this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. my colleague susie gharib will be along later in the program. it may not have been the reaction many investors expected after the death of the world's most wanted terrorist. many americans did cheer the death of osama bid laden, including this celebration at ground zero in new york-- the site of his most deadly attack. his confirmed killing in a u.s. attack initially saw stocks rally and energy prices sink. but the demise of one threat also reminds investors and business of the ever-present risk of terrorism. erika miller reports. >> usa, usa. >> reporter: at ground sdwlero today there was a mix of emotions. some people re-- rejoiced. >> we celebrating death which we hardly ever do. we hardly ever celebrate death but we are celebrating the death of one really bad individual. and that was the death of osama bin laden. he caused so much pain. >> reporter: and that pain was visible on plenty of faces. others were nervous. >> what is it going to do? i think it's going to push up an attack on us here. they're going to have to plan something real quick to show that they're still here. >> reporter: but a few blocks away on wall street there was not much market reaction. it's similar to what happened in 2003 after saddam hussein was captured. today like then, stocks rallied a bit at the open but ended little changed. s&p's howard silverblad explains why. >> it is more of a feel good day, an emotional item. it's not a major change the way 9/11 was which was going to change your life going forward almost every day and your life style. >> reporter: there was more excitement in the oil pit at the new york mercantile exchange. oil traded in a $5 rang and settled down 41 cents at 113.52 a barrel. analyst adelle gates says the oil markets have bigger concerns. >> at the end of the day the market is looking at what's happening in the middle east in terms of supply disruption, could impact obviously the price of crude oil. >> reporter: so bottom line from an investing standpoint, strategists say not a lot has changed since last week. stephen wood warns investors just because there is big news does not mean you should make big changes to your portfolio. >> whether japan, the middle east or osama bin laden which look like reasons to change your long-term investment strategy, we would advise caution on that you want to look at the underlying fundamentals and right now they look, you know, reasonably good. >> reporter: in fact, the s&p 500 is 25% higher than the close on september 10th, 2001. energy and basic materials have been top performers. more than doubling since that day. but a dose of american optimism can't hurt which is what many were feeling in lower manhattan today. erica miller, nightly business report, new york. >> tom: here are the stories in tonight's n.b.r. newswheel: stocks finished lower after the initial boost on the bin laden news. the dow lost three points, the nasdaq fell nine and the s&p off two points. big board volume begins the new month above 900 million shares. nasdaq volume weighed in at over two billion shares. treasury secretary timothy geithner gives uncle sam a little more room before the federal government hits its borrowing limit. on friday, the u.s. treasury will stop issuing certain securities to state and local governments. without these moves, geithner says the country will hit its debt limit in two weeks. the bookkeeping measures allows the government to keep borrowing money until early august. nasdaq o.m.x. and the intercontinental exchange hope the third time's the charm when it comes to its bid for the n.y.s.e. nasdaq has taken its $11 billion offer directly to new york stock exchange shareholders. n.y.s.e.'s board twice rejected that offer in favor on one from germany's deutche bourse. >> susie: still ahead, warren buffett says he made mistakes in the david sokol episode. my interview with the oracle of omaha, coming up. >> tom: the death of osama bin laden after a decade-long manhunt strikes a strategic blow to al qaeda, so says the white house. that's just one way the events of the past 24 hours alter the world's national security landscape. it is also changes how the u.s. government thinks about and budgets for its security. darren gersh reports. >> reporter: even before an elite team of navy seals attacked this fortress-like compound in pakistan, the u.s. defense establishment was preparing to tighten its budget belt. military analyst loren thompson says the wars in iraq and afghanistan now cost $100 billion a year. he says the strike that killed bin laden will eventually accelerate the winding down of those conflicts. >> there is not going to be a peace dividend associated with osama bin laden's death any time soon. but of course, the reason we are in afghanistan, the reason we went to iraq was all linked to 9/11 attacks. so with the chief author of those attacks now dead, there is a high likelihood that we are headed into a period of contraction in defense demand and maybe more money available for other things. >> reporter: since osama bin laden launched attacks on the united states, the armed forces have added 92,000 soldiers and marines. with al qaeda's leader gone, analysts expect the military to return to it's pre-9/11 size. gordon adams headed up national security budgeting for the clinton white house. as important as bin laden's death is, he says the key factor driving down defense spending is the massive federal deficit. >> it means slowing down some