>> tom: with less than three weeks to go until the nation hits its borrowing limit, the u.s. debt talks kick in to high gear. the nation's biggest business leaders are joining the call for a deal now. >> we need certainty about the debt ceiling and we need it now. >> susie: meantime, global aluminum leader alcoa turns in blockbuster quarterly results as earnings season gets underway. it's "nightly business report" for monday, july 11. 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. alcoa reported strong quarterly earnings after the bell today, kicking off earnings season with an upbeat outlook. but tom, not as much optimism today about debt talks in europe and in washington. >> tom: susie, fresh worries about europe sent u.s. markets sharply lower. european finance leaders spent the day trying to find common ground for the next bailout of greece. some have been pushing for private investors to take losses before european governments fork over more money. >> susie: europe's not the only

place talking about deficits. the president asked democrats and republicans, "if not now, when?" and he pushed hard today for as big a deficit agreement as possible. that will require leadership and hard decisions, the president said, and not just from politicians. darren gersh reports. >> reporter: before he sat down with congressional leaders, the president said both parties talk tough about fixing the nation's debt problems, but they still aren't willing to come to the table and make hard sacrifices. and he added another group to that list: the nation's business leaders. >> the business community is a lot like everybody else, which is we want to cut everybody else's stuff and we want to keep our stuff. we want to cut our taxes, but if you want to raise revenue with somebody else's taxes, that's okay. and that kind of mindset is why we never get the problem solved. >> reporter: but house speaker john boehner says there is a reason businesses shouldn't be asked to give more now. >> our disagreement with the president is not about closing

loopholes. none of us are fond of loopholes. our disagreement is over the idea of raising taxes on the very people that we're asking to create jobs in our country. >> reporter: individual companies have always focused their teams of lobbyists on securing tax breaks and contracts from washington that can help their businesses. talking tough on spending has usually fallen to business association leaders like the u.s. chamber's tom donahue. he says congress and the administration have to take the first steps. >> i haven't seen the government step up on the questions of medicare and medicaid, but we will continue to talk. this thing will get resolved. >> reporter: g.e. c.e.o. jeffrey immelt hoped that would be sooner rather than later. >> we need certainty about the debt ceiling and we need it now. >> reporter: while business complains about the uncertainty around the debt ceiling, there appears to be little sign of it in bond markets. price of u.s. treasury debt is actually rising, says i.s.i. group's andy laperriere.

>> there's not a lot of evidence that the u.s. economy is paying a price for a lack of agreement on the debt ceiling. >> susie: darren joins us now live from our washington bureau. you know, darren, maybe one of the reasons that there isn't an agreement, the terms keep changing. last week there was talk about a big solution, a grand bargain. now they're talking about a smaller solution. so which is it, big or small? >> it looks like it's going to be small. but here's the weird thing. remember when $2 trillion was a lot of money? they're talking about that being the small deal now. and really it's about half of what we need. we need to get a $4 trillion deal over the next decade. this will get about halfway there, enough to get us through the 2012 election. and presumably after that we would have the rest, a bigger deal after the election. that's the hope, that's the base scenario and that's what they're going for. >> susie: speaking of hope, seems like all along in this process there's been a disconnect, on the one hand the markets are saying half hope, they're going to get a

deal, but the reality is there are a lot of tough decisions that have to be made and nobody is willing to make them. so is there reason enough to be optimistic? >> i did find a slight silver lining in this, you have to look really hard. first, look, they're locked in a room together, and don't underestimate that. once they're locked in a room together it hard for them to get out without a deal. also if you look between the lines, they're a little more understanding of each other's positions. a fewer personal swipes. so those are subtle signs that they'reon and they all agree a deal needs to be done. so all of that is reason for optimism. but there's still a chance that there will be a problem. >> susie: and it might not come to a deal on august 2. if that happens, can you explain what would be the real economic impact for the average american person? >> well, the bipartisan policy center did a as to and basically they said in august, if we don't get an agreement, they'd have to cut federal

