>> tom: from greece's i.o.u. woes to the slowing u.s. economy, it's shaping up to be a hot summer for american investors. >> the volatility has certainly been there in the market, so in that regard it's certainly not been a market that you want to take your eyes off of for very long. >> susie: what to watch for in the market and the best trades to make this summer. it's "nightly business report" for monday, june 27. 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 >> susie: good evening everyone. a solid rally on wall street today as the major stock averages broke a three-day losing streak. investors were upbeat that greece will pass crucial austerity measures this week. tom, the greek parliament votes on wednesday and, if the bill goes through, the country will get billions of dollars of additional loans. >> tom: susie, also helping to ease the worry? word that french banks will roll over their greek debt into new bonds. the hope is that could avert a european debt crisis. also boosting optimism? news that global regulators have agreed to more favorable financial standards for big banks.

>> susie: despite today's market rally, experts say the coming months could be rocky for investors. suzanne pratt explains. >> reporter: the lazy days of summer are finally here on wall street, but market pros predict this summer the u.s. stock market will see more volatility than sluggishness. from the debt crisis in greece to debt ceiling negotiations in washington, trading will be headline driven. take today for instance. startegist paul larson says u.s. stocks got a nice boost as investors welcomed the progress made in europe. >> much like in real estate, where it's location, location, location, right now in the market it's all about greece, greece, greece. >> reporter: greece's debt problems will not go away overnight, and experts say they're likely to whipsaw the market when domestic news is in short supply. in two weeks, however, look for u.s. corporate news to dictate trading again. that's when companies begin reporting second quarter results.

alcoa will be first on july 11. according to thomson reuters, expectations for q2 profits for s&p 500 firms have gotten progressively better since the start of this year. still, portfolio manager jack caffrey says the bigger issue for investors will be what companies say about the second half, when some worry the economy will slow further. >> i think companies will have positive news-- are likely to have positive news in terms of what they've recently seen. that said, i would expect them to offer a bit more cautious guidance, attempting to underpromise and overdeliver in terms of managing those expectations. >> reporter: historically, the summer is not kind to equity investors. and, many strategists say the next few months could be rough. but, some also say it could provide investors with opportunities. >> on the whole, i think you're looking at fairly low expectations and i think it's at low expectations that can bias us to more positive outcome, more positive market reactions to the news we wind up getting. >> reporter: last summer was not a good stretch for stock

investors either. but, experts say it's important to note that the dow is up 23% since this time last june. suzanne pratt, "nightly business report," new york. >> tom: the white house says a significant deal with republicans on cutting government spending and raising the nation's debt limit is still possible. but at the same time, the administration has toughened its stance on the need for higher taxes to be part of any agreement. president obama and vice president biden held separate talks with the senate majority and minority leaders today. before the meeting, minority leader mitch mcconnell said democratic proposals to raise taxes were "counterproductive." both sides think a deal to avert default can happen before the august 2 deadline. joining us now with more analysis, mohamed el-erian, c.e.o. of pimco and co-chief investment officer of the world's biggest bond fund. hi, nice to have you with us.

>> thank you, sus yee. >> susie: we have lots to talk about. let's begin with greece, how do you think this whole greek drama is going to play out? >> it's going to play out over time. it's both an engineering problem and a political problem. and they've got so many people involved. you've got the greek government, the official creditors. so we should expect a lot of volatility. lots of conflicting news and ultimately the reality is, susie, it's very difficult to solve. >> all right. now today deutsche bank c.e.o. said that if the greek problem spreads to other countries it could top lehman brothers in terms of contagion for the world financial system. tell us what you see as the best scenario that investors can expect and the worst. >> the best scenario is that we get a greek population that is willing to sacrifice for a number of years. official creditors willing

to put in money and private creditors willing to roll over, the op rat difficult approach. low probability but if that happens it will quiet down greece. the worst probability is we get a situation where not only greece defaults but suddenly portugal are pushed to the edge and people will ask questions about italy and spain. i think right now we're looking at a situation where most likely greece will restructure. that most likely the other two countries are going to come under pressure but the crisis can be contained from going to spain and italy. and spain and italy are important because they're very large in relative degrees. >> susie: let's move from greece to the united states. you heard our report about the white house holding those talking about raising the debt ceiling in those negotiations and time is running out before the august 2nd deadline. if there is no agreement by then what are the issues that americans face? >> if there is no agreement

