>> tom: oil prices tumble as the u.s. and the international energy agency pump 60 million barrels of oil onto the market. the goal? easing global prices. but it's not much oil for an energy thirsty world. >> we're looking at a three-day supply here that's being sold, and i think this is more of a political move than an economic move. >> susie: meanwhile, a late day deal on greece helps blunt a tough day of selling on wall street. it's "nightly business report" for thursday, june 23. 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. greece and oil prices-- these were the two hot topics in world markets today. stocks and oil both sold off this morning after the international energy agency stunned investors with news it's releasing 60 million barrels of oil to help the global economy. half of that oil is coming from u.s. emergency stockpiles. susie, the move was in response to the loss of oil supplies in libya and the middle east. >> susie: tom, late this afternoon, greece and european officials agreed on a five-year austerity plan. that news helped stocks rebound on wall street.

u.s. crude oil futures sold off sharply, sliding over $4 to close at $91.02 a barrel, its lowest price in four months. brent crude, which is used to set international oil prices, fell 6%. >> tom: and, as suzanne pratt reports, oil prices might fall even further in the coming weeks. >> reporter: 60 milli barrels of oil is a drop in the proverbial bucket when it comes to global oil supplies. after all, the world blows through more than 60 million barrels of oil in one day. of that, the u.s. consumes 19 million. but some experts say the international energy agency's decision to pump oil onto the market is not because the world needs it; it's because the global economic recovery is in jeopardy and world leaders needed to do something. in fact, oil trader anthony grisanti says oil prices sold off today mostly on concerns about global demand. >> i think that people have

completely overlooked how bad this economy is. we just ratcheted down our growth in this country. i just watched bernanke last night. there was nothing positive at all that came out of his statement. >> reporter: oil prices spiked beginning in late february when violence in libya shutdown much of that country's oil output. but several weeks ago, crude prices began to fall as data showed the u.s. economy hit a soft patch. some traders predict worries about the recovery will push the cost of oil down further this summer. >> i think it could settle around $75, $80 a barrel; gasoline around $3 a gallon. i think the economy will be able to absorb that without a problem. that's a dollar less for gasoline prices than we were at the high. >> reporter: of course, the question remains whether lower oil prices will be the magic bullet for america's economy. suzanne pratt, "nightly business report," new york.

the dow lost 59 points after falling more than 200 earlier in the session; the s&p 500 and nasdaq actually gained ground. >> tom: here are the stories in tonight's "n.b.r. newswheel." fresh signs of the weak recovery in jobs and housing. first up, jobless claims continued to tick higher, rising by 9,000 last week to 429,000 applications. the weekly average hasn't dipped below the key 400,000 since april. new home sales fell 2.1% in may to an annual pace of 319,000 units. that means we're on pace for fewer sales than 2010, the worst year ever for new home sales. but prices ticked higher for the first time since december-- the median rose to $222,000. with gas prices still running

about a buck higher than last summer, the tax man is giving consumers a break. the irs today boosted its standard mileage deduction to 55.5 cents a mile; that's up almost a nickel. still ahead-- too hot not to cool down. we talk about the red-hot chinese economy and its place in global markets. our guest, jing ulrich, head of j.p. morgan china. >> susie: "in abeyance"-- that's how the white house is describing talks to reach an agreement raising the nation's debt limit. republicans walked out of the talks today, saying there was no point in continuing if democrats were going to insist on tax increases. as darren gersh reports, the drama is not yet worrying investors, but it is complicating efforts to reach a $2 trillion package of spending cuts. >> reporter: bond markets greeted news the debt limit talks had broken down with a yawn today. the view seemed to be that this was just another act in a long-

running political drama. two republicans-- majority leader eric cantor and arizona senator jon kyl-- abandoned negotiations, saying democrats were pushing for tax hikes they could not support. the next move may be house speaker john boehner's, but today, he did not give any ground. >> a tax hike cannot pass the house of representatives. it's not just that its a bad idea; it doesn't have the votes and it can't happen. >> reporter: boehner insisted the president needed to get more involved in the talks. but democrats like chris van hollen, a participant in the debt limit talks, charged republicans were pushing their anti-tax agenda at the expense of the country. >> the speaker of the house said it was time for an adult moment- - "adult moments" mean it's time for making tough decisions. >> reporter: at the very least, democrats would like to see some symbolic tax breaks, like incentives for oil companies cut as part of a $2 trillion deficit reduction package.

