>> announcer: this is "nightly business rep with tyler mathisen and s signs of fatigue? the market falls as investors find reasons to dial back their enthusiasm. not very merry. target says the holiday quarter will not be a jolly one. and shares of the big box chain stumbled. the fine print. there's a provision in the senate tax proposal that would limit choice for investors. and it could prove very costly. those stories and more tonight on "nightly business report" for wednesday,. good evening, everyone. i'm sue herera. >> and i'm bill griffeth in tonight for tyler mathisen, coming to you once again here from the new york stock exchange, where stocks did fall yet again. uncertainty appears to be

creeping back into this market lately, as attention remains squarely on the potential for tax reform, on lower oil prices, and on the health of the economy. when all was said and done, the dow jones industri dropd another 138 points, closed at 23,271, its lowest level in three weeks, by the way. the nasdaq was off by 31. and the s&p 500 fell 14, but it does still remain just 1% from its most recent high. and tax reform is indeed a big deal for the markets and investors. this afternoon senator johnson became the first republican to say that he will vote against the senate tax plan because he thinks it unfairly benefits corporations more than other types of businesses. the senate can lose only two votes and still pass the proposal. but as ylan mui reports, there are a lot of changes being made, including one that could make your tax cut tempo. >> reporter: the senate adding two bombshells to its tax plan.

getting rid of the individual mandate for health care, and making the tax cuts for households expire after 2025. both of these measures could complicate the political negotiations that have been under way for weeks. today, senator ron johnson of wisconsin became the first republican to come out against the tax plan. republicans can only lose one more senator and still get this passed. the republicans didn't have the votes to pass the repeal of obamacare. senate leadership says this time is different. >> so in the end, keeping the individual mandate tax in place means retaining the status quo, which is not working too well. zeroing it out means we have a chance to provide greater tax relief to middle class families through both reduced penalties and lower overall rates. >> reporter: the proposal in the senate eliminates the penalty that people have to pay when they don't have health insurance. the government estimates that this will raise $318 billion

over a decade. but democrats say that's just because fewer people will sign up for health insurance which means the government will have to pay fewer subsidies in order to help them afford it. democratic senator claire mccaskill says that means the money is really coming out of the pockets of the poor. >> is there a fairy that's dropping it on the senate? the money you're spending is coming out of medicaid and subsidies to people who make less than $50,000. >> reporter: the other controversial change is making all of the individual tax cuts temporary. the lower rates, the increased exemption for the estate tax, the doubling of the standard deduction. all of those would go away in 2025. now, lawmakers don't have a lot of time to digest these details. the senate is scheduled to vote on its version of the tax plan this week. the house will vote on its tax bill tomorrow. right now republican strategy appears to be, go big and hope that they don't have to go home.

for "nightly business report, i'm ylan mui in washington. and there is another provision in the senate tax plan that's getting investor attention. that provision would have investors sell their oldest shares first, which typically results in a larger capital gain. a bit later in our program, we'll discuss what that could potentially mean for you. bill? there's a reason for the recent market caution, sue. energy shares dropped for a fourth straight session, tracking the price of domestic crude. an unexpected increase in stockpiles and a downbeat outlook from an energy watchdog both contributed to today's decline, which took oil prices down to $55 a barrel. treasury yields also slipped following the release of two key economic reports. retail sales rose .2% last month. most economists weren't looking for any increase at all.

the increase was because consumers bought more cars, furniture, and clothes. the consumer price index was up enough to price in further interest rate hikes from the federal reserve next year. here is why that's important. expectations that the fed will tighten interest rates could push yields on the two-year treasury higher and at the same time inflation, though trending upwards, remains subdued, limiting a rise in yields of the benchmark ten-year note on the longer end of the curve. the difference between the ten-year and the two-year now is currently at its lowest in about a decade. in other words the yield curve is flattening. some say that flattening yield curve means investors are worried about the broader outlook for the economy and stocks. is the world's biggest bond market sending a signal that stock investors can't or shouldn't ignore? bob michael is the global head of fixed engine at jpmorgan asset management and he joins us now to talk about that. nice to have you, bob.

