this is "nightly business report" with tyler mathisen and sue herera. >> in lock step. stocks rise and fall with oil's every move. what it will take to break the tightest correlation in years. and energy industry first. with all the turmoil, the sector did something today it's never done before. and apple's ceo speaks for the first time since the court order was handed down and offering a vigorous defense in his fight with the fbi over privacy. all that and more tonight on "nightly business report" for wednesday, february 24th. >> good evening, everyone. welcome. it was a day like many we've seen this year. oil started lower. so did stocks. oil reversed course. stocks followed.

today, the move was sharp. domestic crude went from a loss of nearly 4%, to a slight gain. the reason for the turn, a smaller than expected build in crude inventories last week and strong demand for gasoline. and by the closing bell, the dow jones industrial average gained 53 points to 16,484. it had been down more than 26 0 points. the nasdaq rose 39. the s&p 500 added 8. as brian sullivan reports from the energy summit in houston, industry executives are navigating their way through what may be a new normal. >> reporter: if you want to understand the mood of the oil and gas business right now, investor charlie lakam sums it up this way. >> this is unquestionably, i think, one of the most, you know, devastating periods in the industry. this will be the first time since the mid 1980s where you've had 2 successive declines in most commodity prices as well as

activity. >> that pretty much sums it up, as the mood in major oil and gas conference here in houston remains tough, the reality of lower for longer oil prices sets in. but ceos aren't paid to complain. they're paid to manage through difficult situations. and the ceo of pioneer natural resources says the industry is going to use this time to try to get smarter. >> industry always does best in the downturns. we draw better prospects. we have our best people working on them. we cut expenses. service costs are down 35%, 40%. and eventually we all know the oil price is going to go back up. that's when the best time to be drilling is during a downturn. so you get your best return on equity. you get your best return. >> that may be cold comfort, though, for many investors who lost money invest in oil and gas companies recently. for those investors, there may be good news on the horizon. longtime former ceo of bp, lord

john brown surprised us by saying this. >> during the long downturn of oil prices, the returns on capital were higher for the large companies than during the boom years. >> and that's the view we haven't heard before. that as painful as the past year has been for oil and gas companies and their investors, the industry might come out of this a little bit smarter and a little more profitable. for "nightly business report" in houston, texas, i'm brian sullivan. the once booming oil business in deep financial trouble now and fallout from low oil prices being felt, which energy companies will likely survive and who will not in a potential wave of consolidation? maybe even bankruptcies. the ceo of pioneer resources doesn't see major oil companies buying up distressed companied just yet. >> majors don't want to buy these companies that are distressed because their debt, they got to pay 101, the debt will be put to them and they got to pay top dollar for the debt.

>> joining us to talk about the oil and stock market, founding partner with again capital and kenny, director of o'neal securities. gentle he gentlemen, welcome to both of you. john, let me start with you. you heard the ceo of pioneer. he was broadcasting the probability at a certain point in time of major, a large number of bankruptcies in the oil business. how many of today's players do you think are likely to go into distress maybe even bankruptcy within the next year to two? >> well, i'm going to piggyback on a report from deloitte, said 75% of the companies could go -- distressed -- yeah, 75%, bankruptcy, restructuring of debt at the least, or that winds up at the worst. >> are they at that point yet or is there an oil price at which the pain becomes too great to endure and their debt then

becomes unmanageable? >> if i could use a football analogy, we're in the red zone, okay, and we're about to go over the goal line here for that actual pain play. no doubt about it. >> let me go to kenny and find out when he agrees with that because there are some, kenny, who think maybe we're starting to form a little bit of a base in oil and then there are others like john who thinks we're going lower. where do you stand on that? >> i actually think that oil is trying to build a base right in here. that being said, that doesn't mean you're not going to have these bankruptcies because, listen, a lot of companies can't operate at this level. he's absolutely right. you're getting to that point. that's going to be the silver lining. once they start to restrekture, once they go into bankruptcy, that's going to be the company for bigger companies. one way or the other, it feels to me right in between 28, 32, oil is trying to build a base right in here. i think it's going to end up doing that. >> john, i think we can guess who some of the buyers might be at that point of distress. they'll be the big majors, the exxonmobils, maybe some of the

chinese oil companies, maybe the gentleman's pioneer company might be one of them. who will the sellers be? who will be the -- who will be the road kill in this? >> well, i think the road kill, for sure, first of all, the rich are going to get richer as a result of this. the family of companies you just enumerated, for sure, but companies like chesapeake, unfortunately, i think, is among the road kill. goodrich petroleum, lin energy are names to look out for. insellers, i could have put these in the road kill or seller tragedy. hess is going to be one of those in my view as well as newfield exploration. i think bp becomes the supermajor that gets bought up or merged in some way. >> whoa. go ahead. >> before i tgo to kenny and as about the correlations in the markets do you stand by your projectionou made on "nightly business report" we may contest 18? >> 100%. we're definitely going there.

