>> when we said we're serious about cutting spending, we're damn serious about it they can keep their word and significantly cut the deficit, or shut down america's government >> susie: the clock is ticking down towards a federal government shutdown. it's looking more likely that when the clock strikes 12, many government functions will come to a halt. >> tom: what could those closures mean for you and your investments. you're watching "nightly business report" for friday, april 8. 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 >> susie: good evening, everyone. it's crunch time for uncle sam and the u.s. budget. unless lawmakers can agree on a budget deal, tom, the u.s. government will shut down at midnight tonight. >> tom: susie, the clock is running out. it looks like negotiators have agreed on the overall price tag of budget cuts: $38 billion. but republicans are still demanding policy changes that democrats are not willing to accept.

one issue holding things up-- a provision to end government funding of planned parenthood. >> susie: here's darren gersh. >> reporter: republicans and democrats remain where they were a day ago-- close, but not close enough. senate majority leader harry reid said policy issues still divided the two sides with republicans refusing to compromise on funding for family planning services. >> they can keep their word and significantly cut the federal deficit, or they can shut down america's government over women's access to health care. if that sounds ridiculous, it's because it is ridiculous. >> reporter: house speaker john boehner rejected that characterization. the speaker said almost all the policy issues have been worked out. the sticking point is still spending. >> we're not going to roll over and sell out the american people

like it has been done time and time again here in washington. when we say we're serious about cutting spending, we're damn serious about it. >> reporter: talks continued behind closed doors this afternoon. senate majority leader harry reid said staff was also working on a one-week extension of government funding that would also pay the troops through the end of the fiscal year. that funding bill would be ready in case negotiators wrap up work on an agreement to fund the entire government for the rest of the 2011 fiscal year. of course, that assumes more progress is made in private, and judging by what's being said in public, that won't be easy. >> susie: darren joins us now with more on the budget crisis. hi, darren. here we go again. >> reporter: yes. back at it. >> susie: exactly. so the way you left off in your report, it sounds like this could happen. i mean, how long could it last, the shutdown? >> reporter: that's the problem, nobody knows.

i have talked to a bunch of people on the hill and they tend to be more republicans who say that some of the things, some saying it could be short, not last very long, maybe go through the weekend and that they would get back to work, they would find a way to get the government back to work by monday, when most federal workers report for work. but nobody knows for sure. and once they get out of the room and stop talking, it's very hard to get them back in the room. >> susie: let's say it goes beyond the weekend, drags on a little longer. what does this heen for the government and what does this mean for american citizens? >> reporter: let's run down what would happen here. so the small business administration would be closed. these are the agencies that are important to business. f. h. a. lending, the federal housing administration, makes a lot of mortgages right now, supports the housing market, they would not process new loans. the s. e. c. which regulates the stock exchange would be mostly closed, barely doing anything to monitor what's going on in trading.

the commodity futures trading commission also on a skeleton staff. mostly not doing much work to monitor what's going on in trading. national parks would be closed. the i.r.s. would only process electronic returns, not paper returns. no new social security applications for social security benefits would come in. health and safety issues would still be open. so law enforcement, national security, social security checks would go out. medicare would make payments. and you'll be able to mail your letters so, the post office will be open. >> susie: and the list goes on. as you know -- >> reporter: very complicated. >> susie: and from a lot of the people i've been talking to, i'm sure you've been hearing the same thing, the american public is fed up with all this bickering going on in washington. what's would you say are the political and other risks if the government does shutdown? >> reporter: this is fascinating, this is very interesting because i think a

lot of what's going on here is that for the two parties for the strongest supporters this threat of a shutdown, this battle is intensifying their support. so in some sense this is working for the parties or for both sides. so women's groups want democrats to fight for funding for pro-choice, republicans are showing that they are going to work hard for pro-life issues. but it's the independents who could be able yen it aed by all this, the people who aren't that strong politically might get fed up and it's unclear whether they're going to blame both parties or one or the other. >> susie: a lot of blaming, messy business. we'll see what happens over the weekend. thank so you much, darren, once again. >> reporter: thank you, suzive. >> susie: we've been talking with darren gersh. >> tom: all week long investors and traders were monitoring those washington negotiations. despite the excitement in the nation's capitol, stocks only fell modestly today. the dow lost 29 points, the

