tv Nightly Business Report PBS March 21, 2019 5:00pm-5:30pm PDT
>> announcer: this is "nightly business report" with sue herera an nike trips. the stock has been on a run, but disappointing sales growth in north america now has investors running the other way. biogenbreakdown. the company sheds $18 billion in market valuefter its once-promising alzheimer's drug ends in failure. poor performance. crash tests of some popular pickup trucks are raising new safety questions. we have those stories and much more tonight on "nightly business report" for thurs. good evening, everyone, and welcome. wall streetas in rally mode. stocks reached a five-month high today with the dow gaining more than 20 points, led by the technology sector.
investors were willing to take on more risk following the federal reserve's decision yesterday to keep rates steady this year. dmething we t you about last night. and that resulted in a 216-point gain for the dow jones industrial average to 25,962 the nasdaq rose 109 points and the s&p 500 added 30. andike couldelp determine the direction of the stock market tomorrow. late today the dow component reported better-than-expected earnings and anxpansion in gross margins. here are the numbers we got. the compa earned 68 cents when the street was looking for aboua 65 cents share. revenue was just about in line withexpectations, more than $9.5 billion. those sales were strong. nike results in north america were not as solid as many had hoped and that caught investors offuard this evening. the stock fell innitial after-hours trading. sara eisen has more on nike's numbers. >> the takeaway from nike's
beat, this is a company in the middle of an upswing in innovation and solid growth, but the marke is already onto it. nike posting very strong sales across geographies, from north america to europe to despite some warnings and evidence of an economic slowdown in different parts of theworld. why? innovation is key. and you see that in higher margins. nike is able to charge more for newer produche, like epic react and the vapor max that are resonating with consumers right now. the only challenge, wall street is already onto t story. the stock has run up 20% to a record high. 's rebounded strongly off the lows, leaving some investors t wonder what's next. for "nightly business report," i'm sara eisen. biogen shares had their worst day in more than a decadet this the biotech company said it was stopping t phase clinical trials of an alzheimer's treatment. considered obeen of the most promising in the fight against the
memory-destroying disease. the company says the decision to halt the tris was n due to safety concerns, but instead because analysis shod the trials were unlikely to meet their primary goals. that sent the stock down 29%. so wha t wills setback mean for biogen and other companies in the biotech sector? joining us tonight, an equity analyst at jeffries, and he joins us to talk more about this. good to see you again, welcome back, michael. >> thank you. >> there were a lot of high expectations for this treatment of alzheimer's as it went through the various stages how big setback is this for biogen to see it fail? yeah,thanks. well, certainly from a practical standpoint we're obviously disappointed and it's a big disappointment for patients. but for biogen specifically, this was the most important pipeline drug. could have been a drug that was 10 to $15 billion of sales, could double the company'sn revenue earnings. so this is a big setback for the
company. i think they're going to have te take s time to regroup and re-evaluate the pipeline and probably go out ande do some m acquisitions. >> i was just going to say, you think tt they do have to make some acquisitions. what sector of biotech do theyo for or look in, and what companies do you think might be a good fit? >> that's a great question. you know, i think that what they are likely to go out and do i still focused on broad areas of, neurolompanies like sage or marinas. sage obviouslyust had a depression drug approved this week, which could be a big program. and gene therapy, they did a gene therapy acquisition last month. gene therapyas a lot of promise and there's a lot of great drugs in the pipeline from like serepta is one example so i think that's where they'll be focused over the next year or so. >> and what now for alzheimer's? there had been a lot of hope in the last fewears that we had been figuring this thing out and maybe coming up withome effective treatments, but now
what? >> yeah, no, you're right.is as the most promising drug in development. they had reall shown a lot data over the past couple of years that led us to be optimistic. and i think that where this kes us backs a view that are there different targets within alzheimer's to go after? are there different genetic it?ents o are they looking at the right patient population? so i think thisigs a setback for people. i think that the company will have to reassess the i pipeline. ink this is a big disappointment for those in the picking up on bill's point, though, are there other companies that are being aggressive in the alzheer's space, or was biogen really the only one or the leader? >> you know, biogen certainly was the leade from the standpoint that they have the most late stage asset with the most promisinga d with the most numbers of patients. there are other c have drugs that are earlier in development, whether that be a
denali or an elector which have some very early science in phase 1 that people are optimistic about. but ultimately this was one of the big ones. again, a big because there was a lot of potential. >> indeed. well, let's hope somebody se can com along with something there. michael yi, thanks for joining us tonight. new developmentsdonight relao boeing. the company plans to slow production at its 737 factory. boeing says it continues to build the 737 at a monthly rate of 52 but willse three buffer days next week to catch up on work delayed by and supplier issues. to the economy now and a new survey of economic conditions, which rose in february for the first time in fivemonths. it's the index of leading economic indicators. they were up 0.2%, led by higher stock prices, lower interest rates, and improved access to credit. economists say it could be a sign that growth will pick up after a sw start to this year.
