>> this is nbr. >> susie: good evening. i'm susie gharib. from the ipad to the kindle, does the growing popularity of tablet computers mean the end of the p.c.? >> tom: i'm tom hudson. more signs the housing market is rebuilding. home prices have jumped, and new home sales are as strong as they've been in three years. >> susie: and an exclusive interview with two of the biggest names in the fiscal cliff debate. we talk with the co-chairs of the president's deficit reduction panel. >> tom: that and more tonight on nbr! captioning sponsored by wpbt >> tom: we begin tonight with the personal computer. this week, the two biggest makers of p.c.s, and their shareholders, are paying the price of competition from smart phones and tablets. the stocks of hewlett packard and dell trade near multi-year

lows after reporting big drops in computer sales. after years of dominance in technology, is the age of the p.c. coming to an end? to get a glimpse of what this business could look like in the future, erika miller headed to pcmag.com. >> reporter: every generation has its computer. this was one of the first ibm personal computers, vintage 1981. remember this imac, also from the '80s? you can bet someday our children will view our sleek 2012 desktops as antiquities as well. it seems hard to believe that the ipad was only introduced two years ago. back then, skeptics predicted it would just be a fad, another entertainment device. but nowadays, consumers increasingly prefer mobile devices over desktops. so that begs the question-- will p.c.s eventually become obsolete? >> at the end of the day, and for that matter, when people are at work during the day, they're not going to be able to give up their desktop computers or their laptops.

right now, mobile devices just aren't powerful enough. >> rorter: and there's a huge disparity in storage space. the smallest desktop hard drive has more than twice as much capacity as a top of the line ipad. so although they may not be as fun, p.c.s are far outselling tablets. industry watcher gartner predicts p.c. sales will total 390 million units this year versus 96 million for tablets, but that's still impressive for a relatively new device. part of what's powering the growth of tablets is lower cost and portability. although what many of us really love are the apps. >> part of what people like so muchpebout the tablets and smart phones, of course, is that you have this range of apps and you can simply tap on them. you don't need to go through a browser to get favorite sites or your favorite games and so on. >> reporter: it will be interesting to see what happens when microsoft's windows 8 operating system comes out in late october. some think it could herald in a

new p.c. revolution. we caught a glimpse of the new software at p.c. mag. >> the main innovation with windows 8 is the design, where it looks more like what you would expect from a tablet operating system. it combines, for the first time, a desktop and a touch-style operating system. when you log in, you are going to see this tile-based interface, which is also what people will see if their using a tablet or a phone. >> reporter: and if there's one thing these dinosaurs from the past have taught us, better to evolve than become extinct. erika miller, nbr, new york. >> susie: meanwhile, here's an update on that high-profile legal battle between apple and samsung. it looks like the jury could be getting close to a verdict after just two days of deliberations. jurors asked the judge if they could put in extra hours today, leading to speculation that they're trying to make a decision before the weekend. this multi-billion dollar case over patents used in apple's

ipad and iphone designs could have big implications for the tech industry. here to explain, pete pachal, tech editor of mashable, the web site for all things digital. >> so pete, let's talk a little bit about outcomes. if apple wins, what will come out of that? what's going to happen? >> well, i think what you're going to see is it will have a chilling effect on the industry. it kind of all comes down to exactly what the jury decides, point by point. they have over 600 questions as i understand on the jury form as to what constitutes infringement and what doesn't. but if it comes out more in apple's favor, it's going to be much more-- you're going to see manufacturers being much more cautious with their designs to make sure they're not too close to apple. >> susie: and what about a samsung win in what would be the implications of that on the industry? >> yeah, same thing with samsung, you basically will see a lot more apple

knockoffs. i don't think that will necessarily affect what apple does. apple has always been more of a leader in the design and gadget space. but i think you're going to see a lot more followers. >> susie: so who has the most to lose here? >> i would say samsung definitely has more to lose. you know, it's basically been cast as apple is suing samsung for infringeing on their patent. samsung does have counterclaims. so honestly this could go either way. but really the way it's been cast and the way i believe the jury is perceiving it is they have to decide whether or not samsung really infringed on apple's patents. and where exactly that happened. and you know, deciding which design elements, which icons might be out of bounds. >> susie: you said this is a very complicated decision and this verdict form is very involved. so do you think that this is going to be a decisive, it will be a decisive winner or

