>> t t: : od evening, , d d anks captioning sponsored by wpbt >> the summer has traditionally been slower-- we've all heard "sell in may and go away"-- but this summer has been very busy. >> tom: the question now: how's september shaping up, and will august's record volatility continue? >> susie: and we continue our focus on fixing the economy. tonight, removing barriers standing in the way of start-up businesses. it's "nightly business report" for thursday, september 1. 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. >> tom: good evening, and thanks for joining us. the white house today sharply cut its growth forecast for the u.s. economy, susie. the move underscores the importance of president obama's big speech on jobs next week. >> susie: tom, it also shows that the white house is less optimistic about economic growth

and jobs, just as we've been hearing from private economists. here's the outlook from the obama administration. the office of management and budget slashed its growth outlook for this year to 1.7%, down from its earlier forecast of just above 3%. it also cut estimates for next year and 2013. as for jobs, it sees the unemployment rate averaging about 9% this year and next. >> tom: goldman sachs came out with a grim jobs forecast just one day ahead of the august report. goldman analysts cut its estimate in half. it now believes businesses added just 25,000 jobs last month. >> the jobless data will be released tomorrow. >> susie: those gloomy forecasts pressured stocks on this first day of september trading. on wall street, the dow fell 120 points, the nasdaq lost 33, and the s&p 500 fell about 15. as for trading volume, just over a billion shares moving on the big board and 1.8 billion on the nasdaq.

and today's decline in stocks is raising eyebrows on wall street. after all, it's not a good start to a month known to be bad for stock investors. but will september 2011 buck the historical trend and turn out to be kind? suzanne pratt reports. >> reporter: for many americans, september means beautiful weather and new beginnings. for the stock market, however, it can be the scariest time of the year. ( "jaws" theme playing ) at this td ameritrade center in manhattan today, investors were cautiously checking their portfolios and hoping for a quieter month. >> well, i think this is a phase. i don't think it's going to be volatile like this forever, or even for a year. >> i haven't bought anything. i'm still making up my mind. >> reporter: investor fears are not without merit. since 1944, the s&p 500 has lost an average of about half a percentage point in september, making it the worst month on the calendar for stocks.

by the way, historically, december is the best. to be sure, september's reputation is fairly well known on wall street. still, that notorious pattern shows no sign of weakening, and this year it follows a rather nasty august for stocks. still, market strategist jack caffrey is optimistic about this september. >> certainly, in the short-term, you've seen a nice turn in momentum. you've seen stocks trading with a bit of improvement. what would be nice to see is a little bit more volume on the some of the up days. >> reporter: caffrey expects investors to keep one eye on corporate profits and the other on washington, and hopes for new economic stimulus. at td ameritrade in new york, branch manager jeff goldberg says if investors had a third eye, it would be fixed on europe. >> they do get it. i mean, they know where greece is, they know where western

europe is, and many of them have been there. so they also relate to what's happening in europe to what's happening here. >> reporter: one more thing about september that's worth noting: no one really know why it's usually the cruelest month for the stock market. of course, this year could be different. suzanne pratt, "nightly business report," new york. >> tom: goldman sachs is getting out of the mortgage servicing business. regulators in new york have signed off on the sale of goldman's servicing unit to florida-based ocwen loan servicing, but there are conditions attached to that sale. as darren gersh reports, the standards regulators are putting in place could pave the way for a national agreement overhauling mortgage servicers. >> reporter: even now, four years into the housing crisis, there are few rules actually in place that require the companies processing mortgage payments and pushing through foreclosures to treat homeowners right. the settlement between goldman sachs and new york regulators as a condition for selling off its mortgage servicing business helps change that.

>> finally, i mean, it's someone stepping up to say, "you know, if you're not going to follow the law, you're going to have to pay for it." and hopefully the fine will be enough so that it isn't looked at by the industry as simply a cost of doing business. >> reporter: the agreement requires goldman sachs to help homeowners by writing down $53 million in unpaid mortgage debt. it also ends so-called robo- signing in which company employees swear they've reviewed documents they have not. goldman sachs will have to restore equity or otherwise pay homeowners who lost their home to wrongful foreclosure. ocwen, the company taking over goldman's servicing business, also agreed to provide a single point of contact for all borrowers trying to modify a mortgage or avoid foreclosure. consumer advocates like michael calhoun say a single point of contact is a big step forward. >> if you are trying to get a loan modification, they have got to have a live person who has knowledge of your loan modification that you can talk to. because lots of people send in

