this is "nightly business report." with tyler mathisen and sue herera. fighting words. the government says apple's rhetoric is false and it should open an encrypted iphone used by a california gunman. rally fizzles. the european central bank cut rates and stocks take off. then the air came out of the balloon. so what happened? and muscling up. why general motors thinks a legendary brand is ready to roar again. all that and more for thursday, march 10th. good evening and welcome. tyler mathisen is on assignment tonight. the justice department filed its latest response in the fight over encryption, calling apple's rhetoric false and corrosive. the government wants apple to comply with the fbi to unlock an

iphone used by one of the gunmen in a december attack in san bernardino, california, which left 14 people dead. the government also said in this case apple "deliberately raised technological barriers" and that apple can remove those bare yerls. so let's bring amon jaffers in for more. the justice department wording was extremely strong -- really tough language from doj. i want to read an excerpt to give you a sense how strong this language was, writing apple attacks the allritz act, the 1789 law the government is relying on, attacked as air cake, the court order as leading to a police state, and the fbi investigation as shoddy, while extolling itself as the primary guardian of americans' privacy. the department of justice saying apple is holing itself up on a pedestal as the guardian of america's privacy when in reality the department of justice says this is about

terrorism and access to a particular phone under a legal warrant. this is this back and forth blizzard of paperwork that we're going to see now between apple and the government ahead of this march, end of march hearing, where we'll see both parties in court and they could argue it out in front of the judge. >> the public opinion is so divided on this. the latest nbc news/"wall street journal" poll basically said 47% say that apple should not cooperate and open the phone. 42% say it should. it's fascinating. >> it is very tight. you notice there both sides below 50%. so there's no rieal consensus i the country what ought to be done here. this is a case everyone who's watching it thinks might be headed to the supreme court because it's one of those fundamental tests of america's liberties versus law enforcement's ability to go after criminals that's going to have to be decided by a high court because a lot of this technology, these questions of

encryption, are so new to the courts and the legal system. >> one of apple's claims is they would have to devote an enormous amount of man power and a lot of hours, if they decided to cooperate with the government. the government counters it would take probably six engineers and two weeks. >> right. >> there's ground somewhere in there. >> that's right. look, the government doesn't buy apple's argument that this would be unduly burdensome on apple to create this software that the government wants apple to create here. they also say that apple doesn't have any first amendment rights or fifth amendment rights that pertain to this specific request from the government. so the government very skeptical of apple as you would expect them to be in these court filings. it's very argumentative and an intense argument. >> the next date is when? >> end of march. i believe the hearing will be march 22nd. that's when we'll see both sides have a chance to argue in front of the judge, who issued the original order in favor of the government's position here, presumably whichever side she

comes down on, the person, the party that's not happy is going to appeal it. i think this will go to the ninth circuit after that, then possibly up to the supreme court. >> thank you so much, we appreciate it. for most of the day the story was the european central bank's decision to cut interest rates and expand its economic stimulus programs. julia chatterly has the details from frankfurt, germany. >> reporter: investors were hoping for a ba zuk ka. mario draghi, president of the european central bank, more than obliged. he announced his 25% increase in the monthly asset purchases. this in an effort to keep bond yields down, keep mortgage costs and consumer loan costs down. he also announced four big new lending facilities, four-year money that can be borrowed at zero rate. get this he said if the banks can get their net lending above a certain threshold, they'll be paid to do it. so all the focus really in this

meeting about pushing cash out to the real economy and making sure the banks aren't being damaged too much by negative deposit rates. he did take those further into negative territory but at the same time you see this effort to offset some of the impact that's having on bank profitability. we saw bank stocks certainly rally in the european session today. what else he announced, though, and this is the big one, they're going to be buying corporate bonds in europe as well. they won't buy bank bonds but we're still seeing a huge increase in the available assets that they're now willing to buy. i have to say, he also mentioned the fact that rates in europe will remain significantly low beyond the end of this program, which is march 2017. so while there was an effort to get cash up to the real economy, protect the profitability of banks, you have to feel sorry for savers in germany and more broadly in the eurozone.

