this is "nightly business report" with tyler mathisen and sue herera. >> stocks and commodities tumble and odds are the federal reserve is taking notice. >> drug powerhouse teva buys allergen's generic drug unit. sales speed bump chrysler gets hit with a massive fine and is forced to buy back hundreds of thousands of vehicles. will buyers care? all that tonight on nightly business report. a global selloff, what started in china spread to europe and landed here with a thump in the u.s. stocks tumbled across the world after china's shanghai composite

swooned 8 1/2% its biggest one day dive in more than eight years. while you may not own any chinese stocks the continued volatility does matter to investors like you. it's reigniting fears in the world's second largest economy. a number of big u.s. companies from caterpillar to whirlpool express concern about the slowdown in change in a, there are new worries about the effectiveness of beijing's efforts to prop up the market. by the close, the dow jones industrial average suffered its first five-day losing streak since january falling 127 points to 17,440. the nasdaq dropped 48 and the s&p sank 12. what triggered the big global selloff. >> mainland china stock markets equities plunged more than 8%. that's on signs that beijing may

be backing away from supporting the market while concerns over economic health soured sentiments even further. the largest list of companies, fell 8.6%. while the shanghai composite lost 8 1/2% as you see here the drops were the biggest since february 27th 2007. investors have been hit by the data showing that china's industrial firms dropped 3/10 of a% from a year ago. . index heavyweights including bank of communications petra china, all slumped to their daily downward limits of 10%. that's where we stand, back to you. >> the route in china also knocked the price of some key commodities today, oil already under pressure from supply concerns and a strong dollar fell to a four-month low, settling down about 1 1/2% to 47.39. copper which relies on china to

drive demand fell to a 6-year low. gold rose. the federal reserve is watching china and commodity prices very closely as it considers when and whether to hike interest rates in more than a decade. policy makers can't ignore what's happening in the world's second largest economy. >> most fed watchers think the three biggest factors are the unemployment rate which at 5.3% is at or very near where the fed wants it to be. inflation, which is still well below the fed's 2% target rate. and the health of the global economy, specifically and most critically china. how much of a fed factor is china? in a word big. it is after all the world's second largest economy and home to one of its most volatile closely watched stock markets. a market that took its biggest drop in eight years monday.

that 8 1/2% slide has some analysts worried. >> this is not a good situation. the markets are reflecting the fact that we're in a global economic slowdown and any hope that china was going to lead us out is gone. >> others say don't read too much into the stock market action. >> the chinese market underperformed global economic recovery for years and years and years. while their economy is going very well they're stock market did nothing. their economy starts slowing down, and the stock market takes off. it tells you something, it's completely divorced from fundamentals. it's all driven by policy out of beijing. >> the feds policy makers can't ignore the economic impact of that huge country. it affects every market sector. the s&p 500 companies with the highest revenue exposure to china are sky works solutions. semiconductors which does two thirds of its business in china.

qualcomm almost half. broaden things out to greater asia and beyond the tech sector say, and look at energy. schlumberger and conoco phillips do more than 20% of their business in asia. boeing logs a quarter of their sales there. abbott labs does more than 30% of its sales in asia. get the picture? it's hard to ignore. china, that is. and fed chair janet yellin has acknowledged in the careful phrasing of a central banker that developments overseas will affect the timing of any decision by the federal reserve to raise interest rates here at home. >> were we to judge that these developments did create substantial risks or weren't changing the outlook in some notable way. then a change in the outlook is something that would affect monetary policy. >> what she said.

>> when will the fed begin to raise rates? few believe it's going to happen at the meeting this week since there's no post meeting press conference we won't know the tenor of the discussion until the minutes are released in three weeks. >> global growth concerns overshadowed positive economic data here. durable goods, toasters and jetliners that are expected to last three years or more jumped from a month earlier. much of that was due to aircraft orders. the report prompted j.p. morgan to raise its estimate to 2.4%. the government releases its second read on thursday. a massive health care deal to tell you about, teva has agreed to buy allergen's generic's unit. the deal will make teva one of the top ranked drug makers globally. shares of allergen rose 6%.

teva up 16%. what drove the tieup and why there could be more in the works? >> drug deals are continuing at their record clip today's purchase by teva marks a rapid pivot by the israeli drug maker which had been pursuing unsolicited bids. the deal puts teva in the top ten pharmaceutical companies worldwide and allergen is free to pursue more purchases. consolidation among health insurers and policies in part shows a reasoning nor the sale. >> you look at how dynamic this industry is many we want to lead that change i don't want to follow that change. i think a lot of that will impact the generics business what it does for the brangded business it says innovate. if you innovate you're going to get reimbursed. >> saunders has been referred to as the chuck norris of m & a.

