>> tom: wall street heads south on a new worry for the nation's big banks. stocks have their worst day since august with the dow back below 11,00. >> susie: some of the nation's biggest bond investors are trying to force bank of america to take back billions of dollars in soured mortgages. you're watching "nightly business report" for tuesday, october 19. 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 and thanks for joining us. a sharp sell-off on wall street on reports big bond investors

are pressuring bank of america to buy back billions of dollars of bad mortgages. susie, the group includes pimco, blackrock, and the federal reserve bank of new york. >> susie: tom, investors didn't like what that could mean and dumped stocks, pushing the dow back below the 11,000 level. the dow fell 165 points, the nasdaq lost 43, and the s&p 500 was off 18. shares of bank of america dropped more than 4%, even though, this morning, it reported better-than-expected quarterly earnings. >> tom: at issue, b-of-a may be forced to buy back part of a $47 billion pool of mortgages that was bundled and sold by its countrywide financial unit. kathy patrick represents the institutional investors and says her clients will fight to recoup their losses. >> the integrity of the capital markets depends on contracts being enforced, and they will be. it takes a long time, it's sometimes cumbersome, but it happens, and this is proof that

it happens, because people had doubted, publicly, that bondholders could organize themselves to exercise their rights. we've demonstrated that they can and they will. >> tom: bank of america says it will vigorously defend itself from those investor claims. meanwhile, federal regulators are now trying to get to the bottom of the foreclosure paperwork mess. the white house says an inter- agency task force is looking into charges of widespread mistakes on foreclosure documents. >> susie: also pressuring u.s. and global markets-- word that china abruptly raised its interest rate for the first time in three years. as scott gurvey reports, the quarter-point boost was designed to cool china's raging real- estate market. >> reporter: the chinese government's surprise interest rate hike applies the brakes to an economy growing at an annual rate of around 10%. chinese consumer prices are rising at a 3.5% rate, with housing prices rising even faster.

scott macdonald of aladdin capital says the chinese government has good reason to worry about inflation. >> if they do not allow the chinese population to have a good life, then they've got some problems. and you know, tiananmen square, 1989, you had a lot of political agitation, but at the same time, what really pushed, like, workers and unionists into the movement was high inflation. so, there's definitely historical dimension to how china regards slowing down inflation and their approach to it. >> reporter: jing ulrich, chairman of china equities and commodities, a division of j.p. morgan, says, in spite of today's market action, the chinese rate hike will have little effect outside that country. >> this one rate hike won't have a lot of impact on the u.s. economy because, if you look at the underlying chinese economic trajectory, it is still very healthy. so we know a strong china, a fast-growing china, is good for the rest of the global economy.

>> reporter: but a string of rate hikes by the chinese would tend to slow imports which, ulrich admits, is part of china's long-term plan to transform its economy. >> the chinese government wants to achieve more of a balancing of the internal economy. they want to have growth driven primarily by domestic consumption, instead of by investments or exports. they also want to make social welfare more equitable. >> reporter: while those moves may affect trade between china and the u.s., macdonald says both nations need to keep each other healthy. >> the u.s. and china are very much interlinked by global trade and finance. and no matter how much either side likes or dislikes it, the u.s. still has deficits which need financing. china still has exports which need end buyers. you don't want the u.s. economy to go into another recession and you don't want china to slow down too much. there's a delicate balance that needs to be maintained here between the two countries. >> reporter: we'll get a better gauge on how china's doing this

thursday when the country releases its latest economic data. scott gurvey, "nightly business report," new york. >> susie: here are the stories in tonight's "n.b.r. newswheel." a surprise rise in new home construction in september as housing starts rose three tenths of a percent. while that's still weak, it's the highest point since the tax credit for new buyers ended in april. and hundreds of thousands of french citizens today challenged a proposed change in the country's retirement age from 60 to 62. the protests came on the sixth day of a national strike, where airline flights have been canceled and garbage pickup abandoned. >> tom: still ahead, an investment for the ages. tonight's word on the street is "energy." how investors of different ages should approach oil and energy investing. dan dicker of thestreet.com joins us. >> susie: does your doctor take money from drug companies to speak on their behalf?

