this is "nightly business report" with tyler mathisen and sue here. bring your a game, apple, amazon, and alphabet rept arterly results, and their performance could have an tside impact on the market. follow the money. investorsore plowing i stocks and they are buying low cost funds that invest in well-known indexes. mall makeover, as stores close shopping centers have a new strategy to get back in shape. those stows and more tonight on "nigusiness report" for thursday, february 1st. good evening, everyone, and welcome. triple a, apple, amazon, alphabet, three behemots in the tech world and they make up three of the four.s biggest

companies by market value. and they comprise a large percentage of the nasdaq 100. that means their quartersu s, their outlooks, and what their executivesbu say abo ness can sway the broader market. on the we hear from all three. >> let's start with apple. the world's biggest publicly traded company. its flagship product, the of course has been a driver of growth. but in the latest quarter, which includ the holiday season apple didn't sell as many as expected. in fact iphone unit sales fell 1%. nevertheless, earnings in the quter topped expectations, revenue did as well, coming in at more than $88 billion, almost a billion a day. but stock whipsawed in late day trading. josh lipton is at apple headquarters in cupertino. >> reporter: 77.3 million. that was the bigumber in apple's latest quarterly report. refers to the nber of i-phones that apple shipped in the

quarter. that was a bit light versus expectations. m analystselled 80 million. when people are buying those phones they are paying wemore. know that, the higher price points for the 8 and the 8 plus and the flagshipch iphone x w starts at $99. the average selli cost clocked in at $796. that was better than the $756 that analysts had opted. for "nightly business report" i'm josh lipton. >> reporter: alphabet cracked $100nn billion inl sales for the first time in its 20 year history. its revenue beat wall street estimates and itsre earnings lts did not. that sent shares initially lowes in after h trading. aditi roy has more on alphabet's quarterly results. >> reporter: one of the key metrics were watching was traffic acquisition costs. those are the feesoogle pays

its distribution partners. they have been going up in cent years because of the rye in mobile anding pro grammatic. they were slightly above analyst expectations. that is an areaf concern for some analysts. on the other hand for the first time in the company's history google hit annual revenues of $100 billion. and one other metric of note, the company reports the gop tax plan resulted in an additiol tax expense of $9.9 billion. i did ask alphabet's cfo whether the companyight mak an announcement about repatriation. sheaid tha repay treeation tax provides a lot of flexibility but it is more of a legal status rather than a change in investments. a zon reportedearnings, $1.9 billion better than analystsct ex. revenue for the quarter surged more than 30% because of a sharp

increase in online shopping during thewholiday season. e you may know them as a on line retailer that's not the revenue clengine. itd computie ining business is. it sent shares higher in after hours trading. >>nother big report by sam done driven by record holiday season and cloud computing union, aws, amazon web services. tozon crediting resul growth of its prime membership program. s it did it saw more than 4 million sign ups in one week alone last quarter. revenues from subscription services including music video and other services grew to $3.2 billion. it was there is the first full quarter after sales from whole foods were added. sales came up to $4.5 billion. the mainake away, amazon

continues to grow sales and be profitable while spending big on new businesses like veo content, advertising and brick and mortar. for "nightly business report" i'm deirdre doza, san francisco. >> we have now hrd from all the major tech giants. let's go over some of the any's ghts from each co performance and talk about what could be next. joining us to dohat is a.b. mendez, from frost investment advise oorz. ab, good to see you. >> good to be back. >> let me start wh amazon. it is one of your largest holdings. what did you make of the report and whatre you expecting longer term from the stock from. >> an investment standpoint amazonor the last year or two for me has been mainly about the aws cloud busine. it's been incredibly steady in terms of therowth remaining before 40% and operating margins hanging around 25 we were expecting a slight uptick in the top line growth, which begot, 44% top line

growth. that cloud business for amazon annualizes $12 million of revenue and $5 million of rprofit. anot quarter of consistentof ability and revenue. >> a.b. you have got your head in the clouds. because of amazon's cloud business. what did you see in their report today that impressed you or didn't? >> we known all of alphabet, amazon and microsoft and these are the three sort of hyper scale cloud leaders. you e alphabet report, know, twals a little bit less growth than we expected. obviously one of the interesting parts of google's business has become sort of the other bet.e outsf cloud, they also have self driving cars and life science. i have been paying attention to that line but the cloud growth at google was a bit underwell. ing, 35%. >> let me turn you to apple. the ock has been under a

