tv Nightly Business Report PBS August 22, 2017 5:00pm-5:31pm PDT
. this is "nightly business report" with tyler mathisen and sue herera. tax talk. reports of progress on tax reform helps lift the stock market today, but are some of your favorite deductions now on the table? hefty verdict. johnson & johnson ordered to pay a record amount in a baby powder case. what shareholders need to know. shifting gears. why automakers are charged up to sell cars that plug in. those stories and more tonight on "nightly business report" for tuesday,. good evening, everyone, and welcome. stocks took off today. investors dove back into the market amid growing speculation that the trump administration is making head way in its efforts to reform the tax code and implement pro business policies
which the markets view as a 'sieve for corporate earnings. technology and energy shares led the way as investors put their recent nervousness on the back burner. today the dow jones industrial average advanced 196 point 21,899. bob pisani has more on today's bounce back. . >> reporter: the bulls were back in charge today. stocks rebounded after a string of sloppy trading days to close higher with the dow up nearly 200 points. that's the best day in nearly four months. tax reform talk set the stage early on after sources at the white house said lawmakers and president donald trump's economics team were closer to orchestrating tax cuts and are reaching a consensus on how to pay for those cuts. the markets rose because there's some finally meat on a tax cut proposal though some say short term tax cuts are far from full on tax reform. regardless, risk is back on the
table. banks, biotech, semiconductor stocks are all higher on the day and more defensive sections like utilities, real estate, consumer staples were all down on the day. it's been a very rough year for infrastructure stocks. they rallied thinking this will allow companies to repatriate. now tomorrow we'll get data on new home sales plus earnings from lowe's, express, and american eagle outfitters among others. for "nightly business report", i'm bob pisani at the new york stock exchange. today's renewed hope for tax reform was driven mainly by a reports from politico. it said the white house and key gop lawmakers have found common ground for paying for both the individual and corporate tax breaks. some of the options, capping the mortgage interest deduction, eliminating state and local tax writeoffs, eliminating business's ability to deduct interest and another idea on the
table is to tax money that workers put into their 401k plans and do the taxing up front. politico also reports that any proposal will require u.s. companies to bring back earnings from overseas at a one-time low tax rate. the corporate rate could fall somewhere between 22 and 25% down from 35. still undecided is whether the tax cuts suggested are permanent, temporary, or a mix of both. so joining us now to talk more about what this potentially common ground on tax reform could mean for you is ben white. he is the chief economic correspondent at politico. good to see you, ben, as always. >> good to be here. >> what is your sense as to how big this common ground is? i mean, that's certainly what ty just laid out, much more detail
johnson & johnson has been ordered to pay more than $400 million in a case tied to one of its most well-known products, baby powder. it's not the first verdict against the company and this product but it is the largest, and it may not be the last. meg terrell has the details. >> reporter: johnson & johnson this week was ordered to pay $417 million to a woman in california who claimed in a lawsuit that the company's iconic baby powder caused her ovarian cancer. it was the biggest verdict yet for the health care giant which has faced a series of lawsuits over its talcum powder safety when used regularly for feminine hygiene. j&j has lost four cases with damages totaling $400 million. it won a recent case there and two cases in new jersey have been dismissed. the company said it plans to appeal saying it's, quote, guided by the science which supports the safety of johnson's baby powder. the ceo addressed the mounting lawsuits in an interview last year. >> we're disappointed in some of
the recent talc verdicts. we have empathy for the families they represent. in this case, we think frankly it's inconsistent with more than 100 years of experience with powder, more than 30 years of very compelling clinical evidence. so, look, in these cases we think the right thing to do is appeal it and continue to fight it. but we put safety and quality first in everything that we do. >> j&j said today it's preparing for additional trials in the u.s. and will continue to defend the safety of johnson's baby powder. for "nightly business report" i'm meg terrell. the lawsuits, however, have not affected j&j stock price. it's up 13%. that's slightly better than the broader s&p 500. if you're a shareholder, though, are these lawsuits something that you need to watch? peter anderson is chief investor officer at fiduciary trust. peter, welcome. always good to see you.
we should point out whether you own johnson & johnson as an individual company in your portfolio, you may own it in an index fund or you may own it in an index fund like one that you run. how big a deal is this for johnson and johnson? i gather there could be as many as a,000 suits that could go to trial here. >> well, you know, these cases are inherently predictable, and i think that's the problem is that very, very hard to financially model going forward what the outcomes are going to be, how many will be dismissed before that. and, remember, if actuarially they're saying maybe 1,000 or up to 4,000 cases could be on the books. so we're at the very beginning of this phase, tyler. it's inherently unpredictable as i said. the curiosity is, as you opened, why hasn't the stock responded
to these initial findings? >> do you have a theory on that? perhaps this is not as big a part of j&j, this particular sector or product, as others or is there another reason you think the stock has been so resilient? >> first off, j&j is a huge company. even with what you quoted, it's slightly immaterial. that's the first point, the second point is j&j remains an aaa rating. that's a rare rating in the bond world i'm referring to by the rating agencies. that reflects the tremendous resiliency that a company like this has even in the face of some of these lawsuits that might be pending. so i think investors -- the smart investors that hold this stock are probably waiting to see exactly how the next phase of this will come out.
