>> announcer: this is "nightly business report" with tyler mathisen a toy story. the largest toy store in the u.s. files for bankruptcy as the former powerhouse becomes the latest victim of the upheaval in the industry. retail revival. best buy came back from the brink by playing defense against amazon. and its playbo seems to be working. residents wonder when if ever they'll be able to rebuild after harvey. those stories and more on "nightly business report." good evening, everyone, i'm sue herera. tyler mathisen is off tonight. first, toys "r" us.

the store that once adopted t the industry is being turned upside down. the bankruptcy is among the largest ever by a specialty retailer and could usher in changes to the company's nearly 1600 stores. kate rogers is at a toys "r" us in paramus, new jersey. ♪ i don't want to grow up ♪ i'm a toys "r" us kid >> reporter: despite the wishful thinking in the commercial, we all did grow up. >> when you look at retail, the way it's being portrayed in the market right now, it's under siege. there are some retailers that are challenged. toys was in that camp. >> reporter: when consumers are turning to online, the company

says it plans to restructure $5 billion in debt. it planned an initial public offering in 2010, then reversed course in 2013. then it closed its flagship store in 2015. this wasn't always the case. toys "r" us grew from 350 stores in the 1980s to more than 1600 stores around the globe today. but as shoppers turned to the web, amazon is stealing market share. while the toy industry grew 5% in 2016, amazon experienced 24% growth in its toy sales. >> preferred is probably not leaving the house and shopping online. i typically don't ever really come to the store, especially toys "r" us. >> reporter: toys "r" us has not announced closures or layoffs. it expects to announce plans to hire thousands more workers during the peak holiday season. customers can rest assured, they will not see disruptions to their rewards program and gift

cards won't expire. but that hasn't stopped nervous shoppers to rush to the stores today to use their gift cards. >> someone posted the rumor that it was closing and if you have gift cards, spend them by the end of the week because they weren't going to be going anymore. >> rumor has it that toys "r" us is claiming bankruptcy. and once that happens, our gift cards go to zero dollar balance. >> reporter: toys "r" us isn't alone in its struggles. in fact it joins retailers payless and radio shack in filing for bankruptcy in 2017. i'm kate rogers in paramus, new jersey, for "nightly business report." then there's best buy. a few years ago that company was on death's door. back then its new ceo decided to close some stores and focus on online business. that strategy helped turn the company around. today the consumer electronics chain held its first investor meeting in five years. the message was starkly different than its last one in

2012. courtney reagan is at best buy headquarters in richfield, >> reporter: it's a different feeling at best buy headquarters these days. just five years ago, many wondered if the consumer electronics retailer was viable in the age of amazon. >> we had negative comps. there was questions on whether we would survive. >> reporter: the ceo was new to the job then and had a plan to turn it around. >> we've had four years of positive comps, our margins have expanded. we've been in the top 10% of the s&p 500 from a total shareholder standpoint. we're gaining share. we've become relevant again. >> reporter: he says he fixed what was wrong. now wall street analysts say he needs to find growth. >> best buy today is much better equipped to compete with amazon. to stay relevant, ca the continue to appeal to that consumer who wants above the the online and instore shopping experience? >> reporter: one key category

best buy is focussing on is the connected home. that market could be worth $50 billion worldwide by 2021. best buy could capture 10% of the u.s. smart home market, adding substantially to sales. with its new in-home adviser network, experts will actually come to your home, help you figure out how to make your home smarter, more connected, install things like security systems and even smart door bells. best buy is expanding its tech support program, a step beyond its geek squad. >> it covers every technology product you have in your home, whether or not you bought it at best buy. if netflix isn't working tonight, is it because of netflix? is it the wi-fi? is it the tv? is it the streaming device? honey, please help me! and we're honey. >> reporter: while still small, amazon has its own tech rescue

team. and amazon's formidable online dominance is one of the reasons best buy had to undergo its transformation in the first place. for "nightly business report," i'm courtney reagan in richfield, minnesota. but today wall street wasn't buying best buy's growth story. the company said it expects its long term earnings to come in below wall street estimates. and shares took a tumble, off 8%. in another sign of the changing retail times, kohl's will let amazon customers return items at some of their stores. the retailer will pack and ship the merchandise back to the online retailer for free. earlier this month kohl's announced plans to sell the amazon echo speaker, fire tv and other amazon branded devices in ten of its stores. on wall street, stocks edged higher and closed at record levels as investors held off on making big investments ahead of the fed's upcoming policy announcement. we'll have more on that in a minute. traders this afternoon were keeping watch over a powerful