>> good evening, nice to be on. >> so what is the bond market telling you as the pertains to the economy and stock? >> it's telling us a couple of things. i think first of all it's raising some red flags. if we look at the high yield market in particular, yields have been rising there for the last few weeks or there's been a bit of a selloff. and when we look at where yields got to at 5.4% a few weeks ago, that seemed to be too low and overly optimistic on corporate earnings and growth. we've now backed up to 6%. i think that's m >> but we're also in a situation, bob, where yields overseas are much lower than they are here in the united states. international investors find themselves coming to the u.s. and buying our bonds because they get a much better yield, a much higher yield here. that's another reason why we're seeing this flattening of the curve, isn't it? >> that's true, i think you're right to be somewhat concerned about the yield curve

flattening, because after all, the fed is taking the punch bowl away. they are leaning into growth and inflation before they become too much of a problem. and stocks in particular don't like the feds leaning into anything. that said, you still have overly accommodative monetary policy overseas. you have negative yields. you have the printing of money. and investors there are exporting that capital to the u.s. market and buying our bond market. so that's helping to stabilize things quite a bit. >> do you view, as some do, what's happening in the bond market right now as a sign that the stock market may be either peaking or heading into a correction mode? >> we don't just yet. what we're seeing in the high yield market and with the yield curve i think are pretty normal for this part of the cycle. some profit taking, some

response to fed tightening. but other things look pretty good, right? the jobs market looks pretty healthy. there's talk of tax reform and tax cuts. and central banks, even though the fed has begun the normalization process, they're still overly accommodative and providing a lot of liquidity into the system. >> before we let you go, would you buy treasuries right now? >> i wouldn't. i think credit is the better buy in here. i like the backup in high yield to 6%. i think it stabilizes in here and rallies going forward. >> on that note, bob, thanks for joining us. bob michael with jpmorgan asset management. bill? >> thanks, guys. it hasn't happened in a while, but general electric was the best performing stock in the dow today, up 2%. this after that sharp and steep decline following the company's announced plan to restructure which we've been telling you about here.

how secure is ge's membership in the blue chip index dow industrials? bob pisani takes a look at that. >> reporter: ge's sacred spot as the longest running member of the dow jones industrial aver coul in jeopardy. the workings of the index committee which determines which stocks stay in and which stocks drop out of the dow is unclear. there's no price threshold that you get thrown out if you drop below a certain price. but ge is trading at $18 right now. at&t was $33 when it was removed 2015. alcoa was $8. bank of america was $14. citigroup dropped to $3 when it was removed in june 2009. gm was 27 cents when it was dropped at the same time. so there's clearly no cutoff price that would get a company kicked out of the dow. but the price relationship with other stocks may be very

important a price-weighted index. david blitzer is the chairman of the index committee at s&p dow jones indices. he says he prefers the ratio to be 10/1. boeing is $261. that's nearly 15 times the price of general electric. by that standard, ge is definitely a candidate to be removed from the dow jones industri average. another way to look at this is not the price but by the state of the company. when they dropped alcoa in 2013, it was partly because raw material companies aren't as important as they used to be. a better parallel may be hewlett-packard, the pc maker was dropped in 2013 because it was a former tech giant that had fallen on hard times. the company's board of directors was struggling. the company seemed unsure what

it it should be doing next. does that sound familiar at all? for "nightly business report, m bob pisani at the new york stock exchange. coming up, why the new tax plan could be a problem for investors who are part of the buy an airbus has inked the biggest airplane order ever. the european airplane maker has signed a deal to sell 430 jet liners valued at $50 billion to a private equity firm that has stakes in low cost airlines around the world. that deal was made at the dubai air show. it was a rough day for

target shareholders. that stock fell nearly 10%, despite reporting solid third quarter results and lifting its full year guidance. but it was what the company said about the critical holiday period that sent chills through investors.n >> reporter: target hit a bullseye with its third quarter results. but investors are disappointed with the holiday forecast. ceo brian cornell says he's surprised at the reaction to expectations. cornell says he's confident going into the holiday quarter. >> we feel really good about our performance, the progress we've made. and i feel really confident that we've got all of the elements working well, as we go into the fourth quarter. >> reporter: it doesn't sound like you're worried about what you've seen, you feel pretty good. >> i feel great about the start of the year. >> reporter: they're undergoing a multiyear plan to spend $7

