>> announcer: this is "nightly business report" with sue herera and bill griffin. >> here comes amazon. the on line retaiuyr b a little known internet pharmacy rattling partstr of the itional health care industry. >> nike's big run. sales were strong in north america for the first time in a year as t dow component turns in a better than expected quarter. >> place your bets. atlantic city re-opens two casinos, but will they improve the city's fortunes? those stories and much more tonight on "nightly business report" for this thursday, june 28th. > good evening,everyone. welcome. amazon is making a big push into thharmacy business.

uithe online retailer is aing pill pack an online pharmacy with a nationwide reach. that's the type of move the health care industry has been feing for some time because some see amazon's entry as a way to upend the traditional market for prescriptio drugs. that sent shares of walgreens, cv and rite-aid lower. it also pressured stocks in the drug distribution industry. meg tyrel takes a look at if amazon took its first step to be a majorye p in health care. >> reporter: amazon is the great disruptor from books to retail to grocery stores, the entrance of amazon signalled massive transformation and loss business for competitors. for more than a year it appeared pharmacies might be the next target. with the purchase of pill-pack they have signalled a move into the space. pill pack is a 5-year-old online pharmacy specializing in sving patients with multiple prescriptions. it delivers presorted

medications directly to patient homes. >> you w pills, never stand in line at a pharmacy and never miss your medication again. >> reporter: it allows people to contact pharmacists any time of day. it had revenue of $100 million in 2017 versus $50 billion for cvs and walgreens. amazon spent about a billion to acquire pill pack but didn't sclose the rms. the market reaction was massive. stocks of cvs, walgree and rite-aid sank erasing billions of dollars in their market value. amerisource and express scrip saw shares decline. walgreens has been on the defense when it ces to amazon and its ceo struck the tone today on the quarterly earnings call. >> we don't see any reason to be woied. we are n complacent. i'll repeat this. we have a clear plan.

i believe we will continue with the execution of our plan. >> reporter: others space have turned to mergers to counteract the threat. cvs is loong to purchase aetna. as analysts point out it is not just the competition for pharmacy business that may be weighing on retailers. >> when i goo cvs a walmart who is a loser in this bidder, i'm picking up a lot of things on the way to getting my drug prescription at the back of the store. now i'm definitely going to be doing that neon i think this just puts amazon right in a great place. >> reporter: while broader plans for the pharmacy space aren't clear, investors believe it will disrupt here as much as it has other industries. for "nightly business report"," i'm meg tyrell. >> stevenhalper joins us now from canter fitzgerald. thanks for joining us.

>> thank youor having me. >> when amazon bought whole foods it sent huge ripples through the grocery do you see it happening in health care? >> no. i think the pharmacy business i a lot more complicated than grocery. simply because the employers as well as the pharmacy benefit managers get to control the networks where consumers can get prescriptieds fi most of the managed care companies in our universe we cover at cantor aeady have captive mail order facilities and they basically exclude other mail order facilities. so you can't get your prescripti filled at another mail order pharmacy. so whats it for amazon? why would they do this then if what you laid out obviously kind of shrinks the market for them? >> clearly pharmacy is a very large market. to some extent perhaps the next move for amazon is to move in to the pharmacy benefit space.

that a possibility. there are also many smallye , health plans, that don't have captive mail order where this mht be a goodservice. remember, pharmacy is very large industry. collectively, $360 billion of sales. pill pack is very small and there is a very long road to climb here to become main stream and the bigst challenge is being part of the pharmacy networks. many years ago there was a company drugstore.com that tried to do the same thing. it simply didn't work. >> clearly today we saw a big response to suthis. was showing those fellow drug distributors and retail pharmacies that saw big declines theirtocks after this announcement came out. the same thing happened last year on the whole foods deal. a lot of grocery stocks went down but then back. do you see the same thing happening here? in other words would you step on some of the pharmacies now?

