>> tom: oil prices plunge amid a broad commodity sell-off. crude tumbles below $100 a barrel on worries about falling u.s. demand. >> susie: silver sinks again, bringing gold down with it. but the dollar reversed course, moving higher for the first time in weeks. you're watching "nightly business report" for thursday, may 5. 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 >> susie: good evening, everyone. another down day for the stock and commodity markets on renewed worries about the american economic recovery. and tom, investors are also very anxious about tomorrow's critical report on the job market. >> tom: oil saw a stiff sell- off, falling below $100 a barrel for the first time since march. in new york trading, crude futures tumbled 8% or about $10 to $99.80. looking at precious metals, gold dropped 2%, closing below the $1,500 level. silver declined 8% to $36 an ounce.

but the u.s. dollar rallied on word that interest rates in europe may not rise as soon as many expected. >> susie: erika miller has more on today's market action, and whether the years-long commodity rally is over. >> reporter: there's an old saying that the cure for high oil prices is high oil prices, and it helps explain the big declines in energy and other commodities today. gasoline has surged 35% in a year to almost $4 a gallon nationwide. as a result, economist constance hunter says many americans have no choice but to cut back. >> the fact is commodity prices, and specifically oil, were getting high enough that demand was starting to fall back. and when you see that, you see prices fall back. >> reporter: weak economic data today stoked those fears, especially an unexpected spike in jobless claims. in addition, the european central bank surprised some investors by suggesting it will

wait until after june to raise rates. that pushed the dollar up against the euro, which makes commodities quoted in u.s. currency more expensive for foreign buyers. finally, there may be a less obvious factor influencing the markets. glencore, a large commodity trading house in switzerland, is going public, and many professional investors are eager for a piece of the action. >> there is talk in the market that some portfolio managers are selling commodities so they can buy into the i.p.o., and that will serve as their commodity allocation. >> reporter: over the past year, many commodities have surged to record levels. the c.r.b. index of 19 commodities is up over 25% in that period, even including the recent plunge. trader ray carbone says its natural for investors to question whether the party is over. >> it seems that today's answer is the sidelines is the best place to be, and we are seeing people rushing for the exits in the precious metals, in the crude oil, and in the commodity asset class.

>> reporter: if commodities keep falling, it's good news for the american economy and the american consumer. after all, if the price of food, gas, and clothing fall, there's more money to spend on other things. erika miller, "nightly business report," new york. >> tom: here are the stories in tonight's "n.b.r. newswheel." stocks fell on that massive sell-off in commodities. the dow lost 139 points, the nasdaq fell 13.5, and the s&p 500 off 12 points. big board volume-- 1.1 billion shares; the nasdaq hit 2.2 billion. federal reserve chairman ben bernanke says the government must proceed with caution as it overhauls financial regulation. bernanke warned regulators must avoid imposing burdensome rules on financial companies. he'll give lawmakers an update on how implementing the dodd- frank law is going next week when he testifies before the senate banking committee. retailers rang up another strong

month of sales in april, thanks to a rush of easter shopping. teen retailers benefited the most from the spring shopping rush. the sector was up an average of 12.5%. discounters like costco and target did well, too. sales at macy's and jc penney helped department stores see a 9% increase. still ahead, the flash crash one year later. has enough been done to prevent another market free fall? >> susie: as we mentioned earlier, investors are nervous about tomorrow's employment report. here's why. a report today on the job market shows new unemployment claims rose to their highest level in eight months. first time claims jumped by 43,000. that's a key reason why many economists have lowered the expectations for job growth. but as darren gersh reports, many analysts think the weakness won't last. >> reporter: if those plunging oil prices show up here, then economists hope more unemployed

people will show up here-- at a new job. so, in a sense, the april employment report that comes out tomorrow is already old news, because economic conditions are changing quickly, says economist mark zandi. >> assuming oil prices are near their peak and we're not going to get gas prices moving much higher from here, i think the economy will find its footing again, and we'll feel much better as we make our way into the summer. >> reporter: economists are not expecting to see a sharp reversal in hiring, but they are expecting job creation slowed last month. the consensus call is for april payroll growth of between 150,000 to 200,000 jobs. that's a significant drop from the 216,000 jobs created in march. economist heidi shierholz says that's nothing to cheer about. >> we are still in the very rocky, rocky part of the recovery. we're not yet to sustained, robust job growth, not even close. >> reporter: which means the number of workers who have been unemployed for a long time likely rose last month. bringing them back to the job

