♪ this is "nightly business report" with bill griffith and sue herera. buyback binge. corporate america is expected tm buy backe shares than ever. a trillion dollars worth this year. what are the ramifications for the market and investors. >> calling it quits. ra nooyi stepping down. and why morend more big-name companies are adding sa bat chemica bat californias as a major perk. all that and more for monday, august 6th. and we b you good ening, everybody. welcome for this monday. stocks started the week in the ack, thanks to strength in technology, especially facebook.

shares of the social media company rose 4% today on reports it's in talks with banks to allow facebook users to use its mer platform for financial transactions. that in turn helped push the nasdaq higher for theifth raight day. has done the nasdaq that since may. here are the numbers when all was said and done. the dow rose 39 points to 25,502. the nasdaq climbed by 47. the s&p added ten points today. and while facebook did have a big say in the nasdaq's move today, goldman sachs says htvestors should focus on something that m have a key influence on the market overall. ldman says thi year will be a record for stock buybacks. ready for i the firm estimates buybacks will hit $1 trillion. bob pisani has more. >> it's not just a big year for earnings. it's also turning out a big year for buybacks. teybacks are exp to rise 46% from last year to a

staggering $1 trillio why the buyback binge? partly because of tax reform, but also because o revenue growth, which has been a very big contributor. here's the good news. this is the most popularonth for repurchase execution. it's even possible this recent rally is partly fueled by buybacks. the buyback blaout period has ended for most companies, so companies can resume buying again. not surprisingly, the tech sector in particular will benefit from surge in buybacks. tech has accounted for 40% of the prepurchase authorization. here's the bad news. we tave to points out every time. not all buybacks are created it's share count reduction that you want. companies are indeed reducing their shares outstanding by buybacks, apple is a good example, they have been reducing their shares outstanding by about 5% each year since 2013. that's a lot. but many others are increasing

their share count by offering new optio to management. they're increasing. at the same time, they announced the buyback. so in the long run, it's all a wash, and the share count does stock.down for the well, that's a waste. indeed while the s&p found overall reduction in 2016 and 2017, the total shares outstanding in the s&pardropped. sohis year, the total share count of all the companies of the s&p has h increased af percent this year. well, that doesn't help. for "nightly business beport," i' pisani at the new york stock exchange. >> joe duran jsns now to talk more about these stock buybacks, what it mns for the market. joe is ceo at united capital. welcome back. >> thank you. it's great to be . ba >> companies get criticized for these buybacks in some cases. couldn't they find better use for this money? you know -- aci is it fin engineering to some degree? what about the impact it has on the market and investors?

>> well, it's obviously greatnv fortors when this happens, because you're increasing the number of buyers and reducg the amount of stock. as bob pointed out accurately, a lot of companies simply do it as ao way transfer wealth to management. those are the times where it doesn't work ou so well, because what you're doing is reducing the share count and then transferring options to management. however, there are two places where it works really wl. one, wheou have a company with a very big war chehi and apple, has brought in the money from offshore, with the tax repatriation and now can use th money as a dividend or to buy back stock. investors.t for it increases the amount of earnings for each share which actual reduces pes. that's fantastic for everyone. the cassn where it d work so well again when it is financial engineeriyp. askally companies with the highest earnings, the highest cash flow and the most balance sheet that can d it. it is negative in one sense that if that's the most efficient use

of their money, it sugges s maybe it a high growth company and doesn't have the ability to put the money to give equity.turn on but it's still better that they return the money to shareholders an hold on to i on a balance sheet and make 2 or 3% on their cash. >> is there a significance to the goldman estimate that we might see1 trillion worth of buybacks? ouu know, we try not to focus on those big numbers all of the time. but that's a pretty sizeable number. >> again, you should thi oft more like noise. temporarily, it can offset the underpinnings of the economy, so it can look like when a stock clines, can create a floor, because the company can buy back its stock. and that can be good. it buffers the volatility. however, over the long term, what drives stock prices are earnings and gdp. and those things are insurmountable for any company, no matter how big its war chest. ultimately, if the company isn't growing its earnings, if it doesn't have aeturn on equity,

s valuations will end up -- the stock will end up goi down. again, it's kind of like when countries try to support their currency they can do it for a while, but it's not a lasting legacy. >> indeed. joe duran with united capital, thanks again for joining us tonight. >> you bet. >> it certainly seems like wall street has been hitting a lot of milestones lately, whether it's theol trillionrs in buybacks or apple hitting $1in trillio market value. they are signs the bull market is a mature one. but if mike santoli tells m, thht not be a bad thing. >> wall street is busy commorating several market milestones this summer. in less than three weeks' time, the bull market is due to become the longest of all-time. abt a month later, the anniversary of the failure of lehman brothers will marde a de since the great financial crisis. and, of course, last week apple was celebrated fin bec the first u.s. company to reach $1 trillion in market value. l of these moments reflect how long markets have been climbing, and they prompt the natural

