>> tom: job growth is slowing and housing remains in the cellar, so will it be another summer of softness for the u.s. economy? >> keep adding up a whole bunch of special factors that you hope will go away over the three to six months. but, it's clearly at best what you might call a soft patch with an already slowing economy. >> tom: while the economy may be crawling along, apple eyes the virtual skies. c.e.o. steve jobs comes back to announce its cloud computing service, taking on amazon.com and google. you're watching "nightly business report" for monday, june 6. 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 >> tom: good evening and thanks for joining us. susie gharib is on assignment. worry, worry and more worry about main street dominated wall street today. stocks sold off again, with the s&p 500 extending its slide to a fourth session. the index is now at its lowest level since mid march. there was no fresh economic data out today for investors, but recent reports point to an economy that has stalled. still, as suzanne pratt reports, it may be more of a speed bump for the recovery rather than a

major pothole. >> reporter: two years after the recession ended, the u.s. economy should be growing at a very healthy clip. instead, new jobs are hard to come by, factory output is slowing and buyers have put on the brakes on car sales. on top of that, consumer confidence is slipping and the stock market is sliding. the big question is whether the economy's so-called soft patch will expand into something more dangerous. economist cary leahey says the risk of an extended slowdown is very high. >> you can't help look at the numbers and see that when energy prices get as high as they are-- with many people encountering $4 a gallon when they go to the pump-- that has traditionally been a flash point for the economy and slower growth ahead, if not a downturn. >> reporter: six months ago, goldman sachs thought the economy was picking up steam. today, the bank's economic team says that was the wrong call. while the firm's chief economist jan hatzius says the u.s. has

hit a soft patch, he does not believe it's headed for another recession. >> i do think you'll see some acceleration over the next few months. but, even if you look three months down the road or six months down the road, you'll probably still find that we're not growing as fast as we'd like to see. >> reporter: so, what would help the economy gain momentum? you guessed it. some experts are calling for more love from the federal reserve. it would most likely come in the form of more asset-buying by the central bank, also known as a third round of quantitative easing, or qe3. >> that's a relatively high hurdle. we don't really expect the fed to go there. if they did, i do think it probably would have some effect. but, at this point the likelihood is still relatively small. >> reporter: and how about the chance of a different kind of government love? >> you'd like to have an old- fashioned pump-priming kind of project, or better yet a smart program, and i'm sure people are going to talk about it, to help firms create jobs. but, there's just no sentiment

for that at all. >> reporter: extended slowdown or soft patch, experts say the good news is we're probably not headed for a double-dip recession. the bad news is that, for many americans, the economic environment will continue to feel pretty darn awful. suzanne pratt, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: a weak start for the major averages this monday. the dow fell 61 points, the nasdaq lost 30 and the s&p 500 off 14. trading volume kicking off the week with nearly 955 million shares moving on the big board and almost 1.9 billion on the nasdaq. as the european union and the international monetary fund work on a new aid package for greece, support is building for greece to launch a debt exchange. under that scenario, greece would swap soon-to-mature debt for bonds that mature further out, but the plan is not without problems.

it could also trigger a technical default. nobel prize-winning economist peter diamond has withdrawn his candidacy for the federal reserve board of governors. he wrote about how distorted the confirmation process has become in an op-ed piece for today's "new york times" called "when a nobel prize isn't enough." higher oil prices and turmoil around the globe will take a bigger bite out of airline profits this year-- so says the international air transport association. it cut its 2011 profit outlook today by more than half to $4 billion. last year, the industry earned an estimated $18 billion in profits. still ahead, we head to cleveland, ohio, for tonight's "beyond the scoreboard," and a lesson in losing the fight for top talent. one of the hottest trends in technology is cloud computing. and one of the world's top consumer technology companies is reaching into the cloud. >> reporter: for the second time since going on medical leave in january, apple c.e.o. steve jobs

made a one-day return to center stage, announcing apple's new icloud service. it allows users to store music and other data online without having to download songs from their home computers. apple joins amazon.com and google in the race for cloud customers. apple's icloud has a similar business strategy to amazon's cloud drive service. both offer up to five gigabytes of storage for free. apple will charge $25 per year for a new service that matches music you own but didn't buy from itunes to be available on the cloud. additional storage space at amazon starts at $20 per year. meantime, microsoft focused on its video game platform, the xbox 360, and its kinect motion device. in the two years since announcing the kinect, sales have been hot-- more than 10 million worldwide. microsoft unveiled a library of new video game titles for the holiday season, access to google's youtube through the xbox network, as well as other live tv programs.

