>> susie: alcoa stumbles as earnings season kicks off. the problem? a big drop in aluminum prices despite strong demand. >> i'm diane eastabrook at the north american international auto show in detroit where, for the first time in years, the auto industry has something to be excited about. >> susie: itnightly busi this is "nightly business report" with susie gharib and tom hudson. "nightly business report"

captioning sponsored by wpbt >> susie: good evening, everyone. my colleague tom hudson is off tonight. a bad start to earnings season. alcoa reported a quarterly loss, it's the first dow component to report and the aluminum giant is considered a bellwether for the economy. here are the numbers that were released right after the market close today: excluding special charges, alcoa lost three cents a share, just what analysts were expecting. this is the company's first loss in two years. revenues rose 6% to $6 billion. alcoa stock slipped in after- hours trading, but was higher by 2% in the regular session. as for the rest of the market, the dow rose nearly 33 points, the nasdaq added two and the s&p gained three points. joining us now to discuss those results?

klaus kleinfeld. he's chairman and c.e.o. of alcoa. klaus, nice to see you and happy new area. >> hello, susie, hello, happy new area, susie. >> susie: thank you so much, well, looking at these quarterly numbers, what are they telling you about the outlook, what can we expect from alcoa in the new year? >> well, first of all, this quarter has been overshadowed by the restructuring actions that we've taken. and the restructuring aks that we've taken have basically two directions. one to increase our competitiveness in general. the second to adjust to the market environment that we have had in our industry. now if you want to look forward to what we see in 2012, we actually do see that there are some air of confidence coming back into the economy. particularly here in the u.s. we've seen a rebounce of consumer confidence since basically summer last year. we've seen the manufacturers procurement index clearly going up. so these are really good

things. we do project a growth on a worldwide basis for aluminum 7% we do project. we do project that china given the unsustainable structure of their industry is going to go into a deficit. basically meaning that there will need to be imports going into china. so there is quite a bit of interesting things happening in our industry in 2012. >> we know that you produce aluminum product force a lot of industries. everything from jet planes to soda cans, to packagesing companies. and automakers. how are those sectors doing? what are your customers telling you? >> well, we continue to see an enormously positive feature in the aerospace industry. the aerospace industry had the second highest order intake in the history of avionics last year, boeing and airbus together have 8 toy-- 8.2 years of auto backlog now. the automotive industry, talking about detroit today, also in the u.s. as well as

in china continues to have a very positive situation. in the u.s. it is very strongly influenced by the average age of the cars being higher than typically, so there is a demand to lag so to say which is coming through now. >> susie: tell us how -- >> and we have lagging industries like the construction industry where we really continue to see basically nothing happening here in the u.s.. >> suzanne: . >> susie: looking around the world i do want to ask you about europe, how are things looking in europe. we've been hearing a lot of forecasts calling for a recession in europe. what is that going to mean for your business? >> well, we do believe that there is a chance of a recession in europe and pressee high chance. the projections from bloomberg are minus 0.25%. overall now as henry kissinger said there is no telephone number for europe. so there is obviously huge differences depending on which country you go to. the interesting thing is, which i believe say very sensitive indicator for the eurozone crisis for the

budget situation there is the five year or ten year bond yields. and you saw that they have been shooting up last year. and then they've constantly been coming down. and if you look particularly not last week, they are substantially down. and i believe that this would only happen if people are not regaining confidence in the,actions that are taken by the countries as well as by europe in total. so i am probably more optimistic than people are on that end. >> susie: very interesting. >> it is a big problem and it's going to take some time and it's go stock very different for specific countries in europe. >> susie: moving back to the u.s., you did announce that you are closing some plants on friday, you announced that. do you see that you are going to have to cut doses-- costs in other parts of your operation whether in the u.s. or overseas? >> well, we announced that we are curtail being 12% of our capacity. so this affects two plants in the u.s. both plants. one plant in tennessee, the

other in texas which say partial curtainment. and for those, both of those plants are already curtailed so this doesn't have a negative impact on jobs. we also noah nounced today that we are taking capacity off in europe and we are looking for full containment of a plan in italy, a partial con tanlt of two plants. all of this is driven by uncompetitiveness of those plants in the current environment and it is going to bring our competitors position into much better shape. >> susie: we hope we can talk to you again as the year goes on to get an update on how things are actually working out. thanks so much, klaus. >> thank you, susie. >> susie: and we have been talking with klaus kleinfeld, chairman and krooef alcoa. >> i think it's fair to say that detroit is back in a big way because the whole show is about substantive new models. it's not makeovers. it's cars with a lot of technology.

