this is nightly business report with bill griffithnd sue re. >> what a week. a dramatic sell off. what happens next and what money moves should you consider making? big bank earnings. results are in. it is what they arebo saying the economy, interest rates and trade that is getng all the attention. the new subprime, no down payment, low interest loans. sound familiar? they are back and they havethe supporf a major bank. those stories and much more tonight on "nightly business report" for friday, october 12 m. welcome. for many it was a stomach churning week on wall street

thatnded today with gains. that allowed investors to take a much needed breath and digest what had happened over the past two days. the sharp drop in the dow was certainly the talk of investors around the world because it was and unsure when it would end. the dowlimbed t 25,339. 167. asdaq was up the s&p gained 38. look at the losses for the week. it was t biggest weekly decline for stocks since late march. what a five days it was. ns the s were there. trade tensions and that sinking feeling about hiu.s. relations. tech stocks, the high flyers losing altitude. bond yields at seven year highs and a fed determined to hike interest rates. stocks came out swinging on n

monday, d200 early on and then up in the afternoon. ultimately the dow finished up only slightly. on tuesday interest rates took center stage. autos and homes have been getting moreexpensive. 30-year mortgage rates touchedpe five ent. stocks drifted lower. late in the day president trump weighed in on the fed's rate hikes. >> the fed is doing what they think is necessary. >> reporter: on wednesday, the president continued. >> i think the fed has gone crazy. >> reporter: he also s td ed is going loco and stocks have gone loco. the dow falling more than 800 points. thursday -- >> the red arrows are back. >> the dow down. >> reporter: down morehan 500 points for a two-day decline of 1,300 points. three quarters of the s&p touched correction territory.

finally today, more volatility, a bounce higher, up more than 400 points but then down briefl finally, then, up more than 280 points. >> let's turn to talk about what is nextke for the m and what moves you should be making, if any, in your portfolio. he is h of america's asset allocations at u.b.s. global welt wealth. or the pros on wall street this was a day and a week that really had heads spinning. so for the average investor, what is your best advice on how to really weather what looks like it is going to be quite a volatile period? >> one was a moven higher interest rates and the other is trade. when we look at what is happening over the pt week this feels reminiscent of what

happened last year whether it was a correction similar to this, it took a couple of months for th market to stabilize and then try to continue to move higher. i think the reason thatpe hd was because the economic fundamentals were solid. in the u.s. that t is still case. nothing over the past two weeks suggests that the economy has gotten worse. it suggests the u.s. economy is doing very well. it gives us confi suggest once you get through gyrations thed bull market sho continue. >> a lot of people are watching who invest forncome whether fixed income portfolio or in equities of some kind. rates are rising. that is causing stock prices to godown. what is the average investor to do with that kind of scenario? >> the rate rise has given svestors who have invested in fixed incomeurities a chance to invest at higher yields and higher returns. for the stock market anytime you have a large move in interest

ras like we have seen in the last couple of months it takes time for the market to digest it and adjust and reset. i think for investors the way we is anof it, this opportunity to add that to equity market risk. even if you areoong for income, there are opportunities in divide-paying stocks and the correction has given an opportunity to reduce valetions and mt a little more attractive innt certain seg >> should investors prepare for more volatility? for those who are not the pros on wall street, sitting and watching this program at home and saying i don't know what i coming next, what should they do? stage ink we are at a the economic cycle where we will get these kind of periodic bugs of volatility in the market. i think one of the best ways investors c deal with this and not be overcome be otions is to make sure they have clear long term goals and think abo their portfolios to achieve

different objectives. one example is toave a portfolio for liquidity needs. make sure it coversour cash flow needs and invest in a safe d short cash. then it has very little risk to theg. anothernt is investing for the long term for your retirementne s, for education and things of that sort. you can invest in equities and other riskier assets. by segmenting this way when you get drawar downs andt crashes we have seen, it is confined to the longevityrt lio. we find with our investors when they take this approach to divide that way it helps them ride through the periods of volatility much more easily. >> very good advice. >> that is one thing i think investors will try to do. >> thank you. >> my pleasure. enings season did get

