tv Nightly Business Report PBS August 7, 2014 7:00pm-7:31pm PDT
. this is "nightly business report" with tyler mathisen and susie gharib. >> global tensions, stocks slump as concerns over europe's economy and possible escalations in ukraine and iraq weigh on the markets. how global turmoil, could, could end up helping u.s. stocks and bonds. >> passwords, as more and more reports surface of data breaches and computer hacks, are passwords becoming a thing of the past? >> and a heavy burden, companies have drugs that might save some people's lives. but they have to say no. the difficult decisions, and the reason behind them. as we continue the three-part series for desperate measures for thursday, august 7th. good evening. i'm tyler mathisen, welcome.
>> i'm sue herrera filling in for susie gharib. positive news in the u.s., investors focussing on europe's economy and conflicts in iraq, tensions between russia and the west over ukraine could threaten europe's economy and with italy officially in recession, that set a bad tone and then reports surfaced that the u.s. may be considering air strikes against muslim extremists in iraq. in audition to air drops of humanitarian aid. should that situation escalate, markets are sure to react. that overshadowed data here showing first-time jobless claims fell to a more than eight-year low. stocks managed to bounce off of the lows of the day and here is how they looked at the close. by the end of the session, the dow is down 75 and sitting right around a three-month low and the nasdaq down 20 and s&p off by ten. in what is widely interpreted as a flight to safety, the yield on the u.s.
ten-year note closed at the lowest level this year. the closing yield of 2.41% is the lowest since june of 2013. german and british bond yields slid, as well. a perspective from nick colis, chief market strategist. i hear an intellecti l tension, some say the u.s. economy is strong, signs are good, corporate earnings are good, valuations are not overly stretched and yet, other people say the international tensions could be a fracture point for the market in at least the short term. where do you stand? >> that's a good summery of the tension we hear from the institutional clients, as well. there is no doubt the u.s. economy is second gear moving into third year, but the problem is europe is in first gear. that's a real slow down on the global economy and we have shock potential items, both in the
ukraine and in iraq and let's not forget libya, as well. the good news, i think, so far oil prices have not yet spiked due to the degree of risk. we're below $100 a barrel. that's good news for the consumer. >> to the tyler's point, it might make the u.s. market look more attractive, more of a safe haven because there aren't more places to allocate cash at this point. >> that's actually quite true. it is accurate. if you look at europe for example, we see clients interested in european equities but they are getting more defensive because they see the european economy not gaining traction and same for japan and along the markets, the u.s. becomes a better place to look for value. >> one of the news items today had to do with russia identifying some of the company's and country's against which they are taking retaliation sanctions and many of those are food companies,
agriculture companies that do a lot of business in russia and european companies, i should say. could that further weaken europe if one of their big markets, ie russia is foreclosed to them? >> on one hand, those sanctions are damaging to the medium term prospects of the companies you mentioned. on the flip side, if we talk about sanctions than at least we're not shooting at each other and a hot war in the ukraine would be a lot worse for europe and european equities and economy than the sanctions we're talking about. sanctions can get lifted once you take the next step into a full-blown conflict it's harder to unravel. >> what do you make of the drop in bond yields that some say is a canary in a cole mine, some saying there is something out there about to change dramatically. we saw the lows at 2.41% but a global move down in yields. >> that's right. yields around the world,
particularly in the u.s. are an anomaly of 014. the rates have fallen. on the backs of concerns about gio politics, which is accurate but also still a search for yield from a population that's getting older and looking for fixed income instruments. i don't expect the trend to end any time soon. >> give me two ideas on places to put my money. >> we like u.s. technology stocks, large cap technology stocks. we have good growth because of the u.s. economy and consumer non-durables, food and staples companies that can generate good yield if we see inflation pick up. >> nick, thank you. >> thank you. some of the nation's top names reporting same-store sales for july and they were mostly better. l brands, former limited brands said sales rose 6% beating estimates. gap saw sales up 2% and costco posted a 5% jump but that missed
expectations. here is a look how the companies finished the regular trading session. as brick and mord ermortar reta gear up for the shopping season, many are finding an unlikely ally called web rooming. courtney regan will explain. >> reporter: video may have killed the radio star, but the web hasn't killed the retail store. in fact, recent surveys indicate it may be helping. showrooming or consumers browsing in store but buying online has driven retailers like best buy and target to price match both physical and online competitors and now, the initiative may be turning the trend to web rooming, instead. shoppers browsing online but buying in storm. according to surveys from the international counsel of shopping centers, around 3/4ths of back to school shoppers plan to research products online first but will still buy goods
