tv Nightly Business Report PBS May 25, 2016 6:30pm-7:01pm PDT
this is "nightly business report" with tyler mathisen and sue herera. what's changed. the rally is building so why are the markets stressing about all the things that used to have them so worried? today we face a crisis in our airports. we've all red the headlines. three hour long security lines. tempers flare in congress and at airports but delta and the tsa may have found a solution to get you through security more quickly. science or science fiction, medical technology is advancing faster than ever before changing the way we treat illness. the first part of our modern medicine series begins tonight for wednesday may 25th.
good evening. i'm tyler mathisen. welcome everybody. two straight days of gains on wall street, a rise in oil prices, optimism over the economy and positive news out of greece held fuel the rise and some investment pros say that higher interest rates may not spell trouble for the economy or stocks after all. with that the dow jones industrial average climbed to 17,851. the nasdaq added 33 and the s&p 50 0 was up 14. >> reporter: many of the market risks haven't changed but the market perceptions of how risky they are may have so we've put a lot of hot button topics on our thermometer here.
we'll start with markets that traders are valuing high right now. the summer interest rate hike and also watching what's happens with the uk leaving of the european union and also perhaps a rolling of the markets around that and what's happening with the u.s. elections coming up this fall. china was a huge topic last year and into this year early and it still remains a big topic but maybe not as important or as flaring as it was at that point here. corporate earnings slightly better than expected although still not great. oil prices, they've stablized. they thought they were going to down huge but they managed to stabilize. u.s. economic data has generally gotten better, it's up for debate right now but some people say if the u.s. economic situation isn't going gang busters but it's still going good enough is that enough to
help power the markets. all of that is being assessed throughout the summer months and into the u.s. elections this fall. we'll talk more about the markets. mr. mcconnell. welcome. the risks haven't gone away necessarily. maybe our perception of them has changed just a little bit. i don't want to make too much out of two days of triple digit gains but does this feel like a sustainable change in momentum to you or not? >> i think we've covered the positive aspects of what has come out from an economic data standpoint and some reduced political risks. the thing i would add that's new is investment sentiment was awful heading into this week so individual investment sentiment is bearish so that's the additional piece that's led to the rally we've seen. >> are investors are becoming
too come plas ent when it comes to thinking about the feds, thinking that we're going to see a rate hike and we're definitely going to see an exit from the eu from britain that we're going to see a u.s. election however one thinks it might end, are inveers gelting complacent and that's fueling what's happening with the market. >> no i don't think so. there's still a concern about britain leaving the european union. the concern about the fed is a little bit more justifiable. the reduction in concern because if the fed does raise interest rates, that's a sign the economy's a little bit better. it's a sign that financial markets are stable and the fact th the market's moving up at a time when investors are thinking the feds may raise rates is a good sign. >> so you side stepped my question whether you think this rally can continue. you said that sellers we sort of
ran out of them. do you think that's an enduring possibility or that sellers are going to come back at the first sign of trouble. >> what i'll be looking for is a continuation of the economic data showing a moderate expansion. so we saw good housing data but we saw relatively mod acre purchasing reports so we need to see the economy continue to advance for the market to keep working. sentiment is a help but we really do need economic data to continue to come through. >> so what about the elections here and let's get a quick thought on the possibility that england, great britain would leave the european union. >> so i don't think that is the likely scenario. if you look at the market reaction the pound has appreciated by 6% or 7% and the polls are indicating greater confidence that they will remain
in the european union. the u.s. election is much harder to handicap because we don't know what's going to happen not only on the presidential side but with congress so the market will likely churn until we have better clarity on the likely outcome of the u.s. election. >> great to see you. a potential interest rate hike is not in fact a done deal but the data is favorable so says the president of the st. louis fed. he specifically pointed to the most recent reports on the labor market. >> obviously we've tried to be data dependent and i don't think there's any reason to pre-judge the june meeting at this point. we can wait until we get to the meeting to see what the data says and try to make a good decision. >> he said while jobs data are strong, other measures are not as robust. in europe it has been a while since we heard about greece asking for money from its international creditors but that is what happened overnight.