by august 2nd or whatever date it is because there is some question mark is it august 2nd, much later but if there is no agreement by that time the treasury is going to have to start making very difficult decisions as to who po pay. they will have to start cutting transfers on various programs and the question comes does it default on its debt. the reason why this would be such a big event, susie s that the system is not built for this. the system is not built for a aaa company like the united states having debt payment introruptions. so we would be really in a very, very different place, in a very unpredictable place. >> and what would that mean for the markets, for the u.s. economy? >> it would mean a major adjustment. remember it's not only what happened internally but the u.s. occupies a very special role in the global economy. we are in the middle of the global economy. people depend on the dollar as the u.s. reserve policy. they depend on our financial system to help with our

savings and investment. if our standing comes down bus of some credit event this would be really bad news for the u.s. economy. >> so what are your strategies at pimco and more importantly what should the average investor do, what changes should they make in their portfolio. what investment strategies should they pursue during these uncertain times. >> so the first thing susie is to recognize this loss of moving pieces. we spoke about europe. we spoke about the debt ceiling. let's also not forget the u.s. economy is weakening in this disagreement is it temporary, more permanent. let's not forget the middle east it is still unstable. we just haven't talked about it for a while. so lots of moving pieces and lots of volatility. investigators have to navigate. our feeling is that the volatility would be accompanied by a downward trend in equity prices. so we would say take advantage of rallies to reposition yourself. reduce risk and further down the road there will be

wonderful opportunitieses to pick up cheap securities this is not the time to do so. this is the time to really tighten your seat belt because it's going to get really volatile. >> pimco recently over the last year or so has been moving away from u.s. treasuries and more into equities. tell us do you still favor stocks over bonds and is that the same kind of plan that the average guy should pursue? >> we've been looking for it because they spread which means where dow get paid as an investor without taking excessive risk so that's the main emphasis. right now we don't want to take excessive risk but at the same time you don't want to have your pocket picked by very low returns. so our advice to investors is have it available go. up the castle structure. and don't buy something simply because it has a label on it. make sure that you buy something because other people want to buy it later on. >> all right. that's very good advice.

mohammed thank you so much. great having you on the program. >> thank you >> tom: here are the stories in tonight's n.b.r. newswheel: the financials led stocks higher. the dow rose 109 points, the nasdaq was up 35 and the s&p 500 added 11. trading volume starting the week with 834 million shares moving on the big board. 1.7 billion shares on the nasdaq. u.s. gas prices continue to head lower. they're down eight cents in the past week, averaging $3.57 a gallon. it's the first time gas prices have been below $3.60 a gallon in three months. still, prices are about 80 cents higher than last summer. and those high prices had more americans putting spending on hold last month. the commerce department reports personal spending was flat from april to may on higher gas prices and stubbornly high unemployment. the u.s. supreme court today struck down a california law banning the sale or rental of

violent video games to minors. the justices say the law violates the first amendment. still ahead, the los angeles dodgers file for bankruptcy protection. tonight's "beyond the scoreboard" takes on the business strategy of going broke. >> susie: the cost to borrow money for homeowners hasn't been this low since last fall. 30-year fixed-rate home loans are now going for about 4.5%. while cheap rates haven't boosted home sales, they have spurred new interest in refinancing. but as diane eastabrook reports, the ailing housing market is making refis tougher. >> reporter: since interest rates on thirty-year mortgages started heading toward 4.5% last month, the phone calls have been pouring in to perl mortgage broker dean vlamis. >> people are calling, "we know that rates are coming down, is now the time to potentially finance?" >> reporter: the answer is often yes.... and no. yes, it is a good time to refinance. but, no, unfortunately because you don't qualify.

