>> announcer: this is nightly business report with sue herera and bill griffeth. stocks surge. the dow breaks above 26,000 and the s&p 500 has the best postm midtlection rally since 1982. health care prognosi it was t driving issue for voters. now investors want to know what changes may be in store for that industry. safety warning. boeing alerts airlines worldwide to a poepgsly faulty specie of fair following deadly crash. thoseetories and m on nightly business for wednesday, november 7th. and good evening, everyone. and well. bill griffeth is on assignment tonight. today there was a big rally on stocks took off at the opening and just kept on going.

investorsce emb the results of the midterm elections, the democrats took the house, the republicans maintained control of the senate. that seemed to lift cloud of uncertainty over the market. adding to the optimis were comments by president trump that he would be willing to work with the democrats to bolster economic groh. >> now is the time for members of both parties to join together, put partisanship aside, and keep the american economic miracle going strong. >> and that was investors needed to hear. the dow jones industrial average soared 545 points to 26180. the nasdaq was up 194. and the s&p 500 added 58. so what should investors focus on next? mike santoli takes a>> look. with a midterm elections past and the result largely as expected wall street has turned the focus to the chances for the

stock market to continue the rebound from a nasty oxycodone with a year end rally. following the popular script as many stregists noted midterm election years have a tendency to finish strong. and the prevailing wmadom holds rkets do fine with d.c. gridlo and a power split between the two parties. it's important to note gnthat t major index rose more than 7 peppers from the october 29th low and investors have not been freed from the election by the ncerns weighing o the mechanic. trade frictions with china, qution base how aggressive the federal reserve will be in raising rates, and uncertainty he over how much growth in the economy and inon corrent profits might slow in 2019. the election had no direct bearing on the china tariff issue which has been an year hang on stocks. as for the fed, it meets and will issue a policy statement tomorrow. bu no move onates is expected until next month we the fourth quarter point hike is

anticipate. many invesrs suggested the fed should back away from plans for three more hikesext year but the recent employment and wage data are strong enough to supporthe stance for now. correspondent earnings, the third quarter on pace to show 27% over a year ago, the third straight increase above 20%. this surge in profit has supported equity valuations but by the first ouarter next year growth is seen sliding to about 5%. wis is leaving wall street unsure how generoul i to reward companies for the current strong results. for now,s toda rally showed investors are taking advantage of a calm are mket and stock prices that are a good deal lower than they were seven weeks ago. it all fits with the post election rally script for now. but don't be surpred ifhe market trips over one of the lingering challenges if the index approaches former higher 5% higher from here. for nightly business report, mike santoli. stocks typically do well when congres is split and the

white house under republican control. according to analysis from bank of ameri merrill lynch, the s&p 500 averages an annual return of12%. the firm calls grid lock as the best case scenario for the markets. because it may prevent a lot of things from getting done or undone. well whenoters went to the polls, a number of issues were top of mind . thexit polls show health care topping the list withgh more ng it as the top concern than the economy or any other issue. that's the first time that's happened in a decade. second was immigration. the economy more broadly fell to number 3. and health care is just onegef thea items on the to do list for the new congress. ylan mui in washington tonight. >> reporter: with change in power comes change in leadership. democrats winni control of the house makes nancy pelosi the presumptive speaker. she is already laid out the top three priorities. campaign finance and ethics reform lower drug prices and

infrastructure. >>ea two ago today, everyone came together and said we the urgency, we want to take responsibility, and that gave us opportunity to protect the affordable care act. that was so essential to the health and financial securit of america's working families. and we knew it would be a target of t trump administration. >> the lawmakerste expto turn that agenda into legislative action aretell n democrats, likely to serve as committee chairman and they spent months preparing the proposals. max even waters on financial services. frank colin on energy and commerce. peter defast owe on transportation to name afew. but wilthing get done in the divided foft in senate majority leader mitch mcconnell spoke with nancy pelosi over the phone he said there could be ro for a deal on infrastructure or maybe prescriptione drug prfloog i

have to tell constituents you think we eight hate each other. th senate is a collegial place. even though we had obviously big differences over things like taxes. and judges. ththe were plenty of things we did together. there is no reason that stopsec simplyse the house becomes democratic. >> the wild card could be president trump himself. he toldeporters he is willing to work with democrats but not if they launch a flurriy of investigations into his administration. if government grinds to a halt, trumpaid he plans to blame the democrats. for nightly business rert, i'm ylan mui in washington. with health care in focus in washington, the sector rallied on wall street today. the insurers got lift even hitting new records as did medicaid stocks and as bertha coombs reports, investors are now trying to figure out what's next for that industry. >> reporter: h lth care was a number one issue for voters in this election whoesperately nt help with high costs.

