this is "nightly busines report" with sue herera. wheeling and dealing. two deals, one done and the other possibly totaling a staggering $100 billion. off and running. alcoa kicks off earnings season. the expectations and the realities of this always crucial time period for companies and for investors. and health rewards. how one insurance company is trying to revive sales and get people into better shape. all that and much more tonight for wednesday, april 8th. good evening everybody. i'm bill griffeth in for tyler mathisen. sue herera is also off tonight. so it's just you and me tonight. let's get to it shall we? it was a day of deals, mega

deals. if they go through, it would total $100 billion. first up the big one. last night we told you about royal dutch shell in talks to buy bg group. today, shell pulled the trigger saying that it would buy bg for $70 billion making it the biggest deal in that industry in more than a decade back when chevron bought texaco in 2000 for $36 billion. shares of shell finished the day lower by 3.5%. jackie deangelis has more on what this deal means tonight. >> reporter: a big deal announced in the energy patch today. royal dutch shell buying bg's roughly $7 billion. it's the latest energy deal this year and one of the larger of the last decade rivaling when exxon bought mobile in 1998. bg known for both oil and gas assets. the addition of those assets will boost shell's portfolio by about 25%. >> for shell, the purchase of bg

increases their oil and natural gas reserves as well as their oil production while bg brings to the table storage and tunnelling assets as well as tankers to move natural gas around the world. with the lower oil and natural gas we've seen whiting petroleum put themselves up for sale as well as other companies that go into bankruptcy. so the time is right for more mergers and acquisitions as we'll see more consolidation this year. >> reporter: bg's stock dropped 5% since the oil slide last summer. that and wide range of assets make it a prime acquisition candidate. with shell paying 50% premium to try to keep exxon from making a counteroffer some analysts are questioning that valuation. but shell is betting it's cheaper to make the deal for proven reserves than it would be to spend money looking for new ones. >> with the decline of oil and natural gas prices we're seeing that it's cheaper for big companies to actually buy other smaller companies to increase

their reserves of production rather than to go out on their own and drill for oil and gas. >> reporter: with oil prices falling 50% since the beginning of the fly last summer analysts say that the industry is ripe for consolidation. some of the names on the table for acquisition are bp ai patch chi, eog and pioneer just to name a few. some analysts think oil prices are trying to find a bottom in recent weeks and the time to strike on deals is now. others still argue there's more pain to come especially as u.s. inventories continue to rise and so does saudi arabia's output. for "nightly business report," i'm jackie deangelis. >> the other mega deal news of the day. myland to buy perigo. one of the top shellers of the generic medications and fu mid sized drug firms.

perigo said it will meet to discuss the offer with its board. higher by 3% and shares of mailan up. these were the first and second best performing stocks inside the s&p 500 index respectively today. well tonight marks the unofficial start of earnings season with a late report from aluminum maker alcoa. per tradition, the company earned adjusted 28% of shares beat estimates by 2% but revenue came a little shy of expectations but it was still higher than a year ago. shares fell initially in the after hours trade. morgan brennan joins us now with one of the key takeaways from alcoa's earnings. good evening. good evening, bill. yeah so it was mixed results with shares about alcoa trade after hours as a result of that. that said this was a solid quarter for this company. we saw record results in upstream metals business. the smelting of aluminum, better than expected and we continue to

see this transition for this company into the sort of value-added higher margins, faster growth manufactured products. that came in a little less than expected in terms of revenue, in terms of products for most of the products but still, high volumes for autos and high demand for aerospace so this transition happening for alcoa is continuing. it was a solid quarter dispaillette mixdis mixed results. >> aluminum can be so volatile. where are they in the process? >> they announced recently they'll be cutting further smelting capacity in parts of the world. they're continuing to cut back on that and move more into these manufactured products to cater to construction to aerospace and automotives. pickup trucks. >> look at the pickup trucks made of aluminum. it's a huge and highly profitable for them too. >> that's the reason you have alcoa coming out. demand to grow 6.5% this year in

aluminum. >> morgan brennan, thank you. see you later. elsewhere, earnings season is a big deal for wall street of course. companies and investors, many pros of a downbeat outlook for the profits right now. so what are the expectations for this first quarter season? dominic chu takes a look tonight. >> reporter: when it comes to the strength of the upcoming earnings season the bar has been set low. very low. a poll of wall street analysts conducted by thompson reuters predicting a nearly 3% decline for s&p 500 companies. if that were to happen it would be the first decline since the third quarter of 2009 as the nation was trying to emerge from the financial crisis. >> we say that every quarter that guidance is important, but guidance could not be more important as we go into this earnings season because of the drawdowns and inestimates. and the weak numbers that by the way the economic data releases that we got in the first quarter. the market needs to be sure and

