. thi is "nightly business report" with sueerera and billth grif busy week. earnings a ricrrive in force, t results could determine thedi ction of the market. the great rotation, growth stocks have led the market highhi but our cef lasting value stocks about to take on a new leadership role. extra credit. your credit score is about to et a major overhaul making i easier toet a loan and pile on more debt. those stories and much more tonight on "nightly business report" for this monday, october 22nd. good evening, everyone. welcome. earnings matter. this week willrove it. america's biggest companies will let investors kw how they' doing, what's working in their

favor and the challenges they face. thatundamental information will allow investors to analyze rtw trends and make s decisions when it comes to their money. this week ten dow components will report along with rghly 150 s&p 500 members. dominic chu has more on this week's past earnings calendar. >> just about everyone who cares about mkets will care a lot more this week given the number of earnings stories that wilbe scrutinized. while the initial string of earnings reports over the past week or so have been mainly focused on the bigbanks, this week will provide a wider spectrum of industries. if you're looking at the construction business, caterpillar reports on tuesday with close attention paid to what it says about china. how about the state of big ticket consumer spending. ford motor reports on wednesday. they could comment on the impact of tariffs and higher commodity costs. communications and retail. amazon, alphabet and facebook

there on thursday. the potential for internet regulation and the handlin of user data is on investor's minds. what about the consumer staples. colgate pal moll live reports on friday. they'll see whether theirecent rate hikes pay off. the busiest day happens on thursday. ckle up for quarterly results from roughly 66 companies in the s&p 500 on that day. for "nightly business report," i'm dominic chu. and all of those earnings report could shed light on a few major issues the market's facing right now. bob pisani picks up the story from there. >> reporter: so far about 20% of the s&p 500 has reported earnings but this week the focus will shift to companies.y we'll hear from the likes of microsoft, amazon, intel and p googent alphabet. the number one theme for earnings is marginre pres particularly for industrials which includes higher raw material costs, higher labor costs, tariffsnd foreign currency weakness. he impact of a china slowdown andher rates also are major

topic and a new issue has emerged. the potential isolation of saudi arabia since the company is a majores ir in technology funds. tech is expected to be one of the leading drivers of with growth at 20% compared to the same period a year ago. energy and financials are also expected to post strong earnings growth as well. the problem is the market is a forwardooking mechanism and earnings growth into 2019 is looking lower, about 9% in 2019 versus 20% in 2018 due largely to the e tect of the cut impact waning. now the good news is that revenue growth at 6 to 7% is still well above the historic 3 norm of to 5% growth. that could just be the key for e markets t combat fears of rising rates and higher costs. for "nightly business report," i'm bob pisani at the new york stock exchange. so as you can tell, it is iethe b week for earnings, and so far the results have been majority ofe companies that have reported

topping expectations. on tap this week as we mentioned e the financial reports from a number of giants including amazon, alphabet and boeing. so joining us now to discuss how this quartere compares to last period is mike tomorrow p soon, president of s&p investment advisory services.ba welcome, mike. nice to see you again. >> hi, sue. from everything that i've been reading that it's going to be a pretty darn good y quarter, off a little bit from last quarter, but still nothing to shakeck a s at. >> no, that's right, sue. looking probably right now youba can py say that 22% is probably a pretty good number. i expect that number may kreecr up a little bit to 23, 24%. what iike about this quarter is that three sectors that, you know, really me up a successful earnings season are looking really good. financials, already we've seen a preview of them and expectation is for themo have almost 40%. 40% know, actually above

earnings growth. the consumer looks pretty good. expecting about 11% there and you know the technology sector, again, you know, doing what it does. 24, % expected growth overme the sa quarter last year. s when you have those major contributors to th 500 earnings, you know, all kicking on the same tunethere, you do pretty well. >> but overall, mike, the overall growth rate of earnings when you put all the companies togeer, the percentage increase is starting to slow down from quarter to qua er to quarter, isn't it? >> indeed, bill. look, i mean, first of all, the s&p 500, in fact most companies in this country basically got a big boost from the tax reform package when theyed redhe effective -- the tax rate. so that boosted up earnings. and what will happen is it's just law of numbers. it's comparables become harder to basically beat those numbers.

