this is "nightly business report" with tyler mathisen and sue herera. super sized. all-day breakfast powers mcdonald's profits past expectations for the third straight quarter. the company's turnaround has taken hold but can it be sustained? signpost a deluge of big-name earnings this week led to some wins but a lot of disappointment too. what the profit picture says about the future of stock prices. and office space. the fast-growing big-money craze that hopes to keep you fit even at your desk. all this and more tonight on "nightly business report" for friday good even asking welcome. it was a big week for earnings and a big week for head-scratching.

there were size an beats and lots of whiffs. even when a company did well as we saw with google's parent alphabet, sometimes the mark punished it because the company didn't do well enough. no matter how you cut it, it is all about the earnings this time of year. and today was no different. so let's start with the dow component mcdonald's. the fast food chain beat estimates for the third time in a row, posted its first quarterly same-store sales rise in two years. the driver here, you guessed it, all-day breakfast. got to love that. shares were up strongly early but then they faded into the close. susan lee has more. >> reporter: mcdonald's is proving that less is more. its latest quarterly report card beat market expectations of profit, sales and revenue. what's working for the company? well, a simpler menu with fewer items for customers to choose from, offerings of all-day breakfast items like egg mcmuffins and hotcakes, 2 for

$5, two of their main menu items for $5, helping boost same-source sales. all that helped drive profit in the first three months of the year to come in way ahead of estimates. we think all-day breakfast is a gift that keeping on giving into' sfen, the company trying to take this momentum they got from all-day breakfast and get other thins in play, for instance, quality upgrades, the pick 2 platform, technology, loyalty, to extend this rally. >> reporter: new thinses mcdonald's is trying, all you can eat fries in some u.s. locations. also different sizings in big macs where you can get bigger big grabs called grand macs or ones called mac juniors. this is a turnaround plan for the golden arches that started about a year ago after years of slumping sales and losing customers. its recovery efforts under mcdonald's' relatively new ceo steve easterbrook who stepped into the top job in 2015.

internationally mcdonald's is being helped by improvements in key markets. china was a standout, sales increasing more than 7% after problems with suppliers in the country. mcdonald's said it wants to make china its second-largest market in the world after the united states. the japan business finally turning in a profit after a rough couple of years, losing money. at the end of march mcdonald's had more than 36,000 stores around the world and it aims to open 500 more this year. they're also returning a lot of money back to shareholders. $30 billion in the last three years. but even with the stellar earnings results mcdonald's executives say this is only the beginning in a turnaround plan to get back to the peak days of profitability for the company. three companies that are also used as a proxy for the economy posted their latest results today. general electric, caterpillar, and honeywell. at ge, which is in the process of shedding assets from its ge

capital unit, adjusted profit etched out expectations but there was concern its organic revenue fell. caterpillar missed on the bottom line but its revenue beat forecasts. honeywell results were better than expected. all those shares of all three finished to the downside. but as bob a. >> sapisani tells us, it might t be the results that matter right now. might be the tone. >> reporter: three big industrials reported today and there's a subtle but important change in the tone from cautious to mildly upbeat. reaffirmed ctric their full year guidance. ceo jeff immelt blunt in calling the oil and gas business challenging but said the aviation business was seeing sustained strength and health care was rebounding and we were seeing improvements in our business in china overall concluding there's plenty of business out there to achieve our goals. that's more positive than last quarter. even companies that have had a tough time are modestly more

optimistic. caterpillar, it was not a good quarter, sales declines in all key businesses including construction and oil and gas, mining and rail. but. ceo overhellman came on our air and said, overall i think we're close to the bottom. for a company that has seen declining revenues since 2012, saying we are close to a bottom, that's a change in taupe. honeywell, earnings up 9% year over year, that's good. officials noted growth in the key aerospace category had accelerated in the current quarter. why were the stocks do slightly today? because the stocks have had a nice rally since the february bottom and they're expensive right now. what does all this mean for the markets? there's a change in tone, however modest, and that's good sign for earnings in the second half of the year and it credits the chances that we can end this earnings recession, this four consecutive quarterser of earnis decline in the s&p 500. for "nightly business report" i'm bob pisani at the new york

stock exchange. what are the earnings telling us? our guest concedes corporate profits have been a very mixed bag but thinks the worst of the earnings slump is passing. karen cavenaugh is senior market strategist with voya investment management. karen, good to have you with us. you say that earnings growth is actually going to be down year over year, but not as bad as the most dire forecast. what's working? >> that's correct. i don't think that we are going to get that negative growth that we were expecting. we still will have negative growth. what's working is that things we were worried about have subsided. the dollar is getting weaker. oil is going up. and the fed is remaining accommodative. that's good news for stocks. in terms of sectors, karen, have there been surprises the financials have been a worry for a lot of people certainly. the big banks. have there been surprises in different sectors that you've been impressed with? >> well, energy financials, not

