>> there's been an undertone of consumer pessimism throughout 2011, but august marked a new low. >> susie: stocks eke out small gains as investors remain on edge. today's worry? the civil war in libya. >> tom: moammar qadhafi's 42- year reign may be ending, but pockets of fighting and uncertainty over libya's oil continue. it's "nightly business report" for monday, august 22. 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. rebels in libya tonight say they are in charge in tripoli. it appears that the moammar qaddafi regime has collapsed. in the oil markets prices were mixed, and on wall street stock prices rose modestly. we'll have more on the oil situation and libya in a moment, tom. >> tom: susie, a choppy day of trading as investors are looking ahead to the end of this week.

federal reserve chairman ben bernanke gives a keynote speech on friday at a conference in jackson hole, wyoming. ahead of that, the dow rose 37 points, the nasdaq added 3.5 and the s&p 500 was up fractionally. trading volume started the week heavier, with 1.1 billion shares moving on the big board and just under two billion on the nasdaq. >> susie: stocks bounced back today after weeks of losses, but still investor confidence is pretty shaky. so what would it take to restore investor optimism? erika miller reports. >> reporter: if the stock market were an amusement park ride, it would probably look something like this. investors are at the edge of their seats as the s&p 500 has dropped more than 12% this month alone. strategists say investors want to see three things before they'll be convinced it's safe to step back in. the first is the resolution of europe's debt crisis, as strategist david levkowitz explains.

>> in think investors want to see the european policymakers make a very strong financial commitment to defending the eurozone, and there are various estimates to how much that might be-- some estimates as high as $2 trillion euro backstop. >> reporter: but investors are also worried about the situation here in the u.s. strategist sam stovall thinks confidence will come back once there's a credible debt reduction plan. >> i think what would make investors feel a little bit better are comments coming from fed chairman bernanke, comments from the treasury, from the u.s. government that indicate both sides of the houses of congress are really working together to solve our very high debt-to- g.d.p. levels. >> reporter: the third factor that could help boost investor confidence is reassurance that the u.s. economy is not heading back into recession. >> if we get a little more confidence in terms of resolving

the european situation and the stalemate in d.c., i think the economic data will hopefully pick up a bit. >> reporter: all these worries weighed on investor confidence this month. the latest bankrate survey shows 35% of americans say their overall financial situation is worse now than a year ago. bankrate's greg mcbride is not surprised by the pessimism. >> august has been a very eventful month-- a stock market correction, a credit rating downgrade and renewed worries about recession. you put all that together, and consumers' feelings of overall financial security are at their lowest levels of the year. >> reporter: it doesn't help that next week is the start of september, the most dreaded month for stock investors. >> september historically has posted the worst declines for the s&p of any month-- going back to 1990, 1970, 1945 or '29. where the average decline is more than 1% since 1929 versus a gain of close to 1% for all other months. stovall thinks stocks will re- test their lows late september or early october.

>> reporter: all this suggests that investing in the stock market is no kiddie ride. though there will be occasional calm days, the market's breathtaking twists and turns are probably not over. erika miller, "nightly business report," new york. >> susie: president obama today called the situation in libya "fluid," but he said it has become clear we are nearing the end of moammar qaddafi's 42-year rule. the rebel flag is now flying over tripoli, qaddafi is no where to be found and two of his sons are in custody. months of nato airstrikes have demolished qaddafi's compound in tripoli, much of the city's infrastructure, and shut down the oil-rich nation's exports. inn europe north sea brefernt crude fell 26 cents to gallon 108 a barrel while here in new york light sweet crude added 1.86 to $84 a barrel. and joining us now john kilduff oil analyst at-- hi,

john. >> hi, susie, good evening. >> susie: kind of a surprise that we didn't see prices go down more dramatically. why is that? >> well, i think there is a lot of speculation still about the situation there on the ground. as the president referred to it as fluid. we're still waiting to see where qaddafi is. and importantly there's conjecture over what the state of the oil infrastructure there actually is i happen to believe it's in fairly good shape and exports will resume rather quickly. but there's considerabl considerable-- differing opinion out there about it taking a substantial amount of time, two or three years even to get back to precrisis levels. >> susie: i was going to ask you, how long would it take libya if their infrastructure -- structure is in good shape to ramp up, get back where it was at its peak pumping 1.6 s it million barrels a day? >> that's right. well, one of the biggest producers in the country, the western oil company from italy, says you can have oil going by winter.

