this is nightlyreusiness rt with bill griffith and sue herrera. >> second quarter selloff. stocksanked to start april as the possibility of a trade war takes center stage. >> take that. china does slap tariffs on more than 100 types of u.s. imports. >> and cash to burn? homeowners have record equity in their homes and if they tap into it, what could they spendn?t o all that and more on "nightly business report" for monday, april 2nd. good evening, everyone. welcome. i'm contessa brewer in forue herrera. >> and i'm bill griffith. welcome aboard. the new york area woke o up this april 2nd to a blanket of snow. and that cdll spr to stocks as they were hit by a pair of tees to day that, isariffs and technology. china went through with its threat to hit u.s. products wh

tariffs. we'll have more on that in a moment. and technology resumed the roller we've seen over the last few months. lower by shares of intel today 6 they were do on a bloomberg report that says apple is going to use its own chips instead of intel's in its macs. that start as early as2020. here's how things shook out when all is said and done. the dow fell by 458 points. could have been wthse gh. at the low of the day, the dow was down about 760 points the nasdaq again was the biggest loser. it was off 193 or nearly 3%. d the s&p 500 was off by 50. the worst srt t an april. get this since 1929. bob pisani has more tonight. >> it was a sea of red on wall street. we saw broad base selloff all 11 s&p 500 sectors are now in corrtion mode. that means down 10% or more from the recent highs. invest as were confused frustrated by the uncertaint f

around trars and technology woes and those concerns led tor hig volatility but lighter volume initially. as soon as the s&p 500 broke below the 200 day moving average that, is a keyecical indicator, the selling picked up steam led by amazon o reports that apple may soon be using its own in house chips instead of intel's. looking ahead, is this the start of a great tech unwind? we don't know yet. earnings xprekted to grow 20% in the first quarter. that's huge. the biggest in years. and to continue along that path for the rest of the year. 20%, just practically unheard of. particularly after such a longru bull but the earnings outlook is being clouded a little bit by concerns about technology. the overall market may not be overvalued b certain tech probably is overvalued. semiconductors, for example, ane capital equ stocks which have all pulled back. the problem is technology has gotten a little too big for their britches. te alone is25% of the waiting or the s&p 500, far and away the biggest se and the big five, apple,

alphabet, microsof amazon. they're a consumer discretionary stock. the five together account for 15% of the s&p 500. and tech and financial earnings in the first quarter are expected to be almost double the rest of the s&p 500. so no wonder the market goes into a tizzy when there is a small threat to techarngs expectations. for "nightly business report," i'm bob pisani at the new york stock exchang >> today it was china's turn to throw a tariff tantrum.e hitting mhan 100 types of u.s. imports with taxes as high as 25%. we have the details from beijing. >> reporter: china is making good on its pledge to retaliate against president trump's tariffs on steelnd aluminum. over the weekend, the finance ministry said that previously announced tariffs would go into effect starting today. these tariffs mainly target american meat, fruit, nuts, wine, steel, and aluminum prodyts. and the affect about $3 billion

of goods. the commerce ministry sai tariffs were to balance the loss from u.s. action and suggested that the tariffs were not meant to escalate t conflict. the ministry said we hope that me united states will withdraw thesures that violate the rules of the wto as soon as poible so that the trade of related products between china and the united states will return to the normal track. the tariffs impacted pork stocks in greater china. stocks of local pk producers jumped but wh group, a chinese company which owns smithfield foods in the united states, saw its stock lose 8%. wh group's imported smithfield pork products are popular in china. online retailer zrblts for sm l smithfield h as oranges and cherries and american wine are some of j.d.'s sellers. the tariffs were a major topic on chinese social media with some expressing concern about thac i on consumers here.

still, the commerce ministry said the chinese public largely supports this move. like theji u.s., b opened up a period for commentary by citizens as well as companies so that they could share their thoughts. d according to the government, most people said that they supported the government'sfo s to protect china's national interests and also said that they would support even tougher action against the u.s. if it's necessary. let's turnar to twot pros for more on how trade war fears and the slide in tech is affecting overall market at the start of this second quarter. we have with us tonight, bret ewing, chief market strategist at first franklin financial services and james wang is tech analt at arc vestments. good to see you both. the feeling is there won't be a trade war that somebody's going to have to blink. because nobody wants a trade war right now. but,ye wall street acts as if