confirmation is needed that we are pulling out of it and things are going to get better in the next couple of quarters. >> reporter: the consensus is that the the most earnings growth comes from the financial sector as banks continue to work on growing their overall health and capital positions. those things will be in focu next week as some of the biggest names like j.p. morgan chase, wells far goe, bank of america and goldman sachs report their numbers. the biggest drag on corporate earnings growth is expected to come from the energy sector. perhaps no surprise given the sharp drop in oil prices we've seen over the course of the last year. the question for many investors is whether or not large companies like exxonmobil chevron, conoco phillips and others are worth looking at given their recent stock slide. some experts though are looking beyond the energy stocks for the best opportunities. >> the place that you focus is where we're getting the best relative performance in the stock market and interestingly, the place we're getting the best

relative performance are also the sectors of the market which are likely to post solid positive earnings. consumer discretionary. that's certainly at the top of the list. health care information technology. i not only think you're going to have pretty good earnings in those three sectors for the first quarter, but i think for all of 2015 and for that matter 2016. >> reporter: the stock market hasn't seen a larger scale pullback since 2011 and earnings growth has been behind a lot of the optimism in the overall market. now, it's about whether america's biggest companies can keep that positive momentum going. for "nightly business report," i'm dominic chu. meanwhile the federal reserve released the minutes of its most recent meeting held in mid march and it turns out beneficials were still split on when to raise interest rates. the timing of a potential rate increase of historically low levels has of course been on wall street's mind for quite some time. hampton pearson has more tonight. >> reporter: janet yellin and fellow monetary policy makers di

agreed widely last month on when to begin lifting interest rates from record lows. just released minutes from the mid march meeting showed some policy makers wanted to raise rates in june and some afraid to hike later this year and some said the economy wouldn't be strong enough for an increase until 2016. the fed's benchmark rate has been near zero since december of 2008. the minutes show policy makers unanimously agree to remove the word patient from policy statement. said further strengthening of the job market inflation moving closer to the 2% annual target and international development would all be factors in deciding what lies ahead for interest rate policy. for "nightly business report," i'm hampton pearson in washington. stocks were moved by those minutes, moved all over the place as a matter of fact as investors pored over the language that hampton just told you about. there seems to be a bit of a delayed reaction as the minutes

came out as it happened around the same time that guilty verdict for boston marathon bombing dzhokhar tsarnaev came out, but close to 17,902. the nasdaq had good day up by 40 minutes. mylin and perigo held that and s&p 5005 5 points. commission fined at&t several million dollars over data breaches at three international coal centers. it's the largest security breach ever by the fcc. the breach compromised almost 300,000 u.s. customer names, full and partial social security numbers and account information as well. the incidents happened at call centers in mexico columbia the philippines and it happened in 2013 and 2014. walmart is appealing a district court decision in philadelphia tonight that could give one of the retailers small shareholders a bigger say in how

the company's board operates it's a decision being closely watche by investor advocates and big business. mary thompson tells us why. >> reporter: business is sca they lose the appeal it will impose restrictions on how the company conducts its day-to-day business. advocates for the suit's plaintiff say the proposal is about improving board oversight, not disrupting operations. here's the story. last year new york city's trinity church filed a proposal to be included in walmart's proxy. the proposal at the board committee set guidelines to help management decide if a product on the retailer's shelves are consistent with walmart's family and community minded image. that's an example, the proposal asked walmart how semiautomatic rifles but not music with violent lyrics. fcc granted to omit this proposal from its proxy saying commonly used exclusion clause barring proposals that could

interfere with the company's day-to-day operations. in a rare move trinity went to urt, the scc's decision was overturned and if it's upheld the scc may have less lee way to have similar proposals in the future and companies fear this will prompt a flood of proposals, corporations would rather avoid than fight. for "nightly business report," i'm mary thompson. >> by the wa decision is expected on that sometime next week. apple fanatics can finally order the latest igear, the apple watch on friday. will the long awaited wearable gadget be a positive for apple stock and the company with the largest market cap in the land for every mutual fund as well? walter pisac with btic, a financial tech. a lot of reviews came out today, generally positive. have you had a chance apple watch yet? >> i did when first launched but only 15 minutes to use it. i think what i saw with some of the reviews today, one of the