purchased allergen and changes his company's name all amounting to more than $100 billion of deal activity. now, investors wonder whether his next move is as buyer or target. >> he said the word acquisition and transformational about half a dozen times in the period of a half hour. which is telling everyone, i'm gogel fant hunting. >> bernstein analyst says abvee, amgen and bioagain may be on the list. each has a market valuation of $70 billion. allergen sls to a bigger company like pfizer which was unsuccessful last year in its more than $120 billion bid to bias electra zeneca. where does this leave mylan, no longer a target for teva. it only intensifies to buy rival parago a deal that so far

parago has rebuffed. the consolidation frenzy is a rise rising health of costs. drug companies in turn must buy in order to get a bigger piece of the pie. for nightly business report i'm meg terrell. a record find for phi at/chrysler over mishandling safety recalls. it's part of a settlement which has been highly critical of how the automaker handled defects. that pressured the stock which fell nearly 5%. the agreement comes just days after chrysler recalled more than a million cars to block hackers from taking control of the vehicles. will that recall impact sales? phil lebeau has the surprising answer. >> it's a whopper of a penalty for fee at chrysler the auto maker will pay $105 million to the federal government for manage handling recalls of more

than $11 million vehicles including $70 million in cash $20 million to improve how it handles future recalls, and $15 million if there are future violations. an independent auditor will monitor how fda handles safety issues over the next three years, but what really stands out is fiat/chrysler, must offer to buy back almost 200,000 ram trucks with faulty suspensions, while owners of more than 1 million jeeps prone to catching fire will get offers to trade in their vehicles for above the market value or get an incentive to get the model fixed with a protective trailer hitch. >> i think it is the right type of penalty, and it's the right type of rehabilitation that's being used by our team at nitsa. >> fiat/chrysler is paying the price for years of fighting the federal government over whether or not to recall vehicles for a variety of issues tired of pushing the automaker to do more the national highway

traffic safety administration recently took the unusual step of holding a public hearing about fiat chrysler being slow to act, within the last few weeks, the ceo said it's time for the automaker to change its attitude. >> we're not perfect. we need to continue to work with the agency to sort of mutt us on the right path. >> fiat/chrysler's quality is being slammed, buyers don't seem to care. >> this year's sales are going faster than the industry overall the jeep brand, its sales are up 20% this year. nightly business report chicago. still ahead, place your bets the very real money behind the growing business of fantasy sports.

♪ more trouble for puerto rico the commonwealth just doesn't have enough cash to make an august first payment. the government looking to raise as much as $500 million by a financing deal backed by petroleum products. there's no longer a market to raise the 3 billion originally planned. >> congress's long august recess within reach, lawmakers have a number of issues to tackle before that break starts. on the agenda funding for the highway trust fund and reauthorization of the import export bank. ayman, why has this battle to

reauthorize the import export bank really split republicans so dramatically on capitol hill? >> there are two factions at play here one is a group of republicans you can call chamber of commerce republicans, that's the group that really supports reauthorizing the export import bank which has been around for 81 years, but there's another group of republicans who you can think of as the club for growth group, those guys think the export/import bank is a relic, it's all about crony capitalism these projects are worthwhile at all, private banks can step in and finance them. >> where are the democrats on this are they all for it? >> democrats are for it and you see a lot of big companies that benefit from export import bank loans, including big names like boeing and caterpillar, they're for it and they have a pretty big lobbying effort for it to get reauthorized the state is hanging by a string here in washington. >> what about the battle about overseas lending and how it's

connected to funding here for the highway bill? >> yeah. one of the interesting maneuvers we've seen over the recent days is this connection of the import/export bank that was a maneuver done in the senate it's classic washington. you attach it to a must pass bill and the highway bill is popular in a lot of congressional districts across the country. that's what they've done in the senate but in the house side republicans say they're not moved by what the senators did, they're not necessarily going to take up that bill they're proposing a short term extension to the highway bill just for a couple months maybe to the end of the year that would not include an extension of the export/import bank at this point, it's very unlikely the export/import bank will be reauthorized this week. we have a stand-off between house republicans and senate republican leaders. >> thank you very much. ayman jaffers on the case.

twitter reports today, facebook reports on wednesday. and the companies seem to be going in very different directions. julia borsten explains why. >> reporter: it's a tale of two very different social stocks. facebook shares up about 16% in the past three months while twitter lost 34%. facebook soaring to around an all time high as the company continues to grow users and ad revenue. on optimism about the potential to make money from the company's other fast growing apps. messenger, instagram and what's app and their new video apps. >> one of the important things is the sense is facebook is slowly grabbing attention from advertisers away from google in video in particular. >> in contrast twitter is in the midst of an awkward transition on the hunt for a new permanent ceo called project

lightning which won't launch until this fall. while investors are bullish in the potential to use human curators we won't see the impact for several quarters. >> it's a project that twitter sorely needs. it's one that's supposed to make it easier for new users to come in and understand what it is. a lot of regular folks don't get what twitter is or what the purpose is. >> one other challenge for twitter, two areas where it used to dominate sharing news and following public figures, facebook has been investing heavily. to keep users within its ecosystem rather than swiping over to twitter. julia borsten in los angeles. we begin with merger activity mcgraw-hill financial announced a deal to buy snl financial for more than $2 billion. snl specializes in data and analytic services for the financial industry which will expand mcgraw's offerings, mcgraw tumbled almost 6% today.

