>> announcer: this is "nightly business report" with tyler big week. the dow has its best week of the year. but there appear to be geopolitical rumblings beneath the surface. new controversy. facebook and google may have enabled advertisers to direct ads to people with violent and anti-semitic views. as the issues pile up, what does that mean for investors? flat fee. in this competitive housing market brokers are changing traditional models. that could mean big savings for buyers and sellers. those stories and more tonight on "nightly business report" for friday, september 15th. good evening, everyone, and welcome. i'm sue herera. tyler mathisen is off tonight. a record setting week.

the blue chip index recorded its best week of 2017. the s&p 500 broke through 2500 for the first time ever, sending both indexes to all time highs. boeing, the best performing dow stock this year, accounted for nearly half of the gains, after a wall street firm raised its price target on the stock ahead of that company's investor meeting next week. today the dow jones industrial average added 64 points to 22,268. nasdaq rose 18. the s&p 500 was up four. for the week, the dow logged the biggest gain of the three major averages, up more than 2%. late in the day, stocks were unfazed by the united kingdom's decision to raise the terror threat level to critical. prime minister theresa may said armed police and members of the military would be seen on the streets in the coming days, following a bomb explosion in a london subway car this morning, injuring at least 22 rush hour commuters. as of this evening, police are

still looking for the assailant. there are other geopolitical rumblings that investors are watching, namely north korea. president trump and his top national security adviser said there are military options for dealing with that country after it fired a missile over japan last nig. >> there is a military option. it's not what we prefer to do. what we have to do is call on all nations, call on everyone to do everything we can to address this global problem, short of war. >> we have two reports tonight from the region. first, in seoul, is sherry kang. >> reporter: north korea's latest missile that flew overt northern part of japan for the second time in three weeks serves a couple of different purposes for the regime. first, it sends a message to washington that its missile can indeed reach u.s. territory if fired in the right direction.

this particular missile traveled 3700 kilometers. that very well covers the distance between north korea and guam. and two, it defies the latest u.n. security council resolutions and its sanctions. three, it gets to test its missiles. its latest focus seems to be launching its missiles in the normal angle. but in terms of the reaction coming from the relevant countries, it's stayed pretty much the same. south korea conducted its own missile exercise. japan says this is not going to be tolerated. the united states called for direct action from russia and china. china in the meantime says this is between washington and pyongyang. for "nightly business report," sherry kang, seoul. >> as sherry mentioned, washington wants china to play a bigger role in the north korean crisis, complicating an already complicated economic relationship between the world's

first and second largest economies. eunice yoon has more from >> reporter: pressure is mounting on china to do more to rein in north korea, including from u.s. secretary of state rex tillerson. china responded today, saying that beijing shouldn't be the one held responsible. at a regular press briefing, the foreign ministry said china is not at the center of the conflict. china is not a driver of the escalation of tensions. and china does not hold the key to solving the issue. the ministry was reacting to secretary tillerson's statement after north korea's missile test, when he said china and russia must indicate their intolerance for these reckless missile launches by taking direct actions of their own. tillerson had said that the u.s. had pushed for an oil embargo to be included as part of tougher u.n. sanctions but watered down

the demands to get russia and china on board. he said he hoped china would, quote, take it upon themselves to use the very powerful tool of oil supply to persuade north korea to reconsider. china had some suggestions of its own for the u.s. the foreign ministry said today, "we think the relevant parties should take responsibilities for their duties and fulfill their obligations." from china's perspectives, those parties are the u.s. and south korea and north korea. all this week, the chinese state press has been full of commentaries saying that the u.s. and south korea should end their military exercises. beijing has argued that pyongyang needs a reason to join the international community and feel secure giving up its weapons program. china believes these drills are being interpreted as threats. that argument was stressed in the state media again today "the global times," the communist party paper, had a headline reading, "the international community should not panic.

the u.s. and south korea hold the power to change the korean peninsula." i'm eunice yoon for "nightly business report" in beijing. retail sales fell in august as americans spent less at the end of the summer, falling 2%, the biggest decline since march and the second drop in three months. the slower pace of spending reflects the outsize importance of the u.s. auto industry. in august, sales at auto dealerships were off 1.5%. a separate report showed a decline in consumer sentiment due to concerns over the outlook for the national economy. industrial production january.for the first time an increase was expected. some of that drop was due in part to hurricane harvey, which battered oil, gas, and chemical plants along the gulf coast. and a cool summer in the east caused a decline in utility usage. there was some positive news.

