tv Nightly Business Report PBS March 12, 2019 5:00pm-5:31pm PDT
>> announcer: this is "nightly business report" with bill jetsed grou boeing's most popular plane is being idled around the world and the stock has its biggest two-day sell-off in nearly a divorce deal rejected. uk prime minister theresa may suffers a second brexit defeat, making the country's scheduled exit from the eu all that more chaotic. the price of admission for some wealthy individuals. th price was very high and they were allegedly willing to pay it to get their kids into prestigious schools. those stories and much more tonight on "nightly business report" for . good evening, everyone. and welcome.ei
's popular plane is being grounded around the globe. from europe to asia, governments are keeping's boei newest jet from flying following the crash over the weekend of an ethiopian commercial flight. ss we reported, the plane in question boeing's 737 max 8. the faa says theli ar is air worthy. in a statement the company saidt safety is boeing eboeing's numr one priority and we have full confidence in the safety of the max, end quote. that's not enough for lawmakersn in washing who are calling on the faa to reverse its decision. senator ted cruz says he plans to hold a hearing on the fatal crashes of two boeing 737 max 8 jets since october, a that sent the stock down another 6% in trading today.u phil lebas been covering the story for us all along. it's didn't to see you, phil. so with all these groundings, how much pressure is the faa under and the airlines that fly
the plane, american and southwest and others? >> and united as well as air canada here in north america. sue, there is immense pressure no only on the airlines but also on the faa, because the faa feeling heat not only from lawmakers inwashington there were tweets today pby the president talking about the complexity of plaairplanes and whether they're too complex. that led to a phone call between president trump and dennis mullenberg. he confirmed his feeling that the planes were safe, including the 737 max 8 and max 9. so the question becomes does that pressure which is growing clearly day byoe day, it reach a point where the faa says let's ground these planes unless we have some answers. at thi point i don't think it's reached that level. now, that could change. it could change if the presidens puts pe on the secretary of transportation, elaine chao
and says let's shut it down until we have more answers. >> the max 8 is the most popular plane for boeing. it's the growth driver for the future for re. do you think some of this is a business decision on their part not to call for a grounding? >> no, because thefa is pretty serious -- very serious when it comes to any idea of something being wrong, a defect. something just not working the way it is expected to work with these airplanes. remember, bill, they get reams and rms and reams of data on planes ight when these are taking off and landing. they know by now. 41,000 flights by outhwest airlines and the pilots and the airline are saying we're not seeing anything that is unusual here. that's one factor behind the faa saying, look, we thought something was wron ife truly thought something was wrong about a pick part or onen we would shut it down but they don't have that evidence yet. >> on that note, thank you, phil
lebeau. >> you bet. let's continue the conversation about this whole boeing mess with seth kaplan. seth, thanks tonight. us >> good to be here, bill. >> why do you think with all of the countries around the world who have either grounded the max 8 or prohibited it from flying over their, airspa and the numbers grow almost by the hour today, why do you think the faa and boeing have chosen not had the same in the united states? >> well, i believe t that the plane is saf fly. nobody wants to be the person that gets this decision wrong, so i think they're taking a vero teatic approach to it and as phil said saying we don't see anything suggesting otherwise. but what you have is not only political pressure but consumers re. you wonder if at some point boeing itself doesn't say, you know what, we're keeping this story in the news longer than necessary. because i hear the faa saying
you need to make changes and the other is y can still fly. >> do you think boeing should be proactive and say, okay, l's ask t faa to ground the fleet in order to restore confidence in its planes? >> i think somebody there shoulb at least thinking about doing that. again, i trust that if they had any doubts, you know, in terms of t safety of the aircraft that they would indeed be doing that. but yeah, this keeps going until something else happens. u have people that don't want to get on these airplanes right now and a fix a month or so out, that's a long time in terms of an extended news cycle. >> more needs to be known about e crash in ethiopia and exactly what caused this, but tell us about the max 8 and this device or system that may have caused the crash and the one involving lions gate in