that said, even if earnings grow slow, the absolute amount of earnings continue to go up. so you have to feel pretty good about that. and i'll address the fact that, yeah, we may have h a peek in the last quarter. we had 25% earnings growth. this 22, 23, whatever it may be is a bit more modest and in the next quarter's down in the teens. that's a certainty, a mathematical certainty. that doesn't meang they're mak less money, they're making more money and the market will have to adjust its pricing. >> one of the things the market or the stockarket in particular seems to react to is the guidance, what's said on conference calls with analysts and whathe company projects going forward. what are you anticipating hearing from som companies in terms of their guidance? >> well, you know, when you gety guidance have to be careful with it because the numbe oone rule ceos or corporate officers when they're providing guidance is to never over promise so what they'll do is

they'll talk about as many things that could foul up their business as they possibly can in sort of ateasured way j to make sure people are aware of the risks. smart thing to do, but usually they're -- you know, it usually doesn't come out to the worst part of the negativity that they might express. now that said, we are at an inflection point. we have probably slower global growth going forward. the u.s. econo looks great. standout in the world economy. you know, the consumer, youave to have question marks around that. the housing market, there's some economic numbers that are around housing that are causing a little bitn. of conc people are a little bit concerned about tariffs but you have to remember all tse things, bull market's crime, a wall of worry. >> right. >> people sticking to the fundamentals, the companies are expected to make more and more money although the growth i going to slow down. >> on that note, mike, thank you so much.

mike thompson with s&p advisory services. some service sectors did dampen investor sentiment especially it led to a mixed finish for the stocks. the s&p 500 declined for a fourth straight session as bank stocks fell broadly and energy sharpped along with the price of oil. the dow jones industrial averagn was d 126 points to 25,317. 19. nasdaq rose by the s&p was down 11. october has been one of the most volatile months for stocks so far this year, and some are wondering whether the shakeout means a shift in leadership is underway, fm growth into value. mike santoli has the details. >> reporter: wall street's month lo h pull back undercut the big expected growth stocks that have led the market higher in the past year. this has raised theho voices have been heralding the long awaited shift into less flashy butheaper value stocks but such a pivoting market m leadership ie tougher by the serious cyclical and

long-term issues weighing on many less expensive sectors. a handoff is something that typically only occurs after a more pronounced phase of broad market volatility. they make their ways because they're out of favor or seem to be facin tough fundamental challenges. this means a disciplined value investor right now is left to hunt around beaten value stocks or mall reilers, all viewed of long-term victims of changing consumer behavior. the weakness in these groups as well as the hard hit housing stocks seem to reflect worry that it has entered a later stage. it could take a reacceleration of ernomic growth o a pause in the rate hiking c paign to spark a comeback. and in such an environment, who's to say that popular growth stocks such as amazon, netflix and apple wouldn't also resume their climb. financial stocks are a very large weighting in the value category. it's been a serious underperformer and what would seem a beneficial rise in interest tes.

here again, something dramatic would need ton shifte market stance on the duration of the economic expansion to make banks a leadership group again. it may well be true that they're set upo rform relatively well, but a bet that value stocks will carry the market higher through the r of this year and into 2019 seems to face odds.y long for "nightly business report," i'm mike santoli. monday began with huge rally in the chinese stock market. the shanghai index re a ver strong 4% after chinese authorities over the weekend pledged to do whatever it would take to supporta' ch economy and offset the negative impact of u.s. tariffs. and those comments helped extend friday's gains thate saw over there. the chinese stocks have been among the worsterrmers though this year of any global market. the budget standoffth betwe european union and italy is intensifying. italy's government plans to move ahead with its snding plans despite it breaching e.u. rules.

the budt runs deficit that is triple the level that is agreed to by the previous government. now mody's late friday ad down italy's bond rating to one moch above tnk. tim take a look at some of today's upgrades and downgrades. we begin with shares of intel tonight which was upgraded from buy to neutral. the analysts cited conservative earnings per share estimates. pricearget $50. intel rose more than 2% to $45 and a penny. at&t was upgraded. c theyed the launch ofhe hey speed 5g network and noted the potential benefits ofl the rec completed merger with time warner. despite the upgrades shares fell a fraction to $32.67. chipotle was upgraded from outperform to perform. they expect sales to improve

through the second half of the fiscal year of 2019. the price target is $510. the stock rose a fraction to $431.19. ebay's rating was down from buy.ral to the analyst cites the potential for slower growth and says ebay is underperforming the omrce sector with, quote, no easy fixes, end pquote. thece target is $33. the stock fell almost 1% to $28.49. still ahead, keeping score and why it may soon be easier for people with shakier credit to borrow money. houston could soon becomeew theub for u.s. oil pricing with the launch of a new futures