question of how much longer the good times can last. the bull market's rank is the longest ever date to start to march o 2009. and rests on an assumption that the jecuary 2018 rord high in the s&p 500 is ultimately surpassed before the index declines at least 20%. this simple definition of bull market is continuing unless the s&p falls 20% or more is widely used, but sometimes disputed. some strategists look bac at two severe broad down terms in 2011 and in 2015 when broader market gauges oth than the s&p 500 lost 20% of their value as important s rbacks thatet the clock on this bull market. and perhaps makes it a bit younger than its thnical age. the ten-year anniversary of the lehman implosion is instructed for investors, as well. the average annual retn over e past ten years for u.s. stocks is a bit more than 10%. it's just about the historical long-term rate of appreciation for equities. keep in mind,rs ten y ago today was right before the

market was to lose nearly half its value ove the next eight months. so that 10% annual return since then represes quite a revival. still, when major bull markets do end, the average yearly gain over the prior decade has typically been above 15%, there's nothing about how far stocks have come since 2008 to suggest anyainful pay back is necessarily due. as forti apple hng $1 trillion, that's almost entirely a matter of normal inflation. the general rise in equity market value and the enormous mk economic power in apple. apple does not have a particularly outsizedheeighting in&p 500. it's around 4%. and its valuation is supported by its quarter trillionla d in annual revenue and profit total in unmatched corporate hit and is not notablyte inf by investors. excess by if, let's say, the economy slows dramatically or trade wars hit corporate profits and we have a

market has more gains in the rear-view mirror than it has waiting up ahead of it. but passing these landmarks doesn't suggest the market ie heading for end of that road all that soon. for "nightly business report," i'm mike santoli. now, as mike mentioned, apple makes up about 4% of the s&p 500. but how influential does that make it to the rest of the market? dom chu takes i look. >> app huge, and that characterization was solidified with its now trillion-dollar-plus valuation. that pinnae also means for s&p 500 and the nasdaq composite, apple is the most influential stock. ople makes upr 4% of the s&p 500, and by comparison, microsoft carries a 3.5% weighting, google parent compann n alphabet is a little over 3%, and as is amocon.com. andl media company facebook comes in a dtant

fth with a nearly 2% weight. so is apple the most influential stock of all-time? not quite. according to s&p dow jones, more have had in the s&p 500. in data going back to 1980, year-end weightings, it turns out microsoft was a 5% weight in the dot-com era in 1999. exnmobiln 2008. at&t back in 1981. and it's big blue, ibm, that was a nearly 6.5% weight of the s&p back at the end of 1985. now, just some perspective, the s&p 500 market value at the of july was right around $25.8 trillion. hypoetically, if apple were to become worth 6.4% of the index,

it would be worth, hypothetically, over $1.6 trillion. apple still has a lot of work to do to reach that kind of valuation. for "nightly business report," i'm dominic chu. it is time to take a look at some of today's upgrades and wn grades. barclays is downgrading shares of intel from overweight to equal weight. the firm sayinges theis behind intel and its server business and margin pressures could intensify next year. barclays shaved the price target 15% to $53. intel closed today at 49.30, down 3 cents. qualcomm is being raised at cowen from market perform to outperform. the analysts citing lower spending, and qualcomm's $30 billion buyback. cowen also raised the price targetmo 80 f 64. today qualcomm closed at 65.7al up a percent. >owen is also upping chip equipment maker, applied materials, from market perform

to outperform. citing attractive valuation and a rebound on spending on its geiver fabrication equipment. the price t was raised slightly to $62 a share. shares finished at 49.4 up more than 1% today. atlantic equities is upgrading comcast from neutral to overweight on fewer concerns about comcast's future, now that it has dropped that bid for 21st century fox assets. the price target was raised from 34 to $42, ad we n to point out comcast is the parent company of cnbc, which produces this program. shares of the company closed down 9 cents at> $35.32. toys"r"us is gone, but not forgotten. the now defunct retailer i leaving quite an impression, even though its doors are first, overall toy sales were up 7% in the first half of this year and the research adviser mdp group thinks s of that sales growth is because of