those moves by ecb were originally welcomed by investors. stocks jumped but reversed course, at one point down 1% during the day. then in the end stocks recovered and kind of hugged the flat line. the dow losing 5 points to 16,995. the nasdaq dropped 12. the s&p 500 was able to scratch out a fractional gain. all of that had some people asking, what happened? >> reporter: what happened to our rally? ecb head mario draghi initially did everything the market expected. reduced rates, expanded the qe vertebral, announced they will be buying bonds, stocks went up, euro went down, bond yields went down, at least in europe. at the end press conference a remark changed everything, he said he didn't anticipate the need to further reduce rates. okay. that doesn't sound like much. but suddenly everything reversed. stocks in europe and the u.s., futures started dropping. germany ended down 2% for the

did day. why did that happen? that doesn't sound very controversial, maybe draghi wanted to send a more balanced message that rates will keep going down forever. that sounds reasonable. the market seemed surprised and at the least indicates the market's addiction to stimulus programs is still very strong. it didn't help that oil dropped at the open. so many big oil names like exxonmobil struggled all day to get into the green. one positive aspect of the ecb moves was the dollar weakened against euro. a weaker dollar is good news for multi national companies because it makes exports cheaper for others to buy. companies like coke and philip morris and pepsi and clorox did go into the green although only fractionally. bill adams joins to us talk about the european central bank's move and what it might mean for the u.s. economy and the federal reserve. he's senior international economist with pnc financial.

nice to have you here. >> good to be back. >> i guess the question is what does it mean to those of us here in the united states that have investment dollars committed? because now our fed is going in the opposite direction of the european central bank and many other central banks around the world. >> well, it was a tricky easing measure from the ecb. there were a couple of different tools that they used to ease. they used them in different degrees today. i think the takeaway is that monetary policy is getting easier overseas. you would expect that to cause a stronger dollar over the course of this year. but markets had expected more than we got today. i think this reaction with a weaker dollar, stronger euro, might not last. but in either case i think it's probably not going to be enough to stop the fed from continuing to gradually raise rates in the united states in 2016. >> what about our economy here at home? europe obviously is struggling

and in many cases has not recovered at all from the financial crisis. yet our economy, we're getting some mixed data, but in general things look like we're on an upswing. >> well, the u.s. economy now, we see the sharp divergence between the domestic side of the u.s. economy, the service sector, the labor market, which looks like they're fairly good and getting better. then the export side of the u.s. economy and energy and manufacturing that are really struggling to get the strength of the u.s. dollar. >> what about those two sectors, because some people look at the whip saw we're seeing in oil and the down draft we're seeing in other areas as recessionary. or deflationary. do either of those two terms fit with your scenario for the economy? >> i don't think those apply to the u.s. economy. in the u.s. we're looking to real gdp growth of 2% in 2016 or maybe a little better. the unemployment rate will

probably continue to move, edge lower over the course of the year, maybe reach 4.7% by the end of the year. that's pretty good by u.s. standards. for low oil prices obviously it's negative for oil producers, but it's like a tax cut for american consumers. and it should boost consumer spending power. and that will mean more spending on other goods and services in the u.s. economy. >> are you happy with wage growth? because we're starting to see a little bit of -- not wage inflation necessarily, but growth in wages. >> it's encouraging that we are seeing wage growth start to trend higher. it's not where we expect it to be. i think we'll probably see faster wage growth by the end of this year and that's because the labor market in the united states is tightening and this is the part of the business cycle where we traditionally do see wages accelerate. >> on that note, bill, thank you so much for your perspective, we appreciate it. bill adams with pnc financial. mean time, american express

is talking directly to investors and addressing their concerns that the company's business model is broken. more from san francisco. >> reporter: american express has evolved from freight mail to travelers checks to being the largest u.s. credit card issuer by purchases. but investors are now doubting that its business model can withstand customer defections, regulatory challenges and a rapidly changing competitive landscape. ceo touting the company for 15 years addressed those concerns head-on thursday at the start of american express' investor day. >> let me start with the first question i mentioned. is the american express business model fundamentally broken? i can tell you with complete confidence that the answer here is, no. some elements of our business haven't performed as well as we'd like in this environment. yes, we're ending our costco partnership.