a gauge of new york area manufacturing remained near a three-year high in september. in washington, senator orrin hatch doubts that the 15% corporate tax rate sought by h is the chair of realistic. the senate finance committee and one of the so-called big six congressional and white house officials leading the effort on tax reform. he admits that overhauling the tax code is much harder than overhauling health care. >> it requires a lot of intellectual acumen to be able to handle these matters. plus there's a lot of differences, a lot of difference of opinion of various aspects of the code. democrats want more revenue so they can spend more money. republicans want less revenue so we can bolster and increase the economy and get more jobs and opportunities for people. you know, those two philosophies seem to collide all the time in this particular area. >> despite those differences,

senator hatch said he believes tax reform can get done this year. congress is also keeping a closer watch over silicon valley. this week, lawmakers said they are likely to call for public hearings to examine whether facebook and other social media companies were used by foreign governments, specifically russia, to manipulate last year's u.s. presidential election. senator mark warner called social media the, quote, wild, wild west with very few rules. some members of congress may also be considering new legislation to tackle online spending by foreign adversaries. facebook has admitted that it still doesn't know the full extent of russia's ad purchases during the 2016 elections. if that wasn't enough, it was also discovered that advertisers could pay to reach almost any kind of facebook user, including antisemites. google is reportedly having similar issues, putting the two largest ad companies at the center of a new controversy. julia boorstin has m

>> reporter: jew-haters and how to burn jews. jewish parasites will ruin everything. these bigoted slurs were some of the targeting categories facebook and google's self-service ad platforms offered advertisers. both the ad giants removed these options, facebook changing its targeting process after being contacted by pro publica, google responding to a buzzfeed report. over 2,000 people expressed interest in anti-semitic topics. >> they're essentially an ad company. if there's one thing they should be policing, it would be the things they sell for money. and the fact that they didn't have a review system in place or at least not a particularly good one is surprising. >> reporter: facebook removed those categories and changed its policies, issuing a statement including, quote, we prohibit advertisers from discriminating people based on religion and other attributes. keeping our community safe is critical to our mission. >> i don't think this was a question of bad intent.

i think it is one where there is oversight issues. i think it's absolutely the case that they can apply some technology to this, but in the interim they'll have to throw human bodies at this and really snuff it out. >> reporter: google also facing scrutiny after buzzfeed reporting advertisers can target racist and anti-semitic keywords in phrases. google says their goal is to stop any offensive ads appearing. "we didn't catch all the offensive suggestions. that's not good enough and we'll work harder to stop this from happening again." questions about facebook and google's advertising policies are sure to remain a hot button topic. for "nightly business report," i'm julia boorstin in los angeles. and there are other issues as well. former google employees yesterday filed a class action lawsuit against the company, arguing that it pays women less for similar work. separately, google also faces a

big antitrust backlash in europe, having just been ordered to pay a multibillion dollar fine to the european union. so far, tech investors have paid little attention to these issues. the sector has helped lift the market to record levels. but at what point might that change? brent bill is the managing director of internet research at jeffri . brent, nice to have you with us. welcome to the program tonight. >> thanks, sue. >> do you anticipate the underpinnings of these companies changing, especially if we see washington getting involved in some of these very separate issues and companies? >> i don't. i think it's headline risk versus fundamental risk. they're both obviously huge global platforms. and i think we've seen, you know, concerns come through both these names over the past few years. we don't think it's going to have any fundamental impact. i think they'll deal with these in a proactive way, in a

positive way. but i don't see any major impact to what's happening at the core company. i don't think advertisers are going to change their propose. i certainly don't think google or facebook will have to change, you know, the underlying fundamentals of their companies because of this. >> headline risk, though, quite frequently brings with it a lot of volatility, especially if, as expected, some of these executives are called on capitol hill to testify, and those are, you know, televised, usually. for the average investor, do they need to be prepared for more volatility based on that headline risk? >> yeah, i think the headline risk creates short term volatility. i would go back to, covering microsoft for almost 20 years, microsoft has had a lot of these headline risks with fines and changes they had to make to their operating system. and if you kind of look back,

those issues were when the stock was 25 or 30 and we're now north of 70 in microsoft. i lived through those, covering microsoft for many years. so i think it's all how you deal with this, right? i think the way that other internet companies have dealt with past challenges have not been the way that i think i would handle them or google or facebook, the way they're going to handle this. my view is that when you look at kind of maturity of these teams, they're probably on a different playing field than a lot of the other companies i actually follow in the internet space. i don't anticipate a big issue here. >> would that change, with your opinion change if increased regulation was imposed on these companies? that's being bandied about on capitol hill. we quoted senator warner as saying it's the wild wild west. there has been speculation that because it's such a broad swath of silicon valley, that maybe more regulation is needed. does that change the equation or not? >> we would look at that.

