No one was disappointed. Our Washington Bureau chief darren gersh tonight on what happened and what comes next. Reporter by now, you know how this story goes. After the lastminute meeting at the white house, the speaker emerges grimfaced. The discussion about revenue in my view is over. Its about taking on the spending problem in washington. Reporter cut to the White House Briefing room. The president says hes been reasonable. Some tax cuts, some spending cuts and some entitlement reform. Thats his prescription for budgetary pain. And since republicans wont accept it, the president says the middle class is about to feel the pain of those automatic spending cuts known in washington speak as the sequester. I dont anticipate a huge financial crisis, but people are going to be hurt. The economy will not grow as quickly as it would have. Unemployment will not go down as quickly as it would have and there are lives behind that. And thats real. And its not necessary, thats the problem. Reporter but wait, this movie already has a sequel. March 27, the government runs out of funding and without congressional action will have to shut down most operations. Its unclear whether the sequel will have a happy ending, but it will certainly be a cliff hanger. Heres the backstory. The real fight is over what government should really do . Bill hoagland worked with republicans for 30plus years to craft their budget strategy. He says the sequester slashes at categories of Government Spending that have been cut and cut again. And i think were going to find that thats where the investments to the future are. Thats infrastructure, thats science, thats technology, thats education. And i think we will start to realize that were really jeopardizing longterm Economic Growth by cutting back on investments, but retaining current consumption if you like. We have to change the mix there and maybe that will start to resonate out there with the American Public and maybe then well be able to move forward with some sort of more reasonable fiscal path to the future. Reporter by easter, hoagland expects the sequester pain will probably be bad enough to force some sort of compromise, if not how bad is it going to be . What im hearing from a lot of people is the feeling this whole sequester thing is way overblown, is it . Okay, play the washington number game with me for a minute. You heard the 2 number. Oh, its only 2 of federal spending over the next 10 years. Its no big deal. But theres another washington number which is because of the way the sequester is structured, its 10 to 13 in some programs this year. And thats going to cause some pain. Susie all right, well, talk us through this a little bit. I mean, you have said that the automatic spending cuts are going to be gradual. They officially kick in at midnight tonight. So talk us through what happens after midnight. Reporter right, its kind of like explaining the indefensible but heres how it goes. The government is going to have to start deciding, because its going to be real, who gets furloughed. Theyre going to have to send out letters. Theyre going to say, hey, we think youre going to be furloughed. Theyre going to have to decide which contracts they have to cancel. It will take them time to notify people. All that is going to start unfolding over the next couple of woks. Then people will find out and actually be furloughed. The money will come out of their paychecks, the contracts will be kansasled, the pain will be felt. Susie darren, youve been covering so many of these washington crises over the years. So you know the mentality. Who is it going to take to get problems and democrats and the white house to sit down and really hammer out a deal to get us out of this mess . Reporter will folks who are watching this at home are going to have to get really upset, and thats what both sides are now counting on. Theyre counting on either theyre going to win the Public Opinion battle or the president will win the Public Opinion battle. One side will be proven right. But that pressure is whats going to force a change or well have the sequester for the entire time. Susie all right, well we can see what happens on monday at least, or saturday and sunday as well. Darren, thanks so much. Washington bureau chief, darren gesh. Susie always a pleasure. Tom still ahead, best buy rings up a better than expected holiday season. Whats next for the struggling electronics retailer, now that its founder has given up on taking it private. It was a volatile end to a wild week on wall street. Stocks opened sharply lower today, but quickly rebounded on positive manufacturing news. The dow added 35 points to close just 75 points from its all time high. The nasdaq tacked on 10 points and the s p 500 gained 3. 5. Still the 800 pound gorilla on wall street today was the spending cut showdown in the nations capital, known as sequester. Suzanne pratt reports. Reporter there was little evidence here today at the New York Stock Exchange of the looming sequester in washington. Even as the clock ticked closer to those Government Spending cuts it was business as usual. Stocks were bought and stocks were sold. Big board Trader Jonathan Corpina says hes not surprised by the nonchalance of investors. I think both parties have expressed enough insight to give us the idea that nothing was really going to get accomplished today or up to and leading to today that was really going to have a big effect on our economy or on our markets. Reporter speaking of the economy, it turns out investors today were more interested in some favorable Economic Data, suggesting u. S. Manufacturing isnt too bad after all. That took some of the sting out of a report showing the average income of most american is at the lowest level in two decades. Yikes and, corpina thinks its the economy in the u. S. And europe thats going to push and pull stocks in the coming weeks, not american politics. Next week weve a lot of Economic Data thats on the plate. Weve got an unemployment number coming out at the end of the week next week. I think thats going to help us give a little bit on an insight as to what the mentality of the investors are. Reporter others say investors will only shrug off washington for so long. If theres no deal by march 27 and the government shuts down, the stock market will undoubtedly show it. Suzanne pratt, n. B. R. , new york. Susie as darren mentioned, those automatic spending cuts could hit nearly 1. 