>> announcer: this is "nightly business report" with tyler mathisen and sue herera. fed speak. the chair of the federal reserve gives her first public comments since last week's big rate decision. steve liesman with the news and analysis. one-two punch. china's slowing economy and low oil prices prompting caterpillar to slash its revenue forecast and jobs. bugged and rigged. the latest on the scandal engulfing the manufacturer of perhaps the world's most iconic car, the beetle. all that and more tonight on "nightly business report" for thursday september 24th. good evening, everyone. speaking for the first time since the federal reserve's controversial decision to keep interest rates near zero, chair janet yellen late today said she supports a rate hike sometime later this year. it was just one week ago that the head of what is arguably the

world's most powerful central bank cited low inflation and a weak global economy as reasons not to raise interest rates. steve liesman joins us now with more on her speech. so what did she say? >> she said that -- she associated herself as among those who believe that the federal reserve will raise rates, it will be appropriate to raise interest rates this year. the importance of that is last week when sme spoke she said other members of the committee, and wouldn't answer the question when asked about what she actually believes. now you can count the fed chair as among those who think rates ought to go up "sometime later this year," and i think i know what your follow-up question is. >> does this mean they will, and when? >> if the chair says, it's likely to happen. although she did give the obligatory caveat of depends on the economic data, it could happen later or it could happen earlier. so the question the market is obsessed over is this it will happen next month in october or will it happen in december? unclear from what she said.

she was very clear that the two things that are keeping down inflation and the economy today, energy prices are sinking fast. every time i seem to drive in, gas prices are lower. and import prices from two things, which is weak economic -- economies overseas and two, the strength of the dollar. she says those are going to pass through the system, they're transitory. she's confident that inflation is going to move back to the fed's 2% target. >> what did she say if anything at all about sign-up? because in the q & a after the news conference last week she was asked a lot about it. what about it in this particular address? >> so it's a 23-page speech with a three-page appendix and eight or nine graphics in there. so my recollection is she does not mention the word china at all because i would have flagged that. she does mention the idea of overseas economic weakness and dollar strength being things that put downward pressure on inflation. but this time around china was

not central to what is really an academic speech about inflation. >> your instinct, having followed several chairs of the federal reserve, would it be more likely that rates would rise at a meeting where they have a press conference following it, which is i believe the december meeting, as opposed to the october meeting, and is there anything that says they might raise interest rates outside of a meeting? >> i don't think they have a reason to raise outside of a meeting. that's the easy part of the question. i think they could well do it later in october. let's say, for example, you get up the next payroll report which is the september report, which comes in early october, and it comes in at 250,000 or 275,000 and the unemployment rate kicks down from 1.1%. let's say even below 5%. the fed could go ahead and hike rates. >> that could be the green light. >> and they have a system in place, by the way, which they've made public, to hold a press conference after a meeting in which no press conference is called. so they get reporters on the

phone and the chair will both explain herself and explain what the committee did and take questions from reporters. >> given what you know about the market, and obviously you know a lot, will this speech reassure the market or spook the market? >> given the last several months i feel like i know less about the market than i thought i knew. >> join the group. >> and i always say if you're not confused you're not paying attention. so i thought the market would be happy but with the idea the fed did not raise rates last week. the market has gone straight down since that time period. i have to think it's worth entertaining the possibility that the reverse is true, that if the federal reserve were to hike and remove that uncertainty over the when, which by the way yellen says is not a big deal, the when. she says the more important deal is the rate of increase which she says will be gradual and will be low but i think that if that's possible the market could rally on that news. >> it's anyone's guess. zbls anybody's guess. that's what makes the market, right? thanks, steve.

steve liesman. the slowing global economy. china is take a toll on caterpillar, the world's biggest construction and mining equipment maker is slashing jobs and cutting its revenue forecast. that pressured shares of the dow component. it fell more than 6% today, making it the worst-performing stock on the blue chip index. hampton pearson has more on caterpillar's pain. >> reporter: the world's biggest construction and mining equipment maker began the year projecting revenues in excess of $50 billion. a restructuring plan unveiled today includes slashing that forecast by a billion dollars and cutting up to 10,000 jobs by 2018. it will impact 20 plants worldwide across its major businesses -- construction, mining, energy, and transportation. a combination of a slowdown in industrial activity in china where caterpillar's machine and construction industry sales were down double digits in june and a u.s. downturn in oil and gas

construction due to falling oil prices is triggering those job cuts. leading analysts say finding the new normal will be a challenge for caterpillar, especially given the downturn in key commodities. >> you have to take down facilities, overhead to a new normal, which is going to be far lower. co-production keeps declining, it's down another 10% this year. haven't had a co-plan in almost four years in this country. that tells you that you have to structurally change, and that's what they're doing. >> reporter: caterpillar, a dow component, saw its stock fall more than 6% today in trading, it pulled down shares of other industrial companies as well. shares of caterpillar have fallen more than 20% this year. >> weakness in emerging market growth and in particular china imbue our outlook for the global economy with a lot of down side risk. so anytime you have an event, especially for a large multinational company that's

