. this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com. interactive financial multi media tools for an ever changing financial world. our dividend stock advisor guides and helps generate income during a period of low interest rates. we are thestreet.com. houses divided, stocks sink, short term yields spike and a credit rating agency warns it could downgrade u.s. debt, this as the house and senate collide for competing propels to reopen the government and avoid default. >> title wave, yahoo's poor guidance. this is just the start.

what should you watch as the biggest names in technology begin releasing quarterly report cards. >> that and more for "nightly business report" for tuesday, october 15th. high drama in d.c. and the fallout is already being felt. the house of representatives has a new plan to open the government and extend the country's debt limit. the senate says it will wait and see, and while this is going on, ratings agency fich put the united states triple a credit rating on negative watch. that means the sterling rating is under review for a possible downgrade. john harwood joins us with the latest on negotiations from congress, john, where do things stand now? a day. >> it's a crazy day. we thought we had a house senate, a democratic republican agreement for the senate, the solution, pass the senate, go to the house. the caucus had a meeting and

headliners told john boehner they want a different plan on the floor. they plan to vote on it later tonight but it's not at all clear that will pass. some of the outside organizations are urging no votes, and if that collapses, then we're back to reed and mcconnell and we'll see whether they can have a deal and move it through to avoid default. >> what are the elements of embryonic house plan? >> the house plan would extend government funding -- reopen the government immediately extend funding through december 15th and raise the debt limit to february 7th, the position in the reed mcconnell compromise and also have some provisions that democrats could not accept. it would bar the treasury secretary from using what we call extraordinary measures to extend the debt ceiling by juggling accounts, ed essentially, when we -- congress has not raised the indictment limit. this is something every treasury

secretary does. there is no way the white house couldn't accept that. it would strip the employer contributions to the health benefits, an attempt to embarrass democrats by saying you would protect essential subsides for staffers and members of congress but actually, the staffers and members of congress would be the only people under obama care who would be forced to do without the subsides. both of these are seen as poison pills by democrats and reid and mcconnell have to come with their plan. >> we'll wait and see if there is a vote or not. traders began the session with a wait and see approach to talks in washington but optimism faded quickly and stocks plunged after senate leaders suspended negotiations to see what house republicans would come up with. the losses were steep, swift and across the board with all ten

ending lower. the dow fell 13 three points ending four consecutive days of gains and nasdaq down 21 and s&p slit 12. the treasury six month bills was not well-received with the prospect of a missed payment. look at that spike. for more let's turn to roger, the chairman and ceo of ever core partners and served as deputy secretary of the clinton administration. roger, great to have you back on the program. >> hi, susie. >> let me ask you about the fich news. people are worried about a downgrade on the u.s. credit rating and there seems to be a whiff of it if that happens. how much damage does this do to the u.s. credit reputation and how serious is all this? >> it is very serious, although,

if you look at what the stock market did today, which was a slight decline, really, it's not signaling great alarm. i don't think the market is yet convinced that a real default, meaning missing an interest payment or missing a principle payment is really likely. now, the fich announcement is a warning. it's not a surprising warning because if we actually did miss an interest payment or miss a principle payment, they would really have no choice but to downgrade the u.s. because under their charters, a default requires a downgrade and moodies, which also maintains a aaa rating on u.s. debt, united states of america debt, likely would be forced to do the same thing. but that's a symptom. it's not a cause. because if we actually miss an interest or principle payment

and really did default, not in some high sense but in a real economic sense, the impacts would be really quite devastating. every single american, every single organization, which borrows money, mortgage, a consumer loan, any other type of borrowing would pay more and pay more for a long time as compared to what we would have paid if we didn't suffer this fate. >> let me broaden the discussion a little bit. you're a businessman. if the united states government was a business, could you do business with it as it currently functions? >> i think the answer to that is yes, actually. because corporations, as we all know, suffer financial emergencies, often on the edge of insolvent and organized under chapter 11 all the time. general motors and chrysler, which in 2009 both went through the chapter 11 bankruptcy

