>> tom: a disappointing snapshot of the u.s. economy shows weaker than expected growth. but economists say there's a silver lining. >> we think the underlying trajectory of the economy is healthier than i think many people expect, and i also think there's resiliency here. >> tom: with the economy in question, the federal reserve will conduct a new round of stress tests, testing the health of the nation's biggest banks. it's "nightly business report" for tuesday, november 22. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

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. it's test time again for the nation's biggest banks. late today, the federal reserve revealed plans to conduct another round of stress tests. it will be the fourth since the credit crisis. the central bank wants to make sure banks can hold up during a "deep recession". the fed says a recession is unlikely, but it's checking the financial strength of big banks. this comes at a time when many investors and consumers have been concerned about how exposed american banks are to the

european debt crisis. the tests will be conducted in 2012 and will be done every year. they will apply to 19 firms that participated in similar tests earlier this year. 12 other banks with assets of at least $50 billion will be included in the tests for the first time. the new tests come as bank of america's board has been warned the company could face an enforcement action if its capital levels don't improve. b-of-a, the nation's second largest lender, has been selling assets over the past year in an effort to raise capital. regulators have been watching capital levels at the bank since may of 2009, and "the wall street journal" reports that, in recent months, regulators have met with b-of-a's board, demanding more progress.

the group includes blackrock and the california public employee's pension found. they decided not to join a multimillion lawsuit. calipers says it is pleased with the agreement. black rock and bank of america did not comment. the rest of the nation's banks are doing better-- a lot better. profits are up 49% over a year ago. the federal deposit insurance corporation says the banking industry earned over $35 billion during the third quarter, up from $23 billion a year ago. more than 60% of banks reported improved earnings. meanwhile, the number of problem banks fell for the first quarter in five years. 844 made the list this quarter-- that accounts for about 11.5% of all u.s. banks. >> susie: : it turns out the u.s. economy was a bit cooler this summer than originally thought. the government said today g.d.p. grew at a revised annual rate of just 2% in the third quarter.

the earlier estimate put the growth rate at 2.5%. but, as suzanne pratt reports, there's a bit of good news in that bad news. >> reporter: remember some of the highlights from this past summer? in july, lawmakers battled over our nation's deficit and debt ceiling. in august, standard & poor's downgraded u.s. debt. and by september, wall street was "occupied" by some new neighbors. against that backdrop, the nation's gdp grew at only a 2% annual rate. while it's the fastest quarter so far this year, it's less than originally reported. still, if ever a dark cloud had a silver lining, q3 g.d.p. might be it. it turns out g.d.p. expanded more slowly in july through september, mostly because businesses drew down their inventories by a lot. economist bruce kasman says that sets the stage for a stronger economy at year-end. >> i think what it suggests is

that what we lost in this revision in the third quarter, we'll probably get back either this quarter or next in terms of somewhat more strength in the inventory component. >> reporter: j.p. morgan is expecting the economy to grow at an annual pace of 3% in the fourth quarter. but that will probably be as a good as it gets for a while, due to some serious economic headwinds. >> we're not building in an extension of the payroll tax or unemployment benefits. and as a result of that and the european recession, we think growth is going to slow pretty sharply as we go through the first half of next year. >> reporter: to be sure, kasman does not expect the u.s. to slide into a recession in 2012. but other experts are still worried. that's despite stronger readings lately on retail sales and housing. s&p strategist sam stovall says points to past history. >> i do have a bit of a concern, however, and that is every time since world war ii that we've had two consecutive quarters of g.d.p. at 2% or less, we have

eventually slipped into recession. >> reporter: so on this thanksgiving week, it looks like we should be thankful the economy is still growing, even if it's at a slower pace. suzanne pratt, "nightly business report," new york. >> susie: still ahead, with thousands of travelers heading out for the holidays, we take a closer look at the state of the online travel industry. >> tom: how much will your doctor be paid? congress will have to answer that question in the next month as it struggles to adjust the payment formula for medicare providers. darren gersh explains why physician medicare payments is a top issue lawmakers will try to work out in the next few weeks. >> reporter: 90% of the patients dr, arthur palomara treats are covered by medicare. and if congress doesn't act by the end of the year, his fees for all that work will be cut by almost 30%. >> it's going to be a disaster. we're going to try to make ends meet for a while, but i'm sure,

