this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. tom hudson is on assignment. u.s. stocks plunged today, joining a massive selloff that started in asia and quickly spread to europe and around the globe.

investors dumped everything from oil to precious metals on renewed worries about the global economy. the federal reserve fanned those fears yesterday with its gloomy outlook about the u.s. economy and global financial markets. only the u.s. bond market was spared. investors flocked to the safety of government debt, pushing the yield on the 10-year note to a record low. heres' a look at how the major averages fared by the close. they all dropped by 3% or more. the dow tumbled 391 points. it had been down about 500 points. the nasdaq fell 82 and the s&p 500 lost 37. markets-- a big drop in gold, down $66 to close at $1,741-- and crude oil futures slid over $5.00 to settle at $80.51 a barrel. erika miller takes a closer look at today's market selloff. >> reporter: today, it was sell sell sell, straight from the

opening bell. the dow and the s&p 500 joined an extraordinary global market selloff at the start of trading and never looked back. by the time the dust settled at 4 p.m., blue chips were at their lowest level since august. market strategist wayne kaufman says this is not a garden- variety correction. >> this is not run of the mill. this is stress in the financial system. there are a lot of indicators that show this-- that are reaching levels that show real fear. >> reporter: stock investors are becoming more worried about the possibility of another recession. they were spooked by the fed's grim outlook for the economy yesterday, and many are disappointed that the fed isn't doing more to help. but the concern is not just about weakness in the u.s. it's europe and asia, too. >> you've got not only the continuing european financial situation, with greece and the possibility of a domino effect through the rest of europe, but you've also got, now, the potential for a slowdown in

china. >> reporter: those jitters were also felt at the new york mercantile exchange today. crude futures settled down 6%, at one point dipping below $80 a barrel. trader anthony grisanti thinks oil could head to the low 70s on the back of a decline in stock prices. >> when you look at oil, over the last 2.5 months, really what it's been following is the equity market, almost tick for tick. if you put those two charts together, they run in tandem with each other. >> reporter: gold often benefits from worries about stocks. but not today. the yellow metal took a dive, setting a new four-week low. analyst joung park believes many traders sold their gold today to cover losses elsewhere. >> investors are taking a sell first, ask questions later attitude. they're trying to liquidate any asset that they have in order to fund redemption requests from investors. >> reporter: investors have been running from volatility, but

there haven't been many places to hide. experts don't think that will change until there are signs of improvement in the economy. erika miller, "nightly business report," new york. >> reporter: fixing europe's economy is at the top of the agenda for top finance members meeting in washington today. g20 ministers and central bankers are gathering for the next two days for a crucial meeting of the international monetary fund. joining me now is john lipsky, the i.m.f.'s first deputy managing director. john, so nice to have you on program. >> glad to be here, susie. >> susie: well, as you heard, investors all around the world very, very concerned about the european debt crisis, and just want to get your thoughts on how bad is the situation? >> well, there's-- as our managing director christine liggard said today, we are in a dangerous new phase in which it is clear there is uncertainty

about the economic outlook and unsupporter about whether economic policymakers have the will and clarity of insight to adopt policies needed to keep the economy-- global economy expanding. we think that the answer is going to be continued expansion because we think that the underlying fundamentals and the policies that we anticipate will be put in place, will produce that result. but for now, it's clear that there is an issue of confidence on the part of investors. >> susie: john, earlier this week, the chief economist of the i.m.f.-- and i'm quoting him-- said,"europe must get its act together." what does the i.m.f. think europe should be doing but is not doing? >> the principal challenges in europe are, first of all, difficulties with government finance, debt and deficits. and so the first order of business is to put in place

convincing some credible plans of medium-term budget adjustments. secondly, the weakness in finances of-- government finances has infected banks, and so it is necessary to provide the kind of backstopping that will keep confidence-- restore confidence in general in european banking system, and, third, there needs to be reforms to the governance in the euro zone to create greater confidence in the adequacy policy in the medium term. european authorities have taken measures on all these fronts. investors are waiting for the implementation. so that is the challenge. as my colleague olivia blanchard said, it's tile to get the act together. it's really to implement the measures that have been agreed. >> susie: while we're waiting for all that to happen, markets seem to be pricing in a greek

