parties in parliament called on murdoch to dump his plans to pursue it. at least four members of the u.s. congress want the government to investigate whether u.s. citizens were victims of phone hacking by murdoch's media outlets. international journalists were attempted to hack into the phone messages of 9/11 victims. > ruling party officials say mr. salih will go back after he's 4 surgery. those are the headlines. those are the headlines in cnn in london. "world business today" starts now. very good morning to you from cnn rome. >> and good afternoon from cnn hong kong. i'm pauline chu and this is "world business today." these are the top stories on this thursday, july 14th. running on empty and running out of time on both sides of the atlantic. there's a tense stalemate in washington as lawmakers fail yet again to head off the looming debt default. meanwhile, italy races to push through austerity measures and restore confidence in the country's economy. plus, rupert murdoch is in damage control mode as the crisis at newscorp continues after he ditches his bid for bskyb. but first, a tide of debt trouble seems to be rising on both sides of the atlantic with lawmakers in a number of countries, frantically trying to cope with their country's financial woes. in the united states, as we speak, talks to raise the country's borrowing limit have once again, it seems, hit the buffers. and moody's says as a result of that it's putting the united states on sovereign's on credit watch negative for potential downgrade. here in europe, italy is grabbing the headlines. it's planning a $7 billion bond sale on thursday, this as lawmakers scramble frantically to pass through a punishing set of measures. the upper house of the italian parliament debatining at the moment. we expect the finance minister to take center stage. all of this is adding up to be a great time for investors in gold which has hit a new record high as many people are looking for a safe place, a traditional safe haven to put their money in. and nina, this pressure is being felt all across the globe as debt default meet innings washington run into a fifth day now. we've seen losses across much of asia today. european markets are also down and the u.s. futures aren't looking too perky at the moment. all of that has left gold hovering near a record high as you mentioned, nina, over $1,500 an ounce. >> we should talk about how the european stock markets are reacting, pauline. european investors not terribly convinced this crisis over, especially when talking about italy, which is europe's fourth largest economy. taking a look at the markets. the cac 40 in france, the ftse 100 down by quite a bit at the moment. and the markets in milan, well, are not moving that much but this is a day when the italian parliament will be trying to push through these painful austerity measures. the country has gone to the bond market for its thursday weekly sale, pauline. >> we'll see what the yield brings on the bond market there. and it was a similar story here in asia, nenia, where most of the asian markets had a down day on thursday. let's take a look at the numbers the nikkei ended down by more than 0.25%, the hang seng was flat and the shanghai composite up by 0.5%. the main concern was over moody's warning that it could downgrade its rating on u.s. debt has the political impasse in washington continues over raising the debt ceiling. that has dragged on and the deadline for doing so looms, august 2nd deadline. also financial stocks even exporters have felt most of the pressure, especially exporters, in japan where the yen is still very strong, it's broken past that 80 milestone mark, that sort of yardstick mark. it's too strong for the exporters. right now, a dollar yen, the yen is trading at 79 yen to the dollar. so a bit too strong for exporters. nina? >> pauline, let's also take a look at how the stock markets performed on wall street just yesterday. stocks there on wednesday bounced back from three days worth of losses despite the ongoing debacle surrounding the u.s. debt ceiling. moody's comments about it. one of the reasons we saw gains is particularly because we had encouraging growth numbers coming out of china and more importantly, we had soothing words from the federal reserve chairman ben bernanke himself. at the close of trade, a gain between 0.3 and 0.5%. let's go back to what bernanke was saying, in his semiannual testimony, he said once again, the soft spot that the economy has hit will be short lived. here's what's interesting about what he had to say. after spending months denying to people there would be stimulus measures, he gave this hint. >> the federal reserve remains prepared to respond should economic developments indicate that an adjustment would be appropriate. >> now, that's quite a different tone from the message we got two weeks ago when the fed ended its last round of stimulus of qe2. looking ahead to the start of trade in the u.s., right now in premarket trade, the major markets are pointing to a higher open. this is quite different from just a little while ago where all the futures were pointing to a lower open. perhaps there is some confidence that things will get done in italy and confidence perhaps that we may see some results in the fifth day of negotiations down in washington. high tension and high stakes in the white house, talks to diffuse the debt crisis ended wednesday night with both sides offering conflicting reports of the proceedings. this was the scene as congressional lawmakers met. one thing we do know is that the fourth day of discussions ended in stalemate and that a fifth day of talks is planned for today. now, this man, house majority leader eric cantor says that when he proposed a short-term deal to raise the debt creeling which is something the president opposes, mr. obama became agitated and said he had sat there long enough. now, according to cantor, he claims that the president cut him off by saying i'll see you tomorrow and then walked out. well, a democratic source tells it a little bit differently, saying that the president challenged mr. cantor for, quote, talking out of both sides of his mouth. now, this is why tensions are high. nearly $14.3 trillion of debt, that limit will be reached on august 2nd if congress refuses to raise the debt ceiling. that would have ripple effects around the world. if that doesn't happen, the u.s. will officially run out of money. cnn's jessica yellin is in washington. >> the president sort of told the entire group that this is exactly what americans think of as washington at its worst, washington