but our model isn't broken, nor is it static. >> but the costco agreement will hurt. amex hit half its u.s. consumer billing target, mainly due to costco. amex is being dropped by fidelity and jet blue. due to this environment he said the prior earnings target of 12% to 15% earnings per share of growth would no longer be appropriate though he declined to set a new target. despite warren buffett holding a more than 15% stake in the company it was the dow's worst perform they are year. before news of executive reorganization and cost-cutting plan pulled it off the lows. >> we've demonstrated we can hit the expense goals we set for ourselves and i'm confident we can achieve our most recent billion-dollar target. the priority for me and for all of our business leaders is sustainably growing revenue. our board is fully supportive of our plans. >> that support he mentioned

dampened investor speculation the company could pursue a merger, acquisition, or even ceo change. instead, amex is refocusing on one of its existing revenue streams, lending. now a "major strategic thrust" though the company's website boasts its one competitive advantage is not having to rely on it. as the strategy was unveiled amex shares fell. analysts said a focus on organic growth wouldn't necessarily be surprising but also wouldn't be likely to change what it called "increasingly negative investor sentiment." coming up, small business gets some help fighting regulation and some very onerous licensing laws.

which it comes to small business owners, regulation is always near the top of their concerns. even more so than the economy. and in our latest look at small business matters, small business owners have an advocate challenging some of these laws. kate rogers has more from charleston, south carolina. >> so i have flash cards here that i made up. hundreds of them. >> reporter: kimberly billups studied three months to pass the tour guide exam no inn hopes of opening her own business. billups said a city law requiring a 200-question test based on a 500-page book and an oral exam stands in her way. >> the fathers, the authors, the

signers of the declaration of independence and the constitution are buried here in our backyard. the hypocrisy of all of this, you know -- i know they're rolling over in their grave. >> reporter: around the country government regulations and red tape have long plagued main street but now would-be entrepreneurs like billups are fighting back with the help of d.c.-based nonprofit law firm the institute for justice, which filed suit on billups' behalf in january. >> there's nothing more fundamental to the idea of the american dream is the idea that you can start your own business, be your own boss. the last thing we need is for the government to stand in between a would-be entrepreneur and a willing, fully informed customer. >> reporter: the city of charleston says its tourism industry reaches nearly 5 million visitors and it has a responsibility to regulate it in a manner that "provides for continued success and prosperity while protect gts the public." in wisconsin the controversy is over cookies. lisa takes pride in the muffins

and cookies she serves to guests at her bed and breakfast, but selling those same goods to customers could potentially land her in jail for up to six months. the reason? the state doesn't allow for the sale of baked goods not made in a licensed commercial kitchen, which she says could cost nearly $50,000. so she can serve her guests the treats, but if they want to buy some extra for the road, it's against the law. >> over the last 20 years, i've lost thousands of dollars of income of these muffins that i could be selling, along with other baked goods, to guests as they head home after staying here. >> reporter: she filed suit in january against the wisconsin department of agriculture, trade and consumer protection on behalf of heard and two other entrepreneurs. the wisconsin doj says it's reviewing the complaint. >> if we could help home bakers like myself with that on-ramp, we could really revitalize our economy on a lasting local level. that's the important ingredient to all of this.

>> reporter: for "nightly business report" in south carolina, i'm kate rogers. tonight's "market focus," the discount retailer is increasing its quarterly dividend to 25 cents from 22 cents. the company also will buy back about $1 billion in shares. dollar general also saw sales rise 7% as demand rose for candy and perishables and tobacco. shares surged more than tin% to 83.23. party city issued better than expected earnings in the latest quarter. sales growth increased more than 2% for the party supply retailer thanks to a robust hall bean shopping season. the company did however miss on revenue targets and it expects sales to come in below expectations for the year. nonetheless, shares surged 14% to 12.50. transcanada is reportedly in talks to buy natural gas company columbia. transcanada issued that statement confirming it was in

talks with an unnamed company and that no agreement had been reached. columbia pipeline shares rose more than 8.5% to 21.43. shares of transcanada fell nearly 4% to 35.66. softwaremaker nuance communications will buy back $500 million of its shares from billionaire carl icahn and some of his affiliates, the deal expected to close next week. shares fell nearly 2% to 19.81. straight ahead, how general motors hopes low gas prices will help brighten up one of its legendary brands.