that would be december 2 1st. and a agree with that time frame. the systems there were shut down in an orderly fashion. it's not like they were overrun. they weren't targeted, necessarily, for attack. there is miles of pipeline, tons of redundancy so i think we have good reason to be optimistic. most 6 that oil, a good million barrels of it or more coming on-line by the first quarter of next year. >> susie: so let's say that that oil does come back on-line. what does that mean for oil prices around the world? >> how much will they come down? >> they should come down considerably. that brent crude number you referred to should be down and $90 a barrel. that, european markets got hit the hardest because they are reliant on what we call light sweet, naturally low in sulfur crude oil for all of their motor fuel production. they have very stringent environmental regulations over there. that's basically the only kind of oil they can use. and no other country could make up the gap, not even saudi arabia. >> susie: do you think the prices will stay down? >> i do.

and unfortunately it's partly because of what was referenced in the story that lead into here, the lack, the crate never consumer confidence, the diminished outlook for the economy, and even global oil demand estimates have been downgraded significantly for next year. down as much as $500,000 barrels a day by opec themselves. >> susie: now what about these international oil companies that shut down their operations back in february when all of these rebels were picking up steam. now there's talk that they may be going back and returning it to libya. do you think that they will, given that we really don't know the economic orientation of the new regime? >> i do. and i think they're going to be for the most part welcomed back. you know, they did clear out ahead of time, ahead of all the conflagration. but both the rebels and qaddafi to the end were working on ways of exporting oil to generate hard currency. this rebel group, the ruling council's five parties, five tribes, basically, that have

to try to hold this country together, they're going to need the money. they want the money. i think the money in this case will solve most problems. we've got to hope the in-fighting doesn't start now amongst them but if we can get past that, if they can legitimately find a way to spread the wealth the way qaddafi did, even, there's a model there for this, this oil will flow rather quickly. >> susie: and you told me that the kind of companies we're talking about are like royal dutch/shell and totale, eni from italy, will these companies go back there when-- they also don't know how secure it is and what the hostilities will be like? isn't that a big factor? >> no, i think they will definitely go back. first of all they are used to operating in these hot spots and unstable zones politically and militarily. i would point to iraq as a great example of that. but how much oil stayed on-line and continues to be increased even with the uncertainty security situation there. here keep in mind, you don't have a country that was a decade under sanctions. you really have facilities that have only been shut down for several months.

they can be quickly ramped up with the exceptions of a couple of refineries in the country. it is hard to bring those out of what we call a cold start but the oil can absolutely flow quickly. and like i said it did at times during the war here, after, particularly to nearby mediterranean refining facilities in europe. it's going to be a great surprise, great benefit to the western consumers in our economies. >> susie: we'll see about that. it is a developing situation. thank you so much for coming on the program too explain it all. we appreciate it. >> susie: and we've been ticking with john kilduff oil analyst at again capital. >> tom: still ahead, investing in main street u.s.a. we look at the health of the municipal bond market with bond expert marilyn cohen. japan could soon see a downgrade of its credit rating. moody's put the country's double-a2 rating on review for possible downgrade on may 31 and a decision is expected any day now. moody's can either extend its 90-day review period or take

action. analysts think moody's will follow through with a ratings cut since the country's economy has only worsened since may. >> susie: a dizzying ride for goldman sachs investors late today. the stock tumbled as much as 5% in the last minutes of trading. the tumble came on word that c.e.o. lloyd blankfein has hired his own lawyer. the investment firm confirmed that development late today. blankfein, seen here testifying before congress during the financial crisis, has retained the services of prominent washington d.c. lawyer reid weingarten. blankfein has not been charged in any civil or criminal charges. but tom, goldman-- the firm-- has been singled out by a senate committee for conflicts of interest and fraud during the financial crisis. and senator carl levin said he would send the committee's findings to the department of justice. a lot of legal issues. >> tom: as you said susie, a lot of late action in goldman. here's a look-- down $5.25 or

almost 5% to $106.51. really happened in the last five minutes of trading. a new low for goldman. let's take a look now at other stocks in tonight's "market focus." stocks started the week in the green, but only barely, despite decent early buying. the dow industrials continue to see these wide intraday swings. at its best level today, the dow was up more than 200 points. the index hit its low for the day just before the close, eking out just a small gain. financial stocks saw the worst of the selling, led again by bank of america. b. of a. shares fell almost 8%. some experts point out bank of america has become a favorite for high-frequency traders thanks to its low price and large number of shares available

to be traded. j.p. morgan fell almost 3%, and insurance giant travelers fell 1%. telecom and technology stocks were the leaders today, hewlett- packard saw some buying for the first time in several sessions. h.p. shares were among the most damaged during last week's selloff. the stock lost 20% on friday. bit of a rebound today by 3.6%. they were hit by a disappointing outlook as well as h.p.'s restructuring and decision to get out of the personal computer and smartphone business. the irony is today, it began promoting a new desktop computer. the fall of tripoli helped push oil prices down today, but it wasn't necessarily bullish news for energy firms with operations in libya.

