♪ this is "nrehtly business rt" with bill gr >> piece of the puzzle, federal reserve policymakersth acknowlee inflation pressures are building. and investors aren't quite sure what to make of that. icahn in limbo. why xerox has a future full of question marks. why some are spending tens of millions of dollars on big pty spaces with nothi inside. those stories and more tonight on "nightly busi. and we do bid you good evening. it was a day that should have beenood for the bulls. the federal reserve after all iid what many wanted to hear, it kepterest rates steady and hinted more rate hikes arek later this year if the

economy continues to strengthen. policymakers also acknowledge that inflation was taken higher but said it did not expect prices to spiral out o control. stocks did initially rise on those comments. but then a slow, steady decline took hold into the closing bell this thafternoon. dow finished down 174 points to 23,924. the nasdaq was off by 29. the s&p fell by 19. steve liesman has more on today's fed de. >> the federal reserve is keeping interest rates unchanged at its may meeting and signaling further rate hikes, but it did t as some feared suggest any uicker pace for those rate hikes. it acknowledged that inflation had moved up towards the 2% target but didn't seem especially concerned about it. it reminded the investors that e 2% inflation report is symmetric. so what does that mean?

well, it's kind of seen as a code word tot markets because ran below the 2% mark the fed is not going to quicken the pace of the hikes if inflati runs above that target. so the markets raised the probability of a 25 basis points rate hike, and it kept unchanged at the high 68% probability the chance of another hike inpt ber. and it lowered a bit to 35% from 39% the probability of a rate hike in december because the fed didn't seem so clear about that third hike. now markets are now less clear and some bondyields by the way fell as well. on the economy, the federal reserve said what it had said in the last meeting. that economic actisity isg moderately, that job gains are strong. up employment rate is low. and thatg strongly. household spending was sn to be moderated and the risks appear ultimately between lower growth and higher growth to be quote, roughly balanced. so is it two or three more rate

hikes well, it's definitely one more acco ming tokets and probably two more. and the fed and investors and market seven more months of unemployment, inflation and growth data if it's three rmore. "nightly business report," i'm steve liesman in washington. and as the fed watches the labor market a new report shows that it remains strong. according to the payroll processor adp private companies added 204,000 jobs in april. that was above expectations and the fifth straight month that gains exceeded 200,000. the growth was broad based as well, coming from the service sector and also industries like construction i but traues continue to hang over our economy. amid the threat of additional tariffs a u.s. delegation is now headed to china for twoks on how thd's two largest econ can avoid a trade war.

eunice yun is in beijing tonight. >> in a few hours, president eaump's entire economic led by steve mnuchin will be arriving in china. they're expected t go immediately into talks which will beginning on thursday local time and last until friday.n secretary mnucd team are scheduled to xi jinping's top economic adviser and there are reports tt it could also meet with the vice president and possibly even president xi himself. any results of the negotiations would likely be announced on afternoon. i spoke with the chinese official who has been involved with trade that this time around there haven't been the same level of pliminary meetings to lay the ground work for the higher level negotiations as there ha so the whole process is being handled much differently by the ions the the discu chinese are sending mixed signals. on the one hand they're pegging themselves as a champio of free trade and taking steps to

be open. on the other hand, today,he state press is taking a hard-line. suggesting china won't be able to budge on the industrial policies or lop $100 billion off the foreign ministry said that the talks could be constructives as long as theside was sincere.w what the chinese will be willing to offer and whether or nothat's going to be enough to satisfy secretary mnuchin and his team. for "nightly business report" i'm eunice yun inbe ing. tesla is trying to make inroads into the chinese auto market as we reported last week. tonight, investors got to look at theal finan and the results were not as bad as some had feared. the loss is narrowed to $3.35 a share. the revenue rose to $3.4 billion. as for the stock it was volatile inou after trading. phil lebeau has the one key takeaway from sla's quarter.