default. let's just assume that does happen. what would that mean for other weakened european countries like portugal, ireland, italy. and also, would this lead to that ton team coveragion effect, the domino effect that everybody is worried about? >> susie, the i.m.f., along with its partners are the european central bank and the euro group have agreed a program with the greek authorities that would, on the one hand, include policy adjustment, fiscal adjustment, and structural reforms by greek authorities and financial support from its international partners. if this program is fully implemented, it will-- it will succeed in preventing the kind of outcome that you describe. >> susie: i want to pick up on what you said about things that european banks need to do and to bolster their capital structure. there's a lot of concern about the european banks and whether

they can handle so many countries going into default. can they? >> well, first of all, the programs that have been put in place in grease, in portugal, in ireland, if implemented fully, will prevent that kind of an outcome. nonetheless, there is a clear need to provide the kind of financial backstopping that will boost confidence in the-- and the ability of the european banking system to support, through credit expansion, continued growth. >> susie: all right, i guess bottom line, we just have about 30 seconds left, is there a solution to the european debt crisis? how is this going to play ow? >> absolutely. fiscal adjustment, banks-- backstopping the banks, governance reform. these elements will provide a way forward for the european economy. >> susie: all right, well

thank you so much for sharing your insights with us. we really appreciate it. pleasure having you on the program, john. >> thanks, susie. glad to be here. >> susie: and we've been speaking with john lipsky, first deputy managing director of the i.m.f. hewlett-packard has a new c.e.o. tonight, its third new one in a decade. meg whitman is in and leo apotheker is out.

whitman ran ebay for years before campaigning to be governor of california. apotheker was fired by the tech company's board. he ran h.p. for less than a year. during that time, h.p. shares lost more than 40% of their value, and today was no exception. the stock lost almost 5%. joining us now to talk more about this big corporate shakeup at h.p., jeffrey sonnenfeld, professor of management at yale university. hi, jeff, hi, susie, how are you? >> susie: good, thank you. the big question everybody upons answered is whitman the right person for the job? >> she is the right person for the job, and for several reasons. first, she-- she wouldn't be the first choice for a lo of us hoping an insider really grounded in this business would get it, here she is on board for a little period of time. she has a good consumer marketing background. she's a great communicator. and she's gotten better after

being bruised a bit in her campaign. she understands how to integrate businesses and she's tested, proven c.e.o., something which while she has some declines when she left at the end of e-bay, and had some challenges with amazon cutting in on space there and maybe overpaid a little bit for skype, she still on balance is quite promising. >> susie: analysts say some of the shortcomings they point to, she really doesn't have any experience in the p.c. and technology part of the business. she's never really run a company this big. your thoughts on that. >> no, a $6 billion business she ran is say pretty large business but it's barely 10% of some of the respective units that she would be overseeing. so it is a huge jump in scale, admittedly. something which is impressive, though, she has as a chairman-- apparently once-- as news of the late afternoon-- once her executive chairman, ray lane,

for a fantastic partnership, could be the strongest team in technology today, he was the president of oracle, and has a great relationship with her from before when she was trying to save and build e-bay, he was, as president of oracle, a vital ally to her back then. and this is quite encouraging because they'll complement each other in critical ways. >> susie: there's a lot of stuff that she needs to do to fix hewlett packard. what do you think is most important thing she needs to do first? >> well, they have to shrug off this legacy of being bludgeoned by board prat falls in the past. this is a new board. there are only a dozen people and 10 of them are quite new and five are very new. to shake off having to defend the past is one. another is there are critical people in there running these units and to figure out who is staying and who is going not just in terms of personnel but the units. the p.c. unit, tom brady, who will be the c.e.o. himself

