>> susie: what goes up must come down. after recently hitting new highs, gold and silver lead a broad sell-off in commodities. >> tom: is the remarkable run for the metals over for good, or do they still have room to shine? you're watching "nightly business report" for wednesday, may 4. this is "nightly business report" with susie gharib and tom hudson.

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. stocks and commodity prices were down today, and susie, gold and silver also dropped sharply. >> susie: tom, the recent sell- off in precious metals accelerated today. silver prices plunged 7.5% to just under $40 an ounce. gold fell $25 to $1,515. one catalyst? word that george soros' big hedge fund is cutting back its position in precious metals. >> tom: and another factor in the selling? maybe new margin requirements

for silver from the c.m.e. group. the commodities exchange has raised trading costs three times in the past week, making it more expensive for investors. and speculators. suzanne pratt reports on whether the outlook for precious metals is tarnished. >> reporter: listen closely and perhaps you can hear the silver bubble popping. having doubled its price in six months, the white metal is down 19% in the last few days. some experts say higher transaction costs for silver futures have left a huge gash in the bubble. but, others like precious metals trader mihir dange mahear dangay say the damage can be repaired. >> it seems like the bubble has bursted. it seems like the end all, be all. we saw below $40 today. i think you'll see it below $40 for some more time. but, in the end it's still a bullish commodity. >> reporter: silver bulls cite the somewhat arcane ratio between gold and silver prices. they say it suggests silver today is still undervalued. quite simply, the ratio represents the number of silver ounces it takes to buy an ounce

of gold. the higher the number, the cheaper silver is compared to gold. in 1980, when silver prices hit $50 and gold touched $850, the ratio fell to a low of 17. in 1991, when silver fell to $3, the ratio peaked at 100. today it stands at 39. as for silver's big brother, gold, its recent pullback has been more muted. experts say that's partly because investors have been selling silver and buying gold. and, analyst jim steele says, there's a long list of reasons to support a continued rally in the yellow metal. >> accommodative monetary policy, fear of inflation, higher commodity prices, in particular-- specifically food and energy prices which have triggered some geopolitical risks around the world, particularly in the middle east, followed, i think, also by sovereign debt concerns in european union and even worries about u.s. debt. >> reporter: many experts

believe both silver and gold prices will resume their upward moves in the coming months, but they also point out silver is likely to be more volatile as the market for it is much smaller than gold. suzanne pratt, "nightly business report," new york. >> susie: here are the stories in tonight's n.b.r. newswheel: stocks ended lower for a third day. the dow lost 83 points, the nasdaq fell 13 and the s&p 500 off nine points. big board volume was above a billion shares, nasdaq volume more than $2 billion. oil prices finished lower as well. as we told you, in new york tradi, crude futures fell $1.81 to close at $109.24. intel announced a major breakthrough in chip design. the company plans to release 3d transistor chips to make p.c.s and smartphones faster and more efficient. they're called trigate transistors.

intel expects them to start showing up in computers next year. >> susie: still ahead, shopping for bargains in retail. hilary kramer is our "street critique" guest. and later, in tonight's "money file," real world advice for college grads. >> tom: the u.s. treasury said today it plans to sell $72 billion of i.o.u.s next week. that's enough to bring the nation right up to the edge of its $14 trillion debt ceiling. raising that debt limit is the biggest battle in washington these days. a key meeting is set for tomorrow with vice president joe biden. as darren gersh reports, topping the agenda will be finding some way to enforce budget discipline. >> reporter: with less than three months to go before the nation hits the debt ceiling and faces default, policy makers say an agreement may hinge on finding some kind of budgetary trigger mechanism. that trigger would force automatic cuts in the federal budget if deficit reduction goals aren't met. finance committee chairman max

baucus says a mechanism like that will be on the agenda for tomorrow's meeting with the vice president. >> whether there will be one, i don't know. what its composition will be, i don't know. there are a wide range of ideas on what it should be, but i suspect that's going to be very high on the list of subjects that we are going to talk about. >> reporter: the president is calling for limits on how fast the national debt can grow. if it tops his goal, automatic spending cuts and tax increases would kick in. those tax increases are a problem for republicans like utah's orrin hatch. >> if it's a trigger that amounts to automatic taxation, then i'm against that, because i don't think it is the revenue side that's the problem. i think the spending side is the problem, and we all know it. >> reporter: but if the budget mechanism is aimed solely at cutting spending, policy expert bob greenstein warns republicans will have no reason to reach a deal that addresses all the nation's budget problems.

