>> tom: no doubt about it, the federal reserve stands ready to act. >> given the committees objectives, there would appear all else being equal to be a case for further action. >> suzanne: but the fed chairman's likely plan buying up more treasuries could have a big impact on the dollar keeping it weak, longer. you're watching "nightly business report" for friday, october 15. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

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>> suzanne: good evening everyone, susie gharib is off tonight. tom, federal reserve chairman ben bernanke said today further action may be needed to spur the weak economy. at a speech in boston, bernanke said the u.s. is plagued by high unemployment and the threat of deflation. >> tom: suzanne, in this environment, the fed chairman said the central bank could resume large purchases of government debt. that's exactly what financial markets expect bernanke and company will decide to do at their next policy meeting in early november. >> suzanne: while such action appears likely, the fed chairman also noted today that caution was warranted with any innovative policy. >> one disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public. >> suzanne: when chairman bernanke talks, a lot of people

listen and many trade on his every word. those traders have been sending the currency markets into turmoil. it's a concern for everyone who buys things made overseas or sells something for export. scott gurvey explains. >> reporter: the american dollar has been falling to levels not seen for more than a year, reacting to signals the federal reserve is about to pump more money into the economy. government officials usually talk up the dollar. but currency strategist win thin says this time the government is probably pleased with the sell- off. >> i don't think the u.s. policymakers are actively trying to engineer a weaker dollar. you know you hear conspiracy theories from time to time that they want a weaker dollar, i don't think that's true. but they're not exactly unhappy with it either. right now, as i've said, we're getting some of the befits without many of the detriments. >> reporter: the benefits are more competitive exports for american companies. we're seeing that. the detriment usually is inflation. but we've seen none of that.

what we are seeing is a major disruption of currency markets. analyst omer esiner says that's because most industrialized countries are keeping their interest rates low. >> all these economies with very, very low interest rates have created a flood of capital to higher return and right now investors are finding higher returns in mostly emerging markets in asia and latin america so we've seen currencies in asia and latin america across really the emerging markets rally to multi-year highs in >> reporter: officials in brazil, a big exporter, are calling the currency crisis the equivalent of war. if it is, economist beth ann bovina says the industrialized nations are not going to surrender any time soon. >> the world just came out of the worst recession since world war two. most economies are fighting to keep their recoveries alive and many of these economies have very, very weak domestic spending, the u.s. included. so those economies are trying to fight to keep those exports, basically keep the recovery because the domestic, consumers

at home are not buying enough product to keep the growth growing. >> reporter: at this point, the currency imbalances have not reached extreme levels. still, experts warn if they do no nation will come out a winner. >> a worst case scenario is a global competitive devaluation of currencies which kind of harks back to the nineteen thirties where nations were engaged in a beggar thy neighbor type of behavior where competitive devaluation turned into trade wars. >> reporter: currency valuations were at the top of the agenda at the meeting of the international monetary fund earlier this month. and they are sure to be the talk of korea, when the g20 finance ministers and central bank governors meet there next week. scott gurvey, "nightly business report," new york. >> tom: these moves in the dollar can impact the overseas business of american companies like united technologies. it's brands are known around the globe-- carrier air conditioners, pratt and whitney airplane engines and otis elevators.

60% of united tech's revenues come from outside the u.s. so a stronger u.s. dollar can hurt its bottom line. but a weaker dollar can help. for instance, a one penny move in the dollar against the euro means a one penny move in united tech's earnings per share according to a sterne a.g. analyst. if the dollar drops a penny, united tech earnings will be a penny more per share. but wolfgang koester with currency management firm fire- apps notes united tech could see costs rise, if it has to pay more for materials priced in stronger currencies. >> so you actually have offsets there that may actually have negative impacts due to the costs. while your revenues may be looking higher, your costs proportionally may be actually even higher. >> tom: we will see just what impact the dollar had on united tech's earnings and its outlook next week. third quarter results are due wednesday.

