>omommerger blockck.. the justice department sues to stop at&t's takeover of t- mobile, saying the deal would be bad for competition. >> betting against at&t is difficult, but on the merits we felt this deal faced a lot of challenges going in. >> susie: what now for at&t? we'll look at what today's action means for the entire wireless industry. it's "nightly business report" for wednesday, august 31. 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 thank you for joining us. the giant merger between at&t and t-mobile got disconnected today. the justice department filed a lawsuit to block the $39 billion deal, susie. >> susie: tom, the announcement surprised at&t and investors. but in the end, the government called the deal bad for

consumers, saying today "price, quality and innovation would be diminished if the merger between the number two and number four wireless carriers took place." >> tom: today's lawsuit is the biggest challenge to the merger, which has faced criticism. the f.c.c., for one, echoed concerns about competition. at&t stock fell on the news, down almost 4%, but the bulls came calling for sprint, sending its stock up nearly 6%. darren gersh takes a look at what today's move means for at&t and t-mobile. >> reporter: at&t tied up its merger with t-mobile with a pretty political bow. there were promises to build out wireless broadband in rural america, an obama administration priority. labor unions were part of the team, 5,000 call center jobs would be brought back to the united states. but today, justice department antitrust lawyers bucked the political pressure and decided four mobile phone companies was as low as they would go.

>> there's a quip from a famous old anti-trust lawyer that used to say the difference between republicans and democrats after all the fancy econo-metrics is democrats want to see four competitors and republicans are satisfied with three. i don't know if that's true, but that's where we've gotten with this case, is a determination that we now need to have four national players with this level of competition. >> reporter: at&t was clearly caught off guard by the timing of the announcement and vowed to vigorously contest the decision in court. because so few antitrust cases are actually decided by a judge, it is hard to gauge at&t's chances to push through its $39 billion merger with t-mobile. >> we think that that's a bit of a long shot. >> reporter: morningstar's michael hodel points out the justice department has broad authority to reshape and reject mergers it deems anti- competitive. >> betting against att is difficult, but on the merits we felt this deal faced a lot of challenges going in. >> reporter: the justice department argues at&t could do everything it says the merger

will do simply by investing in its own business instead of removing a competitor. at&t counters it needs t- mobile's assets to ramp up more advanced mobile phone services. the merger's fate will determine the competitive landscape of the mobile phone industry. >> i think the industry goes back to the status quo. you have four major nationwide competitors, and two of them are very, very strong. two of them are very weak, and the two weaker players are trying to figure out how to better compete against the big two. >> reporter: unless, of course, another competitor is now tempted to buy in. >> google, the cable companies, who knows who it will be, may rethink-- dish which is very active in moving into wireless broadband-- may rethink their strategies and wonder what opportunities there are. >> reporter: at&t has up to a year to show it can win this merger battle. if not, it will have to pay $3 billion to t-mobile owner deutsche telkom. darren gersh, "nightly business report," washington. >> susie: at&t stock tumbled more than 4% today, but our next

guest still has a "strong buy" rating on the stock. a short while ago, i talked with todd rosenbluth, telecom analyst at standard & poor's, and asked him why he's so upbeat about at&t. >> for two reasons. one, we think the deal may still go through. at&t in our opinion at s&p is likely to agree to divesting of certain assets of t mobile in order to get the deal done. they want the spectrum and there's still some sin are ji opportunities if they get the deal done. but if at&t does in the do the deal as a stand alone company we think this is an undervalued stock with an would have average dividend yield -- an above average dividend yield. >> susie: let's say at&t doesn't get the green light. what happens to t mobile, it stands to lose a lot, doesn't it? >> yes, we think t mobile will be negatively impacted. they were looking to partner up with at&t, it would save them investment needs, it would save them in marketing needs. and the u.s. part of deutsche

telekom has been struggling as of late. >> susie: what's your view on deutsche telekom stock, the parent of t mobile? >> s&p has a recommendation on deutsche telekom shares, the shares that trade in europe. >> susie: so let's talk about some of the other telecom players that are involved in this whole story. looks like the market is saying that sprint is the clear winner here. the stock up about 6%. is that the case? >> we think sprint is the beneficiary of this. they were fighting the deal because on competitive side of things, we think that at&t if it was a bigger company would be harder for a sprint nextel to compete against and we think if sprint gets the iphone and as it looks to grow its customer base it is a good investment opportunity. >> susie: do you think that sprint can make a move to buy a t mobile, and if it did what would that mean for the company? >> so we're not speculating that sprint nextel is going to partner up with t mobile. but we could see them do is if at&t has to spin off some

