>> paul: is d-day for uncle sam's ney market mutuafund guarantee. after toda the treasury is ne protecting those funds. we'll explain what ts means for your investmts. >> susie: but the treasury m step up its lendinto the d.i.c. the agency in chargef banks may ask r a big loan after 94 bank failures soar this year. >> paul: the bulk of tse failur have been small, community banks. many are suggling with unemployme and bad loans, just like t communities they serve. susie: tonight's "market monitor" believes thmarket has a lot rther to go to the upside. he's robermorrow, editor of

the institutional advisory service. >> paul: i'm paul kang. >> susie: and m susie gharib. this i"nightly business report" for friday, ptember 18. "nightly business repo" is made poible by: this program was made ssible by contributionso your pbs station om viewers like you. thank you. ptioning sponsored by wpbt >> susie: good evening, everyone. an important devopment tonight for millions of ericans who invest imoney market mutual funds. after today, t funds will not havehe backing of the government.

the u.s. treasury created th guarantee a yeargo to reassure instors their money was safe after the sharesf one of the tion's largest funds broke t buck, falling below e sacred one doll level. erika miller takes a look how the expiration of is program could fect investors. >> reporter: if you ha money invested in a money mark mutu fund, chances are you are earning next tnothing. the average annual tot return for these funds isust six tenths of a percent,ccording to imoneynet. and after today, the tasury department will end its ar- long grantee of eligible money market mutual funds. financial planner acy francis says most peop have better invement options, anyway. >> for theverage investor, money market funds don'tffer any additionalenefit than necessarily putting your mon instead in an f.d.i.c.-insur cd or f.d.i.c.-insur bank account. and some of those bankccounts, escially the online bank

accountsare actually yielding quita bit more than your average money market. >> reporter: and many vestors have puld money out already. money market mutl fund assets now stand arnd $3.5 trillion, wn from a record $3.9 trilli in january. but morngstar's christine benz ys the outflow is probably n tied to the end of goverent guarantee progra >> investors havgotten more comfortable with riskier asss, so they have gravitad toward stock and bo funds at e expense of money market nds and other able vehicles. reporter: she says there's reason to flee mon market mutu funds, because they are nerally less risky then they were a year ago. >> i thi that managers learned well theisks of running too risky money market portfios last year. so risk aversion is in a risk taking is t. >> repter: however, it is imrtant to point out that money market mual funds are not as safe as money mket deposiaccounts, which are offered by banks andnsured by the f.d.i.c. thercould be big changes coming tmoney market mutual funds. the securitiesnd exchange

commission is considering a proposalo require funds to float their share pres, instead of maintning a constant dollar-a-sharvalue. paul schott stevens, head the mutual fd industry's trade oup, thinks that is a bad ea. >>t basically, fundamentally changes the natu of a money market fund, wch has been attractive and uful to investors to a large degree because ofhe convenience of that stable net asset value per share. >> reporter: the expiratioof thgovernment's money market insurance plan may be d news r some investors. buthere's also some good news- - the gornment says its plan earned over a billion dollarin rticipation fees for taxpaye and suffered no losses. erika miller, "nhtly business report", new york. >> paul: encourad by yestday's mild, profit-taking pullback, cautious bers got ocks on wall street moving higher aga. buy recommendations earheaded

an early rallyn the blue chs. at 11:00 a.m., the dow pted a 41 point gain wi the nasdaq up three points. despite chop price action, which s partly due to expiring septembestock options and futures,he market ended the day modestlyigher across the board. thdow industrial average closed up .28 at 9,820.20. it fell only once th week and had a net overall in of 214.79 points. the sdaq rose 6.11 to 2,132.86 today. like the dow, it felonly once this weeand rose 51.96 points overall. the s&p 500 gained 2.8to 1,068.30 today, and for the week, advaed 25.57 points. in the bond market, the n-year note fell 23/32 to 1 10/32, puing the yield at 3.47%.