but many republicans have signed a pledge vowing not to raise any taxes. alex brill worked for the republican staff of the tax- writing ways and means committee. he says republicans fear democrats are demanding a tax increase so they can use it against republicans in next year's elections. >> there is no need, from a budgetary perspective, to bring that onto the table in order to get a deal. that's a political issue. >> reporter: brill expects a short-term debt limit extension will be needed before a final agreement is reached. but political economist tom gallagher says investors are expecting the final product will contain a big fudge factor. >> my guess is that the outcome of this process will be they won't solve the deficit problem, but they will manage it. it will be a step in the right direction. markets aren't showing much concern in the current level of deficits, so i think it will be fine. my guess is it will be a package that the budget policy experts-- you know, the policy wonks-- won't like, but the market will be fine with. >> reporter: inside the beltway,

the break-up of the talks is seen as a sign the parties are now getting to the really hard work. and that will require the president and the speaker to find some common ground. darren gersh, "nightly business report," washington. >> susie: joining us to analyze these developments-- constance hunter, chief economist at aladdin capital. hi, constance. >> hi, susie, how are you? >> susie: good, thank you. let me pick up where we left off in our reporting with this question, will lower oil prices be the magic bullet to fix the economy? what do you think? >> well, it's certainly a big bullet. it's not necessarily going to be the magic bullet. everybody has been feeling the oil pinch, whether you're a household, an individual, you're running a company. and so it certainly will help because it will reduce that cost for business owners and for families. it will allow them to spend on other things, other than oil. >> susie: will it boost consumer confidence?

>> it could. it could if you have other things also happening at the same time. but i think there's three big structural problems overhanging our economy. one is our it's structural problems with jobs. one is the structural problem with housing, and one is the structural problem with the debt ceiling and the deficit you talked about earlier. >> susie: now, this move by the white house and the i.a.e. made a lot of people think that are things that bad in the global economy? it got people more nervous rather than lesnervous. >> well, i certainly got the-- it certainly got the markets to sell off and that's partly because oil stocks fell off. i'm not sure that translates to main street being nervous. i think main street is going to feel some relief. >> susie: i mised the last part of what you were saying but i would like to come back to why the stocks did sell off. you think $90 oil is good news

and that would be a good thing for the markets? why the disconnect? >> that's what i was saying, main street, i think, will feel the relief, and the markets were selling off in part because oil and gas companies make up a fairly large part of the market. and so you have the sell-off in those companies pulling other companies down. you also had a big sell-off in financials. they were down 1.2% by the end of the day. >> susie: let's talk a little bit about greece. what happens next, and can the country avoid a default? >> our view is that they're going to have a very difficult time avoiding default, and that's because even if they get this package passed next week by their parliament, which is a very big if, it doesn't solve the problems in their economy. they're not collecting the taxes that they need to collect. they have huge structural changes that need to be made, and people in greece are very angry and very upset. so i think that the minute you start having elections in that country, this is a five-year plan, but he may not be there

for five years. >> susie: what happens next? what's the next step in the process? >> the next step in the sprs next week the parliament has to vote on what the prime minister has agreed with the i.m.f. and it's not 100% sure thing that that's going to pass. over the weekend, i think you're going to see a lot of rioting. you're going to see a lot of political backlash. and it remains to be seen if all of the members in the party are going to back him. if they do, he has a majority, and it can pass. but it's not a sure thing. >> susie: all right. constance, thank you so much. nice having you on the program tonight. >> thank you. >> susie: our guest tonight, constance hunter, chief economist at aladdin capital.

