this is nig"nightly busines report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com, interactive financial multi media tools for an ever changing financial world. our dividend stock advisor guides and helps generate income during a period of low interest rates. we are thestreet.com. see congress reach a historic bipartisan agreement over a default on the nation's bills. >> it's my hope today we can put some of those most urgent issues behind us. >> striking a deal, an 11th hour agreement to reopen the government and avoid default sends stocks soaring but will this temporary fix prevent the market from moving forward and hold back american businesses from making important decisions. >> leaving a mark. some of the nation's biggest

companies have been battered and bruised by washington. what are their executives saying about the damage that's already been done to the economy. >> and singing the blues, ibm the bluest of the blue chip posting a missed revenue today. sending shares sharply lower after hours that could impact trading tomorrow. we have that and more for "nightly business report" for wednesday, october 16th. good evening everyone and welcome. an end is in sight barring last-minute snag nobody expects. after days of bargains and stops, a deal has been reached to reopen the federal government and avoid default on its debts. the agreement struck by senate leaders reid and mcconnell is a temporary one, a truce, but it meets two goals the white house insisted upon. get government employees back to work and authorize more federal borrowing. the bill needs to pass in the

senate and the house tonight, and reach the president's desk by midnight eastern time, that way it beats the treasury's stated deadline when it says it could start running out of cash fast. john harwood joins us now from washington with more on the deal reached today, a timeline of tonight's voting and whether we have to go through this all over again in just a couple months time, john? >> tyler, you know that congressional manage manufacturing process is built around time of delivery. we expect the senate is going to pass this bipartisan deal between harry reid, mitch mcconnell around 7:15 p.m. eastern time and reopen the government through january 15th. it would raise the debt limit through around february the 7th. in the meantime, congress would negotiate a longer term budget deal that would alleviate part

of the budget secoquester, at least that's the goal and both parties agreed need some raening in. that deal which we expect to get more than 80 votes to the senate could go to the house of representatives. speaker boehner said resisting blocking the senate bill will not be a tack tig for us. so repub kin opposition collapsed, that doesn't mean a lot of republicans won't vote against it but it will be signed by the president and represents an believuation of debt that's been hanging over us. >> john, we'll go through this again in january and february. do you think washington lawmakers learned anything from this, or is that a dumb question? >> it's not a dumb question at all, in fact the key question coming from this, susie. the president's goal, which is i'm not going to negotiate on congress doing its job to reopen the government and raise the debt limit is he's trying to break the habit of congress

getting into crisis mode and, you know, doing last-minute haggling that he considered unreasonable. so if he's right, if the president's calculations is right, we won't have as much drama in january and february but we don't know that. some advisors aren't so sure he broke the habit, but we'll wait and see whether republicans take a different tack next time around. >> all right. thanks a lot, john. john harwood reporting from washington. wall street, stocks rallied on word of a deal in congress that would avoid a devastating u.s. default. all the major indexes went soaring, each rising more than 1%. the dow surged 205 points, the nasdaq jumped 45 closing at the highest level since the year 2000 and s&p added 23 points, a few points away from a record high. with a budget deal looking like it will pass tonight and hundreds of thousands of furloughed workers going back to work, how much has the 16-day

government shut down cost the economy? a lot. the agency says the 16-day shut down shaved at least 16ths of o1% and if that senate bill doesn't become law tonight and the country defaults on its debt, s&p says the economy would take an almost immediate 4% hit sending the u.s. into another recession. here is another negative, the money taken out of long-term stock and bond mutual funds. according to out flows from stock and bond funds added up to $5.5 billion last year for the weekending october 9th domestic funds had out flows of $5 billion and foreign equity funds at the 2 billion and municipal bond funds saw 1 billion.

