this is nightly business report with tyler mathisen and sue herera. stocks clobbered. new threats from north korea send a chill down wall street as one of the worst months for stocks gets off to a very rocky start. back to work. congress has a lot to do in a small amount of time. investors watching very closely. what you should focus on and ignore. buying a home? how much will you need to earn to buy a house this fall? those stories and more tonight on nightly business report for tuesday, september 5. good evening. it was a rude welcome back from a long labor day weekend or the summer, if you think of it that way. and stocks got hit, hard. the reason, fresh threats from a

defiant north korea, top north korean diplomat warned his country is ready to send, quote, gift packages to the u.s. comments come just days after that country tested most powerful nuclear bomb yet. marking an escalation with standoff with united states and allies. u.s. ambassador urged the security counsel to impose the strongest possible sanctions to north korea to cut off revenue that lets the nation build ballistic missile and war heads. crisis prompted investors to sell stocks. dow jones dropped 234 to 21753. nasdaq was off about 59. almost 60. s&p 500 pulled back 18. reports tonight from the new york stock exchange. >> reporter: mounting tensions between the united states and north korea royal global markets after north korea conducted most powerful nuclear test to date. gold prices shot up to one year

high in this geo political jitters. in the absence of any major catalyst, earning season winding down, there is a sense of nervousness today. you got a market risen a lot this year. debt ceiling looming overhead and another big hurricane on th traders looking for an excuse to sell. biotech semi conductors, facebook, amazon, apple, and alphabet all lower. federal reserve playbook also remains in question. saw the yield on a ten year treasury note sink to lowest level since november after worried about lower inflation. goldman sax responsible for a quarter of the dows decline. investors will wait to see if the september swoon is here to stay. for nightly business report, new york stock exchange. the situation with north korea is complex. not just for the united states, but for many countries in asia. we have three reports for you

tonight. the first one is from yfrom. the five nations that make up the bricks have wrapped up three day summit with a condemnation of north korea's nuclear tests. in the declaration, brazil, russia, india and south africa jointly said they deplored t ed and hoped it would be resolved through peaceful means. he and russia president vladimir pu to appropriately deal with pyongyang over nuclear test. president xi also met with prime minster modi in hopes of smoothing over month long conflict over a territory in the

himalayas: leadership role in the developing role and own image as a champion of globalization. at the conference, president xi emphasized a need to ward off rising protectionism and embrace multilateral trading systems. also said it was comprised. should tighten economic ties. as a way to usher in what he described as a new golden decade for the bricks. for nightly business report. amid the nuclear tensions questions about a new arms deal between the u.s. and south korea. seoul. trump administration says said that president trump has given a concept yule approval for the deal.

saying that it understand it to be washington expression of support for south korea's national defense, but one saying both countries were able to confirm if the two leaders agreement to throw out the restrictions on south korea's missile payload capabilities as south korea is trying to beef up its national defense in the face of all these missile tests as well as the latest nuclear test by north korea. in the meantime, north korea may be keeping at it as south korean officials say there are signs the regime could be getting ready for another ballistic missile launch. for nightly business report, seoul. tokyo tonight with the reaction to north korea's nuclear test. speaking to reporters today, defense minister said this latest test from north korea was significantly larger than initial japanese government estimates.

upon further review, he said he believed the size of the explosion was 120 kilotons. that's roughly eight times the size of the nuclear bomb that was dropped on hiroshima. considering the size of this explosion, the minister said the japanese government now believed there is a strong possibility this was in fact a hydrogen bomb. we did hear from prime minster shinzo abe today warning of further provocation saying the japanese needed to remain indivi lent and vigilant. suggested the government had begun drawing up plans for evacuating roughly 60,000 japanese citizens over the korean peninsula in case of an all-out war. these are plans the government has been considering since april, amid constant provocation from north korea. would include findingi, ev shelters as well as limiting

