>> susie: concern and hope about europe dominate u.s. trading again. european countries hold back on spending, but no agreement on greece. >> tom: from europe to a battle unfolding in stores across america-- beer versus liquor. we look at who's winning and how it could benefit your portfolio. it's "nightly business report" for monday, january 30. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

captioning sponsored by wpbt >> susie: good evening everyone. progress in fits and starts at a european summit meeting in brussels today, and that led to losses and a late comeback on wall street. tom, european leaders met to work on three key items: an agreement not to overspend, a permanent bailout fund to deal with the spreading financial crisis. between with still don't have a deal between greece and its lenders. a more optimistic message that europe is get on top its did debt crisis that lead to the blue chips losing 6 and 3/4 points.

on the bell after dropping in the first hour of trading, the naz was down 4, the s&p down 3 and change. >> susie: at the core of the european negotiations is the impact serious budget cutting could have on the 17 individual nations in the eurozone. sylvia hall takes a closer look at the issues facing european policymakers. >> reporter: in a meeting room in brussels, almost all of europe's leaders agreed not to spend outside their means. the u.k. and the czech republic were the holdouts. more than 1,000 miles away, debt-ridden greece hangs in the balance. the country's unemployment rate stands at almost 20% and it's facing a 14.5 billion euro bond payment due in march. germany has the finances to help, but it's demanding painful budget cuts in return. political economist matthias matthijs says germany may be holding a hard, dangerous line. >> it makes the imbalances in the european economy even worse, rather than solving them. and i think it's the imbalances

of creditors and debtors in europe that was at the heart of this crisis, not the fiscal sins of all other countries. >> reporter: he says the focus on budget cutting-- a policy called "austerity"-- in europe has the potential to make matters worse putting people out of work and distracting from pro-growth measures. >> if you can grow an economy, and we can bring down the debt- to-gdp ratio also, i think that's a big misunderstanding. america never paid back the big world war ii debt, they grew out of it. that seems to be a much more attractive solution to the problem. >> reporter: but fred bergsten of the peterson institute says the sustainability of the eurozone is riding on its members' abilities to get their fiscal houses in order. >> the long-term issues are critically important. europe created an economic and monetary union that was adequate on the monetary side, but inadequate on the economic side, and the whole experiment with the euro will collapse unless they get that reconciled. >> reporter: bergsten says

austerity is important, but agrees europe's leaders should also look hard for ways to get their economies moving again. bergsten says right now europe is not out of the woods, but he thinks the e.u., and the euro, will emerge stronger than ever. >> in the current crises, they have never gotten ahead in the sense of fully assuaging market anxieties, but at each stage when there could have been a collapse, they've come up with the necessary money, the necessary programs, and new institutional changes which are now underway which will also in the process lead them to come out stronger. >> reporter: austerity measures are already having a real impact. just today, belgian transportation workers began a 24-hour strike in protest of budget cutbacks. sylvia hall, "nightly business report," washington. >> tom: europe could be just one reason why the pace of corporate deals is slower this january compared to a year ago. there have been $42 billion dollars worth of mergers announced so far this year. that's the slowest pace since

2003, according to standard & poor's. but monday lived up to its reputation as a day to announce corporate mergers, with two separate deals totaling almost $5 billion. the biggest has the swiss conglomerate a.b.b. buying power and technology firm thomas and betts. this is a $3.9 billion cash deal, with a.b.b. paying thomas and betts shareholders $72 per share. the buyout furthers a.b.b.'s presence in the u.s. power utility equipment business, and it continues two trends we've seen with buyouts this year, according to richard peterson of s&p. >> companies with an abundance of cash on the balance sheets, the access to credit and the willingness to do deals should spring back some transactions. and more importantly, if you look at the fact that two of the three biggest deals in the u.s. involve foreign buyers, that may be a trend that we'll look forward to in 2012. >> tom: the other sizable deal announced today involves auto

parts retailer pep boys being buought out by a private equity fund. this is a $1 billion deal including debt. the deal allows pep boys 45 days to shop for other offers. if this deal closes, shareholders will get $15 per share. >> susie: speaking of deals, a lot of talk today about facebook. the social networking giant may file paperwork this week to sell its shares to the public for the first time. the "wall street journal" is reporting that the offering could value facebook at $100 billion. joining us to talk more about this? anumpam palit, head of research at greencrest capital, a new york investment firm specializing in technology. welcome to nightly business report. >> thanks for having me. >> susie: let me begin by just ask you-- asking you, is facebook really worth a hundred billion dollars. >> we don't really know all the numbers right now. and a lot of the valuation is done by speculation right now. so you know, if you think