>> right. within my coverage list whi is e managed care list, we saw the same weakness because of the exposure to mail order pharmacy. we believe that the stos overreacted and we would certainly reiterate our overweight rating within our coverage list. we would point out united health care and centenes two great managed care companies followed by anthem which is goinghrgh a process to in source its pbm and mail order pharmacies and they are actually going to be partnering with cvs beginning in 2020. >> very good. thanks for joining us tonight. >> thank you. we, amazon's move into the drugstore business came on the same day walgreens posted its first earnings report as a dow component. the company topped wall street earnings and profit estimates, hiked the dividend and i buying back shares. as kate rogers reports, walgreens is facing a number of

challenges. the newest blue chip is feeling blue. the larrest drugshain is facing new competition from amazon and trying to compensate for some ofts own missteps. same store sales in walgreensn retail divisere down as people spent less on household and personal care. even the pharmacy business was amat. >> the se store sales, especially in the u.s., were quite weak. that reflects what whave been seeing in the channel for the last couple of years which is margin pressurro coming both ends of the business. >> analysts say the company is aiming to position itself as a health destination like some competitors, offering an of services designed to bring in customers. last year the company announced a partnership with fed ex for drop off and pick up services as well as a partnership with lab corps showing promise in florida. >> they menoned optical and hearing. i do think they are kind of inching toward doing more health

re-type services and chasing cvs. >> good news came in the form of a $10 billion share buy back and a higher dividend. walgreens has another thing working in its favor -- demographics. as boomers age they are likely to fill for prescriptions. for "nightly business report" i'm kate rogers. >> elsewhere fellow dow component nike reported better than expected earnings and revenue t to new product launches that consumers liked. nike earned 69 cents a share, five cents better than estimates. revenue rose nearly 13% to more than $9 billion. thatleased investors. they sent the stock higher in initial after hours trading. sarah ieisen has more details. >> repter: nike did it again, beating wall street's high expectations in the quarterly earnings report. north america is this is one of the biggest questions going into the report after a sluggish period in

nike's home market. an important market -- north america -- representing more than 40% of total nike sales is now growing again. 3%. investors wan to hear if that can continue. nike's growtht mar continues to be on fire. that would be china. china representin35% revenue growth for nike during the quarter. one question though -- will the trade headwinds, if they escalate, start to hurt? itot only an important market in terms of customers for nike as seen by tn growth this quarter but manufacturing as well. footwear and apparel so far have been spared from the tariffs back and forth between the u.s. and china. but if things get worse, that could be anissue. finally, in terms of products, basketball continues to be hot but the jordan brand, not so much. jordan brand sales shrinking during the period on lower volumes in sales but basketball still continuing double digit growth. new styles like vapor max and

epic react analysts say are performing well. overall a healthynnapshot one of the dow jones industrial average's best winners of 2018. for "nightly business report" i'm sarah eisen. >> on wall street stocks rose as investors brushed off the uncertainty over trade policy. a rally in the technology and financial sectors helped lift major average and byhe close the dow jones industrial average advanced 98 points to 24,216. the nasdaq was up 58 and the s&p 500 added 16. bob pisani has more on today's move higher. >> reporter: stocks ended in tft green a slow but steady drift higher and with just onem trading day left in the month the dow is on pace to end down half a percent for june. the market showed signs of relief in the rare o absence trade-related headlines. industrial stocks materials stocks which were hit hard by trade related concerns had snmal

gains. jpmorgan, citigroup, morgan stanley up. the xlf is a basket of financial stocks and itan finallyed to snap a 13-day losing streak as the federal reserve released results of the latest round of bank stress tests. remember,alech and finan are the two largest sectors in the s&p 500. they have been massively oversold for months. in particular have been oversold. for the year the s&p 500 is up just about 1.5%. its worst showing since. 20 sectors that led the chart through most of the quarter weakened as the second quarter has come to a close. that sector is le small cap stocks, russell 2000, facebook, apple, netflix and semiconductors. there is a lot of good news for the second half. buybacks are showing no signs of slowing down. tax cuts are continuing u.s. earnings. growth is strong. the markets have been shrugging off a slight downward revision

for first quarter gdp today. the watersre a little bit muddier now. for "nightly business report" i'm bob pisani a the new y stock exchange. it is time to take a look at some of today's upgrades and downgrades.ib was given a rating of buy in new coverage. the analyst cites the potential for modest but sustained growth. the target is 150 dollars. shares of i rose to 140-04. sales force is a top pick citing the potential to expand operating margins. the target i $152. sales rose to $135.12. >> meanwhile mat tell was downgraded to underperform from neutral. citing valuation ander lg earnings estimates for the toy maker. price target now $12. that stock fell more than 2.5% to $16.34.

