>> susie: a jittery day for investors, as the elections and an important fed meeting hang over the markets. but some strategists still say a new rally is in the works. >> i think we can do another 8% into the end of the year on the major indices-- on the dow, the s&p and the nasdaq. >> tom: that enthusiasm comes as wall street readies for what's traditionally the strongest season for stocks. you're watching "nightly business report" for wednesday, october 27. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

>> reporter: halloween is just days away, and with it comes the start of a season that's anything but spooky for the stock market. according to standard & poor's, november to january is the best three-month period for stocks. since 1930, the s&p 500 has added an average of 3.2% during that stretch. and, it's been an up period in two thirds of those years strategist sam stovall says the gains happen because investors shift their focus. >> i think the reason why november starts off the strongest rolling three-month period is that investors, after they start getting the news about third-quarter earnings reports, start to focus on the year ahead. they start to focus about five quarters ahead-- pretty much giving up on the current year.

>> reporter: past history does not necessarily guarantee that this november through january will be a good period for the stock market. but, those experts who believe it will point to attractive valuations for equities. strategist art hogan says the market needs to get past mid- term elections and next week's fed meeting. stocks will then get a lift as investors look to fundamentals. >> i think we can do another 8% into the end of the year on the major indices-- on the dow, the s&p and the nasdaq. the nasdaq probably has a little more buzz to it. i think the nasdaq is probably going to do better towards the end of the year and into next year, because technology is probably going to be the way to play. >> reporter: others worry the market may be due for a correction, especially since its recent rally. since the end of august, the s&p 500 has surged a hefty 12%. investors have been buying up shares partly in anticipation of a republican sweep of congress. but, market pros say that's not a certainty. >> if we see that republicans just take one house of congress, then we end up with a very split congress.

and historically, that is not very positive for equity prices. >> reporter: experts say the election outcome is also important for wall street, because of what it means for the bush tax cuts. while market pros expects an extension of those cuts, the sooner it happens the better it will be for stocks. >> if it doesn't happen 'til january, that's going to slow investment by a lot of people, not the least of which is businesses. if you don't know what your tax base is, it's going to be very difficult to make new decisions on putting new money to work. >> reporter: and, no matter what time of year it is, uncertainty almost always spooks the stock market. suzanne pratt, "nightly business report," new york. >> tom: good news, bad news in today's new home sales report. the good news first. new homes sales rose 6.6% in september to 307,000 units, or an 8-month supply. the bad? sales are still near their lowest levels since uncle sam started tracking the numbers 40 years ago. meanwhile, the nation's home builders today said business is slowly starting to pick up from historic lows. but their chief economist, david

crowe, says this recession was different. >> unlike most housing recoveries, this housing industry is really not going to lead the economy out of this recession, it's going to follow it or at least be concurrent with it, because the people that will buy houses have got to be secure in their jobs. >> tom: another issue homebuilders are worried about, the foreclosure paperwork mess putting a chill on demand, which could weaken home prices. but the u.s. treasury isn't worried. its office of homeowner preservation today said it sees no big problems from issues surrounding foreclosures. >> susie: here are the stories in tonight's n.b.r. newswheel: as we mentioned, worries about the size of the fed's plan to help the economy led to a mixed close on wall street: the dow fell 43 points, but the nasdaq gained nearly six and the s&p 500 off three. trading volume moved higher on both the big board and the nasdaq. orders for big ticket items

perked up in september, thanks to a jump in aircraft orders. the commerce department said durable goods orders rose 3.3% last month. but when you factor out transportation, orders were up just 0.8%. the federal trade commission is closing the books on its investigation into google's gaffe with no action. the company admitted it inadvertently collected private consumer data while building its street view mapping service. the f.t.c. says the company has since taken steps to mitigate any privacy concerns. >> tom: still ahead, all that glitters is gold, but tonight's street critique asks the question "is it better to own the actual metal, or gold mining stocks?" >> susie: there's a showdown tonight in the world of cable television. cablevision struck out in an attempt to reach a deal with news corp as the first game of the world series gets underway. that leaves three million cablevision viewers without access to the game. late this afternoon, cablevision