process and today are both thriving. so obviously, everybody who they need to do business with is happy to do business with them. so because the underlying credit, meaning the economic strength of the united states and the strength of taxpayer payments every year in the form of taxes is actually undimini undiminish undiminished. there is nothing about the event in washington diminishing that. i think from a business person's point of view, the answer to the question is yes, but there are institutions around the world who would shy away from buying treasury sec tourries, bills, notes, bonds for quite sometime if, in fact, we defaulted because many of them are prohibited for example from buying security from anyone in default or has been in default for a year or two or three. so there is no question about the interest rate impacts of

this possible action -- possible fate, should we suffer it, even though i think a business person would say well, it's still a strong credit and we can do business with them. >> all right. roger, some interesting thoughts and issues not going away yet. maybe we'll circle back at some point. thank you for tonight. >> my pleasure. well, even as negotiations continue in washington to raise the debt limit, two minor financial institutions are preparing for a financial default. according to the wall street journal citi group and state street prepare for possible u.s. default. the cheief executive at walmart called the global economy unpredictable, but at the annual meeting with investors and an lipss today, ceo hike duke said quote, no

matter the environment we're in, walmart will win. another sector lying in the path of the debt crisis is commercial real estate, construction and sales have been surging but that could change if lawmakers and the president don't come to a deal. in fact, some say damage has already been done diana olick has more. >> reporter: in scenes across the country, scenes are similar. the improving economy is fueling commercial construction as demands for offices, retail space and multi-family apartments rises. >> there is a lot of momentum in commercial, a lot of property sales, activity is higher than a year ago than two years ago. >> reporter: commercial property sales volume is to surpass $300 billion this year, that's up 380% from the low in 2009. sales spiked in the final quarter of last year on speculation of higher tax rates. imagine what would happen in the

reverse, if a debt default cause add spike in interest rates. >> commercial property is interest rate sensitive and credit depen don't and long-term. those are not got formulas for a high-interest rate environment and an environment where credit is volatile. >> reporter: depending on big banks and investors. banks have been very leery of real estate risks but in the second quarter of this year, there was a net increase in lending on construction projects for the first time since the financial crisis. at maryland based walker and dun lop a commercial real estatesta uncertainty is weighing on borrowers and investors. >> the most discouraging thing that we're seeing right now is that this congress is going to go through, yet, another crisis and probably end up kicking the can down the road but not even as far as many people would like to see it get kicked.

>> reporter: while interest rates haven't moved much to the runup to the debt line, the anticipation hurt investor confidence if the deal ends up being a punch, that is delaying any decision until early next year, commercial real estate financing will still take a hit. >> any of these disruptions that imply more risk that make investors worry about the bond market that can push interest rates higher, not because the fed is stepping away but because there is fundamentally more risk in the market, if those are things that really hurt commercial real estate. >> reporter: and may already have. diana olick, "nightly business report", washington. still ahead, two big tech names out with late-day earnings but one thing in each report investors need to know, up next. first, how the international markets performed today.

closely watched earnings aft closing bell this evening, first up doe component and intel that beat wall street estimates, they earned profits of just about 3 billion pulling in 58 cents a share, revenue in line with expectatio expectations. see sema was looking into this. >> they beat expectations and delivered solid earnings by controlling costs during a weak p.c. environment. finding a way to maintain expenses led to the expansion in growth margins. >> seema don't go away. we heard from yahoo after the market closed. they earned 38 cents a share that beat estimates by a penny

but revenue came in at just over $1 billion, down 5% compared to a year ago. so seema what's the big take away on the quarterly report? >> its user base continues to grow as more than 800 million monthly users, up 20% over the past 15 months and marissa mayers says this is a meaningful increase in traffic and can the company monetize this audience, display and search did come in lower year after year. >> seema, thank you very much. david garrity, welcome, good to have you with us. really quickly, give me a, b, c, d, e, f grades for intel and then google. >> intel a b grade, maybe b plus. if we look at yahoo, we have to give them probably an a minus to

