>> this is n.b.r. >> tom: good evening. i'm tom hudson. job growth remains slow, so the federal reserve is sticking to its game plan, buying billions of dollars in bonds hoping to boost the economy. >> susie: i'm susie gharib. new home sales hit their highest level in two years, we look at what all that buying means for construction hiring. >> tom: and how smart-phones and tablet computers are driving g changes for the video and onlin game industry. >> susie: that and more tonight on "n.b.r."! good news today from the federal

reserve if you need a mortgage, or a business loan: interest rates wilstay super-low for at least three more years. the fed wrapped up a two day w meeting and decided to leave its key interest rate unchanged. is still growing at a "moderate pace," the housing sector is improving, household spding is "expanding," but businedi investment has slowed, the unemployment rate is still "elevated" as we know, and strains in the global financial markets pose "significant risk." as darren gersh reports, the fed wants to keep a low profile for the next few weeks. >> reporter: less than two weeks before the election, the federal reserve was clearly not looking to make big changes in its policy statement. so what we got were slight course corrections today. on inflation, for example, the fed said inflation picked p somewhat from septembeck becausm of higher energy prices, but that trend may already be in the rear view mirror. >> if anything, core inflation has been coming in low over the past three months.

the core c.p.i. increased only 0.1% over july, august, and september, pushing it further below their 2% target, i think that might be more significant for them than the fact that energy prices rose in a transitory way over the summer. >> reporter: we won't know for a few more weeks what the fed talked about at today's meeting, but it's a good bet chairman ben bernanke and his colleagues are trying to figure out what to do at tir december meeting.at that's just before a bond-buying program called operation twist expires. it's goal is br ging down long term interest rates. >> my guess is what they will do is they will expand their open- ended quantitative easing, double it from 45 to closer to 85 billion a month in treasury purchases. so be more gressive than the current quantitative easing. >> reporter: another topic of discussion today was most likely what to tell the world about where the fed hopes to take orhe economy. the central banks already sets a target for inflation of 2%. the debate now is whether to be equally specific about the fed's

goal for unemployment. >> the plus in tgeting thein employment rate is they get more juice in the sense that it would pushing long-term interest rates down more and it would push stock prices and housing prices up more. >> reporter: but members of the fed's policy setting committee disagree on how to measure that target. >> lots of things besides the fed that's action influence the unemployment rate. so it's very hard to set a target for something you don't control and the circumstances around which you can't really foresee that well. >> reporter: the fed would like to reduce uncertainty about what it is trying to do, but first the fed itself has to resolve it's own uncertainty about how low it can push unemployme . .arren gersh, "n.b.r.," washington. >> susie: for more analysis on that fed decision, diane swonk joins us, she's chief economist at mesirow financial. so, the fed is stking to its plan, no real surprises today.

did anything stand out foro you? >> you know, there really wasn't much that stood out. i tnk that was importantat the real issue here is that the fed is still continuing to be sort of a certainty in this ocean of uncertainty for both consumers and investors alike, saying we're willing to leave tha punch bowl out that a little longer than anybody thought and maybe get some people tipsy. >> there wasn't much market reaction to the fed decision. do you think the message of the markets is there is really t much more that the fed can do to ft the economy? >> i don't think the fed is out o bullets at all, nor do they. they think every time they do something, they need to do more. and the federal reserve is certainly going to make another announcement in december to compensate for the end of what they call the twist. chubby checker's song, the twist." they're going to continue to buy more treasury bonds

and extend their balance sheet further. the problem for the fed is it is almost as if ben bernanke has dropped the money from the proverbial helicopters and it has got caught in the treth and they're trying to shake it out of the trees and have it fall to the ground so we can pick it up and spend it more. >> a lot of people are homeless, and a lot of people are going to be voting in the election, and there trying to figure out what is going on in this economy. we seem to get two pictures. we have companies saying that the outlook is bad, and we're hearing they're laying off workers and closing plants and cutting costs, and yet theyi message from the report card from the feds sounded a little more encouraging about the recovery. so which is it? clear it up for us. >> what we're seeing is the manufacturing sector, which had been the shining star, is going to the housing sector, which has been absent during much of this recovery, the fact that the housing sector is coming back is a really

powerful message out there, and really important that housing prices have bottomed. that's the largest uity holdings for most consumers, and that along with the fact we're building home again, particularlyo single-family homes, and in terms of the dollar. bigger than apartments, and that is not happening again. that's an important start in the right direction. >> you know, warren buffett said today it really doesn't make a difference which candidate ends up in the white house. american businesses and the economy will improve under either one. so does it really matter who wins the presidential race? >> you know, i spend more time understanding politics to handicap what is going to happen with fiscal policy, tax policy, and spending policy, because that matters at this stage of the game.se what really is is the game changer isnot really who is president, but whono wins the w senate and so we have