at a certain point in time, we're not going to be able to continue to see medicare patients. >> reporter: dr. palomara has been here before. almost every year, congress passes what's come to be known as the "doc fix," a tweaking of the medicare formula that sets payments for physicians. often, the doc fix is done at the very last minute, leaving doctor's worrying about how they will pay their bills. >> i have to tell you, though, perhaps like somebody who has chronic pain, you kind of learn how to live with it and you just push it into the recesses of your memory. >> reporter: this problem began when congress changed the way doctors are paid for treating patients on medicare. a new formula based pay on the growth in medical inflation and the number of seniors seeking care. on paper, the savings were huge; in practice, the new formula was a disaster. >> as it turns out, the formula was well off, and we keep having these across-the-board cuts that it indicates. and the congress says, "no, no, no, we can't use the formula," and they fix the doc's reimbursement.

>> reporter: the new formula also targeted only one part of a complicated system. >> you can't just look at the doctors. doctors work in a large medical complex that includes hospitals, mri centers, and everything. you got to put everything under the budget. >> reporter: with the failure of the super-committee, the doc fix is now a top priority for congress. >> i think congress feels they need to do this because they are worried that there could, in effect, be a doctor's rebellion under medicare, which would disrupt the availability of services to the elderly and disabled, and that's not something anybody wants to see happen. >> reporter: the doc fix is, however, expensive-- more than $20 billion next year, which means a deeply divided congress will have to find a way to pay for it. with time running short, the doc fix could be pushed into next year, putting doctor palomara in a bind. >> our overhead is here, our salaries are here, our employees salaries are here. we just can't ignore those. >> reporter: which is why dr. palomara is optimistic congress will do another doc fix, and

most likely, another one next year and the year after that. darren gersh, "nightly business report," washington. >> susie: lawmakers will put the bankruptcy of derivatives firm mf global under the microscope. december 15 is the tentative date for the hearing. regulators and top mf global officials like jon corzine, who resigned as c.e.o., and the firm's c.o.o., bradley abelow, have been invited to testify before the house financial services subcommittee for oversight and investigations. meanwhile, j.p. morgan is vying to buy a nearly 5% stake in the london metal exchange from mg global holdings for $39.1 million. mf global filed for bankruptcy october 31 after bad trades on european debt triggered its collapse. on wall street kind of another down day. this is five days in a row that the s&p is down. a lot of worries of a recession in europe and new economy in the u.s. >> it's slower than expected that third quarter number took any kind of wind out of the sales of the market and of course the holiday week is

following as well. let's go ahead and take a look at what was happening in tonight's market focus. it was a choppy session for stocks with a bias to the downside, thanks to the slower u.s. economic data and higher interest rates in europe. you can see the battle between buyers and sellers on the daily chart of the s&p 500. the market hit its low of the day just before noon, eastern, and the high came about two hours later. the minutes from the last federal reserve meeting buoyed hopes for the possibility of more stimulus. but the market couldn't hold on and ended down a fraction. the drop continues eating away at the gains from october. the index is now at its lowest price since the first week of october. while stocks sank, bonds continued to rally, sending interest rates lower. the yield on the ten-year

government note fell again, down to 1.93%. we're looking at the last 180 sessions. yields are now at the bottom of the range they've been in this month. the drop in bond interest rates did not help the traditional dividend paying stock sector of utilities. it was the weakest today, down 1.3%. the energy and financial sectors also led the losers. powering the utilities lower, a.e.s., integrys, and c.m.s. energy, each falling at least 2%. a.e.s. received state okay for its purchase of d.p.l., dayton power and light. the deal could close before the end of the month. bank of america led the losers for the dow industrials. we reported earlier the concerns about its capital levels. shares fell 2%, continuing to trade below $6 per share. the stock is only about 25 cents above its 52 week low hit in mid-october.

