this is "nightly business report" with tyler mathisen and susie gharib. not too hot, not too cold, july's employment report may have been just right, but does it leave the federal reserve leeway to keep interest rates low? >> stocks struggle, the major indexes fail to recover from yesterday's steep losses and the s&p 500 the worse lost in two years. >> less is more. why proctor and gamble believes the way to bulk up sales is to slim down. all that and more tonight on "nightly business report" for friday, the first of august. i can't believe it's august. good evening i'm tyler mathisen. >> i'm sue her rir rera in for gharib. today we learned the economy

created 209,000 jobs in july, the sixth straight month of 200,000 jobs or more and that hasn't happened since 1997. the number was still below expectations and the unemployment rate ticked up to 6.2%. that disappointment actually alleviated a worry, that the federal reserve may be forced to move faster on rates than previously thought. eamon javers looks inside the report and what it means for the economy and job hunters. >> reporter: today marked the sixth month of 200,000 plus jobs growth in the united states and we haven't seen a month of job declines since 2010. that's creating opportunity across the economy. the government said today employment and leisure and hospitality headed 375,000 jobs so far this year, primarily in food services and drinking places. and here in maryland, the state is cashing in on casino jobs.

the number of workers is expected to triple to just over 9,000 jobs in the next two years. mgm resort is building a billion-dollar casino southeast of washington dc. the doors won't open for two years, but they are already recruiting to field nearly 4,000 jobs. >> i think it's honestly an opportunity of a lifetime to open a brand-new facility that will be beautiful. mostly i'm here to find out exactly what they are looking for and the opportunities they have. >> reporter: at the white house, president obama called it good news. >> so the good news is the economy is clearly getting stronger. things are getting better. our engines are revving a little bit louder, and the decisions we make right now can sustain and keep that growth and momentum going. >> reporter: the steady jobs bounce back has investors betting on when the fed might

scale back the so-called quantitative easing program which has driven the stock market the new highs. analysts are calling this the goldie locks jobs report, not too hot, not too cold. it could be good news for investors. for "nightly business report", i'm eamon javers in washington. >> a number of economic reports to boot fail to lift the stock market today leaving the s&p with the biggest weekly drop in two years. instead, global concerns surrounding argentina's debt crisis overshadowed any positive data that came out. at the close the dow finished lower by 70 points to 16,493. the nasdaq was off 17 and s&p 500 lost a mere five points. for the week, the blue chip dow index fell almost 3%, worst weekly dive since january. the nasdaq had its biggest weekly loss since april, and the s&p lost more than 2.5%. so let's talk more now about the

economy, today's jobs report and what it may mean for the fed and the markets to do that, we welcome chris wolf, chief investment officer with merrill lynch private banking and investment group and chief economist at moody's. was this as we characterized it at the top, a goldie locks job report, not too hot, not too cold, the best you could have hoped for? >> yeah, it was perfect. you know, a lot of jobs really broad based across a lot of industries across all pay scales. at this pace of job growth, unemployment will decline rapidly but we're not to a point where we're seeing any significant wage pressures. from a workers perspective, that's not great. we want to see the wage growth, but from the stock market perspective, investors don't want to see too much wage growth because that might induce the fed to raise interest rates sooner rather than later. >> chris, does it confirm what

we suspected, which is the economy is growing slowly and surely and at a pace that is not going to trigger inflation in a big way? at least no time soon? >> yeah, you know, i think go gold -- goldie locks is the term you use. there is a big sensitivity on the depenaldanlts on fed action. they said they haveo move sooner, the fed has to move sooner. today's day to say s no they don't and we have done reversals in the bond market. there is a lot of sensitivity among the upcoming taper that's important for investors to consider. while the economy is good, i think the markets will think more where the fundamental growth trajectory is supposed to be in 2015 and 2016. mark, as he just pointed out, the market seemed to be concerned about the pace of labor costs growth and that that

