>> announcer: this is ""nightly business report" with bill herera. > trade whiplash. talks hit a snag and stocks move lower, but a white house official says that's not the case, making enclosuclear that a deal won't be easy. concerns expense pintensify. re confirm what many had feared that the global economy's upward trajectory is changing course. holding pattern. the wand-off inhington is causing a number of airline ceos to hold off on their business plans. those stories and mu more tonight on "nightly business report" fo we do bid you a good evening and welcome. investors we reminded once again today about two major market overhangs,y nam trade

and global growth. stocks were lower from the concerns s morning on about growth, especially in china. and then the major averages tk other leg down on reports that a trade meeting between the american and chinese officials scheduled for this week h been cancelled. when the white house said the talks will resume at the ende o month, stocks staged a minor comeback, as we've seen so many times fore. but at the close the dow and other major indices were still deep in negative territory. the industrial average fell more than 300 points to 24,404. the nasdaq dropped by, 1 the s&p was down 37. kayla tausche has more on today's ba-and-forth ontrade. >> reporter: as the u.s. and china work to flesh out their trade truths, an in-person meeting expected to happen in w washington thik will no longer happen, according to two people briefed on those developments. u.s. officials are said to want stronger commitments from china on opening up markets, not stealing u.s. technology, and accountability if china doesn't

hold up its end of the bargain. the two a expected to meet next week. national economic counselry director l kudlow said the focus is still on that meeting and denied others h been planned. >> the big meeting that everyone is moving towards will be the vice premier coming at the end of the month, as i think everybody knows. that will be a very important that will be a principals meeting, and everyone was looking towards that. n there we other intermediate meetings schedules. >> reporter: kudlow acknowledged the difficulty inherent with getting a deal with china but says he doesn't sha that pessimism and the president, he said, doesn't either. the presidentayn mo though, urged china to do a real deal and stop playing around, after days earlier suggesting talks were going well. the two sides have set a deadline of march 1st to resolve their agreemhet. ise the u.s. will put higher tariffs in place. for "nightly buness report," m kayla tausche in washington.

china's trade issues are taking a toll on its economy. according to numbers released by that government, growtlowed to 6.6%. hile that sounds like a decen rate, it was china's slowest pace i 28 years. eunice eun is ineijing tonight. >> china's economy posted its slowest growth inee nearly t decades. most economists believe that the economy here will continue to slide even further, with banking stimulus measures kicking in only by theer second quart at the earliest and more likely in the second half of the year. 2018 gdp was 6.6% and growthn the fourt quarter indicated weakeningin momentum c in at 6.4%. this as investment missed up 5.9% instead of6% analysts were looking for. real estate fai growth slowed. property i a big driver for the economy and indicator for future constructions activity. one important data point, unemployment. the jobless rate rose to 4.9%

for december. part of that is because of weakness in the export sector. uncertainty on u.s. tariffs caused some companies to delin stments and hiring. beijing would continue toin oduce new measures to stabilize the economy while maging the trade war in th u.s. for "nightly business report," i'm eunice eun in beijing. slowing growth in china has renewed fears the global economy is doing the same. that fear was reflected in a new forecast from the international monetary fund, which cut its k19 outl to 3.5% growth from 3.7%. th imf's managing director said the reason why is simple, risks are on the rise. >> what changed is the level of risks and the acceleration of the pace at which risks are eventually mate if you look at six months ago, thererwere threats, there concerns, but they were not of a magnitude that we have now.

we look now at tariff increases that have taken place and that are beginning to have an however small. we are looking at threats. we are looking at an attpt to resolve it. >> slowing global growth isn't just a concern among investors but alsomong business leaders, who are meeting in davos, switzerland, for the world economic forum. that's where becky quick is for us ton >> attendees at this year's forum are facing lot of issues head on. you've got things like global rowth that's really up in question at thispoint. all kinds of questions about what's happening with trade with china and the posbility of u.s. recession, which ray dalio tells us he thinks could happena sooner rather later. >> there's a significant risk of a -- a recession, is it minus one, is it plus one? let's not get technical abo that too much. there's a high likelihood of a significant slowing in 2020. >> and carlisle group's david reububenstein told us he thinkse

government shutdown could end soon as well. >> the members of congress ande people in ministration know this is hurting the economy, the shutdown, and really want toth resolve . i think there's a real resolve to get this resolved very quickly. it's not going to go on for a month in my view. >> we heard from the heads of many companies, including bank of ameri and marriott. >> china too you've got risks on their economy because of trade. you've got also a shift toward consumerism, which is helpful for us. >> we think the consumers are very strong right now.e' th you know, a lot to talk about car sales slowing down or house sales and things like that but lots go into experiences. >> for "nightly ,"siness repo'm becky ghquick in davos. >> for more, here's the chief investment strategist at nuvine.

