. this is "nightly business report" with bill griffeth and sue herera. stocks drop as bond yields rise to their highest level in years. is this just a test for the market and investors? sluggish sales. home depot reports a rare sales miss and the retailer blames unusual spring snow. rolling the why las vegas is going to extremes to attract a younger crowd. osetories and more tonight on "nightly business report," he said, for this tuesday, may 15th. good evening, everybody. i'm bill griffeth. sue is off tonight. the dow's win streak was snapped today after eig consecutive up days. one factor may have been the 2easury yield hitting the highest level sin is 11.

add to that new hints of inflation, a rise in o prices, you had declines across the board. the dow fell by 193 points to 24,706. the nasq was off by 59. the s&p 500 was down 18. bob pisani takes a closer look now at the declines on wall street today. >> reporter: two key factors drove the market selloff. first, after an eight-day win streak, the market is simply more importantly,ernflation co have come to the fore once again. stocks sold off after the release ofwo economic reports this morning after the market opened. and the empir state manufacturing survey. retail sales rose just about as much as enomists expected in april, but gasoline prices spiked. wsantime, the gauge of manufacturing s raw materials rising to their highest levels in several years in april. you put the two together and it rekindles the same kind of

inflation fears the market addressed in february when gher wage costs caused the dow to drop 500 points on february 2nd during the jobs report. the reaction tod was aot more muted. the yield on the ten year rose to its highest leveln seven years but the price decline in stocks was much more modest back in february andum v was not particularly heavy down here indicating investors were not t rushin sell. so here's the key. question is the shock of higher prices starting to wear off? how cfortable are investors getting with higher rates? the economy looks strongn the second quarter if rates are going up because the economy is good, that's not as bad if rates are going up solely because ination is going up. the action in the next couple days will be a big test for the markets. is this healthy profit taking or are we just rolling over again? for "nightly business report," i'm bobisi at the new york stock exchange. investors were also caughtf guard by north korea today. there were reports that that country hasel indefin

postponed high level talks with south korea which were scheduled r tomorrow. the north koreans were reportedly upset about a previously scheduled joint south korean u.s. military drill. it is unclear what impact this may havde on pre trump's scheduled summit with kim jong-un on june 12th so what does all of this mean for the markets? joining us tonigh ken mahoney is here to talk about all of this. he is ceo and president of mahoney asset management. good to see you. >> you're inclined to buy dips like today, right? >> absolutely. the real sto is about earnings, earnings, earnings. location, location, location in real estate. the market has to be about earnings. companies guided higher for the most part. companies also have a lot of earnings because of the tax windfall they have that they can buy back stocks and pay dividends. >> the environment's changing. rates are going up. i mentioned the y tenr now above 3.07%. does that worry you at all? >> a littlebit. look how we got there. it's not because of inflation,

it's because of growth. two months ago people were saying we get to 3%, the market is going to roll over. 1% down isn't rolling over. if it stays up here and goes higher, we'll have to watch that. bonds are competition into stocks but the same token if yo, think about a couple of months ago we hit 3%. the algorithms are going to make the markee. casc >> geopolitical, trade, none of this we were talking about last year. it was all about earnings last year. now we have allf these different concerns for the market. what about those as well? winds.t of head you compare this year to last year, last yearas an anomaly. all of this volatility. we've had two 10% corrections in 2018. 2018 is more normal in the market than what happed in 2017. the biggest draw down we had in 2017 was only 3%. you do expect the head winds. we have this push and pull going on. >> when you get this kind of a dip, what do you buy? >> i like technology. i like large cap. technology, we're still getting

top line owth. companies are still growing their sales numbers. most of the other industries arn making tbers because of eps meaning they're buying back stock, hitting their numberou ifook at technology, they're still growing in sales and that's where the action is. >> you're not betting on the consumer right now? >> no, not at this point. the consumer staples is a laggard. there's some branding with undercurrents. i like to go wh the elitists. yes, they're more volatile than most of the other sectors. that's where the growth is and where investors will be attracted to. >> i know you're investing for growth. lot of our viewers invest for income. with rates rising, it's tough to find a safe investment there, re where do you go? >> there are tho tips thase tip. ets. rising rates. floating rates type of thing. ets do give, you know, some type of immune off those high jeer rs and lower bond prices. ke mahoney with mahoney asset management joining us this evening. elsewhere, the treasury

