Welcom welcome major news breaking in technology today. A Landmark Partnership to develop apps and Business Software for use by corporate employees on iphones and ipads. Both stocks moving higher in early post market trading. Well have more on this once unthinkable deal in just a moment. We begin tonight with after the bell earnings from two tech bellwethers, intel and yahoo. First up the computer chip maker intel. It reported better than expected revenues and earnings, net profit up nearly 3 billion on Strong Demand for personal computers and the chips inside them. Excludeing certain items, intel pulled down 55 cents a share, thats three cents better than analysts estimates. Revenue nearly 14 billion topped the forecast. Shares of the dow component rose as much as 3 in after hours trading. Seema mody join us us from the nasdaq marketplace with more on the results. Seema, when what is the take away from intel . Tyler, investors are talking about showing signs of growth in an industry that at some point was telling investors there was a lack of growth but clearly, the personal computer adding value to intel. They are going forward. In fact, it gave a strong forecast for the Current Quarter and year siting pc shipments. Okay. Dont go away seema, well be back to you. Next, yahoo, the internet giant earned 37 cents a share excludeing certain items. Disappointing investors with a one penny a share miss. Revenue was also short of forecast, just topping 1 billion even though rates for ad ads fell. Yahoo shares were initially up 2 in late day trading so lets turn to seema again. Whats the big take away . Results came in below expectations due to a decline in display Advertising Sales but news on the alibaba stake thats expected to go public in early august. Thats what investors were focused on. Yahoo said it would return half of the after tax ipos to shareholders and reducing the number of shares yahoo is required to sell at the alibaalibab alibaba ipo from 208 million shares. When reading through the notes of the report, its trying to capitalize on the Alibaba Investment as the core business continues to struggle. Back to you. Thanks a lot. Seema mody reporting from the nasdaq. Now to the big apple ibm news. Back in 1984 apple skewered ibm in an ad portraying it as an evil big brother. Today the companies are a bffs. Tim cook and vir gina announced they will team up on more than 100 apps that will combine the strength of ibms an lcalled it massive mobile reach via the iphone and ipad. The theory here, combine ibm east strength in Enterprise Computing with apples keep it simple know how serving real people doing real work on tablets. Tim cook says this was a deal that just had to be done. It takes the best of apple and the best of ibm and puts those together. There is no over lap. There is no camp tiompetition a focuses on the enterprise customer. So this is all about transforming the enterprise, reinventing the enterprise, taking big data an lalitys downo the people. The apps will be available starting this fall. Google making some news late today, as well, naming the ford ceo to the board of directors. He will serve on the audit committee. The experience at ford might come in handy as google develops a selfdriving car and looks to get more Android Software inside vehicles. Not to be left out of todays tech news and then some, motorcycle soft respected tech websites report its planning its biggest round of job cuts in five years. Perhaps as many as 6,000 workers. This comes after the Software Giant acquired nokias hand set business taking on 30,000 more employees. The cuts are many speexpected t where the companies over lap. Lets turn the skip. Skip, nice to have you with us because we have so much to talk to you about and id like to start with the ibm and apple deal. How much of a game changer is this and i know you dont have an l or apple or ibm in your portfolio. Does this change your mind in the stocks. Its too early to know. I think its good for both companies. Certainly alp is looking to sell more equipment, more hand held devices, more i max, more phones, whatever and this gives ibm an ability to work on the software and what they do best. So down the road, this should be good for both. Now whether it moves the needles enough to result in stock price changes long term wont we need to hold off and wait a quarter or two and lets see what the results are. As we pointed out earlier today, the early reaction on the market was positive. I can imagine the folks at rim are shaking little bit this evening. Well, i would think so. I think weve seen the stock price fall in aftermarket. Again, its putting the apple product right in direct competition with the win product in the enterprise marketplace and i think it will do well for apple. Skip, i want to talk to you also about yahoo not really great earning report on a day that is the twoyear anniversary since Marissa Mayer took over as ceo. How is he doing