this is "nhtly business report" with sue herera and bill griffith. ♪ >> new phase. the white house and the european union avert a transatlantic trade war, easing an escalation of tension as investors watch closely. >> pricing pressure. some of the world's biggest companies are seeing their costs rise and they're citing tariffs. >> facebook face. pla revenue growth flows and now the question is whether a series of recent controversies are taking a toll. those stories and more on "nightly business report" for wednesday, july 25th. and we bid you good evening, everybody and welcome. there was a reversal ofl ortune on wreet today. stocks started this day lower on concerns about tariffs and the higher costs that they can

cause, but the markets ended the day sharply higher on late word of a potential change in trade relations between the u.s. and the european union following a meeting this afternoon at the white house. e dow rose 172 points after falling more than 100 points earlier in the session. the nasdaq gained 91 and that closed at a record and the s&p 500 added 25. kayla tausche has more on the trade developments from the white house tonight. kayla? >> bill, two months into an escalating trade fight and after more than two hours behind closed door, theeaders of the united states and the european commission emerged to announce a suspension of the tit for tat moves that have been escalating relations between the two, and because of a new deal.re here'sdent trump. >> we also will resolve the steel andf aluminum tar issues and we will resolve retaliatory tariffs.

we have some tariffs that are retaliatory and that will get resolved as part of what we're doing. >> so thosenomic weapons will be laid down. the european commission said that as long as negotiations continue in good faith and no new action will be put in place. >> as long as there is safety,u ss one party would stop with the negotiations, we will have further tariffs and re-assess e existing tariffs on steel and aluminum. >> so what does this deal look like? the european union will work toward bing more soybeans and buy more u.s. natural gas. they will try totrmline regulation in the medical industry for one and both nations will be workioward lowering tariffs on non-to dustrial goods, though we should note, a grain of salt and a spokesperson for the european commission says no concessions were made and talks are ongoing. you'll remember the u.s. and china reached a similar truce

back in may and that lasted for three before the administration revisited tariffs f china and that situation is movingward. we'll see how the situation with europe pans out. back to you. tariffs.you said non-auto what about those auto tariffs? we know that one of theocuses of president junker coming to the white house today was to try and head off the threatened higher tariffs that president trump had talked about. wher do we stand on autos right now? >> it would seem that united states bah of those comments that so long as negotiations and talks continue that there will be no new that would seem to suggest that the u.s. had agreed to europe to t put any new tariffs on autos mittinge, but by not c to lower tariffs on existing automobile imports and exports, that meansha the u.s. doesn't have to reduce its tariffs, that itn places light trucks that come into the u.s. and

similarly, the eu doesn't have to lower its tariffs that the president criticized on carsgo ing over to europe. >> kayla tausche at the white .ouse for us tonight. thanks, kay >> as we mentioned, for most of the day investors were focused on tariffs and rising commodity and materials ndprices, that was a big issue for general ysler in the at c most recent quarter. both stocks shifted into reverse in today'srading session as they tried to steer their way down a bumpy road. phil lebeau has the details. >> the auto industry is hitting aough patch. the problem? growing trade tensions are pushing up costs and that prompted general motors to lower how much it plans to earn this year. >> we have seen an escalation of he modity prices across spectrum of commodities inteuding sel and aluminum that has beenve dri by market forces. >> those forces are also weighing on ft chrysler which cut how much revenue it plans to generate in 2018. for today, one concern is the impact of tariffs in china.

investors don't seem to that there's been no drop in demand for new cars and trucks.t insteay're focused on tariffs pushing up the total price of a vehicle hr much automakers pay for raw materials like steel and aluminum and while gm says it expects higher costs to continue the this year, analysts believe today's warning may be as bad as it gets. >> think this is a good me on their part to set a very high price to se the bar her and not hoping that things come dn as many people might expect by the end of the year that steel prices mofn a bit. that may give the upside. >> the auto industry may g me relief for congress and there are now two measures proposing toimit the president's ability to institute higher auto tariffs and this president trump considers instituting a 25% tariff on imported vehicles. phil lebeau, "nightly business report," chicago. >> like other domestic automaker, ford is contending

