>> announcer: this is nightly business report with sue herera griffeth. stock surge, investoring take the new phase of the trade war between the u.s. c andna in stride, hoping for a quick resolution, even as big busindss sohe alarm. $1 billion tax. that's what the latest rounds of tariffs fould mean housing, resulting in higher costs and even higher home prices. new competition, audi is nou chargi and taking on tesla with an all-new luxury electric vehicle. those stories and much more tonight on nightly business report for this tuesday, september the 18 and good evening, everyone, and welcome. well few predicted t market would rally. but that's exactly what it did. investors shrugged off the

tariffs and china's retaliatory move at ayast for t now some say the $200 billion in additional tariffs on imports of chinese goods were not as bad as feared. others say since the new tariffs will be staggered that gives the two countries more time to talk. and potentiallyn reach agreement. iaen all was said and done, the dow jones indus average advanced 184 points to 26246. theed&p 500 a15. >> but the trade war between the world's two largest economies is real. today lhe presidentt the door open for more talks but said he is ready to escalate the fight further if necessary. >> we may make a deal at some t. po but right now we just imposed $200illion at 25%. we just went on -- it kicks in january 1st to 25%. starts off at 10%.ly but sho there after goes to 25. and if there is a retaliation

against our farmers and industrial workers, ranchers, if any of that impose on we're kicking in another $257 billiond that will be also at 25%. which we don't want to do but probably will have no choice. >> now surisingly china did immediately strike back announcesing billions ofts dolls of own in retaliatory tariffs on mores.s u goods. our reporter picks up the story from beijing. >> reporter: china made good on the promise to hit the u.s. back with tariffs. the tariffs would cover $60 gbillion worth of americads and kick in one minute after thb u.s.'s on sep 24th. now, the number of items hasn't changed from the original list. but the rates are lower in the range of 5% to 10% to match the u.s. aes. items supposed to be hit by a 25% like bng were li will face 8% tariffs but china said if the

u.s. raises taxes to 25% as the white house promised then china will match the rates. the listlu incs small aircraft drug ingredients, wheat and lng. the government explained the move this way. this is a forced response to u.s. uni lateralismnd trade protectionism. china says they hope the u.s. will stop the trade friction. there has been speculation that the move by president trump would would kill off plab planned negotiations in washington the man supposed to go was the vice premiere. vuhu. he is the d point personling with the u.s. on trade. however there is a widespread feeling the latest decision by president trump has made it politically difficult for him to vis with the u.s. treasury secretary because thereot coulde r failure. the "wall street journal" ispo ing the chinese downgrade the delegation by sending the vice commerce minority who visited d.c. a few weeks ago.

a that trade war heats up china's holdings of u.s. treasuries cooled off falling to a 6-month low in july. according to the treasury department, the chinese ownership dlined to 1.71 trillion. the trump adnistration first activated tariffs on july 6th. mcis the largest foreign creditor to the united states. with all of this back and forth theusiness community i having a hard time determining what comes next?ll he trade fight be short or long and drawn out? bob pisani did digging >> trade tensions continue to rise for the u.s. and china firing a new round of this woke. but investors are trying to figure out what kind of trade war we are in exactly. the markets appear to belie that many of president trump thats are pos touring ahead of the midterm earthquakes and that the trade war will dissipate and

that will be back to business as usual. the similar optimism spilled out from the c suite recently. listen to what c apple ck said on trade. >> i'm optimistic because trade is one of the things it'sot a zero-sum game. you and i can trade something and we can both w. i'm optimistic the two countries will sort this ou and life will go on. >> but what happens if the markets come to believe thate are in a much longer term conflict with china? alibaba founder jack moss says he thinks we could underestimate the friction and could create a mess for all sides. >> this thing will not long if apt shot at solution there is no shot at solutio china u.s. and trade last for 30 would be 40 years becomes such a big size there is no problems that are impossible. there are big problems it is

potential. >> at a recent conference a ceo told he expects moreariffs to s me into play. >> we expect therere tariffs and it's going to start to affect, you know a department store retailer moreic signtly because of the apparel pieces that will be part of it. what i can say we've been working with our supply chain lookin at ourrivate brands, and we prepared for this. >> also bank of america recommends add new global fund manager survey showing that trade war is still the number one concern for investors. a thatourth strait month, second on the list is a china slowdown followed byed theal reserve raising interest rates too quickly. one thing is clear, the markets are not prepared for a decadeslong trade war. for nightly business report, bob pisani new york stock exchange. the ceo of fedex weighed in on the trade fight making it clear he doesn't like it.