positives were for people tht longer than 15 minutes, a full week is that battery life a lot longer than what people expected. on the flip side some concerns about some of the latency of the product but i think those were some applications that were very specific for how those reviewers were using the watch. >> right. for consumers, it will be a cachet a lot of curiosity and so forth but what about for investors? does the apple watch matter when it comes to apple stocks do you think? >> it doesn't matter to the a primary driver of earnings but the iphone is still generating the vast majority of profits but matter it's the first product under tim cook as far as him coming out with a new product and also a first extension of the iphone that could lead to people's view on how they might be successful in the living room or car or other future products they might want to get into. a good sign post product but not one to specifically drive earnings for the company over the course of the year.

>> you make the point it's an extension of the iphone. one thing clear under tim cook's term at apple is that they're transitioning from a gadget company more to a platform kind of a company and the iphone itself is a platform and the apple watch is that extension, right? >> they definitely seem to want to pull you in what's their ecosystem. if you're using your computer and communicating with your phone or all the different products that they have and the watches, just another one of those products that makes it harder for you to go and buy an android phone or blackberry, whatev else is out there. if they have you in that ecosystem, they'll have you buy more products and services that lead to more profit for the company. >> walter pisic of btig. thank you for joining us. >> thank you. coming up how would you feel if your life insurance company knew everything about your health inrealtime but got a discount on your policy for this information and will it lead to other companies do

the good news for the housing market. mortgage applications rose for the third straight week and with mortgage applications and mortgage rates still low and rents getting ever higher why aren't more renters turning into home buyers? the answers may surprise you. diana olick has our story tonight. >> reporter: more apartments are going up but so too are rents. >> it's gone up every time we get a lease renewal. >> reporter: rent growth at the beginning of this year was the highest in nearly four years according to axiom metric. why don't more renters buy?

>> can't take on that financial burden. >> reporter: if you take the costs from home buying taxes, renovations and compare to the cost of renting, zillow figures it takes just two years for a buyer to be paying the same or less thapn a renter. the numbers vary market to market. it takes less time in dallas and the midwest, more time in california and new york. still, nearly half of renters surveyed said either their credit or finances keep them from buying a home. >> i would say credit. >> i just don't have enough to qualify. >> reporter: cre scores required to get a mortgage today are far higher than they were even before g boom. researchers at the urban institute claim that kept 4 million borrowers from the year before following the housing crash when bad loans cost the banks billions. >> lenders became hesitant to extend loans to any borrowers with a chance of defaulting because of that heightened loss

that they could take from the repurchase risk. >> reporter: even though renters with good credit say they are already struggling just to pay the rent never mind save for a down payment. >> income has been lower than it's been in a long time. therefore, there's a lot fewer households that now qualify for a loan so been applying. >> reporter: all the mortgage aside, 20% of renters surveyed said they simply prefer to rent. even as home sales edge up slightly we're not seeing big growth in first time buyers. that is renters becoming homeowners. for "nightly business report," i'm diana olick in washington. the merger of american airlines and u.s. airways now one step closer to completion and that's where we begin tonight's market focus. regulators granted the airline group a single operating certificate marking a milestone in their integration since carriers merged back in 2013. that news means the federal aviation administration now recognizin as a single entity.

shares of american rose more than 2.5% today to $48.74. and you can expect to see more disney movies in imax theaters. renewed to 2017 covering releases from disney pixar, marvel and lucas film including a blockbuster hit like the star wars movies copping outming out. imax 3% higher to $36.33. strong prescription sales helped rite aid beat profit estimates. revenues also topped estimate but the drugstore chain below street estimates. shares rose 2% to $8.87. tesla announced upgrade to flag ship model s. th electric car with larger ba pack and all-wheel drive features now. that car starts at $75,000, that's tesla's lowest price

model, by the way. shares up 2% to $207.67. and shares of penntear after disappointed investors with guidance. the industrial machinery firm slashed first quarter earnings estimates citing strong dollar and lower than expected oil and gas industry demand. that stock fell by 3.5% to $62.21 making it by the way, the worst performer in the s&p 500 index today. and triumph group announced some management changes. the aerospace engineering and components makers ceo is stepping down to be replaced on interim basis by the company's founder. searching for permanent ceo candidate. shares popped by 8.5% as a result to $65.06. john hancock is hoping that you're willing to live a healthier lifestyle for a lower life insurance premium. for the first time here in the u.s. the life insurance company is offering as much as a 15% discount in exchange for