>> susie: two government agencies that are pposed to pafor themselves are at risk of nlonger being able to do that. bank failures are drning the reserve fund at thfederal posit insurance corporation, or.d.i.c. mortgage defaults are the in problem for the federal using administraon, or f.h.a. it wl soon be below the minimum reserves congress requir. as stephie dhue reports,oth situions could leave taxpayers on the hook. >> reporr: the fallout from the housg bust continues to weigh on theederal government. f.d.i.c. chairman sheilaair says her agey may have to tap a $500 bilon line of credit with t treasury to shore up its deposit insurance fu. >> we are carefuy considering aloptions. >> reporter:he f.d.i.c. has already ed some of its options, chaing banks an emergency feand raising bank emiums.

since mo banks failures are likely, analyst karepetrou ys raising fees again could counterproductiv >>anks are already weak. the more you take monefrom them to bolster f.d.i.c., e less they have to suort their n capital, let alone make ne los and enhance the recovery. >> reporr: the f.h.a. has similar problems. the agency has a hh default te on loans made during the hoing boom, and as home ices fall, loans are mo risky. but f.h.a. commissioner dad stevens says his agency wille able tcover the losses. >> uer no circumstances will a taxpayer bailout be needed t support the fund. >>eporter: the f.h.a. will hire a chief risk ofcer and tightecredit and appraisal standards, butays it won't raispremiums or down payments for borrers. the agcy now guarantees 23% of all homeoans, up from 2% three years ago. and it makes up 80% of loanso first-time hombuyers.

economist dean baker says ho the agency handles its lses will be kefor the housing rket. >> if they begin to be more cautious, perhaps ben to raise the down payment requireme, which is just 3.5% now, oraise their fees, scrutize loans more cefully, that would make their finances more sere, but e flip side is they'd be les of a buttress for e market. >> reporr: with rising foreclosures a increasing bank failures expected, anasts predict the rains on the agencies to get woe before they getetter. stephanie dhue, "nightly business rept," washington. >> paul: le today, the f.d.i.c. closed two more fling banks. two units irwin financial mark the 93rd and 94th closus this year. many of the banks that are struggling to survive ese days are local banks that lend sml businesses and consumers. in the past year since the collapse of lehmanrothers, most of the lenders thatailed have been community banks wi asts under $10 billion. as we wrap up our specl

seri, "lessons from lehman," diane eaabrook reports rising unemployment is puttg many more lal banks at risk. >> reporter: the receson has battered and bised chicago's chatham neighborhood. the joess rate here exceeds the city's current 10.5% last monthlone, 150 homes were foreclos, and businesses are folding. shore bank has served chago's south side neighrhoods for more than 30 years ands feeling chham's pain. executive ce president jean pogge says, increasingly, e mmunity bank's low and moderate incomcustomers are ther delinquent or defaultin on loan paymts. >> we have found that e primy reason for delinquencies is unemploymt, and the second reason is high medal bills due to lk of insurance. our customers talk to us, ey pay us first, they pay us unl they don have the money to pay us anymore. >> reporter:hore bank is not one in its troubles. the federal deposit insurae corporatiosays, of the nearly 100 banks that havfailed so

far this year, almost all were communitbanks with assets under $10 billion. experts blame the sour ecomy more than risklending. they say many small banks lo money on business and residential loans th went bust because of rising unemployme and a pull-back in consumer spending. david klein followcommunity banks for r.b. wealth management. he thinks, over the ne few years,hings will get worse before they get better. >> we're looking at about thousa banks, perhaps even re, failing, and the reason for that is, number one, theob losses, the commercial loans outstanding, the real tate loans outstanding. so, is is kind of the composite what is going on in the u.s.conomy today. >> reporr: about 500 local banks ve already gotten