those lower interestates are good news for home buyers. moorartgage rates are down as t spring selling season heats up. >> mortgage rates are now at the lowest level i more than a year. this after the federal reserve chairman yesterday said td re wo no more rate hikes this year and that the central bank would start buying bondsagain. mortgage rates loosely follow the yield on the 10-year treasury. we've got fromr just o 5% on the 30-year fixed to 4.34% toccy,ding to mortgage news daily. to put that in perspective, if you're a home buyer a taking out $300,000 mortgage, you're now payingbout $150 a month less than you would have in november. the queion nows will that be enough to juice home buying this spring, enough to make up for the high home prices we're still seeing? home sales dropped off last year as rates rose.e wh affordability has now improved slightly, first-time buyers are still struggling to get into this pricey market.
for nowhere, i'miana olick. uk prime minister theresa may arrived in brussels today for a summit of european union leaders. time is cerinly of essence now since the deadline for the uk to leave the bloc is a week fro tomorrow. the issue on the table today was of course the brexit deal that the uk parliament has already rejected. willem marx is in brussels for us tonight. >> reporter: in this city kno for itslast-minute political compromises, a deal struck almost 200 hours before a e.adline could appear premat but if the eu approves the brexit delay overnight thursday in brussels, itfr would ste a failure to find agreement back in london. after intense back-and-forth negotiations that have now lasted one year acti, 11 months 21 days. before this last council meeting, theresa m had requested more time to get her deal through the british
ragislature. se european leaders told us they hoped she would manage that next irek. time lucky. >> most of us are ready to give brexit another chance. prime minister m another chance to convince her parliament to vote the agreement. there's still time. we still have this possibility. >> reporter: as of right now there's not much time. justs eight d until britain legally leaves the eu and the possibility that lawmakers in westminster vote through may's deal remains very narrow. i hope that there will be support in the parliament next week, because we all have the same interests, to avoid a hard brexit, to avoid a no-deal scenario. >> reporter: french president emmanuel macron has taken a hard-line stance andd he insis that a liamenurrliamentary defe could meanes it cra out.
>> in case of a no vote, directly it will guide everybody to a no deal for sure. this is it. >> reporter: after two years of talks, europe's leaders told us they were sll not clearbout the will of the uk's voters, lawmakers, or indeed its leader, ough they acknowledge she is caht between a rock and a hard place. >> we're in a special situation because at the moment we have more no options on the table than options. the speak of th house of commons telling us that he doesn't want to revote. they are telling us that they don't want t renegotiate. so we know what everybody doesn't want but we don't know what you want. >> reporter: for "nightly business report," i'm willem marx in ussels, belgium. it is time to take a some of today's upgrades and downgrades. apple was upgraded to strong buy from buy at needham. th alyst cites apple's new content service and says the company should be viewed more as an ecosystem rather than a product company. the price target is $225. the stock rose more than 3.5% to
> conoco philips was upgraded. the analyst cites the potential for free cash flow generation. the stock rose a t fraction $68.14. icron tech was downgraded at citi. they site soft revenue guidance released yesterday. today the ceo says he's focused on growing the profitability of the business. >> as long as we focus on our supply growth to be in line with demand, we believe in the portfolio of products with the technology advancements that we are making, thet portfolio t we are expanding we will definitely do well in terms of meeting the requirements of our customers and absolutely n maintaining our sharee market as well. >> citi's price target for the stock i$30. despite the downgrade the stock rose more than 9% to $43.99. still ahead, wall street's
>> i'mor robert frank in new city.ng on "nightly business report," did g just ll the suit? we'll take you inside one of manhattan' m top suitakers to find out what wall stree facebook has admitted to inadvertently exposing the passwords belonging to hundreds of millions of its users.co ing to reports the social media company stored about 600 million passwords without encrypting them, meaning they were viewable as plain texts to some company employees.