indonesia. >> this wasn airplane that boeing in many regards didn't its competitor had come out with something new. they wanted to wait another five or t yea but said you know what, rather than a new airplane, let'sut new engines on more or less the tried and true 737. they had to make some other modificatio some regards not a big departure. but the anti-stall systemd that haomething to do about the lion air crash,o harder say with this one, which was designed to prevent something that had caused previous famous crashes. the planeeginning to stall, a pilot not doing what they're supposed to in panic, counterintuitively you're supposed to turn your nose down, dive into th stall and regain ume air speed. the rest of would want to pull back and climb and accelerate the all. this was designed to prevent that but pla in causing one crash and perhaps
the other. >> seth, thanks for joining us tonight. >> thank you, bill on wall street, the decline in boeing shares dragged thep blue c dow index lower, but a rise in the shares of tech and energy companies held lift the other indexes by the close. the dow jones industrial average eventually fell 96 points to 25,554. the nasdaq was up 32. the s&p 500 gained 8. e, meanwh consumer prices rose for the first time in four months in february. according to the labor desurtment, the cr price index increased by 0.2%. that was in line with expectations. it was lifted mainly by gains in the cost of food, gasoline and rent. the overalf pacee increase was modest given that this was the smallestnnual gain i nearly two and a half years. the u.s. tradere esentative was on capitol hill today and told lawmakers that the u.s. and china arema ng headway on key issues, butal that any trade de must be enforceabl or the president won't sign .
>> we have to have real progress, and we have to maintain the righto able to whatever happens to the current tariffs, to raise tariffs in situations where there's violations of the agreement. and that's the core. if we don't do that nothing makes any difference. that's a matter of ngotiation. date has been set yet for a summit meeting between president trump and chinese esident xi. more drama across the atlantic today. theuk parliament rejected prime minister theresa may's lates plan to exit the european union. this vote leaves the united kingdom with no obvious way forward ahead of the march 29 deadline to leave that bloc. that has created loads of confusion around the nation's litical and economic future. our villa marks joins us tonight from longd. so what s the key issue that made it fail again? and you've got two more key votes coming up over the next two days, right?s
>> thaght, bill. the key issue was once again an issue that dominater the cotion over the last six months or so, since we got close to theetails of this deal being agreed back in december. but essentially it was the idea that the uk would be involved in an insurance policy the eu demanded, theri government demanded which would avoid having a hard border. at's something they didn't want to see because it would limit the uk's ability to create an independent trade policy in the future and essentially despite a -dlach effort by theresa may last night in talks with herounterparts in raussberg and france, she was unable to get that backstop she had hoped for and that's why we saw the defeat in terms of the deal tonight. what that meansn terms of the
next couple days of votes, tomorrow we could see p tliament tr rule out the uk leaving the european union without an agreement. that's something that could be very economically damaging, m according tt analysts. and what that means after that is on thursday if they rule out leaving without a deal, you could then see the parliament calling for an extension of a two-year period in which we've seen these negotiations continue. that extension would be reliant on the european sidllowing it, though. >> exactly. what about the prime minister? it a threat to her position point?e minister at this >> well, back in december she faced a challenge from within her own conservative party. the rules of that party dictate that it won't be another 12 months before she can be challenged by her own mps. we've seen since the start of the year that the labor opposition party have tabled the no confidence in her government.
that did not get a majority. she maintains a very small majority withelp from an irish party. i've been speaking to a number of mps this evening and one of them and a number of other members of her party have said there is no point changing the prime minister if it doesn't change the fundamental brexit position. this northern irish backstop is not going to be negotiated any differently by a different leader. >> thanks for staying late for us tonight, villa. it is time to take a look at some of today's upgrades and downgrades. coca-cola was downgraded to hold from buy at hsbc. the analyst says the company is trying to grow revenues with low margin brands, and that could take years. the price target is $50. the stock fell a fraction to $46.05. monster beverage was downgraded to market perform from outperform. the analyst says the stock's valuation may be as good as it
gets. the price target i$62. the sck fell 1.5% to $60.23. still ahead, why the o and has industry is no longer ignoring climate cnge. the food and drugti administ has found a replacent for outgoing chief haott gottlieb. nedless will serve as acting fda commissioner when gottlieb leaves next month. gottlieb resignednd last week served in his role for nearly two years. in an e-mail to fda staff, ib gottlieb des sharpless as deeply committed to public help.
