>> susie: u.s. stocks got pushed and pulled by european headlines today. this time, italy is in the driver's seat. tens of thousands of people protest in rome. there are calls for italy's prime minister to step down as the country's debt crisis intensifies. it's "nightly business report" for monday, november 7. 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. captioning sponsored by wpbt >> susie: good evening everyone. my colleague tom hudson is on assignment tonight. wall street just can't get away from europe as european politics dominated u.s. trading again today. u.s. stocks recovered earlier losses after a european central bank official said the region's debt crisis will be under control in two years. the dow added 85 points, the blue chip average is back above 12,000. the nasdaq tacked on nine and the s&p 500 rose nearly eight points. earlier in trading, investors were bombarded with european headlines, mostly about italy. the concern now is that it could be the next european domino to

fall as that country's huge debt crisis escalates. italy's borrowing costs spiked today to the highest level since the launch of the euro 14 years ago. the yield on 10-year italian government bonds neared 6.8%, what many experts consider bailout territory. keeping bonds below 7% is critical because italy, as europe's third largest economy, is too big to bail out. against this backdrop there are calls for italian prime minister silvio berlosconi to resign. he faces several crucial votes in the italian parliament this week. meanwhile, greek prime minister george papandreou reportedly reached a deal with the opposition on a crisis coalition to approve a bailout. that country's new leader will be announced tomorrow as papandreou over the weekend agreed to step down. joining us now to sort through this latest chapter in the european debt crisis? nick colas, chief market strategist at convergex group.

test nice to have you back with us. >> thanks so much. >> susie: let's start talking aboutity lee, how blad is the financial situation there? >> the markets are very concerned that italy has a large amount of debt to roll over in the next three years. something on the order of a trillion dollars. and so the worry is that as the i it willian financial system begins to feel more stress in the italian economy continues to contract, it will be harder and harder to roll that debt over. and that's very meaningful for banking, the banking system around the world, particularly in europe, france, germany and the u.k. especially. so there is a little bit of a domino affect here where if italy begins to feel real stress the rest of the financial system will feel even more. >> susie: a lot of investors today are hoping or counting on italian prime minister burr lus cone to step down. is it a foregone conclusion that a change in government in italy would be better, a good thing. >> well, i think it would be a good thing in the near term because it would indicate some level of interest and change, change

in the political system, changing the economic system. but as we have seen in greece these changes occur only very slowly and with a lot of hesitancy and almost a halting motion. and it doesn't really reassure markets for more than a couple of days that thing will really change. there is still a lot of hard work to be done regardless of who the prime minister is. >> susie: well, we've seen this domino of distressed european countries and your concern that france ultimately could be the next one in trouble. tell us why? >> yeah, when it comes down to really the most bedrock issue about europe everything has to do with france and germany. the two biggest economies outside the u.s. which isn't in the your owe and the solvency of those two countries are paramount they have to maintain their aaa status accord together rating agencies here in the u.s. of the two france has a slightly weaker system. mostly because its banks are owned a lot more of the european debt that we are talking about than the german banks do. and so the french situation is the more important of the two. and investors are very, very concerned that if the

european situation develops any further, freferjt banks are going to get hit and france may lose its aaa rating. >> as you heard us reporting european banking official is a central bank official is saying that he thinks that the european debt crisis will get under control in two years. is that realistic? >> two years is an awfully long time to see the kind of stress that we've had. two years basically says europe will go into a recession, there will be more bank failures and more stress in the system. so two years may not sound like a very long time to a european bureaucrat it would be several lifetimes to most u.s. investors. >> so tell us how bad could things get over the next-- let's say over the next year. >> over the next year i think you're looking at just more of the same as we've seen in the last six months which is to say periods of volatility in the market, periods of volatility both here in u.s. stocks and overseas and a level of uncertainty that really doesn't encourage economic growth so against that backdrop we have to worry about u.s. unemployment rates. we have to worry about what

the u.s. government is doing with its deficit because capitol markets are worried about sovereign debt all over the world. that kind of detail to this issue would dampen on the growth and confidence wouldn't be good for anybody. >> nick, can you give us a quick analysis of the lates situation in greece, looks like papandreou is stepping aside. new coalition government trying to work out through their austerity measures. what do you expect is going to happen next. is greece going to get its house in order? >> it looks like greece is taking slow and halting steps to improving the government's situation there and getting a government that will back the agreement made to reduce its debt to take that haircut at 50% and to get its house in order. but regardless again of who the government is in greece, it's going to be a series of very difficult year force the greek people. either under the austerity program or under getting out of the euro. and i think no matter who is in charge it will be very difficult period to govern regardless of the outcome. >> as you know this whole european situation has been weighing on the u.s.