nasdaq slipped nearly 16 and the s&p 500 off five. big board volume tapered off from thursday's pace to 821 million shares. nasdaq volume was light as well at 1.6 billion shares. suzanne pratt reports. >> reporter: here's a big shocker for stock investors, the teflon market has pretty much shrugged off the threat of a government shutdown. investors are watching lawmakers duke it out in washington. but, market pro stephen wood says the budget negotiations are viewed on wall street as political theater. >> if critical services start getting impinged, which my understanding is they would not be. there's probably not going to be that big an effect on the market as long as there's negotiations going into place. >> reporter: the u.s. government has been shuttered before. the last time was during the clinton administration. in a two-month period spanning from november 1995 to early

january 1996, the government shut down twice, yet the dow actually gained ground. still, economist david wyss worries what an extended shut down would mean for stocks because of what it could do to the economy. >> you need to get some stuff done through the courts, for example: bankruptcies, foreclosures. all of that gets delayed while the government is shutdown. for a couple of weeks it doesn't make a lot of difference, for a >> reporter: investors, economists and policymakers will also have to do without crucial economic data if the government closes. retail sales and inflation numbers are due out next week. >> it's sort of like sailing a ship. you know if you disconnect your gps system for a couple of hours, you pretty much still know where you are and what you're doing. the longer is stays disconnected the farther off course you can get. >> reporter: experts say for now, they're more concerned about what rising oil prices could do to stocks than a government shutdown.

today, crude oil futures in surged to almost $113 a barrel. suzanne pratt, "nightly business report," new york. >> tom: still ahead, government shutdown, higher oil prices and the federal reserve winding up its bond buying binge. none of it has tonight's market monitor worried about the bull market. she's elaine garzarelli of garzarelli capital. >> susie: japan restored power today to three nuclear plants impacted by yesterday's earthquake aftershock. despite that major scare, there was no new damage following last month's catastrophic earthquake and tsunami. our guest tonight is watching the situation in japan closely. his company, n.r.g. energy, has been lobbying to build two nuclear plants in texas. the partner in the project is tokyo electric, owner of the damaged fukashima dai-chi nuclear facility in japan. when i talked with n.r.g. c.e.o. david crane, i asked him if he has second thoughts.

>> well, i don't have any second thoughts about the idea of new nuclear power in the united states. i'm 100% confident that our nuclear plant would be very differently swayed from fukushima. but certainly what's happened in japan, to tokyo electric, has been a big setback and also it introduced some regulatory uncertainty into the united states situation. so it's a definite set back for the plant, but i to be have any second thoughts about new nuclear power. >> susie: as you know, mr. crane, there hasn't been a new nuclear plant built in the united states for more than 30 years. given the crisis in japan and all of these concerns, the public's serns about safety, -- concerns about safety, is there really a few for nuclear in the u.s.? >> i think there needs to be a future, because i actually think of nuclear power as the strongest environmental weapon that we have in the fight against climate change. and i actually think the public has questions that they want to have answered as a rult of fukushima, and i

think the u.s. nuclear power has to answer those questions. but if we do answer those questions, i absolutely believe that nuclear power is something that needs to be part of the energy future of the united states. >> susie: when you look at oil prices now at $112, gasoline prices also rising, what is the solution to meet our energy needs outside of nuclear? >> well, i think obviously the country will use a lot more of its own domestic natural gas, and there's a lot more wind being built, solar power, the cost of solar power has come way down. so when you're talking about fuels, energy for transportation like gasoline and crude oil, i think the solution is what we're talking about here today in texas, which is to move to electric vehicles in a big way. >> susie: let's talk a little about those electric cars. you're standing in front of a charging station for electric vehicles. your company built it. do you see building more of these? what are your plans?

