captioning sponsored by wpbt >> we hadn't had consecutive quarters of such economic retraction since the great depression. >> so we've got a tremendous hole to fill. >> stocks tumbled on words from the white house that the recession's job losses could be worse than thought. the blue chips tumbled 268 points to just above the 10,000 level. debt woes in greece, spain and portugal adding to the selling. we asked sue schweitzer for-- stu schwider for insight. we are watching nightly business report. this is "nightly business report" with susie gharib and tom hudson. "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. a serious stock market sell off today. the dow tumbled 268 points, barely closing above 10,000, the nasdaq dropped 3%, the s&p 500 fell 34. >> tom: susie, the white house warned tomorrow's jobs report will include a massive revision, showing more than 8 million jobs were lost since the recession began. that's 1 million more than we thought. >> susie: tom, also weighing on the market, a debt crisis in europe. greece, portugal, and spain are at risk of default. joining us to explain what this means, stu schweitzer, global market strategist at j.p. morgan private bank. hi, stu. >> hey, susie. >> so what was the fear that spooked the markets the most? was it this surprise number on jobs or was it the debt crisis in europe? >> i think it was both jobs and the debt crisis, the european debt crisis, but let me make what i think is an important distinction on

the job front. because there were two-bits of news today on jobs. one was the white house saying that there was going to be a big downward revision to the job count coming out with tomorrow's report. but that is pretty widely known in the markets. and the unemployment rate already reflects all the damage that we've had to jobs. it's terrible at 10% plus. the other news that came out on jobs, though, was the latest weekly figure on unemployment insurance claims which did move up unexpectedly. and they had been in a downtrend and now they're up something like 10% above where they were at their low just several weeks ago. and so that is the big concern. >> that was a concern. and what about on this debt crisis. is there any ripple effect. and what does that mean to all of us here in the u.s. and for the u.s. economy? >> well, first of all, the debt cries sis very severe. it is, you know, if you look at europe and where european growth has come from in the last number of years, it's really been from the

periphery but the periphery was doing that on borrowed time and borrowed money. and so now they are really in a lot of difficulty, greece in particular, portugal, spain and so on. the implications i think for us is it's a reminder that the world's governments are sort of running out of ammunition to support growth. that it can't be done on borrowed money without consequences eventually. >> and stu, what does this mean for the average investor at home listening to all of this, is it time for them to make some move because of this sell-off today in their portfolios, in their 401ks. >> i would make two points, susie. first of all, you know, after a billing year such as we had last year, and let's face t an unexpectedly big year. a lot of people became more optimistic as a result just of the run-up in share prices. but that made us more vulnerable to a correction along the way. and i think what we are having is probely just that it's severe, don't get me wrong but it is just a

severe correction and we've had several of those through the course of the last 12 months. >> all right so, what advice you can give. what do you do to protect yourself. should you move things around in your portfolio. should you be invested only in u.s. stocks at this time? >> well, no, for sure not. i think first of all diversification is really critical. we've been advising our clients that the jpmorgan private bank to be invested in the market, principally in u.s. equity and in nonjapan-asian equity well. do see asia as an engine for growth but we've also been saying don't have as much equity as you normally might have had with all this monetary firepower and all this fiscal estimate plus-- stimulus coming in because there are consequences from all of this. and so you want to be diversified. we advise our clients to be invested, for example n high-yield bonds and other credit instruments which have delivered good returns and have held up during this downturn. >> and what about gold, did it surprise you that it sold off today.

usually you would think it would be just the opposite at a crisis time. >> well, commodities generally have been selling off. to the extent that people are worried about growth, and let's face it, china is tightening, that is also aggravated worries about growth. to the extent there are more concerns about growth, there has become, come do be-- to be downward price pressure on commodity prices, oil, metal and even the precious metals. >> is this selling going to continue s this the beginning of a correction in the market? >> well, i think, susie, that it's the beginning of a difficult year in the markets. but we still have the potential to close higher for the year. i would say the likelihood of closing higher for the year. but it's going to take nerves of steal to deal with all the volatility. >> thanks so much for guiding us through all of this. >> always a pleasure, susie. >> my guest tonight stu schweitzer, global market strategist at jpmorgan private bank is