before at palm, very strong printer group, very strong it's enterprise group was under-invested by a predecessor, mark herd, and the issue is to build the business back up, communicate a common strategy. right now to rush to shareholders without being able to say what is h.p. is critical. there was a vaulted culture what we used to refer it as h.p. way of progressive management and cutting edge science and technology. and they have to get back to that vision and that would be quite exciting. and i think the combination of-- with ray lane right now and of course meg whitman will be the ideal one-two punch. the best days of fizz disney is when they had a combination like this and coca-cola and microsoft. sometimes when you have shared leadership it can work very well with complementary skills. >> susie: they've had such a revolving door of management there and there has been such board room drama. they've had phone hacking

scandales, false expense reports. is the problem at hewlettit packard the c.e.o. or the problem of the board? >> it had been a pretty good board. it always had fantastic leadership until lou platt, which took us into the early 90s, lou platt stepped down and they went into one of the world's worst succession until this recent succession. the situation with carl i fiorina who a prior h.p. board had hired. the board turned over but they had lingering problems that were unbelievable. the irony is none of these people was ego maniacal and certainly were not greedy, not like the scandals we have seen in corporate america in the past. nobody is plundering shareholder wealth. they're all trying to do the right thing and they're very smart people. >> susie: i'm going to jump in

because we just have a few seconds left. the stock of hewlett packard is down sharply as we told you. how patient do you think shareholders will be with meg whitman? how much time does she have to prove herself? >> i think she's certainly going to be entitled to at least six months, and the predecessor has gotten 10, 11 months and it was spiraling downwards. certainly it takes a new c.e.o. usually two years to take charge, especially coming in from the outside. sadly, she's not going to have those two years but i do think we'll see a lot happen in six to eight months. a lot of business clarity needs to happen in the next six weeks. >> susie: all right, we'll see what happens. thank you for getting us started to think about the new term under meg whitman. thank you so much. >> thank you. >> susie: we've been speaking with jeffrey sonnenfield from yale's school of minimum. still ahead on the program, teaching your kids the ins and outs of money. it's tonight's "kids and cash." it was an extraordinary day in the markets, with all the arrows pointing down, from stocks to

commodities. let's take a look in tonight's "market focus." as we've mentioned, investors dumped stocks in reaction to the federal reserve's dire assessment of the u.s. and global economy. a quick look at market breadth on n.y.s.e. and the nasdaq shows just how widespread the selling was. almost 90% of the stocks traded on the big board and the nasdaq dropped today. pulling up an intraday look at the dow, you can see the blue chips in freefall from the open, dropping more than 500 points, then cutting its losses slightly to end down 391 points or 3.5%. among the hardest hit on the dow? united technologies, alcoa and caterpillar, all off nearly 7% or more. blame it on profit taking. in the two years leading up to this spring, these stocks had doubled in value. all of the s&p 500 sectors were

in the red today, with the materials, energy and industrials leading the selling. among the materials, steel stocks saw the heaviest selling- - racking up double-digit losses. allegheny tech off 13%, a.k. steel and u.s. steel both off over 11%. energy stocks also getting burned. double digit losses in alpha natural resources and tesoro energy. oil exploration firm q.e.p. resources down 9%. the best-performing stock in the s&p 500? goodrich. the aircraft parts maker rising 10% after united technologies confirmed plans to buy it for $16.5 billion in cash. some positive news after the bell today. first, nike out with strong earnings. it reported a 15% jump in earnings to $1.36 a share. it says future orders are strong. nike shares rose 5% in after- hours trading to over $88 a share. they were down almost 2% in the regular session.

also after the bell, mcdonald's giving shareholders a treat. it's boosting its quarterly dividend by 15% to 70 cents per share. the company says it hopes to return $6 billion to shareholders through dividends and share repurchases this year. another stock in the news today? fedex. shares tumbled 8% after the shipping giant warned that its profits this year will come in lower than expected. the problem? a drop in shipments, especially in asia. still, fedex reported fiscal first-quarter earnings of $1.46 a share, in line with estimates and up 22% from a year ago. there are many companies like fed-ex that rely on business overseas. roughly half of the revenues of the biggest american companies come from international operations. so what happens if their exports slow down? darren gersh takes a look. >> reporter: exports have been a bright spot for a sagging u.s.

