this is nightly business report with tyler mathisen and sue herera. >> earnings surprise amazon turns an unexpected profit, its stocks soar in after hours trading, making it a more valuable company than walmart, general electric and jpmorgan. charge it that's what most people did last quarter. why china may no longer be the driver of global growth. and why that has some of the world's biggest american companies on edge. all that and more tonight on nightly gizbusiness report for thursday july 23rd. >> good evening, everyone i'm sharon epperson. >> welcome one and all. what an evening for amazon the

online commerce bow heamage turning a profit and holding its market capacity the likes of walmart, general electric and jpmorgan. amazon pulled down 19 cents a share in earnings forecast for a loss of 14 cents. revenue topped expectations and rose nearly 20% to $23 billion in just the 3 month quarter. shares rocketed higher initially, and that sharp rise added billions to the net worth of ceo and founder. josh lipton has more on amazon's remarkable quarter. >> a big number that caught a lot of investors by surprise and that earnings release, $1.8 billion, that is the revenue that amazon said it generated in the quarter from amazon services its cloud computing division that competes with riv will as like microsoft.

it was better than expected in a step up from just $1 billion in a year ago period. operating income was also better than expected. amazon only started breaking out that performance a couple quarters ago, so this is still new and exciting news for amazon. a big source of money for the e commerce giant that has everyone very excited in afterhours. >> amazon wasn't the only company to surprise investors, dow component visa one of the largest payment processors in the world reported a 25% jump in profits. the quarter was helped by a double-digit rise in payments processed on its network, the company earned 74 cents a share, easily topping estimates of 59 cents. revenues also came in better than expected at a three and a half billion up 11% from a year ago. investors said shares of the dow component up as much as 7%

initially following the report. mary thompson digs deeper into visa's results. >> third quarter profits, rising 25%, thanks to a higher than expected increase in the amount of payments it processes on its network. this along with expectations is prompting the firm to raise very slightly its four-year earnings outlook. the total volume rose 11% to 1.2 $1.2 trillion in the quarter, the company earning fees from those transactions and that helped to offset the impact of a stronger dollar. more u.s. focus and its rival mastercard visa continues to talk to cease va europe about acquiring that business. the company hopes to have this resolved by october. the acquisition greatly expands visa's global footprint. for nightly business report mary thompson. one of the biggest issues this earnings season has been china, slowing growth in the world's second economy is showing up in u.s. company

earnings, the latest to feel the impact caterpillar. cut its full year sales impacts warning china and brazil remain stagnant as to when things get better in china. doug olberhelman couldn't say. >> i think they're close tore the bottom it's hard to say, the news is mixed, the chinese leadership is really trying to reform that economy which needs to be done. they manage it pretty well in the past will they do so in the future? has yet to be seen i think whatever it is is probably closer to the end and the beginning. it's yet to be seen and the forecast will bear out whatever it is. >> the company pledged to buy back 1 $1/2 billion in stock. dow chemical also warned of softness in china, the company's ceo says china has been and will continue to be a weak spot.

dow chemical may not be able to maintain its growth rate in that key market. the company reported lower sales which were hurt by a strong dollar as well and weak oil prices. shares dropped more than 4%. while china is taking a toll on some big companies, this earnings season it's not the only culprit, another part of the world is causing demand to slow and that is latin america, bob pasan ireports now on the pain many big international companies are feeling these days. >> the problem has been a string of disappointing earnings reports, particularly from large multinational companies like caterpillar or 3 m or united technologies or emerson electric even. there's two big problems. slowing economies in china and latin america. and second strength in the dollar. the slowing economies are leading to decline commodity prices and the slowdown in capital spending the dollar strength is reducing profits

that were made overseas. the weakness is not just in china. whirlpool and caterpillar mention lower sales in latin america. the largest of the latin america etf's has seen very heavy volume. traders have been aware of these problems for some time they've already lightened up on commodity's stocks and the global industrials. however, they have piled a lot of money into three other groups. first into banks on expectations of higher rates. second into health care mostly biotech, and third tech and internet stocks particularly the big four apple, facebook google and amazon any sign that these three groups are falling apart will elicit panic among traders. so far that has not happened. that's why amazon's surprising swing to a profit after the close is a big relief to investors. for nightly business report.