about the company that could have been 3 and a half to 4 billion in revenue in 2011 and 7 to 7 and a half billion in 2012, about ten times revenue get together $75 billion range so the range of 75 to 100 billion, quite a large range is low end of the range. i think are you thinking about a potential compelling value. at the high end of the range are you talking about investors might be uncomfortable with in terms of the multiple. >> we still don't have all the numbers, i guess until that paperwork is actually filed it could happen this week. we don't really know. but from your experience what can investors expect in terms of how profitable is facebook and what the revenue stream is. what can they expect? >> you know, i think the revenue stream and the profitability are something that will make facebook very different than a lot of the social media ipos that we saw last year. last year we saw a lot of companies that grew very fast but struck nell terms of profitability. we estimate that facebook is

actually quite profitable, even margins potentially as high as 50%. so when you think about a company of this size, of this scale and profitability, that is really where investors will get excited. >> you know, face book has something like 800 million users. that's amazing. so i guess how much bigger can it get. that's a question many investors will be asking before they buy any shares in this company. >> absolutely. you know n a lot of ways when you think about the unique visitor growth of this company they are a victim of their own success. how much bigger can you get than 800 million users. we think that growth really in two aspects. on the first side they are going to continue to grow very strongly we believe in markets outside of the u.s. and outside of western europe so when you think about markets like russia, like india, like brazil, like south korea, there is a lot of growth opportunity for them in terms of users. when you think about them domestically and western europe the growth will not come as much from unique visitor growth but from more time spent to more engagement on the platform as face book rolls out new services like it's been

doing. movie streaming, e-commerce services on the platform, the kind of thicks that will drive engagement. >> let me put you on the pot sheer. is this a stock you think that individual investors should scramble to own? >> it all really defend-- depends on the valuation it is really too early to tempt 75 to 100 billion range they are talking about, we have to look at the numbers. only a company this seis you can talk bay range of $250 billion from low end to high end. certainly at the low end of the range i think there is compelling value. we will have to look at how much cash they are generating to get a sense of what it is worth. >> all right, anumpam, you've given use lot to think about and a preview of this facebook offering. >> thanks for having me. >> we've been speaking with anumpam palit with greencrest capital. >> still ahead tonight word on the street, technology, >> tom: still ahead, tonight's "word on the street"? "technology." thestreet.com's jill malandrino joins us for a look at how tech stocks are quietly propelling the markets higher this year.

>> susie: carnival cut its profit outlook today, saying its italian cruise ship disaster could cut 2012 earnings by as much as $175 million. in a filing with u.s. regulators, the company said it's still trying to determine the accident's impact on revenues and that it has already seen a big drop in bookings. still, carnival said it does not believe the incident will have a significant long-term impact on its business. carnival shares fell 35 cents or 1% closing at around $30 in change. they are down 12% since that accident happened earlier this month. >> tom: big competitor royal caribbean also down in sympathy today, more than 1%. let's get you wrapped up with the rest of tonight's market focus. >> tom: with no resolution yet between greece and its creditors, u.s. stocks began the week in the red but finished well off the lows of the day.

today started with a 1% drop in the first hour of trading, but the losses were pared as the session wore on, ending with just a fractional loss. with european worries back in the headlines, the u.s. financial sector saw the biggest losses, falling 1%. then the utilities and consumer staples sectors dropped a 0.5% each. bank of america shed 3%, making it the biggest loser among dow industrial stocks. it announced a reorganization of its investment banking leadership. it pointed to a "changing market environment" for the changes. b. of a.'s investment banking business saw its net income cut in half last year. separately, goldman sachs downgraded its rating on b. of a. shares to neutral. meantime, european bank stocks traded in the u.s. also saw selling pressure. barclays and deutsche bank fell more than 4% each. royal bank of scotland, which owns citizens financial, fell by 3.5%.

one consequence of the worries about europe is the u.s. bond market rally continues, dropping interest rates down to multi- week lows. the benchmark 10-year government note is now yielding 1.85%, its lowest since mid-december. the buying of u.s. government debt follows a big pop in portuguese government bonds as worries about portugal's finances build. another consequence of european worries? a strong japanese currency. japan has been trying to re- ignite its economy for more than 20 years, and among its most recent challenges has been a very strong currency. a high yen value has made it difficult for japan to increase its exports because of the expense for its foreign customers. the yen has fallen to its low against the u.s. dollar this year, and its lowest since halloween-- the latest time the bank of japan sold yen, hoping to drive down its currency. but since then, buyers have moved back in, driving up the value of the yen.

