this is nightly business report with tyler math son and sue herrera. then there were three. raising new questions about competition costs, choice and what may change when guyou go see your doctor. steer clear. how chr ler plans to fix its vehicles who are susceptible to being hacked. what presidential candidate hillary clinton has planned for your investment returns. all that and more tonight on "nightly business report" for friday july 24. >> good evening, everyone. i'm sharon ep per sonperson in tonight for sue herrera. >> and i'm tyler matheson.

a deal tonight that touches the live of every single american: health care. anthem says it's buying rival cigna for $250 million. the deal comes just weeks after aetna says it wants to buy humana quickly altering the landscape to five major insurance carriers to just three, assuming the announced deals get regulatory approval. both anthem and cigna saw their shares lower in trading. the wave of consolidation is raising a number of questions about the power of these companies, competition and costs per patient. >> reporter: anthem and cigna say together they'll be able to cut out more than $2 billion in overhead costs and ultimately that will be good for consumers. >> it will improve our ability to serve customers across commercial medicaid medicare and international markets and create greater efficiencies and

affordability for our customers. >> reporter: the sheer scale of the $54 billion merger will attract regulatory scrutiny. the combined company will have more than 50 million members, covering 1 in 5 americans. but they'll likely look at the alleged cigna deal with humana which will limit five big players to three players, including humana health. >> it looks like we'll have a ford, chrysler gm situation in the world market. >> reporter: california where anthem is already a world leader its market share would increase by 19%. insurers argue getting bigger helps them get better prices from large hospital operators. they say that could help the overall market. >> based on research that wiie've done they don't substantially reduce the competitive detail in markets. you're creating more competitive companies but you're not

necessarily reducing the competitive situation in a market. >> consumer groups think fewer choices will just mean higher prices for individuals, employers and in medicare advantage. anti-trust companies say the companies have to make a strong case to regulators that it won't. >> they can, in fact become more efficient and they should be able to lower the rate of increase of their prices. but as you know in the hospital sector to some degree and in other mergers, we frequently see price increases. >> reporter: while anthem and cigna express confidence their deal will be approved it could take well over a year and they have included a break-up fee in their agreement. bertha cuns nightly business report. let's talk about what the health care industry will mean to you. he's a health economist at yale university. thanks for joining us. >> thank you. >> another big merger in the insurance space and we're looking at what it all will mean for the consumer.

what will it mean? >> i think it's history for any guide that the merger lower prices if anything it will raise them. there was a merger in 1999 between aetna and prudential. that raised prices for consumers by 20%. the areas that are more competitive have lower prices for consumers. so i just don't think this is going to be something that's particularly good for our consumers. >> you heard all those executives better efficiency more affordability, serve customers better lower rates of increase. you're not buying any of it. >> i think it's pretty clear why they want to merge. these private insurers are playing a much much larger role in health care in the u.s. and medicare and medicaid and the federal program. and the reason they really want to push for these mergers is that provider markets are becoming much much more competitive. it's just not clear that as these insurance companies are getting bigger that they'll pass

on any savings they'll make to consumers. >> what about prior investors. will they really agree to this merger another one in its space. we'll only have three insurance companies out there. is that enough competition? what will they say? >> the doj will be having a hard look. to the extent these companies have overlapping markets in certain areas is what they'll be looking at. to a certain extent they do. you can look at new hampshire, and they do have a significant amount of overlap. we can also look at some recent precedent from the come tascast time warner deal that fell apart where they said big purchases are not an organist for these types of mergers. i think we'll see a divestiture. >> the thing is these insurers need to have the bulk to deal with the big health care

institutions the hospitals, the medical practices, so that they in the same sense, and i don't mean to overstate the analogy, like walmart can effectively dictate the price to the vendor. have i got that right? >> you've got that totally right and that's where the complexity really comes in. these insurers want to be bigger players at the negotiating table, but at some level the argument they'll make to the doj is look we're not getting bigger in the same market. the argument is this gives us more power. this allows us to negotiate. at the same time they can't argue they don't have overlapping markets. >> the government has a lot to look into. zach cooper with yale university thanks for joining us. the food and drug administration has approved the first of a new generation of cholesterol drugs. the fda did, however, limit the drug's use to patients whose cholesterol problems stem from hereditary issues. the drug made by regeneron, will be about 14,000 a year.