online deal company groupon is only seven cents above its initial public offering price. shares dropped almost 15%, down to just above $20 dollars per share. shares have traded for less than a month. earlier this week, it's biggest competitor, livingsocial.com, reportedly was raising $200 million in funding. a former online high-flier continues coming back down. netflix sank 5.5%. volume was stronger than usual as shares fell to a new 52 week low. the company warned it will lose money in 2012, leading to a round of analyst price cuts. again, the problem is a significant loss of customers over its decision earlier this year to raise prices and split the dvd-by-mail business from its online streaming service. it later dropped that strategy,

but its share price continues dropping. ahead of the thanksgiving holiday and soup probably is not on the menu. while campbell soup's latest quarterly earnings were better than forecast, sales were a little weaker that expected. shares cooled off, sliding more than 5% on heavy volume. that sent the stock down to a two month low. meantime, medical device maker medtronic saw its shares up 4.5% on twice its usual volume. earnings were above estimates. new products helped its bottom line despite weakness in heart defibllators. and that's tonight's "market focus."

>> tom: it's not only retailers looking forward to a busy holiday season. the final six weeks of the year sees some of the busiest days for the travel industry. airfares are up an average of 6% this season, even though the air transportation association predicts a 2% drop in passenger traffic. while fewer americans may be flying, online travel firms have seen international visitors pick up.

three-quarters of the bookings at name your own price travel site priceline.com come from foreign travelers. c.e.o. jeff boyd admits it's surprising given the sour news out of europe. >> i think part of the surprise is probably attributable to a little bit of overhang related to concerns about the europe debt crisis and the macroeconomic situation. >> tom: expedia.com's business still favors americans on the road, accounting for 60% of its hotels.com business. but c.e.o. dara khosrowshahi finds international visitors are spending more faster. >> people may be putting off buying a home, but they're not putting off going on vacation. it is more profitable than the international business. the international business, however, is growing faster, especially the asian economies, the latin american, the south american economies. those are just exploding. so, we do expect the international part of our business to become a higher percentage of our total business. >> tom: regardless of where a

traveler hails from, they are finding higher prices-- not only airfares, but also accommodations. triple-a finds hotel rates average $145 per night, up 6% from last year. homeaway.com concentrates on the vacation rental home business. similar to other travel sites, c.e.o. brian sharples says the vacation home rental business has been strong, especially overseas. >> i think the thing that's been the most surprising to me in the recession is that the traveler traffic has continued unabated from a growth perspective in the business, and we've really tried to understand that. as a sign of how strong homeaway.com thinks the overseas market is, in the last five years, the company has bought established sites in the u.k., france, germany, brazil and australia. rates are going up we expect now and priority mail packagages in january. these price increases are the latest effort by the postal

service to avoid bankruptcy. the agency has said it may run out of money to operate this year. now in separate strategy the postal service has hired evcourt partners to return it to profitability. they advised general mortle during its bankruptcy and later during the public offering. with just one more trading day until the thanksgiving holiday, here's what we're watching for tomorrow. weekly jobless claims, and the october reports on durable goods, along with personal income and spending. also tomorrow, hilary kramer is our "street critique" guest. email your questions to streetcritique@nbr.com. the u.s. justice department closed a major criminal and civil case against merck today regarding its drug vioxx. merck agreed to pay nearly $950 million to settle charges it promoted the painkiller for unapproved use. however, merck doesn't admit liability or wrongdoing. vioxx was pulled from the market in 2004 after being linked to

heart attacks. in 2007, the drug maker paid almost $5 billion to end lawsuits by former vioxx users. >> tom: the head of the federal communications commission wants to take a closer look at at&t's proposed takeover of t-mobile. "the wall street journal" reports julius genachowski will seek an administrative law hearing on the $39 billion deal. the companies are already facing opposition from the justice department. it has sued to stop the deal, citing anti-trust issues. the fcc hearing would come at the end of the anti-trust trial.

professional golf is not taking a break for the thanksgiving holiday. the game heads to china for its next tournament. the $7.5 million purse is a small fraction of the $62 billion generated annually by the entire golf industry. in tonight's "beyond the scoreboard," rick horrow caught up with golfer mark o'meara recently to talk about how the business is changing and the difference winning masters made on his career. prior to 98 i won tournaments around the world and had a nice successful career. i think what it did for me is put the icing on the cake in my professional career. it certainly, the exposure factor of winning a major championship. the marketing aspect helps.