microsoft also adds a search function to its video game console, using voice recognition technology. dennis durkin is the chief operating and financial officer at microsoft's interactive entertainment, the division responsible for xbox. >> you know today how difficult it is to find content inside your digital television ecosystem, and now we've solved that problem for consumers today. so whatever show you want to watch, whatever movie you'd like to see, whatever game, whatever piece of content you're going to want to find, we're going to make that super easy for a family. >> tom: lance ulanoff is the editor-in-chief of pcmag.com. he joins us tonight from san francisco. a couple of tech giants with two different announcements. let's begin with apple's new initiative. what does the icoud from apple which is a service mean for apple's traditional focus which has been on hard ware, iphones, i pads and what not? >> right, well it is kind of shocking what steve jobs said. he demoted all hardware, called it basically just devices. so you know, they're

basically portals for the content that you're going to access. although, you know, apple's icloud service doesn't keep your entire library in the clouds all the time. i mean it has the record of your information but you still have to play it locally. but whenever you buy a new gadget, a new ios gadget you can simply download what you already purchased to that device. that's the benefit. >> tom: what's the business opportunity here? as i mentioned cloud computing is as hot as social networking in terms of technology phrases. so what's the opportunity that apple sees? >> well, i think first of all they can't deny the cloud. they can't deny that people are becoming more and more comfortable with storing things other than their local devices. but it also lowers the barrier. you know, you actually feel more comfortable buying stuff from a company that says you can buy it once and have it everywhere. and they will probably make more money that way. you know, i think that it is an opportunity for them to break down the barrier that

people may feel about buying a new device. you know, people hold on to their hardware a long time because they are afraid of what they will lose. now they don't have to have that fear. >> one of the strategies here is its match itune service with which allows folks to keep what they bought and ripped for years instead of having to buy new music. this really speaks to apple's strong relationship with the music industry, doesn't it? >> strong, powerful, maybe arm twisting. i am really shocked they were able to do this. this is kind of astounding because basically they've convinced the major labels not to charge people again to download a better digital version of the song they may have ripped. unless you have ripped it at a higher bit rate but you're going to get a noity radios, no digital rights. >> 256 kilobyte copy of the music that you would have ripped simply because they could match and say yes, we do have this in the library. that means dow it once.

rip once, have it forever. and the labels don't get paid again. but there is that 24.99 a year fee. and you know, if enough people do that, i bet the labels do get paid. >> tom: i got to move on to microsoft in our final mine here. because it's announcement focused on video gaming and functionality. greater impact do you think for the consumer compared to the shareholder for microsoft? >> yeah, yeah, there is a bunch of feature enhance. s. getting more tv access. ubiquity is surgeon. they are taking one of their more powerful services which is doing quite well against google, binge, and putting it in x box iii 60. voice enabled. you never touch your control. you just basically speak and it's there. that is a nice idea. and of course the game updates, haloone of the most popular titles ever is going to get a refresh, even a new triology in 2012. that is big news for gaming

fanatics. >> tom: can it drive bigger growth for microsoft or does it keep pace for microsoft. >> i think it keeps pace. they sold 8 million kinects before the end of the year, 2 million after. that slowed down a little bit this is keeping pace. >> tom: we appreciate the update from san francisco tonight. it's lance ulanoff, veteran chief of pcmag.com.

note, more red on the screen and >> tom: week begins on a weak note, more red on the screen and selling in latin america. the june weakness for stocks continues with the major indices continuing their sell-off. pull out and let's start our focus on the past 90 sessions of the s&p 500 index. here it is, last three months plus. with today's drop, we're down about 4% from the last day in may. the index still has about 30 points to go before it retests its march low. financial stocks were among the weakest today, and bank of america led the losers inside the dow industrials. b. of a. sank another 4%. look at this move lower. the selling has picked up this month, pushing the stock down to a new 52-week low.

let's roll that out. in fact, this is b. of a.'s lowest share price since the spring of 2009. other major banking stocks took hits. citi fell 4.5%. j.p. morgan dropped 2.5%. wells fargo shed more than 2%. rochdale securities analyst dick bove recommended selling wells fargo. energy was the other weakest sector. financials and energy were the two weakest. halliburton was among the biggest losers, falling 4.5%. the u.s. supreme court brought back a decade-old securities fraud lawsuit. the case claims halliburton mislead investors about asbestos liabilities and a 1998 merger. it goes back to an appeals court. in advance of wednesday's opec meeting on oil production, one bright spot among energy-related stocks was oil tankers. overseas shipholding and frontline gained 4% and 3% respectively. lazard capital markets thinks opec may increase production slightly, but that will help the

rental rates for oil tankers. both of these stocks are down at least 30% over the past year. watch shares of package maker temple-inland. after closing at a its lowest price of the year, the stock shot up 43%-- up to $30 per share after the close. it has received an unsolicited buyout offer from international paper, offering $30.60 per share. temple-inland calls it "grossly undervalued." the market likes i.p.'s bid. the stock was up almost 4% after announcing its hostile offer for temple-inland. it's is a $3.4 billion cash offer. while u.s. stocks have been weak, we saw a stiff sell-off in latin america, lead by peru. this is the i-shares peru exchange-traded fund-- falling almost 14%. investors fled after the election of a new left-wing

president and concerns about new taxes, especially on red-hot miners. among the peruvian companies with american stocks, miner buena-ventura dropped 15%. credit-corp is the largest financial services provider in peru. it fell almost 19% to a new 52- week low. three mid-cap healthcare stocks saw stiff selling. biotech exelixis lost a fifth of its value on worries about a cancer drug side effects. diagnostic equipment maker gen- probe fell almost 13%. it had disappointing results looking for a buyer. and biotech united therapeutics dropped 6% on disappointing blood pressure medicine study results. and that's tonight's "market focus."