this has been a prelude, the saudi stance this week. you're starting to see the refineries go to maintenance, operating below 85% of capacity. oil is going to back up big-time in the system here. >> kenny, first of all comment on that. what does that mean for stocks because they've been so correlated to the price of oil? >> well, listen, analysts, investment banks married this story, supposed weakness in oil to the global economy, to global growth. wh that mean for global stock markets and u.s. stock markets? in fact, i think the problem is not lack of demand. i think it's huge oversupply and the saudis have said it. listen, they're willing to sell oil at next to nothing as long as they wipe everybody else out. listen, if oil goes to $18 a barrel, it's going to get really tough. i'm not sure that i'm in that camp, but i do think that, you know, the saudis are not going to put up with it unless people start -- unless some of these countries start to freeze or pull back on production, then they'll just keep producing until they wipe everybody out. at that point, then, i think,

you know, that is when the market will disconnect. >> so, kenny, what i'm hearing you say is there's a narrative that has been woven by the investment banks, by the media, that oil and stocks are joined at the hip. >> that's right. >> at some point, something breaks that narrative, right? >> and so i think what breaks it i think is when you find oil stabilizing. i tend to be i guess more optimistic. i think it's going to stabilize, in it does, the macrodata gets better, you'll see the natural separation between how the market is operating versus how oil is operating. right now they're so connected because they've married the story so much that everybody watches every little tick, whatever oil does, oh my god, what's the stocks going to do? it's ridiculous. >> left hand gestures go to kenny with o'neal. john. again, appreciate it always. >> thanks. all right. john mentioned chesapeake. well, oil and natural gas producer chesapeake energy lost more than $14 billion last year

on the downturn in commodity prices. the number two u.s. natural gas producer more than halved its annual capital budget and said it would sell more assets this year to help pay off debt. chesapeake also warned that production could fall by as much as 5% this year because of those asset sales. but those cash-conserving steps eased investors' concerns a bit and the stock actually rallied more than 20%. sue, the shale gas revolution created a lot of supply and changed the global gas market as we know it. there's been a big push to build the infrastructure so that excess can be exported which could benefit the economy and the labor market. getting it from here to there and converting it into liquified form to transport it more efficiently has been a challenge until now. jackie deangeles reports on the energy market milestone set today in cameron, louisiana. >> reporter: one of the advantages of fracking, unlocking more natural gas than

we know what to do with here in the united states. and now for the first time in history, cheniere energy exporting the first shipment of commercial lng out of the lower 48 u.s. states. >> it's a very important event for cheniere. something we've been waiting for, obviously been under construction for a number of years. our investors are obviously very excited to see the first cargo, first commissioning cargo go out. >> reporter: this ship will carry 3.6 trillion btu of liquid natural gas to brazil. south america is a big market for u.s. natural gas. so is europe and also the far east. not only is this a massive undertaking for the company, but a groundbreaking initiative for the industry. a shift from building import terminals in the past when it was believed that we would need product, to the shale boom now where we've unlocked product and need export terminals to move it out. >> we're really changing how the market looks. there will be a more liquid market going forward in lng

because we don't have destination clauses. this lng could be traded or taken anywhere in the world. >> reporter: one of the concerns when exporting commodities is what it will do to prices at home. cheniere said studies have shown natural gas is so great over the next 20 years prices should not be impacted much. cheni chen cheniere is two years ahead of the company. first mover advantage in the space is likely to position it well as the energy revolution fuels forward. for "nightly business report," i'm jackie deangeles in cameron, louisiana. the federal reserve's vice chair stanley fisher said the decline in oil and commodity prices suggests that inflation will remain lower for longer than previously expected and as low oil prices weigh on overseas economies, fisher says it is too early to tell whether the global volatility will impact the u.s. >> if the recent financial market developments lead to

sustained tightening of financial conditions, they could signal a slowing in the global economy that could effect growth and inflation in the united states. but we have seen similar periods of volatility in recent years, including in the second half of 2011, that has left very little visible imprint on the economy and it's still early to judge the ramifications of the increased market volatility. >> his colleague, jeffrey lacquer, the president of the richmond fed, says he sees no evidence of a recession on the horizon and the case can be made for raising interest rates further. the central bank next meets in three weeks. still ahead, madison vallywood. the national security project that silicon valley, hollywood, and the justice department are working on.

