>> tom: the conversations are continuing. nothing is agreed to until everything is agreed to. right now, we need to just make sure that we pay our bills and that the government stays open. >> susie: tough talk on both sides as a federal government shutdown looms and the budget standoff continues. >> tom: as around-the-clock negotiations continue, will both sides reach a compromise or are we in store for another short- term extension? you're watching "nightly business report" for wednesday, april 6. 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. captioning sponsored by wpbt >> susie: good evening everyone. deal or no deal? that's the big question in washington as lawmakers continue last-ditch negotiations on a budget to prevent the federal government from shutting down. tom, there's even a meeting tonight at the white house. with john boehner and harry reid. >> tom: susie, that's because there's been no sign today that republicans and democrats making compromises on their differences

and no consensus over how many billions of dollars to cut from the 2011 budget. >> susie: president obama and other white house officials warned today about the impact of a government shutdown and how cutbacks in services could impact the nation. darren gersh reports. >> it is the peak tourist season in washington, a time when the nation's capitol puts on a show. but there will be no national cherry blossom festival parade if the government shuts down. and there will be more disruptions, according to senior government officials. roughly 800,000 federal employees will be furloughed. the i.r.s. will stop processing paper returns, which could delay tax refunds for one in three taxpayers. e-filers will be okay. the federal housing administration will stop issuing loans, and that could have a big impact. the f.h.a. now issues one out of every three mortgages. small business administration loans? those will be put on hold too. and while federal workers are likely to get back pay once a shutdown ends, senator barbara

mikulski says private contractors working for the government won't be so lucky. >> many of them are veterans who started small- to medium-sized businesses. these people, if there is a government shutdown, will not get paid. hello! >> reporter: but house republicans are holding out for deeper budget cuts, in part to satisfy demands from tea party activists who want to tame government deficits. house speaker john boehner said there was some progress in talks on a spending plan for the rest of this year, but house republicans are also planning to vote tomorrow to delay a shutdown by one-week. >> we're going to fight for the largest spending cuts and the policy riders that were attached to them, because we believe cutting spending will lead to a better environment for job creation. >> reporter: democrats have opposed another short-term spending extension, and the president says it's time to move forward.

>> susie: darren joins us now with more on the budget battle. hi, darren. let's get right to it. do you think that this white house meeting that president obama has called is going to be the make or break point for getting a budget agreement? >> i'm not sure we can say that yet. we've had so many of them and ongoing never ending crisis. i think it's a clear sign that there's some progress going on that they are meeting. the key issue, as we've said, is that republicans want to do one week, another one-week extension. the president wants to get this done at least through the fiscal year in september. and republicans are adding on a restriction on abortion, susie, to the twun-week extension. and as you know, that will be very hard for democrats to accept. >> susie: how do you think it's going to play out? is there going to be an extension or government shutdown? >> it's too soon to tell. the key issue here is i think both parties have been saying they don't want to have a shutdown. they've also been saying, that

as john boehner said today, that the cost of a government shutdown won't save any money because the workers will probably ultimately get paid. but the key issue is neither side is completely sure who will get blamed if they shut down the government. so even if there is a government shutdown, that will tend to make it a short one. >> susie: so there have been government shutdowns in the past. what are we talking about here? is this going to go on for days or weeks? or what? >> right. well, as you know, under bill clinton theres with a partial government shutdown, it important to say partial, that lasted three weeks. i think that's the record holder, about three weeks. most of them are a week or even a couple days. so i think we've talked about this before on the program, the american people by and large don't like to see the government not work. they don't think that's a long-term solution. so that tends to make the parties get together and cut a deal. >> susie: we'll find out if there's going to be a deal in a matter of 48 hours. thanks so much, darren. >> thank you.

>> susie: we've been speaking with darren gersh, our washington bureau chief. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks finished with modest gains. the dow added nearly 33 points, the nasdaq rose eight and the s&p 500 up nearly three points. big board trading was firmly above 880 million shares. nasdaq just managed to top two billion. after weeks of negotiations, the u.s. has reached a free-trade agreement with colombia. the deal will boost u.s. exports to the south american nation by $1 billion a year. the plan has more protections for workers and union leaders in colombia. and in the u.s., key beneficiaries include farmers and the makers of heavy machinery, like caterpillar. a change of heart from portugal. the country is asking the european union for financial help after resisting that move for months. analysts expect portugal could need $114 billion. still ahead, our "street critique" looks at two tech underdogs that may have some bite left.