good. however, the consumer discretionary sector is holding up very well and that's because we have a strong consumer. >> what do you see going into the next quarter, next two quarters here? why do you say you think we're turning a corner here, that the worst is going to be behind us? >> because just as i said, we have already assimilated all of those bad things we've been bothering the market the last couple of quarters. that's the strong dollar is hurting revenues overseas. the fact that we were worried about interest rates rising. the fact that oil was so low. those things have kind of subsided. now with an accommodative fed i thinkerings can really turn the corner. and we actually have seen sales growth is not really as bad as we were anticipating and it's been a little bit better than in previous quarters. so that should lead to better enings as we go through the year. >> we've been hearing that the individual investor was kind of scared off because everybody was talking about how bad this earnings season was going to be. given what you've laid out, and indeed if it comes to pass i

would argue that the individual investor who has a longer-term time horizon, who may have been sitting out part of this earnings season, might want to go in and take a look at some beaten-down stocks. >> absolutely. so we see that time and time again, when investors are getting out, that's probably when they should be getting in. at voya we advocate global diversification all the time. >> the market has gone up quite a bit since mid-february. in the face of these profit declines. do you think that the market has gotten ahead of the better earnings or priced in the better earnings that you see coming? >> no, not really. i think that's why we've been a little bit of ranged out. it goes forward, it goes back. right now we're not far from where we ended the year, up a little bit. but i think the mark is getting a little bit more mojo going, more enthusiastic. it hasn't gotten out of control because it's being reined in by the earnings. overall we don't have actual

growth. >> we like the mojo. >> being better than expected isn't actual growth. we will see that as we go through the year. >> let's pray for the mojo. karen cavenaugh with voya investment management. turning to wall street, the dow managed to hang on to the 18,000 mark as many of those earnings weighed on stocks. in particular, microsoft which had its worst day in more than a year. in the end, the dow scratched out a 21-point gain to close at 18,003. the nasdaq fell 39. the s&p 500 barely budged. for the week only the nasdaq finished lower. president obama in london alongside prime minister david cameron urged british voters to stay in the european union. a referendum on whether to leavo the eu takes place on 23 june. the president said it's in britain's best interests to remain in the group it joined more than 40 years ago. >> if right now i've got access to a massive market where i sell

44% of my exports? and now i'm thinking about leaving the organization that gives me access to tha? that's not something i'd probably d >> president obama went on to say if britain left, there would eventually be a trade agreement between the countries but that britain would be at the back of the queue for a deal. here at home, uber will pay $100 million to settle a pair of class action lawsuits in california and massachusetts which will keep its drivers classified as independent contractors, not employees. identifying drivers as employees would have significantly raised its operating expenses. the company also agreed to have arbitration for drivers who have disputes and to communicate drivers' ratings and cause if someone is terminated. uber faces similar suits in several other states. china is the world's largest auto market, one of the largest

for uber. the beijing auto show gets under way and one thing that will be of major interest, self-driving cars. eunice yun takes us for a drive in a driverless car in beijing. >> reporter: with so many first-time drivers in china, being something unusual on the road isn't uncoon. but nothing quite like this. chinese carmakers testing out its new driverless car, the raeton, travel interesting the southwestern city of chongqing to the capital beijing. the 20,000 kilometer or 1,200 mile j 1rney is the latest effort by a chinese company to outmaneuver google and other foreign rivals in self-driving car technology. >> the car can do a lot, lot more. but they're doing research. google's approach need more time. ours, there's a consumer for the

vehicle fast. >> reporter: it's one of the growing number of chinese companies joining the global race to design an autonomous auto. the partner of ford in china has created two models, one for cities and another that becomes self-driving on the highway. for now both cars need a driver as a backup to navigate trickier traffic conditions. >> if the driver want to change lanes, either give a voice command or he can just use a signal. the vehicle will check the surrounding area. >> reporter: on this trip the vehicle switched labors, made three-point turns on their own, and clocked speeds of 120 come tears an hour. exercises to help engineers work out the kinks two of selling cars as early as 2018. the push for self-driving cars is part of a broader state initiative for china to become a leader in i.t.