>> tom: as we just reported, we could find out tomorrow that the number of people out of work may be much bigger than we thought. and the burning question for those out-of-work americans is, when will jobs come back, and what sectors of the economy will be hiring? scott gurvey gets some answers. >> reporter: while we have come a long way from the six-digit job loss numbers we saw every month last year, cautious employers have been working their remaining employees harder and hiring temporary workers rather than making a full-time commitment. economist cary leahey says as a result, job growth will be slow, starting in the second quarter, and will come first in service sector support positions. >> since firms are hiring temporary employees, particularly in the service area, that will filter through. so they'll hire more professional, they'll hire some more retailing people, some more accounting people and back office people, and that will filter through the economy. >> reporter: the manufacturing sector continues to shrink in terms of its overall contribution to the economy. but u.b.s.'s thomas brener says because it is more sensitive to economic cycles, manufacturing will be a leading contributor to payrolls once employers become

convinced demand is real. >> we're probably going to see at the beginning of the recovery much more jobs being formed in the goods producing sector, mainly manufacturing. construction will probably be very moderate with the overhang that we have there in supply. but i think on the manufacturing side we'll probably see pretty strong numbers coming our way. >> reporter: most analysts expect job growth in the healthcare sector because of the aging population, even if legislation to expand insurance coverage fails. and then there's technology, which often leads coming out of a recession and seems poised to do so again this time. >> it's basically flat at the moment which is actually good news, compared to most sectors over the last 12 months. but, yes, technology will benefit. that's one of the areas the administration and congress is targeting. >> reporter: government will also be adding as many as half a million jobs at the census bureau. but they will be very temporary, lasting only six months. scott gurvey, "nightly business report", new york. >> susie: here are the stories in tonight's "n.b.r. newswheel". a new chapter in the saga of

bank of america's shotgun wedding to merrill lynch. bank of america today settled with the securities and exchange commission over allegations it mislead investors about merrill lynch bonuses and losses. the bank will pay a $150 million fine and beef up its corporate governance rules. that settlement comes as the new york attorney general sued the bank and its former c.e.o. ken lewis for misleading shareholders and the government about the merger with merrill lynch. an attorney for lewis called the charges without merit. >> tom: more trouble tonight for toyota. this time, with its popular prius hybrid. the u.s. transportation department is now investigating brake problems on the 2010 model. the issue, braking when driving over bumpy roads and potholes. the news comes after the recall of more than 2 million other toyotas for sticky gas pedals. as diane eastabrook reports, the prius problem is another dent for the auto giant. >> reporter: so far more than 100 prius owners in the u.s. have reported the brake problem. four drivers say their brakes

may have caused accidents. i.h.s. global insight's rebecca lindland says a problem with prius could dent toyota's reputation even more. >> the prius name is almost a brand unto itself for toyota and for many consumers it's sort of a generic term for a hybrid vehicle, i kind of equate it to kleenax, what people call facial tissue. >> reporter: the prius problem couldn't come at a worse time for toyota. the company is already reeling from a massive recall in the u.s., europe, and china for sticky gas pedals on eight other models. dealers just started repairing that problem and hope they won't have a different one with prius. >> we're getting over 1,000 emails a day on different issues right now, over our four toyota stores. we have not yet received a call or email from a customer concerned about the brake issue on the new prius. >> reporter: the u.s. investigation comes after the japanese government ordered toyota to probe brakes on the new prius there. as a result, the company changed

the anti-lock brake systems on those vehicles sold since last month. in a statement the company said toyota will continue to evaluate the condition as it relates to owner complaints and will keep national highway traffic safety administration informed of its progress. critics attribute toyota's recent turmoil to a company growing too big too fast. others like motor trend's todd lassa think the auto company could also be a victim of rapidly changing technology. >> we've been adding a lot of things very quickly. the technology has advanced very quickly. it may be hard to keep up with the reliability on those things. i think we may be seeing some of that right now. >> reporter: there was some good news at toyota today. the company said it made a $1.7 billion profit in the previous quarter. still, its stock took a hit today on news of the prius investigation and potential lost sales across its product line. >> i think it's safe to say that they have a much larger struggle on their hands to gain market

share than they did a week ago. >> reporter: lindland says toyota does enjoy much good will among its customers, she's just not sure how long that good will can last if the company faces more bad news. diane eastabrook, "nightly business report", chicago. >> tom: late this afternoon, ford said it will do a software fix on the brakes of 18,000 2010 mercury milan and ford fusion gas-electric hybrids. the company says some customers think they're losing brake power when their cars switch between two braking systems. ford says dealers can repair the problem in about 45 minutes. the automaker says its action is not related to the prius problem. >> susie: it's almost time for the big game, super bowl sunday is this weekend and it's also one the biggest advertising events of the year. still ahead, we talk with a c.e.o. who's betting big on the big game. he's michael mendes of diamond foods.