little bit of pressure recently. there have been talks about the iphone x not phaps selling as well as many people had expected. t you know the report came in pretty good. how did you view it? >>ct e right. the revenues came in slightly above, you know, what the street was expecting, roughlye in l with what we were expecting. what it was was disappointing etunit sales andr than expected average selling price. i think that means that the mix of the latest iphone generation has been more heavily weighted towards iphone x, less towards the 8. we get for and more data points coming out of the aban supply chain with eachuarter that passes because that supply chain becomes more complex. and so there are more different touch points. the data point ahead of the quarter were so negative that the actual number came in above a lower bar. >> i'm going to make you do a sophie's choice, we have heard from facebook, malaysia, amazon,

alphabet and apple. if you had to put fresh money to work r oht now in of these, custom would it be? >> tyler i'm going to give you a sophie's choice kind of answer for that question. across the board i am getting a little bit cautious on the market's valuation. so i'ming with very opportunistic about when and where we put new mon to work. i will tell that you ourst lar holdngs are going cell and amazon. i believe that the combination of hyper scale cloud computing and increasingly real and needle moving artificial intelligence and machine learning that can make operations more efficient across enterprise computin e-commerce, on line advertising, this technology is actually becoming something that is additive to top line revenue growth and efficiency in a number of different areas. those two companies, alphabet and aman are far and away the leaders in that technology which has so many different applications. that's one of the main reasons why they are our largest holdings in the large cap portfoli

>> good t see you a.b., a.b. mendez with frost investment advisors. >> visa saw profit up 22% as more people used its network. the company credited strong growth in the u.s. during the holiday season. that wasn't enough. the stock fell in initial after hours trading. fellow dow component dow dupont reported a rise in sales and beat wreath profits estimate the producer was happened by a strong global economy that led to higher price force its products. but the strong quarter was overshadowed by a disappointing earnings forecast for the year. it sent shares down 3% make at this time worst performing dow stock intoday's trading session. >> stocks started the month of february struggling to hold on to gai after the strong january performance. the higher bond yiel on the 30 year u.s. testry security3% topd or the first time since last

may. that did cap any stock market gains. the dow jones industrials added 37 to 26,186. nasdaq off 25. s&p 500 fell one. despite today's sma market moves, money has been plowing into stocks. it was evident all ofanast year continued into the start this one. bob pass any takes a lk at where all that money is going. >> reporter: the economicews s been better. tax cuts have helped corporate earnings, and money is just pouring into the stock market.et s have record inflows in 2017 and starting off wh bigger inflow in 2018. $75 billion in january. is tet a lot? it sis. the average inflows last year were a little ove $40 billion a month. the money is coming into u.s. equity funds and international unts funds that invest in europe and emerging markets because the global economy is expanding and earnings are going up overseas as well. what are investors buying, low cost funds that invest in well-known indexes like the s&p

500, russell 2000 or the nasdaq 100. or broad some european index. they are cheap and an easy way to get broad access to the market w. rates rising you would think invesrs would beumping bonds but that's not happening. there were outflows from the larges corporate bond funds as well as high yield funds. but the numbers aresmall. what would turn off the money spigot? investors feel good about the economy and the prospects for corporate earnings. that's the impetus. there is no recession in sibt. the onlyrile is concerns the economy may run too hot pt proing feds to raise rates faster than anticipated. that's been a rally kilfar in the . for "nightly business report," i'm bob pass any at the new york stock exchange. >> time to look at today's upand dawn grades. chipotle was cut from neutral to sell. they are facing a new normal of lower growth. the price target dropped$2 to 0 from 3.45 shares down 13%.

