Shares of mcdonalds fell 4. 5 after reporting weaker than expected earnings and revenues. The fast food giant also said Earnings Growth will be quote pressured going forward. Profits were up at General Electric, but revenues came in below analyst estimates and g. E. Also warned of a tough economic environment. The stock slid 3. 5 . Nervousness about the outlook for Technology Companies pulled down stocks. Microsoft and google, both reported disappointing earnings yesterday. By the closing bell, the dow lost 205 points or 1. 5 . The tech heavy nasdaq really got slammed down 67 points and, the s p 500 dropped 24. The problem is there doesnt seem to be any real tolerance for when a company misses. So, you can have decent bottom line growth, but if the revenue side is light or if the guidance even has a tinge of negativity to it, there doesnt seem to be any mercy, which simply probably tells us in a broad sense that stocks are to a large extent almost priced to perfection. Susie Corporate America may be down about its future prospects, but American Consumers are beginning to feel more upbeat. Consumer confidence is at its highest level in seven months. Why the disconnect and should investors be concerned about these out of sync views . Erika miller reports. Reporter for years now, Corporate America has been thriving, while consumers have been struggling. But now it seems, the tables have turned. Businesses are worrying, while regular americans are feeling more hopeful. First, the worry warts. Since the start of earnings season, a host of companies have reported disappointing numbers, including General Electric, mcdonalds, google, microsoft and alcoa. Across the board, companies are getting slammed by a weak global economy, particularly in europe. We know that the european debt crisis is still highly impacting companies and, for the most part, theres really no sector thats been able to benefit from growth there very broadly. So its still the number one region that companies are citing with their toughest region going into even 2013. Reporter s p 500 firms are expected to post their worst earnings and revenue results since 2009. Profits are expected to rise just 0. 4 and revenues 1. 3 . But there will likely be a wide gap between the winners and losers this quarter. Our two biggest laggers as far as sectors go for the Third Quarter are commoditiesrelated sectors materials and energy. Materials expected to be down about 21 in the Third Quarter, energy down almost 17 . Whereas on the flipside, companies that were seeing that are doing quite well, financials expected be up about 20 . Reporter but consumers are leaving the nail biting to Corporate America. Theyre less concerned about the slowdown overseas and more interested in whats happening in their own backyards. For most, jobs are their primary source of income. And while the labor market is weak, its still growing. As importantly, real estate prices are rising and homes are most peoples biggest asset. Only about half of u. S. Households even own stocks. But what about anxiety about the president ial election and fiscal cliff . I think consumers really will not take notice of the Political Risk and political events until we are in some real critical break down stages. Reporter so, many consumers are feeling good heading into the holidays, even if the mood in Corporate America is souring. Erika miller, n. B. R. , new york. Tom still ahead, the crash gold joined the selloff today, following stocks lower, as concerns about earnings and europe, raised new questions about demand. Gold fell over 20 to 17. 24 an ounce, hitting a sixweek low. Meanwhile, european leaders wrapped up their latest summit today, the fourth this year with progress on establishing a single banking supervisor for the eurozone. Its a move that would allow the e. U. s rescue fund to start recapitalizing ailing banks. Susie from wall street to susie from wall street to washington a stern warning. Top banking c. E. O. s tell lawmakers letting the fiscal cliff happen would bring quote, grave consequences for the u. S. Economy. Sylvia hall reports. Reporter some of the biggest names on wall street tell washington to get to work and avoid the fiscal cliff. J. P. Morgans jamie dimon, bank of americas Brian Moynihan and Goldman SachsLloyd Blankfein joined 13 other c. E. O. S in a letter to congress and the white house. Expiration of tax cuts and automatic Government Spending cuts already has held back businesses, and if the cliff is triggered in january as scheduled, things will get much worse. Bankrates greg mcbride says all americans would feel the pain. Its going to put a few million more people out of work, the stock market would tank so everyone with a 401 k would feel it, and even the people who are still working, theyre going to make less money, theyre going to have less money, its not going to be fun for anybody. Reporter the bank c. E. O. S also raised concern over the potential for another credit downgrade for america. They said it could lead to higher Interest Rates. Higher Interest Payments would worsen our nations fiscal burden and likely increase uncertainty and instability in Global Financial markets. Reporter but its not clear yet whether that would happen. In this environment, europes in the middle of a debt crisis much of the developed world is either in or on the brink of recession, we could see in effect similar to what we saw last where the downgrade to the u. S. Credit rating actually pushes Interest Rates lower as people continue to flock