in recent years greece's debt lows have been a summertime hair ball for stocks but now the international monetary fund apparently like what they see. they approved greece's reform efforts and gave the country more than $11 billion. the french government is tapping its oil reserve to end gasoline short animals. according to local french papers 1/4th of the country's gas stations have run out of fuel or are low. a strike of labor laws have spread across to fra e compa threatened to review its investments in response to this disruption. domestic crude is closing at $50 a barrel. there was a larger than expected drop in crude stock piles.
oil futures settled at $49.66. despite the rise oil and gasoline prices are low and that means a lot of people are going to hit the road this holiday weekend. according to aaa in all 38 million americans are expected to travel and most of that travel will be by car. jacky has more on what's promising to be one of the highest volume memorial travel >> reporter: the inspiration is coming from cheap gas. the national average is $2.30 today on aaa's website, up 16 cents over the last month but down 44 cents from this time last year. still, not everyone is satisfied. >> i think gas prices should be even lower but they're not as high as they were last year around this time. i do drive a lot with my job and everything so gas prices are very important. >> i'm going to drive. if the gas prices are high i'm not going to be as happy as i'm
driving but i'm still going to go where i need to go. >> reporter: top destinations orlando, washington, d.c., new york and miami, all places expected to have nice weather this weekend. so far this year americans have saved about $18 billion on gasoline alone. where those savings are being spent is debatable but cheap gas motor motivates people to get up and go. >> we came in the summer with a huge amount of supply of gasoline and yes we are drawing at record rates right now for gasoline demand because prices are so low, but that demand should be able to be met with the supplies that we do have. i imagine prices will probably peak in the next two or three weeks barring any hurricanes or political problems. >> crude is up almost 50% in the last three months alone. if the market is starting to stablize could we see an average of $2. >> i don't think it will happen until after the summer driving
season. what happens during the summer there's a premium for the gasoline to burn cleaner. once we get through that season we go back te cheaper winter gas and that's the point where you could see $2 a gal again. >> reporter: one thing for sure most consumers aren't kicking the gift horse in the month. this price is nothing to sneer at. >> if you're heading to the airport this weekend you may be wondering if flying means you'll be dealing with long lines at security checkpoints. in atlanta they hope they've found one solution to make airport security lines move faster. we have more on what's being done. >> reporter: it looks like a regular tsa security checkpoint but atlanta's airport has a new system designed to quickly move travelers through security screening. >> if it's as successful as we believe it is i think airports are going to be looking for this
technology. >> reporter: when travelers get to the checkpoint there are five stations for five people to but their belongings in bins. when the person is done they push their bin down the line to the x-ray machine and walk through a metaldetector. if there's a problem with their bag it's sent to an area for further inspection that way it doesn't hold up the line. with five people constantly going through one of two metal detectors the lines should move even if some people are occasionally stopped. >> it went fast up to this point, but quicker than the old way to unload your bags. >> i didn't think it was faster. >> seemed to go pretty quickly. went through the front of the line and my bag did get screened but it only took about ten minutes all together. >> reporter: with long lines in many airports the tsa is adding more officers and more overtime. meanwhile the head of the agency
found himself on capitol hill answering questions on how the tsa can relieve security line headaches. >> you're undergoing an impossible or trying to take on an impossible task. do you think that the number of bags going through our check points is problematic. >> reporter: delta spent $1 million developing this security system and there were a few hiccups with passengers adjusting to the new set up but nothing major. if it works as planned this new system could clear up to 25% more passengers than a standard tsa checkpoint which would be welcome news for those travelers tired of waiting in security lines. "nightly business report" atlanta. microsoft guts its smartphones business. does it have a mobile strategy that will work?