express scripts downgraded by bernstein to market perform. the analyst there sees margin pressure fro increased competition. the firm says any benefits from tare rm are priced into the stock already. what happened? the stock fell, more than 1%. to 78.10. >> goldman chs, removed nvidia from its conviction buy list while maintning a buyrating. the firm cites a 130% rise in the stock since december 2016 the analyst also sees the possibility for increased earnings volatility. shares fell 2%. nike's price target was raised to $76 a share at ubs. the firm sites a return to u.s. growth and less promessional activity. the analystns maint buy rating on the stock. nike shares fellractionally to $67.65. coming up, a package delivery giant disappoints

investo investors. l tell you why. it was aecord quarter for holiday deliveries. but ups failed to deliver for omvestors. theny issued a disappointing earnings outlook and announced plans to spende even m on network upgrades. that is not something that shareholders wand to hear. the stock fell 6% in trading today. morgan brennan has the details. >> reporter: ups, the spending didn't stop with the hops. despite an earnings beat shares

of the company fell today after profit outlooks fell short of expectations. ups expected big savings from tax refo but plans to funnel a big chunk back into its business, a bet that more capital spend will help it keep pace with more e-commerce shipments.ng >> it's gro paster than gdp. we are investing to make sure that we not only have capacity for this period but for the entire year. >> reporter: they plan to spend $6.5 billion thi year or 10% of revenue to expandpp the cg network. er buying boeing cargo jets and plans to open 18 new facilities including three u.s. ground hubs in areas where a spike in online shopping orders triggered delays last quarter. >> we grow last quarter by 11%. we know the demand and opportunity is there. a few w years ago decided to invest in the international. we are seeing the rts today.

and we are in the middle of investing in the u.s. d operations in a way that we haven't hrically and we are going to see the results and leverage created out of those vermts. >> reporter: over the holidays, ups delivered an eye popping 762 million packages. 45% more than just five years ago. that growth has led tor highe revenue, and higher costs. including last quarter, when bottle necks after thanksgiving d added $125 million in expenses. as well as rival fedex have already been spending billions to keep pace with surging icommerce demand cuttingo profit and at times frustrating investors. analysts say today's results show for ups more still needs to be done. the question now, will big brown's big bets finally pay off? and if so, when? for "nightly business report," i'm morgan brennan. higher consumer spendin helped mastercard. that's where we begintonight's

market foes us. the payments company reporndd profits sales that topped estimates as more customers made holiday purchases with plastic. mastercard also sai transactions in foreign markets were up. up more than 2% at $172.93 weaker sales in the u.s. and abroad causedrs y's results to disappoint. the candy maker's 2018di foreca 't excite investors either. the company sees sales up 5 to 7% while margins are expected to remain flat. hershey couldn't sugar coat the news. and that sent shares down about 6% to $103.77 meantime the health insurer cigna said it would raise the minimum wage for its employees and replace retirement account contributions following chaes to the tax law. the company beat street estimates in the last quarter, said its results mend by freehing enrollment. they gave upbeat guidanc the year. >> i think the question fundamentally for everybody in this base is, canow you

can you continue to innovate? can you ctinue to deliver a strong value? we put target an outlook for 2018 that indicates all of the before. we are confident in the fact that we will continue to grow the business and be rewarded by shareholders over time. >> shares fell 175% to $205.01 alibaba reported a rise in revenues that topped estimates. alibaba said it would take a 33% take in its payment affiliate ir exchange intellectual property rights. down 6%, .2$1 >> cost cuts and an upturn in commodity prices helped conoco phillips price rise to a level that impressed the street. they said a successful year prompted the company to increase its dividend and increase share repurchase as well. they were up to $59.35.

higher used car sales helped profits at auto nation. acey said consumers are embracing the strategy of no haggle prices and the focus o reselling preowned vehicles. overall it was a strong quarter. >> the foundation first and foremost is a record operating result in the fourth quarter driven byevenue of $5.7 billion, a 4% increase. but moretlimport on a same store sales basis we increased oss profit by 7%. >> but shares fell more than 3.5% to 58.04. and after the bell, the toy maker matel reportedpp dinting sales in a quarter the companyng typically b in the majority of its annual profits. demand for barbie dollsic did up but other key brands failed to exce consumers. they posted a loss but said it is taking act to improve its profitability.

sharesinished the reg lay day down 3%. more evidence the job market is the tigest it has beenn decades. the number of people who employed for unemployment benefits fell by 1,000 in late january keeping the level now at a 45-year low. tomorrow theth m employment report comes out. expectations are for an increase of 177,000 jobs with the unemployment rate staying steady 4.1%. activity in the manufacturingector cooled slightly last month. but less than expected. that's according to the institutes for supply management, whiew said orders fell a bit but remain at levels consistent with expansion. employment in the industry is also expanding. and order back logs are a growi faster rate. after finishing last year with strong sales,er autom have carried that momentum into 2018. in fact, january sales turnedbe out t a little better than analysts expected. and caincreasingly, ame are paying more than ever for their new ride. here's phil lebeau.