and it looks like the alibaba deal is critical to yahoos success, do you agree . I would agree with your conclusion. I think shes doing fine. Were in the middle innings of the ball game. She took over, stabilized the ship. There were a lot of holes to plug and shes done a pretty good job with that, with what she had to work with. The earnings are a little disappointing today but as expected its really what happens next. Shell get a big influx to cash assuming that happens as expected and its what she does to reinvigorate yahoo and restart the growth cycle of yahoo. Lets get a Quick Reaction from you on intel before we move on to some of the other companies that i know are in your sights down the road. I like the intel earnings. They were good. Intel is your classic turtle versus the heir. It plunges along. The problem is its a huge company, huge revenues, huge profits and it takes a lot to move the needle to really ramp up the growth of the stock price. Today was a good day for intel, i think. And next week we have a lot of Big Companies reporting, amazon. Youre a big fan of amazon. Is it worthwhile to put new money in it now . The wrap against amazon is its expensive by various multiples. The good news is amazon is kind of controlling the space. It is the player in online purchasing and had great growth and net worth and revenues and its profits and we would expect that to continue particularly when you look year over year. Its a seasonal type of revenue, so the look next week should be on a year over year basis, not a quarter to quarter basis. All right. Well see what happens when the companies report. Thanks a lot, skip. And the markets fluctuated wildly today with investors reacting to every word spoken and written from fed chairian n chair janet yellen. It was the written report that accompanied her testimony that the market seemed to be fixated on. Reporter the market getting surprise from the accompanying Monetary Policy report to congress. That raised questions whether there were bubbles in specific parts of the stock market. Reporter read violation met tricks do appear substantially stretched, particularly those for smaller if i recalls despite a notable downturn in equity prices. Those stocks took a hit before recovering somewhat during the day. Later in the q and a, yellen discussed how low rates can push investors into risky positions and driving up asset prices. Low interest rates, i think, have had a positive effect on helping the recovery, but of course, we have to be careful about looking for situations where low rates may be starting behavior that can be dangerous to financial stability. On economic and Monetary Policy, yellen seemed to keep the markets on track with the belief the fed would raise rates sometime in the middle of next year, though, she never mention add date. She suggested the fed could move faster or more slowly if the economy lagged. Overall, her concerns were by getting it wrong. She noticed for example there were many quote, false dawns, when the fed thought the economy would take off. It seems that the yellen fed desperately wants to avoid doing anything that would bring a premature end to a recovery that finally appears to be gaining traction. While yellen suggested there will be better results in the job market, she said there is a ways to run. While rising compensation or wage growth is one sign that the labor market is healing, were not even at the point where wages are rising at a pace that they could give rise to inflation. What is clear is that yellen and the fed have a keen eye on the evaluations and economic data, especially jobs data. There is a market expectation the fed will keep rates in check and gradually hike them next year but yellen made clear its not a promise and the plan is only as good as the data. For nightly Business Report, im steve liesman. Before Janet Yellens testimony, the major stock averages started out hower. The dow reached a fresh day high following more solid bank earnings, good news about new York State Manufacturing and increases in retail sales. By the close, stocks pulled back ending the session mixed. The dow added five points and is only about seven points away from a new historic high. The nasdaq where biotech and social media stocks trade lost 24 and the s p was off by three points. Joining us to talk about the markets, chair yellen and more. Global chief investment strategist at black rock. Russ, welcome back. What worries you in the market today . Well, ironically, its a lot of what i think the fed shares spoke about. I dont think Financial Markets are in a bubble. I think valuations are probably a little above average but reasonable given the low rate, low inflation environment but as we read today, this are part ps of the market and andian jan yellen mentioned an area stretched because people are searching for yield and growth in a low yield world. You know, russ, its very rare to hear a top Federal Reserve