agreed to pay the rate that fox- parent news corp charges a larger rival cable company to transmit fox programming. but fox turned it down, calling the offer "unacceptable," adding "the offer is yet another in a long line of publicity stunts." cablevision responded by saying "it's clear that newscorp is operating in bad faith." it's calling on regulators to intervene immediately. joining us now, rebecca arbogast, media regulatory analyst at stifel nicolaus. what a situation, rebecca, what's going on, a lot of unhappy baseball fans tonight. what do you think happens next? >> well, this is a battle that brings in two great american traditions. sports and money. so unless there is some last minute standdown by one of the companies, there will be a number of folks in the cabl cablevision territory who are not going to be able to watch the world series. if the yankees as a home town

team had made it into the world series, this would have been a battle of epic proportions. as it is, it's become one, a longer, but one in a line of mounting beatles between the distributors of tv and the programers tv. >> this has been going on for a couple of weeks now, and americans get pretty cranky when they can't watch their tv shows. why do you think that regulators at the federal communications commission didn't step in earlier to settle this whole negotiating problem? >> i think the last thing that government wants to get involved in is being drawn into what they view as primarily market private negotiations. so if you know that the government will step in and do something that changes the leverage, the negotiating leverage, companies will try to draw them in every time. i think the policy makers both congress and the f. c. c. have been looking to see whether these standoffs to the programmers and the cable companies are part of just rocket transition from a system that had no cash payments at all

which is where things traditionally were, to a system where there is typically cash payments and it's a fairly steep rampup in figuring out what are the reasonable payments. so i think they've, the government has been hopeful that this would all statize and there would be no need for government intervention. >> susie: to you think that to set this dispute comes down to dollars and cents? is it's money or something se? >> it's money, it's money. i think it's money, but it's money in the situation is made more complicated by the fact that viewers increasingly can move away from the traditional distribution and watch programming online. so i think it's a realistic fear on the part of both the distributors and the con ten providers that at some point customers will say enough of this, and i'm going to try to watch as much programming as i can on the internet, and cut the cord. >> susie: earlier this year we had abc, disney dealing with a similar dispute, i think with time warner.

are we going to see more of these disputes over carriage agreements and more disruptions of television broadcasts? what's going to happen next? >> i think unfortunately it appears this these problems aren't over. now, fox and cable vision are two very aggressive negotiators, so this has gone on longer and this may be a particular pairing of particularly tough negotiators. but i think that we're not over with it yet and i think the problem will be, as you said, nothing makes someone more cranky than getting between them and their tv, and those are cranky voters who then go and complain to their congress people. and ask for the government to step in. >> susie: now that everyone is talking about it, do you think there mate be a quicker settlement between now and tomorrow and game two of the world series? >> often times when you have this kind of drama, right, which happened at the beginning of the year over football games and then a little later over the qaurdz and how the world series, it does -- the academy awards and the world series, it does focus minds and bring them into agreement.

so it's quite possible that these two companies will come together, perhaps in the next few days. i think it's eke actually likely that they will remain at odds until after the world series is over. i understand cablevision may have made an offer to reimburse some of its customers if they want to watch the series over at the mlb website. >> susie: sorry to interrupt, it a good thought and i'm afraid we have to leave it there. but let's hope you're right and three million viewers will be really happen if we get a quick settlement. thanks so much. >> thank you. >> susie: we've been speaking with rebecca arbogast.

>> tom: stocks were able to claw their way back from a down point to a mixed close, at the worst the dow industrials were off by 150 points, but ending mixed. let's get it updated in tonight's market focus. >> tom: stocks clawed their way back to a mixed close. at its worst point, the dow industrials were down almost 150 points. material stocks chalked up the biggest sector losses. with the market expecting the fed to pump more money into the economy at its meeting next week, the basic materials exchange traded fund has been chopping around new 52 week highs as of late. but today, the fund dropped 1%. talk of a smaller-than- anticipated fed effort hurt the sector today. here are the biggest drops, led by steel maker a.k. steel. shares sunk another 3% today on twice its usual volume. the company has warned of losses

