>> susie: the unemployment rate slides lower, but progress on jobs is still painfully slow. >> so even though we've created 1.3 million jobs and we saved a whole lot of jobs, you've still got a whole bunch of folks who are out there looking, still struggling. we've got a big hole that were digging ourselves out of. >> tom: from the president and the fed chairman to a woman who got a job by changing her game plan. we measure the job market. you're watching "nightly business report" for friday, january 7. 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 >> susie: good evening, everyone. from wall street to washington the talk today was about the job market. the nation's unemployment rate fell to its lowest level in a year and a half-- slipping to 9.4% in december. and american businesses added a disappointing 103,000 jobs. >> tom: susie, those job numbers came as president obama announced the new leader of his economic team. he named gene sperling as the new head of his national

economic council-- the top economic advisory position in the white house. sperling held the same job in president clinton's administration and replaces larry summers. >> susie: also in washington today, federal reserve chief ben bernanke told lawmakers on capitol hill that a normal economy is still years away. we have two reports looking at bernanke's testimony and the outlook for the job market. we begin with suzanne pratt in new york. >> reporter: this is the proverbial hole the u.s. labor market still needs to climb out from. creating 100,000 new jobs a month, as we did in december, only keeps the hole from getting deeper. over the past three months, the economy has added an average of 128,000 jobs. that's just enough to keep pace with population growth. and, it's too little to cause a significant drop in the unemployment rate. economist julia coronado explains companies are holding back on hiring for reasons beyond just consumer spending.

in addition, they now have the worry that other input costs pressures are rising. so, we're seeing lots of commodity pressures and they're worried about their operating profits getting squeezed. so, that makes them conservative. yes, the unemployment rate fell to 9.4% last month. but, experts say that happened because a quarter of a million people stopped looking for jobs. the government no longer counts them as unemployed. so, what does the latest job market snapshot suggest about the chances of getting hired in 2011? economist jonathan basile says the odds are still getting better. >> the uncertainty about taxes has turned more positive, and it looks like washington is singing a more business friendly tune for hiring for investing. >> reporter: basile expects the economy to begin adding about 200,000 jobs a month, early this year.. other economists are a bit more pessimistic, saying it could take until summer before we see businesses hiring at a healthier clip.

>> sectors like construction and finance and state and local governments, they're still working off of excesses of the past. so, it's just going to be slow progress. >> reporter: slow progress and slow going for the more than 14 million americans that remain unemployed. and, perhaps years before the unemployment rate returns to pre-recession levels. suzanne pratt, "nightly business report," new york. >> reporter: this is darren gersh in washington. federal reserve chairman ben bernanke welcomed signs that consumer spending and business investment are picking up. that, he said, should lead to a sustainable economic recovery. but the job market is another story-- that could take four or five years to get back to normal. >> persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery. >> reporter: given his outlook for what he called a moderately stronger 2011, the fed chairman

gave no sign of backing away from plans to buy $600 billion in bonds in an effort to keep interest rates low and support the economy. bernanke made clear inflation is not only contained, it is so low it might hold down wages and reduce living standards. the fed's bond-buying plan known as quantitative easing is aimed at heading that off. >> we've seen since august, significant improvement in stock prices, in spreads, in volatility, in a variety of areas and i think we are having some positive benefits on financial conditions and are contributing to a better outlook for the economy. >> reporter: the fed chairman repeated his pleas to congress for fiscal responsibility. but the surprise today was how much time senators spent talking about the crisis in state budgets. senate budget committee chairman kent conrad said it was time to put a plan together in case those states came calling for help. >> we can reasonably anticipate we may have requests made to us and i can tell you, i don't

think congress, the house or the senate are going to be very interested in bailouts to states. >> reporter: conrad mentioned five states that might be calling washington for help-- illinois, arizona, california, washington and texas. darren gersh, "nightly business report," washington. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks were under a little pressure on that jobs report: the dow fell 22 points, the nasdaq six, the s&p 500 was off two. trading volume topped a billion shares on the big board almost two billion on the nasdaq. who holds the actual mortgage? that's now a key question in foreclosures. today, massachusetts' top court voided two foreclosures done by wells fargo and u.s. bancorp. the court says the companies couldn't prove they held the mortgages when they foreclosed. speaking of loans, americans are taking out more of them to buy

