>> tom: democrats and republicans square off on tax cuts. >> we are ready, this week, to give tax cuts to every american making $250,000 or less. >> why wouldn't we work together to make it clear that all current tax rates will be extended for the next two years? >> susie: when it comes to the economy, the election confrontation has already begun. you're watching "nightly business report" for wednesday, september 8. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

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>> susie: good evening everyone. president obama rolled out his newest proposal today to re- energize the economy and to boost hiring. tom, the president's strongest pitch was for extending the bush tax cuts for middle class americans making less than $250,000 a year. >> tom: susie, at the same time, president obama said he opposes tax breaks for "millionaires and billionaires." he was speaking at a college campus outside cleveland, ohio, on the turf of one of his toughest republican critics-- house minority leader john boehner. >> susie: the speech set the tone for the president's economic agenda going into the midterm elections, which are just two months away. darren gersh reports. >> reporter: in a campaign-style event, the president today drew the battle lines, casting the election as a choice between the old economic model and the new. >> do we return to the same failed policies that ran our economy into a ditch, or do we

keep moving forward with policies that are slowly pulling us out? >> reporter: too slowly, republicans fired back. on jobs, republican leader john boehner argued the president's policies are the problem, and a few new ideas won't change that. >> until this uncertainty and spending is under control... i don't think these are going to have much impact. >> reporter: what does all this politicking mean for your bottom line? first, on those new proposals from the president: $50 billion in infrastructure spending, an expansion and extension of the research and development tax credits, and 100% expensing of new equipment. the last is most likely to become law, and even that analysts consider a long shot. second, whatever the election outcome, there will be less help coming for the economy. goldman sachs washington analyst alec philips says that's one reason his firm is downgrading their economic forecast for 2011. >> there's really three things happening there. one is the fading effect of the 2009 fiscal stimulus bill.

number two is our concern that congress will not extend unemployment benefits past their expiration in november. and number three is the fact that at least some of the tax cuts look likely to expire. on those tax cuts, president obama today vowed to extend the bush tax cuts for the middle class, but let cuts for those making more than $250,000 expire. philips thinks republicans will eventually blink, allowing the president to win this battle. but, conservatives like douglas holtz-eakin disagree. >> i think when push comes to shove, the worst thing for the economy would be to let everything sunset. if the price of avoiding that is an extension, for at least a short while, of the top two rates, he'll do it. >> reporter: financial markets are now expecting the election to result in divided government. in the past that has been good for investors, but with an uncertain economic outlook, some analysts think this time, gridlock could be more of mixed blessing. darren gersh, "nightly business report," washington.

>> tom: here are the stories in tonight's n.b.r. newswheel: stocks closed higher after a successful auction of portuguese government debt eased worries about europe's financial system. at the bell, the dow rose 46 points, the nasdaq added 20 and the s&p 500 up seven points. volume rose slightly from yesterday's pace. 879 million shares traded on the big board. just over two billion on the nasdaq. all three major indices dropped from higher prices after the fed's latest assessment of the economy. the regional fed banks say the recovery cooled through july and august. five reported economic growth at a moderate pace. another five said conditions were mixed or decelerating. and two regions, boston and cleveland, pointed to positive developments. getting fired from h.p. may pay big for mark hurd. he's getting a pretty big pay day from his new employer, oracle. hurd's base salary will be $950,000 a year, according to a securities and exchange commission filing. he's also eligible for up to a

$10 million bonus, plus stock options. that's on top of the severance package hurd got for leaving h.p., valued between $35 and $50 million. >> tom: still ahead, tech takeovers. our "street critique" guest mark watson expects buyouts to continue in the technology sector. coming up, he'll tell us what stocks he's buying. >> susie: b.p. today released its own findings about what went wrong on the deepwater horizon rig. the oil giant takes some responsibility for the deadly disaster, but says it was a chain of events involving multiple companies that led to the accident. b.p. began its investigation immediately after the explosion and released the results today in a 200-page report. stephanie dhue has more. >> reporter: today's report says the problem started with a bad cement job that caused dangerous gases to leak into the well undetected. crew members misread tests and thought the well was under control, and didn't act until it was too late. the blowout preventer, which

