♪ this is "nightly business report" with sue herrera and bill griffin. ♪ stocks rebound. the dow soars more than 300 points as the bulls beat back the bears for control of this market. >> major obstacles, why some of america's most beloved consumer brands are now attached to wall street's most hated stocks. >> private eye. the new role investigators are now playing in board rooms across the country. those stories and much more tonight on "nightly business report" for this wednesday, may 30th. good evening, everybody. welcome. what a difference a day makes. stocks rocketed higher at the opening bell and really never looked back, recoughing much of

yesterday's losses. bank stocks rallied, energy shared soared and small caps hit a record as investor concerned over a political crisis in italy faded. the dow advanced to 24,667. the nasdaq was up 65 and the s&p 500 rose 34. >> oil prices also gained ground, notching their first gain in six sessions. a report that opec will keep crude production curbs in place at least until the end of this year helped reverse the commodity's recent slide on fears about higher production. domestic crude rose about 2% today, settling above $68 a barrel. >> oil prices may have ended higher today, but they're down about 5% for the week. and the rise in rates that we've been telling you about have also begun to cool. so does this quickly-changing narrative signal a pause or a fundamental shift in the market? joining us is sandy villory of

the villory balanced fund. which is it, is it a pause in an upside trajectory or a fundamental shift in the way the market is valuing things? >> i think it is a pause. you remember we started the year at 246 on the ten-year. we went all the way up to 312. now we're back to 285 on the hen-yeahe ten-year. that's a little bit of a pullback but the fed is going to put upward pressure on interest rates. i think you're seeing that play out in the market with small caps that tend to do better in a rising interest rate environment versus large caps. remember, the larger cap multinationals in the s&p tend to export more expensive good and services. so when interest rates go up, the dollar goes up which again favors small caps. i think small caps are the place

to be for the rest of 2018. >> there is a huge difference between investing in a rising interest rate environment and a declining interest rate environment, es essentialpecial you're investing for income. what's an investor who's looking for income to do? >> that's an interesting question. when you look at the ten-year right around 3% that's one scenario. then you have good income stocks that are paying 3% dividend yields. what you see in 2018 is investors shifting as rates have come up as bond rates have come up from the proctor & gambles of the world to bonds. so i think proctor & gamble is down about 25% year to date. i would have some exposure to stocks and bonds such as in my balance fund where it's about 70-30 stocks to bonds. >> on that note, thanks for the

advice. we appreciate it. >> thank you. one issue that still gets the market's attention is trade. as we reported yesterday, the white house has revived its plan to move ahead with tariffs on some chinese goods. the response from beijing was swift and it was sharp. ♪ >> reporter: president trump's decision on tariffs isn't going down very well in china. soon after the white house issued a statement, the commerce ministry responded, saying we are surprised by the strategic statement released by the white house. at the same time it's half expected. today, the foreign ministry said in international relationships every time you change, every time you break a promise, the country's credibility is damaged. officially both ministries said that china wants the u.s. to meet them halfway in the spirit of the joint statement. however, i spoke with one official on the chinese side who's familiar with the trade talks and he said the most

important thing that the u.s. and china need to do is establish mutual trust. but that this latest move isn't helping. the commerce secretary wilbur ross will be visiting china this weekend to continue trade talks. advanced teams are here in beijing to work out the details. the official said that the trump administration strategy appears to be to pressure the chinese. as for whether china will retaliate, the foreign ministry comments on that, saying china doesn't want a trade war, but we won't hide from one. if the u.s. insists on being reckless, china will take action to safeguard its legitimate interests. meantime, a trade deadline looms with the european union, another key trading partner. tariffs on steel and aluminum imports are scheduled to take effect on friday. and there are reports tonight that the u.s. will impose those import tariffs, and it comes as trade officials met on the sideline o the oecd meeting in

