economic cyber crimes against american companies. which firms were hack and why were they targeted? we have all that and more on this monday business report on monday, may 19th. >> good evening, everyone, thanks for joining us. modest gains in stocks today, but that's not what people on wall street were buzzing about. much of the talk was about two members in the dow jones industrials average, both global economies and both involved in massive multibillion dollars that could transform their business model and industry but only one of those companies appears to have a deal. the other, no deem. that itself where we start tonight after month of negotiations and multiple sweetened offers. pfizer received a no from britain's arizona tra zenica, still it wasn't enough. so no deal with some pretty big questions remain about what's next for pfizer and as tra zenica. >> take it or are leave it and astrazenica left it rejected pfizer's sweetened and it says final offer. because the $1 fine billion price tag just wasn't if you have. >> we decided it's 13ri69. they needed to put more than 10% plus on the table to get the recommendation discussions. so that's the request from our shareholders. that's what we did. >> but the brushoff is leaving pfizer with an uncertain future as its plan to create the drug company hits a major road block. despite the setback, pfizer has one more week to make the offer, a deadline established under british law. pfizer says it won't, but it does give astrazenica time to pressure it to continue talks. pfizer also has the option to go hostile, which pines taking the issue wage to shareholders over the head of the board, but it says it doesn't want to. the chances of a deal completely collapsing is real. and if that does happen, pfizer will be left with a ton of cash to put to work. >> they didn't want to necessarily repatriate the cash, they could buy back shares and use the cashover seas to balance off some of that debt. >> and the outcome of this deal could leave a lasting effect on other american drug companies looking to do overseas deals that would lower their tax rate. >> closing the loopholes on being able to do a tax inversion for these mergers would likely mean that there will be a bit of a flurry to get these deals done sooner rather than later. >> without a deal, both companies may find themselves searching for big fixes because each has seen sales drop and as pat tents expire, they are facing performer competition from generic truck makers. >> this is how drug makers performed today. pfizer rose half a person st. astrazenica down 12%. a passive acquisition today, at&t, it reached a deal to buy direct tv for nearly $50 billion. it's the latest merger in the telecom and television industry, changing the landscape on how people receive data and wireless services. morgan brennan has more on which companies may be if play for future americaners. >> we've known it was coming, but the weekend, at&t and directtv officially struck a deem. parking the latest big ticket purchase in the communications space. the deal which still has to get past regulators, will create a combined company with access to over 26 million u.s. paid tv subscribers. putting it up against another come cast. at&t and directtv's deal excels a mergeing trend in media, consolidation. analysts say the entire industry is undergoing a fundamental shift as customers go online for their immediate consumption. >> this is all about broad band. we live in a brond band world. for the one is talking about how many video households they have, how much better video service they can offer. it all about what is the potential of broad band in this country and what can that beggar company do if terms of getting into a wifi foot print to provide wireless access to that broad band. >> at&t will be able to build out the services and that raidss questions about dish in this case, which doesn't have if internet capabilitys to compete but has the we'reless airways that telecom companies want. today news are fueling reports that dish could be if talks with verizon, a move if realized could spur yet another deal. at&t's announcement raises questions about regulators and whether two major mergers will impede yet another acquisition, sprint's interest in t-mobile u.s. >> i think it's a good time to get deals through the regulators. there will be very little pushback. i think this deal is going to dictate the way other deals play out in the states. >> won thing is certain, pedia companies are seeking ways to build out their video services. and see infrastructure to distribute them. for "fightly business report," i'm morgan brennan in los angeles. >> and rich peterson joins us now to talk about today's episode of deal or no deal. he's director of s&p capital. good to have new studio tonight. let's talk first about the pfizer deal. this one looks like it may not take place, i am wondering a what your spiedy sense is. do you think this is a tactical retreat? >> the key word is final west virginia does final mean? >> according to takeover panel in the u.k. the final proposal is the final proposal. is