>> well, absolutely. this is the first charging station today we've opened up the first fast charging station, privately funded in the united states here in dallas, texas. and we have a plan to create a network of these chargers in the dallas fort worth area and the houston area. so those will be the first two major urban areas in the united states that are basically have the infrastructure to support electric vehicles in a major way. >> susie: are there enough electric vehicles on the road to justify that kind of expansion? >> well, there are absolutely not enough electric vehicles as we stand here today in april of 2011. but by 2012 there could be 10 or 11 plug-in vehicles available to the american consumer. and the reason we've gone a little early in sort of building out this charging network is because we want the american consumer to get over this range anxiety issue that comes with electric vehicle ownership and get to range confidence. very few people want to buy a car that they don't know where

they'll be able to quite. and by having these charging stations around dallas, fort worth and houston, people will have confidence that they can use their car anywhere they go in the urban area. >> susie: all right. good luck to you on all of that. thank you so much for joining us tonight on "nightly business report". >> thank you for having me. >> susie: there was a wait and see attitude on wall street this week, between the uncertainty about the budget

and the government shutdown, and anticipation for the kickoff of corporate earnings next week. so running down the numbers for you, the dow was up three points for the week, the nasdaq fell nine, the sp off four points. so tom, the markets closed this week just about where they were last friday. >> tom: yes, pretty much. there was a lot of sound and fury in the market all week as well as today new york doubt about it. let's go ahead and roll with tonight's market focus. >> tom: the major stock indices closed out the week with some weakness, but several commodities were red hot. one market consequence of the looming government shutdown is the dollar. the dollar index tracks the dollar against a basket of six currencies including the euro and the swiss franc. it has broken through its lows from month to drop to a new 52 week low. don't forget the european central bank this week raised its interest rate, which also puts pressure on the dollar.

that's because accounts in europe may pay higher interest rates than american bank accounts. the drop in the dollar helps fuel the commodity rally. this is the price of oil going back to september 2008. oil traders had been watching the $110 per barrel, as this is where oil paused during its stiff sell off two and a half years ago. with today's 2% jump, oil is over that level tonight. the dollar weakness also continues to feed the rally in metals. gold and silver continue setting new highs. and corn prices are at new all- time highs as well. one other place we may be seeing some affect of the budget impasse-- government bonds. this is the interest rate on a 10-year government bond. it nearing its highest rate since february. higher rates mean lower bond prices.

in today's stock market, with the oil rally, it's no surprise energy stocks stayed strong. the sector leaders were drilling contractor nabors up 3.5% to a new 52 week high. investor firm macquarie repeated its outperform rating. integrated oil company murphy also is at a new high. murphy and occidental petroleum each rallied 2.6%. leading the sector losers, financial stocks. this financial select e.t.f. fell about one percent on light volume. google finally got the government's green light to buy i.t.a. software. i.t.a. makes software for airfare search websites. under a settlement with the justice department, google will have to license i.t.a. data to other websites and it must continue to support that software. google shares were down a fraction with the broad market. this deal was first announced back in july when google was near this low.

but the government okay comes after travel website expedia's announcement last night that it has preliminary plans to split into two companies. that led to today's 13% jump. the plan would separate expedia's trip advisor business, which uses i.t.a.'s software. disk drive makers seagate and western digital were moving up today. seagate added almost 8% after announcing a stock dividend and gave an upbeat quarterly update. competitor western digital added 2.7%. finally, some big drugmaker stocks may be in focus next week, especially if there is a government shutdown. on tuesday, a food and drug administration advisory panel is scheduled to talk about new uses for cancer medicines from pfizer and novartis. those shares were split. merck gained 1%. it has a hepatitis c treatment that is scheduled for f.d.a. action next month. and that's tonight's market focus.

>> susie: the securities and exchange commission is considering whether to ease rules on private companies issuing shares. one issue that's being reviewed: the 500 shareholder threshold meant to mark the transition to public ownership. that's gotten more attention recently as wall street banks and electronic markets offer investors a chance to buy and actively trade stakes in tech firms like facebook and twitter before they go public. >> tom: here's what we're watching for next week: monday, alcoa kicks off earnings season. c.e.o. klaus kleinfeld joins us with the results. later in the week, we'll also see earnings from big banks

