Stocks dropped sharply. At one poi the dow jones was off 250 points. It finished down 195, at 18,143. The nasdaq fell 49. And the s p 500 was off 20. The reason for the swoon, a bloomberg report that some hedge funds cut their exposure to germanys Deutsche Bank. That sent shares of deutsche ba to an alltime low and rippled into the u. S. Financial sector. Thats because the report was reminisct of the financial crisis, when investors sold on news of counterparties pulling business with banks like lehman br and bear stearns. And that nervousness seeped then into the broader market. Bob pisani explains why. Reporte the markets were fairly quiet midday when a report from bloomberg on deutsche dropp the markets. They reported some hedge funds that cleared derivatives trades with the banks and withdrew some positions, a possible sign of concern about doing business with the bank. Its not much of a story, but it did revive long dormant memories of 2008. Deutsche b dropp 7 . European banks about 3 . U. S. Banks dropped. Jpmorgan d1. 5 . The s p dropped before recoveri some those losses. What possibly does Deutsche Bank have to do with jpmorgan . On the surface, not much. But in the postfinancialc world view, it doesnt take much. The concern is if Deutsche Bank did go under, it would cause a confiden of crisis in europe. Never mind the chances are small that that would happen. Its small but not zero. Problems with one bank could lead to higher credit costs and slower economi growth in general. Remember, markets hate uncertaint traders losing confidence in your viability as a bank, that was a big issue in 2008. What about rest of the market . Why did whirlpool drop 2 . The simple answer is todays trading action is dominated by traders who pull their bids when theres market uncertain. When theres heavy volume, buying drops to attract the buyers. For nightly busine bob pisa at th new york stock exch should we be worried about the health of the u. S. Banks or are todays fears overblowing . Our guest is the banking analyst at susquehanna fin group. He joins us now to discuss. Jack, welcome, always a pleasure to have you with us. What did you mak of todays actions, specifically as it referred to Deutsche Bank . So the Deutsche Bank news is really reminiscent of what happ in 08, as bob said. When customers stop doing business with their brokers, it becomes a self fulfilli prophecy and a crisis of confidence memo are short, and its an extrapoln to say, look, this will have a bad impact on the rest of the economy. Being priced in to some ext today. A lot of people sell and ask questions later. Let me ask the questions. Is Deutsche Bank in trouble . Are any u. S. Banks going to be struck by any kind of contagion . Any time you hear of clients pulling back, thats a concern, that creates more concern from incremenl clien and it becomes sort of a snowball effect. I dot cover Deutsche Bank. I do cover the u. S. Banks. And there are very little parallels to make to the u. S. Banking system. The quality of the u. S. Banks is pristine, betr than its been in a decade. Loans are growing. You know, housing is doing very well, even though we had a down number in august. On a year to year basis, housing continues to grow very nicely. And were just not seeing any of those kind of issues. In fact, you know, for some of th banks in the u. S. With market exposure, you kn, s pulling back from deutschek may create an opportuny for names like jpmorgan, bank of america, to do more with those customers. In other words, it might help the u. S. Banks, because of the pristine balan sheets and because of the perception of more safety . Absolutely. What about the fed . Does this type of an event, especial if the selling continues, have any impact on whether they feel less comfortable or more comfortable moving on Interest Rates . I would speculate that it makes them feel less comfortabl right . Uncertainty is r a good thing. If Deutsche Bank does suffer some sort of event and germany doesnt step in, could that weigh on Economic Growth . Could it cause, you know, Corporate America to pause and further hold back, hold off on Capital Spending . Those things would roll up into a slower gdp growth rate, potent causing the fed to hold off. I think there h been some enthusia coming out of th septembe meeting that the fed could raise rates, and banks responded to that. This obviously calls that intbi. Jack, thanks for joinus. If youre one of the millions of americans who commute to work by train, this story hits home. A crowded nj transit commuter train plowed into the hoboken station during the morning rush. It smashed into a barrier, knocking out pillars, killing at least one, injuring numerous others. Heres reporte i a height of rush hour this morning when a new jers commuter train crashed at the Hoboken Terminal here behind me. The Hoboken Terminal is one stop away from new york city, where you have to transfer to get all the way into the city from here. Governor chris is calling it a tragic accident and says its too early to specul exactly