in physical stores, making sure the item is in stock, seeing and touching the products and avoiding shipping costs are among the top reasons why consumers are web rooming. >> even if your retailer is selling five, 10, 15, 0% of the goods online, the converse of that is 80, 85, 95% of the goods are being sold in store. the store is still very important and what we're seeing then is online, via the web rooming is having a very big influence on the in store purchases. you can't think about store and online as separate. you have to think how they influence each other. >> the national retail federation forecast the average family with children enrolled in grades k through 12 will spend $669 on back to school this year, up 5% from last year. the average back to school spending for a college student is expected to raise to $916 but the spending increase for both is due more to the fact that goods are pricier now and not
necessarily that shoppers are buying more. still, for stores and e commerce alike, the fact consumers are spending is welcome news heading into the all important second half of the year. for "nightly business report", i'm courtney regan. earnings out today from two government-run mortgage giants. fannie mae made $3.7 billion over the past three months, the tenth straight quartly profit and freddie mac the 11th. it's part of their 2008 bailout terms profits of both go to the treasury department as a dividend, even though both have already paid back their loans in full. and one of the biggest complaints in the housing market today is that there is simply not enough out there to buy. sellers are under water and staying put or they are waiting for prices to go higher. but something else is adding to the lack of listings and our
real estate correspondent diana olick explains. >> reporter: shelley and keon are loving their new home in baltimore. it is four times the size of their last home in the heart of the city, the home they are now renting out. >> it really wasn't worth it to take the $30,000 hit when we could get someone to rent the property, have them pay down the mortgage, and, you know, get to a place where we could either get out for the same price or, you know, eventually maybe make a profit off of it. >> reporter: $30,000, that's how far under water they were on the downtown home's mortgage. rather than take the hit, they took the rent like so many others are doing across the country. >> now as people are starting to move and sale, individuals, they are turning into landlords by choice, and that is definitely having a dent in the inventory numbers. >> reporter: the supply of homes for sale is finally starting to rise, but it is still tight,
which is pushing home prices higher. rents are also rising and that was enough to convince the burleys being landlords was worth it. >> they put an ad on craigslist. >> i was probably more stressed than my wife. >> reporter: three months later, agree it was the right choice, even after putting 20% down on the new house and now carrying two mortgages. >> we just cut out non-essentials and able to stockpile the down payment quicker so we could move up and move into this lovely home. >> reporter: they kept their old home because they were under water, but others are choosing to become landlords for just the opposite reason. they have gained so much equity in their homes recently, they can use that to buy a new home and still earn rental income on top of that. >> some of them are all cash. our agents are seeing a lot of people come through their door with cash in hand to buy that next place. a lot of them, obviously, don't need the equity in their former home where they are able to tap
some of it out and use it to buy the next place. >> reporter: whatever the case, richardson says the trend is growing and in turn, shrinking the supply needed to keep the recovery in home sales going strong. for "nightly business report", i'm diana olick in washington. coming up, if you're like many of us, you probably have several passwords for your various online accounts, but with security in ever increasing concerns, is the era of the password dead? facebook is looking to make your personal online information secure. the social networking giant is buying a company called private
core, which helps protect commuters and data centers that power internet services from hackers and harmful spyware. no terms of the deal were disclosed. >> securing data may be more important than ever after russian hackers store more than a billion confidential user names and passwords off thousands of websites. that's raising questions whether the era of the password may be over. eamon javers joins us now from washington. are passwords passee? >> reporter: passwords may be about to be a thing of the past there is a major cybersecurity conference going on right now called black hat and death conand the big top pick of conversation, how will we get consumers to the point they don't have to remember five or six extremely complicated past words with capital letters, numbers, all those things that keep us so confused all the time as computer users. couple things that are on the table for discussion, one is websites that don't require a password but instead will simply
send you an e-mail. so you go to the website and instead of typing in the password, you say i would like to log in. it sends you an e-mail to the e-mail address and if you click on that e-mail, it assumes it's in fact you. another one is wearable tech, a bracelet or wearable device when you bring it in proximity to the device, it will know it's you and let you log in without a password. a lot of that work is being done there. there are thumbprint analysis devices out there right now, and there is even an android app which will allow you to log into the android device if you have your blue tooth and wi-fi in and you're in proximity of the device. it assumes again, based on the accumulation that it's really you and lets you in on a password. >> passwords have problems, emon but do any messages have their own accept pretty issues? >> they do. one problem with bio me the tricks, if you use a thumbprint,