in a blog post, facebook did not say how many users were affected,ut it did say that it would start sending out notifications so users can passwords.ir most companies do encrypt passwords to prevent them from being stolen in the event of a data breach. new crash tests are raising questions about the safety of some of america's most popular vehicles, pickks tr in fact a watchdog group says some pickups struggle to protect passengers in the front seat. phil lebeau has the detail >> reporter: the impact of new crash tests from the insurance institute for highway safety is unning. some of the most popular pickup trucks struggle to protect test dummies ding in the front passenger seat. >> in general the pickup truck class of vehicless not doing as good a job protecting right front passengers as other classes of vehicle. >> reporte of the large pickups tested, the ford f-150, ram 1500 and nissan titan
received the top possible rating ofgood, one notch above honda ridgeline's acceptable grade. bycomparison, the iihs says the chevy silvedo 1500nd gmc sierra 1500 provided marginal protection, while the toyota owest possible grade of poor. the insurance institute believes these tests will prompt automakers to improve the safety of the pickups, especially as jeep and ford roll out midsize pickups to meet the gropiwing demand for trucks, which have gone from being wor and utility vehicles to becoming the everyday ride for more americans. >> pickup trucks have become sort of a vehicle that peoplepl treat as p used to treat cars. they're driving them back and forth to school, back and forth to work. so crash protection in theseck kind of t is more and more important to more and more people. >> reporter: last year pickup sales increased more than 4%,
easily outpacing the market overall. something that is expected to happen again in 2019, as with the love affair pickup runs hotter than ever. .hil lebeau, "nightly business more people are eating out at olive garden, and that's where we begin toght's market focus. promotions and menu upgrades at the casual dining restaurant are paying off for parent company dardenrestaurants. darden reported detter-than-expected earnings and rai its fiscal year outlook. it also reported strong results as itste longhorn house locations as well. shares rose to $116.11. lands end reported a near 60% decline in profits for thes la quarter, but they still managed to beat wall street earninue and rev estimates. analysts say that the company's turn-around is starting to paye off,ve it or not, but investors wanted more obviously. the s fckl 6% to $16.12. conagra reported
better-than-excted earnings thanks to higher prices and an increase in sales at its snack unit. ose higher prices helped to offset a rise in transportation and commodity costs. the company also signalled improvement at pinnacle foods, the company it purchased for ckre than $8 billion last year. the s today gained 12% to $25.82. cvs has started selling cannabis-based products in eight statespa the c specified that the products are topical only. it is n selling any supplements or food additives that contain cbd. >> anecdotally we've heard from our customers thahave used ose products that, gee, it's helped with pain relief f arthritis and other, you know, other ailments. so wngre g to walk slowly, but we think that this is something the customers are going to looking for and is part of the health offering. the stock gained 2% to $57.40. clorox is suing rival
household products maker. it alleges that the british company falsely claimed in ads that its lysol products are superior to those made by clorox. the stock was up about 1% to $158.06. levi strauss made its return to wall street today, marking the largest ipo of an apparel company in years. the iconic americanetail brand began trading on the new york stock exchange after having riced its initial public offering at $17 a share. that was above the expected range. the company is now eyeing expansion through new stores. and the ceoays levi strauss is giving customers and now investors what they want. >> to be successful, it does comeown totrong brands. consumers at the end of the day love an emotional with their brand. and we've recreated that love levi's. we have built a very, very big platform on big w data andre mining the data that we
do collect and really turning it into revenue. >> well, it was an emotional day for those shareholders today. theyoared by nearly 32% to $22.41. and in honor of that ipo, theng new york stock excha suspended its dress code for today only. traders were permitted to wear jeans, which are typically not allowed. the big board's dress code calls for men to wear a jacket and a tie, but today it was casual >> and that casual trend is becoming moreommon place in the financial services industry. it's changing anus entire iy that has focused for years on dressing bankers a some of wall street's most storied firms. robert frank is in lower manhattan for us >> reporter: the traditional business suit has been going out of style for years. but goldman sachs' announcement that it's going casual mar the end of an era for an industry that dressed wall street for cades. national suit sales dropping
from just under $13 million in 2011 to $11 million last. ye and they're expected to fall to $10 million in the next few years. millenials are driving the trend. >> i think it's a great idea that places ar row lackelaxing dress codes. you can express yourself more as opposed to wearing slacks and a sttton-down every day. >> reporter: walet was one of the last holdouts for the suit and goldman set the styleh for m of the street. >> we have said for a while if goldman goes casual, there's going to be a problem, because goldman is such a bellwether for the market and is such a trend setter among other firme' i think see a lot of other holdouts begin to very quickly adopt. >>ter: the future probably looks a lot like this. we're in downtownat manhn. they had dozens of goldman clients. their traditional suit sales are own 28% just over the last ree years. so andrews isda consong the
industry, buying up new york's oldest suit maker. it's pushing into like blazers, custom jeans and leather jackets. and it's focusing on events like weddings, big parties and even tv and movies. some say goldman's announcement could even help the business in the short term, since sport coats will become the new power suit. >> we just had a client from in tan in who had come get two suits right after the announcement. he said, all right, i still need the suits, but i need three sport coats now too. >> reporter: for "nightly business frank in downtown manhattan. and sticking with retail, shoe retailer nine west is now emerging from bankruptcy protection with ameew the company will now be known as premiere brands group. nine west filha forer 11 protection in april of last year and cut its debt by about $1 billion in the process. coming up, winter whiplash. western states got a lot of snow this ski season, but experts say
leat's the exception, not the >> here's a look at what to watch for tomorrow. we're going to get a fresh read on the housing market witlethe e of existing home sales. tiffany's quarterly results will give us a glimpse into the health of the luxury jewelry market. and the latest read on manufacturing wil us if the sector is being impacted by the slowdown road. that's what we're watching f the western part of the eeited states has record snowfall this year, but that hasn't been the sntrend. fall totals have been moving in the other direction. in fact, experts s ski seasons are already getting shorter, due to warmerur temper.