>> susie: still ahead, why the american automakers are turning heads at the big auto show in detroit. there may finally be some good news for the struggling housing market. some experts believe home sales will show new signs of life if the job market continues to improve. but as erika miller explains, higher sales don't always mean higher prices. >> reporter: the housing market is usually linked closely to the labor market. after all, people won't buy homes unless they have a steady paycheck and confidence in their jobs. but a pick-up in hiring nationwide may not matter much this time. economists say the missing ingredient is raises. >> growth in wages-- this is the gauge that we need to see start improving before we see any significant improvement in housing demand, and the wages have been falling. >> reporter: a even bigger problem is bloated housing inventory.

according to corelogic, there is currently a shadow inventory of about 1.6 million homes for sale-- a five-month supply. and more homes are likely to come on the market if banks reach a robosigning settlement with state attorneys general. >> we are probably going to see a settlement soon this year to resolve that, which will result in a new wave of foreclosures, and so a lot of those homes that have been delinquent for a while, finally move the stage of foreclosure. >> reporter: that doesn't bode well for prices nationwide. unless there's bold government intervention, many economists predict prices will fall in most regions this year. >> i'm not saying we will see a considerable, rapid decline in housing prices, but we certainly won't see much of a pick-up. i'm predicting something like another 2% or 3% decline this year. >> reporter: but when it comes to the rental market, it's a completely different picture. more foreclosures will likely mean more competition for rental apartments, especially in dense cities like new york, san

francisco and boston. and those high rents threaten to hold back economic growth if businesses can't afford to pay workers enough to live nearby. fortunately, there may be some rent relief down the road. >> builders are responding to the increases in rents, but it typically takes a little over a year for a multi-family building-- a rental building-- to come on to the market. so we are not going to see that addition to the supply until late this year or early next year. >> reporter: so, 2012 shaping up to be a year of limbo for the housing market. many homeowners hoped this year would mark a significant turnaround, but that's being pushed out to 2013 at the earliest. erika miller, "nightly business report," new york. >> susie: a key reason the housing turnaround is on hold? the thousands of foreclosed homes sitting empty across the country, adding to the glut of homes for sale. some analysts say renting out these foreclosed properties could help ease the housing

crisis, and its one option the federal government is considering. darren gersh reports. >> reporter: once a nation of owners, many a pundit has warned the united states is turning into a nation of renters. but that might just be one way to solve the nation's ongoing housing crisis. >> as a practical matter, there are a lot of homes sitting vacant and there aren't a lot of people out there who can buy them, and if we insist on selling these as ownership units, it will just depress prices further. >> reporter: many of the homes in or near foreclosure are owned by the federal mortgage giants fannie mae and freddie mac. instead of selling those homes in foreclosure, the mortgage companies are considering becoming a landlord or forming a joint venture with investors to rent out the homes, but the most likely option may be an outright sale of homes to investors who will in turn rent them out. >> it's a bit of realism. i would have like to have seen it three years ago, whatever, but you take what you can get. >> reporter: the federal

government-- through fannie mae and freddie mac-- accounts for roughly half of all foreclosure sales a year, roughly 475,000. assuming those were converted to rental units instead of being dumped on the market, goldman sachs estimates the change would be enough to boost the annual house price appreciation rate by up to one percentage point a year. >> while that might seem like not a huge increase on a national basis, it could be more important in some local areas so still worth doing, so we just don't think on a national basis it will have a huge impact. >> reporter: and it could help bring down rent inflation by half a percentage point a year, a welcome break for many households. darren gersh, "nightly business report," washington. >> susie: the auto industry is all revved up as it kicks off the annual north american international autoshow in detroit. hyundai in the spotlight, with its elantra winning top honors as the north american car of the year. the land rover evoque won truck of the year. but the big three u.s. automakers are the big stars at this year's show. as diane eastabrook reports, their comeback is capturing the attention of competitors from

around the globe. >> reporter: putting a new twist on an old name, chrysler rolled out the 2013 dodge dart this morning at the north american international auto show. built on an alfa romeo chassis, this iteration of the dart will be available with three different engines and transmissions. it also features a multimedia center inside with ipod connectivity and a navigation system-- all for less than $16,000. >> it's beautiful, it's powerful, but it's also very smart. >> reporter: at the motor city's big auto show, excitement is back in a big way. forget about the bankruptcies that rocked chrysler and g.m.-- detroit's big three have their headlights pointed toward the future. auto analyst john casesa calls this the silver lining in a very dark period. >> it had to happen, and i guess the show tells us they're investing in new capital from the u.s. government and from taxpayers in a very wise way.