>> a big sigh of relief for the investors as the automaker eported better than expected results for the first quarter. it still lost a lot of money, $3.35 a share, but that beat the estimate by about 20 cents a share. revenue b coming inter than expected. the one takeaway from this earnin report -- model production. it was at 2,270 per week for each week in april. and the company says it's also on track to hit its target of building 5,000 model 3s per week within a couple of months. remember, theriginal target was hit 5,000 per week by the end of june. so again, tesla shareholders a bit of relief as the company reported better than expected results and gavee sirly encouraging news in the model 3. philebeau, "nightly business report," chicago. and from a modern company to that would be xerox. they find themselves at a

crossroads tonight and there arh report private equity firm apollo management is interested in buying their interest came to light today after xerox's ceo stepped do and that puts the merger with fuji film which many of you -- viewed as a life line in jeopardy. the latest twist in xerox's long an founded in rochester, new york, in 1906, the photographic company made photo paper and equipment. some 30 years later, physicist chester carlson invented a static electricity. dubbed xeroxography.ed after being tuy kodak and genera patents to haloid in 1949. the copier industry was then born with the release of the xerox 914 and the res history.

the company hit the new york stock exchange in 1961 under the na name tha became synonymous with the office for years it drew into the fortune 500 company and then things changed. in the 1980s they were slow to adapt toin the c digital age, instead choosing to diversify to financial services and other areas and they began to lose market share in thess core busi and by the beginning of the 21st century the stock collapsed. things turned around in the 2000s when they began to focus on services instead of product but that didn't lastlo . amid declining revenue and pressure from carl icahn, xerox spun off the business services company acs in 2016. now called condow it they run food stamp networks for nearly half the company among other

things. fuji film which has had ties to xerox since the early 1960s bought a controlling stakeco in thmpany. a sore spot for some investors which has brought us to today's events leaving an american icon in limbo >> so let' turn to david benoit. "the wall rt we are street journal" and he covered this story. welcome. great to have you with us. >> thanks for having me. >> this is very tangled we needless to say. it comes down toat accns that the heads of the o mpany, the d others did this fuji deal witho the consent of the board to save their own jobs. >> right, exactly. so what essentially is happened was last year carl icahn was on -- had a representative on the board of fuji -- on the board of xerox, i'm getting altangled, and xerox essen tbated about whether or o fire their ceo, jeff jacobson.

in november they told him, hey, avu need to stop the conversations you been having with fuji. we might replace you imminently. instead he went on and he did it. he had a blessing from the chairman and the lead independent director and he rushed to get the deal is how e icahn team described it. and a judge agreed with them and blocked the deal from hapclning. >> rly, somebody sees value in the company though. whether it's carl icahn or darwin deason or apollo management. what is -- what are the strengths xerox haso ight now? >>e argument for why xerox is an attractive asset. one, they have a ton of etents. they hajor inventions in america. they have a lot of researc techt their fingertips and there's n realms for them to get into. there's 3-d printing and new types of printing on like fruit and other topics that really that could be a huge asset if they're run right. and if they're given the ability

toin vate. >> so what happens next? as i understand, theha judge wod to approve any deal with fuji and where does this leave fuji? what happens next is one, icahn and deason and xerox settled their legal fighan the out, icahn's pick is iasand he and are more or less taking o the judge has tseapprove that lement. that could come any mo. fuji is trying to block that ttlement because essentially the new board of xerox under icahn and deason are already saying, gy, we'ng to step back. we might not finish this deal. we want to look at other t options. we w figure out what to d hg on to it. but their shareholders weren't too pleased today at the idea they m.ht pay mo so who knows what happens next? >> who knows, i know will be watching it closely and reading your stories about it.

david, t david benoit with "the wall street journal." still ahead,ol should sharrs be happy if their company goes out and gets a high profile execrm is it a case ofu beware cambridge analytica is shutting down and will declare bankruptcy in the u.s. and the uk. that decision follows the disclosure that the political consultamisy firm sed