what the cause was or whether or it could have prevented. We dont know what the cause of the high rate of speed was. Therefore we cannot answer the question as to whether or not any othe apparatus or systems could ha slowed the train down or not based on that. So were not going to speculate on that. Reporte hoboken, new jersey is a major commuter town. New jerseyra says on average 3900 passengers could ha on board on an average day, by the time the train d he. Governor chris c does not have an estimate for when the train station will be up and running again. Commuters are urged to look into other options to make their way into new york city. For nightly busine im Courtney Reagan in hoboken, new jersey. A team of safety inspectors arrived at that crash site today. Morgan brennan has reported y for us on the Railroad Industry and legislated safety changes. She joins us now. Morgan, there is a Safety System called ptc, positive train control, that governs speed. Had it been installed here, it might have averted this accident. Y has it been so slow to be taken up . So positive train control is actually it was mandated by congress in 2008 that all railroads, passenger, freight, and commuter railroads have to install this high tech technolo that basically would prevent trains going at high speeds fm crashing into other trains or crashing into stations. It basically overrides the operator to slow the train down or bring it to a stop. So its still an investigation th active. We still dont have all the details. If it turns out that it could han prevented this, it will certain draw attention to this technology that was supposed t place by the end of 2015 and then had that deadline extende to 2018. So why is new jersey in particul so far behind . Because some states have been able to upgrade in a much more efficient manner. So this is an estimated cost to install this for all the railroads ie country, is 10 billion. Its very detailed technogy specifically, new jers transi none of their trains have it yet. Thats been a bit slower to adopt this a big part of that is because new jers doesn have a fifth of its budget is arily on hold because of disputes within the state around fiscal budget topics, including that. Its been very expensive and a lot of railroads have been having a hard time installing it. How does it work . Dont wonk. Okay. Ill try to do this is that couple of sentences. Positive train control, it basically automates the train system, the railroad network. It uses radio airwaves to connect the trains to transmit along the tracks, so that e folks that oversee these networks know where every train is, how fast its moving. The trains can sense where other trains are. It basical automates the Railroad System and it slows the train down if its going too fast. Exactly. So it can override an operator if theyre moving the train too fast. Morgan, thanks a lot, morgan bren regulatory the nations economy grew in the Second Quarter than original thought. Gross domesti product, the broadest measure of goods and services produce across country, expanded a 1. 4 annual rate. Thats up from 1. 1 reported last month. That report showed that growth in exports, which adds to gdp, outpaced gains for imports. It also highlighted an improvem in Business Investment now to housing, which may be showing some signs of cooling off just a bit. Buying slowed yet again in august with fewer people signing contracts to buy existing homes. It is the Third Straight drop in socalled pending home sales. And as diana olick reports, realtors blame it on a lack of supply w reporte fir home buyers tyler and Theresa Mullen are doing the final walk through before closing on their dc home. They knew they it as soon as they saw it, so they wasted no time making an offer. Eight months of house hunting taught them that. It was a bit shocking when youre trying tod a place within t p range and as soon as you start looking at it, its gone. Reporte the number of listings have been dropping for 15 straight months nationally. Realtors says its the primary reason for falling sales and rising prices. Perhaps the buyers are exhausted. They excited by the low inventory choices. And furthermore, home prices consiste rising above peoples wages. People are getting knocked out. Repor one quarter of u. S. Housing markets are less affordab than their long term historical norms. People are seeing it worsen co to a year ago. While some hot markets like san frano are starting to see prices ease, other markets in texas and colorado are seeing double digit gains. The markets simply need more homes. But homebuilders are the no ramping up production enough to meet demand, and only now are they starting to turn to starter homes. That will help first time homebuye down the road, but not today. I think thats what we found to be the most surprising, is we saw a place listed on a wednesday, and we were scheduled to go see it on saturday, and by saturday morni we got a phone call that it was already under contract. The mullens advice, if you wa to move, move quickly. For