♪ this is "nightly business report" with tyler mathisen and sue herara. >> the pope and the president. the pontiff and the head of the people's republic of china arrive in the united states for the start of two very important state visits. >> scandal widens. millions more volkswagen vehicles evaded emission regulations as costs to the company mount. >> and right prescription. how one presidential hopeful plans to take on a powerful industry. all that and more tonight on "nightly business report" for tuesday, september 22nd. >> a rough day on wall street. more coming up in a moment. but we begin tonight with the two moment to us state visits both of which began today. pope francis arrived in our nation's capital for his first

ever trip to the united states. he then heads to new york and philadelphia, and at some point, could discuss a topic he's touched on before, namely, capitalism's flaws. in washington state, the president of china began a nearly week long trip. his first state visit to america as the leader of that country. in addition to meeting with president obama, he will be talking with a who's who have american ceos at a time when tensions between china and some industries are running high. that's where we begin our coverage with michelle caruso-cabrera in seattle. >> reporter: the president of china arrives in the united states at a critical time in u.s./china relations. chinese economy has been faltering and beijing increasing its level of economic intervention. president will be meeting with ceos of apple, most, burke shish hathaway, ibm, general motor who have an a lot at stake in china and deeply concerned about the

situation there. one of those meetings orchestrated by hank paulson. >> china is very important to these multinational companies. and their voices haven't been quite as loud in support of u.s./china relations because the business climate is becoming more difficult. they have concerns not just about the economy but concerns about the pace of reform in opening up and concerns about whether some of these new laws and regulations are, you know, which are limiting access, they have concerns about the intent behind that. >> just today the current u.s. treasure sect jack lew published an op-ed in "the wall street journal" questioning president xi's commitment to market reforms. the market is of great importance to many parts of the american economy. president x will meet with five u.s. governors including terry

branston who has known xi since he visited iowa 30 years ago. they still have a personal relationship and also an economic one. >> china has become a major trading partner. we're the leading soybean producing state in america. 30% of our soybeans go to china. they also recently a chinese company purchased smithfield foods because they wanted safe reliable supply of pork. >> reporter: the other issue, cyberattacks that the u.s. government believes were orchestrated by the chinese government. president obama is expected to press the leader on cybersecurity. the u.s. has been considering whether or not to unleash economic sanctions on chinese companies an us oo accused of hackers. the president's response could determine whether or not sanctions aresa imposed. tonight president x will make a policy speech in front of hundreds of political and economic leaders from the united states. what he says will set the tone for the entire trip. for "nightly business report," michelle ca ruse so cabrera

seattle. >> joining us is sam saks, a chinese analyst at theure asia group a political research firm. good to have you with us. there are a variety of topics that are friction points between the united states and china. of all of them whether it's cybersecurity or trade or of military relations in the south china sea, what is the one that is the trickiest and is there any possibility of progress on that issue during this visit? >> the most difficult issue is cyberenabled economic espionage. unfortunately, i see this as one we're not going to see a lot of progress during this visit. >> why not? i mean, is it not beneficial that they just discuss what has been such a thorny issue? would you deem that progress iffive deed, they do sit down and actually bring the topic up? >> the topic will be discussed. and that's a sign of progress. the fact that they're willing to address the elephant in the room, but we're going to see a

more confrontational stance from washington. at the same time, i don't think beijing is willing to give on this and not going to give up on psycher attacks no matter what is discussed on this visit. >> talk more broadly what's been going on in china lately. the economy is certainly slowing. we doe know how reliable some of the numbers are. they have responded to drops in the market in ways that are sort of inimical to free marketism. how free market do you really believeing this chinese leadership is? >> this leadership is actually committed to giving a greater role to market forces in the economy. i don't see what happened this summer as derailing reform efforts so much as a political distraction. but it's going to be incredibly difficult to implement. there's a lot of vested interest in the economy that don't have a motive to see these t changes me forward. xi faces a lot of opposition in doing so. >> what about the territorial

disputes going on as tyler mentioned in the southern china seas? any progress there, do you think? how aggressive do you think the u.s. will be in pressing china on that issue? >> i think the u.s. is going to be more aggressive in pressing china than we've seen in the past. i also think this is going to be met with a more hard line stance in beijing. this government is increasingly confident in its ability to back up its territorial claims. but i don't see armed conflict as being a real risk. >> let's go back to the question is of cybersecurity which is, i happen to agree with you. i think that is probably the trickiest one to get a handle on. the chinese are a proud country and they don't like being lectured about their practices and we don't like being lectured and i'm sure the chinese believe we're involved in probably some cybersecurity issues that would not be helpful to them. >> absolutely. that's why i don't think we're going to see a lot of traction. i think that washington has

