PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: Call it performance pressure. Just how well will U.S. banks hold up if the economy really breaks down? That`s what the government is looking at in its bank stress test. Meanwhile, Ben Bernanke says bank nationalization is not on the table. SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Energy, education and healthcare spending are also big priorities for the Obama administration. We`ll look at what companies will benefit most from the president`s new initiatives.

KANGAS: Xerox is one beneficiary of those initiatives. We talk with Xerox CEO Anne Mulcahy about the stimulus package, as well as the job outlook and her strategies for dealing with the recession.

GHARIB: Tonight`s "Street Critique" guest says when it comes to investing in precious metals, all that glitters is gold. He`s Dave Meger, director of metals trading at Alaron futures and options.

KANGAS: I`m Paul Kangas.

GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Wednesday, February 25.

Good evening everyone. The Obama administration unveiled today its stress test guidelines for American banks. They`ll be used to test the health of the nation`s 19 biggest financial institutions to determine if they need more government loans and how much. It comes as President Obama urges lawmakers to write tough new regulations for the financial industry. Darren Gersh has details.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This afternoon the president laid out financial ground rules for the future, putting forward his broad principles for reform once the credit crisis is over.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Financial institutions that pose serious risks, systemic risks to our market should be subject to serious oversight by the government.

GERSH: That`s for tomorrow. For today, regulators are beginning to stress test bank finances and now they have said how it will work. Bank examiners will evaluate the ability of consumers and businesses to repay loans under two scenarios. First, the baseline assumes the economy falls 2 percent this year and rebounds 2 percent next year; unemployment hovers between 8 and 9 percent. Second, in what is delicately called the more adverse case, the economy drops more than 3 percent and is mostly flat next year; unemployment tops 10 percent.

Regulators will also examine what happens to banks if home prices keep sliding, under the baseline, down 14 percent this year and 4 percent next, in the worst case, a sobering 22 percent this year and 7 percent next year. Experts consider the assumptions plausible. The question says Vince Reinhart, a former senior official at the Federal Reserve, is with the banks.

VINCENT REINHART, RESIDENT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE: We`re not really confident that banks know what their own balance sheet is. So it is not obvious that we should be confident that they would know what their balance sheet would look like in a year.

GERSH: Regulators said they would not make the results public, leaving individual banks to release their test scores. The real goal of this exercise, Reinhart says, is for regulators to force banks to clean up their finances.

REINHART: This is saying, take a look at your balance sheet, report back if you think you have balance sheet problems. This is an opportunity for them to say, well, actually we need a little more capital.

GERSH: But even as the government contemplates pumping more money into banks, Fed Chairman Ben Bernanke repeated assurances to the House Financial Services Committee today that the stress tests won`t end with the government owning banks.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Nationalization to my mind, is when the government seizes the bank, zeroes out the shareholders and begins to manage and run the bank. And we don`t plan anything like that.

GERSH: Bernanke also took a rare stab at analyzing the stock market. The Fed chairman said the low prices today don`t reflect economic fundamentals as much as the fear investors now feel. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: Also in Washington today, President Obama nominated former Washington Governor Gary Locke as his Commerce secretary. Locke is also a lawyer with expertise in trade issues. He`s the president`s third nominee after New Mexico Governor Bill Richardson and New Hampshire Senator Judd Gregg withdrew their nominations.

KANGAS: Speaking of the president, in his address to Congress last night, Mr. Obama called for increased spending for energy, health care and education. While details of the plan are still sketchy, Scott Gurvey looks at which areas of those sectors could benefit and whether investors should consider them.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Energy, education, healthcare. These are the sectors President Obama identified last night as critical areas for government investment in the nation`s future. Jim Awad of Zephyr Management says as a result, these sectors should outperform the overall economy in the years ahead.

JAMES AWAD, INVESTMENT STRATEGIST, ZEPHYR MANAGEMENT: If the government is going to be spending a lot of money in these three areas, that relative to the rest of the economy, these are going to be three growth industries and you`re going to see investors and money going into them.

GURVEY: In the energy sector, analyst Fadel Gheit says it will pay to be green.

FADEL GHEIT, SR. OIL & GAS ANALYST, OPPENHEIMER & CO.: Obviously natural gas companies. Most of the independent oil and gas companies are basically natural gas companies, so they will benefit definitely from that. But technology, whether it`s clean coal, whether green energy, that will open up a very new area if you will and will put the muscle of the U.S. government behind it and I think will (INAUDIBLE) significant growth in this area.

GURVEY: In education, salaries are by far the largest expense and these are for the most part public sector jobs. But analysts also predict growth for textbook publishers, companies which specialize in school construction and those which create web-based instruction and other educational alternatives. Healthcare is much more complicated. As the government gets more involved in providing insurance and managing care, that will increase the volume of services, but decrease profit margins. Robert Gold of Standard & Poor`s suggests investors look for companies which provide specific services.

ROBERT GOLD, DIR., HEALTH CARE EQUITY RESEARCH, STANDARD & POOR`S: We`re not talking about the product companies as much. We`re not talking about the large capital equipment companies, which are struggling right now with reduced hospital spending generally. We`re talking more about again the companies that collect patient records, that do inventory management, that just help operating efficiencies for the system. I think you`re going to see a lot of companies emerge in those categories and a lot of the current companies are going to face a lot of pricing pressures.

GURVEY: The president releases his budget tomorrow, but there are reports tonight that it will call for spending $634 billion over the next 10 years as a down payment on the overhaul of the health care system. That money to come from reductions in Medicare payments and limits on the tax deductions taken for upper income taxpayers. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.

KANGAS: A steep opening sell-off greeted Wall Street this morning, triggered by a 5.3 percent drop in January existing home sales. At 11:00 a.m., the Dow posted a 175 point loss with the NASDAQ Composite off 32 points. Then after some details of the bank stress test came out this afternoon, the market moved briefly into positive ground only to pull back by the closing bell. The Dow Industrial Average ended down 80.05 points at 7270.89. The NASDAQ Composite lost 16.40 at 1425.43, while the Standard & Poor`s 500 Index fell 8.24 at 764.90.