captioning sponsored by wpbt >> susie: the jobs picture brightens as unemployment dips slightly and fewer jobs are lost in july. the white house says today's employment report confirms the economy has pulled back from the brink. >> jeff: lawmakers head home to hear from the people who sent them to washington, and they're getting an earful as town hall meetings on health care reform get heated. >> susie: our market monitor guest says there's too much euphoria in the markets, and it's time for investors to bank some profits. he's richard steinberg, president of steinberg global asset management. >> jeff: then, a.i.g. shares soar as the tax payer investment

finally turns a profit. but the bailed-out insurer isn't out of the woods yet. we'll tell you why. >> susie: i'm susie gharib. >> jeff: and i'm jeff yastine. paul kangas is off tonight. this is "nightly business report" for friday, august 7. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening, everyone. the nation's unemployment rate fell for the first time in a year, and president obama said today that the worst of the

recession may be over. the labor department reported that american businesses cut 247,000 jobs in july, the slowest pace since last august. the unemployment dropped slightly to 9.4%. president obama welcomed the news as a sign that the economy is improving, but cautioned that more work needs to be done to reach full recovery. >> as far as i'm concerned, we will not have a true recovery as long as we're losing jobs, and we won't rest until every american that is looking for work can find a job. i have no doubt that we can make these changes. >> susie: here in new york, we talked with people still waiting for the change the president is promising. scott gurvey met with some new yorkers today to find out about their job hunting efforts. >> reporter: in spite of today's employment report, there wasn't much in the way of exuberance, irrational or otherwise, at the offices of h.r. specialist adecco group. jobseeker julio santana says not much has changed.

>> it's still hard to try to find a job. even to get an interview it's hard. i had interviews and, you know, i've had people, human resources departments, tell me out of 200 resumes, they've only chosen five. >> reporter: julio is looking for work in the hospitality sector, which has been hard hit as consumers cut back on discretionary spending. but adecco c.e.o. tig gilliam says there are jobs to be found in certain areas. >> most people are feeling that the job market at least is not getting worse. and in many categories, especially in areas like i.t. and accounting, two areas where we see job growth at the national level. and also i think where we see job seekers more confident of their opportunities going forward. >> reporter: also looking forward, economist steven wieting says improvement seen in the manufacturing sector at the end of july will soon generate more jobs. >> broader employment in the united states, services-related employment, things like marketing, sales positions, are all highly correlated to the

manufacturing cycle. and there's been a lot of restraint on employment in production. and it's going to be in a period where it may be able to catch up a bit. >> reporter: one of the big worries going forward is the prospect of a jobless recovery. we've seen that before, but economist michael fero says we may avoid that fate this time. >> the last two recessions were quite mild. and so for that reason you didn't see a whole lot of hiring afterwards. it could be that we've had so much layoffs this recession, that staffing is so thin, that we need to pick up hiring when we actually return to positive growth, which hopefully will be soon. >> reporter: soon, even the optimistic forecasters say, means the end of this year and early next. job seeker barbara alfonso says even with a job, lifestyle changes made in response to the recession are likely to continue. >> i used to spend ridiculous amounts of money on going out to eat and shopping, and whatnot. and because of everything that's happened, it's not just myself, even for my friends with jobs, it's been very sobering.

>> reporter: the unexpected decline in the unemployment rate is being taken with a big grain of salt by many economists. a lot of job seekers gave up their search in july, and the jobless rate could tick up again if they resume looking for work. scott gurvey, "nightly business report," new york. >> jeff: well, just the hint of slowing job losses had the bulls roaring and short sellers yelling for mercy. the dow popped 160 points higher in the first 90 minutes of trading. consumer-related stocks, like american express, disney and home depot, were favorites on the day. both the dow and nasdaq surged in the early afternoon, but some traders cashing out ahead of the weekend trimmed the gains. the dow still finished up 113.81 points at 9370.07. this week, it fell twice and rose three times for an overall gain of 198.46 points. the nasdaq gained 27 points to 2000.25. it also rose in three out of the last 5 sessions for an overall advance of 21.75 points. the s&p 500 gained 13.40 points

to 1010.48. for the week up, the s&p tacked on 23 points. in the bond market, the 10 year note lost 25/32nds to 94- 4/32nds, putting the yield at 3.85%. >> susie: lawmakers on capitol hill left town today for their august recess. they left behind some important unfinished business: a healthcare reform bill. but now as they head home to their districts they begin the campaign for and against the trillion dollar reform plan. stephanie dhue reports on how the health care debate cash for clunkers is shaping up with constituents. >> we have no choice but to move forward.

