>> susie: alcoa kicks off earnings season with a hit, as higher aluminum prices lead to bigger profits. >> tom: what does the new year bring for the company? we ask c.e.o. klaus kleinfeld in our exclusive interview. you're watching "nightly business report" for monday, january 10. 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. solid earnings tonight from alcoa and a bullish forecast for this year. the world's largest aluminum company is the first dow component to report quarterly numbers, and tom, analysts are hoping these strong numbers will set a positive tone for the upcoming corporate earnings season. >> tom: susie, the results also beat analyst estimates. excluding special items, alcoa earned 21 cents a share in the fourth quarter-- two cents more than estimates. revenues were in line with expectations-- $5.7 billion. alcoa also said it expects 12% growth this year for aluminum products, and it's calling for

global demand to double by 2020. >> tom: here are the stories in the question is whether italy, spain and portugal will be able to sell their own bonds this week. if interest rates are at those auctions, rather, are too high the debt crisis in europe could spread. suzanne pratt takes a look at what europe's woes could mean for u.s. stocks this year. >> remember what >> reporter: remember what europe's debt crisis did to u.s. stocks last year? well, those worries are back. at issue now is whether the weak economies of portugal, italy and spain can successfully sell billions of dollars in bonds later this week. it is the first such auction this year. a rough reception will raise new questions about whether europe is doing enough to stop the crisis, which began last year with greece. global market strategist stu

schweitzer says wealthier european countries such as germany and france need to step up. >> the question is at what point will the rest of europe bail out these troubled countries and how much market distress and disarray will have to occur before they decide to go ahead and do so. that disarry could spell trouble for u.s. stocks, which have rallied nicely since september. experts say it will become increasingly difficult for american investors to ignore europe's sovereign debt crisis. >> volatility is likely to increase significantly, shaking people's confidence to a degree, i think, especially because people have become more optimistic about the outlook than they were a few months ago. >> reporter: other market pros think europe's woes could trigger intermittent selloffs in u.s. stocks this year. but, equity strategist david lefkowitz says europe's headlines are unlikely to dominate america's markets. >> right now you're seeing a

very modest impact on u.s. equity markets over the past couple of trading days because of this issue. it's possible that we see a little bit more of an impact on u.s. markets. but, ultimately we think the fundamentals here, especially u.s. corporate fundamentals, are strong enough to overcome some of those concerns. >> reporter: european debt issues are likely to remain a manageable thorn in the side of u.s. investors this year, and perhaps beyond. experts say it's a complicated problem that only gets solved if there's the political will to do. suzanne pratt, "nightly business report," new york. klaus, happy new year and welcome back. >> hello, happy new year, susie. >> susie: all right, so you had a very bullish forecast for the year. and for the decade. what's going to drive that growth and are you basically saying that the global economy has turned the corner? >> well, i don't know whether i call it bullish. if you just look at aluminum

demand 2010 we actually started out with saying demand will increase by 10%. and it ended up increasing by 13%. what we project for next year is 12% increase. >> susie: all right. but and where is that growth goinging to come from? we see that a lot of your business is in the united states and europe where the economies have been pretty weak. you have a low profile in china. are you goinging to be stepping up your business in china especially since a lot of the china is closing a lot of its out of date aluminum plants? >> well, this is the worldwide market so it's not about just going present there. but it's also about importing selling to china. we sell about a billion, i would say, in china and to china. so part of it is what we manufacture there. and part of it is what we have there. china is important for us in the market. and we continue to see 15% growth, 21% growth, last year 15% growth, next year this year basically 2011.

