♪ this is "nightly business report" wh sue ferrera and bill griffin. ♪ triple digit gains. stocks took off today on optimism over earnings and an easing of tensions in syria. >> game changer, merck bets on a new type of cancer drug is paying off and extending the lives of lung canceren pa. >> philly fever. city of brotherly love is in love with its sports teams and all the money that comes along with the winning. ose stories and much more tonight on "nightly business report" for this monday, april 16th. indeed, good evening everyone. welcome. t a strong sta the week as investors shifted their attention to earnings and corporate fundamentalsayn a from geo politics. the companies that have reported earnings so farav h for the

most part, topped expectations. today the dow jones industrial avage advanced 212 points to 24,573. the nasdaq added 49. some investors want to know if this is maybe as good as it's going to get. >> reporter: the big debate the market is having is thisak whol earnings story, the idea that this year earnings will be up 18-20%. in 2019 that estimate will go down to 10%. keep in mind earnings are still growing but the rate of growth in 2019 will slow down. will that matter? myense is that it will but it's too early to have this fight. this see to be debate for the third quarter. the bieest problem is everyon is expecting really strong earnings. that reversed today. this tellse this is not a big

worry about earnings peaking but the barots a higher right now. the good news is that there'sy clea floor under the market with these trade issues and perhaps syria calming down. what about the fed? that's a real wildcard. they may be raising rates. but if things go bad, i think they will definitely slow the pace of increases. ere's some limit on the downside. i think the big issue is interest rates. with volatility backing down, we'll see if rates start to move up. we've seem to be one or two nasty inflation reports from making this a worry. this there's a lot of things that may be keeping a lid on the market's gains. and speaking of rnings, late today netflix reported a trong quarter, adding more subscribers than expected thanks to a slate of original programming. the vidng strea company earned 64 cents a share which was in line with estimates.

total revenue rose by 40% to 7 $3.7 billion. investors obviously like the results, sending the stock higher in the initial ainer hours trsession tonight. >> reporter: the bottom line is the company continues to grow its subriber baseaster than expected, adding nearly 7.5 million new subscribers in the quarter, a million more than ant list projections. the stronger than expected both is happening both in the inchrnational market, whi accounts for half of revenue and 55% of aemberships as we in the u.s. where the company's investment in original content is paying off despite a more saturated market. netflix attributing that growth to a portfolio serving subscribers' advance tastes. another package with sky begins later this year. netflix projecting user dproet will continue.

looking at the addition of over 6 million subscribers. first quarter earnings season is fuellingtocks so far, but what are some of the potential red lights and green lights that are facing the market that you should know about? good to see you again, kevin. >> good to be here. >> once again you're the only guide in the trading room. you work way too hard. let's start with some of the green lights for this market, se primarily bec we have seen such strong rallies in this market. you citehe consumer is pretty much holding on, confidence surveys are hanging in there, at least for now. and global inflation needs to stabilize. tell us about some of these. >> we'll start with t consumer because it's 70% of the economy. we've seend some very g stability coming out of that area of the economy the last few

years. did see some real strong numbers towards the end of last .e consumer spending was growingt arou arou arou. that's down shifted, a big dip, t enough to be concerned about but we do need to watch that. the rest of the enomy tends to key off what the consumer does. >> i'll add another metapher . some of the bricks in the wall of worry, these are the red lights that we think about here. you cite the investorsudnly turning risk averse, global capital spending faltering and trade negotiations going awry. those are all of things we worry about every day. >> it sure is.ns er confidence, investor confidence kind of tied together. we see s consumertiment essentially at cycle highs, which is a blessing and a curse. if consumers are not confiden n they'r going to spend. if investors are not confident,

they're not going to invest. we don't want that to go too far. we're at the high end of the range as far as both of tse sentiment indicators are concerned looking back throughout the cycle. if a of those two thins were to roll over, it could feed into capital investment businesspl s for spending which provide a tonic to the economy. we need to look at how confidence interacts with planned business investment. it means a lot for the economy and the markets. >> one ofhihes you focused on under our green light section ets inflation. we did some data in the last week or so that really spoke to the fact that inflation i building a little bit. that brought in the whole fed discussion. is the market pretty much inline with what the fed has told us they intend to do? >> yeah. we all know that the fed is set to raise interest rates, maybe two or three times this year. that's fine as long as -- because the market is pricing that in.

