this program is made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening, everyone. washington got another warning from wall street today. moody's investors service said it will put the u.s. government's "triple-a" credit rating on review for possible downgrade if lawmakers don't make meaningful progress on raising the debt ceiling. tom? >> tom: susie, moody's wants to see progress by mid-july or it will launch the review. its current rating outlook on the u.s. is "stable." this is the second agency to warn the u.s. >> susie: the ratings agency said the widening political divide over the budget talks is forcing its hand. but if a deal is reached and the debt ceiling is raised before the august 2 deadline, the country will keep its blue chip rating. also today, moody's said it doesn't think uncle sam will go to extraordinary lengths to save some of the nations biggest banks. that could lead the firm to cut debt ratings on bank of america, citigroup and wells fargo. >> tom: also in washington today, the department of education rolled out new regulations on for-profit colleges. while the rules ensure graduates of for-profit colleges earn degrees that get them jobs and let them pay back student loans, the schools will have longer to implement them. stocks of for-profit colleges staged a strong rally as investors decided regulators had given the industry a passing grade. darren gersh reports. >> reporter: alarmed by high student loan default rates at for-profit schools, the department of education set out more than a year ago to make sure more students graduate with a degree that actually helps them find work and pay back their loans. but r.b.c. capital analyst bob wetenhall says regulators turned out to be easy graders. >> and some of the companies that were suspected of being the primary violators, like i.t.t. educational services and corinthian colleges, and e.d.m.c., are now in a much better position due to having a longer time frame in which to adjust their practices to meet these relaxed thresholds. >> reporter: r.b.c. capital does seek investment banking business with for-profit colleges. the new regulations require that for-profit schools pass one of three tests to stay in the federal student loan program: 35% of former students are repaying their loans, or a typical graduate's annual student loan payment is less than 30% of discretionary income or 12% of total earnings. but the new rule gives colleges four years to pass the so-called "gainful employment" test, and critics like david halperin say the industry now has more time to fleece students. >> it's a rule that is not as strong... nearly as strong as it should be for protecting america's students and america's taxpayers, but it's a step in the right direction. >> reporter: harris miller disagrees. he represents for-profit colleges in washington and says industry leaders will meet this weekend to consider whether to try to block the new regulations in court or by lobbying congress. >> if it does impact hundreds of thousands of students and it will deny them access to higher education-- and i do mean deny, because these are students who rarely have choices-- then that's a very bad public policy. >> reporter: the american council on education's terry hartle gives the new rule mixed marks. he says it will curb some abuses, but the regulations are extremely complicated. >> it will have an impact; we just don't know exactly who it will impact or how. >> reporter: with the regulation behind them, investors in for- profit colleges are focused on the economy. as the job market improves, analysts expect fewer students will want to sign up for an expensive education at a for- profit college. darren gersh, "nightly business report," washington. >> susie: here are the stories in tonight's "n.b.r. newswheel": blue chip stocks remained weak as investors focused on tomorrow's jobs report. the dow fell 41 points, the nasdaq rose four, the s&p 500 lost a point. a billion shares traded on the big board, just under two billion on the nasdaq. new claims for jobless benefits fell by 6,000 last week to 424,000. it's the eighth straight week that number was above 400,000. and bloomberg news reports that goldman sachs was subpoenaed by the manhattan district attorneys office. the d.a. reportedly wants to know about a senate report on goldman's business dealings ahead of the financial crisis. no comment from goldman or the d.a. >> reporter: still ahead, i talk with the c.e.o. of saks about the outlook for luxury retail as the economy slows. >> tom: online banking customers, video gamers and users of google's e-mail all have faced the potential of electronic i.d. theft in recent weeks. the threats also expose those companies to financial losses and tarnished reputations. the latest electronic break-in was disclosed this week by google, claiming its g-mail service was attacked by hackers in china. china's foreign ministry denies it supports hacking. the google attack is just the latest. in the past month, sony's playstation video game network had more than 100 million user accounts compromised, and marketer epsilon saw hackers get access to customer e-mails it