travel to the peninsula. for nightly business report, tokyo. from asia to washington where some very thorny issues await lawmakers as they return to srecess. only a small number of working days to get these things done. did start with a fresh rift between the white house and business community. today the justice department said it wanted to end a program that protected people brought to the u.s. illegally as children unless congress steps in within six months. attorney general gave reasons why. >> the effect of this unilateral executive amnesty among other things contributed to a surge of minors at the southern border that yielded terrible humanitarian consequences. it also denied jobs to hundreds of thousands of americans by allowing those same illegal aliens to take those jobs. >> some of the largest companies don't want the so-call daca

program scrapped. they signed a letter calling these people vital to the future of the u.s. economy. according to the center for american progress, the loss of workers would wipe out potentially hundreds of billions of dollars from u.s. domestic product. it would be felt unevenly across the country. california would take the biggest hit of $11 billion followed by texas, illinois, new jersey and florida. the other tshs congress has to resolve includes funding emergency aide for victims of hurricane harvey averting a u.s. debt default and renewing government funding to avoid a shutdown. also the question of funding obamacare cost sharing subsidies and the president has said that he wants members to start working on tax cuts. jeb push pabush partner and it' to have you back. >> thank you. >> last time you were on said it was a question of what congress has to do versus what congress wants to do.

that was before harvey. th thrown a wrench into everything. what now do they have to do. >> it was before harvey. also before this daca announcement. also befor this north korean discussion. so our predictions of a lot of market volatility in september has simply been amplified by these new issues coming out over the last week. now what needs to get done is debt ceiling needs to be raised: we don't want to play around with the borrowings that the united states and wherewithal of the credit rating. in addition to that, you at least have to put forward a continuing resolution at the end of the month to keep funding the government. risk of a government shutdown has narrowed slightly and some of that is because of the ancillary issues. >> do you expect them to get the debt vote through? most of them on capitol hill do expect. we've been at this brink before. >> we have always said the united states will not default on debt.

the question is how are we going to get to that point where we pass the debt ceiling increase. by the funding and so forth with the debt ceiling increase, that obviously will bring some more broader support for that measure. >> will it be one of those situations we've seen in the past where we go up to the 11th hour? >> it wouldn't be washington, d.c. if we didn't go up to the 11th hour. i think quite honestly the harvey funding bill and the financial support for harvey victims, that will accelerate that process. i think we're more lik t to get that vote this weekend. >> all right. jeff, thank y so much. jeff bush, with the washington update. washington lt get done to north korea's missile threat. a lot of important issues for investors like do you process. how and where should you focus your attention and what can you afford to pay a little less attention to. mark is president of the jmp securities. he's here now with us to

discuss. teed up an awful lot of items on the congressional to do list and north korean issue is looming out there. how do i process all of these information that could clear have an impact on my portfolio. >> it's hard. like you just outlined, there are a myriad of things to worry about and things we haven't thought about yet. we had a good year. we took a little breather through august and then the market came back to near record highs. today was i think a reminder there's a lot of issues on the table. i think it's time for investors once again to look at their portfolios. realize what has worked. realize potentially what had higher expectation that maybe won't work quite as much as people thought. take stock and watch the next three or four weeks as we get to the fourth quarter. those reports as you know from the third quarter won't be until october. plenty of activity for investors to reassess. >> what is the bond market telling you. we saw bonds in some parts of

the government curve move to new highs. interest rates dropped dramatically. to me it says people want safety. >> it's a couple of things. i think that people do want safety. i think there's growth that will be tempered by the storm and potentially irma as well. the potential that job creation albeit strong will not accelerate. quite the safety that you mentioned. a person said the ten year is not going to 3% any time soon may not be for the next several years. bottom market is selling to date. not going to happen. >> closer to 2% than 3%. >> exactly. >> you plengsed you wementioned looking at trades or positions that had worked some, hadn't. maybe you don't want to walk away. enumerate what those are, the ones that seem solid and the ones that seem less solid.