spending by 40%. what does that mean? that's $134 billion, about 10% of the economy in the month of august that would disappear. on top of that, we have to roll over $500 billion of debt. how you're going to do that in a market where you don't have an agreement on the debt limit? that's a scary thought. >> susie: a lot scary things there. thanks, darren, appreciate it. >> my pleasure. >> susie: we've been speaking with our washington bureau chief, darren gersh. >> tom: still ahead, alcoa's profit more than doubles. we talk with c.e.o. klaus kleinfeld about those earnings and the aluminum giant's hiring plans. while washington tries to find a fix to america's debt problem, european debt worries are spreading again, and that hit u.s. stocks hard today. the dow fell 151 points, the nasdaq lost 57 and the s&p 500 was down 24 points. trading volume started the week with 827 million shares moving on the big board and almost 1.8

billion shares on the nasdaq. european finance ministers met today, looking for private investors to share in the pain of bailing out greece. some countries insist investors lose some money before they will help greece. meantime, german media reports president of the european central bank, jean-claude trichet, is asking big banks for advice on dealing with a euro- zone country going bankrupt. brian wesbury is the chief economist at first trust. so brian, is europe for of a threat to american investors today compared to where we left it last week? >> i don't think so, tom. i think we got hit by obviously the employment report last friday, the debt talks in the u.s., but then obviously renewed fears in europe. and there's a lot of unknown in europe about how far this will go, about whether banks will have to take cuts and whether that can be linked back to u.s. banks. so i think the fear is just there, and remember we were on fire over the last seven or

eight trading days. so i think we just gave some of it back up as these fears were renewed. >> tom: you mentioned some of the uncertainty, the latest bit of uncertainty is italy, italian dealt problems. how real is that risk of italy? >> you know, i'm sure a lot of these are real. i don't think italy is in as bad a shape as greece is. i mean greece is in the end probably going to have to sell some islands or something to pay off their debt. italy has a lot more assets, a lot more revenue, and their problems aren't as intrack tabl, but that doesn't mean they don't have problems, and they're big. they could take down a bank, possibly. one thing we have to remember is that u.s. banks do not have direct exposure today to european countries or in fact much sovereign debt at all, like they did back in the early 80s when we had all that exposure to latin america. >> tom: but you wouldn't necessarily know it if you watched the financial stocks

over the past several months. any time greece is in the headlines or italy is in the headlines you sell u.s. banking stocks. >> and that's because what's happening here is it's almost like the butterfly effect, you know, butterfly flaps out wings in brazil you get a tornado in witchita. so if italy were to go down, then you have deutsch bank and that connects with credit default swaps and nobody really knows exactly how all these intricacies work. but they worry about one bank leading like a dm i know to another and having -- domino to another and having an impact on u.s. banks. because we do have some exposure to these european banks in the united states and that's where the real fears lie. so the question is do they have to take haircuts or not. how does the european union address these things. >> tom: brian wesbury, he is with first trust. >> susie: more now on alcoa. its second quarter earnings more than doubled from a year ago. as the first dow component to

report, the aluminum giant set a positive tone for the upcoming corporate earnings season. alcoa earned 32 cents a share, in line with analyst estimates. but revenues surged, up 27% to $6.6 billion dollars-- much higher than expectations. the company expects global aluminum demand will grow 12% this year and double by 2020. joining us now, alcoa c.e.o. klaus kleinfeld. so nice to have you back on the program. >> nice to talk to you. >> susie: so you have solid numbers. but, you know, you also said today that the economic recovery is, quote, uneven. so what does alcoa expect the rest of the year to look like? >> well, we actually do see, the stock with aluminum demands, we do see that from all the things we see, aluminum demand is stable, we believe 12% growth this year from 13% growth last year, doubling in the next 10 years. that's what we see.

on the end markets we see positive things in the aerospace segment. everybody went there and said boeing airbus, the big one probably going to get 300 new orders. they ended up with more than 870 orders. and the good news is alcoa also was able to sign a contract with airbus, for a total of a billion. we see the same type of optimistic environment in the trucks and trailers, also here in the u.s., and we -- >> susie: before you go through all that, let's look because we have a graphic here that looks at your various segments and it is impressive. going down the list, your packaging division, which is cans, up 13% quarter over quarter. aerospace as you just were talking about, up 6%. you go down the list, transportation, industrial products, autos, all of them doing very, very well there. as a c.e.o. who does travel around the world, given all

the evidence that we're getting that it's a weak economic environment, how do you expect demand to respond to the various divisions? >> well, we see that on the building and construction side, the situation hasn't changed, it very weak, particularly in the u.s. and europe. china and some other places continue to do well. automotive, we believe will continue to have growth there. the u.s. growth rate is probably going to be moderate in total, i.m.f. has the u.s. at 2.5% growth rate this year. i think that's probably realistic. and europe, you just talked about it before, that's a lot of uncertainty. but i'm pretty optimistic that they will get their hands around it and have some growth there with the elements of strong growth like in germany. >> susie: okay. we actually have a question from one of our viewers. let's take a look at it a. he's saying that where do you expect to grow, i think you've answered that part of the question.

