The stress test we told you about right here last night. Now, todays mixed Economic Data gave pause to the idea so prevalent over the past couple of days that the Federal Reserve will surely raise Interest Rates soon maybe even in june. Well by the close, the Dow Jones Industrial average gained 260 points today to finish at 17,895. Nasdaq rose 43 and the s p 500 tacked on 25. Stocks rallied despite a warning from the dow component intel. Chip maker slashed about a billn dollars from First Quarter revenue forecast. That move surprised the street and investors. Intel, the worst performing stock in the blue chip dow today falling more than 4. 5 . Josh lipton now with more on why the chips are down at intel. Reporter intel was the darling of the dow last year. Enjoying the biggest gain in the index. So far this year its a different story. One big reason . Weaker than expected demand for personal computers in the workplace. Thats a problem for intel, the company that controls the market for pc chips that accounts for some 50 of its sales. So far in 2015 intel stock is dramatically underperforming both the s p 500 and the nasdaq. Although the stock might now look more attractively valued some analysts still arent convinced its a buy. Theres no doubt that the stock is looking more attractive now its come back from the high. At over 27 and closer to 31, people might want to start kicking their tires. What i think will keep people is we dont know how the company views the full year yet. Reporter one tailwind for the pc market last year was microsofts decision to end support for its windows xp operating system. That forced companies to buy new computers. But intel said today that small and medium sized businesses running pcs with that old operating system arent upgrading their machines. And this afternoon, analysts at Research Firm idc said they expect pc shipments to fall by nearly 5 this year a drop from the previous forecast. Despite these challenges intel still has its fans on the street. Bulls argue that when microsoft releases windows 10 the new version of its operating system a lot more companies will buy new computers in the back half of the year. That would give a boost to intel. Intels other big business line is providing chips for servers which accounts for about 20 of its sales. Analysts say that business looks strong. But intel bulls are on the defensive with the stock firmly in the red this year. Investors could have a much better sense of whether intel is a buy when the company next reports earnings on april 14th. For nightly Business Report, im josh lipton in silicon valley. To the markets now. And you know the chances of owning a fund that beats the market these days is very low. According to s ps latest report on actively managed mutual funds, 86 of active Fund Managers failed to beat the benchmark last year. 82 failed over the past decade. Senior director of Index Research at S P Dow Jones indices joins us with more. Nice to have you here. This is pretty much an index advocates dream, these numbers. Yes. What the data is telling us is that it is very difficult to outperform the benchmark over the horizon and these are professional managers with investment insight. If they cant beat the insight, what does it mean for the aver investor . What did you look at a, in different categories whether international or small company, growth value, et cetera et cetera was the percentage of funds that beat their benchmarks in the one, five, and ten year periods . Did anybody do it . Well, if you look across the nine u. S. Boxes, youll see none of the categories outperformed the benchmark. Over shortterm near term medium term or longer term horizon. Its often thought that perhaps with the return of volatility that some of these actively managed funds will do better but your Research Also shows thats not the case. That is not the case. If you go back to the last two periods with heightened volatility and stress in the market such as 2001 or 2008 if you look at those reports, youll see that most of the managers did not beat the benchmarks. Domestic equity funds lagged considerably across all time frames. 77 , 81 , 77 underperforming. The argument for active management a has often been a couple of things. Number one, in small cap categories thats where the active managers could show their stuff. In emerging or international markets. Thats where they added value, or in down markets, thats where they added value. Did you find that at all . That is not the case according to our data. If you look at these socalled inefficient markets like the small capital emerging markets, youll see over the 10 year horizon, managers investing in those categories did not outperform the benchmarks. So for the average investor as you mentioned earlier doesnt have all of these, you know, computer models and things at their disposal it really sounds like they should just do the index funds. Is that what this data is actually telling the average investor . Well if youre an average investor or youre a retiree or someone about to retire and youre going to live on your income or you need the capital reservation, you dont have the time horizon to recoup from the losses if you invest in active managers. In that case your best bet is market returns via lowcost alternative option. Was this underperformance attributable largely to the fact that index funds are much less expensive to own than actively managed funds or it just couldnt . Explain it away. Well if you take back the cost even then right, make them on the parody basis, they still form the benchmark. So it doesnt really move the dow at all. Thank you very much for joining us. With S P Dow Jones. Ty . To the federal budget deficit fell slightly. The Treasury Department say thats a decline of 1 from the same period last year for the entire budget year that ends in september. The Congressional Budget Office forecasts a deficit that is slightly above that for 2014. Are you feeling wealthier . Household net worth hit a record in the Fourth Quarter of last year rising by 1. 5 trillion to 83 trillion. According to the Federal Reserve, the gains were driven by stock market gains and home buyer values the biggest asset for most americans. A positive sign for the job market. The number of americans filing Unemployment Benefits fell more than forecast last week. According to the Labor Department initial claims dropped 36,000 to 289,000. That was the three week low. Retail sales fell for a Third Straight month in february. Kept out of the malls and the auto showrooms too. Despite an improving labor market the Commerce Department reports spending fell 0. 