this is "nightly business report" with sue herera and bill griffeth. concerns linger. e dow drops as investors analyze the potential impact of the tariffs and wonder what's next for stocks. >> shot in the arm. an expensiveholesterol drug shows promising results, but will insurers pay? toy transformation. why the indus synonymous with fun could soon usher in a new era. those stories and more tonight on "nightly businessr report" is monday march 12th. good evening, everybody. i'm bill griffeth. i'm noin for anybody tonight. >> no, you're in for yourself. >> i am. >> so great to have you here, >> i'm thrilled to be here and especially to work with my college classmate. >> right back at you. it's a great new chapter for nbr. so we begin the program tonight with bill and the stock market.

the blue chip dow indexel triple digits mainly on trade war concerns. investors are assessinghe potential impact of some of the world's biggest companies, namely bong, caterpillar and united technologies. one strategist says the skes are high. a mistake in trade policy could be as biges a mist in monetary policy. the dow jones industrial average fell 157 points to 25178, the nasdaq w up 27 and the s&p 500 was off 3. despite today's mixed market the nasdaq closed at a record forth second straight session. so whatt is nr stocks? bob pisani takes a look. >> the bulls regained control of the market on friday but today not much was swaying stocks one way or the her. that's a bit of a problem. the market briefly rose on reports that cnbc criticer larry kudlow could be the top contender to take over as donald

trp's top economic policy adviser but drifted steadily lower after that. the problem is there's a b of a news gap this week. with the jobs report out and earnings season winding down, the markets are now entering a choppy period that characterized by lighter trading volumes and a little bit of intraday volatility, but there's not a lot oconviction one way or the other. we did see defense stocks and industrial stocks like boeing and caterpillar lower today. those were the big winners last week, but not this week. what comes next? investors will be watching a couple of key inflation points this week including consumer and producer prices, but not much else until the federal reserve's next meeting. that won't be until next, we march 21st. the down side risk is stocks are still prone to the scary inflatio headline, but the good news is we're already retesting the record highs. you know, the&p 500 is just about 2% away from its oldig historicand the nasdaq is already there. for "nightly business report," n i'm bob p at the new york

stock exchange. let's turn now to rich garini, the ceo of pnc investments. it happened again here, rich, where stocks seemed to be most exposed to tariffs wentil lower those not so exposed, those in the nasdaq and the russell 20, went higher. do you see that continuing? >> i think we're at a me, bill, of high volatility. i mean, when i look at thema ets, it's certainly a market that's driven by interest rates, concerns around inflation and then you addhe tariff issue. and i think you have a great combination for continued volatility as we go forward. >> so how do yougainvestst that type of a background for clients? how are you advisinghem to deploy cash if they have cash and let'st assume t they're longer term investors. >> well, at pnc investments, we continue to reinforce the idea

of long-term planning.t stith a financial plan. start with a goal-based pl and really understand what your time horizon is. and make sure,sl obvi that in these types the s t kets yo don't make any rash decisions and really look and focus on the economy and jus overall market fundamentals. we feel that the market continues to be a great place to be for our long-term investors. >> but in the short term you will have toe higher interest rates. everybody believes that the fed this month is going to be raising rates yet again and maybe as many as four times this year. how do you change the investment mix if that happens? >> well i mean, i think certainly with the concerns around inflation, there's a realistic possibility that the fed could raise four times this year. the market certainly would have forecasted in three rate increases and i think we'll see one as soon as next week at the

next fedmeing, but certainly for our -- for your viewers and frankly ournvestors at pnc, we continue to focus on the long tee and we contio think that the market is a great place to be as long as youo have a long-term time horizon. but be ready for continued volatility and possible retesting of the lows that we saw the first week of february. >> indeed. rip, always good to seeyou. rich garini with pnc investments tonight. china is stepping up itsic crm of the tariffs announced last week, warning there will be no winners in a trade war. re eunice eun reports, they want the government tond. >> i'm at a factory of a com'sny thithin the metals industry here that is calling on their government to retalia against president trump's tariffs.