but how do you and the business intend to maneuver over the next few years to give, he wants an insight on how you see the changing economy. so what is your strategy for any uncertainty, any bumps in the road? >> well, when you run a company you have limited number of leaders. and you basically have to operate on all of them. have you to get your costs under control, right. that's one thing. the second thing is you have to work with innovation and growth, that's why i'm so proud that we also have seen the top line grow 27% and doubling the profit, there are some elements that you can influence. kid not influence the jensen timt, in a way the jensen timt sometimes becomes a self fulfilling prophecy, as much as i hate it, kid not influence the currency swings. but the market understands that. >> susie: how about hiring, let's talk about jobs. you have been hiring, but we've been hearing from a lot c.e.o.s saying that they're holding off on hiring until the economic uncertainty is lifted, until there's some kind of conclusion in the

dealt talks in washington. what's your view on hiring? will you be adding to your payroll? >> by the way, that's a very nice trance toigs the viewer's question, because the most important thing is the people that you have on your team, the talent base that you have and any c.e.o. will tell you that. have you to focus on that. in terms of hiring when you talk about the total of alcoa, we've added about 2,500 jobs since the lowest point, june of last year n. the u.s. 2,200. and a major part of that is new hiring. some of it is acquisitions that we did, but a major part is new hiring. we have some places like davenport, ohio that were substantially hit in the downturn, but they now have more employees than they had before. >> susie: quickly, why do your fellow c.e.o.s not feel comfortable about hiring? >> you don't want a compromise on your cost position. as long as you believe that the uptoward trend is not stable, you stay away from hiring, right, because you

want to keep the cost as flexible as you can, right. but the thing is, the thing is if you have got new products, if you have good relationships with your customers, you can create growth, can you create growth even in down markets and that's what we're doing. we're doing it in segments, where the general segment is even going down. >> susie: sorry we have to cut it off. it's a very good conversation, as always. thank so you much for coming on the program. >> my pleasure. >> susie: we've been talking with klaus kleinfeld, the c.e.o. of alcoa.

>> tom: caught between the earnings season beginning and european worries, u.s. stocks fell sharply. let's get to tonight's "market focus." as is usually the case when europe crowds the headlines, financial stocks led the decline. we don't need to look any further than the biggest bank by assets in the u.s., bank of america. shares of b. of a. fell more than 3.25% and volume was heavier than usual. the drop sinks bank of america below its lows of last month, down to its lowest price since may, 2009. this was the biggest loser among dow industrial stocks today. other big banks hit today-- citi falling more than 5%. morgan stanley dropped over 3%. this is a 2.5-year low for morgan stanley. and j.p. morgan fell more than

3%. uncle sam's i.o.u.s continue to be a port in the storm over europe. the interest rate on the 10-year government note fell back below 3%. as rates drop, bond prices rally. it puts the yield just above its june low. the uncertainty hasn't hurt dealmaking. coal miner peabody is teaming up with global steel maker arcelor mittal. they have a $5 billion offer for australian coal company macarthur. this company was the target of a bidding war last year, but talks collapsed. macarthur is a key producer of coal used for steel making. peabody shares fell 3.5%. when peabody made its play for macarthur last year, b-t-u was trading around $40 per share.

clearly much higher tonight. a $1 billion deal in global chemicals also hit the tape today. arch chemical is the target of swiss company lonza group. the cash offer is $47.20 per share. look at this rally, though. with arch chemical jumping more than 12%, the market signals a higher offer may be coming. the buyout talk found its way back to clorox, shares bucked the downward trend today to close up almost 3%. this pushes the stock to its highest price since may. noted shareholder carl icahn holds a 9% stake. and that's tonight's "market focus."