facebook data. they have been losing clients and they have faced risingegal fees in the wake of the data scandal. it is every investor's work nightmare -- financial fraud. even though law enforcement agencies have me tools and laws to help police, this system is still far from perfecttond y it was the topic of a conference in w york city. attended by our scott cohn who has covered all manner of fraud over the years. he is joining us to talk about this. this tends to come in waves. so how can investors tell when that's a new wave of fraud on the horizon? did you talk about that today? -- there is a wave coming. that's for sure. according to people tt were at is conference. this was a conference that was put on by the university of california rkeley's center for business and law. so it was really a cross-section of regulators, attorneys, investors, journalists. so a lotnt of iesting takes on this. and it's not just because we're at that stage in the markets or because these things do happen

in ves. but because of basic human nature. these frauds tend to build on each other. you know, we had the s & l scandals and all variations on similar themes that means it happened before and it will happen again. >> did you discuss what areas or what industries or sectors are more vulnerable than others? >> yeah. of course as warrebuffett famously said you don't know who's been swimming naked until the tide goes out and we're not at that point yet. the big short seller is lookica at health. a lot of things going on there. a lot of transactions, dialysis companies. private companp medical practices. things like that that he says could lend themselves to creative accounting. there was a whole panel on cryptocurrencies which everyone is talking about. everyone seems to agree there

here to stay. but the issue right now is all of these inial coin offerings. all the news things that are coming up. the s.e. assistant director of enforcement who the commission's working group on this said they're looking at it closely. at whether the coin offerings are securities which is a company raising money or an actual coin offering starting up the currency. she is worried, so a lot of others at the conference that people will lose money on. this. >> we're glad you're on the job. keeping an eye out for the next wave. scott cohn in y newk city. pizza hut and kfc failed to deliver for yum brands. a key measure of salesis estad the restaurants rose less than expected in the face of rising competit that overshadowed better than expected earnings and revenue at the parent company which is yum brands. the shares dropped to $80.20

humana reported better revenue in the most recent quarternd raised the full year profit forecast but investors are focused on higher than expect medical costs. that sent shares lower by 2%. cvs health topped the forecasts thanks to higher sales of prescription drugs and a lower tax rate. the company expects to close the $69 billion deal to buy aetna in the second half of the year but on the down day on wall street shares still fell 3% to4. $65 consumers are once again charging more on the credit cards and that helped mastercard report higher than expected sales and profits today. people using their cards outside the country that they're issued in. resulting in a rise of more than 20% in those lucrative cross border fees.

mastercard was up 3% today to $185.82. wayfair posted a wideroshan expectedbut revenue did grow nearl retailer tracted more customers to the website. in fac company is gaining market share in the home goods e-commerce . mark investors seemed to like that news, sendinthe shares higher by more than 13% today. and aig reported earnings that missed the estimates. it cited continued struggles with the property casualty insurance business. shares of aig traded initially lower in after hours trading tonight. onedef the largest rtment stores in the macy'scquired a boutique retail shop in new york. but it might not be the store raat macy's is after, but er the woma courtney reagan explains. >> macy's bought a 7-year-old new york store called story.

it's a living magazine and it completely changes the inventory and presentation every four to eight weeks to fit a themewi which align the message of a corporateponsor. like the feel good story with cigna thatel products to help the consumers feel good. and the key is rachel scheckman. she will take on newly creative role as macy's brand experience officer and she will focus on innovating the in store sopping experience. a former consultaneckman has caug the creative way she executes retail. though she neveron scaled b the one location. it makes macy's a growing part trd for buying both t concepts and the talent that comes with it. walmart spent more than t

$3 billi buy jet.com and found mark rory. he's bought smaller companies for both the un and the expertise of the employees. for "nightly business report" i'm courtney reagan. and macy'snl isn't the company that goes after superstar executives. other retail giants in theast like sears and jcpenney have brought in star power to help turn t stores around with very mixed results. is tess the way to go for shareholders? joining us is eric gordon, a rofessor at the university of michigan's school of business. thank you for joining us tonight. >> hello. >> you pick any of -- maybe the mostams instance of a company hiring a superstar executive when chrysler hired lee iacocca. >> yeah. that one worked. ou're an investor you have to have mixed feelings. you're excited but you have to beworried.