>> suzanne: here are the stories in tonight's n.b.r. newswheel: wall street ends the week mixed, as weakness in the financials dragged the blue chips lower. the dow fell 31 points, the nasdaq rose 33 points and the s&p 500 was up two. big board trading volume topped 1.4 billion shares, its highest of the week, while nasdaq trading volume held firmly above two billion shares. consumer prices barely budged in september, up just one-tenth of a percent. the core-rate, excluding food and energy prices was flat, meaning inflation is virtually nonexistent. that lack of inflation has uncle sam again saying no to an increase in social security benefits. it's the second year in a row that millions of retirees and disabled workers won't get a cost of living boost. no public trial for angelo mozilo, one of the most notorious faces of the subprime mortgage mess. the former countrywide c.e.o. today agreed to pay $67.5 million dollars to settle civil fraud charges with the securities and exchange

commission. but as part of the deal, mozilo admits no guilt. countrywide's current owner, bank of america, will pay $45 million of what mozilo owes. >> tom: still ahead, from the cows to the crops to the cheese, we go down on the farm as tonight's "all in the family" introduces us to the family behind "crave brothers farm." >> suzanne: some potentially good cheer today about the outlook for the holiday season. retail sales rose more than expected in september up six- tenths of a percent. that gain is fueling hopes for strong holiday sales. erika miller takes a look at which stores are likely to do best and why. >> reporter: at the manhattan target store, in a far back corner is a hint that christmas is coming. still, store manager michael alvarez is confident his company has a leg up on rivals this year. >> target is known to be tar- jay, you know very fashionable and we are very inexpensive when it comes to being competitive in

prices. so, that's what's really driving guest frequency. >> reporter: he's not alone in his optimism. retail expert jharonne martis expects discounters to be the biggest sales gainers this year with one notable exception. >> during the recession, wal- mart mostly focused on the middle class consumer. they wanted to gain that marketshare from middle class consumers trading down. because they did so, they lost a lot of their core consumer, which is the low end consumer. >> reporter: it makes sense that discounters are expected to do well this holiday season, given the weak economy. but surprisingly, many luxury stores are also expected to be winners. in fact, jewelry stores, like tiffany, are expected to ring up the second biggest sales gains. analyst rob samuels expects jewelry and accessories to be more popular than clothing. >> we're at a point where how many more shirts does someone need to buy? a lot of it's the same. and in order to differentiate yourself from a fashion perspective, maybe you add a necklace.

you add a watch. you add a bracelet. you add a bag. >> reporter: ipads, kindles, and video game consoles are also expected to be top gift items. but, analysts are not predicting big sales gains at electronics stores like best buy. >> the problem with electronics is last year, they had very strong same store sales. so this year they are facing difficult comparisons. >> reporter: overall, the holiday season is expected to be a good one for retailers up mid single digits. that's not just good for stores like target. it may also mean a little something extra for their youngest customers. erika miller, "nightly business report," new york.

>> tom: a mixed performance today, but the major indices are higher tonight compared to a week ago. let's take a look at tonight's "market focus." this week was marked by the foreclosure documentation mess hitting banks and technology earnings helping that sector. for the week, the dow industrials gained a half percent, despite dropping yesterday and today. the nasdaq saw the biggest gains, up 2.8% with the biggest gains coming today. the s&p 500 added about 1%. the indices are up six of the past seven weeks. today for the second session in a row, financial stocks weighed on the market, including general electric. finance remains g.e.'s biggest

business. while earnings were better than expected, revenues came up short with sales off for wind energy equipment and jet engines. g.e. was the worst performing dow component today, falling more than 5% on four times average volume. bank of america and j.p. morgan weighed on the dow too. each are reviewing their foreclosure procedures. s&p cut its rating on b. of a. to hold over foreclosure concerns. meantime, capital one dropped more than 7.5%. it increased the amount of credit card balances it doesn't not expect to collect on. meantime, technology was the leader, thanks to google earnings and more merger talk. google popped 11% on the heels of its much better than expected earnings last night. volume jumped on this rally too. google is over $600 per share for the first time since january. while we're talking earnings, apple is due out monday. the stock hit a new high in anticipation of those results.