back to u.s. stocks, drug maker amylin saw strong volume and a big rally thanks to the f.d.a., giving the okay to its diabetes drug. shares shot up 17.5%. volume was 10 times normal. the drug was rejected twice by regulators wanting more info on the side effects to the heart. the medicine is injected once a week to treat type-2 diabetes. "u.s.a. today" owner gannet shed almost 7% after reporting another quarterly drop in advertising revenue for its newspapers and t.v. stations. the publisher said retailers recorded the biggest drop in ad spending between thanksgiving and christmas. share price slid 7%. we mentioned the big corporate buyouts earlier in the program. we had a couple of big companies announce asset sales. exxon mobil shed a fraction after selling its japanese subsidiary for almost $4 billion, giving up control of a refiner. u.s. steel fell almost 4% after agreeing to sell its serbian unit to that country's

government. the company calls it a nominal price and expects to take a loss. the serbian government is buying it to avoid major job losses. radioshack could be a stock to watch tomorrow. after the close tonight, the retailer warned of disappointing fourth-quarter results, and it blames sprint. shares gained 1% during the regular session but fell 20% after the warning, down below $8.5 per share. the store said sprint's changes to its customers and credit models led to fewer new and upgraded subscribers. and that's tonight's "market focus." >> susie: this coming sunday, the two best teams in football will be battling for dominance on the field. off the field, however, another competition has been brewing: sales of beer versus liquor. and you might be surprised to learn which vice has been victorious. suzanne pratt has the story. >> all choices lead you somewhere. bold choices take you where you're supposed to be. >> reporter: thanks to a hip and

cool new image, liquor, not beer, has become the choice of many alcohol drinkers. so much so that spirits sales continue to gain ground on their fizzy rival. >> what i've seen lately, actually, the trend is as far as buying spirits, it's more higher end spirits, looking at single- malt scotches, the higher-end rums, and some higher-end vodkas as well. >> reporter: in 2011, spirits accounted for more than a third of the u.s. alcohol market. a decade earlier, spirits had less than 28%. and it's beer, not wine, that's been slipping. spirits trade association c.e.o. peter cressy also credits greater cultural acceptance of hard alcohol, like bourbon, vodka and tequila. >> a really nice, well-made cocktail is a thing of art. you watch a really good bartender at one of the great bars here in new york or elsewhere, it's really pretty special.

>> reporter: bars like this one are where spirits are frequently consumed, but more drinking actually happens at home. the industry says that's in part because 37 states now are permitted to sell spirits on sundays. the beer industry, however, is battling back. anheuser busch is devoting a big chunk of its pricey super bowl ad time this sunday to bud light platinum. the new beer has a higher alcohol content and is aimed at younger, urban drinkers. but beer's problems extend beyond marketing, to the u.s. economy. that's because many out-of-work americans today tend to be beer drinkers rather than liquor consumers. so what does this booze battle mean for beverage stocks? last year, it was a bit of a mixed drink for spirits stocks, with only brown forman, the maker of jack daniels, gaining ground. beverage analyst comeal gadralwala calls the spirits industry a buy-and-hold category.

>> all of them have pretty steady dividends. they also have pretty steady buybacks. so, it's a good cash return story, along with a good secular growth story, along with the economy gets better-- a premiumization kicker to it. >> reporter: so if the drinks themselves don't keep your spirits up, then perhaps the stocks will give your portfolio a nice buzz. suzanne pratt, "nightly business report," new york.

>> tom: the year has gotten off to a good start for shareholders, but one stock index outpaces the gains elsewhere: the nasdaq. that brings us to tonight's "word on the street," "technology." jill malandrino is with thestreet.com. nice to see you, year-to-date the nasdaq up more than 8%, information technology sector up 7%. can tech carry the rest of the year? >> i absolutely think it can. what investors don't realize, look at the s&p, up 4.5% for the year not one really can identify why. it's been choppy, unconstructive trading but what investors don't realize is that the tech sector comprises over 16% of the s&p. and that's where that true nice healthy support is coming from. because these tech companies, the identifiable friend with earnings has not been that great. there is nothing that healthy coming out. but your tech names are the ones that are being driven by cash. you're getting those buybacks and dividend increases and that's what investors want. >> is that what is driving the. we talked a lot over the