to the one remaining safehaven which is the u. S. Reporter we probably wont see movement on the issue until after novembers election. Until then, congress will face mounting political pressure to avoid another recession. Sylvia hall, n. B. R. , washington. Tom its common to hear politicians talking tough about china during an election year. President obama is quick to point to trade penalties his administration has put on chinese products. Governor mitt romney has promised to label china a currency manipulator for holding back the value of its currency against the dollar. But is getting tough on china the right solution . Darren gersh reports. Reporter if the u. S. And china had facebook accounts, their relationship status would be its complicated. Theres agreement and disagreement on National Security and economics. The u. S. Pushes on human rights. The chinese push back demanding mutual respect. Economist john silvia says its all too complex to manage by ultimatum. Its a relationship of constant negotiation. Much like many of us do with a marriage. Its not i have to win today. I win tomorrow. Its one of i compromise, i learn what you want. And we work forward over time. Its a long term negotiating process because we are going to be with china for at least the next 50 to 100 years. Reporter there is a reason president ial candidates talk tougher on china than sitting u. S. President s. A trade fight between the worlds two largest economies could weaken confidence in the global economy. There is the danger of a spiraling trade war that was never intended, by anybody on the u. S. Side or on the chinese side, but just like a regular war, things can spiral out of control into places people never intended and i think there is a serious risk of that. Reporter that is always the argument against a public trade fight with china, and critics say thats why our trade deficit continues to widen. These pessimists have not a shred of evidence to base their case on, because a tough approach toward china has never been tried to any significant, sustained basis by any american president. Reporter but few economists believe china is to blame for of our biggest economic woes. But thats the view both parties are happy to pitch at election time. If the public solidifies a really, really negative, pessimistic view about chinas role in the international system, chinas role in the international economy, etc, that can become a binding constraint on american politics on american policy towards china. Reporter but no one wants the economic equivalent of the cold war and thats why the winner of this election will sound more cautious on china once hes in the oval office. Darren gersh, n. B. R. , washington. Susie almost 200,000 more people are working temporary jobs today compared to a year ago. The tough job market has forced many workers into freelance work, but some have gone willingly. As we wrap up our series freelance nation, Diane Eastabrook introduces us to a freelancer who left fulltime employment by choice and may never go back. Reporter its break time for shari schmidt. But the 48yearold Marketing Consultants office isnt in a Chicago Office tower its the kitchen in her suburban home. Schmidt is a freelancer. Most people go in, they have lunch, they go home. I dont do that its a little bit more flexible and that is one of the great advantages. Reporter schmidt gave up a fulltime marketing gig 14 years ago when she married her husband tom. She wanted to concentrate on starting a family and had twins abigail and allison five years later. Through an agency, schmidt has gotten work consistently ever since. Shes been on her current project for four years, making up to 85,000 annually. By freelancing i was able to keep my resume active, so some really interesting projects and keep my name out there and stay home. I could pick and choose some projects, i could work as many hours or as few hours as i wanted to and i was able to balance things out in a way that made sense with our family. Reporter Many Companies have turned to freelancers after downsizing during the recession. A recent survey by online employment website elance found 62 of freelancers were getting work, managing two to six projects at a time. And 43 expected to earn more money next year, than this year. Schmidt gets paid by the hour and is limited to 40 hours a week. And while freelancing lets her focus more on her family life than her professional one, she admits there are drawbacks. Health insurance is an issue, Vacation Time is an issue. When i dont work i dont get paid, so you have to balance that out. And, i think that you know looking at it longterm and saying 20 years from now if i have to go back and find a job would i be able to . Thats one of the challenges. Reporter for now schmidt thinks the benefits outweigh the challenges. He is a dog that needs a lot of attention. Reporter with mom at home the family was able to adopt oreo. And while the mother of two thinks she could make more money working fulltime, she thinks the extra cash might get eaten up on child care, petsitters, and commuting into chicago. When schmidt started freelancing, she intended to one day go back to working full time. Now shes not sure she ever will. I hope that i can continue to freelance at the rate that im doing now and stay out of an office. Oreo hopes so, too. Diane eastabrook, n. B. R. , palos hills illinois. Tom september came and went without a significant stock selloff despite its record as the worst month for investors. But not october. The major indices had their worst selloff since june. The s p 500 saw selling from the opening bell and prices kept falling throughout the session. The low of the day was hit an hour before the closing bell. It ended down 1. 