one downside if your thumbprint is compromised, it's hard to get a new one. you can get a new password but tough to get a new thumbprint. those are challenges they have to work through, and some of this will be done by behavior an lit ticks, that is analyzing activity once you're inside the system to make sure it is you. is your device located in your house or work or places you usually are. are you logging in at the times of day you normally log in and doing the types of things you normally do? that behavior monitoring will say wait a second, if someone in another country logged in as me, it's probably not me. >> that would be true in my case. thank you. >> you bet. mixed results from the eye network is where we begin tonight's market focus. revenue came in short as the media giant took a hit because it lost rights to broadcast the ncaa college basketball semi finals. despite that, cbs is doubling the program to 6 billion and
increasing the dividend to 15 cents per share. shares fell initially during the regular trading session the stock was off 1% to $56.90. news corp, the publisher of the wall street journal said revenue came in a bit above forecast but the number was down from last year as advertising sales were weak. sales didn't move much. the stock was down nearly 1% to $17.01. mylan missed estimates with revenue falling short, as well. the company also cut the earnings guidance for the current quarter blaming higher extensiopens for k products. that sent shares down 3% to $46.49. watch out amazon, maybe, google and barnes & noble are joining forces to deliver books. starting today, book buyers in a few locations will be able to get same-day delivery from local barnes & noble stores through what is known as google shopping
express, the partnership could help barnes & noble build a presence since the brick and mortar business struggled. shares were off slightly and barns and noble 2.5% higher at $21.75. wendy's served up second quarter earnings that doubled. the chain continued to benefit from the sale of restaurants and the company said it's going to continue the strategy and offer up more of its franchises. to top it all off, the special sauces, the company reaffirmed the guidance. shares of zynga tanked after late disappointing results. the social gaming company anoublsed weaker than expected revenue as it is struggling to increase useers and guidance was t of the estimates. after hours the stock initially plunged. you can see it dive there. during the regular session, shares were higher to $2.92.
despite isolated heavy rains, there is no substantial relief for the portion of the country in a multi-year drought. the department of agriculture's weekly drought monitor saws 1/3rd is considered under mouth rid to severe drought and the weather earn and southern plain states are hit hard. the three-year drought in california is officially the worst on record for that state. but as josh lipton tells us now, some growers and utilities are turning to where else for help but silicon valley. >> reporter: from residential use to agriculture, the water worry is on in california. >> a huge concern. >> reporter: she's the director of grower relations for the francis ford winery in california. she says if the three-year drought turns into a four or five-year drought there will be problems. >> it could be a compounding issue for us that could keep continuing on and if that should
happen, perhaps in a couple years, we would really see the impact on wine grapes. >> reporter: that's why she teamed up with tech start up of a company flying planes over farm land and gives growers thermal images that can show farmers potential trouble spots when it comes to irrigation. >> after having that technology, we can fine tune it so finally, we have so much more confidence and comfort in how we irrigate. it's changed everything for us. >> reporter: the startup as 100 customers and says demand for the service is strong. >> we see a lot of interest from growers because of the drought and it definitely helps them find irrigation leaks and manage water more effectively. >> reporter: not just on the farm where tech startups and big name investors are hoping to help when it comes to the water crisis. water smart software is one of those startups, which has received funding from the likes
of the wesley group. >> so this a home water report. >> reporter: the company works with water utilities to supply detailed information to customers on water use showing how much water one home may be using versus another of the same size. >> you can in someways think of water smart as a virtual reservoir as people are prompted to useless water to improve the water efficiency. you're effectively creating more reserves in the reservoir for other people to use. >> reporter: and as this water crisis continues, more help from silicon valley may be on the way. >> as our water resources are squeezed, we'll see more interest from investors. i think that's a good thing, the challenge is it going to be too late? >> reporter: the drought cost the state of california $2 billion and 17,000 jobs but startups like water smart software are hoping to ease the water crisis. josh lipton, "nightly business report" geyserville, california. up next, why companies with
potentially life-saving drugs have to turn away people who desperately need them. >> tonight in the second of our three-part series desperate measures, terminally ill patients and what their families face and the only thing left to try is experimental drugs but drug makers often won't allow new unproven medications to be used siting risk to the patient and to the drug companies themselves. meg terrell has the story. >> reporter: two years into her battle with the rare form of cancer, natalee troller and her family think they may be close to something that could help.
