tv Nightly Business Report PBS August 26, 2015 6:30pm-7:01pm PDT
this is "nightly business report" with tyler mathisen and sue herera. >> race to the finish. the stock rally picks up steam into the closing bell. but after days of violent swings, is wall street satisfied with the bounceback? jackson hole. is it eroding as bankers group well the economic mess? new tax. why a quarter of all u.s. employers could soon face some hefty fees on their health plan. all that and more tonight for wednesday, august 26. good evening. welcome. tyler mathisen is off tonight. the move higher was massive culminating in the dow's third biggest point gain ever. it was the exact opposite of yesterday when the rally turned
into a head fake and selling intensified into the close. today sbirs came out in force, snapping six days of dramatic selling. at the close the dow jones industrial average soared 619 points to 16,285. the nasdaq rose 281 points. and the s&p 500 rallied nearly 73 and has emerged out of correction territory. with questions about global growth still lingering, was wall street satisfied with that rally? the report from the new york stock exchange. >> it was another wild day but with a very different ending. it started like yesterday with a 300 point move in the dow at the open. unlike yesterday, we began rallying midday and kept going. the issue yesterday was not much of a factor today. after 3:00 p.m. yesterday, waves of orders to sell stocks at the close started hitting the floor. very large numbers. when traders saw this sell
imbalance, they sold ahead of it. that exacerbated the big sell-off yesterday. that did not happen today. sell orders at the close were relatively muted. so is this the bottom? it is too early to say. the floor was happy to see a rally in the close is that on big volume. but i think traders continue to believe the market remain as bit sketchy and are not convinced this is necessarily a sustainable upside. caution will be the theme. for "nightly business report" at the new york exchange. >> so with people skemt xal the optimism can be sustained, amid doubts of china's economic he think growth. >> to buy or not to buy. that is the question. many stock market investors are trying to figure out if the
recent volatility is a reason to stay in or get out of the action. there are a number of reasons the rally could march on despite the recent sell-off. some experts point to lower oil and gasoline prices as being beneficial to consumers. others say the relative value of stocks given the pullback. it may be too much to expect massive gains. >> you have corporate earnings that all the rate of growth have slowed, are still greg. regardless of what the fed does, you have historically easy money. and you have a sloped yield curve. you generally don't see bear markets swell those characteristics so i think money can be made in stocks. i don't know if you'll see the stock market returns. >> of course for all the bullish commentary, there are reasons for caution. those same lower xlod at this prices could take a bite out of
energy profits. there are also global economic risks, especially for china that could continue to be a drag and of course, the fed and interest rate policy. >> if the fed doesn't raise rates, it could signal to the markets that they're worried that something step attic could be problematic for the economy. so i think it would be far better if they get on with it. >> one thing is more certain. the market volcano i have tatil contributed. >> another key piece of this market puzzle is the federal reserve and when it will raise interest rates for the first time in nearly a decade. over the next few days, central bankers will tackle head on the stock market turmoil and the looming decision on rates. steve reports from the annual
kansas city fed symposium in wyoming. >> as central bankers from around the world are ready to meet in the shadow of the majestic teton mountains, it looks more like this. that has led the leading beneficial idea that it is eroding. >> the decision to begin to normalization process at the september meeting seems less compellingo me than it was a few weeks ago. normalization could become more compelling by the time of the meeting as we get more information on how the u.s. is performing. >> he is not coming to jackson hole, said chinese economic weakness, the strength of the dollar all combine to make the chance of a hike less likely in september. he wouldn't rule it out since it is three weeks until next meeting and lots of data to come. >> a lot can happen between now and then.
we'll be very sensitive to what happens to the employment numbers a week from this coming friday. and it looks like you're going to get another decline in the unemployment rate. >> a new cnbc survey says economists expect another rate hike more than previously. moving the expectation from december to september. but nearly 26% still see the chance of a september hike. the u.s. data has been fairly strong. just today the government reported that business investment in july rose the most in a year. the fed is cautious about recent developments. >> the slowdown in china and the falling prices are emerging economies. this could lead to less demand for u.s. goods and services. >> some thought the fed might go for a hike in the mountains. it looks more like the fed in
jackson hole will be on hold. for nightly business report. >> and tomorrow from jackson hole, we'll hear from the federal reserve president. so how resillen is the u.s. economy? are the problems in china and other markets a threat to our economic health. >> thank you for having me. >> let's start with china. it seems to be the flash point right now. we've obviously seen financial impact in our markets. what about the economic impact that a slowdown in china might have? >> i think that's the critical question. it is the economic, really china's economy should be the focus. not the equity market. despite the recent volatility. we've had concerns that many sectors within china, particularly the manufacturing
sector, was growing. weaker than was widely appreciated. i think some are becoming much more appreciated and that has had some modest impact on some part of the u.s. economy. >> do you believe the numbers coming out from china in terms of their growth? or do you think they're exacerbated even though they're lower numbers than the past. do you think they're growing at a 7% rate or perhaps even better or less? >> well, i think more importantly, some of the measures just tends to be less volatile than one would expect from economic statistics. i think the leading indicators we look at suggest they will not officially reach their growth target this year. and i think that paired with the recent currency, i think those had some role to play. >> where does this put the feds? >> unfortunately, this does come
at an unfortunate time. i was firmly in the camp that september, despite some suggesting it was a close call, i think the federal reserve customer will raise rates. it is reasonably confident, just giving another voracious move forward. i think it is more the commodity prices and the weakness in emerging markets may lead them to pause. >> what about your investors? what are you hearing from them surrounding the market volatility of the past four or five days? are they nerve? holding pat and letting wall street do what it needs to do to normalize? what are you hearing? >> amazingly, they are standing pat. clearly we are hearing from them more. they are certainly more interested.