a roadmap going forward, getting rid of some of the uncertainty on taxes, spending, and everhing else out there. >> we have one more meeting of the federal reserve before the end of the year. anything we shouldhi be expecting? what are you monitoring over the next couple of weeks and months? >> what weu will see is i think the fed will expand their balance sheet further into december. as we get into next year, i think we will see that shift, where the fed stops talking about calendar days, and actually starts explicitly targeting the unemployment rate over a period of time. we'll see something like -- we'll keep monitor costs easy and continuing to expand our balance sheet until unemployment falls below 7%. they haven't decided on the actual rate yet. i would have loved to have been a fly on the wall today because no doubt there was a debate on that. they want to get explicit targets so people really

know what the fed is going to. >> diane, thanks so much. chief economist at mezro financial. >> reporter: i'm erik miller in new york. still ahead, we r ok at why an improving economy isn't creating more construction jobs. w tom: early stock gains on eall street turned to losses by the closing bell as investors and traders reacted to the federal reserve's latest take on the economy. positive news on housing failed to bolster stocks, we'll have more on housingt aittle later in the program. l as for stocks: the dow fell 25 points, the nasdaq lost nearly nine, and the s&p was down four. for the second time this month, federal procutors in new york have filed a civil laws it against a big bank over bad home mortgages.la ter banklawsuit goes of america for at least one billion dollars in damages, alleging bank of amerite's countrywide financial unit duped the government into buying home loans destined to go bad.me

in the lawsuit, prosecutors said countrywide called its strategy "the hustle," designed to speed up mortgage loans by eliminating quality safe-guards. the hustle allegedly included mis-stated incomes forta borrowers, inflated proper appraisals and mis- representations of the property being bought. but at the same time, countrywide claimed it was making it morerdifficult to qualify for home loans.ul >> countrywide and bank of america systemicly removed every check in favor of its own balance.ov they cast aside underwriters, eliminated quality controls, and concealed resulting defects. >> reporter: the government mortgage giants subsequently bought the mortgages, only to see them fail, contributing to the collapse and government rescue of fannie mae and freddie mac in 2008. this is theirst federal civil case involving loans soldedo the two government mortgage giants. two weeks ago, federal prosecutors sued wells fargo, accusing it of reckless mortgage lending, sticking taxpayers with the bill. today's lawsuit claims bank of america failed to buyback loans

from fane mae false, and late this afternoon, a bank of america spokesman told "n.b.r."f that is simply false. the statement continued, at some point, banof america can't beri expected to compensate every entity that claims losses that actually were caused by the economic downturn. >> sue: as we reported, the federal reserve said the housing sector continues to improve, and there were more signs today. sales of newly built single family homes surged to their highest level in more than two years. september sales rose 5.7% to an

annual ratweof r89,000 units. u that was much better than expectations. home prices were up as well, straightr a seven month, and nearly 5% yearevver year. all this week we're looking at the housing market. tonight: will rising home sales, and higher prices mean more construction jobs? currently, the unemployment rate for those workers is about 12%, much worse than the national average. erika miller reports. >> reporter: the men and women in hard hats have been ong the hardest hit workers since the great recession. the u.s. economy may be recovering, but there has not been much of a gain ine cotruction employment. >> construction employment has been very spotty. we've seen a couple of months and then it flatns out or even drops back down.fl >> reporter:n the past two years, the constructn n industry has added 36,0ry jobs.36 that's fraction of the 3.9t' million positions that have been created in the private sector overall.

but there has beeone bright spot across the nation: apartment construction. ige reason has as much to do with lifestyle preference, as economics. >> there does seem to be a shift in preferences among young, potential homebuyers to live closer to the city or in the first ring of suburbs. many of them are looking o ay in apartments living rather than having a home further out where they need a car to get any where. they would have more of a mortgage they would be tied into. >> reporter: on the flip side, public spending on constructiono has fallen sharply. it's down 3.5% from a year ago, as state and local governments tighten their belts. the conruction industry is hoping next year will be better for hiring than this one. many u.s. businesses have put projects on hold, due to c political uncertainty, and worries about the fiscal cliff. but the most impoant factor is the economy:

>> you might expect that as the housing recovery gets a little bit of pace over the next year or so, that should translatean into stronger hiring going forward. we are not going to return levels we were at before thern recession, the housing sector is not going be that big again. but the trend should be up. >> reporter: if construction improves, it's good for the economy as a whole. according to trade association figures, every billion dollars spent on construction creates 28,000 jobs throughout the economy. erika miller, "n.b.r.," new york. >> susie: tomorrow, we tackle the rental market, and one especially hot market for renters, as we continue our week-long look at the housing comeback.in >> tom: from housing to manufacturing. manufacturing has been a bright poin the u.s. economy, but its utlook may be dimming.ma a eliminary report for october shows demand for u.s. products is beginning to wane, threatening to turn manufacturing into a drag on the economy. diane eastabrook has details.