with high costassociated with those tariffs on steel and aluminum. the company reported a decline in earnings of almost 5% and the companyts lowered 2018 earnings projection citing among other things a disruption in production of th popular f-150 pickup and weak sales in china ant sent shares of ford lower in initial after-hos trading tonight. >> higher costs are also being felt over at boeing, despite posting better than expected earnings the company a full-year earnings forecast missed estimates. it also cut itsio proje for its key defense business. boeing which calls itself the single largest exporte t china saw its shares fall in trading today. >> you can add fellow dow component coke to the list of companies seeing rising cost pressure because of steel and aluminum tariffs. >> the company is translating into lihigher prices becausef the carbonated sources. >> they impose the tariffs and

it's one of many factors that caused us to go out in the middle of the year with our partners which is pretty unual, but it was the right thing to do for the business and for the long term. we're not a primary, direct ct imn some of these tariffs and it flows through on supply chain and all sorts ofifrent ways and ultimately that will have to pass through. >> in its most recent coke reported better than expected earnings and revenue thanks to rising demand for its new diet coke drinks and that helpedhares gain more than 1.5% today. >> so let's turn to muhamd alaran to discuss what we learned today and also the fsh round o talks on trade out of washington. he is the chief economicer adv at allianz. welcome, nice to see you as always, muhammu,. >> thank sue. >> it's hard to know where to start because there was so much news today between the earnings and also the late developments

on trade, so let me start there. you have penned several pieces about the different scenarios forrade and one of which you call a positive risk scenario andomething thatoes beyond a still free fairer trade system w and didstart to see the seeds of that this afternoon? >> we did. it's still early day, but we did because we heard about zero tariffs. we heard about reforming t wto ich anchors the rules-based system andre tas a positive risk scenario out there which is that at the end of all of t tit for tat on the tariff side you end up with a trade system that is structurally stronger. it is not the baseline. i think the baseline is still the free trade that we ow, but a little bit with a few tweaks and it's important to recognize that there is a left tail a bad risk of ite with trade war

and the markets are starting to appreciate that. i am struck, muhammad that on hear from y that we big companies about the higher costs associated with the aluminum and steel tariffs with the boeings,nd the coca-colas and now we are opening with the eu on the tear ofs and what's an investor to do with this new information? >> the investor is to be reminded of two things. one is that the reason why economists are nervous aboutri s is because they are stagflationary. the first part is the inflation part. costs go up and companies pass on the higher cost into prices and normally do a little bit more because they have to raise prices and then demand comes down so you get the stagflation report and tod was a reminder that phase one and to some extent phase two have been triggered, but we got a second reminder which is that there was

a difference between the journey and the destination. the journey was always going to be bumpy because of the risk of escalation, there's a risk of a mistake, there's a riskf an accident and the big issue for the marketplace ishe destination, to see through the journey, and i t thinkt today we improved the probability of a better destination. >> speaking of betters, earni let me turn you to earnings before i have to let you go and a number of the earnings reports that we havee gotten hen pretty good. the economy seems to be firing on all cylinders, certainly. >> it is. the u.s. economy will continue to outpace others, ande ou will heary on and on that america will outperform,ut what you also saw today is that there are international headwind, that the global

economy as a whole is getting trickier and that the u.s. will continue to register strg growth, but people have to also pay attention that the neighborhood is getting weaker. >> muhammad, thank you so much for spending time with us. muhammad alaran with allia . >> time to take a look at some of today's upgrades and bdowngrades. in tonight with walmart shares which were downgraded to hold from accumulate at gordon hafket. the analyst expects shares to be range bound for a while. price tshget at $92. es of the dow component fell a fraction to $87.90. that same analyst upgraded a target to accumulate from hol and the recent acceleration in store traffic at the retailer and the price target now $86. that stock rose a fraction to $79.99. > lockheed martin was upgraded

to outperform, from market perform. th price target is $370. the shares rose to $324.36. spotify was downgraded to hold from buy at. pivot the analyst cites valuation given the stock's recent run-up. the stock's price is $2 hun. it was up 18 cents to $197.99. still ahead, new hope. biogen's experimentalzh mer's drug shows some promise, but experts say the new study pnts an unclear picture. ♪ ♪ yet anothng weak rean the housing market and a report sales of orning said new homes in june fell more than expected to an eight-month low.e numbers for may were revised lower and the pressured homebuil rs in today'session,