lockheed martin is boast known as an aerospace contractor whose products are used by the military. but now the company has something for the commercial market and it's unique. so much so that you might say it's a bird. it's a plane. it's -- well, jane wells explains. >> reporter: one morning ten years ago, a bizarre aircraft flew out of lockheed martin's secretive works in the the california high desert, a hee yum yum-filled hybrid air ship, part blimp, part wing, with four external diesel engines to control movement. lockheed wondered if it could find customers willing to carry cargo this way to remote areas of the world. >> you back your truck and load and unload from the back side. >> reporter: ten years later the company thinks it has found customers willing to buy the airship, the lmh-1, as a

less-expensive way to deliver equipment or products to areas without infrastructure. everyone from mining operations to u.p.s. how much will it cost? >> $40 million list price, which is pretty affordable for an aircraft. >> reporter: i'm inside one of the three so-called lobes in the prototype, it's like being in a really big bounce house. when the real airship is built they think they're going to be three types bigger and longer and in total it will be able to carry 47,000 pounds of cargo. >> this is something that's going to dramatically change the way we move cargo around the world. >> reporter: grant kule is in charge of selling to the commercial market. he brings in potential customers to this mock-up of the 19-passenger gondola which lockheed had built by a hollywood set designer. there's a simulator to play with. >> did we land? >> yeah. >> oh my gosh, thank you. >> reporter: all of this in a place not used to letting in the media. i mean, this is where they built the sr-71. how unusual is it for lockheed to have kind of a separate sales

segment, if you will? >> from what i understand, it's totally unique. >> reporter: the airship geese on sale at a time when the defense side is slowing down and lockheed just announced 1,000 voluntary buyouts. while there are competitors creating other airships, lockheed hopes to be first to market bit end of 2018. it also hopes to sell hundreds of them. and the first orders are expected in the next few weeks. >> our goal has always been to do the lowest possible cost. we're focused on the cargo market. >> reporter: boyd said lockheed martin has put in over $100 million to fund this product. whether a place known for stealthy military projects can succeed in the open commercial world remains up in the air. for "nightly business report," jane wells, palmdale, california. from the air to the road. and this one is for all of you muscle car fans. chevy is rolling out two new versions of the camaro and making a push to gallop right past thehe mustang in sales. phil lebeau has more on the camaro comeback.

>> reporter: top down, engine roaring. chevy believes this will be the summer camaro comes back. leading the charge, two new versions, including a convertible. >> the first month in here our sales are up 44%. we know why people are waiting for the new for. when we introduced the new car it was like, wow, this is great. >> reporter: the camaro still has the sound and look that he wanted it define the muscle car. and yes, you can get six and eight-cylinder versions. but in a change that may assemble strange to camaro fans there's a new addition with a four-cylinder engine. with gas at well under $2 a gallon, chevy believes muscle cars will be even more attractive. not only because people will spent less at the pump, but they'll also have more money to pay for a muscle car like the new camaro. >> in order for these new vehicles to survive they've got to get repeat sales which means

the woman or guy that has one today has to feel good enough about that ownership that in two, four years they're going to buy again. cheap fuel makes that an easier decision. >> reporter: the muscle car war between chevy and ford has seen the latest version of the mustang race ahead of the camaro in the last year when sales dipped. still, gm says camaros in a showroom will bring in buyers. but increasingly those buying a camaro or a ford mustang are looking for more than pure power and a throaty roar. >> the cars we're driving today are all about handling and precise steering and brakes. that's a different formula than what the muscle car's known for. i think we're going to open this up to a whole bunch of new buyers. >> reporter: a new age for an iconic car, still pushing the thrill of opening it up and cruising down the highway. phil lebeau, "nightly business report," las vegas. a few months ago we told you about the spending controversy at the wounded warrior project.

now cbs is reporting the ceo and c.o.o. of that organization have been fired. the crity came under fire when a cbs investigation revealed latchish spending. and that is "nightly business report" for tonight. i'm sue herera. thank for watching. we want to remind you, this is the time of year your public television station seeks your support and we thank you for that. have a great evening. we'll see you tomorrow. this program is brought you to in part by

a passion for better understanding our world. accomplish the same thing -- they both allow us to venture into our world and experience great art, music, history, food, and people. and by... bread for the world, an advocacy organization working to end hunger and poverty at home and abroad. hi, i'm rick steves, back with more of the best of europe. this time we're enjoying the delights of the french countryside -- it's the chateaux of the loire river valley. thanks for joining us.