>> announcer: this is "nightly business report" with tyler mathisen and sue h triple play. the dow, nasdaq, and s&p 500 all set records again. and now with earnings season about to get under way, will corporate america's report card help stocks even more? talking trade with the world's largest free trade agreement hanging in the balance. canada's prime minister comes to washington as tensions run high. and empty cup. the u.s. men's soccer team fails to qualify for next year's world cup. why that could have a big financial impact far beyond the soccer pitch. all that and more tonight on "nightly business report" for wednesday, october 11th. good evening, and welcome, everybody. it was a hat trick of records

for the major market indexes on wall street today. but first we begin in washington with the latest round of talks to renegotiate the north american free trade agreement or nafta got under way. the talks are expected to be tough between the u.s., canada, and mexico. today canadian prime minister justin trudeau brought his case directly to the oval office. kayla tausche has more. >> reporter: in a meeting with the canadian prime minister, president trump said tough negotiations are ahead over trade negotiations with canada, the u.s., and mexico. >> i've been opposed to nafta for a long time in terms of the fairness of nafta. we'll renegotiate. if we can't make a deal, we'll leave it. but maybe that won't be necessary. >> reporter: labor groups hosted protest signs outside the talks

as business groups worried requirements for higher share of u.s. parts in autos might kill the deal. ahead of the meeting with the president, prime minister justin trudeau and foreign minister christie of freeland met with the ways and means committee which oversees trade agreements. in prepared remarks, trudeau touted trade with canada and thanks the group for inviting him. committee aides say canada requested it. the fact of the meeting underscores an uneasy alliance with nafta partners worried the white house is proposing purposely unpopular demands in this week's nafta negotiations in order to justify potentially pulling out. this round of nafta negotiations will extend in two days, now set to close on tuesday. the extension is meant to give more time to hash out

different topics. for "nightly business report," i'm kayla tausche in washington. >> let's turn now to jonathan lieber, the head of the eurasia group's united states practice. nice to have you here. >> thank you, good to be here. >> given what we've heard from the president and from prime minister trudeau, how likely do you think that the nafta negotiations will be successful as they exist now? >> i think the probability of a successful renegotiation of this deal is declining right now. you have a very real deadline, sometime early next year, because the mexican presidential season is going to start heating up. you've got the united states, who is backing away from their initially fairly reasonable set of demands to a much more difficult set of asks of the mexican and canadian governments, putting a lot more pressure on these talks. >> what do we end up with, jon? do we end up with a terminated

nafta and bilateral trade agreements with the u.s. and mexico and the u.s. and canada, or what? >> so i think what's much more likely is the u.s. very well could trigger the withdrawal provision of nafta, but never actually go through with the withdrawal process. the u.s. has never withdrawn from a trade agreement before, congress would be very unlikely to support that. in that case you have nafta hanging out there in limbo throughout the mexican presidential election next year, potentially you've got a new government in mexico, potentially the republicans lose the house, and there could be more negotiations next year. >> there's talk mexico may not be included in the deal, it may just be the u.s. and canada. if they strike some sort of deal, what would be the advantages as we know the negotiations are right now, to the united states? >> so, you know, nafta is a quarter of a century old. there's huge parts of the

american economy in particular that just didn't really exist back then. you can update nafta to include provisions on digital goods, for example. there's probably intellectual property provisions that a lot of american businesses would welcome. a lot of stuff that the trump administration is pushing for is not welcomed in mexico, canada, or the u.s. business community. there's not a lot of wind to be gained from the more extreme demands by the trump administration. >> a lot of american businesses like nafta, it helps them do business economically, the chamber of commerce among them. let me go back to your earlier point. if we activate those sort of withdrawal provisions, but nafta doesn't really go away? what's the point there? the president gets to say, hey, i walked away from nafta, and what? >> i think the president is trying to increase leverage. if we know anything about the president's deal history or the books he's written, he wants to

go into negotiations with the strongest possible hand he can. in this situation, the way he can increase and maximize his leverage is not just by threatening to withdrawal but actually he could pull the trigger on a withdrawal. it would be a much more serious situation that they would have to stand up and pay attention to. >> which means we'll be talking to you again, jon. thank you so much. jon lieber with the asia group. the minutes of the last fed meeting show the central bank is on track to increase interest rates once again later this year. steve liesman has the lowdown on what policymakers are thinking >> reporter: fed officials had a serious debate about inflation and wages being too low and what that meant for the next rate hike. minutes of the meeting show the key issue is the failure of inflation to head the feds' 2% target. members of the rate-setting committee thought the recent

