>> tom: paid up! chrysler c.e.o. sergio marchionne marks a turning point for the automaker. >> repayment of the government loans closes an important chapter in our history, but we still have a great deal to accomplish to regain our rightful plane in the automotive landscape. >> susie: what cars will drive chrysler's turnaround, and will buyers want them? we ask a top analyst. you're watching "nightly business report" for tuesday, may 24. 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. an important milestone for chrysler today. it repaid $7.5 billion in bailout loans from the u.s. and canadian governments. and tom, for chrysler this is an amazing story about its determination to survive. >> tom: and its ability susie, c.e.o. sergio marchionne marked the payback at a chrysler plant in michigan. he said the repayment closes an important chapter at chrysler, but added there is still "work to be done." >> we are changing both the

image and the substance of our group and regaining the faith of the public. this impressive about-face prompted one commentator to say that we have gone from third world to world class. >> susie: chrysler survived financial collapse after the u.s. forced it into bankruptcy almost two years ago. the government committed more than $12 billion to saving the automaker and put it under the control of italian automaker fiat. now this has been a turnaround year for the company. chrysler earned $116 million in the first quarter, its first profit since 2006. it has about $10 billion in cash and so far this year, sales are up 23%. joining us to talk more about chrysler, rebecca lindland, senior analyst at i.h.s. automotive. >> susie: hi, rebecca. >> hi, susie. >> susie: so what kind of financial shape is chrysler in right now? >> they're actually doing

really, really well. their sales are up 22.5% year-to-date, and we see some terrific numbers from their new products. so we're seeing good results from the products they've been launching, and in union general, a really positive feeling about the company. >> susie: chrysler is talking about selling its shares to the country maybe next year, i.p.o. . does it make sense for the public to invest in it? >> one of the things that people need to realize is chrysler has actually refinanced this debt. they haven't actually paid it off. they've paid off the federal governments of u.s. and canada, but they still have this debt on its books. so that could impact any i.p.o. that they're trying to do. but i don't anticipate that really being a significant negative because they have a lot of positives going for them as well. >> susie: let's talk about its products lineup.

we know general motors has the signature car. the chevy volt, the chevy cruze, and ford has the ford focus and ford fusion. what does chrysler have going for it? >> chrysler has a combination of vehicles. certainly the chrysler 300, that is new this year, is one of their trademarks. they also had the jeep grand cherokee, as i mentioned, the dodge durango, and the new 500, and the cabreolet that launched this week. it can help chrysler with their car-truck balance. >> susan>> susie: that fiat 500 is ahead in italy, but shown in the showrooms here in the u.s. is this the kind of car people want to buy? >> the ones we're getting are in tuluca, new mexico. but they're made in italy.

it is the kind of car people will have as thar second car. i have been driving one all week, both in l.a. and here. it is a lot of fun. it is a lot safer and has a much more stable stance than i expected it to have. and it is really a show-stopper. >> susie: looking at u.s. market share, g.m. is number one with more than 19% of the market, followed by ford, toyota, and honda. and then chrysler was under 10%. is chrysler in a position to boost its market share in the u.s.? >> i think the new product launches will do that. they really only started rolling them out at the end of december and into the showrooms. people still need to learn about the new brands, the new chrysler products. they need to get familiar with the company again. probably the only obstacle i see is they are so truck dependent. and with gas prices high, that can be a detriment. >> susie: let's pull out

and talk a little about the u.s. auto industry. you have a forecast that total auto sales in the u.s. are expected to reach 12.7 million units. that is up from the last few years, but still quite below the $16 million level which we hit before the recession. when you factor in gas prices, supply constraints from japan, how is the u.s. auto industry doing? >> it's definitely recovering. but it continues to get ahead by industry issues, by recalls, by natural disasters. there is a lot of things that keep kind of pummelling this industry, so we can't get back up to that 16 million, 15 million mark. and we're incredibly dependent on the economy and the consumer. and if the consumer isn't feeling really good about themselves, they're not going to go out and buy a new car unless they have to. and also, we're facing these shortages from japan and a lack of i incentives

