Marketplace - American Public Media

You know it’s rough when an investment club stops investing. That’s in large part what happened in recent years at Gene Senter’s Dayton, Ohio, club. Last year, stocks accounted for only around half their roughly $100,000 portfolio. Spooked by the financial downturn, the mostly retired club members had moved the money to safer waters.

Their skittishness about stocks -- even as the S&P and Dow Jones Industrial Average recently hit multi-year highs -- reflects the thinking of a lot of American small investors. They know the importance of stocks in a portfolio, but worry about losing their shirts if the current bull market turns south.

Americans are returning to stocks, but slowly. Mutual fund tracking firm Lipper says that in 2013, stock funds have taken in $20.7 billion more than investors have pulled out. But that’s tip money compared to the far greater amounts investors took out in recent years, often at a loss. Wounds from the latest downturn are still fresh for many Americans.

“They got crushed in the crisis and they just have not come back,” says Tom Roseen, who heads Lipper’s research services.

He adds that many investors also got burned in the dot-com meltdown.

Washington State University finance professor John Nofsinger studies investor psychology. No matter how much media hype kicks up around a rising market, he says it’s not enough to distract investors from what’s happening in their lives.

“People still know friends or relatives that are either out of work or trying to get a better job or those kinds of things and so we’re still a little cautious,” Nofsinger says. “But now we’re at least positive cautious.”

“Positive cautious” is a far cry from enthusiastic. But that may be all the market can ask for from ordinary Americans whose retirement savings have been battered.

As for the Ohio investment club, it’s now wading back into stocks. Members are frustrated with the paltry returns of safe spots like money market funds. At their meeting last month, they took more than half of the cash that was on the sidelines and bought a new batch of stocks.

“We decided that we are investors and we want to be in there,” Senter explains. “Because you’re not getting anything with cash.”

Kai Ryssdal: The Dow Industrials spent most of last week dancing around the 14,000 mark. The S&P 500 and the Nasdaq were doin' fine as well. Small investors who'd largely bailed out of stocks during the financial crisis started gingerly returning during weeks of encouraging economic and corporate news.

And then, today. The Dow's first triple-digit loss of the year. Marketplace's Mark Garrison looked into why jitters continue as apparently good news abounds.

Mark Garrison: You know it’s rough when an investment club stops investing. That’s in large part what happened in recent years at Gene Senter’s Dayton, Ohio club. Last year, stocks accounted for only around half their roughly $100-thousand dollar portfolio. But at their meeting last month, they added a large batch of stocks.

Gene Senter: We decided that we are investors and we want to be in there, because you’re not getting anything with cash.

And there’s evidence more Americans are doing the same thing, moving away from safe, but low-return spots like money market funds. Mutual fund tracking firm Lipper says stock funds have taken in more than $20-billion dollars this year. But that’s tip money compared to what people took out in recent years, often at a loss.

Tom Roseen: They got crushed in the crisis and they just have not come back into there.

Lipper’s Tom Roseen adds many investors also got mixed up in the dot-com meltdown.

Roseen: Really I think people were burned and they’ve been burned twice in a decade.

Washington State University finance professor John Nofsinger studies investor psychology. No matter how much media hype kicks up around a rising market, it’s not enough to distract investors from what’s happening in their lives.

John Nofsinger: People still know friends or relatives that are either out of work or trying to get a better job or those kinds of things and so we’re still a little cautious. But now we’re at least positive cautious.

“Positive cautious” is a far cry from enthusiastic. But that may be all the market can ask for from ordinary Americans whose retirement savings have been battered. In New York, I'm Mark Garrison, for Marketplace.

You may have caught the news that McDonald's has a new item called Fish McBites. It's the second seafood offering from the fast-food giant. The first being, of course, the Filet-O-Fish. That classic with the fried fish, steamed bun, American cheese and tartar sauce was added nationally in 1965, a way to lure Catholics who didn't eat meat on Fridays. So it's no surprise Fish McBites are debuting near the start of Lent.