underway in earnest today. this sson is shaping up to be a bit more complicated given the extreme market volatility and issues like rising rates and trade tariffs. today jp morgan, citi and wells fargo started us off. sl le picker has our result tonight. >> amid the market volatility this week investors today were focussed on the third quarter earnings from the three large banks for clues about what their results say about the economy, intest rates and lending as a whole. jp morgan beat analywh estimates e citi and wells fargo posted mixednumbers. on a call with analyst jp morgan ceo jamie dimon spoke optimistically about the firm and the economy. and jp morgan's results seem to support that as one analyst wrote, always

tough to call the end of the cycle, but there is no evidence in the end in jp morgan's results. dimen was brushin off concerns saying investors need to look at the reasons why rates are rising and not just the fact that they are rising. >> the why is more important. the economy is strong. rates are goingup. most of us consider it a healthy normalization and going back to more of a free market when tt come asset pricing and interest rates. to me, overall it g is ad thing particularly for the economy. i dora exptes will continue to go up. >> on the media call dimen highlighted specific risks including exit, trade and international tensions. he calle the head winds geopolitical issues bursting all over the place but said he didn't think they would derail the u.s. economy. both citi and wells fargo have ocbeensed on their own plans

to bring down expenses but also shhroughng their own ear earnings that the rising interest rate environment is benefitting their bottom line. rising interest rates can help banks. there is a point in the cycle where banks no longer benef when consumers and businesseak stopg out as many loans as they were before. analysts and investors don't see evidence of that quite yet, at least based on the reports from the first three major u.s. banks to share their third quarter results. the treasury secretary says he is notoncerned in the sharp pullback in the market this week simply because the economys so strong. >> i think the fundamentals are still very strong. the u.s. econo is strong. the u.s. earnings are strong. i see this is just a natural correction after the markets were up a lot. it is really no new information in the market on the fed or on trade, for that matter. so i really see this asti a

re of markets tending to go too far in both direcyons and t have natural corrections. >> the treasury secretary also said that the white house respects the independence of the federal reserve and that when criticized the central bank he was just expressing his turn aboutin rest rates rising too quickly. one of the things that is working in the market's favor are buybacks by corporations. buybacks occur when the company repurchases stock. that reduces the number of outstanding shares and could potentially increase earnings per share. a large number of buybacks are expected and that could be good r the broader market. bob pisani has details. >> buybacks have been one ogthe stories. data track estimates that companies&pn the00 have repurchased $646 billion of their own stock, that is about 30% more than the year before. there is plenty ofr dry pow

that is left. one firm told me there is at least $350illion in unused be puts just waiting to back to work. more than om300nies have active buybacks programs. contrary to popular belief, companies can buyback stocks during the blackout period providing companies have set up a plan to buy back scks on a regular basis. there are restrictions such as not buyg in the last five minutes of trading. corporations typically buyback on the dolla stock. corporations can buy back more stock and may get more . aggressi when is this going to end? when will companies stop buying back stocks? right now they are generating enormous amounts of free cash flow. unless com can find an attractive use for the excess

cash, i'm betting companies will still funnel thef money their excess cash to buybacks. for "nightly business report" i'm bob pisani. microsoft was upgraded to rm outperrom neutral. the analyst cites the company's earnings power and the decline in the stock price this week p thece target is $121. microsoft sharee r 3%. netflix was upgraded to buy from neutral at citi. the analyst cites the strg fundamentals and recent pullback. netflix reportsn earnings tuesday. the price target is $375. the sres rose more than 5%. >> square was upgraded to buy from hold. the analyst says the company is un and sees long term nt pol.

