>> susie: crude oil prices slip on fresh worries about demand and the global economy. but, traders say there's no stopping prices at the pump. >> i do think wholesale wise you're going to see $5 gas in a lot of areas of the country, on both coasts. >> tom: this man is a big investor in berkshire hathaway stock. we took his pulse after warren buffet released his annual letter to shareholders. it's "nightly business report" for monday, february 27. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

captioning sponsored by wpbt >> susie: good evening, everyone. a pull back in oil prices today after days of spurting higher. there are still worries about iran and supply disruptions, but tom those were overshadowed by concerns that the world economy is slowing. >> tom: susie the risk of higher prices was a concern this weekend at a meeting of world finance ministers. in new york trading today, crude futures lost $1.21 to close at $108.56 a bael. still, u.s. oil prices are up 10% this year. >> susie: those high prices have pushed energy stocks up, too.

and, as suzanne pratt reports, there could still be time for investors to take advantage of the big move higher in big oil stocks. >> reporter: no matter where you pump, gas prices have been heading higher. and, that's bad news for consumers and perhaps the whole economy and it's fragile recovery. but, it's been good news for big oil companies or supermajors and their shareholders. so far this year, a closely watched energy sector e.t.f. is up 10% moving almost in lock step with the rise in oil and gas prices. the question is whether oil stocks have more room to run. some experts say the answer depends on what happens here at the pump. many factors fuel oil company profits, including costs and environmental disasters. but, a big move in oil prices plays the biggest role. one energy expert says what's most important is that crude oil prices remain close to or above $100 a barrel.

>> a deep water well costs about 50 a barrel, $75 depending where you are. so, if you can sell your oil at $100 plus it's very positive for any of these companies. >> reporter: so, where are oil prices are headed next? energy trader anthony grisanti says that's easy: higher. >> number one you have the threat from iran that's being held over this market and number two as far as refineries closing. you've had three of them close on the east coast, you've had a couple go down on the west coast, you've had some in europe being shutdown and these are shutdowns that are going to be permanent. >> reporter: others aren't so certain energy prices will continue to climb north. they believe geopolitical tensions will be less of a support for the market and then there's the demand concern. higher prices at the pump usually means people buy less gas, which in turn pushes prices lower. still, others say one more reason to consider buying big oil shares these days is their

dividends. on average they pay about 3% to 4% and those payouts come no matter what happens to oil prices. suzanne pratt, "nightly business report," new york. >> tom: a potential new source for imported oil into the u.s. is trying again. in january, the obama administration blocked trans- canada's keystone x.l. pipeline over environmental concerns. but the company today said it will start building the southern leg of that pipeline, running from the cushing, oklahoma oil storage hub to refineries on texas' gulf coast. the $2.3 billion smaller project should be up and running by the end of next year. and since it doesn't crossny natial borders, it won't be subject to a full-blown federal environmental review. >> susie: the trial to decide who should pay for the nation's worst oil spill was delayed today. the one-week delay allows b.p. time to continue negotiations with the plaintiffs' steering committee. that's the committee represents condominium owners, fishermen, hoteliers, restaurateurs and others who say their livelihoods were damaged by the deepwater

horizon explosion and subsequent oil spill. still, b.p. says there's no guarantee a deal can be reached. >> tom: blue chip stocks once again tested the 13,000 mark on the dow jones industrial average and once again, they failed to close above that level. here's how the day played out on the dow, plunging over 100 points at the open, then coming back to life after a report on pending home sales showed a jump in the number of sales contracts signed last month. still, the dow ended the day down slightly, falling about a point and a half, but the nasdaq rose two points and the s&p was up about that much. after the closing bell today, greece was officially rated to be in default of its i.o.u.s. s&cut greece long rm credit rating to selective default. earlier this month, s&p warned it would make the downgrade if greece was going to force its lenders to swap their i.o.u.s for new ones, accepting less money. greece did just that and now the selective default rating brings up questions if payments on bond insurance and derivatives will

be triggered. still ahead, tonight's word on the street, cloud. james rogers of thestreet.com has his three favorite stock plays when it comes to cloud computing. >> susie: a lot of talk today about warren buffett and succession plans at berkshire hathaway where he is chairman and c.e.o. he gave some clues over the weekend when he released his annual letter to shareholders. here are the highlights. on succession, buffett said one individual has been chosen, but he didn't identify the person. buffett who is 81 years old and his business partner charlie munger, 88, have no plans to step down. but buffett said the transfer of responsibility will be seamless when the time comes. buffett reported that berkshire's 4th quarter profits fell 30% and 2011 earnings were down 21%. but the company's cash rose to 7 billn. on housing, buffett said the market remains in a quote "depression of its own" and he was dead wrong predicting it