>> reporter: democratic congressman john dingell was shouted down by protestors at a town hall meeting today in his home state of michigan. >> boo! >> reporter: several democratic town hall meetings this week have suffered the same fate, swamped by protestors organized against what they fear will be a high cost government reform plan. the current protests are reminiscent of an august recess 20 years ago, when seniors heckled then ways and means committee chairman dan rostenkowski. they were upset about taxes passed to pay for a medicare prescription drug benefit. the law was repealed a few months later. judy feder of the center for american progress, which supports the obama health reform plan, says organized protests can be misleading. >> we've learned that there is the capacity of idealogs to whip up a frenzy that is highly vocal, but not representative of what american people are thinking.

>> reporter: it's not just town hall confrontations that can sway opinion. senate republican whip jon kyl used the floor this morning to put his own spin on what he wants to learn from constituents during the recess. >> do you believe your heath care situation is in such a dire straight that we need to take on that kind of debt or are there more targeted ways to resolve the problems that everybody acknowledges exist? >> reporter: a quinnipiac university poll released this week suggests americans are more concerned about runaway deficits than an overhaul of the health care system. pollster peter brown says as lawmakers try to persuade voters in town hall forums, the most effective advocate will likely be president obama. >> voters listen to their president. they may not agree with what he says, they may say, "no, you're wrong." but they listen to what he has to say and he has to be convincing this month. >> reporter: the president rarely misses an opportunity to talk about the issue, including today during remarks about the economy. >> we need health insurance reform that brings down costs, provides more security for folks who have insurance and more

affordable options for those who don't. >> reporter: with congressional lawmakers in their home districts for the next month, this a critical time. what happens now can either create or crush the momentum needed to pass health reform this fall. stephanie dhue, "nightly business report," washington. >> jeff: with a $2 billion fill up, the cash for clunkers program rolls on. president obama today signed off on the additional money, approved by the senate last night. the measure extends the program that burned through a billion dollars in its first week. so far, over 200,000 people have taken the government offer, getting $4,500 off a new fuel efficient vehicle for scrapping gas guzzlers. >> meanwhile general motors has geared up for a potential public offering of shares sometime next year. the auto maker says 2.5 billion shares would be common stock and a billion preferred. no date has been set for the

offering. g.m. plans to keep disclosing reports as if it was public. the heads of the senate banking and budget committees, chris dodd and kent conrad, were cleared of wrongdoing today for accepting sweetheart deals on home loans. the senate ethics committee's year long investigation found the loans did not violate the gifts rule because they were available to a wide variety of borrowers with comparable credit histories. but the panel scolded the two democrats for not being more careful to avoid the appearance of preferential treatment. both received loans through a countrywide financial v.i.p.

program known as friends of angelo after former c.e.o. angelo mozilo. >> susie: a.i.g. reported today its first quarterly profit in two years. but the troubled insurer is still far from repaying american taxpayers billions of dollars in loans. excluding items, a.i.g. earned $2.57 a share, a dramatic swing from last year's loss of more than ten dollars a share. outgoing c.e.o. ed liddy warned that future results will continue to be volatile. a.i.g. still owes $87 billion in bailout funds. the firm has been selling assets to repay that money, and expects to give back about $4.5 billion this year. despite that, a.i.g. plans to spend more than $1 billion on bonuses to retain key executives, jeff? >> susie: susie, next week the government's compensation czar will start reviewing pay packages at several bailed out companies, including a.i.g. >> jeff: now, let's take a look at our stocks in the news tonight.

>> jeff: and those are the stocks in the news tonight, susie.

>> jeff, when it comes to selling on the web, it's hard to go solo. the discount retailer ended a partnership with amazon.com. target said earlier this year it would beef up the movie offerings on its site including trailers and audio clips. those are key business segments for amazon, the world's biggest online retailer. monday, we talk with a father/ son team focusing on growth and value, don and craig hodges of the hodges fund. >> susie: fewer ticket sales means more layoffs at delta air lines. c.e.o. richard anderson said today the world's biggest airline has to eliminate more management jobs, but he didn't say how many. delta has cut 2,000 positions over the past 18 months. it's also tightening budgets on vendors and advertising. the global recession has been brutal for delta. the airline's revenues are off by $3 billion so far this year.