empathy that people felt towards losing toys"r"us. then there's las week's jobs report in which economists blamed the company's closing for the weak headline number. and nowhe laid off workers are taking aim at private equity. leslie picker has more. >> about one month ago, toys"r"us closed for good. but the controversy surrounding its 33,000 displaced workers has only amplified. the july jobseport was bleak reminder of the rail casualty g belyhe otherwise healthy employment picture.me so of the toy stores'd- laif workers have beeneeking redemption. they're taking aim at the private equity firms that acquired toys"r"us in a leveraged buyout in 2005. the workers say the pe firm paid themselves hundreds of millis,s of dollven as they let toys"r"us slip into bankruptcy. the workers have garnered support from members of congress who wrote a letter to the three firms, sayin urging them to do

something to help. both new jersey's u.s. senators and one congressman have rthlied former toys"r"us employees, demanding severance. >> this storied new jersey company was run into the ground by bunch of corporate raiders, looking to turn a profit. these companies drained toys"r"us of its resources and its ability todapt in the marketplace. and they treated its woemers, oyees like robert and shaquema, as expendable, as afterthoughts, as collateral damage. >> last week, the toys were on capitol hill, asking for legislation that includes more nsworker protectio in pe inveeiments. for thr part, the pe firms appear to be willing to provide some aid for the former toys"r"us employees outside of the bankruptcy process. in a letter backed to congress, kk they did not want toys"r"us to be liquidated, but it was forced by>>reditors.

n private equity, it's not -- it wasn't theiroal to dismantle this company. it was theiran goal to buy i make the company more profitable and then come out of it. but things>> changed. kkr said they did not profit from the investment. for "nightly business report," i'm leslie picker. coming up,po dow comnt and widely held company disney, is scheduled to release its latest earnings tomorrow. what are the expectations for the magic kingdom? re s of sprint and t-mobile got a lift today, following report in the "new york post," saying that the justice department now believes that just three national 5g carriers are nee to provide sufficient competition in the

telecom industry. investors seem to take that as t meaning tha prospects of the $26 billion merger between these two wireless carriers is be,g approv may have improved as a result. th companies were sharpl higher on the day. tomorrow after the bell, disney is expected to release its third quarter earnings. the shares rose nearly 2%, ahead of those numbers. julia boorstin takes a look at what investors should expect. >> disney is expected to have a strong quarter, thanks to strength of the theme parks and the success of an infinity war bolstering the studio and overcoming a disappointing performance of "star wars" performance. it will grow 23%, while revenue is expecte grow nearly 8%. the division facing the most scrutiny, media networks, which includes espn, as investcrs examine suiber losses. disney said its subscriber base fell by 3%. on the flip side, we'll see how

much digital initiatives, suchsp as plus and revenue from skinny over the top bundles are compensating for traditional declines. investors are looking for details of disney streaming service in e works set to launch next fall. we don't know how much disney will charge for the app, which will include a live action "star wars" ries, plus other original tv series and movies, as well as hundreds of films ana ths of tv episodes from disney's library. >> it is all about conte'r. whether y cutting the cord or skinning the bundle, unless you have eontent, pe will quit staring at a blank screen and they are the king of content. >> we're also watching to see if bob iger gives any update on international regulatory approval for disney's ack acquisition of fox or whether he wants fox to make a higher bids bid for sky and how the company will chang mega merger could impact outlook. i'm julia boorstin in los angeles. visitor turnoutes impre at seaworld. and that's where we begin tonight's marketocus.

e theme park operator said the new attractions and promotions which, by the way, included free beer, caused attendance to rise in all of its parks. both earnings and totalen r saw gains as a result. attendance famously suffered at seaworld after that 2013 documentary called "black fish," alleged the company mistreated the killer whales in some of its shows. shares today rose almost 17% to $24.69. newell brands cut its earnings forecast for the fourth ti this year after it reported weaker quarterly sales and profits. the maker ofelmer's glue and sharpie markers said the bankruptcy of babies r us, whi sold many of newell's products nd the retailer's cutting inventory, put a dent in its own results. shares of newell brands from off 14% to6. $22 meanwhile, rite aid revised its guidance for fiscal year 2019, saying it overestimated

the cost of generic drugs when it initially made its forecast. the news comes just three daysr beite aid shareholders are set to vote on the company's proposed merger with the albertson's grocery cin. ri aid shares tell nearly 10% today to 1.66. after the bell, zillow said it was buying a national mortgage lender. up until tnow, company has remained focused on providing listings and quotes. said the deal was mortgage lenders of america will allow it to create new partnership opportunities and potentially originate mortgages. c separately, tpany reported a rise in revenue. but the shares plunged in after hours trading. they ended the regular day up 1% to $59 even. ter the bell hertz said each of its divisions saw growth this car rental ping the company narrow its losses. evenue also inched higher and toppedimates. shares, though, were volatile in the extended sessions. they ended theegular day down 1.5% to $15.67.

