captioning sponsored by wpbt >> paul: a progress report on home loan modifications shows mortgage help is hard to get, even with a $75-billion foreclosure prevention plan in place. the administration says lenders need to get busy keeping more americans in their homes. >> susie: this man could hold the key to health care reform passing the senate. but he says we need to do it right, not fast. coming up, our conversation with republican senator charles grassley. >> paul: prices at the pump could be headed higher as crude continues above $70 a barrel. now economists are worried those higher prices could derail a recovery.

>> susie: it looks like more americans are eating at home and that's giving kraft foods a big boost. the numbers are in and its profits are up. details in tonight's stocks in the news. >> paul: i'm paul kangas. >> susie: and i'm susie gharib. this is "nightly business report" for monday, august 3. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. >> susie: good evening, everyone.

a lousy report card today on the obama administration's foreclosure prevention program. of the millions of americans delinquent in paying their mortgages, only 9% are being modified, that's 235,000 borrowers. the administration launched its "making home affordable" plan in february, offering financial incentives to banks and other lenders to modify mortgages for struggling borrowers. as stephanie dhue reports those lenders need to do a better job. >> reporter: the bills have been piling up for jean andre- sassine. he fell three months behind on his mortgage after he was laid off and his wife had health problems. >> we had to choose between paying the mortgage or paying for the premiums, to keep the scheduled surgery going, so we opted for surgery. >> reporter: he says he's gotten the run-around from chase mortgage each time he has called. >> someone takes my name, my loan number, ask what montly

income is, expenses, utilities, then say okay, we'll get back to you, and then that's it, you never hear from them again. clear with that step. he says he's done that. j.p. morgan chase has modified 20% its nearly $40 -- 400,000 delinquent mortgages. among among other big lenders, gmac has modified 20%, citimortgage 15%, wells fargo 6% and bank of america 4%. just 235,000 loans have been modified out of the almost 3 million eligible for the program. treasury undersecretary michael barr says the industry needs to do more. >> we're disappointed in the performance of some of the servicers, we think they could have ramped up better, faster, more consistently. >> reporter: the industry says

the home affordable modification program is just one way to modify loans. another way, the industry's hope now program, which has modified an additional 300,000 loans since june. paul leonard of the housing policy council says some of the banks on the treasury's list haven't been enrolled in the program long enough to make a difference. >> what's not reflected in the treasury's initial announcement is when the company actually signed up for the program, so i think in the fall we'll have a better sense for the companies that have really kicked it into gear. >> reporter: the administration wants the industry to modify half a million loans under the program by november. but even that goal is met, analysts expect a record number of foreclosures this year. stephanie dhue, "nightly business report", washington. >> paul: the fate of health care reform may rest in the hands of six u.s. senators. three republicans and three democrats. they've been negotiating for over a month now. to find out what they are

talking about, darren gersh spoke with iowa republican charles grassley, a key member of the group. darren asked grassley how much progress the group has made. >> a lot of noncontroversial things that i suppose that you could say there's been a lot of accomplishment on over even far back. but there's always a large share of the issues that are not only complex, but also controversial and there's still a lot of those left to do. >> reporter:? democratic leaders said the bipartisan group should deliver a healthcare plan by september 15th. what do you think of the deadline? >> well, if the majority party made a decision that that's what they were going to do regardless, they could enforce it and do it. but i've always been an advocate for let's do it right. and several reasons for saying "let's do it right." one of them is, you know,

healthcare is one-sixth of our economy. when you are restruck you aring that much of the economy you ought to be very careful how you do it. and there ought to be thoughtful. >> reporter: one of the more controversial issues about healthcare is whether there should be some kind of public option, the government is providing a health insurance plan. could you support a public option like that? >> look at what the think tank here on the east compost says about it. they say if you have a government run insurance company that these are my words, not their's. that is in competition, government is not a fair can he for. government is not a competitor eighths predator. and then going back to llewlny they would tell you under though circumstances 120 million people would opt out. what happens when you take 120 million people out of 177 million dollars private sector insurance program, you have 50 million people left and pretty soon premiums go up and pretty