recognized they have to focus on points of leverage over beijg. right now that point of leverage is access to u.s. markets for chinese companies. that's why we've seen sanctions put on the table as a policy option. and in fact, i don't see that threat of sanctions being off the table anytime soon. unless beijing comes to some significant agreement with washington which is actually not very likely. >> miss saks, thank you so much for being with us. we appreciate your insights. later in the program, we'll hear from a hackner china. pope francis began his five-day visit to the u.s. which involves travel to three cities. this afternoon, he landed in washington, d.c. where he was greeted by cheering fans and by president obama and the first family. mary thompson is in the capital reporting on the pontiff's visit for us. a pretty historic day today, mary. >> it certainly was, sue. it the 266th pope becoming the fourth leader of the catholic church to visit the united

states where 70 million identified themselves as catholic. at joint base andrews he waved to the crowds but didn't make nel public comments saving his braeths for the many events he has during this tour. it kicks off tomorrow with a meeting at the white house with the president and a mass later in the day. on thursday he addresses congress and on friday, the u.n. general assembly with the main event coming sunday, an outdoor masses in philadelphia to celebrate the conclusion of the festival of families. expect is the pope to couch on hot button issues here in the u.s. including immigration, income inkey quality and prime minister change. the pope has shaped his message since stepping out last year. that will message being is he is a leader of a churching >> he has been critical broadly of capitalism. he has been cautioninging about how we humans treat the

environment. phrases that might not go over terribly well in a congress controlled by the gop. >> tyler, i number of people say that the phrases that are fiery are the only ones that make headlines. they say it's hard to put francis in a box. while he has been critical of capitalism, he has also commented has helped to raise a number of people out of poverty. he talks of business as being a noble profession. at the same time, he says people in those positions in business positions and power have to keep in mind that they need to use that power in order to raise up the poorest among us. as far as climate change goes, he sees the environment as one of god's gifts. it's a gift that the people should protect. that's his message and we're expected to hear it especially when he addresses the u.n. general assembly. that is probably when he'll speak most on climate change. it's not a position very welcome by a number in the gop.

you saw his approval among u.s. candidates go down significantly when he released his paper on the environment in large part because conservative catholics didn't like what they heard. >> mary thompson in washington. worries over global growth and the timing of interest rate hike here in the united states crept back into the market today. stocks started the day lower and they stayed there. the dow jones industrial average down 179 points to 16,330. nasdaq dropped 72, the s&p 500 was off 24, bob pisani has more on today's sharp decline from the new york stock exchange. >> reporter: it was anotherne of those why are we down days. it wasn't just one headline. it was a series of smaller headlines that added up to more uncertainty in the global market. china's president xi xin ping touched down in the u.s. even though the china markets were up overnight, china was in fox focus as zat asia development bank lowered its gdp estimate to 6.8% down from 7.2%.

then credit suisse came out with a' report on the commodities market entitled "race to the bottom," citing the long-term problems of falling demand and rising supply cutting the ratings on a number of commodity stocks like anglo-american. other commodity names like rio pinto all were down 3 to 5%. elsewhere, the volkswagen scandal is another can of worms. the french finance minister called for a probe into the entire auto sector. that's a big problem. companies like volkswagen, daimler and bmw are at the heart of the german economy and the german stock market, the largest market in continental europe. little wonder the german stock market down 8% in the last two days at its lows for the year. for "nightly business report," i'm bob pisani. >> as bob just reported, investors here and in europe are keeping watch over what happens with volkswagen. the scandal has widened to include more than 11 million

vehicles. and as phil lebeau reports, there are now questions about the future of the automaker's ceo. >> reporter: as the scandal involving would ex-vegan's emissions and diesel deception continues to grow, so do apologies coming from executives with the german automaker the latest from the martin winterkorn. he is the subject of a lot of debate right now whether or not he will retain his job. his current contract is up on thursday and many are questioning whether or not he will keep it. one german newspaper says his contract will be terminated. volkswagen responded to that report calling it ridiculous. we know that the vw board is meeting this week discussing winterkorn's future and no doubt discussing what's happening with the emission scandal as it continues to grow around the world. earlier today, martin winterkorn issued a video statement in which he once again apologized for what they've done when comes to deceiving customers about the level of emissions in their

