>> a modest improvement in the labor market helps to calm worries on wall street. >> it was better than expected or certainly better than feared. that doesn't make it a good report. it's still a slow recovery in the united states. >> the message in the market now is that its guilty until proven innocent. you need to have better data in front of you, you're not just going to blindly pay for it right now. qt we recap the wild week and get some advice on where best to invest now. it's "nightly business report" for friday, august 5. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

captioning sponsored by wpbt >> tom: good evening and thanks for joining us. susie gharib is off tonight. i'm joined by suzanne pratt. suzanne, a much calmer day for stock investors today after yesterday's awful rout thanks in part to a better-than-expected report on jobs. >> suzanne: tom, hiring actually accelerated last month. employers added 117,000 new jobs to their payrolls in july. that nudged the unemployment lower, to 9.1% from 9.2% in >> tom: while the stock indices stabilized from the sell-off yesterday, that was only after

deeper losses in the morning. at one point, the dow industrial index was down almost 250 points. by the closing bell, the dow finished up almost 61 points, the nasdaq lost about 24 while the s&p 500 was essentially unchanged. trading volume rising from yesterday's pace to over two billion shares on the big board and 3.7 billion on the nasdaq. these are the highest volume numbers in more than a year. >> suzanne: now for a closer look at that july employment report. economists say the numbers were just okay, not great, but they should be good enough to silence talk of a recession, at least for now. >> reporter: the sigh of relief on trading floors today was nearly audible. >> it's not really a strong report by any means. it's really suggesting a slow recovery. there have been concerns the economy may already be dipping into a new recession or double dip. i think we've gotten a sign in this employment report that

we're still on a very slow, a very gradual recovery path. >> reporter: economist steve gallagher says the problem is a slow economy can only make jobs at a very slow pace. in the last three months, employers have added a total of 216,000 new jobs to payrolls. today, we learned that more jobs were actually created in may and june than originally reported. but nearly 14 million americans remain unemployed. and, with job growth still anemic, the unemployment rate is going to stay elevated. economist anthony chan says if we're lucky, we'll get as many as 150,000 new jobs a month through the end of this year. >> that, i think, will be just barely enough to hold the unemployment rate. we may see a little bit of a decline in the unemployment rate between now and the end of the year, and, the hope and expectation is that next year we start to see a little bit stronger growth. >> reporter: economists believe most new jobs will come from the private sector as they did last month.

the government, particularly at the state and local level, cut positions again in july. it was the ninth straight month of job losses in the government sector. >> it sounds like it's bad news initially and it certainly is for those employees. but, we are seeing state and local governments address their underlying problems. they've been spending too much, issuing a lot of debt in last few years. >> reporter: experts say once local governments get their fiscal houses in order, they will start hiring again, helping to heal the battered job market. as for what else can be done to help the u.s. economy and labor market? economists say the recent drop in prices at the pump should put more money in consumers' pockets. >> if you've been tracking energy prices certainly over the last couple of weeks and days you've seen that those prices have begun to move south and that should support growth. >> suzanne: still ahead, our coverage of the job market continues. we profile a new program looking to get america back to work one

job at a time, and we'll hear how a school principal landed her new job in this month's "you're hired." >> tom: lost in the headlines this week was corporate earnings. second quarter earnings season is tapering off and profits show a double-digit increase. earnings per share are up more than 18% from a year ago, marking the seventh straight quarter of double-digit growth. seven out of 10 companies have turned in better-than-expected results. our "market monitor" tonight is adam parker, chief u.s. equity strategist at morgan stanley. adam, welcome to nightly business report. do you think investors have ignored these earnings with ault other noise coming out of the markets and in washington this week? >> investors have paid attention to them but there's been less upside this quarter than the previous. you're right, the estimates have come in better than expected but the guidance was probably a little bit worse than expected.

