captioning sponsoredy wpbt >> reform is coming. it is on track; its coming. we have tried fodecades to fix a broken system, and we ha never, in my entirtenure in public life, been thislose. >> sus: vice president biden announces a deal with th nati's hospitals to cut $155- billion in health ca costs over the nt decade. cong up, what the effort means for health care rerm. >> jef it's google vs. crosoft. as the web search giant delops a computer orating system. and the softwa giant goes aftethe web search market. >> susieanother nasty quarter for alcoa, as the alinum giant kicks off earnin season. the metals maker says it facing the most serious downrn in the history of the uminum dustry.

>> susie: tonighs "street critiq" guest says he's not sure there ever were any economic green shos. he's paul lars, equities stratest at morningstar. i'm susie gharib. this is "nightlyusiness report" r wednesday, july 8. "nightly business port" is madpossible by: this program was madpossible by ctributions to your pbs station from viewersike you. thanyou. >> susie: good evening everyone. more funng today for president obama'ambitious healthcare reform plan. the nation's hospitals agrd to give up $155illion in medicare

and medicaid paymentover the next ten years to lp pay for the pl. vice preside joe biden announcethe agreement at the white house,aying the administration's orhaul of health ce is "on track, it is coming." thadministration is pushing for a comprehense bill to be signed in e fall. stephanie dhue reports. >> reporter: t $155 billion the obama administration has wrunout of hospitals sounds like a lot. buthat's over a decade. and $45 billion less thathe administrati was looking for. vice president joe bid says hospitals ll make up for the lower payments. >> as more people are insure hoitals will bear less of the nancial burden of caring for the uninsured anunderinsured, anwe'll reduce payments to cover those costs, in tand with that reduction. >> repter: the agreement is contingent on health reform becoming law. the pharmaceutical indusy has made similar agreement, and will spend $80 blion over n years to lower prescriion drug

costs. physicians, labor unns and insurance mpanies are also ing asked to do their share. chip kahn, w represents inveor-owned hospitals, says today's deal puta cap on the amou hospitals will have to give up in the debate. >> there are lot of moving parts for hospitals in healt reform, and thisives us sort of aense of security about the big picture that we can then work with e committees on the details. >> reporter: health pocy analysjon glaudeman says the agreements buy a period of cal before the storm >> these deals, as they e stagged out over a period of days and weeks have the fect of dampening t public position, that might otherwi arise fromhese organizations, and essentially postponehat day of reckoning until whave anctual piece of legislation. reporter: lawmakers are wrangling over how tpay for thhealth care bill. proposs to raise reven by limitingax deductions for employers or ireasing medicare yroll taxes are popular. and reducing provider sts further ll also meet resiance.

chip kahn says hospitalsre concned a public insurance planould cut costs simply by paying below-medicare tes. >> those rates arerequently insufficient and the lasthing need is to get both new peopleovered or people who have coverage now, havthem covered by anotherayer who's nopaying well enough. >> repter: if health care reform a patient, it woulde in critical cartoday. the next month will dede if ll survive this year. if health care reform we a patient, it wod be in critical re today. e next month will crucial to determine if reforhas a chance of psing into law this year. stephanie dhue, "night business report"washington. >> jf: we'll talk health care reform tomorronight with healthnd human services secretary kathleen sebelius. >> susie: leaders from theroup of eight leang industrial nations say their economies e still in serio economic troubldespite some encouraging signs. meeting l'aquila, italy, g-8 leaders including s. president obama, said they'ltake all steps neceary to restore grth and maintain financial stability. however, they also pleed to begin anning a withdrawal of

stimulus measures adopteto combat the fincial crisis. >> jeff: another sharp decli in energy prices once agai capped any real llishness in equies. the dow lost about 60 pointsn the first halff the session. thatracked a sharp 4% decline in oil prices, a neay $3 slide to $602 a barrel. but the selling appeed to bring inhe proverbial bargain hunters. e nasdaq rallied and so did the dow back to brk-even levels. yers flocked to e treasury's 9 billion sale of 10-year notes. th lead to a huge rally.

>>eff: as the u.s. continues to pour oops into afghanistan, another ttle is emerging: the fight against cyber crim several govement websites in the uned states and south korea, including thehite house and u.s.ecret service, went down in recent days. ber attackers also targeted e "washington post," the nys and the nasdaqin some cases making it tough for users access the infecd sites. soh korean intelligence agents sanorth korea or its sympathizers may be behind t cyber assault. whoever the culprit,he bigger questi seems to be whether the u.s. iready for more powerful attacks. tech expert james lewis ys no. >> this attackas primitive as it was, shed that some u.s. agencies are not prepared. so if the most bic attack could takehem offline, what