hardware programs, and it probably means refocusing on missions. the whole counterinsurgency nation-building occupational mission, i think, will begin to slip away. >> reporter: one thing that won't go away, though, is spending on the special forces that finally succeeded in killing bin laden. >> it will reemphasize that small, alert, capable, very lethal niche capability that is the special forces, but it's not going to add much weight in particular to whether we continue to have a large army or get busy with the defense build- down that clearly is already underway. >> reporter: thompson says that adjustment is already priced into the outlook. >> the market seems to be signaling that future demand for weapons systems is soft. it seems to be saying that betting in the commercial sector is a smarter thing to do right now. >> reporter: there is certainly room to trim security spending. over the next 12 years, the obama administration plans to cut $400 billion from a projected security budget of $10 trillion. darren gersh, "nightly business report," washington. >> tom: warren buffett doesn't expect the death of bin laden to have a big impact on the financial markets. and the oracle of omaha still worries about future terrorist attacks on the u.s. over the weekend, buffett met with about 40,000 berkshire hathaway shareholders to answer their questions. many of those questions centered on controversial stock trades by a now former top executive. susie gharib reports. >> susie: it hasn't been the best of times recently for warren buffett, but you couldn't tell by looking at him or listening to him this weekend. >> go big red! go big red! >> susie: while there was some of the usual carnival atmosphere, the controversial sokol saga hung over the weekend meeting. david sokol, a berkshire executive and top contender to succeed buffett, resigned abruptly in march. that shocker came after sokol revealed he bought lubrizol stock just before buffett acquired the chemical company. then last week, berkshire's audit committee issued a scathing report saying sokol violated berkshire's ethics and insider trading policies. at berkshire's annual shareholders' meeting, buffett admitted he made a "big mistake" in not questioning sokol about those stock purchases. still, he said sokol's actions were "inexplicable and inexcusable." >> a man made a terrible mistake and he's paying for it, unfortunately, and i feel badly for him. but berkshire moves on. >> susie: are you angry about what david sokol did? >> i'm disappointed. but, you know, he did a lot of good for berkshire-- some terrific things-- and to this point i never found anything to criticize, so i'm disappointed. >> susie: mr. buffett, what changes are you making at berkshire so another david sokol situation doesn't happen again? >> well, i think if you look at our code of ethics and our insider trading rules, i think you'll find they are very comparable to other major companies-- that if somebody's going to break the rules, they're going to break the rules. >> susie: the c.e.o.s of two berkshire subsidiaries told me buffett's policies and principles don't need changing. >> he trusts us and we feel obligated to fulfill that trust. so i don't think he needs to do anything differently. >> i think the rules that have been in place all along, have been pretty clear to me. >> reporter: so far the sokol controversy hasn't damaged berkshire stock. the "a" shares are down only slightly since march 30, when sokol resigned, but the shares have lagged the broader market since last year's annual meeting. that hasn't discouraged money manager mario gabelli. >> the background noise of what has occurred in the papers with the lubrizol deal has created an air pocket in the stock. it's worthwhile to stay with it. in fact, it's getting to be time to buy it. >> susie: money manager david rolfe sees the stock topping $175,000 this year. >> it's very rare when you can buy berkshire hathaway when earnings look like they are compounding at plus 25%, as well as how cheap the stock is today. again, it's a very a rare opportunity to pick up these shares at a significant discount to fair value. >> susie: the meeting's other big topic? who will fill buffett's enormous shoes once the octogenarian is gone. buffett told shareholders the unnamed leading candidate is "as straight as an arrow." >> it's absolutely essential that anybody that runs berkshire be a first class character, but that's always been true. >> susie: matt rose is rumored to be buffett's top pick. he is c.e.o. of burlington northern. that's the huge railroad buffett bought a year ago. but rose is mum on the subject. >> i just think warren's going to be around a long time. and i'm not going to speculate. and that's really something he's going to work through with his board. >> susie: besides succession, shareholders were anxious to hear what the oracle of omaha had to say about the economy, the housing market and how berkshire's businesses are doing. >> residential construction is the big hold back in terms of the economy increasing at a faster pace, but we're making steady progress ever since the fall of 2009 and it continues right up 'til now. >> susie: in terms of jobs, are you going to be doing a lot of hiring this year at berkshire? >> we are not going to be. we will be doing net hiring--we will have more employees at the end of the year than at the start of the year. what would really help is when residential housing comes back. it will come back. i just don't know when