directly plugged into the global industrial sector that corroborates that message, then markets react. >> reporter: caterpillar officials say businesses like construction, mining, oil and gas sometimes do go through prolonged slowdowns, but they also say those industries are the right businesses to be in for the long term. for "nightly business report" i'm hampton pearson in washington. the health of the global economy is issue number one at an annual gathering of thought leaders and decision makers in nantucket, massachusetts. the meeting is called the nantucket project. and some of the attendees shared their thoughts and opinions with brian sullivan. >> reporter: even on this small island off the coast of massachusetts the concerns are decidedly global. here at the fifth annual nantucket project gathering of business, political, and creative leaders, the signs of a possible global slowdown

dominate the economic conversation with china and germany square on the front page. former barclays capital ceo bob diamond is here, and he said china's fate right now is unknown. >> we've seen 20 years of very strong economic growth. we have a correction. how strong will that correction be or how deep will that correction be? i'm not sure that we know yet. i think a lot of it depends on the quality of the policy response. >> reporter: it's difficult to blame anybody for being a bit nervous. what started as concerns over a china slowdown have spread now throughout the world. the volkswagen scandal has helped drag down the german stock market by 17% over the past three months. and brazil, the world's seventh biggest economy, is now in a deep recession and its currency has been sinking. starwood capital's barry sternlicht who has developed billions in hotel and development projects around the world for more than 25 years, says it is a confusing time even for the best investors. >> to me it feels like we're

standing on quicksand right now. there are smart people who are confused, and there are people who say this blip in china does nothing, china's rich, and equally smart people who say this is the beginning of the end of the chinese experiment because of the overinvestment in physical plant and that's not needed and there's so much bad debt in the banking system that the country's not nearly as rich as people think. >> reporter: sternlicht added that one way to help end some of the confusion would be for the u.s. federal reserve to raise interest rates. >> keeping rates low actually is just creating such bubbles and such distortions and such bad behavior in the capital markets that it's time to raise the short end. i don't think the long end goes up that much. >> reporter: we don't know if the federal reserve will heed that advice until late october or mid december when the fed meets again. brian sullivan for "nightly business report," nantucket, massachusetts. stocks fell for the third straight session today on those global growth concerns and ahead of that speech by federal reserve chair janet yellen.

by the close the dow jones industrials were off 78 points, but they'd been down as much as 263 earlier in the day. the nasdaq fell 18 and is now negative for the year. the s&p 500 declined by 6. nike could potentially change the tone of trading tomorrow. the dow component easily beat wall street earnings estimates, making it nine quarters in a row of better than expected profit. the world's largest sportswear maker reported earnings per share of $1.34 beating expectations by 15 cents. revenue rose from a year ago coming in at nearly $8.5 billion helped by strong sales of higher margin products. that sent the stock soaring initially in after-hours trading. dominic chu has more on what's going right at nike. >> reporter: beyond the headline profit and sales numbers the reason why many traders and analysts are even more bullish on nike now has something to do with futures orders growth. now, simply put, this is a measure of what kind of growth in future business nike expects in the coming months. and nike reported a big number.

17% growth if you take out the effects of different currency movements around the world. that's much bigger than the 11% growth that analysts were expecting on average. and that expected growth also came better across all regions and nike reports on. the most important of which could arguably be north america, europe, and greater china. those regions are of key importance to nike. the company says those china futures orders are growing again by about 27%. remember, nike's stock has already outperforms the market so far in 2015, so the question becomes whether this is bullish enough to take the stock up even higher or if it's due for a pause. back over to you guys. >> dominic chu reporting. now to the u.s. economy where the number of americans who applied for unemployment benefits rose last week. despite that uptick, though, the level is still low and follows a path of solid job growth. according to the labor department, jobless claims up 3,000 to a seasonally adjusted

