. this is "nightly business report" with bill griffeth and su herera. >> stocks seesaw. the market saw sharp losses and gains as investors navigate a world with higher interest rates and reworkheir portfolios. labor shortage. delivery company dhl is looking for workers as it enters the busy time of year. hot holiday. to get your gift list ready. the retailers are stocking up in the hopes of getting a bigger slice of the toy market now that toys "r" us are gone. "nightly business report" for monday, october 8th. a we do bid you good evening, everybody. welcome. it was one of those daysck when the s market just couldn't seem to make up its mind. the dow swung bet en a200 point decline in the morning and a nearly 100 point gain in the

afternoon. the rte in technology shares continued to deepen and the s&p just kind of floundered during the day. in the end the industrial average rose to 28486 and the points ell another 52 and the s&p was down just one. the bond market was closed today for the columbus day holiday, but clearly interest rates were still on the minds of stock traders following last week's dramatic rise in treasury yields. the question remains, why have yields spiked? is it because inflation is soon to be a problem or is it simply because equity investors should be concerned if it's for all the right reasons. keantoli digs into that for us tonight. >> reporter: over time it's true stocksan do well as bond yields climb due to strong economic growth, low unemployment and more normal levels of inflation. in fact, the ten-year treasury has doubled ove the past two years from a yield of 1.6% to

3.2% and during that time the s&p 500 is up by more than 30%. yet y at this stage thrrs into a fed tightening campaign each fresh high and bond yield t a t for stock market valuations that are down from january but remain near the e uppe of their long-term range. the stock market's priced earnings is high relative to bond yields as is been since 2008. stocks were a good deal moreex nsive for most of the decade for the financial crisis but so far during this economic expansion the market has refused to restore tt expansion to stocks. high yields act as a head wind to corporate investment by raising the cost of debt. corporate bond yields are at a 2.5 year high which pinches companies including m firms and of course with yields on safe government bonds exceeding 3%, they start to appear aorettractive to investors relative to expected ten-year stock returnsnyhich

strategists argue could be in the mid single digits from here. all of this helps explain why the stock market has stalled out when yields reach a n high or threshold as investors tryma to their peace with a higher cost of money and look for assurance that rising rates won't hasten a slowdown in an economy that's been seen a deceleratiit heading into the new year. for "nightly business report," m mike santoli. so what does the rise in rates mean for individual sectors? bob pisanireaks that down. >> reporter: relentless rise of interest rates has moved the etf business in a big way in the last few days. now weave seen particularly heavy volume in bond etfs in the last week. treasury etfs in particular right across the yield curve. three to seven year etf and ten to 20 year. we've also seen very heavy volume in the maingrnvestment t etf, the lqd. they're all hitting new lowslo ing at stock etfs. the usual sectors that get hit

by higher rates are taking a beating. we've seen new lows in the etfs around emerging markets,me arou builders, global automobile stocks and you can see the gaming stocks which are often highly leveraged and can be very susceptible to sudden moves in interest rates. look carefully and you'll see that the strong economy is eclping otherrs that might normally, normally suffer under higher rates. so reets, real estate investment trusts, they're down but they're not even close to new lows. that's partlyecause the economy is so strong and sectors of real estate rvices, health care, storage, apartments, even hotels, they're all doing well. also hava busy high yield etf like hyg are also down but they're not at new lows and for a good reason. the high yield etfs are more tied to the credit cycle thaner the it rate cycle and with the economy being so strong, the risk ofllefault is s fairly

low. for "nightly business report," i'm bob a pisani the new york stock exchange. with this recent dramatic rise in interest s rates,ere a model portfolio that could benefit from these risinte michael jones is with us tonight. he's chairman of river front investment group. he's got some ideas o. th thank you for joining us tonight. >> glad to be here. if you had to start from scratch as rat, rise he give us a sense broadly speaking, this is oroadly speaking not just every single individual investor out there, what kind of a mix would you sees for stoo bonds right now? >> well, i think that mix is changing in response to what's market.g in the bond if you look back over theast ten years, bonds have been very expensive. by the same token stocks have p. been very ch they've been offering great returns. our portfolios have had an over weight to stocks for 10 to 15% and we've taken that money out

