>> susie: alcoa stumbles as earnings season kicks off. the problem? a big drop in aluminum prices despite strong demand. >> i'm diane eastabrook at the north american international auto show in detroit where, for the first time in years, the auto industry has something to be excited about. >> susie: itnightly busi this is "nightly business report" with susie gharib and tom hudson. "nightly business report"

captioning sponsored by wpbt >> susie: good evening, everyone. my colleague tom hudson is off tonight. a bad start to earnings season. alcoa reported a quarterly loss, it's the first dow component to report and the aluminum giant is considered a bellwether for the economy. here are the numbers that were released right after the market close today: excluding special charges, alcoa lost three cents a share, just what analysts were expecting. this is the company's first loss in two years. revenues rose 6% to $6 billion. alcoa stock slipped in after- hours trading, but was higher by 2% in the regular session. as for the rest of the market, the dow rose nearly 33 points, the nasdaq added two and the s&p gained three points. joining us now to discuss those results? klaus kleinfeld. he's chairman and c.e.o. of alcoa.

klaus, nice to see you and happy new area. >> hello, susie, hello, happy new area, susie. >> susie: thank you so much, well, looking at these quarterly numbeeer w the manufas procurement since basically summer last year. we've seen the manufacturers procurement index clearly going up. so manufacturers procurement index clearly going up. so these are really good things. we do project a growth on a rl so these are really good things. we do project a growth on a worldwide basis for aluminum 7% we do project. we do project that china given the on a worldwide basis for aluminum 7% we do project. we do project that china given the unsustainable structure of their industry is going to go into a deficit. basically meaning that there wiee given the unsustainable structure of their industry is going to go into a deficit.

basically meaning that there will need to be imports going into china. so there is quite a bit ofdecit. basically meaning that there will need to be imports going into china. so there is quite a bit of interesting things happening in our industry in 2012. >> wknowt so there is quite a bit of interesting things happening in our industry in 2012. >> we know that you produce aluminum product force a lot of industries. everything from jet planes to soda cans, to packagesing companies. and automakers. how are those sectors doing? what are your customers telling you? >> well, we continue to see an enormously positive feature in the aerospace industry. the aerospace industry had the second highest order intake in the history of avionics last year, boeing and airbus together have 8 toy-- 8.2 years of auto backlog now. the automotive industry, talking about detroit today, also in the u.s. as well as

in china continues to have a very positive situation. in the u.s. it is very strongly influenced by the average age of the cars being higher than typically, so there is a demand to lag so to say which is coming through now. >> susie: tell us how -- >> and we have lagging industries like the construction industry where we really continue to see basically nothing happening here in the u.s.. >> suzanne: . >> susie: looking around the world i do want to ask you about europe, how are things looking in europe. we've been hearing a lot of forecasts calling for a recession in europe. what is that going to mean for your business? >> well, we do believe that there is a chance of a recession in europe and pressee high chance. the projections from bloomberg are minus 0.25%. overall now as henry kissinger said there is no telephone number for europe. so there is obviously huge differences depending on which country you go to. the interesting thing is, which i believe say very sensitive indicator for the eurozone crisis for the

budget situation there is the five year or ten year bond yields. and you saw that they have been shooting up last year. and then they've constantly been coming down. and if you look particularly not last week, they are substantially down. and i believe that this would only happen if people are not regaining confidence in the,actions that are taken by the countries as well as by europe in total. so i am probably more optimistic than people are on that end. >> susie: very interesting. >> it is a big problem and it's going to take some time and it's go stock very different for specific countries in europe. >> susie: moving back to the u.s., you did announce that you are closing some plants on friday, you announced that. do you see that you are going to have to cut doses-- costs in other parts of your operation whether in the u.s. or overseas? >> well, we announced that we are curtail being 12% of our capacity. so this affects two plants in the u.s. both plants. one plant in tennessee, the

other in texas which say partial curtainment. and for those, both of those plants are already curtailed so this doesn't have a negative impact on jobs. we also noah nounced today that we are taking capacity off in europe and we are looking for full containment of a plan in italy, a partial con tanlt of two plants. all of this is driven by uncompetitiveness of those plants in the current environment and it is going to bring our competitors position into much better shape. >> susie: we hope we can talk to you again as the year goes on to get an update on how things are actually working out. thanks so much, klaus. >> thank you, susie. >> susie: and we have been talking with klaus kleinfeld, chairman and krooef alcoa. >> i think it's fair to say that detroit is back in a big way because the whole show is about substantive new models. it's not makeovers. it's cars with a lot of technology. >> susie: still ahead, why the

american automakers are turning heads at the big auto show in detroit. there may finally be some good news for the struggling housing market. some experts believe home sales will show new signs of life if the job market continues to improve. but as erika miller explains, higher sales don't always mean higher prices. >> reporter: the housing market is usually linked closely to the labor market. after all, people won't buy homes unless they have a steady paycheck and confidence in their jobs. but a pick-up in hiring nationwide may not matter much this time. economists say the missing ingredient is raises. >> growth in wages-- this is the gauge that we need to see start improving before we see any significant improvement in housing demand, and the wages have been falling. >> reporter: a even bigger problem is bloated housing inventory.

according to corelogic, there is currently a shadow inventory of about 1.6 million homes for sale-- a five-month supply. and more homes are likely to come on the market if banks reach a robosigning settlement with state attorneys general. >> we are probably going to see a settlement soon this year to resolve that, which will result in a new wave of foreclosures, and so a lot of those homes that have been delinquent for a while, finally move the stage of foreclosure. >> reporter: that doesn't bode well for prices nationwide. unless there's bold government intervention, many economists predict prices will fall in most regions this year. >> i'm not saying we will see a considerable, rapid decline in housing prices, but we certainly won't see much of a pick-up. i'm predicting something like another 2% or 3% decline this year. >> reporter: but when it comes to the rental market, it's a completely different picture. more foreclosures will likely mean more competition for rental apartments, especially in dense cities like new york, san

francisco and boston. and those high rents threaten to hold back economic growth if businesses can't afford to pay workers enough to live nearby. fortunately, there may be some rent relief down the road. >> builders are responding to the increases in rents, but it typically takes a little over a year for a multi-family building-- a rental building-- to come on to the market. so we are not going to see that addition to the supply until late this year or early next year. ep