you know, we've only had several what they call bellwether trials in this situation, and we've had other trials, too, as you mentioned earlier, they haven't all been successful. so, you know, to quote a baseball analogy, i would say we're just at the beginning, the top of the first inning of this situation, and you have to wait and see to get more statistics to model this to get a sense of what it will look like going forward. >> peter, thank you as always. good to see you. peter anderson, fiduciary trust. vfw sold a lot of shoes. that's where we begin tonight's market focus. the discount shoe retailer said higher sales of regular priced merchandise helped the company report its first same store sales gain since 2016. earnings and revenue were ahead of street expectations. the shares took off rising more than 17% to $18.43. an increase in marketing costs caused cosmetics company cote to
swing to an unexpected loss. the owner of the brand's cover girl and rimmel topped sales forecast but warned retailers may not stock some of its beauty products until the second half of 2018. shares of cote fell narrowly 9.5% to 1771. the luxury home builder toll brothers reported higher than expected sales. overall revenue missed analyst expectations. profit topped estimates and the ceo said he was pleased with the results. >> our revenue is up 18%. our backlog was up 21%. our new orders were up 24%. and it's the fourth quarter in a row that we've been north of 20% in order growth. we lead the industry, so we're doing really well. we're very happy with all of our operations nationwide. >> but the company also trimmed its full-year revenue guidance citing delivery delays of a flooring product and that sent shares lower by 2% finishing the
day at $37.27. the medical device maker medtronics said the heart and vascular device will grow. top sales also rose but were lower than expected as a week-long computer outage hurt those results. it was off 2% at eighty-one seventy-six. the oil giant, number two behind exxon in the u.s., seeks new leadership and its vice chairman could be the leading candidate for the executive position. no decision's final just yet. the report said the transition could be announced next month. chevron shares up fractionally to $106.36. after the bell the cloud computing company salesforce.com reported better than expected results, lifted its revenue outlook but wall street zeroed in on a decline in profit in the most recent quarter and that sent shares initially lower as you see there in the extended session. they did, however, finish the regular day up 1% at $92.95.
ford is plugging into china's electric car market. the automaker is planning a joint venture in that country which is the world's largest car market. volvo which is owned by a chinese automaker is wrapping up its own push to build electric cars. fill lebeau has more on the charged up interest to sell cars that plug in. >> reporter: when you mention electric cars, most people talk about tesla and maybe the chevy bolt or nissan leaf, but volvo and its new xc 60 crossover utility vehicle, which is a plug-in hybrid, is out to shift that perception. >> now this is an evolution and not a revolution. and we have made a few statements in the past being volvo. we have said by 2025 we want to have 1 million electrified cars on the road. >> reporter: ford is joining the race to plug in cars. new ceo jim hackett has inked a deal to work with chinese
automaker to build electric vehicles for chinese buyers. why? because electric vehicle sales in china far outpace the u.s., germany, and france. in short, the chinese are plugging in and they're pushing automakers to go green around the world while americans have been slow to embrace evs, that may be changing. tesla has almost a half million reservations for its new model 3 with many coming from the u.s. and volvo says interest spiked after it committed to making all of its vehicles electric starting in 2019. >> every time like when we announced two weeks ago that we are going for electrified cars by 2019 you instantly see that it sparks an interest. the demand is increasing, but the result by example that the current xe 60, it's not going to be around until early next year. that's not something that we expected. >> reporter: buyers might be more interested in electric
vehicles, automakers realize that if gas prices drop further or remain extremely low, those who said they once were interested in an electric car may change their mind. phil lebeau, "nightly business report", chicago. coming up, what beyonce and jay z will pay to buy their dream house in los angeles. you won't believe the size of th.
we're mourning a lot. we're ip know vating. we're seeing what's portable. what we can continue with here. what we can put online with services. we're doing what we want to do. creating connection with our consumer. >> as of now, there are no plans to create the wellry and other stack stores. pieces may get introduced in the future. the department store is mum on traffic and sales metrics but seems to think it's on to s something. >> it's all about feeling better. the consumer is feeling better.
like a lot of fashion and trend, it will take more time to take hold but we have a lot of momentum. we'll continue to learn what's important. >> consumers may be more into health and fitness but do they want to get their wellness fixed from a department store? for "nightly business report", i'm courtney ragan in new york city. here's a story you don't hear every day. the power company and jay z took out a $52 million mortgage, 52 million. before you try to calculate the monthly payment, robert frank has run the numbers for you. >> reporter: jay z and beyonce became the latest record breakers in the exploding l.a. market. they paid $88 million for a newly built ultra modern home in the bel air neighborhood. that's the most expensive sale of the year in l.a. the couple's new digs total 30,000 square feet, six buildings, spa, staff quarters, basketball court, four swimming pools and bullet proof windows and doors. the power company has been
trying to buy in the city but with prices soaring in the high end they were repeatedly out bid. they first made a run at this house in beverly hills in 2014. before they had a deal the founder of minecraft stepped in and offered $70 million and he got the house. then last year they were outbid by designer tom ford on a $50 million home. sources tell me they toured a $250 million home and lots of other properties this year. they couldn't agree on price even though they're paying $88 million for the home, they're getting a mortgage for 52 million. that would work out to monthly payments of around $250,000. l.a. has eclipsed new york to become the capital of hyper priced real estate. there are now more than half a dozen listings over $100 million in l.a. compared to just one or two in new york city. maybe jay z and beyonce should have considered settling in more affordable manhattan. for "nightly business report",
i'm robert f >> what if you leave your reading glasses in one of the rooms in a 30,000 square foot house? >> you have to go -- >> you have to go hunting for them. >> i don't know. it doesn't seem right or real. >> real. real. >> all right. that's "nightly business report" for tonight. i'm sue herera. thanks for joining us. >> thanks for me as well. i'm tyler mathisen. >> have a great evening. we'll see you tomorrow. >> here they
this is a bbc is america. funding of this presentation is made possible by. the freemen foundation. and coal fuller foundation pursuing solutions for america's neglected me. 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