that and more tonight on n.b.r.! wall street was on a stimulus high today. stocks surged sharply, as investors and traders are counting on central banks in europe and the u.s. to announce moves next week to stimulate the global economy. here's why they're feeling confident. the heads of france and germany said today they are ready to take bolder steps to deal with the region's debt problems. in a statement they said they determined to do everything to protect the euro area. their comments came a day after the president of europe's central bank said he was prepared to do quote "whatever it takes to preserve the euro" and to ease borrowing costs for spain and italy. all this comes as federal reserve chairman bernanke has been hinting that the fed is stands ready to stimulate the u.s. economy and policymakers could do just that when they meet on tuesday in washington. with so much help potentially on the way, the dow skyrocketed almost 190 points, closing above

the psychologically important 13,000 level. the nasdaq jumped 65 points and the s&p rose 26 points. for thweek, the jor averag were a up or more and one market strategist says the markets are what's driving action in europe. >> the financial markets are the ultimate vigilante in all of this. they create enough pressure when things are not good to force governments which are largely dysfunctional into making the right decisions. >> susie: marshall front is also tonight's market monitor guest. we'll talk more with him in just a few moments and we'll also look more closely at the latest reading on u.s. economic growth. "nightly business report" is brought to you by:

captioning sponsored by wpbt >> tom: the american economy grew in the second quarter, but the pace of that growth slowed down as consumers pulled back on spending. the economgrew at a 1.5% annual rate between aprian june according to the commerce department. that's slightly higher than economist expectations. but it represents the slowest growth since last fall and down considerably from the faster growth the economy experienced during the holidays last year and the first three months of this year. it turns out, those growth rates were revised higher, making the second quarter slowdown that much more. the drag on the second quarter economy came from a slowdown in spending by consumers. it was the smallest gain in a year with spending on big items, especially vehicles, falling. spending from the federal government down to city halls also fell and that comes ahead

of the automatic spending cuts due to take effect next year at the federal level. this report is the latest to show a slowing recovery just as the federal reserve meets next tuesday and wednesday to discuss its options. >> next week, we think that they may consider extending the zero rate guidance. right now, they're telling us that they will be on hold until late 2014. they may decide to go ahead and extend that to 2015. >> tom: the d's main interest rate has been near zero for four years. and it turns out, the great recession wasn't quite so deep. revisions released today said the economy shrank by 4.7% during the recession, slightly less than the previous estimate of 5.1%. >> susie: despite that, consumers are still feeling blue. they're worried about the economy and that's why confidence among american consumers fell in july to the lowest level this year. the thomson reuters university of michigan survey shows consumer sentiment dropped to 72 this month, down from june's reading. it was expected to rise.

but it's not just consumer confidence that's collapsing. as erika miller explains, so is financial confidence. and that may be a worrisome sign for the economic recovery. >> reporter: for many, the worry is savings. >> the past few years i really haven't been able to save up. i've been using some of the savings. but i haven't saved up much. no. >> reporter: for others it's rising expenses. >> i pay more on pension and i pay more for my health benefits. >> reporter: for a variety of reasons, americans are growing more worried about their finces. a new bankrate.com survey shows 28% of americans believe their financial situation is worse now, compared to a year ago. just 23% feel better, which is the lowest reading since march. but don't blame the lousy job market. >> it was interesting to see that job security was actually the one area of financial security that consumers note is actually most improved over the last 12 months. so people no longer feel like

they're going to imminently lose their jobs. that's a step in the right direction. >> reporter: the problem, he says, is stagnant wages. >> until that paycheck starts to grow, it's going to be very difficult for people to ramp up their spending in the way we need to get this economy out of first gear. it's also going to be difficult for americans to make headway on financial security by boosting their savings. >> reporter: a drop in financial security is never a good sign. but remember, what people say is not always what they do: >> we have not found, in our work, that surveys are very predictive of actual spending by consumers. >> reporter: and, at this point, maki doesn't see any sharp decline in that spending that could derail the economic recovery. >> consumer spending is growing. it's growing at only a moderate pace however. we think that's unlikely to change significantly until one of two things happens: either we get a sharp significant rise in the stock market-- even greater than we've seen to date-- or we see the housing market come back like gangbusters.

