this is nightly business report. with sue herera and bill griffeth. what anged? the market peaked three months ago and today things are a lot different than they were then. big oil boom, not owe fast. oil prices are rising, but exxon andhevron can't seem to capitalize. price hike. amazon's primeembership is one of the engines that drives that company, and it's about to cost you more. those stories andore tonight on "nightly business report" for friday, april 27th. good evening, everyone, and welcome. i'm sue herera, bill griffeth is off tonight. wall street wobbled a bit. stocks closed out one of the busiest weeksar ofngs kind of mixed. not even those blow-out tech results we told you about last

night were ae to liftly higher. it seems as if debating whetheril it lift interest rates. the nasdaq added 1 point and the s&p 500 was up nearly 3. the major averages were slightly lower for the week. despite declines this week, stocks are on track for monthly toarks three months since gains. the market peaked. as mike ntoli reports, a lot has changed since then. >> it has now been three months since the stock market hit its latest peak in a rush of new year's enthusiasm over a humming economy and a big tax cut. since then, the market has turned volatilend ntative, dropping a quick 10% in february and then struggling to cling to its longerm up trend as a side effect of bri economic growth and lower taxes gained more attention. namely higher interest rates, a buildup of inflation and lofty equity valuations.

the s&p 500it now about 7% beneath its late january high and rough flat on the year. one way of looking at this setback is a simple payback for a overheated two-month surge of momentum that started at thanksgiving. in part this payback is in response to higher borrowing costs. the ten-year yield pushed up nearly half a percent from three mont ago. the market has managed to absorb this rise inth rates wit s&p 500 sitting a few percent over its february low even as the yiel struckmulti-year highs. the main result of the three-month rollover in stocks has been to make them look a good deal less expense i've and to cool off runaway investor op mism. strong gains, corporate earnings and sluggish share prizes have dropped the earnings multiple to around 16 based on the coming year's forecast profitat right in line with its five-year average. investor surveys and mutual fund flow trends show investors have turned a good deal more cautious as well. the good news in all of this, so

far it doesn't appear that the stock market tickp is any serious risk to growth. gdp is ahead orojections and companies have boosted capital spending which both argue against the idea that a recession risk is rising. with investors sensitive to a rapid spurt in interest rates or a chance corporate profits are peaking f thecycle, wall street might well stay in its choppy tentative trading range for a while longer. rategood news of cor prosperity now comes with partial offsets in the form of highere rates and m inflation. so far, though, this anxious three-month adjustmen in stock does not indicate that january's peak was the very top of this bull .market for nightly business report, i'm mike santoli. as il pricesrise, you would think that big oil's t pr profit and revenue would too. but that wasn't necessarily the case for exxonmobil and chevron in the most recent eiquarter. results were mixed and so was reaction o wall street. jackie deangelis explains >>why. il prices are up almost 40%

in the last year, climbing closer and close to $70 a barrel. the reason, excess inventories are falling while global growth looksstrong. still, some of the oil majors struggled with earnings. exxonmobil told investors that its quarterly profit was higher year on year,t but still fell short of expectations. higher oil prices did help the mpany, but the company's downstream business which refines and sellsuels s a slump because of higher expenses abroad and lower profit margins on sales of assets. chevron's profits were better than expected, however, it's revenues whileigher than the previous year did not beat the streetxp regardingtations for oil prices, the company said this on its conference call. >> we're not designingur business on these kind of prices. we're driving our business for a lower, for longer assumption. i would expec prices to stay in a fairly tight range over time and we're going to design our business toeal with theower end of those assumptions.

>> chevron stock price has seen a rebound of aut 10% in the last three months in part refiningrouble in its business the previous quarter took its stock price down. earlier this week, conoco phillips beat expectations on profit and revenue. higher oil prices were part of the story, but so were cost cuts. denergy was tou as a bright spot for investors this year because of the oil price rebound and it's definitely outperformed. the s&p energy sectos up a little more than 2% year to date. one of the four sectors shong gain in that time period and econd best only to the technology sector. but experts say a full rebound in energy wl continue to take time, as $70 oil is better than sub $40 but not as good as over $100. i'm jackie deangis. amazon is hiking the price of one of its most important serves, its prime membership. it appears that people are willing to pay up for wt's become one of the driving forces behind amazon's dominance.