economy. forecasters like macroeconomic advisers are expecting u.s. companies will see sales overseas jump 9% next year, which is why the treasury secretary was talking up exports today. >> u.s. export growth has been really very strong in this stage of recovery, and i think it's encouragingly strong because it's happening across the american economy. >> reporter: but markets lost faith in that story today. investors began their day with fedex, a bellwether for global shipping, downgrading its outlook. it confirmed what many already feared-- that the world economy is slowing down. >> if we continue to have this kind of macroeconomic malaise, yeah, we can get through 2011 with decent profits because we already had a very good first half, but as we get into 2012, there could be some real vulnerability to consensus earnings forecasts, and that's what is really driving the selloff in the market. >> reporter: reports out today show manufacturing in europe is teetering on recession and even china's industrial juggernaut is slowing. the news left economists

wondering if there is any place in the world that is still willing to buy things. >> we're again pinning our hopes on some emerging markets, even though they're bigger. there are a lot of things that are going well in the emerging markets. they aren't going to be enough to pull up the global economy if europe and the u.s. slip into recession again. >> reporter: emerging markets also make a lot of money selling commodities, many of which tanked today on fears of falling industrial demand. the world's last feel-good story suddenly doesn't feel so good. >> a fall in developing countries' domestic demand would mean we'd lose their economic engines. as drivers for global recovery. >> reporter: so what's now driving the global recovery? good question. darren gersh, "nightly business report," washington >> susie: here's what we're watching for tomorrow: our friday "market monitor" guest says the u.s. economy is doing better than most people think, and there are many good value stocks around the world. he's chris orndorff of western asset management.

and with the global economy grinding to a halt, airlines are putting their growth plans on hold. we take a look at the turbulence facing the industry. toys 'r' us says it won't need as many temp workers this holiday season because it won't be opening as many temporary pop up stores. the big toy retailer says it will add 40,000 seasonal workers this year for its stores and distribution centers. that's about 5,000 less than last year. but there's hope for those workers. last year, about 10% of the company's holiday workforce were offered full time jobs. yum brands has found a buyer for its long john silver's restaurant chain. it's l.j.s. partners, a group of franchisees and other investors. yum is also selling its a&w restaurant brand to a franchisee group calling itself "a great american brand." no details on the price of those deals, but yum says the transactions won't have much of an impact on earnings.

>> susie: when it comes to teaching your kids about money, how about making it a family affair? with tonight's "kids and cash," here's elaine king, author of "family and money matters." >> three out of every four

parents give a form of allowance to their children, but only half require them to save a portion or give them guidance on what to do. on average, children watch about 3.5 hours of tv a day, which equals thousands of commercials begging them to spend that money, rather than save it. statistics show that with a goal or plan in mind, individuals can double their allowance and gift money. highly successful families use the following five disciplines to put themselves on strong financial footing: families have a common goal and each member takes responsibility for a task. next: families explain the value of delayed gratification and fixed vs. variable expenses. three: families empower each member with a portion of the family's budget goal. next: families understand the power of compounding with savings and with debt.

fiinally: families lead by example and compensate on good behavior. remember, to evolve, you must know the tools to succeed. giving your family the skills to make their own choices in life and money will allow them to reach their dreams. i'm elaine king. >> susie: speaking of kids and cash, from groceries to clothes to buying gas to haul them around, it's getting more expensive to raise a family. the cost of raising a child from birth to age 18 averaged almost $227,000 last year. that's up nearly 40% from a decade ago. the agriculture department tallied the numbers and says expenses for even the first year of a child's life has skyrocketed, from 9,800 ten years ago to almost $14,000 now. and that's not counting for the money you need to set aside for college. just a reminder, you can keep up with n.b.r. any time. we're 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, @sgharibnbr. we're also on facebook at bizrpt. that's "nightly business report" for thursday, september 22. i'm susie gharib. 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. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

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