if he or she does, it's been a closely kept industry secret, until now. the non-profit newsroom propublica has developed a database of payments to thousands of doctors, so now you can easily find out how much money big pharma companies pay them. it's a controversial topic-- supporters say paid speakers can keep you healthy. critics say it's all about marketing. tonight, a closer look at the influence of drug company money on health care in "dollars for docs". washington bureau chief darren gersh has spent months looking into this issue. tonight, darren introduces us to one doctor and the decision he made. >> come on back. we're going into room one. >> reporter: in some ways, this is your classic family practice. dr. stuart stoloff has been practicing medicine in carson city, nevada, for over 32 years. but stoloff is more than your typical family doc. if you have asthma, he likely helped with your diagnosis.

that's because dr. stoloff serves on the national expert panel setting asthma treatment guidelines. and that's a key reason dr. stoloff came to the attention of drug companies like glaxosmithkline, which asked him to speak to other doctors. >> and when you do that, when you're involved in that task, the pharmaceutical industry really would like to have you as an adviser. the pharmaceutical company wants to know what you are thinking, what the evidence is. >> reporter: when he first started speaking to other doctors, dr. stoloff says glaxo paid him to talk about his work and the work of the expert panel. >> and that was an absolute joy to me, because i got to raise issues. i got to ask questions where we don't have answers. >> reporter: a new database compiled by the non-profit newsroom propublica underscores the extensive financial connections between pharmaceutical companies and the

nation's doctors. the database merges information from seven drug companies that have publicly disclosed payments to physicians. many of the disclosures were required by legal settlements. these companies represent just over a third of the industry, but since last year, they have paid almost 18,000 doctors speaking, consulting and other fees totaling almost $258 million. in some cases, the pay is substantial. 384 doctors have each earned more than $100,000 from drug companies in the last two years. dr. stoloff is one of them, but his ranking in this lucrative and influential group is falling fast. the records that glaxo put out show that you made $107,000 in '09 speaking for them. and in 2010, it's $500. >> oh, i made $500? >> reporter: that's what it says. >> oh, wow. >> reporter: what changed?

>> okay. in 2009, the majority of the year, i was invited to speak on guidelines and on the state of asthma. >> reporter: but a year ago, dr. stoloff says glaxo told him there would be changes to his contract. if he wanted to keep speaking for the drug maker, he would have to follow the slide show presentation, or "deck," glaxo had developed. >> you will speak only on the slides that we provide you, and we will tell you exactly what you will say, basically, word for word. >> reporter: and that crossed a line for dr. stoloff. >> i couldn't do it. i'm not trying to sell drugs. and the slide decks that have been developed by the companies, not that all of them are the same, but overwhelmingly, it's to sell their product. >> reporter: critics say the extensive use of doctors to speak for drug companies inflates the cost of medicine by promoting brand name drugs over cheaper generics. and cleveland clinic's dr.

steven nissen argues the problem goes even further. >> the minute that physicians become the marketers for drug companies, we're now serving two masters. which master do we serve, the patient or the drug company? i don't think you can serve both masters. >> reporter: in an email to "nightly business report," glaxosmithkline writes: "we respect dr. stoloff's position, but we cannot waive our policy, which is that gsk reviews all information to be presented to ensure that it is consistent with the approved u.s. label for the products discussed." doctor tom stossel is a long- time advocate of industry cooperation with doctors. he argues that's critical to developing and implementing treatments that have dramatically improved medicine. dr. stossel says there is a good reason companies are asking doctors to stick closely to the slides, which have been submitted to the f.d.a. for review. >> but it's not because the companies are putting subliminal marketing messages in the

material; it's because they are so afraid of legal consequences. >> reporter: which stossel considers a shame. he's worried about curtailing pharmaceutical company speaker's programs, because doctors are already too slow to adopt treatments that help their patients. >> a much greater problem than physicians getting inappropriate information is physicians not getting information, and there are many examples of important products that didn't penetrate, get to patients, for a very long time. >> reporter: but nissen says patients are raising uncomfortable questions. >> patients sometimes, and they told me this, are questioning, you know, "why was i given this drug?" d if they question the integrity of our decision-making process, then they will not take the therapies and they may be seriously harmed by that. >> reporter: dr. stoloff says the money he earned did not influence what he prescribes, and he says the particular drug a patient uses is often dictated

