rising rates, from mortgages to credit cards to auto and

student loans, why next week's fed meetings could hit the wallet and hit it hard. >> crude mood, if energy production is at record levels, why are energy prices at five-month highs and why aren't we feeling relief at the pump. man of steel hits the theaters can he strengthen the warner brother's franchise. we have that and more tonight on nightly business report for friday, june 14th. good evening everybody i'm bill griffith. stocks ended with a triple digit loss but the key gauge everybody is fixed on is interest rates. with the pull back rates have spiked over the last two months as wall street tries to figure out if and when the federal reserve will wind down the bond buying program. more clues could come over the next week when the fed meeting occurs, and when it does come to

rates, the big one for most people is died to their homes, with a 30-year mortgage around 6% and trending higher, who do rising rates hurt and do they slow the recovery? >> reporter: anyone who bought a home ten years ago knows today's mortgage rates are a huge bargain, but rising rates are still spooking the market. >> i'm starting to see, actually, some of the first-time homebuyers realize this is the time to get into the market. >> reporter: the 30-year fixed loan is 4.15% last week up from 3.59% in the beginning of pay. a 14-month high. while that pushed refinance applications down 36% in a month, purchase applications fell just under 2%. some home builders are actually seeing sales gain. >> it's the equivalent of a price increase. it creates unagain see. we're seeing more sales now because rates are creeping up slowly.

if that continues and we stay in a manageable range, we'll be fine. >> reporter: rates mean nothing to today's buyers. 32% in buyers in april were all cash up from 29% ago, no mortgage at all. they are keeping the distressed end of the market going. 1/5th were investors. california a big investor market where sales are surging. the typical mortgage payment was $1,227 that was up from $1,006 a year ago. last month's typical payment was still 47% the 1989 peak and 57% below the latest 2006 peak. so who do rising rates hurt? first-time buyers who accounted for 29% of home purchases in april compared to their usual 40

plus percent. >> we might have to see buyers lower expectations. >> reporter: mortgage rates are rising with prices. buyers are losing spending power but potential sellers are gaining home equity, allowing them to move up. it begs the question, does it even out? not on the mortgage rates increasing, it could lead to higher car loan rates, credit did cards, student debt and more. >> reporter: americans will run up $47 billion in new credit card debt this year according to a new study from card hub.com. >> i pay my bills for that one card all the time and always more than the minimum payment and i cannot seem to pay it. >> reporter: off economists say if higher interest rates are coming, consumers will see them on the unpaid credit card balances. >> on the credit cards you'll

see rates move up fairly rapidly if rates continue to rise, which is a big if. >> reporter: low interest rates made new cars more affordable with retail sales up in may, up 1. 8%. but leading economists say the auto industry will offer creative financing insen ticeni >> the monthly payment is important and how they can manage that and anything the auto industry can do to minimize that payment is helping to sell cars. >> reporter: it's not sparking anything like mart kthe market anxiety. >> you do want to get out of debt quicker. nobody wants to have the feeling of actually having to owe somebody anything, so with student loans being as expensive

as they are, i want to get them out of the way as quick as possible. >> reporter: the one silver lining, gasoline prices are lower than this time last year. as one person we talked to today, we'll take anything we can get. for nightly business report, i'm hampton pearson in washington. earlier stocks ended on the downside today following a decline in consumer confidence in june, industrial production flat in may and a surprising half a percent increase mostly on rising food and energy costs. after four days, the sizable losses this week the averages ended lower for the third week out of the past four. the dow lost 106 but still managed to close above the 15,000 level. the nasdaq was down by 21. the snp 500 was off by nine points. the yield on fell slightly today, foreigners have been bailing

since before the market drop. that private overseas investors sold out of a record $30 billion in treasury bonds and notes in april and foreign governments dumps an additional 55 billion. that kind of attitude is rest nating, higher payroll taxes and cuts in u.s. government spending have posted downside risks to the country's economic outlook and will likely shave about 1.5% off u.s. growth this year. those cuts part of the sequester legislation that kicked in march 1st and led to furloughs today, a one-day shut down of the irs, housing and urban development and eps and office of management and budget. the largest municipal bankruptcy in history today by failing to make payments on $2.5 billion in debt. the state apointed financial

manager also asked creditors to take about 10 cents on the dollars of what the city owes them. it's designed to save cash to pay for police, fire and other city services. crude oil prices in the future's market settled at a five-month high up more than a dollar a barrel. prices have surged nearly 2% just this week. traders say the reason for the price spike is the political turmoil in syria. although it's not an oil exporter they are surrounded by places like iraq, turkey, lebanon and isreal. john, great to have you here with us. >> good evening. >> i don't get this. we've been hearing for awhile now these reports about the u.s. is getting close to energy independence. we have record oil supplies.

