♪ "nightly busineness report." with bill griffith and sue herera. of se a wild day ends with sharp declines as trade fears are rekindled and tech stocks umble. bigblues, big bet. ibm makes its largest acquisition ever, but will its purchase of red hat transform this american tech icon? no way out. why businesses caught in the trade war with china are out of luck when it comes to getting an exemptesn. those stond much more tonight on "nightly business report" tonit, monday,ctober 29th. >> we bid you good evening, everybody. and welcome. wall street went through yet another head-spinning trading day t start this week. at the open this morning, the dow rallied me than 300

points, just when it looked like stocks might continue higher, oe momentum started turn. and not long after the market's gains completely disappeared, thanks to a report that the white house is preparing for the possibility of more tariffs on all remaining chinese imports. the selloff was so steep, at one pot this afternoon, that all of the major indexes briefly fell into corctionerritory. meaning they were down 10% or more from their most recent peaks. at the close, the dow was down 245oints to 24,442. 116.asdaq slipped by and the s&p 500 was down 17. by the way, the bigge los in the dow today was boeing. it was down as much as 8% for a time, briefly dropping it into correction territory, as well today. bob pisani has more on today's ups and downs. >> stocks staged a rally at the open, but the dow swung than 900 points, selling off, going towards the close, but then rallying right at the close, ending down 250 points.

a wild day early on. boeing, the company's brand-new lion air 787 jet crashed into indonesian overnight. elsewhere, the stock market showed that once again, trade issues are w really matters. trade-related names took a leg lower on rep.ts that the u is already planning its next wade of chinese tariffs the tariffs cou amount to another $257 billion on all remaining inese imports. tech was another loser today. amazon drifted lower along with other large cap tech names on reports that the uk would roll out the developed world' first digital tax on tech giants. the taxes go into effect in 2020 n the uk, expected to generate 400 million pounds per year. that sent broader fang stocks, including netflix and google and parent alphabet on the day.

for the moment, it looks like the bears are back in control. 7 out of 11 s&p sectors arett g in correction territory. that is down 10% or more off of their recent ghs. for "nightly business report," i'm bob pisani at oce new york exchange. >> okay. so what happens next? it's certainly something investors all wanno to and it's something that the major wall street firms are trying to figure out. morgan stanley's top strategist says the october selloff c ald morph inear market. while goldman sachs says the mayhem has gotten out of hand, and that stocks will rebound. so, whi is it? mike santoli did some digging. >> brutal october selloff. e has not only dropped the s&p 500 by man 9% and pounded the majority of stocks even haer, it has also place the market right on the line between a routine correction and more serious and lasting setback. the sharp retreat threatened te a longer market uptrend that stretches back to february of 2016 when the worldes ind

were emerging from a six-month tailspin related to a global thdustrial slow down and oil crash. weakness recently has investors on alert for signs the market is detecting signals sharp tapering off of u.s. economic growth and corporate profits into 2019. at a time when the federal reserve seems intent on raising interest rates a few more times through next year. the mini market panic runs counter to optimism about sturdy economy and third quarter earnings growth of 20%. the fact that the stock marke tends to lead changes in the economic trend has heightened 'sll stre anxiety and yet it's also true that stocks experience nasty pullbacks far more often than the economy skids toward a recession. if there is any bright side of the s&p being a risk at breaking a 32-month uptrend, it's that the selling has reached an extreme. with three quarters of all large stocks down more than 10%rom eir high, and nearly half off at least 20%, a lot of damage has already been done. this suggests that any

reassuring evidence in the durability ofcomic growth, a tightening pace for the passage of the election couldh be eno to propel at least a strong relief rally before for "nightly business report," i'm mike santoli. so with mor earnings o deck, the employment report out on friday, the midterm elections next week, what should investo be watching? joining us tonight for a strategy session is cliff hodge, director of investments at cornerstone wealth. good to see you. thanks for joining us. >> thank you for having me. great to be with you this evenin t >> for yous week will be about earnings. you're looking at facebook and apple, among others. but what about the fac that the market this month has treated good news still as bad news? they have sold off even on positive earnings reports? >> well, it's a great question, and really there are two key things that i'm watching this. we earnings and jobs. so we do have a slew of earniss repo this week from bellwether stocks and big cat

tech names, which if we get any sort of good news, can go a long way toward turning the tide with this negative sentiment that we have had over the past month. >> so i think you just heard mike santoli'seport. one street, one house on the street thinks that basically we're going to morph into a bear market. the other thinks that everything is overdone. where do you stand on that debate, given some of the hurdles the market still hf ahead it? >> sure. important the really question that investors are grappling with. when you look historically, whenever we he had these selloffs that are not accompanied by a recession, nthey've gone to be great buying opportunities. and while i'm not ready to calt bottom just yet, none of the recession indicators i watch a flashing yellow or red at this point. so i think ultimate, we will go on to make new highs before th economic expansion and this