their documents, and then they talk to someone that they've never talked to before who says, "we never got your documents," and they start all over again. >> reporter: calhoun hopes the agreement between goldman sachs and state regulators will provide a model for servicing standards that could push forward national settlement talks now under way between states and the country's biggest banks. in the next month, calhoun expects those talks will either succeed in resolving the robo- signing mess or they will blow up. >> there's still a cloud of uncertainty over homeowners. there is a little bit of light there that we are making some progress, but it is far from settled whether these other really critical things will get resolved and whether they will be resolved soon. >> reporter: and removing that cloud of uncertainty will be a critical step to reviving the nation's housing market. darren gersh, "nightly business report," washington. >> tom: meanwhile, the u.s. treasury is calling out two of the nation's largest mortgage lenders for not doing enough to keep troubled borrowers in their

homes. the agency says bank of america and j.p. morgan have done a poor job of permanently lowering mortgage payments for people enrolled in federal foreclosure prevention programs. the treasury believes the lenders have rejected people that are eligible for mortgage modifications. the government did resume incentive payments to wells fargo after that bank made changes to its modification process. >> susie: still ahead, giving your kids super financial powers like the ability to budget and save. it's tonight's "kids and cash." >> tom: small companies generate the bulk of new jobs, and start- ups are a key source of those new paychecks. one trouble, though, is fewer new companies are starting, and those that are, are hiring fewer people. as we continue our series, "how to fix the economy," we spoke with carl schramm, c.e.o. of the kaufmann foundation, about his start-up act proposal. schramm blames the slow pace of start-ups on uncertainty. >> i think it's undeniable

that if you are's starting a new business and you're not sure about how the economy's going to work around you and what the government's going to do, that you are going to be more cautious. the larger fundamental macro issue is the american economy's largely becoming a big firm, small firm economy. when big firms aren't growing, small firm its won't grow. >> tom: your start-up act suggestion really focus on entrepreneurialism, why focus there as opposed to focusing and fuhr turring small companies already in operation. >> what we are looking for is high-growth operations that are generally new start-ups in in. in technological areas where people aren't working. and that if you look across thistical, the force of statistics tell us that it's the new businesses that are critical to the growth of the economy. simply put, i think our task is to get more people starting businesses. and to then attend to the question of the success of those businesses. and therein comes the answer to your question. and that is, to get them

successful, yes, they have to have capital. but first we have to get them going. >> tom: your start-up act proposals have four parts beginning with financial. you want to he limb natio nation-- eliminate income tax on the first year for start-ups or low income taxes-- lower capital taxes or eliminate capital gains tacks on small companies. what kind of payback could this have? >> if you have growth, robust growth, 3, 4, 5% and income in the treasury will grow enormously. >> tom: you also talk bim gration in your suggestions, offering green cards to immigrants of certain technical backgrounds that start and create types of businesses here in the u.s. isn't that choosing winners? >> is this choosing winners? you bet you. what we're basically saying is if the smartest people from around the world want to come to the united states for their education and graduate education, that's still the case. now if we could capture those folks or in fact, invite people who might have been trained at the indian institutes of technology, which is a worthy competitor

to let's say m.i.t. or calltech, those people should come to the united states and start their businesses here. is this selective immigration policy? absolutely. because if we don't have growth, solving the problem of illegal immigratio immigration-- immigrants which are a vast number of folks, is going to be very much harder. >> tom: you also would like the government to tackle regulation proposing that any major rules automatically expire after ten years unless they are reintroduced and reimplemented. doesn't that just insert more uncertainty where there had been certainty? >> well, it inserts a marvelous type of uncertainty. because these are all rules which lawyers would call mall aprohibitas. these are all the things that shouldn't be done. now presumes that businesses are all going to do bad things. and americans don't believe that. the other day i rented a chair for a party. on the bottom of this chair in new york state is a sticker about ten inches by

ten inches talking about what the fire code in california permits in terms of when this chair would melt. it's a plastic chair. if you look at it, you just think my gosh, here's a guy making plastic chairs. who doesn't set out to make a chair that won't fall apart in a fire. people are smart enough not to be in a room. >> tom: you talk about innovation in your start-up proposals and proposing a fast track patent approval process for companies that pay a higher amount or discounts for smaller businesses with patents. what would that provide that entrepreneurs don't currently have? >> if you are a brand-new start-up business with a high-tech idea, an idea that nobody else has had yet and you really want to protect it, this ought to be a very, very, very quick process. because you're not going to invest your money, you're not going to take the next step, you're to the going to quit your job until you have at least some certainty that you have a proprietary interest in this idea. >> tom: dr. schramm many of these proposals have been in front of congress before.