paris. >> reporter: the forum in paris where today the oacd released their updated economic projections for the world economy, showing a growth rebounding to 3.9%. now, this is the strongest period of growth the world economy has experienced in years. however, they have cited some clouds on the horizon, some rifts that policy makers need to be mindful of. one of them was trade wars. this is coming at an interesting time for europe because on june the 1st the exemptions from the u.s. are set to expire and the expectation is they may not be renewed. on the sidelines of this meeting we know the european trade commissioner also met with her counterpart, wilbur ross and did have discussions. however, neither one of them have commented on what the final tariff decision is going to look

like. mr. ross did say the eu is the only trading partner that has said they will not be willing to engage in discussions as long as tariffs do end up getting applied. of course, all of this comes at a time when policy makers have been discussing next steps on mu multilateralism and how to improve it to make it more inclusive and more fair. >> economic growth was revised slightly lower here for the first quart other of the year. in its latest revision the government said this morning that the economy grew at a 2.2% annual rate between january and march, down from the previous estimate of 2.3%. economists say that businesses and cop sum nsumers slowed thei spending a tad. u.s. businesses added to their payrolls in may. according to the latest adp survey private payrollshiring i

construction, education and health care. it might be slowing slightly as the pool of available workers dwindles. the fed reserve is refining a rule that governs trading at bank passenge central bank is proposing a chai change to the rule that would place the greatest restrictions on banks that do the most trading. banks that do less trading would face fewer regulations. this rule, which is a part of the dodd-frank banking law adopted after the financial crisis, has often been criticized by wall street as being too onerous and harmful to the functioning of the market. the latest survey from the federal reserve casts an up beat view on the economy. the beige book points to a moderate pickup in activity this spring. >> reporter: the latest federal reserve snapshot, the beige

book, finds economic activity expanded moderately in late april and early may. manufacturing leading the way, shifting into high gear with more than half the districts reporting a pickup and one-third classifying activity as strong. on the other side, overall consumer spending was characterized as soft. this was uncertainty about international trade policy. all in all, it's part of what economists see as a mixed economy with some concerns on the horizon. >> the good news is the fed probably doesn't have to move super fast to raise rates. they're going to raise rates in june, but of course if they go too fast that's when the market gets nervous. >> reporter: it's still all about labor markets. they remain tight across the country with reports of difficulties filling jobs. shortages of qualified workers

including truck drivers, carpenters, and i.t. professionals, many firms responding by increasing wages and compensation packages. however, the fed still says overall wage pressures in the aggregate remain modest. that's leading economists to see no alarm bells for the fed when it comes to future monetary policy. >> wage growth has been extremely modest relative to other times when we've had economic expansion post a crisis and recovery period. >> reporter: the next and perhaps most important economic barometer just two days away, the all-important jobs report from the labor department on friday. time to take a look at some of today's upgrades and downgrades. apple was downgraded to hold from buy at maxim group. the analyst there calls the optimism over apple's services business overblown and says the company's subscription business will disappoint investors.

price target now $200. that stock fell a fraction to 187. fellow dow component exxonmobil saw it raised. the analyst cites the acceleration of the company's investments in new energy products. the price target, $100. the stock rose 4% today. steel was downgraded to sell from neutral over at goldman sachs. the analyst there cites increased competition with the automotive business. the price target is $4. the stock closed at $4.58. target was added to bank of america's top ideas list. the analyst says the retailer will benefit from aging demographics. the price target is $86. the stock rose more than 2% to $73.47. still ahead, the future of the media industry according to those who run it.

consumer reports reverses its recent decision and will now recommend the tesla model 3. the recent update improved the car's braking distance by almost 20 feet. the braking performance prevented the car from getting a consumer reports recommendation. today's move helped live tesla's shares nearly 3%. there is a new perk for walmart employees. the retailer is now offering pay for its workers to go back to school, as long as they get degrees in business or supply chain management. the country's largest private employer is partnering with three universities to offer these degrees to nearly 1.5 million part-time and full-time employees. as the labor market tightens,