that the key word or proposal. >> if it turns out they go their spat ways, what does pfizer do then? >> obviously, they wait six months before another proposal, then you have disgruntled shareholders, many of which are big institution, black rock is the biggest shareholder. only 8%. it's very disgruntled. the fact that the shares dropped 8% today. >> do you think that pfizer decides not to go hostile, it's longer and they are under this time pressure, they have to do a deal with somebody as soon as possible. >> i think the question is hostile deals by tear nature, they show a 20 or 25% success rate for a hostile deal. the board on board so to speak. this fact is they want to do this deal in part to do the corporation inversion to try to take advantage of the lower tax rates if you can you can offered. a lot of terms have done that. activists have acquired warner chillicothe a couple years ago in the manufacturing side. so it's up to the management of fiez tore make the determination how soon, you know, will they make a decision to go hostile? >> let's talk about the at&t and direct the tv deal. in the piece there that 40r7k sent, verizon now ball in your court. are they likely to go after dish which has been sort of in play at various times over the past few years? >> it's kind of funny, at&t 30 years after the baby bells were broken up. here at&t is coming back into. >> it's like godzilla returning. >> every two years. >> bigger is better, that the case? you have to have scale? >> you are talking ab verizon. i think the difficulty is there. they required a stake in verizon wireless. so they're trying to put that into their, under drear e their umbrella. i think with dish network, you talk about a check for it. we have only so many pieces left on the board. the fact with dish to talk about verizon but i don't think that's happening. they talk about soft things, sprint which is owned by japan's soft bank or t-mobile which is owned by bush telecom, both international players that parents may not be too apt to look for that deal. >> a lot of people are saying whatever happens with verizon whatever they do next, the next mergers will be maybe fox, maybe netflix. do you see it that way? >> i think one factor is private equity. now, we are talking about who is the other players? private equity is on the order of $300 million of unused capital to put to work. it's to be active in the media center. most deals are discretionary. >> rich peterson, tanks very much. thank you to see you. >> on wall street, those headline grabbing mergers we told you about gave stocks a modest boost, enough to lift the dow transportation index to a fresh all time high t. dow added 25 points the nasdaq was up thanks to the s&p up 17 points. apple and google have called a truce at least for today and on one issue, they have agreed to drop multiple pat tent infringement lawsuits. apple called google's android operateing system a copy of the iphone system while google file a series of lawsuits against apple for stealing its mobile patents. the truce does not apply to apple's long ongoing and longstanding litigation against samsung over patent use. google's youtube unit is reportedly paying $1 billion in cash to acquire twitch. it's a videogameing streaming service. what exactly is twitch? who uses it and why is it worth all that money? >> it sound exciting, not exciting. >> reporter: most people couldn't answer this question, what's the post-popular video can el on google's youtube? the answer is twitch. twitch is beth known for streaming live tournaments, where gamers can watch others play. this is a big park. as many as 1 million people sometimes watch these do you remembers, which can last up to ten hours and that's exactly why google is now reportedly thinking of spending $1 billion to buy twitch. >> google obviously is interested if bronding its reach, broadening the reach of youtube. twitch i know is the largest youtube channel. so more activity on youtube is on twitch tan any other channel. >> it's within striking zansz here. >> twitch hasn't been around now. it has 35 million unique visitors and it's raised $35 million from besseem re ear venture part first. it's one of the hottest web services in the world. part of that is due to the loyalty and focus of the global videogameing community, which loves its live streaming entertainment. >> ps, war and x-box one, having twitch integrated. sony, there is literally a button on the controller you press. you start broadcasting. so the idea that, you know, people can bach your game session and each of those consol makers sells for tens of millions of consols, with eforecast each of them is going to sell 100 million or more son consols, you will have 100 million vikaia twitch. >> at any time of the day, for google it's about building a giant audience, if they c'mon advertise twitch's fan base, google believes that can be a license to present money. >> still ahead on the program, the u.s. accuses some members of the chinese military of cyber-spying on american companies. which companies? and why will they tell you this? credit suisse is coming