> wells fargo ceo tim sloan told the house committee they have improved following a series of scandals that impacted millions of customers. this rol stepped into i promised that accountability and transparency would define our efforts, and they have. above all, wells fargo is committed to m ring thingsht for our customers and to earning back the public's trust. a dedicated to compensating every customer who suffered harm because of ourst es. >> sloan was grilled by both democrats and republicans on the committee. e chair, maxine waters, said the bank's nearly $2 triion in assets were too big to manage, but sloan said that wasn't the bank's issue. oil prices rose a few pennies today after saudi arab annod plans to continue to cut output a in april also because of a cut in exports from venezuela due to a power outage. domestic crude rose eight cents
to$56.87 a barrel. naturally rising oil prices are od for the energyndustry and one reason is that companies need attractive prices when they goooking for investment. brian sullivan explains from the industry gathering in ho >> reporter: three big topics on day two of this energy conference. continued investment in oil and gas, the world outside of texas, and climate change. few industries are as capital intense ji or costly as oil and gas. while americans may l love gasoline prices, the ceo of hess oil tells us oil prices need to be high enough where there is an incentive to continue to invest the key challenge for the oilus and gas iy is investment. we're simply not investing enough in oil and gas to grow supply to keep up with demand. the international energy agency has made very clear hat that number should be $580 billion a
year. three years ago it was $350 billion. two years, $370 billion. last year $410 billion. this year $420 billion. the price has to be high enough encouragehat investment. at reporter: most of the money in the united st has been flowing to just one oil and gas region and that is the well-known permean basin in western texas. while they love the story, the ceo ofs chevron s be careful, because all the attention on the permean can drown out attention from other profitable oil plays. >> the permean ishe newest play in our industry and it's terrific. it's growing fast. the fastest growing asset in our portfolio but far from the only thing in our portfolio. we're a global company with positions all around the world, all of which are important to >> reporter: another big issue here, climate change and carbon emissions. for years, this is an issue that
the oil an gas industry simply avoided. now they can do so no longer. shareholders and institution investors are often demanding accountability and transparency on the topic. companies are trying to hit the issue head on. but wesked the ceo of occidental if an oil and gas company can take t lead on the issue. >> we're the largest handler of co2 in the world. so we're perfectly positioned to take it and use it in our enhanced oil recovery projects in the permean. doing that, it's a win-win for our shareholders in that we make mon on that, it's commercial for us, and we reduce emissions in the united states. >> reporter: and of course the issue of venezuela certainly a big talking point as well. thn country an economic and humanitarian crisis. oil and gas, the life blood of that nation, as oil production simply continues to fall. there are rolng blackout and there is no money to pay the workers. everybody here is talking not only what is happening in
venezuela, but what the future of that coury may be. they have the largest proven oil reserves in the world. for "nightly business report," brian sullivanhouston, texas. dick's sporting goods is pulling guns fromore of its stores. that's where we begin tonight's market focus. a year after the company pulled firearms from ten locations following the parkland, florida, shooting, dick's says it will stop selling guns in 125 more stores and replace them with higher margin sports gear t try to reverse slumping overall sales. during the q holidayrter same-store sales fell more than 2%. while earnings and revenue beat forecasts, the company gave a weaker-than-expected full-year . outl lumber liquidators has agreed to pay $33 million to settle charges it misled investorsbout the safety of its laminate flooring made in china and sold in the u.s.e settlement with the justice department and the s.e.c. comes
four yrs after the company was alleged to sell the flooring with high levels of formaldehyde which is known to cause cancer. lumberrs liquidaell 3% to d11.08. verizon s it experienced a network outage that blocked many east coast customers from being able to send text messages. the telecom company did not confirm the scopef the outage but said all service had been restored by mid-morning. verizon shares were off just a fraction today. the ceo of t-bile and o sprint, they were both back on capitol hill today defending their planned b $26lion merger. t-mobile's chief said it would be good for the country. >> deliver a rcsurged carrier to deliver 5g, increase competition and create american jobs. first and foremost t-mobile will make sure america wins the 5g
race. it will fuel innovation and job creation well beyond anything we've seen so far. >> t-mobile closed at $71.70 sprint was $6.22. shares of stitch fix took off following last night's quarterly profit report that beat estimates. the personal styling service ys reven came in above street forecasts. the number of its activelits jumped by 18%. as a result, stitch fix raisedea its full revenue outlook. shares rose by 25% today to $33.78. coming up, it reads like a who's who, including selects, ceos and billionaire entrepreneurs. but it's really a list of wealthy parents caught in an admissions scam trying to get their kids into top universities. the sordid details when we come back.