this summer. so the 12.7 million mark is down a little from what we forecasted. >> susie: still a bumpy road ahead. thank you so much for coming on in explaining it. we've been speaking with rebecca lindland at i.h.s. automotive. >> tom: here are the stories in tonight's n.b.r. newswheel: mild losses on wall street on lingering worries about greece's debt crisis. the dow fell 25 points, the nasdaq was off 12 and the s&p 500 lost a point. trading volume held steady on the big board with 866 million shares moving trading hands. it rose slightly to 1.9 billion shares on the nasdaq. moody's investors service is making dire predictions on what would happen if greece defaults on its debt. moodys says that could spark downgrades on the other shaky european nations. tokyo electric power now says half the reactors at the fukushima nuclear power plant melted down in the aftermath of the earthquake and tsunami there. and we're seeing the first damage estimates on this

weekend's deadly tornado in the midwest. losses from the storm that killed 117 people are expected to run as much as $3 billion for insured homes, businesses and factories. for manipulating the oil market back in 2008. that's when prices neared $150 a barrel. the c.f.t.c. accuses them are hoarding millions of barrels of physical crude oil and shorting futures while simultaneously dumping its oil stash on the market. >> susie: still ahead, can historically low mortgage rates spur a buying binge in the housing market? some experts say it'll take more than cheap mortgages to build home sales. >> tom: pressure on stocks has sparked a renewed interest in the bond market.

today's government's auction of $35 billion in two-year notes drew solid demand. that demand helped support longer-dated treasurys, yields on which have been falling. today the yield on the ten-year note held steady at 3.12%. that's close to its low of the year. still, there are some key worries for bond investors, according to pat arbor of shatkin arbor. >> the debt concerns in europe. the concerns about our debt ceiling being reached causing some shrinkage in supply of debt. and thirdly the concern about a double dip recession. >> tom: one good thing about those falling bond yields is lower home mortgage rates. they're at the lowest levels of the year. a 30-year fixed rate mortgage, for example, averages about 4.6% nationwide. that may help bring back home buyers in a sector that's showing hesitant signs of recovery. today, we did see some good news about housing. the commerce department reported new home sales rose a better- than-expected 7.3% in april, the second straight monthly gain. erika miller looks at whether

housing is building a solid foundation on cheap borrowing rates. >> reporter: for many people, this represents the american dream. to others, it's a symbol of risk and bad fortune. the percentage of u.s. households owning the home they live in now stands at 66%. that's the lowest level in 13 years. the peak was 69% back in 2004. mortgage broker melissa cohn sees two main reasons for the drop. >> one, i think that people fear that the real estate market in certain places will continue to decline, and that people don't want to become a homeowner until real estate values have actually bottomed. and, two, its harder for people to get financing today. if you have bad credit, low mortgage rates probably don't matter. >> reporter: bankrate's greg mcbride sees other reasons for buyers to hold back. >> nobody is sitting back there saying they're not going to buy a home because mortgage rates are still too darn high. no! it's the fact that people aren't secure in their jobs. they don't have enough money for a down payment. they think home prices will fall further, or they can't sell the

house that they're in. >> reporter: but there is some good news that could help the housing market recover. the u.s. market-- especially the high end-- is getting strong interest from buyers outside the u.s. home sales to foreigners hit $82 billion for the year ended in march. that's up almost 25% from the prior 12 months. that's not the only potential positive. there's another trend that could help neighborhoods where home prices are weakest. >> in a lot of markets-- particularly the hardest hit markets of the country-- you are seeing a surge in cash buyers. a lot of these are investors-- buyers that are purchasing multiple properties. and that may well serve to put a floor under prices, limit how much further prices can fall. >> reporter: home prices have fallen about about 5% in the past year, and many expect a similar drop in the coming 12 months. but pessimists predict prices could fall 10%-- or more-- if the job market stays weak. erika miller, "nightly business report," new york.

but pessimists predict prices >> susie: with two months to go before it begins work, the consumer financial protection bureau is already under fire. house republicans today intensified their attacks on elizabeth warren, the woman appointed by president obama to get the new agency up and running. as darren gersh reports, at an oversight hearing, warren fired back.