nightly busine Deutsche Bank wasnt the only bank in the news today. The ceo of wells fargo back in washingt as shares of that bank fell to multiyear lows. This time, john stumpf faced qu lawmake over his banks fake account scandal. Me congress were just as angry this week as they were last. Wilford frost reports from capitol hill. Repor wells fargos ceo, john stumpf, faces hig on capit days, two days after he agreed to forfeit 40 million of his pay. His challenge today, to provide more detail and conve he was sorry. May i respond . Well give the witness an opportunity to respond. As i said before, im sorry we didt this right. I take this very seriously. Im not in denial. And we will get this right. We will fix this. Reporte as to the details, the 2 million fake accounts number could b as much as 75 lower based on the latest investigat also said the full board is being investi entirely, not just Company Executives like him. And the House Committee does plan to investigate the regulato as well as the company on whom there was mixed opinion. But the focus once again was the tone of the hearing as opposed the content. Lawmakers still angry and wanting more. The whole board needs to go, if theyre going to allow someone to be in charge when time after time, you just talked abt you fired 5300 employees when you found out they were doing something wrong, they were fired because they were doing but wrong. Well, something is going wrong at this bank. And you are the head of it. So shouldnt the board from your own admission, if the buck stops with you, as you came out here and said, i apologiz the buck sto also to also admit that criminal activity was going on in your bank, then you should b it stop. Reporter the other big takeaway, this week well see rising pressure for other banks to be dragged into whatsoever has a Single Company issue. We have t are too big to fail. Bail008 we found they were too eric holder has told us they are too big to jail, saying he s for bringing a criminal indictment we now learn that theyre too big to manage, too big to regulate. It time to break them up. Rep thus the other banks will be keeping an eye on developmen so it sum up, the ceo john stumpf performed much better today than nine days ago, but the issue rumbles on for wells fargo. Fo nightly busine wilford frost in washington. Ahead, why some say viacom and cbs are b the fcc has delayed a vote on the controversial settop box proposal. The measure woulde opened up the cable box marketplace to competitio by requiring providers shows avai streaming apps. Regulatorsee not all the issues been the measure has faced stiff oppositi from cable and content providers. The Redstone Family which owns a majority of both viacom and cbs called for the two companies to get back together. Viacom and cbs used to be part of one company until viacoms assets were spun off about a decade ago. Viacom and cbs shares rose in trading today. Julia boorstin has more. Reporte today there are proposals that the companies cbs and vieac remerge to respond more aggressively to the changing enter landscape. Whetr this dea happens is really up to cbs les m. Cbs would likely draw a big premium in the proposed allstock tra to make that deal happen. Analysts have raised concerns about viacoms cable network, struggling ratings and higher than average costs weighing on cbs growth. But there would be cost savings, and greater scale could give cbs more power in negotiations for distributi and more content for its digital apps. For nightly busine im julia boorstin. Snacks and water help pepsis earnings pop. The food and bench giant Beat Estimates thank to strength in north amera for its fritolay noncarbonated drinks. That helped offset a continued decline in soda. Revenue surged in key overseas markets. S take a look shares. They rose a fraction at 107. 76. And sticking with snacks, conagra, whose brands include slim jim and ready whip, dont mix the too, but revenue did slip a bit. Conagra wants to refocus its business on healthier products to keep up with consume purchasers of conagra are up 7 . Fitbit shares hard hit. Pacific Crest Securities cut the fitness device maker to underweigh essenti a sell signal, from neutral, saying sales of the companys latest product were off to a slow start. The fitness tracking ban was seen as a flagship holiday product. Fitbits share finished the day down 11 at 14. 81. Qualcomm may reportedly acqu nxp semi conductors. The wall street journal says qualcomm is in talks with the chip maker over a deal that could take place in the next thre months. The takeover could be valued at more than 30 billion. Shares of nxp were up nearly 17 to 96. 12 while qualcomm was up 6 to 67. 