this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. wall street says good riddance to its most volatile quarter since the financial crisis. susie, things ended on a sour note. >> susie: stocks tumbled today, tom, amid new worries about the global recovery. specifically, the latest disagreements between european leaders over how to resolve that region's debt crisis.

at the close, the dow lost more than 240 points. the nasdaq fell 65 and the s&p 500 off 30 points. for the week, the dow had three up days ending up 1%. the nasdaq was down for three days off nearly 3% for the week. and the s&p 500 lost 5% since last week. >> tom: the summer swoon came as u.s. investors worried about europe and u.s. politicians fought over spending. for the quarter, the dow, nasdaq and s&p 500 were all down over 12% during the quarter with the s&p taking the biggest hit off over 14%. september was the 500's fifth straight monthly loss. investors were rewarded by playing defense. utilities stocks performed the best up about a half percent. the second best sector lost more than 4%, consumer staples. as for the worst sectors, think economy and banking. material stocks lost a quarter of their value. financials fell more than 23%. one place investors did make

money-- u.s. government bonds. and remember this bond rally came even though standard and poor's cut uncle sam's credit rating after the drawn out fight to raise the debt ceiling. the yield on the ten-year government note dropped to dropped to a post-world war two low around 1.7% at one point. as yields drop, prices rise. up until the last two weeks, gold was, well, golden. it began the quarter around $1,500 an ounce, shot up to $1,900 over worries about europe and the u.s. economy slowing. but ends the quarter around $1,625 an ounce. and u.s. light sweet crude oil saw its biggest quarterly drop since the financial crisis. from the mid-'90s down to below $80 a barrel tonight. >> susie: billionaire investor warren buffett was busy investing in the third quarter. he told me today that he bought $4 billion worth of stocks in the past three months. buffett came here to the new york stock exchange to ring the opening bell with business wire c.e.o. cathy tamraz. they were celebrating the 50th anniversary of the news wire

service owned by buffett's berkshire hathaway conglomerate. as buffett mingled on the floor with traders, stocks were falling, but the oracle of omaha told me he's still buying and upbeat about the u.s. economy. >> the economy is doing pretty well. we own 70-plus businesses. we own about five that are associated with home construction. they're flat on their backes, and they're just like they've been for three years now, four years, almost. and so there's been no bounce there. everything else is moving forward. we have businesses that serve heavy industry. they're moving forward. we have consumer business. we have three jewelry chains. we have four furniture operations. their sales are improving. >> kearkts how about you? how is your business doing in this climate? >> we're doing well in business. we're pretty conservative in how we move it forward but revenues are up and we're pretty happy with the way things look. >> susie: is business good enough that you're hiring? >> yes, i want to say one thing we have never had a layoff, in

good times and bad times, and we are adding a few bodies as i like to call them this year. >> she's doing a fabulous job. i will tell you. >> susie: mr. buffet, everybody was so surprised earlier this week you announced a stock buyback of berkshire stocks. why did you do it? >> because of the relationship of the price of the stock and what we think is the value the stock. we always said when you've taken care of the needs of the business and your stock sells well below what you think it's instrinsically worth, then it makes sense to buy it in. we tried it one time in 2000, butlet stock ran up real fast. if the stock stays down relative to intripsic value we'll buy a lot of it. so we did it because we got more for our money than we're paying. >paying. >> susie: what is your outlook? are you bullish or bearish? >> i never had a view on that, susie. i never will. i am enormously bullish on this

country overtime but i don't have the faintest idea what the market is going to do in the next five minutes and the next five months. i dont pay any attention to it. we bought in the fourth quarter, $4 billion net, of stock. i don't know whether those stocks are going to go up or down next month and i don't care. i'd like it better if they go down because we're buying more of them all the time. i just don't think about the market. >> susie: how do you feel about your big investment in bank of america? stock is lower than when you bought it? >> i bought it to hold probable at least 10 years. it just doesn't make any difference. >> susie: berkshire still has a lot of cash on the books. what do you want to buy next? >> i just like to buy. i like to buy a business, and we bought one yesterday, princeton insurance-- we agreed to buy it. it requires approval. who knows what we'll do federal. we like buying common stock if it's cheap. we like buying our own stock if it's cheap. >> susie: looking at the u.s. economy, you have been suggesting a tax on