earthquake which rocked mexico city. buildings collapsed, airports closed, and mexican stocks fell before trading was halted. the dow jones industrial average gained 39 points to 22,370. the nasdaq was up six be. and the s&p 500 added almost three. in washington, federal reserve policymakers met for the first day of a two-day meeting. an interest rate hike is not expected to be announced tomorrow. but many are looking for details on the central bank's plan to pare back its bond holdings. steve liesman takes a look at what else they're looking for. >> reporter: the survey for september showing no change expected in rates at the end of this meeting here. rates 100% of our 42 respondents are expected to remain unchanged after the meeting. tomorrow, the third rate hike, though. 76% believe there will be an another quarter point hike before the end of the year, a little higher than market prices might suggest.

finally, 68% say by october the federal reserve will begin to reduce that $4.5 trillion balance sheet. the outlook for rates, they've come down, compared for example from our march survey. the same for 2017. but look what happened for 2018, down by 0.3%, down by 0.2. we'll watch that tomorrow to see if fed officials are bringing down their estimate for how far they have to go in this right cyc rate cycle. the balance sheet is expected to go down $2.4 trillion. don't get too excited. some people say it's like watching paint dry, it will take 4.4 years to get there. how low can the unemployment rate go before it sparks inflation? 3.7%, that's pretty much below the 4% level on the 4.4% level where we are right now. so there's room to run, according to these respondents, before inflation. but note this, 45% say there's

little or no connection of the unemployment rate to inflation. for "nightly business report," i'm steve liesman. many on wall street were also watching events at the united nations. in his first address to the u.n., president trump threatened to, quote, totally destroy north korea if the u.s. is forced to defend itself or its allies in east asia. >> rocket man is on a suicide mission for himself and for his regime. the united states is ready, willing, and able, but hopefully this will not be necessary. that's what the united nations is all about. that's what the united nations is for. >> the north korean ambassador to the u.n. walked out before president trump's speech began. the senate easily passed a nearly $700 billion defense bill

late yesterday. the measure would put the u.s. armed forces on track for a bigger budget than at any time during the wars in iraq and afghanistan. the bill calls for expanded missile defenses in response to those escalating tensions with north korea. and a new effort to reform the health care system is gaining steam in the senate. the graham/cassidy bill would repeal the infrastructure of the affordable care act. but it would leave the taxes in place and funnel that revenue towards the states. the white house backs the bill. so does the speaker of the house. and the bill's sponsor lindsey graham appears optimistic. >> we're going to get 50 republican votes. and i make a prediction. there are going to be a lot of democrats struggling with a no vote, because at least eight of them, eight of them, their states do far better than obamacare in terms of funding and they have more control over the money. and that's going to be a hard no. >> andrew friedman is the principal at the washington

update. he join us now to discuss this latest effort, good to see you, andrew, welcome back. >> how are you? >> i'm good. how do you handicap the odds on this? what we're hearing from republican leaders is they kind of feel like this is it, that this is their last best bet to getting health care reform through. >> it's probably their last bet, i'll agree with that. the concern many have expressed about the bill, and as senator graham noted, some states do better under this bill, they get more money from the federal government for their health care system than they do now, they would get more. what that does is it's taking money away from states that expanded medicaid and provided free insurance to all lower income people. they're left holding the bag. they don't get as much money from the federal government. which means many of the constituents and residents in those states are going to lose insurance that they currently have under the aca. i think that will be a problem for senators and governors in those states. >> do you think that they have

the votes? senator graham seemed to think they do. as you know, it always comes down to the wire. >> it sure does. first of they're not going to get democratic votes, that's hyperbole. the question is whether republicans that held out on the prior attempt to fix the aca support this attempt. we don't know. and one problem that we are facing is, we're not going to have an estimate from the congressional budget office as to how many people lose insurance and how high premiums would go under this legislation. so everybody will be shooting blind. my guess is, and we'll have to see, when it comes right down to it, i think that enough republicans that did not support the prior attempt are probably not going to support this attempt. they're worried about constituents losing insurance who are used to having it. >> it says it would restructure the aca waivers to let states more easily drop certain insurance rules. what rules would that refer to? and is that another contentious