>> reporter: it's important to remember that financial security also depends on a willingness to take charge of your finances. the bankrate survey shows only 60% of americans track their spending, which is a key to boosting savings and lowering debt. erika miller, "n.b.r.," new york. >> tom: the slow economic growth like what the u.s. has seen this year should not turn into no growth. that's the outlook from tonight's market monitor. marshall front is the chairman and chief investment officer at front barnett associates. he joins us from the c.m.e. group in chicago.

>> what gives you optimism that the slower growth the first half of the year in the u.s. isn't going to continue to slow down in the second half? >> we look at it two ways. >> top down, bottoms up. from a top down standpoint, we see earnings continuing to be reonab good. we see consumer spending at two percent in the second half of the year. we see exports a little weaker as a result of europe's continuing slowdown, but overall, we see the economy chugging along at one and a half to two percent for the rest of the year from a bottoms up standpoint our analytical model which has never failed to call a recession or recovery within six months continues to show that the economy is going to expand for the foreseeable future. >> tom: but two percent growth? how does that argue for

putting money into the stock market? >> well, if we have to look at it in terms of the alternive. clearly, two percent growth is not something to write home about. but with stocks selling at 10 or 11 times earnings, and bonds yielding pitifully, we think that the growing dividends have augered well for investors and that they are going to find their way to them once the uncertainties are clarified. >> tom: one place we've seen growth and dividends come together is technology, and you've been in this sector a long time and you continue to look xlk, the technology spider etf. what do you anticipate aught of this long term? >> l i think long term -- many long term investors are underinvested. individuals really got burned back in the late 1990s, early 2000 period, and have largely

deserted the scene. we think they'll come back, because these are company that is are going to continue to have above average earnings, above average revenue growth, and can be very widely owned. >> you also are looking to go over seas with china. pretty aggressive play considering the slowdown we've seen in china, and the slowdown for that matter in the etf that follows some of the larjter chinese stocks. ticker symbol. fxi. are you early, do you thk? >> we're probably early and the strategy would be to gradually move into it over time, the june figures in china look good. they're going to get a lot of stimulus, fiscal and monetary stimulus, and subsequent to the turnover this fall. >> tom: so looking for a chinese play there. you haven't been afraid to go overseas. >> last time we spoke to you in february, you were looking at the s&p for oil and gas

equipment services fund. that's down 10 and a half percent. but you were in developing markets in the etf in emerging markets. that's down 10%. you've taken licks. are you putting new money to work? >> definitely. when cash it available we're putting mon nethose areas, particularly the emerging marketss are going to grow much more rapidly. we see significant opportunities there. >> tom: optimism abounlds. the u.s. how about the fund? do you own the fund yourself for you and your client? >> the firm owns them, the fund owns them. >> tom: marshall front with the front barnett associates.

>> susie: apple is spending some of its huge pi of cash. it's buying mobile security firm authen-tec for $356 million. the company makes security devices for mobile devices like fingerprint readers. while apple hasn't said what it plans to do with the technology, analysts say one of authen-tec's biggest assets is its patent portfolio. authentic shareholders still need to approve the deal. likely they will. today the shares surged 66% or over $3 to close at $8.42. >> good day for shareholders all across the board, wasn't it? >> it really was.