what is next for the markets, the economy and your money? with answers mohammed, ceo and chief investment officer of p pimco and richard, chief officer of jp morgan bank. two of my favorite folks. mohammed, i want to start with running a sound byte from early today from your friend and rival larry fink of black rock where he expresses sadness over who he saw this country just go through. >> i would say there is a profound sadness. they look at the united states as a beacon of hope and the united states to have a secured investment, and now they are raising questions are those foundation l principals correct going forward? that's what i'm frightened of. i don't see any overt change of behavior yet but being asked questions related to this and it

may lead to changes in behavior. >> mohammed, what do you think there? he's referring to our standing in the world as a safe investment haven, our treasury securities most especially. how do you react to what you just heard? >> we are being asked questions, the rest of the world is looking saying what are you up to? how can you be so irresponsible if you're the issue of reserve currency and if we have delegated to you our financial mediation, after all we saved by holding your bond? so the rest of the world is confused, taken a back. you cannot replace something with nothing. so it's not as if they can go elsewhere in the short run but it's not a good idea to do this because at some point, they will build pipes around the u.s. and that would harm our economic interest and our national security. >> richard, let me -- and mohammed, too, let me bring up comments that came from the national retail federation today and this is a quote saying our

economic recovery is retail lead and consumer driven and leaders on both ends of pennsylvania avenue need to stop undermining consumer confidence with partisan posturing. when consumers cut back spending it cuts jobs in every industry. to what extent has this episode done to consumer confidence and how long will it take for american businesses and the economy to bounce back from this? >> susie, from my prospective the critical issue is what washington accomplished was diminishing politics and fundamentals. if this goes on longer, i think it becomes real meaningful consequence. data through october 7th continues to show resilient consumption, and growth and s&p's numbers that tyler talked about in terms of cutting back growth by 60 basis points, i would probably argue they were

over reaching a little bit in expectations. we still have a view that we'll see 2% growth this year. so confidence matters, but i think what the government accomplishes is getting people back to the fundamentals and for more rearing markets right now, you'll recognize we literally reset to where we were september 18th after the meetings. that's good news. >> mohammed, markets broadly speaking, bond markets and the stock market maybe more especially didn't seem to freak out and overreact to what we've just gone through and hopefully what will come to a conclusion this evening, but how should i as an individual investor position my money with the level of uncertainty that seems to be lingering even tonight as we look ahead to another set of deadlines two and three months down the road. how should i invest? >> so to the assumption that is key to the market feeling relatively calm about this. one is we would not default and that was correct. the other one was this notion

that you could look through the economic damage. why? because people who weren't being paid were going to be paid so the damage would be temporary and reverseful. this second assumption is more questionable today because what we've got is not a resolution. you called it a truce. i would call it a seize fire. we have a seize fire and one thing you don't want to do is play russian roulette with consumer confidence ahead of the holiday season. that's not a great time to do it. our concern is the bounce back would be less dynamic than otherwise because people know there is a risk we pay go through this again in january and february. >> mohammed, the other thing in the air is the u.s.'s credit rating. does the u.s. deserve this sterling aaa rating given that we are going crisis to crisis and if there is a downgrade, how will that impact investor confidence, not only here in the u.s. but around the world? >> so we deserve it in the sense that this is not an ability to

pay issue. we are so able to pay, susie. this is a political willingness to pay issue. so if rationality prevails, which at the end of the day, it will prevail because there is so much at risk, we are at aaa. now if we get downgraded, it is problematic. okay? it is problematic because we are the aaa and a lot of people hold instruments because of the aaa and also treasuries are used as collateral so it would mess up the plumbing of the system. so we need to avoid not just for the good of the u.s. but for the good of the global system, we need to avoid more downgrades. >> richard you're i know a calm guy. you always make me feel a little more secure when i listen to you and i sense youfolioportfolio. what would you say for a typical investor would be a good asset allocation as we move into the

last quarter of this we're and into 2014? >> i think separating views and vantage point from long-term money, tyler and short-term money. long-term money we stay invested in and the theme i hit with the team is if we don't believe there is a flat left-tail event coming and we didn't around this, we put a low probability of an all default around this, you stick the course and to me, i think the most important for upside from here is recognizing how high we've risen. we have markets up 20%. it's an out standing year. most investors feel really granddaughter abo good about that. short-term money can trade ranges, lots of volatile the and long-term money stay invested. >> richard, thank you very much. appreciate you and mohammed, great as always to see you. some stern words for lawmakers over the threat of a u.s. default on the debt. warren buffet didn't menace words giving his opinion of a

