Announcer this is nightly Business Report with Tyler Mathisen and sue herera. The bulls are back. Investors went shopping for stocks, thanks to upbeat earnings on wall street and policy movement in washington. In denial. Verizon didnt want to bring back unlimited data. But when customers fled, it did an aboutface to stem the bleeding. And a hot selling american brand in china. Reporter im phil lebeau in shanghai, china, were cadillacs are rolling off the line and sales are soaring. Could china eventually become the largest market in the world for cadillacs . That story coming up on nightly Business Report. Those stories and more, tonight, thursday, april 20th. Good evening, everyone, and welcome. Im sue herera. Tyler mathisen is off tonight. Wall street and washington came together, and the result was a stock market rally. Profit reports were mostly upbeat. European markets rose. And there seems to be movement on some of the Trump Administrations progrowth agenda. Here are the closing numbers. The Dow Jones Industrial average rose 174 points to 20,578. The nasdaq added 53. And the s p 500 gained 17. Bob pisani has more. Reporter why the rally today . Its a tricky call, but several factors are fueling the move higher. Earnings have been mostly positive today, whether its csx helping the railroads or qualcomm helping semi conductors, the earnings story has generally been better than expected, at least today. Secondly, europe had a strong close. Its been choppy this week, french elections have been a major concern for the markets. But those worries eased today on hopes that more moderate candidates might prevail in the first round of elections over there. Third, after a lot of hand wringing in washington, theres talk about a house compromise on health care, and could be a major move forward, and more tax cut talk, as Steve Mnuchin said were close to bringing forward major tax reform. Lastly, a bit of a bounceback. Sectors that sold off this month reversed today, particularly Retail Stocks and steel stocks. The president talked up steel all throughout the morning. The bottom line, theres not been a lot of movement in the markets because theres not been a lot of reasons to sell. Were only 1. 5 from the historic highs. Its hard to make the case for a big drop in the markets unless you believe one of several things. First, france might be pulling out of the european union, or second, the tax cut Program President trump has been pushing will be dead, or third, the u. S. Economic data will keep getting worse in the second and third quarters and bond yields will move down. For the moment, the market seems to be saying none of these prospects are very likely. For nightly Business Report, bob pisani at the new york stock exchange. And has bob mentioned, House Republicans may be getting closer to a deal on health care. Kayla tausche has the details. Reporter nearly a month after the house pulled an 11hour vote on the American Health care act, broad amendments to the bill have been agreed to. To appease conservative Freedom Caucus, there are waivers that let states abandon oncemandatory benefits like maternity and mental health. A Freedom Caucus source said those changes would turn 18 to 20 votes for yesterday. The moderate tuesday group could not be reached but its leader expressed support for the changes on facebook. The changes, plus comments overseas by speaker ryan that they were putting the, quote, finishing touches on health care, sent expectations into overdrive. The white house reportedly wants a vote on wednesday. Senior gop aides caution thats unrealistic. The memo isnt legislative language, and members of congress dont even return until tuesday night. Republicans have a call on saturday, but that was scheduled two weeks ago to discuss a forthcoming spending bill and only now will need to discuss health care. For nightly Business Report, im kayla tausche, washington. So if a revised Health Care Bill does come together, what challenges does it face . And with todays comments on tax reform from the treasury secretary, with a what can investors check . John harwood joins us from washington. What are the obstacles to the new blueprint . The obstacles are the same ones that faced it before. It has some elements of obamacare, but it also would result in a lot of people losing their insurance, and the preexisting condition protections might be preserved in name only, not in fact, because insurers would have the ability to charge a lot more for people with preexisting conditions. So kayla mentioned the expectations have gone into overdrive as a result of the talk about this compromise. I think theyve been revved up way into overdrive and everyone ought to temper those expectations. We also have a coming budget deadline and a possible Government Shutdown looming. Thats right. Now, i think the shutdown is less likely. Even though theres negotiations and disagreement going on, three sides, democrats, republicans in the congress, as well as the white house think the likelihood is that if we get to the end of next week and that deadline arrives, that congress is likely to punt at least for a short period of time, a week or so while the talks continue to go on. I do think in the end were going to avoid a shutdown and likely have a bipartisan compromise that will not have some of the controversial elements that the white house initially asked for. Its more important