>> susie: wall street kicks off the week with another round of deals. intel, 3m and sanofi aventis are all making big plays for smaller firms. >> in this type of a difficult climate, where revenue growth is hard to achieve, buying a company, integrating it, taking out the cost savings and the synergies, is a better way to boost profits than waiting for sales growth. >> tom: from fingerprinting to pharmaceuticals, a look at why we're seeing a boost in m&a activity. you're watching "nightly business report" for monday, august 30. 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. captioning sponsored by wpbt >> susie: good evening everyone. a new week, and a new batch of billion-dollar merger deals. tom, intel said today it's buying the wireless business of german chip maker infineon technologies. >> tom: susie, the price tag on

that deal is $1.4 billion in cash. it's the second deal for intel in as many weeks. the chip giant's paying over $7 billion for mcafee, the big computer security firm. also today, 3m agreed to buy cogent, maker of a different kind of security product-- devices for fingerprinting and biometric identification-- for nearly $1 billion. american companies are sitting on a pile of cash. but they're not using it for hiring, they are using the money for deal-making. erika miller has details. >> reporter: consumers are not the only ones holding on tightly to their cash these days. corporations are too. non-financial companies in the standard & poor's 500 have a record $837 billion in cash in their coffers. that's enough to pay 2.8 million workers-- basically, the entire population of chicago-- $100,000 a year for three years. but one of the few places companies are spending money is on is on mergers and acquisitions. with one day left, august already has the highest value of

global m&a deals this year. merger expert tom burnett says buying other companies makes perfect sense in a weak economy. >> in our view, in this type of a difficult climate, where revenue growth is hard to achieve, buying a company, integrating it, taking out the cost savings and the synergies, is a better way to boost profits than waiting for sales growth >> reporter: that's great for corporations, but not always for american workers, at least in the short term. when firms merge, they consolidate operations, which often leads to layoffs. but americans may take some comfort in knowing that a flurry of deal-making is often a positive sign about the outlook for the economy. >> there's a lot of activity amongst big companies who aren't active in the merger space. this is telling us that corporate boardrooms must be sensing a little bit more optimism-- light at the end of

the tunnel-- in terms of global economic growth. >> reporter: few think we'll see positive signs in friday's employment report. economists are expecting a loss of 100,00 jobs for august-- on wells fargo strategist scott wren says it will be a long time before there's significant improvement in hiring: >> right now people are hestitant to hire a strategic sense, without having to hire new people in, without having to train those people, and without up-front costs it takes to organically grow the business you're in. >> reporter: so what will it take to get firms to abandon their cash-hoarding mentality and start hiring? experts say firms need to see a strong recovery in consumer demand. don't expect that, as long as the job market remains weak. erika miller, "nightly business report," new york

>> tom: here are the stories in tonight's n.b.r. newswheel: stocks tumbled as investors focused on the economy the dow fell 140 points, the nasdaq lost 33 and the s&p 500 was off 15. trading volume started the week light, with 817 million shares moving on the big board and 1.6 billion shares changing hands on the nasdaq. americans saved less money in july. last month, the savings rate fell to its lowest point in three months-- just under 6%-- as spending outpaced incomes. the commerce department says personal spending rose by 0.4% last month. incomes were up by just half that. president obmama says his economic team is working to find new ways to get the economy moving. he says congress can help create jobs by passing a $30 billion bill to boost lending to small businesses. >> it would help them get the credit they need and eliminate capital gains taxes on key investments so they have more incentive to invest right now. and, it would accelerate $55 billion of tax relief to encourage american businesses,

small and large, to expand their investments over the next 14 months. >> tom: that jobs bill was blocked by senate republicans, worried about its cost. before the president's comments, house minority leader john boehner again called for the president to fire his economic team. boehner also said keeping the bush tax cuts would help the nation's small businesses create jobs. >> susie: still ahead, it's been five years since hurricane katrina devastated new orleans. we talk economic revival with tulane university's peter ricchiuti. >> tom: hewlett-packard wants to own more of its stock. h.p.'s board today boosted its share buyback program by $10 billion. the move comes on the heels of a 17% slide in h.p.'s share price since the company's c.e.o. resigned abruptly three weeks ago. h.p.'s interim c.e.o. says about a third of that buyback will come during the company's fiscal fourth quarter, which ends october 31.