tracking your health and physical activities. will this open the door for others in the industry to do the same? tom scales is a research director. thank you fo tonight. >> happy to be here. >> in south africa, it's popular over there. you get a fit be on your wrist. more activity the cheaper your life insurance. that's what john hancock has in mind isn't it? >> it's broader than that but that's the fundamental. an incentive p to live healthier for your benefit and lower premiums. >> will this increase sales? i know it has been stagnant for years. this feels gimmicky to me. what do you think? >> i don't think it is. the industry has been in the telematics on the pnc side. there's opportunity as well. people are motivated by both good health and lower premiums so it seems like something that will catch on. it certainly has in south afterkarkster

and moved to the u.k. and now in the u.s. >> who is the demographic, the younger crowd less likely to want to buy life insurance younger crowd is amenable to getting lower premiums but if you look around any mall people walking around you see it on people of all ages. target is broad. >> we see that's the case. what about privacy issues, inevitably t come up when they gather this kind of information about your activity at some point. will there be privacy issues facing the life insurance companies? >> i really don't think so. the information they gather is fairly small and very innocuous. let's face it. the information about exercise patterns is not something that the average hacker is going to be going after. so the information is pretty bland. i don't really see an issue. i would be willing to give them that information. >> starting with john hancock, do you think others will follow? they'll be watching closely to

see if moves their sales. >> i think they will. the industry doesn't move at a fast pace but frequent flyer programs are similar. it's an incentive program to reduce your cost with a minor giveback. so i think others will follow. vitality is certainly a first. i wrote a paper last fall talking about the potentias an example. i think there's a lot of opportunity in the industry, shake it up a little do something new and interesting and let's face it. hancock is a great start. they're a company of a high reputation. that lends a lot of credence to it. >> why have life i lagged over the years, what's going on there? >> you know there's a lot of industry issues but really the issue i see more than anything else is the economy. let's face it. for the last five years, people's disposable income has dropped. if you're focusing whether to buy food pay electric bill rent pay life insurance one of the first things you'll drop is your life insurance. so i certainly hope and believe that the economy turn around

will turn around the industry as well. >> you think this will move the needle for them on sales? >> it's different, it's exciting but also optional. you can buy products from hancock and the others using vitality with the program or without the program. it's a choice of the consumer. >> tom scales with selwich. thank you. >> happy to be here. thank you. coming up the $3 million slice of the meat industry some people cannot get enough of. the booming business of bison. by the way, here's a look at what to watch tomorrow he said.

we will look at the health of a labor market with initial jobless claims. greece's next major debt repayment to the international monetary fund due. interesting to see how that works out, all coming thursday. something to watch for. finally tonight, this wednesday, it's the meat that's in a bull market. the one people are willing to pay more for, double digits per pound and i'm talking about bison. but even though things seemed fine ranchers are running into some obstacles. jane wells has more out there where the buffalo roam. >> reporter: it's america's original protein and now it's hottest. bison puts the paleo in the paleo diet. been raising east of san diego and watched the market grow steadily despite bison meat's high costs.

grass fed ground buffalo meat could cost 3 a pound but the industry predicts over $300 million in sales this year up 7%. as high end or health conscious consumer choose bison for leanness. even the federal government buying some for the school lunch program but despite demand up against a different situation. an epic drought. >> we depend on the rainfall for our grass to grow and if we don't get that grass, that means we simply got to cut back on how many animals that we can keep on the property. >> reporter: the buffalo roam over this land with less grass to eat. so ken charles is shipping some? >> it seems like in this part of the country, most rely on alfalfa for supplemental feed and the japanese market tends to drive that to where so much of it is exported from this region of the country. we pay a horribly high prices for ala when we need to

purchase it. >> reporter: he's willing to pay because bison is bull market but don't expect it to replace beef completely. many slaughterhouses won't handle them and there's not enough to work altering the facilities for the large animals. last year 67,000 bison were processed which sounds like a lot but twice as many beef cattle are every day. jane wells, ramona california. that is "nightly business report" for tonight. i'm bill griffeth. thank you so much for watching everybody. ha evening.

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