you kind of expect a price break. why are prices going up? >> it's a hope for energy self-reliance and not independence. it's a global market. you string together the problems that you just related to us all, production problems, that is, within opec about 2 million barrels per day are offline, whether libya, some of the african countries and embargo on iran, it adds up to tipping the balance globely to a tighter market rather than over supply situation, even though we have record inventories we have here in the united states. >> they are pushing the price up beyond what it should be based on supply and demand out there. is that the case? >> i guess if there weren't riots in turkey or if there wasn't a potential problem in syria between the u.s. and russia as a approximate see war,

the specklators would have no reason to buy up all the oil they can to avoid the rush. there is a rational why traders do what they do. the 2 million barrels i went through, it's real, and demand is sufficient enough out there that that's what -- we need those 2 million barrels to push the prices down to the '80s and '70s. because of what has gone on again, it didn't happen. >> what can we expect to pay at the gas pump, noticing around new york it's gets close to $4 a gallon. what do you see across the country? >> that's another irritating factor. we have all this oil and may be in the process of trading the crude oil addiction to a gasoline addiction. we closed refineries on the east coast, a number of others have been through extended maintenance. the people in midwest are paying unbelievable amounts for gas,

$4, $4.50, $5 a gallon -- >> really, already at $5? >> yeah, european refineries right now are in extended shut down getting ready for a ramp up in august and into july 4th, look for $4 a gallon. >> do you ever expect more refineries to be built? when was the last time we had a repineally built in the united states? >> you have to go bar 1970s, early '70s. there are smaller tea pat refineries to process shale oil in north carolina and other places, more locally so you'll be less reliant. so we may see some of that, but other than that, no, they are closing. they are closing in europe. they are closing here -- >> because it's not profitable. >> it's not profitable. the industry is going through a rationization like we've seen with the airline industry i have. >> thank you, john. have a great weekend.

>> thank you. still ahead on the program, if you build it, they will come. so china built homes, lots of them but so far no one is coming. we'll tell you why. first, let's get a check how the international markets closed today. well, the rivalry between boeing and europe's airbus to build the biggest passenger jet ever ramped up a bit more today. at next week's paris air show, boeing will reportedly outline plans to build an even version of the massive 787 dreamliner jet, the new one that can hold 323 passengers. in the meantime, after years of delays and billions in

development costs, airbus launched the wide body in france today. the a 350 with the upturn wings is 25% more fuel efficient than comparable planes taking aim at the dreamliner. confidence in banks. according to a new poll, americans are more confident in u.s. banks than they have been in five years. now the poll gives no clear reason for the boost in confidence but suggests the up tick stems from the high score banks got on stress tests conducted by the federal reserve right after the financial crisis. there is talk of a cable company deal, talk so far in market focus tonight. the charter communications looking for acquisitions in timewarner cable but timewarner said they had no interest in the deal. they surged on higher than normal volume. charter touching a new all-time high, it gained more than 5%.

american express led the financials lowers as an analyst lowered the rating from equal weight to over weight saying future growth potential is held back by slower revenue growth. they raised the price target to $82 and shares dropped closing at 7297. this irish drug company is trying to fend off a hostile take over for $13 a share. investors hope this turns into a bidding war at a higher price. shares gained more than 8% on heavy volume closing at $13.66. worries about the future of monster beverage. the american medical association is expected to recommend a ban on high energy drinks to anyone under the age of 18. investors decided not to wait for the news and sold the stock. monster beverage down almost 4.5% to $59.26.

our market monitor says the market will go through a sloppy sideways move. michael, when you sit here with the dow jones 3% below the all-time high, you think there will be more coming, don't you? >> i do. you know, a 3% correction given the strength of the up trend in this market, that would be absolutely the minimum of the kind of pull back we should expect. however, given that the fed is pushing a lot of quantitative easing into the market, we might have a shallower than normal pull back and we might work out over bought sentiment by being sloppy and sideways throughout the summer. >> how much of a correction, michael? how big? >> you know, i wouldn't be surprised, if, you know, we limit the downsize, say for example on the snp 500 to 1600 which would be a very shallow modest pull back by his tore

ri -- historical standards. you got recovery in autos and housing being offset by fiscal drag out of washington and thanks to that, you keep the feds printing the money. >> let's talk about what you would do to protect yourself or those investments you feel are attractive now. you got the power share and ztf right now, yes? >> absolutely. when we look for value in the marketplace, we go shopping where other people don't want to go, and if you think about where investors have been very comfortable in this bull market, it's been in the stable business model, dividend oriented names and on our model, those are 30 to 35% over value. go to the opposite end of the spectrum, you look at the very volatile industrial technology, the oil exploration and production, those names are 35 to 40% under valued and as the economy stabilized, we think investors will return to those names. >> okay. >> now you can do stock