maintains for companies such as walgreen's, capital one and h.s.n. on capitol hill today, lawmakers called for new regulations to increase security precautions. tim schaaf, president of sony network entertainment international, said those new initiatives and big budgets may not be enough to prevent another security breach. >> despite spending millions of dollars to secure your networks, despite all of the best methods known to us, our networks are not 100% protected. >> tom: denis kelly is author of the "official identity theft prevention handbook." he's also chairman of the identity ambassador commission, a private group that certifies identity theft prevention experts. >> welcome tonight to business report. is there no amount of money? no amount of protection can guarantee the security of customer information online? >> there's nothing that can absolutely guarantee your information won't be stolen. the way the identity theft criminals work, you can't guarantee your information won't be stolen. >> tom: we saw the executives from sowny and epsilon endorse the idea of federal legislation in order to security breach protocol. what are cums expecte companies do now? >> right now policies are guiding them. that's where we get a situation where companies are actually begging for legislation to regulate them. >> tom: is it possible federal regulation could cover all security breaches? >> it's impossible to cover all types of different security breaches, but what they can do is provide a framework that gives them an option to change things baseed on the situation. >> tom: this is nothing new. a couple of years ago, a handful of retailers saw millions of credit card numbers stolen. tj max among them. what does the precedence have, and what should you do? >> what's happening now is a lot of these retailers and companies are hiding, because they're not sure what to do. what we're trying to do is change through legislation, and give them the confidence so they act responsibly, and let the consumers know. >> tom: let's talk about the cost of breaches to the companies, because data has shown that the cost of personal records has risen considerably. it was $180 per stolen record in 2006. last year over $210 per stolen record. where's the biggest liability? >> the biggest liability is surprising many people. it's actually the indirect cost. two to one incorrect cost, the loss of reputation and branding. >> tom: now from the consumer standpoint, there's a lot of risk. your personal identity, financial information. you brought along ideas to best protect, begining with the idea that they should set up automatic fraud alerts. how do these work? >> the way it works is you call up one of the credit bureaus and put a fraud alert on your credit file. what that does is if you're getting new credit, they must validate that you are who you say you are which should be part of the process. >> tom: and this is automatic. and you also say don't answer uninitiated e-mails. phishing expeditions. >> right. exactly. that's the epsilon breach. a way to steal knowledge is through the social engineering. they know that you bank at bank of america, so they're going torement themselves as though they're a representative from bank are america. >> tom: but even legit, don't answer? >> never answer. everything to lose. >> tom: and make your personal data personal. we're in the age of social networking. fi. you're in line at the grocery store, you don't go ran up to somebody and tell them your name. why do that online >> and vacation and personal travel plans offline. >> and personal security, why let criminals know you're not going to be at home. >> financial costs for corporations and we appreciate the idea. denis kelly is our guest, and the author of the official identedity theft handbook. >> susie: late today, groupon filed to go public. the daily deal web site hopes to raise up to $750 million. now, it's the latest in a growing number of companies jumping on the i.p.o. bandwagon. that's not just good news for investment bankers; it's also a positive sign for the overall market. erika miller takes a closer look at why i.p.o.s have been looking sweeter to investors. >> reporter: it's not just "time to make the donuts"; it's also time to make the dough. dunkin' donuts is one of 140 firms planning an initial public offering. it's the biggest i.p.o. backlog in almost four years. toys 'r us and real estate web site zillow are also on the list. i.p.o. expert david menlow says it's not a coincidence that many are well-known names. >> the new trends that are emerging in this i.p.o. market certainly point to investors not having any patience for stocks that need an explanation, any more than a sentence of two. name recognition, brand i.d. is critical for many of these offerings at this particular point. >> reporter: the i.p.o. market has picked up steam since linked in debuted two weeks ago. the $1.3 billion raised makes it the most successful i.p.o. since google. but many in the class of 2011 have struggled in the after- market. shares of linked-in, for example, are down almost 17% from their first day close. analyst rich peterson explains