i think you're looking at two companies, facebook's growing 40 plus%, google is growing 20 percent. they're massively outperforming a lot of names. google is trading close to a market multiple. if there was something that they imposed on their business that would change the way they do business, we would reconsider. but we haven't seen that yet. so this is all speculation. we've heard these cries in the past but i don't necessarily think there's been a major change to the company's business. remember, they have multiple businesses that are in place. >> yes. >> so google has an autonomous driving business, they have youtube, they have the google cloud, which is the commercial cloud. they have a lot of other businesses that are not tied to directly advertising. so i do think they are very diversified businesses. i think the way that they've dealt with past issues has been, they've dealt with them like grownups and admitted they've

had issues and moved on. again, i don't believe that all the companies we work with have had that approach in the past. >> on that note, we'll see. thank you, brent, for spending time with us. >> have a good weekend. >> you too. straight ahead, steady and reliable. those are the types of stocks our market monitor says you should own, and he has a list of names to r a rising number of americans are falling behind on their credit card payments. several large u.s. banks reported a rise in delinquency rates for august, that's the second consecutive monthly rise.

while rates remain below financial crisis levels, it could become a problem for the banks and result in higher loan losses for some lenders. equifax is making changes to its executive ranks in the wake of its massive data breach. the company said its chief information officer and chief security officer are retiring effective immediately. senator elizabeth warren along with other democrats introduced a bill today that would force credit reporting bureaus like equifax to allow consumers to freeze and unfreeze their credit for free. credit reporting companies charge consumers for those services. senator warren also signaled that the consumer financial protection bureau may require extra powers in order to ensure closer federal oversight of credit reporting agencies. and in a letter to equifax and its rivals, she asked for information to see if new federal legislation was needed to protect consumers. google's parent company alphabet is reportedly considering investing $1 billion

in lyft, which is uber's biggest competitor. according to news website axios, talks are being driven by top officials at alphabet. the two companies already have ties. earlier this year, alphabet's self-driving car unite waymo signed a deal with lyft to collaborate on autonomous vehicle technology. jpmorgan gives its take on the airlines. analysts at jpmorgan lowered their rating on american airlines and united-continental to neutral over concerns on domestic pricing weakness and higher fuel costs. but the firm upgraded southwest, citing an attractive valuation. shares of american fell fractionally to $46 even. united was off 2% to 59.80. southwest was up to 54.72. analysts at evercore thi cc

nvidia has more to run, saying the company is creating the industry standard in artificial intelligence systems. in its known, evercore went on to say that nvidia will likely maintain its leadership in the space. shares of the stock took off, rising 6% to 180.11. anthem says it is reversing an earlier decision to exit from the affordable care act exchange in virginia. the health insurer said it will instead grow its presence in the state after learning that its exit would leave more than 60 county without obamacare coverage. anthem shares were off slightly to 186.59. and automotive seat supplier adiant saw its shares take off after blue harbor disclosed a more than 60% stake in the company, due to the believe that adiant will expand share buybacks and grow its business in china. the share was up to $80.26.

our market monitor says this is not the time to be chasing growth stocks in this market. he says investors should be looking at names that are much sturdier. he is matthew roddy for rockland trust, welcome, matt, nice to have you here. >> thank you for having me. >> how do you define studier? >> we look for companies with pristine balance sheets, consistently able to grow their dividends, really companies that have been through all types of market events and come out stronger on the other side. i think that's what we're looking for, leadership, certainly in their industries, that's obviously very important too. >> all right. let's get to your picks. and it strikes me that all three of these actually benefit because of all the rebuilding that has to take place in florida and in houston. home depot is the first one, you say consistently strong revenue and same-store sales growth. >> yeah, i mean, it is true they benefit. we've owned home depot for long