apple ceo tim cook in his first interview since the court order came down last week to used by one ofne the san bernardino shooters said complying with the order would be bad for america. in an interview with abc news, cook said it would set a legal precedent that would offend many americans. >> i think safety of the public is incredibly important. safety of our kids. safety of our families is very important. the protection of people's data is incredibly important. and so the tradeoff here is we know that doing this could expose people to incredible vulnerabilities. this is not something that we would create. >> in your quiet moments, do you have any concern that you might

be able prevent a terrorist attack by breaking into that phone? >> david, some things are hard and some things are right and some things are both. this is one of those things. >> apple has until friday to respond to the court order which it says it will fight. weakness in printers and pc sales pressured hp's results. the company met wall street expectations of 36 cents a share in the first quarter. revenue fell about 12%, though it came in just slightly better than estimates. the company did reaffirm guidance for the current year sending shares slightly higher initially in after-hours trading. but given the softness in pc and printer demand, why invest in an oldtime business? josh lipton outlines the reasons for and against. >> reporter: hp ink is cheap and boasts a 5% dividend yield. that's the good news according to analysts. the challenge, the shrinking pc market. pcs are about 60% of the

company's revenues and that's a market that continues to make headlines for all the wrong reasons. research firm idc says pc shipments dropped nearly 11% last year, that was the worst year over year decline in history as the pc market remains pressured by competition from mobile phones and tablets. in addition, printing contributes 40% of the company's sales and about 75% of its profits. that's a market that's also declining. >> well, there's less and less consumers buying ink jet printers these days as consumers kind of continue to migrate toward mobile devices and rely, i'd say,less so on printers in the households. >> despite cheethese challengesf the people rank the comeny a buy. the company's commitment to capital return and a bet that the pressures in the pc and printer markets will moderate.

n aging pc got infrastructure, you see just better comparables on a year-over-year basis following the magnified declines we've seen in recent years. i think some of the headwinds we've seen on this side over the last 12 months that will start to dissipate as we head into the second half of the year. >> zeno highlights the risk to his calm including more competition from rivals such as lenovo and dell. for now, though, he ranks hp ink a buy. for "nightly business report," i'm josh lipton in san francisco. target's results reaffirm its turnaround that it is taking hold. the retailer's quarter sales topped analysts and it expects its full-year prost fit to be better than expected. that's pretty good and sent shares 4% higher today. jane wells' read on the consumer might be right in the bull's-eye. >> reporter: consumer confidence may be down.

the stock market is volatile and retail giant walmart pretty much expects no growth this year. but people are still buying stuff. and some retailers are doing a better job of figuring out what stuff at what price. >> we think the middle income consumer and the lower income consumer are in a slightly better place given lower gas prices, lower unemployment, as well as rising minimum wage. >> reporter: over the holiday target saw sales grow nearly 2% at stores which have been opened at least a year. online sales accounted for most of that growth. rocketing up 34% from last holiday. but free shipping and steep discounts brought in sales and profit figures below wall street expectations. and the ceo told analysts that while the strategy helped target take business from competitors, how low can prices go? >> we're always stepping back and analyzing promotional effectiveness, looking back at our playbook and as we plan for next year, we'll continue to enhance and refine and make sure that we have very broad, very simple, and very effective

offers that continue to drive traffic and promptly grow our sales. >> reporter: then there's the earnings report from tjx which owns chance like t.j.maxx and marshalls. unlike target, tjx has very little online business. the vast majority of sales come from people going into the stores. and they did just that over the holiday. traffic was up so much that even though individual customers spent less on average, total sales and profits handily beat expectations. >> people really love the inventory at tjx, when you come to the store you're seeing something new, fresh and different every time. >> reporter: tjx gave earnings guidance for this year which was very conservative, lower than what wall street expected and blamed a lot on higher wages. meanwhile, target's forecast for this year was better than estimates and said low gas prices are, quote, always good. both companies think they have the consumer figured out, at least mostly. as target's cfo said, the consumer is consistently inconsistent. for "nightly business report,"

jane wells, los angeles. well, a warm start to the winter helped sales at lowe's. that's where we begin tonight's market focus. revenue was better than expected in the home improvement company's later quarter as consumers purchased more outdoor items. much like rival home depot lowe's was helped by customer spending on renovations and profits fell in line with analyst expectations and the company issued an upbeat outlook for this year saying it expects revenue to rise 6%. shares up 1% to 6862. missouri court ordered johnson & johnson to pay $72 million in damages to the family of a deceased woman who sued the company after alleging baby powder with talc caused her ovarian cancer. a johnson & johnson spokeswoman says the company stands by its belief that talc is safe to use in products and j & j will be evaluating its legal options. despite the news shares were up 1% to 10496.

honeywell is looking for a buyer for its building solutions business. the deal could be worth between $3 billion and $4 billion. the news comes after honeywell said yesterday it held talks with united technologies over the past year regarding a potential merger. shares of honeywell fell fractionally to 10330. shares of avis fell the most in more than seven years after last night's earnings missed estimates on both the top and bottom lines in the latest quarter. the car rental company also gave a downbeat outlook for the year citing expected impact from currency ranks investments intended to better the business shares crushed down more than 26%. that's more than a dented fender. at 2204. the cloud computing company sales force beat the street's revenue estimates. it was in line with profit targets. the company said it expects earnings for this year to top expectations and what happened? shares popped initially in after-hours trading but the company did close the regular session down more than a half percent at 6252.