contract. this new contract will price west texas t oilt is pulled from the oil rich personalian basin and then delivered t a terminal along the houston shipping channel. the permean basin produces 3.5 billion barrels daily which isf 1/3e nation's total. that may be a more accurate point thanhe benchmark that is delivered to cushing oklahoma nce most of the nation's oil exports are shipped out of the gulf coast. as we ported, the treasury department outlined a proposal on friday designed to increas investment in some of the nation's poorest areas. though there are supporters of that idea, there are also critics. ylan mui is into washi tonight. >> reporter: san juan, suburban maryland and sparks, nevada, what do they all have in common? they'reorll in oppnity zones. theer newest gent effort to encourage development in low income neighborhoods and investors are lining up to take

advantage of it. >> it's been busy but we're excited about the prospects moving forward and think there'r endous opportunity. >> reporter: states got to pick the areas. there are 8700 of them across the country with an average poverty rate of more than 32%. investors with capital gainsthn r portfolios can defer their tax bills by taking that money and i putting it an opportunity zone. if they keep it in there long enough they can discount the gains by up to 15% and any profit from the investment in the opportunity zone is tax free after ten years. >> the incentive is a graduated incentive that rewarts patient capital. the goal here is to get equity capital off the sidelines and over a long term see that capital invested and reinvested into low income areas. >> reporter: there's a pool of more than $6 trillion of unrealized capitale gains in u.s. critics say all of that money might not go in the places thae t most. >> it will cat at thatlize some investor action, but whatdo we

t know yet is how well it will work for communities themselv themse bes. >> reporokings found most economic zones are in economic distress but 11% have poverty rates that are below the national average. >> these are places ance that have tremendously high need but also have some market opportunity. >> repter: treasury is still finalizing the rules for the program. it should ru fully up and ing next year. for "nightly business report," i'm ylan mui, in >shington. >> the demise of toys "r" us is still hurting hasbro. that'shere we begin tonight's market focus. they reported a ditble d decline in revenue and weaker than expected profit for the third quarter. hasbro has been scrambling to find new avenues toell its products after the collapse of toys "r" us which was ones the world's largest stand alone toy mak maker. they will layoff250% of the

company's sales force. hallibuon is warni fourth quarter earnings won't be as large as they're forecaing. th cited ongoing weakness in the north american hydra fracturing market but the firm is seeing strength in its international business thanks to the rising price of brent cru oil. shares of halliburton fell 3% to $36.40. american rail car is selling itself to a unit of the ite rail fund. the deal is valued at $1.75 billion. they're backed by billionairein stor carl icahn and icahn enter prizes. that soared to $70 polaris industries reported solid third quarter results despite trade concerns. the maker of atvs and snowmobiles saw double digit increases in sales and profit thanks in pt to the newly acquired boat business. the company expects full year les to grow between 11 and 12% and the stock rose more than 2% today to $92.74.

the fda delayed the approval deadline for one of bristol-myers squibb's cancer treatments. they expect the regulator to rule by next may on its experimental treatment of drunks cancer.t lung this does not reduce the delay of an eventual greenightut the stock fell 6% to $50.88. kimberly-clark reported better than normal earnings. michael suh will take over next year. the change comes ad a company restructuriur restructg. like other package goods makers they're facing rising commodity and transportation costs. d the stockpped more than 3% to $106.40. caesar's enttainment is reportedly set to reject the takeover offer from tillman fratti t. they beliet takeover would saddle caesars with too much

debt. they own the golden nugget casino. the shares of the stock fell about 7% to 949. well, the number that determines your credit i worthine about to get a major overhaul. fair isaac, that's the company behind a widely used fico plans to launch a new credit scoring system next year. it's called the ultra fico score. that will take intoco ideration how consumers manage their money, not just how they manage their joining us to explain the changes and what it means, matt schultz is at compare cards.com. thanks for joining us. >> thanks for having . >> why are they doing this and who will this benefit? >> this isy rea about banks wanting to expantd the universe of cusmershat they can -- that they can lend to. the truth is thater s a whole expanse of people out there who banks just d't have enough information about to make smart decisions about whe they're risky to lend to and

being able to incorporate things like how youdl h your bank account will open up a lot of possibilities for banks. >> let'sohrough some of the changes. you mentioned the banking statements, but there are other things that t going to take into consideration that are additions to what theyook at now. >> yeah. what they're allowing you to do basically connect your online bank statements, your online checking account to fico and allowing them to access that sort of information from u so they can see things like what kind of average balance you have, whether you've overdrawn your account very often, how frequently you do transactions and the thought is that all of these are basically justore data points that lenders can use to make a more informed decision about who is a risky borrower. >> we should point out that people who already have a pretty high fico score won't be