after years of tremendousre latory upheaval, a divided congress could bring some ctwelcome pre ability. democrats can't push threw medicare for all. while republicans can't push a repeal of the affordable care act or health program >> republican oriented ideas around medicaid block granting are, you know, in essence off the table now with this election result. and the fear that some investors had that medicare might be a source of -- a source of cuts perhaps is part of the way to pay for the deficit impact of tax reform. that as well is pretty much off the table. >> at thete level more support for the aca as voters in idaho, nebraska and utah approved medicaid expansion w measuresle maine elect add democratic governor. will carry out that state's 2017

referendum which has been blocked by its republicanor govern. analysts say more coverage is a positive for hospitals and insurers. >> now have the opportunity for some states to expan medicaid, for some states that are goinge to imore in the health insurance exchanges. you may have more paying customers at the end of this. >> reporter: investors are certainly breathing a sigh of relief sending health care shares broadly higher. but even inid a d washington combatting high drug prices resonates on both sides of the aisle. >> when we asked consumers what should the government be doing around drug prices? i mean the numbe one answer we received was, they should actually be addressinghe costs themselves, really price controls. >> still the risk of bipartisanship breaking out on capitol hill looks just as unlikely in the next congress as it has been. for nightly business report, i'm bertha coombs. so what could the possible changes in the health care instry mean for your

investments? car ray murphy joins to us talk about that. the chiefes ient officers at united capital. nice to have you here, car ray. >> thanks foravg me. >> i talked to one analyst today saying this is a perfect or best case scenario for those involved in the health care stre. would you agree with that? >> i do. of all theifferent areas of the market who had an issue at stake in yesterday's election, health care is the clearest signal. and i think the two biggest take aways -- you've bee talking about them earlier, the affordable care act is here to stay and medicaid rather than being brought down is being ex bnded. i thinh of those are very positive for the health care secretarier >> what aut drug pricing? both sides of the aisle seem to want to do something?no now whether o that happens certainly we don't know yet. but that seems to be the intent. what might thempact be on some drug companies. >> well, so it's. interesti today we had both the managed

care companies and pharmaceutical companies rallying. bpically one rallies at the expense of the oth drug costs are an input to manage care. pu here we see it rally. so the most immediate impact from the election is that the populationhhat b of those groups of companies serve has just increased. you think about medicaid. we have 600,000 new people with access to doctors, hospitals, pharmaceuticals. while drug pricing continues to be an issue and resolved yesterday, the pool of people who can buy the drugs incr wsed. >> andld assume that that fwoes for the insurers to a certain extent as well. >> absolutely. at's all very positive for the insurers as well. pan. and also when you think about the affe care act, a big thing holding both the managed a care companies pharmaceuticals companies back was the uncertainty. now with democrats taking control of the house not only do we have the affordable care act in place for the next two yea while thedems control the house. but i think it's not going away.

the longer people get used to access to that program, the more used to i they get and it's difficult to dismantle. that's less uncertainty from the insurers perspective sfl from an investment standpoint if you are ath long-term investor i a good time to look at some of the particular players in this arena? and if so what sectors? >> i do think -- i am positive in the market heading into the back part of the year. so you know from a very macroperspectivear i think w in a seasonally strong period of the year. we have the uncertainty of thee ons behind us. santa clause is could coming to town. d.erybody feels g but we have seen a rotation into more defensive areas. so i tend to favor those that are less tied to top line gdp when you think about health care we still have strong growth characteristics. we just he is expand theed the pool of potential commerces i mention processed and you are not behold been no thet n quarter of gdp.

i think particularly as managed care stocks and thema phutical stocks have much stronger characteristics into the back half of the year. >> thank you very much kara. he> as mike sanitiy mentioned earlier in program, the federal reserve wraps up a eeting tomorrow. with interest rates in focus. steve liesman tells us what the strategists anding money managers have to say about monetary policy, the market and the economy. >> reporter: no rest for the weiery fresh after dealing wit the u.s. midterm elections investor haves to think about the federal reser. here are theeced etions for the november meeting of the u.s. central bank. 90% of our panel says no ree rate h in november. 85% that rate hike in december. so some pretty good certainty around a fourth rate hike for this year. how many next year? 2.5. what does that mean? it means good agreement on doing two and about half of the panel of 30 say they're staying at two