the extent the audience is growing and the challenge for the ceo marissa mayer is the audience. >> google, i think it comes out on the 17th. >> yes, so google led out the close sunday, weakness as far as revenue growth. they have been doing things to improve the search quality, which may have slowed activity in the third quarter but investors should look to the strong year-end shopping season, which is typically in the fourth quarter. >> and microsoft coming out next week. tell us what you're expecting there and this has been a really volatile year for microsoft stock. is it a buy at 34? >> at 34, we think microsoft is still very attractive. there are a number of things that work in microsoft's favor fundamentally. the growth in terms of cloud computing. microsoft is coming in as a strong contender in that area, strong reception for the products and office 365. and if we look at what is going on in terms of microsoft from a

governance standpoint, they before l bring in a new ceo and there will probably be changes made which may create value for shareholde shareholders, it continues to be an attractive stock. may not beat the numbers on the 25th, but we think a good number. >> the relationship with nokia and google with the mobility, that acquisition has not exactly paid off mobility at google has not really worked for them. what do you think will happen for microsoft? >> you have to look at the reasons the companies are making acquisitions. they did get into the hand set business at google and microsoft as acquiring nokia but acquired a substantial portfolio of property or pat tents, which both are using to grow base business and from the stand point of looking at microsoft, they have a devices and services strategy and need to put the product more in the hands of consumers as they move towards

mobile forms of computing, smart phones and tablets. nokia not powerful as far as smart phones but the combination of a strand brand like nokia globally if we look into the developing markets and the technology invasion could lead to interesting upside over the next three to five years. >> we can't talk about tech without bringing up apple. i know you've been recommending it for awhile now. the stock crossed over the 500-dollar mark briefly today. what do you think about apple at this point and the stock, as well? >> you do have the new ipad that's going to be coming out, introduction i think is slated for the 22nd of october there are invitations that have gone out. i think it's tradeable here. ahead of the event and result of the earnings that will come out shortly after that launch. at $500 a share, apple certainly, you know, one of the least expensive stocks among the tech sector and one looks at the

balance sheet, one company that's certainly able to continue to reward shareholders not only in shares of dividend increases but may possibly consider increase and we have activist carl icahn who is talking with management and certainly finding support from other institutional investors in this respect. >> all right. david, let me ask you one final quick question. we talked about a lot of companies but is there one we didn't ask you about that you wish we had? >> certainly the twitter ipo will be very important in terms of what it has to say about overall demand for the tech sector names as investble themes. so we'll have the road show starting for that transaction on the 25th of october, probably have a pricing on the 15th of november ahead of thanksgiving. there are ways to play the twitter ipo. there is a company gsv capital invest in twitter but nonetheless, we think transaction will be important to give investors a read on the strength of the tech sector into

the end of the year. >> we have twitter news coming up. but let me get any disclosures about the stocks you just mentioned. >> certainly, i own intel, long, long yahoo and gsv capital and i own microsoft and apple, as well. >> david, thank you very much. appreciate you being with us. >> thank you. as promised, a little twitter news. david just mentioned twitter has chosen an exchange to lift on. the social media giant plans to lift shares on the new york stock exchange, not the nasdaq and the ticker symbol will be twtr. you can figure out how they figured that one out, huh, su see. >> so smart, tyler. the world's biggest beverage maker, coca-cola. they posted numbers in line as they sold more soft drinks and teas and waters, especially in countries like china, india and russia and that helped offset the cost of restructuring the bottling operations in brazil

and the fill leans and an economic slowdown in mexico. coke shares 1% today to 37.6. johnson & johnson another doe come upon innocent reported better than expected quarterly results thanks to strong growth for prescription drugs that threat arthritis and prostate cancer that helped offset weaker numbers from the medical device and consumer products units. the stocks rose fractionally to almost $90 a share. citi group missed wall street warning estimates. the bank was hurt by a double digit drop in bond activity which usually slows down but this time the results were exacerbated when the federal reserve decided in september not to taper the program. city stock finished down by 1.5% to $48.86. charles swab issuing a