madison square garden was graded to buy from hold at jeffreys. the analyst cited the company's just board approved plan to spin the sports busesses into a separate company. price target now $350. the stock soared nearly 14% today to 303.29. still ahead, the financial sector moves t higheray after floundering for a while. is that a positive sign for long-terinvestors? zo a certainly was busy today in addition to the pill pack deal we told you abt, the company made another move as well. amazon announced it is rolling out a new delivery service aimed at the most critical part of the livery chain - the last mile.

logistics of course is a big part of their success and now they are ramping up its own network. courtney reagan is in seattle at amazon headqrters. >> reporter: for fed ex u.p.s., dhl and the postal serce, a major customer becomes a bigger competitor. today they are l delivery service, hiring hundreds of delivery service partners -- individuals running their own local amazon package network. by doing ts amazon isoping to tackle the final most a ensive leg of shipping package called the last mile. amazon will leasep to 40 logo'd vehicle to each unit and provide training and technology. each business will start the day fat one 75 current amazon delivery stations in the u.s.g gett their packaged and routes. olin has been running h for five months as a test in denver. >> startedrohe back endss

making sure we get ready for the day. makingure drivers are assigned the right area tond deliver make sure the packages are ready. work with the statione are out of. >> amazon algorithm built to maximize efficiency, determine which packages go to amazon's new local delivery network and which go to other deliverye partners ld ex and the postal service. >>ut this is acaling cost effectively. if you think about the growth of e-commerce, parcel delivery we're going to have to meet thew . it is outpacing the growth of the core provids. >> amazo now represents half of the e-commerce area which is only 15% of total commerce. if it's going to go to 40 or 50% of commerce they have to increase their logisticsca bility by three or four x. u.p.s. and f ex can'to that. amazon has to find new ways toc

inue to grow their logistics capability. >> reporter: in response to amazon's new delivery program u.p.s. said it closely monitors customer and competitor announcements. the postal service said it needs to earn its customers' business every day. amazon is hoping this new program will help it cut costs. for amon'sartners it is both an opportunity and a risk.pp antunity to start a business with amazon's help, but a risk to run a business completely dependent upon one customer. for "nightly business report" i'm courtney reagan at amazon headquarters in seattle, washington. meantime, the economy grew less than initially thought in the first quarter. the grossc domesroduct was down to 2% amidst weakest consumer spending in fe years. economists expect a rebound in she second quarter. >> now bob told you, the federal reserve cleared the way today for most of thes. biggest banks to return billions of dollars to shareholders. the one exception was deutsch

bank. regulators cited material weakness in its data capabilitiesnd capital planning controls. so that rejection now requires deutsch bank to make changes in its u.s. operatio a. fo the other banks they immediately came out with dividend hikes and yback plans. even goldman sachs andyorgan stanere allowed limited payouts. here are some of the new dividend plans and some of the buyback plans that were announced today. >> we, obviously a positive day for the financials sector after suffering its longest losing streak ever. the fhich is an etf that tracks the financial sector rio toda after falling for -- rose today after falling for 13 straight sessions. will the gains hold? ken leon is director of equity research and joins us with his outlook. good to see yo welcome. >> thank you. >> bill dailed the stres test results. they were positive for many of those banks. did what we see today form a

bottom, do you think, in the financials sector? >> i think it did. for particularly the large banks' return of capital, dividend increases and share repurchases, looks like it's set to reward investors. we thinkhat's the key driver for the second half of the year. there's otherriversn the business that are healthy. and there's been concerns as well. >> curious. the economy is clearly in good shape now. interest rates are goingup. both of those things are good for the banking sector. they improve profitability yet the stocks have been in this prolonged slump. why is that, do you think? >> the stocks had great performance last year and they did stall early this year. i think the concern is with the economy being so strong long growth is still, for example, on the corporate side 2%. 5%? isn't it 4% to the consumer side growth is

better. you often hear about flattening yield curve. banks need a healthy sbeead een the cost of their money and what they lend for as ll >> if you were to put new cash to work in these names, what names do you like in the financialct ? >> well, taking into account today's news from the fed,ank of america which is a strong buy is going to haveeaningful return, 40% upside as it relates to buybacks and dividend growth. they also are executing very well every quarter now.an jpmo is the quality large cap name. they also had very positive news as it t related a dividend increase. and then thirdly, still like the capital markets. ey whichr morgan sta is a buy. morgan stanley is going to big beneficiary for mergers and acquisitions and investment banking.