greenstein says that's one way a bad budget trigger will be worse than no trigger at all. >> the republicans will say, "why should i never negotiate a deal? because if i negotiate a deal with democrats, they'll want to close some loopholes or raise taxes for high income people. hey, if i do nothing, i get these automatic cuts." >> reporter: in 1985, former senator phil gramm was one of the authors of the first budget enforcement trigger. he cautions a new one won't solve the nation's addiction to debt. >> the best thing that you can hope for is that this tilts the process toward compromise, tilts the process towards hard choices. but other than that, congress has still got to do it. >> reporter: political analysts say a budget trigger may be the key to getting the votes needed to raise the debt limit. but like so much else in this debate, no one is quite sure how to shape that trigger to win support from both democrats and republicans. darren gersh, "nightly business report," washington.

>> susie: shares of tesla motors rev'ved a little higher after the automaker reported a quarterly loss smaller than expected. tesla lost more than $41 million, or 44 cents a share. analysts were expected the company to be 52 cents in the red. now despite the loss, total revenues were the highest in the company's history. still, tesla is not expected to make a profit until its second

electric car, the "model s," comes out next year. our silicon valley reporter, robin mcelhatton, recently sat down with tesla c.e.o. elon musk and began by asking how tesla is changing the car-buying experience. >> we're trying to create something that's fundamentally different from the typical car buying experience. we're locating the source in a shopping malls, and there's this interactive videos, you can design the car in the store. you can see what it looks like, pictured in different environments. electric cars are a very new thing to most people. if they're not familiar with how electric cars work, how they, you know what do you do about the range, how do you recharge them, are they safe, what's really cool about an electric car. and so that's the story is about educating people, not just about tesla, but about how electric cars can be fundamentally superior and a better experience than a

gasoline car. >> reporter: you were the first out of the gate to manufacture an electric vehicle sports car, the roadster. you've sold about 1500 so far. how many do you expect to sell total before you stop manufacturing the roadster? >> the roadster is the first viable electric car of the modern era. so it's therefore i think a great collectors item and that's how we've designed the roadster program, to be something that is quite scarce. so that if you're an early roadster customer and you've taken the chance of buying a car with us, then on a new car company with a new technology, well, there ought to be some sort of reward for that. and that's why we've intentionally con strained the volume of the tesla roadster to only around 2400 vehicles. and in fact we'll stop taking orders on the tesla roadster later this year, in the united states, and then early next year in europe and japan.

>> reporter: and you're currently gearing up to manufacture the model f sedan. can you tell me about that, you know, how many do you expect to sell per year, what's the price point there? will it still deliver mid 12's as you expected? >> we do expect to start deliveries in the middle of next year, so things are on track as far as that is concerned. we are aiming for around 20,000 vehicles a year. that will take us several months to reach that production rate. so it will probably be late 2012 or early 2013 when we're at an annualized rate of 20,000 a year. then we'll keep introducing additional products, so at the end of this year we'll be unveiling model x by is, which is a crossover suv. >> reporter: you have federal loans to help you manufacture the model f? >> yes. >> reporter: will that loan, those monies be put into place for future vehicles as well? >> our default plan is to fund

the development of new vehicles by raising private capital. and so it's possible that we may be able to get some additional government loans, but we're not counting on that. if we do get additional government loans, it will speed the process, by which we can accelerate. >> reporter: the company has not been profitable yet. when do you expect that tesla will be profitable? >> we're aiming for 2013. and i think it was possible for bhounl, it was a minor blip, we're proud of that month, but going from the roadster to the model s and ramping up production by a factor of 30, and with all the capital investment that requires, it's difficult to be possible as a whole. but if you look at tesla's business lines, the roadster business line, and our power train business line, those business lines are actually quite profitable in and of themselves. it just that we're spending half a billion on the model s.

but had the model s starts production, not long after it starts production, that we'll be profitable. >> susan: tom, pretty exciting looking car. but switching gears, not much excitement on wall street today. investors are worried about the economy, and the recovery, and that pulled down stocks. >> tom: yes, back down to not being able to climb the wall with economic data, and some earnings disappointments, so let's get to it with tonight's market focus. >> tom: the major stock indices slipped, as did commodity prices-- pushing down the material, energy and industrial sectors. pull out and roll out, the exchange-traded fund following the materials sector. it fell almost 2%. this is the third time it's made a run after $41 only to be turned back. clearly at a level to watch.