but we also continue to see substantial growth in what we would call the emerging markets from india, indonesia, southeast aisha, brazil, those are markets that we do believe will continue to grow fast. >> susie: now klaus, the company recently said that its reopening the three plants here in the u.s. in new york state and washington state, hiring -- 60 people to meet demand. will we see more hiring by alcoa this year? >> we've seen quite a bit, particularly here in the u.s. we've added about 1,300 people to our payroll in 2010. what you just mentioned affects about 260 people. we're bringing back capacity, we're utilizing the opportunity of getting very, very competitive power. and very clean power, hydro power. so that all makes sense. and if the market conditions to grow, we will be doing that. >> susie: we know alcoa

produces a lum name-- a lum new for jet plane, soda cans, to the auto industry. how are those sectors looking? what is the outlook for them for 2011? >> outlook is substantially improved. we actually see that almost all of our end markets, those that you mentioned, have a pretty positive picture. let's go to aerospace. aerospace, roughly 300 orders of large scale planes in 2009. roughly 900 last year, right. if you look at automotive, we saw the december number coming in in the u.s. very strong, 1.1 million sales there. this breaks the pattern of the decline. the decline since 2005. we didn't have a year which was gross which we do have now. trucks and trailers. we see in trucks we see a 25% increase and trailers a 50% increase. and coy go through a lot of those examples. >> you know, like many companies alcoa has a good

cash position. you have 1.5 billion dollars of cash. how are you goinging to use it? is it going ton for more investment and maybe more jobs, increasing the dividend? well, first i'm very, very happy what we call our cash sustainability program has worked so well as you correctly said. we are throwing off cash in a record fashion like we've never done it before. that was one of the targets that we set for what we wanted to achieve going through the downturn, learninging how to better generate cash in our businesses and we've achieved it. and we will continue to use the cash very wisely. and invest it into all kinds of things to create value. we are currently building out our system in saudi arabia. we are building the lowest costs refinery smilter, mine and mill that has ever been built on this planet. as you said, we are bringing back three facilities here in the u.s. and also that we're using our cash for. so on the pension side we

will most likely put some into financing the pensions and we will also use it for growing in some areas. we have a pretty ambitious growth plan. >> it looks like. we will have to leave it there but it sounds like a good start for this new yearment thank you so much for coming on our program. always a pleasure talking with you. >> pleasure, likewise. >> we've been speaking with klaus >> tom: here are the stories in tonight's n.b.r. newswheel: worries about european debt had blue chip stocks some under pressure. the dow fell 37 points, the nasdaq gained four, while the s&p 500 was up a point. trading volume started the week with under a billion shares on the big board and almost two billion on the nasdaq. over $20 billion worth of deals in the works today. the biggest? duke energy is buying progress energy for nearly $14 billion. we'll run down all of the day's deals in tonight's "market focus."

and the trans alaska pipeline was down for a third day today, with no sign of a fix. a leak at a pumping station is to blame. normally, the pipeline carries 630,000 barrels a day. the shutdown pushed oil prices higher, up $1.22 to $89.25 a barrel in new york trading. >> reporter: this is diane eastabrook. fuel economy and optimism are tops at the north american international auto show. i'll have details coming up from detroit. >> susie: it's one of the worst- kept secrets in telecom. tomorrow, apple is expected to make official plans to roll out the iphone on the verizon wireless network. that had investors hanging up on rival at&t today, sending shares down 2%. darren gersh looks at the implications of apple ending its exclusive iphone affair with at&t. >> reporter: so just what kind of iphone will we see tomorrow? the betting is apple will announce an iphone 4 tweaked slightly so it can run on the verizon wireless network.

while apple does like to surprise people, "consumer reports'" paul reynolds isn't expecting a complete overhaul tomorrow. >> if it is sort of a transitional iphone that is basically the iphone 4 modified, then i think people need to think carefully about signing on for a two-year contract with a phone that is already falling a little bit behind the competition. >> reporter: in the past, apple has announced a new iphone in june. but whatever comes out tomorrow, a deal with verizon is a clear winner for apple. analysts expect apple will sell up to 13 million iphones through verizon. add in at&t sales and you get 22 million iphones sold in the united states this year-- a 50% jump over last year. and analysts estimate apple will get $400 for each phone sold by either carrier. but verizon should also do well, says telecomm analyst john