markets. can you give us your outlook for the next six months or so about what happens to u.s. stocks? >> sure. the best thing you can say about u.s. stocks is u.s. corporations have done a fantastic job of managing their businesses through it's been a very tumultuous period since the financial crisis and corporate earnings really are the standout positive in the market so if you look at s&p easternings, they are going to be 25 dollars for the third quarter of 2011 which annualizes to 100 a year. and against that a 1200 s&p looks cheap by what most investors look at for valuation. that is the positive against the macro concerns we've spoken about. so for the u.s. markets, for u.s. equity investors, you can look forward to a good news bad news situation. on the good news side corporations have done a good job with corporate earnings, dividend levels are rising, cash levels are very high. that provides stability. however, you are going to be facing these macro issues in europe for at least the next year if not longer so the volatility we have seen is

going to be here to stay. >> susie: got to get used to that volatility. thanks a lot for coming be o the program. >you.k >> susie: we've been speaking with nick colas chief market strategist at convergeex group. all of the uncertainty in europe led to a flight to safety for investors. treasury prices turned higher, pushing 10-year yields back under 2%. that's the lowest they've been in a month. gold futures shined 2% higher, boosted by technical buying and that political uncertainty in europe. gold settled up $35 at $1,790 an ounce. european issues also sent oil prices higher. in new york trading, light sweet crude extended its climb to close up more than $1 to $95.49. $95.52. the spending habits of americans took some of the focus off of europe today. americans borrowed more money in september. they took out loans to buy cars and attend college, while cutting back on credit card use. federal reserve figures out today show consumer borrowing rose by nearly $7.5 billion.

in a filing late friday, buffett's berkshire hathaway shows it bought $20 billion in stocks in the three months that ended september 30. the investments disclosed include nearly $7 billion of equities, $5 billion for preferred shares and warrants in bank of america, and the acquisition of lubrizol for about $9 billion. still ahead, the wealth gap between young and old americans stretches to the widest on record. another twist in the drama unfolding around m.f. global, the brokerage firm that collapsed last week. now the top u.s. futures regulator has recused himself from the investigation of m.f. global. gary gensler, chairman of the commodity futures trading commission, stepped down today because of concerns of conflict of interest. gensler and former m.f. global c.e.o. jon corzine held prominent positions at goldman sachs at one time. both left the investment bank in the late 1990s. the nation's top securities regulator, mary shapiro, told

n.b.r. today that regulators are not to blame for the collapse of m.f. global. she said the securities and exchange commission and other regulators are investigating what exactly went wrong at the firm. schapiro was speaking at a securities industry conference, where she said the sec is looking at revamping money market funds. one option is to let the value of money market funds fluctuate instead of being fixed at $1 a share. it's a controversial idea, because safety and stability are the reasons most people buy money market mutual funds. erika miller talked with shapiro about money market reform, but first she asked her to explain the role of regulators in the demise of m.f. global. >> ms global's failure is a result of their decisions, investment decisions, bad decisions and not the result of regulatory 235i8ure in my view. >> so it's solely the responsibility of leadership say, the cree jon corzine.

>> sure they need to manage their risk, they need to follow the rules. the cardinal rules with respect to investor aspect they are to be segregated and protected. if that didn't happen, and i want to be careful not to comment because we are in the middle of an investigation, obviously, than that is a violation on long-standing rules on commodity side and securities side. >> one of the most troubling aspects is the missing $600 million in client funds. i know you are still looking into that. but where do you think the money went? >> well, that's on the futures side. and that's something that obviously lots of people are worrying about right now including pacific trustee who is responsible for unwinding the broker/dealer business and broker deal-- business and the chicago mercantile exchange and the cftc are focused on that as well. >> as you know the dodd frank financial reform bill has only been partially implemented. and even if it had been fully implemented it couldn't have changed the outcome here. do you think dodd frank needs to be broadened out to