>> the chinese governments kind of encourage chinese companies to invest more in product development, research. it's good for the company, good for our consumer, good for the country. >> reporter: good for the efforts to develop technology it sees as essential to pulling ahead in the global auto industry. for "nightly business report," i'm eunice yun in beijing. coming up, this week's market monitor thinkrk security is where you need to look if you want some winners for your portfolio. he has three names he'll tell you abou

in what's sure to raise the ire of some in this highly charged election year, records show federal reserve governor leo brainard has reached her personal political contribution limit, $2,700. that has gone to democratic front-runner hillary clinton. the donations are within brainard's rights but it's bound to again raise questions about the fed's independence. eamon javers has been looking into this. >> we had to go back to 1990 to check the records here. in that span of time, we couldn't find a single other fed governor who made a contribution to a presidential candidate while sitting as a fed governor. a lot of them gave money before they joined the fed and after they left, but the tradition has been that while they're a fed governor they don't give to presidential candidates. we did find a couple who gave to lower-level political canceled dates or to state political parties, that sort of thing. this one is raising eyebrows in washington. a lot of people interpreting it

as an effort by brainard to curry favor with the hillary clinton camp and maybe angling for a job in the clinton administration if that happens come next year. >> we know whether see has been a long-time clinton supporter, number one? number two, can you see circumstances under which this becomes a major political controversy that could potentially lead to her resignation? >> i don't think it becomes a major controversy at this point. it's well within her rights as a citizen of the united states. you're entitled to give this campaign contribution, no rules at the fed prohibit it, so she didn't violate anything in doing this. but yes, she has a history with the clinton -- the bill clinton administration. she worked in the obama treasury department. and her husband is a state department official. so there's a clear connection here between brainard and the democratic party and the clintons in particular. but the tradition has been that the fed maintains it's above politics, it's not in that partisan system at all, the fed simply does technocratic fed-type things for nonpartisan

reasons. and this, critics will say, erodes that just a little bit. >> it does come though at a time when the bernanke fed and also this fed, under ms. yellen, has been much more open than fed governing bodies of the past. >> yes, absolutely. in a way this is a victory for transparency. these contributions are in the federal election commission records, they're there for anybody to see. nobody's hiding anything here with this one. so there are those who support brainard's position and say, if she's a democrat, why shouldn't she be a democrat and act like democrats do in washington? so that's the counter argument that, hey, at least nobody's hiding anything in all this. >> thank you, have a great weekend, emoney javers. >> american area lines buying back $2 billion worth of shares. "market focus." the largest u.s. airline by some measures said low fuel prices have helped profits grow but the company pointed out revenue was pressured by competition and

softness in travel to and from latin america. shares of the airline down 4.5% on the day at 38.21. another ipo opened for trading today and it's one of the first tech companies to do so in months. secure works, the cyber security arm of dell, initially hoped to price its shares in the range of $15.50 to $17.50. but it ended up opening at just $14 a share. and after a somewhat volatile day that's exactly where its shares finished, $14 even. the consumer goods maker kimberly clark had a mixed first quarter as the company saw profit rise and revenue fall. the firm also saw sales increasing in china one of its most competitive marks. but price cuts and promotions crimped profits there. u.s. sales were up, shares of the company were down today over 3% to 126.88. auto dealer auto nation saw its profit fall 14% this past quarter as the company said

consumer purchases of new cars has remained flat. storm damage also took a toll on the company's profits as did an increase in pricing incentives. shares of auto nation up 3% for the day to finish at 49.49. comerica feeling the heat from shareholders today as reports emerge that several major shareholders want that bank to consider a sale. that's according to "the wall street journal." the shareholders say the bank has not done enough to produce acceptable returns and that comerica must take action to fix its issues. this comes a few days after comerica released its earnings where it said energy-related loans weighed heavily on the bank's performance. shares of comerica up 3% to 44.02. recent earthquakes in japan have hit home for general motors. that company announcing today that it is temporarily suspending production at four north american plants due to supply chain issues caused by that disaster. the company did note that the shutdown should not have any impact on its full year

production. shares of the automaker down more than 1% to 32.18. and now to our market monitor this week. who likes cyber security stocks? in the current climate he says they're immune to the current cycle. peter anderson, chief investment officer at congress wealth management. how much more than the rate of gdp growth do you think these companies can grow their business? >> well, this is a very, very exciting sector. mainly because we are all kind of fatigued about looking at energy, oil prices, interest rate hikes, the political situation. and when you look at cyber security stocks they seem to be immune from all that. and you can easily or i should say conservatively guess that the growth rate should be at least multiples of gdp, say, three, four, five times. i'm setting that as a fairly conservative guideline. i really do feel much more

