suzanne pratt reports. >> reporter: yes, there will be life for the u.s. stock market after the fiscal cliff. it may not seem so today, as stock investors ran for the exits even faster than washington lawmakers left town for the holidays. but, somehow, someway, sometime there will be a deal between congress and white house. and, once that happens equity investors will need to refocus. >> once we get into the new year, i think we're going to get right back into earnings season again. and, once again earnings season is what happened last quarter and what do we think is going to happen in the quarters moving forward. >> reporter: as far as what happened in the quarter that ends for most companies on new year's eve, the answer isn't good. according to standard and poor's, wall street analysts predict big u.s. firms only saw a 3% increase in profits in the urth quart. october 1, they were far more optimistic, forecasting a close to 10% gain. so what happened to all that earnings optimism earnings? it turns out it evaporated, as the u.s. economy started to show

suzanne pratt reports. >> reporter: 11,000 jobs are a lot of layoffs, even for a bank as huge as citi. and there could be more. that's because the monster firm is still struggling to recover from the great recession even though it has fired a lot of other workers in the last few years. the thing is, citi has a new c.e.o. in michael corbat, and experts say he's anxious to make his mark, even if that includes cutting staff. and the need to slim down is not unique to citi; it's industry- wide. a financial industry runs into huge problems. it happened in the '30s, and it happened in the last five years. when you go through these periods, you go through a lot of change. that industry is now trying to figure out what is the right size of the industry. >> reporter: still, economists say citi's action today is not the start of a new ve aofls crfe america. the nation's job market may not be robust, but it's not frozen, either. in fact, today, the payroll firm a.d.p. reported 118,000 new private sector jobs were added in november, fewer than in october. the blame for last month's slowdown in hi

suzanne pratt, "n.b.r.," new york. >> tom: cliff or no cliff. still ahead, tonight's market monitor guest says stock prices and the economy will grow in 2013. hank smith of haverford trust joins us. >> tom: super storm sandy keeps showing up in some economic data. this time: consumer spending. spending fell 0.2% in october. it was expected to be up that much. stocks were mixed with continued nervousness about the fiscal cliff. the dow gained just three points, the nasdaq lost nearly two. the s&p 500 was virtually unchanged. on the week, the dow up just barely. the nasdaq the biggest gainer: up almost 1.5%, the s&p up half a percentage point. >> susie: investors took a bite out of yum brands today. the stock tumbled 10% after the parent of k.f.c. and pizza hut said its business in china is slowing. yum's c.e.o. warned that china sales will fall by 4% in the fourth quarter, that's a big drop from the same period a year ago when sales surged 21%. blaming the weak chinese economy, yum also said it plans to reduce the number of restaurant openings in

suzanne pratt reports. >> reporter: four days after its debut, most of the much-hyped collaboration is still available at this target in edgewater, new jersey. there are gifts for your four- legged friends, and plenty of bar accessories for your partying pals, including shot glasses and cocktail shakers. there's even green transportation by alice and olivia. gone ithis funky sweatshirt, although you can still get it online. almost gone are these brian atwood gloves at $50 a pair. and only a handful of carolina herrera notebooks are left. 24 designers created products ranging from $8 to $500 a piece. many of the designers are not household names, but a deal with target gives them mass market exposure. clearly, target and neiman marcus are hoping the partnerhip will put some sizzle into their holiday sales. >> i think it's done well, it's set up well. it's beautiful everything here. it's different. >> reporter: target is no stranger to other designer hook- ups, many of whose pieces normally sell for steep price tags at high-end department stores. don't forget the wildly successful misson

suzanne pratt reports. >> reporter: one thing is for sure, wall street can count. that means investors know there are just nine trading days left until tax hikes automatically take effect across the nation, and hit americans where it hurts: their wallets. and, investors are also aware there are even fewer days before lawmakers are scheduled to leave on holiday break. despite the ticking clock, many investors remain optimistic there will be a deal between congress and the white house before the ball drops in time square. veteran trader jonathan corpina agrees there will soon be a resolution, but he thinks the news will be a big ho-hum for stocks. >> i think the sentiment of a deal solution is already priced into our market right now. so, what does that really mean. when we get news that a deal is in place or partially in place will we get a huge upswing in the market. i don't think so, i think it's already been priced in. >> reporter: other market pros are less sanguine about an agreement in the next few days. even with signs of progress in washington today, they wo

suzanne pratt reports. >> reporter: the tree is up on wall and broad, and so is the u.s. stock market. the holiday season typically is a good time for stocks. in fact, since 1950, december has been the best month of the year for the s&p 500 with the index gaining an average of 1.7%. this december is off to a good start, even though the fiscal cliff looms large over trading floors. most investors remain optimistic there will be a deal in washington before santa arrives. but floor broker teddy weisberg isn't sure where all the optimism is coming from. >> it's a real dilemma here because a lot of folks that i talk to, and customers and professionals alike, are very, very nervous. and i think they are perplexed by the lack of weakness in the market, if you will. >> reporter: economists say no deal between lawmakers and the white house by new year's could push the u.s. into recession by early next year. that dire prediction should be bad news for stocks, but investors remain unfazed. experts say stocks are more likely to move in a tight trading range in the next few weeks. >>