>> a brutal day at the exchange. it looks like nobody, or very few stocks were able to exchan the sell-off, right. >> yeah, very few ports in this storm, lots of red on the screen. let's take a look at tonight's market focus. it was the stiffest of selling was seen in the basic materials, energy and financial sectors.

each off by around 4%. but there were much bigger losers inside the sectors. financial stocks lead the way lower with c.m.e. group, genworth, and c.b. richard ellis the three biggest percentage drops. financial exchange c.m.e. missed earnings expectations, contributing to its 7.8% drop. insurance firm genworth and real estate firm c.b. ellis each saw heavier than usual volume on the sell-off. energy stocks also were among the worst performers, led by a trio of coal producers massey, consol, and peabody. president obama is creating a task force to speed up the development of clean coal technologies. and leading material stocks lower, metal producers. titanium metals, a.k. steel, and allegheny tech all were hit today. titanium to the tune of more than a 10% drop. steel stocks had a nice run through 2009, but this year have erased about six weeks worth of gains. total volume on the big board and nasdaq was on the stronger side.

bearish exchange traded funds saw big volume as investors piled in to profit from a down market. these three were the most active e.t.f.'s that traded higher, and all three are leveraged. that means for every dollar their benchmark is down, they're up two in the case of the ultra short s&p 500, ticker s.d.s., or $3 in the case of the financial bear, ticker f.a.z., and small cap bear, ticker t.z.a. goldman sachs helped contribute to the selling in financial stocks. the bank warned that the so- called volker rule would take out a chunk of its revenues. goldman stock drops 4% after managing director gerlad corrigan told congress that 10% of its net revenues could be at risk if it has to curb trading its own money and if it is banned from investing in hedge funds and private equity. mastercard pumped up its incentives and rebates in its last quarter and it worked, maybe too well. while earnings were up 23% from

last year, the numbers still weren't good enough to meet expectations. operating expenses, though, were up thanks to a 25% jump in marketing. the stock reflected this disappointment, dropping to november lows on eight times average volume. burger king brought home the bacon in its fiscal second quarter with earnings up 13%. lower costs helped out as did its $1 cheeseburger promotion, which helped bring in more customers. burger king stock saw almost three times volume, bucking the down market today, gaining 3%. while burger king saw more customers, a trio of consumer goods companies saw lower stock prices on the heels of their earnings. clorox, sara lee, and kellogg's were all lower. both sara lee and kellogg's pushed up their 2010 guidance even as earnings were mixed between the two. speaking of the consumer,

shoppers' appetites in january weren't that impressive overall, but here are a few retail sales stand outs. sales at stores open for at least 12 months showed better than a 3% gain at macy's, allowing that stock to go against the grain today and add more than 2.5%. macy's took the opportunity to increase its profit prediction. sales at abercrombie were up 8% versus the expectations of better than an 8% drop, and the stock rising in kind. target stock, though, was off with sales up a disappointing half percent last month. the store predicts february will be very similar to january. over the past couple of weeks, we've highlighted some of the moves in eastman kodak. the stock jumped 60% in january even as the broader market was weak. today, it gave back a portion of that gain, slipping more than 11% on more than three times average volume. the company's 2010 forecast was disappointing. and that's tonight's "market focus".

>> tom: it's super bowl time. the big game is sunday and it's always one of the year's biggest sporting and advertising events. companies are spending almost $3 million for a 30-second commercial during sunday's game. diamond foods in one of them. c.e.o. michael mendes tells us it's worth it to help fuel the growth of two of its snack brands. >> the products that we are marketing are snack products. and they fit so nicely if a super bowl venue when people are consuming snacks. >> you got to sell a lot of snacks though to am could up with the almost $3 million that it takes for the 30 seconds of advertising,

don't new. >> well, you know, we are a high growth bismts and the thing that we are trying to achieve with our super bowl program is we're building up permanent distribution with our retail partners at retailers throughout the country. and by us having a super bowl campaign helps encourage our retailers to place those products on the shelf. 2007 when we had ray super bowl commercial we saw a 68% lift in sales in that four week period we had the campaign. so it is is a venue that works well for us. >> in 2006 the economy was in a much different condition. the consumer had a lot more money in his or her pocket. how about this year, what do you expect to use as a gauge for whether or not your super bowl spending is successful or not? >> well, you know, for one i think that we are being innovative in the fact that we're going to be advertising two brands in the 30 second commercial. we're fortunate in our emerald and pop secret brands are both challenger brands had that actually appeal to a similar consumer demographic. i think that consumers are looking still for great

