>> paul: world leaders are gathering in pittsburgh for the g-20 summit. from economic stability to climate change, we look at what tops the agenda. >> suzanne: after four straight months of gains, home sales stumble unexpectedly. that leaves many people wondering what happened to the recovery thought to be underway in the housing market. >> they're not doing buy-backs, they're not doing dividends, cap expenditures are down, hiring is almost nonexistent. >> paul: and that's because s&p 500 companies are sitting on almost $800 billion in cash. coming up, what they're doing with all that money. >> suzanne: raspberries for the maker of the popular blackberry smart phone, as research in motion's latest results disappoint. tonight's "stocks in the news" looks at just how badly the shares are doing in after-hours trading. i'm paul kangas. >> suzanne: and i'm suzanne pratt. susie gharib is on assignment. this is "nightly business report" for thursday, september 24. "nightly business report" is made possible by:

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>> suzanne: good evening, everyone. the group of 20 begins its two- day meeting in pittsburgh tonight with a search for common ground and questions about how much they'll actually get done. the leaders of germany and france continue to call for tougher regulation of the financial industry. president obama, who is hosting the gathering, is expected to push for a re-balancing of the global economy. joining us know with a preview of the g-20 agenda is washington bureau chief darren gersh. welcome. >> hey, suzanne, how are you. >> good, thanks. talk about the rebalancing of the global economy. exactly what does the u.s. expect to happen? >> well, rebalancing is kind of a code word. basically what it means is that the united states wants to get a new position where we are borrowing less from the rest of the world and the chinese but also the germans and the japanese are buying more from the rest of the world and specifically importing more from the rest of the world so that way we

don't have these massive global imbalances that build up. as you might imagine it's a little controversial with the other countries involved at the g-20 summit but it's important to the united states. and treasury secretary timothy quitener just a little while ago came out and said that he wants to see the dollar preserved as the world global reserve currency and in order to do that we have to bring our budget deficit down. but we also have to accomplish this rebalancing so the world doesn't have these huge financial mismatches. >> does that mean that the dollar is actually going to be on the agenda at this meeting? >>. >> the dollar is kind of always on the agenda whether formally or informally. basically the dollar is brought up because it can often be a proxy for how trade flows are going and in the past t has been the case that the united states wants to see other country as just their currencies. so it may not explicitly talk about the dollar per se but it's in the background. it's a measure of how these imbalances are working.

how big they are and kind of pressure in the global system to bring it more into alignment. >> in terms of financial regulatory reform, what is it that the germans and the french would like to have happen at the summit. >> yeah, this is one of these little kurfluff els that kind of come up right before these big meetings. the germans and the french were talking about capping pay, basically capping bonuses for bank ceos. you could say that it is a coincidence that the germans are going into an election this weekend and that this issue happened to come up. but basically they are talking about capping pay for executive the. united states doesn't like this idea. we don't like caps. we are talking more about governance changes on how ceos pay is set. and there is discussion, there will be discussion about these ideas of reigning in ceo pay by having clawbacks and somehow finding a better way to relate ceo pay to the risks that institutions will taking on so that ceos don't

have an incentive to take on huge risk and they get paid if the bank blows up. >> it will be very interesting to see if any of these things actually do get accomplished. thank you, darren. >> thanks. >> wharton bureau chief darren gersh. >> paul: sales of existing homes fell unexpectedly last month after four straight months of gains. sales dropped 2.7% to just over five million homes. analysts read the decline as evidence the housing market is relatively stable, but still fragile. economist mark zandi says government policy is key to what happens next. >> i don't think the housing market will do well without significant continued government support. that means continued low mortgage rates because of the federal reserve buying mortgage securities; that means an extension of the housing tax credit; that means an extension of higher conforming loan limits and other things. i just think, at this point, the market is still too fragile. after modest opening gains, wall street headed lower this morning as investors focused on those disappointing home sales numbers

and ignored a drop of 21,000 in the latest weekly jobless benefit claims. the dow gave up an early 30- point advance and posted a 45- point loss at 11:00 a.m., with the nasdaq off 27 points. stocks stayed broadly lower as a resurgence in the dollar undermined commodities, especially oil. the dow industrial average closed down 41.11 at 9,707.44. the nasdaq fell 23.81 to 2,107.61. the s&p 500 lost 10.09 to 1,050.78. in the bond market, the ten-year note rose 10/32 to 102 2/32, putting the yield at 3.38%.

