<Show: NIGHTLY BUSINESS REPORT> <Date: August 5, 2013> <Time: 18:30:00> <Tran: 080501cb.

118> <Type: SHOW> <Head: NIGHTLY BUSINESS REPORT for August 5, 2013, PBS> <Sect: News; Domestic> <Byline: Susie Gharib, Tyler Mathisen, Diana Olick, Jane Wells, Mary Thompson> <Guest: Jason Blair> <Spec: Business; Washington Post (NYSE:WPO); Media; Internet; Television and Radio; Banking; Consumers; Financial Services; Housing; Wal-Mart (NYSE:WMT); Economy; Policies> <Time: 18:30>

ANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib, brought to you by --

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SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Media shocker. The Washington Post (NYSE:WPO) Company sells its newspaper and publishing assets to Amazon (NASDAQ:AMZN).com founder, Jeff Bezos. The deal capped the day of big news in print, online and in television.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Looser lending. New reports say banks are lowering standards for businesses, consumer and home buyers. That`s good news for prospective borrowers, but does it signal a return to the bad old days of too easy credit?

GHARIB: And home grown. Wal-Mart (NYSE:WMT) pledges to buy American made goods. How the Wal-Mart (NYSE:WMT) effect could help U.S. manufacturing, as we kick off a special series called "Made in America."

We have all that and much more tonight on NIGHTLY BUSINESS REPORT for Monday, August 5th.

MATHISEN: It was a stunning late day capper today to a day of major news affecting the newspapers you read, the Web sites you visit, the TV networks you watch, and the cable systems you may subscribe to.

Amazon (NASDAQ:AMZN).com founder and CEO, Jeff Bezos, is personally buying the publishing business of the Washington Post (NYSE:WPO) Company, which includes the fames newspaper for $250 million. "The Post" long run by members of the Eugene Meyer and Graham families reached the peak of its fame for tough reporting, during the Watergate era. Warren Buffett`s Berkshire Hathaway (NYSE:BRK.A) is today, a major shareholder.

Bezos says, quote, "I understand the critical role `The Post` plays in Washington, D.C., and our nation, and `The Post`s` values will not change."

According to an SEC filing, the rest of the company will change its name within 60 days of the deal`s closing. And investors like the news. They sent shares of Washington Post (NYSE:WPO) higher after hours.

GHARIB: Another media legend, "Newsweek," once owned by the Washington Post (NYSE:WPO) Company was sold again, this time to IBT Media.

This is the all digital news publisher of the "International Business Times." The price and terms of the deal were not disclosed. The weekly news magazine that publishes online only was owned by Barry Diller`s IAC Interactive Corp. IBT says it plans to build on "The Newsweek" brand and to grow the online franchise with readers worldwide.

MATHISEN: And deal number three: the owner of the Boston Red Sox is now also the owner of "The Boston Globe". John Henry purchased the paper from The New York Times (NYSE:NYT) Company for the bargain price of $70 million. The deal includes "The Globe`s" Web site and Boston.com site. The price tag is just a fraction of the more than $1 billion, The New York Times (NYSE:NYT) Company paid for the newspaper two decades ago.

GHARIB: And in the world of television today, Time Warner (NYSE:TWX) Cable made a proposal to CBS (NYSE:CBS) to end their fee dispute. CEO Glenn Britt sent a letter to CBS (NYSE:CBS) CEO Les Moonves giving consumers a chance to pay for the network on a standalone basis, otherwise known as the ala carte model. If accepted, CBS (NYSE:CBS) would get back on the air after a three-day blackout. In an interview, the incoming CEO of Time Warner (NYSE:TWX) Cable, Robert Marcus (NYSE:MCS), said he wants to make a deal.

(BEGIN VIDEO CLIP)

ROBERT MARCUS, INCOMING TIME WARNER CABLE CEO: We`re as anxious as anyone to restore CBS (NYSE:CBS) programming to our lineup, and ensure that our customers have access to it. The key really is, we need to do so at a fair price and on reasonable terms for our customers.