walmart is hoping that the program will keep those employees at the company. the benefit was announced today at the start of walmart's annual shareholder meet. amazon ceo jeff bayers gath meeting. a proposal to split the ceo and board chair positions failed. fox shareholders are going to vote on the proposed merger with disney on july 10th. that puts pressure on comcast to make a formal offer for fox's assets. that deal and the future of the industry was just one of the topics at the code conference, which brings together the biggest players in the business. ♪ >> reporter: with leaders, the biggest media and tech companies

taking the stage at the code conference at a range of media megadeals pending. the question of why there's pressure to consolidate loomed large. 21st centu fox ceo james murdoch saying they see so much opportunity in having greater scale. when pressed on comcast's plan to make a higher bid for fox than disney, he focused on progress on disney's acquisition. >> we had an agreement with disney and we have an agreement with disney which we find very attractive for our shareholders. it's an all stock agreement. we think the prospects for the new firm are very strong. we think from a regulatory perspective that you have a higher certainty of close. when you weigh up all of those factors, that's really what we thought was the right thing to do. whether or not the board is asked to consider a different offer from somebody else in the future we'll deal with that as we go. >> reporter: with at&t awaiting a judge's ruling on whether it will be able to buy time warner, ceo randall stephenson saying consolidation is inevitable.

>> nobody knows what the future is going to look like five or six years from now, but the bet most people are making is premium content is going to be very, very relevant five or six years from now. a lot of bandwidth is going to be required to make all that happen and there are going to be new kind of business models surrounding this. >> reporter: with at&t looking to grow, it feels pressure from big tech. one of those big tech companies, facebook, is feeling the heat here at the code conference. fox ceo james murdoch criticizing facebook ads and how it's been used as a platform for manipulation. snap ceo took a dig at facebook for copying its features but not its more stringent regulation policy. >> they've changed their prun products and changed the mission. fundamental they're having a hard time changing the dna of their campaign. and the dna of their company is all about having people compete online for attention.

>> reporter: cheryl sandberg responding by saying they're taking responsibility and investing big even though it will hurt their bottom line to make sure this doesn't happen again. >> we can get better, we can be more transparent. we can put a lot more resources in technology automation and people. >> reporter: sandberg also talking about all the changes they've made in the past two months and the ways they're complying with new european privacy regulations. sales impress at dick's sporting goods. the retailer reported stronger than expected earnings and revenue, quelling fears that business performance would be impacted by the company's decision to stop selling guns. in fact, dick's said it thinks new customer visits have increased as a result of that policy. the company also raised its earnings guidance for the full year and the shares jumped nearly 26% to $38.35.

the company said increased investment in its jimmy choo brand would be cutting into earnings growth in 2018. so the share is down more than 11%. dsw improved sales this quarter and launched a new loyalty program that it hopes will generate additional growth. the company didn't update its earnings guidance specifically for the year, however. and that disappointed some investors. dsw shares finished down to $24.61. watch maker movado added that e-commerce performance was a bright spot for the company in the quarter. it also raised its four-year earnings forecast. shares ticked higher by 16 important today to finish at

$49.20. after the bell tonight, cloud software company box reported a narrower than expected loss and higher revenue. the company also gave guidance for the current quarter. still, shares initially traded lower in the extended session erasing a more than 1% gain. big consumer brands are facing unprecedented challenges. we've been telling you about familiar names, most recently campbell's soup that are seeing sales slide as they struggle to keep up with changing consumer taste. a closer look at the stumbles that have put these well-known companies on the defensive. >> reporter: many of america's best known brands are hurting, from playtex to palmolive, they're facing real questions about how to stay relevant. take campbell's soup after the retirement of its ceo.