official talk about specific parts about the stock market. I mean, what is the danger of being that specific about stock sectors and sub sectors . You know, its a fascinating question and i dont think janet yellen is trying to get a job as a strategist. The point is to say we get it. The fed is under a lot of criticism about this very top pick, which is that there is a cause to keeping rates this low for this low and the cost is you raise the risk of inflating asset bubbles. I think what fed chair was trying to say, were aware of this. Were aware there are certain parts of the market that are extremely stretched. What is important is what she didnt say. The fact that she really highlighted a couple sectors is the notion that the fed does not believe that the Broader Market whether were talking about equity or credit is in a bubble. Thats a fascinating point. What i think youre saying is that in those parts of the market that are stretched, whether you find the pandora and gr groupon, they can snap back and hurt you. In the u. S. Generally larger is cheaper. We had a huge run in small caps. Those valuations are twice than Large Cap Companies on a basis. Large looks cheaper. The reason is again, people have been stretching for yield in sectors like utilities the more cyclic l parts of the market and the u. S. Has been out performing for a long time. Thats arguably justified because u. S. Growth is stronger, but its left u. S. Stocks relatively expensive, compared to the rest of the world and for the most part stocks in asia, the International Sector do look less expensive than stocks in the United States. All right. So for the average investor who is listening to all these comments that youre making and seeing the headlines, what is the take away for them. Should they feel good to put their money in the market or what . Connect the dots for us. I think there are a couple dots to connegligent here, the first going back to the comments by janet yellen be careful. Be careful of the momentum parts where valuations just got to unsustainable levels. Those are dangerous. The Broader Market looks reasonable. You can still make money but, and this is important, stocks really gained quite a bit. They are not nearly as cheap as they were and if stocks go higher in the next year, which we expect, the rate of gains will likely be slower than over the past three to four years. Russ, thank you very much, as always. Thank you, tyler. And coming up, we switch gears, the growing concern over a Liver Disease you probably never even heard of and which pharmaceutical companies are leading the way in developing treatments. Thats next. We begin tonights market focus with a 25 billion deal tobacco deal in a merge there will combine two of the largest tobacco producers. The combination will give reynolds a domination in one area where the cigarette business is growing. Menthol cigarettes but will sell the blue e cigarette to britains imperil. Lorillard tumbled 10 to 60. 17. Another deal to tell you about, Specialty Chemicals company is buying rock Wood Holdings for about 6 billion in cash and stock. The move is effort for those who tap into the demand for lithium products. Shares of rock wood popped 10 to 83. 15. Albemarle fell to 70 and change. The quarterly profit rose thanks to Strong Performance and the fixed income trading fell less. Investors liked the news, shares rose more than 1 to 169. 17. And jp morgan shares rallied on better than expected quarterly results, even though the banks earnings and revenue declined, trading revenue held up better than analysts forecast. Jpm stock jumped 3. 5 to 58. 27. After the bell, Railroad Operator csx reported a rise in Second Quarter earnings. In line with estimates and confirmed the outlook. The stock initially down a little after the announcement. During the regular session, though, shares were up a fraction to 31. 15. Go pro saw shares property. They began coverage of the wearable camera maker with an out perform rating and 60 price target saying the company established itself as a durable multimedia and active lifestyle brand and that sent the stock up 13 today to 41. 63. Opposite story for michael kors, that stock down for the second day in a row as stern ag and barkleys reduced their price targets for the highend retailer. Both firms siting increased promotional activity that could put pressure on margins. Shares tumbled to 79. 44. John and johnson reported earnings topped by sells of the hepatitis c treatment. The company cautioned the pill will lose some steam later this year as newer rivals come to the markets. Still, shares were about 2 lower today. They finished at 103. 28. You may not know about mash, its a Liver Disease that affects many americans. With no medication on the market, its being referred to as the new help tpatitis c beca treatment is expected to approach 40 billion. More on the dash to treat gnash. Reporter you probably never heard of it but some say it could become the next global epidemic, nash is a progressive Liver Disease often associated with obesity. Drug makers are eyeing a huge and still growing potential market. There is probably 6 million, 6. 