>> susie: oil prices traded above $109 a barrel today on more concerns about libyan oil supplies. that's the highest level since september 2008. by the close, futures had pulled back slightly, settling at $108.83. but crude's not the only thing surging, so are gas prices at the pump. suzanne pratt looks at what those higher energy costs may mean for the economy. >> reporter: this is the threshold for gas prices that we hoped to never see again. that's because $4 a gallon is considered the magic number for putting the brakes on the u.s. economy. higher gas prices act like a tax on consumers, burning up cash they could devote to other things. and, americans aren't just feeling it at the pump. they're paying fuel surcharges to travel and even to send packages. economist anthony chan recently trimmed his g.d.p. forecast by a few tenths of a percent due in part to higher energy costs.

>> i think at this point we have to be somewhat concerned over the near term that in the first half of this year economic growth is going to be slower than it otherwise would've been. >> reporter: fixed-income strategist jonathan beinner says we can weather the increase in prices. >> we're not that worried. we do think that the u.s. economy is actually on a pretty stable, although slow recovery. and, this is a headwind, but we don't think it's an enormous headwind. >> reporter: new york state is notorious for high gas prices, thanks to added taxes. but, according to a.a.a., currently consumers in 10 other u.s. states can pay about $4 a gallon when they fill up. and, it's not just the spreading $4 price tag that's causing trouble. it's how quickly gas got there. since last year, the average price of unleaded gasoline in the u.s. has jumped 31%. and given escalating tensions in the middle east, prices are expected to move higher. but, in order to have material effect on the economy, experts

say energy prices would have to spike much higher and do so very quickly. >> really what we would become more worried about is a real supply disruption, where you actually have to ration the oil that's being produced and those that were going to use the oil have to change their plans. that's when it has a real impact on growth. >> reporter: for the record, most experts don't think we'll get see a major disruption in oil supplies. still, economists are keeping one eye on oil prices and the other on consumers. suzanne pratt, "nightly business report," new york. >> tom: 11 months ago today, the dow jones industrial average plunged 900 points in a matter of minutes. it was the flash crash, the largest-ever intra-day decline for the dow. now, the stock cops have a new idea they hope will protect investors from those kinds of wild price swings. during the flash crash the price of some stocks fell to a penny per share in seconds, as buy orders disappeared. the securities and exchange commission has been trying to

come up with ways to address those kinds of crazy ask oftentimes incorrect price leaps of now many stocks are subject to circuit breakers. say a stock trades at 20 a share, if the price moves by more than 10% over five minutes, trading is stopped for five minutes. the new proposal takes that same stock and puts a 5% price band around it. the idea is called limit up, limit down. if the price jumps out of the band and does not come back within the range in 15 seconds, trading is halted for five minutes. stocks not subject to the current rules, they could trade in a 10% range. and these ranges would double during the opening and closing periods to allow wider price swings. >> they're putting a band aid on a wound that hasn't disinfected yet. >> tom: he does not think the proposal addresss the causes of the flash crash. >> the circuit breakers themselves will halt the stocks, but what are we talking about, why are the stocks moving in the first place, that's the real issue. what happened on may 6 wasn't

a circuit breaker issue. may 6 of last year was caused by many issues. >> tom: among those causes, what he calls the fragmentation of the u.s. stock market. there are now dozens of exchanges where stocks may trade. one other issue with this proposal, pointed out by experts to us, it doesn't answer what happens after the trading halt. at what price the stock may reopen. >> susie: here's another blow to investors confidence. authorities have charged two men with running a multimillion- dollar insider trading scheme. one of the suspects is an attorney who allegedly stole confidential information about deals involving oracle, sun microsystems and 3com. he's accused of passing tips to the other suspect, a trader. both men face charges, including conspiracy to commit securities fraud and obstruction of justice. they could face 20 years in prison. these new charges come amid a broad government crackdown on insider trading, including the criminal trial of galleon group hedge fund founder raj rajaratnam.

prosecutors in that case are expected to rest this week. >> susie: a nice move up on most of the major averages today. but still investors are cautious, looks like they're waiting for the official kickoff of earning season, which starts on monday, when al ko areports its earnings. >> tom: we don't have to wait too long for that kickoff.