by insurance companies anyway. >> most people now, the first thing they ask is, "is this product... is this medicine on my formulary? where is it on my formulary?" and second, "do you have a generic?" >> reporter: dr. stoloff is still paid to consult on asthma treatments and the development of clinical trials for at least five drug companies. but he says he'll never agree to give a speech to promote a single drug, a practice he says does not promote sound science. >> why don't you just wear a shirt that says the name of the product on the front when you walk into the room? if the only thing you are going to do is talk about that one product, it is a waste of my time. darren gersh, "nightly business report," washington. >> susie: tomorrow night, darren looks at how carefully drug companies are vetting the doctors who speak for their companies. our partners for this detailed look at the influence of drug company money on health care include propublica, n.p.r., the "chicago tribune", the "boston globe" and "consumer reports". want to know if your doctor is on the list?

check our web site: nbratpbs.org. >> tom: we mentioned the market selloff eariler, and stocks backing off five month highs. let's get you updated in tant's "market focus." stocks backed off five-month highs by the chinese central bank raising interest rates and renewed worries about banks and mortgages with bondholders

wanting bank of america to buy back billions of bad mortgages. the china action helped the dollar find buyers. the dollar index bounced off nine-month lows. that bounce derailed high-flying emerging markets, which have thrived from the dollar's weakness. the ishares emerging markets e.t.f. fell from its recent new high, dropping 3%. the australian e.t.f. dropped almost 3.5%; south korea fell almost 6%. emerging markets have been attracting investors looking for faster growing economies than the u.s. and europe. the dollar spike also hit commodities that have been rallying on the shoulders of the weak dollar. oil fell more than 4%, down below $80 a barrel. gold dropped 2.5%. it was at a record high last friday. and copper fell 2.5%. if china is successful at slowing its economy, it may mean less demand for commodities. before the market learned of bank of america in the crosshairs of mortgage

bondholders, b-of-a released its earnings. they were better than expected, but the bank took a $10.4 billion accounting charge against these profits. it wrote down the value of its credit card business, thanks to new federal regulations over fees. despite the new rules, credit suisse analyst mosha orenbach thinks b-of-a still has an advantage. >> the credit card business has gotten substantially more competitive. the advantage that b-of-a has is that it has the largest consumer deposit base against which it can market to get additional customers for its card base. and relatively few banks actually have that advantage. >> tom: b-of-a stock was the worst performing dow component on the heels of mortgage bondholders trying to force it to buy back billions in bad mortgages. the stock fell 4% to a new 52- week low. meantime, goldman sachs saw a drop in its quarterly earnings, thanks to a drop in trading and investment banking. still, results were better than expected.

goldman added 2% on heavy volume. this is its highest price since april. coke was one of two dow stocks to post a gain today, climbing to a new milestone above $60 per share. coke stock has been on a tear since its july low around $50. tonight is a two-year high, and on heavier than usual volume. earnings could get some of the credit today. they came in three cents better than expected, with a jump in sales in brazil and russia, especially. north american sales also improved. additionally, coke's stock buyback plan this year will wind up being bigger than first estimated. one other dow component with earnings-- johnson and johnson. results easily beat the street, even as sales fell due to recalls of over the counter children's cold medicines and tylenol. j&j noted health care spending growth is slowing. the stock was down fractionally. energy was the biggest loser among the sectors, hit by the gain in the dollar and

subsequent drop in oil prices. nabors fell almost 6% on heavy volume. it is a drilling contractor. independent oil and hat gas company denbury resources fell 5%. and occidental petroleum dropped 5%, even though its earnings were better than expected. oxy's profits rose from a year ago, thanks to record production company-wide. but energy production in its key state of california fell. one energy stock fighting the weak market was coal producer massey energy. the company is exploring strategic alternatives, according to reports; in other words, a possible sale. shares hit a five-month high on that speculation. and that's tonight's "market focus."

