>> tom: american airlines becomes the last of the legacy air carriers to file for bankruptcy. >> our flights will operate, our 80,000 employees will be out there doing the very best job they can to take great care of our customers. >> susie: the move puts its stock into a tailspin. a.m.r. shares tumble almost 85%. it's "nightly business report" for tuesday, november 29. 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. american airlines is bankrupt. susie, the company wound up declaring bankruptcy today after years of trying to avoid the same path as many of its competitors. >> susie: tom, the nation's third largest carrier filed for chapter 11 protection in an effort to cut labor costs and debt. american and its parent, a.m.r., also replaced its chief executive in the move, naming thomas horton as the new c.e.o. >> tom: shares of american's parent company, a.m.r., got slammed today, down 84%. here's a chart of the stock over the past 90-trading sessions. you can see a big drop in early october when bankruptcy rumors first scared investors.

as suzanne pratt reports, the airline has high hopes for what it will achieve from going bankrupt. >> reporter: american airlines has finally hit a patch of turbulence too large to avoid. the rough air was brought on by the carrier's sky high labor costs in the face of rising fuel prices and limited travel demand. new c.e.o. thomas horton said at a news conference today bankruptcy should give american a chance to cut expenses. >> i think it's the right decision at the right time to move our company forward. i think, as many of you know, the last decade has been extraordinarily hard for the airline industry. >> reporter: so hard that all of the industry's major carriers have already been in bankruptcy; some have even merged. but at la guardia airport today, there was little sign of the airline's financial problems. lines were long, and employees diligently helping passengers.

american will go through the same arduous process as its competitors. and through it all, the carrier says, it will be business as usual. for customers, that means reservations will be honored and those all important frequent flier miles will be maintained. airline analyst ray neidl says bankruptcy allows american to reopen existing labor deals and gives it muscle in negotiating with unions. >> in bankruptcy, you got a third party overseeing you, and if you present a plan that's credible, then it would put a lot of pressure on the unions to go along with that, because the alternative could be a liquidation. i don't think that's going to happen. >> reporter: american has been battling with unions for years to adjust labor deals that are costly when compared to peers. american pilots union spokesman dennis tajer called the chapter 11 filing an unfortunate step. >> a lot of progress was made

and a lot of gaps were closed on the issues. in the end, apparently, time ran out. a.p.a. was ready, willing, and able to continue the discussions outside of this type of environment. >> reporter: former american c.e.o. robert crandall says one strategy he doesn't expect to see is a merger. >> mergers and bankruptcies are completely different strategies. american is big enough. whether or not it will ever merge with another carrier is problematic and something for the future, but it doesn't need a merger. it's big enough to stand on its own. >> reporter: airlines are one of the few industries where a chapter 11 filing is viewed almost as a positive. not only do carriers usually emerge stronger, but more competitors are better for consumers. suzanne pratt, "nightly business report," new york. >> susie: speaking of consumers, the american consumer appears to be making a comeback, despite stubbornly high unemployment. the conference board said today its index of consumer confidence

rose in november, its best reading in eight years. that helped push the blue chips higher on wall street. the dow rose 32 points, the nasdaq fell about 12, and the s&p 500 added 2.5. trading volume was a touch lighter with 917 million shares moving on the big board and 1.6 billion on the nasdaq. investors were also hopeful that european finance ministers meeting in brussels today and tomorrow could make progress on resolving the region's debt crisis. >> the european stability fund more leverage so it has more power the financial health of italy will certainly be on the agenda. italy's borrowing costs hit almost 8% today, a euro-era record and a sign that the country could need financial aid like greece, portugal and ireland. >> tom: after the closing bell today, standard and poor's

applied new criteria to the credit rating of dozens of big banks, and most of those banks had their credit rating dinged. among those seeing their ratings downgraded-- bank of america, j.p. morgan, citigroup, wells fargo, morgan stanley, and goldman sachs. the downgrades come after s&p changed how it computes debt ratings for large financial institutions. among the changes-- less confidence by s&p that governments would bail out banks that get in trouble. the new criteria aims to link bank's credit health to the health of the overall economy. more on the impact on banking stocks coming up in "market focus." >> susie: still ahead-- enron was once the energy company to work for. then, its house of cards folded. we continue our look at enron's bankruptcy ten years later. >> tom: congress is headed toward a vote this week on extending the payroll tax cut for another year, and expectations are growing the