deidre bosa has more. >> jennifer greco has been an amazon prime member for two years. she uses the t service aboutce a week. >> i use it for everything, like from books to health products to displays. it has everything i need and i get it right away. upcoming e says the price hike for her prime membership won't stop her from subscribing. >> honestly, considering that most of the time i don't even get charged for shipping, it's really not a bad erdeal. >> o reactions were a little more mixed. >> because i abuse i so much, it's not as big of a deal because i know i'll get my worth out of it. >> that's like $20 more than last year. >> this is not tim first they have done this to me, but i'll eat it. i'll eat the cost because i'm so addicted to my amazon prime. >> annual primemberships will soon cost $119. that's a 20% increase from the current $99. it goes into 1 effect mayth for new subscribers and june 16th

for current memrs renewing. the company says that as the prime ecosystem haspa ed, so too have amazon's costs. >> the value of prime to customers has never been greater. and the cost is ao high. as we pointed out, especially with shipping options and digital benefits. continue to see a rise in costs. >> the last time amazon raised the price of its prime membership was back in 2014 when 20 million items were available for two-day free shipping. today there are more than 100 million eligible products as well as two-hour free whole foods grocery delivery in ten cities and a hugelyxpded digital library of music and video content. analysts like mark mahaney aren't worried. he points out the extra revenue will allow amazon t inves even more back into the business. >> and you put in a $20 price increase on 100 millionsu cribers, that's $2 billion in incremental revenue cash flow

that could dropdown. knowing amazon, they won't allow it to drop down. they'll invest it in something. but still it's great profit potential. >> but the stakes are high revenue from prime memberships is part of one of the gr fastesing business segments for amazon, a unit that grew 60% year over year this past quart. more broadly, prime itself is the flywheel in the amazon machine. research sws that members shop more often and spend more on the platform tha nonmembers. once you're in, amazon can upsell you on prime upgrad like fresh grocery delivery and music unlimited. for ht"n business report," i'm deidre bosa, san francisco. so what exactly is your $119 membership used for? we're joined by tom forte who broke down tho numbers for us to determine what amazon does with your money. he's managing dr and a senior research analyst at d.a. vevidson. welcome, nice to ou here, tom. >> thanks for having me, sue. >> do you agreese with t who say before we get into the

breakdown that people are going to be willing to pay up for this sice tha service, that amazon has that strong a pricing power? >> absolutely. what people are paying for, let's be clear, is convenience. the ability to t an increasing number of products on a two-day basis, sometimes faster, and selection. being able to get so many hafferent products quickly to your home. that's really what people are paying for. t i donk that they will not balk at an incremental $20-a-year fee for amazon prime. >>ple had some p who did, but the vast majority of those who deidre interviewed agreed with you. so you worked up kin of a pie chart for us to see where that money is allocated. so let's take a look at that. we have 2%oes to the headquarters. 34% goes to profits. that's a very large number. tell me about that. >> generally speaking, i you look at amazon's buckets of profitability, we usually think

of cloud computing as their largest bucket of profits. but on a relativebasis, if you look at the cost structure, so the notion of y just pointing out how much we estimate of that prime g revens toward shipping and handling, how much of it goes toward content costs, things of that nature, we're estimating that about 34% ends up as profits to amazon. so this would make it one of tha most proe efforts by the company, which is why i think investors arexcoed at the $20 price increase. >> you know, i found it interesting that only % goes to content, because we hear from so manyompanies that one of their major costs and one of their majorce cs is the cost associated with content. that seems like a low number to me. >> it may be on the low side, but if you look costs, they're almost at parity with shipping costs, so pretty expensive costs for the company.

and i would argue, and i suspect that when yo polled consumers, not many of them today are saying i'm a prime member for streaming video on amazon. t y just reupped their deal with the nfl, two more years of thursday night football. ad they also hav new head of their amazon studios, who has a strong background in television. amazonhe extent that prime can have more hits, more mainstream content, thenaybe you'll see more consumers in the future saying i'm a prime member, not just forast and free shipping on so many different items, but because i love the content. >> on that note, tom, thank you so much for joining us tonight. have a great weekend. >> you too, sue, thank you. well, north and south korea's historic talks helped lift stock markets across asia, but investors are looking at the mmit with both optimism as well as caution. eunice eun is in seoul tonight.

