this is "nightly business report" with tyler mathisen and sue herera. tech wreck, dow components apple and microsoft fall sharply after reporting late day profits, potentially extends today's deep selloff in stocks. >> new hope and a new generation of potential drugs, that can treat a growing disease with no cure. alzheimer's. >> not so fast the one thing that kohl prevent the federal reserve from raising interest r5i9s. all that and more tonight on nightly business report. >> good evening, everyone. >> welcome, everybody. sharon it was a blue chip wreck on wall street today. more on that in a moment but we begin tonight with earnings from apple and microsoft, to

bellwether companies of the new economy. the tech sector makes up 20% of the s&p 500 by the way, tonight both companies, which you likely own through your mutual funds and 401(k)s, they failed to wow investors. first, apple. the world's most valuable company, reported earnings of $1.85 a share. revenue was slightly better at 49.6 billion. what's the problem? despite selling more than 47 million iphones in the quarter, yeah you heard me right, it was the company's weak outlook that sent shares initially lower. a lot lower after that report. josh lipton has the key takeaway from apple's results. >> the big number in apple's latest earnings report 47.5 million. that is the number of iphones apple said it shipped in the quarter, now, that was up 35% year over year but was also basically in line with what wall

street expected. analysts had forecasted apple would ship some 47.3 million iphones in a conversation with apple's ceo tim cook. he told me that only 27% of the company's install base had moved those newer 6 and 6 plus models. that suggests plenty of upgrade head room ahead. at least in the after hours, investors seem to be focused on that in-line number. for nightly business report i'm josh lipton in cupertino, california. microsoft reported better than expected earnings in revenue, but took a hit from restructuring charges and soft demand from some of its products. the world's largest software company reported earnings of 62 cents a share. the company reported revenue that was slightly more than $22 billion. but investors wanted more sending shares initially lower after the report. kayla digs deeper into the results. >> from the face of it

microsoft's fiscal fourth quarter looks like a beat all around the problem was, the company's quarter was mahred by a massive write down of its nokia ago we saying that happened just a new years ago, it was forecast to be a $6.7 billion writedown. when you peel away what the revenue story told us, itting looed weeker. some currency head winds, especially in its overseas business namely for japan. when you look at its licensing, there was an expectation that as p.c. shipments declined installs of windows and office would decline as well. they declined more than the pc shipments fell by. that's leading people to wonder what exactly is going on there. "nightly business report" new york. >> yahoo missed second quarter earnings estimates, those sales narrowly beat those forecasts. the internet media company's

results were way down by higher spending to attract users to its websites in order to better compete with google and facebook and others. part of yahoo's strategy has been to invest for its mobil platform. shares of yahoo fell initially after the report as you see there. >> let's turn to david garrity now for more discussion about what's happening in the tech sector and what it may mean for you and your money. he's principle at gvb research. so many people have some of these big tech names in their portfolio, either in their ira or perhaps in their mutual funds, in their 401 k. we're talking about names as big as apple. is there really growth for these big stocks. >> certainly looking at apple, we're in a situation here where the expectations are for growth over the next five years. probably better than 15% on a

sick u lar secular rate and we're in a situation where apple is gaining share. apple products are being sold at they occupy the top of the market. and so from that standpoint we think apple remains the dominant player in a high growth segment, if we look at the valuation on the stock. we're still looking at a valuation which is below an overall market multiple. we think that apple in terms of what you're paying for its growth remains quite attractive might have been somewhat disappointing in the quarter that we didn't see the announcement coming out. the company certainly has the funds available to do that. on the product innovation side we would say that you know the i-phone 6 upgrade cycle remains strong. may have been disappointing in terms of the quarter, there may have been concerns about the september quarter's guidance. the opportunity to buy apple shares on this pull back remains attractive. >> there's a long term bet, it's two-thumbs up for apple.