would recover by now. on investing, stocks will outperform gold and bonds. and even though investors believe bonds are safe, buffett says they are quote "among the most dangerous of assets." i turned to glenn tongue for some reaction and analysis. he's managing parter at t-2 partners, where berkshire hathaway is its top holding. we began by talking about buffett's succession plan. >> i think it's likely that he will run the company for another five years. however, if the unexpected happens, and he's not running the business tomorrow, it's comforting know that is there's someone in line to run the business. >> why sdntd warren buffet just name his successor? >> i don't see why naming the individual today is a benefit to the company, to the shareholders. people who work weapon berkshire hathaway, people who sell their companies and businesss to berkshire hathaway wanted to be dealing with him, not the next in

line. they don't want to be think about those issues wh. mr. buffet is no longer running the company, someone else will step into the role. >> talk about berkshire hathaway the company, how is >> fantastic. the five most important businesses operated at record level. he stated they'll be generating $10 billion in profits next year. >> susie: quarterly profits were down for 20 len. >> if you look at each and every one of the operating businesses, whether it's the utilities or the railroads or manufacturing businesses, they were all up year over year, and all up quarter over quartered. and so the underlying businesses are doing traffically well. the accounting conventions required a wright up, rather than a write down. the earnings go down, but the cash flow went up, and the operating performance has never been stronger. >> susie: but what berkshire stock.

the shares trading at 120,000 for two years. >> we think it's worth about $180,000 per share. we were buying berkshire stock today aggressively in the marketplace. it has the most powerful balance sheet of any company in america, and has earnings power growing very rapidly. >> susie: would you be that optimistic if tomorrow warren buffet wasn't involved in the company? >> there's no element of warren buffet premium that we throw into our valuation. we think if mr. buffet left the company, he would still drink coca-cola tomorrow, and people would be ensuring themselves through gieko. so we value those elements of the business. >> susie: what's your reaction to what warren buffet said about bonds as the most dangerous of assets. do you agree with that? >> i agree. if you look at the interest rate, it's very, everywhere low, and if prevailing interest rates go up, the principle will go down, and you'll lose purchasing power by investing in bonds. >> so berk sthir's cash is now

up to $37 billion. is it time to pay a dividend, even though buffet is not a fan of them? >> i don't think so. i think warren buffet can find better deals with the cash an the shareholders can with the dividend. he finds opportunities like investing in bank of america. it's a fantastic deal that was available only to berkshire hathaway and warren buffet >> susie: glen, thank you for talking. >> thank you. >> tom: warren buffett also said today he would buy millions of single family homes if he could. today, 2,500 of them went on sale under a federal pilot program. the idea is to sell fannie mae- owned homes to private investors who want to use them as rental properties. as darren gersh reports, these homes may go fast. reporter: warren buffett is not alone. money-making ideas love company and large investors and private equity types already have hundreds of millions, maybe billions of dollars, on hand to buy up foreclosed homes and rent them out. at carrington mortgage rick sharga says the company is ready

to buy 30,000 to 40,000 homes. >> i think we all agree with warren buffet. if we could buy millions of homes, we'd be doing that right now. there is a lot of capital that's very interested in participating in a program like this. >> reporter: like this, meaning a pilot program announced by federal regulators who took charge of the troubled mortgage gian fannie mae and freddie mac when the companies were placed under government control. the federal housing finance agency today announced a test sale of 2,500 homes around the country. focusing on areas from los angeles to nevada and florida where the housing fell hardest. but this is a tiny fraction of the 700,000 or so foreclosed homes now on the books of financial institutions. and here's the problem: warren buffett wanna-be's say they can't find enough homes to buy now. some banks may be holding off on selling, believing they can get a higher price. others may not be carrying foreclosed homes on their books at realistic market prices. and that could cause a lender or

somebody else holding these properties to have to do a significant write down at the point that they execute the sale. as investors prepare to become big landlords, economist dean baker hopes regulators will be more creative. he'd like to see renters offered a chance to become old-fashioned american homesteaders. >> the basic idea is that you have someone come in and pay some nominal amount to buy it initially and then if they stay there and fix it up and pay their taxes live in the place for five years, then it's theirs. with private equity lining up to buy rental properties, critics worry the industry that caused the housing crisis is now preparing to profit from the destruction. but investors argue the bad actors have gone out of business. >> it's a popular sentiment that the same folks who got us into this mess are going to profit on the way back. fortunately, it's not true. >> reporter: while warren buffett dreams of buying millions of homes, big investors have modest hopes. they figure the market for big coanies and private equi investments at roughly 200,000 foreclosed homes in the next two years.