another half say they do three next year. let's put all the quarter point rate hikes together i will tell what you it adds up to at a fed fund rate, the overnight rate the fed uses to adjust overall --he overall economy to2.4,ing with going up three. and stay there. at some point the panel believes the fed gets restrictive by a quarter the point and ends at 3.3%. remember hiking rates is just ones of the thi the fed does tp. . it's reducing the balance sheet. if it stays on course it reduces around the ll$4 tn balance sheet by 600 billion. we asked what's that worth in rate hike terms? 15% say it's less than one hike. 32% say it's equal to a singler quaroint hike. and 32% say it's two or three hikes. the average is 35 basis points. in your mind when you think about how much t fed is going to do next year it's the rate hikes maybe two or three. but then an additional $600

anllion reduction in the b sheet. back to you. wall street was also keeping ofeye on the resignation attorney general jeff sessions which came at the president'squ t. sessions's dprt the yur follows a year of public criticism for his decision to recuses himself from the russia invesgation. session's chief of staff matthew whitaker was named acting attorney general. it's time to look at today's upgrades and downgrades. taet was upgraded to outperform from market perform at cowen. the aglyst cit traffic at the stories, private brand innovation and push into digital. the pris target is $100. he stock rose more than% to 86.7 aig downgraded from to inline from outperform at ever your isai citing the analyst for potentials earnings to come in beloonsensus. the price target is $51. the shares fell one%. the. mack moran was downgraded to

unrerperform from secretary perform at rbc capital markets. president analyst cites that stocks valuation ahead of what is expected to a decline in 2019 production. the provides target is $15 but the stock rose along with the broader market today to finish at $12.33. still ahead, smooth sailing, money is pouring into therouse industry. thanks to a strong economy and now a major cruiseine is pouring money into miami. facebook says russian trolls trd to influence the midterm elections. the social media company blocked more than 100 facebook andst ram accounts with potential ties to a so-called rm.ll

those accounts may be linked to a group that was indicted earlier this year over allegations it interfered in thp 20sidential election. in san francisco, voters approved a plan that wouax big companies to help the homeless. it will be the largest tax i increa that city's history. as we reported, the measure known as prop c dwoid the tech companies. it had the backing of salesforce but was opposed by other firms including twitter and lyft. separately a missouri aansas residents voted yesterday to raise their state's minimumwa s. missouri approved a hike to $12 per hour. in increments by the year 2023. arkansas's minimum wage will increase to $11 an hour t by year 2021. roughly a quarter of that state's workers will benefit from that increase. defense stocks are among thoseted to benefit from that divided congress. it is considered one othe areas where both exacts and the

president may find common ground. recall, the democrats agreed to a defense department budget incase for t fiscal year 2019. today, boeing, northrup grumman and ld martin were all higher. boeing in and the faa warn airlines around the world about tpotential faulty piece of softwaret could leave pilots confused appear put airplanes in dire situations. the warning comes as investigators continue to search for the cause of a crash of a brand-new boeing 737 max off the coast of indonesia. phil lebeau has more. >> as vrgs continue probingor clues about why a lion air 737 max 8 airplane crashed into the java sea, they arere iingly focusing on whether the pilots were seeingin erroneous rmation in the cockpit. specifically, what was the data coming from the plane's angle of attack indicator? that sensor, a vein on the outside of thees fuselage

pilots a visual reading of whether the plane is flying at an angle that could lead to a stall and potentially a steep dive. boeing's bulletin reinforces how pilots should handle that situation process. as investigators review the air flight data recorder they are drawing some conclusions. boeing saysnvestigators have indicated lion air fght 610 experienced ee roenz input from one of the aoa sensors. when search crews find and listen to the plane's cockpit voice recorder they'll havett beer picture of what the pilot saw and how they reacted in the final moments of the flight. boeing mass delivered approximately 200, 737 max 8an with more 2500 schedule to be built over the exseveral years. it's the mpany's most popular plane. at this point there is no indication airlines have to ound the 737 max 8s. in part because boeing and

safety rulators believe this bulletin addresses a potential concern forpilots. while investigators hunt for the official cause of the lion air crash. il lebeau, nightly business report, chicago. michael korsless falls out of fashion that's where we begin the market focus. the handbag maker missed quartey expectations for the first time in two years np sales at restale sres in europy weak and analysts eress concepts i. over the strategy that sent shares lower by 14% to 49.05. beauty products maker kody missed revenue estimates the second straight quarter the companyeported a 10% sales drop in europe, the biggest lmarket. as w as supply chain disruptions. the shares plunged more than 22% to $8oo6. dean reported disappointing third quarter injures and lowered the full-year outlook.il the largest producer in the