it will, but that will result in thousands and thousands of more jobs at berkshire. >> susie: and then there's the question of all that cash. berkshire has about $40 billion in its war chest, and buffett says he's looking for something big to buy but won't give specifics. >> i've always got some gleams in my eye, but it really depends on the sellers. we don't induce people to sell their businesses. they get the idea and then come to us. >> susie: buffett ended the weekend doing what he loves best, convincing people to buy berkshire. >> good luck! >> susie: behind the counter at borsheims jewelry store in omaha, he was hawking baubles and bracelets-- reminding everyone that the oracle of omaha hasn't lost his magic touch. susie gharib, "nightly business report," omaha. >> tom: one final note about berkshire. on our website, n.b.r. on pbs.org, you can see a longer version of susie's interview with warren buffett. stocks couldn't hold on to their opening gains despite the seemingly bullish news regarding bin laden's death, but a trio of big buyout efforts provided for some pockets of strength. let's take a look at tonight's "market focus." the major stock indices sank throughout the session. health care, which was the best performing sector in april, continued in its market-top position. health stocks were helped by some dealing, with cephalon in the sights of generic drug maker teva. cephalon jumped more than 4% after receiving the buyout offer from teva. volume jumped five-fold. one reason the buyout price pop wasn't huge was because of this pop in march. that's when valeant pharmaceuticals made a hostile buyout offer. but this price from teva comes in higher, at $6.8 billion in cash. cephalon shareholders will get $81.50 per share, more than what valeant was offering, and valeant dropped its hostile effort. as a sign of market enthusiasm, the buyer, teva traded up more than 3% while valeant fell almost 6%. hospital operator tenet fell 3.5% on very heavy volume, even though its hostile buyer is willing to pay more. this hostile effort by community health to buy tenet goes back to december. community increased its offer 20% to $7.25 per share. community calls the price its best and final offer. the energy sector was the weakest overall, but international coal fired up 30% to a new high. very active, as you saw earlier. arch coal will buy the company for $14.60 per share, just above tonight's closing price. with the rally. apple shed 1%, as it became a little less important for some investors today. follow us here. its influence in the nasdaq 100 index was reduced as five other tech heavyweights increased their weightings in the index. prior to today, apple's weighting inside the index had grown to more than 20% as its share price rallied from the single digits eight years go to more than $300 dollars. beginning today, its share of the nasdaq 100 was reduced to just over 12%. that means other stocks have increased their influence. among those increasing their weight? microsoft, oracle, intel, cisco systems and google. morningstar e.f.t. analyst robert goldsborough points out it changes the focus of funds using the nasdaq 100 as a benchmark. >> your subsector bolsters toward everything from internet and software are going to be rising whereas your focus on manufacturer, consumer, broad-based consumer hardware like apple, you see that exposure going down. of those heavier weights, microsoft and intel each fell 1%. oracle gained 1% to a new ten- year high. finally, the last 90 sessions of the silver trust exchange traded fund. here it is. look at this rally. it fell more than 8.5% as volume tripled. this sell-off takes this fund below its small sell-off a week ago. and that's tonight's "market focus." >> tom: the biggest event in the business of horse racing rounds the final turn this weekend. tonight's "beyond the scoreboard" starts beyond the race course for the kentucky derby and its owner, churchill downs. rick horrow is a sports business analyst and c.e.o. of horrow sports ventures. always nice to see you. the kentucky derby this saturday, the biggest public profile event for the church hill downs corporation. no doubt about it. but take a look at these numbers here in terms of where churchill downs is making its money. last year most of its earning came from racing, 41%. but look at that slice in orange, 34% from gaming, a double-digit increase. so it seems like the business of horse racing is less and less about horses. >> well, i have another perspective for you. the handle, the bets two years ago $12 billion nationally, thoroughbred, not bad. but 66 billion casino, india-- indian casino, so the industry now is about entertainment, it's about getting people to the track, per se. not necessarily watching the horse racing. >> tom: and we're seeing this really play itself out in the share price of churchill downs which is publicly traded. stock price this year has been flat, to trending lower. clearly reacting to more competition for that gaming dollar. >> and the bottom line for the triple crown which is wonderful, 2.5 minute race, $180 million economic impact for louisville, they're doing okay. and the races themselves seem to be on solid financial footing. nbc's consolidated all three triple crown races for the first time since 2005 through 2015. so the megahorse races are still the only game in town. >> tom: for horse racing. but again only at 2.5 minutes a clip. meantime slightly fewer people are going to the ball game so far this year for