brian, thanks for joining us tonight. >> thanks for having me. >> my old friend larry kudlow is still adamant that the economy is strong. but you have to bieve if china is slowing down, the rest of us will have to slow down at some poret. don't you >> the u.s. is a little bit less chinad to a slowdown in than some other countries are. in and around china, east roasi has a big customer base in china, so they are more wmediately exposed thanare and we're seeing that evidence. european data has been quite weak. u.s. data has been okay to the g extent we'reting data during the government shutdown. but clearly if china a more abrupt slowdown than it already has, it could be very difficult for investors and for u.s. growth to really do anything but wha it's been doing, which is slowing down. >> we've been talking a lot ong our p about trade, about the lack of an agreement between the u.s. and now we hear that meetings are being postponed, but maybe will be rescheduled. what impact do you ukimately thhat will have on the

economy? >> thi isn't something that seemed like the market was ignoring in 2019 it was moving up every day. this was the first day we got a little bad newsha or news on trade and we're reminded, oh, yes, we have this march 1st deadline if it's not extended taxes on chinesexports go from 10% to 25% and that has a big o impa our economy and on china. as that risk grows as we approach march 1 ast witho deal, this becomes a bit more of a concern for the markets. that said, f the commentm the white house, to the extent they want a deal, they're going to be hang gh-level talks next week. i think if there's a silver lining to the government ut wn, it's probably that a deal with china is more likely because the administration probably doesn't want to fight those two fights at the same time, not hav deal with china and also not having the government open. t so if administration wants a deal, it will get a deal with china, it just b may not the comprehensive far-reaching, far looking deal that theyay have

wanted at the outset. >> where do you rank brexit in all of this right now? >> there's a huge amount of uncertaiunun aro brexit. a few weeks ago we said it's very likely there's going to be a deal at theast minute. at this point i think it's more likely than not they'll have to line, that de they'll have to revoke the article 50 declarati that put the brexit date into place and they're going to have to continue to muddle throu for a deal that can pass parliament and/or a second referendum, which has become more likely that we still don't think it should be considered the base case. we really think it's going to take more a time for developed deal that can pass parliament and will be acceptable tthe ropean union. the europeans will give them the extension because they want a softerrexit too. >> if they do extend article 50, does that not continue the uncertainty? >> it absolutely does, but it probably makes -- if t crashing out scenario, the no-deal scenario where the uk

leaves on that date and there's no plan in place for trade or customs or border enforcement, if it takes that scenario off the table,ve re the worst-case scenariofor theuk and the eurozone markets, that probably is a goo thing even if it creates more uncertainty heading into the future. >> brian, thanks for joining us tonight. >> thanks for having me. aw> to the u.s. economy and housing which a much larger than expect eed drop in home sales. diana olick explains. >> december is usually the slowest month for the housing market, but it was particularly slow in 2018. not only was the drop in home sales larger than expected, it was an unusually large monthly move regardless of direction. sales fell 6.4%, and that's seasonally adjusted. theses closingere deals made in october so it had nothingo do with the government shutdown, nor did stock market volatility

play much of a role in it. >> normally the change is not this to see such a large magnitude suually there's special factors, like new cr protection, mortgage disclosure rule or maybe a taxex credit ration. but the latest decline is harder to explai >> mortgage rates did rise in september and october, before starti to fall aga in november. so affordability was likely a factor. the median home price for all oc 2018e in at $259,100. thats the highest price on record. >> so what we're seeing is really a response from what had been a spike in rates. consumers' concern that prices have escalated to where there's fear that the might be the last one to buy at the top of the market. >> and that's where consumer sentiment comes in. the g hns ine prices had been shrinking for much of last year, and prices had even gone negative in parts of the west, especially california. consumersthat some

were afraid to buy a home that could soon be worthless than they paid for it. for "nightly business report," i'm dna olick in washington. not surprisingly, that drop es sales of existing h rippled through the sector today and sent shares of the major home builders all lower. it is time to take a look at some of today's upgrades and downgrades. ke was downgraded to outperform from market perform. the analy says its product lineup for 2019 should increase company eprofits. rice target is $90. the shares were up a fraction to $80.75. w under armou upgraded to conviction buy from neutral at goldman sachs. the analyst says the company should benefit from strong consumer spending. the price i targe $28, but the stock fell a fraction to $20.48 goldman sachs also downgraded the gap to sell from neutrah the analyst citing deteriorating brand momentum. price target now $23 and shares fell 4% today to $24..