darren gersh, "nightly business report," washington. >> susie: more housing headaches for bank of america, the giant bank was hit with a lawsuit by the u.s. department of housing and urban development today. it's charged with discriminating against disabled homebuyers. the agency says b. of a. put unnecessary and burdensome requirements on disabled borrowers. in two separate states, borrowers complained saying they had to show medical records to prove their disabilities and detail their social security income. bank of america says the cases came down to inconsistencies between federal housing administration lending standards and conventional underwriting standards. and that it followed the stricter federal standards which require more detail.

>> susie: with fees rising and customer service falling, more americans ditched big banks last year and moved their money to small banks and credit unions. j.d. power and associates surveyed 5,000 people who shopped for a new bank or bank account over the past year. its defection rate for large, regionalnd midsize banks averaged as high as 11% last year, up sharply from 2010. meanwhile smaller banks and credit unions lost less than 1% of their customers. that was far better than the near 9% defection rate those small shops saw a year ago. >> tom, surprisingly, bank

stocks, big and spall led the market higher today. >> tom: a lot of folks are putting their money into those bank stocks today, even though we got the news how the customers have been behaving. susie, take a look at tonight's market. >> tom: a mixed finished for the major stock indices with the dow industrials unable to stick above 13,000. but stocks were able to bounce back from some early session selling thanks to some more encouraging signs in the housing market with pending home sales up. but we did see the dow dip into the closing bell, ending with a small loss. it was a trio of financial stocks that were the best performers insidthe dow. j.p. morgan and nk of amera each gained two percent. american express rallied more than 1.5%. in the broad market, the financial sector was the strongest, but the gains were pretty tame under 1%. the consumer discretionary sector was the second best today with only a three-tenths of a

percent gain. the jump in pending home purchases helped spark some buying in home-related areas of the stock market. pending contracts on existing homes jumped 2% in january, up to the highest level in almost two years. that news on real estate helped pushhares of whirlpool to a seven month high, jumping almost 7%. volume was strong on the move. paintmaker sherwin williams is at a new high today, up more than 2%. shares are up more than 26% in the past year. speaking of homes, home supplies retailer lowe's turned in earnings a nickel better than estimates. similar to home depot's quarter, lowe's benefited from mild weather allowing customers to start on home improvement projects early. shares saw heavier than usual volume, but were up less than 1% focus shifted to online travel company priceline.com after the bell today. and the name your own price website continues to see big

growth. wall street was expecting a big jump in earnings from a year ago. priceline did not disappoint. results were more than 30 cents per share stronger than estimates. both international and domestic travel bookings were better than expected. priceline shares saw little movement during the regular session today, but shot up more than 6% in after hours action to over $628 a share. if it holds tomorrow, that would be more than a decade high f the stock. a big bankruptcy in japan may mean one less global maker of a common memory chip used in computers and that had shares of micron jumping. m.u. jumped almost 7% to an eight month high. el-pida memory in japan filed for bankruptcy under the weight of big loans coming due. micron is the last u.s. maker of dynamic random access memory chips. while the overall energy sector cooled a little bit today we did see some buying in a giant oil driller and a master limited partnership were hot

driller trans-ean rallied 5%. it reported a loss last quarter related to the 2010 gulf of mexico oil spill, indicating a possible settlement in the case. cheniere energy partners, the master limited partnership focused on liquefied natural gas jumped to a new 52 week high up 12%. private equity firm blackstone is investing $2 billion to help the firm build a liquefied nat gas plant in louisiana. a lot of the commodity market focus has been on energy lately, but today soybeans took the lead. "beans in the teens" is the old sang athe chicago board of trade and we're there for the first time since last fall. beans jumped above $13 a bushel today for the first time in five months. the markets thinks the south american harvest will be disappointing, while global demand for beans continues growing. and that's tonight's market focus. >> susie: record help for the nation's farmers last year in the form of crop insurance. u.s. farmers received $10 billion in crop insurance payouts and with 5% of 2011 claims outstanding that number