a split decision? >> i think it will probably see more of a split decision. i know that probably honestly the complexity of the form probably favors samsung because in the case of a split decision i think they can spin that into sortuú& of more of a win. but i think given some of >> reporter: i'm diane eastabrook in central illinois. still ahead, i'll tell you how

some farmers are using technology to grow corn in one of the worst droughts in decades. >> susie: a big sell-off on wall street today after a top federal reserve official dashed hopes of more stimulus for the u.s. economy. james bullard, head of the federal reserve bank of st. louis, a non-voting member of the central bank, said he's seeing signs of an improving economy and doesn't believe another round of help is necessary right now. that, combined with those tech worries we told you about, pulled down stocks. the dow tumbled 115 points, its first-triple digit loss in a month. the nasdaq lost 20 points, while the s&p fell 11. >> tom: those losses come, in spite of two more signs of a housing recovery today. first, sales of new homes jumped 3.6% in july, up to their fastest pace in three years.

gains were the biggest in the northeast. a separate report found home prices were up 1.8% in the second quarter. that's the steepest quarterly increase in six and a half years, according to the federal housing finance agency. megan mcgrath covers homebuilding companies for m.k.m. partners. first of all, how are you going to describe the velocity that we are seeing in the housing market. traditionally a slow down. >> that is the reading for the july homes are encouraging and we tend to take a 3 month rolling average to get out some of these monthly jumps. and new-home sales up 21% on afully month rolling average and it was 17% last month. and that's what we need to see continued increases in year-over-year growth. and as we continue to look at the year-over-year growth that will take some of the

seasonality out of the picture. so we will see home sales flow subsequentlyly on an actual basis as official-- time period but as we adjust the seasonality we can see things accelerate into the fall. >> admittedly we are coming off a low base though. so we could see, you know, pick up in velocity. the question is the sustainability of this even without the seasonal factors can we get rid of the lumpiness s that gone now. are people feeling comfortable making these big purchases. >> for now they are and you are right, we are coming off a low base, these are great numbers but we're just bouncing off the bottom here. so if we look a little bit further ahead let's look into 2013 and further beyond. we don't think that this level of growth is sustainable, if we don't get g improvements in the job market and consumer confidence. so we can totally sail along at these levels of growth for a couple months but we will need so to see further improvements in the economy to sustain the growth next

year. >> earlier we see-- a pretty a spectacular earnings call, dr horton is another home builder here that you are pretty bullish on. it has climbed steadily. what dow anticipate out of dhi on into 2013 as you mentioned. >> it is the biggest home builder in the u.s. we like them because they are positioned for a broad based recovery and what we are hearing is builders are seeing a recovery in most of their geography. and we think they have a quarter end in september and that is usually a good quarter for them. they push their salespeople to close the homes, but in the near term we're looking for them to do really well and if we can start to see some home price appreciation these builders that started to make a little bit of money should see their profits continue to increase in to 2013. that is what we are looking for into next year. we think next year will be a pricing story. >> another one is kb homes. how much of this is a price story, the share price has not necessarily seen that steady trend over the past

12 months that dr horton has. >> this is a little bit of a different story. this is your turnaround story in the group. the company had a tough first half of the year. they had some issues with their financing partner and they're getting beyond those issues in the back half of the year so what we are looking for out of them is to turn around basically flat-to-down growth in the first half which is significantly below their peers, so we want to see that turn around, we want nice positive growth if the back half of the year. we expect to see it. and if we do, we think some of this valuation discount the company is getting is going to come off. >> overall -- optimism continuing to rebuild in housing. megan mcgrath with us, covering that area.

>> susie: we continue our coverage of the impact of the fiscal cliff on the u.s. economy. two leaders urging lawmakers to fix the problem before it's too late are alan simpson and erskine bowles. they are the co-chairs of president obama's commission on deficit reduction. our washington bureau chief, darren gersh, spoke with them, and began by asking erskine bowles why he thinks we will go over the cliff. >> because i think both sides see it to their advantage to go over the cliff, their political advantage. to me, it makes no sense whatsoever. what they're doing is really, you know, making a bet on the country. they're really risking our country. we've got $7 trillion worth of economic events that will hit us in the gut in december-- expiration of bush tax cuts, the expiration of the payroll tax