you can use both thumbs there for apple, david. as a long term play how does microsoft look to you? >> it's a little trickier it's a company which was successful in earlier generations of technology. namely around pc's if we look at the shift over to mobil devices, microsoft is a far distant third behind apple and google in terms of the operating system software that's being provided. obviously, microsoft's predicaments are somewhat underscored by the fact that we're going to be giving away our window's 10 operating system to consumers. something they won the have done in the past. a company that has substantial resources both financial and technical, nevertheless somewhat disconcerting to see a company go out and spend $9 billion to buy a company, and then within approximately a year and a half later, write off the full value of that as well as also fire the substantial number of employees related to that business. the hope here is under new ceo,

the company will find a better direction going more toward cloud computing that will help to reignite the growth for the company, microsoft, a name that we like may not be so aggressive on a pull back as we may be with apple. >> a like not a love on microsoft, david. thank you for joining us david garrity with gba research. >> sharon was just mentioning how many mutual funds own apple or microsoft. according to micro star. the top three holders of apple, the vanguard institutional index fund in a lot of 401 ks. as for microsoft, the institutional index are two of the biggest holders as is the american funds group, washington mutual fund. tyler, those weak after the bell results could sknd today's deep losses disappointing results from a handful of dow components weighed on the blue chip index.

united technologies fell 7%. verizon dropped more than 2%. travelers was one of the bright spots after it reported results this morning, that dragged down the dow overall, which fell 181 points to 17,9119. the nasdaq was off 10 points and the s&p 500 fell 9 points. dom niks chuinick chu has more on today's earnings. >> reporter: the dive in the dow today was the result of a broader base selloff. a vast majority of which finished the day lower, the stock that drove much of the weakness was united technologies. the diversified industrial technology behind pratt & whitney aircraft engines and carrier aircraft systems reported earnings that beat forecasts. overall sales fell shy of expectations. the company said that orders from china for its otis elevators and escalators business fell. as a result of that it cut its

full year forecast. now, remember the company also recently announced the sale of its sikorski helicopter business to lockheed martin. another decliner on the day was verizon communications america's biggest telecom company. it reported profits that beat wall street estimates, but it too reported sales that missed. while verizon did manage to add more wireless phone customers and boosted revenues for its fios high speed internet phone and tv service, average sales generated peruser fell, thanks to increased competition and promotions that was one of the reasons it lowered expectations for full year sales growth. one of the monthsest bright spots came by insurance giant travelers, it too reported profits that beat analyst estimates on sales that fell slightly below forecast. the company was aided by fewer losses tied to catastrophes that the company insures against and settlement of a prior tax issue. shares were among a handful on the dow that rose on the day.

with less than a fifth of companies having reported their quarterly results, a big focus will be on whether the rest of corporate america can help drive earnings growth. we're still very early in earnings season. for nightly business report i'm dominick chu. >> late today, dow jones reports that federal regulators are close to approving at&t's $49 billion acquisition of direct tv that would clear the way for the biggest media deal of the past year, the justice department has already signed off on that deal. city group is being ordered to pay about $700 million to customers for deceptive marketing and billing tactics. the refund will go to more than 8 1/2 million credit card customers. the consumer financial credit bureau says citi took place from 2003 and 2012. some big banks are setting aside more money to cover bad

loans to energy companies. after oil prices dropped over the past year. according to reuters that raises the possibility that deteriorating loans could start to hurt bank earnings. last week executives from jpmorgan and wells fargo told investors that they are increasingly concerned about loans to oil and gas companies. today oil prices settled around $50 a barrel. >> one wall street strategist says the federal reserve had never hiked rates when commodities had been in a pronounced down trend. he's larry mcdonald. welcome, good to have you with us. is it as simple as history, if it is, the crb i think is down about a third over the past year that would say the fed season the going to do anything this year. >> that's the thing tyler, the crb is right on the 2009 recession lows and it's very close to the 2002 recession

lows. the commodity index is right on recession levels and you have to remember the united states in the '80s and 90s was 55 to 60% of global gdp. today we're 24 25%. the fed has to look at the global economy, much more so than he did in years past. >> that's not the first thing larry that the fed will say they're going to look at when it comes to what they're going to do with interest rates. how important do you think are commiditity prices to their next move and when do you think they're going to make that move? >> remember they have a dual mandate, which was established -- think about how long the dual mandate, they have to look at unemployment and inflation. and ten years ago, chinese gdp would say 2 trillion now we're up around 10 or 11 trillion. the dual mandate, if china's slowing and that's hurting commodity prices that's going to leak over eventually to core

inflation. it doesn't give them a reason to hike. on unemployment level. but the inflation level, if it's ticking down a notch, certainly doesn't. >> very interesting point. larry bhk donald haven't heard it made, appreciate it. >> still ahead, the big hope big opportunity and big risks associated with developing new alzheimer's drugs. ♪