Filet-O-Fish has never outsold burgers at McDonald's, but the company is one of the largest buyers of fish in the United States, says Kerry Coughlin, a regional director with the Marine Stewardship Council. The council recently certified all McDonald's fish as sustainable. This morning, she says, several council staff brought in their wrappers from the sandwich and the cardboard boxes of the new Fish McBites, to show off the "wild-caught Alaskan pollock" language on the packaging.

Coughlin says the Alaskan fishery is sustainable because the managers make sure the boats don't catch too much, too fast.

"Ensuring that they will have a supply of fish to keep that business going," she says.

In addition to the green halo, fish gives McDonalds another reputation boost with moms, says marketing analyst Maria Bailey.

"Millenial moms like to have their children have a broader range of flavors and tastes in their diet," she says.

They might see a McBites Happy Meal as a way to introduce the fish flavor. Plus she finds these younger moms tend to me more conscious of health. Sure it's battered, fried fish, but compared to rumors and concerns over beef (remember "pink slime"?), it's better.

"They want to keep their children safe, and fish seems like a safer route," Bailey says.

A Fish McBites Happy Meal has 135 calories less than a cheeseburger meal. However, if you pick up another seasonal item on the menu, the oh-so-popular Shamrock Shake, it probably negates any health savings.

The U.S.  Department of Justice -- along with the attorneys general in many states -- are reportedly set to file civil charges against the credit rating agency Standard & Poor's. The suit, which could be filed as early as this week, would allege that S&P fraudulently rated mortgage bonds in the lead up to the financial crisis.

S&P responded to news of the civil suit with a statement:

A DOJ lawsuit would be entirely without factual or legal merit. It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market -- including U.S. Government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained -- and that every CDO that DOJ has cited to us also independently received the same rating from another rating agency.

Since the financial crisis, critics have said the U.S. government failed to prosecute or punish Wall Street for many of the actions that led up to the crisis. Government prosecutors have argued that misdeeds in this arena are hard to prove.

"The behavior that brought the fiscal crisis was risky and stupid but perhaps not illegal," said Wall Street Journal reporter Evan Perez, who is covering the story. And S&P may be the first named in a suit, but they won't be the last. Perez says this is probably just beginning of a wider effort.

But how successful will it be? Ratings agencies in the past have cited the First Amendment -- that they have the right to say whatever they like about bonds. But that might not apply in the case of fraud -- which might be what the Justice Department will argue.

So we begin this Monday with a stock quote: ticker symbol MHP. The McGraw Hill Companies, Incorporated. Off almost 14 percent at the close -- and you can blame it all on McGraw Hill’s wholly owned subsidiary, the credit ratings agency Standard & Poor's.

There are reports today that the Department of Justice and a whole mess of state attorneys general are set to file suit -- perhaps this week -- charging S&P with fraudulently rating mortgage bonds in the lead up to the financial crisis.

Evan Perez is covering the story for the Wall Street Journal. So we asked him -- why'd it take so long?

Perez says the Department of Justice has felt pressure since the financial crisis of 2008 to bring criminal charges against those responsible. "The behavior that brought the fiscal crisis was risky and stupid but perhaps not illegal."

But how successful will it be? Ratings agencies in the past have cited the First Amendment -- that they have the right to say whatever they like about bonds. But that might not apply in the case of fraud -- which might be what the Justice Department will argue.

S&P has responded to news of the civil suit with a statement:

A DOJ lawsuit would be entirely without factual or legal merit. It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market -- including U.S. Government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained -- and that every CDO that DOJ has cited to us also independently received the same rating from another rating agency.

And S&P may be the first named in a suit, but they won't be the last. Perez says this is probably just beginning of a wider effort.

We'll bet that if you have a conversation about the Superbowl this morning, it won't be about the Ravens or the commercials you saw. It'll be about the fact that the power went out right in the middle of TV's biggest night. But could that dark moment in football history  turn out to be a bright spot for social media?

The British treasury secretary has given an ultimatum to the country's banks: Obey new rules or be broken up. Should the U.S. do the same?