cut, it's these mindless and senseless across-the-board cuts that came about because of the sequester, which came about because of the failure of the super committee. and if we do nothing by the end of this year, the negative impact on economic growth in 2013 will be enough to throw us back into a recession. and it won't be just 2013, because companies will have to start preparing, so we will start seeing negative growth in the fourth quarter of this year. i'm very worried about this. why would you do that? why would you take that risk if you didn't have to? and we don't have to. >> reporter: senator simpson, do you agree we're going over the cliff, and who do you think is to blame if we do? >> well, there will be plenty enough to go around. i'd add one other note-- how do you think we got here? you sent people to washington, you people out in the land sent people to washington for 60 or 70 years to bring home the

bacon-- go get the new highway, go get the new dam, go get the airport, go get the ymca, go get the bucks. and the congressman just sit there in a town meeting and turn to the staffer and say, "write that down, we'll just stick it in the next bill." that's how we got here. >> reporter: let me follow up on that. mr. bowles, that does raise the question of how much deficit reduction can you do in the short run, and what impact is it going to have on the economy? in other words, how do you balance off the need to get... deal with this debt, which we all agree we have to do, but we also have to get the economy to keep moving and creating jobs. how do you strike that balance? >> i think that's a pretty easy answer. let me just kind of frame it first. what our commission recommended is that we have $4 trillion of deficit reduction, and we didn't make that $4 trillion number up just because the #4 bus passed us on the street. $4 trillion is not the maximum amount we need to reduce the deficit.

it's not the ideal amount. it's the minimum amount you need to reduce the deficit to stabilize the debt and get it on a downward path as a percent of gdp. and we got a majority of republicans on our commission, a majority of democrats on the commission to vote for it. and several people ask us, "well, gosh, if we take these steps now, then we do run the risk of accelerating this downward turn in the economy." that's why we made our number- one principle we wouldn't do anything to disrupt a very fragile economic recovery. so we delayed the early actions that would cause these cuts to take place and skewed them out into the out years. what people want to see is a plan so we actually do get to balance in the not-to-distant future. >> reporter: senator simpson, you're... the plan that you put together with mr. bowles didn't get a lot of support from

democrats and republicans. a lot of people ran as fast as they could away from it. now that you've had two years to think about this, what is going to bring them back to a plan like yours? >> damned if i know, but the probably the markets will call the shots. and forget about the ratings agencies. that is small potatoes. it's going to be the markets that call the shots, and when they call the shots, people are going to look around who have to pay more interest, who get diddled on this program or that or lose this program. and they are going to look around and say, "who were the guys in office when this happened? who knew this was going to happen and let it happen?"

>> tom: a day after the federal reserve seemed ready to provide new help for the economy, a less encouraging statement from a regional federal reserve official helped cool down stocks. the s&p 500 was in the red the entire session. the index is down three out of the past four sessions since hitting a post-recession high. 591 million shares traded on the big board; just under 1.4 billion moved on the nasdaq. all ten of the major stock sectors were down, led by losses in the materials sector, down 1.7%. utilities fell 1.1%; the financial sector shed 1%. also weighing on economically sensitive stocks-- manufacturing activity in china dropped to a nine-month low. among the weakest materials stocks were steel makers.

u.s. steel fell 6.9%. investment firm dahlman rose cut its rating on u.s. steel from buy to hold over concerns about demand and pricing. iron ore producer cliffs natural resources was down 5%; allegheny technologies shed 4.8%. close-out retailer big lots saw a big drop in its stock price. the store has been trying to sell items with higher profit margins, but the strategy hasn't worked. shares fell hard, down 20.8%. they dropped to a 52 week low. second quarter earnings were short of expectations, and the company also cut its full-year outlook for the second time this year. after the closing bell tonight, the focus was on two software companies. first, salesforce.com. adjusted earnings were three cents per share stronger than anticipated. the company raised its financial forecast for the current quarter. but after slipping 1.2% during the regular session, the stock fell another 5% in after-hours action.

growth of its deferred revenue slowed-- that's an important metric for its subscription based business model. the other software maker reporting earnings tonight-- engineering design software maker autodesk. after closing at $35.71 per share, the stock traded down 22% after the closing bell, below $28 per share after announcing a restructuring effort. second quarter earnings were a penny less than expected. revenue was a disappointment. it then lowered its full year revenue forecast. autodesk wants to restructure toward cloud and mobile computing, costing an undetermined number of jobs. for the seventh session in a row, gold moved higher. it's on pace for its best month since january. tonight's settlement at $1,672.80 an ounce is a four month high. gold has caught a bid as talk about more federal reserve stimulus has picked up. but interestingly, while stocks cooled today over some federal reserve president comments interpreted as doubtful about new help, gold kept climbing.

all of the five most actively traded e.t.f.s were lower, led by the 1% drop for the financial sector fund. and that's tonight's "market focus." >> susie: seeds are a $12 billion business for companies like monsanto and dupont. what could be blockbuster products for those companies are being put to the test this summer. drought-tolerant corn hybrids are just hitting the market. diane eastabrook looks at how some are holding up in this year's parched midwest.