billion improving its digital business, remodel stores, pay store employees more, and lower prices. it may be the right strategy to compete, it pressures profit. >> as we look forward and think about 2018, we struggle really to see how earnings can really grow in the outer years. >> reporter: while target's comparable sales came in double what analysts expected, almost all of the growth came from online sales. store sales at target's more than 1800 stores are flat. that's concerning, when target's online sales are less than 5% of total sales, but responsible for nearly all of the sales growth. >> i feel good about our store performance, whether it's someone ordering online and picking up in a store, now in minneapolis someone ordering and driving up to a store. we ship from store, obviously. and now 1400 locations. our stores really enable our digital growth, whether it's in urban centers or on college

campuses. stores still matter. >> reporter: target launched four new original brands this fall, including hearth and hand, co-designed by hgtv stars chip and joanna gaines. cornell says sharp reaction to that brand has been amazing and has been a traffic driver. but sales in traditional traffic driving categories like essentials are lower. and grocery needs improvement. target has lower prices on thousands of items, hoping to drive traffic into stores for household staples. and for checking off shoppers' holiday wish lists. for "nightly business report," i'm courtney reagan in minneapolis, minnesota. meanwhile, cisco's security business helped that company report better than expected earnings and revenue in its most recent quarter. the world's largest network maker has been diversifying its business away from just switching and routing and it may be paying off. shares rose in initial fraytrad

and after hours tonight. n has more. >> reporter: instead of a one-time sale, cisco is counting on revenue from subscription-based services. that's critical for cisco because the market for its hardware, meaning switches and routers, doesn't have much growth left. so cisco is now focused on distributing more of the software and services that companies are buying. cisco now says recurring revenue makes up 32% of total revenue. bryan white of drexel hamilton says that's important for two reasons. it means investors have greater visibility into the future of this business and investors generally sign higher multiples to those countries with stronger recurring revenue. for "nightly business report," i'm josh lipton, san francisco. nelson peltz reportedly wins a board seat at procter & gamble. according to cnbc, the activist hedge fund manager has been elected to p&g's board of directors after a recount showed he won by more than 40,000

votes. p&g says that's subject to review. peltz has a more than $3 billion stake in p&g and has criticized the company. last month p&g said peltz had lost his bid by more than 6 million votes. shares rose in the extended session but finished the regular day down a fraction to $88.23. acorda therapeutics says people died in trials of a medication. it's stopped enrolling new patients in the study and plans to speak with the fda about the treatment. their shares plunged nearly 40% to $17 even. and scientists at samgamo therapeutics have tried to permanently change a gene inside a patient's body, in an effort to wipe out an incurable disease called hunter syndrome. the experiment was the first of its kind. and while the results won't be

known for months, this new and precise form of gene editing could offer new hope for people battling deadly diseases. shares of samgamo jumped 13% to $14.65. defense contractor raytheon says it is adding $2 billion to its existing share buyback program. shares initially rose in after hours following that announcement, but ended the regular session down a fraction to $182.85. after the bell tonight, home furnishing retailer rh raised earnings and sales guidance for the current quarter, due to stronger business performance and a $2 million tax benefit. shares initial took off in after hours trading but ended the regular session down 6% to $83.30. and we recently told you that hasbro had approached mattel with a takeover offer. reuters says tonight that mattel is not interested, reportedly

voicing antitrust concerns, and saying the offer undervalues the company. shares of mattel are down but were hire in the after hours market. hasbro shares are off 1% at $94.75. the head of the consumer financial protection bureau, richard cordray, is stepping down. he was appointed by president obama to lead the consumer watchdog agency that has been at the center of a number of political controversies. the agency was set up in response to the financial crisis to police things like mortgages and credit cards. republicans have long argued th okay. now to that new provision in the senate's tax plan that we told you about earlier that could take away your ability to pick and choose which stocks you want to sell out of your portfolio and the number of shares. under the new rule, if it were to pass, investors would be forced to sell their oldest shares first, fifo, which

typically has a larger capital gain. if the change does happen, investors would pay an estimated $2.7 billion more in taxes over the next decade as a result. robert gordon joins us to talk about this. how big a deal is this? you have a choice right now, but if you had to sell those older shares first, how big a tax bite are we talking about here? >> well, it really depends on each client's situation. if the prices they paid for the share are pretty much the same, even though it went over many years, it wouldn't matter. but the markets move, people don't buy all in one big lump, and most of the time people do have specific lots that have cost basis that are quite different than each other. there are four different tax efficient strategies that use specific lot identification in order to get the most juice out of them. and those four strategies will be severely impacted. >> bob, would it also affect

people who are in mutual funds, in etfs, and the like? or is it just individual stockholders with individual stock? >> well, the first three issues that i would discuss are as they relate to individuals. the fourth and the bigger structural issue is that exchange traded funds or etfs are traditionally more tax efficient than open end funds because they do something called a redemption in kind under sect852. when they do that, they deliver the shares out of the portfolio and the capital gain literally evaporates. as an example, vanguard's etf and vanguard's open end fund are the same fund, and i believe that when people cash out of the vanguard etf, the market makers may very wel given shares that the vanguard open end fund bought at low prices many years ago.