suzanne pratt reports, the outlook for bonds next year depends a lot on what happens washington this year. >> reporter: less than 2%-- that's what the benchmark ten- year treasury bond pays today. even with record low yields, investors have continued to buy bonds in a big way. everyone from the chinese government to american retirees hold u.s. treasuries. and the federal reserve continues to promise rates will remain low, at least for the next few years. so what does that mean for bond investors, especially as worries about a bond bubble grow? >> i know those people have been warning about a bond bubble for quite a few years. but the fact is, we just haven't seen it. the fed has made quite clear that if inflation expectations were to get out of control, or even if we got even close to it, the fed would do something about it. >> reporter: don't forget, inflation is the bond market's nemesis because it erodes the value of bonds. and there's concern all the money the u.s. central bank pumped into the financial system in recent years will drive up prices. and then there are those who bel

suzanne pratt, "n.b.r.," new york. >> susie: another nick to toyota's reputation. the automaker is paying a record fine, more than $17 million, for failing to promptly report safety defects related to a lexus recall. this is the second time since 2010 that toyota has paid fines for not properly reporting vehicle defects to u.s. regulators. toyota once had the best reputation for quality and safety, but in the last three years it has announced numerous recalls for separate investigations into sticky pedals, poorly designed floor mats and steering rod problems. >> susie: big changes coming to pfizer. the giant drug maker plans to cut about 20% of its u.s. sales force, or 600 jobs. according to a report from bloomberg, the cuts begin this month and are said to be part of c.e.o. ian read's strategy to reposition pfizer after losing patent protection on its top selling drug, lipitor. at its peak, that cholesterol drug generated revenues of nearly $10 billion a year for pfizer. while lipitor's loss was tough for pfizer, it was a boon for generic drug makers. but in the c

suzanne pratt met with the man behind the tastes, mccormick's top chef, and got a close-up "smell". >reporter: here's how american's spiced up their cooking in the past, a lot of salt, a dash of pepper and easy on the garlic. but, u.s. palates are expanding, and now include everything from smoked paprika to dukkah. that's right dukkah, what mccormick executive chef kevan vetter thinks will be a big hit with american tastebuds in the next few years. >> the dukkah is a spice blend made up of toasted nuts and toasted spices, very rich and savory. it's got a very rich texture aspect to it combination. the trend here that we're talking about is empowered eating. people are trying to be more thoughtful about what they're eating and make better choices. you know dukkah is a great example of something that could translate into the world of snacks, so making a dukkah flavored snack cracker. you may not see broccoli attached to that, exactly, exactly. but dukkah is an example of a great flavor that could move into the other world of food away from a restaurant or a sprinkling on. that's a great

can and will drive into the future on its own.on suzanne pratt, "n.b.r.," new york. >> susie: our "nbr-u" partners at wharton have new research showing how accounting for government loan guarantees, like the one given to g.m., is impacting uncle sam's bottom line. you can learn more on the web, d st heato: www.nbr.com and h loofor the "nbr-u" tab.l >> tom: look for the dirt two fly in coming months. permits to build new homes in more than a four-year high last month as actual home building slowed down a bit. housing starts fell 3% in novembefrom the month before, but it has beenfr strong recovery, compared to a ye ago, housing starts up 21.6%. the building permit, jumping 3.6% in november, up to their highest level since july 2008. martin connor is the chief financial officer, and he joins us tonight from nnnsylvania. marty, welcome back to n.b.r. have you been out there increasing your building permit for next year? >>ma tom, it is great to be with n.b.r. i do think t we are increasiwe our permits. we've seen dramatic ocreases in our sales through the first four quarterscrf our year, al

suzanne pratt reports. rtses. >> reporter: a peak inside this manhattan apple store and it looks like everything is a-okay. plenty of customer, plenty of purchases. so why has the shine come off apple's shares? with a-- in a word, actually two, profit-taking. >> i think the biggest reason for the selling going back to when it was priced $700 in september is pure profit-taking. if you look from the beginning year to september, the stock was up 74%. so i think you had some natural profit-taking. >> reporter: but this isn't ode year-end selling by institutions looking to record nice numbers. this supposedly is fiscal cliff related selling as shareholders worries that capital gains tax rates will be higher next year. >> still, financial planner sharon appleman says selling stock solely for tax reasons isn't the best idea. >> i definitely think it's a legitimate concern and can be an opportunity. and i would say if somebody was interested in reducing a physician any-- position anyway, that can certainly be a gre

suzanne pratt, "n.b.r.," new york. >> susie: american automakers got a bump up in sales in november, thanks to super storm sandy. consumers postponed purchases when the hurricane hit in october, and resumed buying last month. but as diane eastabrook reports, the looming fiscal cliff could cause that sales momentum to lose traction. >> reporter: november turned out to be a good month for the big three and a great month for their foreign competitors. g.m. and ford both saw a modest uptick in vehicle sales last month-- while chrysler got a double digit boost. but competitors from europe and japan blew the domestics doors off. sales at v.w. were up just under 30%. while honda led the japanese pack with a sales increase of just under 40%. the car companies think super storm sandy pushed some sales the last weekend of october into november. morningstar auto analyst richard hilgert agrees sandy helped, but the storm wasn't the primary reason november was such a strong month. >> we've got a lot of pent up demand still out there-- pent up demand coming from, especially from the average age of