extension will pass. democrats back it as a way to spur consumer spending, but republicans have been reluctant to support it because it would cost more than a billion dollars in revenue. darren gersh talks to council of economic advisors chairman alan krueger about what's at stake. >> i think it's a critical debate. i think we're at a moment where the recovery is fragile. we have been recovering for nine quarters in a row. but we would like to see the recovery be stronger. so, as an economist i look at this situation and say what will help support the recovery in this situation. i think extending the pay role tax cut, that congress passd and the president signed at the end of last year which is delivering about a thousand dollar tax cut to a typical family earning $50,000 a year. the president proposed expanding it making it 1500-dollar tax cut for that family. i think that would help sustain

the recovery. >> republicans are saying they may go along extending the existing tax cut but not willing to expanded it as the president wants. what do you say to those republicans to convince them to expanded the pay role tax cut. >> i think if you say what is holding th the economy back from faster growth the number one explanation is aggregate demand is weak. households are working down on debt. the same logic supporting the 2 percent payroll tax deduction would support extending it. i think the president has proposed tax cut for employers, small employers and small employers who are expanding to hire more and help with cashflow. >> democrats are proposing to raise taxes on the wealthy to

help with this. isn't this a net zero. >> the president came up with one proposal and senate tkepl indicates came up with a proposal the president said he can support. i think you have to credit who is being affected by the tax cut and tax increase and who is paying for it they are proposing a sur tax on over a million dollars a year. it's a small sliver on the population and higher income families over a million dollars a year have a tendency to spend less than middle class families who disproportionately benefit. i think it provides the right medicine. >> is this like the bush tax cut. a temporary tax cut that is

extended over and over again until it's almost permanent. >> i think this is much different. one thing the president proposed a way to pay for tax cuts back in september. secondly i think these are expressly temporary measures where the bush tax cuts were designed in such a way that they lasted for ten years and exploded in costs towards the end. >> alan krueger the president of the chairman's council of advisors thank you for your time. >> thank you. clear

>> susie: looks like consumers are spending again. on cyber monday, the online shopping day the monday after thanksgiving, consumers pointed and clicked their way to strong numbers for retailers. online purchases topped last year's record of over $1 billion. cyber monday sales surged 33% from last year, according to ibm. online shoppers spent nearly $200, on average. although the vast majority of consumers used their computers during work hours, ibm says nearly 7% of cyber shoppers used their mobile devices to buy items online. >> tom, there was some buying of stocks not as much as yesterday. investors were hoping the dow, smp and nasdaq would get into the black for the year. didn't quite make it. >> not quite yet, susie. at least we're able to digest

the big gains we saw at the beginning of the week yesterday. let's role and get you updated the major market indices were mixed, with the tone set by stronger consumer confidence in the u.s. and optimism regarding europe's debt situation. the dow industrials were able to hang on to yesterday's strong rally and add a fraction today. we're looking at the past 30 sessions, and with one day left in november, the index is down 3.3% for the month. despite the american airlines bankruptcy, transportation stocks saw some follow-through buying. this exchange traded fund follows the dow jones transportation index. it's back at a level it saw some selling in august and september, around $85 per share. among legacy airline stocks, we saw gains in united-continental, delta, and u.s. airways, each up at least 4.5%. one of the challenges for

american airlines and all of the big carriers is the price of jet fuel. crude oil is just below $100 per barrel tonight, after gaining more than $1.50 today. we're right in the middle of the range oil has been in over the past year-- 75 on the low side to $115 on the high side. energy stocks was the strongest sector today, up 1.5%. utility stocks also were strong, along with consumer staples, each of those up 1%. while certainly not a consumer staple, high-end jewelry retailer tiffany had a very strong third quarter. earnings were nine cents ahead of estimates. every geographic region saw double-digit sales growth last quarter. still, that did not help shares today. the stock sold off sharply, down almost 9%. volume quadrupled with the stock closing at a six-week low. it's fourth quarter outlook was disappointing, alluding to the debt troubles in europe.