on a conferenc call with analysts fred smith said this is something everyone is worried about because it could potentially slow economic activity. >> history is very, verylear that countries that pursue thea most opents are the one that is prosper the most and whose citizens's iome increases the most. americaen tealism does not work. there is example after example of it. people that try to manage economies, particularly worldwidem economies f a centrally managed perspective cannot do so. >> fedex does not douch siness with china. but the u.s. china shipping accounts for 2% of fed fedex totasales. given the enormous sides of the latest tariffs at $200 billion some economists are saying these will be felt directly in the walt wlets ofns

ers. steve liesman breaks it down. >> most person americans have been able to avoid thede war. but maybe not anymore. the imposition by the trump administration of $200 billion new trafrs on china could bring the trade war home literally. about 50% of the tariffs are on consumer goods. that includeser comp furn turs lamps and food products. meaning higher prices. and when prices ris people buy less so growth declines. economists debate the magnitude of the tariff impact nearly all think it's negative for gdp. that could bese ld if the tariffs are temporary and break downse trade restrictions. some peg it at a couple points of gdp. one forecaster said all thees u. ch tariffs combined with chinese retaliation could shave a half point off growth growth next year. some warned of recession.s mood wrote it's a material

falling asset prices. recession outcomes possible. but not all economists were concerned. wells fargo says the u.s. economy will weather the uncertainty so long as business sentiment and consumer sentiment remain positive. how much it hurts depends on how fast the u.s. economy grows if it grows at 4% a couple tenths won't matter. at the prior rate ever 2% a couple texts matter more. and then consumers feel the negative affects in higher prices and slowerroh. por nightly business report steve liesman. the national association of manufacturers representing both big and small operations wants china to end its and i competitive behavior. but the head of the group also said he would rather see the two sides talk and not levy tariffs. >> our issue, of course, is that tariffs drive up the cost of goods heren the united states, driving up the costs for

consumers. manufacturers we want to see the administration successful bring china back to the table fo negotiations. we have been calling for a rules based bilateral trade agreement for many months now. and we want to see that done. >> both concerns are being echoed by a major manufacturer in huntsville, alabama where we find brian sullivan tonight. >> at the polaris factory in huntsville, alabama production lines are humsing a the r offd vehicle assembly continues. but there is concern a trade war and tariffs could slow things down. because even if a compa like polaris wanted to source everything from american companies it likely can't. some of the steel and aluminum parts going into each of these have to be sourced overseas. they simply aren't made here. and if those parts come from china, then the tariffs add 10% osts. ceo scott wine says the combination of the two tariffs

and domestic price increases haves made thi more expensive and he is worried about the impact on sales. >>e resource most components here in north america and here in the united states we do buy a reasonable amount from china. and there isno a 10%, going to 25% german on all the goods from china. driving up the cost of vehicles and ultimately over time as our prices go up reducing demand. >ny of these rangers and other polaris products are slapped wi theirwn 40% tariff there. wine agrees with the president that china ila notying on a level field and a t newde deal needs to get done. he just wants it to get done quickly. >> go fast. just get this done quickly. the -- the opportunity for america to behe better off on other i had side of this is great. the impactn t short-polar sis too big for me not to want in quickly.

we need to to get freer and fair trade as fasts we can. >> companies like minnesota based polaris made alabama a manufacturing success story but it's home to major company based outside of theted states like mercedes and hyundai and honda. who employ huntings of amaens. alabama republican cochems maob ks supports the aged. but he wants to make sure the base stays strong. >> anything we can to try to merce more manufacturing in the united states ofca the more you are seeing the foreign automotive countries decide to operate and manufacture in the united statesf erica rather than in their home countries. >> polaris is doinghat many mpanies are doing, eating some passing along others in the form of higher prices.no righ the american economy is strong enough to withstand it but polaris hope the trade fight doesn't become the very thing that i slows all down.

for nightly business report, brianll an, huntsville, alabama. in the meantime the tradean talks witha are set to resume tomorrow. the a two sidear to be fair apart in some areas. and today themianadian prime ster justin trudeau says his government will walk away if necessary. e u.s. imposed deadline is set for october 1st. it's time to look at the a upgrad ground downgazed facebook price target was tutt cuto $1,957 from 205 at jp morgan .amount says rising expenses reduce earnings. share m also lowers per estimate for next year the stock fell a fracture sthun to160.30. wal-mart was given outperform rating at bmo capital. the analyst citing longtime eexaminers profitability .price target is $110, the stock rice to 95 pfrt 43.