roughly $13 llion from the gornment's troubled asset relief program or ta. steve rdier from independent community bankerof america is caing for a bigger bailout. >> under t current provision, onlyhe very healthiest banks se to be eligible for the tarp money, and we think th the easury should stretch their criteria a lite bit so banks that are fing some difficulties could sti be eligible for se tarp money. >> reporter: shore bank requested money fromarp earlier this year, but was turned down. pogge says the lender wod like a second cnce. >> tarp money would lp us make new los to homeowners and to small businesses to create n jobs and to help these communitiestart to recover from this seous recession. >> reporter: poggelso thinks more government oversight all banks is inevitae and probably neceary, as long as it doesn't make it harder forenders to jump-start growth in neighborhoods like this on diane eastabrook, "nigly business report," chago. >> susie: meanwhile, there's other area where government

oversighof banks might be beefed up-- paychecks! e fed is reportedly looking new ruleto reign in bankers' pay in hopes ocurbing a culture of ting huge risks. uters reports the new guidelines would lit pay for y employee who's in a positi to make risky bets. it would also force bankto coare their compensation rates against their riva. the fes board of governors needs tokay any move like this. then, the publ would get a chan to weigh in as well. >> susie: it lks like you can add the f.b. to the list of agencies investigating bk of

america's purchase of merrl lynch. newspaper reports say thfeds are conducting a crinal probe into the deal, andt's been in the works for six months. the f.b.i. declined toomment on the rept. bank of america d the same, saying only that it has ven thousands of documents tmany government eities. b. of a. has been der fire since itought merrill lynch january 1. it allegedly failed to tell shareholders about t brokerage's operating sses and bonus paymentso executives. pa. >> paul: susie, bank of amera shar were among the big board's most active. we'll see them atake a look at so stocks in the news tonight.

>> susie: a prograing note for xt week as we kick off speci coverage of the nation's hlt re reform story. on monday, tsday and wednesday nights, right here, je

yastine'"bill of health" signate segments will look at health insance in the workace. then on thursday night, "nhtly business report" will jointher p.b.s. news and puic affairs shows for a special, 90-mite pre time look at health care reform. i'm one of the hostsor this precedented collaboration among "nightlyusiness report", "now on pbs" and "tavismiley", a timelynd in-depth look at the issues. it's called "p special report: heal care reform," and airs thursday, septemr 24 at 9:00 p.m., eastertime. check the local listings in ur area. >> paul: alsmonday, how taxpays can benefit from a new agency designed to protect consumers. >> susie: the clock is ticki for some u.b.s. ients. they have til wednesday to let authorities know about the cret swiss accounts. if they do, theyl likely avoid crimin prosecution and minimize civ penalties. u.b.s. has sent tters to

client telling them the i.r.s. is looking for information aut offsre accounts in swzerland. after nexteek, tax cheats will face ctly penalties, as well as criminacharges. paul: ebay lost its bid to acquted in a french court. the onli auctioneer was found ilty of counterfeiting for selling fakeuxury brands on its site. the court ordereebay must pay re than $117,000 to luxury group l.v.m.h., which make luxuryragrances like christian dior. ay will also face fines for future iringements. it has not commeed on today's rung. @÷sw

>> susie: he's a look at what's happening next week: our fray "market monitor" guest is mark leibovit, chf market strategist at vrtrader.com. on the economic lendar: monday, august leang inditors are released; tuesday, fedal reserve pocymakers begin a two-day meeting on interest ras. their decisi will come wednesy. so wednesday, the weekly report on ude oil and gasoline inventories; thursday, ekly jobless claims and isting home sales for august; friday, the august repts on durable goods and new home sales. >> paul:y guest "market monitor" this ek is robert morrow, editor of e institutional advisoryervice and publisher the monthly rket letter, the high ch

growth fecaster. bob, welcome back to "nightl business report" >> good toe back, paul. >> paul: ven the fact u.s. stocks have beendvancing for six monthsow, do you believe the bull market still has legs? >>bsolutely. i thina new bull maet started rch 8 this year at a s& of around 676. at that time, my institution advisory said that we uld go to150 in the octor-november time fme this year. is will be ainor peak,nd an ongoing bull mket. >> paul: how long wi it la overall? >> the bull market will probably lastwo, three years, say several years. there will be two more minor peaks wh measuble declis so iwill be a daunting market. >> pl: will the dow and other major indicesi had the record highs? >> ty probably will. i mainly focus on the s&p 5 becausof the broad base. >> paul: what sectors do u