market is getting harder and harder. in past recessions, workers could move around the country to find jobs. now, they aren't. >> it used to be if you lost your job in michigan, you could easily move to florida or atlanta or texas, you knew where to go, and you knew where the job was, and you could do it. but now, it's not obvious where you'd go if you lose your job in michigan, and you maybe can't move because you are underwater. >> reporter: given the recent rise in jobless benefit claims, some economists think it's possible the unemployment rate went up slightly last month. that doesn't mean the outlook has changed much, but it won't help consumer confidence when it comes to jobs. darren gersh, "nightly business report," washington. >> tom: progress, but no deal. that's the bottom line on vice- president joe biden's meeting with republican and democratic lawmakers. it was the first of a series of get-togethers aimed at reducing the deficit and government spending. republican leaders and the white house reportedly are discussing a deal to set up deficit targets and spending cuts. in exchange, republicans would

try to lift the $14 trillion debt ceiling. changes to medicare, medicaid and taxes would be put off until after next year's elections, according to "the wall street journal." >> tom: at its worst point today, the dow industrials fell more than 200 points. in the course of 20 minutes last may 6, the dow plunged more than 700 points. it was the biggest and fastest

fall in the history of the dow. it was the "flash crash." >> for several minutes one year ago tomorrow it appeared the dow and dozens of stocks were in a freefall, prices plummeted. in the case-of-philip morris its share price fell from 49 dollars to 17 dollars, accenture to a penny a share. at one point the dow was down is,000 points. bit time the closing bell rang the index had fall enonly 348 points in. months following the flash crash account sec launched an investigation concluding worries about your pooen debt, fewer buy-- buyers and sellers a a huge stock index sell order hit the market can. one year later can it happen again? we spoke with robert engle, a member of the joint advisor committee on emerging regulatory issues, also finance professor at the new york university stern school of business. and joe saluzzi a part never in the institution stock

brokerage firm. we began by asking professor engle if the market is more or less susceptible to a flash crash. >> i think there are some pro section-- protections that have been put in place. they instituted the circuit breakers, individual stock circuit breakers early on and extended them, the rang. and these are a little bit of a brute force solution. but they will stop something like a flash crash from happening at least the same way it did before. >> joe, have you been satisfied with the response thus far? >> i think the problem with the flash crash wasn't the drop, the sign of it, it was the speed of the crash it happened within 15 minutes and that can certainly happen today. you can get a 10% drop in five minutes and that's what shakes investor's confidence. >> reporter: speaking to that point, joe, are you confident that the contribute errs to the flash crash have been positively identified? >> wbltion i don't think there was one particular cause. and i think the report, the initial report by the sec some people misinterpreted it as saying there was one

rogue-- that wasn't nisly correct. if you look deeper into it, it really was the walking a waive the so-called liquid kit providers which caused this cascade effect. so i think there is lots of work to do and the real problem is the fragmentation of the market. >> tom: what about that idea of liquidity providers it is a fancy way to make sure there are enough people at the party so that the trading continues. i mean do you think that if too many people leave that they ought to be fined for it? >> i think that's absolutely the important point. and i don't think we have actually figured out what a good solution for that is. will you liquidity providers need to be protected. they need to be protected from the high frequency traders that actually sometimes take advantage of publicly posted liquidity orders. and drive people to the dark pools and internalizers and so forth. and i think there are a variety of suggestions that we discussed in our report which all are important in terms of improving the

structure of the market. >> tom: one of those proposed responses has been trading limits. limiting a stock's movement to no more than 5 or 10% during a five minute period. for instance xyz stock is at 50, it couldn't trade lower than 45 or higher than 55 within a given five minute period of time or it would be paused. now on wednesday this week, guys, we still see cancelled trades. on wednesday about an hour after the opening bell 100 shares of apple traded at 321 dollars and change. when the previous trade was closer to 350 dollars. joe, is this evidence that the trading limits work or aren't working? >> no, trading limits are a band-aid, essentially. they are putting on a band-aid to a wound that hasn't healed. the wound is the fragmented market structure that we have. so yeah, you can have 10% bans whether you want to enhance them to limit-up, down, i think that is a good idea and maybe that will slow things down. but are you still nod addressing the root problem. why does a stock trade down 10% in a matter of seconds. liquidity providers realize are there any obligations there. they are getting the benefits of a market maker

