this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. the clock is ticking for the mid-term elections. americans on main street are eager for their voices to be heard. and tom, investors on wall street are waiting for a post- election market rally. history shows they might just get one. >> tom: susie, mid-term elections are classic case studies for the stock market. in the third year of a first- term presidency, which would be next year, stocks have rallied every time, since 1939. the "stock traders almanac," which tracks these things says in years where there's a democrat in the white house, stocks have rallied more than 21%. >> susie: this time, the run up might have come early. s&p strategist alec young notes the dow has surged more than a thousand points since september. >> there is building anticipation that the republicans will take the house. so certainly i think that's probably factored into the market and viewed as a positive given tremendous tax and regulatory uncertainty that is currently hanging over a sluggish domestic recovery. >> susie: two of the most closely watched senate races in the country are in illinois and florida. both are races without any incumbents. and with both states struggling with double-digit unemployment, those races are all about the economy. as we continue our coverage, "mid-term 2010-- it's the economy." we bring you two reports. we begin with diane eastabrook in illinois, where the focus is on regaining thousands of lost manufacturing jobs. >> reporter: shuttered factories have become part of the landscape in rust belt states like illinois. in the last two years, the recession has claimed more than 100,000 manufacturing jobs here. job search boot camps are attracting twice as many displaced workers as they did a year ago. some like craig radcliffe want more help from washington. >> i would think that maybe at a time like this you would want to open up to more ideas and not really worry about how many people think you should do this or that. >> reporter: in illinois, jobs and the economy are central issues in the campaign for the u.s. senate where republican congressman mark kirk is running against democratic state treasurer alexi giannoulias. some illinois manufacturers call this election the most important one in decades. >> the policies that we've seen implemented in washington over the last two years are killing american business. >> reporter: bert miller is the president of phoenix closures-- a 120-year-old firm that makes plastic container caps. miller wants less government regulation and tax cuts extended for everyone, including the wealthy, something kirk favors, but giannoulias opposes. >> if you start raising those taxes, you are going to find that there is less money to invest in capital equipment and things like that. and if there is less money to invest in those things that's an autocataytic slowing of the economy. >> while the economy and jobs loom large in illinois this election year, so too does scandal. both of the state's u.s. senate candidates are battling controversy that political scientists say could overshadow other issues. >> reporter: for giannoulias it's the failure of his family's chicago bank which allegedly made loans to the mob a decade ago. for kirk, it's the embellishment of his naval record. northwestern university political science professor victoria defrancesco soto thinks these issues could influence voters more than the economy. >> the economy has been going down hill in illinois for a long time. we're the rust belt, so people were consciously aware of what was going on unlike a nevada. so, they're in the midst of an economic downturn, but they don't want to add insult to injury by having someone who is a liar or who has links to the mob. >> reporter: despite their reasons, soto thinks the way illinoisans cast their votes in this election could send a strong message to the president. since it's for his old senate seat, the outcome could be viewed as a referendum on his policies. diane eastabrook, "nightly business report," naperville, illinois. >> reporter: this is jeff yastine. foreclosure signs. political signs. the two go together in florida, where housing defaults are the fifth highest in the nation. that, combined with a 12% unemployment rate, and an economy just limping along is driving the sentiment of voters. like tracy flett. he owns a south-florida based roofing company which has had its share of layoffs. he's also one of thousands of people who went to the polls for early voting this week. >> i'm looking for someone who cares about balance, someone who's looking out for the middle class; i'm looking for someone who's doing the right things for big corporations, but also the right things for the small business owner. and i'm looking for people who care. >> reporter: the right things for business are key factors in the three-way race for florida's open senate seat. republican marco rubio has been hammering away with a low-tax message that's made him the front-runner. republican-governor turned- independent charlie crist, and congressman kendrick meek running a distant 2nd and 3rd. rubio has benefitted from major support and endorsements from national business groups, like the u.s. chamber of commerce, and the national federation of independent business. but the senate race hasn't seen any endorsements from the florida chamber of commerce. its president and c.e.o. mark wilson says the group's members, more than anything, are looking for policy predictability in washington. >> the private sector, when they know that they're not going to change our taxes around, when they're not going to force benefits on small businesses that they can't afford, when they feel that it's safe to invest again, and they feel they can invest in employees, technology, and productivity improvement, then we'll see job growth in this state and in this country, that we haven't seen in over a decade. >> reporter: professor charles zelden of nova southeastern university, say in a state like florida ardent pro-business messages, like low taxes, are an especially winning formula. but they come with a catch. >> the problem is what do you do for less income coming in? what do you cut? the problem is we don't want services to be cut. we want a stimulus that keeps our teachers working, that keeps our cops working. keeps our firefighters working. but we also don't want to pay more taxes. you can't do both. >> reporter: as this trio of senate candidates hit the homestretch, florida residents will soon make their priorities known. jeff ytine, "nightly