could go higher. drought in the great plains, spring flooding along th mississippi river and crop- damaging freezes in the south pushed claims higher. the last record was in 2008 when payouts topped $8.5 billion. >> tom: the forecast for technology is cloudy as in oud computing. the movement to on-demand software and data storage continues to pick up. which brings us to tonight's word on the street: cloud. james rogers is technology editor at thestreet.com. >> nice to see you, congratulations on the new gig. >> thank you very much. >> tom: tell us how cloud computing is different, and how it's changing? >> well, you know cloud is one

of the textbook words we see. it's a trend picking up. it's becoming a mainstream technology. what is it? basically there's different forms of cloud. cloud could be a business that accessing servers and storage capacity like rack space or a company that's using specialized software services like sales force.com where all of these areas are growing. >> tom: you mentioned two companies. emc is the granddaddy is the space. share prices had a sharp rally, what could fuel it higher. >> emc provides the core infrastructure like basic storage hardware or voterualization which is popular, it has a lot of weapons in the arsenal, it's safety and security, and i think because of this, it's really in the sweet spot for

the cloud, cloud and demands for the service helped push them to record results recently and continuing with results. i think emc is one of tech's best performers. it's not the sexiest, but there's a lot more upside potential. >> emc is the old school cloud play. software side, sales force.com, crm is the ticker symbol. its had a heck of a quarter, and has a record order on the books for the current quarter. how can it move higher? >> i have sales force as one of the big tech rebound stoblgs twr 2012, and it's starting to live up to that bill. this company is one of the first cloud traillaze, and if you look at resources, what we're seeing is more and more

large entersurprise deals. >> now the both protential -- i k maybe we're seeing it's overblown, and there's more growth. >> tom: finally. thirst seconds on rack space. this is seen as a pure play in cloud. and the stock price kind of renekts that as the excitement as picked up in several weeks. >> like competitors they focus on the cloud. customer support, and i spoke to the executives there, and they have new product plans for this year, and on the financial side of the company, there's a lot of upside. >> tom: can you or do you own any of these stocks, james if >> no, none whatsoever. >> reporter: you can read the article at the street.com and find a link on our website. james rogers with the street.com. >> thank you, tom.

>> susie: as the nation gears up for prime elections. >> susie: as the nation gears up for super tuesday with primaries in michigan and arizona. tonight's commentator says there's something she'd really like to see during this presidential race. she's maya macguineas, president of the committee for a responsible federal budget and >> it's campaign season and with campaigns come lots of promises. last week, we released a report looking at how the republican candidates campaign proposals would affect the country's bottom line and we have also analyzed the president's budget. suffice it to say, we are on track for a whole lot of red ink. so here's my proposal. once we get to the general election, we should have debate focusing solely on fixing the budget. each candidate would be required to put forth a plan to save $5 trillion over a decade with the full set of details. and it would give us, the voters, a chance to see what it really takes to create a responsible budget. we'd see what it takes if we don't raise any taxes at all or cut them further as all the

republicans have proposed; and we see how much it would take in tax increases to cover all the new spending the president has proposed while also bringing down the deficit. better yet, we might see what a more realistic proposal would look like. maybe the candidates wouldn't show up, maybe they would try to use funny numbers. but maybe, just maybe it would jumpstart the long overdue national discussion about what it will really take to fix the budget. i'm maya macguineas. >> susie: and finally tonight, from insider trading to ponzi scheme, f.b.i. investigations into financial crimes last year led to billions in court-ordered restitution. the ds say thewon mo than 3,000 financial crime convictions last year, securing $12 billion in court ordered payouts. in some cases, the government itself was the victim through medicare fraud. and the f.b.i. leaned on gordon gekko himself or the actor who played him in the "wall street" movies to help fight financial crime. the agency used actor michael

douglas in a new public service announcement warning investors about deals that are too good to be true. >> tom: here's what we're watching for tomorrow. we'll see the latest numbers on durable goods orders to see if that washing machine you bought in january is adding to the economy. and we'll get the latest on home prices with the s&p case schiller home price index for december then, when it comes to the economy and politics, there's often a lot of talk. we look at campaign promises versus political realities. that's "nightly business report" for monday, february 27. i'm tom hudson. goodnight everyone and goodnight to you, too, susie. >> susie: good night, tom. i'm susie gharib goodnight, everyone. we hope to see all of you again tomorrow night. "night business report" is made possible by:

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