to republicans not to shut the government down than to hang out for things that are difficult to achieve. Theres been talk, quite a bit of talk actually, in the last two days and this afternoon, about the timeline for tax reform which does keep changing. Given the rhetoric that we heard today, as it changed again . I dont think so. I think its going to be a long process. If they get something done through one chamber of commerce by the end of the year, that will be a spectacular success. You still have questions to be answered about whether its individual and corporate, whether its going to be revenue neutral or not. Secretary mnuchin said today that revenue neutral, it would pay for itself, but only with a massive amount of dynamic scoring, up to 2 trillion, he said. Thats going to be difficult to get through the senate as well as the house. There are still very large challenges. We havent even mentioned infrastructure. The Administration Still has not laid out their infrastructure plan yet. A lot to pore over, john harwood in washington, thank you so much. The director of the International Monetary fund said that she believes her organization can work with the Trump Administration to improve trade. But christine le guard also cautioned against protectionist measures. The concern of all our members is to make sure that we protect free, fair, and global trade, and that we all work at eliminating the distortion, eliminating what could constitute a Playing Field that is not level and accessible to all. So were on the same page. She also said that by working together, all parties can improve the system that we currently have. While she was speaking at the opening of the imf and World Bank Spring meeting, President Trump was getting ready to sign an executive order, surrounded by steel ceos, to study whether steel imports into the u. S. Should be restricted. His commerce secretary said the investigation will determine whether chinese and other foreignmade steel are threats to national security. We dont a couple absolutely prohibiting the import of steel. I cant imagine that that would be a conclusion. What were trying to do is to change the arithmetic so that the dumping practices are not as effective as they have been. This is not meant to say there will never be another ton of steel imported into the united states. The move helped lift a number of the steel stocks in todays trading session. As the Trump Administration targets steel imports, China Remains a lucrative market for u. S. Automakers and in particular for general motors. Gm has become the second largest automaker in that country, and its now having success selling cadillacs to chinese buyers. Phil lebeau is in shanghai. Reporter this man is about to buy his first luxury suv. But instead of looking at the most popular high end models in china, he wants to drive a cadillac xt5. Im Getting Better pay and want an improvement, and ive always liked u. S. Brands like cadillac. Reporter cadillac has risen to become the fourth bestselling brand in the country. As it expands production here, it may not be long until gm sells more cadillacs in china than in the u. S. We are among the Fastest Growing Luxury Brands in china. And im very confident well be able to continue. You will most likely see a double digit growth this year in china. Reporter a big reason is not only because its more Cost Effective to build here, but vehicles assembled in this country are not hit with a 25 tariff. Thats the tax that china puts on all imported autos. And its a hefty tax. But it hasnt stopped automakers like bmw from shipping thousands of suvs from its plant in South Carolina to dealerships in china. U. S. Exporting ten times as many vehicles to china as it imports . Few expect President Trump to start a trade war with china. The reality is that for most global automakers, american ones included, they produce most of their vehicles here in china. So the tariff issue is only for a very, very limited segment of vehicles, High Performance luxury vehicles that are really almost immune to pricing. Reporter thats good news for chinese customers like j ju jinga, who are increasingly buying classic American Brands like cadillac. Phil lebeau, nightly Business Report, china. General motors has stopped doing business in venezuela. The automaker has called the governments seizure illegal and has vowed to take legal action against that move. Ahead, while a price war may be good for consumers, is the opposite true for shareholders . Earnings today from three dow components. Well start with visa. Late today, the Worlds Largest Payments Network operator gave an upbeat outlook and reported better than expected quarterly revenue. That was enough to send shares initially higher in after hours trading. The Company Also Announced a 5 billion buyback program. A different story for fellow dow component travelers which reported a double digit drop in quarterly profit. The insurer was hit by higher catastrophe losses thanks to wind and hail storms in several regions of the country. The company also authorized a 5 billion share buyback. Shares fell 1 in trading today. Dow component verizon is struggling to hold on to customers and get them to pay a premium for its service. The nations largest wireless provider reported a decline of 300,000 cellphone subscribers over just the past few months. Things could have been worse. The company reintroduced