5 million jobs. While that could push the Unemployment Rate higher, many u. S. States were actually adding jobs in 2012. Ruben ramirez breaks down the numbers. Reporter there were fewer people standing in unemployment lines in 2012 as the vast majority of states saw their jobless rates drop. In new data out today, the average Unemployment Rate dropped in 46 states and the District Of Columbia last year. It stayed the same in New Hampshire and pennsylvania and was up in just two states, new york and new jersey. North dakota continues benefiting from the shale energy boom with the lowest state Unemployment Rate in the nation for the fourth year in a row. Also making the list, nebraska and south dakota. And the states with the highest unemployment include two where the housing collapse hit full force. Nevada and california. Rhode island had the third highest. Regionally, the west was the only area to have an Unemployment Rate above the national average. The northeast sits relatively close to the national average. And the two bright spots for job seekers were the midwest and the south. Ruben ramirez, n. B. R. , washington. Tom best buy wont be bought out, at least not by its founder. Richard schulze ended his efforts to takeover the company. That news came as the retailer lost less money than feared during the holiday quarter, as it continues to turnaround its business. Erika miller has a closer look. Reporter finally, some good news from the Worlds LargestConsumer Electronics chain. Yes, the Company Reported a big loss of 409 million in the latest quarter. But thats a lot better than the 1. 7 billion it lost in the same quarter the prior year. But most analysts we pleased with the results. I do think the company has still got a long road ahead of itself. I do think they face very serious competition from the likes of amazon, costco and wal mart. But i do think the company is in a better place today than it was a year. Reporter in addition, the companys founder Richard Schultze appears to have abandoned plans to buy the company, providing more certainty about leadership. Investors are growing more confident current c. E. O. Hubert jolys turnaround plan is working. Among the positives in todays Earnings Report better than expected profit margins, as well as an 11 increase in u. S. Online sales. And earlier this week, the Company Announced a 725 million cost cutting plan. Best buy also plans to revamp its website. So, is now a good time to buy the stock, which is up more than 40 this year . Right now i think the shares might be a little bit over valued. Theyve had a nice run. Reporter but bestbuys turnaround will not be easy. The company gave a cautious outlook got the first quarter, because it is ramping up investments. And a quirk of the calendar means there will be one week less sales this quarter compared to last year. Erika miller, n. B. R. , new york. Susie more cars and trucks zoomed off show room floors last month, as februarys sales moved decidedly higher. Ford motor lead the way, sales there up over 9 , g. M. Up 7 chrysler sales rose 4 . As for imports, toyota fared the best up over 4 , honda sales fell 2 , but v. W. Sales notched higher by 3 . The head of volswagen America Jonathan browning fears the fast start to sales this year will moderate, tom, as the sequesters cuts drag on the consumer. Tom i guess it depends on your vantage point. Fords sales chief said he think the sequester will do little to derail sales. It comes down to the availability of capital to purchase the cars. A bright spot for the socks today. The major indices overcame some morning session to end with small gains, capping a volatile week. The s p 500 began the session by falling 1 as personal incomes fell by the most in 20 years in february. But encourage data from u. S. Manufacturers helped cut the losses and the index finished out the session up a fraction. Markets began the week with profit taking and big drops, but by todays closing bell the dow industrial average was up 0. 6 this week. The nasdaq gained 0. 3 . And the s p 500 is 0. 2 higher tonight compared to a week ago. Volume today was moderate. 742 million shares traded on the big board. 1. 9 billion traded on the nasdaq. The Health Care Sector put up the best gain among the major sectors, rising 0. 8 . The Consumer Discretionary added 0. 6 . Apple held back gains in the broad market, as a federal judge cut apples payday over patent infringements by samsung. The judge cut apples 1 billion award to just under 600 million. She overturned the patent ruling involving several of the samsung devices apple accused it of ripping off its patents and the judge ordered a new trial for those devices. Hedge Fund InvestorDavid Einhorn dropped his lawsuit to stop apple from a specific shareholder vote. He got the judge to bar the vote at this weeks shareholder meeting. Shares fell 2. 5 , pushing the stock to a new 52 week low. Shares are down 20 since the first of the year. Retail stocks helped the Consumer Sector with a combination of clothing and high end jewelry. The gap rose 2. 