>> reporter: it was elizabeth warren's idea to create the consumer financial protection bureau, and today she flatly rejected charges the new regulator is the most powerful agency ever. warren called talk like that overblown. >> shoot, the consumer agency isn't even strongest of the banking regulators, much less most powerful agency ever created. >> reporter: warren says there are clear limits on the bureau's power, including the ability of other bank regulators to veto new consumer rules. but republicans charge warren is already over-reaching by actively engaging in settlement talks with state attorneys general negotiating with mortgage servicers. and members of the committee tried hard today to pin warren down. south carolina's trey gowdy demanded to know whether consumer complaints would be made public. >> i think you'll agree with me that unfounded, unsubstantiated complaints have a deleterious effect on the accused. >> reporter: warren suggested that decision would be made on a

product-by-product basis. in the case of credit cards, warren says the bureau is working with industry leaders on a new complaint system. >> as soon as we receive a complaint, that complaint can go directly to the credit card companies. they can help us understand whether the complaint has merit. >> reporter: gowdy pressed harder, asking warren what responsibilities consumers have to understand the financial products they're buying. >> is there a duty to educate yourself? yes or no. >> i believe that an empowered consumer is a consumer who can not only protect himself or herself, but one who can change the market. >> mr. chairman, i give up. >> reporter: democrats like maryland's elijah cummings fiercely defended warren, painting her as an underdog taking on the big banks. >> how in world will you be able to compete against this goliath when you are so mismatched? >> reporter: warren said the bureau would use the market, making it easier for consumers

to compare prices and understand risks. >> if they have clear and simple information in front of them, if they can make apples-to-apples comparisons, will be able to turn this market around. >> reporter: there are new reports out today that democrats are trying to recruit warren to run for senate in her home state of massachusetts. a spokeswoman for the bureau says warren is 100% focused on getting the new agency up and running. darren gersh, "nightly business report," washington. >> tom: hasn't had much of a chance to get up and running lately. let's get you updated with tonight's mar "market focus." after starting in positive territory, the major stock indices couldn't hold on to buyers, finishing lower again today.

although energy stocks were the strongest group, as oil prices popped back over $99 per barrel. this is the past 90 sessions for the s&p energy select exchange- traded fund. it was up 1.4% today, but is down more than 7% of this high, corresponding to the sell-off we've seen this month in oil. leading the sector today, though, was a natural gas firm-- el paso. shares jumped 6.5%. volume exploded, increasing more than four-fold. this is a new 52-week high, a new post-recession high. investors are buying as the company raised its financial forecast, and ahead of el paso splitting into two companies. by the end of the year, el paso will separate its pipeline and storage business from its exploration and production work. other energy gainers today included occidental petroluem, up 3.6%. oil services giant halliburton was up almost 3%. and refiner marathon gained 2.8%. marathon says the spin-off of its refining and sales operations is scheduled to be completed by the end of june.

industrial stocks were the weakest sector, and general electric was the weakest dow industrial stock. shares fell 1.5%. this is the past 180 sessions. clearly the trend here lately has been lower. shares could be on their way to re-test this low in march, just below $19 per share. that dip there. after the close, the focus fell on semiconductor equipment maker applied materials. it was able to show a profit a penny better than estimates. its growing business with the solar industry helped. shares were down a fraction ahead of those results, but the trend since this early march high has been down. the close brought the stock down to a five-month low. it may fall further tomorrow. shares were down another 2% after the close as its outlook was less than anticipated. autozone shares saw a nice rally, up almost 6% on very strong volume. the stock has seen a nice rally over the past year. the jump today takes it to a new 52-week high. as the auto business has been improving, so has autozone.

profits popped in its latest quarter with sales and margins growing. it also continues to open new stores. medical device maker medtronic, meantime, turned in a disappointing quarter-- coming up two cents per share shy of estimates. the firm says an unfavorable study about heart defibrillators, a government probe and a tough u.s. market for its spinal business puts pressure on its u.s. business. shares fell about 1%, but volume almost tripled on the drop. just last week, shares were at a 52-week high. since then, they've fallen 5%. watch a.i.g. tomorrow. the u.s. government began selling its stake, reportedly getting $29 per share. reuters figures the treasury department needs to get an average price of $28.72 per share to break even. after tonight's sale, the government will still own 1.4 billion shares. tonight's deal could put further pressure on a.i.g., which closed just above $29 per share.

cleary has been moving lower for the past 5 months. and that's tonight's "market focus." >> tom: since the stock market >> tom: since the stock market rally began in the spring of 2009, small stocks have seen the biggest gains. while large stocks making up the s&p 500 are up 95% since march 2009, the smaller stocks of the russell 2000 stock index are up 136%. tonight's "word on the street?" "size." bryan ashenberg is a portfolio manager at thestreet.com.