>> reporter: detroit also wants to look younger. g.m. is rolling out a new chevy sonic r.s., a hatchback version of its popular sonic subcompact introduced late last year. the company also unveiled a concept called the tru 140s, a play on exotic italian sports cars. both vehicles are targeted to consumers under 30--a segment g.m. estimates could be well over 30 million potential buyers. north america president mark reuss says going after these buyers requires a completely different mind set. >> you see it with some of the smart phones, laptops, the internet, facebook. all of these things are competing for time and what is important to them in a car buying we have to understand that. >> reporter: this is a pivotal year for the auto industry because more americans appear to be in the car-buying mood after the long recession. last year, u.s. consumers bought more than 12.5 million vehicles- - a 10% increase over the previous year. industry watchers are confident

they'll keep buying this year, although some think the pace could slow. one potential problem could be rising gasoline prices. ford thinks it can combat that threat with new, more fuel- efficient versions of the fusion. the new model hitting showrooms this fall sports an eco-boost engine that promises 37 miles per gallon on the highway. a hybrid version will also come out this fall, followed by an electric plug-in next year. ford president and c.e.o. alan mulally says the company has the flexibility to make whatever version consumers want the most. >> the neat thing about the ford plan is they are made in the same production line. 75% of the parts are exactly the same. we can match the production of the vehicle to real demand and also offer them up more affordability than anybody else. >> reporter: a reinvigorated big three present a bigger challenge to japanese and european manufacturers. nissan chairman and c.e.o. carlos ghosn says everyone will have to be on their a game to win in the u.s. >> in order to prevail in the u.s. market you're just going to have to reinvent yourself.

as a company, you are going to have to invent new products and new technology all the time. japan could the big wild card this year. >> reporter: tomorrow that toyota, honda and nissan, will be rolling out new products here they hope will put them back in the driver's seat. diane eastabrook, "nightly business report," detroit. >> susie: as we reported earlier, investors were on alcoa watch today. a gain in the aluminum giant in anticipation of earnings helped put a small shine on the blue- chip average. let's take a look in tonight's "market focus." here at the n.y.s.e., the blue chips moved in a narrow range on an otherwise calm trading day. among the leading s&p sectors today? industrials, energy and financials, all rising less than 1%. apple stock was in the spotlight. the shares hit an all-time high of $427.75 before a late-session

selloff resulted in a small loss. goldman sachs raised its price target for the tech giant to $550 a share on expectations of strong holiday sales. goldman predicts apple sold over 30 million iphones in december and says a line of more affordable ipads is on the horizon. also in the tech sector, but this time in the minus column, google. the search engine was among the worst performers in the s&p 500 today. google shares fell more than 4% to $622.46 after motorola mobility issued a profit warning, raising concerns about google's pending acquisition of the smartphone maker. google's pending $12.5 billion buyout of motorola is expected to close early this year. neflix continued to prove today that fortunes can change almost overnight. you may recall the stock plunged 60% last year after the company raised prices and tried to separate its d.v.d.-by-mail and streaming businesses.

so far this year, however, the shares are up over 40%, the most of any s&p 500 name. it rose nearly $12 a share today to close at $98.18. netflix said it's launching service in the united kingdom and ireland. in a sign of improving consumer confidence, consumers are taking on some extra debt. the government reported that consumer borrowing surged by more than $20 billion in november, the largest monthly gain in a decade. not only were they buying cars, but also frequently swiping credit cards for holiday gifts. no surprise then that shares of american express and mastercard each rose while visa lost ground today. citi expects the u.s. card and payment sector to outperform this year, citing fewer regulatory risks and an improving economy. in the biotech space, a lot of interest in a linkup between bristol-myers squibb and inhibitex. over the weekend, bristol myers agreed to acquire inhibitex for $2.5 billion or $26 a share.

inhibitex shares more than doubled today while bristol myers barely budged. inhibitex is developing a oral treatment for hepatitis c. the buyout news spread to other biotechs with experimental hepatitis c therapies in the pipeline. idenix surged nearly 40%, a near five-year high. achillion pharmaceuticals rose more than 20%. and pharmasset climbed 3%. and that's tonight's "market focus."