selection there but given the risk, we think bundling them into a single eft is the way to go. >> let's start with discover financial, dff on the big bored. why do you like this one? >> well, we like this one and largely because it's got a hidden gem. in audition to the well-known credit card component of their business, they are also one of the three players in the payment processing business. so you've got the bank networks, you've got american express and you've got discover and discover is taking market share from the banks and american express faster than anybody else. they signed an agreement with paypal that gives them a tremendous opportunity for growth over the next several years and in audition to that they are a balance sheet lengther and as those credit card balances grow, so do their earnings. the old hp, they messed up a

bit, maybe over paid on the acquisition with the most recent earnings, it sounds like they turned the corner there. >> any disclosures to tell us about in those? >> i invest in all our portfolios so that means i any every one of these names in my account. >> thanks for joining us tonight. >> thank you. going through a construction boom building rows and rows of homes and apartments but sometimes the building was in the wrong place. those urban hot spots are now looking more like ghost towns. >> reporter: if you wanted a build a housing project ten times larger than central park, this is what it would look lock. in china authorities spending billions to erect hundreds of thousands of apartments. the idea, if they build it, lit

come. we're not worried about a house l bubble. we need more homes. china is constructing new homes as part of the aggressive push to build out the cities. by 2025 china is projected to have 20 cities with over a million people each compared to the u.s. with nine. the move is meant to raise incomes here and create a bigger consumer class but the concern is there is a mismatch in investment potentially littering china with uninhabited ghost towns. >> there is no -- there isn't such a huge demand there, so you build this huge infrastructure there not used, so that's going to be a huge waste of public money. >> reporter: only ten years ago this area used to be all farm land but today it's part of the largest public housing project in china. this country is constructing 36 million new subsidized homes, even so new city slickers like

this one in beijing can't afford to buy one. no matter where you go here she says housing is expensive. with so many empty apartments, concerns are rising all the buildings could lead to a local debt crisis but many worry it over blown. >> they have a lot of power in their hands. they can look at how the economy is growing and try to build, build, build ahead to satisfy demand ahead. >> reporter: a reminder in this state, if you build it, you can force them to come. for nightly business report. >> coming up, if you were watching yesterday and i know i was, you saw george lucas and steven spielberg say one day you'll be paying a whole lot more to see a movie. guess what? that day has come. but first, top commodities, treasuries physical therapied

today. -- faired today. the up scale sport, won over millions of women with th price yoga gear plans to open up stores just for men. it may be known for the costly recall of see through women's yoga pants so the big question will men dare to buy lulu's wear. >> it doesn't seem manly to me. >> in the unisex store i probably could meet more women. >> the embarrassing recall, today the company posted a rather add for a new chief executive. candidates for the quote head boss person will often need to

concomplicate, hold a head stance for ten minutes and bring yoga to mars within five years. later the companyish shuped a statement saying the post was for fun. >> they were just kidding, sort of. paramount pictures hope many will go to the movie man of steal. will an advertising blitz draw more movie goers in or drive them away? julia has the story. >> reporter: man of steal swoops into 4200 u.s. theaters this weekend. warner brothers superman groups $21 million at the box office thursday between 75 million and $100 million. >> always kind of a fan of comic and superman has been around since i was a child. >> this will be one of the biggest superman movies made. >> reporter: they would like to turn the take on it which cost 200 million dollar to produce

like a franchise like the dark knight that grows 2.5 billion-dollar worldwide. to get the word out they worked with 100 promeotional tie-ins like walmart with glasses. campaigns with the national guard and chrysler and knnoki a. >> they can't buy media to get into the isles of the grocery store or other specific places that these partners can bring them into, and just generally speaking, if they are able to create that surround sound this is an event movie, that helps them open the picture. >> reporter: now the super hero showdown is on. man of steal not only has the potential to create a franchise but bring new life into the justice league charters to compete with the avengers from disney's marvel. warner brothers struggled to turn it into franchises.

green lantern fell flat. in contrast iron man three that opened six weeks ago grossed $1.2 billion around the world. it's the latest in the string of hits from marvel's avinengers a iron man and thor were considered second tier. we'll see if warner brothers can do the same with the man of steel and other classic charters. and finally tonight, when george lucas told nbr viewers last night that the price of going to the movies may soon hit $50 a ticket, many people found it hard to believe, including us. >> you'll end up with fewer theaters, bigger theaters with a lot of nice things. going to the movies is going to cost you $50, maybe $100, maybe $150.

like going to broadway for a football game. >> what happens sooner than he thought, paramount picture social security offering $50 tickets for "world war z." you get to see the movie two days before the premiere, a movie size poster, custom 3 d glasses and an hd stream and a small popcorn. does it make sense, $50 or wait for the dvd? >> i would wait unless brad pitt was there to shake my hand. i remember in college taking a young lady to see a movie and fl flinched when i saw the ticket went up to $5. >> you're dating yourself, bill. >> i know. i'm susie gharib, thanks for watching and to all the fathers out there, have a happy father's day. >> i'm bill griffith, have a great night and log on to nbr.com.