millionaires. what kind of reaction have you been getting from the rich and not-so-rich. >> i have been calling for a tax on ult rarich people. there are plenty who pay normal tax rates. i wouldn't touch that. it's for the ultrarich who pay very, very low tax rates. i would say it's been about three to one in favor. i've got know a lot of response, and a lot has been negative, but three times as much has been favorable. >> susie: there's only so much that taxes can do to fix the economy. >> sure. >> susie: what else needs to be done to fick the economy? >> we have used fiscal policy very, very strongly. we've used monetary policy in a way nobody ever believed we would. i think we've used those tools up pretty well and i'm glad we did. i think the most important factor coming out of any recession is the natural regenerated juices of capitalism. it's people like millions of americans trying to think of some way to do better for their family and do better for their customer today than today.

it's always worked. it will continue to work. >> susie: what about europe? how much do the problems in europe concern you? >> they're very concerning. they have got a tough hand to play. but the world guilty on. europe will be a bigger, better market five grers now and 10 years from now than it is now, just like the u.s. will. >> susie: kathy, the one worry that berkshire investors have is who is going to run the company when warren buffet decides to retire? who would you like to see in that job? >> i can't give you a name, but i can say i don't think investors need to worry because there's a culture in this company that produces a lot of talent and there are many, many people that operate the way warren does-- although, nobody is warun. i'm certainly not worried. i don't think anyone ills should be worried. >> susie: thank you both so much. warren buffet, cathy tamraz, a pleasure to have you on the program. >> tom: still ahead, protestors take to wall street to rally against greed. but with no clear message or demands comes little notice.

>> susie: new rules take effect tomorrow for debit card transactions. the rules limit how much banks can charge merchants to process payments made with debit cards. the change comes as bank of america announced a new $5 monthly debit card fee for its customers. bank of america joins sun trust and regions financial, while wells fargo and j.p. morgan are testing monthly fees. that's not the only way banks are making more from fees. as darren gersh reports, some are offering new loans that critics say resemble pay-day loans. >> reporter: when roxy oliveira got to the end of the month, she found herself short of cash. but she tweeted out she'd found an answer at her bank. it's called a direct deposit advance. the 25-year-old got her loan from wells fargo. >> it's your best friend and your worst enemy at the same time. and they'll help you out you know, but you've got to pay. >> reporter: oliveira tapped an expensive line of short-term credit offered by a growing number of banks including fifth third u.s. bank and more

recently regions bank. the loans go by names like direct deposit advance, checking account advance, ready advance or early access. but they're not cheap. roxy will pay back the $120 she borrowed, plus $9 in fees with her next direct deposit. >> it looks like it's a circle that's starting. if i can't get through this pay period, i mean, what's going to happen next pay period when i'm a $129 short instead of just... just not being able to make it? >> reporter: bank industry consultants push these kinds of loans as a way to generate big profits. but consumer advocates say the direct deposit advances banks offer are similar to payday loans. mike calhoun at the center for responsible lending says the one-time fees add up and in some cases consumers can find they are paying the equivalent of 300% interest. >> these loans almost always push people deeper into a financial crisis.

they take a short term financial problem and turn it into a long- term crisis. >> reporter: the banks we spoke with warn their customers these loans are expensive and all of them limit the amount customers can borrow each month. those who borrow too often are subject to a cooling-off period. >> we can't pretend that there are some people who don't sometimes need small dollar loans. this is an innovative, creative way to address the needs of people who need short-term loans and yet provide the safeguards so they don't get into a cycle of debt. >> reporter: we found plenty of people asking questions on internet message boards about these advances. wenceslao patino was one of them. he says his bank offers a better deal than a payday lender, but after six months of taking out loans. he's already racked up $220 in fees. >> honestly, i don't see myself getting out of this cycle until the end of tax times. that's when i get my finances in

order. >> reporter: patino and other consumers we spoke with say they trust a traditional bank much more than a payday lender. but consumer advocates hope regulators will soon tighten the rules around these new loans to make sure customers aren't forced deeper into debt. darren gersh, "nightly business report," washington. >> tom: the third quarter ended in a familiar way. let's get to tonight's market focus.