gold prices fell almost $9 today to $1608 an ounce. prices have been falling in recent weeks, but investors are hoping gold will regain its luster in 2012. our next guest says gold bugs expect prices to rally more than 20% in the new year to about $2,000. tonight's "word on the street" is "gold," and joining us now? alix steel, markets reporter at thestreet.com. hi, alix, nice to you have with us. happy if you year. >> good to be here. >> susie: so you have been talking to a ot love gold experts. the ones that are predicting a gold rally what did they see going to drive prices higher? >> the biggest factor is going to be a weaker u.s. dollar. the dollar in gold tend to move incertificatesly to each other so when the dollar is weaker investors don't feel very good about the paper currency so they

go to a hard asset, a good place to tore their wealth. now obviously the eurozone get issues have been take center stage. if europe is able to resolve their issues and a spotlight is shined on the u.s. we may find that our situation is no better than greece, if that happens the dollar could fall off and gold could rally. the other thing is perhaps cuan tative easing, will central banks like the federal reserve pump more money not system. many analysts think that will happen in the first quarter or second quarter of this year. and the third reason is going to be central bank buying. they bought about 344 tons of gold in the first 11 months of last year that is huge. and a key support for high gold prices. >> all right. let's look at the flip side because there ra others that are saying that gold prices are go stock pretty much stay where they are right now, through the rest of the year. so what's the thinking there? >> yeah, absolutely. the worst risk here is actually just sentiment it was a very volatile, very scary year in 2011 for gold

investors. you had gold plummet 18% from its intraday high of 1923 to its closing price of 2011, 1566. that's leaving many investors, many big name investors on the sidelines an gold really needs them company back into the market in full force. also gold not really trading as a safe haven right now. >> susie: let's move along because we have less than a minute. and you have names of gold stocks for those people who are interested in investing, that you have heard from some our sources so let's talk about some them. at the top of your list you have barrick gold, abx. what is the thinking there. why would this make sense and we'll quickly run through the other two. >> barrick gold is really the safety gold miner, if you are looking for that kind of risky play t is 12% growth profile over the next five years and a dividend. doesn't have sexy growth but nice stability. >> and then another one gold corp. this is trading off the nyse. why is that popular? >> because this has a sexy growth this is going to grow about 70%.

it's gold production will go to 70% in the next five years that is huge. but in order to do that it has to bring forward about six gold projects. there is a lot of room for risk, room for error there. >> and in a few words moveal gold's resource up 2% today. >> yeah, junior gold minor won't have any gold produced out of the ground until 5 or 6 years but could be a takeover target. very risky but very interesting play here. >> all right, thanks a lot. lots of information. do you own any of these stocks personally. >> as a reportser i can't, unfortunately. >> i know the feeling. thanks a lot, alix, great having you. >> and we've been speaking with alix steel markets reporter at the street.com. let's take a look now at what we're watching for tomorrow. november's wholesale trade numbers come out. and "fortune" magazine's allan sloan tackles the latest go-to investment, dividend stocks. also tomorrow, voters in new hampshire head to the polls. we'll see who they're supporting in the republican presidential race.

>> susie: macy's got a boost in its credit rating today, thanks to strong holiday sales and an improved outlook. moody's investors service lifted the retailer's debt from junk status to its lowest investment grade rating and said the outlook is "stable". the move comes just days after macy's raised its earnings outlook for the fourth quarter and doubled its quarterly dividend to 20 cents a share. the head of the swiss national bank quit in a scandal today. chairman philipp hildebrand said he was resigning to protect the integrity of the central bank. hildebrand said it was impossible for him to prove that his wife acted alone in a currency trade last year. that trade was made just weeks before he oversaw steps to cap the rise of the swiss franc. her profit on the trade has not been revealed, but its believed to be around 75,000 swiss francs.

with partisan politics reaching new heights, tonight's commentator has high hopes for the new year. he's doug holtz-eakin, president of the american action forum. >> 'tis the season of hope as a new year stretches before us, but what should we hope for - besides the obvious-- the steelers win the super bowl? i say we hope that good policy

becomes good politics. the u.s. desperately needs entitlement reforms, fundamental tax reform, and a path to avoiding a debt crisis. so lets hope washington fixes social security, instead of continuing its paralyzing fight over whether to steal two months or a full year of its financing. it is a disgrace to have as its plan for solvency a 23% across- the-board cut in the retirement support of retirees. americans deserve a social safety that that is reliable and durable. fixing social security would meet obligations. it would signal world capital markets that america will address its oppressive debt burden, perhaps buying a bit of time from our creditors, and it would restore some faith in public institutions. lets hope washington recognizes the need for pro-growth tax reform. permanent low marginal tax rates, a broad base, and an internationally competitive code are keys to meeting our growth needs. washington has been consumed by temporary tax policies, targeted at key political constituencies. these are ineffective, unfair, and unwise. i realize that most new year wishes end up being the seeds of december regret, but if not 2012, i will wish for the same in 2013, because it is only a

matter of time, and the u.s. doesn't have much. i'm doug holtz-eakin. >> susie: that's "nightly business report" for monday, january 9. i'm susie gharib. have a great evening everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org