shares popped by 7%. e es lauder was downgraded to neutral with the analyst citing concerns about the impact with the trade with china. price target is $138. the sharesel one percent to $126.32. sll ahead, three stock picks a market monitor says you should buy and hold to get you through these volatile times. what they do after natural disasters and that is tally the damage. one early estime puts the cost at $8 billion. the storm left a trail of

destruction stretching from florida to virginia. xi beach and the florida dl panh for example, was one of the hardest h areas. over 1 million residents remain without power. back to the market and the economy where interest rates and wild market swings aren't just beingalked about on wall street but across the country. tonight brian sullivan spoke to a businessman ino houston get his view on borrowing, the consumer and the state of the american economy. >> witto recent market volatility there has been a lot of questions about whether or not the market whether stocks or bonds is telling a negative story about the ame economy. will the u.s. economy slow down? is t economy headed into some kind of recession perhaps next year? a lot of speculation. the best thing to do is go to the source of the consumer and that is speaking with the chairman and ceo of landry's.

they own more than 600 restaurants, a bunch of cinos as well as the houston rockets. are you seeing any slow down in the consumer at your restaurants orhotels? >> the consumer is out there spending money. what you are seeing in the stock market is just little corrections that you have to have when the market is up 300% in the last eight years. they are out there. they are gambling. they are buying car and buying food. nobody worry about a thing.th economy, all the catalysts that make the economy strong are oods going to be good for a while. >> he is not seeing a slow down yet but does caution as a builder interest ratesly certa as they rise do matter especially if you are spending couple hundred million dollars on a development. >> when you start talking about a hundred million dollars one percent is a bunch of money. it definitely has an effect. that is why capitalism in h

americ been so great in the last few years because interest rates have been low. let's not screw it up and raise them too fast. >> when you ag build a multimillion dollar hotel any rise does matter. i think the idea being the market may not necessarily reflect the american economy which by all i measures going very, very strong. if rates keep rising and if we see the price of oil keep rising it coulde hit on the u.s. consumer especially in a place like houston, texas. for "nightly business repor i'm brian sullivan. ford sales fell sharply in china. that is where we begin tonight's market focus with a 43% decline in sales in september. it is the third s aight month clines. auto sales in china overall dropped the most in nearly seven years. analysts say they are concerned

the chinese demand for cars coul f contract for thest time in decades as economic growth continues to sl s. fores fell nearly two percent to $8.64. pnc financial reported a rise in quarterly profit but loan growth was disappointing. investors are expected to see lenders benit from higher borrowing by businesses as those firms take advantage of their ne lower tax rate. shares were off more than five percent to 124.26. general electric has delayed therelease of third quarter results by almost a week. the company says it will g ne th ceo more time to review his businesses. and jpn mor analysts argued that the company did not have enoughr assets cash flow to pay down liabilities. share of ge fell to 12.32. bristol-myers canr drug

was being tested on lung cancer. the study was being done on patients with an aggressive form of the disease whose condition had relapsed after chemotherapy. shares wereasically unchanged up a penny. software company soared ina itst debut. the ceo says he did not consider delaying the ipo mostly because he says the outlet for his business is rong. >> we have almost 1,000 custome customers. ose customers have been within a plan. i was looking really at the future of the plan and how that can be positioned. i thinkhings worked out quite well over the last two ek >> shares soared 42% on the first day of trading and clo at $24.30. now to oury wee market monitor. the last time he was with us in april he recommended amazon

which has risen 15% since then, facebook w dch isn 8% and salesforce.com which is 18% mark lehman is with us. welcome back. >> thanks for having me. >> let's get to the three stocks tonight that are really ver relevant. upwork is your first stock. a freelancer plant form which would benefit from the tight labor mart we seeight now. >> that's exactly right. it is the best play on the market. it is highly in demand. they match talent withni com that need that talent. and it is a very high growing market as well as an international market. this is great company that recently went public. for the next few years it is name you want to watch. >> not worrying about the nine percent decline this year? >> it went public recently. it's a new company. it will be volatile.