cars or go to school. consumer credit edged up in november by $1.3 billion. but credit card debt fell for a record 27th month in a row. still ahead, how contract work helped one woman find her way back to full time employment. her story in tonight's "you're hired!" >> susie: the race is on for green cars. today ford motor rolled out its first all electric car: the focus electric. the gasoline-free vehicle goes on sale later this year. its one of five new electrified vehicles ford will deliver over the next two years. the focus goes up against g.m.'s volt and the nissan leaf both already in showrooms. the focus delivers 100 miles of electric driving like the leaf and it costs less. the big question now is will consumers go green and buy these new electric cars. that's what i asked company chairman bill ford backstage at today's new york's event.

>> i think some people will, and it's like any new technology. there's always a learning curve. there's always a hesitancy on some people's part to be the adopter of the new technology. we were talking a minute ago about the ipad, and some people thought, no, too much technology but once they have it they think how do i ever do without it. i expect electric vehicles will ultimately fall into that cat fwor. >> susie: we've seen a surge of people buying suvs, with gas prices at $3 and up. so what do you think it will take to make summers really go green? >> well, look, we've taken a point of view that gas prices over time have to go up. and also because of that we've decided we want to be the fuel economy leader in every segment that we participate in. put another way, even the people who are buying suv's and pickup trucks, they want better fume economy. >> susie: so ford is coming off of a great year, sales and market share are up, how are you going to do in 2011?

>> we always go for improvement and that's what we're shooting for. we have a lot of momentum behind us, our products are being well received, our reputation is high we just need to keel building on it. >> susie: do you they that consumers will shy away from going into showrooms? >> we've had pretty low industry sales the last few years. by all stadz they've been historically all depressed levels, inin spite of that we've done well. so we've taylored or programs for a modest increase. we reacted very quickly to reality, not what we hope it is, but what it really is. so if the world unfolds a certain way we'll be ready to react. >> susie: what do you have to do to stay ahead of the competition? you've got the new and improved general motors, chrysler is doing better. >> we have great competitors. our future is really in our hands and that's a great place to have it. i love where we are, i love our

plan, i love the products we've got coming, we've got to continue to execute, there's nothing terribly magic about it. we just have to do do what we've been doing and continue to do it better. >> susie: car sales got up to 11.5 million in 2010, analysts are saying 13 million for this year. is this the comeback year? >> i think so. we are getting momentum, it does feel better, it felt better in really month over month, probably since mid summer. we've seen a little momentum every single month. we like to see that. >> susie: bill, thank you so much. good luck with the new car. >> good to see you, thank you. on monday, the north american international autoshow gets underway in detroit and we'll be there. midwest bureau chief diane eastabrook brings us the latest offerings from the world's biggest automakers and walks the floor with a leading analyst.

>> susie: so tom as we reported those disappointing jobs number put some pressure on stocks today, and all the major markets were down. but for the week they were all up. so, so far 2011 is off to a good start, wouldn't you say? >> tom: it is certainly if you're long stocks, building on those gains this week that we saw in 2010. so let's take a look and we'll roll out tonight's market focus. >> tom: 2011 started off in the green for the major stock indices. the first week of the new year came to a quiet end but our big

three were up for the week. the dow industrials started the year with three straight days of gains ending the week up eight- tenths of a percent. the nasdaq added almost 2% for the week. and the s&p 500 gained just over 1% for the week. today's trading was hit by both the jobs figures and the massachusetts court ruling upholding two invalid home foreclosures by wells fargo and u.s. bancorp. but the major indices climbed back from deeper losses. we roll out today's trading of the s&p 500. the index started in positive territory and tried to hold those gains in the morning, but trading hit its low for the day in early afternoon. some buyers came back and the index closed down just a fraction. wells fargo dropped 2% on heavy volume.