some of them have already failed. what makes you encouraged at all that this time may be different? >> starting new businesses is critical to fixing the economy. the economy's broken. if we want to have robust growth again we've got to have new companies being founded. >> tom: dr. carl schramm with the kauffman foundation, thank you very much. >> my pleasure. >> tom: we talk with several young business owners to find out how they went from an idea to running a successful company. our special "young entrepreneurs" airs this labor day, monday, september 5.

>> susie: a big legal victory today for s.a.p. in a long- running copyright infringement case against rival oracle. originally, a jury awarded oracle $1.3 billion in damages. it was the largest-ever copyright infringement award. oracle claimed s.a.p. improperly used its programs, but a judge called the verdict "grossly excessive" and reduced it to $272 million. s.a.p. says it's gratified by the decision and the reduced damages. oracle plans to pursue the case until it receives what it calls "the full amount it deserves." despite hurricane irene and turmoil in the stock market in august, u.s. automakers still managed to post double-digit sales gains. chrysler rose the most, up 31% on strong sales of its revamped jeep brand and a big showing by the tiny fiat 500.

sales at g.m. and ford also benefited from new models and crossover vehicles. meanwhile, japanese automakers are still recovering from their earthquake-related supply chain issues. toyota sales fell 13%, honda tumbled 24%, but nissan rose 19%. morningstar auto analyst richard hilgert says industry fundamentals look good, but the u.s. economy is the wildcard. >> people still have to get back and forth to work, and we think that those positive fundamentals that are out in the marketplace are going to keep demand coming even though we still have somewhat of an uncertain economic outlook and high unemployment. >> susie: stocks of the u.s. automakers fell sharply today, with g.m. losing 4% and ford falling over 2%. still, tom, standard and poor's put a "buy" rating on g.m. today and repeated its "buy" rating on ford. >> tom: still pretty bullish about those oems, original equipment manufacturers based here in the united states. but overall the broad market

taking a bit of a pause here, susie, so let's go ahead and roll with tonight's market focus. the major stock indices start september by breaking a four session winning streak as the focus turns to tomorrow's employment data. here's what the dow industrials looked like today. the dow shot up to its highest level just after 10:00 a.m. eastern time. that's when the institute of supply management reported a stronger than expected report on manufacturing. financial stocks led the market losers. the biggest drag on the dow was j.p. morgan and its 3.4% drop. several headlines surrounding big banks and mortgage servicing, which we reported on earlier, hurt the sector. goldman sachs was the subject of many of those headlines. shares sank 3.5%. citigroup lost more than a dollar, just over 3%. and bank of america dropped back below $8 per share, falling over 3%.

we saw mixed strength in retail stocks as they start reporting their august sales. the back-to-school spending season is second only to the holiday season, but, this year, the last week of august was hurt by hurricane irene from the mid- atlantic north through new england. discount warehouse costco reported same-store sales were up 11%, far better than anticipated. costco stock bucked the weaker tape today, closing higher by more than 1.2%. it has now recovered almost all of what it lost from the sell- off since late july. costco also announced that c.e.o. jim sinegal will step down january 1. his number two, craig jelinek, will take over. meantime, the gap continues to see its sales fall, down another 6% in august, leading to today's 3% stock price decline. the drop puts the gap less than

$1 above its 52-week low from mid-august. among other retailers, macy's says if it weren't for irene, sales would have topped estimates. shares were up 2%. kohl's sales fell, taking its stock price with them down 2%. and discounter t.j. maxx reported sales grew at half the rate expected. shares saw heavy volume, dropping 3%. telecommunications gear maker ciena provided a pleasant surprise for investors, reporting a profit of eight cents per share when a loss of the same amount was expected. while european business continues to slow, the company says u.s. customers are buying strong. the stock saw strong buying, up 20% on very heavy volume. slowing demand for its gear this year has pushed the stock down. but with today's buying, it's at a one-month high. we will want to watch netflix tomorrow. shares were down 8% from this

