>> announcer: this is nightly business report with bill griffeth and suea. her volatility returns. this week tested investors nerves. but it's not totally clear why stocks moved sharply higher one day only to tank the next. priced out. as interest rates rise, the american dream of home ownership omoves out reach. think big. the megamillions jackpot hits $1.0 billion. a number that's hard to grasp and wrap your head around. those stories and more tonight, friday ob october 19th. >> we bid you good evening, everybody. e. investors got a wakeup of call of sorts. volatility returns with choppy

trading sessions. what was peculiar about the wee was the news didn't change from day to day. but that didn't stop the market from rising and falling sharply. today no different. in the end, major indexes finished mixed with the din g 64 points. it's at 25444 after sliding more than 320 points yesterday. the nasdaq was down6. the s&p fell 1. for the week, after all the wild swings, we only s fractional gains and losses. and they certainly don't tell the whole story. opchop woo o withy week marked by itical tensions between the u.s. and saudi arabia and concerns about the chinese economy and antaan budget crisis. all of it had investors wondering if the u.s. economy could stay as strong as it loo now. >> the market struggled all day moving between gains and loss. >> on monday, the dow ended down 89 points.

then strong earnings from a broad swath of tech, health care and financial companies set the stage for a relf rally on tuesday and the week's biggest move, a o gain 547 points. but the relief was brief. >> the federal reserve hints at more r >> on wednesday, minutes from a recent fed meeting confirmed beliefs that another interest rate hike is coming in december. the dow dropped more than 300 points early on before finishing down 91. adding t the global plate of worries on thursday, china's economic slowdown and european central bank leader mario draghi who worried out loud about eu members spending beyond means. the dow dropped 327 points. and today another bumpy ride. gain of more than 200 points disappeared. buthe dow bounced back again and finished up 64. in man ways the wild ride traces back to last week's

two-day loss of more than 1,300 dow points. since then, lot of bumps. >> and the question investors want to know is whether this bumpy ride continues. mike santelli editionnto that. >> stock market hit tushlens in october with daily swings at least 1% in the five of e past seven days and the sharpest drop in eight months. is this another test of the market resil yaens of the first phase of a tail spin into a doob deeper correction of the sort investors endured early in the year appear before that in late 2015. traders are dissecting the day to die magi rations for clues. the foe for the moment the market lows set a week ago ob the s&p 500, down 7 from the record highonf a m ago held up and the jumpy rallies and lloffs followed a typical of a market trying to steady after a swift setback. longtime wall street wisdom says the bottom is re-tested over

days and weeks to see if hunters step in again. this is the the pattern unfolding between february and air april of thi year. the optistic takes on the recent action sates a choppy adjust to higher interest rates global market weakness and the flagging leadership of big steak stocks rather than the stirring of the draft downturn. earnings are coming through strong for add third quarter. s andsonal patterns tend to turn positive from about in time in october through the end of the year. but tge of the economic expansion and concerns about the eventual end have become m per vase nef recent weeks.th effective task cuts and fiscal spending hikes will wain next year and the federal reserve seems intent on lifting interestates another three times in 2019 despite risks of slowing growth. in the meantime trade conflict dropped's china's market into a ar market and european markets are all down more than 10% from their highs. theay the cross current play out in the coming weeks will determine whether any further

we.ness in the u stocks is a simple re-test of buyer he reare resolve or relapse into something painful. now, o theory the that tries to explain the recent volatility is that it has been driven by computers. and sophisticated algorithms. thatas one of th explanations offered yesterday by david solman, the new c at goldman sachs. >> the growth of passive oducts, index product, etf, the growth of systematic trading andlso you know machines more involved in what we do. all those things are tested over any duration of time with eevere stress. now, when see a little bit of stress you can see reactions that might lead to u believe that there is a risk that would more significant stress that could play a bigger role but wouldn't predict it but it's something we watch. there is no question looking at lastweek, som of the selling is the result of programmatic selling.

