this is "nightly business report" with tyler mathisen and sue herera. >> bounce back. the rally holds for a second day. the dow logs its best two-day point gain ever. is this the turning point that investors had been looking for? no clear path. the u.s. economy grows as global economies hit a rough patch. complicating the picture even more for the federal reserve. and off the charts. the best car consumer reports has ever tested. all that and more tonight on "nightly business report" for thursday, august 27. good evening. welcome. i'm sue herera. tyler mathisen is off tonight. solid growth, the u.s. economy grew more than originally thought in the second quarter. helped by a trifecta of spending

by consumers, businesses and governments. gross domestic product, the broadest measure of economic activity expanded at 3.7%. above expectations of 3.2%. and that wasn't the only positive economic report. the job market also remains healthy. claims for first-time unemployment benefits fell by 6,000 last week to near historic lows and home buyer demand remains steady in july. as pending home sales, a forward looking gauge of u.s. home sales rose half a percent. but these numbers stand in contrast to what's happening in other parts of the world. where stock markets are falling and global growth may be slowing. no more is more evidence than in jackson hole, wyoming, where the federal reserve's next move is very much in focus. steve liesman is there.

>> reporter: this grizzly bear stands at the entrance in jackson hole, a threatening reminder they may not be out of the woods when it comes to the dangers of raising interest rates. but one fed official is ready to stare down the bear. >> this week's events complicate the picture but i think it's too soon to say it fundamentally changing that picture. so in my own view, the normalization process needs to begin and the economy is performing in a way that i think is prepared to take that. >> reporter: it's major question for the fed. to be deterred by theer marketsr propelled by the better economic data. rate hike advocates got ammunition today in the major form of an upgrade to gdp. every major component the consumer, business and government was revised higher. it was a substantial bounce back from the weak growth that started the year. >> in particular it was very good to see more investment, because that's been one of the challengers where we haven't been seeing enough investment. if we can get more investment

that means firms are more comfortable where with the -- with where the economy is growing, there's more hiring, wage growth and then we are on the good path. >> there are those that the fed should fear the markets more. >> the case of september was weakening even before the sell-off. and i think the sell-off does matter even though you absolutely shouldn't set policy for the benefit of the markets. >> here in jackson hole, there's another element for the fed to consider. politics. protesters led by prize winning economist urged the fed to stand pat so workers' wages could rise. >> i don't see this as a hard call and what is interesting is that though widespread support among people who are not of the mind set of the fed, not involved in the financial markets, people who are really concerned about the real economy, there's a broad consensus. this is not the time to be

raising interest rates. >> as fed officials prepare to meet, the mountains are shrouded in clouds a bit like the outlook for fed policy ahead. no doubt there's a bear lurking in those woods. for "nightly business report," i'm steve liesman in jackson hole, wyoming. >> no bear today. stocks soared for the second straight day. helping the dow index log its best two day point gain ever. it's the latest big move in a week chockful of them. the dow has travelled more than 10,000 points since monday. and there's still one more day to go in this week. at the f tish today the dow rose 369 points, closing out of correction territory. the nasdaq out of the correction climbed 115 and the s&p 500 gained 47. could this be the turning point that investors have been looking for? bob pisani reports from the new york stock exchange. >> the rally held for a second day, but not without a lot of drama. for example, the dow went up 2%

in the last 45 minutes. once again, looking at a chart of the dow really does don't justice to the volatility. this is the way to look at the day. the dow opened up and rallied another 180 points in the afternoon and fell apart in the afternoon. dropping 300 points and then rallied 330 points into the close. traders bought stocks hand over fist. seven stocks advancing for every one declining. volume was heavy once again. though not as strong as early in the week. the most widely held names like apple, microsoft, pfizer, all were up 2 to 3%. a 10% rise in crude made energy stocks the star performer. if you look at the 300 point rise in the dow along with the 600 point rally you might be tempted to say that we have turned the corner. but the crazy intraday moves do not inspire confidence. we need to see more boring august days before traders feel the worst is behind us. for "nightly business report," i'm bob pisani at the new york stock exchange.