bull market come to>>n end. hat about jobs? the last few reports have been okay. not home t runs, ay numbers. and enough to keep the fed on track to raise rates some more. do you think that will happen on friday, as well? >> sure. so the jobs number on friday is the most important nber going into the mid terms. and while the headline employment number will garner most of the attention, i'm actually going to be more focused on wage growth. so the market is forecasting an hourly average earnings incase of 3.2% year over year. i think anythings l than that will actually be a positive for the stock market, because i will be an additional data point that may cause the fed to hike going forwar >> you sai you -- >> i think an overly -- >> go ahead. >> i'm sorry. i think an overly aggressive fed is the o number concern for markets going forward. >> very quicy, once the mid terms are over, is that a green light for the market?

the market aays hates uncertainty. >> the market does hate uncertaiery. and you n want to say never. but when you look back historically, since 1950, u.s. stocks have never had a price declin a 12 monther mid terms. and the average annual return of the s&p 500 over that same time span is over 15%. so in my mind, history is certainlythn the side o bulls going forward. >> all right. very good. a bullish cliff hodge joining us tonight from cornerstone wealth. thanks for joining to. inv fled from actively managed funds, which suffered their worst quarter in seven years. according to the financial times, more than $86 billion was pulled from stock-picking funds globally in the third quarter, just as volatility started to pick up. activeunds have been losing market share to passive funds for years. and not even a massive technology deal could make investors optimistic today. as you have probably heard by morning, confirmed this it is acquiring software and

services firm red hator $33 billion. that is the third largest tech takeover ever.e urchase gives ibm a bigger presence in the cloud. but it's paying a big premium for it, as well. o sharthe dow component fell slightly, while red hat stock soared by % today. and even as ibm touts the benefits of the dealre there still plenty of questions to be answered. josh lipton has details. >> reporter: ibm ceo jenny m romette her biggest bet yet on the cloud, calling acquisition of red hat transformative. >> for us, it's all about resetting the cloud landscape. and this is to create the number one company that will be the number one hybrid cloud provider. >> reporter: ibm's strategy is to capitalize on thearket for what's known as hybrid cloud computing. where red hat is a big player. that's where companies store some data in the pub c cloud liamazon's aws and microsoft's azure, and other information inwn their private data centers. that's often necessao do,

because of regulatory reasons. >> you have to be hybrid, you have to be able to handle mu.iple clou you have to be open technologies. you have to do lticloud management. and that's what we can do. >> reporter: red hat is the largestisibutor of leinux, providing software tools to companies as they build apps and services for the cloud era. anal wts say this a fairly expensive acquisition, and that it does not address some of ibm's broader challenges. >> despite it being an attractive, compelling, larde , by far the largest one ibm has ever done, itoesn't solve the core problem that ibm has or even really make a lot of progress in s that problem. which is that ibm still has abt 40% of revenues in structurally declining areas of enterprise i.t. areas that are not coming back.

le reporter: one more possible challenge, there'sy of competition for ibm in this market, too. from other tech companies, like microsoft, hewlett-packard enterprise and dell emc. for "nightly business report," i'm josh lipton. so l's turn now to vin ronani for details and the outlook overall. he's the tech analyst at key ap bankal markets. nice to have you here. welcome. >> hi, sue. hi, bil h thanks fing me on. >> we've heard both sides of this. it's a transformative deal, or they're so far behind, it's going to take them a while t integrate this deal and start to compete with amazon and microsoft. ich is it in your book? >> look, i mean, ibm and red hat, they've been dating for about 20 years. they've been partnering since 1999. so they have a lot of experience working together. they've created a giant product. togeth they have invested in labs

together. so the 20-year-old relationshiph i think a lot to do with the deal. so thile ink it's a fairly large deal. the fact that they've had a long-standing relationship i think serves them well in ensuring this relatively quick integration. >> okee. so they've dating a long time, but there are a lot of people on wall street who think the wedding was tooxpensive at $33 billion. they're going to have to make an awful lot of money to get this what do you think? >> look, i mean, the cloud market is a $1 trillion nd opportunity, that trillion dollars is still growing. so it's a fairly large opportunity that they're chasing. and potentially it has a potential of changing course for ibm's future. when you look at t it int context, you know, it's actually a small price to pay. given t size of the opportunity and the potential for ibm to change course. >> how quickly do th have to