6 last month. This number is watched very closely because Consumer Spending is one of the main drivers of economic growth. Retailers also trying to gauge what type of impact the strengthening dollar will have on their bottom line and its high End Companies that could be most affected. Courtney reagan has more. Reporter since many retailers operate all over the world, a strong dollar hits in different ways. Some positive and some negative. On the manufacturing side american retailers that source goods overseas could see lower costs thanks to the dollars strength. But a lot of those contracts are in dollars, so the retailers dont end up saving any money. Plus retails can still take a hit when selling those goods in markets with weaker currencies. On the sales side its more expensive for Foreign Tourists to buy merchandise in the u. S. Impacting higher end retailers more leading to some recent cautions. Coach executive said the stronger Dollar International tourist trends will impact sales and costs, but not enough to alter annual guidance. Ralph lauren executives say sales to tourists have been lower, especially those from russia and the middle east. Even market ceo karen cass said while the business isnt dependent on international consumers, there is some slowdown in brazilian shoppers in florida, but not enough to make a measurable impact. The maker of ugs said the biggest drag on sales in the most recent quarter was the dropoff in foreign tourism to Flag Ship Stores in new york las vegas, san francisco, and hawaii. While some higher end retailers are aware of the trends t banks, ed ruema dont feel its the full impact. When we talk with Foreign Tourists, they tend to plan a few months in advance. If you contemplate currencies really weakened in january, we think it could begin to impact that tourist trade most significantly during the key summer months. I just heard the other day many of the comedians used to cross the border from canada to toronto from buffalo, the numbers have been way down because people cant afford anymore to do the shopping and the traveling through the states. So as far as canadians are concerned, were not happy. Reporter but there is a silver lining. The u. S. Consumer is widely considered to be in a position of strength right now and associated bank svp and investment sarah walker said American Consumers who earn and buy in dollars will be a significant offset to a drop in tourist sfendpending. For nightly Business Report, im courtney reagan. The fda recently cleared the way for a new class of drugs that could potentially lead to cheaper, lifesaving medicines. A new class of drugs could do something that hasnt been done in a while. Cut the price of expensive medications nearly in half. Thats what an executive at cvs health said in reuters, referring to copy cat biotech drugs, including biosimilars. Meg tirrell has more on these medications and why they may have the potential to alter drug pricing. Reporter it was a landmark for the drug industry. Last week the first medicine known as a biosimilar was approved in the United States. Biosimilars are Generic Companies of bilogic drugs, treating cancer to rheumatoid arthritis. The industry calls them biosimilars because it argues the manufacturing process is so complicated, the products arent identical. The difference in biosimilar is generics are typically small molecules, those can be accurately replicated and therefore, the drugs are essential the same. And theyre made by living organism as opposed to synthesized in the lab. As a result every time you make those large biological drugs, theyre slightly different. Reporter the medicine approved made by sandose, of noe varts. Its used to support the immune system through chemotherapy. Even though it was approved its not yet on the market. Novartis is in a legal battle that will play out over the next few months. The big question about biosimilars is their price. Typical institutes for the anxiety pill xanax, can have discounts up to 98 . Because biosimilars require more complex manufacturing, admit theyll come at smaller discounts. Our take is similarly end up being priced from 40 discount to 80 and 90 discount versus the innovative drugs they are replicating. This is somewhat controversial. Other people think the discount will be a lot lower like 20 to 30 . Reporter may save the Health Care System 5 billion over the decade. Assumed discount 30 off the branded drug about 3500 per 30 days express script says. Biosimilars could save the Health Care System 250 billion in the next ten years. What does this mean for the drug industry . Increased competition will weigh on revenues. Citigroup estimates 80 reduction in sales of balamta once the biosimilars come out. Bringing five copy cat drugs. For nightly Business Report, Lumber Liquidators fights back about the safety of the products. Thats where we begin tonights market focus. Retailer on the offensive in response to a report on cbss 60 minutes a couple of weeks ago that alleged some of the companys flooring products contain higher than expected levels of a known carcinogen. They say its confident the products are safe. Our goal today is to reassure our customers and investors that we are indeed the company you can put your faith in. And that you can continue to trust Lumber Liquidators to deliver a safe product to our customers. Shares popped more than 10 today to 36. 08. United technology is exploring Strategic Options for its sa sakorski helicopter unit. The spinoff will help the company grow. Sarorski is a great helicopter business. In terms of the portfolio, how do you predict a higher margin into the future . And were looking at the next ten years. Its a difficult decision to spin off, but its the right thing to do because it creates value. Shares up 2. 5 today to 121. 24. Results earnings rise 90 on stronger revenue thanks to season past sales. The company did lower the upper end of the full year forecast for earnings but investors played past that. The stocks surged 10 to 93. 27. Margins continued to decline. The company is optimistic about the spring selling season saying its margins will improve if the Housing Market continues to strengthen. The stock more than 2 higher to 3. 