iron ore miner cliffs natural led the sector decliners, falling 4%. miner freeport mcmoran shed almost 4% with that sell-off in precious metals and steel maker a.k. steel fell more than 2%. mining equipment maker caterpillar led the dow losers, falling more than 2%. the stock is down $5 from this high of last week after its strong earnings report. shares are up more than 60% over the past year thanks to the commodity boom. intel was the best gainer among dow industrial components, up almost 2%. look at this move here. volume was very heavy, more than 130 million shares. and how about it? the rally we've seen since mid- april after a strong earnings report has taken intel to a new 52-week high. meantime, the semiconductor industry is the latest to host a buyout-- specifically semiconductor manufacturing. applied materials will pay $4.9 billion in cash for varian semi.

varian shareholders will get $63 per share. the buyer, applied materials, fell 1% while varian jumped more than 50% to just below the buy- out price. a rumored buyout offer is official. food giant conagra is going after ralcorp, maker of post cereals. it's a $4.9 billion offer, valuing ralcorp at $86 per share, but ralcorp has said no thanks. ralcorp shares jumped another 4.9% on the public disclosure. another new 52 week high. shares were just below $70 last week just before the market rumors began. they have shot higher here. before the bell this morning, cereal kellogg was among those with disappointing earnings. profits were four cents per share less than anticipated as you can see, shares fell a little over 1%, but volume has picked up in recent sessions as the share price slid from its most recent high.

speaking of the food business, grocer whole foods released these results after the close. earnings beat estimates by a ful nickel per share. up considerably from last year. shares were flat today before the results, but traded up 4% after the bell. shares are up almost 50% from a year ago. earlier, suzanne looked at the sell-off in silver and gold. here's some other commodity sell-offs. cotton, coffee and sugar were not spared the selling. sugar is at its lowest price since september. back to stocks, and another disappointing quarterly report. this one from casino las vegas sands. results were shy of expectations, even though they soared compared to a year earlier. but competitor m.g.m., while it lost money, it didn't lose as much money as feared. revenue increased. how did the two compare? and the two stocks moved in opposite directions. sands fell more than 7% while m.g.m. jumped more than 10%. and that's tonight's "market focus."

>> tom: consumer confidence has been rising and retail sales have been steady. tonight's "street critique" guest also expects our waistlines to continue to expand. she's hilary kramer, editor of gamechangerstocks.com. always nice to see you. you're looking at a men's clothing retailer, casual male. what makes you like casual male, if our waist lines are expanding? >> well, tom, this is a company that has a low valuation, it a cheap price stop, but it's all about the trend. and 33% conservatively of this country is overweight. it's a $7 billion business,

the big and tall male stores. and this is the market leader, at 7%, trying to grow their share of the market to 14% with some really innovative strategies. >> tom: the stock trend at least as of the past couple weeks has been down as it trades below $4. >> exactly, and that to me really has to do with the fact that although retail has been stable there's a lot of concern out there about consumers being able to spend, with inflation so high, gasoline prices up. the number today, really slightly disappointing, so casual male as a small forgotten stock on wall street has, can lose appeal, there will be more sellers than buyers. but it's also an interesting acquisition target for private equity fund that wants a cash flow cow in the right area, with a strategy, and also that has a stellar clean balance sheet that paid off all of its debt. >> tom: around $4, do you have a price target over the next of to 12 months? >> i have a price target of $7 a share, but even if it goes

back to 5.50, investors have made their money. >> tom: let's get some updates, one on teva pharmaceuticals, buying cefhalon. the trend has been lower for teva, do you like the deal? >> i love this for teva, because investors have been worried about the pipeline. do they have enough drugs in the pipeline, they're losing their m. s. drug to a lot of competition and also jenner ix that will come in in another two years. the key is 13 new compounds in 65 trials, this is a pipeline business for them. but they also inherit drugs immediately for the central nervous system, pain killing therapies as well as sleeping disorders. this is really going to give the shares the lift that they deserve and i've always said it's a great stock for value and careful investors who want to protect their -- >>. >> tom: you also like share pharmaceuticals, this one you mentioned back on december 1. stock price has gone from $70 up to above 90.