believe are psed to make the greatest gains. >> that the sectors that are most favorable are tecology, materials, energy, consumer scretion, and i think those will be the mor ones. >> rooy: and tecology is yourxpertise area, away. >> i hava strong background. iave 37 patents technology now 38. >>aul: i guess you know wt you're talking about. your last visit th us in d-july of last year, you made a bullish ll which was folled by the financial crisis and big losses in the market which, unfortunately, iluded your buy recommendions. t's have a quick look an see how they've done since then. it won't be a pretty picture theinancial sector e.t.f.s and technology selecboth down but not bad on tech. are you still with these? >> with ch. >> paul:kay, all right. and th broadcom up 4.1%.

that's a iumph. are you still with it? >> yes >> paul:nd intel, you like intel. naonalemiconductor down badly, proshares ultradown. e you still with those? >> i thi they'll make recoveri in this bull mket. >> paul:hey're on the mend now. right. >> paul:o you have new recommdations? >> righti do. e first recommendation is th techlogysector. >> pau x.l.m. wch yufdiked for a longime. >> itonsists of 85 stocks so you get a very broad exposureo tenology theecond one is b.m.c. softre. it is a mar internation ftware vendor. >> b.m.c., th symbol, as you might imagine. >> the nextne will be vanced micrevices, a.m.d. they're a global seconductor

manufactureure, and i think they're very iortant in the miconductor area. >> paul: you know allbout technolo so all your picks so faare tech stocks. how about another one >> app would one. >> paul: everybody likes apple! >> they're liking it for good reason. it's still predominant in personal compute, music devices, cell phones >> paul: rit. and those at you recommended previous last july of 2008 are you sting with all six of them, is that righ >> year, i think they' make recovees. paul: they're on the mend now but still well downrom where they were in july. >> it willake some while but this is a bull mket withome legs. >> paul: what are in reasons rousse bullish? >> my thod is technology, technical approach. i've forecast somewhat like cycles with a more sophistice approach using my ckground in vibration analysis and is teing me we're nay new bul mark. it starmarch 8. >> paul:o you personally own any of the stocks ntioned or

have other diclosures to ma? i don't because i think it interfears with my objectivity. >> paul: that's aood reason not to own them especially r those who follow your aice. >>ight, exactly. >> paul: i want thank youor sharing your zeus us once ain. >> thank you, paul. >> paul: my guest, robert morrow the institutional advisor service. >> susie: repping today's maet action: stocks end t week with moderateains. the dow rose 36 pointsnd the nasdaq addedix. to learn more about e stories in tonight's broadca, to watch our streaming video and to te part in our dailblog, go to "nightly business reporton pbs.org. you can also ema us at nbr@pborg. d finally tonight, ohio's havi a garage sale tomorrow. that's not a garagsale in ohio; it's garage sale for ohio. the state's rplus property is gog up for auction, everything from washersnd dryers to blackberry phones to a treadmill. yoalso can buy boat paddles, overhead projectors,

forklift... well, you get the idea. the state wants clean out its closets, so everythingoes-- but everythingoes as is. so state officials are wning, paul, thatome of these surplus items cod be damaged. as theld saying goes, buyer beware. >> paul: you know, mgarage i thought used to for cars. now i'm lucky if can get a bicycle inhere, wedged in. >> susie: i know. i was ing to say after they finishn ohio, come on over to mylace. i have a lot of things that would be good for a garage sale. >> paul: seems like everyone has just abo the same. >> sus: yes, absolutely. >> susie: that's "ghtly businesseport" for friday, september 18. i'm susigharib good night, everyoneand have a great weekend. you, too, paul. >> paul: and you, as well, susie. i'm paul kangas, wishing a of you the bestf good buys. "nightlyusiness report" is made possible by:

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