the merger talk was in disk drives today, focused on seagate technology, but helping out that entire industry. seagate skyrocketed 22% on huge volume. the company has been approached by a potential buyer to go private. fellow disk drive maker western digital added eight percent. and flash memory maker sandisk added 1%. one final earnings update, toymaker mattel. christmas make come later than usual. earnings were a penny above estimates but fisher price sales were disappointing. that knocked the stock off a 52 week high hit earlier this week. mattel figures holiday buyers will wait until the last minute to make purchases. a trio of new stocks hit the market this week. a retailer, auto parts maker and college apartments. campus crest communities builds and manages student housing. it came public at $12.50 per share and is up slightly. tower international makes

automotive frames and chassis. it's i.p.o. price was $13 per share, where it closed tonight. that also was the i.p.o. price for women's clothing retailer body central and its closing price, too. and that's tonight's "market focus." >> suzanne: in wisconsin, you often find more cows than people. it's also where you'll find four brothers who've discovered new ways to milk profits from their business. the crave brothers run one of wisconsin's largest dairy farms, and they built it from the ground up. in tonight's all in the family

segment, diane eastabrook shows us how the craves are breeding success with a mix of innovation and teamwork. >> reporter: as morning breaks over wisconsin, crave brothers farm is well into its work day. four brothers run this sprawling operation in south central wisconsin which includes 1,700 acres of land, 2,000 cows and a cheese factory. each of the crave brothers has a specific job. >> you're getting me tip toeing through the tulips here. >> reporter: mark rides herd over the heifers. >> this we will use for cattle feed. >> reporter: tom tends the crops. >> this is melted mozzarella curd. >> reporter: george runs the cheese factory. >> it's nice to have an office where i don't have to plug in the space heater when i walk in. >> reporter: and charlie keeps the books. crave brothers is one of wisconsin's largest and most successful family dairy farms. but 30 years ago, few could have predicted its success.

the crave family lived on a small farm. but their father, bob, sold it in the mid 1970s. in 1978, fresh out of college, charlie and george wanted to get back into the business. they rented some land and began with 50 cows. a couple of years later, the two bought this farm and began buying more cows and more land. tom and mark joined them along the way. from the beginning, the craves thought big. >> why monkey with a small corn planter if i could operate a large one. let's use our skills in a more contemporary fashion. when the craves started this operation in 1980 there were 40,000 family owned dairy farms in wisconsin. today there are around 13,000. many of those producers have gone out of business because milk prices have been relatively flat while other farm costs have risen. the craves say the key to surviving and thriving in this industry is innovation. each one of those vats will produce about 25,000 pounds of

cheese today. >> reporter: ten years ago george got the idea to use their milk to make cheese. >> we wanted to get off the commodity treadmill. we wanted to insulate ourselves from the commodity market and get our product closer to the consumer. >> reporter: today the cheese factory is the crave's biggest money maker, cranking out thousands of pounds of mozzarella, mascarpone, and a soft cheese called "les frere," which appropriately is french for brothers. >> and where will this be sold? this is sold in a lot of specialty markets, boutique markets and wine stores and that type of item. this is a real high end type of cheese. >> reporter: another innovation: a methane digester. the huge structure converts manure from the cows into energy for the area's power grid. >> it's enough power for the farm, the cheese factory, and 300 homes. >> reporter: and, byproduct from the digester is pumped out to the fields to fertilize the crave's corn and soybeans.

>> this is a little bit cheaper than loading it on trailers and hauling it out to the field on tractors. you save some money and you aren't compacting the soil. >> if we figure 200 acres at what did you figure tom 180 a bushel? 150 easy. >> reporter: the craves always look toward the future. recently, mark, the youngest brother, was made the farm's general manager. >> i try in my new role to spur just a little bit more momentum behind decisions and get them done a little quicker, not that i make them all. >> reporter: do your brothers ever question any decision you make? >> oh, certainly, they're brothers. >> reporter: and what do you say? >> we talk it over again. >> when were the promos for the mascarpone this summer? i don't have the dates right. >> reporter: and george is learning more about marketing from his wife, debbie. >> should we promote two things at a time, two recipes? >> i think we should do a dessert, too. >> reporter: the craves aren't sure just where they'll go from here. an on-site cheese store is one possibility. but, their main objective is to

