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tv   Nightly Business Report  PBS  September 9, 2015 7:00pm-7:31pm PDT

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this is "nightly business report" with tyler mathisen and sue herera. >> late day drop. the bears come out in force minutes before the closing bell, for what had been a relatively calm day into a tissy. >> i'll scratch your back if you scratch mine. how pervasive is that behavior that forced the ceo to resign? >> and what slow down? the facilitiering of the chinese economy could be a positive for the united states. all that and more tonight on "nightly business report" for wednesday, september 9th. >> good evening, every one. welcome. late day drama which saw the markets go deep entire reverse and swing 400 points. the dow started with a spark when stocks bounced right out of
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the gate but that's pretty much where it ended. and the rally started fading after the release of a strong government report on the labor market. so sfrong some say it could prompt the federal reserve to raise interest rates in nearly a decade. they meet next week. combine that with the continued uncertainty in the market and stocks fell and fell even hard entire the close. by the end of the trading day, the dow jones industrial average dropped 239 points to 16,253. all 30 dow come opponents finished lower. the nasdaq declined 55. the s&p 500 was off 27. oil certainly didn't help either. west texas intermediate fell on 4415 and that pressured any energy shares. so right in the middle of that with take's action. >> another volatile day on wall street. the dow opening up over 170 points in early trading
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following games that we saw in japan and china. the big gains spurred by repeated promises of lowered corporate taxes in july and more government stimulus in china. however, that wasn't new news and that made traders skeptical. especially following tuesday's big gains. tuesday markets were then hit by a report on job openings, about 10:00 eastern. that report said openings are at their highest levels in 15 years. the so-called report causes the markets to sell off in early trading. that's because it raised expectations that the latest time could give the federal reserve another reason to raise interest rates possibly as soon as next week when policy makers meet. apple announcement of a new ipad, update to apple tv and new iphones, adding weakness in energy stocks on the back of another down session for oil and the dow finished off more than
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230 points and back into correction territory. for the new york stock exchange. the promise of more stimulus out of china has u.s. investors cheering early on today but in reality, the u.s. may be the country's least affected by what going on. that may sound counter intuitive since the global economy is so interconnected and china is the world's second largest economy. that theory has been backed by recent reports. as steve explains, a slowdown in china may not necessarily pose big a threat in the u.s. >> much of the market volatility has been tied to concern over china's economic slowdown. to several economists, it looks like the tail wagging the dog. the u.s. buys five times for stuff more stuff from china has the it buys than us. in fact total trade, imports and exports, is only about 3% of the
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$17 trillion economy. >> when china slows down, it tends to have a ripple effect on the whole region in asia. with the 1% slowdown in china, it only has 0.1% impact on gdp. the impact on the u.s. overall both direct and indirect is very limited. >> a recent study of 27 countries found the u.s. among the least vulnerable to a sharp chinese slowdown. commodities would fare the worst. still, some sound the alarm bells. they note the u.s. corporate profits as opposed to the economy would suffer because chinese consumers buy less from american companies. they padre china is so ingrained into the world that a cooling of the china would affect the u.s. it is much more important than external demand. the rest world does, however,
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have an impact. the notion that the u.s. can drag the global economy along is no longer the case. >> yet a reason study by economists at the kangs city federal reserve bank found a new upside from the chinese slowdown. tens of millions now leading the country and ending up in the u.s. economy. from cond owes to companies, the chinese are helping to bump up equity prices. >> so far the data backs it. suggesting while the u.s. economy's state affected by china, it is not ultimately determined by it. for "nightly business report." the widely followed hedge fund manager remains bearish on china. he said chinese economic growth would continue to decline by about 2 pierce year and he made it clear that he thinks the chinese economic model of
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investment is broken. >> investment is still almost 50% of the economy. and they're running out of room to borrow. that's the real problem. the banking system is loaned up. they've had to resort to shadow banking and now comment is leaving. that's the real news story. >> he is the founder with more than $3 billion in assets under management. the chinese government invited to discuss the pro longed slide in the stock marked. he accepted the invitation to meet with officials in august. black rock is the world's largest asset manager. to the scandal in the sky, as we reported last night, united continental's chief executive resigned and made the ongoing investigation. now the public and investors are asking, what went wrong at
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united? the new ceo vows to lift the airline to new heights. phil has the story. >> reporter: a corporate scandal rock . they resign without warning as questions mound about the relationship and he two united executives had with the former head of the new york/new jersey port authority which runs the newark airport. federal investigators are looking into why united add flights from newark to columbia, south carolina, near the second home of the port authority leader. a route later kansas when he told the port authority chairman later left his job. did they add the flight? >> is there something of value, was there a quid pro quo or was there a kickback? >> united is not commenting on the investigation. meanwhile the new ceo vows to improve the performance from a
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poor on time arrival record. united can do better and the airline's new ceo knows it. >> it is just an absolute and complete point that we need to reach our customers with a better service project. and that is our commitment. that will take a lot of time and effort. >> he takes over united after running operations for csx. given his back ground, they are cautiously optimistic munoz can lift profitability and performance to match the top competitors. "nightly business report," chicago. how pervasive are trading favors in the business world? john singer is a partner at the law firm and he joins us now. we don't know all the details between what transpired between them.