♪ alzheimer's, it affects more than 5 million americans today. it is the country's sixth most deadly disease. and yet finding a cure or a treatment that slows the progression of the ailment has proved illusive now as meg terrell reports, there appears to be new hope. >> the quest to develop a drug that actually slows the course of alzheimer's disease has been a long one, marked by failure. since 1998 123 drugs have failed in development. just four were approved. none slowed the declines in memory loss and sinking clearly that characterized alzheimer's. this year though new hope has bloomed. >> the sign of the community has been given a boost by some recent positive news of different drugs. we are all very hopeful at this time, more hopeful than we have been before. >> experimental medicines are under the spotlight this week with new data coming wednesday

at the alzheimer's association international conference in washington, d.c.. they work to remove the plaque buildups in the brain, thought to be toxic to neurons. evidence from early studies shows that removing the plaques may help stem declines in cognition, results that still need to be supported by larger studies. a successful drug could mean big business. more than 5 million americans have alzheimer's today, a number that could triple by 2050. some analysts estimate the market for an alzheimer's drug could be $20 billion a year. >> this disease is urgent and we need answers now. they cost us about 2% of medicare overall spending today. that number will increase almost 25% by 2040 if we don't stop this disease. the national institutes of health spent about $65 million of its $30 billion budget on alzheimer's disease last year. an amount some say isn't enough

to address the size of the problem. it allocated more than a billion and a half to heart disease. and $5 billion to cancer. >> we need to have a war on alzheimer's mentality here. >> fred hassan led pharmaceutical companies which developed an alaska timer's drug now owned by merck. >> it's imperative the patients can't speak for themselves. that's why we as a society need to speak for the patients here and do more. half a billion is not much. >> the results tomorrow could spur not just hope for medicine but big moves in drug maker stock prices as well. biogen shares could swing $50 in either direction. for nightly business report i'm meg terrell. chipotle beats estimates but misses on one key metric. that's where we begin tonight's market focus. same store sales rose less than

analysts were expecting, still it managed to top consensus on the top and bottom lines. shares were lower, but managed to turn around. during the regular session, shares were off a fraction to $673.07. go pro saw its revenues surge by 70%. earnings in revenue topped the street's consensus, shares were volatile initially in after hours trading. the stock was 2% higher to 62.04. novartis saw its shares after reporting a decline in profits. this was drug giant hit by the effects of a strong u.s. dollar yet the ceo says he's optimistic about the company's pipeline. >> when you look at our results, the best part about the quarter was the innovation we just got approval to launch our new heart failure drug.

this is a drug that's proven to reduce cardiovascular death by 40%. we think this is going to be a multimillion dollar drug for the company. >> shares slipped to $103.71. baker hughes swung to a loss in its most recent quarter. the oil fueled revenue company saying it expects tumbling oil prices will persist for the rest of the year. sales weren't as weak as expected. shares rose 2% to $6.64. an increase in trading activity helped post an increase in profit. shares flipped on this down day. harley-davidson also reporting mixed quarterlies, the strong greenback weighed on its international sales. the cycle maker refused to keep pace with rival discounts. shares revved up a little bit about 5% to 57.67.

lifelong shares were halted after the ftc charged the identity theft monitoring company saying it failed to protect its consumers data. the charges say the firm is violating the terms of a previous settlement with the agency. life law could disagree saying it's prepared to take the case to court. when shares continue trading they plunged, plunging almost 50% lower on the day at 8:15. c.i.t. group won approval for its pending deal to buy one west bank. the office of the comptroller currency gave the okay. the federal agency has to okay the agreement. shares were more than 2% higher, they finished at 48.18. toshiba finds itself at the center of one of japan's biggest accounting scandals. the ceo resigned after taking responsibility for inflating