also out after the bell, weight watchers raised its full ye earnings outlook after improved margins. those results were overshadowed by weaker subscriber growth. shares were lowern after hours, but finished the day up i fr to >$92.21. pepsico's ceo is stepping down. the chief executive indra nooyi will stay on as chairman until early next year. she'll be replaced by the current president. unde newooyi's leadership, the stock climbed 80%. joining us e isc gordon at the ross school of business to talk more, not just about miss nooyi's legacy, but the future of female ceose c-suite. good to see you again, eric. >> hello, lsue. 's start first of all with

indra nooyi. she was part of a relatively small and very elite group of female ceodos. ou think she's going out because she's achieved what she wanted to achieve? >> i think she's achieved a lot of what she's wanted to achieve. she was ceo for 12 years. that's a long time for any ceo, and she was a ceo in a tough business, and i think she navigated thwaters very well. >> you know, she's part of a generation though, of women ceos that came up together about the same tim meg whitman and others, ba at general motors. but there aren't a lot of younger women coming up through the ranks thesewe days. still don't have enough women on boards these days. why isn't more progress being made at this point, eric, do you think? >> you know, that's a hard question to answer, and i think boards had better start answering it. if you look at meg wtman and mary barra, indra, these are y goodho have done a v job. in meg's case, at a couple of companies. so if we areot putting younger

women in the slot that are preparing tm to step up, that's a bigke mista. we need that talent. >> you know, i found it teresting that -- the s&p 500, there were only 25, if you include indra nooyi, ceos. you mentioned the board component. but whatlse do you think it is going to take to eourage more women to achieve the ceo potion of a publicly traded company? pa have a lot of women in privately held ces that are ceos, or founders of their own companies. n bu necessarily in publicly traded companies. >> yeah, i think the women have to be given training and menting and opportunities in how you deal with being in a public company. being in the scrutiny of equity analysts. being under the gun from activists. and as indra was. ne

nelson peltz was after her. i think we're not doing enough yet. >> on that note, eric gordo thank you so much for joining us. >> my pleasure. >> from the university of michigan's ross school of businessne and up, why some of the nation's biggest companies are giving employees more time off the job. trump administration says it will reimpose economic sanctions on iran that were lifted under a 2015 agreement to curb iran's nuclear program. e sanctions would target iran's purchases of u.s. dollars, metal trading, coal, industrial-related software and its automotive sector. the administration says the goal is to get iran to stop its clear enrichment and to curb its weapons program.

in an increasingly tight labor market, companies are getting creative when it comes to offering employee perks. they have to be competitive to attract and retain top talent. and as eric chemi tells us, that trend is growing. >> jawell, lebron mes is vacationing in the caribbean. there is no off season when you work forhe nba league office. with the wnba, the k league, the aft, olympic basketball, it's become a 24/7 operation all year long. for kerry catlock, senior vice president of global marketing partnerships, that meansta co travel, meetings, late nights. for other employees, it could mean burnout. that's why in 2015 the league created a new benefit, offeringh employees w ten years of service a fully paid four-week sabbatical. at 20 years, they get eight weeks off. >> i call workingt the league a way of life. you have to love it, you have to be part of it. you've got to acept it. thatay of life. but at a ten-year good to recharge.

>> for some employees, a sabbatical has meant family quality time. for others it means travel. for everyone, it's a rare chance to turn off their phones and unwind, knowing their job will be waiting for them upon return. >> we went to europe for three weeks, and to germany and to italy. we didck the q turnaround, and ended up going to western massachusetts for a week. and i indulged in c dpp-off and pickup, making lunches, cooking dinner being there every night for bedtime for the kids. and it was as extraordinary as the first part. >> nike mcdonald's and intel also offer similar programs. but the nba is the first professional sports organihition to offer benefit. experts say it's being increasingly used across all industries to retain highled vamployees in increasingly tight job market. >> sabbatical is certainly a way to do th, toeward people for their long-term standing with an organization. so we've seen , not a ton, but certainly seeing it come out more and more. >> for the company, it can mean

finding future leaders. to be a little bit blunt, i said to most people, when we first started, if this place can't survive without you forek four we're in a world of hurt. >> for "nightly business report," i'm eric chemi. and before we go, a quick look a what happened on wall street today. modest gains. the dow climbed9 by points. nasdaq was the big gainer, up 47. and the s&p added 10. and thaty is "nighsiness report" for tonight. i'm bill griffith. thanks for watching. >> i'm sue h aera. ha great evening. we will see you right back here tomorrow.

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