>> susie: here's what we're >> tom: what makes some small caps still attractive, even after the rally we just saw? >> it is all about their fundamentals. if their fundamentals are good, stocks are still going to go higher. >> tom: looking for profit growth, you're going to begin with a transportation company. a smaller railroad. kansas southern. ksu. and this clearly has had a nice rally. what fuels it higher? >> well, what i really like about ksu is the exposure in mexico. it is the only class run rail operator in mexico. they have called mexico the new china. what is happening is that the labor rates between china and mexico are converging. china is only 15% cheaper than it is with mexico. and with shipping costs and time to market advantages, we're seeing many manufacturers switching their manufacturing to mexico. this is going to help

ksu's cross-border revenues go higher. >> tom: interesting. rfc holding, ticker symbol, rrr, is a rental equipment company that focuses on heavy industrial equipment. it has had a bit of selling pressure over the last couple of months. do you expect that to turn around? >> i do expect it to turn around because the company is eg very strong rental volumes and rates. last quarter, the rental rates were up year-over-year. and they're going to create operating leverage and lead to higher earnings over the coming years. >> tom: california pizza kitchen is a restaurant as well as a frozen food-maker. cpki. this stock has been stuck in a trend. what is going to break it out? >> they're not growing their stores, but they're focusing on cost-cutting and getting their prices right. management is lopping off low-selling items, and

replacing them with higher margin, healthier options. which will hopefully increase traffic. and the company has put itself up for sale. which means i would never recommend a stock just for that, but the fact that the company is trading at a pretty good valuation, i think leads to good risk rewards. >> tom: bryan, do you have any position of these stocks? >> i don't own any of the names personally. >> tom: you can read bryan's article on thestreet.com. our guest, bryan ashen berg with thestreet.com. we'll also >> susie: here's what we're watching for tomorrow: quarterly results for costco and zale, along with the weekly reports on crude and gasoline inventories. we'll also see durable goods for april. they're expected to fall sharply as a result of the disaster in japan. and hilary kramer is our "street critique" guest. email your questions to streetcritique@nbr.com. it's smaller and less expensive and has a battery life of two

months. we're talking about barnes & noble's new nook e-reader. it was unveiled today and does a lot more than just store electronic books. the device has a black and white screen, two-gig internal memory, wifi capability and a memory card slot. in terms of pricing, the nook sells for $139, the same as amazon's kindle. >> tom: jackson hewitt tax service has filed for chapter 11 bankruptcy protection. the second largest u.s. tax preparer got in over its head with tax-refund loans and now must restructure its debt. bank regulators say those loans are unsafe. they have moved to stop companies from offering them. while under bankruptcy protection, jackson hewitt says it will operate normally and will handle the 2012 tax season. >> susie: when it comes to the

>> susie: when it comes to the economy and the fight over the debt ceiling, tonight's commentator thinks washington lawmakers need a lesson in financial literacy. he's allan sloan, senior editor- at-large at "fortune." >> you wonder if some of the people who are supposedly running our country have forgotten how to count-- or ever knew how. they babble endlessly about the supposed evil of the $700 billion troubled asset relief program. in fact, tarp is only a small

part of the $8 trillion the government put up to bail out the financial system in 2008 and 2009. it not only helped save the financial system, but will probably end up costing taxpayers little or nothing. then there's the debate about raising the debt ceiling. politicians and ideologues who think a government default would be fine are going to be awfully surprised if it really happens. it will be horrendous. hedge funds that bet against our country would make a ton of money. the rest of us will suffer financial turmoil, rising interest rates and huge financial instability. national economic literacy month ended on april 30. perhaps we should bring it back in june, to see if there's any hope. i'm allan sloan. >> susie: that's "nightly business report" for tuesday, may 24. i'm susie gharib. good night everyone, and good night to you too, tom. >> tom: good night susie. i'm tom hudson. good night everybody. we hope to see all of you again tomorrow night. "nightly business report" is

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