hodulik, since an iphone user pays an additional $35 a month for a data plan. >> a smartphone customer is a better customer than a traditional customer. an iphone customer is a better customer than a traditional smartphone customer. >> reporter: but hodulik expects at&t to fight back with more incentives, more marketing and more aggressive efforts to keep customers now that it is losing its exclusive right to sell iphone service. hodulik's firm has done business with att in the past year. >> i wouldn't call it a new war or anything, but i would think the level of competitive intensity is going to go up as a result of the loss of exclusivity, as every other carrier tries to defend their market share. so that is likely cause margins to compress industry wide in the first half of 2011. >> reporter: the iphone battle is expected to accelerate the trend, seen at the recent consumer electronics show, to more powerful mobile phones with bigger screens and more features. >> and the promise here is that faster networks, faster

processing will give us smart phones that are even more like little computers in our pockets. >> reporter: the competition between apple's iphone and the google android will not only give consumers more choices, it is also helping drive the u.s. economy forward. apple and google are on track to dominate the global market for mobile phone operating systems. darren gersh, "nightly business report," washington. >> susie: and tom, i'll be talking with verizon president and chief operating officer lowell mcadam tomorrow at that event.

>> tom: let's take a look at tonight's market focus... monday certainly lived up its reputation as an acquisition announcement day with several deals hitting the market. and we'll begin with the deal creating the biggest utility in the u.s. duke energy and progress will combine. here are the details. duke will pay $13.7 billion in stock for progress. based upon the closing price of duke, progress shareholders get just under $46 per share. the combo would have electricity customers stretched over six states. shares of progress moved down

below the purchase price. shares started rallying six months ago as acquisition talks began. duke energy shares also slipped, down 1% on a huge pick-up in volume. the deal means duke will have more business in the regulated electricity market. maybe a small concern there. in the food business, dupont looks to have the winning bid for danish company danisco. it makes food ingredients and enzymes. dupont's offer is $6.3 billion, most in cash. the deal gives dupont a leading developer of biofuels. interesting move here. dupont shares saw heavy volume today, sliding 1.5%. but they have been rallying nicely over the past year, up more than 40%. while we're talking about food, sara lee stock jumped to another

52-week high. nice move. 4.5%. a group of investors reportedly is putting together an offer. sara lee already rejected a buyout offer from a brazilian firm and is in the process of splitting its meat and coffee operations into two companies. and hugh hefner finally is consummating his buyout of the company he founded, playboy. shares jumped 17% on almost ten times their usual volume. back in july, hefner offered $5.50 per share. this offer is for $6.15 per share. it was a different kind of deal after the close tonight between semiconductor companies nvidia and intel. under a new agreement, intel will pay nvidia $1.5 billion for certain nvidia technology. nvidia will get certain intel technology as well. this deal ends a five-year legal battle. nvidia was among the best- performing tech stocks today, up almost 4%, and another 5% after the close.

shares have jumped 30% in a week. intel was up a fraction today. a.m.d. led technology today, up 4% to its first close above $9 since may. but shares gave up most of today's gains after the close when it announced c.e.o. dirk meyer resigned, effective immediately. for-profit education stocks were slammed today. strayer education lost more than a fifth of its value. new student enrollment fell 20%. devry fell 10%. apollo group s however, after the close, apollo was up 10% of this closing price. why? apollo's earnings came in much better than expected. revenues increased, but margins fell. it was able to beat the street. solar power stocks were hot today, thanks to a brighter outlook and a new deal. l.d.k. solar led the way, up 18% as it raised its outlook. sunpower added almost 9% after signing a power deal with edison international in california.

tomorrow, one to watch may be supervalu. the supermarket has been trying to stage a turnaround amid higher food prices. that's tonight's "market focus." >> susie: china said today said it expects auto sales to cool off this year, ending a three- year boom. that news came as the north american international auto show got underway in detroit, with the big automakers forecasting a jump in u.s. sales. as diane eastabrook reports, there was lots of optimism on display-- something that's been missing from detroit for a few

years. >> it's time for chrysler to come back onto the stage... >> reporter: chrysler kicked off the north american international auto show as the comeback kid. the company unleashed an aggressively restyled 300 sedan, after appearing at last year's show with no new products. but what a difference a year makes. buoyed by increasing sales last fall, the auto industry is making a u-turn out of its worst downturn in decades. there's renewed optimism and a refreshed approach to selling cars and trucks. g.m., known mostly for its big trucks and sport utilities, unveiled two new small cars-- the buick verano and the chevrolet sonic. g.m. north american president mark reuss says a government-led bankruptcy reorganization helped the company reduce costs so it can make small cars profitably. and making these new cars also means more jobs at g.m.