a whopping 54 companies in the s&p 500 reported earnings today, making today the busiest day of this earnings season for mcdonalds to general motors to underarmor dominick chiao rounds up the reports. >> mcdonald's, the world's biggest fast food restaurant chain reported earnings that topped analysts estimates on sales that were relatively in line with expectations. investors were concerned that those sales at stores open at least a year continued to show signs of weakness. fellow dow member 3m was one of the biggest drags on the index. the diversified manufacturing company that makes everything from scorch tape to computer networking tables reported earnings that narrowly topped estimates as sales fell shy. 3m cut its full-year guidance. a bright spot came from general motors despite reporting sales because of the effects offluctuations.

and continued strength in profit margins for its china operations. kimberly clark reported profits that were better than expectations and sales that were in line. the company raised the lower end of its earnings guidance for the year despite dealing with the effects of fluctuations. kimberly clark is the company behind kleenex tissues and huggies diapers. the mining giant reported earnings that beat estimates on sales that narrowly missed. the company like others in the industry is dealing with falling commodity prices. and a big winner today, underarmor. america's second biggest athletic apparel maker stayed that way all session long and hit a record high at one point. earnings and sales topped estimates and it raised its four-year access. for nightly business report i'm dominick chu. on this earnings bonanza

day, stocks closed in the red for the third day in a row, as the profit reports pressured the major averages by the close, the dow jones industrial average fell 119 points. to 17,731. the nasdaq was off 25 points and the s&p 500 was down 12. the cautious mood also was reflected in commodities with oil prices slipping below $50 a barrel increasing inventories and concerns about iranian shipments, fueled concerns about swelling supplies. >> the fbi has a warning for american companies, be wear of chinese corporate espionage. the attacks are becoming more brave brazen and the targets more broad. the fbi is making a big push to alert companies of the dangers. what is the fbi doing? >> a big push in terms of publicity to warn american companies about this spike they're seeing in corporate espionage coming from china, they say they've seen about 53% more cases this year than they

did in the previous 12 months. there are hundreds of cases out there now, of chinese corporate espionage. they gave us this video. take a look this is surveillance video provided by the fbi that shows two chinese executives there on the left-hand side of your screen. the chinese thought they were going to bribe this american executive for access to glass manufacturing secrets, they hand him the cash in reality what happens at the end of this video, is fbi agents crash into this room and arrest the two chinese executives for corporate espionage. the fbi put together a training video for american executives. they've been showing it in private. take a look at this video, it's a little bit like a hollywood movie the way the fbi produces it. >> if you manufacture in china, you save on transportation and labor costs. >> robert moore. >> u.s. intelligence officials that i spoke to today said they fear that the united states is actually losing the battle on

corporate espionage to the chinese, they say u.s. economic dominance in the world is at stake here and spies are chipping away at that economic dominance, guys. >> what does the fbi say american executives should watch for as they monitor their own employees. >> one of the things they say is the biggest problem is the insider threat people inside your company who have access to your company who are doing suspicious things. by that they mean taking a lot of trips back to their home country or working nights and weekends when they're not necessarily required to. and anybody inside your company who's accessing information in your company that's not -- doesn't really pertain to their daily job, they say all those things are red flags you may have a problem. >> why does the fbi say they're seeing so much more of it? >> something has changed inside china, and also russia particularly in china. there's a big push from chinese government intelligence to gather more secrets inside. that's what's driving this huge

caseload. they think american companies are simply getting better at reporting a lot of this to the fbi. so they're working on that relationship between law enforcement and american companies to stamp out this kind of spying. >> have they quantified how much this is costing american businesses right now? >> they say it's hard to come up with a dollar figure. they're going after most often is intellectual property. it's in the billions of dollars, what they're going after is not what you would think. you think of aerospace parts, micro chips, really sensitive stuff. the chinese are after seeds, technology in manufacturing processes, dye that can make a particular kind of white coloring in manufacturing. all these things that are used to make goods in this country are valuable to chinese businesses and they're trying to steal that intellectual property from american companies. >> thank you. to read more about the fight against chinese corporate espionage. head to our website.