that's more than i pay for mine. the pressured shares closed down 2.5%. on wall street the blue chip dow index finished the week on triple decline on concerns after china and the ozone introduced lower data. the dow jones fell 163 points to 17,568. the nasdaq dropped 57 points way down by shares of viogen which saw a double digit decline. we'll have more on that in the program. and the s&p 500 sank 22 points. for the week all the major averages fell more than 2%. it was the largest weekly drop for the s&p 500 and the nasdaq since march. amazon shares was easily the top performing stock today after it reported an unexpected profit and a blowout quarter which we told you about last night. the stock jumped nearly 10

paerls tonight10% tonight, as you see there, and that brought the gains for the year to about 47%. we talk about what's driving amazon's success and if it can continue to stay in the black. >> amazon is known for delivering all kinds of items, but investors got a surprise package this week: profit. after two weeks of watching amazon are we seeing the beginning of a new consistently profitable era? don't count on it. the ceo is known to show earnings now and then perhaps just to remind investors that he can. meanwhile, he's already set his sights on some expensive new frontiers, interstate ecommerce growth in countries like italy, spain, and the use of the cloud which sees amf buying and computing managing resources and renting them out to customers. >> they're definitely investing in future gloetrowth areas, but we

like the fact that they're investing in the marketplace opportunity. they're not investing in driverless cars or rocket ships, they're investing in the prime business. >> amazon saulsis also spending big money by making tv shows like golden winner transparent. those production costs a nine-figure expense will appear this quarter. so don't expect them to schedule a profit delivery every quarter. for "nightly business report," i'm john ford. american airlines said it had its most profitable quarter ever. they felt their earnings nearly double as cheaper fuel helped lower cost and off set a decline in revenue. but passengers paid less per mile in the second quarter than they did last summer and they expect that trend to continue. that outlook pressure shares which fell 27%. u.s. airlines under

investigation now for possible price gouging. the transportation department is looking into whether delta, american jet blue and united raised fares while train service between new york and washington was disabled following that deadly amtrak crash in philadelphia in may. the northeast corridor is one of the most heavily traveled areas by train or plane. there is a second investigation into the airlines one by the justice department examining whether the airlines worked together to illegally keep fares high. and fiat chrysler issues a major safety recall to block its vehicles from hackers. it follows 100 million automobiles and follows the revelation that moving jeep vehicles can be controlled remotely. here's more on what may be the first of its kind recall for the industry. >> reporter: the video is startling. a driver losing control of his 2014 jeep cherokee while a hacker uses his computer to tell

the vehicle what to do. it was a planned hacking exposing a flaw in the software of jeep infotainment systems. now chrysler is recalling 114 models built between 2014 and 2015. the owners will receive a usb device and can update their vehicle software without visiting a dealership. fiat chrysler says that aside from the hacking, there have been no cases of models being hacked remotely. one of the persons that exposed the jeep software flaw says the odds of the cars being hacked is still incredibly low. >> we've spent the last three years of our life doing this research and a year on the jeep alone. so it's not easy to do. i'm more afraid of someone textingtext ing and driving and running into me than i am about somebody hacking my car. >> concerns are growing automakers have not done enough to make sure strangers cannot

gain remote control of those cars. that's why cyber security is rapidly becoming a primary focus for automakers and regulators who want to make sure hackers cannot get control of millions of vehicles out on the road. phil lebeau nightly business report chicago. the highway traffic safety administration said it encouraged fiat chrysler to examine those vehicles and it will look into the effect of the supposed anti-hacking fix. it was a big month for earnings and we're not done yet. next week looks to be an interesting one as well and we'll hear from the new york stock exchange. >> reporter: the focus will again be on earnings next week but as always a small number of companies will be in focus. there is a lot riding on facebook which reports wednesday, because the stock is up 20% in the last month on expectations of a strong report. investors have put a lot of money into a small group of big