still at post recession highs waiting for these numbers here. let's look at tonight's market focus. stocks climbed back after some morning selling to end with small gains, led by financial stocks. it was shares of regional banks helped the financial sector. this e.t.f. here, it follows many of them. with today's 2% rally, it is at the top of its range it has been trading in since december. big financial stocks though, they saw buyers too. american express, j.p. morgan and bank of america were three out of the top five performing dow stocks today. all moving about 2% or so. cisco led the dow, jumping almost 5%. volume more than doubled as shares popped off of recent lows. cisco stock has seen a series of drops as earnings guidance has been disappointing. c.e.o. john chambers, in an

email to employees, says the company has been slow to make decisions, has lost accountability and calls on cisco to be more disciplined as it grows. the share price clearly responding today. cisco and many other multi- national firms have been helped by the weaker u.s dollar. today, the euro hit a new one- year high against the dollar. tomorrow, the european central bank is expected to raise interest rates for the first time since the recession to battle higher inflation rates. and that led to euro gaining today. the weaker dollar helps commodities. look at this trio. copper prices are at a one-week high. demand from china also helps. silver continues to hit new generational highs. and gold also sits at another new high. over $1,400 an ounce. the metal rally is helping alcoa shares shine. a fractional gain today as the stock continues over $18. this is the past 2.5 years.

and the gains today put it at its highest price since october of 2008. there it is. it comes just ahead of earnings. alcoa reports its latest quarterly results on monday. another commodity giant, monsanto, turned in its financial report card today. earnings as you can see were three cents better than estimates, but the firm said it was too early to say if it had stopped losing market share after farmers did not buy its higher priced seeds and herbicide last year. and that lack of visibility hurt shares, knocking monsanto down almost 6%. volume quadrupled. four times average. the stock remains above its march low though. some optimism has been building that, as corn and soybean prices have been rallying, that would help agribusiness and monsanto. there's been plenty of focus around semiconductors investors this week with the texas

instruments buyout of national semi, but check out american semi-- it's been trending down, then plunging 42% on huge volume. it makes chips for turbines, motors and other gear. the firm cut its earnings guidance after a customer refused to take delivery of components. it had to drop down its expectations. finally, a couple of firms are talking about the impact from the japanese earthquake. chinese tech firm hi-soft cut its profit targets, but thinks rebuilding in japan will mean more demand for i.t. services. in the long term. shares gained 12%. new skin was up 6%, seeing an impact in its first quarter due to japan. still, it raised its guidance. shares responded. and that's tonight's "market focus."

>> tom: while technology stocks have been rallying, two tech giants have been stumbling. our "street critique" guest has her eye on them. she's hilary kramer, editor of gamechangerstocks.com. hillary, you like microsoft and cisco, each have seen double digit drops from a year ago. begin with cisco. shares jumped today as we mentioned after the c.e.o. john chambers talked about how the company is not being aggressive enough. what mike's you like cisco? >> cisco is under valued on every metric that you look at. when you compare cisco, tom, to the rest of the market and the tech sector, it's incredibly undervalued. what you have is a company that has $28 billion in cash and now with john chambers the c.e.o. who i respect greatly has said is we have really let

down ourselves and shareholders, we're going to get more aggressive and expand so cisco can afford to go and buy growth. plus, this is an important point, they are involved with the smart group, for example, they are building our lick trick grid so customers can talk to power station, and john chambers has said it a $20 billion market, it all about network communication, so cisco is not dead and it's not dead money. >> tom: you mentioned the cash on cisco's balance sheet. microsoft has had billions for a long time, msft for microsoft. the share price at $26. what's the price target that you have for microsoft? >> well, i'm looking for $31 on microsoft. but again you have the dividend here, and what you have is you have some safety. the reason i'm talking about cisco and microsoft today, the background is the vulnerability of our stock market. it's time for a pullback, there's too much bullish sentiment.

