>> tom: alcoa kicks off earning season with a bright, shiny outlook. revenue was higher than expected. while profit was lower, it was better than predicted. >> susie: and the company sees higher aluminum prices for the rest of the year, thanks to huge demand from china. we talk with alcoa c.e.o. klaus kleinfeld. you're watching "nightly business report" for thursday, october 7. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. alcoa reported upbeat quarterly

earnings after the bell. susie, the aluminum giant is the first dow component to report. >> susie: tom, investors approved-- the stock rose 3% in after-hours trading. alcoa posted a quarterly profit of $61 million, or nine cents a share. that's four cents more than analyst estimates. revenue also came in higher than expected, up 15% to more than $5 billion. c.e.o. klaus kleinfeld will join us in a moment to talk about those results. but first, tom, last month, consumers showed they're ready, willing and able to spend. the result was better-than- expected september sales for many retailers. the big winners-- teen retailers like abercrombie and fitch; department stores, including macy's; and luxury chains like saks. on the flip side, discounters like target, bj's and t.j.x. missed estimates. >> tom: while people were spending, they weren't using plastic. new data show consumer borrowing fell in august as credit card use slid for the 24th

consecutive month. looking at the numbers, you'd think america is adopting a new thrifty mentality. but dig a little deeper, and it's not clear there's a new mindset. erika miller explains. >> reporter: there are a growing number of web sites dedicated to saving consumers money. the trend would seem to suggest americans are becoming more frugal. not necessarily. cardhub.com looked at consumer credit data and came to a grim conclusion. yes, credit card balances fell by $134 billion in the 18 months between january 2009 and june of this year. but nearly all of that drop was due to write-downs by lenders. that's money they can't collect from borrowers in default. cardhub's odysseus papadimitriou expects that trend to continue. >> unfortunately, in 2010, our latest projections show that there is going to be no decrease in credit card debt as a result of consumers paying down. there is going to be a net increase. >> reporter: an increase to the

tune of $26 billion after charge-offs. that works out to an extra $114 owed by every american adult. but economist cary leahey says there is one positive sign-- americans are saving more. >> their savings rates have gone up from effectively zero in 2006 and 2007 to 6%, which is actually surprisingly high compared to what people thought they were. >> reporter: but cardhub believes much of the increase in the national savings rate is coming is coming from a small group of wealthy americans. >> it is this small segment of the population that i believe is increasing their savings rate. and so we see the overall savings rate increasing, when it doesn't reflect what most americans and actually doing. >> reporter: all of this could be good news for retailers this holiday season. if consumers are not particularly concerned about debt or saving money, that leaves more cash that can be spent on gifts. erika miller, "nightly business report," new york.

>> tom: here are the stories in tonight's "n.b.r. newswheel." blue chip stocks fell slightly in anticipation of earnings season and tomorrow's employment report. the dow dropped 19 points, the nasdaq gained three, and the s&p 500 lost nearly two points. volume backed down from yesterday's pace. fewer than one billion shares traded on the big board. nasdaq volume was under two billion shares. mortgage rates have once again fallen to bargain basement prices, according to freddie mac. the average 30-year fixed rate mortgage is 4.27% this week, a record low. the average rate of 15-year- fixed loans, a popular choice for refinancing, dropped to 3.72%. >> susie: the september report card on the job market comes out tomorrow morning. but here's something critical to watch, other than just september-- the data will include revisions to a year's worth of past jobs numbers. that could be big, because it could show the job market was weaker than we thought.

here's the year being reworked-- from april of last year through march of this year. right now, the government says we lost 1.7 million jobs over that time. but that could change. as for the september numbers, estimates are all over the board-- from no jobs lost or gained to 75,000 private jobs added. the unemployment rate is expected to reach 9.7%. tomorrow's report is the last jobs number before election day, and the next federal reserve meeting, which could result in new stimulus for the economy. >> tom: amid growing confusion over foreclosure proceedings, president obama will not sign a bill that would let foreclosure documents be accepted among multiple states. instead, the president is sending the legislation back to congress for changes. consumer advocates argued the bill would make it difficult for homeowners to challenge foreclosure documents prepared in other states. still ahead, nevadans are struggling with foreclosures and the highest unemployment rate in the nation.