investors appeared to like the plan. h.p. shares rose 56 cents, or 1.5%, to $38.56. its threat to ban blackberry >> susie: india is postponing its threat to ban blackberry services for at least 60 days. that's because research in motion, maker of the popular smartphones, agreed to give india access to encrypted data. the country will test that access over the next two months, and decide whether to let the phones be used. reuters is also quoting a senior government official as saying india wants to track similar technology used by google and skype. >> welcome back to nightly business report. >> thank you for having. >> me. >> five years post katrina, how would you describe the economy today? >> it's better than we thought it'd be five years ago. the economy is good. we have short-term positives, money coming in from fema and

insurance companies and all that. i think the storm is paying a lot of long-term dividends in terms of infrastructure changes and also, for instance, the public schools systems here were dismal. now they've been entirely replaced by charter schools. we have a brand-new mayor. there's a lot of optimism in the air. >> tom: you talked about the short-term money that came in. a lot of that coming from the federal government in the form of emergency management money, almost $6 billion, better than $8.5 billion to the state of louisiana to homeowners in new orleans. as some of the money kind of winds down are the signs you're seeing on the ground self-sustaining for the new orleans' economy? er. >> absolutely right. we have to stand on our own two feet, now the backdrop of money coming in is pretty much over, but i think things are really starting to turn around, for instance, a mile from where i am right now in the french quarter, there's a huge health care complex being built. there's plans for the veterans administrations, combination of tulane and lsu, it's it's those kinds of things that will really help us. >> tom: i'm going to ask you

about health care jobs in a moment in that area. overall, unemployment has rizen in new orleans, but not as high as it is nationally, only.5% in july compared to 9.5% national fleet u.s. the labor base is smaller in new orleans compared to before the storm, less than 80% of the population is back. the deep water oil moratorium after the b.p. oil disaster. does that threaten the recovery? the moratorium? >> in a bill big, big, way. the moratorium on deep water drilling say lot worse than people think it is. it's tens of thousands of jobs and very good paying jobs and also cutting off the royalty income that comes into the state. that's supposed to end in november. there's some hope around these parts that the obama administration is going to end that a little quicker than that but it's a big deal and it really threatens the recovery. >> tom: you mentioned jobs overall. compared to right around the times of the storms, there was a lot more construction jobs in new orleans today compared to five years ago but tourism and

heat care jobs have -- health care jobs have continued to see losses, what kind of policies need to be put in place to reverse that job loss? >> part of it we really don't have much control over, you look at the tourism side. we're a big, big convention sitting here in new orleans, people love to come here, because of the national economy, people cut back the number of conventions they've had, number of people they're bringing and number of days they stay so we're starting to get dinged by the national economy there. >> tom: your finance students at tulane do research that goes and advises the portfolio managers in the hancock horizon burke &road mutual fund. over the past five years since the storm, shares of that fund are actually higher meanwhile the s&p 500 is lower. what's this tell us about gulf coast communities? >> it has a positive message. this fund is mainly made up of the companies in this area. it's telling us that this part of the world is growing faster than the rest of the economy and has a very good outlook. if you'll remember -- if you think of stocks being great leading economic indicators, i think it tells a very positive

tale. >> tom: does it tell that tale especially when it comes to energy specifically? >> yes, i really do think once we get passed the moratorium issue here, we have a lot of opportunity on the energy side throughout the state but particularly in the deep water area. >> tom: peter, do you own shares in the fund? >> no, i do not. the students don't either. >> tom: peter ricchiuti along with us. thank you for the update five years on after katrina. he's the assistant business school dean at tulane university.