>> what we see through the august time frame is you see in some of the getting back to terms we frankly heard a lot in the summer. there's going to be a time in the next three or four weeks report those stocks are under pressure. i think you want to assess what kind of quarters they're going have. second quarter for each company. >> amazon, netflix, google. >> you look at what kind of pricing power facebook has enjoyed. you want to pay attention there. activity and you also see some production get improvement in the last couple of months. you want to pay attention there. >> also, if the average investors balance that with a move into utilities or adding a little bit of gold to the portfolio. >> i think investors have to decide that placing all your bets in one basket is never a good idea. i think those who thought rates are going higher and you've got to be an only tech stocks and got to stay away from banks cert

h et cetera has never been a good idea. where the market has worked, i think you want to stay there. >> mark, appreciate it. still ahead, returning home, but how much of the damage is covered by insurance? florida's governor has declared a statewide emergency. the storm is now a powerful category five and could potentially make land fall later this week. though it's direct path is not

yet entirely clear. irma's impact is already being felt in the stock market. insurers fell sharply today. hci group posted biggest ever one day percentage drop. heritage at record lows. universal insurance off 14%. united insurance was off 7%. it wasn't just the florida insurers, the broader sector was hit today as well. meantime in houston, homeowners and business owners assess the damage there and continue to check their insurance policies in the aftermath of hurricane harvey. morgan is on the ground. >> reporter: people are coming home to loss. some of it covered by insurance, but most not. she's lived in her home for 25 years. accountant by profession, she was forced to leave when the floodwaters came. >> i got out around 3:00.

i wanted to go to the bathroom. when i was going downstairs, i see even my refrigerator was flooding. i told my husband we have water in the house. i cried. >> does not have flood insurance. because her home is not located in a high risk flood zone. it wasn't mandatory and she didn't think she needed it. >> i'm trying to get fema to help me a little bit. >> also lost four cars. after the deductible will be covered by farmers insurance. just one example of the more than 30,000 claims, a third of them auto related. farmers has received so far. auto losses alone are expected to be in the billions of dollars. paid out by insurers like state farm, allstate, progressive and farmers. >> houstons is a community that relies a great deal on vehicles. we want to make sure that our customers are able to start the process of identifying and they as possible. >> here in the houston suburb of baytown, the royal purple

raceway has been temporarily converted to a giant salvage yard. thousands of cars, trucks, boats and construction equipment damaged by harvey is being assessed by insurance adjusts for companies like state farm and farmers. it's too early to know the extent of the damage to homes and businesses. analysts estimate a half million vehicles or more could be damaged and not just personal ones. clear lake infinity has water flood dozens of cars. >> us as a dealership lost $8 million in inventory. trying to recover from that. >> auto insurance policies cover flood damage, home insurance plans generally do not. for some homeowners, it's not over yet. >> here at the reservoir, army corp cont to flood. it's released from this gate.

they said they will continue to release water until mid september. >> our office is right behind me. we have about two foot of water in the office. we put that water in there ourselves. >> they said it's necessary to flood the neighborhood to keep the city's neighborhoods from overflowing and infrastructure from getting damaged. across town as ruined furniture and debris stacks up and awaiting removal, getting to work. contractors stripped the first floor and busy making repairs. if she can wrangle the money, it will be over in a month. >> we already have the sheetrock. already ahead of the game. >> nightly business re morgan in houston. shares of the cruise line also haed add tough day. royal caribbean and carnival had to change plans when hurricane harvey shutdown a port in houston. now hurricane irma is causing additional disruptions and rerouting of ships out of that

path. a major pipeline carrying gasoline has resumed operations. it had been knocked by hurricane harvey. the colonial pipeline system is the largest in the nation. shutdown with a number of refineries caused gasoline prices to spike. according to triple a, average national price of gasoline was up to $2.64. up nearly 20 cents from late last week. >> houston busyman has agreed to buy the houston rockets for a reported record amount. tilman called the purchase of his hometown team a dream come true. while terms of the deal were not disclosed, the price tag is reported at more than $2 billion. nba record. the transaction is pending and requires of the league sport of governors. the purchase sent shares of msg higher. msg owns the knicks. the team is msg's biggest asettasset.