7 . Trading volume picked up as prices fell. 939 million shares traded on the big board. 2. 2 billion on the nasdaq. All ten major stock sectors were lower. The heaviest selling was in technology, down 2. 3 . The material sector fell 2 . And industrials were down 1. 8 . Despite todays drop, two of the three big indices are higher tonight compared to a week ago. The dow industrials hung on to the smallest of weekly gains, up 0. 1 . Technology saw the worst performance. The nasdaq fell 1. 3 . And the s p 500 gained 0. 3 on the week. Semiconductor maker Advanced Micro Devices saw the heaviest selling in the tech sector thanks to its disappointing quarter and decision to cut staff as it faces a fast changing computer market. A. M. D. Shares lost 16. 8 on heavy volume. Other chip stocks were lower too. Nvidia fell 5. 9 . Investment bank f. B. R. Cut its rating to market perform due to the ongoing weakness in traditional computer sales. Intel, which had its own disappointing results earlier this week, fell 1. 9 . But the earnings weakness extended beyond technology. Mcdonalds turned in disappointing results for the Second Quarter in a row. Earnings were four cents below estimates as restaurant sales growth slowed to its lowest pace in nine years. Mcdonalds also cautions october sales have continued on that slower trend. It was the worst percentage loser among the dow industrial stocks, falling 4. 5 . This is its lowest price since late august. Both mcdonalds and fellow dow stock General Electric saw business slow in europe. For g. E. , earnings were not a disappointing, matching analyst expectations but revenue was less than anticipated. And g. E. Was cautious at best about 2013. The stock fell 3. 4 . Volume doubled as the stock closed at a five week low. G. E. Did stick with its prediction of double digit Earnings Growth for the full year. But another conglomerate reported better than expected earnings, despite the european trouble. Honeywell shares fought against the weak market, rising 1. 7 even though quarter revenues were lighter than forecast. Its aerospace and chemicals businesses helped its Third Quarter financial performance. All of the five most actively traded Exchange Traded funds were lower. The nasdaq one hundred tracking fund saw the biggest drop, down 2. 4 . And thats tonights market focus. Tom a setback. Thats what tonights market monitor calls todays stock selloff. Mark skousen is the editor of forecasts and strategies. You dont think theres a change in sentiment reflected in todays selloff . We should note, happy birthday to you. Thank you. Tom you dont think theres a change in sentiment in todays selloff . I think its in honor of the anniversary of the stock market crash, which was on my birthday so i think it was totally appropriate. Seriously, i think the earnings disappointment in google and mcdonalds and so forth, everybody was predicting this, and now its finally happening. I think it had its impact. I am still bullish, given the number of things going on. Tom give us a couple of those items going on that still provide with you optimism. Well, i think, first of all, the market is relatively cheap, if you look at the p e ratio longterm, the s p 500, around 15, 16. And right now were around 13 or 14. Things are still relatively cheap. The other thing is the fed policy continues. We have this quantity eternity, i or infinity that everybody is talking about. I think thats very bullish, especially for the financials. Tom not bullish if youre looking for Interest Rates. You think theres room to move here with Enterprise Products partners, a mastered limited partnership yielding about 5 e. P. D. Its close to its high. Why do you think it has room to move . Well, they have a policy of raising their dividend every quarter. Theyre in a sector where any kind of economic recovery will be bullish because that will be more natural gas going through the pipelines. Theyre still paying a very you know, 4. 7 dividend. They keep increasing the dividend. The dividend payout ratio is relatively small, so i like it a lot. Tom you also like finance here with main street capital, m. A. I. In the ticker and an awful low good looking chart, dr. Skousen. Significant yield but any concerns you could be buying close to the top here with this financial . Yeah, thats always a possibility. But, look, theres heavy insider buying just as late as last month, and theyve had insider buying for the last three months. They raised their dividend four times in the last year. They pay monthly, and its still selling for under nine times earnings. So estimated earnings for this next year. So its relatively cheap, and its in the private sector. Its in loaning money to private Equity Companies who cant turn to the banks anymore, because the banks are busy investing in treasuries or mortgagebacked securities. I think its a very bullish industry, and if mitt romney byebyes president of the united states, these kinds of stocks are going to roar ahead because i think youre going it see much improvement in the economy. Tom would you sale, however, if the inverse is true, if president obama is elected. Would you still these sell these purely because of politics . No, i think some stocks doing very well coal stocks will go back into a bear market, and Online Education