there could be one wlachlt do you thi sou. what do you thinkoing on here? >> i don't believe that there is going to be a trade war nor do i believe that wall street fully thinks there's going to be one as well. think markets like to overreact in the short run. and combine that with the actions of the federal reserve and interest rates where they're going. i think you have a perfect storm to create a nice correction. >> and james, when we' talking about a potential trade war, the president has pointed out that there aresss with intellectual property coming in from china and how they deal wi that with the united states. how much of what we saw today with the selloff in tech was about this trade war looming and just about it was tech itself? >> i think it's mostly tech itself at thisstage. trade war is not going to hurt tech as much as it does some of the industries. there was some specific name selloffs today with tesla and facebook. i don't think it's really the trade commentar but more the tech sector. >> you think the selloff in

facebook is roverdone,ht? >> it has been overdone. i mean facebook is not a perfect company. it hasn't manag privacy very well. and they're taking steps to address that. but facebook is now has cheaper valuation than walmart which i think is a clean sign that it's w overdone. >> so at this point, do you think it's the time for people to jump in? facebook has seen a deep dive in the share price. could this be a good buying opportunity? zblfr >>nk i t retanl vestoil investo should not try to time the market. being invested in products that auto balce like etfs and doing dollar cost averaging. if you just do that meodically, yes, right n is a good time to buy because the same great companies are now selling at a discount. >> bret, y use that word correction. people have been waiting for one. hing going got som here and have for the last few months. you are ready to step in yet or do you think there i more down side to come here? he last timehink we've been in this position

where we broke the 200-day moving average is the brexit event. if you look at the underlying economy back then relative to where we are today, that was ag great buy opportunity back then. nd if you look at the economy today, i think it's much, much stronger and has some catalyst to upside here with the recent fiscal policy. what we'll see how that workou >> do you step in and buy the technology which has been the leader to the upside ando the down side or is there another owoup you prefer? >> you the way we look at it, it's been a broad nice breath on thedo selloff. le digits across the board from the intraday highs this year. and we - would tell if our clients have a long enough time t's gratewe think opportunity to put some capital to work here. >> and at thispoint, james, do you think that there are specific stocks that you're looking at,ni specific com that you think represent an incredible value during the

volatile times? >> you know, tselloffs for facebook and maybe google can be justheied based on concerns about their advertising business. not all the f-a-a-n-g companie. are the s the companies that have a direct business model or relationship with the consumer like netflix, like amazon, they are -- they've been sold off for no reason at all. so we think those are great names. we're actually bullish on all the f-a-a-n-g names and continue to be. so i think investors can be selective and they're a good opportunity >> the market. hat about amazon though? the president has taken aim at that company with the tax situation and he feels like that they're taking the post office forraed as well. you don't see that as a big head wind for this company? >> amazon is keeping the pos office alive i mean if it weren't for the amazon packages coming through every day, i don't know what thu post office be delivering. i think the president generally has a pretty good sense of what is good with populous sentiment. this case he may have made an error. amazon is extremely popular with

consumers. they do not have a problem with amazon or any of their business practices. they enjoy the l a prices i think they'll continue to like the company. >> bret ewing with first financial services and james wang with arc investments. thank you both for joining us. >> thank you. there are likely to be a lot of losers in a trade war. califoia has a lot on the line and the fear is the golden state could become trade war casualty. >> reporter: u.s. farmers are hard hit fromna chi's announcement of tariffs on the 128 u.s. products. list includes $3 billion worth of items, $2 billion in agrilture products alone. trade experts saymp the it could be far reaching and could send farmers scrambling to find other buyerhe >> so you're not able to export the product is going to be sold somesere. and ioing to have a definitely a price depressing impact on those products. >> ang the top states affected

by the tariffs, california. st year the golden state exported $16 billion worth of goods to china, topping all other states, and making china its third largest trading partner. the state suppl nearly $2 billion worth of agriculture exports to china. buthe tariffs could cut into that revenue. fruit,nuts, and wine are california staples and on the list of products subject to tariffs. >> theyake so much. and it's such a wide variety of products that imepacts a the loe agriculture. it's a key market in the asia pacific space. certainly a growing market. >> it's not just california exports that could be affected by a trade conflict between the u.s. a chin in 2016, the state received $16 billion in investment from china. that'serore than any o state received according to the economic consulting firm the rodium group. this say trade tensions between the two countries could hurt that investment and cost jobs