>> reporter: there was both good and bad news today for u.s. manufactures. the good news: financial information firm markit said its flash purchasing managers index showed modest improvement in october, increasing to 51.3 from 51.1 in september. a reading above 50 is considered positive. now, comes the bad news. markit said its most recent survey of roughly 600 u.s. factories found growth in new orders slowed to a modest pace this month. while hiring increased slightly it did so at the slowest pace in two years. and finally, factories said coodity costs increased sharply in this month. markit's chief economist chris williamson said, "while he consumer side of the u.s. economy appears to be finding a thw lease on life, the manufacturing sector is currently acting as a drag in termsf both economic growth and the labor market e purchasing manars told markit they think much of the wemaness stemfrom uncertainty in europe and asia and concern about the

fiscal cliff at home. diane eastabrook, "n.b.r.,"fr chicago. >> susie: zynga, showed investors today that it's very much in the game. after the market close, shares of the video ga company, most famous for farmville, jumped more than 15%. zynga's quarterly results met estimatesnyand the company also said it will buthback $200l million worth of shares. looking at the numbers: zynga broke en. and revenue was a bright spoke up 3% from a year ago.

but as ruben ramirez reports the gaming industry is shifting as ople spend more time on their smart phones and tablets. >> reporter: you don't have to be a big company to get your game onto a smartphone, analysts call it "the democratization," and it's wreaking havoc on the video game industry. >> for years and year you had an arms race in the video game industry. ve bigger companies were able to make much better games, better graphics, better talent, all those kinds of things and that worked really well when there was a limited market in terms of the shelf space in a stoe. >> reporter: sales of in the video game industry fell 24% last month, marking a tenth. consecutive monthly decline. big companies like electronic arts, take two interactive and activision have struged ovetr to find their footing in a rapidly changing environment. >> it's just been a sector that has been decimated by the fact that mobile devices, tablets, and phones are really taking more and more of consumers time. >> reporter: the move to social gaming like zynga was supposed to breathe new life into industry, but that's fading fast.

>> now that everything is moving away from desktop and away from facebook to the mobile platforms zynga is just like everyone else and so far they haven't proven that they can make money on that. >> reporter: over the next two weeks well see big name titles like halo, assassins creed, and call of duty hit store shelves just in time for the holid while schacter says those titles will likely do well, a shifting industry landscape may leave some of the big players behind. ruben ramirez, "n.b.r.," n.y.c. >>usie: for rajat gupta, it will be two years in prison, and a $5 million fine. the former goldman sachs board member was sentenced here in new york today, for leaking tardroom secrets to uss friend and former hedge fund manager, raj rajaratnam. gupta was convicted of securities fraud and conspiracy. prosecutors had asked for a prison term of eight to 10 years.

so another rough day in the markets. >> and at least f investors, not allowed to hang their buy trades on from the federal reserves. let's get everybody updated with tonight's market focus. and u.s. stocks dids. continue to move lower. adding to their losses since ate last week. early gains in the s&p 500 vanished in the first hour of trading. the index hugged the unchanged level waiting for the federal reserve, only to movestower after the central bank sticks with its strategy of bond buying and low interest rates. trading volume was 649 million shares on the big board. it picked up from yesterday's pace on the nasdaq, to just below two billion shares. among the top sectors, utilities was the biggest percentage loser, down 0.7%. the energy and technology sectors fell 0.6% each.

tech giant cisco systems was a drag on the dow jones industrial average. the stock was stung by a disappointing outlookrom a big loompetitor. shares of cisco fell 3.5%. volume almost doubled.om this is a two month low for shares. adding to the cloud over cisco, hewlett-packard c.e.o. meg whitman at a tech confernce said, despite troubles at her company, she think h.p. is in better shape to take advantagenc of the changing technology market than cisco. that boast didn't help h.p. shares though. they sank 1.5% closing a penny above tir most recent low. as for the competitor who'st outlook weighed on the tech sector, that was juniper networks. late yesterday, the networking gear manufacturer had a disappointing forecast as spending by telecommunications companies remains uncertain. shares dropped 9% even though ter thanany reported b expected earnings in the latest quarter excluding charges fored layoffs. networking stocks could face new selling pressure tomorrow. after the close f-five networks turned in disappointing quarterly results. after closing at $93.32, sharesu