45. A district Sales Manager at incies pharmaceuticals for taking part in a scheme to take kickbacks for opioids, the latest in a string of charges brought against company emp dealing with the drug. You may remember we aired a series about the scandal last year. S shares were off. Some say the government hasnt moved fast enough on Interest Rates and some want to know why it didnt do more to weed out based behavior at wells fargo. Now theres another issue. Steve lies. Reporte the fed has been criticiz by republican nominee donald tru for being political and keeping rates too low, and by investors for confusing communicat but a gathering wave of criticism has received less publicity. The lack of diversity of the central bank. It became a topic this week when the fed chair faced congress. Weve had no africanamerican president s. Weve had zero latino president s out of 134. So i want to make sure that we stay focused on that. I think we can do better than that. Weve made some progress but we need to do better. At the level of president ial appointmen, i would very much like to see, i would very hope hope that we can see greater diversity in the fomc. R in an effort to address these concern the cans can say city fed held the first ever bankers conference this week in an attempt to identify potential banki leaders who could one day be policy leaders. Yellen addressed the audience toda and hinted at possible changes to come. Rose washington is deputy chair of the kansas city fed, involved in Economic Development lending in tulsa, oklahoma. All money is green but people are different. I bring a unique perspective to this organization, to the monetary pol discussion, because of th commu that i serve, because of the community where i work every day, where my ear is to the ground collecting data from minority businesses, l manufacturers located in census tracks. Reporte moet with several fed officials. The fed has done a pretty good job in balancing things over the years. But i think more diversity on the fed board will bring more insight into whats happening in the urban communities in america. Rep amid calls for greater diversity, the feds first test will come not here in kansas city but in atlanta, where the feds president has announced he retire next year. The campan has begun to seek out a minority to fill the post. For nightly busine im Steve Liesman in kansas city. Coming up, change of plans. Why some families are rethinking their fall and winter vacations tour. It took mondays but Congress Approved more a billion do fight the zika virus. It was included in part of the spending bil we talked about yester that wil keep the government fro shutting down. It comes as families rethink their fall vacations to states that are dependent on tourism like flori reporte the sunshine state, florida, is the second mostvisit in the u. S. After california welcoming in ov 106 million out of town and tou year, accounting for 90 billion, accordi visit florida. This august the Tourism Sector took a hit after the centers for control, the cdc, slapped a travel warning on two neighbor miamidade county. Th meant a change in travel plans for some americans over the peak fall and winter seasons. Global assistance just did a survey of 500,000 travelers who were planning to go to florida. This year as opposed to last year, we found that overall travel to florida during the peak season, which is about midnovemb to midapril, is going toe down about 15 . 30 fewer trips to miami, and 15 le fligh to palm be according cdc, as of last week there were 43 locally acquired cases of zika in florida. The states efforts the spread claimed a victory last week, the cdc lifting the travel advisory to the wynnewood area after no new cases of the illness were reported in the last 45 days. Relief for miami operators that have experienced some lost we have 53,000 hotel rooms countywid d groups meet in hotels. And there have been the cancellas in the hotels, small groups. Reporte most major Tourism Business opera in florida say they havent seen any major effects from zika, including h operates theme parks in orlando. The company said earlier this month that the virus was having e bookings of the cruises lines that operate out po i think on the zika concerns, it really didn impact us very much. The reality is every year there is something, zika this year, ebola, those things come up. Reporte booking for trips to florida may have been down in the month of august, according s new survey, but like the battle to control the zika virus, the states tou sector is hoping fortunes turn around soon. For nightly busine im susan lee. For more on the potential impact zika could have on florida travel, head to our web side, nbr. Com. The dow closed down 195 points. Nasdaq fell 49. The s p 500 was off 20. And that is it for nightly tonight. Im sue herera. Thanks very much for joining us. And thanks from me as well, im tyler mathisen. Have a great evening, everybody, t this program is brought you to in part by a passion for better understanding our world. Accomplish the same thing they both allow us to venture into our world and experience great art, music, history, food, and people. 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. This time were enjoying the delights of the french countryside its the chateaux of the loire river valley. Thanks for joining us
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