>> officials say that president moon jae-in is going to have a phone conversation about the summit with president and he'll likely say that the ramatic events today on th korean peninsula will likely set the stage nicely for a potential meeting between kim jong-un, tho rth korean leader, and the president. and that's because this is potentially a major turning point in a conflict that has been technically going on for decades. after the summit,a' north kores kim and south korea's moon held a joint press conference where they vowed to end the korean war. they agreed to phase disarmament and the complete denuclearization of the korean peninsula. this is a formal side of what's been a fascinating day here. probably the most talked-about moment was when kim perhaps the most secretive leader on the planet, walked over to a podium in front of the media and gave an address live on tv.

he talked about how north and south koreans are the same people and that he hoped for a new path forward. s med to be having a dramatic effect. south koreans were saying that they were deepl moved and were wondering if this conflict could actually end during their lifetime. a now that sounds encouraging, but the koreans have been down this road before. since 2000, there were two other summits, both ended in peace declarations, but nothing came out of those meetings. we still don't know what kim ru jong-un's motivations are and just how seriously committed he is to dismantling his nuclear program. the toronto and montreal stock exchanges shut down early todayue to a technical glitch. this afternoon the exchange operator reportedhat its systems were down and no trades could be executed. du listed canadian stocks on the nyse and the nasdaq continued to trade normally during that outage. rmal trading in the canadian

exchanges is expected to resume on monday. it is time to take a look ao so today's upgrades and downgrades. microst's rating was raised from overweight to neutral over at jpmorgan. the an looiss cite strong growts inloud business. the price target is $110. microsoft shares rosore than 1% to 95.82. facebook's rating was raised to buy from hold. the analyst says the stock is just too cheap to. igno that's a quote. the price target is $202. the stockowinished today just a fraction to 173.59. shares were upgraded to buy from hold over at hsbc. the analyst cites a turn in the u.s. marke nike and a lower tax rate. the price target is $77. nike shares rose 2% to $69.56. still ahead, why the newest avengers movie is box office gold for disney.

it is shaping up to be a blockbuster weekend for disney. theatest marvel avenger movie is making its debut and it's already off to a running start. juliboorstin looks at how big this super hero blm is expected e. >> avengers infinity war is a marvel extravaganza ten years in the making. it ties together the characters and story lines across the past 18 marvel movies, with iron man and capta america teaming up with the guardians oythe gal as well asd- recorbreaking black panther for what looks like the biggest super hero movie ever. wow. i think it just says a lot about

what they have accomplished over ten years. it just goes to show youthat, you know, they have taken this genre that a lot of people ought, you know how long can you make these super hero movies. while they're 10 yea in, it's stronger than ever. i think it just bodes well for the future of the genre. >> ticket sales on fandango have outpaced the last seven marvel movies combined, making it the number three biggest preseller of all me. that bodes well for the film, which is said to be one of the most expensive ev, with a budget reported over $300 million. thursday night previews set a record for marvel, selli $39 million in tickets at the u.s. box office. that's the fourth biggest thursday opening ever. overseas the fil brought i $95 million in two days at i hasn't yet opened in mrkor ets china and russia. this puts t film on track to gross more than $220 million in the u.s. and as much as $500 million worldwide teks d. that would be a record for the spring and by getting

audiences excited about flocking to theaters, it setshe stage for a massive summer. not just for marvel's parent, sney, but for all the studios. >> i think t summer movie season will be better than last year's summer movie season. think just in may alone between infinity war, 2deadpool and a star wars story we could maysne of the biggest we've ever seen on record at the box office. >> after the overall u.s. box office declined nearly 3% last year, studi could use a boost.s avengers rough 85% critics rating on rten tomatoes and over90% audience score bodes well for strong word of mouth for the team of super heroes. i'm julia boorstin in los tv subscribers fleer cha communications. that's where we begin tonight's market focus. ther cable provi said it lost more than 120,000 video subscribers. that's almost triple the amount analysts had expected.

it wasn't just weakness in tv. fewer customers signedp for broadband services. still, charter reported a rise profits andrevenue, thanks to higher ad sales. charter shares fell % to 263.33. the drug maker reported a greater than expected drop in earnings as weak sales in the u.s. and europe hurt its results. the company still reaffirmed its guidance and announced a share buyback adding that it expects to return to growth in the oncond half of this year. the sharesheless fell 2% to $39.60. theoftware maker docusign began trading on the nasdaq today opening at $38 a share. that was above its initial ipo pricing of$2 docusign sold nearly 22 million shes, valuitself at about $4.5 billion. the shares finished higher than they started at $39.73. boeing is reportedly closing inn a deal to buy the aerospace parts maker klx.