department said today it is rachetting up sanctions against iran by targeting the governor of iran's central bank. the u.s. has designated him a terrist for allegedly helping move millions of dollars to lebanon's sanctions like this are intended, of course, to further isolateran from thelobal financial system. high level trade talks between the americans and chinese officials get underway this week. many expect those discussions to be tough anduldit. euniceor yoon repts from beijing tonight. >> reporter: u.s. ambassador t china says that beijing and washington are still very far apart when it comes to resolving trade tensions. speaking at a conference in tokyo, the ambassador said the trump administration wants the chinese to give them a timetable on how china will open up its markets to u.s. produc. ambassador said boosting the sale of natural gas will bethn table and he also said the u.s. would consider easing

tariffs if china opened up its markets for cars and especially food expectations are high that negotiators in washington this week will work out a preliminary deal that would includereer imports to china of american agricultural products. china would ditch tariffs on u. farm goods like soy beans and scale back som non-tariff barriers like quality control protection. in exchange the u.s. would eas restrictions on zte which has effectively stopped operations cause of a u.s. sales band. he deal could encourage the commerce ministry to restart the review of qualcomm's acquisition of nxp of the netherlands. that had been stalled because of the chinese. i spoke to the chair of the americanhaer of commerce here, and he said that the u.s. business community is concerned about a potential missed opportunity. he says there's a fear that the focus on cutting the trade deficit and the reprieve for zte could become a distraction from

the larger structural issues, like market access and fair reciprocal treatment. and with president tmp watching china on his side for his upcoming summit with north korea's kim jong-un, there's a worry here that the trump administration could rush a deag without addreshose concerns. for "nightly business report," i'm eunice yn in beijing. home depot was one of the worst performing stocks in thed dow shares fell more than 1% after the home improvement retailerrt re a rare quarterly sales miss. courtney ragan has more on home depot's results. >> reporter: unceasable weather kept cmers from spending on garden supplies and outdoor merchandise during aime when spending on those items is typically high. m gardeningake up 20% of depot's first quarter sales. the weather hit hardest in april which thepa c said was one of the coldest and snowiest apes nk 20 years. >> i don't t it's nearly as bad as it looks because we had a slow start tospring and this

coming off of two years where there really wasn't much on the wayf a winter. once the weather turned sales picked up. >> in fact, home depot said manp able sales are up double digits just a little bit more april. in good news, may is the most important month for gardening. home depot executives express confidence that sales lost in the first quarter will get i picked up may, june and july and as a result reiterated its full year forecast. while outdoor categories missed the mark, the rest of the store did. sales of items $900 and above grew 10%. sales of appliances increased double digits includi now higher priced washing machines because of tariffs and the company tells me consumers aren't changing their buying behavior as a result of those higher prices. lumber is still selling even with prices at historic highs. perhaps most important to home depot's continued outlook is the continued strength of the u.s. housing market. even as mortgage rates move higher, t national average is

still below the historic average and theffordability index accounting for local housing market differences remains well above the level home depotid cos a red flag. >> home depot's one of the best run companies out there. i think it's very well positionedn a growing sector. >> while investors may have been disappointed with results, many analysts are looking past it and see longer term growth. for "nightly business report," i'm c rtneyragan. time to take a look now at some of today's ndupgrades downgrades. ford's rating was cut to neutral from overweight p ater javaheri. the analyst there says the analyst is not doing enough to become a leader in the autonomous driving price target $12. shares rose fractionally today to $11.22. shares of cbs were upgraded to outperform from market perform at berneein. analysts cite the low probability of a merger with om vi price target, $65. shares rose more than 1% today

to $54.42. and the gap was upgraded to outperform from market perform by the chelsea advisory group. the analyst cites recent traffic gains in the retailer stores and the stock's valuation. price target there is now $39. shares finished up 2.5% to $31.16. and tesla's price target was cut today by a analyst at morgan stanley who had been a ng-tesla bull. the firm cited the continued nrouble in the electric car maker's product process for its model 3 sedan. price target now $291 and, by the way, there are reports tonight that tesla will be temporarily shutting down its model 3 production line to make some fixes. the stock todayha off more 2% to $284.18. still ahead, the land of the driverless cars. >> reporter: i'm phil lebeau in arizona. this is ollie, autonomy eleric

shuttles. being developed in the phoenix area. why is it the hot bed for those types of vehicles? that story when "nightly business report" returns. tl ses city council has passed a new tax that will be levi on big companiesocated there. the tax is estimated to raise about $48 million annually. the revenue will help fun homeless services and affordable housing. seattle-based starbucks was critical of that law. amazon said it wasd disappoin adding that the city doesn't have a revenue problem, it simp has a spending efficiency