a real estate firm with ties to a senator is recordedly under investigation. the fbi and scc are focusing on accounting practices at the company. investigators are asking questions about the relationship between the firm and the senator who has profited over the years from trading the stock. shares fell more than 8%. report by the state department inspector general slammed hillary clinton's use of a private e-mail sever while she was secretary of state. the report was delivered today to members of congress. we are following the story. tell us what the report said and
how damaging is this to her campaign? >> reporter: well, it is damaging. the report did say that the method that secretary of state hillary clinton had chosen to store her e-mail on a personal sever was not an appropriate method of preserving documents and it found that her practices rt policies. that's bad news for hillary clinton especially as you go through the details that were in this report of staffers at one point or another raising concerns about this arrangement. those concerns being brushed off by people close to hillary clinton. it paints a picture that republicans have been trying to paint on the campaign trail that hillary clinton was sort of unworried about e-mail security and decided that she would rather protect her documents in her own home in her own computer sever rather than allow the state department system to have access to those communications. >> what about her own private e-mail, did we find out more about why she chose to keep that e-mail? >> reporter: that's the question is why did she decide do this in
the first place and the report sheds some light on the decision making early on. it's clear this decision was made at the beginning of her tenure as secretary of state and you can see in the report staffers worried about what to do, what the implications of that are. she owned her own e-mail sever that lives in her home and is not controlled by the state department, how do they handle that. they were proposing giving her a separate blackberry or commuter. all that was being wrestled out in early days so clearly this was a decision that was made early on and they stuck to it. >> mrs. clinton has said i'll talk to anybody any time about this, i encourage my staff to do the same. did she? >> reporter: about the e-mail issue? >> did she talk to the inspector general? did she krorp rate. >> reporter: she had said she would cooperate with the investigation in every step of the way and clearly they got access to all of the e-mails between say her aide and hillary
clinton. in fact there's one in which they discuss whether or not for her and hillary clinton says no i don't want a state department e-mail but i don't want that personal e-mail being circulated within the state department. >> is speaker ryan going to endorse mr. trump soon. >> reporter: that's a good question. there's a rumor there's a phone call expected this evening between the twmen. we'll see whether that leads to an endorsement or not. paul ryan under a lot of pressure to fall in line but he is trying to extract some political gain here from donald trump and encourage donald trump to be more in line with paul ryan. >> the great negotiator being negotiated with. thanks very much. >> reporter: you bet. regulators are launching an investigation into ali bab bau. they are looking to the practices related to the annual singles day vent. it regarded more than 14 bll dollars in sales on that day
alone. the news sent shares down to $75.59. at&t may want a piece of yahoo after all. they have made an offer to by the corporate assets. verizon had been considered the front-runner for the businesses. shares of at&t up to $38.62. lower tourist spending dragged down spending. the luxury jeweler say the biggest decline in jeerz. the profit fall and missed estimates and tiffany lowered its earnings forecast for the year. shares were up. sales growth stalled at the clothing chain express. they reported of a drop of sales and warned of a slow down in sales for the current year. the ceo citing a challenging
retail environment. shares fell to $14.68. williams sonoma saw a climb. that helped quarterlies top estimates. shared initially dropped after ending up more than 2%. microsoft cutting more than 1,800 jobs in the mobile phone business and the company will take a nearly $1 billion charge related to that move. this unit has seen multiple rounds of layoffs and write downs since microsoft bought the phone business back in 2014. shares rose 1%. still with microsoft stream lining the troubled mobile unit what will be the company's next move. the co-founder joins us now. i have to admit with a teen-age son i don't know much about this microsoft phone because that's
not the one kids are talking about. is that part of the problem is that people aren't as interested in their phones. >> reporter: it goes back several years. microsoft maybe going back five years thought their mobile operating system could take on apple's ios or google's android system and they were late to the game. they got in bed with no keya as a partner before they ended up buying the hardware unit and it never went anywhere. there was never much developer interest so they never created a system so it's clearly a problem now because the phones aren't anywhere but the problem goes back five years where they never got any traction with the mobile operating system. >> you have to remind me there is a windows phone operating system because it is such a third place finisher here. is mobile ever going to be a big part of microsoft's business. >> reporter: it can be but not on the hardware side.