include more derivatives regulation? >> well, again, i would say these are long-standing rules that appear to have been violated. again, we don't know all the details yet. that are not really impli k5i9ed by dodd frank with. what dodd frank does do which is really important is it creates a mechanism for designating very large, systemically important financial institutions, sifies to be have an extra lay of protection by the fed. it gives us a very important tool when it comes to the largest riskiest financial institutions. >> your topic here today is money market mutual funds. >> right. >> why do you think we need more regulations and what changes would you like to see happen. >> well, you might recall that in september of 2008 when the financial crisis was getting into full swing, a money market mutual fund called reserve primary fund broke the box and precipitated a run on money

market funds. which was really only stopped by treasury stepping in with a guarantee program and fed program to buy commercial paper to unfreeze the short-term credit markets. since that time the sec has done a lot of new rules to make money market funds more resilient and far more transparent so investors can see what their holdings are. but nonetheless they are still subject to runs because of that stable one dollar net asset value. we want to make sure that the taxpayer never has to step in again to support money market funds. >> one idea that you are floating is allowing that net asset value to flow. >> right. >> do you worry that if it no longer has that $1 consistent value that that could cause disruption in the marketplace. >> sure. i mean getting from here to there is difficult. you might never invent a money market fund now but the fact is they exist. they have 2.6 trillion in assets. and to go from a stable entity to a floating entity creates challenges. it's that stable entity that has made them such useful cash management tool force investors.

but at the same time, it that stable net asset value that makes them sus septemberable to run. >> speak of safety, i wonder what you personally learned as a result of the mf global situation. >> there will always be lessons we can learn when we do a postmortem after the failure of a firm. i think one of the interesting learnings, i think though, is that while the cause of disruption whenever a financial firm fail, the markets have handled it pretty well. certainly no taxpayer funds have been invoked in the resolution of this firm. and we'll go through the resolution process and see what else we might learn from it. >> mary schapiro, thank you very much for joining us today. >> thank you.

pricline getting a lot of attention in after-hours trading. solid earnings from the online travel site and its stock surged after the bell. we'll have more on that and the rest of the stocks in tonight's "market focus." early in the day, all of the sectors in the s&p 500 were in the red, but by the closing bell they were solidly in the green. health care and telecom were among the strongest sectors, industrials and financials the weakest performers. you can see the turnaround on the dow with this intraday chart, down sharply in the early

going, with the comeback starting as european markets closed around midday. home depot was one of the dow's biggest gainers, up more than over 2.5%. r.b.c. capital boosted home depot from "sector perform" to "outperform." it believes spending on home- related activities has stabilized and is even improving slightly. h-d reports quarterly earnings november 15. the dow's big loser? alcoa-- falling almost 2% despite word it's spending $2 billion to modernize its smelting operations in quebec, canada. from military vehicles to dental clinics and network technology, wall street saw a host of deals today. shares of military vehicle maker force protection surged 30%. it's being bought by general dynamics. the price tag? $360 million, or $5.52 a share. meanwhile, american dental partners rising $8.20 or 79% on word the chain of dental

practices is being bought by private equity firm j.l.l. partners for about $400 million in cash and debt. also being snapped up by private equity? network technology provider tech-elec. the buyer? siris capital, for $780 million in cash. tekelec shares surged 14% on the news. best buy is spending $1 billion to end its u.s. joint venture with britain's carphone warehouse. the u.s. retailer will take control of the venture's 250 stand-alone best buy mobile shops. it's also canceling plans for a rollout of best buy megastores in europe. the stock down 85 cents, or 3%. investors tuned in to dish network today, even though it lost more than 100,000 subscribers during the third quarter. shares of the satellite t.v. provider jumped 5% as dish launched a rare one-time dividend of $2 a share. it does not pay a regular dividend. but a warning from nomura holdings: the brokerage firm says investors should focus on

the drop in average revenue per user, not the special dividend. and finally, priceline.com could set the tone for trading tomorrow. after the bell, the travel website posted third-quarter earnings that more than doubled- - $9.95 a share, 65 cents above estimates. priceline ended the regular trading session at $509 a share. it was above $513 in after-hours trading. the company says it's actively looking for acquisitions. and that's tonight's "market focus." younger and older americans are further apart than ever financially. a new report from the pew reseach center shows the wealth gap between different generations has stretched to the widest on record. darren gersh tells us what's

behind the historic divide. >> reporter: in markets and in life, it helps to have good timing. bad timing explains a great deal of the growing wealth gap between young people and their parents, says the pew research center's paul taylor. >> think about most younger homeowners, those who are under the age of 35 and own a home. most of them have purchased their homes the last 10 years or so. many of them purchased their homes at prices inflated by the bubble, and when the bubble burst-- and they find themselves behind, they have less equity in their homes, and some of them are so far behind that they find themselves underwater-- that they face foreclosure. >> reporter: taylor says older homeowners who bought earlier and rode the housing boom are doing much better than 30- somethings. a new pew research center study finds median net wealth for those 65 and older has jumped 42% since 1984, but for those younger than 35, it has fallen almost 70%. while housing accounts for much of the wealth change, it is not all of it.