hollywood and silicon valley are signing up to help the white house fight isis. together they want to develop strategies to beat back isis messaging online and in its media. it's being called the madison valleywood project. eamon javers is following that story from washington. good to see you, eamon. who was at the justice department today? >> reporter: yeah, hi, sue. that nickname they came up for this project madison valleywood, madison avenue, silicon executives at the department of justice meeting for three hours to go over strategies to combat isis recruiting on the internet and also in the media generally. the idea is they're going to come up with brainstorms to push back on what isis has been doing. already we've seen companies like twitter cracking down on isis accounts. earlier this month twitter eliminated 125,000 accounts on that service they said were linked to isis, sue. >> how long have they been working on this? >> they've been working on this for a few months. earlier in february we saw

secretary of state john kerry go to hollywood and meet with top studio executives out there in a one-on-one session around the table again brainstorming ideas. the united states is very good at media. very good at technology. but for some reason isis has been better at social media than the united states in terms of its recruiting and getting its message out. this is an effort to try to turn those tables. >> all right, eamon, thank you very much. eamon javers in washington. coming up, as the ranks of the gig economy grow, there's one benefits company that many are turning to. more people are entering the so-called gig economy. recent study by the jpmorgan

chase institute estimates more than 10 million americans earned income through web-based companies like uber and air b&b. as part of the economy grows so does the need for access to benefits. as kate rogers reports, there's one company many are turning to when it comes to health care coverage. >> reporter: the battle over better working protections in the sharing economy space is as hot as ever. uber is facing a class-action lawsuit over the employment status of its drivers which are currently listed as independent contractors. rival startup lyft recently settled a similar suit with several drivers. while its drivers weren't reclassified as a result, better protections were put in place. but there's one company that uber and more are turning to as these developments unfold. stride health. the benefits platform launched in 2013 acts as a modern day insurance broker helping individuals find the right health insurance plans for their profile with a personal forecast via a proprietary algorithm.

individuals not the startups cover the cost of benefits. >> we also look at quality and convenience and access to care so we make sure you can keep using the doctors that you love and you want to keep, and we've got a team that supports you all year round. so if you ever have an issue you need to resolve with your insurance company, we take care of that on your behalf. >> reporter: the company raised more than $50 million from investors including the mayo clinic and makes money by taking a commission from insurers on the plans, itself. stride health is free for individuals and available in all 50 states with more than 230 insurance carriers on its platform including the big five. aetna, united health. cigna, humana, and anthem. competitors include ehealth.com and even healthcare.gov. the sharing economy which has grown in popularity due in part to an uneven recovery post-recession, allows americans to work part time as freelancers, connecting them with available jobs. task grab it was among the first startups to partner with stride

for its taskers who complete jobs from hanging televisions to cleaning homes and food shopping on demand. their taskers are also listed as independent contractors. >> the number-one thing our taskers want is flexibility. they want to work part time. they want to use task grab it as a way to supplement their income and the current model of independent contractor is the model that really supports that. we just want to add to it. we want to enhance it. we want to offer training. we want to offer benefits. we want to offer ways for them to increase and grow their skills. >> reporter: as the debate about better working protections rages on, it seems startups and workers can agree on the importance of flexibility and benefits. it's just a matter of who foots the bill for the latter. for "nightly business report," i'm kate rogers. beijing now has more billionaires than new york. the chinese capital added 32 to its ranks last year bringing the total to 100. thanks to a number of new listings on the stock market. new york city has 95

billionaires according to the latest report's latest global rich list. moscow rounded up the top three with 66. and finally tonight, a unit of the google parent company, alphab alphabet, developed a humanlike robot. the video shows the robot opening doors, picking up boxes, and taking a stroll in the woods. it likes the outdoors. it's also resilient. able to get up when knocked down. i've fallen and i can get up. the humanoid robot is called -- let's watch this -- it's called atlas. >> he's a little slow, though. that's okay. that's "nightly business i'm sue herera. thanks for watching. >> thanks from me as well. i'm tyler mathisen. see you tomorrow.

find out how the return of a feared predatort"... is altering a vast wilderness... wirsing: we live in a world where big predators are largely missing. sethi: ...why a movement to save seeds helps safeguard our food supply... and how a photographer captures the wild spirit of a changing landscape. forsberg: everything is connected to everything else. announcer: major funding for "quest" is provided by the national science foundation. sethi: for nearly two centuries, scientists have been assembling collections like this one