altria was downgraded to underweight from equaleight at morgan stanley. the analyst cit declining sgra cigarette sales and increased scrutiny from the fda when it comes to vaping. the price target is $45. that stock dropped 7% to $497. coming up, a turning point after a rough few years, are things finally working in ibm's favor? johnson & johnson said today it expects sales growth to slow

this year of the dow component blamed generic drug competition and pricing pressure but & j did report better than expected earnings for the most rent arter thanks to sales of its cancer drugs and its psoriasis treatment. we have about $3 to $3.5 billion of generic competition that we'll encounter this year yet we're still able to talk about grow most companies would be talking about contraction or the dialogue would be when are we going to return to growth. we are still going to grow. >> shares o j & j fell 1.5% in today's trade. ellow dow component travelers reported better-than-expected qly profit thanks to growth in premiums. that helped offset catastrophe losses related to the california wildfires. in 2017, travelers began restricting its un rwriting of new business in california due to wildfire risk. the stock was down about 1% to $122.36. well, it was a big quarter for big blue. after the bell tonight, ibm

reported better-than-expected earnings and revenue and says that it sees profit growth this year. hee the numbers they issued. ibm earned .8 that was 5 cents better than expectations. revenue declined, butop it did forecasts at $21 billion. and the cfha saysthe quarter was driven by its cloud and services businesses. >> we actually continued to accelerate our services based business led by strong growth in gbs capitalizing on gital, cognitive and cloud, and in our ss, we k of busi actually had the strongest signings quarter that we've had inell over many years. >> and investors cheered, sending shares of the dow component initially higher in an after hours trade tonight. deidre bosa has more. >> despite a better-than-expected report, ibm's revenueebound didn't last long. the company is still struggling to shift its businessoward a

higher margin next generation technologies like its watson intelligence and cloud computing, a unit that ibm calls strategic imperative. its legacy business, hardware and software, con wnued togh on its turn-around and the company's stock price. a few months ago ibm agreed to buy red hat to boost its cloud business. ld boost sales when the deal closes, but investors will be looking to the company to deliver on organic growth this year as well. for "nightly business report," i'm deidre bosa, san francisco. let's turn now to david for mo than ibm's earnings beat, the senior investment analyst with essential investment advisers. nice to see you again, david. >> thank you for having me. >> you were looking for a growth in cloud that was very important to you.ey id report some growth of was it enough? >> well, i think it's a good step in the right direction. you know, we continue to believe that they're goingve to to transition more clients to the

cloud. and so it's still ear stages, but i think it's positive for them. >> now, it seems that all you had to do was mention you were getting into the cloud business and your companyld be viewed much better on wall street. i think of an amazon, i think of a microsoft. ibm ianging their hat literally on red hat. they made their acquisition to get more into the cloud business. but you're worried about thatqu ition, aren't you? >> well, you know, it's a big acquisition for them. i think that they're going to have to be careful and be able to transition all theme cus from red hat towards the ibm cloud, and so they're going to have to be careful alsop to k all their employees there as well. so i think it's going to take some time.'r th going to have to close the acquisition by the end of the year, so we're going to and see what happens. >> you have the stock as a hold. was there anything in tonight's report that would change your mind on that? >>well, again, it's the right step in the right di i think the company is starting

to execute in some of their priorities. and so they have goo free cash flow that they can use to buy back theirs sto at these prices. so it's a right step in the right direction, but we still d have a h on it. we want toee what happens ft ne in the next couple of quarters. >> we don't normally talk about legacy things like servers and things. how are they doingthere? >> they continue to lose business in that area, and so that's why they're doing this red hat acquisition want to transition some other customers to the cloud. and so they want to make sure that they have a strong cloud that is very secure, that customers feel that they are very secure on it, and so i think they ar tryingo get away from that traditional business and try to go to the >> you know, it's been six years since ibm and ginny rometti has made an effort to turn that company around. is she digng the things by

focusing on the cloud and red hat? is there anything you'd like to see her do differently? >> you know, i think she's doing the right things in terms of the strategy. you know, the cloud is an important fastest growing area in t a few years ago jeff bezos say that the cloud was worth trillions of dollars. so everybody wants to be there and they need to be -- they need to have a strong foot in that area. that will be one area that will focus on security and ai, they are working on that with theon waloud and so they're trying to actually get customers to do better solutions financial services and health care. that's anotherve area they opportunity, artificial intelligence. they are focusing on the right thi thing, you just have to give it a little more time. >> david, thanks. >> thank you for having me. an activist investor calls for uent changes a ebay. that's where we begin tonight's prket focus with elliott managementhing for ebay to