>> reporter: most of mike cyrulik's corn crop looks like burnt toast. but as we traipse deep into one of his central illinois fields, cyrulik shows me something unusual. >> we are here at the artesian corn, okay. >> reporter: and there's a big difference. >> there's a big difference in plant health. >> reporter: last spring, cyrulik used a new drought tolerant seed in part of the 2,000 acres of corn he planted. the green strip shows where he used syngenta's new agrisure artesian seeds. >> the ears are a lot bigger. i'm sure the corn's a lot wetter just because of the plant health. >> reporter: syngenta is among a handful of companies, including monsanto and dupont, rolling out so-called drought-tolerant hybrids. the new varieties identify and use specific genes that help corn use whatever water it gets for nourishment. >> a plant pulls in light energy and water, and it creates sugar basically, and then it stores the sugars somewhere in the plant. and we can have an impact on

where it stores those sugars and how it uses them. >> reporter: dupont's pioneer hybrid is marketing a product called optimum aquamax. farmer brad sauder planted it in about 15% of his 1,100 acres of corn. >> it responded by putting an ear on nearly every stalk, and filling out more normal and looks really good. >> reporter: pioneer has different varieties for different soils since the western cornbelt is drier than the middle and eastern parts. >> the products here-- we'll look at the silking time frame. we'll also look at the plant's ability to withstand the hot days and hot night characteristics that we've had in the droughts the last two years. >> reporter: syngenta charges a 10% premium for artesian. pioneer says aquamax is competitive with its other varieties. both companies say in normal years yields will be on par with conventional varieties. while this year's drought is devastating central illinois, the region normally gets good rainfall, producing bountiful

harvests. so some experts wonder if farmers will use these new seeds. >> it's not going to help us a great deal to look at hybrids that are best when we have dry conditions. we need hybrids for the conditions that we will have on average, and to manage those hybrids correctly. >> reporter: some central illinois farmers say, at this point, they'd be reluctant to pay a premium for the drought tolerant seeds. but then again, they say if these dry conditions persist next year, they just might. diane eastabrook, nbr, tazewell county, illinois. >> tom: tomorrow on nbr: the 20th anniversary of hurricane andrew-- how one south florida town is rebuilding after getting hit by a second storm, the housing collapse. our friday "market monitor" guest has four stocks he says are worth holding for a year. he's chase investment counsel's brian lazorishak. and commodities like gold have been surging-- what's behind the buying?

>> susie: uncertainty is weighing on businesses, whether it's about health care, expiring tax cuts, regulations, or access to capital. tonight's commentator says the smallest american businesses have collectively pushed the "pause" button on hiring and investment. he's jerry ross, executive director at the national entrepreneur center. >> most small businesses are focusing on survival, and they have developed the attitude that the best long-term strategy for a small business is to just wait and see what happens next. remember, every big business that employs thousands today started as a little one. the next home depot or apple could be sprouting today in a garage near you. but the question is, will they survive? we must get our small businesses to hit the "play" button again. our banks need to find a way to provide growth capital for the smallest businesses in our economy, not just the big ones. and congress must remove the

uncertainty of temporary tax policies, unknown healthcare costs, and the constant parade of new regulations. entrepreneurs need to know what the rules of the game are going to be and that the rules aren't going to change again tomorrow. or else they will remain reluctant to invest in equipment, expand operations, or hire new employees. and as a result, our nation's economy will continue to be on pause, or even worse-- it could stop altogether. i'm jerry ross. >> tom: finally toni a makeover for microsoft. as the software giant gets ready to roll out its next generation operating system, windows 8, it offered up a new company logo. it's the company's first new logo in 26 years. it features four colorful squares next to a simple text with the word "microsoft." as for the simple logo, one critic said "this took 25 years?"

that's "nightly business report" for thursday, august 23. good night, susie, and everyone. >> susie: good night, tom. have a great ebvenin everyone. hope to see you online at nbr.com and back here tomorrow night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org