we'll explain how the state could play a very important role in this year's midterm elections. >> susie: more now on alcoa's solid earnings. joining us, klaus kleinfeld, c.e.o. of the aluminum giant. klaus, nice to you have back on nightly business report. >> good evening, good to be here. >> susie: let me jump right ahead for your outlook to 2011. you've come off of a good profitable back-to-back quarter. what are you expecting in terms of profit an revenue growth for next year? >> well, as you said, we have a solid third quarter, cash is up, balance sheet is improved. great performance on the midstream and downstream business. and improvement on the upstream against quite a bit of headwinds that we were facing. at the same time, we see a solid recovery of the economy in general. and also in the u.s. and we have raised the expectation for the alumn alumni-- aluminum, another time, this time to 13% this

year. >> susie: when are you talking about 13%, are you talking being global aluminum consumption and a lot of that, you said in your release today is being driven by what is going on in china. and that's worldwide. but how much will alcoa benefit from that growth given that most of your business is in the united states and in europe. >> well, this is a global market. i mean the commodities market. and the prices,. the prices will be processing from no matter where it coming from, we have a global footprint. the value add is probably 70% outside of the u.s. at this point. 45% currently sold inside 9 u.s. and also in the u.s. the situation is not that bad at all. i mean we see quite a number of pockets of growth. aerospace, for instance, 511 orders this year compared to 195 last year. that is solid, automotive september came in substantially strong,

strongest month after august 2009 which was marked by cash for clunkers. trucks and trailers 50% orders up on that end. so there is good, solid recovery, probably a little slower than we are used to but it is moving in the right direction. >> susie: and how are things looking for you in your business in europe where we know that the economy there is so sluggish? >> well, the interesting thing is that europe as henry kissinger always said doesn't have one telephone number. so there is a lot of-- in there imf just came out yesterday with their worldwide as well as regional growth numbers. and they upped the number for europe to 1.7% growth this year ruz. >> susie: but that still very slow, what does that mean for alcoa's growth? >> sass as i said, for us the most important number you have to keep in mind is what is the reflection of all of that that is happening on the aluminum side. and aluminum as we said we

ended-- upped demand expectation 30% this year. we actually do see that there is quite a bit of tightness going on in the market. prices have in the last two, three weeks come up. in our industry it is typical that we don't get the profit from the higher prices right away. we typically have a lag time above 2 weeks so you can expect that to be running into the next quarter. >> beth: we just have 30 seconds left and i want to talk to you about alcoa stock t did rise in after-hours trading and it was alcoa stock was one of the best dow component performers for the month of september. but it is still a far way off from $40 a share from a few years ago. what has to happen for alcoa stock to get back up to that level? >> well, i think what people are seeing is we have used the downturn to restructure our cost base. we have cut a lot of costs out, become a very lean company and at the same time driven for further innovation and further growth.

and that is all coming back. we currently have utilization in the mid to downstream of roughly 70%. once the economy comes back that comes in. we have the record performance in ouferb downstream 18% this quarter, with the utilization rate of roughly 70%. so you can get a good idea on what all the good things are there to happen almost automatically on top of it. i think we are very well-positioned to continue to use the opportunities that we will be facing very soon. >> susie: we will check with you again in a few months and see if things are working out as planned, thank you so much. we have been speaking with klaus kleinfeld.

>> tom: another day of small moves as we await the september jobs data tomorrow. let's get you updated in tonight's "market focus." despite the modest changes for the major indices, one place we did see a late-day move was in software maker adobe. in the last hour of trade, shares jumped to end with an 11.5% gain. volume more than quadrupled. so what got adobe moving? rumors of buyout interest from microsoft. here's the last year of adobe. the trade has been choppy and trending lower. "the new york times" reports the c.e.o.s of adobe and microsoft recently met in secret. neither company commented.