cleempb over allegations that it helped wealthy american clients hide money in secret swiss bank accounts in order to avoid paying u.s. taxes. the justice department has come out swinging against corporate espionage, accusing five chinese military officials of cyber spying on six american companies. the indictment announced today includes 31 counts of economic espionage, theft of trade secrets anding a dpra rate issed identity theft. the targeted companies are westinghouse, alcoa, u.s. steel, solar world, allegheny technologies and the united steel workers union. at a press event. u.s. attorney general eric holder says international success should not be based on a government's ability to buy and steal secrets and violators will be prosecuted. >> this administration will not tolerate actions by any nation that speaks to illegally sabotage american companies and undermine the integrity of fair competition in the operation of the free market. >> in response coin grounds the charges, calming them absurd and adds they will only harm china-u.s. operations. scott, this all sounds great. but these guys are in china. >> yes, they are. >> they will come here and subject themselves to the u.s. legal process. so what itself the.tof the indictment? >> the point is the largely symbolic, but it's more than that, because they've laid out what the u.s. knows now. they've basically put the chinese on notice, that's what you are telling us. while it could send the chinese further underground the idea is to basically call them out, say, here's what we got. we know what you are doing, now stop it. >> alcoa, westinghouse, u.s. steeshlgs why are they going after these nuclear power companies? >> these are areas where the chinese have been trying to gain a competitive advantage. in some cases, according to this dime, they did just that by basically finding out what the u.s. companies were up to. they were pursuing unfair trade allegations against the chinese or working on joint ventures with the chinese. in the xas of the united steel workers, they were in the process of ramping up their pr campaign against the chinese for unfair trade practices. it gave the chinese allegedly a window into what all these people were doing so they could gain back the advantage? >> several of these companies, with the exception, pittsburgh area companies, that coincidence or because there was a particularly active investigator working in that office? >> that's a part of it. it's also because the steel industry is there and one of the issues china has had in aggressively competing against the u.s. on steel, is china doesn't competebell well on costs, apparently, according to analysts we have spoken to, unless it can find out basically the other side's hands, see what the u.s. companies are doing. >> sophisticated oearnings? >> sophisticated in that allegedly, it was the chinese military the way they were getting is is called spear fishing. that's where they send an e-mail, it looks legit. it has a living or an attachment. the unsuspected party clicks that. that installs malware on their computer and the chinese are in. >> scott cohen, kauchg very much. u.s. officials are busy trying to secure billions in chinese investment dollars to repair the u.s. crumbling business venture him despite efforts, it may not be easy. eunice euan has more. rochester as one of the first acts as u.s. ambassador to china, max baucus is trying to rebuild america's infrom structure. >> the united states is more than opened for business. we would like foreign investment, in this case chinese investment. >> reporter: to stay in by a jenning, the former senator from montana is wooing investors and matching them with investors from arkansas, massachusetts, washington, d.c. >> america really needs the repair its infrastructure, roads, highways, businesses, airports, need to be results in many case. we know that. that frankly means a huge opportunity. >> reporter: baucus' push is to ramp up infrastructure for long-term economic growth. because of concerns about rising deficits, that spending has been limited. the u.s. chamber of commerce believes private money, including from china, can gill fill the gap. it estimates america needs at least $8 trillion to modernize transportation energy and water systems through 2030. they haven't been upgraded since the 1950s. >> given our projections of massive infrastructure needs, china's sources of global capital and infrastructure goods and services and the much wam advantages to be realized, substantial opportunities should develop. >> reporter: the u.s. push comes as chinese companies are looking to diversify their investment and beijing is pursuing tear builder to compete on a global stage. but many companies here say they feel unwelcome. relations between the u.s. and china are tense over foreign policy, cyber spying and trade, some chinese firms fear their investments would face unfairly tough scrutiny in the name of national security, in an industry that's seen as sensitive. baucus, ae long-time washington power broker, though, remains upbeat. >> where there is a will, there is a delay. >> for "nightly business report," i'm eunice euan in beijing. the teen retailer and parent of three people and anthropology reported higher expenses that overshadowed a rise in revenue, fails that the fame sake brand continued to decline. shares were lower after the close, during the regular session the stock was off slightly at $36.17. shares of intermune jumped on positive drug test data. it says experimental medicine to treat a fatal lung disorder had positive results. the drug maker will resubmit the treatment for approval in the u.s. the stock up almost 13.5% to finish at $38.92. campbell's soup posted weaker tan expected quarterly sales. increased promotions failed to drive growth in the soup unit. the company lowered its full year guidance outlook disapoint. ed investors. the shares fell more than 2%. going to the happiest place on earth just got a little more expensive. disney raised the ploois price of a disneyland single day california park pass by $4 to $96. the cost of parking and annual passes are up as well. disneyworld's fraction rose to $81.05. deutsche bank is raising money. the move comes amid uncertainty about the cost of regulations and the need for funds to expand its investment business. shares fell more than 1% to $41.66. go-pro behind if action camera has filed to go pub leg. the company plans to raise up to $100 million in an initial public offering of common stock it will trade on the nasdaq. the board at target stores is drawing leeven on executive pay. the company is revamping compensation plans for current exec and cutting last year's pay for ousted ceo greg steinhoffel after shareholder comments he was making way too much, especially after mishandling that massive credit card. wars are heating up, opinioncy unveiled a high-tech dispensing machine. it's called spire. it takes aim at the free beverage lets people make their custom blend. it will expand into restaurants, movie theaters and other food and drink retails. >> what we can do is drive more growth so we get more accounts. so it's going to be a big win-win. >> pepsi had a lot of catching up to do. coke's free style machines have been out with 20,000. in work place. coming up, wams when the highest high school students in the country get asked complicate i complicated economics questions. >> that answer just ahead. . ben bernanke says there is no need tore the central bank to share its balance sheet. he told the monetary policy conference if dallas when the time comes for the fed to finally raise interest rates, there is no need for the fed to raise its $4 trillion balance sheet. the former fed head added that raising rates means the economy is getting back to normal. well, it may have been a long time ago. even ben bernafk ewas a high school student just learning about economic policy. now there is the annual national economics challenge, bringing thousands of teens across the country to compete over their knowledge of the economy and how it works. steve leisman knows a little about that has more on today's finals in the 14th annual competition. >> reporter: under what conditions is it difficult for monetary policy to have an effect on -- liquidity trap? is there that is correct. >> reporter: take a bunch of ridiculously smart high school sfrunts carmel, indiana. >> my name is christine wang. >> reporter: put them against highly intelligent kids from texas. after successfully complicated questions what do you get? teens from all over the country as far away as hawaii, indiana, bam and as close as right here in new york competed for these trophies. think of it as a spelling bee for economics. can you spell the bacardi equivalent? it's put on for the economics for education. they teach teachers how to teach economics to kids. >> they learn about pricing, immigration the federal reserve system. all of the things they will need to learn and know how the economy around them is working. plus they actually have a lot of fun. >> reporter: carmel took a commanding lead on this question, what type of good or resource has the traits of being fawn exclude annual and rival? >> economy resources. >> that is correct. >> billary came back to tie it. >> once again, we are tied with one question remaining. it is 1111. >> reporter: and eventually win on the question. >> on the components of gdp, which is the most important for long-run economic growth? >>. >> reporter: wait, before we tell you the answer, do you know it at home? you have five seconds, three, two, one. >> investment. >> that is correct. >> congratulation bel air, are you the national champions. >> reporter: and the prize, not a trip to disney world, but something that might have been better for these kids, ringing the closing bell on the new york stock exchange on wall street. for "nightly business report," i'm steve leisman. >> i gotten in of them right. not one. we 23450ed to hire researchers. >> that's it for the "business report tonight." thanks for watching. >> i'm tyler mathieson. an economic dunce. have a great evening, everybody. we'll see you back here tomorrow night. . 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