problem. well, as auto and tech industries race to develop self-driving cars, testing the technology i no longer happening solely in silicon valley. in fact, an emerging hot spot is in chandler, arizona, just outside of phoenix. il lebeau takes a look at why the valley of the sun is heating up for self-driving cars. > reporter: drive around chandler, arizona, and you'll see them with regularity. self-driving chrysler mini vans beingted by wao, formerly known as the google -dselfriving car project. these waymo vans along with self-driving cars being built at intel, chips and processors from nxp for the brains behind the wheel and ollie awe tonneau muss shuttles have made phoenix home. thiss part of larger push by state and local leaders to make the valley of the sun center

for developing autonomous drive vehicles. reaction in my community has been really, really good. they like that we'reth involved this. the autonomous vehicle companies. >> reporter: while arizona has embraced driverless carsy adopting less stringent rules and actively recruiting the development of these cars, a fatal accident involving an uber test car driving in autonomous mode raises the question, is the valley of the sun too exposed to the future technology? for now residents in chandler are not overlyoncerned with the surge of driverless cars on their streets. >> you know, i'm intrigued by it. i way i'm freaked out by it. i don't trust themti ly. >> reporter: doesn't scare you at all? >> not one bit. i'm up for it.co if i d, i'd say push harder. >> because they seem to go with the flow and i'm comfortable with that. i figure probay the safer car of all of the ones out there. a >> reporter: future without drivers now driving the future of the phoenix area.

phil lebeau, "nightly bu cness reportndler, arizona. pfer's anemia treatment gets the green light, and that's where we begin ettonight's ma focus. the fda approved that drug which is almost identical, by the way, to treatments made by amgen and johnson and johnson. the drug is intended to treat anemia by chronic kidney disease or chemotherapy. they hope to make it available this year sometime. shares were off to $35.69. shares of j&j and amgen fell on that news. tyson foods is buying asscas from ame proteins. it will help it recycle more animal pducts to use in feed and pet food. the meat producer said the $850 milln deal will increase the presence in the animal feed business and also help reduceee ouse gas emissions. shares were off a fraction today to $67.28. voda phone said the chief

executive is going to step dow after ten years at the telecom company. he will be replaced by the current cfo. voda phones fell more than 4% to $27.04. okayed regulators have the $8 billion merger of semiconductor makers of microchip a microsemi. that clears an antitrust hurdle for th two companies. the approval means it is more likely that the deal will in fact close. microchip shares were off a fraction to $93.36. shares of micro semirose a percent to $68.5. in a recycling your used paper and plastic could end be up costing you more money. according to the wall street journal u.s. based recycling companies made money for years by shipping goods to china. but chinese officials recently halted those shipments because of contamination concerns and that, inturn, has forced some cities in the u.s. to chargeor residents to recycle goods

that may now just end up in a landfill somewhere. bob ceda did the reportingalor the jound he joibs us to talk about this. a fascinating story, bob. i hado idea the chinese soaked up that much of our recycled over, what, the last 20, 25 years, right? >> yes, that's right. this has been going on for a number of years, since the 0s. china has taken enormous amounts of scrap paper, cardboard, olda c containers and turned them into new materials that have sort of fueled their economic boom in the last 20 years. >> but what we sent them wasn't always perfectly recyclable. for example, there were stillce pizza s in pizza boxes and food and other things in here. so they are calling foul and saying they want a pure recyclable shipment,s that the idea?

>> that's correct. for years the sort of goal was to push as much through the system as possible and the more we pushed through, the lower the quality got and waste materials, household garbage, food items got mixed in and that all got sent overseas and was discovered when the chinese started to take it apart over there. and as the yrs went by, they just got tired of it and said, enough, we're notoing to take all of this trash because then we have a disposal o problemr here. >> right. >> so, okay, as i mentioned, cities are now starting to charge more torecycle. sometimes it goes to a landfill now. dose it make s economically now to recycle? what's going to happen here, do you think? >> well, i think what's really happened is you're still g sng recycling. recycling is here. it's been around for over 20

years. these curbside programs, that's going to continue. the real challenge is to sort of find new markets and to clean up the material that we're collecting right now. >> and is ts -- it occurred to me, probably occurred to you as well, is this only a negotiating tactic for the chinese as part of our trade disputes going on right now?ll >> i -- i don't think it'sra completely related. perhaps some of it is. i think even people in the recycling tindustry, was hauling industry will concede that this trash ithe recyclables is a problem. it's a problem that has been getting worse and the industry has kind of known abouthis for years, but as long as the chinese kept buying it and takiit, there wasn't really a whole lot of concern or immediacy to deal with it. >> so the lesson is leave the