yet they don't have the obligation to be there and really provide liquidity. >> tom: professor, i will give the last word, are you satisfied to those points that joe just talked about, the fragmentation of the market, too many different off marketplaces to trade? >> i think that the fragmentation of the market is part of it but i think it's also the fact that liquidity, there is not much incentive to people to supply liquidity. whether it's incentives or whether it's obligations. the bulk of the liquidity that is provided in the market is transient and it can disappear in a flash. >> tom: make sure there are enough people at the market to continue to trade at fair prices. >> that's right. >> tom: professor we have to --. >> and in bad times especially. >> tom: certainly we saw that a year ago. professor robert engle is a member of the cftc, sec joint advisory committee. joe saluzzi with is with us. it was far from a flash crash, but stocks fell in a broad-based sell-off, with commodities

getting hammered, the dollar strengthening, and bonds rallying. let's get to tonight's "market focus." all ten of the major s&p stock sectors were weaker, as the index ended lower for the fourth straight session. it's the first time the index has been down four days in a row since the height of the financial collapse in the fall of 2008. thanks to the sell-off in oil, energy stocks led the market losers. the energy exchange traded fund shed 2%. volume was big, coming in at almost three times its average pace. with the selling, the index has broken below its low from last month and is threatening the march low. the two big oil stocks in the dow fell hard. exxon dropped 2.6%; chevron was off 2%. trading volume was heavy for both of them. since reporting earnings last week, both of these stocks are down about 6%. as we mentioned, the commodity

weakness was not confined to energy. metal prices fell, hurting alcoa. shared were off 2.6%, matching exxon's fall as the biggest in the dow industrials. miners got hit with major selling. gold miners freeport mc-moran is at a two month low. newmont fell to a one month low. silver miners silver wheaton and pan american continued to come under pressure. some of the commodity selling can be explained by looking at the u.s. dollar. this is the past 90 sessions of the dollar index. it has been trending lower for quite some time. but today, it popped strong, and volume of the dollar index futures was strong as well. here's a longer range picture of the dollar-- since june of 2008, a few months before the worst of the financial crisis. the latest trend down in the dollar did not take the currency below the levels seen in the summer of '08.

we saw bonds play a traditional role as investors looked for safety. this is the yield on the ten- year government iou. it fell today, closing at its lowest yield of the year. that means the price of a ten- year bond is at its highest of the year. we mentioned the retail april same-store sales earlier, led by teen retailers. hot topic stock is pennies below a new 52-week high, thanks to this 12% gain; macy's is at a new 52-week high after its almost 4% rally; and jc penney dropped 5%. it was at a 52-week high just yesterday. and that's tonight's "market focus."

>> susie: even as oil prices fall, renewable energy sources still remain very attractive. that brings us to our partnership with planet forward, a media project based out of george washington university. it's been bringing us energy innovations once a month and today, frank sesno, director of the school of media and public affairs and planet forward host, joins us with an announcement. >> thanks, susie. we've been trying answer the question on how to improve our energy use or consumption. we had hundreds of submissions on the site, and we featured some of the best in our national pbs special. during that special, our live studio audience voted danny

kennedy of sungevity as their choice for planet forward's innovator of the year? danny has a company that leases solar panels. we also asked the online community to pick their innovator of the year. we'll follow both innovators, and show you the successes and challenges they face as they try to move the planet forward. and the choice of the online community is jamie hestekin and the university of arkansas team for their algae-to-butanol idea. >> we're looking at algae as a seed stock to make fuel. >> using bacteria we can produce butynol, carbon, hydrogen and hydrogen. >> since it could work with gasoline engines i can put this fuel in the car and make it go. >> we think that we can start competing with butynol

compared to ethanol and we think we have a pretty cool process because of that. >> a pretty cool process that they hope will make money and really make it on the market. we'll follow jamie hestekin and his team and danny kennedy of sungenvity on nightly business report to see how they do. tune in with us, go yen line and see their progress. weigh in too if you think algae can work, by the way f that is something you want to put in your car, susie. >> susie: so algae into your car can. you know, it is a great innovation. what is it going to cost? >> well, you know, it's just a sliver right now. because it costs too much. right now if you were to do it today with this technology, with you would be talking about close to $8 a gallon. that is a hard sell. but what hestekin and the team are trying to do is bring back the payback for this device that they are putting together which would be on farms and water treatment plants where you can harvest a lot of algae. bring the costs down. they say they can be competitive with a petroleum-based butynol and