>> we're going to do that at the lake orion assembly plant. it's an assembly plant that was closed when we went through some pretty dark times in the whole financial crisis, and now we're going to re-open that with the buick verano and sonic this fall. >> reporter: green is definitely the big buzzword at this show. there are more electric plug ins, more hybrids, and even cars made with lighter materials. the c-max is what ford calls a multi-activity vehicle. the wagon-like product can seat up to seven people. its eco-boost engine combines direct fuel injection and low- inertia turbocharging, providing better fuel economy than a standard internal combusion engine. a five-passenger version will be offered as a hybrid and electric plug-in model. c.e.o. alan mulally says ford's strategy is to provide all things to all consumers, especially with gasoline prices heading up. >> the real thing about ford is to get volume from the same platform, so we can get the cost

down, so we can make it the most affordable for you, and that's the key for all the electrification. toyota is expanding its popular prius. an electric plug-in will be out in about a year. toyota motor sales' donald esmond says the car will get 13 miles per charge. the back-up gasoline engine takes over from there. >> for someone who is running to the store for a short commute, it's the perfect vehicle. and, at the same time you can get in and take a longer trip. >> reporter: behind the scenes, the president and c.e.o. of hyundai motor america gave us a sneak peak of the velositer. the sporty, three-door coupe is targeted at the gen y market. lighter-weight steel will help the velositer get up to 40 miles a gallon of fuel. and the price is right for the gen y market, $17,000. john krafcik thinks the car will sell well even if the job market stays stuck in neutral. >> even to the extent that a lot of gen y don't have jobs, we know that parents are often

helping out with purchases like this one. and, we think there are a lot of things with this car to appeal, not just to gen y members, but also to the parents who might be co-signing. >> reporter: industry watchers think auto companies could sell up to 13 million vehicles in the u.s. this year-- that's about a million and a half more than last. i.h.s. global insight auto analyst rebecca lindland says the economy continues to be the wild card. we have to see better employment levels, we have to see the housing market stabilize. we have to see some things happen, but with a muted recovery we're still expecting 13.1 million units. many car makers say recent sales have convinced them americans are ready to buy, and they think they have the products they want in their driveways. diane eastabrook, "nightly business report," detroit. >> tom: tomorrow, our coverage continues from the north american international auto show with a look at the latest hits and misses. and, our word on the street is "networking." as in the networks powering the

internet and keeping computers, smartphones and tablets connected. james rogers of thestreet.com will be here with three top networking stocks. >> susie: things are changing for the way morgan stanley makes trades with its own money. it will spin off its proprietary trading desk by the end of next year. when that happens, the 60 employees in that unit will launch their own independent advisory firm. the move is in response to a provision in the financial regulatory bill passed last summer-- the so-called volcker rule. morgan stanley's not alone in taking this step. other banks are also closing their trading desks. >> tom: the biggest insider trading case in u.s. history is now a little bigger. federal regulators charged the co-founder of a new york hedge fund and three other people with insider trading. it's all part of the government's massive case involving the galleon group. court documents show google, polycom and hilton are among the stocks illegally traded by those

charged today. there are now 27 defendants in the securities and exchange commission's case. >> tom: finally, it's said if you can make it there, you can make it anywhere.

but that remains to be seen for wal-mart. we're talking about new york, so the discount retailer is beefing up efforts to open a store in new york city. the company is mailing ads to potential shoppers, claiming wal-mart can help the big apple save money and live better. its new york specific web site went live today. wal-mart says a poll of a thousand new yorkers found 71% support wal-mart coming to the city. susie, on wednesday, new york's city council holds a hearing to discuss it. tom, like many new yorkers i was happy when home depot moved it into manhattan. i feel the same about wal-mart. it will be great. >> tom: the struggle for real estate for those big brox retailers that is nightly business report. i'm tom hudson, have a great evening. >> susie: hope su have a great evening as well. i'm susie gharib. good night everyone. hope to see all of you again tomorrow night.

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