the stagnant housing market is most likely the reason. many consumers either have no equity in their homes or are underwater on their current mortgages due to falling home values. foreclosures and short sales are a big part of the decline in values, says inland home mortgage president frank binetti. >> every time one of those homes sells it sells below what the market values are at that time it drops the market values again. the appraisers have a tough time because they can only use comparables that recently sold. well, if all that is selling is short sales and foreclosures, the values just keep dropping. >> reporter: still, sometimes the problem is no sales at all. if a home hasn't sold in your neighborhood in months, it may be hard for a lender to get an accurate appraisal of your property. then, there's the condo problem. in some areas-- take chicago's south loop-- developers overbuilt. many buildings have too many empty units, while some have too many rental units. vlamis says those are huge red flags for banks. >> when a lender looks at a

building they want to make sure it's a viable building. are there people who occupy it? are they living in the property? if they see a high concentration of investors, that concerns them and that's another issue you have in the south loop also. >> reporter: while it may not be easy to refinance, it's not impossible. fannie mae and freddie mac both have programs that help consumers refinance as long as their current loans are owned or secured by fannie and freddie. and some smaller banks are refinancing homeowners with good credit and stable jobs as a way to boost future business. diane eastabrook, "nightly business report," chicago.

well, we're off to eye good start for the week, right, tom? i mean a lot more positive attitude in the markets. and there were more stocks in the green than in the red. >> tom: and certainly after seven down weeks in a row, maybe some relief ahead of the july 4th holiday coming up a week today here, susie. let's take a look at the monday markets with tonight's market focus. it was a strong day of stock buying led by financial and technology stocks. let's start with a big jump in microsoft. shares rallied 3.7%. big rally for a big stock. volume was heavier than usual. nice rally here. tomorrow, the software giant has

scheduled an event to make an announcement regarding cloud computing. that's the practice of using internet-based applications, software and services. microsoft is expected to introduce a cloud-based version of its office suite of business software. there are rumors the company may also launch a tablet version of its windows operating system. that really helped boost shares. other companies working in the cloud computing space helped the tech sector put in the strongest showing today. software firm citrix systems, tech storage and networking companies e.m.c. and f5 each were up by at least 3%. big banking stocks also rallied. bank of america was the second best dow industrial stock today, up more than 3% on strong volume. take a look at the move here. b. of a. stock has been bouncing around 52-week lows lately. around $10 or so. the bank stock buying came after international regulators agreed to new banking rules designed to protect markets from too big to fail institutions. global central banks want the world's biggest banks to hold

back 9.5% of capital to protect themselves if their loans and investments go bad. that's the goal by 2019. still some time off. some analysts expected banks to be required to hold back even more money. so we saw some relief buying in other big banks-- j.p. morgan and citi were up 1% each. a couple of electronic retailers were moving in opposite directions. online store amazon.com jumped 4.5%. volume was decent. morgan stanley added the stock to its best ideas list. the investment bank thinks amazon's potential to gain market share is underestimated by investors. it has a $254 price target. tonight is amazon's first close over $200 per share since mid- may. meantime, best buy stock sank more than 3.5%. corporate bond rating firm fitch cut best buy's credit rating. citing best buy's weak same

store sales and heavy competition, fitch puts best buy's credit rating at just above junk status. after the close, nike reported quarterly earnings well ahead of estimates. running strong, with sales surged in two of its largest markets, north america and china. nike shares were up a fraction before this news and rallied by more than 4% after the close. this drop in march came when it had disappointing quarterly results thanks to higher commodity and labor costs. it raised prices in response. sales came along as well. several drug stocks were moving today. amyline and mannkind rallied 7% and 4% respectively thanks to positive research data about their separate diabetes treatments. microcap biopharmaceutical company icagen more than doubled as drug giant pfizer considers a strategy transaction with it.

and that's tonight's "market focus." >> tom: one of the most storied franchises playing america's pastime has a new chapter-- chapter 11. the los angeles dodgers baseball team is bankrupt. tonight's "beyond the scoreboard" begins with going bust in baseball. rick horrow is a sports business analyst and c.e.o. of horrow sports ventures. nice to see you, sir. >> nice to see you. >> the boys in blue are too much in the red here apparently i guess with the dodgers going bankrupt, wrapping up a messy divorce case is how this case has

wound newspaper bankruptcy course. the dodgers have twice as many assets as liabilities so it's not like they owe the money they can't pay, it is that they are cash poor is this a significant business strategy. >> cash-flow issue, business strategy, to wrest control of the team from the commissioner. he is very powerful, best interest of the game clause motivates his behalfier. there was an issue about using a television contract with fox worth about $3 billion to pay off the divorce settlement and as long as the money is not going to the team in the future, baseball steps in. this is an opportunity by the mccourt lawyers to circumvent that. >> that is the couple where the heart of the mat certificate in divorce course. but this is a business strategy. so the big bank is the lender here, jp more began the debt never possession financier with about a 120% interest rate, this is not cheap money to keep baseball-- 10% interest rate. >> no, but it is also one of those things where there aren't a lot of suitors to capitalize this particular loan out of bankruptcy and the dodgers may be value contract and new stadium