>> tom: goldman sachs is taking a tougher approach in rebutting a senate investigation that concluded the financial giant misled clients by shorting mortgage securities it was selling. the firm is telling regulators and prosecutors that the senate investigation inflated the size of goldman's short positions and contains some errors, at times confusing net income for net revenues. but securities lawyers like dan hurson say the strategy is a risky one that could anger potential prosecutors. >> the mere fact that the numbers were off a bit in the senate report and the big short wasn't as big as maybe it was supposed to be-- it was still a short. and there were still, i would argue, certain obligations. goldman had to disclose adverse interests to the people who were buying these products at the same time they were sending emails around saying what junk

they were. >> tom: senator carl levin led the investigation which produced the 600-plus page report, but his office declined to comment today. fannie mae and freddie mac's efforts to prevent foreclosures slowed dramatically during the first quarter. the federal housing agency says its twin mortgage giants it oversees launched almost 64,000 trial home loan modifications during the quarter. that was down sharply from the fourth quarter, but permanent modifications rose to 320,000. however, when the program was announced two years ago, fannie and freddie said they expected to help between three and four million homeowners. >> tom: here's what we're watching for tomorrow: federal reserve chairman ben bernanke will be in atlanta talking about the u.s. economic outlook. and the fed reports on consumer confidence for april. also tomorrow, our "word on the street" is "backbone." we'll look at three storage and web traffic companies that power social media giants like linkedin and groupon.

another guilty plea in the bernie madoff ponzi scheme. former madoff payroll manager eric lipkin pleaded guilty today to several charges, including conspiracy, bank fraud and falsifying bank records. investigators say lipkin pocketed about $9 million through phony stock trades. he's the third person in the case, other than madoff, to admit guilt. lipkin faces up to 70 years in prison. in another new york city courtroom, former international monetary fund chief dominque strauss-kahn pleaded not guilty. strauss-kahn is charged with the attempted rape of a maid at a manhattan hotel. he entered his plea this morning in new york state supreme court. he'll remain under house arrest until his next court date, scheduled for the middle of next month. it's not uncommon for companies

it's not uncommon for companies to fight over top talent. last month, electronic payment company paypal sued two former employees, claiming they took trade secrets with them when they went to work for google. tonight's "beyond the scoreboard" looks at the financial impact when high priced talent moves. rick horrow is a sports business analyst and c.e.o. of horrow sports ventures.

he joins us from cleveland. great to see you, rick, of course we're talking about the defection of lebron james to miami, from where you are tonight in cleveland about a year ago, most employee changes though clearly aren't this high profile so how is cleveland one year later? >> cleveland one year later is just fine. fred-- the lawyer involved with the greater cleveland partnership says to us that $7 billion in construction happening, not bad for a middle market emerging from a recession. $600 million casino down the street, owned by the guy who owns the cavaliers. 550 million dollar medical part, convention center being done. the flats being redeveloped, $250 million phase one hotel, retail projects. international investment through cleveland incentive program. they're doing just fine without lebron james. >> tom: so these are all long-term projects. it takes planning to get those up and running, a lot of construction to happen. what about the ripple effect though of losing a talent,

not just in the nba but an industry? >> well, if this were just a widget company it would be a different story but the impact psychically of losing lebron james, pretty significant, especially to the dreaded miami. remember i was part of the ownership group or the creation of the miami heat way back when. and i decided to wear this driving into cleveland. listen, the they weren't too excited, i want to tell you. >> tom: they weren't respecting you because you had a t-shirt on, not a suit. miami may be in this year's nba finals. while the team clearly has increased its value, what is interesting to note, we will look at this it is not up as much as cleveland's value is down. in other words, why the miami heat is more valuable team one year after lebron james, the cleveland cavaliers have seen its value go down much more. value has actually been destroyed here, horrow? >> well, yeah t has. and the bottom line is that 26% is pretty significant. because it's over 120 million dollars.

the let up 60 and 17% but also remember the cavaliers lost only-- excuse me, 8 of their first 45 games. not really good with lebron. they had the number one and number four draft pick for next year. so basketball fans in cleveland are trying to move on. but there really has been a significant transference of value. >> tom: one place that they have been able to move on to is, of course, on to major league baseball. not all is lost in cleveland because the indians there in cleveland are a surprise win. at the top of the american league central standings. but look at the business here. the payroll forth indians $49 million, the same winning percentage of the yankees at over $200 million. talk to this point. doing more with less. >> well, and they're inspirational. 84% increase in game day purchase tickets. in may, 130% increase in television viewership so maybe the fans are trying to take out their anger on basketball by watching more baseball. i think it's the cleveland indians are doing more with less. there are nine teams in

baseball that are overleveraged according to baseball offices including new york, chicago, l.a. cleveland is not one of them. doing very, very well. >> tom: performance is what counts ultimately. rick horrow with us from cleveland, the c.e.o. of horrow sports ventures. that's "nightly business report" for monday, june 6. this is the time of year to support your local station. 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 was made possible by contributions to your pbs station from viewers like you.

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