just a moment. and bond yields rose t a near four-year high and that was enough to batter stocks. falling the most since august. the dow jones industrial averag dropped362 points to 26,076. the nasdaq was off 64. s&p 500 was down 31. babb pass any has more on today's selloff from the new york stock he can change. >> the steep selloff continued today on wall street bringing the dow down 4100s after session lows. we haven't seen that for a long time. energy sem i conductors, industrials, key economic benchmarks wdae all down toy. what's going on?er there are s risks to the market right now. call it a stew.ri ng interest rates continue to be a big story. bond yields are hovering aund four-year highs. and with a potentially more aggressivehi federal reserve year, investors are starting to get a little bit nervous. second there is the earngs question. some would argue that the acceleration in earnings growth thatowered the markets higher will slow down the market next year. finally sentiment lels aret their highest levels in many years. ldman sachs, bank america, merrill lynch released their market indicators, they hit their highest in five years for merrill, and seven for goldman. the global markets have enjoyed their strongest start in any year for three decades. there is littl wonder we are starting to see some pent up selling pressure starting to appear. so far this january has been more volatile. we haven't seen that in a whil the s&p made hofs of half a percentr more ten times already this month. that's a rarity. for "nightly business report," i'm bob pa sanny. federal reserve policy make remembers meeting. it is janet yellen's first time chin the r. investors wonder what lies ahead. steve liean h the results of the latest cnbc fed is your phi. >> market participants are looking for a bit more from t federal reserve this year when it comes to interest rate hikes. 95% of our 40 respondents see no hike coming at the meeting this week and that a hike will come in march. they are looking for 3.21 rate hikes this year. your average person looks for three andhe second most common answer is four. that is a change from the last rvey. you can see that in the outlook for rates. the 2018 average, 2.2% or a fule entage point and then some when it comes to the federate hikes.20 , 2.8, not much more in 2020. but long run, 3.2%, that's also higher. overall looking for more in thet way of inter rates. you can see that also in the ten-year yield where the current rate is around 2.7. going to 3.0 at the end of this year and 3.4 in 2019. that's not bad. if you leak a ago that was the expectation for this year at the beginning of 17. higher rates may weigh on the market. 2854 at close of business yeed. only 3 or4% up from where we are right now by the end of this year. and 3005 for the s&p by the end of2019. even if we get higher rates we may get more growth. look at the gdpforecast. up be up, up, up in each successive suey, adding half a percent. it is almost 3%, 2.7% for next year. better numbers that we have seen in because of the tax cuts. that's the expectation this year, thats the tax crive better growth, at least this year and into next year. for "nightly business report" i' steveliesman. as we mentioned earlier, today does mark the second down day for the major averages. is this market selloff just a blip or does it signal the benning of a more meaningful pull back. joining us is chief investment adviser of i bleakestment group. he thinks the market has already seen its best days f this year. andtmhe chief invt officer of creating planning. gentlemen nice to have you here. >> good to be here. >> peter, let me start with you, if i could. it was two very rocky ugly days. what makes you think this ienthe of it and we could turn high again. >> i don't know that we can call it the end of it. u wt is abnormal is the 450 days that preceded today where we broke a record in a record low volatility. last year was the first year in history to have an up month every single month. there is no new news. we just need to have a breather. it's healthy for the pullbacks, to get the corrections that are supposed to happen anyway. we haveo goack to the beginning of 2016 to see a correction. and thatli barely qed as one. that's what is abnormal is the lack of volatility. >> peter, you are our bear on the to. you look nice. you are all good. but you say it wouldn't surprise you if we hit the highor the year last friday. why do you feel that way? >> i tie t it interest rates and global monetary policy testimony world is changing. the key driver this bull market was p/e multiple expansion via zero rates and qe. so now we have on what certain metrics the mostxpensive market we've ever seen and now we have rising interest rates and an intense fix of fed tightening, the quantitative tightening and more rate banks. and the ecp pulling back and bank of japan, and the bank of canada. you it will be a dacher on markets. >> the last couple ofenays have tremor. do you see an earthquake coming or do you see something different than >> i think it depend on the rapidity of this move higher in interest rates. if it continues, if we see 3% plus in the ten year it happens in the combination of an extraordinarily expensive market and an economy that has become