some specific industries, like industrials, which are considered a proxy for the economy and the economic health were a little bit light so i would say it's a bit of a mixed bag, more than an unbridled positive if you really look at earnings season. >> ed: is the market disconnected from earnings season because of all the concerns about the weak economy? >> tom: or do you think it actually is connected considering the less-than-stellar outlook we're seeing from some of the most sensitive sectors? >> i think it really is connected. there are two things you have to consider when you think about the stock market. one is the earnings, which you just alluded to. and the other is the multiple, the price-to-earnings or how much you're going to pay for the earnings and our differentiated call at morgan stanley this year has been on that multiple. we think you're going to pay less for the earnings because you're going to be concerned about the sustainability. you're going to be concerned about some of the macro issues you alluded to. >> ed: to that point, your sense of the earnings growth at -- >> tom: to that point, your

sense of the earnings growth not sustainable in the second half of the year? >> we don't think so. our view has been from the beginning of the year that the estimates in the first half of the year were achievable but in the second half of this year or in 2012 we think that the analysts have are just too optimistic, particularly for profit margins. if you look under the hood at the earnings season, one thing that's quite interesting is that the rewards for beating have been far smaller than the penalty for missing, and that's a key to thinking about how we're going to set up in the second half of the year. >> tom: that's certainly the setup for portfolio strategy. adam, stick around. we'll get to your investment ideas later on in the program. >> suzanne: we've been talking about the rough week for investors. let's run the numbers. on the week, the dow traded lower in three of five sessions for a net loss of almost 700 points or 5.75%. the nasdaq also getting clobbered on the week, down 223 points or over 8%. and the s&p 500 had a 7% drop, losing almost 93 points on the week. while it was a rough week for

stocks, gold shined, hitting record price highs. the yellow metal gained $20 dollars or 1% on the week. >> tom: rumors, reversals, ups and downs-- these are what fuel markets, and made for a memorable week. next week, brace yourself, might be just as notable. darren gersh reminds us of what we went through this week and takes a peek forward. >> reporter: if you like your market metaphors grim, this was your kind of week. >> this was definitely a week where you had a tremendous amount of fear and loathing in the trenches. >> reporter: the end of the washington melodrama did not help. instead, the last-minute deal to avert a debt default leaves some with a nagging suspicion lawmakers are not up to managing the nation's challenges. >> congress has now approved a compromise to reduce the deficit and avert a default that would have devastated our economy. >> reporter: monday's debt limit deal merely removed the threat of disaster, freeing investors

to focus on the possibility of catastrophe. >> i don't think there is any good news. you got to give me a reason to buy stocks. >> reporter: reaons not to buy? italy and spain come to mind. what would be a dream summer vacation has turned into an investor's nightmare. the rescue package put together by european leaders in july is now viewed as inadequate. yesterday, the head of the european central bank decided to buy irish and portugese government bonds, but not italian and spanish bonds. that left markets to draw disturbing conclusions. >> that the rot is still there, that the structural issues facing europe are still there, and investors began to pick away at it. >> reporter: and the united states wasn't looking much better. >> one other thing that we have is the macroeconomic data that's been coming in recent weeks, has been universally negative. >> reporter: which left the market on thursday fearing the worst. >> double dip-- a recession double dip. >> reporter: and now here we are.

the jobs report was a welcome surprise for a moment, and then it wasn't. the dark cloud over europe drove markets down today and then markets reversed course on rumors the european central bank might have changed its mind about buying italian and spanish debt, which sets the stage for next week. the federal reserve meets and will likely have something to say about all this on tuesday. new reports on small business and retail sales will help clarify whether the u.s. economy is losing speed. and investors will be watching and wondering next week whether european banks are having problems getting their hands on the cash they need to keep running. >> it begins to have a feel of late 2007, 2008. >> reporter: so next week it all ends. unless, of course, it doesn't. darren gersh, "nightly business report," washington. >> suzanne: barron's says next week could be another wild one but at least traders and investors can maybe catch up on

rest this weekend and sleep more calmly tonight than yesterday. >> tom: suzanne, whatever happened to the august markets? clearly not here. big volume, big moves, no doubt about it. it continued today although a little bit calmer. let's get you updated with tonight's market focus. while stocks ended the day mixed, the market threatened to make another nasty plunge this morning. we begin with today's chart of the dow jones industrial average shows the volatility today. we saw an initial pop thanks to the jobs numbers, then the dow sank-- down almost 250 points just before noon eastern over worries about europe. then trading finally stabilized as the index eked out a small gain. the sell-off we have seen this week has hit the economically sensitive sectors this morning. the energy sector is down about 10% since last friday's close. material and financial stocks have each lost more than 9% as well.