the familiar finish means plenty of selling with the indices back to where they began the week. the dow industrials spent the entire session in the red, but as we have seen very often, the selling gathered steam into the afternoon. the index closed on its lowest level of the day down more than 2%. hewlett-packard led the dow losers, tumbling more than 5.5%. the firm will pay its former c.e.o. more than $7 million in severance. it was one year ago today when leo apotheker was named c.e.o. of hewlett packard. he was fired this month. during his tenure, the stock lost more than 40%. by the way, new c.e.o. meg whitman will work on $1 a year. semiconductor maker micron didn't help things in technology, reporting a loss in its fiscal fourth quarter. analyst had been expecting a

penny per share profit. micron has been hurt by falling prices for memory chips used in personal computer. micron was the biggest loser among s&p 500 stocks, falling more than 14%. volume was heavy today as well. the stock fell to a new 52 week low, just above $5 per share. it has been a tough week for chip stocks. today, n-vidia fell 4%. advanced micro devices sparked some of the sector selling earlier in the week when it had a disappointing outlook. a.m.d. fell another 4% today. and intel dropped almost 4%. we mentioned earlier how the materials sector was the worst stock sector this quarter. it was also the worst today. heavy equipment maker ingersoll rand fell more than 12%. volume quadrupled with the stock falling to a new 52 week low. the stock is down 40% from its july prices and down more than 45% from its high in may, its third quarter outlook today came

in well below estimates leading to the selling. materials, grain prices took a hit. wheat and corn each fell more than 6% thanks to higher than expected supplies. corn is back below $6 a bushel. and soybeans fell more than 4%. and eastman kodak. the company has been fighting market worries about its business. shares lost more than half their value during the regular session, only to pop up more than 30% after the close. late today kodak said it has no intention of filing for bankruptcy. and that's tonight's market focus. >> susie: near wall street, hundreds of protestors have descended on a nearby plaza. the mood there very anti-wall street and corporate america. demonstrators have been protesting for two weeks. they say they want change. but in what is the question? jeanne yurman visited the protest to find some answers.

>> reporter: they've been camping out for weeks now, just blocks away from the new york stock exchange. the group is called "occupy wall street." it's a mixed crowd. union workers, people out of work, young, old and lots of college students. their grievances? >> inequality and oppression. >> corporate greed. >> i'm upset that people think that corporate welfare is more valid than regular welfare. >> reporter: they have no clear leader. not even a singular website. but one protestor says there is a common theme to start a national dialogue for change. >> it's creating basically this anchor point, which creates a pinwheel of conversation and it started physically in this city. >> reporter: city college of new york professor, john krinsky, says decades of stagnant wage growth and big pay gaps brought the activists together. >> the economy that they're protesting isn't just the economy that has suddenly declined.

there's a lot of that, that's the impetus for this. but it's also, i think, the economy that has not really been very good to a good number of americans for a long time. it's not just here on wall street, similar occupations are popping up across the country in places like san francisco, los angeles and boston. protestors hope to grow their numbers by tens of thousands. >> reporter: social media helped spark the movement and is playing a major role in spreading the word. as is attention from some well known names-- actress, susan sarandon, filmaker, michael moore and former new york governor, david patterson. >> i interviewed one of the organizers on my radio show yesterday and hearing about it i was curious, wanted to come see for myself. >> reporter: occupy wall street is still working on crafting its demands. in the meantiime, protests will go on indefinitely. jeanne yurman, "nightly business re

>> tom: here's what we're watching for next week. our friday market monitor guest is mark leibovit chief market strategist at vrtrader.com. on the economic calendar, auto and chain store sales and the all important jobs report for september. monday, we head to a japan for an update on that nation's rebuilding efforts. six months after its devastating earthquake and nuclear crisis. >> susie: full tilt poker is going all in. it's made a deal to sell the gambling site to a french millionaire known for turning around troubled businesses. bernard tapie has agreed to buy the company, despite its legal problems in the u.s. a federal prosecutor in new york has alleged that full tilt is a giant ponzi scheme owing an estimated $300 million to online players. >> tom: in a new annual review required by the financial reform law, the securities and exchange commission finds some of the nation's biggest credit rating agencies have come up short. the regulator says problems include their ratings methodologies, issues with

timely and accurate disclosures and conflict of interest problems. standard and poor's, moody's and fitch ratings were all covered in the review.

