>> this is nbr. captioning sponsored by wpbt >> susie: good evening. i'm susie gharib. tom is off tonight. facebook losing face with investors. shares tumbled to a new low as many early investors were freed up to sell. germany's merkel talks and investors listen-- encouraging words help markets perk up from europe to wall street. and corn farmers aren't the only ones hurting from the midwest drought. now, cattle ranchers are feeling the heat. that and more tonight on nbr! investors can thank germany's angela merkel for today's market rally. speaking in canada, the german chancellor said she's committed to defending the euro. her comments come just two weeks after european central bank president mario draghi said he'd do whatever it takes to preserve the euro.

merkel repeated that commitment, saying, "we feel committed to do everything we can in order to maintain the common currency." she went on to say that draghi's promises "are completely in line with what we've said all along." investors were encouraged, and stocks rose in europe and here in the u.s. the dow gained 85 points, the nasdaq added 31, and the s&p up about ten points. joining us now, david kelly, chief market strategist at j.p. morgan funds. so david, investors are really counting on central bankers in europe and in the united states to do something to rescue the global economy. realistically what should they be expecting to happen? >> i don't really think that's quite the way to frame it i think what we're seeing particularly in europe, we believe the european central bank would prevent a meltdown. we're not expecting a big liftoff in european economic growth. we expect them to stay in

recession. we expect the u.s. just to continue to grow slowly. the key thing is there is no disaster. and if you look at markets, interest rates, think of bond markets and equity markets the valuations are so far a coup that if you don't have a disaster looming there is no way stocks should be this low given how interest rates are. you are seeing interest rates move up and stock prices move up as people begin to move away from a disastrous scenario. >> so what are the fundamentals that you are focusing on. a lot of people i talked to are looking at the economiment but evening-- the u.s. economy but even there are some are saying there is a lot to be encouraged by the recovery. others are pointing to other statistics that are lessen couraging like the jobs market, like manufacturing. what are you focusing on that gives, that tells you which direction the market is going? >> housing, i think is very important. if there is a swing vote in all of this it is the housing.

we saw very big numbers on single family building permits. building permits overall were at the highest level since 2008. if housing moves up and home prices begin to move that up will help with wealth w economic activity, confidence. i think that will help the u.s. economy move forward. we're really not in a position to slump here because everybody is behaving in such a conservative manner anyway, as houses picks up that adds to economic growth. and corporate profits are doing very well also. the second quarter was the strongest quarter in american history for operating earnings. overall, housing is what makes us feel more optimistic but the basic point of the economy doesn't look like it will stall out here. >> what should investors do. should they buy into these rallies or just sit tight? >> well, i think they should take a long look at where they should be strategically. a lot of people have become more and more conservative over the years and we have a huge amount of money sitting in cash. huge inflows into bond funds,

money moving into equity funds. if this is money they are not going to spend for the next five or ten years, money truly being invested, you invest it where the value is the value is in equities, i think the rest of the world has more problems in a way than the communitied states. i can see a path towards stronger growth in the united states but being overweight in equities takes advantage of improving the u.s. economy. >> all right, we'll leave it there. thanks some of. david kelley of jpmorgan fund investors also sorted through a new batch of economic reports today. on the job front, new claims for jobless benefits rose by 2,000 in the past week. but the four-week moving average dipped slightly, showing continued improvement in the labor market. and a mixed picture on housing: builders broke ground on fewer homes in july, but permits f new homes surged 30%, reaching a four-year high.

sylvia hall reports. >> reporter: things have been good, even encouraging, for the housing market recently, but data out today sent an unexpected reminder that the recovery is fragile. home builders started fewer projects in july than in june-- the pace of housing starts fell just over 1% to annual rate of 746,000 homes. june starts were also revised lower. economists aren't putting much stock in july's pullback. >> the month-to-month decline, to us, we would read as a blip, and the long-term trends are still very positive, from our perspective. >> reporter: home builders share that confidence. new building permits hit a four- year high last month, rising nearly 7% and boosting hopes for housing's comeback. >> housing remains in a recovery phase. it started a more broad-based recovery phase this year. we expect that to continue. and it's one of the main bright spots right now for the u.s. economy. and that may be hard for some people to accept and see and understand because we've been so negative on housing for so long.