(END VIDEO CLIP)

GHARIB: No word yet from CBS (NYSE:CBS). Shares of Time Warner (NYSE:TWX) Cable ended the day higher, shares of CBS (NYSE:CBS) down more than 1 percent.

MATHISEN: Joining us now to talk more about this rapidly changing media landscape is Jason Blair. He`s media industry analyst with the Telsey Advisory Group.

Jason, welcome. Good to have you with us.

Why don`t we start with the Time Warner (NYSE:TWX)/CBS (NYSE:CBS) spat and we`ll work our way back through some of these other stories? As I understand it, what Time Warner (NYSE:TWX) effectively said is, you don`t like our offer to pay you for retransmission rights to carry your stations as part of a bundle. How would you like it if we charge basically on a per customer basis and then you got to sell yourselves to all of our customers system-wide? Do I have that right and will CBS (NYSE:CBS) ever accept it?

(INAUDIBLE)

MATHISEN: All right. Mr. Blair -- obviously, we`re having issues with Mr. Blair`s audio, we`ll try and bring him back a little bit later.

In the meantime, let`s move on to Wall Street. Investors spent much of day trying to find a catalyst for stocks. And for a while, it looked like economic data showing the nation`s services sector might set the tone, that failed to take hold with a lack of any conviction. The Dow had its worst day in more than a month in light volume. The Dow falling 46 points to 15,612, the NASDAQ did manage to add three points, briefly touching a new 13-year high, but the S&P 500 was off two and a half, still, it stayed a little bit above 1,700.

GHARIB: Weighing on the market, comments from a top Federal Reserve official saying the central bank is closer to slowing its stimulus program. Richard Fisher, president of the Federal Reserve Bank of Dallas, and one of the most vocal critics of quantitative easing, warned investors that the Fed should make its first move to pull back on its massive bond-buying program in September.

For months now, policy makers have been debating the issue on the pace and timing of any cuts to monitor stimulus.

MATHISEN: If you`re in the market for a loan, you may be in luck. A new survey from the Federal Reserve says the nation`s banks eased restrictions on everything from business to consumer loans in the second quarter, helping meet an increase in demand. Nearly 20 percent of those questioned report that credit standards had eased at least somewhat for larger and midsized firms. As for households, 10 percent of banks said they loosen some credit standards on residential, car and credit card loans.

GHARIB: Well, when it comes to home loans, another group is also reporting that it`s getting easier for home buyers. The Mortgage Bankers Association says there`s been an increase in lending to people with lower credit scores. And as Diana Olick reports, it may be because rising mortgage rates are making it more difficult for lenders to find business.

(BEGIN VIDEOTAPE)

DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): You would think that as buyers return to the housing market, mortgage bankers would be busier than ever, but that is not the case. Mortgage applications are now down 47 percent from a year ago, driven by a 59 percent drop in refinances, a direct result of the sharp jump in mortgage rates. Bankers who had been struggling to keep up with demand are now suddenly seeking it, and to get it, they are easing up on the underwriting.

Credit availability rose 2.2 percent in July month to month, and is up 3 percent from May, according to a new survey from the Mortgage Bankers Association. The increase was primarily driven by more cash-out refinancing and more loans for borrowers with larger loan balances or lower credit scores. A Federal Reserve survey of senior loan officers reported the same.

CRAIG STRENT, CO-FOUNDER, APEX HOME LOANS: Lenders had a huge backlog of high quality refinance loans that they finally worked through. During that time, they may not have focused on other loans that might have been more intensive in terms of underwriting.

OLICK: Craig Strent, a nonbank lender in Maryland, said quality control is still tight, but lenders put extra constraints on lending just to be able to keep up with the refi boom. Now, they`re taking those extras away.

STRENT: As rates have risen and that refinance volume has dropped, they`re turning their attention to other borrowers.