>> susie: tom, it's a balancing act again, the dow is hovering on the 10,000 level, all 30 of the dow components were down except for hewlett packard. >> h.p., absolutely, helped out by the buy back. one of the things in tonight's market focus. >> tom: the major indices started the week by erasing the gains we saw friday. the list of merger deals wasn't enough to satisfy stock buyers, as more economic data continued to point to a slow, grinding recovery. the s&p 500 spent the entire day in the red, sinking throughout the afternoon. financial stocks led the way down. some household names hitting new 52-week lows. brokers ameritrade and schwab each hit new lows during the trading day. now, schwab was among those

doing deals, growing its exchange traded fund business with a purchase of an investment advisory firm specializing in e.t.f.'s for $150 million in cash. bank of america also hit a new 52-week low. off by 2.5%. b. of a. stock last traded at these prices in july of 2009. b-a-c stock has lost more than a third of its value since its april high. today, it was the biggest percentage loser among dow stocks. monday lived up to its reputation as a merger announcement day. erika reported earlier on companies freeing up cash for deal-making. there were three deals announced today. the biggest, at $18.5 billion, is sanofi-aventis' effort to buy genzyme. sanofi offered $69 per share in cash, which the genzyme board rejected, calling it unrealistic. the market seems confident a higher bid will be coming. genzyme stock rallied beyond the

sanofi offer to close at $69.91. intel hasn't been shy about putting its cash hoard to work. earlier this month, it announced an almost $8 billion cash buyout of security software firm mcafee. now, buying the wireless semiconductor unit of german firm infineon. again, intel is dipping into its cash reserves, spending $1.4 billion to expand further into the wireless chip business. just friday, intel warned of a surprising drop in its personal computer business this quarter, cutting its revenue outlook. rumors of this deal have been around for a few weeks. it comes with intel stock near a 52-week low. shares fell 2% today. and 3m here. the conglomerate is expanding its security business with the purchase of fingerprint systems maker cogent. the official price tag is $943 million, or $10.50 per share for cogent.

it's a little complicated, but 3m will pay only $430 million because of cogent's big cash stockpile. cogent stock hit the buyout price and kept rallying, up more than 24%. the market may be hoping for higher bids to be coming. hopes of corporate bidding wars have risen with this fight for 3par between dell and hewlett- packard. h.p.'s $30-per-share offer has been endorsed by 3par's board of directors. hewlett-packard was the only dow stock to move higher today, thanks to its stock buyback we reported a few minutes ago. in addition to the cash mergers, we've been seeing, shareholders have seen buybacks return. today, a couple to mention. fashion accessory firm fossil plans to spend $750 million on buybacks-- a quarter of its market value. shares rallied to a new high. qlogic makes semiconductors for computer servers. it plans a $200 million buyback plan. shares were up almost 1%. finally, small-cap media service

firm d.g.fastchannel? it took the fast lane to a new low. its forecast came up short due to a shift in one of its units business strategies. the stock plunging, lost almost 40% on huge volume. and that's tonight's "market focus." barns & noble is closing a key store location as the company weighs its strategic

options. it'll shudle the 60,000 square foot store in new york city's lincoln center. the closure is expected at the end of january. barns & noble sites high rent for the decision. earlier this month, the cas cash-strapped company said it was considering all options including a sale of the firm. >> susie: it seems like a simple process, go into a shoe store, see something you like and try a pair on. as we spend more time during the day on our feet, a leading -- leading longer active lives, the shoes we wear can make a difference in how we feel. as jeff reports, it's a key strategy in the growth of one footwear chain. . >> as shoe retailers go, this store isn't a big box. it's more the size of, well, a shoe box. what this chain called "foot solution" lacks in the size of its units it makes up for in service. come here as emily kearns did and you can expect the sales person, certified shoe fitter, to spend at least 30 minutes with you, which makes a huge difference to customers like emmy perpetually unhappy with

the fit of the shoes she buys. >> these kinds, you know, it's ok in the house, slippers, but when i go out, if i do any walking, i hurt, so i want something a little bit better. >> reporter: that focus on health through you choice and proper fit of shoes is at the heart of foot solutions' business model. founder and ceo ray margianno started the chain 10 years ago. back then, fitted shoes weren't on the radar of most shoe buyers. that's changed as the boomer population ages. >> the bottom line is people want to be more active. if you look at our grandmas and grandpas a few generations back, i mean, pretty much when they got into this age group that were retired, they were retired. today it's much more active and to be active, you have to have proper supportive footwear. >> reporter: as a category, shoes with so-called therapeutic benefits have been on the growth fast track, witness the craze over so-called toning shoes which some analysts believe will