inflation was a result of telecom prices. under this line of thinking, inflation would gradually move up towards its target, clearing the way for a hike. there was also worry that technology and global inflation were behind the inflation. that led fed to be less certain about raising d most expect them to rise gradually but some are beginning to think maybe there's more slack in the economy, more slack in the labor market than previously thought. if so, it would cause them to rethink future hikes. the fed clearly indicated it's on track to hike again in december. that's the probably at the moment the even money bet. but if economic data over the next several months, including coming inflation reports, show that the low inflation theories are founded, there looks to be enough concern and doubt on the committee to delay that next rate hike. for "nightly business report," and those fed minutes helped

fuel a modest rise in stocks as investors applauded the central bank's sentiment that the economy is strong enough to perhaps withstand another interest rate hike. that led to record closes for all three of the major indexes. the dow rose 42 points to 22,872. the nasdaq added 16 and the s&p tacked on four. another thing investors turned their attention to -- earnings season. bob pisani has a look. >> reporter: earnings season is starting up again. and the key question now is, are we at peak earnings? could earnings start to decline and maybe even go negative in the next quarter or so? that's what's got traders worried right now. the short answer, relax, it's no. that's what's propping the markets up. earnings are trending up after treading water in 2016, earnings have bounced back in a healthy way in 2017. the s&p 500, earnings are expected to rise this year over last year, another 11 or 12% in

2018. second, look at the scope of the growth. earnings have pretty much returned to double digit growth. we're up 15% in the first quarter, up 12% in the second quarter. the third quarter is a bit of an exception. analysts are only looking for 5% gains. that's because of major insurance losses from hurricanes harvey and irma. but financials, particularly the insurance companies, should bounce back in the fourth quarter once all the dust settles. the key to this story is the strong steady growth in technology. it's been the big winner all year. we've been talking about semiconductors. semiconductors alone are expected to jump almost 30% in their earnings in the third quarter. that's a huge number. another big factor is the global growth trade. we call it the reflation trade. it's real. earnings are improving in europe, for example. the stock 600, like the s&p 500 for europe, they're expec to grow 5.4% in the third quarter and 16% in the farther quarter. that's important given the earnings overseas.

no assumptions have been factored in about tax cuts. yes, traders are expecting some kind of tax cut to materialize and there's some kind of premium in the market expecting that to happen. but it's not in the earnings numbers yet. and when that happens, we may see an additional boost. for "nightly business report," i'm bob pisani at the new york stock exchange. joining us now is karen cavanaugh, senior market strategist at voya investment management. karen, good to have you back. it looks like corporate earnings overall are going to be pretty good. why don't we start with that. what do you see as the overall, when we get through the whole thing, what do you see as the growth rate for the third quarter year over year? >> i think the party is going to keep on rolling. we may not see double digit growth. but we're going to see high mid-single digit growth. we'll probably end up around 7, 8% growth for the third quarter earnings. that's pretty darn good. >> is that because the comparisons are easy for some

sectors? or is it because, you know, corporations are really firing on all cylinders, or maybe a combination of the two? >> i think a combination of the two. in the energy sector, yes, the comparisons are pretty low from the third quarter of 2016. so it makes it a little bit of a lower bar to jump over. we've seen an increase in commodity prices, helping the energy sector. sectors like the tech sector are really benefiting from that global growth story. we have a synchronized global growth expansion going on. that's not something tha we al. this is a really good backdrop for corporate earningsn you sta favored financials. you still favor financials, they're still your top pick, but you say in that third quarter they will be down 12%. why? >> well, that's really the insurance companies that are going to be hit by a lot of the hurricane losses. we definitely will see a

bounceback in the fourr. even i subsectors of financials, i think the banks will do well in the third quarter. i think we're going to see some positive surprises. also financials, the valuations are pretty compelling in the financial sector. there's some good bargains there. they're valued lower than other sectors, so you can really jump in, investors can jump in there. if we get any kind of tax cuts, we'll see the economy move forward. that's really going to help interest rates. that's going to help financials even more. >> all right, from your lips to the earnings report's ears. karen cavanaugh, thank you very much. >> thank you. >> i love it down there in charleston. >> it is a beautiful part of the world. the number of job openings remain near a record high, even after falling slightly in august. according to the labor department, there are a little bit more than 6 million openings. job openings have risen as the number of unemployed have fallen to the lowest in a decade. the unemployment rate is currently standing at a 16-year