before this. they've got 6% top line growth, 14% earnings growth. they've got 6% same-store comps. other retails would be so jealous to have those numbers. they've got 23% growth in their online business. half of that is picked up at the store. it's pretty protected from the amazons of the world. they've grown their dividend at 170% over the last six years. a lot to like about this company as far as how they run their business and execute it. >> you like walmart, your second pick. you say basically it's not getting enough credit from the street. why? >> yeah, that's true. i mean, this is the sturdiest of the oaks. if you're not going to reach out on the highest branch for growth, this is really a sturdy oak you can kind of lean against. when you look at this business, it's having its best run of same-store sales in a while. its online business has been growing 67% last quarter. they've grown to be 12% of their overall business. most of the growth is coming through walmart.com. even though they made great

strategic acquisitions with smaller parts of the business, i think they're doing a good job. they're not getting enough credit, consistently delivering. walmart's valuation shows it's making more money than amazon. it's $80 a share, amazon is priced at almost a thousand, a pretty big valuation gap. >> it certainly is. sherwin-williams, you say they have a great direct to consumer relationship. and they have pricing power too. >> yeah, you know, they did have some raw material costs sort of creep up in 2015, '16. they acquired valspar to help with some of that. they found a lot of cost efficiencies in the valspar acquisition. this is the year their earnings are starting to pick up for them. we see that going out to 2018 and '19. on top of that they've you don't even a dividend 130% in the last six years as well, they've been growing dividends for 41 years. the company has been around since 1866. it's a rock solid company, leadership position. >> on that note, thanks so much,

matt, for joining us tonight. coming up in this high competitive housing market, some brokers are trying to revamp the here's a look at what to watch for next week. fedex, viewed as a barometer for the global economy, will report earnings on monday. on tuesday, we'll find out if residential constructions rebounded in august. on wednesday, the fed will release its decision on interest rates, followed by a news conference with fed chair janet yellen. that's what to watch for coming up next week.

macy's is trimming the number of holiday hires this year by about 4%. even though overall holiday hiring will be down, it is increasing the number of workers at its distribution and warehouses in order to keep up with the growth of online sales. the overall decline stands in contrast to target, which earlier this week said it was hiring 100,000 people to work at its stores. the women's footwear chain air soles is filing for bankruptcy protection. that brand plans to close stores and focus on online shopping. the company's ceo says the restructuring will enable air soles to become stronger and return to growth. home sellers may be in the drivers seat in today's real estate market. that doesn't mean they're exempt from paying real estate agents hefty commissions to get the job done. but what if there was just a

flat fee? some are betting that's the wave of the future. and it's starting already. diana olick has more. >> reporter: the signs are everywhere. competition is fierce for real estate agents. with the number of listings historically low, agents are doing all they can to lure sellers. and that means changing the business model. >> for purple bricks, again, i think what's great about our model, it is new in the u.s. it's been proven in the u.k. within three years. >> reporter: purple bricks launched in los angeles today with $60 million in investor backing. it is a flat fee brokerage, charging $3200 to sell your home. the traditional broker fee is 6% of the sale price of a home. for a homeowner that sells for around $250,000, which is near the median sale price in the u.s., that means a commission of around $15,000. >> i think what will make it successful here in the u.s. is the true hybrid neighbor of the model. we do use technology. at the same time we believe a real estate agent will be the center of the transaction.

>> reporter: it uses all the technology that is fast becoming standard in the business. 3d home tours, appointment portals to schedule showings, and help in staging inform b. but there is a local agent working closely with each seller and purple bricks is enticing those agents, offering them exclusive territories. >> we'll assign a group of territories defined by zip codes which no one in the office can compete with. you'll own that market. >> reporter: purple bricks launched with a similar model in the san francisco bay area. its flat fee is higher, just under $5,000. but home prices there are higher too. the ceo says as the company expands to other markets, it may lower that fee. but the model is still very new. last year, just 2% of commissions were paid as a flat fee. consumers are still split on the idea. >> because they're getting paid the $3200, they're not working for something. >> we would have thought about it, sure. you look at a $6,000 commission

versus $3200. you would have to say, what am i getting for that money? >> reporter: as long as the supply of homes for sale remains so very low, competition among agents will stay very high. which could mean more new models to save consumers more money. for "nightly business report," i'm diana olick in washington. >> and to read more about the growing wave of flat fee real estate brokers, head to our website, nbr.com. that will do it for us tonight on nbr. i'm sue herera. thanks for joining us. have a great weekend. we'll see you right ba

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