might drive through and cause inflation at the retail level. but as you point out, don't we really want wage growth in this country, and what is it going to take to get it? >> yeah, and we absolutely do. i mean, workers, their wages have been growing at no more than the rate of inflation since the recession, that means real wages. our living standards have gone nowhere. we want to see stronger wage growth. the way to get it is more jobs. if we continue on the current growth path and continue to create overturn thousands of jobs per month, by this time next year, i think the job market will be tight enough. it's at that point, of course, the federal reserve will raise interest rates. a couple years down the road if we continue on the current growth path, odds are that we will, then we'll have a really good job market. we'll be at full employment and then we'll get wage gains that are consistent with productivity growth and that's what you want to see. that would be an economy that we

would be very come tofortable w >>hris, talk to me about the markets. i know you would over weight equities compared to bonds, but this was a wild week. volatility was back in a big way. we saw big swings in the market. >> there is complacent. so i think this week was a wakeup call and that things should be more normal when you focus on fundamentals. equity markets in particular, i think, saw a lot of that. we saw the anticipation the fed would change, take profits, take the complacent out of the market. we had big growth in earnings and that just good enough comment i made applies to equity markets, revenue growth is just good enough and earnings growth is good enough to keep i think the rally going, and this over

weight that we recommend with clients is about something simple. there is not a lot of good alternatives to make a compelling case to buy more bonds. some is protection, but not a lot more. >> should individual investors be ready for more volatility as we move through the late summer into the fall? >> yeah, i think we're towards an infliction point by october. there is elections, fed policy change and the infection point is running from policy driven markets to fundamentally driven markets. we think that's a 2015 event and thatvolatility. >> chris wolf of merrill lynch, thank you and jeff mandy. one of the day standout stocks, proctor and gamble. the company owns brands like pampers, tide and gillett reported a 38% rise in earnings beating estimates. that sent shares up 3% making it the top-performing stock. the world's largest consumer products maker announced a big

move to get smaller. sarah eisen tells us why the ceo believes less is more. >> reporter: the world's biggest consumer products company has a growth problem. it's shrinking to simplify the company and boost sales. it will focus instead of 70 to 80 consumer brands like tide deterge gent, pampers and more. part of it is the economy pea. >> it feels, in my seat, a little choppy, and i would say that's true across the globe with some of the political events, et cetera, but against that continued opportunity for growth on both top and bottom line. >> and rivals colgate, kimberly clark also struggle to post stronger sales during the quarter but many expect progress in turning around the company from the ceo to return to the top spot a year ago in an effort

to booth growth. since then, he spun off the pet care business, cut costs, and launched new products like the gillette fusion proglide razer. >> the category in the united states was up 30 points and we started to see cartridge shares grow, as well. >> reporter: part of the problem, p and g is enormous with 120,000 employees, it's been a cincinnati staple. change takes time and the stock is down so far this year, one of the worst performers on the dow in the last 12 months and under performing the broader index. to do it, it's going to have to focus on growing the business and not just growing profits. for "nightly business report", i'm sarah eisen. despite big discounts, u.s. auto sales slowed in july, most

car makers reported gains below expectations but gains nonetheless. chrysler and ford saw double digit moves up with chrysler getting some help from strong sales of the jeep suvs and general motor sales were up 9% compared with last july. still, only ford was able to eke out a number that topped forecast. overall, annual sales slipped further from that 17 million unit mark, which would be a multi year high. shares of ford and gm were off 1% today. and some good news for drivers, gas prices are starting off the month of august at a four-year low. according to gasbuddy.com, the nation-wide average of $3.51 is a gallon is a 15% drop from july 4th and pump prices are expected to continue the slide into the fall because of strong refining output and crude production in north america. still ahead, the market monitor says there are three

stocks that will return 20% over the next year. we will pry the names out of him next. argentina is officially in default. the association that makes the determination decided that a failure to pay event occurred on july 30th. the day that argentina missed the deadline to pay the creditors. meanwhile, a new york judge has ordered negotiations between argentina and investors to continue. more now on jobs and what some are calling domestic outsourcing in manufacturing companies. advance technology services steps in when a client wants to