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but one can well imagine that favors, whether they're asking for or forgiven. where is the line, with acceptable business practices and what crosses the line? >> well, i think in this case you're dealing with a public entity. the port authority is controlled by new york and new jersey, by quoemo and by christie. so you're dealing with taxpayer funds. in this case, it was a pretty cavalier and brazen quid pro quo in that there were these private flights to south carolina from newark that did not exist previously and then all of a sudden, within a few days consequent to the port authority leaving that flight was curtailed. then of course, that was the quid. then the pro quo was united twoonltd curry favor with the
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port authority and they wanted lesser fees, improvement to the terminal. so it is a classic quid pro quo and one that was very cavalier and brazen one year. >> this is obviously a different situation from a private company. how pervasive is that type of behavior with either publicly held companies doing business between another publicly held companies or private companies? sure. i think in my area of practice it is quite pervasive. where it crosses the line from per miss dwroibl impermissible is when you have shareholders being affected. so this whole harken back to what happened in the early 2000s when you have the investment banks like solomon smith barney and others writing research reports that did not reflect his true beliefs but he would
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inflate ratings. and then they increased the investment banking fees. that of course affected shareholders because folks rely upon those ratings, they believed they were true and they affected true beliefs of him and others and then you had shareholders being affected and then the state commissioner's commissioners got involved. >> is it ever okay where there is negotiating with the port authority, is it ever okay for that public company to do something that it knows benefits the private interests of an individual at that public entity that they're doing business with, even if that individual has never asked for it. in other words, can i do you a favor that you've not asked for, just bought.
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>> i think people act a certain way so they think they can effect change. in this case, you had the public figure in this case, samson, the control of of the port authority, he was benefiting personally. he was the one flying to his second home in south carolina so he was going to personally benefit. i'm not sure how anybody else would benefit. the question was whether united did anything wrong. i think it was conclude that had the ceo did not. he walked away with 4.9 in the separation package. so wasn't for cause. he was doing a proper thing for the united shareholders.
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i think the wrong to go was because of the part of the port authority, not on the part of united. >> okay. john singer, we appreciate your time tonight. >> the sector of the economy having problems. it is likely not the one you think. a new survey says the wealth gap in the united states is a bigger problem for the economy. ultimately than slow yoeth. growth is according to the harvard business schools. inequality poses a growing threat to competitiveness. two-thirds of respondents said
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aegds middle class stagnation should be a higher priority than increasing overall economic growth. >> boosting economic growth is a key issue for republican voters. today republican candidate jeb bush outlined his plan to revv up the economy. it all come down to taxes. john harwood has details on how it compares to the that plans of the other presidential hopefuls. >> trying to emerge from the shadow of donald trump, republican candidates are turning to taxes. today it was governor jeb bush. >> the difference between 2% and 4% growth is this. at 2%, we'll stay where we are. with millions on the sidelines, falling behind. at 4% we grow at a pace that lifts up everybody. and there's no excuse for not trying. we need to jump start our
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economy by fixing the tax code. >> the mangs diverge on key details. bush goes to 28% and rand paul has a 14.5% flat tax. on corporate rates, rubio goes to 25%. bush drops it further to 20% and paul would institute a 14.5% added tax on invest many income. paul applies the flat tax and rubio would eliminate comment gains and dividend tax altogether. two big questions, how many of a wind fall would they apply to the wealthy? and what sort plans would we get from hillary clinton and donald trump? >> more now on the labor report we mentioned earlier. the government says there were nearly 6 million job openings in
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july. the highest ever. even though company are hiring, the secretary of labor says there is still room for improvement. >> there's still slack in this economy. we can still do better in terms of lowering the unemployment rate. and one of the best ways to put that upward pressure on wages is to have even more tightening in the labor market. so i think there's opportunity to do that. we're not done yet. i'm very, i'm pleased with this report but no one is spiking the football. we've got more work to do. >> despite the rise in job openings, hiring fell meaning companies are having trouble filling the position. >> and one industry that is having a hard time filling positions is fast food. so chipotle is making a big recruitment push following a number of moves taken by other fast food companies to hire and retain employees. now the story from new york. >> chipotle won't a hiring spree
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opening restaurants three hours earlier this morning to interview job seekers. >> i would love to work there. of course you get free food. i don't know. chipotle just, it's a good place to work at. >> the goal, hire 4,000 workers in a single day. it would boost the 60,000 work force by nearly 7%. some of that will staff directly 200 new restaurants opening this year but chipotle says many of the hires will fill restaurants. with each location prepared to interview as many as 60 applicants. an polices say it is a good move for the country. >> having the extra hope during peak periods will help get more customers into the door. so ultimately it will help chipotle be a winner. >> the hiring binge is the
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latest aggression of a growing trend. the economy market. as more people eat out, fewer people are applying for jobs at chipotle. earlier this summer chipotle beefed up the employment packages with hourly tuition. the cheese cake factory and mcdonald's corporate owned restaurants hiked pay above and beyond where the minimum wage has increased. starbucks is providing tuition reimbursement to those who enroll in an online program. it calls the availability of labor one of its biggest head winds. >> it costs less to retain an employee rather than to go out and recruit new employees and train them. so yes, it will affect the restaurant sector.