>> warren buffett's berkshire hathaway reported a billion and a half dollars in derivative gains as it posted its best report in two years. $2100 a share 14% higher than a year ago. the derivatives gains were tied mainly to the performance of four market indexes in the u.s., europe and japan.

here's a look at what's happening next week. our friday market monitor guest is james stack, president of stack financial management and inves-tech research. on the economic calendar: tuesday, june wholesale trade... and federal reserve policymakers begin a two-day meeting on interest rates. they release their decision on wednesday. also on wednesday, international trade for june. thursday, it's weekly jobless claims and the july reports on retail sales and import prices. friday, july's consumer price index is released. our market monitor guest tonight says the economy is not as good as the markets are reflecting. joining us now to explain: richard steinberg, president of steinberg global asset management. hi, rich. >> nice to see you. >> the news on the job market was good today.

we got a good rally. you're cautious. why? >> was it good or less worse? there is definitely a difference and i think that's an important component. earnings are the starting to come up. we're working our way into a perfect storm on valuation which is basically that values are pretty close to full value even by next year's measures. >> all right. so what are investors supposed to do? sell into these rallies? >> i think if you were invested along the way, you were smart enough to buy when the market was very, very weak, you could take money off the table or if you're going to stay in the party maybe you should switch to a soft drink instead of staying at the party for too long. >> you said to me earlier today that investors are not feeling enough fear. tell us what you mean by that and what's your advice? >> the psychology in the market's lows was "get me out," complete and utter panic especially people relying on

retirement money. now you have greed in the market and you have the "get me in" mentality, momentum is taking this market up and experience has shown and our experience has shown that these momentum trades typically don't end well and we would expect at least a pullback to 950 in the s&p. >> let's look at your stocks that you recommended at the beginning of the year on january 2nd, and you have done really well, i've got to say, the performance has been fantastic. transocean and teva pharmaceuticals both performed well. do you still own them? >> we still own both. rig, which is transocean, the fundamentals are still excellent as well as in the generic business for teva. we would continue to hold both of them, and we do. >> all right. let's switch the graphic here to teva so we can take a quick look at that because you have here c.r.h. which was your irish cement company that didn't do as well. do you still own that? >> we sold that in february, we stopped ourselves out around the 19 level.

it's moved better, but there are problems in ireland and we wanted to move out of the way. >> there is keva: that was a good performer. what about pro shares? performed nicely. what's your view? >> that's double short the treasury and it's a good hedge for clients that have long bond exposure but it's a speculative vehicle and it should be used only to hedge a portfolio, not on a directional bet. >> rich, let's look at your new picks that you are suggesting tonight. at the top of the list, you have an e.t.f. -- a brazilian e. t.f. that trades on the new york stock exchange. tell us about that one. >> this is a basket of all brazilian stocks. brazil still has fantastic fundamentals going, trading at about 10 times next year's earnings with 20% earnings growth, and there is 180 million people there, very resource driven. we think brazil still has great upside. >> and it's had a really nice

move on that stock. what's your target on it? >> i think you see another 15% from here. >> let's move to the next one, l.n.y. what's the story there? >> this is a mortgage reit, very conservative management, they invest in triple-a government mortgage paper and then they lend the money out. credit spreads are great. it yields 14%. we have a $22 target. it's a very, very well run business. >> moving along, a convertible bond index e.t.f., c.w.b. on the new york stock exchange. what's the attraction? >> the attraction here is you can have your cake and eat it too, if the markets continue to do well you get a convertible kicker into equity and i think you probably have another 10% upside to this index. it's also an index that's very hard for people to buy individual bonds in. >> we have 45 seconds left. can you tell us about your last pick? s.h. -- an e.t.f. for the s&p 500 index. >> this is the opposite way that

the s&p works. i own it personally. we own it in the firm. if you're concerned about the market, it's a good way to start to take money off the table without creating short-term gains. >> rich, you said you own this one and your firm owns s.h. how about the other three stocks? >> we own all the recommendations. i only own s.f. personally, though. >> thank you so much for coming on the program. have a great weekend. >> take care. >> my guest tonight, richard steinberg, president of steinberg global asset management. >> jeff: that's nightly business report for friday, august 7. we want to remind you this is the time of year your public television station seeks your support, support that makes programs like "nightly business report" possible. thanks for joining us, and don't forget to support your public television station. i'm jeff yastine. good night, everyone, and have a great weekend. you too, susie. >> susie: good night, jeff. i'm susie gharib. we'll see all of you again next week. "nightly business report" is made possible by:

this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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