younger workers have been hit hard in the recession, with many dropping out of the labor force altogether. rising levels of student debt also help explain the wealth shift. taylor says some of these trends have found voice in the occupy wall street movement. >> i think it's fair to say that this movement is largely driven by young adults. this may explain some of the frustration that they feel. >> reporter: mark calabria of the conservative cato institute says the pew study raises concerns about how government policy shifts income across generations. >> the fact that the elderly have performed so much better relative to everyone else, you know, certainly raises questions in my mind of how we deal with entitlements. you know, should we be means testing social security and medicare?iñ because ultimately, these programs have to be paid for by somebody. >> reporter: while older americans have expanded the wealth gap with younger americans, many are still struggling. using an alternative poverty measure that includes out-of- pocket medical expenses, new figures released today show

almost one in six of those 65 and older are poor. that's far higher than the official rate of one in ten. darren gersh, "nightly business report," washington. >> susie: credit unions and small independent banks across the nation continue to crunch the numbers on how many new customers they have gained thanks to bank transfer day. the official day was on saturday, but the grassroots movement has been underway for a month. the credit union national association claims some 650,000 new customers have joined credit unions, transferring $4.5 billion. thousands of new customers flooded credit institutions and their banking fees. the "wall street journal" reports that boeing employees' credit union in seattle signed up 659 new members. that's a one-day record. excess fees were part of the reason many banking customers made the switch. now, a federal judge has approved a $410 million lawsuit claiming bank of america charged excessive overdraft fees.

13 million b. of a. customers are involved. most will only get back a fraction of the fees they paid. the lawsuit covers debit card transactions between january of 2001 and may of this year. new bank regulations prohibit these fees unless customers approve them. here's what we're watching for tomorrow: quarterly results from liberty media, intercontinental hotels, societe generale and toyota. toyota also reports its quarterly numbers. the automaker is set to report lackluster results. it's been battered by the yen's surge to record highs against the dollar and lost production in the aftermath of the country's devastating earthquake. don't expect to see graphic warning images on cigarette packaging any time soon. a federal judge today blocked the requirement to mandate the photos that were scheduled to start next year. the food and drug adminstration wants the images on all cigarette packages to show the

dangers of smoking, but the tobacco industry argued that the images violated the free speech amendment. the judge agreed. it may now take years to resolve the lawsuit. a new chapter for barnes & noble. the bookseller revealed a new tablet today, taking direct aim at amazon's kindle fire. the nook tablet is now on pre- order and will ship to barnes & noble stores and other retailers late next week. the price tag is $249, about $50 more than the kindle fire. the extra money offers more than twice the storage than the kindle and comes complete with apps for netflix, hulu plus and pandora.

the clock is ticking for the bipartisan congressional panel charged with reducing the federal deficit. it's a critical week for the so- called super-committee. the deadline for reaching a deal is in less than two weeks. tonight's commentator has some advice for the group. he's glenn hubbard, dean of the graduate school of business at columbia university and economic advisor to mitt romney. >> the super-committee's work on our nation's budget deficit problem is important-- and hard. but, a two-part approach points the way. first, over the next decade, we can return federal spending to its long-term average of 20% of g.d.p. how? by eliminating unnecessary federal programs, empowering

states with block grants and reforming and streamlining government. second, we should note that our long-term budget problems reflect yawning budget deficits in social security and medicare. we must find a way to close those deficits while helping americans who need that help and bringing the programs into the twenty-first century. for social security, we can gradually increase the retirement age and slow the rate of benefit growth for upper- income households. for medicare, gradual increases in the eligibility age and premium support for choices among health care plans point the way to reform. memo to the super-committee: the time for action is now. i'm glenn hubbard. >> susie: that's "nightly business report" for monday, november 7. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:

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