earlier this week, shares hit an eight-month high. kind of a similar story for u.s. bancorp-- the other company on the losing end of the massachusetts case. u.s.b. hit its eight month high late last year before hitting this recent slide. leading the dow losers today were three financial giants. insurance firm travelers fell two percent to a three month low. j.p. morgan was off almost 2%. bank of america down on percent. all falling on strong volume. smaller, regional banks got hit worse as a group. this regional bank exchange traded fund dropped almost 3%. volume tripled. goldman sachs advised clients to mostly avoid banks in the southeastern u.s. it calls b.b&t. based in north carolina a sell.

the energy sector saw the best gains of the day, led by diamond offshore. the driller gained almost 5% on positive analyst comments. drilling technology firm f.m.c. gained more than 3%. baker hughes was up 3%, also benefited from optimistic analyst comments. the healthcare sector may be worth watching next week. the industry's leading analyst conference with 300 companies begins monday in san francisco. it brings together drug makers, device companies and health care providers. the health care sector was the the health care e.t.f. was only 1%. the industry conference comes the same week the house of representatives is scheduled to vote on repealing health care reform. a couple of drug developers dendreon. shares jumped almost 8% today on strong volume, possibly making a run after $40 per share. it hasn't traded over $40 since october. the firm announced plans to ask for european okay for its prostate cancer drug by early next year.

meantime, xoma continues with its stock volatility. shares fell 14% today after rallying more than 30% earlier this week. the drop today came as xoma said an interim review of its diabetes-2 drug experiment couldn't determine how well the drug is distributed in the body. that won't be possible for another three months. dean foods saw the biggest rally among s&p 500 stocks today, but even with this 11% rally, d.f. remains below where it was trading in november before it issues a disappointing outlook. the rally was ignited as hedge fund appaloosa management disclosed more than a 7% stake. finally, auto part stocks were falling ahead of the north american auto show in detroit. borg warner, tenneco and dana holding each seeing some profit taking after big rallies over the past year. and that's tonight's market focus.

>> susie: fed-ex and u.p.s. are under investigation by the justice department. anti-trust investigators want to know whether the two package delivery companies are trying to block customers from using third-party shipping negotiators and consultants. the justice department wouldn't comment on the case. but both companies say they are aware of the investigation and call those claims quote "groundless." u.p.s. says the notion that it conspired with rival fedex is quote "outrageous." >> tom: here's what we're watching for next week: our market monitor guest is sandy lincoln, strategist at m&i investment management. monday, alcoa kicks off earnings season. c.e.o. klaus kleinfeld joins us with the results.

and with the valuations of online firms like facebook and groupon expanding exponentially, are we in the midst of another dot com bubble? >> susie: on monday, auto supplier visteon will again trade here at the new york stock exchange. the company will use its old ticker symbol v.c. visteon's shares haven't traded on the big board since march of 2009. it emerged from bankruptcy reorganization in october wiping out $2 billion in debt from its balance sheet. >> tom: the u.s. supreme court will decide if a group of halliburton shareholders can pursue a class-action lawsuit against the oil services company. the investors claim halliburton inflated its stock price when former vice president dick cheney ran it. cheney, who is not named in the lawsuit, was halliburton's c.e.o. before he joined george w. bush's presidential ticket. the merits of the lawsuit are not at issue before the court, only whether it can proceed as a class action. a ruling is expected in june.

>> tom: investors still don't believe in stocks. that's the assessment of tonight's market monitor. he's bernie schaeffer, chairman of schaeffer's investment research, publisher of the "option advisor market letter."

welcome back to "nightly business report". nice to see you again. >> pleasure, tom. >> tom: so not enough investor belief in the market rally, despite the nice rallies we saw last year of why not? >> right, here we have a market that's up 80 some odd percent from its march 2009 bottom as measured by the sp. we go through a cycle and sentiment just like the market goes through cycles. at the bottom you have the despair. then you rally off the bomb everybody think is it's a bear market, so disbelief, eventually the rally reaches what we call the acceptance phase. and ultimately the cycle ends with a market top and you have euphoric type sentiment. >> tom: you still think we're in the disbelief phase. >> a couple quick analogies, the 30 plus years ago back in 1979 plus week, the death of equities on the magazine cover. magazine covers ten to be great indicator of sentiment extreme, this in case despair.