microsoft saw a much more muted response to the rumor, gaining less than a one-half of one percent. the stock is trading near the low end of its range, despite raising its dividend last month. microsoft has been playing catch-up in the mobile phone software market, especially to apple. and apple and adobe have been fighting over apple's refusal to allow adobe's flash software on iphones and ipads. this wasn't the only buyout rumor in technology today. b.m.c. software found itself the target of such talk. shares hit a new 52-week high, rising almost 7% on six times its usual volume. these rumors have been on and off for several weeks. we continue to see the u.s. dollar weaken against the euro, the yen, and other currencies. the dollar index measures the greenback against a half dozen global currencies. it has been sinking since early september. tonight, it is at its lowest point since the first week in january. analysts point to tomorrow's

employment data and the growing expectation the fed will announce a new round of bond buying next month as reasons for the dollar drop. as we mentioned earlier, the shopper showed up in stores in september. retail same store sales had a positive tone; one that rewarded j.c. penney. shares continued their climb that began in august with the stock at its highest price tonight since april. volume was big on this move today. its september same store sales were much better than expected. other winners and losers-- abercrombie and fitch jumped 9% with a big jump in back to school sales. fellow teen retailer aeropostale fell 4% with a disappointing month. the two biggies-- wal-mart and target-- split their stock performance today. of course, wal-mart doesn't report monthly sales; target's came in slightly below expectations. consumer discretionary stocks were among the market leaders, thanks to retail stocks, but marriott was the laggard for the sector. shares fell out of bed, down 6% down to a two-week low. its revenue and outlook were

disappointing. consumer staple pepsi also was a drag, cutting the high end of its earnings growth forecast for the year. the company made its numbers, matching earnings expectations, thanks to its buyout of its two biggest independent bottlers. shares fizzled thanks to it trimming the top of its growth forecast. the stock did four ties its usual volume, falling 3%. and that's tonight's "market focus." >> susie: nevada's u.s. senator harry reid wants to stop all

foreclosures in his state. if he gets it, that could be huge. nevada is ground zero for the foreclosure crisis, although when you think of las vegas, casinos and neon lights likely come to mind. but this election year, political pros think the glitzy city is the place where control of congress may be decided, and foreclosures could be the flashpoint. tonight, we roll out our special election coverage, "midterm 2010-- it's the economy". as darren gersh explains, there is really one issue in nevada right now-- economic survival.. and it's not a pretty picture. >> a lot of it is disbelief. people don't believe that that's real. how are we going to recover"? >> reporter: conceptual artist emily kennerk's work explores the concept of being the best, of being number one. las vegas is her canvas. >> this piece is called "america's #1 foreclosed city, las vegas." >> reporter: each slide is one second, one foreclosure. the impact takes a few moments

to sink in. >> i see them trying to do the numbers and say, "well, if it's every second..." and when they see that it really does match up, i think they are pretty shocked. >> reporter: shocked because these photos go on for 22 hours and nine minutes. if you want to understand what people care about in this election, this is as good a place as any to start. >> there's a lot of conversations that start "we have to do something different. we can't exist this way. is there anyone out there to help us, or are we just going to get thrown under the bus?" >> reporter: in the boom times, this sign eeted 5,000 new residents a month. they came here for good jobs and good homes. ♪ it was an optimistic time, and a new tag line captured the mood: billy vassiliadis's firm developed the marketing campaign that helped define the image of modern las vegas. here's how he described it to us in 2005. >> i think what it did is it got

people back to that notion of needing to escape and needing to not have to meet the societal pressures that you have to meet. >> reporter: vassiliadis is also a democratic political consultant. and now that the boom is gone, he says the optimism that always characterized las vegas voters had been replaced by something new. >> to me, "fear" is the word, and fear that the american dream is over, that we are now the first generation who won't be better off than our parents were, who won't be able to even aspire to the things our parents aspired to." and i think there is a collective resentment that that dream, in their minds, has been taken away. >> reporter: and the las vegas slogan-- "what happens here, stays here"-- has also taken on a new shade of meaning for the tourists, and perhaps the people who live here, too. >> in a two- or three-year period, where people feel they