OLICK: Refinances are 63 percent of all mortgage applications. They had hit a high of 84 percent in December of last year, when mortgage rates hit new record lows.

(on camera): One of the biggest changes noted in the mortgage banker`s report is that cash out refis are coming back. This, of course, as home prices rise, home equity returns. But what`s so interesting is that despite getting burned before, so many borrowers are still willing to pull cash out of their homes the minute it comes back in.

For NIGHTLY BUSINESS REPORT, I`m Diana Olick in Washington.

(END VIDEOTAPE)

GHARIB: To read more on the story, log on to our Web site, NBR.com.

MATHISEN: An outspoken regulator wants banks to get out of the commodities business, Bart Chilton, a member of the Community Futures Trading Commission, is calling on the Federal Reserve to reverse its policy of allowing banks to own metal warehouses, an issue we`ve been reporting on in NBR, as a growing number of buyers complained of prices being artificially raised for metals. Chilton says banks have a conflict of interest when they control the supply of the same commodities they trade.

GHARIB: Meanwhile, Goldman Sachs (NYSE:GS) and the London Metal Exchange are being sued over their commodities warehousing business. The class action lawsuit alleges anticompetitive and monopolistic behavior in connection with aluminum prices. Many buyers have complained about rising metal prices because of long waiting times at warehouses.

Last week, Goldman Sachs (NYSE:GS) says it was taking steps to make aluminum more immediately available to customers.

MATHISEN: U.S. federal energy regulators are ramping up efforts to go after alleged market manipulators. Today, the Federal Energy Regulatory Commission threatened to fine BP $28 million, accusing its traders of manipulating the natural gas market for several months back in 2008. BP says the allegations are without merit and it plans to vigorously defend iself.

GHARIB: Chevron (NYSE:CVX) will pay $2 million in fines for last year`s massive refinery fire in Richmond, California. The oil company also pleaded no contest to charges of violating the state`s health and labor codes. Investigators blamed the fire on a corroded pipe that burst. The fire sent thousands of people to the hospital, most complaining of respiratory problems.

Separately, hundreds of protesters were arrested this weekend in a demonstration to mark tomorrow`s one year anniversary of that fire.

Microsoft (NASDAQ:MSFT) is making another price cut, this time for its tablet Surface Pro, the company is offering a $100 discount. And the move comes just weeks after slashing the price of its less powerful Surface RT by 30 percent.

Last quarter, Microsoft (NASDAQ:MSFT) took a $900 million write-off on unsold surface inventory.

MATHISEN: Apple`s share of the tablet market fell sharply in the second quarter. According to IDC, Apple`s iPad accounted for one third of the tablet market, that`s down from 60 percent a year ago. But it`s still the top single seller in its group.

Meantime, Samsung`s tablet sales quadrupled over the same time frame.

GHARIB: Speaking of Apple (NASDAQ:AAPL), Apple (NASDAQ:AAPL) got an assist from Washington today. President Obama overturned an order from the U.S. International Trade Commission banning imports of older iPhones and iPads, which the agency said violated Samsung patents. The ban would have begun today. The U.S. trade representative says the veto was based on considerations that could have, quote, "an affect on competitive conditions in the

U.S. economy and their effect on the U.S. consumer." The last time a president overturned a trade ban, Ronald Reagan, back in 1987, a case involving Samsung.

MATHISEN: And still ahead, JetBlue`s days as a coach only carrier are numbered. The airline is changing course, going after the first class flyer. But will it pay off?

First, though, let`s take a look at how the international markets closed today.

(MUSIC)

MATHISEN: To the airlines now, where European authorities have signed off on US Airways proposed merger with American Airlines parent company, AMR (NYSE:AMR). But as expected, the approval comes on the condition that American Eagle give up one slot at London`s Heathrow Airport. The combination would create the world`s biggest airline and must be approved by a federal judge before AMR (NYSE:AMR) can emerge from bankruptcy.