just the headline. roughly 50%, or a low august. what we see during a packed season. i would say the transition has been more balanced on both sides of the ledger. so nothing i would say would be commensurate with the volatility in the markets. fairly balanced. >> well, main street is smarter than wall street. thank you very much. joe davis with vanguard. a $13 billion buyout in the energy central. the service think provider will buy cameron international amid the downturn of prices. the deal comes at a time of increased consolidation in the industry as companies cut back on spending and try to shield themselves from plummeting crude oil prices.
speaker of which gasoline prices also dropping which would make it an odd time for an auto maker to run on a new car that doesn't run on gas. that's what toyota is doing. we'll bring that you story a little while in the program. falling oil prices. the offshore rig operator plags to stop investors pay yous as the fall in crude prices weakens demand for drill bits. investors will be asked to approve the cancellation of the final two did i have denied payments of the year. shares fell almost 5%. coming up, the affordable care act back lash. why a looming employer tax could be a big burden for companies and consumers.
as individual investors grow concern about their retirement accounts, boeing has reached a provisional settlement in a class action lawsuit over the company's 401(k) plan. that lawsuit claimed the plan charged employees excessive fees. no details of that settlement have been released. so how do you know whether the fees in your 401(k) plan are reasonable or not? sharon is back with us with what you need to look for. >> to see you as always. >> good to be here. >> what are workers paying for with these fees in the 401(k)? >> well, a lot of different services with the 401(k) fees. administrative services, transaction processing, regulatory fees as well as investment management keys and financial education in some cases. do we have an average of how much those fees are?
>> kit depend on the plan size, also what it is investing in. the fees may be larger. but you might see the plan participant paying between .29% and 1.29%. >> that's quite a range. >> it is a big range. the bigger the plan, the lower it will be. a smaller company plan, half a million dollars in assets or so, they could see a fee as high as 2% to 3%. if you're rourke working for a small employer, you could see a much higher 401(k) fee. >> how do you know, how can you find out whether the fees you're paying are excessive? >> you want to go to a website that does a survey of plans. look at your plan. and also a plan with the participant and the assets about the same size and compare to see where you stand and where your
plan stands. that's one thing to do. also, it is not just the 401(k) fee eating away at your assets. so you want to know what the expense ratios are. morning star a great resource for that. >> so i go to the website and i look at my plan and i get a little sticker shock. what can i do? is there any recourse? >> when you go inside and you look at the funds, maybe you can change to index fungds. you use the tools and find out, if you change your holding, does that change it? you're likely to get a company match. many companies provide that. that's free money on the table. for many people, they won't save any other way. but a 401(k) is a great automated way to save. so it is better to put it in a
place where you know you'll have it long term. yes, you're paying a fee. but if you're getting the company max as well. thank you. impressive quarterlies from express is where we begin the market focus. they raised the 20 final outlook and lifted guidance for the same quarter. the better than expected numbers came as the company scaled back on promotions. shares surged nearly 20% in 2025. also, a strong day for another retailer. abercrombie & fitch. that chain posted a surprise adjusted profit as the performance was held at its roll sister report. and chico had better than expect results. they said they would sell the boston proper direct to consumer
business ask close its existing stores. the stock was more than 6.5% higher to 14.75. and monsanto dropped its bid for syngenta. now they say they will focus the core business ask resume the share buy back program. monsanto rose 8.5% to 9708. syngenta tumbled to 6751. the affordable care act is back on the radar. a report released this week by the kaiser family foundation says about a quarter of employees could be hit with a tax. it is designed to rein in excessive spending. how might that impact you if you receive health benefits from your employer? larry levitt with the kaiser family foundation. nice to have you here.