9 after its strong holiday earnings season. This is gaps highest close since early december. Tiffany rose 2. 8 to a 10 month high. Walt disney led the gains for the dow industrial average, rising 1. 4 , closing just below its all time high. After the closing bell the wall street journal reported disney was talking with news corp over their hulu joint venture online streaming video service. Each own about a third of hulu, but have differed on their Business Models for the service. News corp wants to charge subscription fees. Disney wants more advertising. The maker of the davinci surgical system, Intuitive Surgical continued to see big swings for the second day in a row. Analysts came to the defensive of the company after the food and Drug Administration announced it was looking at the companys safety data. Shares rebounded eight and a half percent after a big drop yesterday after the f. D. A. Disclosed its probe. At least three investment all five of the most actively traded Exchange Traded products were higher. Even with the small gains in the broad market, the s p 500 short term volatility note was also higher, gaining 1. 5 and thats tonights market focus. Tom its begun. Taxes have gone up and Government Spending growth will come down. While painful, our Friday Market monitor thinks the sequesters spending cuts will ultimately be a positive for the u. S. Economy. Randall eley is president of the edgar lomax company. Hes in washington where the sequester is hitting here tonight. How about the debt debate now, randall . Does it change your investment horizon if were talking about things that are happening in the very shortterm future . No. In fact, i think in the long run, its good for our investors who need to take a longterm perspective on investment. So much of investment action thats been taken in the last year has been based on expecting the government, the federal government to step in and Save Companies and in fact create business for them. Now i think investors are will have a chance to realize increasingly theyve got to look at what those companies are able to do on their own. Tom but with so much uncertainty when it comes to fiscal policy taxes, for instance, and Government Spending certainly beyond this fiscal year, how do you skill keep that viewpoint on the longterm horizon . Its difficult. But the fact of life is, this is not the first time in American History wove faced these kind of difficulties. The difference between then and a couple years ago, though, i think most people realize weve got to do something. The federal debt is now a bit larger than our Economic Production independent last year. So we cant continual having the federal government run budget deficits that will have that debt run up with no end. So you notice taxes did go up in january. Were no longer talking about the possibility. It appears some sort of spending cuts are taking place, even if they will be watered down in the next year. Tom certainly not the first time weve seen this, nor, dare we say, the last time weve been to this rodeo here. Lets talk about some investment ideas. You like really big caps here, intel being one of those, the stock down here in the low 20s. But its one of those Technology Companies well known and a 4 yield, twice what the government i. O. U. For 10 years is paying. Thats right. And that yield is solid. Theyve got the earnings to back it up with the p e ratio looking at the last 12 months of earning abou at about 10. Youre talking great competition to the 10year treasury. Tom getting paid and a bit of value in the largecap technology. You also like exxon mobile. Its trading closer to the higher end of its range. We have seen oil prices come off their high. Does that concern you . No, exxon has run a very conservative business but has run it relatively smartly. As far as building a steady, earningsgenerating machine. So we expect exxon to continue doing that. Its p e ratio is only a nine. So this company should continue producing for investors for a long time. Tom a singledigit ratio there. You dont see that with big companies. How about wells fargo. With the Housing Market rebounding yao seen the stock rebound, too. Thats right. And one of the more solid of our large banks when it comes to our financial structure. This isnt a company that has been caught up, at least not as badly, in the huge mortgage writeoffs. We have not seen questions about its very survivability. I think we have a player here that will be profitable. Tom its seen a lot of activity with that refinance business weve seen over the last several months. Lets go back to your previous picks, you liked walmart down about 4 , and the Travers Company up 17. Fief and you still like walmart despite the fact you havent made profit yet. Why . Walmart, if you remember, not only was it profitable when the economy was expanding, but when the late recession occurred late 2008, into 2009, walmart did quite well in comparison to most retailers. Theyve got the capability to believe a player, whatever the economy. Their stocks simply declined on a temporary basis but its got great potential. Tom do you owning everything we mentioned total, randall. We do. Tom randall eley from washington, and the edward lomax company. Susie a look tonight at the impact of technology on healthcare. From c. T. Scanners to supercomputers, the vast u. S. Healthcare industry relies on the latest advancements to bring us breakthroughs in medical care. The streets james rogers reports. Reporter the latest technology is crucial in fighting diseases like cancer. But also presents a massive americas largest companies. Were here at Long Island Jewish Medical Center to see how advanced technologies are revolutionizing health care. G. E. s healthcare business g