aibt diktded to very low interest rates. >> peter, you make the case, though, that we have a very healthy economy underlying, whether it'sic ad to low interest rates. but can you still -- given the run-in this market can you still fi value here at home if ined you think the bull case is still intact oro you need the look elsewhere. >> i don't think the markets ara ove. in 2010 we had high unemployment, people didn'ou hae cash. we didn't have good earnings growth. today we have exceptionally low unemployment, we are getting into the threes now, where you see wage ilation, which i a very good sign of economic strength. and corporations are holding record cash. and they look at more people employed. and people wil probably have more money in their paychecks because we are going to see wage inflation. if you have unemployment go from 7% to 6%nd you want to hire somebody, you go to the unemployed person. to go from 4% to 3%, you have to hire them from somebody else and you have to pay themmore. wage inflation is the real reason why the feds wouldaise rates. it is an interesting circle because the raise rates if they think the economy is strong enough to hold it. that deysn't mean re perfect the at it. it makes sense that we expect greaterarnings going forward than we did five years ago when the market was at a lower price. >> all right. to be uecont gentlemen thank you. >> a reported, health care stocks dragged the market lower today. shares of insurers, drugstores, drug distributors all the decline was in response to new venture that could disrupt th industry. as better that comes reports, the venture is the brainchild of three of the biggest names in amican business. >> reporter: callingal rising care cost as tape worm on the economy, jeff bezos, warren buffett and jamie dimon say they are joining forces. o mplifying their forces enhance technology and drive down health care costs. >> with amazon in play itts refln almost evangelical faith that people have thatru ty can d established business patterns in the way they have done in many other induries. ng we really need to see more details. >> reporter: it's still in the rly planning stage but what could make this different from other employer cost cutting initial tiffs is that the firms are forming their own company. the question is whether they will try to save money by knocking out the middle men who negotiate hospital networks and prices and pharmacy benefit contracts with drug makers. >> i think those who are selling their shares in health care stocks are reading this all wrong. the middleen here have an interest that is aligned with the employers. they are the intermediaries with the health care providers. and the main problem with health care these days is the fact that costs and qualityot are aligned. >> reporter: in fact,msealth care f hailed the news. tona and cvs which want merge their insurance and pharmacy into ante integ health clinic service both said they would welcome the chance to help the firms with the new business model. until now the fear would be that amazon would enter health care as a competitor toin exi services but joining with other employers would helphe put pressure on the industry. >> the best results we have seen have com from jumbo employer efforts, from them either teaming together or doing pilot projects on their own to prove that something is a good idea. then everybody else gets in line and adopts similar approaches >> reporter: it's not clear how soon the new company will launch or where it will be headquartered. but with tech giants likeoogle focus on health care.ve ors are bracing for continued disbankruptcy. >> let'salk more about this partnership between amazon, berkshire hathaway and jp morgan and what it might mean for the health care industry. joining us irk mooalbake, he a health care analyst with raymond james. archael, i have to confess i am a little bit uncn what these three intend to do and how they intend to do it. can you shed any light on that? >> yeah. i mean based on what they sai far, i think the initial focus will be on enhancedec transparencyse we as consumers are being asked to pay re, given tho high deductible plans yet we don't have the tools in hand to effectively shop and balance costs and quality. so i think that that will be one thing. i think also internally they will try to figure it out first before they try and spread it out. i was also kind of interested to hear that they planned or selected kind of a non-profit organization, because if you really wanted make a big bang with a new entity you mightant start for profit, drive more capital in. at this point it doesn look like they are trying to build their own health care system. it looks like they are trying to make it more fish and put, as others have said, margin pressure on it, so tospeak. >> and what do you think about their odds for success? we've seen amazon disrupt so many different industries very successful. and these are three really smart men. maybe that's why the stock sold off dramatically today. what do you thin the success might be? it is a big undertaking? >> it is a big undertaking and it is a veryte fragm industry. it's one of the few service areas where we don't know the costs up front. we don't know until after the process. to