A new documentary airs tonight on CNBC about one of the riskiest bets out there. It's not a stock, or a bond, or a startup company. It's the business of theater on Broadway. CNBC host Maria Bartiromo joins us for a preview of the program, Betting Big on Broadway.

And finally, San Francisco will not be getting a Superbowl trophy, but it is the beneficiary of a PR stunt by Jell-O, which is offering the city free pudding today. And for fans that don't like Jell-O, the company is offering an app for Google Chrome that will block words and images related to Baltimore with puppies.

After a week of near-record highs, Wall Street appears worried again -- one of the culprits may be new concerns about the European debt crisis, especially over issues in Spain or Greece.

In Spain, there are worries about a corruption scandal that may threaten the government.

"There are still fundamental problems in some of these countries," says Julia Coronado, chief economist with the investment bank BNP Paribas. "Spain is in a tough spot. The economy is in terrible shape, people are suffering. If there is a sense that the government isn't contributing their fair share to the pain -- that threatens the stability of the agreements that have been reached."

When it comes to Sunday night’s Super Bowl, chances are it won’t be remembered as the year of the Ravens. Instead, it’s being dubbed the "Night the Lights Went Out in New Orleans."

The Superdome says a circuit breaker sensed an overload and shut down several systems, putting the game on hold for more than 30 minutes. But that dark moment in football history is turning out to be a bright spot for social media.

Take for example Oreo. The company paid an estimated $4 million for a 30-second ad during the game. But when the power went out, it became an unanticipated chance again get its name out there.

“We saw an opportunity, and we quickly developed an image and caption within minutes,” says Oreo’s Vice President of Cookies Lisa Mann.

Oreo was the first advertiser to tweet a response, getting it out in something like four minutes. The tweet featured a pic of a cookie on a darkened background with the caption “You can still dunk in the dark.” 

“I mean it was explosive,” says Jed Williams, senior analyst at ad firm BIA/Kelsey. “It may have been the low point for the SuperBowl, but it was the high mark for the consumption of the event.”

Williams says companies will use last night’s outage as a study in the relationship between Super Bowl ads and social media.

“I think advertisers are going to hardly worry about this,” says JC Bradbury, a sports marketing professor at Kennesaw State University.

Bradbury says don’t expect companies to stop paying those high prices for ads just because of last night’s glitch.

“Television goes out all the time,” says Bradbury. “Television has ways to deal with this. And it’s still one of the most watched programs in the entire country.”

And if an outage happens again, pharmacy chain Walgreens tweeted it’s ready: “We do carry candles.”

When it comes to Sunday night’s Super Bowl, chances are it won’t be remembered as the year of the Ravens. Instead, it’s being dubbed the "Night the Lights Went Out in New Orleans."

The Superdome says a circuit breaker sensed an overload and shut down several systems, putting the game on hold for more than 30 minutes. But that dark moment in football history is turning out to be a bright spot for social media.

Take for example Oreo. The company paid an estimated $4 million for a 30-second ad during the game. But when the power went out, it became an unanticipated chance again get its name out there.

“We saw an opportunity, and we quickly developed an image and caption within minutes,” says Oreo’s Vice President of Cookies Lisa Mann.

Oreo was the first advertiser to tweet a response, getting it out in something like four minutes. The tweet featured a pic of a cookie on a darkened background with the caption “You can still dunk in the dark.” 

“I mean it was explosive,” says Jed Williams, senior analyst at ad firm BIA/Kelsey. “It may have been the low point for the SuperBowl, but it was the high mark for the consumption of the event.”

Williams says companies will use last night’s outage as a study in the relationship between Super Bowl ads and social media.

“I think advertisers are going to hardly worry about this,” says JC Bradbury, a sports marketing professor at Kennesaw State University.

Bradbury says don’t expect companies to stop paying those high prices for ads just because of last night’s glitch.

“Television goes out all the time,” says Bradbury. “Television has ways to deal with this. And it’s still one of the most watched programs in the entire country.”

And if an outage happens again, pharmacy chain Walgreens tweeted it’s ready: “We do carry candles.”