the associations that represent china's steel and aluminum industries are making statements strongly opposing the tariffs. they're now recommending that the chise government tak action against american imports in their sectors andbeyond. for metal products, they should target stainless steel, seamless pipe and strap aluminum. in other industries they say china could punish agricultural products, consumer electronics, luxury goods and coal. this is the first time that coal has been mentioned as a possible target. cha has ramped up its imports of american coal to 3.2 million tons last year, five times more than the previous year and worth $420 millione some chi analysts are arguing that beijing should go after products that would affect president trump's politicas like coal and states that gave him the election win. the steel and aluminum industries here don't export lot directly to the u.s. and are

not eected to be affected very much at all by these tariffs. so far officially t government has followed through with any of these measures. however, based onst thing reaction, some analysts believe bamging could fa pressure to take greater countermeasures any fuher u.s. actionhat could impact china's companies. for "nightly business report" i'm eunice eun, inch a. canada's prime minister has now joined the chorus accusin china of dumping steel on the global markets. he said today that his country has taken steps to stop it from happening. >> we also are very worried about the globaloversupply, china dumping and other places dumping their steel andm alumi and it's affected our workers here. we put in verytrongmeasures, some of the strongest in the world, against dumping, but as i saido the president, as i said to congressional leadership, i'm happy to work with the united states to go even further with them. >> nada, of course, is the biggest supplier of steel and aluminum to the united statd,

or now it is exempt from those steel and aluminum tariffe leveled by white house last week. last week, while the nafta talks continue, during theinterview ith cnbc, mr. trudeau said he believes that the exception has nothing to do with the nafta talks andlihat bs of job on both sides of the border depend on the continued smooth flow of trade. one of the biggest banks on wall street may have just signaled who will be its next ceo. goldman sachs had two heirs apparent. harvey schwartz says he plans t retire in april. that clears theid way for d solomon to become the next chief of one of the world's most powerful financial institutions whenever the ceo steps down.co ing to "the wall street journal" schwartz was informed last week that solomon has the board's backing. time to take a look at some of today's ndupgrades downgrades. ubs is raising its rating on

time warner touy from neutral. the firm believes that its merger with at&t will go through, but even if that deali does time warner shareholders will still win because of the strength of its assets like hbo. and the price target was reaffirmed at $108 a share. the stock rose 1.5% to96.75. meanwhile, micron saw its price raise sharply at nomura making it the highest price target on wall street for that company. the analyst expects higherme ry chip prices to help and he's forecasting a dividend and share buyback announcement in the coming months as well. the firm maintained its buy rating and the stock gained more than 8% today to 59.37. theow component merck was upgraded to outperform from a market perfo here and partners. the firm says merck's drug will perform better thanex cted.

it was up fractional to 55.36. deckers outdoor which makes ugg boots saw its rating downgraded from hold to buy. the company will face some tough comparisons following a good winter season. the price target was cut from $108 a share and the stock fell to $90.28. still ahead, the ceof one drugmaker wants to lower the price of an expensivero choleste drug. but with conditions. ♪ a drug a a new class of cholesterol medicines was shown to lower the risk of heart attacks and death. that's good news, of course, for both patients and the drugmaker,

but the issue is the price. meg terrell h more. >> millions of americans have high cholesterol and heart disease is tf leading cause death in the u.s. and worldwide. so when a new class of cholesterol drugs were approved in 2015, the med since were expected to be huge moneymakers for drug companies. that didn't turn out to be the case. the two drugsavbeen commercial flops bringing in about $500 million combine in revenue last year versus the billions analysts had focast. why? one reason is their price. about $14,000 a year before discounts and rebates. data shows that even when doctors are writings prescriptior these drugs, they're getting rejected more than half the time by health inrsrers. >> docre furious. they write a prescription and most of them are getting rejected. patients should be able to get t the drugs hey want. >> the other reason they're not