it's not a mega company. over time,his is the best player in that space and you want to own it because it is th bestplayer. >> from a tight labor market to a tight housing market espe tally on entry level, this stock has been hit with the rest of the home builder stocks. you like lgi homes. why? >> it is an entry level player in high growth markets in the south. they are a low cost oducer. we know that the home building stocks have been hit very hard. this otock is 50% from its highs. fuamentals remain intact. there will be situations where wage rise. the stock isown 50%. >> last time you were with us you liked amazon. tonight you still like amazon. y? >> it is up since the last time i recommended it and down t% fr recent highs. i think fundamentals haven't changed. you have a minant market share of leader and a high growth

building in what they are doin they are clearly playing the highest of growth markets. u don't get often the best companies trading for a 15% discount i think this is just one people re waiting to add to their portfolios. this is the time. >> these are recommendations you feel are good for the next three years or so. anks for joining us tonight. >> thank you both. >> to read more about mark's picks you can head to our website at nbr.com. coming up -- potential borrowers with poor credit are being offered no down payment, low interest rate llins. sound fa?

facebook issued an update on the security breach. the comny says the hackers stole name and contact details fr 29 million users. the social media network is cooperating with the fbi which is actively investigating that attack. there are reports tonight that sears is going to file for bankruptcy on sunday and as part of aeal with lenders it will receive an emergency loan of $500 million from aroup of banks. and then according to dow jones ther retai will close all but 300 of its stores, giving it a smaller, more manageable foot print. sears was scheduled toake a major debt payment of $134 million on monday. he> you probably remember that after housing crisis lenders tightened up and did away with e subprime loans that went to borrowers with low credit scores. now there is a new program appealing to subprime borrowers with offers of no down payments,

low interest rate loans andck ba by a very big bank. >> reporter: she wanted to be the first in line. first to apply for a no down payment, low interest mortgage at a special event in miami. >> i did find a home. >> no down payment. >> reporter: the event is one of several being held in cities across america this year run by neighborhood assistance corporation of america. >> it's a national disgrace of the low amount of homeownership. >> the r onlyeal solution is to restructure your mortgage. >> reporter: in 2010hey were front and center during the foreclosure crisis holding

events across the country with nks and servicers. bank of america washe then. and bank of america is here now backing the heownership drive with $10 billion in mortgage commitments. >> do you see any risk to bank of america? >> we have seen significant wins in this partorship. juste clear, when we get those loans with the heavy lifting that the team does here, we are over 90% approval. >> repter: borrowers can have low credit scores but have to go through an education session about the program and submitll a necessaryco documents from in statements to phone bills. then they go through counseling to understand their monthly budget ande ens that they can afford the payments. the loans are 15 or 30 year w fixedh interest rates below market about 4.5%. >> that willelp people who have been locked out of homeownership to really become

homeowners. >> reporter: critics of the program argue that with no down payment these borrowers have no reason not to walk awayhould the homes lose value. the difference here is that none them are investors. in order to get the loan, they have to live in the home. >> working people look at their investment asomeownership for their family, their neighborhood and for themselves. >> having a home, that's an investment. homeownership, eedom. >> reporter: for "nightly business report" i'm diana olh miami. >> to read more you can head to our website, m.nbr. finally tonight, a piece of american history i up for sale. the home of john proctor, one of the 19 people executed during the salem witch trials in 1692.

it's on the market, has six bedrooms, two baths andolhe house has been modernized. the asking price is $600 however, you will probably have stiff competition for this because a local historical society is said to be interested in buying the home and t ining o a museum. probably a good idea. >> indeed. favorite story of the day. here is a look at the final day on wall street. the dow climbed 287 points. nasdaq up 167. s&p 500 added 38. for the week the major indexes had the wor decline since late march. that does it for us tonight. i'm sue herera. 'm >> bill griffith. have a great weekend. see you monday.

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