quad drupe until sales this year to more than $1 -- quadruple in sales this year to more than $1.5 billion. more americans are diagnosed with diabetes. poor-fitting shoes could worsen the condition. there's even a medicare benefit, the therapeutic shoe act "instituted in '93 to provide fitted shoes for diabetes sufferers. but at the end of the day, says foot solution franchisee rob feldman, the success of the store is built upon spending time with each customer. >> it's the old adage once they get it on their foot, they then understand it. i can talk until i'm blue in the face but we've got to get the shoe on their foot and then it's almost automatic. >> reporter: that's good enough for emily kearns. >> so you get it right otherwise you get a pile up of shoes in the closet that you're not comfortable in and you don't like. if you get something that fits, it's more better. >> reporter: so if the shoe fits she'll wear it.

jeff yastine, "nightly business report" plantation, florida. >> susie: here's what we're watching for tomorrow. we'll find out what federal reserve board members were debating at their last policy meeting when we get the minutes from the august open market committee. also tomorrow, the s&p case shiller home price index for june. our "word on the street" is "retail." retail "stocks" can go in and out of fashion quickly, but you can diversify your portfolio with retail exchange traded funds. >> susie: chrysler is getting its u.s. dealers up to speed on fiat cars. dodge, chrysler and jeep dealers were in detroit today, learning to become fiat dealers. chrysler hopes for solid sales when it rolls out the fiat 500 mini car to 165 u.s. showrooms in december. dealerships are being asked to build separate areas for fiats, with their own sales and service teams. the brand was last sold in the u.s. nearly 30 years ago. meantime, uncle sam wants to make car shopping easier by getting you more information.

the transportation department and the environmental protection agency want new layouts for window stickers that clearly define a car's fuel efficiency. one includes a letter grade system, using grades from "a plus" to "d" to show fuel economy. the other option puts the estimated annual fuel savings on the window sticker.

>> susie: a new survey shows most economists favor extending the bush tax cuts. the national association of business economics says three in five of its members believe we should keep those lower tax rates on capital gains and dividends. tonight's commentator helped create that tax plan. he's glenn hubbard, dean of columbia business school and former chief economic adviser to president george w. bush. >> treasury secretary geithner is directing the administration's discussion of the need to raise taxes sharply on households earning more than $250,000 per year, reversing the 2001 and 2003 tax cuts. now the increase in marginal tax rates discourages job creation by small business owners at a pivotal point in the nation's economic recovery, and the higher taxes on dividends and capital gains will reduce stock prices and investment. the administration argues two points-- the tax increases are

necessary to finance the nation's budget deficit, and to promote fairness. while deficit reduction is a critical goal, will raising marginal tax rates enhance growth and revenues? reducing spending would be a more pro-growth candidate for deficit reduction. and fairness? if the administration wants to place its view of fairness ahead of growth and job creation, that is a legitimate political choice. but, why not raise more revenue from higher-income taxpayers with less harm to investment and employment? proposals to limit deductions would be a clear alternative. what should we do about taxes? the nation needs a real conversation about the size of government and the tax system that should pay for it. that discussion will likely be front-and-center in the campaign. in the meantime, extending the 2001 and 2003 tax cuts will support the recovery and jobs. i'm glenn hubbard. >> susie: and finally, today

marks warren buffett's 80th birthday, but the oracle of omaha has no plans to retire as c.e.o. of berkshire hathaway. he's vowing to work past 100, buoyed on by his well-known love of hamburgers and cherry coke. buffett says he'll rely on berkshire board member and longtime friend bill gates to tell him if its time to step down. when it comes to investing, buffett has made billions by following these kinds of investment strategies: "be fearful when others are greedy. be greedy when others are fearful." tom, here's another good one: "you can't buy what's popular and do well." all i can say about buffet is that a few months ago when i saw him, he was playing ping-pong with a teenager, a very aggressive game, and he shows no signs of slowing down. >> tom: between the ping-pong, ukelele playing, happy birthday mr. buffet. that's nightly business report

this monday evening, thank you for joining us. it's august 30th. i'm tom hudson. have a good night. >> susie: i'm susie gharib. good night, everyone. see you tomorrow night. "nightly business report" is made possible by:

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