>> united continental was downgraded to neutral from outperform at mcacquiry. they site the valuation up more than 30% since the stafrt yeare prrget now $95. the stock fell 5 cents today to 90.11. discovery was downgraded to sell from hold at pivotal. the analyst cited the 20% gain without meaningful change to fundamentals. price rget, 26. that stock fell 1% to 31.58. tariff l ahead doe trouble loom for the housing market? wall street salaries have come full circle process.

according a new report compensation in the financial industries climbed more than 10% last year. the average salary and bonuss now just over $422,000. the highest it has beenn a decade. lehmathe time when brothers collapsed. mcdonald's workers stage the first me too strike.in accord to workers rights group fight 15. hundreds of employees hell demonstrations cross are across cities culling for more respect in workplace, better training, more transparenty and accountability. back to trade now. aren't you glad the housing market this time rising home prices and the lk of affordable housing has been an ongoing chlg for many home yers. and as more tariffs are slapped on chinese goods that go into the hom building industry, that pain could get worse. dianack o has our story. >> reporter: demands for house something red hot but consumers can' t buy whaty can't afraid.

prices for new homes are especiallily higui asers are faced with rising costs for land, labor and especially materials. new tariffs on chinese goods will only make that worse. of the 5700 products listed in the latest tariffs from the trump administration,in prely look by the nahb found 600 produnes ced to home construction or to tool used to build amounts orom. that represents $10 billion in goods which at a 10% tariff rate puts a $1.0 billion tax on housing, including appliances and other home furnishing products. home buildernt sentias unchanged in september on the national association of home builders index.it still pe but theablers say it could be higher if it weren't for rising costs. taylor morlson ceo she palmer says the costs will inevitably be passed onre to hed consumers. >> ultimately we are in the same place taking the same ireases.

you try to absorb it. but at some point, depending on the extent of it, yes the consumer ultimately will pay for it outer our margins will go down initially. but at some point it depends on mark c how thesumer feels. >> one of the other things, rising mortgage rates after sitting tight for several months the average year on the 30-year fixed now a 7-year high putting home affordable ability a a decade low and even for those staying put and remodel homes, the new tariffsse will incr those costs as well. from kitchen cabinets to countertops tthe saws and nails that put them all in place. for nightly business report, diana olickn washington. sales growth disappoints at general mills. that's where we begin the market focused. the maker of a cheer owe appears hagen dawson bliemd weaker demands for snacks and yog urts for the 11 revenue miss. also trigged about i a rice in frustrate cost. cracker barrel said fewer customers visited restaurants

this quarter but the one who is did spend more process. but it wasn't enough to grow earnings at the rate that wall street expected. so the stock feg 4% to 143 peart 880. auto zone said it sold more car rust this summer in the belt and saw improved performance in the commercial business. while earnings topped expectations, same store sales rose lesn expected. so shares of auto zone were off 2% to 732.76. and visa andasr card have joined a number of banks in agreeing to pay more than $6 billion to settle a yearslong class action lawsuit over car swipe fees. merchants bought the cla action suit back in 2005 alleging the companies violated anti-trust laws by forcing retail tors pay swipe fees. the settlementge is the l ever of an anti-trust case. visa shares climbed to 147.63

shares of meter card r a% to it 20.05. >> the new york post is reporting athenna health extended the dloin for receiving take overbids after the hge fund and shareholder elliott management backed away from an offer to pay $160 a share for the cloud based technology company but another report by cnbc says the delay was because a new potential bidder has entered the picture. shares of athenna health fell to 1325. viking pharmaceutical said the experimental liver disease treatment performed well i a study. the small cap biotech said the therapy was effective a at lowering cholesterol levels and liver i fat patients. sending shares of viking up more than 85% to $19.the 46. meanwhile drigal pharmaceutical saw shares dive 9% to and the california department of insurance is suing