business report," miami. >> tom: here are the stories in tonight's n.b.r. newswheel: a mixed end to the week on wall street, the dow fell 14 points, while the nasdaq added 19 and the s&p 500 was up nearly three points. trading volume did something on the nyse and something else on the nasdaq and it goes here. u.s. treasury secretary timothy geithner is urging limits on trade imbalances for the world's biggest economies. speaking at a gathering of g-20 finance ministers and central bankers in south korea, geithner said he thinks g-20 nations need to keep their current-account balance below 4% of gross domestic product. after weeks of protests and strikes, the french senate has approved a measure hiking that nation's retirement age from 60 to 62. final approval of the change is expected monday. france's unions say the protests will continue, despite today's vote. >> tom: still ahead, sailing the seas of a weak u.s. economy. we bring you illustrator david gillette's latest ink-onomics. >> susie: big tech companies are sitting on billions of dollars of cash, including intel. earlier this week, the chip giant announced plans to spend $6 billion dollars on research and development. it's also forking over more than $7 billion to acquire internet security firm mcafee. stacy smith is the chief financial officer at intel. he tells "nightly business report" using cash wisely is good for intel investors. >> i think companies have a moral obligation to do the right things for their constituencies and for us our constituencies are our owners, so we're always looking at how do we create shareholder value. our employees and then where we have operations we want to do the right things for the countries and the environment and that constituency as well. >> susie: on monday, you can see our entire interview with smith. he explains how intel makes decisions about its $20 billion pile of cash. >> susie: it was a mixed day for the markets but for the week they were up. that makes three in a row. some nervousness about that g-20 meeting of finance ministers this coming weekend. >> tom: yes, that communique will come out before the market opens on monday, but the focus remains on earnings this week and likely the next couple of weeks. let's get you updated on our market focus. >> tom: this was the first of three peak weeks for earnings and those earnings helped the major indices clock another week of gains. the dow added six-tenths of a percent thanks to gains on monday, wednesday and thursday. the nasdaq gained four-tenths of a percent with gains four of the five sessions. the s&p 500 is six-tenths of a percent higher tonight compared to a week ago. a mixed stock market today, with technology and energy stocks leading the gainers. the dow was hurt by a couple of earnings reports. verizon was one of those. results were better than estimates, but down from a year ago. even though it predicted its earnings for the rest of the year will be at the high of its guidance, the stock sold off. shares fell more than 1%. it was the second biggest drop on the dow. it's now at a one month low. one concern: far fewer new wireless subscribers than rival a.t.&t. the other big dow loser was american express-- dropping 3%. earnings last night were better than expected but loan volume remains low, fueling worries about revenues. oil service stocks helped energy put in the best sector gains for the day. among the leaders, schlumberger. earnings beat estimates after excluding the impact of its acquisition of smith international revenue jumped despite the deepwater moratorium during the third quarter. the stock added more than 5% on heavy volume. this is its highest price since early may. earnings were also at play in technology, helping the top three sector gainers. all software makers. compuware was up more than 12% on strong earnings. it's at a two year high. c.a. jumped 5% to its highest price since may. strong earnings, especially in north america helped last quarter. and citrix systems bounced 4%. it had a stronger than expected outlook. investors had an appetite for restaurant stocks, from pizza to mexican to cheesecake. b.j.'s runs pizza and brewery restaurants. strong results and positive analyst comments fueled a 17% run today in shares. chipotle mexican grill boosted its same store sales outlook after strong earnings. shares added 15%. both of those are at all time highs. the cheesecake factory got an analyst upgrade after strong earnings. shares jumped 8%. five initial public offerings this week, including two more chinese-based firms. tal education started at $10. it provides tutoring services in china. shares continue jumping. shang pharma does research for drug makers. it began trading at $15 per share and closed below that price tonight. three others-- vera bradley's i.p.o. was at $16 per share and has had a big run. it makes designer handbags. debit card company net-spend had investors spending. it started at $11 dollars, closing tonight over $13. and bravo brio is the first american restaurant to come public since 2006. it started at $14 per share and is higher tonight. and that's tonight's market focus. >> susie: as we've been reporting, corporate america is feeling better about earnings. investors have been rewarded with a market rally. but there seems to be a disconnect with what most americans are experiencing: lost jobs, lost value in their homes and on and on. with that in mind, we bring you another installment of "inkonomics with david gillette." david's an emmy-winning illustrator and essayist at twin cities public television. tonight, he ponders the question: has our economic ship sailed? >> if you're on a mission to understand the economy, there's no better place to start than your own back yard. for this cartoonist, we're talking minnesota, a small community just west of minneapolis, and resting on the shores of lake minnetonka, a fresh water playground which incidentally emptys itself into a creek, flows through the city, and then drops over the falls. basically it's a land where everything starts with minne, the dakota word for water. and when people in this part of the world want to flex their financial muscles, they spent a lot of money on the minne. it's an economy measured in boats. but here's the surprising part. no matter what you may have heard about the sour economy, there are still plenty of boats on lake minnetonka. on the surface this makes no sense. if you turn on any electronic device, including practically the toaster, you're told we're either in the middle of, emerging from or returning to a recession. for