united technologies. industrial said it was buying aircraft maker rockwell collins for $30 billion including debt. under the deal the company said they will combine aerospace unit into a new business called collins aerospace systems. ceo of united said the key is increasing customer value. >> 30,000 new aircrafts are going to be delivered in the next 15 years. aerospace is growing dramatically. up 5% every year. growth is coming in the aerospace business. with that growth comes pressure from customers to take cost out. continue to innovate. having scale in the aerospace business is absolutely essential. if you're going to deliver the value to the customers that they expect. >> shares of united technologies down 5% at 111.21. rockwell collins shares up slightly. finishing at $131 even. media company trunk said it was

buying the tabloid newspaper the new york daily news in effort to grow digital audience. owner of the chicago try bind a -- tribune and paid $1. resume about $60 million of liabilities. fede invalidated 11 patents on a respiratory drug. the ruling was on a lawsuit that the drug maker filed, which is attempting to sell a generic version of the treatment. they said they plan to appeal the decision. shares of that company off 12% to 36.12. biotech firm said its drug for treating a rare lung disorder performed well during a study. company plans to seek accelerated approval for the food and drug administration. shares s rocketed 120% on the news to 26.99.

after the bell the tech giant hewlett-packard reported higher results. encouraged by the progress its made, still work to be done. ended the regular session down nearly 2% to 14.04. half the bell, despite growing revenue in the latest quarter, gaming and entertainment company dave and busters repord weaker than expected sales and cut same store sales guidance for the year. profit was better than expected, but not enough to lift the stock. shares fell in the extended session, but finished the y up fractionally to 58.14. coming up, the salary you need to earn to buy a home in some of the country's largest cities tod

e to ok at conditions around travel to north dakota to speak about tax reform and with interest rate sitting at historic lows, find out how home buyers are applying for a mortgage. the maker of the mobile phone game, angry birds is planning an initial public offering. finland's entertainment saw rapid growth after the launch of the original angry birds way back in 2009. the company licensed the brand for use on toys and clothing. the business then slowed, but a movie release last year helped revive the brand. expects sales and profits to increase significantly this year. lego plans to cut 1400 jobs

following first annual revenue decline in 13 years. layoffs are 8% of toy makers work force. day nic it's part of a strategy simplify operations and turn around sales in parts of u.s. and europe. labor day weekend marks the start of fall buying market. home buyers tend to be more active this time of year. this fall may be different. >> reporter: home rising so fast today nearly half of the nation's 50 largest housing markets are now considered overvalued. that is home prices are at least 10% higher than the long-term sustainable level with current income. home prices annually jump 6.7 pn% in july. due to historic lack of homes for sale. given the sky high prices for shoppers starting out in the fall market, sobering stats on what salary you need to buy a home. mid summer, you needed just over $56,000 to buy the median priced

home. that's up 10% from the start of the year. hsh a mortgage website calculated that based on principle, interest, insurance and taxes using a 30 year fixed rate mortgage at 4%. the priciest market, no surprise, san jose california where you need $221,000 to buy the median priced home. san francisco is not far behind. compare that to new york city where you need just half of that. 99,000 in annual salary to buy the median priced home. boston, seattle, d.c. not far behind all in the 90,000. on the cheaper side, cleveland the most affordable housing market where you need just over $36,000 in salary and also charlotte, minneapolis and dallas are pretty affordable. in both charlotte and dallas, that necessary salary is up over 10% compared to a year ago. the numbers will only increase and affordability worsen until

there are more homes for sale. just last week the chief economist said given soaring demand and slow new construction, more supply would take a miracle. more nightly business report. before we go, another look at the selloff on wall street today. the dow dropped 234 points. the nasdaq off 59 and s&p 500 pulled back by 18. >> it's so good to have you back. >> nice to be back after a little summer vacation. kids are back in school and everything. >> i know. all is right. that's it for us tonight. >> that's it for me as well. have a great evening. we'll see i'm tyler mathisen.

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