optimistic about the industry in general, given the continuous cyber threats we are going to get. and it's only going to look worse and worse. >> it's not going away, certainly. bruise allen hamilton is your first pick for us, why? >> that's kind of a misunderstood company. most people that -- first off, most peopleeo haven't heard of boos allen hamilton, that piques my interest. if you want to play a real smart game against cyber security, especially domestic terrorism, some people would think buying taser or metal detecters. about the booz allen does something different. instead of being a plain old consulting company, which is what most people think of, it actually guards against -- they use big data to try to find the next sleeper cells in the united states. so let me give you an example. edward snow ken worked there. when he released that data it

was actually when he was working at booz allen. that sohould give viewers a sene of what material they're dealing with. also if you're in investor relations with booz allen it's very hard for you to disclose in complete clarity what your work is because 80% of the employees have secret clearances. and most of the businesses have done consulting through national security agency -- >> we want to get your next two picks, sorry to interrupt, but we're running short on time. give us the thumbnail on palo alto and cyber arc, both of which are off their 52-week highs but you see good prospects, very quickly. >> very quickly, they are the total opposite. instead what they're focusing on is anti-hacking provisions. so target, the business target, for instance, all those companies are very, very careful about who is hacking into their systems. this is a great way to play anti-hacking from the outside of the company and also from the

inside. >> palo alto and cyber arc. i should point out you think that any or all of these could be acquisition targets, correct? >> absolutely. mentioned you earlier, tyler about that ipo, we see other large companies very, very interested in getting a toe hold on this businesss this would be an excellent way to do it. >> peter, thank you, peter anderson with congress wealth management. need to work out but can>> get away from work? well, a look at the big money coming into the newest workout. that's coming next.

here what is to watch next week on monday, a snapshot of the housing market when march new home sales are released. wednesday's a big, and i mean big day, the federal reserve's decision on interest rates comes out. most people think the fed will stand pat but the commentary's going to be picked apart for clues as to when rates might rise. thursday will give us our initial read on economic growth in the first quarter. that is what to watch for a busy week ahead. we all know it's hard to find time to exercise. especially when you're cooped up at work all day. and one of the o fastest-growin sectors in fitness is aimed at all of us working 9:00 to 5:00 and more. it's called deskercize and there are billions being invested to keep you fit while you sit. >> reporter: if you're sitting at your desk watching this story, get up. your body is begging for it. and a brand-new industry is banking on it. >> the key is not just to stand

all day or sit all day, it's to be active throughout the day. >> rep because a whole new array of studies are showing prolonged sitting than increase the risk of heart disease, cancer, diabetes, obesity, even death. the fix is so simple and desks are the start. veridesk started three years ago with one model. now it has 25 fitness products it sells in over 100 countries. demand comes from employers and employees alike. >> all of us want to get down health care costs and all ceos are looking to retain or recruit great employees. active office, sit and stand desks, are part of that solution. >> reporter: a solution which is now the fastest-growing sector of the $10 billion office furniture market. >> this healthy office segment can be as much as one-third of that total office segment over to five years. >> reporter: bicycle desks, ball chairs, mushroom chairs, and a couple of chicago entrepreneurs

took it literally one step further. >> when we started working in full-time jobs we realized our activity levels considerably dropped. >> reporter: so she and a fellow university of chicago grad invented cubie, a desk elliptical. >> one of the key benefits they're seeing is it's vetting their mood as well as helping them be more productive. >> reporter: they just got their second round of funding and expect to sell 15,000 units this the year. >> right now our plan is to scale cubie because we see immense potential in the market. right now we're still a young company. >> reporter: the potential has not gone unnoticed by larger companies like herman miller and steel case, which are adding more active workstations to their offerings. >> steel case introduced its first one in 2004. sales for tt particular product has grown five-fold since then. this is no longer just a one-off. it's a product category. >> reporter: because the old desk and chair model simply doesn't sit well anymore. for "nightly business report," i'm diana olick in washington.

finally, crackerjack is ending its 125-year-old tradition of including a toy surprise in every box. it's replacing the toy with stickers they contain digital codes, codes lead to baseball-inspired games that consumers can play on their smartphones. pepsi's frito lay is going to tweak the logo and the packaging for a more contemporary look. no prize in a crackerjack? >> leave the prize! do we always have to be on our phone? >> that's it for "nightly business report" for tonight and this week. see you next week. >> see you preside

gwen: big wins for the front runners had and that front runners. and here at home, a currency makeover in the works. martha: from humble winner. >> this has been an amazing week. gwen: donald trump says he is ready to be more presidential, but is he? >> in the case of line ted -- lying ted cruz. and i love runningg against crooked hillary. martha: his new strategy with an eye toward the presidency. y.and a front runner turning her