tech names. good newsramatically boosted amazon and google but even the smallest disappointment hurt apple. traders will also be scrutinizing big, national companies for the impact t of the strong dollar. procter & gamble for example, gets 65% of its business outside the u.s. they'll be reporting thursday. other multi-nationals that have already reported have noticed a significant impact on the strong dollar. the two internet companies say exxon mobil and chevron will be reporting at the end of next week. chevron's earnings will probably be down 55%, but estimates have been coming up a bit for them and they'll be scrutinized for any indication of when the oil slide will stop. it's not so much the earnings it's the guidance for the third quarter that really matters. earnings growth is expected to be positive in the second half of the year. but the expectations for the third quarter are now also expected to be down. that's a problem. that's one reason the markets had so much trouble this week. what's the problem? you've heard about it slow growth in china, slow growth in

latin america, but also the dollar strength and weak oil has continued into the third quarter. the fed told us a strong dollar and weak o might be transitory. that hasn't been the case. the bottom line growth is proving to be very elusive this year. for "nitghtly business report," i'm a the new york stock exchange. what presidential candidate hillary clinton has planned for your money asknd your taxes. the federal communications commission has cleared the way for apt's $49 billion acquisition of directv. the deal will pay one of the

largest tv providers in the country and limit one of the biggest hurdles that had been standing in the way of the merger. last week we reported the end was near. directv finished the day with gains. newly built single-family homes fell last week. they reported a decline of 6.8% taking sales to their lowest level in seven months. home builders however, came under pressure falling into today's session, as you see there. presidential candidate hillary clinton has a plan for the economy. she's asking businesses to focus on long-term investments rather than short-term profits. in a speech today in new york, she outlined a series of policy proposals that could impact your investment returns. john harwood was there. >> reporter: last week hillary clinton laid out her plans for more profit sharing to benefit average workers. today she came to the nyu school of business to push back what she called quarterly capitalism and encourage longer term

investment. her centerpiece proposal, a shift in capital gains taxation to have higher rates for investments head forld for a shorter period of time. >> as president i would move to a six-year sliding scale that provides real incentives for long-term investments. for taxpayers in the top bracket, families earning more than $465,000 a year any gains from selling stock in the first two years would be taxed just like ordinary income. then the rate would decrease each year until it returns to the current rate. this means that from the moment investors buy into a company, they'll be more focused on its future growth strategy than its immediate profits. >> the capital gains proposal was just one of the ideas hillary clinton offered to encourage long-term investment. she also said she wants to discourage some activist investors for pushing for short-term profits through means such as stock buyback. she also wants to make sure that

incentives for executive compensation are not tilted toward short term stock options. >> i'm all for rewarding the ceos as well when their companies prosper, and their employees also share in the reward. but there is something wrong when senior executives get rich while companies stutter and employees struggle. >> reporter: as expected the republicans' critique of hillary clinton's plan was on the short term increase in capital gains tax rates. one potential rival, marco rubio of florida, called it an old style tax increase straight out of the 20th century. for "nightly business report," i'm john harwood in new york. clinton's speech came after an investigation of highly classified e-mails while she served as secretary of state. shares were sent way down the biotech giant limiting its

forecasts for years of sales because it just does not suspect it would sell as well as hoped. total sales fell short of the consensus. shares as a result tumbled 22% to $303.03. that made them the worst performer in the s&p 500. positive news on the other hand for glox oeaxo smith klein. they got approval for the first malaria vaccine ever. shares off 1.5%. they finished at 4.9. they saw their revenue topple in the second quarter as current fluctuations and the firm's document technology business dragged down results. its earnings outlook also came in at the lower end of the expected range. still, shares rose 1% to $10.94. and the f-corp easily beating wall street's estimates on both the top and bottom line.

the maker of north face wrangler and other apparell outlook went down. the market monitor who found opportunity in blue chip stocks he said should be in your portfolio for the long term a couple financials he's going to talk about. the last time he was with us was december 2014. he recommended exxonmobil down 10%, schlumberger basically where it was. welcome down chief executive officer at haverford investments. i don't mean to bring up painful memories but two of the three didn't do so well. has it not just been very good for energy? >> no it hasn't, but i like how you emphasized for long term investors, and at least they got paid a well-paying dividend and chevron over 4.5%. >> so you're still happy owning those companies? >> that is correct, we still own