all i can say tom what a wild day, market with triple-digit selling in the morning, at least blue chips. and by the close you have no idea what a roller coaster ride it was. >> tom: this is a perfect example, susie, how the final score doesn't nearly tell us the whole story of what went on today and that's why we've got to turn to tonight's market focus. the sharp drop in oil prices didn't help stocks, but the late-day okay of greek government spending cuts helped

pare back losses. it was a tough start for shareholders on this intra-day chart of the s&p 500 index. at it's lowest level of the day, the index had lost more than 2% from yesterday's close. just before 3:00 p.m. eastern time, the greek parliament approved a five-year plan to cut spending, and the market responded positively. we still ended down by a fraction. here's one place where buyers showed up-- the bond market. this is the past 90 sessions for the yield on the ten-year u.s. government note. it remains bouncing along the 2.9% level. yields have been falling and bond prices rising in response to the weak economic data.

after the close, two tech bellwethers reported earnings. oracle reported better than forecast earnings, while software sales showed strong growth, technology hardware sales were flat. oracle was able to beat the weak tape today and trade higher in anticipation of its results. but after the close, shares fell as much as 6%. tomorrow, we'll have to watch to see if oracle can stay above its march low, which was just above $30 per share. semiconductor maker micron came into its earnings report with a nice rally, up 3% during the regular session. but after the close, the stock dropped 13.5% below this closing price. if that holds through tomorrow, it would take micron below its low of last week. here's how the micron numbers looked. profits were a big disappointment, coming in six cents less than anticipated. the c.e.o. says the firm

continues dealing with pricing pressure for its memory chips. also, desktop and notebook computer sales remain week. during the regular session, the tech sector was the strongest; the weakest was energy. with the hit to oil prices, big energy stocks went along with it. exxonmobil shed 1.7%. it was the second biggest loser today among dow industrial stocks. the drop brings exxon stock back to january price levels. the prospect of lower fuel costs helped lift airline stocks. american airline's, a.m.r., united continental, delta and southwest all gained at least 3.5%. looks like we could have a bidding war in the utility industry. late today, williams companies offered $39 per share for southern union. southern union already has a deal at $33 per share from energy transfer equity. here's what williams and energy transfer are fighting over. southern union jumped last week when the first deal was announced.

after the close today, shares shot up to over $39 per share when williams announced its offer. the two would-be buyers, williams and energy transfer, each lost a fraction during the regular session. both were about 4% lower than these closing prices after williams released its bid. it's a different kind of fight between viacom and cablevision. viacom sued the cable company, accusing it of streaming viacom television channels on mobile devices such as apple's ipad running a cablevision application. both viacom and cablevision were down more than 1.5%. finally, watch radio shack tomorrow. it gets kicked out of the s&p 500. and that's tonight's "market focus."

>> tom: while the federal reserve is trying to kick start the american economy, chinese financial authorities hope to cool theirs down. china isiest ling with an inflation problem. nationwide home property prices were up more than 4% in april, and its economy grew by almost 10% in the first quarter. a lot is riding on the chinese economy. it's the third biggest destination for american-made goods and services and europe's biggest trading partner. jing ulrich is the chairman of global markets for china with j.p. morgan. she joins us tonight from new york. jing, is the chinese economy with the higher inflation and these high property prices on an unstable path? >> i don't think it is on an unstable path. how much, we do have some imambulances in the economy.

for example, luxury housing prices have been too high. we have an inflation problem krifen by food prices, commodity prices. but in addition, we also have to worry about what's happening in the chinese economy, especially in the hinterland of china. we have income gaps becoming wider and wider across the country. that's why the chinese authority has implemented important plans to narrow the income gap, reduce inflation and reduce the imbalances. >> tom: let's talk about that real quick. reduce inflation and reduce income gaps. can those two things happen? you would think to reduce the income gap you would have to raise prices which would feed inflation. >> the chinese government is trying to reduce inflation through several meebz. first of all, they're cooling down lending practices by the chinese banks. lending is coming down from 30% growth to now about 16%. number two, they're trying to control food prices as well as

import prices in general, including energy. and number three, the chinese government is trying to make more investments in the hinterland of china, rather than the coastal regions. so overtime, especially during this five-year plan, which run interests 2011 to 2016, we do believe income gaps can be reduced and income disparity has been an ongoing issue for china for some time. but i think five years interest now, the economy will become better balanced. >> tom: meantime today, we're still seeing some of these commodity prices royal the market. but corn futures have dropped significantly, and u.s. oil is down by almost 12%. corn prices down 9.5% just this month alone. does this ease the inflation pressure and we extension the global inflation? >> you know, there's always a lag between the headline commodity prices and the actual