assets to get the deal done, sprint nextel could be a potential buyer of those assets, in our opinion. >> susie: let's talk about verizon. what's your outlook on verizon? >> we have a hold recommendation on verizon. verizon is the leading player in the space, a more rational competitive environment, would be a positive for verizon. we think verizon can gain some market share and given ton certainty that's happening in the marketplace. but the stock really reflects a lot the positive characteristics we look for in the stock right now. >> susie: and what about the smaller telecom players, like metro pcs? does all of the stuff that's going on work for or against them? >> so, if there's continued consolidation in the telecom lab scape, then melt oh row pc s is a potentially attract of asset. they've been growing. we think they can also gain if

t mobile continues to struggle. we also think that iyz, which is a dow jones telecom sector etf, may be way way for people to look at this. it has holdings in at&t, verizon, sprint and metro pcs. >> susie: and what about consumers, what do all these skirmishes mean for consumers? >> well, right now we've got uncertainty. so if you are a t mobile customer you are still a t mobile customer. we think it's unlikely that t mobile will be adegrees any of the next couple of months to try to gain customers. and so if you're happy with who your service provider is, you should stick witness. but if this deal does not go through, we could see a slowdown in investment from at&t's perspective because they've got a ladder in their capital spending needs in stead of doing a one-two deal with the t mobile acquisition. >> susie: do you own any of these stocks that you talked about today? >> no, i do not own any telecom stocks that we talked about. >> susie: thank you so much

for coming on the program, a really pleasure having you. >> tom: stocks capped off a volatile august by finishing the day higher, pushing the dow jones industrial average back into positive territory for 2011. the blue chips gained 53.5 points, the nasdaq inched up three and the s&p 500 up nearly six. volume was up a little from yesterday-- 1.3 billion on the board board and just under 2.1 billion on the nasdaq. president obama wants to unveil his proposals to jumpstart new jobs in a prime-time speech a week from today. but late today, house speaker john boehner asked the president to reschedule and give the speech the next night, once congress is back in session. whenever the speech is, so far we know the president's plans include more infrastructure spending, tax incentives to spur hiring and a reduction in the employer portion of the payroll tax credit. today, the president urged congress to pass an extension of

a federal highway bill. it's currently slated to expire at the end of next month. president obama says failing to extend the bill would cause 4,000 workers to be furloughed without pay immediately and could lead to a million workers losing their jobs over the next year. >> susie: meanwhile, new reports out today show the health of america's labor market remains weak. payrolls processor a.d.p. said private employers added only 91,000 new jobs in august, slightly less than expected and a decline from july. but the number of planned job cuts fell in august, according to outplacement consulting firm challenger, gray & christmas. still, year-over-year, job cuts are 47% above last year's level. the data comes just two days ahead of the government's august employment report. that closely watched survey is also likely to be disappointing. and, as suzanne pratt explains, americans should not expect the job market to improve much this fall.

>> reporter: for new york's mckissack construction company, there is work for the dozen employees on this battery park project, but new jobs are likely to be scarce. v.p. mike kaleeda says he hasn't hired anyone since july. >> it hasn't been this slow on the hiring side since 2006. >> reporter: unfortunately experts say job prospects for the construction industry and many other types of work is not expected to perk up this fall-- that's as the economy is likely to remain stuck in slow motion. business cycle expert laksman achuthan says the string of good months for hiring that came in the spring was probably this year's best stretch. >> that is as good as it was going to get. we're not going back to that kind of jobs growth any time soon. we're going to continue to see weaker and softer jobs growth through the end of this year. we don't see any sustained upturn in sight. >> reporter: just how weak are