two other consumer focused stocks were the best performers inside the dow industrials. home depot jumped more than 5%, closing at a four-year high. coca-cola added more than 2%. and the big loser was bank of america, sliding more than 3%. b-of-a shares saw big volume-- more than 330 million shares traded-- as it closed at its lowest price since the spring of 2009. and after hours, the stock fell closer to the $5 mark after standard and poor's cut its credit rating, along with dozens of other banks. j.p. morgan closed down 2% during the regular session, and lost another quarter-percent after the debt ratings downgrade. wells fargo lost a fraction during the session and fell another three-quarters of a percent in after-hours trading. citi was up a fraction during the day, but fell a half-percent after the close. a couple of other notable moves- - corning shares lost more than 10% on heavy volume. the company cut its fourth quarter outlook after a korean customer won't follow through

with its contract to buy corning's lcd glass for television screens. finally, liquor company central european distribution jumped almost 30%. a russian vodka maker has taken close to a 10% stake. the two companies are competitors. central european has cut its outlook twice this year. and that's tonight's "market focus." >> susie: this week marks the tenth anniversary of the collapse of enron, one of the largest bankruptcies in corporate american history. and all this week, we're looking at how that event changed american business and the energy industry. tonight, as we continue our coverage of "enron: ten years later," andrew schneider of houston pbs speaks with former enron employees about the day enron closed its doors. >> reporter: december 3, 2001, was a warm, muggy day in houston. 4,000 enron employees arrived at work to find the air conditioning had been turned off. floor by floor, they were told the company was bankrupt, then

given 30 minutes to pack up their belongings and leave the building. houston was already in a recession. enron's collapse made it worse, as richard rathvon explains. >> the energy industry had kind of collapsed here. dynegy collapsed, as well as the energy market itself. a lot of people struggled to find work in their same field. a lot of people needed to make changes. >> reporter: the experience left many former employees with a jaded view, not just of enron itself, but also of enron's basic philosophy-- the belief in the inherent goodness of free markets with minimal regulation. max eberts is one of them. >> you have an industry that was not regulated, and as a result, it was free to run amok. one would hope there would have been a great lesson learned by the financial markets of late, but yet, there are people out there who believe the markets are better suited to regulate themselves. i disagree completely, and enron

taught me that. >> reporter: the word "enron" on a résume proved a scarlet "e" for many looking for new jobs. workers who were close to retirement were among the hardest hit. but the stigma didn't last forever. phyllis anzalone was one of the pioneers of enron's retail electricity business. >> if you were young enough to be in a position to rebuild your career, there were many, many places you could go. i find it kind of entertaining to run into ex-enroners everywhere i go within the energy industry. they're everywhere. >> reporter: enron also turned out to be a perfect training ground for entrepreneurs. ravi kathuria is one of many enron alumni who struck out on his own. >> enron disappeared, it was a stigma for houston, and yet now, the people who left enron have spawned so many businesses. and they're doing quite well, because the one thing enron taught you was dealing with change.

>> reporter: there are still signs of enron's presence all over the houston landscape. one of the most enduring is the former enron field, now minute maid park. ken lay galvanized houston's business community to build the baseball stadium, with the twin goals of keeping the astros in houston and revitalizing the city's downtown. he succeeded in both. >> one of the key lessons that i took from enron is the difference between passion and obsession. we all need to have passion. there were a lot of passionate people at enron. unfortunately, a small group of them became obsessed with financial performance and led the company to its downfall. >> reporter: the tilted "e" behind me once graced the lobby of enron's headquarters. it now occupies the lobby of a micro-cache computer store off houston's gulf freeway. like every other physical asset enron owned, the logo was auctioned off to pay the company's debts, a humbling end for a business that once aimed to become the greatest company in the world. andrew schneider, "nightly