I'm in Chicago checking out some stadium seats for a Cubs baseball game -- the thing is, these seats aren't actually part of Wrigley Field. They are across the street on top of a private rooftop. At the height of baseball season, it can cost about $100 to watch a game from here. But watching trains go by might be all fans can do from here if the Cubs put up two big billboards in the outfield.

The team's owners, the Ricketts family, have a $300 million proposal to make structural updates while preserving Wrigley's trademark ivy walls and old, manual scoreboard.

Beth Murphy owns a building across from Wrigley. She says theres's no need to block a neighborhood institution.

"There is a reason that the Cubs pull when they have losing season -- and we've had quite a few in a row now. There's a reason. And I believe it's a synergy between the neighborhood and the ball park," says Murphy.

The Cubs say they're just trying to fund the ballpark's renovation without using any taxpayer dollars.

"All the rooftops are saying is they want to continue to make money selling tickets to a product for which they have to make not one penny of investment," says Dennis Culloton, a spokesman for the Ricketts family.

The rooftop owners do give some money to the Cubs, about 17 percent a year. But these billboards would drive them out of business. So the neighbors are suggesting a series of digital rooftop signs with all revenue going to the Cubs and the city.

"Their plan would sound good if it were at all based in reality to have seven electronic billboards put up in the Lakeview community, sort of giving it a Time Square feel," says Culloton.

He says the Cubs' advertising partners are more interested in being in the park than out. But, the Cubs haven't entirely rejected the rooftop idea. Culloton says the team is still open to ideas, it's just that things need to get moving, fast. The Cubs expect to have a done deal by the middle of February.

If you filled up your car at a gas station this weekend, you probably noticed that it cost you a bit more than it did the last time you were at the pump. The average price for a gallon of gas is about 13 cents higher than it was two weeks ago. Several factors contributed to that rise.

One of those factors -- refineries are transitioning from producing cheaper winter-blend to more expensive summer-blend gasoline. Refineries also use this time of year to do maintenance on their facilities, which means they produce less gas, lowering supply.

"Well, basically, they are cleaning their machines and making sure everything is functioning properly ahead of the high demand season," says Gregory Dacko, a senior economist at IHS. Yet another reason for the higher price at the pump, says Dacko, is cutbacks in production by OPEC.

But the single biggest factor is the price of crude oil. "The price of crude oil makes up about 66 percent of the price of a gallon of gasoline" says Avery Ash, a spokesperson for AAA.

Crude oil is up by 14 percent since mid-December. Analysts don't expect prices to rise quite as fast as they did this time last year. But last Friday did mark the first time in 2013 that the national average price of a gallon of gas was higher than that same day in 2012.

San Francisco will not be getting a Superbowl trophy, but it is the beneficiary of a PR stunt by Jell-O, which is offering the city free pudding today. And for fans that don't like Jell-O, the company is offering an app for Google Chrome that will block words and images related to Baltimore with puppies.

This final note today, which comes with the observation that the price of a barrel of crude oil has been rising for two straight months. The Energy Department said today the average American household now spends $2,900 a year on gas. That's just under 4 percent of household income, which is, in turn, the most we've spent on gas in 30 years.

It's all about the costs of efficiency, really. Even though our cars get more miles per gallon, we're driving more.

Oh, and gas is expensive.

A group of investors wants to take Dell private. Michael Dell, the computer company's founder and chief executive, has been in talks with banks, a private equity firm and Microsoft.

"You could say Microsoft is doing this for selfish reasons," say James McQuivey, an analyst with Forrester Research. He says Microsoft wants to survive.

"Microsoft cares about Dell because they need to have enough companies putting enough effort into making Windows-based devices."

And by investing in Dell, Microsoft could encourage that. Jayson Noland, an IT analyst with Baird, says this is Microsoft acknowledging the tech landscape has changed.

"We've seen so much innovation in consumer electronics -- specifically smart phones and tablets -- and the PC hasn't kept up."

Forrester's James McQuivey says Microsoft has begun to branch out. It used to be just a software company.

"There is a lot of risk in Microsoft putting its hand on the hardware business." But, he says, there'd be a lot more risk if it didn't.