>> when we found this new medicine, pd 1, we definitely wanted to participate in the trial. >> reporter: pd 1 is part of a new class of experimental drugs. the family and oncologists asked for access. they all said no. >> it was only including people 18 and up, and since i'm only 15, they wouldn't let me in. we asked for compassion et use, but they denied it. >> reporter: compassionate use is a way to use outside of the clinical trials for patients with no other options. natalee and countless others fit that describe. >> agonizing. >> reporter: doug williams leads research, two years ago, the company was working on a therapy. with compassion et use requests pouring in, biogen prepared enough supply to give 5,000
patients if the drug proved to work in clinical trials. >> an individual situation while difficult and heart wrenching has to be weighed against the backdrop of what the ultimate goal is which is to bring these drugs to market to treat the cross section of the population as quickly as we can possibly do it. >> reporter: there are risks for both patients and drug makers. natalee's doctor worried about the safety. >> these drugs are not ben nine. i have concerns about using potentially using a medication that we have no information on because of side effects can be very serious. potentially life threatening. >> reporter: the companies worry about side effects. art caplin advised drug makers on compassionate use. >> people who take experimental drugs are often sick. the odds of getting better are rare. >> reporter: there is bad outcome in a patient much sicker
than others could affect the drug's chances of approval and another factor they must consider, supply. >> they might have as much as a tiny thimble of that drug and if they give it to a dying person, they can't complete the trial to get the drug on the market to get to anybody with the disease. >> reporter: companies saying not having enough data in different forms of cancer, including in kids, an issue that set natalee back. there are also ethical considerations. >> who do you say yes to? who do you say no to? >> reporter: they say making a drug available through compassionate use could potentially slow a drug's pass to market and there is always a concern a drug won't work. the compound for lithe disease failed. >> they are not real drugs yet. it's just hope to being real hope for patients and we want to prove that something is actually false hope.
>> reporter: for a patient like natalee, the proof may not come soon enough. >> complicated questions, meg terrell joins us now with more. meg, whether a patient is involved with a compassion et use exception for involved in an experimental trial, how do the companies handle legal liability there if i'm enrolling in one of these things or taking a drug, do i basically absolve the drug company? >> talking to her dad, he says as a parent you read through the consent forms and don't hold anybody accountable or liable if something goes wrong. it's a scary thing. another thing companies consider is not just liability but does a bad outcome in somebody that might be sicker kind of disrupt an entire clinical trial program. some say if there are any side effects, of course, we want toe know about them but some say could that be a concern?
could that slow down enrollment or the evaluation of the clinical trial results? these are all concerns. >> so many people in your piece and out there are so vested in finding treatments all the way down to natalee's physician, laura davis who shaved her head. >> yeah, she has short hair in support of cancer research. >> which is amazing. you look at the commitment that all of these scientists and all of these physicians have, are there changes buying put in place to the system to make it more workable or is that not an option? >> there is a lot of pressure building on the system to change, something that i learned. there are laws discussed in several states, called right to try and conflilcting views whether those will help and we'll explore in another piece that you'll air tomorrow. there are questions is there enough communication between the fda and other companies and could there be a way of a
two-track system to provide compassion et use and if something goes wrong on one end it won't affect the other. >> terrific series. we look forward to the third install mtd. >> thanks. >> for more on the series about compassion et use, go to nbr.com. and that will do it for "nightly business report" tonight. i'm sue herrera in for susie gharib. >> thanks from me, as well. i'm tyler mathisen. have a great evening, everyone. we hope to see you back here tomorrow night.
captioning by vitac, underwritten by fireman's fund announcer: the following kqed production was produced in hi-definition. ♪ >> it's all about licking your plate. >> the food is just fabulous. >> i should be a psychoanalyst for the amount of money i spend in restaurants. >> i had a horrible experience. >> i don't even think we were at the same restaurant and everybody, i'm sure, saved room for those desserts.