Cash For More Than 500 Banks

Suzanne O'Halloran analyzes the morning business headlines.
10:11 | 12/21/11

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Transcript for Cash For More Than 500 Banks
You're watching live coverage of the opening bell on ABC news now ringing the bell this morning some real character isn't paying that six. With -- about half numbers of New York City Ballet that's. Sites -- there is the opening bell for this Wednesday December 21 hello ivory when I'm Stephanie -- in New York Dow futures just turned lower this morning following yesterday's job. Big job. Of 337 points or aiming now to discuss all the business headlines at this hour is Susanna howler and from Bloomberg TV good morning Suzanne in -- -- and I'm so let's. The major push in Europe today to help stabilize the continent more than 500 banks -- 640 billion dollars. From the European Central Bank explained the purpose of this -- yet. What ECB is trying to -- is are trying to prevent. A freezing of credit in that region and this really came as a surprise a lot of the investors -- even realize there weren't that many banks. In their region and it's really -- deal that the banks can't refuse it's cheap money. But the purpose this is to prevent. The European debt crisis from getting worse and what we decide our own financial prices in 2008 was really credit completely froze and that's what we had a lot of the Wall Street banks. Have to go to the government. Four essentially a loner some type of stimulus and that -- what we -- seeing in Europe right now efforts to prevent what we -- 2008 here in the US you can look at it as just another form of stimulus similar -- at you she -- she we're acutely three that's a lot of experts -- can are describing -- -- today big question is there any guarantees that the banks will actually use this loan. To help the hurting European economy. Yeah absolutely not and we don't know how the banks to ease money that's another part of this story that. We'll become. Bigger deal going forward and look we just. It was -- European stocks rally on the news and then. Reversed a European stocks are lower our markets had a similar reaction so investors. It. Initially composite cannot add to that me look a little bit deeper as you mentioned I don't know how the banks agony is the money and that's a real problem because it's unlikely that this move. Will present prevent a recession next year in the European region and a lot of economists actually. Our renew -- their calls for recession and that region today even that we did get that help from the ECB to certainly an interesting twist investors look at it. As the ECB trying to get in front of the problem but it's certainly not going to be -- -- there are a lot of questions about how to keep tabs on the money the banks are taking and we we -- the same questions here at home and speaking up. We've got a big banking story here in the US Bank of America has close to settling a -- with the Justice Department gives details yet this have really important story because back. America probably one of the most interesting as stories corporate stories of the year -- NA is potentially close to settling with the government's fair lending unit over. Loans made by countrywide deal -- call countrywide was purchased by Bank of America countrywide was a leading provider of sub prime mortgages. After Bank of America -- countrywide we realize of course of a lot of these mortgages were bogus and Bank of America left holding the bag so. What CEO Brian Linehan has been under tremendous pressure to do is clean up the liabilities tied -- countrywide and countrywide when investors look at Bank of America. They don't know how much all of these bad loans are gonna end up costing the bank -- -- -- -- in the billions. But they just don't know how much -- this settlement is very important because. Hopefully we'll get a dollar figure. It will help remove some of the overhang on Bank of America. And they need to really output some of these issues behind the bank can -- look at -- America. This stock this week training in the five dollar level its last about 70% of its value this year even a little bit more. And a lot of speculation. It remains around Bank of America whether or not going to be able to pull themselves out of this hole -- this to be a step in the right direction but -- of a lot of other issues as well. We talked about this before Stephanie their -- -- 30000 workers they're trying to become smaller as well so. This actually would be from our reporting probably the biggest settlement of its kind with the Justice Department. -- certainly had very important step for Bank of America at least they can close that one chapter are right in less and a half hour will be getting your numbers on existing home sales -- those great numbers that came out yesterday on housing starts. What are we looking for today. You know that maybe not so great we look at the headline number we are expected to see a minor increase. In home sales certainly about -- positive but a lot of economists particularly of those at the national association of militaries are talking about some kind of revisions that may -- in a report. They'll show perhaps a housing market. Isn't as strong as we've been led to believe in some of these select reports that we -- the housing market -- and very very steep correction and we are. Far away from where we need to be to pull the housing market out of its own double dip recession -- These numbers are going to be important just because the markets here kind of teetering. Looking for some direction now but certainly what economists