bus as volatility goes up some of the algorithms force people to sell. >> let's turn to the our friend kenny director of the exchange floor division at oh o'neill. kenny nice to see you my friend. >> and you, my -- and you. >> there were times this week i have to admit we were scrambling we were trying to come one a reason foray the intr swing, up or down. how much of do you think is computerized trading. >> a lot of it is preprogrammed at this moment because what you have t understand i what happened last week, right, as rates shot up, a abe, as the market was illor prepared the surge in rates then you had the selloff. the selloff produced a lot of internal damage. and you know, internal damage meaning to the broader market as well as the individual names. and that damage exacerbated b the speed at which the markets and individual stocks can trade because of the automation. the i automatio one the market

fragmentation is the other. the new york stock exc nge is no longer stram. there are ten kppgs and 40 venues where people can guy and sell process. it's a fragmenetd maace which adds to the volatility. >> and for the average -- f the average long-term investor, keepy, what do they need to look at in week like this where you see the violent swings and they nder, should they sell or not? can you give enemy a nugget of advice as to when to pull the triggeen g the automation we have. >> sure i'd love to. here is the deal. if you ar long-term investor with a well thought out plan and the stocks that are in your portfolio are wons that have a good story, they're strong you stay on top of it, make sure the story has not changed and then when moves like in happen in the broader market gets hit for whatever reason, whether it's talk ofranterest s, whether surging interest rates that all of a sudden cause the selloff, ee stocks that you h that are in your portfolio, that are

good namesooith a story knows are stocks when they o on sale, the way we saw are stocks that you should consider adding positions to or putting more mone to work in. the last thing you should do is run out the door on that of course the story on that particular stock has change. t it's changed then that's a different story it hasn't changed and the stock goes on sale, then that should be an opportunity for l ag-term investor to put more money to work. the long-term investor should not liste to the daily noise, rights, the noise that's created by this automation. they need to learn to eliminate that. >> before gou i think it's important to note very quickly that can marry larry kudlow or jack vogelg say the long run it's earnings that matter to the stock market and prices and you're right. the short-te swings is just noise, right. ngs in the short-term s this case are created by not only the surge in interest rates but somef the opolitical issues, what's happening in saudi arabia, what's happeni.

down in d and all that stuff, although creates short-term noise does not no the long term price tox. >> sounds like a busy week with the voice there i can tell. >> i di >> kenny with ee knoll securities always good to see you. >> you as well bye buy zboo and the federal reserve official adds another item tohe list of risks to the market. according to routers, c the of the atlanta fed says the case of missing journalist jamaul khashoggi is monitored because it might lead to sanctions that uld strupt oil markets. rafael bostic is believed to be the first central banker to comment on that case. today, the price of domestic crude climbed although down overall for the week. well china's economic growth is slowing. the world's second largest economy reported the slowest quarterly growthn nearly a decade and some global companies are starting to feel the effects as well. seema mody explains. >> reporter: china's kissimmee cooling down as t u.s.-china

trade tensions heat up. chinese officials blamed external rates and trade frictions for drop in growth. the central bank followed with new measures to boost the economy in an t attempto ease investor concern about growthll g. the slowdown in the world's second largest company is ratcheting financial pressure and compani doing business there. >> the truth is it's slowing. and it's really masking i think a bigger problem that's developing. the -- the owners of businesses that i know and investors in china are deciding that the -- the trade war with the u.s. is more offing into a longer term cold war of sorts and that it's not going away when t tariffs go away if they do. >> this morning, french tire maker michal inwarned a slowdown siting weak demand from china after luxury nglomerate lvmh reported a dropn sales from chinese shopper. a concerning sign a as china is

a growth market for fashion retailer. analysts at oxford economics say a string of dipartmentingata from china suggest as broader based slowdown is nowin eme inconvenient timing as tensions between the united states and china continue to intensify. for nilt nightly business report, seema mody. > and from china to europe. european union officials continue to spar with italy over itsge b investors around the world are watching to see how this is going to play out. even as the eu's budget chief tries to calm concerns, with you italy's financial problems could spread. villa marks is in brussels for us tonight. >> reporter: yesterday both eu president and mario draghi and the european commissioner for foreign air force had strong words of warningor italy's new government and the spending plans. draghiai the iuorioie countr must follow rules. while the ministry expressed

serious current about the italy' budgets. senior politician in rom did not reac kiently. one minister said bureaucrat ins pursuele shouldot pont fif kiting and find out what italians want. the they said the you weren warning show italy was in the right. today in rom ty nchzed the eu has no intention of sbrfrpg in the italy air fors but thead blood is unlikely to end soon. italy must formal responder to co which monday and in the meantime the 10 yeyrd peeled the stock market touched a 20 opinion month and bank stocks took ari ham. villa marks in bruisele was alling up. time to loo upgrades and downgrades. we begin with disney, upgr to overbating equal weight at barkleys siting the focuses on streamorg and the potential growth in that area. the price tget 1309, sharz of

disney rose 2% to 11.90 tay. ford downgraded to equal weight rom overweight at morgan stanley. citing limited progress from the auto maker restructuring and sae the dividend may at risk. price target, $10, the stock fell a fraction to $8.50. >> ee bay downgraded from hold touy at stifle nicklaus. the analyst says the paypal earnings release suggests weaker bay in thes at ee third quarter. the stock tropd 8% to 28.75. apple rated outperform in new coverage at at wedbush. they see strong iphone demand and citing the growingic servic is. >> services we think that business alone as it is about half a trillion, call it ha50 billion. i think that's the street now is starting to resort -- sort ofal ree that, and the multiple continues to expand sfla and the price target is