267,000. a big increase in the number of new home sales last month. job grains and low mortgage rates sent that read on real estate to a more than seven-year high. that's according to the commerce department. the increase of nearly 6% was also well above forecast. and that strength is not showing up, however, in manufacturing. orders for durable or long-lasting manufactured goods slipped in august. this according to the commerce department. that was mostly due to a decrease in the number of bookings for mu cars, airplanes and military hardware. on top of that overall business investment was weaker. at least 29 state attorneys general have initiated an investigation into volkswagen and whether it exceeded emissions tests in some of its diesel cars. this comes as the automaker's board prepares to meet tomorrow where it will likely turn over the reins to another auto executive whose job it will be to steer that company out of crisis. phil lebeau reports. >> reporter: as the scandal involving rigged diesel engines

grows at volkswagen, the embattled automaker is preparing for a new ceo. sources say mattias mueller, who has run porsche the last five years, will be tabbed to take over volkswagen. his elevation will come as other executives at vw leave the company. how many and what knowledge they may have had about the rigged engine software remains to be seen, but it's clear regulators in europe and around the world are just starting to ask questions including here in the u.s. where the researcher who uncovered the deception in vw's diesel engines says the amount of pollution the cars were actually spitting out was substantially higher than what vw had been advertising. >> we saw the large differences in numbers. that's when we knew that the vehicle was exhibiting off-cycle emission behavior. >> reporter: meanwhile, volkswagen dealers here in the u.s. are still unable to sell several clean diesel models. and the negative press may be keeping customers away from

dealerships. truecar says volkswagen is the only major automaker heren the u.s. to see a drop in sales in september. phil lebeau, "nightly business report," chicago. >> shares of bmw, which trade over in germany, dropped sharply after a german newspaper claimed that its diesel engines were "significantly exceeding regulatory limits." but later in the day that same newspaper made a clarification, saying there was in fact no evidence of emission manipulation by bmw. still ahead, people before profit. the message the pope delivered to congress today during an historic speech. we'll give you the details.

pope francis today became the first pope to address a joint meeting of congress. in his wide-ranging speech the pontiff encouraged a divisive legislature to keep the channels of communication open, telling them it's the only way we can solve the many economic and social problems that face the world. mary thompson reports from washington. >> reporter: congress gives a thunderous reception to the 266th leader of the catholic church, bringing tears to the eyes of this host and fellow catholic, house speaker john boehner. and shouts of joy from the 30,000 people outside the capitol. the first pope to address congress, telling lawmakers live by the golden rule. >> do unto others as you would have them do unto you. >> reporter: his speech more than a catechism, though. the pope calling for the world's largest arms exporter to end the

arms trade. >> why are deadly weapons being sold to those who plan to inflict untold suffering on individuals and society? sadly the answer has to be simply for money. >> reporter: and in describing business as a noble profession urged its leaders to put people before profits. >> prosperity from the area in which it operates, especially if it sees the creation of jobs as an essential part of its service to the common good. >> reporter: the pope's praise of the late dorothy day, a founder of the left-leaning catholic workers movement, suggests he remains wary of capitalism. when failing to include a line

from his prepared text that says politics can't be a slave to the economy and finance, it appears the pope was wary of being too critical of it as well. the vatican calling the dropped line a little oversight by the pope in a 50-minute speech asking congress to remember and respect their immigrant roots and to work toward a culture of care that would combat poverty and protect nature. in keeping with catholic principles, francis made a veiled defense of traditional marriage, called for respect of life at its earliest stages and the abolishment of the death penalty. while the pope's speech offered something for both sides of the aisle, in a taped message presidential hopeful marco rubio saying he hears the pope's call of working toward common goals. >> he reminded us that whatever our policy differences might be we're all called to put the good of our people above all. >> reporter: differences put aside at least for a day. in washington, d.c. i'm mary thompson for "nightly business

report." and a quick transition here to market focus, and we begin with kb home posting results that topped estimates. lower than expected deliveries were offset by an increase in selling prices, revenue and home deliveries both increased double digits. shares were 1% higher to $14.60. a miss on the top line sent shares of bed bath & beyond way down in initial after-hours trading. the home furnishings retailer did announce a new $200 billion stock buyback program. you can see shares slid initially after the close before coming back just a bit in the regular session. the stock was off a fraction. it finished at 59.33. a similar story for pier one. the company's revenue also fell short of expectations and the firm cut its guidance for the full year. shares slipped initially after the close. in the regular session the stock was off 2 1/2%. 867 is where it finished. the publisher scholastic reporting a wider than expected loss. but the loss comes right after the company sold its educational technology unit. the company's children's

publishing unit helped drive the jump in revenue. shares were up a few cents to close at $42.79. accenture also posted a beat on the top and bottom line. that came despite the negative impact of a strong dollar. the consulting firm also hiked its dividend by 8% and added $5 billion to its stock buyback program. shares fell a fraction to $97.77. a report that transocean, the offshore rig contractor, may be linked to the corruption probe of petrobras weighed on those shares. according to bloomberg, a former executive at the brazilian state-run oil firm, testified that he received payments from someone claiming to work for transocean, that in xhch for a contract. shares tumbled almost 5% to 13.01. and the chip maker marvel technology said it would cut jobs in its mobile platforming business. the move will result in a nearly 20% reduction in its global workforce of about 7,000. shares popped initially in after

hours trading. before the close the stock was up 1k36% to 9.02. the most powerful and influential young business people. you can find them in the latest issue of "fortune" magazine. and the just released 40 under 40 list. topping the list this year is adam newman, co-founder and ceo of wework, a provider of shared -- what i ahandsome fellow he is there. he's joined by many other young professionals, some names you'll recognize, others you might not. and here with the highlights is susie gerub, senior continental at "fortune" and a contributor to "nightly business report." i know alfred e. newman. i don't know adam newman at all. >> you should. >> where's zuckerberg? where's page and -- >> so many years mark zuckerberg was on that list and larry page of google. so "fortune" decided let's come up 100% of new names and they did. a lot of the names you don't know. the companies you do know. besides wework which is a temporary work space company. in the top three tesla, the top executive of tesla.