pizza out of the pizza box, bob? >> that's correct. >> thanks for joining us toni appreciate it very much. >> thank you. comg up, the big bet las vegas is making on millennials. officials in nevada sar they not worried about yesterday's supreme court ruling that overturned that ban on sports betting in most states. in fact, they say las vegas where sports betting is already legal could benefit. that's because sin city is going all out to attract a younger crowd. b contessawer reports for us

tonight. v >> reporter: las is seeing a record number of visitors and they're getting younger andr, younge but they're not necessarily coming ogamble. >> i didn't smoke inside because i can't do that at home. >> reporter: thecerts and restaurants are a bigdraw. marshmallow really draws the 20 somethings in. chain smokers draws in the old millennial crowd, those who are hitting their career stride and may have more money to spend. the mgm grand kate terse to a crowd craving a cool social experience, part arcade, part sports bar, part casino. >> would you ever pla the slots? >> no i like card games. >> no. >> reporter: thatresents a challenge. the casinos are betting technology can change. >> in our new casino of th future that we're rolling out is

called cx 3. we worked with a lot of the game manufacturers and we' introducing slot product that allows you to plug your phone in, automatically it recalibrates and shows you a leader boa and where y rank on that leader board. much more interaction. >> reporter: just thi month nevada approved the tri-station gaming machine. it offers different game choices.ed i tri out into the dead, a zombie game that has more than 40il million m downloads. >> in our case a lot of the players that played g thee weren't even expecting to play. they were walking byhe and saw something that was interesting to them that they thought they would try playing, and that's new revenue for the casino floor itself. >> reporter: games with multi-player machines will have games they recognize, pacman, deal or no deal, cut the rope, it's been downloadeds more than a million times. imagine you walk through the casino and you see a game you've played way too much time on your

phone. you think, yeah, i can master this.vi a, you've turned someone with no interest in the slots into a gambler. >> we're super happy to report the average age of our players3 is 36 which is a 20-year shift for what you see of average electronic game players. >> reporter: don't forget sports. vegas i rapidly becoming a sportstown. visitors of all ages stream in to see the golden knights, and esports draws massive young crowds to a first of its kind dedicated arena at the luxor. with tle wayed now for legal sports gambling, what happens in vegas won't stay here. in las vegas, ctessa brewer, "nightly business report." now additionally, some have said that the supreme court ruling on sports betting could increase the value of somam sports in fact, today there were reports that a hedge fund manager is close to paying a record amount for an nfl franchise. robert frank has that story.

>> reporter: hedge fund billionaire david tepper's o purchasef the carolina panthers for 2.2 billion sets a neecord for the nfl and ties him h for thehest price ever paid for a sports team. based on the ecomics of sports, team values showed no signs of slowing. tepper paid the same price for the panthers tt was paid for the houston rockets last year which is more than 25 times the purchase price in that blows away the previous record price for a nfl team easily passing the 1.4 billion paid for the buffa bills i 2014. there are now 87 sports teams in america worth at least $1 billion and the list is growing. the premium forive sports in an increasingly fragmented world is inc gasing but thewing number of billionaires that want trophy assets that generate cash, status and membershipan i exclusive club is the main driver of prices.

when steve ballmer paid 2 billion for the l.a. clippers, it whe four times previous record for an nba team. many say he overpaid. forbes puts the team's value at 2.2 billio the dallas coy boys are still the most valuable team in sports worth an estimated 4.2 billion followed by the yankees and soccer's manchester at 3.7 billion. tepper owns 5% of the nfl's pittsburgh steelers worth an estimated 25 billion. he needs to put up 35% ofca his for the panthers. he'll be selling his stake in the steelers for 135 million. he's worth 11 billion so theti deal will give him plenty of cash to change all of his steelers jerseys to blue. robert frank, "nightly business report finally tonight, the man who first called wall street bond traders masters of the universe has died.

author tom wolf famously chronicled america power and greed in the bonfire of the vanities. he immortalized the mercuryau astr in "the right stuff." he pioneered new styles of writing and hear poped catch phrases like the radical sheik and tom wolff was 88 years old. the dow was down 199 points. nasdaq down 59. the s&p lost 18 that is "nightly business report" for tonight. i'm bill griffeth. than for joining us. e you tomorrow

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