$310. the highest on wall street. shares rose 1.5% to 219.31. >> still ahead stock surge, the dow component that proved doubters wrong, at least for today. >> the treasury department unveiled new rules for investors looking to finance development in underserved communities. in. in wrurn return the iivestors re tack breaks. the proposal would govern investments in so-called opportunity these were created by last year's new tax law. treasury officia expect as much as $100 billion in private capital to be funneled into the areas. >> existing home sales fell by

the most in more than 2 years. the national association of realtime orsed says sales dro 3.4% last month as a combination of higher prices and rising mortgage rates made homes lessfordable. for those already in the process of buyin a home, the rise in rates is changing their plans. diana olick has our ory. >> reporter: don and natasha richardson signed a contract on a newly built home in austin texas at the start of the year when interest rates we low. >> one of the things that we considered was where the interest rates were gcang. e of what we heard about everything you know possibly going up in the future. pnd that's one of the reasons we took the s when we did. now we are in a different place. even just eight months later. >> because construction is tahang longer expected and the rate they locked in long ago expired. now with rates a full percentage point higher than they were at the start of the year, they are looking at a whole new set of numbers. >> we don't anticipate it being a problem getting another lo.

but at the same time it's definitely doesn'teel as a solid foundation as it did when we had it already approved. >> while stt and natasha will still buy the home they will likely dl back on the amenity like electronics and higher end appliances. >> there is let a lot of we can afforda by the time we lock in the interest rate. >> we thought we in a plan but now it's a little -- we'll we're just nervous. >> for other higher rates could knock them out of home oership the richardson's agent says some buyers have decided to wait and so have se of t sellers. >> i have several customers decided to lease properties right now instead ofus sell be they are afraid with the raising rates that they won't be able to get the same market value they did earlier this year. >> other sellers are staying put because they don't want to move and the current low rate. moving up to a better home now also means moving upo a higher rate. for nightly business report,

diana olick in washington. >> to earnings now in and proctor & gamble big day, the dow component reported strongest sales growth in five years and said it's raising prices on products. and that sent shares up the most in dade. sarah eisen looks at p&g's better than expected relts. >> investors cheering proctor & gamble's best gwth in five years. the ceo david taylor says when the improvement the are seeing it's broad and global. >> yes, a lot did come together in terms of the absolute tom line growth. but what you see in this trend, months ago, six months ago you saw north america, u.s. rather turning positive. now we ar positive on share on pass one, three, six months. you'veeen this the sequential improvement in china. now at sequential improvement in the -- our latin america business. we are starting to overcome some of the very invite headwinds in the middle east. we are making good sequential

progress on india. but it's really focused on superiority of the brands across thee elements talked. and the productivity helped h offset wha been a very difficult external environment. >> the take away, this quarter is alection of both a better global economy, especially in theni uted states, and p&g's s turn aroundtrategy starting to bear fruit. at explains the growth that the company saw in its beauty business. home care and even grooming which had been doo p doirly lately. shedding brands strmlining decision making by jeefrg and products. some of the mov they have made to get p&g growing again. now despite in momentum, the company did keep its long-term outlook intact. saying it expects to grow 2% to 3% organic sales this year.ol taylor td me for being onservative because the macroeconomic environment globally is challenging. at has purt hurt p&g in the form of a stronger u.s. dollar

and higher commodity costs utting pressure on their input costs. they're also passing the higher price onto the consumer, something that's going to impact spending over the next few quarters. for nightly businessept, eisen. the denim business is fading at vf corp. that's where we begin the market focus. the owner of wrangler and lee jeans issued a bleak forecast for the june business and reported slow sales at outdoor bronzed including continual berland. that offset quarterly results that were stronger than expected.e stock tumbled 10%. the s.e.c. has oepd an investigation no honeywell kpt account be .company said it's cooperate processing. orted better ey r than expected earnings in the recent quarter but warned the ongoing trade war between the u.s. and china will pressure margins in 2019 potentially costing it hundreds of millions of dollars. the stock fell 1% to 153.47.