are saying don't look for this report necessarily to be as positive as what we -- yesterday -- -- an -- economic reports. But. We -- the housing market does still have a lot work to do to get out of bullets and but I am certainly an important of these numbers OK let's -- Walgreen -- -- that was some disappointing earnings this morning what seems to be the problem there he didn't -- -- really interesting story -- earnings were disappointing at Walgreens is nation's largest drugstore and even losing customers have a contract for prescriptions and -- with Express -- of pharmacy benefit management plan a lot of folks are probably familiar -- that this is 85 billion dollar contract. A couple of weeks ago the two sides actually publicly said that they were fighting about the contract and renewing that contract expires at the end of the year so sense that -- has had a lot of problems in my they said today its customers are leaving they're going to other rivals and we heard front New -- call yesterday -- CBS CBS actually is going after these customers who weren't nervous. That the plan won't be grenade they did business outlaw at Walgreens. And apparently according to CBS. Walgreens stores are within a mile of a lot of CVS stores today are encouraging. Customers to switch over to CBS and predicted. That about 23 million prescriptions name make the move they also said earnings next year could be eleven cents better -- -- they're projecting because. They're going to be taking market share away from -- brain cell that we heard -- -- today the stock is -- about 14% this year this is a tough one there and -- tough spot they would like to renew that contract with Express Scripts. But as -- now what we're hearing as there -- just. There -- sudden they're not on the same. Page right now that's a big negative for Walgreens we look at the -- it's really interesting because I had -- -- didn't realize it myself but there's a fierce rivalry going not. Between these two brands and right now CBS actually shares jumped the most in three years yesterday. To continue to make headway against -- -- OK switching to attack Oracle also -- disappointing earnings. Yet that this another problem for the market today because we think -- Oracle. The world's second largest software maker there all still in the fourth. Biggest company in the NASDAQ-100 -- so this stock was looking -- -- decline potentially anywhere. Between 10% or -- depending on how the day progresses so certainly this will weigh on technology stocks today what happened with Oracle. And according to CEO Larry -- this is a great run company but. What they told us last night late last night is their big customers are not signing contracts they -- -- -- -- deals out that's a big problem for companies like Oracle because. That's how they make their money so they ended up missing -- profit and sales numbers. Today there's a lot of questions about what they're gonna do going forward to cut and manage the consciousness we're hearing from CEOs abroad and we did -- interestingly enough. Red -- and other software provider as well said something very similar the customers just don't want to sign a deal so. This is -- the end of the year we also have a Thanksgiving holiday which apparently. Cut the quarter a little bit short in terms of when executives usually son has contracts. We'll be looking into an exported to see if this trend continues but it does appear that CEOs are. Not willing to you assign any big contracts right now because there's a lot of uncertainty in the United States. And abroad and of course was going on -- moshing ten as well back at lawmakers can't come to an agreement with the payroll tax. That's this is -- man I want let's talk about that -- little disease and because that's certainly a big headline in the next ten days that tax cut its buyers. Are the market's reacting at all to that yeah you know -- -- yesterday interestingly enough -- -- -- what was happening in Washington. But we really need to pay attention to this because we topped economists' if in fact this does expire. For example. It depending on where your pay scale is but for some folks you could be looking at least in an extra thousand dollars and -- your paycheck. So this will impact the economy and a lot of economists say if it does go away we'll have to take down GDP estimates for the US perhaps in the first -- second quarter the team era is talking about that's a bathroom and look at it having a real real impact and in the end the anything that we're noticing as well -- is while the European struggle with their problems and we. Make fun of them and criticized them for error not be able to come to an agreement for -- is so serious yeah tapping in Washington is exactly the same thing. And the fact that they cannot come to an agreement the fact that a lot of members of the senate and are already gone for the Christmas and -- airs Friday the Chanukah holiday that's it that's. Important DL and we're hearing perhaps a President Obama may ask them to come back to working get a deal done before the expiration. But it has a big impact and -- -- in the uncertainty factor is what it's all about Wall Street -- investors don't like uncertainty they may not like. The eventual outcome but they just want to know what it is yeah and and we don't now. Yeah and the -- Wall Street and main street -- -- how -- from Bloomberg TV we know you'll continue to follow that all the other business headlines for -- thanks so much thank you.

This transcript has been automatically generated and may not be 100% accurate.

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