would a sophisticateopponent do? th should worry us. jeff: president obama unveiled a cyber-defse plan in late may but many the details are ill unclear. in the meantime, the u. government ss all sites are ck up and running. it's also working to confirm whether north korea is ifact responsible r this assault. >> susie: there's a ber battle of different sort underway and its pitting two ch titans againseach other. google saitoday it's preparing to launch its own operatin system for persol computers a direct assault on riva microsoft. as sco gurvey reports, the bold move is latest in a sies of srmishes between the google and microsoft. reporter: the way google ha been attacking mrosoft, you'd almost tnk it was personal. maybe it is. google's announcement th it will delivern operating system to compete wh microsoft's windows cos just weeks before microst sends a final version of windows 7, to computer makers. "7" is thencarnation of its bread-and-butter product. t while google's announcemen certaiy stirs the competitive

pot, its chromo/s is targeted netbooks. thsmall lightweight computers which exoded on the market last year. scott ssler of standard and poor's says google is no meeting microsofhead on. >>on't get me wrong that's a very kind of excitinand compelng area with a lot of growth potential but it really not aajor part of microsoft's venue and profit se a this point. >> reporter: the google operatinsystem is just one of a mber of areas where the moter of mountain view is attacking the dominator of redmond. google is so competing with microsoft office, it applicion suite, and with its internet browser, which is bundled with windo. crosoft has struck back with severasearch advertising products, the latest called "bing", all to compete with e phenomenly successful google search engine. the coanies also battle in areas where neither dominas. both have mobile tephone operatinsystems, microsoft is believed planning a version windows 7 design for netbooks. and both compete with otrs to prove services through

networking, which is called cloud computing. gole won't deliverts chrome operatg system for a year but we do know it will be sed on linux. there have beelinux based deskp systems on the market for years and pcmagazine.com lance ulanoff sa there are good reasons w they haven't deed windows' market share. >> onef the reasons that windows is sometimeseen as so big and diffult to use is that microsoft is fced to support 90% ofhe computers in the world. 90% of the cfigurations where businessesely on things that they havand that are still working. if ty get the new version of windows everything will stl work. i don't know howoogle can promisthat kind of reliility. >> reporter: gooe may be sidestepping that issubuy targeting thnetbook. scott kessler says buyers netbooks, may not insist othe me user experiences deskto users. >> this is goi to be largely an additnal, low cost pc that people are going to use maybin

connection with a desktoor another laptopr what have you. so we ink people maybe more inclined to ke a chance or exriment with google especially if the price and e experience are right and susie, microsoft and ggle are also doingattle in the hallof government here and abroad. whe both firms are encouraging investigators to lk into the competive practices of their chief rival. >> susie: we just got a new flash while you wer delivering yourer to that gole says it chrome wille avaible to users at no cost. sohat do you make of that? >> well, that was not unexpect. it certnly one wayto build market sha. it's going to be very interestg to figure out in the long run how google makes any moy from this. google reay hasn't made any money from any ofts applicions. it makes a phenomil amount of money from itseb search and the advertising with that. but nothing els it has de has been profitable. how will it make money this way. will it put advertising on the desk top of chme users?

and what willthe anti-trust people thi about this? it raises questions. >> susie but wenow that goog is very poparith most users, they love the searchngine, theyove the mail services. seems likes it's gng to be an easy sell to get consumers to usehe new chrome. >> maybe consumers, maybe the peopleho like to try out new things. but, you know, have you lookn the long run at this thing. the linux basedystems have been out for a long time, we'll have to seeif they have the pport for applications and when businesses look at these thgs they're goingo look at that, and as some of our commentators see in the story, they're going to look to see if ey can deal with the centraled control and the curity, the kinds of things that have been built into wiows over the few years. >> susie: so are you sayi that microsoft doesn need to worry about google? >> microsoft can ner sit back andot worry. it's the kinof the hill and everody will be nipping at its toes.

where they do have to worry, i think theet book is a short timer, ithink weget bigger and better mobile phonemart one devices, and google is a big player there so is microsoft. is palm, apple, ther are a lot of players ther that could be theext wave. >> susie i'm sure you' keep us post on a that. thanks, scott. thanks scott, new york buru chief scott guey. >> jef remember how the governmentas planning to buy up those toxic mortgage securities held by ban? well, plan to do that is finally getting off the grou. but it is starng off small. the treary announced today

that nine big ll street players will hane the bulk of thwork. the federagovernment will kick in up to $30 billi in debt and equi to start. one big me not on the list: pimco, the giant bond fund manager. they pulled out of the progr. wa street money managers now ve 12 weeks to raise the mon they will need tbring to the table. >> susie: alcoa marked thetart of earnings ason today, repoing its third straight quarterly loss after theell. the alinum giant lost 26-cents a share in the second arter, much better an the 38 cent-a- share loss that wall street expected. but, it s still a sharp cline from last year's profi of 66 cents a she. ala's poor performance comes on weak global demand for uminum as well as depressed prices for the met. and, jeff, alc's ceo calls it "the mosserious downturn in the history of the aluminu industry." jeff: susie, alcoa's shares rose 50 cents in aer hours trading. e stock waamong the nyse mo actives. wel see it as we take a look at our stocks in thnews tonight.