profits by more than $1 billion over several years. at a press conference today thes were seen vowing. a gesture meant to convey deep shame. the company will have to restate profits back to 20 o 8 when the cover-up began. uber the fast growing ride hailing app start-up held a jobs tour for drivers today in new york city. the jobs tour comes as new york tries to crackdown on the company's expansion. the city council is expected to vote on a bill that would cap uber's growth while the city studies its impact on traffic congestion. uber executives say the measure threatens its business model in one of its largest markets. uber now valued at around $40 billion, is fast becoming a political lightning rod. not just in new york but also on the national stage. republicans have embraced it as a symbol of disruptive progression, democrats say it represents a new era of job in

security. the temping of america. john harwood joins us from washington. uber's not only changing the business world, but the political world. why have so many politicians not just mayor de blasio here in new york latched on to it and made it the target of political warfare? >> reporter: what do they say about economics? it's about creative destruction. and when you have creative destruction. some things get destroyed. old models old incumbent firms, and in the case of bill de blasio in new york he is raising the issue of traffic congestion but the rise of uber is also threatening the incumbent taxi drivers who have relationships, financial relationships with the city with its politicians and so that's not an insignificant item. secondly uber represents broader changes in the national economy, that's what hillary clinton and some democrats have pointed to. although they are not to be fair to democrats, they are not

saying uber is bad in and of itself it raises some problems and underscores some problems in the economy we have to deal with. >> what about the republicans, what are they saying in terms of how companies are changing the economy, changing the way people are working today? >> republicans are casting uber as a symbol of the 21st century economy, and say when democrats raise questions about it they're looking backwards, they're representing the past for example, last week hillary clinton gave a speech reflecting her economic view in which she talked about the issue of classification should workers be described as contractors or as employees of firms like uber? as it happened this is a big issue with uber many other firms too, fedex just paid a big settlement on that issue as well. and jeb bush attacked her for being stuck in the last century, that's a fuft tour past debate that republicans think they're on the right side of. >> john harwood, thanks very

much. john harwood reporting tonight from washington. one sector of the real estate market that has been red-hot for investors. we'll tell you what it is. you may be surprised next. ♪ here's what to watch tomorrow earnings from dow components american express, boeing coca-cola and more. housing data and weekly mortgage applications and that's what to watch wednesday. a little known sector of real estate investment it's growing exponentially. data centers that serve the cloud. sounds pretty dull? not if you look at the product

potential involved. diana olick has more on this sector. >> reporter: most people think the cloud lives in the sky. it really lives here in data centers in downtown buildings and suburban warehouses. as data booms, so too does the value of all that real estate and the reefs that own it. >> our focus is serving the fortune 1,000. that comprises about 75% of our business. these are the largest companies in the world that are chosen to store their computers in our data centers. >> cyrus one is one of five data center reads that own two types of property. one is a power station for servers like this one in sterling virginia the other is an internet hub where the ten an thes exchange data. these are more valuable because they're located in urban areas. >> we're structured as a real estate investment trust. we're a derivative of what's going on in all the growth and

technology space. everything you hear about google and netflix and rack space and amazon and all those new technologies that are going on ultimately reside in the data center. >> data center read returns have been robust to say the least. digital realty and qts in particular up 46% in the past year. they can, however, be a tough sell because they are at the crossroads of real estate and technology which investors value differently. >> because data centers are subject to all this technology risk potential technology risk because there's so much more to understanding the sector than simply knowing where the real estate is located, some investors opt not to take on the brain damage of understanding these various risks. >> and then there's demand. technology changes moment to moment forecasting that change in terms of real estate for both tenants and landlords is tricky. developers want to capture this

demand immediately, too much speculation could lead to too much supply. for nightly business support, i'm diana olick, washington. >> interesting investment to think about. >> the capital returns were huge as diana just showed out over the past year. >> that's "nightly business report" for tonight, i'm sharon epperson thanks for watching. >> have a great evening, everybody. hope you'll join us here tomorrow night.

tonight on "spark!," we step away from museums and galleries and into the urban landscape to discover artists whose work emanates from life on the street. in our first story the gift of grafitti artist david cho once a self-described husler and thief, he's now searching for a new direction, using art to find his way. >> no one goes to museums. you have this whole attitude and get a can of paint and go out and paint all of the stuff on the freeway and 1,000 people will see it before 8:00 on the 101 freeway in our second story tommy guerrero's innate sense of rhythm and movement has helped him forge another career.