ss report with sue herera appear bilrieth. new worries. stocks get slammeds global issues from europe to china to the middle east get pushed to the front burner. we'll tell what you investors need to know. > fighting back, how facebook is calling forllands on deck to combat any potential manipulation during the midterm elections. and rising risks as torrential downpoursed flood more and more areas we show you how and why cities and companies on not looking for answers the ground. they are turning to the cloud. all that and mor tonight on nightly business report for this thursday, october the 18 and good evening, everybody and welcome. october has not been kind so far

to stock investors. so stop me if you have heard this before. stocks sol off today again. the usual suspects were to blame. interest rates,de t war, but a new wrinkle reared its head, at was overseas concerns. concerns about china slowing, europe and the growing tension over the situation between the u.s. and saudi arabia. and they all teame up to take stocks down today. the dow fell 327 points to 25379. the nasdaq plunged 157 poi and the s&p 500as off 40. bob pisani has more on the selloff. orter: it was another sharp down day on wall street adding to the steep losses for the month of market. the markets dealing with a slough of issues old old and new. china slowdown is prom nlt. morgan stanley warned about slowing auto salesn china. warnings for "g," ford and

chrysler. cart pilar is feeling the pressure. 25% of sales in asia. n bu just caterpillar np sealed air opsachted on the and bottom line joining many industrials seeing larger pressures weaker currency, higher labor costs and tariffs. the markets took another dip when headlines came from the european central bang mario draghi. draghi says one of the biggest risks is countries trying to circumvent the eu rules. it sent major european stocks to lows. stocks with signifint exposure to europe like mcdonald's, dow r dupont, coke down as well. finally a debate around steve unusualen's decision to pull out of the davos in the desert conference. the saudis are involved in tech funds, raising funds for technology companies and inos good if they are isolated. it puts the dow and s&p about 6%

below the recent record highs. for nightly businesseported o report, bob pisani. >> now as bob mentioned, stock moved lower late this morning after that warning from the european central bank president. phillip marks h that part of the story from brussels. >> the president, mario draghi warned european minority nas the eu budgetary rules foub must be followed if they want to avoid damage in the financial sector and growth prospect. this seemed to be clear reference to the italian government. which submit add the budget plan at the start of the week and almost immediately atton the eu commissioner for financial affairs on a v tool rome the italys he had concerns. he mentioned an fiscal plan unprecedentedly higher.

the budget is half the gchd ryrg which is at 130% a massive planned increase in government expenditures funding a universal basic income and growth ufrpgs ands that have not beensed by the country's independent watchg, the italian equivalent of the cbo. new they did have a conversation withhe minister who insists it's about growing the sluggish economy. but it's been cle that tria is romep heing the show in must answer to others with italian bond yields jumping aroundig five-year nearing the end of the week traders do not seem to be betting on at budget reconciliatio between the two sides any time soon. forigly business, bill marks in brusselsing with 'slgium. >> l bring to brad mcmelon talking about the global issues weighing on the market fro europe to china to the middle east. and what you need to know. he is the chief investment officemo with the cealth financial network.

brad, welcome nice to have you here? >> thank yin for hme. >> now, we have known that italy has had financial issues for some time was it just this new wrinkle with mr. draghi's comments that derailed the markets or perhaps the combination ofhina slowing and the middle east tensions as well? >> i think it' a couple of things. i think rates are rising which makes the gas chromatography of any italian overspending a lot more substantial. it's the facthat mario draghi lianif fit to call the i government out. and it's that the government does indeed have plans for w spending outsit the eu wants. so all of these things say yes th another problem. >> we have always had to take the chinese growth numbers with grain of salt. ears.ve known that for but the markets seem to be sensing that there is a real slowdown going on there economically since they' been my grating to a more consumer oriented economy.

you think is happening over there in and what impact does it have on investors here in thenited states? >> the real impact, the real sign there is trouble in china is the chinese government is taking repeated efforts over the past couple of weeks and months to actually strengthen the economy. that's something they do when they are worried about growth. so the fears coming are not from whatre.s. banks saying, they are from the actual action attentionf the chinese itself. that said you have to remember china is in fact either thege second l or the largest economy in the world. so when china sneezes the rest of the world takes notice. what that means for here in the u.s. is probably actually not onl that much. the directctions are not all that significant. and many of enemy have already beenit by the trade -- by the tariffs. so right now it's something to watch but we don't need to worry that much. >> and very quickly on saudi siabia, ts are being ratcheted upti interally. and bob pisani pointed out that