but if inflation were to ramp from here unexpectedly and we started to see a pop in inflation here, around the world, in europe, japan, for example, really t start see some true signs of real inflation coming back, that might force the fet to more aggressive than what the market is currently looking for, not priced in. that could be a problem for the market heading into maybe the second or third quarter. so that's sething we have to keep an eye on. right now, fine. but we have to watch that trajectory. >> thank you as always, kevin. we appreci >> thank you. now, while stocks rose today, the price of oil fell. domestic crude was off by more than 1% following its biggest weekly gain in months last week. now, it seems counter that oil prices would drop after the weekend's allied air strikes on syria, but there's a reason why. >> reporter: crude prices lower after the air strikes in syria over the weekend.

oil traders are calling this the classic case of buy the rumor, sell the facts. the rumor, last week the markets didn't know wha to expect. the fact, air strike this is soekend appear to be a one-time action. here isn't more anticipated strife at this moment. that cour, change, howe if russia gets more aggressive. syria is not a major oil producer, but chaos in the region iss alw concern because of the oil producers sur rounding tha ing tha rounding that countries. russia is a big producer. a there'ays a worry that supplies will be at risk. russia has warned of consequences for this weekend's air strikes. ase just discussed, the central bank remains on track to raise interest rateshree or four times this year, so says the head of theework fed. bill dudley added that any more than that would be unlikely. exactly't think we know how many more rate hike wes're

going -- hikes we'r going to do this year. the last meeng was thr hike this is year, but there were a number of people that werect exg four. three or four seemed like a reasonable expectation this year. as long as inflation is relatively low, thesed going to be gradual. >> volatility isack to more normal levels. judley is leaving his post in mid . john williams will be his successor. the president is making two more nominations to the board ol the fed reserve. richard clarita and kansas regulator michelle bowman has been named to fill a vacant fed governor position. in economic news, reta les rebounded in march following three months of tmclines. the commerce dept reported a .6% rise in sales last month, the largest increase since november.

consumers purchased morers furniture and appliances. economists say the report underscores the improved financial condition of american households. home builder confidence has fallen for a fourth straight mont and it comes at a time when more construction is needed homesrease the supply of in the market. the closely watched index cited a lack of buildable lots, increasing material costs and rising prices for that decline in confidence. >> merck was one of the best performing stocks on the blue chip dow today after the drug company's new type of lung cancer drug performedetter than expected in a clinical trial. the stock rose about2.5%, providing hope for patients, physicians and investors. >> reporter: since they were approved in 2014, drugs that stimulate the been giving new hope to patients with melanoma,kidney cancer, lymphoma and other cancers,

including famously to president jimmy carter. the medicine made by merck showed some new results today in lung cancer that are being called unprecedented. >> very good news for people with lung cancer who desperately need some good news. >> lung cancer causes the most cancer related death than any form o the disease. lung cancer will cause more tha 234,000 new case this is year in the u.s. and more than 154,000 deaths. the size of the problem also means it's big busin analysts say t marketor lung cancer drugs is estimated at $10-15 billion a year. the results today presented at the america association for cancer research conference in chicago were closely watched, both by medicine and on wall street. the data on merckro were a clinical trial in newly diagnosed lung patients.