48. Dollar general matching earnings estimates today. Though its sales did miss, it niche initiated a dividend. It plans to spend more on labor this year as chains like walmart have hiked wages. To the upside to 74. 28. And investors got their chance to react to boxs first Earnings Report since going public and it was not pretty. Cloud storage reported wider than expected loss on higher operating expenses. The ceo is disputing the estimate calculations saying analysts made an error. We obviously want to make sure we set appropriate expectations and that we our communication is well aligned with the market and for the most part were just focused on execution. We had a great quarter behind us. We had a lot of growth going on this year. Our number one focus right now is on execution, on the business. Nonetheless the shares tumbled 11 to 18. 20. Bmw reported higher earnings and sales. The german car maker reported a 9 rise in net profit, increasing dividend shareholde bmw forecast increase in sales volume this year with the help of 15 new models. Bmw shares trade in frankfurt. German Automaker Volkswagen is already the worlds second largest auto maker and expect to pass toyota. Volkswagen said growth is good but needs to improve in one major market where it struggles. The u. S. Philip lebeau has more from be reporter dr. Martin vintercorn has good reason to smile. As ceo of volkswagen hes grown annual sales to more than 10 million vehicles and has positioned vw to pass toyota for number one worldwide. I dont know whether well spasz toyota this year but we try to achieve other targets. Reporter those include boosting Profit Margins after spending billions to expand Assembly Lines worldwide, including in the u. S. Where sales have lagged. In part because the company has been slow to build suvs. Yes. We did procrastinate and wait too long. Of course near small end, we have to close a factory so we were reticent and now going into the offensive in the states. Reporter bmw starts building a new suv with more to follow. Meanwhile, its biggest luxury brand, audi is cashing in on americas growing demand for high end cars. Audis got a tremendous amount and theyre expanding their portfolio, but it really comes down to capacity and their capacity doesnt really expand until 2017 when they open up next facility. Reporter if volkswagen is able to reach its potential in the United States it could be poised for an extended run as the Worlds Largest auto maker, a title it could capture for the first time in 2015. Philip lebeau nightly Business Report, berlin germany. Coming up the big push by private companies to one day make big money exploring the final fr. Two landmark lawsuits against ride sharing compa uber and lift will go to a jury. That was the decision of two judges and it updates a story we first told you about just a few weeks ago. Those lawsuits alleged that workers for the companies should be considered employees rather than contractors and are therefore owed certain benefits and protections. As the jury finds the drivers are employees, it could change the Business Model of both uber and lift. Now to the race to develop space. Big investments being made by both private companies and individuals to commercialize the socalled final frontier and today in las vegas, jane wells got a look at the latest project that will soon make its way to the International Space reporter its one small step for space, one giant leap for private enterprise. This is a tremendous accomplishment for bob and his team. Reporter Las Vegasbased Bigelow Aerospace is sending this package to the space station. Inside is the beam that will expand in under 5 minutes to a living area that nasa will test for safety and durability. What were interested in is how does it expand the longitudinal or back into the space station . Reporter Robert Bigelow spent 247 million of his own fortune to test expandible in space and nasa paid 8 billion, attached to the space station as seen in this animation. Such inflatable craft could eventually replace the space station but can it withstand the rigors of space . These systems are extremely reliable the safest thing that mankind could be in today by far. Reporter former astronaut now works for bigelow and said the beams skin in stronger than any spacecraft ever. The layers itself, people think, how sturdy can it be . Its like a steelbelted tire except for the material in there is stronger than steel. Reporter but bigelow has big plans. He wants to build housing large enough for several astronauts and eventually replace the space station with them. And maybe even in a decade have habitats for the moon. Theyre working on lunar landers but heres the problem. Theres no system of Property Rights for the moon. The one who spends the money to get there could reap the rewards. Faa will restrict any lunar launch licenses so two American Companies dont go to the same place on the moon and bigelow said thats a start. Next is to probably create a definition of what is this boundary . When sufficiently safe with the human beings and other facilities what is the standoff distance . Reporter the final frontier has a changing businessman and hopes to get back this time as a commercial astronaut. Hows the pay . Its different. Reportel is astronomical. Jane wells, las vegas. Heres what to watch tomorrow. On the economic front, Producer Prices for february will be released before the opening bell. Consensus is for a rise at 1. 3 and we get a report on Consumer Sentiment for march. And that does it for nightly Business Report tonight. Im sue herera and we want to remind you, this is the time of year your Public Television station seeks your support. Im just going to call it tv station. Tyler mathisen on behalf of your public tv station, thank you for your support. This program is brought to you in part by a passion for better understanding our world. Thoughtful travel can engage our minds challenge our assumptions, broaden our perspectives and completely surprise us just like Public Television. And by. Bread for the world, an Advocacy Organization working to end hunger and poverty at home and abroad. Hi, im rick steves, back with more of the best of europe. The people here claim if you stand on a chair you can see all across their country. This is the best of the netherlands. Thanks for joining us
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