fell as much as $10 in after hours trading. a.t.&t. saw the growth in its new wireless customers slow down to a fraction of its biggest n.mpetitor: verizon. earnings were three cents higher than estimates, while revenues were disappointing. almost half its revenue comes from its wireless business. 151,000 customers signed long- term contracts during the quarter. verizon had 1.5 million new subscribers. a.t.&t. stock dropped 0.8%. the stock has been sliding since the first week of october, when it hit a four year high. we saw mixed results and stock reactions from a quartet of big defense contractors. boeing had better than expected earnings and it raised its full year outlook. but shares dropped a fraction. alsorup-grumman shar fell despite beating shrnings estimates. lockheed martin rallied 2.1% after raising its outlook and reporting stronger than anticipated results. and general dynamics was up 2.4% even though its earnings came up short of estimates.

facebook was ve heavily traded h after last night's better than expected earnings report. it translated into a 19% stock price pop today. volume was five times average. this is its biggest single day rally since it went public in may at $38 per share. but even with the pop, it remains well below that initial price. meantime, netflix fell 11.9% after warning last night it may lose money this quarter thanks to its international expansion costs. the five mt actively traded t change traded products were mixed. the gainers were the emerging markets fund and the s&p 500 volatility note. and that's tonight's "market focus."

>> susie: the big business of debt collection is about to get a new watchdog. the consumer financial protection bureau said today it will supervise firms that collect at least $10 million in consumer debt annually. that's more than 60% of the collection industry. the bureau says it will examine whether collectors are up front about who they are and how much people owe. they'll also watch for companies that harass consumers or use dishonest phone tactics. >> tom: this is an important week for microsoft and its shareholders. the company is due to officially launch its newest operating system on friday called windows 8. but today the company learned it faces a fine by european regulators that could amount to more than $7 billion. >> reporter: microsoft has a month to respond to accusations it did not offer a choice of internet browsers beyond its own

internet explorer in a recent version of its current we dows softwarnt it is required to do so under an agreement with euro an regulators three years ago. in a statement, microsoft said "we sincerely apologize feu this mistake," calling it a technical error. t as microsoft prepared to release its windows eight software friday, it also acknowledged it's making changes in how users can choose their internet browser as a result of its discussions with the european commission. microft has a lot at stake. a european fine could be as much as 10% of its global revenues of $74.3 billion. and with a new version of windows coming this week, thatof product is a key driver of future business. the windows division brings in 25% of the company's revenues. shares sank 0.6% to close at $27.90, their lowest price since mid-january.

>> susie: in the money file tonight, it's that time of year again. open enrollment for medicare part d, the prescription drug corage. here's raren gibbs, founder of the gibbs perspective. >> it's open enrollment time for medicare part d.e' if you're 65 years or older, disabled or a care giver for someone on medicare, you have from now until december 7 to review and modify your prescription drug plan. approximately 49 million people are enrolled in medicare part d and can expect an average annual premium increase of 7%, but increases can vary from as low as 1% to as much as 23%. any changes you make will be efftive january 1, 2013. medicare has increased coverage for brand name and generic drugs in the donut hole, the gap between initial efverage limitia and maximum coverage and expanded coverage to include depression, alcohol abuse and cardiovascular disease.ma compare the cost of prescription drugs, both brand name and generic; determine if your preferred pharmacy is in the

plan's network; and consider whether you want co-insurance or co-payment coverage some combination of both. with more benefits, better choices and lower costs, it makes sense to shop and compare. to find a plan, go to: www.medicare.gov. i'm karen gibbs. >> susie: when it comes to celebrities and big pay checks, you hear a lot about oprah d brad pitt, but what about those who continue to earn big bucks when they're gone.ra forbes is out with its annual list of top earners among, dead celebr ies. elizabeth taylor is number one: her estate earned $210 million in the past year, much of it from an auction of her jewels and art. she's followed by michaelle jackson, at $145 million, and perennial top seller, elvis, at $55 million. tom if you're wondering how they manage to pull in such big bucks, most of it comes fm licensing deals with their estates.

that's "nightly business report" for wednesday, october 24. good night tom and everyone. >> tom: goodnight susie, we'll see you online at: www.nbr.com and back here tomorrow night.es captioning sponsored by wpbt captiod by media access group at wgbh cess.wgbh.org >> join us anytime at nbr.com. there, you'll find full episodes of the program, complete show transcripts and all the market stats. also follows us on our facebook page at bizrpt. and on twitter @bizrpt.