its unlimited data plans to stop the bleeding. And those new plans helped bring some customers back. The Telecom Price war hurt verizons stock price, which fell 1 . Verizon is the nations leading cellphone carrier, but it may not be as nimble and scrappy as it once was when it comes to competing against smaller rivals. When youre the largest wireless provider or a mammoth retailer, what are the risks to investors if the company is losing market share . Eric gordon, professor at the university of michigans ross school of business, joins us now to talk about that. Welcome back, nice to have you here, eric. Hello, sue. Does it really come down to size . Are the Bigger Companies less able to compete and actually have to cut prices than the Smaller Companies . Yeah, it seems as if a lot of them lose their agility, their ability to kind of appeal to customers with the newest, best, coolest thing. You know, they make a lot of investments in what made them big yesterday. And customers are fickle. So it can be very difficult for them to keep market share. And, you know, once they start losing market share, its really tough to get it back. You have to do Something Like you said verizon is doing, you have to cut prices. And thats another big danger. Other maybe you buy a competitor, right . Or you do some consolidation. Weve seen a lot of that in the last two years, where the only way you can keep market share or grow is to buy somebody else. And thats pretty risky. That ends up being kind of, you know history will show that those often dont work. If youre a shareholder, you dont like to see market share go. Youre not usually too happy to see your company do a big acquisition. Weve talked about big versus small. But what about the biggest of the big like an amazon, like a walmart . Are they immune to that because of their huge footprint . The huge footprint helps them. But theyre also very agile. Amazon is always introducing something new. It used to be just books. Now its about everything. Recently amazon got a patent on making clothing on demand. Thats pretty far from where it started. But it shows that its one of those rare Big Companies that has kept its agility. Is that why the stock continues to outperform versus a verizon which lost strength recently because of this competitive environment . Amazon keeps showing that it can come up with Innovative New things that people like. Verizon, not so. I mean, a price cut . Thats not new. Theyre going to buy yahoo im not sure thats going to help them very much. Put on your investor hat for me. If youre seeing a company like a verizon or there are a number of others out there in the wireless space and other spaces that have had to compete, is that a warning sign to an investor, that they should perhaps take a look at their holdings in that company . Yes. I see a company losing market share. You know, i give them a little bit of time to come up with a new ad campaign. But if they lose market share over, you know, three or four quarters, and the best they can come up with is to turn that around as a price cut, as an investor, im going to start looking for alternatives. Eric, thank you. Always good to see you. Eric gordon with the university of michigans ross school of busine. The Mortgage Servicing company okwen is hit by a government lawsuit. The Consumer Financial Protection Bureau is suing the company for, quote, failing borrowers at every stage of the Mortgage Servicing process, end quote. The cfpb accused the company of sending inaccurate statements, ignoring customers complaints, and illegally foreclosuring on borrowers. Shares of the company were cut in half, down 53 to 2. 49. The drug maker tisaro said its new Ovarian Cancer treatment will cost patients nearly 10,000 a month for a 200 milligram daily dose. But the company said the starting dose would likely be at 300 milligrams, bringing the cost to nearly 15,000. Shares fell 6 to 139. 01. Homebuilder d. R. Horton had revenue that impressed investors. It said it expects to sell more homes than initially expected and raised its forecast. Shares finished lower by 2. 5 to 33. 10. Sherman williams said higher paint sales and increase in selling prices helped that Company Post Better than expected earnings. It says it sees net sales rising this quarter. Shares rose 4 to 324. 02. Foot locker issued a profit warning, saying a delay in income tax refunds caused customer spending to slow in february. The athletic Footwear Company lowered its earning guidance for 2017 to account for the slow start to the year. Despite the downbeat outlook, the company said its encouraged by the sales momentum its seeing this month. Shares rose 5 to 76. 55. Activist investor alkado management is calling for a management shakeup at wild wings. The founder spoke about the issues he says have been plaguing that company. The fundamental operating metrics of this business have been in fairly significant deterioration for multiple years on end, whether its traffic, store sales, restaurant level operating margins, returns on capital, guest experience, technology implementations. The list is extraordinarily long and broad. And there is absolutely no comprehensive plan by this Management Team or board to address any of these issues. Shares of the company surged almost 6 to 163. 