think they can get you a payback on this thing they hope in under five years. >> susie: you are already working on your next project. in a few words you can tell us what it is about. >> smart communities, transportation, green architecture, business models. how can communities build and grow to adapt to a changing planet that is what we are looking at next. >> susie: we will be waiting for to you tell us all about it, thanks so much, frank. >> thank you. >> susie: and we've been talking with frank sesno at planet forward. >> tom: here's what we're watching for tomorrow: as we mentioned, we'll see the april jobs report from the labor department. it's expected to show employers added 186,000 jobs. "market monitor. and robert stovall is our "market monitor. he's looking for companies pumping up pay-outs to shareholders, where he's finding the potential of higher dividends. robert is managing director and strategist at wood asset management. >> susie: the list corporate america waits for all year long is out-- the fortune 500-- and

walmart is number one. it's the second year running that the world's largest retailer held the top spot, when judged by revenue. it's followed by three huge oil companies: exxon mobil, chevron, and conoco phillips, another example of how high energy prices are affecting things. and fannie mae leaps from 81st last year to number five this year, because of new accounting rules and a bailout from uncle sam. >> tom: federal prosecutors have trimmed down their case against financier allen stanford. eight charges have been dropped; 14 remain, including wire and mail fraud. the feds say stanford ran a ponzi scheme, funding a lavish style of yachts and private jets. stanford's lawyers say their client is innocent. he's currently at a federal prison in north carolina, the same prison that's home to bernie madoff.

>> tom: it's something that happens to every parent. you're in the grocery store, your child has a tantrum, ranging from whining and crying to screaming and kicking. in tonight's "kids and cash" series, how to avoid those outbursts over something on the store shelf by teaching your children the value of money. here's alisa weinstein, author of "earn it, learn it." >> oh, the "gimmies." aren't they the best? you're just standing in the aisle of target, holding your laundry list, looking for cotton

balls or q-tips, and your kid starts insisting she has to have a new sparkly pink lip balm. and you're thinking, "seriously? you own 13 sparkly pink lip balms." and you realize that the gimmies have taken over. i can imagine almost every parent in america has been there at some point, in some fashion. though if you think about it, these meltdowns are not our kids trying to be mean. they're actually telling us, and everyone within earshot, something loud and clear-- they don't get how hard it is to earn money. which makes sense-- everything's electronic. from direct deposit to atms, my kid has never actually seen the money i earn from my job get deposited into my bank account, that that's the money that's flying out of the atm. there's no money fairy; there's me, working hard. so it was during that pivotal sparkly lip balm gimmies moment that i realized my kid was ready for allowance. she needed the opportunity to earn and hold, spend and save and give money she earned. which has given her a huge sense of control, no matter what aisle we're in. so the next time you're standing

in your favorite mega-store, trying to race through a 50-item laundry list in 16 minutes and your little one, whom you love, is letting the world know you are the worst parent ever for not providing for her every whim, take a breath, get through your shopping, find the allowance program that works for your family. and then announce, "you, my friend, are going to learn how to buy your lip balm for yourself." >> susie: president obama came to lower manhattan today to honor the people who died in the 9/11 terrorist attacks, and to close the final chapter in the hunt for osama bin laden. it was a solemn and silent ceremony as the president laid a wreath at ground zero. he didn't make any public comments. for those of us at "nightly business report" who reported and lived through that tragic time, today is bittersweet. bitter, because we still remember the victims, many of them friends of the program we regularly interviewed. we remember wall street looking like a war zone, and the 14

checkpoints we needed to clear just to get to the new york stock exchange. we remember losing our new york studios, just blocks from the world trade center, and our struggle to relocate. but we also celebrate today, because every day, as we come to the nyse, we witness the rebirth of the financial district with the freedom tower and memorial plaza near completion. so, tom, here's to a new beginning. >> tom: new beginning and to never forget, susie. >> susie: that's right. that's "nightly business report" for thursday, may 5. 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 captioned by media access group at wgbh access.wgbh.org >> more information about investing is available in: to order this dvd, call 1-800- play-pbs or visit online at shoppbs.org. >> be more. pbs.