we talking about? many experts say we'll be lucky to see 100,000 new jobs a month in september through december. if that happens, the unemployment rate will remain around 9%. it also means new hiring will barely keep pace with u.s. population growth. to be sure, there will be some new jobs in some sectors. experts describe those as the non-discretionary areas of the economy. >> education, healthcare and defense and certain basic items that, no matter what, we the country are going to purchase. >> reporter: how does mckissack feel about hiring next year? >> we are only slightly optimistic that we will begin to see a turnaround later in 2012. but, that's being cautiously optimistic and i'm really not counting on that. >> reporter: suzanne pratt, "nightly business report," new york. >> susie: so tom this is the

last trading day of august and the marketend up on a up note. but beyond that, most investors are happy saying good-bye and good ridance to this brutal, nasty, ugly month of trading, really a tough time. >> tom: it hasbeen. we've seen several hundred point swings almost every trading day for the dow jones. good ridance to august. noun the less, let's go ahead and get everybody updated with tonight's market focus. the at&t news held back any gains the dow industrials were able to muster, but the major indices did put in their four sessions of gains. the dow today spent most of the session in the green, despite the drag by at&t. it looked like we have seen a small loss as the index went negative less than an hour before the close, but it eked out a fractional gain. here's the past 30 sessions of the dow, showing the strong drop

in late july, the double bottom in august and the small recovery over the past week and a half. by the way, year to date, the dow is back in positive territory with today's gain. let's show you the past 180 sessions of at&t. today, it saw huge volume as the federal government moved to block its buyout of t-mobile and shares fell almost 4%. but the stock remains about 40 cents above where it was trading in late march, when it first made the play for t-mobile. while the telecom sector was the weakest one thanks to at&t, companies operating cell towers rallied. these firms face losing a customer if at&t's buyout of t- mobile eventually goes through. s.b.a. communications, crown castle and american tower all saw heavier volume as their stock prices moved up today. alcoa's rally led the dow industrials, moving up more than 3.5% as alcoa tries to dig

itself out of the sell-off that began last month. goldman sachs helped out metal makers, with its analyst predicting demand to continue to be fairly healthy thanks to emerging markets. companies have to get that raw material out of the ground, and makers of mining equipment machines caught bids today. joy global stock also was helped by a strong quarterly earnings report, as well as the firm raising its outlook. caterpillar came along, up more than 1% too. a sign of the times in health care today, as insurance firm united health group expands in california. united is buying a major southern california doctors group. the price was not disclosed. it further gets the insurance company involved in providing health care services. united has said previously its health providers will contract with other insurance carriers. united health stock saw a small

gain, carrying it to its highest since august first. volume was light on the move higher today. and while the financial sector was the weakest today, e-trade financial bucked a weak sector, ending with more than a 7% gain. that was the best among all the s&p 500 stocks. an analyst at sandle o'neill expects trading volumes jumped in august, helping e-trade's revenues. we want to watch shares of, the shares of... shares were down in after hours action.

volatility and big swings in trading volume may be tough to stomach for long-term investors, but it can be great for the business of trading. tonight's "street critique" guest is looking to profit from more trading. she's hilary kramer, editor of gamechangerstocks.com. so, you're looking at an exchange, the cme group specifically, this is a company that operates the exchanges where oil, gold, government bond, over en corn futures are traded. what makes you live cme group at this point in its stock price, trading at $267 per share? >> tom, the cme group has been

hit hard whether the market coming off in august, yes it very ironic because the way the kme group makes its money is on volumes. volumes of these contracts in these areas that you just mentioned which are all growth areas, right, metal, platinum, silver, gold, energy has been very strong, and it's very important to realize that we've had a lot more treasury issueance. all those positions need to be hedged, that's the interest rate area for cme. it's a great story, earnings will be out of the park. i don't own it yet, i am planning on building a position in cme, maybe even on the call option side, i have such great expectations. >> tom: using leverage yourself. the big question with cme is how is it going to be impacted by the coming new regulations for financial derivatives? that clearly doesn't concern you here, does it? >> it doesn't concern me as much, because the cme group is going really international, and regulation i think has