should have sealed the well, failed. b.p. took responsibility for its decisions on the rig, but also blamed halliburton for the cement job and rig operator transocean, which maintained the blowout preventer. transocean called b.p.'s report a "self-serving attempt to conceal... b.p.'s fatally flawed well design." b.p. says the well design is sound and consistent with other wells in the area. halliburton says it completed the well under b.p.'s specifications. it also says it's confident its contract with b.p. protects it from lawsuits. the 50-person b.p. investigation team found no proof the company cut corners, but they suggested that b.p. look more broadly at what happened. this report won't be the last word. transocean is doing its own investigation. government agencies, including the coast guard and the justice department, have their own probes. there's also a presidential commission looking into what went wrong. stephanie dhue, "nightly business report," washington. >> tom: south florida is home to

sunny skies, beautiful beaches... and it's also the epicenter of the nation's foreclosure crisis. the housing bust is putting the squeeze on south florida's taxpayers and the budgets of municipal governments. as we continue our "budget blues" series tonight, jeff yastine tells us how the lack of tax revenue means higher taxes and fewer services for people in the sunshine state. >> reporter: the human impact of the housing bust is well known-- unemployment, families uprooted, and a steep decline in home prices. now, the financial impact is coming home to roost. south florida is home to many examples, like the city of miami. >> this city has to function, and i don't think any of you want to see this city not function. >> reporter: last week, the city of miami called an emergency budget meeting to consider the unthinkable-- cuts in pay and pension benefits for police and fire-rescue crews. >> when considering voting on cuts in benefits, i would ask

the commissioners the following question: how much would you have to be paid in order to risk the thought of not seeing your children or loved ones again, or to save a complete stranger? >> and i am confident that the experiment that is being played on city of miami employees is neither just nor legal. >> reporter: faced with plugging a $105 million budget hole by october 1, miami mayor tomas regalado says there are no easy options left. >> it's either, we go and take the money from what we have now in terms of workforce, or lay off 1,300 people. we're talking more than 100 cops, 50 or 60 firefighters, solid waste people, public

works, you know... the works. >> reporter: in miami-dade county, revenues from property taxes are off by $30 billion. in neighboring broward county, where fort lauderdale is the largest city, property taxes are down $17 billion. taken together, that's $26,000 less in property taxes from every home and condo in the region. and that means more belt- tightening. workers in north miami beach will take a 10% pay cut and 10- day furloughs. hialeah, a city of 200,000, will lay off 50 employees, and could cut worker pay by a third. in broward county, 10% of bus routes are on the chopping block. along with millions of dollars less, says county commissioner stacy ritter, for law enforcement and other key services. >> you feel like you're stuck between a rock and a hard place. do you raise taxes and give them the services they want, but recognize that in this economy, raising taxes is a really bad thing to do? or do you cut the service, keep the tax level what it is, and

just recognize that they'll be mad at you because the parks and libraries aren't open when they want? there's no good answer and no way to please everybody in a time like this. jeff yastine, "nightly business report," miami. >> tom: our series continues tomorrow in new jersey, with a tale of two neighboring towns taking different approaches to control costs. >> susie: goldman sachs faces a large fine in the united kingdom.

the "financial times" is reporting the amount could reach $31 million. a formal announcement is expected tomorrow. the f.t. report says the claim follows a five-month investigation by the u.k.'s financial regulator into goldman's overseas business. it was launched in april, after the securities and exchange commission charged goldman with misleading investigators. the bank was fined $500 million by u.s. regulators, but the "u- u.k. fine is not solely based on that controversial abacus transaction, but overall business practices in the u.k. >> tom: with financial taking the lead again, but this time it was on the upside. lots going on, so let's get everybody updated, susie, in tonight's "market focus." >> tom: investors were able to shrug off the federal reserve's

regional economic assessment showing slower growth. it was back to the economically sensitive sectors of finance and industrial stocks, with each of those sector e.t.f.'s up 1%. investors shunned more defensive and dividend-paying utility stocks. that e.t.f. off 0.5%. on the weak side, visa was the biggest loser among s&p 500 stocks. analysts at bank of america merrill lynch worry visa may see its margins drop because of the financial reform law. shares of visa fell 4% on twice their usual volume. analysts are concerned that financial reform could increase pressure on visa to cut its processing fees. b. of a. merrill lynch cut its rating of the stock to "underperform." merger talk is a regular staple of the markets these days, with new and old rumors. the old rumor making a comeback today involved the "new york times." the stock was the biggest percentage gainer of the s&p 500, rallying 8% on four times usual volume.