report to rise faster adding if the economy continues to recover and client trading remains at current levels, it will become more profitable. the stock to $23.03 and that was good for a multi-year high. domino's pizza, the second largest pizza chain reported the first earnings miss in more than a year. the increased spending on overseas outlets and mobile apps. not all bad. sales rose more than expected in the u.s. helped by new menu item s but that was not enough. the stock fell to $64.90 and a non-earnings story to tell you about. fedex plans to add up to $32 million to an existing stock buy back program. the package delivery company says the strong balance sheet gives it the flexibility to do buybacks and reaffirms confidence in the strategy. investors seem to like the idea sending the stock up 4% on this down day to $120.08. we're two weeks into the

roll out of the health insurance exchanges and anything but smooth. bertha coombs takes a look how the internet marketplaces faired so far and how much still needs to be done. >> reporter: stephanie gordon is anxious to shop for insurance on new york's exchange. >> i want health insurance, i just can't afford it. >> reporter: so far she can't get passed the application process. >> i go to eligibility, and there is nothing. i work in online media so i know nothing is perfect. i know there is going to be glitches, but it's been over, you know, been a couple weeks now. >> reporter: like the federal exchange, new york state of health makes users complete an application before they can shop for plans. so far 100,000 applicants made it through the process but the state is still working out glitches. >> we identified some places in the application where consumers were just waiting simply a little bit too long to get

information. >> reporter: connecticut and kentucky had a smoother enrollment with which exchanged to shop before. >> they wanted to be able to go on the site and shop and look to see what the applicable subsidies might be. >> reporter: the state exchanges had the advantage of more stream lined management. the federal exchange built to serve 36 states opted to build out of the insurance marketplaces and involved coordinating it companies. most states went with a single vendor. >> you have more of a seamless experience. you're only dealing with one team, one set of protocols. there is not as much of the bureaucracy. >> reporter: stephanie gordon is helping new york works out the glitches soon, but she'll keep trying to enroll for as long as it takes. >> i've been without health insurance for about two and a half years now, so what's another couple months? >> reporter: bertha coombs, for

night night li b"nightly business re. could a new high profile higher at apple shift a strategy and a hint at new products in the pipeline? first, how commodities, currencies and treasuries performed today. 3w4r5 p . apple may be head in a new direction. they are hiring angela aaron. she'll head up the retail and online operations. jon fortt looks at apple's newest hire and the timing of the move. >> reporter: it's been a tough role to fill, retail chief for

what's arargua arguably the tou. angela aaron, the current ceo of burberry will lead in the string. during her seven years at burberry she's known for giving the shop more and cutting cost where needed and pushing a dig dill agenda that boosted the image among customers. >> we call it retail theater. all of those big screens, that's prom london. we can stream shows into stores and 180 stores have ipads so if what's in the store, the customer wants something else they saw online, again, not a problem. >> reporter: retail is a tough business, apple's first retail chief ron johnson left two and a half years ago for j.c. penney where the board forced him out

in april. the second chief lasted less than 12 months. she will have to dive right in. >> she understands the consumer at a level that's extraordinary and she knows how to talk to her with a high-end product and build volume out of that high-end product. very few people know how to do that. >> reporter: those skills come at a pivotal time for apple. they proudly will gear up for the launch of another iphone, perhaps a new watch or tv. ceo tim cook talked about the stores as the main chance customers get to interact with the brand, which is why he popped in on the iphone launch day last month. it remains to be seen how core a player he'll be in apple's infamously secret of culture. will she weigh in on prototypes, tvps? if so, she could be a big part of the future. >> do you think she can make a difference? >> i think she can. i think she's a real wizzard at

branding and merchandising. we'll see. we'll see. that's "nightly business report" for tonight, i'm susie gharib. for more on the stories we covered tonight, go to nbr.com. >> i'm tyler mathisen. thanks for watching. have a great evening everybody. see you back here tomorrow night. "nightly business report" has been brought to you by. >> thestreet.com, interactive financial multi media tools for an ever changing financial world. our dividend stock advisor guides and helps generate income during a period of low interest rates, we are thestreet.com.