but it's actually a situation where there's more light and less tunnel. >> reporter: economist michael gapen says, this year, the housing sector is on track to start about half the new homes it would have before the market crashed. that means, despite all the signs of recovery, housing still has a long way to go. sylvia hall, nbr, washington. >> reporter: i'm erika miller in southampton, new york. coming up, i'll take you behind the scenes at an ice company that makes 225 tons of ice a day! >> susie: relief came to part of the drought-stricken midwest today-- rain drenched iowa through ohio. but some of the southern areas are still scorched. the drought is taking a huge toll on livestock farmers. the heat is stressing animals and the cost to feed them is soaring. as diane eastabrook reports, that will eventually mean much higher meat prices in the future. >> reporter: it's lunch time at the walter farm in ottawa, illinois. but this summer, the cows are

dining on hay, instead of pasture grass they normally eat this time of year. >> it's been so dry so long, it's pretty much burnt up. like right here, with the last rain, there's some grass starting to come. but it might take awhile; it might not recover this year. >> reporter: this is yet another cost the drought is dealing u.s. farmers. walter typically doesn't start feeding his cows hay until late fall, but with no grass, he had to start months earlier. and it's costing him a bundle. >> here just in central illinois, small square bails are selling for $7 to $8 a bail, when typically they're around $4 a bail. large round bails, those are over $200 a ton, corn is over $8 a bushel. >> reporter: the high cost of feed is also forcing many feed lots to liquidate herds early. while that could flood the market with beef in the short run, driving down prices, it's likely to mean less of it at a much higher price down the road. >> the market is in a very difficult spot.

it takes profitability in the industry over an extended period of time to get people to begin to expand. >> reporter: with feed costs so high, walter says he'll probably send his calves to market early, and he has no plans to buy any more cows. >> three years ago, i had one cow, and we bought a lot to build the herd. we're not going to grow the herd very much this year as in what we've done in the past. >> reporter: and there's another downside to the drought-- heat stress is making it harder for the females to get pregnant, so walter says it could take a lot longer for him to rebuild his herd. diane eastabrook, nbr, ottawa, illinois.

>> susie: shares of facebook hitting a new low today as millions of insider shareholders, including employees, were freed up to sell. the expiration of this first so-called "lock up" led to a wave of selling. the stock tumbled more than 6% to just under $20 a share, down 48% since facebook went public in may. joining us now to talk about the outlook for facebook, scott kessler, equity analyst at s&p capital i.q. scott, you just upgraded facebook stock to a buy from a hold. make a case why people should buy facebook at $20 a share? >> well, thanks a lot, susie. so the case really has three points. number one, we see growth. a lot of people seem to talk about-facebook like they don't generate revenues or growth.

but we're looking for 25% or more revenue growth in each of the next three years. two f you look at what facebook has been doing seems like they are more focused on execution when it comes to both monday at thisization and mobile. that has been a big question. and but we've seen traction with request to sponsored stories, for example. and three a lot of people understand that we look the a facebook and say this is a stock that is very overvalued. but frankly f you look at it at $20 a share oring so, subtract out 5950 a share per cash and investments they v you are talking about a stock that trades at a pe based on next year's estimates at about 23 times earnings which is lardly unreasonable at this level. so based on all those factors, we understand the negativity but we're taking the other side of that trade right now. >> so what's the problem with this stock then why hasn't it worked out for facebook. >> well, i think a couple of

reasons. the most obvious is that they really haven't seemed to have gotten over the fact that the ipo seemed to be price toad high. too many shares were issued. there were obviously glitches in the entire ipo process. that really scared a lot of people. and then they seemingly haven't gotten people to understand the growth story and the potential in terms of total addressable that they have. you add that to the fact that yes, there has been a lot of negativity and these lockup expirations have been coming and there really hasn't been a lot to get excited about on the positive side. we expect that to change perhaps in the coming weeks and months as its company becomes more proactive in talking with the investment public. >> and scott wa, about mark zuckerberg, is he the right person to be c.e.o.? i hear a lot of chat their maybe it's time for him to step aside. >> you know, i don't know if that's the case. obviously this is an