A new documentary airs tonight on CNBC about one of the riskiest bets out there. It's not a stock, or a bond, or a startup company. It's the business of theater on Broadway.

According to Maria Bartiromo, the creator of the documentary "Betting Big on Broadway", 8 out of 10 shows lose money.

"It's tough to actually break out and make money on Broadway," says Bartiromo, "I think investors do it because they love it as opposed to doing it because they think they are going to have an overnight success."

Though Broadway has seen it's fair share of highly successful shows, such as Phantom of the Opera and The Lion King, they are the exceptions says Bartiromo.

So what makes some shows enduring classics while others fizzle out?

"I think it's important to connect with audiences, to entertain. Yes, you want to have a show that has lots of glitz and glamour and great songs, but at the same time, a story is always something that will connect with people," says Bartiromo.

Today Britain’s finance chief -- or Chancellor of the Exchequer -- George Osborne launches his new Banking Reform Bill which contains a measure to force banks to keep their retail business separate from their riskier, investment banking operations.

The idea behind this “ring-fencing” is that if an investment bank runs into trouble, the retail arm with its checking accounts, personal loans and ATM's , won’t necessarily be affected. Taxpayers may not therefore be required to bail out the whole bank because of a threat to the financial system.

Osborne said today that this measure would be given teeth. Or to use another metaphor: The ring-fence will be "electrified." If the banks try to evade the new rules, they will be broken up.

Ralph Silva, an analyst with SRN consulting says the U.S. should follow suit:

“American regulators must be given that power. They need to be the highest court in the land, they need to be the strongest policemen because the financial services is critical to the safety and secuirity of America,” claims Silva.

Britain’s planned reform will take the U.K. back to where the U.S. used to be before it repealed the Glass-Steagall Act in the late 1990s. The Act, introduced after the Depression, separated retail from investment banking.

A new app is hoping to offer some digital truth serum.  Truth Teller, under development at the Washington Post, aims to automatically check political speeches for lies, darn lies, and other misrepresentations. 

"We feed a video into our Truth Teller, it extracts the audio, it turns that audio into a transcript, then it takes that text, runs an algorithm and matches claims in that text to our database of facts and then returns back to the user whether this is true or false," says Cory Haik, the Washington Post's executive producer for digital news.

Haik says the idea came from a small speech made by Rep. Michele Bachmann (R-MN) to group of voters in Iowa during the 2012 presidential primaries. A Post editor in attendance found parts of it erroneous. Haik thought to herself, what if there was an app, much like the song-identifier app Shazam, for politics?

While the app is still a work-in-progress, Haik says the goal is to one day enable a voter to simply hold up their phone, record any politician, and see real-time if they are hearing fact or fiction.

Check out the Truth Teller prototype on your desktop here.

This week, we're asking a range of accomplished figures in the tech world about what could be the next digital frontier.  Are we moving away from an Internet of webpages and toward an Internet of things, or an Internet of interconnected objects?

According to John Chambers, CEO of Cisco Systems, we're heading towards what he calls "the Internet of everything."

Think smart refrigerators that call the repair man when broken, or a water meter in your house that monitors use and decreases leakage.

"If you look back at they year 2000, maybe 200 million devices were connected, today it's 10 billion. In 2020, it is 50 billion," says Chambers. "We believe it will change every aspect of people's lives."

From a business perspective, Chambers says the vast new hook-up could save companies around the world $14.4 trillion over the next ten years.

To hear Chambers discuss other new frontiers of connectivity, click on the audio player above.

As you consider your weekend plans, allow us to suggest dinner and a movie.

It is Oscar season, after all. And by most accounts, a pretty good Oscar season at that. Which makes it a good season for the studios that make those movies, says Wesley Morris, film critic at Grantland.

But it's not all luck. Studios are making fewer films and they're getting strategic about when they release them. Those last few months of autumn? Yep, that's when they're releasing the prestigious films that'll win them an Oscar (they hope).