technology got hit hard because the saudis are big investors in technology. how big a problem might that >> the real impact from saudi arabia in my opinion is oil. and the thing is, now that the of is the biggest producer oil their ability to influence us in that way is actlly much less. so there is going to be more attention paid to this. but i think theirect impact on the u.s. is going to be quite minor over time. yourad thank common mcmillon with commonwealth financial network. >> thank you. now earnings after tel dow component american express earningsterly estimates and a record 10.1 billion in revenue which was alsohead of estimates. the company said the gains reflected stronger spending by consumers and small businesses. and amex also raised the ll-year earnings and revenue forecasts. shares initially spiked following the earnings release.y neiping out ari.5% decline

the regular session closing at 102.84. recurringhas been a theme among many companies reported earnings so far this quarter. can you guess what it is? well it's tariffs and trade talk. dominic chu has more. >> reporte 50 oh companies that reported earnings so far this sean have mentioned the word tariffs explicitly during the c oference call in the earnings releases. now it's still early in the season but here is sochlt things that they are saying about what's happening with tariffs overall. in its n is saying conference call we don't see a lot of tariffs related stuff going on. there is obviously on raw material pricing. we have contracts across the company mitigating most of that. so in this case here they're saying they have hedged that in so way. we'll see if it's near medium or longer toerm are term for text tron also another one to watch is granger, officewoupplies place solutions. that company saying they are working with suppliers to

minimize the cost impact of tariffs. also going to try to identify alternative supplyin c and then evaluate pricing actions that could mean perhaps maybe that they pass the prices onto consumers. and last week's fasten al said they could move out of china to another source. in an environment where i the political vashlt as opposed to economic variability it makes it challenging to plan. as we move through earnings season it's important to pay attention to see if the tarif related themes continue to hold. for nightly business rert, dominic chu. coming up, an inside look as facebook fight against people trying to influence t elections. the "wall street journal" is reporting that facebook believes spammers and not ata

nation were responsible for the recent security breach omthatomised the personal information of 30 million users. facebook is said to believe the hacker portrayed themsels as digital marketing company in an attempt to make money through deceptive advertising. and with the midterm earthquakes just around the corner, facebook has launched its first everoo war to fight the election manipulation as part of efforts to avoid ape of 2016 when misinformation was spread across the platform. to accomplish this, the tech giant is using artificial intelligence and machineng learni to help it quicklyfy id and shut down any suspicious activity. julia boorstin got a look for us tonight. >> reporter: facebook has created its first ever war room to fight election manipulation. inof connecting teamsirtually to tackle threats as they arise, tw the social platform is bringingm together. with new strategies to enable

trendsms here to track on facebook using artificial intelligence and machine learning to quickly identify and shut down suspicious activity. >> we have essentially done much scenario planng and like war games internally within the war room in der to plan out different types of problems that we may see and we practice and done drills to see how we can detect that. how we can come to quick decisions and take quick action. >> facebook's head of election integrity, explaining how the teams in this room identified false news that brazilian election day w delayed and attempt at voter experiencing suppression. they they pulled down the post before they went viral. >> here is the war room the emplees representing nearly every corner of company from instagram and what's app to data science and public policy. right now working from 4:00 a.m. to midnight but closer to the mid-terms ehectionswill be working 24 hours a day. this is the facebook latest effort to clamp down on election

manipulationti with a combi of new technology and 20,000 employees focused on safety andty secu they are taking down fake accounts, making political and issue advertising more transparent. reducing the distribution of fake news and disrupting the financia incentive he is of those violating facebook policies. >> part of the reason we have the war room up and running and other teams working from elsewh ce in thepany is so that as the threats develop not quickly but spond we continue to speed up or response and make our response more effective and more efficient. >> facebook aesz's head of cybersecurity saying the systems fischer has in place now wreld havented the russian manipulation of the 2016 election. but he says it's a arms race. and fv will have to continue to improve itsfo defenses. nightly business report, i'm julia boorstin. menlo park, california. novartis expects sales for the year to accelerate. and that's where we begin tonight's market focus. the drug maker hik reven outlook for the year after

reporting stronger than expected quarterly earnings. sales rose during the period but came up short. novartis said it was expanding reach into on college treatmes with the $2 billion deal to acquire drug maker endocite. novartis shares rose 1% to 2684. meanwhile the shares of endocite surged 50% to 23.40. the aerospace conglomerate bled a acquisition on the profit miss. the company said it's been facing issues bing the new all-terrain vehicle business into industrial units. xt tron reported a drop in revenue as it sold fewer turbo prop engining. shares plunged 11% to 57.49. and bank of new york melon id that strength in the investment management and welt management b deliver earnings beat. but the focus was on the bank's total revenuel which f below expectations. so shares off nearly 3% to