business report," houston. >> susie: tonight's commentator has a few thoughts on enron's biggest legacy, the sarbanes- oxley act of 2002. he's michael mandel, senior fellow at the progressive policy institute. >> when enron went out of business ten years ago, it left behind its famous tilted-"e" logo, so famous that i included a picture of the "e" in my economics textbook as an example of what can be sold when a company goes bankrupt. but the energy company also left us with another unfortunate legacy: the sarbanes-oxley act of 2002. this legislation, known as "sarbox," mandated tighter accounting controls for public companies. the intent-- to avoid future financial scandals like enron. a worthy goal, indeed. who could object? but it's now clear that sarbanes-oxley raises costs for all public companies, a virtual full-employment act for accountants. start-ups are especially hurt. if they want to go public, they have to divert millions to

meeting sarbox requirements much more complicated than a young company really needs. in effect, sarbanes-oxley is a hefty tax on creativity and innovation. to my mind, sarbanes-oxley is contributing to the creeping calcification of the u.s. economy. what's worse, the legislation did nothing to prevent the financial scandals that got us into our current mess. so enron's bad behavior spawned bad legislation that is still with us today. thanks a lot, enron. i'm mike mandel. >> tom: our enron coverage continues tomorrow. harvey pitt was the top stock cop when enron collapsed. we talk with the former securities and exchange commission chairman about the implosion and regulatory changes since. plus, the federal reserve releases its beige book survey of regional economies, and teen retailers aeropostale, american eagle outfitters, and express report quarterly results. >> susie: facebook has agreed to settle an investigation by the federal trade commission that looked into deceptive privacy

practices. the social media giant will subject itself to an independent audit on consumer privacy for the next 20 years. facebook founder and c.e.o. mark zuckerberg wrote a blog saying he is committed to making facebook "the leader in transparency and control around privacy." he also announced the addition of two new corporate privacy officers. >> tom: u.s. home prices are falling again in most big cities after posting small gains in the summer and spring. prices dropped in september from august in 17 of 20 cities tracked by the s&p case-shiller home price index. that is the first decline after five straight monthly gains. in phoenix, home prices almost are back to their january 2000 levels. prices in atlanta and las vegas fallen below those levels.

>> american airlines is in bankruptcy court just as professional basketball is to return to the hardcourt at two stadiums beering the american airlines names. we look at what the company is spending on those naming rights. rick harrow is here. >> thank you, sir. >> american airlines is expected to spend $200 million for the naming rights. is it worth it for share

holders? >> i would expect so. they certainly spent those dollars. american airlines center in tkals as american airlines arena in miami. people are confused which one it is. the heat and maverick played last year. the nba championship game. the studies show $9 million. the exposure is over 60 million. that's 6 times roi. that's descent. >> that's a good return on investment. maybe the naming rights are not in question with the initial bankruptcy rights filing. how does the court deal with this. >> the business would be in good shape if the committee was sports marketers. the tangible markers, yet they have the nba champion and the runner up. heat and laugh ricks. they also have the st. louis cardinals. sponsor world series champion.

they may not negotiate union stkaelz and fly but they have picked winners in baseball and basketball. >> the company clearly owes a lot of money here. it was talked ten years ago enron collapsed. they put their name on a stadium as well. does this crushing the value of the naming deals. >> it dilutes it you have to be careful. 40 percent of stadiums and arenas have changed their original names. it's not uncommon. adelphia, fruit of the loom, airlines with twa, america west all bankrupt. you have to be very, very careful of how you deal with the name. that's a valuable asset that could be diluted if it changes. >> we will see how the court handles it. rick, good to see you again. rick harrow with >> susie: you can keep up with nbr anytime. we're online at nbronpbs.org. there, you'll find all the

market data from the program.. and you can follow us on twitter @bzrpt, or my personal feed @sgharibnbr. we're also on facebook at b-i-z-r-p-t. >> tom: and finally, it's the end of the line for the steuben glass company. the maker of american crystal closed its last remaining factory today in corning, new york. more than 60 workers lost their jobs. steuben's flagship retail store in new york city will remain open through at least the end of the year. schottenstein stores bought steuben from corning glass right before the financial crisis hit in 2008. susie, it says the legendary crystal company never turned a profit. >> so it's closing up shot. >> i passed by the store other day "final sale" >> susie: that's "nightly business report" for tuesday, november 29. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. we hope to see all of you again tomorrow night.

"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 captioned by media access group at wgbh access.wgbh.org >>