snacks. and while people are and maybe have less disposable income it might be a little more concerned about their disposable income, they are still looking for those small awards. we would think our products are affordable luxurys that people are going to enjoy. >> but michael, are you anticipating that 40 to 6 o ers bump in the four weeks after the big game that you have seen in years past. >> we do expect to have a nice bump, whether it is going to be that much or not, we'll have to see how that plays out. we do know that we have been able to get a lot more permanent distribution of our new products at retail and we're going to enjoy that benefit on the period going forward. i want to ask you about that return on investment that so-called roi, that is wall street speak, the average super bowl commercial over the years that you advertise, about 2.7 million dollars. which is roughly the net income that you had during last year's super bowl quarter. basically it takes a whole quarter's worth of net income to pay for just the ad time, doesn't it? >> you know, the one thing about advertising is that you really need to try to

look at the investment continuum of the brand that are you investing in. if we were looking at brand, that we were just looking to expose of the next quarter, that kind of short term math may be valid. but we really feel that when you look at the ability to build that distribution of the total consumer franchise to get the opportunity, to get the display activity, you know, in our company we found that both pop secret and emerald will get a $350 to 450% lift in sales. we get a special off-shelf display around an event. >> what quarter, by the way in the super bowl will be. >> we will be in the fourth quarter. >> hopefully a good game. >> saints or colts. >> i have to say i'm rooting for a close game. >> fair enough. >> michael mendes a long with us, the chief executive officer at diamond foods. >> tom: speaking of the super bowl, they are the hottest tickets in town. tomorrow, we huddle with a veteran ticket broker who says this year fans are calling the

shots on prices. >> susie: here's what we're also watching for tomorrow. as we mentioned earlier, we'll find out if jobs were added or lost in january's employment report. we also have an exclusive interview with tom hoenig, president of the kansas city federal reserve bank. he's the only policymaker at the fed calling for higher interest rates. and our friday "market monitor" guest says the key to success is the safety of a good stock at a cheap price. he's john hughes, president of quantum capital management. a big settlement today between state street and government regulators. the firm is paying a $10 million fine, and an extra $300 million to investors who lost money during the sub-prime market collapse. the feds and the state of massachusetts claimed the boston-based bank misled investors about exposure to sub- prime mortgage-backed securities in one of its bond funds. >> tom: dollar general is hanging a big help wanted sign. the discount retailer plans to hire about 5,000 new workers as it opens 600 new stores over the next year. dollar general has been gaining

customers and growing sales since the start of the recession. that's allowed the chain to open new stores while other retailers continue to scale back expansion plans, or close all together.

>> susie: house lawmakers voted today to let uncle sam carry more debt: $14.3 trillion worth of debt. that's more than $46,000 for each american man, woman, and child. numbers like that have tonight's commentator missing the days of old on capitol hill. he's todd buchholz, author of "lasting lessons from the corner office." >> remember william jefferson, the crooked louisiana congressmen who stashed thousands of dollars in his freezer, claiming he was not taking bribes? he's in prison now. and i'm starting to miss him. in fact, i'm starting to miss the really old days, those maligned boss tweed cigar-smoke days when politicians took bribes and made shady deals in twisted alleys. how can i possibly get nostalgic about graft? because it was cheaper than the way congress runs itself today. back then, a legislator would shove a $5,000 bribe into his own pocket to keep for himself. that was cheap. today we're bankrupted by politicians trying to bribe us

with our own money. nowadays, our politicians look more honest, jefferson aside, but they seem less responsible. congressmen are promising trillions of dollars in programs that the american taxpayer cannot afford. the budget deficit has hit 11% of g.d.p. that's almost twice the level it hit in the 1980s, when democrats lambasted president reagan for cutting taxes. the disgraced administration of warren g. harding actually slashed the national debt. our debt ratio is now returning to world war ii levels. even the chinese government is begging the white house to either cut spending or at least go on vacation so they have fewer opportunities to spend more. now, don't get me wrong. i don't think congressmen are committing bribery or extortion. i'd call it burglary. they are taking crowbars and hammers and then breaking, entering, and smashing the piggy banks of our children and grandchildren. i'm todd buchholz. >> susie: that's "nightly business report" for thursday, february 4. i'm susie gharib, goodnight

everyone and goodnight to you too, tom. >> tom: good night, susie. i'm tom hudson. goodnight everyone, we hope to see all of you again tomorrow night. "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 capt media access group at wgbh access.wgbh.org