but the decline in sales was not due to weak demand and that's whathi makess housing market so peculiar. diana olick explains. ♪ ♪ stephen paul of mid atlantic builders is still putting up homes in suburban maryland, but he admits the market isn't what it was just a few months ago. >> the temperatu's lowering a little bit. it was peaking in march. sales were very strong i march. we set a lot of records and it's steadily been dropping. >> sales of newly built homes dropped 5% in june compared with applications to buy a newly built home were considerably lower than june of last year, but this is not about demand. it's all about high costs. first, rising interest rates. theverage on the popular 30-year fixed shot up to start the year and then kept moving higher. that and builders are having to

raise home prices to account for higher labor and material costs. duties duties o canadian lumber vastly increased its cost and recent tariffs on steel and aluminum are only adding to that. >> builders have to be very careful, and it's a fragile situationngith rai prices just to recapture costs, but right now we're in a position where we have to raise prices to break even on those price changes. >> i am very nervous about these price increases. i don'know where it's going to end. >> demand for housing is incredibly strong especially in closed-in suburbs like this one, but much of th demand is coming from younger buyers who can't afford to pay premium prices and they can't afford to pay anything, but premium for nightly business report i'm diana olick in beesda, maryland. >> facebook shares hit a record, but the stock turned lower after the company reported a disappointing quarter. spite reporting better than

expected earnings of $1.74 a share. revenue of 13 billion was weaker than expected and well, they sent that stock lower y as much as 20% in initial after-hours trading. julia boorstin hasore on facebook's reports. >> the company fell just shy of expectations on revenue, daily active users and monthly active users. this raises the question what kind of impact the cambridge analytica privacy regulations calledddpr are having on facebook advertiser and user numbers. it looks like we're seeing that impact in europe in particular, and the daily active users says in europe dropped fromli 3 mil from the private quarter the first time they have declined. this surprising wall street and investors had expected the company to continue to shrug off the impact p and thevacy scandal in regulations and facebook shares had a new rl-time intraday high before the companyorted earnings.

for "nightly business report," i'm julia brstin in los angeles. >> that's where we begin tonight's very busy market focus. the delivery giant's focus rose at a faster than expected clip as international andom erce sales both took off. the company said it is optimistic that it will hit the top of its guidance in the current quarter thanks to broad dehend. >> consumer continues to feel comfortable buying online and increasing the sale of the consumer side and then whate see on the industrial side is we see things like healthcare. the industrialide of retail as well as industrial manufacturing also increasing and that will main takene some of strength oat we started to see at the beginningthis year. ushlgs ps shares climbed to 120.20. visa set a rise translated to a better than expected profit. visa kept itsda revenue ge for the year and it expects earnings to come in higher than

initially thought. shares were volatile in the after hours. ndthey the regular session up nearly 2% at $142.64 and anthem's decision to scale back its presence in its affordable care act market helped that insurer hold down patient dical costs this quarter. the company said that the drop in expenses along with higher premium rates helped earnings rise and that topped expectations and the shares rose a fraction to $247.93. hca health ce treated more patients this quarter and that helped send profits higher. the upbeat resul prompted the hospital operator to raise its full-year earnings soutlook, well. shares climbed 9% today to finish the day at 118.13. sue? northrop grumman said a recent acquisition and stronger demand en the aerospace systems products helped r and profits beat wall street expectations. the company said it expects sales for fighteret parts to remain robust and as a result it is raising its earnings guidance

for the year and investors were hoping for an even stronger nd outlook ahey sent the shares down 2% to 295.50. after the bel matte had disappointing sales and said it was cutting more than 2,000. jo the toymaker was reducing to have the factory in mexico. the quarter's results werey largimpacted by customers taking advantage of the liquidation sales held by toys "r" us. the share fell in after hours and finished the regular session down 1% to $16.29. also after the bellmonday leele the maker of oreo cookies raised its dividend 18% to 26 cents a sharin ithed down a fraction in the regular trading day to $41.50. and the drugmaker glaxosmithkline has struck -- is

taking a stake in the genetics company 23 and me to try and discover new medicines. glaxo says it hopes the collaboration will create more effective research and development processes. gllo f more than 1.5% to $40.52. >> an eerimental drug with biogen was shown to slow the decline in aemory associated with that disease and the results of the clinical trial were highly anticipated because research in this area has been littered with failures in the last few years. there are still concerns tonight. of biogen fell sharply in initial after-urs trading. meg terrell has more on the results here. what are they showing? it soundedrosing for the stock. what happened? >> it's important to note that the stock had u run into these results and moreover they were confusing, but on t basic level, the highest dose of this experimental alzheimer's drug was swn toeduce the progression of alzheimer's by