catering to the base, catering to politics, putting their own political future ahead of doing important things and taking on the big issues. and that he called on the group to take on this challenge and then called the meeting to an end. no matter how you read that, it's clearly an increase in tensions on day three of these debt negotiations. with no sign of real progress with the clock ticking. and i do have it confirmed that this president really did say, you know, with my presidency at stake, i will not yield on this issue. >> the longer the deadlock goes on, the more the world is beginning to worry. moody's put america's credit rating under review on wednesday, hinting at a possible downgrade. that follows similar action from the other two big ratings agencies, standard & poors as well as another agency. ben bernanke warned that congressional lawmakers and he warned them what could happen if they run out of time. >> fairly soon after that date, there would have to be significant cuts in social security, medicare, military pay or some combination of those in order to avoid borrowing more money. if in fact, we ended up defaulting on the debt, or even if we didn't, i think it's possible that simply defaulting on our obligations to our citizens might be enough to create a downgrade in credit ratings and at higher interest rates for us which would be counterproductive, of course, since it makes the deficit worse. >> put simply, cuts would have to be made from social programs to paychecks. one estimate is half of the government's 80 million monthly payments would not be made. the effect of a default by the world's largest economy would be felt around the world as well and the impact on the stock markets could prove catastrophic. furthermore, the reputation of the u.s. would be badly tarnished, even if bond investors continued to be paid, investors and the ratings agencies wouldn't take it lightly when the treasury had to delay payments elsewhere. that's the focus right now in washington. while in europe, nina, the focus on europe and trying to push the austerity package through. >> it's true. a lot of people are in denial about whether or not we'll see countries like italy default. nevertheless, europe is fighting its own crisis, debt crisis, on numerous fronts. as investors seek a safe haven for their money. the failure of some of these european leaders to so far agree on a bailout package for greece, that led fitch to downgrade to ccc, the lowest you'll see anywhere. the euro zone leaders held an emergency meeting on friday. that meetings seems to have slipped and may have been put in the cards for next week. i'm in rome at the moment. the government on the other side of town, towards my right, will soon begin debating -- will be hold be a $7 billion bid auction. later on today it will be debating a 79 billion euro austerity package, crucial to this country. as the senate begins that debate, this country's own debt stands at no less than $2.6 trillion. that really gives you an idea of the magnitude of the kind of scale of what we're talking about here. there's a lotali alilot at stak. of course, if italy were ever to default and fail to pay its debts wouldn't just be international sophisticated investors who would be affected. it would also be the average person on the street. now, the italians say they really don't want austerity but they do realize it's time to make sacrifices. rome, a city famous for the sweet life, no amount of sugar can mask the bitter pill the italians will soon have to swallow. at this cafe, one customer tells me she's worried, very worried. she doesn't think the politicians will be able to get italy out of its situation, a situation she says which is difficult for other european countries. years of easy living and fraught politics have left italy with a debt burden equal to 120% of its economy. everyone agrees, something must be done fast but it's less clear exactly where the ax will fall and when emergency reforms will make it through parliament. italy's finance minister is hoping to push the proposals through on friday, a record speed in a nation famous for its endless political debates. and that's much to the delight of the business community. >> we are all working together and i think and i hope this will be enough to say to america, italy is there, the government is there, entrepreneurs are there, we want to work for zero deficit, cap public spending and go back to growth, which is absolutely very important. >> reporter: as italy's bankers converge upon rome for the annual summit, the timing couldn't be more apt with this country's debt crisis grabbing headlines far beyond its borders. the word on everybody's mind here is austerity but not default it seems do you think italy will default on its debts. >> i see zero chance. >> reporter: in unity, prime minister silvio berlusconi has warned without the necessary measureses, this country will go back 20 years. for the man on the street or in the cafe rather, that would seem no bad thing. >> translator: yes, i am a bit nostalgic. >> reporter: right. as you can see there, the italians realizing that it is time, perhaps, to wake up and smell the coffee. let's take a look at the austerity measures that will be going through parliament in two stages over the next two days. today, we're going to see the government trying to get the bill through the senate which is the upper house of parliament, they have a bigger majority there. it stands more chance of getting through. then they'll be tackling the chamber, the lower house of parliament. what does the bill include? it includes caps on guilded pensions, generous ones in italy, increased contributions for health care. health care has traditionally been free for italians. duties on securities and investments. the italians are known for being big savers. privatizations of state entities such as, for instance, the post office and the train network. pauline, we're talking about cuts here. the total package was supposed to be 52 billion just a couple of days ago. now it has risen to in excess of 79 billion euros. we'll see what happens later on today in parliament. pauline? >> yes. i've already read, nina, politicians may take a pay cut by as much as 50%. 