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>> as for chipotle, was there enough this to fill positions? this restaurant did do some hiring on the spot. overall, chipotle says it has 50,000 applicants pre registered for today. more than the company hoped for. while the labor market is still growing. even though labor market is tightening just a bit, not every company is hiring, lock heed martin eliminating 500 jobs. tlemd the job cuts are in response to changing government priorities and it come a month after announcing the purchase of the maker of the black hawk helicopter. >> another weak report from barnes and noble is where we begin focus. it posted spaels fell for the
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fifth straight quarter. decreased demand for its ereader is waiting online. shares slid to $11.80. christmassy cream posted late earnings. on top of that, the earlier guidance was weak. shares slimmed in initial after hours trading before the close the stock was off a fraction to 17.73. opposite story for bucks. they posted a revenue smaller than expected. its third quarter guidance was better than predicted. the sharing were higher after the close. the shares ended the regular session to 14.25. and palo alto network posted quarterlies the beat on the
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bottom lightning. this as companies are spending more to protect themselves. shared. shares ended up slightly. csx raid road announced that a man will weigh in next year. it said it expects strong bottom line growth. >> meanwhile, let's look at the logistics. the combination will increase the revenue . before the close the to know was off about 2% to 35.53. mcdonald's is switching to cage-free eggs in the united states and canada. it will take long time to get there though. it will take a full decade to go 100% cage-free. this came a if you months after
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they announced they will stop using chickens raised with certain times of antibiotics. shares off 95.43. as we've been reporting a new class of injectable cholesterol lowering drugs have just been released. the new treatments will cost about $14,000 a year per patient. but they should cost about $2,200 per patient. coming up, apple unveiled new products. will it be enough to reverse the doldrums in the stock?
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here's a look at what to watch for tomorrow. we get weekly that jobless claims. import and export prices are out. and the report on whole sale trade is out as well. >> finally, apple introduced the world to a slew of new i-gadgets at its highly anticipated event today. investors didn't seem highly impressed. shares slipped about 2%. what is new and what failed to wow wall street? josh lipton sums it up. we are about to make some monster announcement across several of our product lines. >> a play for dominance in your living room, a big step in the
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enterprise and an under the hood update on your wrist and your hand all unveil in san francisco as apple keys up for the key holiday shopping season. one of the big woirkss china. cook announcing on stage that the coil saw 75% year over year iphone sales growth. the iphone 6 s and 6 s plus featuring video camera came builts along with touch in a more fluid way. apple announcing a new pricing and upgrade plan, pay $32 a month and upgrade felonies to every year. will the iphone refresh and pricing plan ease investors gernls the stock? >> you have less than 30% of customers have upgraded to 6. i think it is a knuckle
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situation. they've laid out the road map. i think you walk away from here incrementbly confident. >> one of the attention was on the refresh of apple tv. the new set top box addresses the needs of the next generation of apple and at home viewing. >> we believe the future of television is apps. in fact this transit is has already gun. >> it integrates tv. like all products, it will be announced over the next two months. from the living room to the conference room, apple introduced a new ipad pro. a 12.9 inch device is. the microsoft surface tablets comes with an optional stylus
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called the apple pencil. if the pro reenergizes sales that have plateaued recently, there could be a lot to leak. >> that's does it for "nightly business report." >> thank you. >> have a great evening and we hope to see you right here tomorrow night.
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narrator: coming up on "quest" -- a landmark new effort in the fight to save california's endangered condors. a space mission reveals billions of planets like earth... marcy: other intelligent life in the universe is perhaps our greatest question. narrator: a groundbreaking discovery about how sleep washes toxins from our brain. and a dive into the ocean's twilight zone. next on "quest." announcer: support for "quest" is provided by...