wine is another key export product on the tariff list. itom also becg increasingly influential. trade group t wine institute ports that exports to china grew 450% over the last decade. and totals nearly $200 million last year. most of that wine was from california. elsewhere in the country, farmers are still bracing for more possibletariffs. soy bean farmers like brent bie are especially on edge. y beans didn't make the they t list of tariffs, account for half of all u.s. agriculture exports to china and some worry they cou be targeted next. >> the difference between a profit for the year and a loss for the year.or >> reporter: is another key item that was on the tariff list. the u.s.an exports more $1 billion worth of pork to china and that product was slapped with a 25% tariff. in response, the national pork producers councild iss a statement saying it was disappointed in the new tari

and are hopeful it will be short lived. for nightly business report, san francisco. well, there was at leastne winner in today's selloff. that was insurer humana which rose on word that the company is talking to walmart about strengthening their existingip relation humana rose 4% on the day while walmart was down about 4%. we have the story tonight. >> reporter: walmart has been expanding its online retail business to attract younger but now the retailer may be looking to make a bigger push into consumerh healt to service its older customer base. >> if this deal could happen,e thould be synergies which will drive more people into the stores and don forget, a customer that's pharmacy plus grocery is about 3.5imes more productive. >> reporter: the retailer has pharmacies and most of the a stornd has had a edco-brand medicare drug plan with human for a decade. sources say a merger between the two is unlikely. but an expandedsh partner

could help both in an increasingly competitive medicare market.hu na could help the retailer expand health services beyond the f pharmacy its senior customers with instore clinics and through its growing home services. >> the longer term question of health care is how much of it will be a touch business wch in my opinion will always be. and that means y need a physical presence. the key for walmart is to access the home health element herend humana's focused in on senior citizens. >> reporter: for human yashgs walmart could provide a bigger kest base to compete with slurns rivals like united health care which has overtaken humana as the number one medicare advantage insurer. cvs's acquisition for aetna also theatens to shake up medicare market even more. if the deal is approved, the combined firm could offer compelling medical and drug benefit coordination as well as primary care services in cvs's

900 pharmacies nationally. theseltre new hcare models which haven't been tested on such a big national but the competition to win at these new intergrated businesses could be a boom to consumers. >> we want the savings to flow back toustomers though. and for it to flow back to customers, you have to have a competitive insurance market that forces o aetna humana to compete on premiums and return savings bk to customers. so i think there will be a the love xrutfli tscrutiny. >> neither walmart nor humana would confirmegheiations but with the changing land xap in health care, most analysts say some kind of alliance makes sense now. let's take a look at some of today's upgrades and down grades. jeffdes upgra tesla to hold from underperform. ahead of quarterly production numbers, they say tesla is likely to miss its own estimates again but still top lowered wall

street expethations. price target here is $250 a share. today tesla shares closed down at $252.48 tlachlt down 5%. rbc capital is raising the rating on dardon r taurants to outperform to sector perform. they cited the company's valuation is appealing following a recent pullbackn sharesf olive garden's parent. the price target was raised to 97 from $93. shares closed off 1.5%o $84.07. >> rbc also upgraded shares of pay role processes company adp to outperform from sector perform. rbc says they see an improving growth story there and better valuations. so the price target was up to $130 from $119. today adp shares closed at $113.30. morgan stanley is cutting shares of fit bit to equal weight. they say they see down side as the companytrgles to

stabilize the revenue. they have a 12 month price target of $4sh a e. shares did head towards that number today, losing more than 9% to close at $4.62. coming up, why you're filing your taxes for this year, a heads up forple in the northeast. .t's not a snow warning this time but rather sa we'll explain. spotify is scheduled to open at the new york stock exchange. it's entering a crowded market

that has big players. we take a look at howspotify stacks up against their competition. >> reporter: when it comes t streaming music subscribers, spotify is the clear leader. it is facing growing competition, a ris factor investors will weigh whether it starts trading tuesday. spotify has 157 monthly active listeners and half of the are paid subscribers. that is almost double the next in line, applewhmusic. h announced last month it has 38 million subscribers andn a comes in last with about 5. s million. th they will grow subscribers 36% this year to between 92 and 96 million. >> spotify doesn't have to outperform. we're at the early days of the music streami revolution. it doesn't have to be one winner take all. competition is good. >> apple muse siic is fastllddi two min subscribers in a month. not to mention apple's advantages.

