year, it's expected to be the tale of two consumers. analyst dana telsey expects luxury stores like coach and tiffany to be popular among high-income shoppers. >> the reason luxury retailers are probably a bright spot is because if you look at household net worth, it's going up all over the world. not at the same rate it had been, but it's still moving higher. therefore, they still have discretionary dollars to spend. >> reporter: at the other extreme are low- and middle- income consumers who are expected to shop at discounters and dollar stores. for its part, best buy notes a common desire across all income levels. >> i think consumers are looking

for value. at all levels. at our high-end products and particularly, i think, the gift- giving spirit is still alive. >> reporter: but after today, that gift-giving spirit is expected to ebb a bit. typically, about 40% of holiday sales take place in the two weeks before christmas. erika miller, "nightly business report," new york. >> tom: gian fulgoni is the chairman of internet marketing research firm comscore. big double-digit increase over the holidays in terms of on-line shopping, cybermonday is almost in the books. dow expect that growth rate to continue? >> i expect cybermonday to be a record day. i think it will be the largest spending day that we've ever had onthe internet. the growth rate for the season as a whole, we're forecasting a 15% growth rate. it started off stronger than that and we went through black friday which was up about 26%. so i don't think 26% will hold but we're going to have

an overall very strong season. >> is any of that on-line spending you're forecasting beginning to eat away at the brick and mortar spending or is it adding to it? >> it's cannibalization, i don't think there is any question about it. it seems to be increasing. as we've gone through the year, it appears that the price-- there are two reasons why people shop on-line s convenience and price. and i think that the price advantage is becoming more and more important to more and more people as this unemployment rate stays up at 9%. and people are out of work longer. so the internet shines in that kind of an environment. >> tom: you found top web sites over the black friday holiday to be pretty obvious for on-line shopping, amazon.com, wal-mart and best buy.com but we just heard erica report that best buy only get --% of its sales from on-line. does that surprise you about a very popular web site for shopper but spenders aren't necessarily going there. >> yeah, that number, is not aware of that number. 5% does seem to be low

relative to what the total proportion of consumer electronics, for example, are buying that occurs on the internet is to you running around 25 to 30%. so as that channel shift in a particular product category t is varying by category in terms of timing, as that occurs i think that the bricks and mortar retailers have got to be really careful. because they could be losing market share in the sense that as the colors-- dollars shift over they don't hold on to what they had at retail. >> tom: is amazon.com likely to be the wig binner this season? >> they had pretty spectacular start to the season. they've had a spectacular year as a whole. so they are about 50% larger than the second retailer in terms of total visitors. and i have no doubt that they will have a very, very strong holiday. >> tom: we appreciate the insight, thank soches. chairman of comscore is gian

fulgoni. >> susie: still ahead, it's been ten years since enron filed for bankruptcy. we look back at what happened and what's changed since the energy giant's demise. general motors was doing damage control today after the government launched an investigation into the chevrolet volt. g.m. is offering loaner vehicles to volt owners until regulators determine why some batteries in the hybrid electric plug-in caught fire after crash tests. as diane eastabrook reports, g.m. says it is doing everything to preserve the reputation of the product it calls its "pride and joy." >> reporter: general motors sent letters to more than 5,300 volt owners nationwide assuring them the hybrid electric plug-in is safe, despite battery fires after government crash tests. mark reuss, president of g.m. north america, says if volt owners still aren't convinced, the company will loan them other vehicles until further testing is complete. >> make no mistake, i believe in the safety of the volt.

chevrolet and g.m. believe in the safety of the volt, but our primary focus is and always will be on the confidence and the concerns of our paying customers. >> reporter: so far, no consumers have reported battery fires. reuss said the company began putting protocols in place last summer to de-power volt batteries after a crash to avoid fires. while volt sales have lagged the company's expectations, sales of other g.m. cars have been brisk in recent months. morningstar auto analyst david whiston is concerned the volt investigation could taint sales of the chevy brand. >> the volt is what's called a "halo car," and the volt provides a lot of cachet to the chevrolet brand in this case. and what it can do is it gets people more aware-- it increases their consideration of buying any other chevy vehicle just because they hear of the volt. >> reporter: nissan, which makes the electric leaf, says there have been no reports of battery fires in any of those cars.