low of 4.2%. the president of the dallas fed says he wants more signs of inflation before raising interest rates again. the yield on the benchmark ten-year treasury has fallen, a reversal of what you usually see. robert kaplan calls that development ominous. he doesn't want the fed to raise rates too fast and risk getting what's known as an inverted yield curve, because that tendsed to a precursor of a recession. the deadly wildfires burning in california have taken their toll already. and now threaten one of the safe .conomic

the head of the food and drug administrn says the country may start to see some drug shortages because of the damage that hurricane a caused to puerto rico. 10% of drugs prescribed in the u.s. are made by manufacturing facilities on that island. drug makers are working to get their facilities back online, but they're facing widespread power occupation and supply iss. the images out of northern california are nothing short of apocalyptic. homes and businesses have been destroyed by the hundreds, lives lost, much of the damage caused by the deadly wires concentrated in sonoma and napa counties, the heart of wine country. aditi roy reports tonigh >> reporter: ray signorello is seeing his winery for the first time since it burned to the ground. his father bought the property in 1977. and now the once-elegant tasting

room is a pile of rubble. signorello is one of five wineries in napa destroyed or heavily damaged by the more than dozen wildfires that have ravaged the state, hitting wine country the hardest. signorello's wine maker was on the property at the time of the blaze and tried to save it. >> so my crew had come up to try to fight the fire for a little while. but they didn't have near the equipment. i mean, i don't think you could have had the equipment to battle what they were trying to battle here. >> reporter: it was too late and the had to flee. they are not alone. in neighboring sonoma county, the owner of paradise ridge winery says he will rebuild. >> it's devastated, suffered complete loss in both the wine making facility and also our tasting room and events center. >> reporter: the economic impact of the wildfires to the tourism economy could be significant. according to the wine institute,

california sold $34 billion worth of wine this year and the state's wine industry generated $114 billion worth of economic impact in the u.s. in napa, dozens of hotels, restaurants, and wineries that were not damaged remain closed due to power outages and road closures. they include meadowwood, silverado resort and spa, and wineries like cakebread ander about berringer. the one good thing is the wineries had completed their harvest. >> it will take a year or to to rebuild. it could have been a lot worse for us. and other people are going through really tough times right now. >> reporter: he also adds that he doesn't expect any long term damage to his crops.

wine makers in this area meantime say what remains to be harvested are cabernet sauvignon grapes. they are thick-skinned and impervious to smoke. i'm aditi roy, "nightly business report," napa valley, california. the airlines reported stronger than expected results despite canceling thousands of flights due to hurricane disruptions. delta said some of the strength in the laters est quarter came overseas. >> in terms of the desirability of travel going over to europe, it's the first time in about three years where our international unit revenue outpaced domestic revenues. we feel good about that trend going forward. >> the company warned higher fuel costs would hurt operating margins in the fourth quarter. still, delta eked out an almost 1% gain on the day, ending at $53.07.

jetblue said the recent hurricanes will cut into its profits in the third and fourth quarter. for the third quarter, earnings per share will be reduced by as much as 7 cents and as much as 13 cents for the fourth quarter. jetblue shares rose almost 1.5% to $20.53. kroger says it's exploring strategy alternatives to its convenience store businesses which may result in a sale of its stores. it reaffirmed its guidance for the year and says it plans to cut costs and make larger investments in e commerce. the luxury handbag maker coach is changing its name to tapestry. the company, which bought kate spade and stuart weitzman, says the company reflects that the company houses several brands. coach will change its stock ticker to tpr. shares of coach, or should i say tapestry, finished down 3% to