of bonds. as you look at what's happening right now with interest rates starting to rise and equity markets getting high enough that they're starting to tip into over value territory, now's a good time to take that extra money that you've beeneeping in equities for the last ten years, because it's the only thing that made sense was zero interest rates, and start shifting that backver into the bond market but into vicy spec sectors of the bond market. >> so would you go very short term in terms of bond exposure? >> i think what the market has done is a great favor toau investors b the most attractive space in the bond market right nowth i safest space. two and three-year treasuries righin now are off yields of close to 3%. if you wanted a yield like that six months agad you to lock your money up for 30 years. you're now able to get that kind of return for a two o three-year investment and, you know, bob was talking about high

yield bonds. they're only yielding 5, 5.5% for all the risk of default that you have to take on when you invest in junkbonds. with treasuries, two-year treasuries with vey lit interest rate risk and little credit risk offering 3%, now is a good time to shift some of the portfolio from the riskiest part of the market to the safest part. >> ee cn 101, continue financias are a good place, is that where you look? what about technology? still g clobbered these days. >> let's talk about technology first because we'll get the bad news over with. i just came back from -- i just came bac from an extended due diligence trip into asia and the undeniable conclusion is that china's losing a trade war. what h that got to do with technology? well, everyone is now realizing that it's too risky to source all oro yourction from china. i mean, 90% of pcs shall maare

china. 70% of phone hand sets. suddenly you can be denied products or have to pay a tariff on your products if the pres uent of theted states signs a certain act. >> okay. >> so what companies are re hgnizing is theye to diversify out of china. they have to find new supply sources. they have to build new supply . chai that's incredibly expensive and it's going to be a pretty ig headwind for tech earnings for the next several years. >> very quickly, whe put the money to benefit from rising interest rates? >> you hit the nail on the head. banks have had zero interest ratesvehat the paid on checking accounts and they've been able to invest the money at zero. that's not very profitable business. they're now keeping interest rates that they pay us on our checking accounts close to zo buthey're able to invest that cash at 2, 2.5, even 3%. that's a significant boost to theyprofitability that haven't had for the last ten years and it's going to really help their

i also like financials in the insurance space because after you've had a seriesf disasters, and it looks like we're about to have another one unfortunately in florida and possibly the gulf c- >> okay. bad for thosery stocks short term as they absorb those losses but it gives them pricing power for the nextor ye wo that really helps their earnings and their stock price. >> michael jones with riverfront investment group. again, thanks for joining us tonight.. appreciate >> my pleasure. thanks. well, the energy markets are watching whatt michael j mentioned. hurricane michael. the intensifying storm is tracking through the energy producing area of the gulf of mexico and it is expected to make landfa near the florida panhandle. according to the u.s. energyad nistration, off shore production in the gulf accounts for 17% of total u.s. crude output. energy traders were also watching a, quote, majorde inci at canada's largest refinery in st. john's, new

brunswick. oil prices settled at4 a barrel. overall oil prices are up 20% so far this year. that's pressuring airline stocks because certainly higher fuel costs c into profits and perhaps lead to higher airfares. phil lebeau has me on that for us. >> reporter: the next time you see the ground crew fueling up your plane before takeoff, remember this, that fuel isashe airfares are likely to move higher. historically airfares move up or down in tandem withet fuel, and now that it costs more to take off, airlines are likely to pass along those higher costs. admittedly, fares have been trending lower with e average domestic round trip ticket now costing $217, butav airlines been able to boost revenue by charging customers to change reservations, upgrade their seats and che. ba in fact, almost all of the major airlines have recently raised theost of checking your first bag from 25 to $30.

that will help airlines offsetl higher f costs. as will theact there's a record number of people flying right now. demand is strong. historically airline stocks move higher ithe fall in anticipation of a busy holiday season. we'll see ifhat's the case this year when airlines start reporting earnings laterhis week. phil lebeau, "nightly business report," aicago. >> rising oil prices are pushing up the price of gasoline.in acco to industry analyst, the price of a gallon of gas is up 7 cents to .97 gail la gallo. that is 41 cents higher last year. los angeles has the highest price at $32. the lowest is in houston at $2.58. g>eral motors sales in china have shifted into reverse. the company announced today that sales there fell by 15% in the third quarter.