have lost any control over their own lives, that they are being driven by bank decisions, wall street decisions, congress. they have no control over their personal employment. for a weekend, for a few days, this place puts them back in charge. >> reporter: for voters like mary jo weinstein, the question is who to put in charge. >> i'm worried about the economy. we live in a state with the highest unemployment rate in the country-- 14.2% or 14.4%. i'm worried about social security. i'm worried about the government taking over our lives. >> reporter: this is her first political campaign. >> one of my children is unemployed and has been for two years, and i'm worried because, pretty soon, his unemployment is going to run out. >> reporter: tea party activist frank ricotta is now, as of three weeks ago, chairman of the clark county republican party. >> if you go back two years, i didn't have a political background. >> reporter: now, he is also appealing to voters who feel they have lost control and want

it back. >> we need to elect people who are fiscally conservative. we need to get the government out of the people's business. government does not create jobs, it is private enterprise that creates jobs. so you let those people do their work-- less government intervention, less taxation. it's always worked before. capitalism is a great thing. >> reporter: this is the house that inspired emily kennerk's work. like so many others here, one day, she walked by and found the neighbors were gone. >> the first thing i noticed was the lock box. >> reporter: she decided to capture the moment with a charcoal rubbing of an entire house. >> i think it has the quality of a memorial. >> reporter: talk with kennerk, and you get the sense she would just like to find someone who can help bring this long stream of images to an end. >> people are in a functional state of shock. they're looking for some direction and someone to say, "here's a way to navigate this."

maybe not solve, but navigate. >> reporter: this story took about five minutes, enough time to see 300 of the images of emily kennerk's work. 79,000 more to go. darren gersh, "nightly business report," las vegas. >> tom: tomorrow, our midterm coverage continues in nevada with a look at a very close congressional race. as we mentioned earlier, we'll also see september's employment report. mohamed el-erian, c.e.o. and co-chief investment officer at pimco will join us to talk about it. and randall eley is back as our "market monitor" guest. he's president of the edgar lomax company. >> susie: the nation's biggest public transit project is off the drawing board tonight. new jersey governor chris christie has stopped plans to build a new rail tunnel between his state and manhattan. christie says the price tag could run as high as $14 billion, and that's just too much. the project has been in the

works for decades, and $600 million has already been spent on it. >> tom: it's citigroup versus j.r. ewing-- only this time, in new york, not dallas. an arbitration panel ordered the banking giant to pay $11.5 million to actor larry hagman, who played ewing on the 1980s tv show named for the texas city. hagman claimed citi defrauded him and broke the law in how it handled securities in his accounts and a life insurance policy. citi disagrees with the ruling, and is reviewing its options. k

>> susie: many economists believe the u.s. is headed for an extended economic slump like the one japan experienced in the 1990s. but tonight's commentator doesn't think so. he's todd buchholz, author of "lasting lessons from the corner office." >> is the u.s. following japan's 20-year economic slide? laid-off japanese executives spend their days in secret hideaways, ashamed to admit that they have no job. will it happen to us, here in america? lots of so-called "experts" think so. baloney. in the 1980s and early '90s, truckloads of books told americans that we'd all be flipping hamburgers for japanese bosses. sean connery starred in a spooky movie called "rising sun." america's frailty seemed

apparent when, at a state dinner in 1992, the first president bush threw up on japan's prime minister. paul krugman wrote "the age of diminished expectations." what happened next? a u.s. economic boom that jacked up wages and drove the unemployment rate down to 4%. here's why the japanese slump doesn't translate into american. first, the japanese population is shrinking. i don't mean height; i mean there are fewer young people available to work. and japan doesn't invite immigrants in to help. second, japan's 1980s success was only in manufacturing. the service sector was dismal. in contrast, u.s. software, entertainment, and advertising are world class. third, our leaders are not dumb enough to sharply hike taxes during a recession. i could be wrong on this last point, but i hope not. japan is still a wondrous place. mount fuji still glimmers in the snow. but even if the sun is setting on japan, our stars and stripes can wave, if not forever, for a

very long time. i'm todd buchholz. >> tom: finally, barbie is hitting the auction block in two weeks. but this doll isn't child's play. wearing a black strapless party dress and a one carat diamond necklace, this is the world's most expensive barbie. she is expected to fetch between $300,000 and %500,000 at christie's auction house in new york. >> susie: so tom, where ken in all this? >> tom: maybe he's out trying to pay are for the diamond necklace. who knows. >> susie: maybe. that's "nightly business report" for thursday, october 7. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: 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. thank you. captioning sponsored by wpbt