30% cpared with placebo. on top of that, the drug was also shownle to the plaque from the brain that are associated with alzheimer's disease. experts in theield say this is very important. those two things appear to be linked, that removin those plaques had an effect on the disease progression. it's importa to note that patients were still getting worse and this is noim oving the symptoms of alzheimer's and it is slowing the declinend the ability to think clearly, guys. >> might that be why the stock did fall in today's trading session? you did pointut the big run-up that it had, but the lack ofar y on those results pain hit the stock. >> yeah. well, it wa expected that it wasn't going to improve the symptoms of alzheimer's disease. we already knew that. we knew it would just slow the prression. whatt looks like analysts are focusing on here are a few things. while the highest dose appear to work very well, the lowest doses

don't fit very well and people see a balanced response through thees d of these clinical trials. there was anothereasure of cog mission in the trial that didn't meettastical -- and it was an >> let's talk about that. the one we got this afternoon is for early onset alzheimer's, but they have other study tha they're doing right now, another drug that they're working on on ad alzheimer's. what does that do to this? >> well, so they do a more advanced drug in clinical trials and that's just in the later stages of testing and it's potentially closer to market. both of these drugs are being testedn early stage alzheimer's patients and not necessarily early onset and just folks early in the stages of th disease, but a lot of ducks -- a lot ofn eggs aree basket for biogen for the later drug. they've invested $2 billion in

running the clinical trial program. some folks may say that because that one measure didn't meet statistical significance, that doesn't bode well for that trial and others say the connection and improvement in cognittion. >> thanks. >> sergio mars on, known for his bold decision making and the trademark black sweater was widely credited with turning fiat andro chryslerd before combining those two cpanies. marcion was forced to step down from his dual role a ceo of fiat chrysler last weekend. the company said he experienced unexpected complicatrom soldier surgery that leftim s avely ill. sergio was 66 yeard.

♪ >> it isri officially hne season and some energy companies are working hard to keep their cuinomers from l power. that is especially true at duke energy and a special high-tech control room in charlotte north carolina. jackie deangelesere for us. last year's hurricane season hit hard with severe power outages that lasted days and in some cases weeks. with the season under way again, it's no surprise that utility companies are bracing for it, using technology to secure the otwer grid to make it less vulnerable to mr nature. duke eney is one, committing $25 billion in investment over the next decade in the six

states it serves to continue updating and modernizing the power grid. 13 billion of that here in north carolina. >> they call this the star wars room, but what you're seeing here isn't science fiction.it duke's energy control center and it's monitoring energy transmission in real time. what that means is power crises can be spotted and dealt with more quickly using smart grade technology and in some cases, problems can be averted or can even heal themselves. in the case of hurricane matthew in 2016, outages that lasted six days would now be cut in half because of control rooms like this. >> with the click of a mouse you can res preer. we have an intelligent smart-thinking grid that can re-route power that can keep service on for customers. >> it's not just hurricane, it's cyber attack, too.ay duke s it's not a matter of if, but when. >> we talk about all of the new devices and technologies that we can deploy, we actually have to

think about that within the context of cybersecurity because ifcan be increasing risk we're not particularly vigilant, adding new digital license to the systems. >> critics say rate hikes for consumers is estimated as high s 17% and the improvements better be made like home monitoring are not worth the cost. while the energy grid needs upkeep, the efforts made to modernize it won't offer consumers enough. >> wehink these investments will deliver great value in the form of reliability and in the form of more information and more options of energy efficiency and more ability to add renewables to the system. finding that equation that maintains the focus price, delivers vue to customers and also maintains a good investment for duke energy investors. that's the balance we're always trying to achieve. company across the u.s. including pg&e, con ed, they're stl investing in the smart grid. estimates sug the global growth rate is 9% per year and likely to increase. for "nightly business report,"

i'm jackie deangeles, charlotte, north carolina. finally tonight, someone in california beat the odds. the lucky winner of the mega ilmillions jackpot porch are purchased the ticket at ernie's liquors in san jose and if that person took the lump sum she would be left with $308 million and even after federal taxes that's still not too shabby. >> no. we didn't win. we would haveome back to work. >> we would have. >> that does it for us. i'm sue herera. >> thanks for joining ius. bill griffith. >> have a good evening. we'll see you tomorrow.

>> this is "bbc world news america." >> funding of this 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 ideal form in our mind, and then we begin to erisel. we strip away evything that stands in the way to reveal new possibilities.