trade concerns have apparently eased at kansas city southern. the railroad operator said today it supports the reworked trade agreement between the u.s., canadand mexico. and added that steel and aluminum tariffs need to be worked through as the ceo put it. the company also repted a 30% increase in profit for the most recent quarter. shares rose more than 3% to 106.12 today. andst not often a ceo belittle wall street analysts and d investoring the company's earnings conference call but that's what happened today when the head of cleveland clifrs id analysts can't read numbers his words. he also went after one unnamed person with jarringanage. >> you are a disaster. you are an embarrassnt to your parents. with in being said, we are going to use money to reward the long-term shareholders. so if the stock continues to go down, based on this kids that

play with computers and somebody else's money, where going to buy back stock. we are going to screw this guy ly b that i don't believe that they will be ableo only resign. they will have to commit suicide. >> well the minings company stock has been heavily shorted and shares fell more th 3% to $11.0 a despite npds in profits and improvedevenue. clearly that's what upset the ceo today. now to our weekly market monitor who says he is finding valued ity in under small cap tech stocks right now. he is jay kaplan coportfolio manager of royce dividend value fund nice to have you here. >> good to be re. >> i can't wait to get the names out. insight enterprises it the first pick why do you like it. >> they sell all technology hardware and software to everody. they are agnostic about winners and processed. there is more cyber, cloud, services stock sells 11 times s urng with the lus are russell

seing at 25 times earnings we think the growth is there for a couple of years. >> visha international technology, a specialized semi conductor you're a dividend fune you l the diftd on this. >> it's almost 2% yield. selling passive cponent there is a worldwide shortage of compass tors as autos are more electric there are more in cars this is problem not solved untid 2019 that's for business. >> my car is getting smarter it's already smartn tme. >> it's going to be crazy. >> let's turn to electric troe scientific industries. trades at about 7 times earnings. >> it's a turn around with new manaasment. making based machines that drill holes thinner than a human hair. so the connecters inside the cell phone,ity bitty homes. business it down right nowit bu hould be really really good the next few years. itself times earnings i think it's good for long-term. >>o much of the interest is the big technology. >> of course. >> fang stocks why do you look to small caps.

>> at small royce we are small capnvestors that helps. away from the news flow and you can think about company fundamentals, and great valuation, without theoise and you have a long-term holding period more than a week or a couple of monthshreeo five years with you can find greatco mpany that is will do well for you over the long period of time. >> as you point out quickly a number of o them also a pay a fairly decent dividend. >> we lovedividends. dividend performing stocks in the russell over time have outperformed non-dividend pairs. >> noue to have here jay jay cappen lynn with the royce dividend value fund and to read more about y's picks head to the website nbr.com. come up, the megamillions jackpot hit a railroaded. but wt's a billion dollars really worth?

the megamillions jackpot hits $1.0 billion. the largest ever. but can you really grasp what a bill dollars is worth? frank holla asked around in hackensack, new jersey. >> wish me ck. >> a billion reasons to play the megamillions today. people acrs the country dreaming about the ten digit jackpot, despite long odds, one in 302 million. >> me appear my wife would be all over the wor a. ta trip here and there. invest, you know things you do when you win that kind of money. >> i think i'm going to do more because with so much money you think why not take a chance? it's only a buck or two. >> before taxes the winner would have twice the net worth ofle on james. taylor swift and george clooney. also a bank account big are thae ross domestic product of island nations samoa. tonga. but most winners take l thep

sum payment for this drawing, $565.5 million and even the winner won't b lucky enough to escape the tax bill. if you estimate at least 30% ing to uncle sam and the state that leaves about 96 million. a good return on investment for a two-dollar ticket. >> yes for two years can't beat that. can't beat that. i mean, t yt's a chanc take in a lifetime. >> if no one wins the friday night drawing it rolls over to 1.6 billion, a new u.s. record grow higher depending on how many more people play. more nightly business report, frank haled inc hackensack, new jersey. finally tontd, october 19th, 1987, ring a bell? monday?r black it was 31 years ago today when the dow plummeted by 22%. still, the largest single day percentage crash in u.s. history. .wise the dow fell 507 points that die day. if the same percentage decne

ppened today it would amount to a decline of 5700 but as we know circuit breakers have been created to try to prent declines like that from happening at least not without pauses during the day to let things settles down. i don't think eitne of us will forget that day. >> we remember it very, very well. >> indeed. before we go, here a look at the final day's numbers on wall street. the dow gaine4 points, the nasdaq down 36. the s&p 500 felld 1. for the week all after all the wild swings we saw only fractional gains and losses. but there is always next week. >> that's right. >> that does it for us tonight i'm sue herera. thanks for joining us. >> i'm bill griffeth. have a great weekend. see you monday.

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