possible default or about the law pamakers who would allow th country to miss payments on its bills, listen up. >> it takes 20 years to build a reputation and 20 minutes to ruin it. we've been building a reputation for proper fiscal behavior with our currency at least for 237 years. the united states, we've become the reserve currency of the world and people all over the world hold our paper. so to give up or to do anything that damages a 237-year period of good behavior is idiot. >> he calls the threat a political weapon of mass destruction. >> buffet's comments about it were echoed today and in troubling earnings outlooks for the fourth quarter. mary thompson has more. >> reporter: for federal express

ceo fred smith says a partial government shutdown is grounding a good part of the business. >> we have tens of thousands on shipments held right now that we can't deliver to the u.s. government and a lot of the vendors shipping to the government are now -- have seized. so on the margin there has been an effect. >> reporter: the shutdown and showdown in washington handling tool makers stanley black and decker's outlook and a modest impact in the third quarter, an impact it sees getting worse in the fourth quarter. chip maker lynn year technology cutting because of its uncertainty about washington. that attitude unlikely to change given a short-term solution from lawmakers means america could find itself in the mist of another debt batting a few months from now. the world's largest asset

manager says this could hurt the economy this quarter and well into the first quarter of next year. >> if it feels like this is kicking a can down the road, it will have a lasting damage to consumer confidence, a lasting damage to ceo behavior in terms of job creation. >> reporter: pittsburgh based pnc echoing those sentiments. it was tied directly to washington. while u.s. bank corp says nervous customers are moving money into cash and the influx of deposits is squeezing into net interest margin as it mays more interest on deposits, deposits that may not be able to lend. growing by $10 billion by the end of september and customers moving to cash seeking certainty and safety for their money as washington diters what to do with it's own. for "nightly business report", i'm mary thompson. still ahead on "nightly business report", big blue reports a big revenue miss sending shares lower after hours. that's coming up next.

first, how the international markets performed today. the u.s. economy grew at a modest to moderate pace but job growth was subdued. a snapshot of business and economic conditions in the fed's 12 regional bank ris districts and growth slowed in richmond, chicago regions. many reported optimism about the future and expressed uncertainty about the government shutdown and looming debt ceiling crisis. a banker's group says new mortgage applications were flat last week with lending rates leveling off, refinancing higher

but requests for new home loans fell to a six-year low on worries about the government shutdown. we begin market focus with a trio of earnings that came out after the market closed today. ibm and it wasn't good news. a revenue miss sent shares lower in after hours trading. the company blamed it on a sharp decline in hardware sales. but earnings beat analysts estimates and ibm reiterated the full year outlook. shares finished up more than 1 perds to $186 and change but dropped about 6% after hours. if the current losses hold, ibm would drag the dow down by 65 points tomorrow. american express reporting a rise in net income in the third quarter beating wall street estimates. card holders spent more in the u.s. and abroad. amex shares finished at $76.32 up 1.5% but didn't move much after the bell. ebay's third big company to

report it posted a rise in earnings but revenues fell short and a disappointing outlook. even though profits in the third quarter grew thanks to increasing mobile transactions and an increase in the number of people using paypal payment processer, investment focuses on the outlook. lost 45 cents in the regular session to $53.52 and fell 4.5% after hours. now bank of america reporting a sharp increase in earnings, fueled but growth in the consumer and wealth management arms. it earned 20 cents a share, 2 cents above wall street estimates and reversing a year ago loss. but it wasn't all positive. the bank struggled in the mortgage department bringing in half of the revenue from a year ear earlier. the stock rose to $14.56. pepsi also beat street estimates and says it's on track to meet financial goals for the year thanks to strong sales of the snack foods. the large global reach in frito lay division made up for

declines and the stock popped 2% to $82.27. shoppers are buying up barbie and that helped boost mattel's bottom line. they reported a 16% rise in quarterly profits easily beating expectations and barbie wasn't the only doll in high demand. sales were strong for monster high and the american girl line. shares of advance auto parts hit an all-time high on news it will buy general parts international, privately held company for a little more than $2 billion. the largest in auto parts, the stock is up 16.5% to $96.16. and pharmaceuticals and s sanofi, their drugs can cut lip pod s in half.

