>> suzanne: he may be driving up profits at g.m., but he won't be in the driver's seat much longer. g.m.'s ed whitacre unexpectedly resigns as the automaker prepares to go public again. >> apparently, he believes that he has set the company up for greatness, as he said, and he's now going to hand it over to somebody that can see them through the i.p.o. >> tom: what the management move means for g.m.'s much- anticipated return to wall street. you're watching "nightly business report" for thursday, august 12. 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. captioning sponsored by wpbt >> tom: good evening everyone, and thanks for joining us. susie gharib is off tonight, i'm joined by suzanne pratt. fresh signs today of the much- talked-about slowing economy. suzanne, weekly jobless claims have hit their highest level in almost six months. >> suzanne: tom, the number of u.s. workers filing new claims for unemployment insurance unexpectedly rose by 2,000 in

the last week to 484,000 claims. >> tom: given the weak job market, many americans are getting nervous about the recovery. but should the government be taking more aggressive action to prop up the economy? and if, so, what? erika miller gets some answers. >> reporter: for many americans, the economic recovery feels more like a recession. despite hundreds of billions of dollars in government stimulus, unemployment remains stubbornly high. which is why many economists think more government action is needed to help the recovery gain traction. economist mark zandi would like congress to extend the bush tax cuts, instead of letting them expire at end of the year. >> i think the economic recovery is just too fragile to raise taxes on anyone at this point in time. i think down the road, when the economy is off and running, then we can allow tax rates to rise-- particularly for high-income households. >> reporter: but others disagree. they argue the extra revenues are needed to help reduce the

nation's record budget deficit. still other economists are not convinced tax cuts would encourage spending. neil soss says the best thing the government can do to help the economy is nothing. >> my father in law was a country doctor, and i think one of his favorite prescriptions was "leave it alone three times a day." and i think there's an element of wisdom in that with respect to policy now. >> reporter: but even he concedes it will be difficult for congress to sit patiently on the sidelines. so, if lawmakers insist on more stimulus, soss would pick a federal job creation program. >> what we really ought to be doing, in my view at least, if we are going to have stimulus at all, is dedicate it explicitly to the kind of infrastructure that the economy is going to need to be safe and productive. >> reporter: the problem with that plan, according to zandi, is it takes time to implement and would not be much use in jumpstarting the economy. so what happens if the government does nothing, and simply waits on the sidelines?

both soss and zandi believe the us will probably skirt recession, it's just a question of whether it's a risk worth taking. erika miller, "nightly business report," new york. suzanne: general motors has a new executive in the driver's seat as it gets closer to going public again. in a surprise announcement, ed whitacre is stepping down as g.m.'s c.e.o. at the end of the month, and will keep the chairman's job until year's end. board member daniel akerson will take over as chief executive september first. but, reuters says that change could push back g.m.'s i.p.o. filing for a few days, since new management would have to be noted in the paperwork. akerson is the managing director at the private equity firm, the carlyle group, and doesn't have a manufacturing background. he'll be g.m.'s fourth chief executive in less than two years. auto analyst rebecca lindland says the management change shows the company is focused on its finances. >> they feel like they have good people in place that are running

the rest of the company, and that have manufacturing and automotive experience, and they've got to get somebody that has an even broader range of experience with wall street doing these kinds of deals, maybe even executing the i.p.o., just really somebody that's very, very comfortable with these kind of financial decisions that need to be made. >> suzanne: the news came as general motors posted a billion- dollar second-quarter profit. that's a stark contrast to this time last year, when the automaker lost nearly $13 billion and slid into bankruptcy. >> tom: here are the stories in tonight's n.b.r. newswheel: wall street couldn't shake its economic worries. the dow fell almost 59 points, the nasdaq lost 18, the s&p 500 was off five. big board volume remained above the billion-share mark, down from yesterday's pace. nasdaq volume also was slightly down. india may block encrypted corporate emails sent over blackberry smartphones, if maker research in motion doesn't help

india monitor those messages. rim has until the end of the month to comply. b.p. will pay a record $50 million fine for safety violations, but not for the gulf disaster. it's from a deadly 2005 explosion at a texas refinery. b.p. will also spend half a billion dollars to protect workers there. and, mortgage rates hit another new low this week: 4.44% on a 30-year fixed. >> tom: still ahead, bank overdraft protection. it's a huge cash cow for the financial sector, but does it just milk consumers? do you need overdraft protection on your checking account? >> suzanne: a drought may be frying russia's crops this year, yet u.s. farmers are looking at a bumper harvest of corn, soybeans, and wheat. while russia's troubles have recently contributed to big swings in wheat prices, some experts say weather is not the only cause of the volatility. diane eastabrook explains. >> reporter: chicago's alpha baking company uses three