the government says so far it is only testing the volt. diane eastabrook, "nightly business report," chicago. >> tom: stocks soared to begin the week, showing lots of green as the holiday season begins. it was the best day in almost a month. broad based gains, coming off the worst thanksgiving week. the s&p 500 jumped almost 3%. the last 90 sessions shows the steep slide since halloween. today's 3% jump snapped a four- day losing streak. all of the major stock sectors led up-- materials, energy and information technology. they gained at least 3.5% each. within the materials sector, steel stocks were hot. u.s. steel rebounded 8.5%. the steel industry has been hurt over worries demand could suffer

as europe's soft economy impacts china's appetite for steel. steel stocks also may have been helped by some take-over talk. investor carl icahn has offered to buy commercial metals for $15 per share, a $1.7 billion deal. shares of c-m-c shot up more than 20%, closing shy of icahn's offer. despite the strong holiday sales, retail stocks were a mixed bag. wal-mart's 0.6% gain was the weakest among dow stocks. macy's, though, saw almost a 5% jump in its stock price. sears saw a 1% drop to a six- week low. a settlement between citigroup and the securities and exchange commission over mortgage bonds was thrown out of court today. it was a $285 million settlement over allegations citi bet against a mortgage bond investment in which it also had a role in choosing what was included in the deal. the federal judge said he couldn't tell if the payment was fair or not. he criticized the commission for not forcing citi to admit to

doing something wrong. the judge set a trial date for july 16. citi shares gained 5% in the broad market rally. it declined comment on the decision. finally, oil closed above $98 dollars per barrel. during the session, it traded over $100. the european union is considering a ban on iranian oil. iran's parliament, meantime, has voted to downgrade its diplomatic relations with britain. this is related to iran's nuclear ambitions. but warm weather in the u.s. sent natural gas prices down 3.8%. and that's tonight's "market finally, facebook ipo could come next spring. and that's tonight's "market focus."

>> tom: if you've wanted to figure out the mood of american investors, you've had to look to europe, even as the u.s. economy has shown signs of life. that brings us to tonight's "word on the street," "american." robert walberg is the chief market strategist at thestreet.com. >> susie: let's look at what's bob, nice to see you, are u.s. markets too worried about europe? >> i think so, tom. i think it's every day you come not market and the european headlines from overnight pretty much set the course for the day.

whether it is italy gok downgraded or france going to be downgraded, italy into default s merkel and germany going to be play nice. every day it is something out of europe and it puts a damper on the u.s. market, third-quarter earnings up 17% and the u. mat market in that same period down 14%. the focus is on the wrong thing t is like that accident when are you driving down the highway, you can't help but slow down and take a look ian though it increases the chances of you getting in an accident yourself it is what is happening here. we are distracted on the wrong thing. focus should be on the u.s. economy which is growing i think better than expected and the consumer come on strong, and corporate earnings which are looking very good and corporate balance sheets which are great. >> tom: are you saying buy u.s.a., made in the u.s.a. and among those stocks are you looking at has american in its title axp, american express, financial services giant. stock price has been volatile, as high as 55 and as low as 42. what do you make of axp over the next 12 months? >> i think here say great opportunity to buy the stock. company is really doing a lot of very good things.

you play on the strength of the rebounding consumer as well as corporate travel. and they're also expanding their international business now about 35% of revenues expected to be up to 50% of revenues in the next few years. stock down here very depressed, has a nice dividend yield of 1.9%. i think is a great time to invest in american express with a target of 65 to 60 a share. >> narrator: apa, the-- . >> tom: apa the energy giant. >> another great guy trading at about 7, 8 times earnings. you know, tremendous reserves. strong double-digit earnings growth, modest dividend, but are you still getting paid something. i think apache is a great play up to the 120 area. >> tom: how about you, dow own any of these positions? >> i don't personally but we do have them in the ap portfolio. >> tom: american is the word on the street, bob wahlberg, his article on the street, robert wall berg with thestreet.com. >> susie: let's look at what's on the calendar for tomorrow.

we'll see the s&p/case shiller home price index for september, and the conference board issues its consumer confidence index for november. then, let the games begin! with the n.b.a. lockout over, "beyond the scoreboard" looks at the business impact of a shortened pro basketball season. after years of declining sales, new-home purchases are once again starting to rise. sales ticked up more than 1% to a seasonally adjusted rate of 307,000. that's up nearly 9% from october of 2010. but tight credit for builders, falling home prices, along with high foreclosures and delinquencies, continue to hold the new home market back. >> tom: barney frank, one of the country's leading liberal voices, will not run for re- election next year. the 16-term congressman served as chairman of the house financial services committee from 2007 to 2011. during that time, he spearheaded work on the landmark dodd-frank financial regulation law, which rewrote the rules for wall street after the 2008 financial crisis.