$38.87. the networking company juniper networks cited lower revenue in its cloud vertical. shares initially fell following the news and ended the regular day down more than 1 persons at $26.86. prepaid car company black hawk network is also forecasting disappointing results. it said increasing competition would cause earnings and revenue to miss estimates. the company beat profit expectations. shares initially lower, they finished the regular day down about 1% at $44.20. it was a heart breaker and perhaps the worst loss in the history of u.s. men's soccer. the american national team fell to the last place team from trinidad and tobago, failing to qualify for the world cup for the first time since 1986. now, you might think this is just a sports story, but it's a lot more than that. a number of companies have a lot

riding on this event. it was a heartbreaker, i watched it and couldn't believe it. but the networks probably were looking at it, television had a lot of riding on it. >> fox in particular. they are spending $400 million for the next two world cups, call it $200 million per tournament. that's four times as much as espn spent per tournament in the previous one. so this is a big investment. if you don't have the most popular team in america playing, it's one thing to get mexico ratings or england ratings, it's not the same to get american ratings. >> the sponsors have spent a lot of money backing the u.s. team, they want to reach the u.s. audience. who is spending the most on sponsorships? >> it's a mix between u.s.-based sponsors and broader fifa sponsors who sponsor the whole tournament. some of these names like at&t, coke, nike, mcdonald's, visa, anheuser-busch, the big brands we think about when we watch a

super bowl or the olympics, that level of companies, similar amounts of money there. but again, if you've got other stars from other countries, hopefully people will still watch. >> right. because it's a global sport, it's very popular all over the world. so one would think there would be over ripple effects, positive or negative. >> the ripple effects can go a few ways. if you think about soccer development until the u.s., what does it mean for major league soccer if young people aren't watching, or if they this america isn't good enough to make the world cup, why should i make a career in soccer, i'll go basketball and football. and there's gear and shoes and getting parents. >> i don't want to catch you flat flooded, where is the next world cup? >> it's in russia. that brings its own complications of sponsors who didn't want to get involved because as we know, russia has a

lot of issues with cheating in other sports and things like that. >> and you have time shifting issues for the u.s. market. >> right. the ratings would already have trouble because of that time shifting. >> interesting story. a heartbreaking loss. >> it really was. >> for a lot of people. >> they just had to have a tie. >> or not score a goal on themselves. >> exactly. thank you, as always. coming up, facebook's ceo takes the stage at a time when the company is under increased scrutiny. .e'll personal computer shipments fell for the 12th straight quarter. according to gartner research, weak back to school sales are partly to blame. shipments of apple's mac were

lower by 5.5%. hp was the only major pc maker to see a gain. >> the massive equifax hack reportedly compromised driver's license data for more than 10 million americans. according to the wall street journal, the license information was taken by those hackers who also took vital personal information like social security numbers. information various by state but licenses typically include a person's date of birth, home address, and personal details like your eye and hair color. facebook and instagram were down temporarily for some users today because of what the company said was a networking issue. but the timing could not have been worse. the company faces intense scrutiny from government officials over its role in spreading false news reports and apologized for what people called a tone-deaf virtual reality trip to puerto rico. today ceo mark zuckerberg took the stage at a corporate event. julia boorstin has more.

>> reporter: virtual reality hasn't been the out of this world hit that many hoped. but mark zuckerberg took the stable at today's oculus connect conference to say this is just the beginning. >> we believe that one day almost everyone is going to use virtual real to improve how we work, h we play, and how we connect with each other. but we know that the most important technologies don't start off mainstream. >> reporter: to drive adoption, zuckerberg announcing a new $199 headset, the oculus go. it doesn't need a mobile phone or a pc, calling it the most accessible vr headset ever. >> this could be a game changer, people are already excited about it. but it's a sort of a loss leader for facebook, because they're pouring a ton of money into vr and won't see a return on it for a long time. >> reporter: aoculus has shut down its vr, and vr growth is

slowing and will not reach mass adoption in the foreseeable future. earlier this week zuckerberg was criticized for being tone deaf in his attempt to promote his headsets by demoing virtual reality technology in a visit to puerto rico, an attempt to show consumers the technology's value outside gaming. zuckerberg apologized. >> it is super hard to get people excited, consumers excited about virtual reality. so a lot of people are going to come into it through gaming. as the prices come down, as it gets simpler to use, they may start to expand into these other areas. >> reporter: zuckerberg showcased vr's range of uses. doctors prescribing vr for pain relief and using it to study the heart. zuckerberg setting a goal of getting a billion people into vr. we'll have to see if the new cheaper headsets tip the product to the mainstream. for "nightly business report," i'm julia boorstin in los angeles. before we go, one more look, why not, at a record day on wall

street. all three of the major indexes at record levels at the close. the dow up 42 points at 22,872. nasdaq up 16. and the s&p 500 packed on four. that will do it for us tonight. for nbr, i'm sue herera. >> thanks from me as well, i'm tyler mathisen. have a great evening, everybody. we'll .

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