millions pounds of wheat flour a week for its buns, rolls, and bread. the company buys wheat on the futures market. and over the past couple of months, wheat prices have been swinging wildly because of a drought in russia. >> it went from $4.80 to $8.20 in less than 60 days. >> reporter: alpha president larry marcucci has been glued to his office laptop since july watching wheat prices gyrate and wondering when he should buy. marcucci thinks buying on the futures markets is more of a gamble now, and weather-related disasters are only part of the reason. >> lately now people have gotten into investing in futures or options, and it's made it much more volatile. like what is going on with wheat right now, making it more exacerbated than it needed to be. >> reporter: futures markets have always been a place for farmers and commodity producers to hedge risk. they've also been a place for speculators to make and lose money. more recently, the futures markets have been luring

investors represented by commodity funds and commodity exchange traded funds. in the past few years, e.t.f.'s alone have tripled the amount of money invested in commodity futures. paul justice tracks e.t.f.'s for morningstar and thinks the funds are influencing prices. >> the problem is, you have to roll these contracts constantly and you see a lot of passive money sitting idly, constantly going into the next futures contract, and it's created this distortion where the futures price is considerably more expensive than the spot price of the end-use products. >> reporter: commodity analysts admit investment money is adding more volatility to futures exchanges. but jack scoville, vice president of price futures group, says it isn't the only reason. >> as you have more wealth created people can afford to pay a little bit more for commodities, so we've seen prices go up. just on an absolute basis, something that is priced at $5, to get the same percentage move, is going to have to move twice as much as something that is

priced at $2.50. >> reporter: marcucci says despite the increased volatility, he'll keep using the futures markets to buy wheat and other commodities. but it has forced him to run his business differently. he no longer locks in prices for a year with customers like he used to. >> nobody can afford to take on that risk for a year. i mean, you could literally put yourself out of business. diane eastabrook, "nightly business report," chicago.

>> not a good day for stocks. and if something doesn't change tomorrow, not a good week for equity investors. >> tom: it's been difficult, clearly the market focus has shifted from corporate easternings which is where it was last week to the economy. let's get you updated on tonight's "market focus" >> tom: the major indices spent the entire day in the red, but the losses were much less than yesterday. technology led the way lower with the disappointing revenue results from cisco. it was the leading loser of all three major indices, the dow, the nasdaq 100 and the s&p 500, with a 10% drop on huge volume-- five times normal today. on this 90-day chart, cisco is close to its july low. pulling out to a 12-month chart, cisco has found buyers at these prices twice before: last month, and back in september.

a move below $21 per share would pierce those levels. cisco's revenues coming in slightly lighter than expected get the blame as many look to cisco as a bellwether for corporate technology spending. the cisco news cast a shadow on techs. data storage was one area the cisco disappointment was felt. netapp dropped almost 9%. juniper is a competitor of cisco. its 7% drop came on twice its usual volume, and e-m-c also saw big volume, falling 5%. all three of these are at five- week lows. staying with technology, graphics semiconductor maker nvidia released its latest results after the close. the reported bottom line was a big miss, and revenues were less than analysts had anticipated. the company lowered its forecast last month due to weakness in europe and china. nvidia stock clearly has been in a downtrend since april. they were up fractionally before the results.

after hours, the stock added 6% despite the earnings miss. engineering software maker autodesk beat the street. revenue across all its major global locations was up. the stock has been trending lower this month, but after the earnings release tonight, shares were up 4%. meantime, retailer nordstrom was active after hours, adding to the losses shareholders saw during the regular session. the stock was off another 4% after the closing bell. this may explain the drop. second quarter earnings came in as expected at 66 cents per share. while same-store sales were up more than 8% during the quarter, it did not change its sales or profit outlook. investors took that as bad news. a couple of other retailers moved on their earnings. kohl's is less than a dollar away from a new 52-week low after reporting better-than- expected earnings. but, the third-quarter outlook was disappointing. auto parts retailer advanced auto parts hit a new high with improved margins, better-than- expected profits and a rosier- than-predicted forecast. an interesting split in the