date, whah heare investors have kind of learned is that moves like this tend to be more evolutionary change rather than rev change.y consortium ually a known as the health transformation alliance, a group of 40 employers, they are star mng toe some change in the pharmacy benefit area. but i would sayti evoary at this point. obviously, the details are scarce athis point and it remains to be seen but that would be my bet at this point. >> quick answer here. igree with y totally. the whole business is so fragmented. and you have all kind of players eager for profits and often p making hugfits through this. but today the stocks almost across the board went down. sdo you think that thatck retreat is going to be enduring because of this? or was it a one-day reaction? >> no.he i think will be fits and starts. i think part of the reason we saw that, ifem you rr late last year there were a lot of concerns that it would be amazon coming in. they would either buy a pbm or buy aisibutor and dramatically change that. then it started to abate as it isn't seem they were following through an their licenses. so you had an early big strong move in the health care stocks this year. and think you some pullback on that as amazon and its nowcounter-parts raised their head again. so you willsee f and starts. the next big announcement will be the ceo. >> alrighty. thanks very much micha baker with raymond james. >> thank you. two dow components reported earnings that topped expectations. pfizef bted from the new tax law and issued upbeat guidance. the nation's biggest drug company plans to investment $5 billion in capital products over the next five years. mcdonald's reported super size sales and better than expected profit the hamburger chain says cheaper menu items helpedto boths traded lower because it was a down market. jp morgan increases its rating on united continental from overweight to underweight. the firm likes the ai expansion plans and says the stock is the cheap nest the ector. price target no$83 a share. the stock closed at $67.01, up nearly 2% on thisdo verward do i. know mora down grades yum brands to y. the firm sites concerns over sales at taco bell. the stock dropped2% at $84.59. >> cvs health was upgraded from buy to strong buy at needham. called it its top pick for 2018. raised to $100 per share from $88. shar closed down 4%. cowen says skechers could announce a share repurchase. that sites optimism in i women's base and a favorable product cycle. it maintains an outperform rating. however shares fell in trading today. still ahead, open skies. why the u.s. airlines are celebrateding a big win, and possible future expansion in the middle east. president trump will deliver his first state of the union address tonight, and the ecomy is expected to get a lot of attention. ayman javers is at the white house. >> reporter: we are told tha the president began making edits on the speech on the plane ride over the davos switzerland last week but the speh writing began as far back as december. there has been a lot of prep time forte tonight's s of the union. the white house has given a sense of some of thet topics t will be included. look at the list of those. topics including the economy, also infrastructure, the question about immigration and how that will be handles, trade, national security. all of those will be pillars o this speech tonight. of the economic valentine's day advisors who has been helping the president on the draft said today the president is going to be talking about infrastructure a give us a price point snees going to talk about two key principles on frastructure. he is going to talk about $1.5 trillion of revestment. mo importantly he is going the talk about streamlining the approval process on infrastructure. >> something else to watch for tonight on a day in which the dow has been down significantly throughout the afternoon, will the psident mention the stock market? he has been proud of stocks' performance under his presidency. he would like to mention the stock market but could that be awkward given the performance today? that's somet for tonight.atch for "nightly business report," ayman javers at the white house. harley davidson warns of slumping demand. that's where we begin tonight's market focus. the motorcycle maker said 2017 was particularly tou with shipments falling to their lowest level in six years as demand among young buyers failed to pick up. it reported stronger than expected sales but sayswi sales continue to weaken this year. harley davidson is responding to the challenges by cutting jobs and closing some manufacturing plants. shares were down. the new tax law cut into profits of the hospital operato hca but the company managed to top expectations thank to a rise in patient admissions. the health care company also said it plans to invest more than $10 billion over the next three years and continue looking atotential acquisition opportunities. the shares rose nearly 4% to $101.45. higher selling prices helped revenue at the home build pulte to rise but it was at a slower pace than analysts wereex cting. profits came in better than expected but the company warned cthat risingts due to a labor shortage would marginalize their profitsn 2018. shares slipped. corning said sales of its