>> it was broad base buying on the heels of more aimgz out of europe here, susie. let's go ahead and get with the market focus. and we'll see broad based buying here with a strong finish. to the week for the major u.s. stock indices, shooting up after german and french leaders pledge to do what it takes to protect the euro zone. the s&p 500 started the session in the green, after thslightly better than expected gross domestic product report for the u.s., showing a slowdown, but not as much as feared. the market popped higher around 1:30 p.m. eastern time after the joint statement from germany and france. stocks have put together two consecutive, putting the s&p 500 at its highest level since early may. it's now up 10% for the year. trading volume picked up again today. 911 million shares moved on the big board. almost 2.1 billion traded on the nasdaq. for the second session in a row all ten major sectors were higher. the health care sector led the winners, up 2.5%. technology gained 2.2%.

and the industrials were higher by 2.1%. global drug maker merck helped ignited the rally in the health care thanks to a stronger than expected quarter. merck earned four cents better than expected, as sales continued growing. newer drugs helped offset a decline in sales of older medicines. merck shares jumped more than 4%, volume more than doubled with the stock breaking out to a four and a half year high. this was the best percentage gainer among dow jones industrial stocks today. leading the entire sector was hospital operator coventry health care. the stock jumped 10.9%. it reported a stronger than expected quarter. the company has had trouble in kentucky, losing money on its medicaid business there. the losses have been shrinking with the company expecting a "reasonable profit" from its kentucky business next year. facebook saw very heavy volume z@b night's earnings call failed to

impress traders. it'sn-linearnings report was met with a new low for its stock. remember, shares came public this year at $38 dollars per share. with today's 11.7% fall, the stock is below $24, a 35% drop from its initial price in may. analysts pointed their concern at facebook's slowest revenue growth in at least a year, much higher operating costs and a lack of specifics on how to profit from the growing mobile trend. but even a much more established company saw its growth prospects questioned. late yesterday, starbucks lowered its financial forecast after a disappointing quarter. e stock fell hard down 9.4%. volume more than quadrupled. the stock is at its lowest price since january. on the heels of last night's earnings, amazon.com was rewarded with a higher share price, up 7.9%. online travel firm expedia shot up 20% thanks to a stronger than expected quarter. that helped priceline.com shares, up almost 9%.

each of the five most actively traded e.t.f.'s rallied. the strongest gains came in the emerging market fund, up 2.8%. and that's tonight's market focus. >> susie: all this week we've been looking at the dangers of cyber attacks on u.s. government, businesses and consumers. as we wrap up our look at cyber security, we turn to a company that is one of the leaders in internet security checkpoint software. joining us now, fred kost, the head of product marketing at

checkpoint. >> fred, start off by telling us, you talked to a lot of companies. what is the chief security issues that concerns businesses the most? su, susie. i think there's two things going on. one, we're finding that how company employees do their work and get their job done has changed. using the internet in different ways and social media and using a lot of new applications. so businesses are very concerned how employees are working might put them at risk for some sort of attack. the other thing they're concerned about it is if you look atttackers they've become clever and targeted in attacks. we face a challenging threat environment. both of those things have companies very concerned about security and how they secure their business today. >> susie: now, when you look at the landscape of threats out there, what companies or industries, or what sections of the country are most

vulnerable? >> what you find is everyone is vulnerable. but fnlt services or people who separate critical infrastructure are more likely to come under attack. look at the day, and the way companies run their business. any company with intellectual company, financial records, traitd secrets or any company that runs critical infrastructure could become vulnerable to attack. so it's not so much the particular sector or vertical industry that's vulnerable. it's any business could be vulnerable. and if you look at the trend, where someone takes a position against a company and launches an attack just because of the political position or the kind of product or service that company offers that, opens up the window more. so you're seeing more and more every business is vulnerable to some kind of attack. >> susie: and a variety of different kinds of attacks. so checkpoint comes to the rescue. what can a company expect you to do without getting into the details of your product,

necessarily. what can a company expect to be protected against these kind of attacks? >> the kinds of things we do is deal with the problems we talked about. companies are concerned how users are viewing allocations and viewing networks. we have ways to protect those employees and the applications they use. other concerns are bring your own device. we're sees users who want to bring devices into the workplace. and companys are concerned. we help solve that problem so companies can feel kfshtdable if an employee brings a device in, they can can be comfortable. and very much now the attackers are going after, and no longer just try to break into the network through the front door. they're more likely to try to get through reading through a website. that's how they pursue getting into the network. so we're focused to make sure