selling is while they're proven to lower ldl that wasn't proven that it leduco a ron in heart steak, stroke and death. in arial of18,000 patients who recently had a cardiac event like heart attack, it was shown to reduce the risk of another ovent by 15%. that's similar t results from amgen's drug last year. but it was related to a lower risk of death than placebo. something analysts say may help sales. it was pronounced in patients with higher levels of ldl to start with. in that group they're talking with health insurers ong provid steeper discounts on the drug. >> one thing is for sure. we're gng to lower t price that people are paying for the drug, whether their insurance company and whethernt it's pat making a co-pay. when you add it all up, that's what it costs to get somebody our drug. e want that price to be lower, but we want them to get the drug. that's got to be the bargain.

>> they're also in negotiation with insurers and has offered, quote, dramatic reductions in price for tse who significantly improve access. foror "nightly business r" meg terrell. serepta therapeutics plans to seek approval for a muscular dystrophy treatment. the fda will review t company's experimental treatment for this disorder. it plans to applyorpproval by the end of this year. the company's first drug was approved back in 2016. shares climbed 6% today and finished the day at $7>>10. meantime short seller citronai research netflix could see tts stock fall to $3 a share. it says t the streaming giant's spending on original content is unsustainable long term and added that the company faces a slewtif comrs that have the money to create compelling content on their own.

netflixhas were off 3% to 21.30. t longtime chief executive of dow chemical istepping down from his role last month. andrew liveris has said he would retire once dow completed its merger with dupont. he also plans to leave the board of director. shares is of dow dupont fell 1% to $71.34. and after the bell, stitc fix reported stronger than expected sales in its second report since going public. the online personal styling company said results were helped by more customers, but earnings for the quarter came in below expectations. and with that shares initially fell in the extended session. they ended the regular day up, however, nearly 7% to 24.12. toys "r" us may be on the brink of liquidation. as we've been reporting, the big box toy retailer is running out of both time andon even

though it still ranks as one of around.gest toy sellers so if it does go under, it would leave a big hole in that entire industry. >> they could all be gone and soon. th logo, the giraffe and the toys "r" us u.s. tv commercials we all grew up with. ♪ i don't want to grow up ♪ i'm a toys "r" us kid >> here at home toys "r" us has alread closed about 200 stores since filing for bankruptcy last september. and in the uk it's csing other 200 stores. something once impossible to imagine. >> it is simply one of the great post war retail businesses of america.s >> t" us can trace its peots to 1948 when charles lazarusned a baby furniture store in washington, d.c. in 1957, after expanding into toys, he began using the toys "r" us name. toys "r" us went public in 1978, grew to som 350 stores in the

1980s and expanded internationallyor to than 1600 stores. >> how did you ever get to be that big? one day i decided to open a second store. and after that i seemed to get easier. >> yes, it all seems so easy until 1998 whenma walrt overtook toys "r" us to become the top u.s.oy retailer. and as quickly as you can say high-speed wifi, online shopping, with the powerful ability to compete on pricing, began to remake retare. there number of folks who track toy sales,stut one in insider says that the top u.s. toy seller today is amazon w qh almost arter of the market. up 1% in market share sinsu last er. toys "r" us is second. but it has lost more than 1% of share over that same time period. and walmart is just behind followed by target and the doll stores. brick and mortar still accounts

all u.s. y half of toil sales. but toys "r" us is coming up on a 200-day deadline toti renee its real estate leases. and barring any last-minute deals to save the brand, american shoppers may soon learn another american icon is disappearing from the retail landscape. >> it will be sad. >> if it's true, i'm going to miss it. >> i do not want it to close. do you know why? because i love toys. >> aw. >> stephanie joins us to talk more about the changing landscape of the toy industry. she's ar consu research analyst at jeffries. i agree with that little boy. i love toys, too. t you mak point in one of your reports that is going to impact the entire toy industries. not just the mattels and the hasbros, but some of the smaller companies as well. >> that's right. ndit's really an of an era of specialty toys. many of these small companies that relied on toys "r" us as an