in change today for sanofi. it closed at $49.29. and looking ahead, one of the most anticipated earnings reports due out before the opening bell tomorrow, dow component verizon. there are high hope ps for a blowout report for the aggressive ex papgs and plans to take complete control of the wireless unit with vote a phone. julia boorstin has more. >> reporter: verizon is expected to report 4% higher revenue and 16% higher earnings per share thanks to a strong wireless business on growing margins. pacific crest analyst michael bowin points to the fact verizon continues to have three times the number of wireless subscribers as at&t. >> overall the subscribers out there are pleased with the network. verizon continues to have probably the highest quality wireless network out there.

the wire line business continues to struggle to a degree but a strong point. overall, it should be a good quarter for the company. >> while the land line phone business is expected to continue to struggle like all land line providers, the high tv and internet services are growing strong but perhaps the biggest focus will be on the dow component's 130 billion-dollar deal to buyout the 47% stake owned by verizon wireless and vote a phone. >> it makes it a cleaner story as far as the entire company and now they don't have to distribute the profitable earnings from vote a phone. they keep it within verizon. >> verizon is increasingly crowded. thursday morning we'll see what kind of guidance verizon management gives about the company's potential to maintain growth into next year. for nightly business report, i'm julia boorstin in los angeles. coming up, the company

behind the push to reduce dependence on foreign oil and the ground-breaking technologies that could one day secure our energy future but first how commodities, treasurys and currencies did today. in washington today, it wasn't just the debt crisis in the spotlight. there was also a lot of talk about american energy independence. the big question at the energy conference, why is the u.s. still dependent on imported oil and how close are we to using energy to be self-sustaining in our needs. sharon epperson reports. >> reporter: with the fed refl government shutdown, some of the premiere institutions for energy

invasion scale dowor shout down completely. but many companies continue to forge ahead with ground-breaking technologies that will help reduce this country's dependence on oil and increase the energy security. corporate executives and policy makers came together at securing america's future energy security to increase awareness and spark action to reduce the nation's dependence on oil. >> energy security is a triple win. it's a win for the customer because our technology reduces the price. it's a win for the climate, and it's a win for security of the nation. politically, economically and from standpoint cost to the customer. >> the fastest and most cost effective way to control the goals and reduce dependence on foreign sources of oil is introduce more efficient engines. >> reporter: they are developing technologies to fine tine engines to increase fuel

efficiency while others are developing new engines including a combat engine for the u.s. army. fuel efficiency in cars and trucks is improving and with heavy dependence on oil, the united states is just middle of the road when it comes to oil security based on a new index measuring more than a dozen countries. car makers are making significant strides in reducing gasoline consumption. nissan sold more than 35,000 battery bpowered leaves and chevy's has sold almost 50,000 vehicles. >> this is part of our solution, really. it's not a single silver bullet solution but it's one of a number of avenues that are available to the transportation sector. >> reporter: compressed natural gas vehicles like the chevy impala due out next year are another. electric trucks are allowing them to draw from the grid.

>> it won't happen immediately. i think electric is another step forward. >> reporter: another step plant-based fuels that replace crude oil. of course thanks will take many years. >> this is a journey. it will take time but there is invasion in a number on companies and now is the time to press on harder than ever. >> reporter: the result will be a more secure energy landscape. for "nightly business report", i'm sharon epperson in washington. finally, today marks the 90th anniversary of the founding of wallet disney. it made cartoon shorts that featured a familiar looking mouse that the known as steam boot willie. it is more than 40 billion in revenue and more theme parks and characters you would hope to encounter. >> you just came back. >> always crowded, always bustling, a nice place to visit. >> that's why they make all the money. that's "nightly business report" for tonight. i'm susie gharib. for more on the stories we

covered tonight, go to nbr.com. >> i'm tyler mathisen, thanks so much for swroining joining us. have a great evening everyone. see you back here tomorrow. "nightly business report" has been brought to you by. >> thestreet.com, multi media tools for an ever changing financial world. our stock advisor guides and generates income during a period of low interest rates. we are thestreet.com. 

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