we understand these threats and protect the business with different products. >> you said a moment ago that these attackers have become clever and come up with ways -- new ways to get around the safeguards that you put in. in just a few seconds that we have left, what can companies do to stay ahead and be prepared for whatever the next >> there's no silver bullet. companies have to put in place products that attach to the threats we talk about, and protect employees and businesses from that. i think that's a key thing to do. there's no one silver bullet. soox*uds w>> susie: we have to there. fred kost of checkpoint software. >> tom: with so much of the economy dependent on consumers and shoppers confidence waning, imagine walking into a store and your smart phone lights up with a special deal. that's one of the technologies motorola solutions is launching for retailers.

diane eastabrook has the latest from the firm's headquarters outside of chicago. >> reporter: in an era of mass merchandising, shoppers sometimes feel lost in the shuffle. motorola solutions is trying to change that. dana warszona senior manager of retail vertical marketing took me on a stroll through the company's innovation center. she demonstrates one technology that let consumers use their smart phones to swipe bar codes and make purchases. >> when they are done, they simply hit transaction and they can actually start the check out process either by shifting this transaction to a cash register or perhaps even sending it to a mobile device like this where an associate can simply check them out. >> one frustration for shoppers and for stores is when items are missing or have sold out. motorola solutions has an answer for that too. video cameras monitor store shelves and let sales associates know when they need to be refilled. >> really what it is is minimizing the time that that shelf is empty which means that

the retailer isn't selling anything. >> reporter: another technology proximity awareness analytics uses wifi and smart phones to help retailers reach out to consumers when they're nearby. >> i could perhaps get a coupon saying, "hey, there's a discount on jeans, dana, we know that you were searching for this on line or something you might want to come in and check it out." >> reporter: motorola solutions says this year it will invest roughly 10% of its $8 billion in revenue developing new technologies like these. the company thinks they'll help bring more customers into stores at a time when many retailers are struggling. but motorola doesn't think the devices will replace sales people. >> there are new ways to automate and speed up the process of keeping pricing straight and keeping the inventory on the shelf and that frees the associate up to give you more of a reason to come to that store. >> reporter: some of these technologies are arriving in stores now, others could be in a retailer near you in a couple of years. diane eastabrook, "nightly business report," schaumburg, illinois.

>> susie: and finally, the 2012 london summer olympic games are finally here. while they'll be broadcast on u.s. television tonight, the games got underway in london a short while ago. rick horrow's in london for the games and has some thoughts on how the u.k. can ensure the olympics have a lasting economic impact. >> reporter: prime minister david cameron here points to a $20 billion impact with 11 million tourists and four and a half million leave behind visitors. but it's not all rosy. the london independent did a survey saying about half the brits question the investment. when the bid was won seven years ago the promised six and a half billion dollar budget. it's nearly twice that. how will the legacy be judged? first, the $760 million olympic stadium. will it be used with the right approach after the games? maybe a premiere soccer league tam or two?

and second, the inspire a generation campaign. will it resonant with the brits to make sure they go way beyond the balance sheet in accessing the success of the games. for 62 million brits, only time will tell. in london, i'm rick horrow. >> susie: next week on "n.b.r.," the fed will be the focal point. the federal reserve kicks off a two-day meeting on tuesday and it's widely expected it will announce new steps to boost the economy. we'll find out whether automakers are boosting the economy: they report july sales on wednesday. and we begin a week long look at the health of regional and community banks. investors all over the world waiting at the edge of their seats to see if they get action to boost the stock market more. >> tom: this will be our own financial olympics next week, the central bank of the united

states and europe. >> susie: let's hope we get lots of gold medals. >> tom: that's nightly business report for friday night. have a great weekend. >> susie: same to you, tom. have a great weekend, everyone. we'll see you online at nbr.com and right back here on monday night. "nightly business report" is brought to you by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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