>> suzanne: the senate finance committee today continued debate over chairman max baucus' proposal to overhaul healthcare. the committee has made slow progress on hundreds of amendments to the measure, the last of five healthcare bills pending in congress. earlier, i spoke with ron williams, chief executive of aetna, about reform of the nation's healthcare system. i began by asking him for his assessment of the baucus plan. solid foundation for important progress. >> and in an op ed that you wrote bay year ago that appeared in the ft, you warned against trying for

the big fix with health-care reform. do you think that the president is currently being too ambitious? >> well, i think i would say based on the president's recent comments that one of the things he's incorporated that i think is important is really an expectation that there be an individual coverage requirement. that we expect that everyone would have insurance. those who could afford it would buy it. and those who couldn't afford it would receive subsidies. and i think one of the big debates that going on now in senate finance is what does that mean and what level of subsidy is both appropriate as well as what is affordable. >> beyond universal reform, what else do you want to see? what would you like to see in terms of health-care reform? >> well, i think there are two critical elements. one is making certain everyone gets access. and i think we have some very solid proposals on that. i think the other one is really making certain that we reform the health care delivery system. because while everyone is aware of the health insurance premium and what health insurance costs, what most people don't connection

is the reason that health care premiums go up is because health-care costs goes up. and the premiums are reflective of that. so bringing more people into the system without really tackling how we get the system to create more value and slow down the rate of increase won't really give us all the reform that we need. >> is there anything in particular that would be completely unacceptable to you? >> well, i think the thing that we've been very concerned about is this notion of the government plan. and it's really something that we think expands the role of government in a way that government is both a player in the health insurance business as well as a rulemaker and a referee. and we think that there are other ways to solve the problem. we think it's diversionary and we should get back to focusing on how we get and keep everyone covered and how do we really focus on the cost of health care itself. >> americans are understandably worried that reform equals higher premiums and or higher taxes for them. how do we pay for reform if

those two things don't happen then? >> well, i think when we look at the senate finance committee proposals, one of the things that does reflect that concern is the fact that there would be a variety of taxes on health insurers. we in turn have no alternative but to pass those taxes on to our customers. and we just encourage the senate finance and others to look for broad based ways so that the financing of the health-care system is really a broad-based responsibility for the whole country. >> uh-huh. i want to begin this next question by saying that i'm not an et ma customer but i do want to say or i do want to share that my family's premiums have gone up more than 50% in the last two years. do you think with health-care reform my premiums are likely to go up or down? >> i think your premiums will go up or down in corelation to health-care cost itself. and most health insurers really look at the underlying rate of increase

in technology, hospitals, physicians, pharmaceuticals and collect that cost, manage it as best they can, and then pass that cost on to the consumer in the form of the premium. so i think the real question will be what happens with the health care delivery system. >> what about aetna's profitability as a result of reform. what do you expect that health-care reform will mean to aetna's bottom line? >> well, i think the answer is we really don't know. i think there are many people who believe that the health industry will get lots of new customers. it's not clear whether those customers would be profitable customers or customers where we would actually take a loss on those customers. so i think what we are doing now is really focusing on taking care of the 19 million customers we have in our medical business and the 36 million americans who have a relationship with us. and really focus on doing a good job for them each and every day. >> let's leave it there. thank you so much for joining us today. >> thank you. >> my guest ron williams,

chairman & ceo of aetna. >> paul: speaking of health care, tonight, "nightly business report" is part of the pbs special report: health care reform." we're collaborating with other pbs news and public affairs programs like "now on pbs" and "tavis smiley." my co-anchor, susie gharib, reports part of this 90-minute, in-depth program that looks at how reforming the nation's $2.5 trillion health care system may change the way americans live. check the local listings in your area. >> suzanne: susie has been busy. she's just back from saudi arabia, and tomorrow night, we'll have her exclusive interview with saudi arabia's oil minister ali al-naimi. he thinks $75 a barrel will be the new baseline price for oil. meanwhile, today in new york trading, crude oil tumbled 4.5% to $65.89 a barrel. low demand is pressuring prices as weekly crude oil inventories rose again.

>> suzanne: former fed chairman paul volcker today criticized president obama's plan to impose strict rules on systemically risky firms. volcker says, even if the rules are adopted, we'll still have firms that are "too big to fail." he serves as an outside economic advisor to the president, and supports much of the administration's regulatory reform plan. but volcker told congressional lawmakers the proposed rules could encourage even riskier behavior.

>> suzanne: meanwhile, volcker's former agency wants to keep one of the tools it's been using to cope with the financial crisis. the federal reserve wants to make the term auction facility or t.a.f. permanent. that program's used to make short-term emergency loans to banks. the central bank is scaling back the lending program's operations because of the improving economy, but the fed wants to keep it as an option. >> paul: the last few weeks have seen a surprising increase in merger and acquisition activity on wall street. and for the most part, the deals are being done with cash, which led us to wonder-- how much cash do companies have on hand, and what will they do with it? scott gurvey gets some answers. >> reporter: what will they do with all that money? american corporations are sitting on stacks of cash. standard and poor's reports the companies in its 500 index have piled up a record amount of nearly 800 billion bucks. s&p's howard silverblatt says it's a result of cost cutting.