>> all right, ken. thank you so much.ap preciate it. kenn l with crfa research. >> shares of b.j.'s wholesales soar on the first day of trading. that's where we begin the market focus. they returned to wall street after seven years as a privately held company. its debut comes at a time when th industry is facing stiff competition online. >> i thi any retailer who says they don't compete with amazon isn' being truthful. there is no doubt that the consumer is getting greatalue andconvenience. in the world we are living in, value retail works.ip membern top of value retail is a business we feel great about. investors have been encouraging us along the way. they did today. shares rose nearly 30% in the debut to$22. meanwhile, the long running patent dispute beten apple and samsung is finally over. n, the ears after it be two companies settled their litigation over smartphone technology. terms of the settlement were not

disclosed. you may recall apple accused samsungf copying iphone design and software features. apple shares werep today to $185.50. chipotle's ceo outlined a broad strategy to revitalize the chain which iludes closing 65 stores and spending more than 00 million to win back customers. the plan was light on details. that disappointed investors. shares fell 6% to 428.36. mccormick reports savory second quarter results. the spice maker posted double git sales growth and profit thanks to strong demand from both the consumer andommercial customers. mccormick shares rose more thant 114.83, their best day in nearly a decade and a new as well. coming up, rolling the dice on atlantic city. >> two brand new casinos opening up on atlantic city's boardwalk which has been down on its luck. is it enough to help the city

regain its status as the crown jewel on the jersey shore? i'm contessa brewer. that's c business report."y casino investors are betting atlantic city is about to hav a change of fortune with two new casinos opening this week. in recent years the city saw casinos close and a.c. pushed tn the brink ofkruptcy. now the city is raising the ante the good times will roll again. >> reporter: with a guitar

smashing and a ribbon cutting, two new casinos openedn the famed atlantic city boardwalk. mayor frank gilliam hopes this is a turning point. >> for so many years the community was left but my job this term is to mak sure w develop a partnership between corporations and the neighborhoods. >> reporter: kenny has worked in atlantic city more than 30 years, but he got his walking papers from trump taj mahal when this town hit the skids. >> leading up to thet mom of actually being dismissed, i leave here now tired, working 14-hour, 15-hour days. i lk out smiling. compared to the experience i was waitg for the hammer to drop. really it's a lot of stress. >> reporter: in the mid 2000s, casinos in new york, delaware and new york created stiff competition. gaming revenue iny atlantic cit fell 50%.

nearly half the casinos went belly up. 11,000 peoe lost their jobs. the city's finances were in such bad shape the state took overcr eating an opportunity for a real deal. hard rock bought the former trump taj mahal for four cents on the dollar of the original costtruction they are spending a fortune to draw top talent to the stages with some 300 acts already eooked for the first year. >> now we ver 300 shows with a complete variety of entertainmen whether it's comedy, motown, obviously the legendary pitbull, carrie underwood tomorrow night playing. just really a great array of broadway entertainment, ra rests, shopping. that's what people want to see. we are delivering it not just here at hard rock, but in atlantic city. >> my hope now is that as we pen and the hard rock opens that the entire board walk is activated and the 24.5 million visitors to atlantic city realize this is an incredible place.

>> reporter: sports betting, newly legalized, is already a big draw. >> browns in four and a half. >> reporter: gaming revenues are climbing modestly for each of the last two years. gaming analysts are skletical it is a cut jackpot. investors are counting on convention business to fill the motels butin a 3,000 hotel rooms creates tough competition for the existing resorts. especially in the winter months when visitors are scarce. ed reporter: add in the vacant lots, boap windows and buildings dotting the landscape it might be a hard sell. >> we have an aggressive code enforcement process to get rid of them. we realize e thergy of atlantic city hasn't always been the best. it is our job to change the perspecti perspective. p>> reporter: the mayor'n includes technology, renewable energy, a new college. will investors have the patience to let it ride? in atlantic city,a conte

brewer for "nightly business report." before we go, a final look at the day on wall street. one of those days where we saw the opposite of yesterday.ye erday, technology and financial stocks were the big losers. today they were the big the dow advanced by eight points to 24,216. tech-led nasdaq up 58 points and the s&p gained 16 points ins toda trading. that will do it for "nightly business report" tonight. i'm sue herera. thanks for watching. >> i'm bill griffith. have a great evening. we'll see you tomorrow.

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