"the wall street journal" said it's part of boeing grow its aircraft services business. boeing shares were off a fraction on the news to $340.88. meanwhile shares of klx popped 9% to $80.05. sprint and t-mobile are reportedly near a merger deal, which could be announced as soon as sunday. according to cnbc, the would be valued at $26 billion, but it would face major allenges from regulators. the report sent sprint sharply lower in after-hours oading. shar t-mobile rose initially in the after-hours session. time for tonight's market monitor. he has some picks he says will rise double digits over the next 12 months. joining us is craig hodges, ce of the hodges capital management. nice to see you again, welcome back. >> thank you. great being on, sue. >> and you are looking at what you say is a more business friely tax and regulatory environment, which is going to

spur these businesses and their ability to expand, correct? >> yeah, it's a much better atmosphere than we've seen previous. i've seen more optimism out of management ams, notust for the tax cuts but the decrease in ougulation andan tell that they feel like the next couple years are going to be a pretty good climate. then you add on the tariff situation, which, you know, there's a lot of notiations and it causes a lot of volatility, but that's goingooo be a thing too for u.s. companies. so i think we're in a good spot. >> excellent. and i called you chris. i know you're craig, i've known you for years, so my apologies on that. >> no problem at all. problem. >> let's get to your first pick, if we could, and that is commercial metals company, cmc. why do you like it? >> yeah,t's a small company, but believe it or not, this small rebarpany is going to be the number one u.s. producer iof rebarthe united states. they just made an acquisition, the brazilian company, their

u.s. rebar operations, and all of a sudden here's commercial metals that's going to have of the world -- or the u.s. rebar market. and rebar goes in to roads and bridges. almost all construction has rebar in it so that's a big beneficiaryf infrastructure. this is a company trading around in the that probably next couple of years will earn $3 a share. that's a very inexpensive stock that we think there's pretty big side in. >> next on the list is international paper, a name that a lot of peopleknow. >> yeah. cternational paper has really taken it on thn the last few months. they're into somewhat negotiations to buy smurf it, the europead corrugaaper company, and it's knocked about 25% of the value out of international paper. meanwhile international paper has had twof the best quarters they have had in a long time. they have had nothing but better results. i think the stock down 15 points from where it was, say, x weeks o, eight weeks ago

got some real upside and you get 3.6% dividend while you wait. so i really like intrnational paere as well. >> you also like the airlines.th yok they're underowned and you're picking that particular arena american airlines. why american? >> yes. american has really come down, surprisingly come down. thistock was, you know, 59 i think in the first part of january here it is i think the stock is kind of in the 42 range now. trading about eight times earnings. they have slightl taken down their earnings about 50 cents for next year because of somegh fuel costs, but they're still going to earn probably close to $6 this year an $7 xt so i think there's pretty good upside. plus buffett has been buying a the airlines and i think there's there.ett bid in i think the airlines at this level have very good upside with very limited downside. >> craig, tha you somuch. have a great weekend. craig hodges of hges capital

management. to read more head to our website, nbr.com. coming up, how a woman combed yoga and her love of goat and turned it into a big business. he's a look at what to watch for next we. pfizer, apple, merck and report their earnings. or friday the closely watched employment reportpril is due out and that's what to watch for next week. well, you may have tried yoga before but have you ever done it with goats? one woman combined the two, created a following and now has a successful business. jane wells is in corvallis, oregon.>>

'm trying to hold a plank position. but i have two baby goats on my back. >> do the goats ever jump from this? because that would be weird. >> it is ird, but also kind of a nice massage. welcome to oregon, the place where the strangest fitness trend was born. >> focus on your breath. >> goat yoga. >> i had never lived in a spot where i could have goats. i've wanted them my whole life. >> lany morse had a career in marketing, then she got divorced, came down with an autoimmuneisease and was very depressed, but she bought some goats and they me her feel better. >> i would go out in the field every day and spend time with my goats. i started calling it goat happy hour and inviting people over. >> one of those people was a ga instructor. >> she was like you should really let me ha a yoga class out here. i said okay, but the goats will be all over the shmans.

s like cool. when i launched my classes in march, i had over 2300 people on a wait list to do goat yoga. >> the goats are surprisingly soft and friendlynd don't smell. though they occasionally leave presents. >> i got op >> first year revenues were $160,000, a figure lany morris expects t y double thisr and turn her business profitable. she's done cporate events f companies like nike, expanded to three locations in oregon and licensed a business in four other states. b >> you're juswn away by how happy it makes everybody. so that's when i a knew i had business. >> turns outcome bi combining d dogs with goats wasn't such ad ba idea. jane wells, corvallis, oregon. christey's is hosting what it calls the most anticipated art world event of the spring. as we've been reporting the collection of being and david

rockefeller will go up for auction nextmonth. today the exhibit of 2,000 items ened in new york. it is expected to be the largesg si auction ever, possibly reaching $1 billion. before we go, here's another look at the day on wall street andhe week. the dow fell 11 points, the usdaq added 1 point and the s&p 500 was nearly 3. the major averages were all slightly loweror the week. and that does it for nbr tonight. i'm sue herera. thanks for joining us. have a great weekend. we'll see you monday.

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