the escalating outcry over the skyrocketing price of medications, adds a new voice, coming up. ♪ a milestone for the job market. the number of americans filing applications for unemployment benefits fell to a 42 year low

last week. that's the lowest since 1973. first time claims for unemployment benefits dropped by 26,000 to 255,000. the report is another sign of increasing momentum in the labor market. in 2010 the massive overhaul of the u.s. financial system known as dodd frank was signed into law. the legislation was designed to fix issues that helped contribute to the crisis and having taxpayers to have to bail out banks like aig. five years later, are we really any safer? >> five years after the passage of the dodd frank reform bill. the debate about whether the system is safer from another catastrophic meltdown. some top regulators say it is. >> by having more capital and liquidity liquidity, we hope that we're preventing future episodes like the devastating one that we just

lived in and if there is some burden that's associated with that and some cost the benefit is a far reduced chance of a financial crisis. >> ask a republican and you'll get a very different answer. >> this is bad policy and worse economics. it erodes market discipline and risks further bailouts to be paid mostly by lower and middle income tax paying families. it becomes a self-fulfilling prophecy helping make firms bigger and riskier than they otherwise would be. >> it's hard to figure out, a couple things are clear. as a result of dodd frank, banks hold more capital on their books. almost three times more capital than when the financial crisis struck. that means taxpayers are safer from being asked to bail out a big bank if it goes down. the banks themselves are less likely to crash and burn. the big banks also undergo a stress test every year. regulators scrutinize whether

they can with stand a disastrous economic shock. most pass but when they don't, they can be banned from buying back shares or paying dividends. what are called living wills. banks have to provide a blueprint for how to take a bank apart and sell it off. there's no strict prohibition on the government bailing out a bank the living wills have been criticized for not providing detail. the question is not are we safer? the real question is at what cost? does dodd frank go too far. >> lending has still not recovered from the financial crisis. lending is still down, housing starts still haven't fully recovered. and part of that is the regulatory apparatus. >> dodd frank has spent thousands of pages of regulations.

italians and new compliance officers inside the banks. and the regular utory burdens that undermines lending and economic growth. all that costs for a safer system which surely runs into the tens of billions of dollars, is weighed against the cost of the financial crisis itself. which ran into the tens of trillions of dollars. for nightly business report i'm steve liesman. shares of starbucks pop on a strong quarter, that's where we begin tonight's market focus. the coffee reporting beat on the top and bottom lines topping it off, the firm announcing it will buy back 50 million shares as part of its buy back program. before the close the stock was off a fraction to 5656. investors are also cheering at&t's late report. result's top analyst estimates as the wireless carrier added customers. shares topped initially after the close. the stocks off about 1% to

33.93. comcast expecting revenues and earnings that were in line with consensus. the nbc universal division helped bolster results. still shares fell 3% to 62.47. comcast is the parent company of cnbc which produces this broadcast. campbell's soup is raising its full-year outlook. as profits have improved due to an aggressive cost-cutting program. the cost cuts are one way the company is transforming itself. >> we're forthing into fresh, looking at our products. we did announce we're taking artificial flavors and colors out of our products. we don't have a lot to begin with, whatever remains, we're committed to taking it out. >> shares were down a fraction today. united continental had its best quarterly profit in history. revenue fell as rival airlines

increased capacity. united announcing a $3 billion share buy back. the strong dollar did weigh on demand from overseas. shares there falling slightly to 56.67. eli lilly raised its full year guidance in the second quarter. the company said sales would have been even better if not for the strong dollar. shares up a fraction there, 86.76 the close. another huge deal in the insurance industry, getting much much closer after nearly a year of discussions. anthem is reportedly close, very close to a deal to buy cigna for $48 billion or so. the merger would create the nation's largest helgth insurer. cigna was 2% higher it finished at 154.36. doctors are now joining forces to make it clear that they think cancer drug costs are simply out of control. a group of 118 oncologists from