why. >> we've seen some companies give up their first-day gains, though they are still trading above their offering price. so, in a month where may was having trouble, the s&p off about 3% or so, some of these companies that recently debuted have retreated a bit as the market has also. >> reporter: 83 companies have gone public so far this year, up from 58 this time last year, a more than 40% increase. david menlow believes this could be the best year for i.p.o.s in a decade. >> the confidence of the i.p.o. market is basically... is basically a barometer, a barometric reading of what people feel about the broader market. i.p.o.s are a luxury item for many investors, and they will not venture into the space unless they feel better about their core investments. >> reporter: so firms like dunkin' donuts hope that investors will continue to have an appetite for new issues as a way to fatten up their investment returns. erika miller, "nightly business report," new york. >> susie: tom, certainly a lot of excitement about ipos, and a lot of worrys about jobs. everybody i've talked to is worried about the employment report coming out tomorrow, expecting a weak number. that's why we see the dow down two days in a row >> tom: confidence high with some of the corporate news out there, but not so much when it comes to the economics. let's go ahead and roll with tonight market focus. a mixed market with investors bracing for tomorrow's monthly employment situation data and absorbing another warning about the u.s. credit rating. despite the worries continuing about a more tepid u.s. economy, the economically sensitive industrial sector was the best today, and it was led by heavy equipment manufacturer joy global. shares jumped more than 5%, just above the range it has been in since early may. the company easily beat estimates in its second quarter. earnings were 17 cents ahead of forecast. its mining business was particularly strong. also helping its stock reaction today: it raised its outlook. that kind of optimism helped out dow component caterpillar. it rose almost 1%. while not spectacular, it was the best among dow stocks. as economic growth concerns have crept in over the past month, cat shares are down about 11% of this high. while we're talking about machines that dig and help build things, hill international is a construction and property manager. shares rocketed higher by 59%. volume soared, up 100%. it received a $1.5 billion contract to manage and supply a big housing development in iraq. the consumer has been in focus with the stock market sell-off, high gas prices and weak housing market, and consumer staple stocks were the weakest sector, lead lower by supermarket supervalu. s.v.u. fell more than 4.5%. volume almost tripled. the firm has been trying to turn itself around, but shares continue trending lower. still, shoppers were spending in may, especially at saks. same store sales shot up better than three times what was expected. shares rose a little over 1%, but volume was heavier than usual. coming up, suzanne pratt sits down with the saks c.e.o., talking about the strength of the high end shopper. other retailers didn't fare so well. kohl's sales were disappointing. it's shares were down almost 3%. j.c. penney actually saw sales drop, and its stock followed suit, down almost 3% to a four- month low. and handbag maker vera bradley shed more than 13% as its quarterly earnings fell. >> this month, and last month, the first couple of trading segs have not been very kind to silver. today, the second trading day of the the month off 4%. and that's tonight's market focus. >> susie: as tom mentioned, sales at the nation's retailers were so-so last month, with a few exceptions. and saks was one of them. the luxury retailer rang up a stunning sales gain of more than 20% in may. shoppers have been snapping up shoes, jewelry and clothing. earlier today, suzanne pratt met with c.e.o. steve sadove and asked him why saks is doing so well. >> our customer is feeling better about themselves, and they're feeling better about the overall condition of the economy. not the overall economy, because you you've got concerns. but there's a bifurcation in the high end customer, and they're feeling better. >> i was going to ask you about the bifurcation. because they're feeling well, and you have the midrange not doing well, and the low end doing so, so, so do you expect that to continue? >> i think the higher end is tied to the stock market. the stock market in the 12 to 12 and a half thousand raishlg, and better than 6500. and our customer looks at their net worth and say i feel not as good as 14,000. but reasonably good about my situation today. they're feeling good about their jobs and the unemployment at the higher end is not very high. and they're saying, i can deal with this and they're buying. >> in the last two weeks, we've seen cybs that the economy has slowed significantly. what do you think that's going to mean for the customer? >> i think it's more of a question of what's going to happen to the stock market, and i'll tell you what's figure to happen to the customer. the stock market seems to have weathered, whether