step out of the business of maintaining its factory and by letting clients focus on their core business, ats itself is growing and hiring along the way. mary thompson looks where the jobs are. >> reporter: 11 years ago, the maker of easy go golf carts decided it wasn't good at maintenance so the specialized vehicles hired advance technology services or ats to repair and maintain the machines that make its carts. its a decision the plant manager carry tomorrhompson says is pay off. >> we launched 40 new vehicles to market, and we've expanded our engineering work force by 138%. so by allowing ats to focus on the maintenance of our equipment, we can focus on growing our brands and our business. >> reporter: since 1985, ats has been sending teams of six to 60 technicians to factory floors in

mexico, north america and more. >> they have to figure out how to do more with less and we're part of the equation. >> reporter: ats vice president brian rabe says his firm brings tools, experience, and skilled labor a facto might have trouble to secure on its own to service the gear. >> if you're in a factory today and you have 5% machine down time. that down time is costing you a lot of money. if we can take and reduce that to 1% down time, you have all that machinery available to be able to produce product and make profits. >> reporter: it's increasingly valuable in the competitive world of global manufacturing, demand is rising for atss services. so this year ats is hiring 500 new technicians. they will repair and maintain the equipment used on assembly lines like this one but finding the workers isn't easy, even when you pay 21 to $51 an hour

with full benefits. >> workers in these plants don't grow on trees, but they do in other industries. >> reporter: he says once ats finds the workers with the right skills, they are given additional training, tailored specifically to the needs of clients. jonathan register once worked in maintenance for an ats client and now he's one of 16 workers at the plant. a team that works better. >> it means i'll get more support. i got more training. i've got backings, you know, i got the resources. >> reporter: resources ats client s can hire to raise productivity. i'm mary thompson for "nightly business report." to read more about ats and how it is helping manufacturing companies expand capacity and cut costs, head to nbr.com. chevron posta rise in

earnings and that's where we begin the market focus. they had better than expected quarterly profits and demand for crude oil had a dip in production. that sent shares down 1% to $127.90. hilton's results beat on the top and bottom lines. the hotel operator raised the forecast as it benefits from that increased occupancy, which means higher room rates. shares rose just slightly to 24.29. the battle took a sharp turn today, the botox maker is suing valant alleging insider trading. allergan is fighting a $51 billion take over bit from valeant and the firm and calling into question the legality of the relationship leading up to the take over attempt. shares of allergan fell to 165.62 and valeant slightly

higher. shares of mobilized soared after the company priced the offering above the expected range. the israeli developer of camera systems that help cars deteblgt oth tect cars should shares at $25 a piece and the stock closed at $37, up 38% today alone. the justice department announced hp agreed to pay $33 million to resolve allegations it overcharged the u.s. postal service for products over an eight-year period. shares of hp 1%, $35.19 on that news. harley davidson recalling more than 3,000 motorcycles to fix an ignition switch problem that can cause the bikes to stall and the crash. the move is preventive. according to the company, no crashes or injuries have been reported. despite that, shares were slightly higher today at $61.98 and brooke shire hathaway say

they soared. it topped earnings and revenue estimates. shares slightly higher at the close at a mere $189,279 and no cents. >> each. >> each. >> tonight's market monitor is calling the recent sell off a short-lived retreat and he says dollar cost averaging over the next two months, may not be a bad idea. joining us is gene, portfolio manager with advisors management. good to see you. >> great to be here, sue, thank you. >> the thing that strikes me is the severity of the sell off, the volatility that went along with it and we took out key technical levels. how much damage has been done? >> there is some, no doubt. there was a lot of hair trigger selling. you can see it when stocks breached widely watched

technical support levels and that really had to do with a lot of anxiety. there was a lot of anticipation about a big correction. we did see some panic selling, some irrational selling by the end of the week and i think that was depicted in the volatility index moving up as it did. >> let's get names on your buy list here at these prices, gene. led by, cell gene, tell me your argument. >> tyler, it's a stock in the group i consider a core holding in a biotechnology, a large cap name there. what impresses me about this stock it's a long-term performance history. we did go through a good correction in stocks in the mark, april period. this has been one of those bioteches that has not only rebounded but moved so it's going to lead to new record high territory. i think that kind of durability and the longer term trend, the short term elasticity does indicate this stock has further to go and the upside, i like the