outlook for the beauty business. estee lauder's guidance came in weak while elizabeth arden's forecast was better looking. estee lauder's latest earnings were a penny less than estimates, plus its profit outlook was disappointing. shares fell almost 3% on big volume. elizabeth arden, though, sees strong momentum and its margins have been widening. the stock jumped more than 11%, regaining what it had lost in the previous two sessions. and that's tonight's "market focus." >> tom: a source of billions of dollars in fees for banks

and billions of dollars in cost force debit card users faces some big changes this weekend. on sunday new rules for bank account overdrafts start. now banks have seen revenue from these overdraft fees increase for several years. these are fees banks charge customers when they spend more than what is in their bank account. they are expected to drop for the first time in several years thanks to this new rule. andy walkary long with-- mandy walker senior project ed editor with consumer reports. welcome to nicely business report. what is the new rule that goes into effect on sunday for debit card users? >> banks have until sunday to sign their current checking account holders up in to their overdraft protection program. previously they would probably sign you up without your knowledge. you would be in this program and you wouldn't know it until you went to make an atm purchase or debit card purchase and then it went through but you didn't have enough in your account and they would hit you with a fee. >> tom: so are these

protection fee programs effectively just short-term loans? >> they're very expensive short-term loans. the effective apr can be triple digits, in fact. the fees i think average about $34 across the country. and if you go and make other debit card purchases you can incur another fee and another fee and another fee. >> tom: so we have a little graphic on how this all works. say you for instance buy a $4 cup of coffee could wind up costing the consumer almost ten times that amount because you order the coffee, use the debit card to pay for it but it you don't have the $4 in the account f you do opt in for this overdraft protection, you then have the $4 charged and also the $35 average fee charge. so then are you talking about i all 39 cup of coffee here, right? >> right, dow have to repay the money that they are essentially lending you. plus pay the fee. it's very expensive latte. >> tom: yeah t is how long do you have to pay for that latte in this case? >> it depends on your bank's

program. some of them if you don't repay it within five business days, say, will charge you an additional fee. >> tom: okay. sounds like you would not advise consumers to sign up for these kinds of protections. >> yeah, that's correct. yeah, we say don't do anything. how easy can that be. don't do anything. don't opt in there are other ways you could pro dwrirkt self that will cost you a lot less. >> tom: let's look at some of those other ways. the first one is basic. make sure you have enough cash in your account to cover what you are using for the debit card that is the first one. >> you want to cushon. >> tom: you want to check that account to make sure you have the balance. get balance alerts, for instance, from your accounts and also link it to other accounts. do you have to link that checking account to a savings account. >> you can do that. you can link it to a savings account. that probably the easiest way or link to a credit card or line of credit if you can get one. if you link it to your savings account money is automatically then

transferred in to your checking account, if you do spend more than you have in your account. and you probably have to pay a fee nor that as well but it will be less than that $35 or $35 t will probably be about $10. >> tom: that 4 dollar cup of coffee won't turn into a 40 dollar cup of coffee. we appreciate some of those ideas. mandy walkary long with us. senior project editor at consumer reports. >> suzanne: here's what we're watching for tomorrow. quarterly results from j.c. penney, along with july's consumer price index and business inventories for june. also tomorrow, our "market monitor" guest says corporate earnings may not be as strong as the stock market thinks. he's douglas cliggott, u.s. equity strategist at credit suisse. >> suzanne: a week after mark hurd's sudden resignation from h.p., the company's board of directors is being sued. filed on behalf of a massachusetts retirement fund that owns shares of h.p., the

lawsuit includes hurd and interim c.e.o. catherine lesjak. the suit claims h.p.'s board had a duty to tell shareholders hurd was part of a sexual harassment investigation. no comment tonight from h.p. or hurd. >> tom: "make my trip" made a big arrival today on wall street, posting the best first- day gain for an initial public offering in almost three years. the indian online travel company soared nearly 90% in its debut on the nasdaq. market watchers think "make my trip" was a hot ticket because there are so few u.s. listed firms focused on india's growing online market.