just last week, shares hit a 52- week low. the rumor making the rounds again is mexican billionaire carlos slim may be looking to buy the company. he already owns 7% and has loaned it $250 million. others making moves today including zymo-genetics. we told you about this deal last night. bristol-myers squibb is buying the bio-pharmaceutical maker for $9.75 per share in cash, a huge premium from last night's closing price. this is a three month chart. the market may be looking for a higher offer with the stock closing at $9.76. computer software security firm symantec rallied more than 4% on twice its usual volume. it's been talked about as a potential merger candidate since intel's buyout of mcafee. the stock is at a one-month high. a couple of earnings, women's apparel retailer talbots was able to turn around a year ago

loss, but it had a disappointing outlook. margins were better, as it easily beat earnings estimates even while sales fell. talbots raised its earnings guidance, but it lowered its sales growth forecast. and that was the disappointing feature. shares fell just over 1%, but traded lower earlier in the day. volume was five times what it normally is. shares have lost a third of their value since that high in april. truck maker navistar is at its lowest price since march, falling 7% today. shares are down almost 30% since hitting a high in june. it easily beat estimates as profit margins widened. normally, a good combination. still, revenue growth wasn't as much as expected, and it dropped its sales forecast for the year. some military truck sales have been pushed out to its next fiscal year. while we're talking about things with motors, the outlooks for several auto part makers were cut by analysts at j.p. morgan. the auto suppliers think

inventories will grow as auto sales growth slows. among those hit, tenneco fell 4.5%. the canadian-based magna dropped almost 4%. and dana was off more than 3.5%. volume was strong in all three stocks. while stocks have been trending higher since september began, some of that buying power likely is coming from bonds. the interest rate on the 10-year government bond has reversed course, at least for now. two weeks ago it hit its lowest level in more than a year and a half, but it has crept back above 2.6% since, as investors sell bonds. and that's tonight's "market focus."

>> susie: do you feel you spend too much time waiting for search results from google? if so, you're in luck. today, the search giant introduced google instant. it gives users suggested results before they're even done typing. google says the new technology can shave up to five seconds from every search. if you like google the way it is, you can disable the new feature from your search page. google is the world's number one search engine, but is facing increased competition from microsoft's bing. >> tom: google is just one of the tech heavyweights that have been buying smaller companies in recent months. tonight's "street critique" guest thinks there are more deals to come. he's mark watson, c.e.o. and chief investment officer at keel asset management. >> tom: back with us temperature from the nasdaq. mark, nice to see you. welcome back to "nightly business report." >> thank you for having me

back again. >> tom: why is it cheaper for these tech companies to buy their growth than build it organically. >> buying growth is a better way, particularly when you're cash rich. in an effort to really boost return on capital, it is probably the most certain way to improve returns longer term. >> tom: let's take a look at some newer ideas, beginning with the business software firm, b.m.c., the ticker symbol, trading in the upper $30 range. why is this right for a takeout? >> we've owned behalf of our clients for sometime. in part because we thought there was fundamental growth just because of businesses outsourcing, etc. but longer term, it is still a single-digit topline grower. we thought it would be a beneficiary of the consolidation you're seeing elsewhere in the tech industry. >> tom: among oracle and

s.a.p., do you think those are the key buyers? >> those, among others. ibm also competes with them. >> tom: sorry to interrupt you. m.u., the ticker symbol on this. this over a 52-week low over demand with the semiconductors. does this worry you? >> it doesn't worry us longer term, and this is absolutely the right time to pick up a name like this. there isn't a lot of net debt on the balance sheet. they have actually been a consolidator, and this is a great time to enter this marketment we think there be much more consolidation. >> tom: mark, when you talk about long-term, is it 12, 18 months, or longer? >> probably a couple of years. >> tom: f.m.c. technology is unique in technology. it is really an oil services technology ferm. it has had a nice rally off the summertime lows.