restructure and sell some business units.t the investmirm said this will allow ebay to double its market value over the next two years. the hedge fund has a4% stake in that company right now. stocclimbed by 6% to $32.90. halliburton is forecasting lower revenue in key businesses. the company says that some north american clients are pulling back on drilling services amid transportation bottlenecks in the largest production region. that overshadowed better-than-expected earnings in the most recent quarter and a pledge to reduce spending. sharesell by 3% to $31.36. iconic says it is no longer pursuing a sale. they had reportedly p itself on the block last summer and there were those reports that apollo global management was a leading bidder and a deal was imminent. not happening apparently. shares dropped by 16% to$17.09. stanley black & decker

topped wall street earnings and revenue forecasts, but its outlook was gloomy. t thls maker cited slowing global economic growth that led the company teduce its sales guidance. it also plans to make digital moves, which it says will increase efficiency. but the stock fell more than 15% to $115.69. ubs missed analysts' estimates for its fourth quarter. the switzerland-based bank warned of a tough start to the year, citing trade disputes and unresolved geopolitical tensns. it fel to $12.94. coming up, the growing headaches for those nning the ai a

>> french regulator has hit google with a $57 million for violating european privacy rules. the ruling stems fro complaints that the company did not go far enough to get users to consent to data gathering for advertising. separately the eurean uni fined mastercard $650 million for breaching antitrust rules. the regulator says the company raised payment processing fees, leading to higher prices for retailers and consumers. the penalty follows a six-year bail for former nissan ceo carlos gohn -- he offered to pay a higher amounti and put up his nissan stock a collateral but this likely decision means he will remain in detention until early march. now to the partial government shutdown which is in

day 32. there is a little bit of movement. the senate has scheduled votes thursday on competing proposals that would reopen the governnt. one vote would be on president trump's plan that includes money wall. border the second measure would fund various agencies until february 8th, but it does not include border wall ney. and one month into the government shutdown, the airline dustry is feeling the impact. unpaid tsa agents are increasingly not coming to work and some airlines are waiting for govnmentpproval on new flights. phil lebeau has more on the industry and the holding >> the lines are getting longer, the frustration is growing. b with the government shutdown dragging on, tsa workers are approaching a second payday where they won't get paid, so a owing number of agents are not showing up for their shifts. more than 10% over the weekend. while washington won't budge, for keyines are waiting government approvals.

take delta. itsewest ane, the airbus a-220 scheduled to start flying january 31st, but with many in e faa furloughed, the agency has not approved the plane for commercial service, leaving delta's ceo to wonder when the shutdown will ending. >> we encourage our elected bestials to do their ver to resolve these differences as quickly as possible. we're not taking sides on th debate, but we need to get the business moving again.we >> for south airlines, the government shutwn means it cannot begin flying to hawaii. the faa must approve all planes making extended flights over bodies of water. so until that happens, southwest is holding off on selling tickets and beginning flights to theislands. huge moment for the airline. meanwhile, alaska airlines i delaying new service to just north of seattle. it is used by boeing to deliver new airplanes and was supposed to start handlin alaska's

flights in early march, but the airline is putting those planshi on hold it waits for the required government approvals. frustrating as this is for the airlines, the tsa and others in theheindustry, good news is this government shutdown has had a limited impact on demand. for the most part bookings remain solid. security lines get longer and more travelers get frustrated, then we could see the airlines start to pay a bigger price. phil lebeau, "nightly business report," chicago. >> here's a look at the final numbers from wall street. the dow fell 301 points, the nasdaq dropped 136, s&p 500 was off 37. >> and finally tonight, we're celebrating a major milestone around here. today is the 40th anniversary of the "nightly business report." it debuted back january 2nd of 1979 with original anchors linda o'brien and del frank andthe graul kangus. today wpbt in south florida

where the show first originated presented the first paul kangus innovationo award former nbr commentator arthur lafrin. linda was on hand to present the award. we proudly congratulate all who have been part of the nbr family these past 40 years. i know you and i and our team areart of tha tradition and very proudly so. >> absolutely. we are privileged to be hosting this program. that does it for us tonight on nbr. i'm sue herera, thanks for joining us. >> i'm bill vegriffeth. great evening. we'll see you

>> this is "bbc world news america. funding of this presentation s made possible by the freeman foundation, and kovlerrs foundation, ng solutions for america's neglected needs. wow. hat is unbelievable. ♪ >> stay curious.