10 we'll see what happens. this is certainly a critical time for a country with sluggish growth but high debt. coming up next on "world business today," first he lost a up in and then his bid for bskyb turned to custard, turned sour. now to top it all off, rupert murdoch is under scrutiny in the u.s. we'll bring you more details on that in just a moment. active naturals wheat formulas target and help repair damage in just 3 washes. for softer, stronger... ... hair with life. [ female announcer ] nourish plus. only from aveeno. from cnn hong kong and rome, this is "world business today." welcome back. >> newscorp's high-flying attempt to take control of bskyb it seems has come firmly crashing back down to earth. rupert murdoch withdrew the bid for bskyb on wednesday. that was amid the scandal at newscorp international. it must have been a tough one for him. >> reporter: oh, yeah, completely. we were all told he was desperate to get his hands on the remaining shares, 60% of sky that he didn't own. and it will be a bitter climbdown for him. one he was facing the reality that in the political climate that was developing where all the main parties were opposed to that takeover going ahead. it was just kind of unrealistic for them to pursue that right now. not saying perhaps they don't come back and have another go at it in six month's time. in terms of what will happen today, there's momentous developments today as well. right now is the deadline, we're told, fora bekaa brooks, the embattle embattled chief international to respond before a committee of politicians on wednesday. we're told 9:20 is the latest she could respond. after that who knows what will happen after that. theoretically she could be forced to attend by the sergeant at arms' office which is sort of an old ancient office here. they've never, in recent memory, had to frog march someone into committee but that's a possible prospect if she decides she won't turn up or answer the invitation. they cant force rupert and james murdoch to turn up because they're not british but rebecca brooks they can. >> dan rivers joining us live from london. many thanks. in the u.s., members of congress are calling for a home grown investigation into hacking and bribery allegations against newscorp. u.s. senator jay rock feller is among those who's asking the justice department to look into reports that newscorp executives allegedly bribed police officers. if americans were involved, rockefeller who you see there, says the company may have violated federal anti-bribery laws. members of congress say they're angry of reports that members may have hacked into the phones of 9/11 victims and their families. newscorp's television operations earn $15 billion a year for the company. that's largely thanks to the success of the fox network and hit shows like "american idol," "24" and "the simpsons." newscorp also owns fox sports network and several television stations from new york to los angeles. you can see a map of all the local tv stations fox owns, they're called fox o & os in the u.s. each one of these antennas represents a station under murdoch's control. newscorp also owns and operates fox news, fox business network and other cable networks, including the international geographic channel and fx. let's take a look at the film division that murdoch owns. it's also highly lucrative, bringing in more than $7 billion a year. and this is largely thanks to the success of popular 20th century fox films such as "avatar," as well as the "x-men" franchise. they have titles like "the wall street journal" and "the new york post." and newscorp also owns the u.s. publisher harper collins with such famous authors as jrr tolkien and c.r. lewis under its belt. nina. >> knows are formidable names to build up over a lifetime of just one person. news corporation and bskyb are feeling the fallout of all of this and this collapsed takeover bid to be precise. banks that advised these two companies during the takeover discussions could stand to lose between $80 million and $90 million. that's the amount they would have received once the deal between news corporation bskyb had been completed. they have little chance to make that back soon. investors on the other hand did seem to welcome the news, the news that news corporation was going to be walking away from this bskyb deal. the common stock closed up in excess of 3% on the stock exchange in sydney just a few hours ago when it last traded. that in turn follows a rise of 2% on the nasdaq wednesday with newscorp shares listed there. it closed at $16.36. strong reaction from investors, perhaps voting in the other direction to rupert murdoch's suspected own ambitions because, of course, as dan rivers was telling us, bskyb is a lucrative company and he did want more of the earnings from that company. and also, nina, there's more to this story. there's a footnote to this whole sordid saga. members of the family that sold dow jones and "wall street journal" to murdoch said she wished they hadn't. christopher bancroft said if he had known of the phone hacking before the sale he would have pushed harder against it. more developments in this saga of murdoch and newscorp, nina. i'm sure we'll hear more in the next couple of days. >> we will indeed. pauline, we'll be taking a break. within we come back we'll have a look at the latest developments in the technology world, including the most requested movie title at netflix right now, it is called "days of rage." more of that after the break. welcome back. you're watching "world business today" from cnn rome. let's bring you up to speed on the big stories out of the tech secretarier this thursday. is the personal computer going the way of the videotape recorder? pc shipments in the u.s. slumped 5.6% in the second quarter, compared to a year ago. they gained only 2.3% around the world. which is about two-thirds less than forecast. analysts point to one formidable new competitor and that's the tablet. speaking of tablets, "the wall street journal" reports that powerhouse online retailer amazon is planning a tablet computer for release in october to compete with apple's ipad. the paper says amazon hopes customers will use its tablet to buy and rent digital content from its website. and customers of the u.s. video service netflix are howling mad over the company's recent decision to sharply raise some prices. thousands of complaints have flooded the netflix facebook page and thousands more have sounded off on twitter. wall street liked the move. netflix's shares hit an all-time high on wednesday. nina? >> you're up to date with the technology headlines there, thanks to pauline. we'll be back as "world business today" continues from cnn rome and hong kong after this short break. welcome back. you're watching "world business today" live on cnn. from rome and hong kong, i'm pauline chu with nina dos santos. welcome back to "world business today." on this thursday in italy, italy is str