thank you for joining us. >> what will this mean for workers? if these health care taxes go into effect? what net would be the bottom line impact? >> this is a very significant tax. 40% on health insurance premium that's exceed certain thresholds in the law. no employer will want to pay this tax. it is such a substantial amount and it is very complicated. so employers will do everything they can to avoid it. that means they'll raise deductibles, raise co-pays, so for workers, they can expect more of that to happen. this will really accelerate the trend. >> if it doesn't go into effect until 2018, why is it back on the radar? >> well, yeah. 2018 seems like a long time away. and it really seems like long time away when the affordable care act pass in the 2010. one is there is a big replying
push to repeal the attacks. and health care providers. that i think is really putting it back on the agenda. and employers are looking at what they'll. do how much tax they might face and what they'll do to avoid it. >> a lot of people use health savings accounts and other times of accounts to help supplement. it is a balance but it helps make up the difference between the deduckible and what they owe the hospital. how will this affect it? >> the stax quite sweeping. it doesn't just affect your insurance benefits but it also hits health reimbursement. all those benefits go into figuring out whether an employer would face a tax. you mentioned there is a big
pushback by various companies and others. is there a chance perhaps the tax could be reduced? is there wiggle room? negotiating room? or no. >> final regulations haven't been issued and those will certainly affect how much any one employer might face in the tax. but there could be congressional efforts to scale back the tax or allow the threshold. right now they grow just with inflation. so 2018 is a ways away. and there could definitely be changes between now and then. we also have an election coming up. >> that's right. and it is an election cycle coming up. thank you very much. coming up, katrina ten years later. and how one new orleans hospital who witnessed it first hand has
transformed since the tragedy hit one decade ago. here's what to watch tomorrow. a preliminary reading on gross domestic product groet. that's the broadest measure of economic activity. weekly jobless claims are out and we'll see how the labor market is doing. on the data front, pending home sales. that's what to watch for thursday. sales of new vehicles are expected to fall 4% in august when compared to last year according to kelly blue book. a caveat, however, last year included sales from the labor day weekend so those years ago levels are harder to sgeet this doesn't necessarily meet demand
is weakening. gasoline prices fell and with the price at the pump, expect to it drop roughly $2 a gallon at the end of the year, it would seem like a strange time to roll out a new car that won't run on gas. instead, the new toyota will be powered by hydrogen. here's more. >> meet toyota's newest car looks like others but it is radically different. it is powered by hydrogen. >> it lets you go 300 miles past, refuel in three minutes and drive like normal. so i think that's what brings people to it. >> officially it gets 312 miles on a full tank of hydrogen and is expected to cost between $40 and $55 to fill up. the price? just over $58,000. toyota plans to sell 3,000 in america.
almost all of them in california. that's because there are just a dozen hydrogen refueling stations open to the public in the u.s. and ten of them are in the golden state. paul has been to many of them filling up his hydrogen powered car. he loves driving on hydro gentle but he says refueling can take up to a half-hour and some pumps aren't always working. >> if i didn't live close to the stations, i wouldn't be a happy person. i live close. i have three alternatives. that's the only reason i chose this hydrogen. i have three alternatives within a two to three-mile radius. if there was only one, i kind of maybe think twice about it. >> toyota is confident california will add more refueling stations to support this car and the very gradual growth of hydrogen powered cars. >> i would like to say it is a
decade behind the vehicle technolo technology. >> a new car in a new technology in a state pushing to get more clean burning vehicles on the road. "nightly business report," los angeles. and finally, it is hard to believe but it's been almost ten years since katrina. the costliest natural disaster in u.s. history. when it slammed into new orleans, overwhelming that city's infrastructure, causing floods, death and displacement. and there was one nol new orleans that witness that had tragedy and began its own transformation. >> one, two, three. >> most hospitals don't have their own navy, much less flood rescue drills. >> leaving evacuation hospital. >> this hospital does because of hurricane katrina. >> my job was to man the waters. try on corral any boats that we could to start evacuating the
ambulatory patients. >> ten years ago, glen casey helped save patients when the waters rose. he would spend much of the year after helping to save the hospital itself. >> i practiced there for 30 years. i was born. there i couldn't see that inls constitution going away. >> after katrina, nearly half the population fled. he ultimately close to sell rather than reopen. >> it was a market went from over 2,000 hospital beds to 500. >> it was just a single hospital operator stepped in to buy the hospital and two others in the area. >> i think katrina was an event that for a lot of reasons, people looked at it and said this is our chance to do something different. this is a chance to be bold. >> since then, oshner has led the wave, acquiring five
additional facility think in the last ten years, turning baptist into one of tools. >> we have invested so much. >> with state-of-the-art systems. >> kit run all the hospital systems. they moved all the supporting equipment. it now has a dedicated fuel line. >> katrina is a one in 100-year-old storm. >> now they say they have to be prepared or the tough reimburse many battles in the the course of the mergers. >> getting ready by looking at their cost structure, becoming very efficient in their operations. >> after the last ten years, they feel prepared for anything.
>> we were able to become very professional. >> bertha coombs, "nightly business report." >> our coverage of trin ten years later with a look at how it transformed the city and how the recovery is a work in progress. that will do it for us tonight. i'm sue herera. thank you for joining us. have a great evening, everybody. see you tomorrow.