5 Million People with scarring or harding of the liver conservatively here in the United States and then europe in the big five nation is about the same. So about 12 Million People or 12 to 13 Million People. Reporter thats counting people battling advance stages of the disease. The number jumps to 30 million in the u. S. Alone when people with milder forms are included. She thinks the market for treating nash will grow to 35 to 40 billion by 2025. So what is developing the treatments . The post familiar name is gilliad sciences. In the United States, there is also Intercept Pharmaceuticals and in france, Bio Tech Company again f genfit. I personally believe that well probably need a couple years or so to see kind of the safety profile of the drugs in audition to outcomes here. I have my little, the drugs will probably be on the market around 2019 or 2020. Reporter until then, the stock prices are likely to be volatile. Analysts say further positive data could cause the stock to double. On negative data, it could be cut in half. For nightly Business Report, im meg terrell. To read more about nash and how drugs to treat the disease could rival hepatitis c medications go to nbr. Com. Another piece of medical news to tell you about which could be big news. The swiss drug maker is teaming up with google to develop a smart contact lens that measures blood glucose in tear data. The smart lens may help restore the eyes ability to focus. Amazing. Coming up next, the new space race with a billion dollars in taxpayer money committed and a dow component vying to win. Why the spacecraft competition has a lot riding on it. Stocks might be flirting with historic ty highs but a different story for energy prices. Crude soared, the first time in more than two months and gasoline prices have fallen for 18 days in a row with gasbuddy. Com reporting today that the average price fell below 3. 66 for the first time in three months. There is a space race heating up. Nasa has to choose a manufact e manufacturer for a crew carrier and the stakes are high for the private companies and for one large publicly traded one, competing for that contract. Jane wells has more. Reporter tony wasnt even born when the Space Shuttle program began. We know were making history again. Reporter now hes part of the team at boeing trying to build the replacement. So no wells . No wells. Reporter has that ever been done before . Never been done before. Reporter boeing is competing against space x and colorado Sierra Nevada to build a space taxi that will be cheaper that fly than the 70 million a seat nasa is paying the russians. Nasa wants one ready to go by 2017. Space x has so far grabbed most of the headlines offering up a capsule and rocket elon musk created. Boeing, however, is offering is system based on what worked in the past. I think in hue man space sight where you have to be air free, bringing in flight crew and hardware and Technology Drives down the risk to humans. Reporter even the space suits look traditional. Orange is always the new black but there are changes. Look at this, this is a samsung tablet, galaxy, all the astronaut wills have them if boeing wins and thats a big if. Nasa spent over a billion dollars seating all three companies and each company had to invest some of its own money. Thats part of nasas new Business Model leasing space on a capsule allowing the builder to lease some. They would like to use a seat for tourist and biggalo would like to use it to set up space habitats so they used things like blue lining. Were like an Inflection Point going from the military interiors to the commercial airliner feel. Reporter nasa should announce a winner next month but if boeing loses, its already bracing for layoffs. It would be difficult. Reporter a sign that space has changed with budgets and figuring out how to survive in thiss this era is hard for rocket science. Jane wells, houston. Thats nightly Business Report for tonight, thanks for watching. Im tyler mathisen. Im susie gharib. Have a great evening. Well see you back here tomorrow. The following kqed production was produced in high definition. [ music ] in san jose a new gallery is dedicated to showing only local artists. Cherri lakey a lot of these people that work in those corporations are also artists. Youve undoubtedly heard but did you know that its revival may have started in berkeley . And experimental music pioneer pauline oliveros. Pauline oliveros one of my major accomplishments in life was going beyond fear through music. This time on spark. [ music ] major funding for spark is provided by the william and flora hewlett foundation, supporting creativity and innovation in the arts since 1967
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