atight's street critique guest says the markets are on ge for a reason. paul larson of morngstar, welcome ba to "nightly business report". >> thanks forhaving me ain. >> jeff: there'slways a lot of questions a we go through the seasons here aut how long does this recession las, and when we talk about ecomic green shoots,re ther any real economic gre shoots tspeak of. >> well, think you can characterize the economy and the ecomic indicators as being less bad. thin are certainly not as bad as they we back in the first quarter. t there's a big fference between less bad and good and we aremost ctainly ill in that less bad phase, stl going in reverse, still expeencing economic

contraction. >> jf: what do w make of th rally we've seen these last weeksnd months? >> well, i thinkthat a loof the ray that we' experienced wa simply a multiple expansion rally meaning that the valuations just got soow in the early rch lows and that a lot of the rall that we'veeen is just bn a rebound, and not necessily refleing any meaningful economi recovery. there hasbeen, you know, some talk of these green shoots, but i don't tnk that there whole lot of subance to the economic expanon theories that are out the righnow. >> ff: so we're sll oking to put money to work in the markets lonterm, you at morningtar focus on what you call wideoat stocks. what do you fe fine as a wide moat? >> well, when we talk about wide moat stocksor companies with we moats, we lik compies that have some st

of protection that is going to protect profits over the long term fromcompetitors. and wehink that these e the companies that are the reallyood place toocus right now. these are th companiesthat hold the hi ground, whi is really imptant as you're going tough what you might call aneconomic flood that we'r experncing. jeff: l's go on wh the first one you haveor us, it's proct andamble. >> this is aonsumer tightening with numerou billiondollar products, very strong brands in the portfolio. i also like that is is company that has roughl a third of its sales comg from emerging market sources. and these emergi markets really are not necessarily affected bthe ongoing ecomic malaise that we are exriencing here in the u.s.. >> jf: then you have a second one,novartis. >> y him the sck market seems to be paintg the

entire health care sectorith a very broad brush right n, worried about heth care reform. but this is very diverse heal care giant, with big businesses and generics, vaccines, consumer products and think thatt's going to escape any major damage from hlth care reform. it's highuality company tradinon the cheapand at's a combination at i really like. >> jf: the third and final one, the hom improvement retailer lows. >> yes, this is a ltle dierent. this is a company that is experienng some very stro stress right now, negative sametore sales at the moments due to the eire situation in the hsing market. but the stock marketeems to be taking today's very difficult situaon and assuming that's going to last in perpetuity. well, i don'tthink that onomic recovery is imminent, i dot think that ts coition is necessarily goi to las forever. d if you thi that recovery will eventually come, lowe's is certaly very cap

rit now. >> jeff: any disclosures to make for u? >> certain. the cook is mos certainly eating t cooking here at morningsr, and i own all three of these stocks, both personally as a well as in the portfoos i manage for morningstar. jeff: thank you, palm, apprecia your time on the program. >> thankou. >> jeff: our gue paul larson of morningstar. >> susie: tomorr, an update on oiearnings as chevron gives its midyear outlook. >> susie: texas llionaire t- one pickens is back-burnerin plans to build the world's largest wind farm. the problem: financing. pickens says he's stl planning to install more than 2,000 wd turbines at a te in the texas nhandle. but until hean get the cash lined up to do that,e's considering smaller project sewhere. pickens is a big bker of alternate sourceof energy includg wind and solar power. >> jeff: ritz camera is fang to black.

the bankpt chain of photogphy stores is heading to auction on the block ler this month. ritz now hasbout 400 stores, half of whatt owned when it filed for chapter 11 earli this year. court doments show there are two potential buyers lely to keep the sres open. but it's also possib the stores cld go out of business altogether.

in the "money le" tonight, why sk doesn't have to be a four letter word. here's jonathan pond, auor of "safe monein tough times." fter what we've been through since the beginninof last yr, it's no wonder that risk is ewed by many investors as somethingo be avoided atll cost. as a result, he ams o money are sitting on t sidelines earnin element nothing. of course, during thlast bull marketinvestors loaded up on risky stocks and eschewemoney market fun. it's time for a change long-term success quires a consiste approach, avoiding too much risk in ebullnt markets and too litt risk in dour marts. rather than inst at the tremes, loading up on stocks after the maets have risen or loading up on easury bills or the likefter the markets have

fallen, you shld strive to inude investments in between those two extremes. for exampl move some of the money that's earning a pittae in cash equivalentinto short- rm bonds or short-term bond funds, to rn more interest without risking much, ifny of your princal. while there'no such thing as a no-risk stock, youan reduce risk by avoiding speculative stocksnd sector plays and instead spreing your money among variety of u.s. d overseas stocks with index funds or exchange-trad funds. most iortantly, keep in mind that risk doesn't ve to be a four-lter word. inact, the biggest risk in investg is taking no risk at all. i'm jonathan pd. >> jf: that's "nightly business report" for wednesd, july 8. i'm jeff yastine goodnight, everyone. and good night to you, sie. >> susie: gonight jeff. i'm sie gharib. we he to see all of you again tomorrow evening.

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