speaking of financial stocks, check out bank of america. the stock was waylaid today, falling hard-- down 7.5%. big move today, look at that. volume was huge, more than a half billion shares traded. some blame the sharp drop and heavy volume on high-frequency traders. those trading systems are computer based and can trade large amounts of stock very, very fast, looking to profit from even the smallest move in shares. the selling does take b. of a. down to its lowest price since the spring of 2009. we're just below that number tonight. consumer stocks were the strongest today, led by clorox and its 3.6% rally. investor carl icahn has offered to buy the company for $80 per share. kraft foods jumped more than 3% a day after announcing its split into two companies. and philip morris was up almost 3%.

consumer giant proctor and gamble had a better than expected quarter as it fights against rising commodity prices. earnings came in two cents per share ahead of estimates. p&g has been raising prices to keep up with those commodity costs. its outlook came in about as expected. shares were among those bouncing higher, up just under 2%. while emerging markets have been a bright spot for business, the u.s. still accounts for more than a third of its business. impressed with last night's quarterly results showing resilience in bookings, a host of analysts raise their price targets for priceline.com. shares popped 9.2%, volumen putting the stock back over $500 per share. weighing on technology stocks

today was brocade communications. it makes switches and software to connect computer servers and data storage gear. turns out, its quarter is not going as good as expected. it cut its financial forecasts due to weak data storage sales. the stock was hit hard, losing almost a third of its value. volume was very strong on the sell off to a new 52-week low. finally, imperial sugar had quite the sour trade today, off almost 60%. it continues to lose money due to lower sales volumes and higher raw sugar prices. and that's tonight's market focus.

>> suzanne: president obama is hoping to create more jobs for military veterans by using tax incentives. today, the president announced a plan to offer breaks to small businesses if they hire any of america's one million veterans. he's asking companies to employ 100,000 vets by 2013. meanwhile, a grassroots group called "one job for america" is also appealing to employers to create work. the organization wants every u.s. business to commit to hiring one new employee. anna olson visited a company in virginia that's taken on the challenge. >> my name is william stilwell. i've been working here at the pappas group for about six months as a designer. >> reporter: william stilwell is enjoying his job at this advertising firm in arlington, virginia, but he went through a lot to get here. he'd been laid off four times before landing this job.

>> you almost start feeling, "well, i go somewhere and it starts to fall down." geez, everywhere i go, it was, "no, we don't need you anymore," "sorry, we're phasing that out," or "we're shutting down." >> reporter: then a grassroots group called "one job for america" changed his luck. the concept of "one job for america" is simple: get people back to work one job at a time. business owners go online and take the pledge to create a single job. so far, more than 200 companies, including the pappas group, have done just that. carla emil, whose background is in advertising, started the movement earlier this year. >> it was a response to my frustration with the unemployment situation in this country, and my idea was to ask every business in america to create one new job. >> as a small business owner in particular, when you read on the site, "what can one job do?" i

can really relate to that. >> reporter: anthony pappas took the "one job for america" pledge and hired william stilwell. he believes he's helping the economy and benefiting from his new employee's work. >> he has great skills, and he fit really well, and it was sort of that, if you will, happy marriage really quickly. >> reporter: but with many employers struggling, not everyone is as anxious to take the pledge. carla emil hoped to create thousands of jobs by now. today, only 74 employees have been hired. --76 >> i'm not giving up. i'm continuing to work at this, and my ultimate goal is to create thousands of jobs. >> reporter: yet for william stilwell, just one job was enough to give him the stability he needed. >> it's, you know, a very solid place to be, and i know that we've got bigger and better things ahead of us, and that's a really cool thing to be involved in. >> reporter: anna olson, "nightly business report," arlington, virginia. >> tom: here's what we're watching for next week. our friday "market monitor" guest?

jason pride, director of investment strategy at glenmede. one big item on the economic calendar? as we mentioned, federal reserve policy makers meet tuesday, with a decision on interest rates due that afternoon. monday, market strategist jeff saut explains why he's not bearish on stocks despite the market turmoil. >> suzanne: some 4,000 federal aviation administration workers will be back on the job monday. the senate passed temporary legislation that will end a partial shutdown of the f.a.a. that has lasted nearly two weeks. congress is expected to make a permanent decision on the agency's funding when it returns from the august recess. the stoppage has cost the government $400 million in uncollected airline plane ticket taxes. it also put an additional 70,000 airport construction-related jobs on hold. >> tom: the post office says it won't be able to pay its bills come september because it's already $5.7 billion in the red for the year. the postal service is asking congress to refund mandatory

over-payments made to its employee retirement fund. it also wants to close post offices, cut saturday delivery and raise postal rates. the rise of online bill paying and the recession are seen as the top causes for the losses. >> tom: with corporate earnings