it's the european concerns, whether it's the oil price shocks, and somewhat slowing economy. if the stock market were to take a big shock, i think it would affect our customers. >> like yesterday? >> 250 points doesn't help, but it's a sustained basis. this is not a day by day basis thaw see the concern. but if you were to see lots of days of those kinds of drops, i think it would be a concern. >> we're talking about a significant correction in the market? >> absolutely. there's probably -- we've been talking about this for years. there's a direct correlation between the state of our business and the perform abs of the dow. >> so your out look for sales is what? >> >> we're becoming increasingly optimistic over the course of the year. we just raised our forecast from high single digits to low double digits. we're seeing a bit of optimism. we're not euphoric. we're still very cautious longer term. but we're seeing the outlook as reasonably solid. >> some people have said that there there's a need to pump more money into the economy in the form of a qe plan, that's it for luxury retailers. do you agree with that? >> i don't think there's any one indicator that is it for the luxury retailer. there's a systemic longer secular trend that's positive for luxury. i think you're going to continue to see the cultural phenomenon of people liking the brands and what they see on the runway and what the celebrities are wearing. that's a positive indicator for luxury. i don't think any one indicator such as a qe 3 were down or not done. when a qe 3 kill the stock market. >> your stock is up 70% since september. what do you need to do to keep it going up. >> it's performance. we have a long way to go. we took a major hit. and we were on the path to increased profitability. our operating margins aren't at the level of some of our competted tores and we have a lot of improvement ahead. >> thank you very much. >> great. >> tom: here's what we're watching for tomorrow: jobs. many economists expect may's employment report will show hiring slowed last month. tomorrow's "market monitor" is stephen wood of russell investments. after all the excitement and worries of this week's stock sell-off, he thinks investors should focus on the slow but still growing global economy. >> susie: fidelity investments has friended facebook in a big way. fidelity's largest stock fund, the contrafund, owns more than three million of facebook's private shares, valued at $74 million. facebook itself carries a nearly $63 billion price tag, according to a recent regulatory filing. fidelity and its rivals are buying stakes in social- networking firms before they go public. that's a big change for the mutual fund industry, which avoided privately traded stocks for years. >> tom: the euro-zone is dealing with a health threat. an e. coli outbreak has killed 17 people and sickened more than 1,500, mostly in germany. health officials say this is a new and highly toxic strain of bacteria. it's unclear just where it came from, but its believed to be spread through raw vegetables and salads. that has prompted russia to ban all imports of raw fruits and vegetables from european union countries. >> susie: when it comes to prosecuting insider trading, tonight's commentator thinks the raj rajaratnam case has changed the playing field in the favor of prosecutors. he's don tellock, a corporate attorney at the pepper hamilton law firm. >> the recent conviction of the galleon group's founder, raj rajarantnam, is notable for a variety of reasons. first, it is a clear signal to wall street that prosecutors are now willing to use wiretaps to investigate white collar crime, a tool previously associated with investigations of drug trafficking and organized crime. second, it is a strong indicator to would-be insider traders that using wiretaps in white collar cases works. third, it proves that insider trading defendants can't use the so-called mosaic defense by claiming they pulled information from a variety of sources when the government has them on tape receiving insider tips. if they have gotten the message, traders, bankers and other wall streeters may now seek legal counsel to get guidance on the limits of the law. although heightened prosecutorial scrutiny and the use of wiretaps will lead to more caution, it will never totally dampen wall street's interest in taking risks to make money. but i'm sure of this: the larger message of the galleon case is that regulators want to make the markets fair for all investors. there is currently a pipeline of insider trading cases being prosecuted by the government to hammer this message home. ultimately, investors will demonstrate their level of confidence in the market's fairness by where they place their money. i'm don tellock. >> you can find more information on how to protect yourself from identity theft online on our website. that's the nightly business report. that's "nightly business report" for thursday, june 2. i'm tom hudson. good night, everyone. and good night to you, too, susie. >> susie: good night, tom. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. 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