>> reporter: this ist happens when you have strong consumer confidence and a market where demand for crossovers, suvs and pickups shows no sign of slowing down. on the surfacas january w a mixed bag by automakers. but each showed pockets of strength. toyota's sales jumped almost 17%, tha to huge month for its pickup trucks. gm was slightly higher with crossover sales spiking 20%. ford saw buyers paying a record high average price. and although fiat chrysler's overall sales were down double digits jeep had i best jan ever. catch the theme here? america still has a big appetite for bigger vehicles. in addition,heew tax law may be convincing buyers they can afford to pay a little more for a new chmodel, w raises the possibility the auto industry could post a fourthtraight year of sales topping 17 million vehicles. but before you count on the auto industry having a big year,

remember, january is typically one of the slowest months at dealerships. we will see if buyers remain as hungry over the next couple of months. phil lo bow, "nightly business report," chicago. separately, toyota will reca 49,000rius and lexus models for air bag issues. some air bags might not deploy in acrash. toyota says dealers will expect and replace the bad air bag sensors for free. coming up, the new mall rat. as more shoppers leave the mall to go on line, landlords are trying to keep their malls alive. how do they do it? well, a little exercise doesn't hurt. we'll explain coming up on "nightly business report."

here's a look at what to want for tomorrow. as we reported earlier, all eyes will be focused on theanuary employment report. dow components merck exxon and chevron willly report quart results. and the latest data on factoryo orders is aue out. that's what to after for on i. e-bay and paypal will split. e-bay'swill no longer be preferred provider. they will partner with a dutch to any which allows you remain on e-bay's website instead of being diverted to paypal's side toay up.

paypal says it will be a minimal hachange. >> w to continue to work with them as we go forward and we will continue to be a big part of the payments platform going forward. i wouldn't characterize it as a strained relationship. >> the stock was strained today. falling 8% while e-bay shares rose sharply. >> ralph lauren, like many retailers is seeing a drop in sales. the company is now trying to wean customers off the deals they have grown accustomed to.r that's eas said than done. they rrted a bigger dline in revenue during the holiday season. online sales also fell that pressured the shares, which fell more than 2%. as more retail moves and out of shopping malls, lond landlords areki l for ways to bring more buyers in. restauran diana olick is in hyattsville,

maryland he is not a fan of shopping o lls. >> i only comee mall when i come to the gym. otherwise i don't stop by the mall at r:l. >> repor which is precisely why mall landlords like if phil base's breathe which owns space in malls across the mid atlanti and northeast are actively recruiting fitness spaces to lease in their malls. >> people are not just taking up time at the gym here. they are goi to the gym. they are cross shopping. they big clothes. they are dining out. they are doing things more than just working out. >> reporter: their working out and walking into both retail and restaurants. >> i do find myself spontaneously going to the mall after i work out just because it's convenient. to be honest sometimes i'll did to the mall as a treat if i have

a really good workout. >> rorter: there is no specific data yet showing whether gyms do dive more traffic to other parts of the mall. buthis man is seeing it anecdotally. >> the test for us is we like it enough that we are doing more of these. we are not doing t one or or the one here today. we are about to open one in a washington subu and we have three or four in negotiations right now. >> reporter: and the benefits both the malls and the gyms. >> it is a great p.partners because the mall can feed off the gym and the gym can feed off the mall. >> reporter: that opens the door for cross poe motion. maybe a fitness apparel bar, toer a juice bar on either side of the gym orut it a few doors down and make your gym-goers go further io the mall because time in the mall is money. >> in my younger years it was a plac hang out and movies. now it's being older, what do i need, can i get in and out

quickly? otherwise i'll purchase on line. >> reporter: just the kind of mind-set that has landlords in a sweat. for "nightly business report" i'm diana olick in hyattsville, maryland. >> to read more about how malls are courting gyms head to our website, nbr.com. >> now there is reallyo excuse for not working out right. >> that's right. you can go there and then trooed treat yourself. >> we'll see. that does it for us tonight. i'mhe sue ra. thank you for joining us. >> thanks from me as well. i'm tie tie. have a wonderful evening, k erybody, and we hope to see you righthere tomorrow night.

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