diesel vehicles. >> translator: i am deeply sorry that we have broken this trust. i would like to make a formal an pol why i to our customers, to the authorities and to the general public tore this misconduct. >> reporter: also today, vw said 11 million diesel engines around the world are impacted with some type of deviation in the software. unclear whether that is the same type of situation as what we're seeing here in the united states with a half million vehicles that had a defeat device on them in order to get around clean air standards. volkswagen says it will take a $7.27 billion charge in the third quarter to deal with the emissions issue. again, volkswagen's board meeting twice this week as the stock is under pressure discussing the future of not only ceo martin winterkorn but its next step as it tries to contain the damage from this emissions scandal. that's the latest regarding volkswagen. >> phil lebeau. one of the worst performing it stocks today was goldman sachs.

earlier today, the ceo lloyd blankfein announced he haslem foema, an illness his doctors say is a highly curable form of the disease. he underwent a series of tests after not feeling well this summer. and had a biopsy last week, which revealed the cancer. still ahead, with all those health insurance mergers, will it hurt consumers? what industry executives said today under oath. health care deductibles are rising as wages barely budge. that's the conclusion of a new study by the kaiser family foundation. a health policy research group. since 2010, deductibles have

risen more than six times faster than workers' earnings and almost three times as fast as premiums during that same time. >> for that report on health care deductibles comes as the chief executives of etna anthem defend their proposed merge in other words front of a senate panel. some lawmakers are concerned consolidation among some of the nation's biggest carriers will result in higher coverage costs. bertha coombs reports from the capitol hill. >> reporter: >> reporter: the big question for senators will, health insurance consolidation help or hurt consumers. mark bert lee knee says etna and huma anyway's combination won't reduce competition. >> today the market competes on choice and choice of doctor. this not change. but to win in the market, we believe consumers should be able to pick products focused on improving the health of the member. >> reporter: anthem's ceo joseph swedish argues his firm's combination with sig nag is necessary to meet changing needs

in health care after the affordable health care act. >> the turbulence and speed of change in the marketplace necessitates a combination that brings new value to the marketplace. in that regard, we believe this economic combination makes a lot of sense for us because we can come to market faster, better, and then in turn create more value for the consumers. >> reporter: northwestern's university see more daphne says past mergers haven't helped consumers citing her study of etna's acquisition of prudential's health business and impact on large employers. >> where etna and prudential had the greatest overlap we found the largest reductions in health care employment and wages. we would have expected premiums to go down in these areas but the opposite was true. >> reporter: senator al franken pressed the insurers to make sure it's different this time. >> will you commit to passing along the savings to your policyholders? >> our savings will be passed along in the price of our

product. >> do you commit to pass those savings on to the consumers? >> we'll certainly do so to the extent that we're providing a very balanced portfolio of offerings to the marketplace that is driven by great value. >> i'm out of time. i do think that we could have gone quicker if those answers were yes. >> reporter: ultimately, it's up to the department of justice and state regulators to sign off on the deals. the anti-trust division of the doj has already asked etna and humana for more information on their proposed merger, they'll likely ask anthem and cigna for more information, as well. ber that will coombs, "nightly business report", washington. >> today democratic presidential hopeful hillary clinton outlined her plan to reign in the rising cost of prescription drugs. and change the way the pharmaceutical industry does business. >> under my plan, drug company who's want to keep getting federal upport will have to

redirect more of their profits into meaningful investments in research and development. that will mean more breakthroughs, more good drugs, not fewer. >> this comes one day after she took to twitter to condemn the price hike of a 62-year-old specialty medicine as we reported yesterday. meg terrell joins us now, she's been following that proposal. meg, is mrs. clinton's plan as worrisome for the biotech industry as investors yesterday feared? >> hey, sue, well, there are parts of it that are worrisome to the community. what some folks are saying the reaction we've been seeing in the stocks are more just a reflection of the jitteriness of a market prizing for five years and the signs that anything could come to potentially stop it. what clinton really focused on today and what we heard from her was trying to get companies to direct their focus from marketing over into research. but the main thing that the drug industry and that investors are

afraid of is she's going to give medicare the ability to negotiate drug prices and did lay that out in her plan today. >> what would it change and how would it affect specific companies and their stocks? >> so if medicare were enabled to negotiate drug prices analysts say this could change everything. decades of the way the drug industry is built. right now, private insurers are the only ones doing the negotiating. and that could really weigh on drug prices. another thing that clinton laid out was to only to cap the out of pocket costs for prescription drugs at $250 a month. what folks say that could affect the insurance stocks more than the drug company stocks because it wouldn't necessarily cap prices but it would cap what the insurers get to have the consumers pay out of pocket. >> she's consistently referenced price gouging. does the plan address that. >> that's an interesting question, as well. though she has addressed price gouging so many times, folks say she didn't introduce anything specific to address that.