piece of the plan, or not? >> it could be. what it will allow the states to do, as i understand it, is to determine what types of diseases or maladies that the insurance is required to cover. which means that states could decide that insurance purchased might not have to cover -- pick a disease or condition. and that means, again, people could be left holding the bag in the sense that they have to pay for their own medical procedures. and that too means people may be left with unexpectedly bad results. >> we will see. andrew, good to see you again. thanks for joining us. >> thanks for having me. >> andrew friedman with the washington update. still ahead, rebuilding houston after hu >> reporter: thousands of houston homeowners need skilled workers to help them rebuild their homes. and they need them fast. but that's just not going to happen. we'll tell you why

a cyberattack and hurricane harvey are causing problems for fedex. the logistics company is blaming those two events for a decline in profit in the most recent quarter which saw revenue come in just shy of estimates. the company also cut its earnings guidance for the full year. investors showed their disappointment, sending the stock lower in initial after hours trading. dominic chu has more on fedex's quarter. >> reporter: shipping and logistics giant fedex reported sales that included not just the effects of hurricane harvey but also a large scale cyberattack on its european shipping operations. the tnt express company which

fedex bought last year, suffered a cyberattack that hampered many operations. earnings were lowered by 79 cents per share because of the attack and another 2 cents per share given the effects of hurricane harvey on its operations in the louisiana and gulf coast region. fedex lowered full year expectations because of the tnt cyberattack. it said all tnt express critical operations systems have been restored but that shipping volumes, sales, and profits are still below previous levels. remember also that the company said yesterday it was going to raise shipping rates on certain services beginning next year. the size and scope of just how badly fedex was hurt by the cyber attacks is one of the biggest things to focus on in the earnings report. and going forward, investors will be looking for tea leaves or any kind of guidance the company has on how the holiday shipping season is expected to shape up. for "nightly business report," i'm dominic chu. there are new reports tonight that equifax was hit by

a breach months before the big one. the first breach reportedly happened in march but equifax told bloomberg news that the intrusion was not related to the one in late july which compromised the personal information of 143 million users. some have criticized equifax's handling of the cyberattack, including not being able to identify whose information was even stolen. equifax is not alone. other companies like yahoo! and target also struggled to understand the severity of their own attacks. as andrea day reports, some companies have no response plan at all. >> if we look at most of the major breaches that have made it in the news, the bungled response actually causes more damage to the company's brand and reputation than the breach did itself. >> reporter: the ful equif only time will tell. but if you think most businesses are ready for a hit, think again. >> 75% of organizations throughout the world actually

don't have incidence response plans in place. >> reporter: that reality creating a busin opportu firms like ibm security, now helping companies with challenges like navigating a slew of laws. >> there are 47 different breach disclosure laws in the 50 u.s. states. >> reporter: like this. california requires notification, even if encrypted information was breached. new york mandates state agencies are notified. and nationwide if health insurance was breached, you may be required to notify the media. meanwhile, alabama, new mexico, and south dakota have no data breach laws. and when it comes to a hack, the old adage is true. time is money. >> if organizations can respond and contain a breach within 30 days or less, they tend to save $1 million over those organizations that don't. >> reporter: even internet companies aren't immune. yahoo! had breaches that took years to fix.

ibm offers incident response, training services, a multimillion dollar facility called the cyber range. >> companies can come in and practice a response to a breach on a fictitious company. >> cybersecurity in protection of our client information is the payroll and human ompany. resources company adp recently about you put their execs through ibm's high tech boot camp. >> it's as important for me to understand how to respond to a crisis as it is for my team to be able to operate in a crisis. >> reporter: it can simulate cyber attacks and train executives on how to respond before customers' data is at risk. the boot camp also evolves to include new attacks as the threats change. for "nightly business report," i'm andrea day. sprint and t-mobile are reportedly in merger talks again. that's where we begin tonight's

market focus. av a potential tieup between the two telecoms was derailed by reporters in 2014, reports surfaced earlier this year that the companies were considering combining. now cnbc says sprint and t-mobile are in active discussions about a stock for stock merger where t-mobile's parent would become the majority owner. sprint's shares rose nearly 7% to $8.20. shares of t-mobile were higher by 5% to 65.42. cereal giant post is adding more products to its portfolio with its $1.5 billion deal to buy bob evans farms. bob evans said it was the refrigerated foods division that sealed the deal. >> if you look at what attracted post to bob evans, it was our refrigerator side dish business which has been growing. we have a 50% market share and growing at a rate that far