plan and a storied brand but not this particular ownership situation and not this particular balance sheet. >> it's fair to say this is not necessarily rare any more in professional sports to go bust, just in the past couple of years two teams have found themselves in the bankruptcy. in the nhl the phoenix coyotes, last year the texas rangers. they went on to play in a world series. is there something wrong with the pro sports business model though. >> no, there is something wrong with dealers who feel like president pro sports franchise will get them out of whatever trouble they have in their other businesses. the situation in texas, the phoenix situation, undercapitalized. they needed to deploy more money not franchises and the commissioners take care to protect their ability to control the future of those franchises. >> tom: so if it is about cash flow for pro sports, lots of pro teams have as corporate parents publicly traded company. cat nicks and rangers are owned by madison square gardens. the 76ers and flyers owned by comcast. liberty capital owns the braves, rogers communication

the toronto blue jays. so is the message, beware if there a pro sports team because they can suck cash out of the company. >> the message is you run the sports franchise independently and you sell it for more than you bought it and you make sure that your other vertically integrated companies don't have to be cannibalized to support the assets. but make sure that your franchise is completely independent and don't think your franchises are going to save other troubled businesses. >> tom: good point. finally to the nfl. if there is to be a season coming this up fall there may be new games on thursday night early in the season. the nfl talking about creating a new television contract according to sports business journal who wins who loses if pro football is on thursday nights early in the season? >> we all win because it is another night to watch nfl football. do we have enough football. no. the winner would be the nfl. they get "x" amount of additional revenue over the $9 billion today, pain divided among the plays are. losers, college football, espn has a contract, they usually don't compete against them, in this case

they would. >> tom: rick, we'll leave it there. rick horrow with horrow sports ventures. >> susie: here's what we're watching for tomorrow: the s&p-case shiller home price index for april is expected to show prices dropped 0.2% in 20 major markets following a similar drop in march. and our "word on the street" is "gold." we'll look at some undervalued gold stocks and find out why analysts think the tide could be turning. in what's being described as the ultimate inside job, a former citigroup vice president has been charged with stealing $19 million from the bank. 35-year-old gary foster was arrested at a new york airport after arriving on a flight from bangkok. in court today, foster pleaded not guilty. prosecutors accuse him of transferring money from several citibank accounts into his personal account at another bank. he faces up to 30 years in prison if convicted. >> tom: blackstone group, one of the nation's biggest private

equity firms, is being asked for more information on how it pays its executives. the company said the securities and exchange commission has requested details on a clause that gives chairman and c.e.o. stephen schwarzman sole discretion to adjust executives' compensation. the agency wants the company to disclose how pay decisions are made in future filings. >> susie: when it comes to

>> susie: when it comes to digging the u.s. out of the deep jobs hole it's in, tonight's commentator thinks president obama is forgetting a key resource. here's bill rodgers, professor at princeton university. >> president obama's jobs and competitiveness council, recently offered recommendations on to quickly accelerate job creation. i applaud the council for its work, but its preliminary recommendations neglect to harness the nonprofit sector, a sector that employees over 12 million americans and has had a known increase in demand for its services. the great recession moved the nation into uncharted waters. as a result, we need to truly expand our thinking on how to reignite the 1990s link between economic growth and robust job creation. to do that, i urge the council to add nonprofits to their deliberations. nonprofits are in a great

position to serve as a bridge to renewed prosperity, acting as short-term employers and providing continued support to the over six million americans that are long-term unemployed, the 8.5 million americans that are working part-time, but want full-time employment, and to the millions of families in communities with chronically high jobless rates. including nonprofits in the discussion and strategies will help raise the likelihood that we can achieve the president's jobs agenda. i'm bill rodgers. >> tom: that's nightly business report for monday, june 27. everyone and goodnight to you too susie... >> susie: good night tom. i'm susie gharib we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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