keep this a family farm. >> we need to keep the family business successful. it's going to provide us with opportunity for the next generation. >> reporter: diane eastabrook, "nightly business report," waterloo, wisconsin. >> tom: here's what we're watching for next week: our friday "market monitor" guest is mark skousen, editor of forecasts and strategies. also next week, quarterly results from the big financials including citigroup, bank of america and goldman sachs. monday, from the easy home loans given out five years ago to today's foreclosure paperwork mess. is the u.s. mortgage system broken? we take a look. >> suzanne: liberty media's john malone is taking center stage at

noted advances made by china since june in allowing its currency to rise in value. >> tom: in just >> tom: general motors is recalling more than 300,000 chevrolet impala sedans, because of a potential problem with their seat belts. the automaker says the belts in the front seat may not restrain passengers in a crash. only the 2009 and 2010 impalas are affected, owners will be notified later this month. but, if drivers are concerned, they can visit a chevy dealership now.

>> tom: expect a choppy and sloppy stock market, but one that remains profitable for investors. that's the outlook from tonight's "market monitor." he's stephen wood, chief market strategist at russell investments. he joins us from the nasdaq. >> tom: steve, nice to see you. welcome back to "nightly business report." >> thanks for having me. >> tom: chopping sloppy, but how profitable for u.s. stocks investors by the end of the yor? >> i think a high single digits is reasonable expectation. the long-term numbers will get you to 7.5%. that seems like a reasonable rate of return for equities. but it will be very choppy and very sloppy to get

there. i think there may be a lot of volatility and scratch and claw you're way to a very average year. >> tom: if you're looking at it as an average year, you're not a believer in the new normal years, and that people should be repaired for 5% or so. >> it all depends on what you mean by the new normal. you and i haven't spoken in the past for a couple of years. we're in a lower return environment. five or six years ago, 6% to 7% return would appear extremely low for a lot of baby-boomers who were in the double digits. i think the rates of return will normalize. but similar returns between fixed income and equities, i think that is a bit premature. >> tom: with that in mind, what types of stocks? where in the world? what kind of market cap?

>> if you're in the u.s., you want to be a larger cap. depend ability of earnings. visibility accounts for a lot in this world. that said, we're advising clients they need to look globally. americans need to get comfortable with the fact that the rest of the world exists and they're going to have to need to learn how to invest with the rest of the world. you need to look into a globally diversified portfolio. the future is now. >> tom: speaking of the future is now, google is one of your new picks here. we clearly saw a big pop on the earnings from yesterday. over $600 per share. would you be a buyer over that level? >> we are. we've been accumulating for a while. this name has been in our portfolio with our managers for a good long while. i think right now in terms of technology, we like the space, generally. and that's a strong name. i think acquireable right now. you don't want to go overly aggressive, but this is a name you want to accumulate. >> tom: oxidental

petroleum, why oxi over anything else? >> the integrated oil -- those are names we haven't liked for a large number of quarters because it is such a volatile commodity price. and there are a lot of issues in the integrated oil space. oxi is a good strong play on long-term capital outlay, and it is well-positioned in the oil services and e.m.p. >> tom: we want to get to stanley decker. what's the driver? >> a lot of people are going to be staying in their houses. a lot of people are going to be do-it-yourselfers. there is a good opportunity there for a consumer who is not dead, maybe he doesn't see the benefits of acquiring a new home, but he will have to live in the one he has for a lot longer. >> tom: 30 second on your previous picks. march 12th, you like hewlett-packard and qualcomm. hewlett-packard clearly getting hit by the

management surprise change. and wells fargo down 20%. do you still like any of these three? >> we do. h.p. is a name we've been lightening up, and qualcomm we've been adding to, and that is the top position in technology space. for wells fargo, finally, it is a great institution or great brand. if you're looking at names like j.p., goldman. given all of the volatility and the ownership market. >> tom: ownership positions in these three? >> in the funds i have and russell funds. >> tom: our market monitor, stephen wood. >> suzanne: that's "nightly business report" for friday, october 15. i'm suzanne pratt. goodnight, everyone and have a great weekend. you too, tom. >> tom: good night suzanne. i'm tom hudson we hope to see all of you again next week. "nightly business report" is made possible by:

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