75. Do you own Bose Headphones . A new lawsuit alleges the audio equipment maker spies on its users and sells information about their listening habits without their permission. According to the complaint, bose was collecting information not covered by its privacy policy. The lawsuit claims that a persons music or podcast listening history can reveal personal and identifying details. Bose has not commented. And there are reports that the cia and the fbi are looking for an insider who gave top secret information to wikileaks. That top secret information, you may recall, described the tools the cia used to penetrate smartphones, smart televisions, and computer systems. Experts say that cyber criminals are taking note and could use the same techniques to spy on you. Andrea day has some tips on what you can do to protect yourself. Every device is exploitable. Reporter from your iphone to smart tv. Theres always a risk of using smart technology, that a threat actor could use it to spy on you. Reporter Kevin Mitnick is a computer hacker who was once on the run from the fbi. After spending time behind bars, he now teaches people how to stay safe in a world filled with connected devices. Its kind of like the wild wild west today. Reporter he says recent leaks show just how wild it can be. Like wikileaks, that exposed government hacking techniques, including eavesdropping through smart tvs. The cia has not confirmed the documents are real. But experts warn these types of leaks could open the door for cyber criminals. Even though the actual source code for the exploit wasnt included, it does give you data around how information was transferred that would allow a hacker or somebody malicious to develop their own exploits based off of that information. Reporter and according to mitni mitnick, only extreme measures willful fully protect you from spies. You have to use it away from your other devices. Reporter he says businesses need to be ready for attacks. Unfortunately, if youre doing with a threat action of a nation state, theyre going to have knowledge of vulnerabilities that the manufacturer cant fix. If you have about 1. 5 million, you could buy a zero day exploit for this type of device. Reporter what can you do now to keep calls and texts private . He uses an app called signal. What that does is allows me to use end to end encryption when communicating with another person. That is the most secure type of communications that we have available today. Reporter and when it comes to smart home devices, change the default password as soon as you plug it in. Thats something many people never do. You can never underestimate what someone can do to get even with you if they get access to your equipment remotely. Reporter he says believe it or not, the most commonly used passwords are 12345 and password. Also never click on a message you dont recognize. If you arent using bluetooth, keep it shut off. Im andrea day for nightly Business Report. Coming up, traveling at hyperspeed. Imagine getting from washington, dc to new york city in one hour. Why one Company Thinks that can be a reality. As you know, there has been a lot of talk about investing in our nations infrastructure. Some see improved roads or bridges. But others envision hyperspeed travel. Morgan brennan has our story. Reporter a high speed train so fast, blink and youll miss it. How we do that is we levitate the train 10 centimeters above ground using a magnetic force. Reporter the super conducting maglev can travel at 370 miles per hour, making it the worlds fastest train. Development has taken two decades on a track just outside tokyo. And the japanese want to bring it here. We know in the northeast corridor, our infrastructure is way behind where it should be. Were looking at a totally new concept, taking Mature Technology from japan, the worlds fastest train, and bringing it here. Reporter hes the ceo of northeast maglev, the Company Looking to bring the system to the busy northeast corridor. The new 220mile line would carry passengers between new york and washington, dc, mostly underground and away from road crossings and other tracks. Amtr amtraks acela trains do it in three hours. Maglev would push that down to one. Work could start as soon as 2019. The cost, 100 billion. First its a privately led venture instead of all being a government project. The second thing is, weve mustered not only private investment, having spent nearly 100 million on the project so far, but also japan has said they would help financing significantly the first leg. Reporter that may sound enticing, but the project also has its skeptics, including amtraks ceo. Rail has the flexibility and all of the advantages of being able to use current infrastructure in highly congested areas. So i think it makes a lot of sense. And anybody, maglev, hyperloop, high speed rail, theyre all going to require enormous amounts of investment. And the Business Model doesnt support it. Reporter u. S. High speed rail has been nothing but a pipe dream for decades. Its expensive to build and maintain. Regulatory hurdles are high and take years to clear. And debilitatingly, local opposition almost always emerges. While the maglev vision is purely japanese, making it reality will be a purely american feat. For nightly Business Report, im morgan brennan. On that note, that is nightly Business Report for tonight. Im sue herera. Thanks for joining us. Have a great evening and we will see you right here tomorrow
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