>> tom: oil is hundreds of millions of years old, but how you may want to invest in energy depends on how old you are. tonight's word on the street is "energy." daniel dicker is a senior contributor at thestreet.com. he joins us from the nasdaq. >> tom: dan, welcome to "nightly business report," nice to see you. >> thanks, tom for having me. fully 50% of the stocks on the big board down here in new york are either energy companies or they have energy as their prior no, ma'am input costs. you can't get any way from energy no matter how you slice it. all of us need heat in the wintertime. >> tom: so let's take a look and walk through the ages. investors in their 20s and 30s, you advice big integrated oil, and

alternative energy. and the biggest of the big, exxon-mobil. what about the growth profile for a stock this large for younger investors. is there one? >> absolutely. first of all, there is a dividend history to goes for decades. that is something you want to hook on to early on. dividend stocks that continue to increase dividends across time. it is a great way to start when you're in your 20s and you have a stressed paycheck and can only invest a little at a time. >> tom: you also like alternative energy for the younger investors, including j.a. solar, a chinese solar company that has had a heck of a runup since august. would you still buy it here? >> the trouble with j.a. solar, i like to tell younger players they should invest a little wit their heart and not just their head. j.a.solar, the problem with the small solar stock, is it is very volatile. it had a 10% move today to the downside. you've got to be able to take a little risk.

if you're starting in the 20s and you have decades for investment to run, something like a j.a. solar could be a tremendous in ve. in your 20s. >> tom: middle age, investors in their 30s and 40s, you like ind integrated oil, and natural gas prices close to historic lows. what is going on here? >> the fundamentals are kicking nat gas prices down and have for a while. the point is this: natural gas is absolutely our conduit. from crude oil to the alternative energy sources that are still decades away. it is cheap and absolutely plentiful and it is domestic, all ours. so even though the obama administration and in fact washington in general, can't see the point of natural gas right now, they will soon in the next few years. you need to be positioned in some of these natural gas stocks while they're cheap. >> tom: dan, give us

advice for investors in their 60s. they traditionally do pay pretty traditionally yields, and e.p.d. with a 5.5% yield. >> yeah. you're on a fixed income, so you need these distributions coming in. it is okay if you're in retirement that you don't need to shelter. you need the money now. >> tom: any shorts or positions? >> i own exxon, devon. you've got it. >> tom: you can read dan's article on thestreet.com. dan, thank you for being with us. our guest is daniel dicker, senior editor at thestreet.com. >> susie: here's what we're watching for tomorrow: the federal reserve issues its beige book survey of the economy. the weekly reports on mortgage applications and crude oil and gasoline inventories are also due out. also tomorrow, the airlines lead the earnings parade. we'll see results from american airlines parent a.m.r corp, delta, and u.s. airways.

a big step today for citigroup to end charges it misled investors. a federal judge okayed the bank's deal with regulators, putting conditions on citi's future business. citi's executives, including the c.e.o. and c.f.o., must personally sign paperwork that earnings are accurate. it must also set up disclosure and earnings committees, and pay a $75 million fine. the deal ends allegations citi didn't tell investors about the risks of investing in sub-prime mortgages. >> tom: oregon will soon be in the chips-- computer chips. intel today said it will build a new development plant there. it's part of a plan to spend up to $8 billion to upgrade technology at intel's chip- making facilities in the u.s. the investment could create 8,000 construction jobs, and nearly a thousand permanent high-tech jobs. intel builds three out of four of its microprocessors in the u.s. euquu

>> susie: and finally tonight, remember the story of the jetblue flight attendant who swore at a passenger, slid down the emergency chute on a plane at kennedy airport and fled? steven slater had his day in court today and he pleaded guilty. he was contrite, and agreed to a deal that requires he undergo

mental health and substance abuse counseling for a year. and tom, he also has to pay jetblue ten grand, the cost of replacing the emergency chute. >> tom: i hope he finds the help he needs, but an awfully expensive outburst at the end of the day, 10 grand. >> susie: it sure was. >> susie: that's "nightly business report" for tuesday, october 19. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everybody. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you.

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