gorilla glass used in smart phones helped everyall revenue rise. the company did warn upcoming investments would hurt profits al the first of '18. shares off 5% at $32.33. the lawn and garden car scotts miracle growosd a worse than expected loss in its latest paarter. the c also said a slow down in one of its subsidiaries would cause sales for 2018 to come in lower than expected. revenuero figures to between 2 and 4%. shares plunged 14% to $91.96. renault nissan beat out voeks wag toon become the world's top selling automaker st year. in 2017, they sold 1076 million vehicles. volkswagen sold a little bit less and falling one spot to number three is toyota, which g postup sales of 10.2 million. after years of complaining about the expansif airlines based in the persianan gulf carrierse in the u.s. are celebrating a big win tonight. qatar airways has agreed to changes that could help u.s. airlin expand in the middle east. phil lebeau has the details. >> reporter: as persian gulf airlines havehe expanded into t u.s. their growth has been a sore spot for u.s. airlines. they claim the gulf criers are sub siddized by their government making it hard to compete on flights to the middle east and parts of asia. but today the u.s. and qatar agreed to changes that should help u.s. airlines qatar airway also not add flights to the u.s. from places like europe, which could undercut transatlantic competition. in addition, qatar airways will agree to accounting standards to ensure financial transparency and limit the use of government asbsidies. >> the presidentade this matter a priority, and the outcome we achieve willed ensure n the l playing field global aviation market. >> deltas one airline celebrating the victory which could eventually lead to the airlinegh re-establishing f to parts of the middle east. >> we need to have a presence in the middle east. we need to have a presence in india and other parts of southeast asia whiche have been out. and by shining the light on the scope of the subsidies and providing transparency it's ow going to a us all to make long term investment decisions to go into markets knowing your government is standing behind us. >> reporter: almost ago year bastion and other airline ceost met with the president at the white house. they complained about middle s eastern airliompeting unfairly. a complaint they have made many time in the past which is why u.s. airlines are celebrating a chap that many nev expected to happen. >> we are being heard. we appreciate it. every time i have talked to president trump, he asked what can we do to help you help america. this ishat he has done, we strongly applaud him for that. >> reporter: next up forphe tr administration, trying to construct aimilar agreement with emirates and etihad ir airways, twones based in the united arab emirates. >> to ad more about the win for u.s. carriers, head to our website. comg up, here come the tech earnings. and the bar is high. it is a big earnings week, but one of rke s' best performing sethors. that would be technology. tomorrow microsoft and facebook report results, followed by alphabet, amazon, andpl the three as on thursday. the sector has performed well, which is why there is a lot to watch in these upcoming results. josh lipton has epmore. >>ter: the bar is high. the sector is expected to post rnings growth that outpaces what is expected for the overall s&p 500. with that growth comes some well-known risks. lawmakers have been asking a lot of questions, specifically about how russian operatives used google and t facebook try and influence last year's presidential election. european union regulators also targeted tech, including leveling a nearly $3 billion fine against google. despite those risks, some say c thespanies are still smart investme advertising businesses are strong, and valuations, they say, remains tractive. te investors are also intested in the impac of new tax law given that pentially hundreds of billions of dollars could now be returned to the u.s. apple, microsoft, cisco, alphabet, and oracle alone have nearly $600 billion stashed overseas. how could tech companies put work?riated cash to likely with stock buy backs and dividends. then there is apple, the sworld' largest public company. ceo tim cook is facing new questions with reports t suggesting thahe iphone x isn't selling as well as expected. apple is not commenting on torse s but even if the x isn't living up to eectations the new and less expensive 8 and 8 plus could pick up the slack a help apple deliver good results on thursday. for "nightly business report" i'm josh the dow dropped 362 points to 26,576. the nasdaq was off 64. the s&p 500 down that will do it for us tonight. i'm sue herera. thank you for joining us. >> f me as well. i'm tyler mathisen. have a great evening, everybody. we'll see you tomorrow. announcer: this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutns for america's neglected needs. >> planning a vacation escape that's relaxing, inviting, and exciting is a lot easier than you think. you can find it here, in aruba. families, couples, and friends can all find their escape on the island with warm, sunny days, cooling tradewinds, and the crystal-blue caribbean sea.

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