abvi, alleging the drug maker gave illegal ckkickto health providers in exchange for prescribing the blockbuster arrangement rightis treatment humor aire which happens to be the world's best selling drug. the suit alleges abvi offered incentives and pree ephesuss to push the kmpgs. the company deniedhaes. abvi shares fell 3% to 92.61 and medical marijuana producer tilray said today it received ap uoval from the. government to supply researchers at the university of california san diego with marijuana that will be used in a clinical trial to test the effectiveness at treating a nervous disorder. tilray is the first canadian company approvedmp tot medical marijuana here into the united states. and boy, did shareholds like the news shares jumped 29%, to closet 154.98. president trump is expected to head to north carolina

tomorrow. to visit the area's affected by rricane florence ando assess the damage. his trip comes as economists try and tally the costs. but thestimates keep changing and in part because of all the flooding and the rising rivers. contessa brewer is in fayetteville, north carolina for us tonight. >> reporter: in fayetteville, the city is bracing for the cape fear refer to tcrest. he previous hurricane hit 58 feet. it's on track to be 61.5. we are constantly monitoring. we have the drones up seeing what communities are affected. >> i want to sw you the rail line. this is a csx rail line through town. you see all the debris pushed by the raging river up again the trestle of the railroad. to give you a perspective of how high this water is, let me show the light post typically on the side of the river. the river is expected to cre tonight at 59 feet right now.

flood stage start at 42 feet. it's way, way above its flood stage. and one of the reasons why this is such a problem, a few minutes aso this bridge crowded with onlookers hoping to just see what was happening i their city and what the danger might be. now you can see the police ofcers from fayetteville moved everybody off. this is still a real threat to this town. and it's a situation that's playing out around north and south carolina today as people ar m still trying e supplies, resources, knows who evacted are tryingo get back to homes. and stores and restaurants and gas stations are trying to open up. >> tre are not a lot of resources for businesses. and so we are thankful the adminiration early on came o and gave the emergency declaration. we've been in contact with them. and so any area that is we can do to help business up and running we are for that. >> reporter: but the flooding remain a major, major threat. we will keep our eye on it from fayette value back to you in the

studio. >> from contessa brewer and how electricharging up t car market. the outlook for the global auto industry remains stable as sales in china, india and in europe. butge moodies s the threat of trafrs, rising interest rates and higher fuel costs could the industry next year. in a new report the credit rating agency said the threat of slowing sales comes as auto makers spend a lot of money on new technology and altnative fuel vehicles. tesla is now facing a criminal probe. the justice department is investigating public statements made by the company's crow elon musk about going private. musk you mightecall made the comments on twitter in early

august. and when he said he secured funding for the deal. car maker has since backed off the statements and decided to not go private. but tesla says it received a voluntary request for documents an cooperating. the report sent shares down 3% in today's drat. and tesla has n only a o an investigation to worry but new competition. audi is the latest you a maker to unveil an all electric model called the etron. phil rhee bow is in san francisco where the electric car battle is heating up 3. >> reporter: the audi etron is not just another suv. it's the latest in a wave of vehicles putting the charge in into the luckry ev market. >> we have created something special, truly special within our first fully electric car, the audi roetn. >> with a range welover $200

million when fl charged, the etron will start at just under $75,000. pricey? yes but in the ball park as teslas which are popular with hiye-end . >> frankly it's simple. launch the cool cure in the luxury mark this is supercool. i'm convinced we see growth there. >> in fact global salesf luxury electric vehicles will sky rocket by 2025. charged up by new electric models from jaguar, bmw, merced-benz and others. all expected to cut into tesla's dominance of the luxury electric vehicle market. >> in a lot of ways the increased competition for tesla really is increased availability of mols, especially models that have the same amenities or luxury offerings that are available in the tesla products. >> reporter: for the foreseeable future tesla will remain the leader in luxury electric vehicles but elon musk knowshe

competition is coming. starting with new model like the etron on sale in the spring of next year. but audi says it's seeing strong reservation on plenty of interest for the first electric model. nightly business report, san francisco. and that's that does it for us tonight i'm sues herera thank for joining us. >> iil bgriffeth have a great evening. see you tomorrow.

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