integrate these two companies, which have very different cultures, even though they have been dating for a long time? they have toeg get that ited fairly quickly, do they not? >> they have until late 2019 before the transaction closes. and i'm sure there's going to be llot of prep work from now untile 2019. and after that, they still have a year or two. wven the fact that they have beenking together, i kind of look at it as more from 24 to 36 months. >> before we let you go,qu kly, what do the competitors do? anything? amazon, micsoft,racle? anybody else have to do something to respond to this? >> look, i mean, i i think like mentioned, it's a humongous opportunity. trillion-dollaopportunity. i think there are going to be multiple wininrs. i don't this is a winner take all situation. ion, this transa basically, ibm is playing more on the private side, on the hybrid side. and i think they have their own aces to work in.

>> orvin, thank youery much. with key bank capital markets. bill? >> great, thank t.u. >> you investors were watching a number of other stories unfold across the globe. germany, for example, chancellor angela merkel, once thow mostful political figure in europe, said she will not seek re-election in 2021. that led to a decline in german bunds, but a rally in german stocks as investoie b that her eventual exit will lead to un easing of austerity measures in that y. and in brazil, an aggressive proponent of free markets won that country's election over the weekend. and analysts say that jair bolsonaro's victory to lead to broad economic reforms and the privatization of some of latin america's biggest companies. time to take a look at upgrades and down grades. ford upgraded from neutral at esldman sachs. the analysts che restructuring plan and rollout of new models. the price target is $12. the stock rose 3% to 9.28.

electronic arts was downgraded to sectom weight f overweight at key bank. the analyst cites concerns over pipeline.y's the firm expects a downward revision to the company's earnings estimates, and the stock fell 5% to 91.19. meanwhile, apple was given a buy rating in new coverage over at jeffries. the s analyst theres that apple can build a massive services operation from its core iphone business. price target now $265. that stock fell more than 1% to 212.24. ralph lauren was rated a buy in new coverage at deu bank. the analyst says the apparel maker is, in his view, of the early stages of a brand turn-around. price target, $149. that stock rose more than 2% today to 130.88. still ahead, china's bridge er troubled waters. ♪

♪ the commercdepartment will strict american companies from selling goods to a chinese state-owned chip maker. e government cites national security grounds. the move is a blow to the chinese company,hich relies o u.s. technology for production and which micron technologies accusedinf ste its intellectual property. a common theme this quarter has been trade. and according to cnbc, 35% of the conference calls that took lace through last friday mentioned tariffs. 45 companies, including costco, saidson and the tariffs were having some negative impact on their

business, while five companies, including kansas ci southern and carmax said tariffs actually helped their results as customers pulled business forward to beat out the economic impact. and with reports that the u. is planning more tariffs, u.s. businesses already caught in the middle of the trade war are hoping to win exemptions. so far, that has not been the case. ylan mui is in washington tonight. >> reporter: tariffs are swamping sea eagle boats in port jefferson, new york. kayaks are getting hit. and for owner john hogue, there's no way out. >> the annual cost to our company, which is a small family business, will be over $1 million a year. >> reporter: the trump administration isn't handing out any waivers from the latest round of tariffs on $200 billion in chinese goods. and businesses say that's not fair. >> exemption process, it provides them an opportunity to hear from stakeholders about what those impacts are. and to remove products for which there is no alternative source

for. >> reporter: retailers are pushing back. in a new letter to the white house, they want an escape hatch before the tariffs jump from 10% to 25% in january. and they've got support from a bipartisan group of lawmakers. but critics say big business shouldn't get any favors from uncle sam. >> whenever you have a high tariff situation, you have t everyone tryin game the system, and you have a high propensity for a cronyis corruption. >> reporter: companies have bee able to apply ivers before. the government was overwhelmed with nearly 50,000 reques for exemptions from tariffs on aluminum.eel and officials are still working through almost 7,000 petitions from businesses trying to avoid previous tariffs on chinese imports. this time, there's no emergency exit. hogue says higher costs willri mean highers for his customers. >> tariffs will not save any american jobs i manufacturing. they will only hurt jobs in

distribution, in sales, in marketing, in i.t. they are completely destructive effort in this industry. le can ride sea e out the storm. for "nightly business report," i'm ylan mui in wandington. there are reports tonight that a chinese regulator wants to cut the tax that's levied on cars purchased in china by half. moveding to bloomberg, the would relieve some of the pain caused by the escalating trade war,hich threatens to affect demand and slow the chinese economy more broadly. china, as you know, is the world's biggest automobile market and a key battleground for gm and . toyo china is making a big vestment in infrastructu and the world's longest sea crossing in particular. but at bridge has been surrounded by controversy. ♪ >> reporter: behind me is the world's longest sea crossing.