GHARIB: And more people are taking to the skies on US Airways. Passenger traffic on the airline rose more than 6 percent in July, and it comes as the carrier continues to increase its capacity. US Airways which operates US Airways shuttles has been optimistic about the strength of travel demand.

MATHISEN: And JetBlue is changing its strategy, making a play for the first class or business class flyer. The all-coach airline plans to offer private suites and live flat seats on some cross country flights. This marks the first time that JetBlue will have two classes of service. But will it take off with travelers?

Jane Wells has the story.

(BEGIN VIDEOTAPE)

JANE WELLS, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): The travel industry hasn`t had a lot to celebrate the last few years. But to fight flat sales, airlines are introducing more flat seats -- where the money is -- in business class.

STEVE SINGH, CONCUR TECHNOLOGIES CEO: The business traveler continues to trend up.

WELLS: At the largest gathering ever of the Global Business Travel Association, airlines like Delta and JetBlue unveiled new business class seats. In fact, it`s the first business class ever for JetBlue, as this is one part of the airplane where sales are growing and profits are sky high.

MIKE MCCORMICK, GLOBAL BUSINESS TRAVEL ASSN. EXEC. DIR.: And that`s prime money for the airlines.

WELLS: Business travel in the U.S. is expected to grow 4.5 percent this year, to $273 billion. But the number two market, China, is expected to grow much faster and in fact double spending by 2017, over taking the U.S. as the number one market.

MCCORMICK: You`ve got major competition here in the United States coming from the big carriers, meaning United, American and Delta, all making big investments, trying to get more seats, more routes in China.

WELLS: And today`s business traveler wants mobile travel help on the go.

ROB GREYBER: If you`re in trouble and you`re getting off an airplane, flight`s been cancelled, meeting`s been delayed, you can click to call an agent right away. They`ll be prebriefed with everything about your trip and everything that`s going on around you.

FRANK PETITO, ORBITZ FOR BUSINESS PRESIDENT: We`re also finding that companies are looking to be cost effective what their travel spends.

WELLS (on camera): At the same time, the current global threat alert is allowing many of these travel management companies to highlight new tools they have for tracking and helping employees on the road.

SINGH: Every CEO wants to know the following, right -- where are my people, how do I communicate with them, how do I track their progress to safety, and how do I ensure they`re safe and sound?

WELLS (voice-over): As travel rebounds from the great recession, it does so in an ever dangerous world.

MCCORMICK: In a global economy, you know that you do have a higher risk profile than maybe in years past. But it`s a fact of life, and we`ll deal with it.

WELLS: For NIGHTLY BUSINESS REPORT, Jane Wells, San Diego.

(END VIDEOTAPE)

GHARIB: We begin our "Market Focus" tonight with a big earnings beat.

Tyson Foods (NYSE:TSN), quarterly profits soared on strong demand for chicken and a rebound in its meat business. The meat producer was able to offset high feed costs with price increases. Tyson`s, one of the world`s largest chicken producers, also boosted its outlook saying sales for the next fiscal year would be higher than estimates.

The stock hitting multiyear highs, closing up more than 4 percent, to $29.69.

A different story for E.W. Scripps (NYSE:SSP), earnings at the newspaper and television company plunged 41 percent. The company blamed the drop in revenue on a decline of political ads.

At the close, the stock tumbled almost 11 percent, to $14.87.

MATHISEN: Concern over a slowdown in the smartphone market leading to a downgrade of Qualcomm (NASDAQ:QCOM). A Wall Street analyst cuts his rating on that stock to neutral from overweight, citing worries that demand was falling for components used in high end smartphones. Qualcomm (NASDAQ:QCOM) chips power Apple (NASDAQ:AAPL) devices, as well as many of Samsung`s.

The stock finished the day fractionally lower, $66.25.