this quarter due to lower prices and higher iron ore costs. industrial gas supplier praxair fell 3%. it was at a new high on monday. earnings today beat the street, even though revenues rose less than anticipated. and miner freeport mcmoran slid almost 3%. gold and copper prices slipped today as the dollar recovered slightly. not all were losers in the material sector, though. twice the number of international paper shares traded after the company's earnings. here are those results, coming in much stronger than estimates. revenues jumped with strength in its paper and packaging businesses, helped by emerging markets. shares of i.p. jumped 4.5%, hitting their highest price since early august. energy stocks also were weak. with the dollar getting a slight bounce, oil prices then saw a bit of selling pressure. conoco phillips dropped more than 1% after its earnings and strategy update. last week, shares of c-o-p hit new 52-week highs before this latest selling pressure.

this week, earnings were better than expected for conoco. it's in the middle of a restructuring effort, which it now says will include selling some refining operations. also on the block, exploration assets in the u.s. and a liquified natural gas project in australia. conoco wants to raise money to pay down debt and more tightly focus the firm on production and exploration. tomorrow morning, it's exxon mobil's turn for earnings. and stronger refinery margins and higher oil prices are expected to help its bottom line. shares were down 1% today. over the past year, the stock is among the worst-performing dow industrial components, down 10%. speaking of dow stocks, procter & gamble gave us its unique read on the global consumer with its quarterly update. we'll have the latest data here, with earnings coming in two cents better than expectations, even though they were down from a year ago. margins were hurt by higher commodity costs, something we heard about yesterday from competitor kimberly-clark.

shares squeezed out a small gain. they've been trading between $60 and $64 per share since last november. p & g finds demand "dampened" in the u.s. moving on, compellent technologies has been in focus since august when hewlett- packard and dell started their bidding war for cloud computing firm 3par. today, we saw just how good business has been for compellent. here are the last 180 sessions for compellent. today, it rocketed up by more than 32% to a new high. it was a record third quarter for earnings, and the fourth quarter projections came in better than forecast. shares were trading in the low teens in august. tonight? over $26 per share. and that's tonight's "market focus."

the most profitable place for mutual fund investors this year has been precious metal funds, according to data from lipper, and the record rise in gold prices gets all the credit. tonight's "street critique" looks at the metal, and the companies that dig it out of the ground. rachel benepe is portfolio manager at first eagle gold fund. tom winmill is portfolio manager at the midas fund. both of you, welcome to "nightly business report", nice to see you. >> thank you. >> great to be here. >> tom: both of the funds own gold and gold mining stocks, but rachel the single biggest position in your fund is bull young. so why concentrate on the melt itself? >> first, in our opinion we wanted to buy the cheapest gold possible, so if that gold is above ground, the bull young --

bull yon, or blofr the yound, we're fair any -- we just want to buy the cheapest possible. but there was a time when boullion was the cheapest option. >> tom: how about these days, which is cheaper? >> we've been finding a lot of opportunities with the companies because of the etf, people just automatically buy the metal because it's easy to do that and they're missing opportunities with companies where they are not really reflecting $$1300 gold. >> tom: tom, your fund is focused on many ofs who gold miners so, do you agree, is the gold above the ground more expensive than in the ground? >> well, it's not as much of a bargain now as it was two years ago. boullion is up about 75% since then and midas went up about 230%. so a lot of the bargain element has gone out of the stocks, but there's still good bargains to be found. >> tom: we'll talk about one of those that you both like. rachel, we want to take a look

at your fund, about 20% in the past 12 months, with five stars. how do you hold the boullion is it physical? >> we own the physical gold. in our view that's our safest and kind of the one investment we don't worry about. so since we can audit our own vault at any time, we can have better control over it. >> tom: so you take possession of the physical as well? >> yes. >> tom: and tom your fund meantime up about 40%, it gets a one-star rating from morning star, and you concentrate clearly on some of the gold equities. how strongly related to you find gold prices and gold equities in the current environment? >> they are very strongly related in the last year and a half, i'd say there's been about a one and a half times move in the gold equities to the boullion price, we expect that to continue. it's been about one to three times the move in the equities to the boullion and that's mostly because of the leverage