8-year-old company and mark zuckerberg has been running it from the get-go. we think that maybe he wasn't as engaged as the ipo approached him throughout that process but if you listen him on the q2 conference call we think de a very good job of articulating his level of engage. as well as his vision for the future. we think that he very much is the right person for the job right now. >> all right. we'll see what happens with this stock. scott kessler, thanks a lot, equity analyst at s&p capital iq. a different kind of day for apple investors. shares rose over $5 today to a new closing high, $636.34, as apple paid out its first dividend to shareholders in 17 years. now, investors are counting on new product announcements that could help push apple shares even higher. ruben ramirez reports. >> reporter: apple stores like this one have seen unprecedented foot traffic, with people visiting one of their 363 retailers around the world.

here at this store in new york city, the glass exterior might be sleek and minimalist, but it's what's inside the counts. the macbooks, the ipads, the ipods, the iphones-- anticipation is building for new products. most analysts expect apple to unveil its iphone 5 on september 12, and start selling them a few weeks later. there is also talk of a refreshed version of the ipad and an ipad mini. wedbush's scott sutherland says the tech giant may have given away some clues in its last quarterly report. >> they were a little more bullish than we would have thought, with the iphone sales declining. so i think part of their guidance for this quarter was inclusive of the iphone, but we still think there is probably upside if there is a september launch within a few countries for the last two weeks. >> reporter: sutherland says even if apple launches the new iiphone in late september, some quick number crunching delivers big results. the company could ship six million iphones and bring in close to an additional

$4 billion. at the end of the day, that would break down to an extra 50 cents a share in profits for the current quarter. but if that's not enough to get investors excited, consider c.e.o. tim cook's reinstatement of the dividend and his share buyback plans. >> two other things that are driving the stock higher, apart from the dividend, that are not fundamental include potential inclusion in the dow jones, and a stock split, which has been gaining some steam lately. >> reporter: over the past year, shares are up 67%. on average, most analysts do see more upside for apple shares, with a target of around $743 a share. that's more than double where the shares were trading last fall. ruben ramirez, nbr, new york

>> susie: on wall street, the trading day started out quietly, but those comments from angela merkel that we told you about put investors in a buying mood. stocks closed at their highest level since april, putting the s&p within striking distance of a four-year high. the index ended up almost ten points. the big theme of the day was retail, with many big chain stores reporting quarterly earnings. but networking and home-building stocks also did well. let's start with wal-mart, the biggest decliner in the dow. the world's largest retailer posted disappointing quarterly revenues and profits, due to slowing sales in the u.s. the company has been slashing prices to lure cost-conscious shoppers, and that has some investors nervous about profit margins. although, the company raised its full-year profit forecast, that didn't do much to help the stock. it fell 3% today, but is still

up on the year. dollar tree shares also fell today by nearly dollar, even though second-quarter profits surged more than 25%. that earnings gain was less than many on wall street expected. in addition, the company lowered its earnings and sales forecasts for the third quarter. a much better day for sears stockholders. the shares jumped after the company reported a loss that was right in line with expectations. revenue came in light due to softer sales at the company's sears and kmart stores. but today, investors were optimistic, sending the shares up more than 6%. best buy shares inched up more than a dollar, but not because of earnings. earlier this month, the founder of the firm, richard schulze made a public bid to take the company private. now, best buy's board is asking him to reveal the names of private equity firms that would back the buyout. there could also be a buyout in the works for video game publisher electronic arts. the company makes the popular "sim city" and "battlefield" games, and is reportedly in

early-stage talks with several private equity firms. shares of the company rose 72 cents to $13.81, providing some relief for investors who've watched the stock tumble to historic lows in recent weeks. now, let's switch from retail to some other sector movers. cisco systems was the biggest gainer in the dow today, up nearly 10%. as we reported last night, the networking company reported better than expected sales and profits, and a big dividend hike. cisco's upbeat comments helped lift shares of other networking stocks like f-5 networks, riverbed technology, and alcatel-lucent. all jumped more than 4%. home-building stocks also rallied today on that news that building permits surged in july. pulte group rose the most, but toll brothers, d.r. horton and lennar rose 3% or more. and finally, we see plus signs across the board for each of the most actively traded e.t.f.s. and that's tonight's "market