the results showed patients taking merck's drug were half as likely to die from lung cancer than those on kechemotherapy alone. rck's stock rose on the news. >> i would say the advantage es to merckecause they're going to be able to put all of this on their label. >> reporter: it was a different story for bristol myers which also presented new clinical trial results. those drugs in combination reduce patients' risk of death or cancer progression by 42%. it wasn't enough to satisfy wall street in the face of merck's data. even though the results aren't directly comparable as the trials were run in different sets of patients. merck's drug is already approved to treat advanced lung cance patients who haven't yet tried other tions. today's clinical trial results are expected to prescribing among physicians. both medicines have price tags

of around $150,000 a year without being combined with othertherapies. en as the field of medicine applauds better results, the side eect of financial toxicity is an increasing concern. >> to read more about the new cancer e in lung treatments head to our website nbr.com. time t take a look at some of today's upgrades and downgrades.m cdonald's saw it rating lower at stevens. the analyst there says that this year's sales growth will not be as strs last years. price target was cut to $1. sha costco saw its rating raises to outperform at wells fargo. the analysts cited benefits from the through tax l and he predicted a special dividend will be declared soon. price target was lifted to $220. shares of costco were up 3%.

craft times is one of three packaged food companies downgraded. the analyst cites an increasingly kpetstive environment and has serious doubts about management's innovatto the price target was cut to $55 per share. shares rose to 61.19. crocs saw its rating downgraded. the analystays investors are paying for much more future progress than a realistic. still ahead, a 60 minute report rais safety questions about -- >>

amazon has shelved plans to become a wlesale distributor of prescription drugs. the complex nature of the business and the lack of interests from hospitals is what prompted that decision. the report lifted shares of the major drug distributors like cardinal health. drugstore chains also saw their rise. the supreme court is hearing a case to decide whether soutes have the power to tax all online sales. in this particular case, south dakota is looking to overturn a decades oldre precedent w states cannot require online retailers to collect sales unless that retailer has a physical presence in the state. justices will hear arguments tomorrow. shares of allegiant came

under pressure following a blistering report by 60 minutes which raised serious questions about the carrier's safety record. the stock finished lower by 3%. some believe the report's impact on the airline's earnings could be limited. >> reporter: allegiant is under pressure after a scathing report by 60 minutes. the safety record is worse than its compitors, including more than 100 serious mechanical incints. 60inutes also accused them of pressuring its pilots to down play safety concerns and to criticize the faa's enforcement of safety rules. one analyst called it half hour of horrible publicity. >> there are going to be some peop who saw that and cancel flights. certainly could be, but it'sd very h to estimate how that could look.

>> reporter: the ceo didn' talk th 60 minutes, but the airline asted the report, saying this unoriginal and outdated story bear no resemblance to the operations today and shows a fundamental sunderstanding of faa compliance, practice and history. the faaid do an audit in 2016 sayin defends its record the faa's oversight has producet re and the rate of incidents reported to the faa's air traffic organization trended downward in recent years. as for the management and ceo, industry watchers believe they will survive the negative publicity. the likelihood that there is any sort of management change as a result of this is zero. again, the challenges that that report k highlights werewn and i think the company has taken steps to address them. >> reporter: many of the problems highlighted are linked

ha the old planes which are beingd out and should be out of the fleet by the end of the year. bank of america posts a solid quarter and that is where we begin tonight's marketefocus. ank issued more loans and said tha clients were more engaged during the period. that helped overallar engs rise. cost cuts and the new tax law also helped results. shares were up a fraction to 29.93 as a result. charles schwab said it saw increasing trading activity and said that new account openings were the highest they've seen on a quarterly basis in nearly 20 years. shares finished higher by 4% to 53.0 japan's softbank is interested in buying mediali per trunk. a report said that the japanese

investment conglomerate has joined a list of several potential bidders that areey ng the owner of the new yorkag daily news, ch tribune and ltimore sun. trunk is also considering other offers. trunk shares rose more than 10% today to $19 even. volkswagon truck unit said it is considering making an offer for trucking giant navistar. a potential deal could be valued at about 3 or $4 billion. shares popped nearly 10% to $40.71. higher cost cut into therofit transportation company jb hunt. overall revenue was stronr than expected as the company shipped more packages. shares climbed 6% to 119.75. g hasnd a regulatory fil shown that the hedge fund point