Another downgrade today, this one for the fashion accessory`s retailer, Fossil (NASDAQ:FOSL). Barclays cut its rating on the stock to under weight, ahead of Fossil`s earnings report tomorrow. The firm says it`s channel checks indicate sales have slowed, despite management`s view that sales will accelerate in the second half of the year. The stock fell 6 percent today to $107.42.

We fixed our technical problems, let`s get back to Jason Blair, media analyst with Telsey Advisory Group. I was asking you Jason whether you thought CBS (NYSE:CBS) would ever accept the proposed deal from Time Warner (NYSE:TWX) Cable to go on an ala carte pricing plan as opposed to being part of a bundle.

Do you think they will? And do you think ala carte pricing is something that`s just over the horizon?

JASON BLAIR, TELSEY ADVISORY GROUP: Tyler, that`s a good question.

I think Time Warner`s offer is designed to educate their end consumer and their subscribers. It`s a serious offer, but it`s an offer that CBS (NYSE:CBS) can`t accept. And the reason for that is that as a homeowner, I`m offered to paid $4 or $5 a month for CBS (NYSE:CBS), I`ll just opt to go buy a $12 antenna, and it`s a one-time cost to me.

The challenge is, is that in the early 1990s, Congress passed the Cable Act. That was a time when it was worried that broadcasters like ABC, CBS (NYSE:CBS) and NBC would effectively fail because the cable bundle was getting so powerful. They were at that time either given must carry or they could negotiate for retrans.

Well, today, the power between content owners and distributors is so unbalanced because of these types of laws, that the cost of content is growing so rapidly, that a number of households today can`t afford to buy pay TV. And that`s bad for the entire TV ecosystem.

GHARIB: Jason, it just seems like what`s going on in the cable industry, the television industry and all the stories that we just reported about what`s happening in the newspaper industry, that we`re at an inflexion point in media and there are going to be new combinations, mergers and sales, whatever. Who do see in this media space are the winners and who are the losers? Whether it`s in, you know, TV or print or online.

BLAIR: Sure. Well, one of the things we look at is the growth of average residential broadband speeds. If you go back to 1983, the average speed of download that we got at our homes has risen at a compound annual growth rate of 65 percent. That`s a 65 percent increase every year. So, today, the average broadband speed is around 20 megabits download stream. We should expect it to be 300 or 400 megs in five years.

And what happens is that what is historically protected media companies, so newspapers were protected because you couldn`t just -- competitors couldn`t distribute that product. And all that content has gone online, and what has protected them has been eroded. So, what we think is that the winners are likely those that have programming scale, and in the case of an Amazon (NASDAQ:AMZN), so as you mentioned, Jeff Bezos is now buying the Washington Post (NYSE:WPO) Company, he`s an incredibly powerful competitor, especially because he gives television content away to his prime subscribers for free.

MATHISEN: Well, we have to leave it there. Jason, thank you very much. And any guy who brings his own rabbit ears, we like, we appreciate it. Jason Blair of Telsey Advisory Group.

BLAIR: Thanks, Tyler.

GHARIB: And coming up on the program, is made in America a profitable and smart business strategy? Wal-Mart (NYSE:WMT), the world`s largest retailer, is proving it can be, as we kick off our special series, "Made in America".

But, first, let`s get a check on how commodities, treasuries and currencies perform today.

(MUSIC)

GHARIB: Wal-Mart (NYSE:WMT) wants to bring back made in America. To do so, it`s promised to buy more U.S. made products, a lot more. That decision by the world`s largest retailer could make a big difference for the economy and jobs, especially manufacturing jobs.

Tonight, in the first of our special series, "Made in America", Mary Thompson looks at the Wal-Mart (NYSE:WMT) economy.

(BEGIN VIDEOTAPE)

MARY THOMPSON, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Here in Fayetteville, Arkansas, new orders are pouring in Hanna`s Candle. The factory has added 60 full time jobs this year, to produce an additional 10 million candles discontinued destined for shelves at Wal-Mart (NYSE:WMT).