investors still trying to wait and see. marathon oil, hess and conoco- phillips all have business in libya. their shares were mixed with fractional moves. export terminals and pipelines were damaged in the six-month civil war, so its uncertain when operations could resume. meantime, u.s. gasoline refiners saw selling as oil prices fell. that can hurt their operating margins. also questions about their operations in libya. marathon's refinery spinoff, marathon petroleum, fell almost 7%. holly-frontier shed almost 6%. western refining dropped 4%. these are their lowest prices since the sell-off low two weeks ago. the situation in libya may have helped gold prices continue to hit new highs, up almost $40 an ounce. new record high again. market talk ahead of friday's speech by federal reserve chairman ben bernanke also may have helped. with the economy weak, pressure has been building for the fed to do something to help spark growth, and that may have longer-term inflationary consequences. now check out another precious metal, platinum.

traditionally, traders tell me platinum trades about $1,000 an ounce over the price of gold, but here's platinum at $1,900 an ounce-- less than $10 over gold. why? one reason may be the stalled auto industry thanks to the japan earthquake. platinum is a key material for catalytic converters, and with auto manufacturing lagging, industrial demand may be lagging. speaking of automakers, general motors stock is at its lowest point since it came public last november at $33 per share. deutsche bank cut its price target to $36.50 over worries about rising pension costs. and that's tonight's "market focus." >> susie: an update tonight on the case against dominique strauss-kahn, the former head of the international monetary fund. prosecutors in the manhattan district attorney's office this afternoon asked the judge to drop all charges against strauss-kahn.

he was charged with sexually assaulting a hotel maid. he's due in court tomorrow for a status hearing. >> tom: government debt troubles are not confined to european countries or washington, d.c. from the tiny town of central falls, rhode island, to jefferson county, alabama, to vallejo, california, city halls and county commissions are wrestling with paying their i.o.u.s. in the case of vallejo, after three years in bankruptcy, a federal judge has okayed its re- payment plan, but those areas

are the exceptions, not the rule, when it comes to municipal bonds. last fall, financial analyst meredith whitney predicted a big increase in municipal bonds going belly up thanks to state and local budgets under pressure. but instead, investors have been buying municipal bonds used for everything from sewer and water projects to airports. an exchange-traded fund following a municipal bond index has rallied back to prices it was trading at last fall before the dire predictions. marilyn cohen is the founder of bond investment firm envision capital management. she joins us from los angeles. so, marilyn, with the raleigh we've seen lately in-- with the rally in fixed income, still good val-- value for investors. >> i don't think they are good value because the nominal yields, the actual yield that you can earn is pretty darn low. if you want to buy a aaa ten year bond you get a paltry 2.3%. that really isn't that enticing. >> tom: but the argument is after considering the tax exemption status that is a

much higher yield then say, investing, in government debt. >> and that's a good argument. but here the big but. the municipal bond issuance is down about 40% this year. so not only do u have state, cities and counties kind of stretched financially, very, very limited new issuance and the demand continues to artificialically hold prices up and yields down. >> tom: so if you don't think that moneyies still provide a bit of value for investors would you sell the municipal bonds if you own them? >> no, i would hold on to them but make sure that they are really still great quality with no little glitches, you know, underneath the roof of them. and i would, i just wouldn't be a big buyer. i wouldn't be buying 30-year bonds right now. we've had a huge rally since february. and where are we going to go. i mean certainly they can go to 0% but why would you want to buy that. so hold on to what you have got and be careful what are you going to buy. >> tom: you mentioned local and state governments under