so everyone needs to be safe, and one of the safest places is a company with lots of cash and lots of opportunity, and it's already under valued. >> tom: on the flip side, some area where you've seen a lot vulnerability is horizon lines, and we continue to get e-mails on this one. we tackled it last week. larry has another comment. i'm well devirs filed and have held onto my horizon line shares to see what will happen next. what have you learned on this issue? hrz was picked on january 5 at 4.60. the company has warned essentially of bankrupt, trading at a dollar. what is the lesson? >> well, the lesson is that any time you play in small caps, in these companies that have vulnerability because they have debt levels, there's always a possibility that a company does poorly. even the large companies. look at lehman, enron, mci world comm, it's possible across the board, and you always want to have cash, fixed income, real estate, and never go more than one percent

in my position, especially in -- in any position, especially in a small cap. but can you make a lot of money and you can have doubles and triples, and that's what you want to aim for. that's why stocks -- that's really the lesson here. >> tom: last week you mentioned you were still holding onto horizon. do you still own it? >> i still own horizon, and it's up 29.4% from when i was on thursday talking about it. you never know. look at what happened with k-mart. everyone thought that was dead money, shares going to zero, and it turned right around. >> tom: to that point, were you behind last week on that dip below a dollar? >> no, i was holding onto the shares i already owned and i'm waiting to see what their restructuring advicer can pull off. conversations are going on with creditors. there's a lot of debt there. however, horizon, i like it because the catalyst in my buying it in the first place is that they have protection

from the jones act which only allows u.s. carriers to ship between the contiguous united states and places like puerto rico and guam. and the economy is improving. >> tom: do you own cisco and microsoft that we mentioned earlier? >> no. i do not own these stocks. you can follow the blog, nbr on pbs.org. you can email us, streetcritique@nbr.com. or you can send us a note via twitter at my feed, @hudsonnbr, or n.b.r.'s feed. and facebook too. we'll feature some of your questions next wednesday. our guest this evening on "street critique," is hilary kramer with gamechangerstocks.com. >> susie: here's what we're watching for tomorrow: quarterly results from constellation brands, pep boys and rite aid, along with weekly jobless claims and chain store sales for march. also tomorrow, our "kids and cash" series continues with useful tips on helping young people land a highly coveted summer job. the world's biggest automaker and the world's biggest software company are teaming up to put cars online. microsoft and toyota are investing $12 million in a

project to monitor g.p.s., voice applications and power usage-- all done through cloud computing. meanwhile, toyota's "prius" has hit a milestone: more than a million vehicles sold. the hybrid's been on the market for 11 years and is now seeing brisk sales, thanks to $4-a- gallon gas. >> tom: vitamin and cleaning products retailer amway will replace $20 million worth of gift cards because the originals were misleading. the deal settles a class-action lawsuit. the gift cards in question had instructions for them to be redeemed before a specific date. plaintiffs claimed that broke state laws that say gift cards can't expire.

>> susie: expecting a tax refund from uncle sam? tonight's "money file" has all the reasons why that's a good thing. here's ramit sethi, author of "i will teach you to be rich." >> it's tax time, and in the next week you'll be seeing expert after expert warning you that a tax refund is actually a bad thing-- that if you're getting one, you've been giving the government too much money. "that's an interest-free loan," they'll shout. let me provide a different perspective. technically, it makes sense to pay the government as little as possible. but here's why i'd rather get a tax refund than owe the government money:

first, the average tax refund is $3,000. how much interest are we actually losing by letting the government hold onto our money for a year? $2.50 a month. that's $2.50. second, if we'd had the money, most of us would have spent it! instead, when americans get a one-time tax refund, we tend to save it or pay off debt. this is the critical importance of the psychology of tax refunds. so the next time someone tells you that a tax refund means you're giving the government too much money, you can feel free to ignore them. you'll know that your money is not just helping the government- - it's helping you at tax-refund time. i'm ramit sethi. >> susie: and finally, a special anniversary for united airlines- - it's been flying the friendly the skies for 85 years. the airline marked its anniversary today by unveiling an airbus a320 painted in united's vintage stars and

stripes pattern. it's called the "friend ship." to give you an idea of how times have really changed for the airline, 85 years ago, fewer than 6,000 americans paid to travel by plane. tom, by comparison, today the new united airlines-- now merged with continental-- flies more than 150 million passengers each year. >> tom: certainly we've grown up quite a bit in the aerospace industry. >> susie: that's called progress. >> tom: and that's called "nightly business report" for this wednesday night april 6. thank you for joining us. i'm tom hudson. have a great night. >> susie: thank you, tom. thanks for watching, everyone, hope to see you all 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.

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