that was the first decline in more than a yearnd in fact auto sales in china overall have been falling becadlytly with analysts saying that the slowing economy in china and trade fri with the u.s. are starting to make consumers . re cautio its that he time. time to take a look at some of today's upgrades and downgrades. general electric was upgraded to over weight from equal weight at barclays. the analyst cites the new ceo's abilo lead a turn around and added that most of the bad news is already priced into the stock. investors are basical saying at this price power, ,enewables, transportation, baker hugh ge, all of that collectively is zero and we harsh.hat's too >> the price target is $16 but the firm puts the stock at $20 in a so-called blue skies scenario. shares ofos ge 3% to $13.61. apple's tart was priced

higher to $16. the stock fell a fraction to $223.77. square's pricearget was raised to 108 at goldman sachs. the analyst there cit margin expansion and revenue growth. the firm maintained the buy rating on the stock in the meantime buy but concerns overua 's credit risk sent that stock lower by about 8% today to $86.06. conagra was upgraded from buy to neutral at ubs. theyro cited the long term gwth potential following the acisition of pinnacle foods. price is $40. shares rose by 3% t $34.65. still ahead, the benefits of interest rates and what they could mean for you.

two american economists have won theze nobel pn economics for their work on understanding how c economies grow sustainably. william nordhaus is best known for climateeconomics. he developed a model that examines the effects ofte cli economy like carbon taxes. paul romer is a professor a nyu, new york university. his work has shown h economic forces govern the companies to innovate. the teamsters union approved a deal with ups even though most members voted against it. since a majority of members did not vote at all and since f2/3 those who did vote did not oppose the contract, it was tified, but the decision could cause a rise in tensions between factions within the aeamsters an of this comes as

companies like ups ramp upor the busy holiday season. it's not just ups ramping up for the holiday rush, dhl is as well and the ability to navigate the tremendous growth in ecommerce depends o the ability to hire the right workers despite the labor shortage. frank holland is in lockborn, ohio, for usto ght. e reporter: workers are in driver's seats at the company that move and deliver all thiuys americansonline. >> i want a company that's going to invest in me and my career goals, and they have done that so far. >> reporter: jennifer rogers erft the job as a tea to work here for the flexibility it offered and now she's become the udent in her professional life. >> to be honest with you, i was not handy with a first got here. i have learned how to use a computer. i learned how to use a laptop. i've hearned to use microsoft so for me that was the ever.rewarding experience

just like basic learning technology on a computer. >> reporter: that kind of training along wh competitive pay, access to new technology and employee rk are just some of the ways that dhl supply chain says it attracts and retains top talent. ea>> wey rely on motivating employees in order for us to successfully service customers. when we can't find the right associate, that impacts our ability to deliver service to customers, it impacts the margin of our >> reporter: there is only one qu fified person every six openings in this kind of work according to a suppl chain management review report. that global shortage, along with competition from amazon which recent i raised minimum wage to $15 an hour and has two facilities within 30 minutes of this one has amped up competition for wo wers. are finding that we have to intview oronsider about ten candidates for every hire that we have. so in ourui efforts to a

pool, would he have to build a pretty substantial pool in order to find the right talent that we're looking >> reporter: dhl and other supply chain companies need workers for assembling and packing along with others for technical and operational work that can offer specialized skills and college degrees. this facility handles 100% of the orders for rhodan and fields. they'll expand by 25% by the end of next year. they can't maintain the productivity and profitability unless they hire the right people. technology is becomingng increa important as the company strives to improve efficiency by integrating robots and ai tech into their facilities and it helps to tract top talent. i'm frank holland in lockbourne, ohio. google exposed data. alphabet's google exposed the private data of hundreds of o thousand users of its google

plus social network. according to "the wall street journal," google opt to disclose the issue in part because of concerns over regulatoryscrutiny. access to the data occurred between 2015 and early this ar the company is also shutting down google plus. shares oft alphaell 1% on the day to $1,155.92. a group of private equity firms are going after arconic. blackstone, the carlisle group and others have joined forcesn a bids to acquire the aluminum maker arconic. they do face competition from other buyout firms. an activist investor has been pushing arconic to explore a sale. shares were up to $23.40. the paint and coatings company ppg is raising the price of its car paint by an arage of 10%. this to combat a rise in raw materials, freight, dtribution and labor costs but after the

bell the company warned that its ird quart results will be impacted by softening demand in china and foreign currency fluctuations. after closing higher it immediately sol off in after hours trading. barnes & noble extended its gains in the margin today following a reported barrons over the weekend that said theo could rise further. shares got a lift on the news at they are entertaining bids from interested buyers. today they rose another 1% to $7.02. walmart is taking on netflix and hulu. they're creating content for its video on demand service called vudu. t purchased vudu eight years ago and it's looking for ways to increase the monthly viewership. shares rose 1.5% to $94.69. reports say a unit ofgarmin