pressure. the of course the federal government is under pressure to cut its spending. what kind of effect could that have on the trickle down effect on some the those municipal bond investor. >> it can't be good. if the federal government has less money to give to the states and the states are already stretched because sales tax revenues, property tax revenues, income tax levels are down, and if we really are going in to a recession or a double dip, that means they'll even go done further. so you know, i think that you have to be very, very careful in what you buy, continue to be on top of what you own and make sure that you know how you're going to get your income from your coupons. >> tom: with that in mind, you are suggesting to municipal bond investors to avoid these three characteristics. avoid special purpose bonds like stadium bonds and those kinds of things. avoid reaching for yield. and that really means usually going for a lower credit quality why do these concern you? >> well, because you want essential things that are really important to your community. a stadium is not that

important. a hockey rink isn't. maybe even the civic centre isn't. certainly a parking structure isn't. and if you reach for yield, that means you are going down in credit quality. the lower the credit quality, the higher the yield but that yield is not compensating you for the risk in the economy and the risk of getting your timely interest and pins pal payments back. >> despite your recommendation of whole municipals dow find some attractive here. you like municipals from three straights. texas, virginia, and tennessee. what sets this trio apart in your mind? >> fiscal responsibility. balanced budgets. who knew, you know, coming from california that's like a blasphemy but like those states, even though they have been downgraded by standard & poor's, i think that their budgetary processes work. i think that the states are doing a fiscally responsible job. and that means there is value there for you, the individual investor and you won't have to worry. >> tom: what is a fixed income invest tore do these

days in these low yield environments, marilyn? >> well, i think that you go for special situations, maybe outside of municipal bond space. corporate bond language has a lot of transparency, quarterly reports. you see what your interest coverage is. i think that there is some value in more of the cuspy type of corporates that are maybe have a turnaround story that is evolving. that is where the value is. but it's not like it was last year. no question about it. >> tom: our guest talking about municipal bonds and other things fixed income, marilyn cohen with envision capital management. >> susie: let's look at what we are watching for you tomorrow. >> susie: here's what we're watching for tomorrow: the commerce department reports on how many new homes were sold last month. we'll also see quarterly results from medtronic, trina solar and williams-sonoma. and, our "word on the street" is "tech." we'll look at three top tech stocks poised to benefit from back-to-school shopping. ford and toyota are teaming up to build a new gas-electric

hybrid engine to power pickup trucks and s.u.v.s. that's right. the rival automakers say this is the first time they've worked together on product development. they say doing so will allow them to bring the new technologies to customers sooner and more affordably than going it alone. but you probably won't see those engines in showrooms until the end of the decade. >> tom: wild swings in the stock market aren't just scaring investors, they're scaring many companies hoping to go public. since august began, 17 companies have pulled or postponed their planned initial public offerings. just four companies have taken the plunge and sold shares to the public for the first time. a firm that tracks this data, dealogic, says it feels a lot like december of 2008, when the financial crisis was spiraling out of control and the i.p.o. market dried up. 18 deals were nixed that month.

>> susie: with the nation's unemployment rate holding stubbornly above 9%, tonight's commentator has a few thoughts on what's holding back job creation. he's tim kane, research fellow at the kauffman foundation. >> as a former economics professor, i'm supposed to say there's no such thing as a dumb question. but there are funny ones, such as "where are the jobs?" consider just seven of the barriers our country has. one: a federal regulator recently blocked boeing from

opening its new factory in south carolina because that state-- i'm not making this up-- recognizes the right to work. two: a few years ago, congress mandated that all the states pay 99 weeks of unemployment insurance instead of the normal 26 weeks. you get half of your lost wages but only if you promise to stay unemployed. three: three major trade deals, were signed by the last president but remain unapproved by congress because the 99-week unemployment system isn't generous enough. four: congress raised the minimum wage by 41% in early 2007. five: the bipartisan kerry-lugar bill in the senate would grant a new kind of visa, the startup visa, to immigrant entrepreneurs who create five jobs in the u.s., but the white house said no, unless the bill also solves every other immigration problem. six: corporations that do business here face the highest tax rate in the world-- okay, second-highest behind japan.

seven: when a startup firm hires its first employee, it gets a surprise notice in the mail that it owes the state and federal government a new tax-- the unemployment tax! america literally taxes job creators for creating jobs. so, "where are the jobs?" are you serious? i'm tim kane. >> tom: just a reminder, you can catch us online at n.b.r. on pbs.org. there you'll find all of the market statistics in the program, and you can watch any programs you may have missed. or you can follow us on twitter, @bizrpt, or my personal feed, @hudsonnbr. if tweeting isn't your thing, friend us on facebook at bizrpt. that's "nightly business report" for monday, august 22. i'm tom hudson. good night everyone, and good night to you too, susie. >> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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