not musk. j.r. starbol. that guy you stumble on the name. and nird place three ride-sharing companies, uber, lyft, and its equivalent in china. so different names. but you know what the unifying theme here is. just leek you saw on the cover of the magazine. big bet. these are entrepreneurs that are making big bets. >> all in. >> all in, no limits. and let's not forget, they're all under 40 years old. >> they are. >> i hate them. just kidding. >> a lot of times technology dominates these types of lists. it's a much more eclectic list. >> sue, usually when we think of innovators, we think of technology companies and entrepreneurs but actually there are some rising stars on this list who work at gm, jpmorgan, goldman sachs, things like that. but also they're rising stars in auto companies. fitness companies like soul cycle.

there's a company that you featured in "bright ideas," debbie sterling of goldie blox, the toymaker that makes toys for girls. the comedian john oliver of that hbo program that's very successful, "last week tonight." so it's a real broad spectrum. >> and taylor swift. >> yes. again, she -- >> she was on the most powerful women. >> she has really made an impact in the music industry and taking on spotify and apple to change their pay model. she's more than an entertainer. >> she's a wonderful businesswoman. >> a disruptor. and she's 25. she's the youngest person on the list. >> wealthiest is? >> wonderful. >> the list is not based on money, tyler. but probably ryan graves, who is with uber. and he's worth i think $1 billion. he's under 40 years old. you're going to hate him too. and also the founder of fitbit. the company went public recently and his shares are worth something like 700 million.

>> good for him. >> somebody has to do it. >> extraordinary people. >> "fortune's" susie gerub and an "nbr" contributor. good to see you. >> nice to see you guys. >> coming up, apple's top competitor is setting up shop in apple's own back yard. that story next. it's going to be friday. here's what to watch tomorrow. the final reading of second quarter gross domestic product is out. apple's new iphone 6s and 6s plus will go on sale. and a read on the health of the consumer with a consumer sentiment report. and that is what to watch on friday. and samsung expanding its

footprint in silicon valley, opening a new 300 million state-of-the-art building and it's not too far from the headquarters of its biggest rival in phones, apple. josh lipton takes us on a tour of samsung's new digs. >> reporter: it's a 1.1 million-square-foot corporate campus. welcome to samsung's new north american headquarters in san jose, california. the 10-story, $300 million facility is the latest in a tech building boom that includes facebook's state-of-the-art headquarters and apple's new campus, which is under construction. samsung hopes to expand its footprint as part of a push to build a bigger presence in silicon valley and get closer to its customers. the facility will house the components division of samsung electronics plus sales and marketing. >> the pace of innovation is

growing at this incredible rate, and if you look at what consumers are craving and what they're demanding they want to have the best, the greatest, the latest. and it's moving at such a fast pace. so this is a perfect time for us to reinvest even deeper right here in silicon valley. >> reporter: the expansion comes at a critical time for samsung. while the tech titan remains the leader with more than 20% of the global smartphone market, its share has been slipping. it faces fierce competition from rivals like apple and chinese vendors. and the company's operating profits have declined year over year for seven straight quarters. the bet now is this new campus can help attract top nanlt silicon valley. amenities include the so-called chill zone complete with napping pods and pool tables. a gym with panoramic views. and of course it wouldn't be a tech campus without free food. samsung does face real challenges.

the stock is down some 15% so far this year. but the korean giant is betting that this new campus and a big footprint here in silicon valley can reverse that trend and win back investors. for "nightly business report" i'm josh lipton in san jose, california. >> and that does it for "nightly business report." eye sue herera. thanks for joining puss. >> and thanks from me as well. i'm tyler mathisen. we hope to see you right back here tomorrow night.

woman: it kind of was, like, the bang that set off the night. man: that is the funkiest restaurant. thomas: the honey walnut prawns will make your insides smile. woman #2: more tortillas, please! man #2: what is comfort food if it isn't gluten and grease? man #3: i love crème brûlée. woman #3: the octopus should have been, like, quadrapus, because it was really small. sbrocco: and you know that when you split something, all the calories evaporate, and then there's none. whalen: that's right.