And that's why you'll see a movie like "Hansel & Gretel: Witch Hunters" during the first month of the year. Morris says "they wait until what is conventionally known as the 'January dumping ground'" to unload films that -- shall we say, aren't quite Oscar-caliber. Meanwhile, big blockbuster films are released in the summer.

Morris says,"We're basically looking at a pretty predictable releasing pattern for all the seasons unless some really brave studio executive decides to shake things up by doing something interesting every once in a while, to keep audiences on their toes." But he says the odds are pretty low.

And you won't have to worry about the movie business going away any time soon. Both big screens and little screens are now owned by a very small handful of the same companies."Whatever money they're not making at the movies, they are certainly making in TV."

Online ticket seller Ticketmaster is trying to cut its customers a break. Not a discount, but better service. The website is doing away with captchas -- you know, those little hard-to-read sequences of letters and numbers you sometimes have to type in to make an online purchase. But it's not doing away with online security.

Ticketmaster is worried that you and I are bots, those automated scripts, or pieces of software which can flood the site, buying up all the Beyonce tickets. In order to tell flesh-and-blood Beyonce fans from soulless scalpers, Ticketmaster has customers fill out captchas, which in case you don’t know, is an acronym.

Tom Satwicz, a consultant with Blink Interactive, a firm that helps companies make their websites more user friendly, explains that it stands for: “Completely Automated Public Turning Test to Tell Computers and Humans Apart."

Satwicz made a tiny slip of the tongue, saying "turning”, but meaning "Turing," as in the pioneering computer scientist. That’s one of the problems with captchas. We humans sometimes make errors. And if you don’t get the captcha right the first time, it gets harder the next.

“People get annoyed and often times they’ll just leave the site instead of making that purchase,” says Whitney Hess,  an independent website consultant.
 
That annoyance is why Ticketmaster says it’s switching to shorter, easier captchas. Instead of text, Ticketmaster customers will have to solve image puzzles. You might be presented with a picture of a car, a flower and a dog and be asked to identify the animal

"This is something that is reasonably pleasant for the human being to go through but really difficult for computers to do," says Arun Sundararajan, a professor of digital strategy at NYU’s Stern School of Business.

Because artificial intelligence is good at text, he predicts more companies will switch their captchas to images.

Ticketmaster says the change to images will save you about seven seconds --  and that could help you score Beyonce tickets before they sell out.

The Labor Department released its latest jobs numbers today -- 157,000 jobs created in January, with an uptick of 0.1 percent in the overall unemployment rate to 7.9 percent. It follows the trend we've seen in the unemployment reports for the last few months -- good, but not spectacular job growth across the country. Some positive news came in the form of the jobs numbers from November and December, which were revised upward.

"I think there's a lot to be taken, that's positive, from the number today," said Fortune magazine's Leigh Gallagher. "Specifically the number of the long-term unemployed is going down quite dramatically, and that's a very important factor."

"It's a steady move in the right direction," said Reuters' Felix Salmon. "But it's going to take a very, very long time before we hit that 6.5 percent target that the Fed has. We all wish it would be faster, and frankly, given how successful all of corporate America is -- as you can see from the stock market -- wouldn't it be nice if they started hiring people with some of those profits?"

Salmon referenced the five-year high the Dow reached today -- closing above 14,000 -- but warned: "The Dow is a completely meaningless average. It's not even an index; it's an anachronism -- and the fact that anyone pays any attention to it just never ceases to astonish me."

"I think there is meaning," countered Gallagher. "But I will say this -- this is something that not everyone is partaking in. We are still living in a country that is a tale of two markets, economies, people, classes, everything."

And we asked them to give us some suggestions for some weekend reading:

Gallagher recommended :

• A fascinating look at how the NRA evolved from a marksmanship group to a mighty lobbying organization.
• The evolving relationship between the Republican Party and big business.
• Fortune's Jessi Hempel on Blackberry's Hail Mary pass.

Salmon's choices:

• Liaquat Ahamed's exit interview with Tim Geithner.
• Chip Brown on the North Dakota oil boom.
• Paul Barrett: Will brain industry lawsuits doom (or save) the NFL?