a half billion people visit the app store weekly a it's integrated into iphones in the home pod. and while pandora shares are down almost 60% over the past year, it's not out just yet. the subscription tier is a year old and only launched on the web in february. music.here is amazon the company saying today they had tens of millions of paid subscribers,oubling the subscription in the last six months. and that's not all. google play music has been around for about five years with no official subscriber count. despite the rivals deep pockets, potify scored a big win this weekend. taylor shift shot a video for r new video just for spotify. a total turn around from swift's boycott of otify four yea ago. most artist reservations about the platform have been addreshod. it also how video can be the next battlegthund for all music streaming companies.

shares of biotechft fell the fda rejected the company's drug application and that's where w begintonight's market focus. the agency rejected the experimental depression drug saying there wasn't enough clinical data proferring the treaent's effectiveness. the fda said more tests are needed beforemy alcan reapply. alchemy said they strongly disagree with the plans to appeal. shares plunged nearly 22% to $45.23. higher egg prices helped cal maine foods report revenues that rose more than expected. earnings fell short of expectations. shares fell nearly 1% to $43.30. >> wall street firm mofit nathanson said users are unhappy with the redesign. the firm says that they hosted the different focus groups then fouas each group dissatisfied with the group. they reaffirmed the sell rating on the snap shares fell more than 8%

today to $14.46. and cvs is reporting to make a bid for viacomhat is below market value. reuters says cbs expected tohe makenitial offer in the coming days and if a deal happens, chief executive less moonves may stay in the role for two more years. both companies lower in today's trade. >> the april 17th deadline to submit your tax return iskl qu approaching. and while next year's tax season may not be on your rar just yet, there is important changes caused by the federal tax overhaul that many tabeayers need tware of in the northeast. but you probably already knew that. we have the details. >> reporter: it's april. is means tax filing season upon us. the deadline to submit your return is on april 17th year. but it's never too early to start thinking about what you might owe next year under the new u.s. tax law. especially if you live in new york, new jersey, connecticut,d

california. because there is a very good chance that your bill g will up. a recent analysis from the tax policy center foundor that than 8% of taxpayers in these states as well as maryland and er the see an increase u new law. state'she most of any in the country. for new yorkers, the bad news gets worse.f because evenu're getting a tax cut, it's going to be smaller than just abowhere else. less than 1.5% on average compared to th anationational ae of 1.7%. the culprit, the new $10,000 deductionstate tax >> we had to restructure the tax code to avoid the attack. they launched a missile. we were standing in thetharget zone o missile because of our tax code. we literally had to flee the

zone we were in. >> reporter: to get aneund the federal law, new york governor andrew cuomo deal that turns property taxes into charitable contributions to the state and gave workers option of converting income tax into a pay role tax. it seems unlikely the u.s. treasury will get onboard with that idea. >> i think it's one of the more ridiculous comments to think that you can take a real estate tax that you'required to make and dress that up as a charitable contribution. >> reporter: bot sides are aring up for a fight. coming up, homeowners are sittingn a record pile of cash. so how will they put that money to work? some possible answerwhen we come back.

rising home values are making home buyers richer than ever before. the amount of equity they're able t tap into is now the highest level on record. will they use it? and how? we take a look.r: >> reporou can thank fast rising home prices and tighter lending standards for t record amount of tapable equity available to homeowners today. that is the amount of equity ove and beyond20% of the home's value which is what lenders require for you toash out. $5.4 trillion at the end of last year. total. or nearly three times what homeowners had during the cession and 10% more than they had at the peek of the last housin boom. it rose by $735 billion jus last year as prices soared.

unlike during the last peak though, to day's homeowners are far more conservative. last year they took out just $262 billion via cash outrefinances or equity lines of credit. commonly called hlocs. that is 1% of all available equity. which is a four year low. and it's nothat they can't. more than half of all the equity is held by borrowers with very high credit scores, meaning easy candidates for hlocs which are expected to rise more this year. so what will they spend it on? remodelling. clfr is projected to rise dramatically this year to thehi est level in more than a decade. people are choosing to stay and te rather than move. that's because there's so little r sale. a record low level of listings. even though spring has already sprung, usually the busiest season of the year for housing. and before we go, another

look at the selloff to start this second quarter on wall street. the dow fell by 458 points to 23,644. the nasdaq was down by 193. th s&p 500 down 59. >> yeah. these are sweaty pal days on wall street. >> that's "nightly business report" for tonight. i'm contea ewer. thank you for much whatting. >> i'm bill griffith. have a great evening. we'll see you tomorrow.

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