been built in to many of the stock price as cross most of the market. let's get to -- >> tom: let's get to our viewer quez. luke asks, is sprint a good candidate for a future takeover or acquisition. clearly a beneficiary of today's news that the department of justice is trying to block the at&t-t mobile deal. at under $4 what do you think of sprint nextel? >> although i do like sprint, it's in our breakout portfolio in my news letter, we've made our money in sprint and there's better areas to go, and as we saw today with the department of justice, anything is possible when you're talking about the telecom industry. >> tom: speaking of telecom going international here with an update from bruce who writes us, i bought telecom israel on hilary's recommendation and have now lost 15%. you liked it in the middle of july, since then it is lower

by 13 to 15%. what now? >> well, first of all, it most likely got eve, has most likely done better tonight general market. even if it's a bit lumpy what i like is that you only have so much competition in israel, that's what ate into their last earnings report and brought the stock price down. we should be able to see some stock appreciation, because they're such a strong market player. >> tom: you still like it, you still own it? >> yes, i still like it. i like international cellcom. >> tom: what would you do with satcom, do you think holding it would rebound my losses? you like it at 3.5. what do you think? >> satconsole lar converters has struggled with all the clean tech market, i'm holding at such a low price, but for others with so many beaten down stocks, you might find

better opportunities somewhere else. i'm hoping for a rebound. >> tom: you own everything we mentioned tonight, except for cme, you mentioned building a position? >> that's right. 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," was hilary kramer with gamechangerstocks.com. >> susie: here's what we're watching for tomorrow: we'll see auto sales and the i.s.m. manufacturing reports for august, and construction spending for july. h&r block and t.d. bank report their quarterly results. and, after a very volatile august, tomorrow we'll look at what september could hold in store for investors. ford motor is going back to school. it's providing cars to zipcar locations at 250 colleges and universities. zipcar is the car-sharing service that allows rentals for hourly or daily rates.

over the next two years, zipcar will add 1,000 ford cars within its college program, primarily the focus and escape models. what's in it for ford? exposure to a large group of potential future buyers. it'll offer discounts and incentives to students in the zipcar program. >> tom: nearly two million homes and businesses are still without power five days after hurricane irene slammed into the east coast. utility companies restored about 7.5 million customers by today, flooding remains the main obstacle. swollen rivers in many states have washed out homes and bridges, making it difficult for repair crews to reach neighborhoods. standard & poor's estimates the national total damage at $20 billion, though others have put the number at half that.

>> susie: there's a movement underway to encourage consumers to spend money at companies led by young people. it's called the "buy young" initiative. anna olson has details. >> reporter: what do this butcher shop, gourmet ketchup line and woven belt company have in common? they're all run by people under age 30 and they're all part of a new movement aimed at getting customers to buy products from young entrepreneurs. matthew segal, who runs a nonprofit called "our time," started "buy young" earlier this summer. >> this is about getting young americans to support young

businesses, the underdog, to help them grow, and to continue to create jobs. it's truly our response to the economic crisis facing young americans. >> reporter: so far, about 50 businesses are taking part in the effort. once they sign up, companies are featured on the "our time" website, which offers 30% to 60% discounts on merchandise. one of the "buy young" businesses is smathers & branson, which makes these needlepoint belts. >> there's a lot of time and thought that goes into the quality, to the actual stitching, to the design. >> reporter: peter smathers carter co-founded the company with his college roommate after both of them received needlepoint belts from their girlfriends. now, seven years heir products are in 700 high-end boutiques and department stores. carter says "buy young" is helping spread the word to new customers. >> the sheer number of people they have on their emailing list was incredible exposure for us, and we've had some incredible orders come in online from that. >> reporter: in fact, "our time" says companies are seeing as many as 200 additional sales per day as thousands visit the "buy young" site.

segal says people like what they're seeing and thinks the movement could result in more cause-conscious consumers. many of these products-- like clothing made out of recycled content or nontoxic nail polish- - are designed with health and social issues in mind. >> i think this will be a values-based buying movement, and i think it will be true forum and platform for economic empowerment for this generation. >> reporter: and customers can expect to see many more young entrepreneurs on the site soon. "our time" says it plans to add hundreds of new companies to its roster in the coming months. anna olson, "nightly business report," washington >> susie: we talk with several other young business owners to find out how they went from an idea to running a successful company. our special, "young entrepreneurs," airs this monday, september 5. >> tom: that's "nightly business report" for wednesday, august 31. 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.

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