last year about the search for yield in dividends or the place where investors have really profited is that, this is the next industry to see the next big dividend push up? >> i absolutely think it will be. because you know what, look at how many investors are screaming for apple to do something with their 100 billion in cash. in the conference call they mentioned that they are actively seeking to do something with their cash potentially, a dividend increase. now you know dividend seekers, that baby boomer generation has a disposable income that wants to put that new money to work. but they need to have some incentives to do so. >> let's put apple up on the chart, aap on the ticker symbol, the earnings blowaway earnings in the last couple of weeks but the question for the share price here at 450, is that sustainable? >> i certainly think it's sustainable. look, ultimately at the end of the day our dream would be a nice 3-for-1 stock split to get that thing under 150 bucks and get new fresh capital to work. ultimately that is what investors want to see but where it is right now this company is growing, there is a ton of cash. i think there is way more

room to run with this. >> you also have identified a suck equipment maker. highest chair price, is 2007. demand for semiconductors has been mixed, vent it. >> that is definitely true, but clack continued, it blue away the quarter surprising investors and analysts alike. they are expecting to slightly increase their hiring numbers which is always a good thing to see because that means that there is money there from the balance sheet to put it to work with increasing their head count. i think out of all the names within the growth story this is the one you need to look at. >> tom: speak of apple and kla tencore, do you have any positions, equity, options or otherwise. >> i do not. >> tom: you can read jill's article about technology perhaps saving 2012 with dividends and share buybacks at the thestreet.com. a link on our web site, our guest jill malandrino with us from thestreet.com.

>> susie: here's what we're watching for tomorrow: we'll get the latest on home prices with the s&p case shiller home price index, and we'll see the consumer confidence numbers for january. also tomorrow, earnings from two bellwethers for the economy: shipping giant u.p.s. and exxon mobil, the world's largest oil company. starbucks is setting up shop in india. it's launching a 50-50 joint venture with tata global, the big indian conglomerate. the first store will open in mumbai in september. starbucks would not say how many stores it's planning for india, but a tata executive said he could see as many as 50 stores opening by year's end and eventually as many as 3,000. >> tom: two big japanese auto parts makers are in hot water here in the u.s. yazaki corporation will pay a $470 million fine for alleged price-fixing on parts it sold u.s. automakers. four of the company's executives will serve prison time here in

the u.s. as part of a deal with the justice department. a second company, denso, will pay $78 million for selling automotive electrical components at inflated prices. >> susie: investors are waiting >> susie: investors are waiting eagerly for friday's report on the job market.

many economists expect to see job gains in the january employment report, but tonight's commentator says there are too many outliers to call it a true jobs recovery. he's bernard baumohl, chief global economist, the economic outlook group. >> later this week, we get to see whether the recent improvement in the job market has continued into the new year. many analysts have already concluded that labor market conditions have turned the corner, now that the economy is on a stronger footing. while the job numbers have looked better lately, to say it has turned the corner, i believe, is way premature. that's because the concerns that kept employers from ramping up hiring last year are still with us today. for example, it is true consumers spent more freely during the holiday season, putting smiles on retailers. but that shopping has been financed largely out of savings and more debt, not a healthy foundation for future spending-- especially with real incomes on moreover, the political food fight in washington has made

future tax and regulatory policies more inscrutable than ever, and that will interfere with business investments. more ominous is the real danger that a european sovereign debt default which could trigger another global financial meltdown, or that a clash with iran will catapult energy prices to levels that can choke off economic activity. this is not the kind of backdrop that emboldens employers to significantly accelerate hiring. for the job market to truly turn around, there needs to be more clarity from washington on tax, regulatory and spending policies, and a resolution of the crises in europe and with iran. i'm bernard baumohl. >> tom: and finally tonight, some of the biggest names in technology and finance want to help put an end to one of the nastiest practices on the internet: phishing! google, facebook, bank of america and others are jointly designing a system to combat phishing-- that's the practice where people are tricked into giving away passwords and other personal information by emails that look as though they come from a legitimate source, like a

bank or a retailer. the new system is called d-marc- - that's short for "domain-based message authentication reporting and conformance." susie, d-marc works by authenticating emails from legitimate senders and weeding out fakes. weeding out the fakes so you don't have to go on a fishing expedition. >> susie: a long name, i hope it works. >> tom: i hope so as well t will save folks headaches and money that is fightly business report this monday evening, january 30th. i'm tom hudson have. a great evening, scsi. >> susie: hope you have a great night too, tom, i'm susie gharib. thanks for watching. we hope to see all of you again right here tomorrow night. >> this is nightly business report with susie gharib, and tom hudson. nightly business report is made

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