country said costs are rising and its losing market share to wal-mart, kroeger and other grocers. the company's closing seven plants. the stock down nearly 50% this year fell 22% today, closing at $6 even. well a rising tide lifts all boats. and so does a strong economy apparently. which may be why the cruise industry is firing on all cylinders. demand is up. bookings are soaring. and now royal caribbean is making a big bet on the consumer withpets recentlned newport in miami. seema modi has the details. >> as more baby boomers rere, the cruise industry is expecting a strong upturn in 2019 with a record 17 ships set to debut next year. the problem is there is not enough capacity at the ports to accoodate the new ships. royal caribbean is taking matters int its own hands, launching a state of the art

terminal, making it t first cruise line to build and launch a termil in port miami. >> this was a $250 million expenditure. but it is -- it will pay back fairly nicely in terms of guest erms of what, in it does for the community, and also our operating costs on a per passenger basis ends up being less. a slightsary to us is the improvement to the bottom line. >> royal broke ground on erminal a last year. the buildmployed 2,000 construction workers. port miami estimates it will have a m$500lion annual economic impact on the state of florida. >> we continue to have increases every year. so we hd a rec year of over 500illion cruise passengers come to port miami, the crust capital of the world. we expect tha to grow another 2 million. by adding facilities and ships. we have contracted morhips and lines. making port miami their home we expect that growth to

continue and start to expand a little bit the t year 2021. >> with the new terminal royal caribbean is forecasting bookings to rice 750,000 to 1.8 million over the next year. but the terminal launch comes at an uncertain time as investors debate the future of the economy, thempact of higher rates and the state of the consumer. royal scaribbea fame says while he is concerned about geopolitics and ongoing trade disputes, it's not having an impact so far. >> i'm a free trade advocate. anything creating tensions about froh trade i view as economically a bad thing. ut our business in china continues to do well. because art of it is the chinese market is so embryonic. it doesn't take much to attract skers. >> they say travel is nd any cally sensitive downturn in the economy can have

profound a consequences whether consumer spend money on travel and cruises. coming up, the economic issues that matter to suburban americans. >> coming on up on nightly business report we tell you with i this beau kohlic suburbann ne just across the river from pennsylvania in nurj's third district may be the perfect representation of the election as a whole. efrmgts as we reported americans care a lot about health care. and the overallconomy. and no where is that morid vent than in suburban america. brian sullivan is in moorstown new jersey for usni t. >> reporter: you may not think it but this little congressional

district that cuts across the middle o sou central new jersey may just perfectly represent the nation as a whol now at this recording this district, new jersey's third, has not been zided. it's too close to call and votes in.comin but why it may represent the country as a whole is not about that part. it's abo what peopl care about, whether or not it's here in the weltier suburbing of moorstown across the river from philadelphia or out near the ocean in tom's river which leane blican. because the election is about the economy. but more than that it's about health care. listen to what david said about his main concerns. >> the meditation that i take to keep me ive, to kee my cancer in remission costs $9,000 a month. i am covered with the affordable care act. if the republicans are to monkey around with that much more, or god for bid, take it away i won't be able to afford the meditation i need to keep my

alive literally. >> reporter: of course the president loomed large even in a leaning blue democrat area like you find trump supportersers. it doesn't mean they necessarily like the president. but they like the way the omy is going. >> i'm a trump supporter. i don't like always what he says. but i like what he does. soy look beyond that and i'm really pleased withhat he accomplished. when the economy is goods everybody -- i have never seen so many trucks in my street. people having work done. feeling good about the money in the bank. >> you have health care and nou've got the e and you've got a race right here yet to be decided but even among that, there are still those remaining single about politics in out in thomas river you meet some saying well, to doesn't matter who is in office nothing changes. >> no matter who isic in o there seems to be some issue everybody wants to fight about. whoever gets voted in there will be a new set of problems to talk about. >> whatever the ultimate outcome here in the new jersey third district won't matter.

the house going for the exact. the senate has been locked down by the republicans. hopefully both sides understand d hear what residents all across new jersey have to say. the economy is important. but health care is their nber one concern. for nightly business report, brian sullivan, moorstown, new jersey. here a look at final numbers on wall street. aig rally, 545 point to the upside for the dow. the nasdaq rising 194. s&p 500 added 58. thattill do for nightly business report tonight. i'm sue hanera. for joining us. and we will see you tomorrow.

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