>> susie: remember enron? it is now ten years after the energy giant went bankrupt,

wiped out savings for investors and employees and led to dozens of arrests of top company executives. it became one of the biggest frauds in history, and its collapse helped re-write the nation's accounting laws. this week, we look at enron's implosion and how it impacted american business. kicking off our coverage tonight? andrew schneider from our bureau at houston p.b.s. he talks with former enron employees about what it was like inside enron as the company began to break down. >> reporter: in the 1990s, enron was the company to work for in houston. it encouraged creative thinking. it offered huge rewards and opportunities for advancement. most of all, it gave employees a sense that they were changing the world for the better by unlocking the power of the free market. former enron energy services employee ravi kathuria remembers. >> every day, there was something new happening. there was a new challenge. there was new ground to be broken. >> reporter: every enron

employee received one of these booklets, stressing the company's core values of respect, integrity, communication and excellence. the company hammered the message home with videos that ran on screens throughout its headquarters. >> enron is a company that deals with everyone with absolute integrity. we play by all of the rules. we stand by our word. we mean what we say. we say what we mean. >> reporter: this wasn't just high-mindedness. enron was a trading company. if people couldn't trust its word, the credit that business depended on would dry up, but enron also depended on constant growth. that led to an overwhelming emphasis on closing deals. former human resources chief cindy olson describes how enron's compensation system reinforced that. >> we gave everyone a lot of options, because everybody was doing it-- in the tech world, on wall street-- what we didn't realize is, the motive it gave people to do pretty much anything to keep our stock price up. >> reporter: it also meant that

people who stood in the way of closing deals got short shrift. steven webster describes an incident that took place just before he left the company in 1999. >> i had been in a meeting-- one of my last meetings as an employee at enron-- discussing one of the projects we were doing internationally, and one of my colleagues just didn't agree with the approach that we were taking to the project, and my boss literally picked up a chair and threw it across the room at him. >> reporter: inevitably, some of those deals proved huge money losers. that put the company's stated values and its high-growth culture on a collision course. stephen arbogast teaches business ethics at the university of houston's bauer college of business. he says enron failed a key test of its integrity as early as 1987, when a rogue trading scandal in the company's valhalla, new york, office nearly drove the company into bankruptcy. >> they failed to investigate the scandal accurately, and then, when it materialized in even worse form than they ever

imagined, they responded to it by getting rid of their internal audit function and outsourcing it to arthur andersen. that speaks volumes about enron's top management attitude on financial control from the get-go. >> reporter: rather than own up to its losses, enron applied its creativity to accounting gimmicks that descended into outright fraud. tomorrow night, we look at the consequences for enron's employees. andrew schneider, "nightly business report," houston. >> tom: so what's really changed since enron's collapse a decade ago? commentator allan sloan says one thing is different: prison. allan is senior editor at large at "fortune." >> one of the biggest mess involves jail time-- or the lack of it. plenty of big fish went to jail in the enron aftermath-- jeff skilling of enron, bernie ebbers of worldcom, dennis kozlowski of tyco, c.e.o.s of adelphia, healthsouth, qwest, and imclone- - but no big shots from firms involved in today's financial

disaster have been indicted, let alone convicted. seeing big shots heading to the big house helped diffuse some of the anger over the damage caused by enron's crimes and the collapse of the stock bubble, but no big shot has been called to account this time around, and far more people have been hurt by the great recession and the housing bubble than by enron and the stock bubble. i'm not saying the government should bring criminal charges against ceos just to make the public happy. that's not justice, it's playing to the mob. but the lack of prospective jail time for even a single big player sure helps explain why so many people have stayed so angry for so long. i'm allan sloan. >> tom: that's "nightly business report" for monday, november 28. i'm tom hudson. good night everyone and good night to you too, susie. good night tom. >> susie: i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night.

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