BURT HANNA, HANNA`S CANDLES CEO: The state of our business before our partnership with Wal-Mart (NYSE:WMT) was very slow, dismal at best.

THOMPSON: Last year, Wal-Mart (NYSE:WMT) accounted for $4 million in sales at Hanna`s Candles. Now, Wal-Mart (NYSE:WMT) says it plans to buy $30 million this year alone. By 2017, the retail giant projects that number will hit 45 million.

But Hanna`s Candles is just one of the manufacturers getting the boost from Wal-Mart (NYSE:WMT), which has pledged to buy $50 million in American made products over the next 10 years.

Wal-Mart (NYSE:WMT) is partnering with highly automated companies that use raw materials found right here in the U.S. But the economics don`t stop at the end of the factory line.

MICHELLE GLOECKLER, WAL-MART: This is not a put an American flag or label on a product and let it sit on the shelf. This has to be proven with customer demand and movement.

THOMPSON (on camera): So, how many more jobs might be created if Wal-Mart (NYSE:WMT) buys $50 billion more of American made can`t goods like these candles? Boston Consulting Group estimates 100,000 jobs.

(voice-over): More jobs at a time when overseas wage increases and higher shipping costs are making domestic manufacturing more attractive than ever.

(on camera): Wal-Mart (NYSE:WMT) isn`t planning on going it alone and bringing more American made goods to store shelves.

(voice-over): Factories like Hanna`s Candles generally have to update their facilities to accommodate more orders, so the push to buy American, would be more viable long term if additional retailers were to get on board.

CEO Burt Hanna says he`s already getting calls from other outlets.

HANNA: I think it`s our responsibility as manufacturers to try to keep the jobs here in America, and figure out a way to do it.

THOMPSON: For NIGHTLY BUSINESS REPORT, I`m Mary Thompson.

(END VIDEOTAPE)

MATHISEN: He`s a three time American League most valuable player, his $275 million contract, the biggest in the history of baseball. And he is also the most polarizing figure in the sport. Alex Rodriguez was suspended today by major league baseball for 211 regular season games through the 2014 season, part of baseball`s most sweeping drug scandal punishment yet. A total of 12 other players also suspended, 50 games each. A-Rod`s suspension comes amid performance enhancing drugs and obstructing MLB`s investigation.

The media have been taking shots at A-Rod for weeks. And New York newspapers and fans are among those voicing their opinions.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sports is about fairness. It`s about sportsmanship. It`s about tradition. You do drugs, you`re out.

UNIDENTIFIED MALE: If I screw up in my job, I get fired. No one comes back to me. I got to fight for unemployment after that. What are these guys, special?

UNIDENTIFIED MALE: Yes, I think what he did is actually cheating.

And probably should be banned.

UNIDENTIFIED MALE: He should definitely be suspended. Not banned, though. He brings a lot to the table.

UNIDENTIFIED MALE: He should be suspended. Not for life, but maybe a year.

(END VIDEO CLIP)

MATHISEN: That`s what he got.

Rodriguez will appeal the suspension allowing him to play for now, maybe even tonight. If the suspension sticks, he could lose more than $30 million in salary.

GHARIB: Those reactions from people on the street and conversation in every office everywhere today.

MATHISEN: People have had it.

GHARIB: It`s a very impassioned, visceral response. We`ll see what happens in Chicago tonight.

MATHISEN: Yes, we will.

GHARIB: That`s NIGHTLY BUSINESS REPORT for tonight. And this is the time of year that your public television station seeks your supports, support that makes programs like NIGHTLY BUSINESS REPORT possible.

MATHISEN: Thanks so much for watching. On behalf of your public TV station, thank you for your support.

Good night, everybody. We`ll see you back here tomorrow night.

END

END

Nightly Business Report transcripts and video are available on-line post broadcast at http://nbr.com. The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2013 CNBC, Inc.

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