focus." buy online or go to the store? that's a common question for parents and kids this back-to- school season. a new study shows that online saves time, but stores offer bigger savings. joining us with more, jordy leiser. he's c.e.o. of stella-service, the company that did the survey. >> jordy t was a very interesting survey. let's go down the specifics of it. starting with shopping time, on-line versus shopping in the store. what did you find? >> well, as you would expect

it actually takes alot long tore go through the process of buying a product in the store. you have to get in the car, you have to drive to the store. so of course the contrary shopping on-line it doesn't take too long, you page a few clicks and check out and the shopping process is over. >> all right. and when it comes to choices of things that you can buy, the selection process, on-line, store better than on-line. i was surprised by that. >> yeah, we were surprised by that as well. the election of the items on-line was actually less than what it was in store. and partially we think that is because on-line they didn't offer that many items that were full priced. they offered just the discounted items in store and you could find those products in store but on-line it was the expensive items so it was an inconsistent offering between on-line and in store. >> all right. tell us about price. that's always an important issue for consumers withness this was interesting for us as well. we found the price was actually higher when are you shopping on-line. usually you think about

lower prices on-line but because some of those lower priced items you couldn't find them on-line, you actually had to go and buy them in the store, once you take into account shipping expenses, the full experience is onlyly about $20 more on average on-line versus going in store. >> all right. and then you surveyed several stores, target, wal-mart, costco, staples, officemax and office depot. office depot was the best choice y was that? >> yeah, i mean office depot did great and i think partially because it was lightning fast shipping. something that is really important to everyone. and so they shipped their products which were delivered in the next day or two days max whereas the average was about four day force the other retailers and they offered a consistent and broad selection across both their on-line and store locations. and finally they had great customer support. it only took about -- >> we're going have to leave it there. we have run out of time. thanks so much.

c.e.o. of stella service. >> thank you this has been one of the warmest summers on record. that means demand for ice is heating up. but making large volumes of ice isn't as simple as you might think. in tonight's "made in america," erika miller takes us to one of the largest ice makers in the northeast. >> reporter: this is one way to cool off in the summertime. now, this is a whole different level of cold. it's only 20 degrees at the nuzzolese brothers ice factory in southampton new york. the factory produces 225 tons of ice a day, the equivalent of 80,000 five-pound bags. >> these machines run 24/7. >> reporter: 24/7? >> these machines, they've been running since memorial day. >> reporter: vincent nuzzolese owns the firm, which was run by his father and grandfather before him. now, a fourth generation pitches

in, nuzzolese's three sons. >> i've been doing this every summer since i was seven years old. >> i'm a mechanic. i manage my ice plant, fix breakdowns. >> i started downstairs stacking, like everyone else. then, i gradually moved up. i'm in distribution right now. >> reporter: making the ice is surprisingly complicated. first, water is pumped into icemakers and frozen while its moving. >> that's why our ice is crystal clear, our ice cube, unlike what you have in your refrigerator. where the water comes in, it freezes and it's white. >> reporter: then, the ice is cut into cubes and put on a conveyer belt, where it heads to this storage bin. next, the ice gets bagged... and put in this freezer. >> the ice settles. it gets cured overnight. it goes out on the trucks the next day. we don't like to put ice on trucks the same day as its processed. >> reporter: in a day or so, it's ready for delivery to over 3,000 customers. the company also makes blocks of

ice for ice sculptures. one advantage of the ice business is it's immune to economic ups and downs. >> americans drink in good times, and they drink even more in bad times! >> reporter: ice may be recession proof, but it's not weather proof. predicting whether the summer is going to be a hot or a cold one is the company's biggest business challenge. and because it's based in the northeast, the business is also seasonal. >> we make 80% of our money in four months. >> reporter: for some people, working in freezing temperatures might be unappealing. but for the nuzzolese family, it's a cool business. it's cold, wet, noisy... i've always enjoyed it. i was always interested in more of the mechanicals of it, so i get to deal with machines every day. it's the perfect job for me. >> reporter: erika miller, nbr, southampton, new york. >> susie: that's "nightly business report" for thursday, august 16. we want to remind you this is

the time of year your public television station seeks your support. i'm susie gharib. good night, everyone. we'll see you online at nbr.com, and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org