health care group and bioteches going forward. >> and you like polaris and makes recreational vehicles and things like that. why do you like it, gene? i know it had good results lately. >> it has. the earnings in the latest quarter were the best quarterly showing in sometime. not only that but the outlook by the company is very strong. so if you put a chart, over lay the charts of harley davidson hog against polaris, the stock is trending lower. is this stock has been trending higher. one of their divisions, india motorcycles, the old original indian seems to be gaining market share but they have other recreational equipment both for the consumer and for commercial use, also. so this is a very strong company, again, good long-term history in terms of performance doing great in this market environment. >> i saw one of those indian cycles down at the jersey shore,

and they are beautiful. final pick tonight, that is western digital. what's your price target and why are you in favor of it? >> well, i think western digital can move to the 120 plus area over the next 12 months. again, when we choose the stock for portfolios, we're looking to assure there are other similarry attractive stocks. so when we look at the data storage area, there are other attractive stocks but in our view, western digital is the leader in this space, in data, audio and video. so we think this is a real great area. here again, another one of these stocks that's been trending higher and is just below its record high here, just a few points below it despite the week that we suffered through here. >> right. gene, any disclosures for the prefix you gave us? >> well, all of these stocks are held in the managed accounts and also in a number of unit investment i supervise. i don't hold any stocks directly

but indirectly through the uit. >> thanks so much. have a great weekend. good to see you again. >> thank you, sue. coming up, something that tyler and i know a lot about, the big business of kids' parties and how one woman took her love of games and arts and crafts and turned it into a very successful career. now a bright idea that turned into a career for a young woman that became a bit of a legend in the san francisco bay area. she's been called the martha steward of kids' birthday parties. who do you turn to when the kids make those special birthday party requests?

>> i want to be a princess, and i want there to be a dragon. >> reporter: or maybe. >> i want to be a rocket ship. >> reporter: sophie has the answers. >> we take a refrigerator box and turn it into a rocket ship. >> reporter: he started doing art projects with her grandmother and never stopped. after college, she became a new york actress but that stopped in 199 2 when her husband took a job in san francisco. >> i was like all right, i got to do something, so i started babysitting. >> reporter: babysitting as luck would have it for a listers, ceos, movie stars taking their kids' wildest dreams and turning their garages into caves, pool patios into pirates ships. sometimes she learned the hard way like the time she built a candy-filled dragon pinata with ten layers of paper ma shay. >> i literally saw the thing apart. you learn by mistake.

it was still a great party. >> reporter: other moms noticed and began booking her to do their parties. >> i was charging like $10 an hour. these are very wealthy women. they were like of course, that's fine. they could smell it a mile away. >> reporter: now a 3500 square foot warehouse is home to the props and supplies she's gathered over 20 years and thousands of parties. her company, sophie's stress free soirees, a party could cost more than $1,000. bar mitzvahs could be $10,000. >> i'm booked through 2015. >> hi, i'm sophie and welcome to my world. >> she's on youtube, in case you ever need bubble snakes or shelf evils. she's even got a new book, sticky fingers, detailing things

you can make with duct tape. but what really gets her going is planting the seeds of creativity in her young party goers. >> this gets me choked up about what i do. come on, you're a party planner but some will say hey, sophie, can i work for you. i love parties, i'm interested in doing this this as a business. >> she inspires creativity. >> kendall was at one of those birthday parties in the mid '90s and came back to work for her as a team. since then, she's worked as a kentucky derby hat maker, taught sewing and starting a full time job as a costumer for the new york city ballet. so just remember, memories made and lessons learned at those birthday parties can pay off. long after the cake is gone. >> how many people get to wake up and say they get to see the

lightbulb go off in a kid's imagination every day of her life. >> she has six full-time employees and 40 to 60 part timers, she employs depending on the size of an event. why didn't i think of that? >> my kids never had that kind of elaborate party. more power to her. good luck to her. all right. that's it for "nightly business report" for tonight. i'm sue ha raerrera in for susi >> i'm tyler mathisen, have a good weekend, everybody. we'll see you ba here on monday. er

♪ >> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, newman's own foundation, giving all profits to charity and pursuing the common good for over 30 yea, kovler foundation, and union .ank >> at union bank, our relationship managers work hard iesunderstand the industr you operate in, working to