so it's going to really hurt how tax efficient the etfs can be. and it's going to take away a lot of the benefit of the etfs' edge. that's why you see the investment company institute trying to beat this proposal back. >> okay. we should just remind everybody, this is only a proposal. it hasn't been passed. but if it were to pass, especially before the end of the year, because this would take effect january 1st of 2018, what would you think people would want to do before the end of the year? >> i think that there are two strategies where this is very important. one is if you owned a thousand shares and you have ten different lots bought at different times, and you knew you were going to sell after the first year or two, after january 1st you would be forced to use your fifo price. if that creates a giant capital gain then maybe what you should be doing is accelerating that selling now and identifying the shares with the highest cost

basis, triggering the least amount of gain. the second issue is people that give stocks to charity. if you bought a stock for a dollar and it goes up to 60 and you give it to charity, you not only get a $60 deduction, but you're also forgiven your capital gains tax. somebody who wants to give shares to charity may want to do it sooner and identify the lowest basis shares. >> i'm sure some financial planners are getting some phone calls. robert gordon, thanks for joining tonight. >> thank you. coming up, time of course is money. so are data. that's why hackers want it and why companies are spendin

nearly half of cybersecurity professionals believe their company could face a major disruptive attack in the next year, according to a survey released this week. companies big and small are working ha against hackers. andrea day takes a look at what's at stake and what can be . >> it's easier right now to list all of the fortune 500 companies that haven't been breached than it is to list the ones that have. >> reporte sec br that have companies scrambling to recover. >> data is becoming more expensive than it's ever been. >> reporter: brian vecci is in the business of securing data, working with brands, he says, that invest millions to keep data safe. >> data security can take down the entire organization. >> reporter: and he says far too many have data just sitting wide open.

veronas did risk assessment on more than 1,000 companies and found 40% had more than 1,000 files open to all employees, data, he says, that should be treated like cash in a vault. >> there's no more big fence that you can put up to keep people out. >> reporter: he says the key is knowing how data is being used. >> we don't live in a world anymore where all of the data or all of the information is in a single building or a single data center. our employees and our users access data from anywhere. >> reporter: tapping into work from home, using networks that can be connected to their smart devices, like door locks and tvs. if those devices are unprotected, he says they're all potential vectors for attack. >> they all have default security settings. and one of the biggest issues for consumer security these days is that many times people don't change the default settings. >> reporter: and according to vecci, using the web can leave critical data exposed. >> any website that you go to, any application that you use inside of a web browser, is a

potential for so t wrong. >> reporter: the most important thing to watch, files and e-mails used by the company on a regular basis. make sure only the right workers have access, and that it's all being carefully monitored. >> you can't catch what you can't see. it's not a "mission impossible," somebody breaking in and using the most advanced technology to get in. it's people looking for a little bit of an open door. these systems are so complex that all it takes is one little chink in the armor and suddenly you've lost. >> reporter: the good news is companies are starting to wake up. according to veronas, 80% of i.t. professionals worldwide say they've changed or plan to change security policies based on recent attacks. for "nightly business before we go, we want to tell you about a special program we're putting together on retirement that will air on thanksgiving. and we want to hear how you are saving for your later years and some of the challenges you're facing in doing that.

log on to our website at nbr.com, click on "contact us," and tell us your story. or you can post a comment on our facebook page or tweet us. if you have a question, our retirement expert may be able to answer that. e-mail us a short video ofestio. >> can't wait to hear your questions. that's "nightly business rep for tonight. i'm sue herera. thanks for joining us. >> and a happy birthday to you, my dear friend. >> oh, thank you so much, bill. i appreciate it. >> i'm bill griffeth. have a great evening, everybody. celebrate with sue. >> woo-hoo! >>

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. you can find it here in aruba. families, couples, and friends can all find their escape on the island with warm, sunny days, cooling trade winds, and the