close tonight. talks reportedly have broken off between netflix and starz entertainment about renewing a deal for movies and other content. we saw lots of activity with u.s.-traded brazilian bank stocks. u.s. investors know the saying "don't fight the fed." well, the brazilian central bank surprised the market and cut interest rates, helping to today's brazilian bank stock rally. banco bradesco, itau and santander all saw gains of over 3%. meantime, brazil's central bank was buying dollars, helping the u.s. currency rally. that and some profit-taking pushed down grains. wheat, corn and soybeans all fell after rallying in august. and that's tonight's "market focus." >> susie: hedge fund manager david einhorn has struck out with his deal to buy a piece of

the new york mets baseball team. the mets said today the $200 million deal was off and that it's actively talking with other investors. now, einhorn, a life-long mets fan, was excited back in may he struck the deal. today, he said extensive last- minute changes by the team made the transaction impossible. the mets invested heavily with ponzi schemer bernie madoff and are facing a $1 billion claim by madoff victims. >> we're learning from routers that u.s. security regulators are asking for the recipe to their secret sauces. the securities and exchange commission and the financial industry regulatory authority want them to hand over the details of their trading strategies including secret computer codes. the regulatory agency says it wants to see the algorithms as part of an investigation into suspicious market activity. the securities and exchange commission says it wants to see the codes to better understand the electronic trading market.

>> susie: here's what we're watching for tomorrow. as we mentioned, we'll see the august employment numbers. economists expect to see 80,000 jobs added to payrolls. also tomorrow, the tug of war in the market between recession fears and strong corporate earnings has our friday "market monitor" guest thinking big. jack ablin of harris private bank will tell us what large cap u.s. stocks he is buying. oil prices inched higher today after major oil and gas producers began shutting production in the gulf of mexico. there's a storm brewing offshore that could become a tropical storm in the coming days. royal dutch shell, exxonmobil, b.p. and marathon oil began precautionary shutdowns as the storm loomed. the storm has the potential to reach hurricane strength and could move westward toward texas. >> tom: meanwhile, victims of hurricane irene are getting a break from the tax man. the internal revenue service is extending tax payment deadlines for some individuals and businesses affected by the storm. businesses that had previously obtained extensions until the middle of this month now have

until the end of october to file 2010 returns. initially, the offer is being made to certain counties in north carolina, new jersey, new york and puerto rico. >> susie: when it comes to

teaching your kids the ins-and- outs of savings and budgeting, keeping their interest isn't always easy. so tonight, we've asked a kid for his take on this. jordan lane palmer is the winner of the 2011 national financial literacy poster contest. he got to show off his winning entry to federal reserve chairman ben bernanke and u.s. treasurer rosie rios. in tonight's "kids and cash," palmer explains how his super- hero concept can help super-size your kid's savings. >> i love superheroes! thor, iron man, captain america, but spiderman is my favorite. uncle ben challenged peter parker and told him "with great power comes great responsibility." this is the concept i use when i think about money management. everyone can be a superhero when it comes to handling money. as the 2011 n.f.c.c. national financial literacy poster

winner, i created a financial superhero named cash save-a-lot. his primary goal is to save money. it starts with setting goals, creating a budget and saving. budgeting is normally the next stage in money management after realizing where money comes from. this is sometimes not the easiest subject to get experience in, since most people have trouble holding onto their money. having savings is needed for budgeting to work. i like to think of savings as realizing that, yes, there is the new nintendo ds that i can buy, but i will not spend my last dollar on the game system. budgeting helps people realize this goal of getting the new nintendo ds and having savings if they have just a little patience. i'm jordan lane-palmer. >> tom: just a reminder, you can catch us online at n.b.r. on pbs.org. there you'll find all the market data from the program, and you can watch any programs you may have missed.

you can also follow us on twitter, @bizrpt, or my personal feed, @hudsonnbr. if tweeting isn't your thing, friend us on facebook at bizrpt. >> susie: after august's market volatility, we asked our facebook friends if they were actively investing or heading to the sidelines? it sparked a lot of comments. here's a sampling of the conversation. sergio says he's "holding and hoping, but not actively trading." kersi says he's hopeful "obama's job plans speech on 9/8 will say something that will create a buying opportunity." lamont says he's on the sidelines for now but always looking to buy weakness and sell strength. and carter says he's actively participating and dollar cost averaging, and that he's "in it for the long haul." the conversation continues on facebook at bitrpc. >> tom: lots on the line for that speech next week. lots on the line for that jobs report tomorrow, susie. >> susie: absolutely, we'll

be covering all of that tomorrow morning. that's "nightly business report" for thursday, september 1. 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