47.79. also out after the bell tonight sketchers said that growing planned for the delights shoe brand and strengthen in the defect a international businesses led to an earnings beat. the shoe maker gave renue guidance the current quarter ahead of the analyst estimates. so shares initially took off in the after hours ton they finished down 2% do you agree the regular session closing at 2612. bank of america mailer leverage is downgrading three of the big home builders. the firm cut tollth bs. pulte and nvr from neutral ty bo lowing the 2018 '19 to e-s for h starts. shares at toll brothers finished higher poulty and nvr fell. the u.s. home construction etf was also lowe alex barren jones us now to talk about his outlock or the home builders and housing market. he is founder and senior housing analyst with the housing research center. thanks for joining us tonight.

thank you, bill and sue great to be >> you were also -- you put a sell early -- you were early on the call with that. when you started to see home builders reduce provides. what were you looking at there. >> we were concerned, you know, that interest rates were rising a little bit too fast and the builders were a little too aggressive with the price increases earlier in theier. as you knowuys weigh the decision to buy a home based on payment. we started tsee that sales slowed down and that some builders moving into trd quarter were going to miss expectations. they started to get ore aggressive with the incentives and some with price cuts. >> you also think that this is a cycle that could go on for a little bit, correct? >> yes, we are concerned that this might be the beginning of a more sowers correction in t housing market. >> now, with the sells, the c of lennar told us earlier today that he told us h that thinks

wall street has the story wrong in large part because as you well knowome builders the last decade have been underbuilding in the wake of the great recession because demand craters after the great recession but built u quite a bit. and now home builders have to catch one the demand. sand he s growth down the road as a result what do you say l that. >> w based on our analysis there was about 4 million excess homes built during the bubble. itnt took about 2016 to absorb the excess vrn. in reality the market has been back to ee question lib ibrahim for a year but they weren't counting on interest rates going up quickly. what we have now isab afford ity kriez. he is correct there is not overreply but afford ability ng crisis gn right now. >> if you are a longer term investor, would you watch the stock market decline in these stks and a to positions if

you have a long-term time horizon? >> not yet. i believe that the stocks have been correcting. but i believe that we' going to have to see a few signs before i recommend investors get back into theome building shares. the things i would need to see is first the fed needs to stop raising interest rates. second of all, interest rates would need totalize. third, the builders would have to stop incentivizing consumers. and they would have to stop dropping prices. once i see those signs i think it's going to be time to buy the homes -- home building shares barringe a >> quickly having said that though, not all home builders are are there some you like better than others? >> yes. right now, you know, we believe that the builders that are going to probably do best are the ones focusing on building affordable houses. as we mentioned we believe that there is of an afford ability crisis. so several builders started taking steps earlier in the year start building more affordable houses. and those are the one that is we

think are going to do better relatively speaking. >> give me a for instance, quickly. >> well, for example, militariage they've been spending about 7 or 75% of all incremental lot shares into buying ldas for affe housing. >> all right. very good. alex baron with the housing c researter thanks for insights tonight. >> thank you. the trumpadministration's tax changes are beginning to change the landscape of the luxurysi h market. high tax states such as new york and new jerse are seeing weaker demand while southern states are seeing a surge in interest. more buyers my grate to the lower taxed araas. robert reports on the tale of two markets. >> reporter: well the tax migration has begun. signs that residents of high tax states i the northeast are moving to florida and the south are changing r thel estate market, especially at the high end. new york, new jersey, nnecticut are all see declines in sales and prices while

florida, is heating up. sales in miami beach wer up a whopping 51% in the third quarter with a 15% jump in prices. that's according to the douglas element and miller samuel and in for the laurelled sales up 24% and palm beach had the strongest sales in five years. florida brokers saying the icially season which o kicks off after thanksgiving has started early and strong this year. but real estate in the higher taxed northeast states, specially the suburbs, continues to slide. provides falling 15% in green imprison connecticut and in fairfield county sales fell the third straight quarter. that comesfter four straight quarters of declines in new york and weakness in new jersey. experts say it's unlikely to get better any timesoon. >> i think it's a structural change, unless you know the tax laws in place for at least a decade basically. . you are see going now. i don't want to give thet impression t everybody in the northeast is going to pack up and move to south florida.