exceeds our competitors. >> shares of post were slightly higher to 86.36. bob evans' shares popped 6% to 77.41. the government is reportedly taking steps to make it easier for american gun makers to sell small arms to foreigners. that's according to reuters. the report said new rules would cut regulatory costs and potentially lead to more job creation in the u.s. that was good news for the gun makers. american outdoor brands shares were higher by 10% to 15.70. after the bell, bed bath & beyond reported disappointing profits and weaker than expected sales growth. the home goods retailer cited a number of issues including restructuring charges and the impact from hurricane harvey. shares initially plunged in the extended hours session and also ended the regular day down about

1% to 27.03. homebuilding activity fell for a second straight month in august thanks to a decline in housing starts for multifamily dwellings. but the report wasn't all negative. building permits, an indicator of future activity, hit a seven-month high. economists expect to see swings in the data in coming months as a result of hurricanes harvey and irma. it's been nearly three weeks since hurricane harvey finally moved out of houston. but the rebuilding has barely begun. for tens of thousands of homeowners, it could take years to get help. diana olic >> reporter: on street after street, houston's houses are inside out. rotting remnants of comfort and necessity sit on former front lawns, in piles higher than homeowners' heads. >> ultimately it ended up about four feet. >> reporter: jennifer and andy taylor gutted their home themselves and with a little help. >> we had about 25 friends and family that we called, facebook,

texted, phone calls. we had an army of friends and family come out with some church volunteers as well. >> reporter: to do all that? >> to do all this. >> reporter: you guys seem incredibly calm an zen about this. >> we've had our m a lot of those moments were really being touched by the outreach. >> reporter: the outreach of volunteers with food, clothing, anything they needed, helped them prop the horrific days of the hurricane, which everything they had disappeared under water. that's why they wanted to stay. >> the fabric of the community has been amazing. we've been here 14 years. we knew that. but to feel it firsthand has been amazing. >> reporter: hundreds of houston homeowners needed skilled workers to help them rebuild their houses. and they need them fast. that's just not going to happen. >> there's not enough people to put it back together. there's not enough workers, not enough material, not enough time. >> reporter: contractor leslie

king had sobering news for all the people calling her daily. >> most of us who are reputable contractors will tell you we already have 50 people on our list. >> reporter: houston had a severe labor shortage before the storm. houston builders permitted 27,000 new homes this year. but now with more than 30,000 additional homes destroyed and even more damaged, the shortage is so much worse. king and the national association of homebuilders are asking the trump administration to let more workers in the country, even if only temporarily. >> i would ask them to please let anyone who is willing to make a dollar and pay some taxes, let them come, please. we need them. >> reporter: because the work is piling up. i'm diana olick in houston. >> to read more about post-harvey rebuilding, head to our website, nbr.com. coming up, thousands of gm workers walk off the job.

and nafta negotiatio ford is trimming production lines at five north american plants, including three in the u.s. all of the plants. cars, not suvs or trucks. ford is scheduling one to three weeks of downtime to lessen unsold car inventory on dealer lots. and general motors is facing its first strike in canada since the mid-1990s. workers at the company's plant in ingersoll, ontario, walked off the job after negotiations failed to produce a new contract. phil lebeau has more on the strike and why it's being watched. >> reporter: when workers walked off the job at gm's plant in

southeast canada, it's the latest indication that automakers are thinking twice before deciding where to build cars and trucks in north america. the ingersoll plant has 3,000 workers. their primary issue, job security. they want a gm commitment to build another model at the plant. the workers in canada used to build the gmc terrain. earlier this year, general motors moved production of that suv to a plant in mexico. and that's at the heart of this strike. gm exports more vehicles from mexico and canada than any other automaker. and before it adds or subtracts production to plants north and south of the border, it's watching to see what happens with the north american free trade agreement. if nafta is ripped up or dramatically altered, gm may think twice about how many vehicles it builds in mexico or

canada. meantime the strike is not stopping the sale of gm's bestselling suv, the chevy equinox is still being built at a gm plant in mexico. so the chevy equinox supply heading into showrooms continues, albeit at a slightly slower pace. phil lebeau, "nightly busine and that is "nightly business report" for tonight. i'm sue herera. thanks for joining us. have a great evening, everybody, and we will see you right ba

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