exposed boat owners. it was due to a miss configuration in one of its backup databases. garmin said it investigated and resolved the issue once it was notified of the breach. shares fell 1% to >>$67.85. after the fed's recent rate hike and with another increase r potentially b the end of the year, many on main street are focused on what the rising rates will cost them. it will more expensive for many borrowers but there are alsos benef to many investors. sharon epperson joins us ton explthat. >> good to be here. >> let's look at the silver lining. what are some of the benefits?ll >> start with higher return for savers. that's the good news for many savers including retirees who will see more interest. inco great news for them as well. then we'll see more credit availability as well. we're seeing that compared toea few ago. >> we know relatively speaking savings rates are pretty low. how much can you expect to earn on savingsaccounts. >> the key is to find the right

high yield savings account. if you look at the national average being .9% you can see a top rate on a high yield savings account 2%. you want to try to get a rate that high, you have to go to online bankikosty to get that rate. they're very competitive. make sure it's fdic enensured. also for savers and thretirees, cd rates are improving also, 2.5% or moreor a one year cd. if you can tie it up for three year or more you can get a 3% on a 3 or 5 year cd and that's a significant increase we've seen in the past. >> absolutely. on the flich sip side, there's s a flip side, you'll pay more. >> if you are a credit worthy borrower, banks want to loan out at theigher rates. products that weren't available. you have to have good creditor

that. we are seeing rates rise for credit cards and that's w gre people ang to get hit. 17% on average for the minimum for a credit card rate according to credit card.com. you add to that the rate point increases and we're going to sew thhin the next billing cycle. the reward there, pay it down now. don't get complacent thinking it's ability on my monthly statementa it will to add up. you could carry that debt for decades. >> always look on t bright side. >> always look on the bright side. money python andharon epperson. >> thank you, sharon, as always. >> sure. coming heup, hottest toys coming this holiday season. apple has taken the unusual step of sending a letter to

congress denying last week's report that it had fallen victio a hardware hack perpetrated by china. that letter says that the bloomberg report provided no evidence to substantiate their claims and that apple's iernal vestigation found those claims to be false. the report singled out app and amazon as two prominent victims of the attackro mft is pausing its windows 10 update, thisfter ports of customers who downloaded the latest upgrade called 1809 discovered that most of their personal files like word documents and photos had been permanently deleted. the root cause of the issue has yet be determined. only files in the documents folder appear to have been affected anday microsoft now it has the tools to help try and recover those deledfiles. well, it may be october, but the nation's major retailers are planning now for the holiday shopping season. with toys "r" us ne, they are competing more aggressively for

your dollars hoping you buyhe hottest holiday toys at their stores. courtney ragan has more. >> reporter: many of the hottest holiday toys fit into categors of unboxing or some element of surprise and collectability and wearable pets. add updates of past year's a favorite you get this year's hottest toys. private toy maker mga tertainment said the lol surprise toys are the top selling ts around the world. lol surprise biggie pets and they're topping hot toyanists be getting harder to find. >> lol hits the shelves and online and then it's immediately sold out. as weret clo to the holidays, there will be more. in the board game area athere's game called relative insanity. that's jeff fox worthy's game. that game has been blowing out. there's a short supply. >> silver says palmsy is this

year's fingerlings. these are hair accessories and they top many hot lists. a new hatchimal has hatchibabies and harry potter's gray h l will be on the wish list. ollf of the year's list are done during theay season. with the liquidation of toys "r" us, other retailers are clammering to pick up the share. consumers were surveyed asking where the would b toys now that toys "r" us or gone. walmart, amazon and target topped the list. still something they wouldn't make up in the days before thristmas. >> the l four days toys "r" us did $500 million in sales.ta it'sering the amount of volume that they moved through the store. now walma and target, i don't know if they're set up to move that type of volume in four

days. with amazon the lt four day consumers are reluctant to place an oloer that to christmas because am i going to get it in time. >> this holiday season will be a test for parents in search for a toy. before wego, one last look at the day on wall street. no bond o trading day becau columbus day. the dow rose 39. 52.daq fell another the s&p was down just a point. >> that will do it for us tonight. i'm su herera. thanks for joining us. >> i'm billgriffeth. happy columbus day. see you tomorrow. >> yes, indeed.

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