most people this implies a lack of jobs, a lack of money, and you would think a lack of time for practicing the principle of displacement. but there they are, boats. and according to the people who take them to market, the bigger they are, the faster they sell. that's why out of all the story lines we're knitting around the contemporary american economy, wasteful government spending, inexceptional education, foreign competition, i'm hanging my life jacket on the resurgence of financial stratification. you see, according to the unique glacial pock marks i call home, this country isn't suffering from an overall shortage of wealth. it's just that the money we do have is disproportionately con send freighted in a handful of 40-foot weekend cruisers, and that's where i'm going to stop. you see i'm not stupid. i don't fully understand the economic forces that allow the rich to get richer while the not rich get not richer. but i do understand human nature. and if i go on national television and make it sound like the entire economic collapse rests on the shoreds of the people who buy boats, my chances of spending a day on the lake are going to end up in the drink. >> susie: so tom, do you think ben bernanke knowthe minnetonka indy indicator? maybe we should tell him about the water effect on the economy? test as long as those boats are seaworthy it may be a lot easier to refloat them, certainly, that's definitely the truth. let's get you update on what we're watching for next week. our friday market monitor is james paulsen, chief investment strategist at wells capital management. we'll get an update on housing from the september reports on new and existing home sales. and the first report on the third quarter g.d.p. is out. monday: our shoptalk series look at ikea and how its eco-friendly policies are giving it a competitive advantage. >> susie: the u.s. postal service still wants you to pay more for stamps. it plans to appeal a regulator's decision that denied permission to raise rates to 46 cents a stamp. the postal service says the increase is needed because of losses caused by a drop in mail volume. it blames it on the weak economy and a shift to email and online bill paying. >> tom: federal regulators are getting involved in the fee dispute between cablevision and news corp. the federal communications commission today sent letters to the heads of both companies. they've been asked to describe how they're negotiating in good faith. about three million cablevision subscribers in new york city and philadelphia have been cut off from fox programming. the blackout will enter its second week tomorrow if a deal isn't reached. >> tom: with the federal reserve poised to try to get more money into the economy, tonight's market monitor thinks that means inflation. mark skousen is editor of the market letter "forecasts and strategies." he joins us tonight from the nasdaq. >> nice to see you, welcome back. >> good to be with you. >> tom: so how much inflation and when do you think we'll see it? >> i think we're going to see inflation down the road. but we have a triple play right now or hat trick, and i'm very bullish. because what we have is low interest rates, we have low price inflation, and we have easy money by the fed. and the fed has deliberately decided to increase inflation to two to 3%, inflation targeting, that's what ben bernanke cut his teeth on, ask he's trying to impose it. >> tom: but we haven't seen any of that inflation really. instead we've seen disinflation. still positive numbers, but very very small. >> yes, and that's because the economy is so sluggish, particularly in the united states, unemployment really high. so they're buying time and that's great for us as investors because prices for investors are low, and it's an opportunity to be buying and taking advantage of this very unique scenario, because inflation will be coming back, gold is a great indicator of future inflation, and look what that's doing. >> tom: yes, over $1300 an ounce. so what markets do you like if the fed is successful and is able to reignite inflation in the months or years ahead? >> as we can see this has been very bearish for the dollar, but it's very bullish for stocks, bonds and commodities. i'm fully invested in all three of those areas. >> tom: so you still like fixed income, even though interest rates are so low? >> well, fixed income, no, not treasury bills that only pay 2 or 3%. what i'm talking about is high difd paying stocks, the kind that i've been recommending to your viewers. >> tom: sure, even though you do like difd, your first new pick here, you're clearly not afreight of volatility, this is a new stock pick, rare element resources. we're going to take a look at a chart here, this owns rare earth element mine in wyoming. ree the ticker symbol. it's a source of some building tensions between the u.s. and china, are you willing to play that geo political risk? >> this is a major geo political risk, and i will warn your viewers and they can see from the chart this stock has lrp doubled, quadrupled in value, sites a risky speculation. but this problem is not going away. china is trying to corner the rare earth market, which is this group of 12 to 17 elements that nobody has ever heard of before that is critical in military applications and in hybrid cars, in cell phones, computers and you name it, and they control 97% of this market. >> tom: let me ask you what kind of price target do you have, what kind of holding period for a stock like that? >> it's a micro cap right now, a lot of people think this is a billion dollar company, so it could possibly triple in value, but it is extremely volatile. >> tom: a new pick with a deep water energy driller, close to a new high. why choose this deep water driller? >> well, because they were hurt by the bp scandal and they are still recovering from it. they have a very nice difd yield of almost 9%. and they're aggressively expanding. i think it's a very good play on the expanding energy area. >> tom: okay. april 23rd you were last with us. you had three picks back then, two of them, the i shares exchange traded fund following hong kong, that stock up 17%. american capital, a private qist firm, up by almost 6%, these are stock returns only. do you still like these two? >> yes, i like hong kong because it's only selling at 15 times earnings, 3% difd. it is the center of growth in asia. i like american capital because there's insider buying recently, and it's still selling below bock. that's a great story. >> tom: you also like epb, a nice dividend on top of that.