that's what we learned through the failed device division but it can be a meaningful part as it extends from the cloud. microsoft has been successful in the cloud. nearly half of their revenues last quarter came from the cloud business. so part of that is extending their enterprise applications into the mobile environment, not just the phones but the tablets and to their own surface pro. i think it can be a meaningful part because users are mobile and that's microsoft's future to approach it that way but certainly not from the hardware side or mobile operating system side. >> you don't think this is going to have a major impact on microsoft's overall business because the focus is on the cloud and also microsoft office, right? >> reporter: that's right. we saw quarter. i think they grew about 120% year over year and it's becoming a cloud company. the pc side has been in a slide
for a number of years now which has really pushed their move into the cloud. pcs are down about 10% year over year now. this is a small hiccup. this is something we've seen for a while. there hasn't been any traction. this is something they probably should have done a year or two ago and we're just now seeing them say that's enough let's cut our losses and look ahead. >> all right. what they're going to be doing forward. thank you so much. coming up, how the department of defense is helping doctors do things that just a few years ago would have seemed unthinkable. the first part of our series on modern medicine is next.
here's what to watch tomorrow. the g 7 summit convenes in japan. mcdonald's hosts their annual meeting. executive compensation is one of the items on the menu there. and pending home sales are going to give a look at the state of the economy and that's what to watch thursday. shares erupted after the food & drug administration said a review of the drug made by the company. some interpreted that as a possible approval by the agency. a panel recommended that the fda reject the controversial medicine which has no effective treatments. the shares spiked more than 26% today to $23.35. medical technology is advancing faster than ever before. things that physicians didn't think possible a few years ago
are today realities. we begin our modern medicine series with a look at how high tech prosthetics are changing the lives of injured vets. >> i lost my arm up here when i stepped on a land mine and almost lost this arm and almost lost my legs. >> reporter: fred downs was 23 and a soldier in vietnam in 1968 when a land mine took his arm. when he returned from the war, his options to address his injury were limited. >> the army fit me with the what i call a hook which is a plastic arm that was the only thing available in those days. >> reporter: he wore that style for 47 years. then in 2009 he was given a chance to use this. >> here is my power grip. >> reporter: the decka arm is built by decca research and development and funded by the research project agency, a branch of the department of
defense. he uses censors on his choos to control the arms. >> it's strange because for the first time in 40 some years i have the ability to use my left hand to grab things. >> reporter: it's part of a wave of technology that's helping the way we think. >> let me show you something cool. >> reporter: this doctor is the project manager. he works with teams of researchers across the country testing new types of prosthetics and they're doing things that just a few years ago seemed like science fiction. this connect the brain and has the same range of motion of the arm and allows the user to feel pressure. >> we can do light touches and harder touches and the person can distinguish between the light touch and the hard touch. >> reporter: patients like jan are showing how promising this
technology can be. sherman was diagnosed with a degenerative disorder that left her unable to move her arms and legs. she entered a trial funded by darpa and underwent surgery to have censors installed in her brain that could control the arm. after some training she showed she could control the arm by just thinking about moving it, feeding herself for the first time in a decade. something as simple as that can make all the dwififference in t world. >> the ability to take care of yourself is crucial, comping your hair and brushing your teeth and getting dressed, all of those who you need as a human being to have your dignity, to have dignity. >> reporter: for "nightly business report." you can ready more about the evolution of prosthetics on our websit tomorrow we will look at how a high tech implant in the brain gave one woman a new outlook on life.
i thought that last gentleman said it right, it gives you back your dignity. >> and thinking about what you want to do and being able to do it after years of not being able to do it. before we go here's another look at today's big gains. the dow jones industrial average clifshed 145 points, the nasdaq added 33 and the s&p 500 was up 14. thanks so much for watching. thanks from me as well. i'm tyler mathisen. have a great evening and we'll see you back her ♪