as bob just mentioned energy stocks moved higher on that spike in oil prices. west texas intermediate settled up more than 10%. much of the gain is being attributed to a technical move. but as jackie deangelis tells us some experts may be starting to change their thinking about where prices are headed. >> crude oil is seeing a $4 pop day, having the best day since april offer 2009. strength in u.s. equities lifted it high ever. have we bottomed, we have seen head fakes before as well. but this time traders think that crude could be working itself out. in terms of data, yesterday a draw in crude inventories added support to prices. remember this is the time of the year that we start to see strong build. that can still go coming but perhaps delayed. tomorrow we'll get recounts from baker hughes which may give us

some insight into how production will trend here in the united states. for "nightly business report" i'm jackie deangelis. the big market swings have grabbed the attention of the individual investor. who wants the know what they should do with their retirement accounts. john sweeney from fidelity investments, planning and advisory services is here to offer only insight on that. welcome back. >> thanks for having me, sue. >> let's start with who are you are hearing from. >> so we heard from three different kinds of investors. the nervous investor and bold investors. on monday, people were concerned about the information coming out of shea, concerned about oil and the impact on the federal reserve. people were looking for information. the nervous investors, very few of them, said maybe it's time to take some profits off the table. the vast majority were confident and the people who had plans, retirement plan, plans for college, and understood the roles of asset allocation in the

portfolios, they were confident and the very bold, they stepped in and they bought on the dips and they took advantage of the low prices. >> what about those who might not have a plan because markets like this and volatility like this certainly rings home the fact that you don't have a plan and the market basically is controlling what you do. >> well, it's interesting. like a health care. the doctor has been trying to get you to come in for an appointment. the same thing is happening with the representatives. they have been calling people all summer trying to get them to and establish plans. this was the precipitating event that sparked people to call us and say, we need to now come in and have a plan. we need to feel confident. so we've turned our phones out bound. we have been proactive at communicating with customers and trying to get them to say, now is the right time to re-establish that plan. >> what about trading activity? you mentioned the bold investors are buying. how significant has been the pickup in trading activity? >> so monday was a record trading day for fidelity. tuesday and wednesday were a top ten trading days all in. across the week it's been buys

almost two to one. you have seen a lot of activity, a lot of people stepping in and looking for bargains in the oversold market. >> thank you so much for the insight, john. appreciate it. john sweeney from fidelity investments. it's not just the individual investors that are keeping watch, but also small business owners because those concerns on wall street could trigger a change in thinking and spending on main street. kate rodgers reports. >> very slow this june, july and august. >> the coffee shop in bronx, may be far removed from wall street and the deepening fears about china that have roiled global markets in recent days, but shob manager zanna totos has been watching the stock market. the business which has been around for 40 years was hoping for a pickup in the fall. this week's events have her concerned.

>> this economy takes a hit, yes, it will happen that we won't be able to pay the rent. it's just going to look like -- lock up the shop and go home. because it's really, really bad. >> recent market moves come at a time when optimism among many small businesses is arguably holding steady. the national federation of independent businesses showed gains in lending according to the pay net business index hit the highest level since 2005 for the month of june. but having survived the ups and downs of the last recession, she is cautious. >> we're not hoping to raise the price and now we are afraid. eggs went up twice the price and we cannot raise the prices. >> while volatile market swings have impact on the day to day operations of the american small businesses, small mom and pop may have cause for concern. many of the staffers rely heavily on 401(k) and ira plans

which are subject to moves in the stock market. >> most main street businesses invest in their own retirement. their self-funded plans like 401(k)s and iras and when they fluctuate it makes everybody nervous. the market has done well for the last few years, main street hasn't done that well but at least there was the confidence in the retirement system. >> zanna totos learned that the hard way in the last recession. she no longer trusts the market after losing her 401(k). >> yeah, a little saving here and there. working, trying to save a little on the side. >> like many on main street she'll be watching wall street from afar. for "nightly business report," i'm kate rodgers. and still ahead, a well known company that's not seeing the slowdown in china, at least not yet. that story is next.

in calculating the prices of the mutual funds and the exchange traded funds can continue into the weekend. this was all caused by the failed software upgrade which has impacted calculations. the issue of course came right as we started this very volatile week. it affects about 20 mutual fund companies. copper producer freeport is lowering the production and slashing jobs. this as it deals with the decline in copper prices and lowing growth worldwide especially in china.