cancer centers across the country called for a curb to the rapidly escalating price of cancer drugs. and they are focusing attention on the financial burden to patients. >> in cancer treatment, doctors are increasingly discussing what they call a new side effect. financial toxicity. >> we're ill equipped to do what is best for the patient sometimes because it's very expensive. >> the doctor is more than one of 100 oncologists who support a patient initiative to lower the price of cancer medicines. their average price has increased as much as 10 fold over a decade and a half. to more than $100,000 per year. >> they'll spend all their life earnings sell their farms. they will do anything to stay alive. these are issues that we hear and encounter on a daily basis. >> the doctors say out of pocket costs for some patients can approach $30,000 a year.

more than half the average annual households income in the u.s. they support new measures to control costs. including allowing medicare the ability to negotiate drug prices enabling the importation of cancer drugs from countries like canada where they're cheaper and reforming the patent system. the outcry over drug prices has been escalating for years. in 2014 fda approvals hit an 18 year high driven in particular for medicines for cancer. >> we're making great strides with some of the new medicines that have been introduced lately. we're also concerned that patients who need these medicines be able to gain these access and afford these medicines. >> the drug industry says the attention on cancer medicines is misplaced. focusing on only one% of spending won't solve the nation's health care challenges. eli lilly's ceo agreed. >> medicines are a small

fraction of what the total cost of cancer care compromises. and yet whoever heard of paying out of pocket for a hospital stay. we need an insurance system that provides adequate coverage for all the elements of care including medicines that patients need. >> analysts say the public attention on drug prices hasn't deterred investment on companies focused on cancer. in fact, it's on the contrary. >> i think investors are seeking out pharmaceutical and biotechnology firms that are focused on cancer. right now, cancer has very strong pricing power despite a growing push back on trying to bring down some of those prices. >> the industry warns that controls on drug prices could stifle innovation and lead to few new medicines. they say they have patient access programs to help those who have trouble covering their costs. >> in this battle over the price of drugs. it's increasingly doctors versus drug companies. for nightly business report i'm

meg terrell. >> digital video is big business now the race is on to own the next frontier in this budding industry. ♪ the big business of digital video, some clips on youtube now track more viewers than prime time television shows.

today the race is on for the next big thing. julia borse step reports from anaheim, california. >> reporter: here at vidcon fans and brands are talking about the next big thing in digital video. new live streaming apps. >> when you watch a live show compared to what they tape and put on youtube, the live shows are more real. it's live. you kind of get to see who the person is more. and you get to interact with them. >> announcing its integrating with go pro to allow anyone to live stream directly from a goprocamera. this connects to laying the groundwork for an advertising business. discovery's shark week already partnering with duncan doughnuts to make more of the platform. >> they work to compete with

periscope which has the advantage of being owned and integrated by twitter. >> according to adobe's digital index, periscope is more popular, the only live streaming app that's making money is you now. it has 5 million members and 100 million user sessions monthly. youtube stars will follow viewers and money. the ceo of digital talent manager big frame. >> our creators will be on twitter at some part of the day. and instagram is huge snap chat is huge. they're really just focused on where they're going to get the most bang for their buck. >> content and distribution giants will chase new viewers and the revenue they get with them. that's why terry is expecting a slew of acquisitions. >> they have to make sure they're going to make the right kind of content and channels and

capabilities to be able to play in this new space. >> we'll see if they draw interest from giants here like youtube. julia julia borstyn. >> my son loves youtube. >> my 9-year-old is on youtube all the time. >> that's the future. thanks have a great evening. you be back here tomorrow night. we look forward to that.

>> the following kqed production was produced in high definition. [ ♪music♪ ] >> yes check please! people! >> it's all about licking your plate. >> the food is just fabulous. >> i should be in psychoanalysis for the amount of money i spend in restaurants. >> i had a horrible experience. >> i don't even think we were at the same restaurant. >> leslie: and everybody, i'm sure, saved room for those desserts.