them in our portfolios and we're buying them for new clients as well. >> happy might not be the exact word that you would use, but you're certainly satisfied owning them. >> we are. again, we have a long-term perspective, and over many decades, regardless of where the price of oil has been names like exxon and chevron have delivered total shareholder returns. >> but now you think investors should be looking at financials as well, and what are the names that you like? >> we like the two highest quality banks in the united states if not the world, wells fargo and jp morgan. they're poised to do well in a rising interest rate environment that will help their net interest margins. also particularly with jp morgan it looks like the headwind of legal and massive fees is starting to dissipate and will be much less so on a go-forward basis. the companies are returning money to shareholders in the

form of dividend increases, so you have a 2.5% dividend yield with both of those companies, and you can expect annual increases each year and they're valued quite reasonably at these levels. >> yeah you've certainly chosen best of breed in that area. utx, united technologies a company that's been in the news this week they're selling off their helicopters. they had a little bit of an earning stumble, if i recall correctly, but you see this decline in the stock as a buying opportunity. >> it's almost a bare market type decline of about 20%. they're in great businesses. otis elevators, pratton whitney jet engines, the carrier building facilities that have wonderful recurring revenues. there is some temporary headwinds, the stronger dollar a concern over china slowing, but we think this is a good buying opportunity. and to take a warren buffett-like viewpoint, with the

proceeds from sikorsky they'll be able to buy much more shares than previously at these lower prices so we think that will be good. >> all right, hank thanks very much. i appreciate your long-term perspective. hank smith with haverford investments. coming up how cuban interns are learning how to be entrepreneurs the american way. ri♪ a major case today, a california judge ruling that the city wanting to lower the pension shortfalls is unconstitutional. the overhaul which was previously approved by lawmakers, sought to eliminate

nearly 10 billion in unfunded pension liability by cutting benefits and increasing contributions. it would have affected more than 60,000 city employees and retirees. chicago has the worst funded pension system of any major u.s. city. tyler, a wide-ranging tariff deal announced today by the world trade organization. dozens of countries have agreed to get rid of duties on more than 200 information technology products from video game consoles to gps devices. this is the first tariff cutting deal announce bid the wfto in almost 20 years. the world federal trade organization says it will affect 60,000 world jobs. when they want to start a small business the research at hand is virtually endless. in cuba it's a whole different story. kate rogers tells us about a new program that gives young cubans the chance to become entrepreneurs. >> have you ever had so much

wi-fi band width in your life? >> reporter: for these cuban students, the answer is no. but as the u.s. has resumed diplomatic relations with cuba a program is bringing four cuban interns to new york city for several weeks this summer to learn about entrepreneurship the american way. miles spencer, tech entrepreneur and angel is funding the program through his non-profit taa. the students are shadowing science, technology computer and math start-ups. >> our vision for the program is have these four kids learn about innovation here and return to cuba to solve problems in cuba for cuban people. but also to serve as the core for an incubator in havana where other like-minded innovators that are already in touch with these four can gather, get access get mentoring and learn to solve those same problems. >> the program came to be

thanks in part to john coffield former governor of havana who got students interested to learn.ar >> it would be topping new hurdles in the communication system among people broad band width. >> the company takes food data and personalizes it for consumers. >> i personally have lived abroad and did internships myself when i was younger. i lived in bolivia for a year which was a very impactful experience for me so i'm very happy to be able to give somebody else an experience. >> for some like robert pereira, the technology alone is something to marvel at. >> all the -- i couldn't have lasted in havana so i will love

to see and learn and. >> others like gabrielle or rodriguez, will help prepare her to one day run a business of her own. >> we hope we get the chance to start our new company, and if it happens to me i'll be ready. >> that's "nightly business report" for tonight. i'm sharon epperson. thanks so much for watching. >> and i'm tyler matheson. have a great week. we'll see you monday.

gwen: the week's political merry-go-round, donald trump and the republican party, hillary clinton and her emails. tonight on "washington week." donald: i'm a republican. i'm a conservative. i'm in first place. gwen: forget about health care, highway funding and even immigration reform. the summertime campaign is all about donald trump. >> he's a war hero because he was captured. i like people that weren't captured, ok? gwen: as he dominates every headline, and forces every other candidate to push back or be pushed. >> i think donald trump is a political car wreck. and people slow down and look at the wreck but they eventually move on. >> i've seen your senator. what a stiff. what a stiff. lindsey graham. gwen: while established senators governors and