10-year returns were negative on the market at that time. we also had three straight years of equity mutual fund outflows. fast forward to 2009, 2010, time magazine, it's time to retire the 401-k in october of 2009. and we just completed three consecutive years of equity mutual fund outflows. disbelief, which means that there's side line money that can still come in to power the market higher. >> tom: one place you think that market, the money is going to find is in small caps, and you're looking at the iwm, options specifically. i want to take a look at what your call option strategy here is, the money calls, essentially the option to buy this etf by august, if profits if iwm rallies. we know that in early bull markets small caps have benefited and you still think there's room to move. >> do i, and yes you're right. for example we talk about negative sp returns, the russell

2000 index over the past 10 years is up almost 70%, so if you're going to play, you want to play where your risk is going to be rewarded. and the iwm options are right, the prices have come down, we're talking about an august option with seven months to go at an 8% premium, in august at the money call option. >> tom: you also are doing a bit of a hedge for this. so you're a beliefer, but yet you want to protect yourself. and here you're looking at the short-term exchange traded note, this follows volatility. june at the money calls, so it's an option to buy by june, by the summertime. and you profit on this one if this volatility exchange traded note rallies. but we've seen it crushed here. not a lot of volatility in the market as we've been moving up to these multi year highs. >> yes. the vix hasn't been trading too long but made an all-time low today. the idea is that sudden this

thesis be incorrect on the russell being as strong as i expect it or external events occur that cause a major pullback in the market, the volatility indices, people will pay up for options, they get nervous, and potentially you could get an explosive rally in an exchange traded note like the vsx. it's not always the volatility goes up and the market has to go down. so you can conceivably make money on both sides of this trade, but i would doubt it. this is really a hedge. >> tom: only a half minute left but i want to look at your picks from june. you liked call options on the xrt retail etf and the dow jones real estate index, both of those are higher. those all kopgss nicely. you also liked put options which were options to sell the euro trust etf. that's essentially lost money.

>> right, we made about 100% gain on the retailing and real estate, and we lost our investment in the euro. so basically two doubles and one total loss as an option trader, i like doing that. >> tom: we'll leave it there. bernie schaeffer hear on market monitor. quick disclears for us? >> i do not own the iwm or the vsx. >> tom: there we go. bernie schaeffer. >> susie: and finally tonight, despite the drop in temporary workers in today's job's report, temp workers have been a growing segment of the labor force since the economic recovery began. one person who found work in recent months is stephanie ross. in our ongoing series "you're hired" she tells us how temping during her new york city job hunt helped her land a full time job. >> my first thought that i had was really shock and awe. i had never been in this

situation and it was kind of depressing that so many people were in it with me. i started looking for a job and i was looking in management positions and i was looking primarily in sales, public relations. you know a variety of fields that i had touched on in my past work experience, so it did take a little time to recover but then, you know, i started collecting unemployment and i would go to the unemployment office like everybody else and i would get there and their was just seas and seas of people. whether the economy was up or down people were still going to say what did you do this year between this job and this job and you want to have a great answer. and that's really when i started to look into contract employment, temping. i thought it was strictly administrative. i thought it was nothing but short term. i really didn't know how great it could be and i had no idea they work with great companies like aol which is where i ended up landing.

i support executive recruitment and operations for the executive recruitment department. not to pat myself on the back but i really feel it was a smart decision to move into contracting and maybe reinvent myself a little bit and hopefully i'll continue to reinvent myself because staying fresh in the job market from what i've learned helps you get ahead. >> tom: that's "nightly business report" for friday, january 7. i'm tom hudson. goodnight everyone and have a great weekend-- you too, susie. >> susie: good night, tom. i'm susie gharib goodnight everyone.. we hope to see all of you again next week. "nightly business report" is made possible by:

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