sometimes it works really well and someti s it doesn't work at all. >> and is that industry specific? i mean does i it work bette retail as bill mentioned or retail in terms of auto industry? and not in other areas. >> you know, it should work in retail because retail is an area of creativity. an individual should be le to make a arthur martinez made a difference at sears. he brought a lot of vicrea, a lot of star power from sak's, but jcpenney brought in ron johnson that one completely h just don't think ye stars ortar power. it doesn't make sense. it's blockin and tackling. you want an experienced person. industriesw in some like retailing, it works half the time and half the time it doesn't. >> what's the message for investors, a lesson of some kind

when a company does go out and hires a superstar executive and can you guess ahead of time whether it's going to work or do you wait to see what the results are going top? >> you can make som j guesses. ronson had never been a ceo of a company, he had never done a tn around. so penney's needed turn around experience but he didn't have the experience. with rachel, the big question will be can she do things that scale at macy's? she's done a fabulousob at her store, but what happens when you have a lot of stort ? >> what abe culturals aspect of a company? you take starbucks orapple, there's a specific culture that surrounds and isn that company. does it matter what kind of a ceo you bring in? does it have to match what the culture or can you change the culture? >> sue, you nailed it.ot it's to be a match.

ron johnson and penney's were a complete mismatch. he was california he was so california he didn't want to move to texas to penney's headquarters. >> right. >> penney's old guard rej lted hie an immune system rejects antibodies. making that fit from small to big to what you're doing to the new one you know you can't -- you can't make a big contribution at n people board with you. >> indeed. eric gordon with the of michigan's school of business, that was fun. thank you for joining us y tonight. >>easure. coming up, the s call it deconstructing luxury. we'll take you to the $58 million west hollywood pent house and show you nothing. i'll explain why coming up next on "nightl"

u.p.s. may one day deliver bulky goods. according tohe reuters,re in talks with one trucking firm to launch an home delivery service for sofas. the move would give u.p.s. an advantage in the so-called final mile delivery. that's a market that's expected to grow to about $12 billion over. and that sent shares of trucking companies like warner and ryder higher in today's session. as interest rates rise, apication for new mortgages and few financings are fallin they were done more nan 1.5% and it comes asat on some 30 year fixed rate home loans reached the highest levels in 4 1/2 years. imagine paying tens of millions of doll

that has absolutely nothing in it. not even the kitchen sink.'s ithe latest trend in multimillion dollar rea estate. call it deconstructing luxury. diana olick is in west hollywood, californi >> this $58 mholion west ywood penthouse condo is not tricked out. it's stripped out right to the yncrete bones. one of a kind. >> it's a new strategy getting big play among ultra high en in and l.a. people love mid century but they want mid century today. >> real estate agents call it a blank canvas so youan walk in, you just see the walls. you see the interior space. but you can do whatever you want tohat space. >> so rather than flaunting aef ch kitchen or spa bathroom, the seller boasts basical thing. it seems as if the property is

new.hi although storied penthouse is anything abut, the vie unmatchable because zoning now prohibits towers here this tall. since opening in1966, it has housed celebrity residen from cher to joan collins, elton john to lindsey lohan. any buyer is going to want tis make it or her own kind. ready to be architect and designer ready than move in ready. >> for us to take a white box and design isu uch easier. n bring the client here, they get to bathe the space. the property is more valuable stripped out. >> gavin broaden came up with some designs,yeo potential have something to look at other than the view. have you ever gone into a beautifully high end home and han and say, i want to take it all out? >> that happens to us nine out of ten projects. >> at this price a property is not perfec.

for "nightly business report" i'm diana olick in west hollywood. and before we go, one last look at the day's numbers on wall street. the dow dropped 174 points to 24,924. the nasdaq was off 29. and the s&p0 fell 19. and that will do it for us tonight on "nbr." i'm sue herera. thank you for joining >> i'm bill gr ♪ th

> is "bbc world news america."th >> funding o presentation is made possible by the freeman foundation, kovler foundation, pursuing solutions for america's neglected needs, and purepoint financial. >> how do we shape our tomorrow? it starts with a vision. we see its idealorm in our mind, and then we begin to chisel. we strip away everything that stands in the way to ribeal new possities. at purepoint financial, we have designed our modern approach to banking around you --