at 34 mile it's n the sixth-lo est in the world. the bridge used up four and a half times of steel needed for thee golden g bridge and has a foure mile sea tunnel in middle. the purpose of the bridge is to more directly connrlt one of the s richest cities, hong kong, to the manufacturing air in the pearl river delta. this region is in the driver of chinese manufacturing and the idea is to make it easier to move people and goods around. the bridge is meant to cut travel time from where i am now to hong kong from three hours to just 30inutes. president xi jinping was here. it was unusually lowke perhaps because the project hasn't been wildly popular, especially in ho kong. the bridge has been expensive. officially, there's no tally, but media had put it as high as $20 billion. the bridge has also become symbolic of the growing e

entangleme entanglement between hong kong and china, the feeling that hong kong isro ehing on the government framework. one lawmaker described it as annan umbilical cord, a reminder to the i'm eunice yuan injuhi. >> tonight's market focus. the owner of outback steakhouse and other restaurant chains reported an increase in customer traffic as well as growth in comparable u.s. sales. and as a result, the company increased its profit and sales guidance for the whole year. hares rose nearly 2% today to $19.15. hsbc reported better than expected profit in its third quarter. the biggest european bank said it benefited from stronger business in asia as well as from cost controlhs shares were up nearly 4% today to $40.18. first data missed earnings estimates and cut its full year profit forecast. the paymentrocessing compa

says it is facing headwinds from the negative impact of currency fluctuations. and so first data shares took a beating today. ey fell 16% to 18.01. and after the bell, mondelez helped p earnings edget expectations. the maker of oreos and sour patch kids reported a rise in ts came in those res shy of estimates. shares were volatile in the after hours, but finished thela re day unchanged at $40.11. comingp is the entertainment industry getting any closer to closing the gender gap? ♪ when it comes to gender equality, a n svey has found

that the country's entertainment industry still has a long way to go. julia boorstin is in los aeles withhe details. >> reporter: after a year marked by the time's up and me too movements and high-profile firings of men for misconduct across the entertainme, industollywood still has a long way to go to get to equal. both men and working entertainment see gender gaps in the indusiny. acco to a linkedin cnbc survey of over 1,000 people. even though equal pay is mandated by law, about a quarter of women and about half of men y they think m and women in the same roles are paid the same. slightly more than that, say men and women a rates. ed at equal >> i'm not surprised. and look, i think you've had immense structural bias in our companies. i don't think it's always intentional. i think there's deep unconscious .

>> reporter: sara harden is with a production company founded by reese witherspoon ton focus female-driven content. >> me too and time's up shine a light on the bias and say, look around. we have to do better. >> reporter: there are obstacles in place that make it challenging foromen to advance, according to 80% of women and more than half of men we surveyed. the biggest issue, an unsupportive or biased corporate culture. otherhallenges include a lack of female leadership and mentorship. so what will i take to close the gap in entertainment? the single-most important thing is for industry lders to speak out about the importance of diversity and inclusion in the workplace. also considered key, a focus on diversity and recruiting and casting. at hello sunshine, the mission is to put women at the center of every story. thnar female-dod team is producing for every platform. tv, film, streaming video, podcasts and audio books. and hello sunshine's harden s she thinks the traditional entertainment giants will

understand the value of embracing diversity. >> i thi b thet companies will realize that their economic futures, that they need towo brg n into authorship at all levels of their companies, whetherhe it's boardrooms, whether it's their writers' rooms, whether it's their meeting rooms. if they want to produce any product or service that is looking to cnect with women. >> with companies like hello sunshine striking deals acrosst industry, our survey found widespread optimism that thest in will shift towards equal representation. two-thir of men and women saying they expect that time's up and me too movements tnghave a las effect. for "nightly business report," i'm julia boorstin in los angeefs. and bore we go, a final look at the day on wall street. another wild one. the dow is down 245 points. e nasdaq slipped by 116. the s&p was down 17. and given this volatile market stretch, we all need a reminder

sos about what to do and what not to so tonight we leave you with a piece of advice from the ceo of charles schwab. >> the mostmptant thing in a time like this is either to do nothing, stick with your plan. or if thinge changed for you personally, update your plan and change your investment approach to reflect that. akt don't changes based on what the market happens to be doing today, tomorrow, last wk or nex week. that's a sure losing strategy. >> good advice. >> words to live by. that does it for usonht. i'm sue herera, thanks for joining us. >> i'm bill griffith. have a great evening. we'll see you tomorrow.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, kovler foundation, pursuing solutions for america'neglected needs. >> wow. that is unbelievable >> [applause]