major league baseball. we have seen attendance through the easter weekend down a little over 1%. clearly this is happening within inflation, with higher energy prices so are we at risk of seeing a repeeft the '08 season. >> we if are it will be the lowest attendance since the millennium and we may have one million people less over time. which affects baseball. you know, general managers say in april kids are still in school. pitchers aren't warmed up yet, the weather is awful and the economy. and you can't use that all the time especially in this month on monday comparison. >> tom: so to that point of energy prices, take a look at lower attendance and energy prices here beginning with see aelt, over $4 a gallon there, lower attendance in los angeles for the dangers, their fans are paying 4 and a quarter plus. rising atendance is happening elsewhere where there is cheap gas, in texas, for instance, still below 4 dollars a gallon but the jays have the canadian dollar and the litre to gallon over $5 but the jays are seeing higher attendance. >> if it were only that simple. i would take a long relieve as opposed to a full gas tank any time. texas rangers in the world series last year, their value went up 25% and it's not only because the gas prices are lower. >> tom: i have to wrap up on the nfl continuing to fight in court about the lockout. we're talking about a technical legality here versus the actual contract where. do things stand there. >> we have had enough, the lawyers, that is enough of this. but the bottom line is they have to mediate a settlement. the judge couldn't convene another mediation until may 16 because it won't settle in the boardroom. it sets on the courthouse steps and everybody is waiting. >> tom: we will wait with them. rick horrow with us from horrow sports ventures. here's what we're watching for tomorrow: quarterly results from comcast, mastercard, n.y.s.e. euronext and pfizer. we'll also see factory orders for march and april auto sales. and our word on the street is "defense." we'll highlight three defense- related stocks poised do well in the post-bin laden era. smartphone maker research in motion is rolling out a new blackberry, hoping to ramp up its presence in a competitive marketplace. the new edition of the blackberry bold will be the thinnest ever, include a touchscreen and a keyboard. it also will have a 1.2 gigahertz processor. now rim's been losing market share in north america to apple's iphone. it just unveiled a new tablet called the playbook, to lukewarm reviews. this new device will be launched this summer. >> tom: meantime, honda is delaying a new product launch. the new c.r.v. crossover won't be for sale at least one month later than anticipated, due to auto part shortages from japan. the same problem is also hampering supplies of other hondas, including its fit and civic hybrids. honda's not alone, though. the global auto industry is having trouble getting supplies from japan, nearly two months after the massive earthquake and tsunami there. >> tom: the death of osama bin laden, and more on what it means for u.s. military spending in the middle east. here with some thought is robert powell. he's a middle east analyst for "the economist" intelligence unit. >> with osama bin laden dead, the question has arisen, both in the united states and further afield, where does the u.s.' now-renamed "war on terror" go from here? sadly for the u.s.' legion of deficit-cutting advocates, the capture of osama bin laden will not result in a significant reduction in overall defense spending. the u.s.' financial and military role in the middle east long predated the emergence of al- qaida, rooted as they are in defending the u.s.' primary interests in that region-- namely, protecting israel and ensuring a steady supply of oil. also, of course, the end of bin laden does not mean the end of the terrorist threat-- and this was evident just in the past few days, when 16 people were killed, including eight french tourists, by a bombing at a cafe in marrakesh in morocco. in reality, al-qaeda is now an amorphous organization, comprised of myriad locally- oriented groups, such as al- qaida in the arabian peninsula, which is based in yemen. notwithstanding this, however, it should be noted that, with bin laden dead, there must now be a temptation within us policymaking circles to reduce its role in afghanistan. the continued deployment of some 100,000 u.s. troops in afghanistan is a massive burden both on the military and the u.s. fiscal finances. the news of bin laden's death would provide an ideal backdrop for the president to declare, eight years to the day after bush came out with the immortal words, mission accomplished. i'm robert powell. >> tom: finally tonight, sometimes big news is just too much news. like today. when the story broke of osama bin laden's death, hundreds of thousands of people logged onto the website of the newseum to see how newspapers around the world were covering it. the newseum posts digital versions of hundreds of front pages every day from all over the world. but the huge landslide of requests crashed the site's servers. the newseum says people always want to see newspaper front pages when huge stories break, even if they have to see them on the web. score one for traditional media. >> tom: that's "nightly business report" for monday, may 2. i'm tom hudson. good night everyone. we hope to see all of you again tomorrow night. this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >> be more. pbs.