it represents a lot of what's going wrong at consumer companies, like missing key insights to customers. the company didn't innovate enough to address the change, according to industry insiders. other companies have tried to catch up by buying successful smaller brands that are growing, like general mills buying annie's known for its organic mac and cheese. they haven't managed to learn from their acquisitions. instead of integrating the startup cultures into their existing products and processes, the companies have absorbed the startups into their existing bureaucratic cultures. they haven't haven't been able to hold onto top talent and founders after a few years of a transition. and the problem is bigger than just losing touch with their customers. the big brands are also getting squeezed by a war between retailers with amazon's whole foods, kroger, walmart, all slashing prices to compete,

squeezing food margins. but some venerable brands are managing to change with the times. con agra has managed to revitalize its frozen food business. >> think about what frozen entrees were ten years ago. now you'll see these power bowls. the bowls themselves are made out of biodegradable material. the companies have done a terrific job of making those brands more relevant. >> some companies have done a better job integrating acquisitions and learning from them. unless companies start to adjust, this is a group that experts say could feel more market pain, see big deals to cut costs and spin off brands and many will be holding onto the past. >> investors no longer love

consumer staple tokstocks. they're turning their backs on this once particulopular sector >> reporter: shares of the biggest food and household product makers are among with worst performers this year, down more than 20% in 2018, compared to slight gains for the broad market. only a may minority of analysts are recommending these stocks, warning that recent declines will only worsen as their commodity costs rise and younger shoppers shun traditional supermarket brands. just two years ago, these consumer staple stocks were favorites of investors, coveted for their generous dividends. today, the focus is on a humming u.s. economy and companies managing to grow profits rapidly. this leaves the question of whether these stocks have become cheap and neglected enough to

represent bargains. they have not be this inexpensive relative to the broad market for more than 15 years. proct looking cheap is no guarantee that the pain is over for investors in these stocks. buying them now is a bet that companies can freshen their brands to win over younger customers or improve mergers and acquisitions. correct or not, that's a bet the wall street crowd is increasingly unwilling to make. coming up, executive search takes on a whole new meaning now that private investigators are involved. ♪ sir martin sorrell is starting a new venture, the founder and former ceo of wpp

has taken control of a shell company in london with the hopes now of transforming it into a new marketing services business. now that's the same strategy that he used years ago to wibui wpp, the company from which he resigned abruptly just six weeks ago. that departure occurred during an international company investigation. the results have yet to be disclosed. and there is a new player in corporate board rooms, the private investigator. they're being used to look into executives' past and by doing so, they are altering the future of some campaigns. leslie picker explains. >> reporter: in the me too era, allegations of predatory behavior bankrupted harvey weinstein's company and forced out wynn founder steve wynn, sending the stock on a roller coaster ride. the stakes are high for corporations failing to root out sexual harassment. so they've turned in droves to

private investigators. >> an ounce of prevention really is worth a pound of cure here, because the cost both in terms of potential drop in stock price, legal and pr costs, possibility of the regulators getting involved, they're enormous compared with the relatively modest expenditure in hiring folks like us in order to rule out this behavior. >> reporter: a private investigator for 25 years, he says he's seen about 35% more client calls related to sexual misconduct over the last six months. >> i have never seen a societal phenomenon that has had an e me too post weinstein world. >> reporter: firms are looking for help in due diligence. he's also looking into the background of potential board members. and some clients are seeking possibly predatory behavior in

competitors, a move that one of his clients calls weapons feminism. he often gets work through lawyers, who recently sought help clearing the name of a client who had been accused of sexual misconduct. >> the me too movement is a very valid movement, but there's been overreaction, we believe. in representing somebody who's been accused, it's important to find out whether or not there's any credibility to the accusations. >> reporter: nardello's number two walked me through their client auofferings. >> database like these that we have access to allow us to search for publicly available information. we always complement that as well with what we call on-site searches. >> reporter: she says on-site searches include sending investigators to where the subject has lived or worked, searching local databases like county court records and knocking on doors to interview neighbors and friends. and the work is making a

difference. national gua says he's seen companies decide against hiring individuals after discovering sexual misconduct. despite the wave of allegations of predatory behavior during the me too movement, he says we may have only seen the tip of the iceberg. before we go, one more look at today's rally on wall street. the nasdaq is up 65, the s&p up 34. >> that does it for us tonight. i'm sue herrera. thanks for joining us. >> i'm bill griffith. have a great evening. see you tomorrow. ♪

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