what is the catalyst? >> part of it was the concerns about the cessation of deepwater drilling. we recently added this name because they're one of the more environmentally-friendly players in the industry. they have an excellent safety record. we think longer term, they will continue to be safe drilling. this is one of the ways to play that. >> tom: back on march 17th, you were with us in the springtime. eastman kodak, off by almost 40%. sineron medical, off by 24%. and american capital, a publicly traded private capital company, it is up by 13%. explain the differences here. >> right. when we offered these three names, we were looking for modest market growth in the s&p. we were looking at special plays. this is still a short-term timeframe. >> tom: okay. >> kodak, we still think longer term will be a beneficiary of the consolidation in tech. it has a net cash

position. it is near its 52-week low. weth longer term it will be part of another entity. >> tom: off by 40%. do you own these stocks, though? >> yes, we do. >> tom: mark, always nice to see you on our "street critique." nice to see you, mark watson. >> thank you again. >> susie: here's what we're watching for tomorrow: weekly jobless claims, along with an update on the state of u.s. imports and exports from july's trade balance. also tomorrow, legislative logjams and political gridlock in our nation's capital. we'll look at the lack of legislative movement in washington and how it's holding up issues like tax cuts, new stimulus spending and key appointments to the federal reserve. >> susie: a key part of general motors' recovery plan cruised off the production line today in lordstown, ohio. it's the chevy cruze, decked out in red, white, and blue, since the u.s. is the latest market for the vehicle. the cruze is the company's top seller worldwide this year.

g.m. has high hopes for the vehicle, which it says has the amenities of a mid-size car, with the stingy gas habits of a compact. >> thomas: united healthcare could be facing a bitter pill in california. its pacificare unit is under fire by state regulators, who say it has botched medical claims and hasn't paid doctors properly. if the violations are confirmed, the company could be on the hook for almost $10 billion in fines. this isn't the first time united's pacificare has been in hot water. it paid $2 million to california to settle charges it refused to pay claims for h.m.o. policy holders. 

>> susie: new figures show a record number of americans are dipping into their 401(k) accounts before retirement. financial planners say that should be a last resort, because of penalties and taxes. but tonight's "money file" has a slightly different view. here's eric schurenberg, editor- in-chief at bnet.com and editorial director at cbsmoneywatch.com. >> in the past 12 months, one in every nine 401(k) participants has borrowed from his or her retirement plan. that's more people raiding nest eggs than at any time in the past 10 years, and it has occasioned all kinds of hand- wringing from financial advisers. now i'd be the last guy to

encourage you to borrow unnecessarily. but sometimes you need a loan, and these days, a 401(k) might be your best source. with minimal fees and no credit check, you can borrow up to half your vested stash, or $50,000. the interest is around 4.25% these days. best of all, you pay the that interest back into your own account-- you pay yourself, in other words. so you could reach retirement with as much in your 401(k) as if you'd never borrowed, but you have to be disciplined. first, make sure you've weighed the alternatives. if you're borrowing for college, check out government- sponsored student loans or home equity loans. these days, though, you're likely to find that your 401(k) offers a better rate. second, resolve to keep contributing to your plan even as you make the loan repayments. that's key to keeping you on track even as you pay the loan back. finally, don't borrow unless you expect to keep your job through the term of the loan. if you leave your employer for any reason, you have to pay the plan back promptly, or you'll

owe taxes on the balance, and possibly a 10% penalty besides. that's the biggest trap you'll find in a 401(k) loan. if you aren't sure you'll avoid it, don't take the loan. i'm eric schurenberg. >> susie: that's "nightly business report" for wednesday, september 8. i'm susie gharib. good night everyone, and goodnight to you too, tom. >> susie: good night susie. i'm tom hudson. good night 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. captioning sponsored by wpbt

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