that could have a big financial impact on the properties that profit from snow. diana olick is back with the next installment in her series, rising risks. >> reporter: colorado may be having onef its best ski seasons this year, but all this rnow is actually proof of how undependable wineather is becoming. because last year's season was one of the worst. delayed as the first opening that i've seen since i moved here in 1991. >> reporter: josh sells like lar homes this in the vail area and said even this year's season got off to slow start. >> last year stunned people. i think a lot of people wer a ttle gunshy from lastar ye. deposits on hotels and everything else. >> reporter: and the winte sports season is even likely to become less reliable. the amount of snow in the western united states has seen an average drop of41% from the early 1980s, according to
research just published in th geophysical research letters. as a result, t snow season shrunk 34 days. that has a direct effect o pthe valuabperties all that snow sits on. >> as far as the real estate business that i own, and then i also am a broker within, what will happen? where's my livelihood in the future in three to four, five yearte >> rr: by 2050, home values near ski resorts could drop by at lst 15% due to warmer winters. s according tody by researchers at the university of wisconsin. in lower elevations like utah, idaho, nevada and parts of california, they could fall as much as 55%. and it's not just the fancy homes. snow sports tourism contributes about $20 billion to the u.s. econy each year. according to researchers at the university of new hampshire and colorado state university. the bulk of thatnd sg is at ski resorts. >> is there a risk to the value
of your properties if you have a shorter ski season? >> i think there could be. >> reporter: robert katz is ceo of vail resorts, a publicly traded company. it operates 15 mountain resorts across theu.s., canada and australia. it also owns luxury hotels and v real estateopment company. >> we do hear from shareholders uite a bit about this weath variability. if i'm going to invest in vail resorts, how do i know that you can consistently drive results? >> reporter: hisanswer, fight climate change from the ground up. lead by example, and at the same time p ttecthe business. >> our sustainability practices are critical to ourlong-term sustainability as a company and the financial performance that we can deliver. >> so it's really yourottom line. >> absolutely. >> reporter: in 2017, katz announced a commitment to using 100% renewable energy. that meansar panels and transitioning to more energy-efficient snow making. yes, snow guns in colorado. and it's buyingpr more erties. recently in vermont and
australia, a geographical weather hedge. >> it's critical because whatee we'reg is variability, which means every resort is not having the same weather at the same time. >> reporter: the company's season lift pass o is part that too. it works at all vail resorts properties, but must be purchased before the season starts. as ski seasons like this become shorter and less dependable, there is one business strategat ould help lower the risk for both resorts and residential real estate. that is turning this winte wonderland into a summer playground. that means investingon millis of dollars in zip lines and mountain coasters for summer tourists. and it appears to be working. summer tax revenue in2016 was 34% higher in vail than four years bere, according to the town of vail. >> it's critical. we think we needo be providing a terrific experience all year round. >> reporter: for "nightly business report, i'm diana olick in vail, colorado. >> to read more about the toll
climate change is taking on the multilion dollar winter sports industry, head to our website, nbr.em. befe go, one more look at the final day on wall street. the finalumbers on wall street. they were pretty good too. the dowas up 216 points, nasdaq climbed by 10 the s&p added 30 points. >> and that is "nightly business repom sue herera, thanks for joining . >> i'm beil agriffeth. hareat eveni