affected that much. they're going to get a loan anyway, but it's the people who are sitting on the bubble right now whoay or may not get that loan, this will help them. so the fear becomes are these o get truly qualified the loans that they couldn't get before. >> yeah, that's the billion dollar question, right? i mean, yny time expand the galaxy of folks that you are willing to ld to, you end up taking a lot more risk, but the truth is tha in a good economy, banks are doing well, consumers are willing to spend so banks are willing to expand t universe and take a little more risk. >> now what about if you want to improve your credit score or you're a little worried about your credit ore. obviously this may help you but you get the point that people over think credit. olutely over le a think credit. they think it's this mysterious, nebulous thing and in some ways

it is. it comes down to three things, paying your bills on time every single time, keeping your balances as low as you possibly can and not going too crazy applying for too much credit too often. if you do thosehree things, lather, rinse, repeat over the course of three years, it's going to be just fine. >> it's not rocket scien sometimes. >> exactly. >> matt schultz with come paircards.com. ank you for joining us tonight. >> thank you. coming up, alexa. who has the bestid ? how startups are pushing the boundaries of voice activate d e technology. jo w wow is there a lot to watch

for tomorrow. allepf themt their earnings tomorrow. the controversial investment conference in saudi arabia gets underway.s a-list businuest including jpmorgan, blackrock and uber have all pulled outth following murder of columnist jamal khashoggi. the future of banking will be on display in las vegas at the money 2020 conference and that's what to watch for on tuesday. richard parsons has resigned as thenterimhairman of cbs due to illness. parsons took the aole just month ago following the resignation of former chairman and ceo leslie moonves. his doctors recommended him cutting back on current commitment facebook is reportedly looking to acquire a cyber security firm in the wake of its most recent breach.o according reports, such an acquisition would allow the social mia company to gain key security talent. it is not clear, hawever,

kind of security help that facebook is interested in. amazon wants alexa to do more and that means finding the next big idea in voice enabled technology and it's looking to u st for an answer. aditi roy recently traveled to seattle to get a first-hand look at the alexa accelerator ogram. >> reporter: welcome to amazon's alexa accelerator demo day. nine startups pitching the next big thing in voicelotech. they include unruly, which creates interactive s.t.e.m. games for kids. the found and i played whack-a-mole after she coded the game on her tablet using the platform. unruly and others are backed by theillion alexa fund which looks for companies that will help expand alexa skill set. amazon started the accelerator last year.

theouers spent three months working on their companies getting mentored b amazon leaders. the alexa fund started in 2015 and h funded 50 companies including smart home company ring which amazon acquired for l reported $1on earlier this year. the director of the alexa fund, portfolio d, says companies provide a glimpse into future >> many times the companies we invest in have first of kind cases. >> he points to blue tag of company we could interact with through alexa in the future. it lets youhop with third party retailers using just your voice. >> alexa, find me some black jump suits. >> i'll send you suggestions via e-mail now. >> the service plays into a core consumer behavior that amazon is trying to disrupt the way we

search. by using just our voices,mazon is taking us away from our phones and laptops. the lseretailero wants to grow amazon's usere and it's pinpointing startups that can help do that and putting a premium on services that make it easier to get what you need by your voice like voice it which translates the voice of people >> a normal life. ng reporter: the alexa accelerator hel achieve jeff bezos aspiration of customers using alexa wherever they are. alexa works with plenty of ig brands awell. it's integrated with 20,000 smart homeep devicessenting more than 3500 brands including ford, bmw, ge and soho. and we can't let you go before we mention what everybody's talking about still, the mega millions or should we call it themegabillions now. tomorrow night's jackpot as you probably know, 1.6 billion.

the largest ever. we must remind you that even though the jackpot is skyrocketing the odds remany the same at 1 in 302 million. od luck. before we go, here's a look at today on wall street e dow was down to 25,317. the nasdaq rose 19 and the s&p 500 was down 11. i'm still going to buy a cket. i know you're not, but i am. >> you enjoy that. >> i'm goi to watch the world series tomorrow night. >> i'll be doing that, too. that does it for us tonight. i'm sue herera. thanks for joining us. >> i'm bill griffeth. have a great evening. we'll see you tomorrow.

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