that proposal to limit out of pocket costs for consumers should address that from their perspective but it doesn't actually affect what the cost of the drugs are. however, we have still seen stocks like valiant which is known for this practice of rising the price of drugs white a lot. >> thank you so much. meg terrell. shareholders will allow bank of america's chairman and ceo to keep both titles. that is where we begin tonight's market focus. more than 60% of the investors voted not to the separate brian about moynihan's two titles. last year the board elevated him to chairman without consulting shareholders. shares fell a fraction today to $15.57. groupon cutting about 10% of its workforce or about 1100 jobs. the move comes as the daily deals site restructures outside of north america anschutz down some of its overseas operation. shares were off today by 2% to $4.08. shares of office depot and

staples slipping today on reports that its merger may get blocked. the "new york post" reported that the head of the federal trade commission may oppose the $11 billion combination. commissioners are expected to rule on it by october. office depot off 4% to $7.06. staples is slipped to $128.75, almost 6%. mixed results from general mills. the foodmaker's adjusted earnings beat sfimts but it's revenue slightly below forecast. restructuring and cost controls are helping the bottom line. shares up slightly, $57.13 was the close. >> darden restaurants managing to top consensus on the top and bottom lines. same restaurant sales rose and the parent of olive garden hiked its earnings guidance for 2016. despite that, shares off slightly to $69.69. conagra's quarterly profit topped estimates. it expects profit margins to continue to expands. but the food producer warned that currency issues will impact

profits. shares fell 7% to $39.40. weatherford international announced it is canceling its share in convertible debt offering only a few hours after announcing the plan. this is the stock price dropped on the initial plan announcement. shares popped on the reversal up more than 10% to $9.31. is the specialty chemical maker ashland will splitsh into the two companies. it will spin off its engine lubricants unit into a publicly traded company to focus focus on higher margin business. shares rose to $108.50. >> still ahead, rarely does a chinese hacker talk openly about his had he clandtine activities. until now.

here's a look at what to watch for tomorrow. a report on mortgage applications. also the purchasing managers manufacturing index is out. it's a read on the private sector economy. and we'll be on the lookout for more news from the pope and president xi's visit to the u.s. that's what to watch for on wednesday. >> price waterhouse coopers is hoping attract talent with a perk. the consulting and accounting firm will give employees $1200 a year up to six years to help them pay off student loan debt. it's not just new grads. the company will offer the benefit to its associate and senior associates employees. >>. >> cyberhacking a major source of friction between the u.s. and china. and it's not often if ever that

a chinese hacker is willing to talk about what he does and why he does it all on camera. eunice yoon has our story tonight from shenzhen, china. >> reporter: from his office in southern china, this former military officer who would only tell us his code name prince says he heads a 5,000-person team known as the hunker union or red hackers. >> translator: i decided to learn hacking skills after my computer was hacked, he said. after i retired from the army, i thought i could use my skills to continue to serve and love my country. i chose to be a red hacker, to be the personification of justice. china's hackers are a source of friction between washington and bay jik. alleged cyberattacks from china have angered the u.s. which has blocked business deals for chinese companies and is now considering sanctions on those suspected of engaging in commercial cyber theft.

the hackers say they work from all over the country but they tend to cluster in hi-tech areas like shenzhen. this city is home to the country's biggest electronics market and it's china's silicon valley. prince denies his group has targeted u.s. companies though he says they have attacked commercial organizations in regional rival japan. prince showed me one way he hacks. today into a local hospital. he finds an e-mail. based on security question, he guesses passwords like the hospital address. by the third try, we're in the system. in less than five minutes. we're now able to gather more information. e-mail, phone numbers, fax he says. prince says for attacks, the hackers act on their own but that occasionally they're called on by the government to help track those believed to be working against the state. the chinese government says it doesn't support hacking activities and we couldn't verify his claims.

>> translator: i independently have some cooperation with the chinese government. but it's all off the record, he says. the government normally asks me to follow the electronic footprint of different hackers, gather information on hackers and submit official reports. for the country he vows to protect. for "nightly business report" i'm un nis union. >> and that does it for an "nightly business report" for tonight. i'm sue herara. thanks for joining us. >> we will see you back here tomorrow.

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