>> tom: with corporate earnings still exhibiting a healthy growth rate, but coming under pressure, our "market monitor" is playing defense. adam parker, chief u.s. equity strategist at morgan stanley, is back with us. adam, if you're playing the fence, what makes a defensive strategy for investment in this kind of climate with this volatility? >> it really is relative estimate achieveability. you want to own stocks in sectors where the estimates are more achievable. where they have less downside should the economy slow. so we're recommending areas like health care, utilities and energy, where we think the estimates are more achievable in the second half of the year than the broader market. we're recommending investors avoid or underweight sectors like consumer discretionary and industrials where the estimates, in our mind, accelerate too much and are therefore unachievable. >> tom: you're looking for areas that do have kind of a lower hurdle so they can get over. you mentioned health care. let's pull this one out.

we're using exchange-traded funds as proxies for the sector. it's come off its most recent highs -- the entire market has, this week -- but this has been very good performance over the past year. what do you think fueled this outside of the higher expectations? >> in january this year, when we went overweight health care, i thought it was very contrarian. the idea was that the estimates were achievable, the valuation was compelling. most professional investors had heard of things like the generics cliff and health care reform and these companies had a lot of cash on the balance sheet to point in a productive direction. i still think that's true despite the fact it's less contrarian, the estimates are more achievable in the second half of the year and that should be a relative safe haven in this risk-averse environment we're in. >> tom: you mentioned utilities, certainly dividend yielda a big attraction. what do you make of the utilities space and the concern

about lower demand if the economy continues to soften? >> i think you nailed it. if you're constructing a portfolio, you have to be mindful of the beta or the risk in the portfolio. utilities stocks are generally lower beta, generally higher xreeld yielding and the analysts have a good view of what the earnings outlook looks like. if i'm worried, which i am, that the estimates are too high in the broader market i probably have a better understanding. i'm a little bit safer with the estimates in utilities so again, it's that relative estimate achieveability that makes that sector attractive right now. >> tom: managing expectations, no doubt about it. do youoin any the e. t. a.'s that we use as proxies? >> of course not. >> ed: chief u.s. equity strategist at morgan stanley. >> suzanne: just a reminder. you catch us online at n.b.r. on pbs.org. there, you can comment on our blog or watch any programs that you may have missed. and finally, with so many americans unemployed for so long, we highlight one job seeker's experience finding

work. it's our series, "you're hired." tonight, alicia brown explains how she landed in the principal's office at a new charter school in florida. >> suzanne: that's "nightly >> my name is alicia brown and i am the proud principal of la mensa academy new jngszs school in palm beach gardens, florida. i have been unemployed for over a year. this job i applied through a&a staffing but i went through the professional placement network to work for swan and broward county. they're also an employee placement service as well. when the typical person would hear, "oh, you have been unemployed for a year and now you're a principal?" it is amazing. i'm thrilled. because it's something i wanted to do for a long time, ever since i was a teacher's aide, i set out in my mind that i wanted to achieve this goal, and 13,

now 14 years later, at 31, i'm fulfilling that dream when i was 17 years old. the job-hunting experience, you cannot get frustrated and tired. it is an emotional experience a lot of the time. i was very persistent and i held onto my faith. a lot of people, they started to -- for being out of work for so long, that i have met, you know, they started to just kind of let go of their goals and ambitions. and i said, "no, i cannot settle." new principal, new school, new kids. >> suzanne: we'll be hearing more stories like alicia's in the coming months. >> tom: it certainly would do us a lot of good. a lot of patience, persistence and pride in that. we'll continue to feature those stories ever every month. >> suzae: that's nightly

business report. i'm suzanne pratt. go yankees. goodnight, tom. >> tom: goodnight, suzanne. we hope to see you back here next week. "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. >> we are pbs.