we're really talking about the wealthy. >> here a tal of two homes. the greenwich estate owned by leona hemsly purchased in 2010 for $35 pl put back on the market for $50 in million in 2016 appear now down $29 million and still know buyers. djt in miami beach, celebrity kohl i had bought this home for $22 million just under the asking price. it's got 13,00square pete, home theater, five bedrooms and an 80 foot guest house. sold by michael learner who made his tortune from baby onboard car signs in the 1980s. country. for nightly business report, i'm robert frank. >> indeed. ing to handle floods by controlling what comes out of the sky. we'llxpin.

and s more earnings now do you component travelers beat quarterly earnings and revenfo casts as the company saw urowth in both of its personal and business ice divisions. and despite hurricane florence, the insurers losses from catastrophes narrowed to $264 million c last year.700 million shares fell more than 1% today to 1.14. b not the same issue over at aig which after the bell said it expects the third quarter catastrophic losses. due to the typhoon in jpen in hurricane and mudslide. as a result the shares plunged in extended hoursto addin 2% loss during the regular session where any finished at 48.61. f thehis mere was one wettest on record in the northeast. and in central texas heavy rain is causing major flooding.

extreme rain event are becoming more common and posing a new challenge t both cities, large and small. in our continuing serhes on rising risks of extreme weather to real estate, diana olick looks now at high-tech solutions aimed at solving the problem. >> reporter: a recent day of heavy rain in albany new york caused this localized flooding. not a national headline but it hould be because of what increasingly frequent and heavier rainfls are doing to the bottom line of local economies across the nation. hitting both infrastructures and budgets. joseph coffey is albany's waterr commissi >> the extreme rainfall events are causing flooding, basements backups and combined sewer overflows to the hudson river zwloorom may through july the ut much of the east coast saw rainfall up tohree times normal levels according to the

national oceanic and atmospheric administration. nine of the extreme prescription eenlts occurred since 1990 according to the environmental prection agency. the more water, the more expensive the damage. in albany alone two summers ago a few random rainstorms caused over $3 million in damage to suers, overwhelmed by unusually heavy water. so in albany's search for solution. nejoseph coffey td to tech, the techis based cloud and a four-year-old company called the opty installing smart system underground to manage water in urban leaks ponds and tanks draining them in advance to hol more are the water when the storms hit. market's qckly is a ceo. >> we are able to take the weather forecast andt use to predict how much runoff is going down in advance to create new y storage without building a new major azbleet quigley says

nationwide there are close to a million sites like this llde that cse the optytology to control the flooding. >>. the lake is held back by a large panel which makes sure that the level is maintained at a certain elevation. at the bottom there is a value of. valve is connectedo cloud infrastructure. >> the valve isorrect directed by a control box connected t the clouted watching weather every second and changing the water level in the f lake. a cheaper solution than building more storm drains and reservoirs. n> typically the savings are in the range the capital side from 50 to 90%. >> opti now has more than 130 systems zploid in 21 states. new york city, pittsburgh and chicago boughtn. quigley says opti's revenue has grown ten fold in the for you years doubling last year e.al its largest private investors are sidewalk labs mission point ilrtners and ecosystem sbeg fund. opty uses technology to manage and direct water

underground, another compa is litting sites and technology higher. rally. rain bank is a recent start-up that turnss rooft in reservoir like this in new orleans. >> the device closes this water falls up in this area. >> it's not going to leak. >> correct. connectsank technolog water valves on rooftops to the cloud holding water during the rain events and then seleasing itwly once the storm has passed. >> our server isun rng algorithms ands monitoring the storm and deciding when is the most inteniod of the storm. it telephones the valves when to lose,ically wr we to colle the water. >> they say the technology is cheap. he calls is nothing compared to what increasingly intense storms are doing to local economies. >> it's becomingit debing to the infrastructure of our cities. o first of all, it's the imiting transportation and movement of commerce, causing damage which is actually costing cities a private owners money

to fix infrastructure dar,ge. >> so fa rain bank is on roof tops in a dozen cities including philadelphia, milwaukee and st. >> the u.s. spends about 5 to $10 billion a year on storm water mitigation. we think we can be a major player inen that pottial market. >> for nightly business report, diana olick in new orleans. >> here is a look at final numbers on wall street.es the dow j industrial average fell 327 points, nasdaq off about 157. s&p was down 40. and that will do f it us tonight i'm sue herera thanks for joining us. >> i'm bill griffeth. see you tomorrow.

♪ >> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation and kovler foundation, pursuing solutions for america's neected needs. >> wow, that is unbelievable. ♪ >> i'm flying!

>>