including j.p. morgan chase and bank of america. as april 18 draws near our tax expert kevin mccormally is back. monday, if you're running way behind, tips on filing your 2007 return before it's too late. >> susie: johnson and johnson will pay $70 million to settle civil and criminal charges that it paid bribes and kickbacks to win overseas business. it's the first major settlement since the obama administration started cracking down on the pharmaceutical industry over a year ago. j&j was accused of paying doctors in several european countries and officials in the iraqi government. the company did not admit or deny guilt. >> tom: starting next week, toyota will begin cutting production at its north american plants adjusting for supply disruptions from japan. the automaker hopes reducing its work week will prevent it from running out of parts. toyota will produce 35,000 fewer vehicles in north america from mid-march to the end of april. that's when the company will re-

assess its production plans. >> tom: not the threat of a government shut down, nor high energy prices will knock down the bull market in stocks. that's the prediction from tonight's market monitor guest. elaine garzarelli is president

of garzarelli capital. welcome back, always nice to see you. >> nice to be here. >> tom: what makes you so confident in higher stock prices with all the uncertainty that remains? >> well, basically, my indicators for the stock market are bullish. they're at 76% level. and they need to go down to 30% for a major bear market. we're down below 43% for 10 to 15% correction. and basically there are economic cycle, monetary valuations, and sentiment. and those are the four categories of my indicators. so it's fundamental for the most part. >> tom: i want to ask you about oil in a moment. last fall the last time you were on with us you were bullish and your indicators were as well. you were looking at the time at the sm for above 1300. we're above that now. so do you have a price target in mind? >> for earnings for this year, assuming that oil prices stay where they are now, which is pretty high, i have 94 for sp

earnings, and for next year i have 102.50. so if you just multiply a 15 multiple by that, which is conservative, our models say 17 would be better based on the baa bond rate. you get up to 1500, on next year's earnings. 2012 earnings. rrp real quick on oil, what price is going to start to concern you? >> i would say 128, 130. we'd have to change our forecast for a much lower growth. >> tom: you new picks, you like materials, we'll begin with the xlb materials sector, exchange traded funded, clearly has been benefiting from the weak dollar, strong commodity. what do you see ahead? >> well, i think that the materials will outperform the stock market by about two times. so that's a pretty good leverage. the stocks, some of them are dupont, freeport, dow, alcoa. >> tom: all household names

certainly in that kind of global industry. you also like financials, which is an interesting pick, clearly there's been a lot of focus on the finance sector and banks especially. we're ahead of earnings season, and the spider financial exchange traded fund has yet to break out to post recession highs. >> yes, but i think it will. it was lagging a little bit, now it's starting to lead for the last couple of weeks and i think it's the cheapest of all my sectors actually. the stocks in there would be j. p. morgan, wells fargo, b. of a, citi, u.s. bank corp.. >> tom: kind of a valuation play as well. we talked about oil a little and you do like the major integrated oils with the energy exchange traded fund. if oil prices don't move up to your concern level of 128 or so, where do you go from here for the xle? >> well, no, this is based on where oil prices are today. i would recommend xle at current prices, which is about

$113 but this one should outperform the market by two times, it's been the best leader in the last six months of all the sectors, and in there we've got sex son, chevron, slul berger, and halliburton. >> tom: you also liked some fixed income, but the picker here on this one, ead, a wells fargo advantaged income, focuses on junk bond, so ear getting the yield of almost 10%. does that concern you though, as europe is raising interest rates and elsewhere? >> no. the junk bond market should do the same as the s and p 500 stocks. and the reason is because we're in part of the economic cycle where the default rate is the lowest we've seen in many, many years. and it should continue unless we go into a recession if oil prices go to 130, that could be a problem, because it could be recessionary. >> tom: september 17 was the

last time you were here. let's go through four four picks back then, the performance also showing double digit returns, beginning with the industrials, up almost 22%, the consumer discretionary fun moving up nicely as well. tech not the lag ard up only 15%, but the home builders, how about that, 23%. do you still like this quarter felt? >> oh, yes, i still do. >> tom: any disclosurees? >> i have a sector analysis fun that i run and i own all of these, all the ones i mentioned and all the ones from last time. >> tom: there we go, full disclosure, from elaine garzarelli, garzarelli capital. >> tom: that's nightly business report for friday, april 8. i'm susie gharib we hope to see all of you again tomorrow night.

"nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org