freeport plans to cut capital spending by nearly 30%. and reduce head count by 10%. that was enough to stem the drastic decline in its share price over the past few months. and send that stock soaring 28% in the regular session. in after hours the stock rose even more after carl icahn reported he's taking a stake in the company. tiffany reported a decline in profits and cuts its earnings outlook for the year. the shares finished down 2%. but the high end jeweler isn't blaming china where it does because for the lackluster quarter. at least not yet. courtney reagan has that story. >> tiffany and company does 25% of the sales in asia-pacific and that region has been a source of growth but lately it's a source of growing concern. in china, tiffany's second quarter sales improved by double digit, but the there's weakness coming from hong kong and macao.

many have shifted their shopping to other markets. the high end jeweler also relies heavily on tourist spending in many regions around the world. that iconic blue box has long been the object of destination shopping for many international travelers. and almost half of its sales still come from the americas. however, tiffany says the strengthening u.s. dollar and subsequent weakening of foreign currency against the green back has decreased tourist travel and spending in the u.s. >> moving forward, it's difficult to paint a clear picture. oppenheimer and company analyst brian neagle points out recent market volatility both in china and around the world isn't captured in tiffany's results. >> i think we have to be careful here. these results were as of the end of july so much of the stock market volatility happened after the q2 results. look, the real key positive in local currencies, very good sales in europe and in japan. solid sales in china and the

u.s. is holding up okay. >> the chief financial officer reminded investors that when it comes to china, quote, it's not possible to quantify the positive wealth effect from a rising stock market on our sales growth. it's similarly difficult to predict any potential negative effect on sales in magnitude or duration from the recent correction or currency devaluation. the high end jeweler says that it remains focused on serving chinese consumers around the world and it's not altering the strategies in any way. for "nightly business report," i'm courtney reagan. a number of other retailers reported earnings today. dollar general reported a rise in second quarter profits as people flocked to the discounter for bargains. off price retailer burlington stores topped for both revenue and earns an raised the -- earnings and raised the full year outlook and michael's posted earnings guidance for the year. the ceo attributed the strong

sales in part for the partnership pinterest. dollar general fell. coffee sales and smucker's quarters, that's where we begin the market focus. the folger's maker saw the coffee business surge, helped by higher prices. profit and revenue came in better than expected. shares were 6.5% higher to $116.29. solid sales helped signet post results. same-store sales were better than expect and it was helped by the recent acquisition of the zales brand. caterpillar announced plans to cut nearly 500 jobs because of declining revenue. the construction and mining equipment maker says it will consolidate the customer services division. shares were more than 2% higher. apple unveiled plans for a new product event on september 9. the tech company is expected to present new iphones and other devices.

apple has introduced a new iphone model every year around this time for the past three years. but it's only dropping vague clues about the event. shares were nearly 3% higher to $112.92. the food and drug administration has approved amgen's drugs for those with hereditary forms of high cholesterol. last month, the fda gave the okay to other treatments. part of a new class of injectable cholesterol drugs that work differently from statins. shares were higher in after hours trading and at the end of the regular session it was up to $155.72. after 80 years of testing cars, consumer reports has done something few would have ever expected. it has given its first perfect score of 100. the car -- the newest version of tesla's model "s." and this helped send shares of the electric vehicle maker up 8%. phil lebeau has the latest details. >> hold on to your seats.

the performance version of tesla's model "s" has made history. doing so well in consumer reports testing it went off the charts. >> so it really kind of blew up our system really. it scored actually above 100 before we actually had to make some changes to our scoring system to account for this car. it really does everything better. something we aren't used to seeing from carsar at all. >> what's improved with the model "s" p 85 d? it accelerates much faster, it has better handling and is more efficient according to consumer reports. tesla ceo elon musk, the praise validates his vision of building an electric car that also delivers great performance. the company says the model "s" being the first car to receive 100 out of 100 points is truly a testament to a commitment to continually giving our customers enhancements in range, performance and value.

and ultimately a better driving and ownership experience. an experience that comes at a hefty price. the model "s" sells well over $100,000 and consumer reports is careful to point out this is the best car it's ever tested. but it's not perfect. especially the center control screen. >> a lot of the controls are actually this big giant ipad basically. it drives the car. there's a full web browser there. you can access it while you drive. i think tesla went too far with that. >> this review gives tesla a boost as it approaches a critical moment next month. that's when it will unveil its next vehicle. the model "x" an electric high end suv. phil lebeau, "nightly business report."