>> suzanne: many college and high school students find internships are a good way to get real work experience. it's estimated half of all college grads have been interns, often for no pay. but, as anna olson reports, the government is now telling employers to think twice about using unpaid interns. >> reporter: felix rivera called on his neighbors and local businesses to raise thousands of dollars so he could spend the summer in washington d.c. he's interning here at catholic news service, a wire service that provides news to the catholic press. he's hoping this will lead to a full-time job. >> they have me doing all sorts

of work. lots of reporting, lots of writing. i've been able to get my name in newspapers around the country. >> reporter: rivera isn't getting paid, but his supervisor julie asher, relies on him to write stories and fill in for employees while they're on vacation. >> really, the main benefit is to actually have them out covering stories that we need covered. >> reporter: catholic news service is a non-profit group, and under fair labor laws, it can use rivera's work without paying him. but for-profit companies have different rules. the labor department recently reminded employers unpaid internships must be purely educational. in other words, companies can't benefit from the work of interns-- unless they're paying for it. ross eisenbrey at the economic policy institute says that will stop employers from exploiting unpaid labor. >> much bigger companies, especially in the fashion industry and publishing, have gotten used to not paying, but they can afford it. >> reporter: as a result of the rule clarification, organizations like atlantic media now pay interns.

still, about 85% of positions advertised on internships.com are unpaid. some are with commercial companies like lacoste, marvel, and bank of america-- which offer course credit, but not always money. joe starrs runs an internship program in washington. he says credit is good enough, and thinks the emphasis on pay will hurt, not help many interns. >> they get real world experience, and if an employer thinks, "well, hey, i can't assign the intern that because it somehow might run afoul of government regulations," it will curtail opportunities. >> reporter: eisenbrey says that won't happen. he thinks most companies want to follow the law, and that they will. >> i've read in various newspapers around the country, smaller businesses are realizing for the first time, they had to pay their interns, and they are. >> reporter: but felix rivera thinks of his unpaid internship as an investment, and he doesn't mind working for free. >> we take that for granted that we're going into an internship that's probably going to be unpaid, and that later on, it

will turn into something that is paid. >> reporter: that's one reason he says the experience he's getting now may be worth far more than money. >> i think, in the end, that i'll have some opportunities here that i couldn't have had anywhere else. anna olson, "nightly business report," washington. >> tom: the election season is about to hit full stride. in a weak job market, that means plenty of work for a political pundit. but what does a pundit actually do? tonight's commentator knows firsthand. he's douglas holtz-eakin, president of the american action forum and former director of the congressional budget office. >> through the magic of modern media, i appear to be working. i'm wearing a tie. i've got my "time for some serious talk" look on. i'm reading from a teleprompter and timing my words to the minute. but i'm not actually working. as you watch this, i'm on a beach in north carolina thinking big thoughts-- like "margarita!" which raises the question, how can you tell when a washington pundit is really working?

or, putting a positive spin on it, what is it that i do? first, i talk a lot. to be honest, i get sick of hearing myself sometimes. especially after over a year of the health care debate, i cringe at the thought of it some days. but i am constantly reminded that just because i've said it before doesn't mean that you've heard it. and i want you to hear it. there's more than just politics. i deeply believe that educated policy choices will be better policy choices. i'm the son and grandson of high school teachers and taught at universities for 20 years. i've continued my teaching career in these new settings: testimony, campaigns, blogs, radio, and television. it is harder teaching, but i don't have to grade tests. second, i listen a lot. when i give a speech or lecture, i learn more from the audience than they learn from me. what issues are on their minds? how do they think about the deficit? trade policy? carbon pollution? i'm not that unusual. washington is full of closet intellectuals, recreational scholars, professional essayists and a multitude of idea-smiths.

but that's when i'm working. now, i'm thinking bigger thoughts-- "mojito!" i'm doug holtz-eakin. >> suzanne: finally, looking for a special place to spend your summers? there's a property up for grabs in maine with a million-dollar view. the ram island ledge lighthouse is being auctioned by the federal government. at more than a century old, the historic landmark needs a lot more than a fresh coat of paint. the property is also hard to get to. it's on a wave-swept rocky ledge without a pier. did i mention, a loud fog horn blares every 10 seconds? so far, there's only been a $10,000 bid. >> tom do i hear $20,000. >> location, location, location, only challenged i think in this case, suzanne. >> yes, yes, yes. that's nightly business report for thursday, august 12th. i'm suzanne pratt, good night everyone, and good night to you tom. >> we hope to see you right back here tomorrow night. >> nightly business

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