72 asset management has taken a 5% stake in video streaming company roku. shes initially popped after the bill news and finished the regular session up o $33.02. >> the head of the world's largest advertising company abruptly stepped down over the weekend. sir martin sorrell's departure follows vague allegations of misconduct. the stock fell hard today as investors tried to assess its future without the long time leader who has helped build thaa company ad agency power house. >> reporter: a dramatic departure of the high profile chief. sir martin sorrell has resigned following the conclus n of an investigation started earlier this month into alleged personal misconduct. the details have not been revealed. over 33 years he turned a stake

in aas shoppingt company into a global ad giant through a series of acquisitions of madison avenue coanies, expanding its focus on digital ads. >> the firm was him. 's kind of interesting. he really was a very strong leader. he was wpp. he's t one that spends time in silicon valley. he's the one who's been competing with facebook and google. it will be iting to see what happens. >> sorrell was known for his massive compensation. he brought in about $100 million in 2015 which is one t of biggest pay deals in u.k. corporate history, wch drew some backlash from shareholders. he ow he will continue to get paid. the -yr-old's resignation is being treated as a retirement, qualifying him foruc as as $27 million depending on the performance of the company. as the boardct con a ceo search, it's promoted its chairman to executive chairman and named two -coos.

the company's stock has declined about 35% over themoast 12 hs. with a forecast of zero revenue growth for 2018. with growingressure on costs and google and facebook's increasing dominance, sorrell's departure raises questions about r the con grglomerate needs to be run differently or split up. >> this is about to be the '70 ab and the '80s where the bankers make a lot of money. >> reporter: nowe'll see what sorrell does next. sources tell us he does not have a noncompete clause and he's not ready to retire just yet. coming up, how years ofng lon sports is turning into a financial win for the city of brotherllove. ♪

♪ the sixers, the eagles, villanova basketball, philadelphia sports teams are definitely on a hot streak right now. that means aey lot of mon pouring into the region. we have a report fm the city >> reporter: saturday night in philadelphia, the 76ers blew out the miami heat. game two is tonight in the stadium walongh the entire city promises to be rocking. it's possibly the mt surprising turn around in all of sports. duoyears ago the team won just 10 out of 82 games and had the worst four-year stretch in league history. now the sixers are on a 17-game win streak and true championshi. contende it's meant a huge uptick in business.

fans and sponsors are excited and willing to spend a lot more money on the upstart sixers. r>> oures are up 70%. we have a 10,000 person waiting list. we've sold out of season tickets for next year already. >> for the wells fargo arena, each additional playoff games men extra half million dollars in revenue. sixers.t just the all of philadelphia sports seems to be on fire. the eagles won their first ever super bowl in february. earlier this month villanova won itsecond ncaa title in the last three years. >> i don't know if there's any fatigue withwinning. we've clearly enjoyed the eagles -- i went to villanova. hopefully there's a trifecta coming. >> the eagles chants break out almost every home game. it's an electric atmosphere.

>> you feel extra energy. when you see all tse people behind you, it's going to give you extra motivation. >> it's a great time to be a sports fan in philadelphia. it's a great time to be part of this momentum. i think the players feed off of that energy. our building has been full all year. it is a process. i' always said it's an ongoing process. it never ends. >> reporter: here at the training complex in new jersey, the many years of losing has finally paid off this season. it's a wall street ownership group. they've got that long-term investing patience to running their team.g you're see it with these playoff wins now. >> i think they've done a great job creating sort of a synergy in terms of what the coaching staff is after, what the front office is after and what the ownership group is after.he >> reporter:ext question is how far can the team go and what the final return on inve investment will be. and before we go tonight, here's another look at the day on walstreet.

it was an upside one. the dow advanced 212 points to winnish at 24,573. the nasdaq is up 49 and the s&p rose 21. you're going tbe watching that game tonight. >> sure. love the nba playoffs. >> that doest for us tonight. thanks for joining us. >>l i'm b griffin. have a great evening. see you tomorrow. ♪ ♪

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