and stuff like that. Tom all right. We last spoke with you in the springtime back on april 27, you had two picks back then. Corning and methanex. Both of those stocks are down. This is just the stock price movement. It does not include dividends, which would reduce these loss. Do you still like these two stocks . Well, i thought we have hit our stops on both of them, and corning is of course, linked with the iphone and whats happening with apexpel that looks like its top out. We sold out of that. And as far as methanex, same thing, i think the Industrial Chemical market is steady but doesnt seem to be generating much excitement. Tom do you own the other two we mentioned earlier . Oh, yes. I own main street and enterprise capital, both of those, Enterprise Partners russia both in my portfolio. Tom our Friday Market monitor and the birthday boy at that, mark skousen, forcasts and strategies. Thank you. Susie next week on n. B. R. housing its the bright spot in the economy, from sales to prices to the state of foreclosures. Well get the outlook for the Real Estate Market heading into 2013. And monday, the last president ial debate is being held in florida, we look at this swing states role in the election. Change can be one of the hardest and most important obstacles to overcome in business. This week lous been thinking about cutting back. Heres author and educator lou heckler. A few weeks back i was reading a story that one of the casual dining restaurant chains is removing salt shakers from its tables and reducing the salt in its most popular dishes. Weve all seen many of the casual and fast food places revamping their menus to make them healthier. It got me thinking about how hard it is to overcome inertia in any business. Funny, isnt it . Somehow it seems easier to add to what we do than it is to take it away. When i worked full time in television we would often get a big response when we dropped a program and very little when we added one. A longtime friend used to work in a hospitalbased weightloss program. She would suggest that people make simple changes in their lives before radically altering their eating habits. Shed ask them to rearrange their furniture at home or sleep on the opposite side of the bed first. It was hard for them. So, is there some salt on your table that needs to be removed . An old habit set aside . It wont be easy. A spanish proverb says, habits are at first cobwebs, then cables. Im lou heckler. Tom if you were an investor 25 years ago, today is a day you have not forgotten. October 19, 1987, black monday. The single worst day for the Dow Jones Industrial average. This is how n. B. R. Began 25 years ago tonight. The law of gravity hit wall street today and Financial Markets around the world for that matter as stock prices plunged even more than they did on black tuesday of 1929. When the dust settled the Dow Jones Industrial average had lost more than 508 points on volume of 604 million shares. By the closing bell that day, the dow had lost an incredible 22. 6 . Trading was so heavy wall street tickers were more than an hour behind. The final hour saw the bottom drop out as more margin call and mutual fund liquidates combined with all those wonderfully created computer driven strategies pummeled the dow industrial average to a record loss of 508. 32. Probably the scariest day, the scariest day i ever spent on the floor of the new york stock and ive been a member here and relatively active for 43 years on the trading floor. It was a wild crazy, scary day. Tom Robert Hagstrom remembers that day. He was a stock broker at legg mason wood walker. He has since written eight books including the Warren Buffett way. Whats the lasting lesson for longterm investors of that crash . If you think about 1987, what you didnt want to do was panic and sell everything because it was notice a depression that followed, as many people speculated. If you had hung on to your stocks you would have done well over the next couple of years. Tom it is being patient, but, boy, 22 gone in one day. Tough to have the discipline to hold on. Well, you know, no doubt. I remember being a stockbroker. It was surreal looking at it, and you were somewhat panicked about it. But cooler heads prevailed pain lot of people that had thought about their companies they owned as investors you own companies and if you thought about things like at t, and there was warren buffet, one of the greatest investors of all time, buying cocacola at the 1987 crash. People that focused on businesses, tom, did very well. People that focused on prices, they have a tendency to panic. Tom lots of safeguards were put into place after that. We have new rules. Do they protect investors any more, do you think . Im not sure. Thats a very good question, tom. As we discussed before, innovation in the Technology Side of market seems to move faster than regulation. There are still bumps in the road and i think we have to do a better job of regulating some of the speed crashes that catch up to us from time to time. Tom Robert Hagstrom, a longtime market veteran along with us tonight. You can watch the entire nightly Business Report broadcast from 25 years ago. Weve put it on our website nbr. Com black monday. Susie that is scary tom thats nightly Business Report for friday, october 19. Good night susie and have a great weekend. Susie you, too, tom. Goodnight, everyone. Well see you online at nbr. Com and back here monday night. Captioning sponsored by wpbt captioned by Media Access Group at wgbh access. Wgbh. Org