coming up, katrina ten years later. the uneven recovery in the city hit by the disaster. here is what to watch for tomorrow. a report on personal income and spending and another check on the consumer with the consumer sentiment index. the city of new orleans is proclaiming itself resilient today, nearly ten years after katrina nearly wiped out the city. the city has recovered and then some. but in other ways it hasn't even come close. and all of that ties back to a

federal response that has been as uneven as the recovery has. scott cohn covered the storm and the aftermath in 2005 and he's back in new orleans for us tonight. >> reporter: it wasn't the storm itself that killed so many people and left 80% of new orleans under water. >> they're try -- >> reporter: it was the failure of the levees, designed, build and maintained by the federal government. they broke in 50 places. >> the surge barrier was built to interrupt that flow. >> reporter: today more than 100 miles of new protection encircles the area at a cost of $14.5 billion. and the army corps of engineers says these barriers will hold. >> i think we've become competitors with the dutch in doing this and we have learned a loot from them and now they are learning a lot from us. >> reporter: the system of levee, pumps and gates is supposed to protect against

100-year flood. but even the local flood control commissioner questions whether it's enough. >> most cities in europe have 500 to 1,000 year protection. this is a hundred year protection considered minimal for a major urban area in the developed world. >> reporter: this guards the city that's about 20% smaller than a decade ago. a $9 billion federal housing program administered by the state was supposed to make it easier for people to come home and 130,000 families did >> this is completely unprecedented. this is the largest rebuilding program in the history of the united states. >> reporter: but thousands more haven't come home. in areas like the lower ninth ward. which local activists blame on a program racked with incompetence. >> there are many, many residents, homeowners, who didn't come back and part ways that's because of the unfairness of the road home program. >> you're doing a heck of a job. fema director is looking --

>> reporter: almost from the beginning the federal government has been trying to make up for the initial response. >> what you're seeing here is an example of the incredible federal, state, local partnerships that have helped to revitalize this community. >> reporter: today, another president came to praise the recovery. the first african-american president in a much wider and forever changed city. the hope is that the changes will mostly be for the better. if not all for the better an example behind me, part of that massive flood control effort to keep surging waters from lake pontchartrain from surging this city. a massive investment to keep history repeating itself. >> you covered this story ten years ago, and you have been bang periodically since then. i'd like your sense of how the recovery is going. >> reporter: you know, in some

areas, it is truly impressive. a lot of this has happened in the last two years. you see a lot of new construction, traffic jams. you see a really great influx of people and investment in this city. but it is uneven. you go to the lower ninth ward, for example, and you can see still just a lot of bare foundations that are sitting there. areas where it hasn't come back. the poverty rate here is back to prekatrina levels or twice the national average. an uneven recovery. >> you said about 20% of the population is below that ten year ago level. is that going to be permanent, do you think or will people relocate as the recovery continues? >> well, you know the people that look at this say nothing is really permanent. nopg is -- nothing is static in a recovery. and that people will come back, but the patterns are different. the demography is different. the racial makeup of this city as we said much wider city, much more hispanic city than before, but still majority african-american.

so it really is a moving target. >> you mentioned culture. what about the musical culture which is so legendary for new orleans? a lot of the musicians have relocated. has that recovered or has that fundamentally changed? >> reporter: yeah, you know, we really wondered about that in the immediate aftermath of the storm. everybody was gone. the local artists, the musicians, the restaurants of course were closed down. that's really come back and it's one of the bright spots of this recovery. there are more restaurants here than before. the musicians are back. there's a -- it's a younger population, more young people have come back in part to make their commitment to the city of new orleans. so that cultural aspect of new orleans is back. but people are more cautious about mother nature and about being prepared. >> understandably so. thank you, scott, so very much. appreciate it. scott cohn in new orleans. coming up tomorrow, scott

will be back, he'll report on the state of the recovery and what companies have done and continue to do to try to help. finally tonight, facebook reached a mind boggling milestone. the social network reported for the first time 1 billion people used facebook in a single day on monday. to put that into perspective, one out of every seven people on earth logged in to facebook. pretty amazing. that does it for "nightly business report" for tonight. i'm sue herera. thanks for watching. have a great evening. see you back here tomorrow night.

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