the white house is now weighing the possibility of having colleges a universities take on some of the financial burden when students are unable to repay their loans. right now the federal government and taxpayers are t sole backstop on defaulted student loans. yesterday's budget proposal from e white house included a line that said that colleges that take taxpayer money should, quote, have skin in the game through a loan risk s program. specifics, though, have not been laid out at this point, but there is curntly more tha $1.5 trillion in outstanding student loan debt. and now to thelatest scan rocking the halls of academia. 50 people have bee crged in a nationwide admissions scam, many
of them well-to-do parents trying to get their kids into some of the highest proolle sc in the country. so well-to-do in fact, the attorney from massachusetts called it a catalog of wealth and privileg bert frank has more. >> they are ceos and billionaire entrepreneurs. hollywood celebrities and top lawyers. they were allus a today by federal prosecutors of being part of a massive scheme to pay bribes to get their kids into college. the u.s. attorney in boston charging 50 people with bribing college coaches and testing administrators to get their kids into georgetow stanford and other elite colleges. the fud involved wealthy parents paying a counseling company a total of $25 million. pay the company would admissions test administrators to help students get better test scores by having someone else take the test or correct the scores and they bribed university varsity coaches to admitdr
chil recruited as athletes, even if they didn't play the sport. >> every year hundreds of thousands of hard-working, talented students strive for admission to elitehools. as every parent knows, these students work harder and harder every year in a system that appears to grow more and more compitive every year. and that system is a zero sum game. forry e student admitted through fraud, an honest, genuinely talented student was rejected. >> now among those charged, actresses felicity huffman of "desperate housewives," "full house" actress lori loughlin, and her husband. doug hodge, the ceo of pimco. mael henriquez of hercules capital and gordon kaplan, the co-chairman of the global law firm wilkerr was also
charged. >> all of them knowingly conspiredge with s and others to help their children either cheat on the s.a.t. or a.c.t. and/or buy their children's admiion to elite schools through fraud. >> none of those charged or their lawyers could be reached foment right after the announcement, but prosecutors say the parents also got to write off thefr bribe their taxes, since it was all done through a fake charity. .or "nigly business re finally tonight, happy birthday to the internet. 30 years ago english scientist tim berners lee with inventing the worldwide web and he wrotehe first web browser a year later. amazon and google celebrated the day with screen shots and animations. today there are about 2 bwelion ites out there, and it's estimated that nearly half the world is online. ni think it's more t half the world. >> i'm sure it is. i can't believe it's 30 years, though. all right, before we go,
here's a look at the final numbers from this day on wall street. the dow fell 96 points, the nasdaq was u 32. the s&p 500 gained 8 points. and that is "nightly business report" for tonight. i'mhe sue ra. thanks for watching. we'd like to remind you, this is the time of year your public television station seeks your support. >> i'm bill grifth. we do thank you very much for that support. have a great evening, everybody. we'll see you to