c.p.i. indicator. now oil prices and korb prices have come down but they've come down from a very high level. china is one of the major energy users in the world and the second largest importer of oil. so as oil prices come down from the highs, it is going to help ease chinese inflationary concerns in the coming mokz. however we have to keep this mind the chinese economy is still growing at a very rapid pace. income growth ranges from 20-25%. that is also going to pose some problems for inflation down the road. >> tom: real quick, there's been a large debate growing in your community between a hard landing for china, which could be difficult, and a soft landing. which camp are you in, jing? >> we believe the chinese economy can achieve a soft landing, but that means that chinese authorities have to use more norbz try and control inflation overheating and in the meantime, they need to boost the incomes to local-income families

by providing low-cost housesing, huk and education. had. >> tom: global investors clearly watching very closely. our guest this evening on china cannul, with j.p. morgan. >> susie: here's what we're watching for tomorrow: we'll get the latest on economic growth with the may report on orders for durable goods, and the revised number on first quarter gross domestic product. we'll also see nike's latest earnings. six months ago, our market monitor guest recommended getting more defensive. tomorrow, alan lancz of lancz global tells us what he sees next for the markets. not everyone loves their new car. j.d. power today released its survey of initial quality on 2011 models. cars that were redesigned or completely new this year are having more quality problems. the reason-- glitches in high- tech add-ons like navigation and audio systems.

here are the models that gave new owners the least headaches: lexus was number one, followed by honda, acura, mercedes benz, and mazda. ford fell to 23rd-- it was fifth last year-- and chrysler's dodge brand came in last. >> tom: facebook has friended the head of netflix. the streaming video service's c.e.o. reed hastings joins the social media site's board of directors. facebook c.e.o. mark zuckerberg said hastings has built a culture of continuous rapid innovation at netflix, something facebook strives for as well. hastings also serves as an independent director on microsoft's board. microsoft has an ownership stake in facebook.

>> susie: why learning how to fail big is a good thing when it comes to silicon valley startups. here's harry lin, executive-in- residence at idealab, a technology incubator. >> for this month's commentary, i was tempted to talk about the technology market and frothiness, bubbles, and snake oil. but we don't need me adding to the hoo-hah. instead, as a veteran of the internet industry, i'm going to talk about the flip-side of irrational exuberance-- startup failure. conventional investor wisdom has it that seven out of ten tech startups go belly-up. out of the other three, only one or two are massive hits, providing outsized returns, which then make up for the seven losses.

how does such a seemingly upside-down system keep going? because of what i'll call the ethos of smart failure. if you're not trying to create the next google or facebook, you're playing it too safe. therefore, you wont fail as much, and that's bad. if you're taking forever to make decisions or changes to your product or business, you're playing it too safe, and you'll probably fail anyway, just more passively. startup investors look for intelligent, progressive- thinking, aggressive-acting companies. they look for employees who've suffered failure and have learned. they look for ideas and concepts that have not succeeded yet, but have been pivoted toward greater promise. in the startup world, you don't want to fail, but you are not afraid of it. almost all of the recent i.p.o.s and big m&as are by companies headed by guys who've failed at earlier startups. it's weird betting on people who've failed, but it succeeds. i'm harry lin. >> susie: and finally, how's

your sock drawer, messy or neat? a new survey by an online dating company says miami residents have the neatest sock drawers; the messiest-- charleston, west virginia. chemistry.com's scientific adviser says an organized sock drawer can reveal a lot about your personality. you might be surprised to learn the study found type-a, detail- oriented people often have the messiest sock drawers. and, tom, that men are more particular than women when it comes to matching their socks. i bet you have a neat sock drawer. >> tom: i'm in miami. the only time i wear socks is when i wear sandals. come on, susie. you know that. >> susie: i plead guilty on type a., and a messy sock drawer. >> tom: so noted. that's "nightly business report" for thursday, june 23. 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

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