>> tom: problems in the boardroom are not good for the business of baseball. tonight's "beyond the scoreboard" begins with ownership struggles off the diamond impacting the biggest moneymaker-- television ratings. rick horrow is a sports business analyst and c.e.o. of horrow sports ventures. he joins us from phoenix, arizona, the site of baseball's all-star game tomorrow night. rick, plumb assignments here, but we've got to talk about big business because two teams are in trouble, the dodgers and the mets, they have among the lowest tv rankings in their local markets, double digit drops, by more than 25% each. how much does ownership matter to business partners like advertisers and tv deals? >> a lot, tom. the med afor cal in hot water applies to the air here, it's about 115 in the shade, luckily chase field is covered in air conditioned, that's what people look forward for to this all-star game. there seems to be a bit of malaise because the dodgers and mets cab get their act

together, tickets down, television down, franchise values down. and it's not just those teams. a lot less of a number watching baseball, affects the spots. all-star game ratings last year 22% below the year before. people are hoping for a miracle for tonight's game. >> tom: how about it here, rick, because as your, do your sponsors lose much when the team and league is disappointing like this? >> well, a lot sponsors continue to commit to baseball because it is american as apple pie, the old chevrolet commercial, ta could -- taco bell sponsors this. obviously less eyeballs on the television set, less value and therefore less of a long-term commitment. people need to turn it around, and baseball clearly is enter than an era of very competitive divisional races, we'll see if that impacts september and october. >> tom: let's talk about in for shareholders of companies that do a lot business with baseball, because you compiled a list of top sports business

power players, the highest ranking major league baseball player on the list is derek jeter, and of course the big hit he had over the weekend, number 3,000, but on your power list, he's number 26. highest ranked major league baseball endorser at 26. is from not much return on investment for baseball endorsements for shareholders? >> well, tom, he gets a lot of stroke because of his 3,000 hits and he's nonsteroid laden, which is also very important. and there are 13 other baseball players in the power 100. but that's less than football. the individual sports are well televised, the individual, the patches on the nascar racers and the cars, the players are out there without a helmet, so it's a mixed bag. baseball has taken a little bit of a hit largely because of the steroid issue. i do believe it's cyclical and i do believe the $12 billion endorsement business will find more of a home for baseball players in the future. >> rick, baseball, nfl, nba

having their labor problems. baseball was 15 years ago. what was the lesson? >> the lesson was you better stick to your knitting, because if it's a $9 billion business like football, and you have affect on labor, it impacts everything as far as overall growth. baseball is lucky, they don't have to deal with it this year, but they better make sure they continue to watch. >> tom: all right, rick horrow, the c.e.o. of horrow sports ventures. >> susie: here's what we're watching for tomorrow: we'll see may's trade balance, and the national federation of independent business issues its latest small business optimism index. also tomorrow, our "word on the street"? "europe." thestreet.com's bob wahlberg joins us with three overlooked european stocks in the midst of all the concerns about government debt. dunkin brands today detailing plans for its i.p.o., an offering that's expected to go like hotcakes with investors. the parent of dunkin donuts

hopes to raise as much as $400 million when it comes to market later this year. million shares, priced somewhere it will offer just over 22 million shares, priced somewhere in the range of $16 to $18 a share. the stock will trade on the nasdaq under the ticker symbol "d-n-k-n." >> tom: the phone hacking scandal surrounding rupert murdoch's newscorp continues to grow. his next deal could be in jeopardy. the british government is taking a tougher stance on newscorp's proposed takeover of satellite television company british sky broadcasting. the deal has come under a full- scale inquiry by britain's competition commission. separately, newscorp today withdrew its offer to spin off sky news if the b. sky b. deal is approved.

>> susie: while washington is focused on the debt debate, tonight's commentator wants to have a bigger conversation about growth. he's glenn hubbard, dean of the graduate school of business at columbia and former top economic advisor to president george w. bush. >> our current national debate over fiscal austerity masks a conversation we need to have about growth-- to raise incomes and create jobs. faster growth doesn't just happen. a supportive policy environment is needed. we need to encourage participation in the workforce and to provide education and training that match the skills required for today and tomorrow.

the productivity of our workforce also depends on the plant and equipment and software businesses have. we need tax reform to promote that investment. growth is powerful. at a 3% growth rate that we can achieve over time, average incomes will double between a baby's first birthday and 25th birthday. that is, the average income of about $45,000 today would be $90,000 in today's prices in a generation. that income can fund health care, education, our defense and a strong safety net. but first we must grow. even as we debate deficit reduction, we should remind our leaders of this. i'm glenn hubbard. >> tom: that's "nightly business report" for monday, july 11. 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 >> be more. pbs..

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