>> tom: after the double digit drop for the major stock indices this quarter, history tells us prices may improve in the short run. tonight's market monitor is sam stovall, chief equity strategist at s&p. sam, it was such an ugly third quarter what, does history tell us to expect in the fourth quarter? >> well, actually, history says that we might end up with a fairly favorable fourth quarter because this most recent decline of more than 14% was the tenth time sense world war ii that we had a third-quarter decline in excess of 10%. and in the prior times, the army price change was a gain of 7.2%, and we saw the market rise in eight of those nine bskses. >> tom: so odds are fourth quarter will actually see higher prices from the prices we see tonight. but can the rally last into

2012? >> i don't really think so. i think it's what i would call a tale of two time frame where's we might end up with an endof year rally because we were so oversold in the third quarter. we then bounced back in the fourth quarter. the bar is set fairly low for third-quarter earnings reports and i guess just nobody is really expecting a santa claus rally. we might be pleasantly surprised. but as away head into 2012, i think we are likely to see that we're going to be increasing the riskes of recession here in the u.s. as well as dipping into a new bear market environment. so i would tend to say that chances are the market will continue to be challenging in the year ahead. >> tom: so a new bear market. you think the s & ps could drop 20% below the highs we saw this year in april. >> that's right. you could say well, gee, that's not sticking your neck out too far. we were already down 18%. but if history repeats itself-- ask & there's no guarantee it will-- we could end up seeing

the s & p decline the average 30% that it normally does associated with recessions and along with it, it could be dragging dun corporate earnings as it has by an average of 18% since 1948. >> tom: sam, tough environment you describe here in your research ponts. company is paying dividendes, companies with a history of rising dividends and investors favoring less volatile stock. over the past decade, the s & p down 21%, add dividend, it's down 22%. you look at the aristocrats who pay continued dividends and increased dividends, those stocks are up better than 100%. what explains this difference? >> i think what explains it is paying up for quality. by focusing on those companies that consistently increase their earnings and dividends. they're not going to be in your high-beta and high-volatile groups. they're not the companies that are fly-by-nights.

they're yu blue chip stocks that pay a dividend and because of that you get to compound the growth. more than 45% of the total return of the s & p comes from reinvested dividends and when you get solid companies behind them, then the price goes along with it. >> 10, 12 years ago dividend was an ugly name. you brought along a couple of examples of these type of firms. abbott labes, the pharmaceutical makers, share price 51 and change tonight. also mcdonald's, mcd, has had a nice run. in fact, this quarter hit a brand new all-time high. what explains their performance? >> well, you could say it's a combination of things. first off, they both have the similar characteristics of above-average consistency of raising their earnings and dividends. s & p has something called equality reanchging where we go back 10 years, looking at the consistency with which a company raising earnings and dividends. we give it a letter grade, a-minus or higher is above average. also it pays a dividend yells of 3% or more, so you tend to

compound that and because of good management, international exposure, and also has gone to be in fairly defensive sectors don't hurt either. >> tom: how about disclosures? any ownership positions yourself in those two, sam? >> no ownership positions in those two. >> tom: on to the fourth quarter with our market monitor this evening. always good to see you, cannel. it's sam stovall with standard and poors. you can catch us online, follow us on twitter. you can friend us at facebook. and take part in our online conversations. >> susie: and finally, people are calling it a modern day noah's ark. a japanese company has created a shelter to be used in disasters like an earthquake or tsumani. the floating capsule is made from enhanced fiberglass and looks like a huge tennis ball. it can hold four adults and comes complete with a small lookout window and breathing holes on top. tom, the company cosmo power already has orders for 600 of

them. kind of thinking like after hurricane irene, i might be interested in one. >> tom: down here in miami we skated past irene and she visited you, no doubt. we're going to revisit japan as a matter of fact next week. that's "nightly business report" for friday, september 30. i'm tom hudson. goodnight, everyone and have a great weekend. susie. >> susie: good night, tom. i'm susie gharib. thanks for joining us. we hope to see all of you again next week. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org