opportunity to grow their brands and their business, those are the companies that we worry about the most. ose are going to be the victims of this ultimate lly consolidation event among retail. optimistically they'll find another home, but we expect fallout. >> don't play with the same kind of toys they used to, right? it's more digital, notph so muc ical. even lego is suffering right now. but why couldn't keep up with those trends? i know they had too much debt. it's tough to service all that. why couldn't they just keep up with theherends that kids were heading into? >> that's a great qu ttion. i thinre are a couple of dynamics. first and foremost we're talking about what you just mentioned, constraints on time. kids today are far more active. they're engaged in oanized activities and sports. is amount of time devoted to traditional plays starting to

decline. we're also seeing electronics become an alternative form of entertainment. i think secondarily the demographicve shift ween has really been unprecedted. we have millennial parents now that are driving the market for toys and baby products. and have you this financial structure that prohibited toys "r" us from making the investments they probably needed to make to keep pace with the changes in the thmarketplace. k it's been a combination of all those factors that have t ledugh this position where wer contem mating a world without toys "r" us >> what doet do to the big toy companies like like a mattel? they've migrated already to walmart and to target and ai amazon, cey, but does it have a material impact on them this pretty seen much coming? >> i think there's been some awareness that there's risk. certainly when toys "r" us filed bankrupt last september, it was a bit of a shock to the

industry. both the fact that it buhappene also the timing in which it occurred right in front of the lot of season when a product was leaving asia on its way to the united states. i think the secondary fact is the one that you bring up just with respe these vendors have been building and fortifying the pipelines into these other channels of distribution for many years. so i think it's going to beti disr certainly for this year. we would expect that there's d soruption over the course of the next couple of quarters just depending on the timing of when theui ltions occur. but by 2019 we'd expt at least 90%, 85 to 90% of toys "r" us volume probably shifts to these other channels. one big consideration for investors is just the marginpl ations. toys "r" us was largely a favorable marn retailer. when you look at the scale ofma walmart andn it changes the narrative pretty quickly. we think hasbro and mattel are having to reflect on what the margin implications might be as

we do see this shift into margin dilutivenr less t creative categories. >> stephanie, thank you so hych. the entrepreneurial spirit is alive and well at a festival in austin. ♪ ♪ as you may know, south by southwest started as a music festival, but it has grown into a lot more than that. th event nowech centered and a place where start-ups look for investors and mediao companies g all-out to show off thr latest programs. and julia boorstin is in the middle of it in austin, texas. >> the atin convention center is packed with a window into the high-tech future.

artificial artificially intelligent robots. it has the reputation as being the place where start-ups such as twitter and 4square started out. hton kutcher with music mogul hosted a start-up competition. >> companies come from everywhere. they come from the midwest, from the south. they come from all across the country, all across the world. and we've been covering south by southwest for years but actually doing something that is meaningful forpa ces that actually shows and inspires the entrepreneurial spirit all across the country. >> also competing for attention at south byut est, media companies creating instagramable experiences around their shows andmovies. like this western town hbo built to promote the second season of d.west worl about 4,000 south by southwest attendees will get a chance to visit west world town of

sweetwater. tweetingse they're all and instagraming their very unique experience re, the marketing message will be heard around the world. attendeegiven hats to enter the two-acre town of sweetwater, to talk to 60 actors who never break character. hbo says the investment is worth it. >> some of the hosts are armed with guns but t guests a armed with cameras. h they'reping us extend the reach. >> warner brothers promoting steven spielberg's upcoming ready player one film invites attendees into a space created movie. and those encouraging visitors to take and share photos hoping to turn the influencers here in austin into evangelists for their content. for "nightly business report," i'm julia boorstin in austin, texas. here is another look at the day on wall street. the dow jones industrial allrage 157 points to 25178.

the nasdaq u27, that's a record. s&p was off 3. that does it for us tonight. i' s herera. thanks for joining us. >> i'm bill griffeth. have a great evening. we'll see you tomorrow. good night.

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