norfolk southern reported a big plunge in second quarter profit declining revenue from coal and crude oil will pressure results for the rest of the year. the firm has seen coal shipments drop off as people turn to cheaper options. delta will pay a half a billion dollars to buy a stake in china's eastern airlines. the boards of both firms still need to give the okay on the deal. delta was off a fraction to 49.93. china eastern slid 6 1/2% to 34.44. restaurant brands inter2345gsal, posted a stronger second quarter profit. both burger king and tim horton's recorded the same sales growth because of new product launches. in the meantime wendys is

testing anti-biotic free chicken items in test markets. they're moving away from antibiotics in meat as consumers grow more concerned before how food is produced. shares at wentdywendy's off slightly. earnings and revenue topped consensus late today. shares dropped off initially after the close. before the bell the stock was off by 4% to 197.68. two companies are steps closer to becoming public companies. budget fitness chain planet fitness said its looking to raise more than $200 million in its initial public offering which would then value that company at 1 $1/2 billion. separately television maker vizio filed preliminary documents for an ipo, the company is known for its low priced televisions and it plans to raise about $170 million.

money is pouring in to legal online sports betting. fantasy sports site draft kings, which lets users bet on actual professional and college sports is getting another $300 million round of funding. the latest round is being led by fox networks group. draft kings and fan dool are valued at a billion dollars a piece. how much are people spending on fantasy sports? in the last year the average fantasy player spent roughly $465 compared to just $95 a couple years ago. adam krajicek is managing director of gaming and he joins us now. do either of these dominant players, draft kings or fandool make any money and if not, why not? >> thanks for having me on. right now, neither fandool or draft kings are profitable they

are experiencing tremendous revenue in top line growth. >> at this point what kind of percentage of user do they have. how big is their audience? is it a large percentage of people that are using it? or is there a lot of room for growth there? >> sure so the daily market is fairly nacant right now, there's a lot of sports fans notice u.s. and in terms of traditional or season long fantasy, the sports trade association has that at over 50 million season long players. but in the daily space last year at its peak there was just around 1.5 million unique daily players. on that basis, you know we're still very early in terms of the user base and the market opportunity. >> so they don't make any money. how would they propose that they will make money when they start to make money. and where's all this revenue going? >> sure so the biggest cost and expense for the major players is

customer acquisition, and they're spending very aggressively right now to acquire players and users, it's essentially a land grab. and they're spending more on the customer acquisition side than they're obviously bringing in. >> advertised? >> yeah advertising. the biggest winners present day are the media companies, the espns, the fox, of the world, that being said the individual lifetime value of the players, the players itself if they were to cut advertising today, fandool would certainly be profitable and draft kings would be as well this year it's really -- it's on the advertising spin that is causing the cash burn. >> what about the regulatory issues if there are any. some people liken it to gambling others say it's harmless it's just fun. >> it's a complex and highly contentious issue right now. we would say, you know the positives that this industry has

going-forward right now is some of the strategic investors that are -- have participated in this latest rounds for example fox into draft kings, you had turner and google into fanningdool, you have major media corporations as well as the sports leagues themselves. to have their support we think is a big vote of confidence and endorsement, not to say there won't be regulatory risks or challenges we feel better having the support of some of these major entities and powerful allies. >> we'll see how it all plays out as the saying goes. >> thank you very much. coming up the pentagon is about to award a massive government contract. but not to any of the companies that you might think.

earnings from dow to report. a report on consumer confidence comes out. some big name corporations are backing president obama's climate change goals. the white house announce edd 13 companies made anti-pollution commitments adding up to $140 billion. that money will be spent on investing and low carbon. >> the pentagon is planning to reward a highly coveted multibillion dollar contract to modernize the electronic health records in what will be the biggest upgrade of health records in this country. winning would be a big deal for

some very big companies. >> the defense department wants to overhaul its health records so doctors treating a serviceman or woman on the front linings willing have a full picture of their medical history. >> instead of taping paper records to the gurneys as our heroes are being brought back from the theaters of war to receive medical care in germany, or back here in the united states that this will all be conveyed electronically. >> it's called the defense health care management modernization project. it's more like a big enchilada. they maintain records for 10 million military records and facilities around the world. >> it's going to be a nice keynote win for whoever becomes the hr vendor of choice. >> three teams are vig for the contract. privately held epic which has

provided electronic records for the kaiser health system along with ibm. serner has teamed with latos and all-scripps aligned with hp and computer sciences seen as a longshot. michael tourney thinks epic will win. >> there will be a host of other replacement opportunities that are coming up in the market where serner will be viewed as the best provider to capitalize on the replacement ss. >> the former chief of the va worried the new records won't be compatible with the va system or other civilian records. >> many of these systems are proprietary, the vendors kept that data siloed and segregated and even sometimes charged their hospital clients or charged their provider clinician clients money to get access to the data.

the defense department expected to announce the contract winner later this week. >> to learn more about this multibillion dollar defense project, head to our website nbr.com. that does it for nightly business report for tonight. thanks for joining us. >> have a great evening, everybody, we'll see you back here tomorrow.

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