in gold producing companies. but the growth is the most strongly correlated indication of equity price appreciation, look for growth in reserves and look for growth in production. >> tom: how about the difference in how an investor should approach these two asset classes is -- rrz we view both of them as our hedge. we view gold mining companies... in our view if you're comparing 1300 for a gold bar or 1300 for a gold mining stock, that's kind of how we evaluate it. we use a proprietary mining model to determine if we hi the stocks are cheaper or if we think the buollion is cheaper. >> tom: tom, do you have any price outlook for the end of the year? >> well, since the beginning of the year we were calling about 1400 by the end of this year and we're looking for about around 1600 by the end of next year.

we think the change that's going on with inflation on the scene and perception of investors, you'll want to be in a hard asset. >> tom: new crest mining, an over-the-counter australian miner, a position in both of your funds in terms of gold stocks. rachel, you first, give us 10 seconds pitch on newcrest. >> we tend to like long-lived assets, companies with lots of reserves in the ground. and ones that are lower cost or that have lower cost curve. newcrest has been cheap. we add, we've been adding throughout and just, it's an asset we also owned and it a long-lived time. >> tom: tom, 10 seconds, why newcrest? >> all the above plus the fact the ounces of production will go from 2.8 not 3.8 million in about four years, strong quality management team. >> tom: and fair to say you both have positions in it with the

funds, is that correct? >> yes. >> correct. >> tom: our guest this is evening, rachel benepe and tom windmill with the midas fund. >> thank you. >> susie: here's what we're watching for tomorrow: quarterly results from microsoft, royal dutch shell and sunoco, along with weekly jobless claims. then, with more and more americans focused on finding a job and holding onto their homes, we continue our coverage "midterm 2010: it's the economy." we look at tea party economics. it looks like the end of the road for a tunnel project connecting new jersey and new york. new jersey's governor chris christie is standing by his decision to cancel the country's biggest public works project. while it was expected to create 6,000 jobs, christie says his state would be on the hook for about $3.5 billion, and it cannot afford that. the tunnel was supposed to double the number of trains that can run into manhattan under the hudson river.

>> tom: more corruption in small town california. four current and former officials of the city of irwindale are accused of spending $14,000 of taxpayer money on a new york city trip that included broadway plays and baseball games. the four, including a current city council member, were supposed to be in new york to work on getting a higher bond rating for their city. recently, eight officials from the nearby town of bell were accused of misusing $5.5 million in public funds. @%

>> susie: with the nation's jobless rate hovering near 10%, the recession has created a whole new class of workers. they're called "perma-lancers," and tonight's "money file" commentator says it's indicative of the new "you're on your own economy." she's manisha thakor, co-author "on my own two feet: a girl's guide to personal finance." >> permalancing-- is it fair or outright exploitation? the answer depends upon what role you think employers should play in an employee's life. short for permanent freelancer, a permalancer works the same hours as a full-time employee. just without benefits. permalancing started as a corporate response to the sky- rocketing costs of traditional employee benefits like health care.

seeing the writing on the wall, other employees began to leave the corporate womb in search of safer ground on their own. i know, because i'm one of those permalancers. and as an author and a speaker, i'm left to my own devices to sort out everything from my healthcare to my quarterly income taxes. as for paid vacation? forget about it. if i don't work, i don't earn. on a good day, it feels as if my inner teddy roosevelt-inspired rugged individualist has been unleashed. on a bad day, it feels as if i've been sent into a stormy sea in an inflatable lifeboat. but on every day it's clear to me that what is missing is a wider acknowledgement that the employment landscape in america has taken a permanent, sharp right-hand turn. employers are no longer serving as society's financial safety net. since we can no longer depend on a corporate employer to take care of us, it's extra important for all americans receive basic financial survival training. going forward, perhaps we're all permalancers now.

i'm manisha thakor. >> tom: that's "nightly business report" for wednesday, october 27. i'm tom hudson. good night everyone, and goodnight to you too, susie. >> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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