>> they're not doing buy-backs, they're not doing dividends, cap expenditures are down, hiring is almost nonexistent. so the cash that they would have been spending on the economy is mostly going into their till. and they're keeping the money close to their vest until they decide it's safe to go out and use it. >> reporter: one of the uses will be to boost marketing and production once consumers start buying again. but wall street has also been betting the cash will let some companies go on a buying spree. and that's already underway-- big names like dell and pfizer have already snapped up other firms. google says it's going to. but stefan selig of bank of america warns not every sector is ready to play "let's make a deal." >> you won't see deals at the moment in those areas which are most impacted by consumer discretionary spending. so, retail and leisure-- in those industries, you've seen very little deal activity, and i think you'll continue to see less deal activity. in those industries that are more defensive-- health care, food and beverage related-- that's where you're seeing

deals, and that's where i think you're going to be able to continue, or you will continue to see transaction activity. >> reporter: some investors are also hoping corporate cash will come their way in the form of dividends. but experts say that is unlikely until the recovery is firmly established. >> once they start a dividend, they're going to have to continue it. over the last year, year and a half, its been okay to cut your dividend. your stock would actually go up because you were facing the situation, doing what you have to do. when they start paying it, they better keep paying it; otherwise, there's going to be a big penalty. >> reporter: it's not just cash sitting on the sidelines. there's stock in many a corporate treasury, too, as the result of buy-backs made when share prices fell. that stock is also available for currency as business improves. scott gurvey, "nightly business report," new york.

>> suzanne: twitter, the fast- growing mio-blogging web site, is close to securing around $100 million in financing. "the wall street journal" reports the deal values twitter at a billion dollars. investors include mutual fund company t. rowe price, insight venture partners, and current twitter investors spark capital and institutional venture partners. back in february, twitter was valued at $250 million, which means it's quadrupled in less than a year. >> paul: tomorrow, our friday "market monitor" guest is mark leibovit, chief market strategist at vrtrader.com.

>> suzanne: september is shaping up to be a bad month for auto sales, following the success of cash for clunkers in august. general motors c.e.o. fritz henderson says sales have been way down. car shopping web site edmonds.com forecasts a 23% decline from a year ago, and j.d. power and associates sees a 29% drop. auto makers release their september sales numbers next thursday. >> paul: wal-mart is paying $3 million to massachusetts to settle claims it shortchanged workers by denying lunch breaks. the state said forcing employees to work without breaks violated labor laws. the giant retailer has faced similar complaints in other states. last year, wal-mart paid $640 million dollars to settle similar suits. the company says it's pleased to have resolved the matter.

>> suzanne: here's a look at what's happening tomorrow: the august reports on durable goods and new home sales are released. we'll also see quarterly results from k.b. home. when it comes to the recession and america's debt levels, do we have too much or not enough? tonight's "two ways to play" says it depends on how you see it. here's kevin depew of minyanville, and minyanville's kevin depew.

>> everywhere we turn these days, we're bombarded with the same message-- namely, that there's too much debt. there are entire television shows devoted to this theme, and even seminars that, ironically, charge you an arm and a leg to explain exactly why you have too much debt. that's the conventional wisdom. but if we look at the u.s. debt load in a global context, where the u.s. is only about a quarter of g.d.p., were actually under- leveraged. keep in mind our return on assets is high, our interest rates very low, and so our ability to borrow and service debt is much greater than current levels. if anything, we don't have too much debt; we have too little. >> i disagree. what is important is lending for productive reasons. for example, if someone were to invent a miraculously cheap way to produce energy, but it needed a vast amount of financing to implement, in the long run, it could be worth the increase in debt because future production would pay for it. instead, were financing unproductive assets like houses, condos and televisions. the market was going through the painful process of destroying this unproductive debt, which would have been a good thing, but massive government intervention stopped it.

now, were propping up worthless assets. it wont last, and with every tick higher in the market, risk is increasing. >> paul: recapping today's market action: stocks slump on a worse-than- expected home sales report. the dow dropped 41 points and the nasdaq lost 23 points. to learn more about the stories in tonight's broadcast, to watch our streaming video and to take part in our daily blog, go to "nightly business report" on pbs.org. you can also email us at nbr@pbs.org. >> suzanne: and finally tonight, world leaders meeting at the g-20 summit are taking home some freebies with a special pittsburgh flair. the first thing you notice-- many items celebrate the city's sports teams. there's a pittsburgh pirates baseball cap, hockey pucks from the penguins, and of course, the steelers' famed "terrible towel." the bags also include a jersey that says "obama" on the back. dignitaries and journalists will also receive jewelry, towels and mugs that represent pittsburgh's

finer points. those swag bags also include cookies for the long plane ride home. paul? what kind of cookies is pittsburgh serving. >> i don't know, but cookies travel very well, while they last. >> absolutely. >> suzanne: that's "nightly business report" for thursday, september 24. i'm suzanne pratt good night, everyone, and good night to you, paul. >> paul: good night, suzanne. i'm paul kangas, wishing all of you the best of good buys. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you.

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