you got lexus, callaway and titlists all over yourself. you're pretty good in the board room too, aren't you. >> i think i have a good relationship with people. i love people so it's eyes for me. i have a long term relationship with toyota and now lexus. they've been tremendous to me. it was one of my last wins on the european tour six or seven years ago. so i'm all about relationships and longevity and staying the course and staying with my team. >> rick: tell us about your fledgling golf course design. >> i don't think anybody's doing too good there. my dream was to try to, i realize i'm not jack nikolas or honor palmer or any of the great architects. i felt like it was an avenue that i had some design experience. i did three or four courses they turned out pretty g if i could do one course during the year somewhere in the world it would be great. but when the economy and the worldwide economy took their hit those days have gone by the wayside. >> rick: tell me how the

business of golf has changed since you turned pro way back in 1980. >> wow. you know, like most things our economy, housing, everything has taken such a great rise for so many years and certainly the pga tour. it's just so much different. working hospitality, tiger woods coming on the scene. who would have ever thought 15 years ago that a golfer would be not just one of the greatest golfers but one of the mees most famous at lots of all of sports. that's what tiger brought to the surface when it comes to the marketing aspect and business aspect. >> rick: who is the next guy? >> that's a great, that's the million dollar question. it's hard to say. there's so many good young talents and players. i think that because there are so many dollars out there and because it's so competitive. there are so many top foreign players playing. we saw that this year. rory and charles -- the young foreign players.

and then we have some young confident american players. billy haas is a fine player, ricky has high expectations. there's probably 20 good young american players getting ready to make take it to the next level too. >> rick: thank you very much. >> thanks rick, appreciate it buddy. >> susie: while the super- committee has collapsed, tonight's commentator believes congress can still make a dent in the nation's massive budget deficit. she's heather boushey, senior economist at the center for american progress. >> the super-committee was unable to agree on a proposal to bring down our nation's long- term budget deficit. this is not a tragedy. congress will have other opportunities to address the budget deficit. frankly, the super-committee was always more likely to fail than not. conservatives refused to consider raising revenues from the wealthiest households in any meaningful way. we cannot balance the budget while continuing to provide large tax breaks for the very wealthy.

we also cannot balance the budget on the backs of the poor and the middle class. the real tragedy is that the super-committee had within its power the ability to improve our economy. they could have taken steps to promote growth and to encourage higher employment, which would, in turn, help improve our long- term budget picture. they could have pushed to ensure that the long-term unemployed continue to receive benefits, and that every working american continues to get a break on their payroll taxes. they could have ramped up investments in infrastructure, and kept teachers in schools and cops on the beat. congress still has the power to do these things. lawmakers have some serious work cut out for them in the next few weeks. the best thing they can do for our nation's long-term deficit is to start by ensuring the strength of key programs to protect the middle class and spurring the american economy towards lower unemployment. i'm heather boushey.

>> tom: you can follow nbr anytime. we're online at nbronpbs.org. there you'll find all the market data from the program. you can also follow us on twitter @bzrrpt or my personal feed @hudsonnbr. if tweeting isn't your thing, friend us on facebook at b-i-z-r-p-t. >> susie: and finally tonight, even though the economy is weak, many companies are still planning to throw a holiday party in the coming weeks. outplacement firm challenger, gray and christmas says almost 70% of firms plan to hold parties this year. that's still far below pre- recession levels, when 95% of big firms were in the mood to celebrate. and the companies that are doing the party thing say they're budgeting about the same as last year. but there are some differences, tom. more than half say parties will be employees only, and about half will hold their celebrations during the workday.

so anything is better than nothing. >> tom: absolutely. a little bit of toast to the year that was and the year that will be susie. that is nightly business report. that's "nightly business report" for tuesday, november 22. i'm tom hudson. good night, everyone, and good night to you, too, susie. >> susie: good night, tom. i'm susie gharib. we hope to see all of you again tomorrow night. "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

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