taking any profits? >> yes. so share -- shire is up 32% since i first recommended the shares. it could get acquired, but i recommend that those that bought that made 32% take 50 to 100% of your money off the table, i've taken 50% off, i'm hanging around for some kind of acquisition, but the premium is already done. you've made 32%, time to move onto other opportunities. >> tom: a couple viewer questions about mortgage insurance. jim wrote in, i bought pmi above $3, it's been trading around $2. what do you see going forward? david asks what will it take to get these stocks to rebound. you liked these both on october 6 as election plays. how about them? >> i have to say, tom, they've been very disappointing for me. it's a longer term horizon for any investors. i'm sitting, i'm waiting, it's about housing rebounding, and also it about regulatory shift to the private market supplying private mortgage insurance.

but it hasn't played out as fast as it has, but i'm sitting around waiting for it to rebound, both of them. >> tom: do you own everything we mentioned tonight? >> yes, i own all of these, but i'm scaling back on the shire. >> tom: thanks, hillary. our guest tonight, hilary kramer with game cha >> tom: you can email us, streetcritique@nbr.com. our guest this evening on "street critique" is hilary kramer with gamechangerstocks.com. >> susie: here's what we're watching for tomorrow: quarterly results from c.v.s. caremark, directv, general motors, kraft and visa. we'll also see chain store sales for april. also tomorrow, our "planet forward" series is back with a big announcement! the george washington university social media project names a winner for the best idea to power the future. >> susie: it's back to the beginning for the jury in the insider trading trial of hedge fund manager raj rajaratnam. a juror was replaced this morning for medical reasons, and the judge told the panel to start deliberating from the beginning. the jury had already been talking behind closed doors for six days.

rajaratnam, the founder of the galleon group, has not been in the courtroom this week. he's undergoing medical treatment for a foot ailment. >> tom: general motors is revving up production of the corvette. the automaker is putting more than $130 million into the kentucky plant where the fast cars are made, creating 250 new jobs. that bowling green plant has been making corvettes for 30 years. at the peak of their popularity in the 1980s, 1,000 people worked at the factory. right now, there are 400.

>> susie: attention recent college grads, in the coming weeks you'll get a lot of advice on how to enter the real world. in tonight's "money file," words of wisdom on navigating your career and finances. here's ramit sethi, author of "i will teach you to be rich." >> as our 2011 college seniors graduate, i'd like to suggest a new, real world education, one that focuses on just three suggestions that can have a profound effect on graduates' careers. the first? negotiate your job offer. very few college graduates negotiate their salary. yet if you do, a ten-minute negotiation can be worth tens of thousands of dollars over your lifetime.

remember, if a company has made you a job offer, they clearly want you-- and they've already spent thousands recruiting you. here's a key phrase you can use: "we're in the same ballpark, so i just want to find a number that's fair for both of us." many of my students have negotiated several thousand dollars in salary increases. next, let's talk about your student loans. you can make dramatic changes in your student loans by doing two things. first, run the numbers using online calculators. you may find that paying an extra $50 a month saves you thousands in interest. second, call your lender. ask them about your repayment options. for example, if you haven't found a job yet, you may get a deferment from paying back loans for a few months. finally, use credit to save thousands. many of us are still using credit card and bank accounts that continue to charge fat fees. switch to online accounts and start building credit. it's not the sexiest advice, but when you go to make larger purchases in a few years-- like a car, or even a house-- having

excellent credit can save you tens of thousands of dollars. i'm ramit sethi. >> susie: ramit has more advice on our website. go to n.b.r. on pbs.org for more tips on negotiating your salary and the best online calculators to figure out the best way to pay down debt. you can also see the credit card company ramit uses and recommends, along with the firms he uses for his checking and savings accounts. >> tom: finally tonight, he may or may not have chopped down a cherry tree, and he may or may not have never told a lie, but one thing george washington did was make beer. we know that because the first president left a handwritten recipe for it, and the new york public library is making plans to cook up the brew. the library's teaming up with a brooklyn beermaker to produce 25 gallons of what's being called "fortitude's founding father brew." it celebrates the library's 100th anniversary. but susie, the stuff won't be sold commercially, so don't look for george washington to replace sam adams on the bar list.

>> susie: that new brand is a mouthful to say. >> tom: yes it is, absolutely. >> tom: that's "nightly business report" for wednesday, may 4. i'm tom hudson. good night everyone, and good night 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: this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org