soon more people opt out and pretty soon nobody is in to the private health insurance you end up where quite a few senators would like to start out. that would be -- with the canadian-style insurance plan. and you know what happens when you have that, you add racking. >> reporter: one -- add rationing. >> reporter: what your senator conrad is talking about a co-op. not for profit, cooperative plan that would compete with private health insurance. could you support something like that? >> i could. if it's in the way that we have known co-ops in the united states for 150 years. whether it's co-op housing in major cities or co-op, grain elevators in central iowa or whether it's rural electric cooperatives, farmers wouldn't have electricity today if there weren't rural electric cooperatives. and so if it's in that spirit, yes, i can. >> reporter: mandates. let me ask you about that. one issue is whether or not you have to mandate employers to

provide health insurance coverage so that more americans get coverage. how broad would that mandate have to be? >> i'm not for employer mandates because you are going to have a situation where you're going to force a lot of small businesses to have insurance and if they don't have it, you're going to -- like house of representatives and the pell lows see bill is going -- going to put tax on. and it's going to kill small business. >> reporter: how does this bipartisan group that you're a member of get to more health insurance coverage if you don't mandate an employers provide coverage? >> through an individual mandate. and that's individual responsibility and even republicans believe in individual responsibility. and what you do, you have accessibility in two ways. one, you have accessibility for those that can't afford it by helping them buy insurance.

and for people that can get private health insurance, but they might be discriminated against based upon preexisting conditions. you do away with that discrimination. in other words, what we have to have is a patient-centered health insurance program. we have to have one that is results oriented. and access to it is a very important part of it. because everybody has access to the health insurance system through the emergency room. but you're paying for it, other people are paying for it. maybe $1200 a year through increased premiums. wouldn't it be better to have each individual responsible for their own healthcare instead of having you pay for them? >> reporter: senator grassley, thank you very much for talking to me. >> glad to be with you. >> susie: also from washington the top democrat predicts the cash for clunkers will bill pass this week.

harry reed said it could happen before friday when the senate goes in to recess. the top repub the senate's top republican, mitch mcconnell, says he'll work with reid on the logistics of a vote. the house has already okayed it. the obama administration wants $2 billion to keep the rebate program going, extending "cash for clunkers" until labor day. more than 150,000 gas guzzlers have been traded in for fuel efficient vehicles. the price tag: $664-million. >> paul: wall street started the day with a modest sell off but didn't end that way. the dow was down 18 points in the first hour of trading with the nasdaq off 19 points. but an upbeat long term outlook from caterpillar and a better than expected 3.6% rise in june pending home sales turned stocks higher during the mid-session with the dow up over 33 points. the selling resumed in the afternoon but stocks made a late rebound to close on the plus side.

>> susie: oil prices fell slightly today but are still up eight dollars in the past three sessions. light sweet crude settled at $71.42 cents a barrel close to the high for the year. prices are being pushed up by hopes a global economic rebound will boost demand for energy. but as erika miller reports some analysts worry higher energy prices could hurt the recovery at a particularly vulnerable time.

>> reporter: some not so super news for drivers heading out for vacation. oil analysts warn prices at the pump could rise another 50 cents a gallon or more in the next few weeks. even worse, oppenheimer's fadel gheit sees potential damage to an economic recovery. >> we import about 60-65% of our oil. our energy bill will continue to rise, if oil prices are not kept in check. so, higher oil prices will derail economic growth or postpone it. >> reporter: he estimates every penny rise in a gallon of gasoline over a year takes $1.5 billion out of consumer pockets. not everyone sees rising oil prices as an economic threat. barclay's dean maki says consumers can handle just about any increase as long as it's gradual. >> if prices move up rapidly, they think perhaps they'll rise rapidly further from here. that will tend to have more of an negative effect on consumer spending then if prices were to

rise very gradually to that same level. >> reporter: however, oil analysts are not discounting a sharp and sizeable rise in prices. they point out volatility in the oil market over the past year has reached levels not seen since the energy shocks in the early 1980s. but even if prices spike, maki points out there may be offsetting factors supporting economic growth, like government stimulus efforts. >> right now, that massive policy push both fiscal and monetary, as well as the cash for clunkers program, is leading to stronger growth despite rising energy prices. >> reporter: it's hard to imagine higher oil prices could be a good thing. but prices are rising due to optimism about the economy. most people would rather have $80 oil and a recovery, than $40 oil and a recession. erika miller, "nightly business report", new york

>> paul: now, let's take a look at some stocks in the news tonight.

and those are the stocks in the news tonight, susie. >> susie: paul, imagine the money you could make if you had a split-second advantage over the competition. the securities and exchange commission has been thinking about just that. the agency is working on rules to ban what are called "flash orders". they're trades made on information that hasn't yet been made public and they're an advantage of literally milliseconds. they're used by high frequency traders or big brokerage firms

and hedge funds with super-fast, computerized trading programs. flash orders account for almost 2.5% of all trades in the u.s. the traders make tiny profits on individual moves but added up, the profits can be huge. >> paul: tomorrow, we talk markets with street critique guest todd harrison. he's founder and c.e.o. of minyanville.com. >> susie: another sign of the financial stress caused by the recession. consumer and business bankruptcy filings were up again last month. more than 125,000 consumers filed for bankruptcy in july. that's the highest monthly total since the bankruptcy code was overhauled in 2005. businesses seeking bankruptcy protection spiked 42% mostly due to the lack of financing available for troubled companies. >> paul: sony is launching a new electronic book reader to compete with amazon's kindle. the company is unveiling its

"reader pocket edition" tomorrow. it will hit stores by the end of the month. the basic "reader" model will retail at $199, a third less than the basic kindle model. both will hit stores include wal-mart and best buy at the end of the month.

>> susie: here's a look at what's happening tomorrow: >> paul: mutual funds that focus on undervalued large and mid-cap stocks took it on the chin when the market sold off last year, but they've finally started to take off. and in tonight's "of mutual interest" segment, we focus on one value fund that's made a big comeback, the oakmark select fund. it's up 31% year to date placing it near the top of its category. bill nygren's been at oakmark select since its inception 13 years ago and he joins us from chicago. bill, welcome to "nightly business report." >> thanks for having me, paul. >> paul: as value manager you look for under valued stock, are there any left after july's big rally? they look say market is up 50%. and which is true. but we don't think there is much

fundamental reasons for the market to be that cheap back then. you have to remember, the market is still down a third from where it was a decade ago. >> paul: good point. you only have about 20 stocks in the fund portfolio, biggest holdings are media like discovery communications and viacom. why do you like that group? >> i think investors have turned too negative on the media group, there is concern about new media, specifically the internet and all the different devices to view media on. we think content companies that deliver demanded content are still going to be among better names in the stock market. they lick discovery has improving balance sheet. we think their best days are still ahead. >> paul: interesting. you also have pharmaceutical and tech stocks on the portfolio, are you still seeing value there? >> absolutely. i think sometimes people think because we're a value manager, we can only buy the lousiest companies with very cheapest, but when names like

pharmaceuticals or other healthcare names certainly the technology names get then out by other investors and become as cheap as traditional businesses, we're happy to buy those, too. >> paul: now, you were burned by the financial stocks a to you years ago, do you think they're good buys now? >> well, it's true, paul, we didn't see the collapse in home prices coming. i wish we had. but we still think the retail banking business is a great business and we believe that once loss ratios get back to normalized levels their earnings will come through and those stocks can go substantially higher. >> paul: which do you like the best in that group? >> we own capital one financial, j.p. morgan and bank america. we think all three are still very attractive. >> paul: okay. now do you personally own or have any other disclosures to make about those issues that we've mentioned tonight? >> i don't directly own any of the stocks in the fund or any other stocks for that matter. but the majority of my personal assets are in the funds that i

manage. so indirectly i have big interest there. >> paul: you've global select fund also, very briefly, you like some of the foreign markets and which so? >> we like basically all of the foreign markets, we think valuations are attractive as they are in the u.s. and we've got that fund about evenly split now between u.s. names and non-u.s. names. >> paul: very good. bill, great to see finally paying off and thank you for your information. >> thanks for everything me. >> paul: my guest, bill nygren of the oakmark select fund. >> susie: that's "nightly business report" for tuesday, august 4. we want to remind you this is the time of year your public television station seeks your support. >> paul: support that makes programs like nightly business report possible. >> susie: thanks for joining us. and don't forget to support your public television station. i'm susie gharib. goodnight, everyone. you too, paul. >> paul: goodnight susie. i'm paul kangas wishing all of you the best of good buys. "nightly business report" is made possible by:

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