>>nnouncer: this is "nightly business report" with sue herera and bill februarga s. two months into 2019 and the stock market is heating up, making this one of the best starts to a year in >>decades. delinquencies rise. cars are getting more expensive. and aepewt shows a growing number of borrowers are failing to make their monthly payments. fake review crackdown. a ground-breakg settlement for the ftc. but do companies need to get a better grip on what's posted on their websites? thoseries and more tonight on "nightly business report" for > ood evening, everyone, and welcome. i'm sue herera. >> a i'm tyler mathisen in

tonight for bill griffeth. we begin tonight with that market. february is in the books, the month that bring v usalentine's day saw investors fall in love with stocks. just look at the numbers.aj the three indexes all posted solid gains. look at those numbers,th extendg rally that has taken over wall street for much of 2019. thatame -- that rise came despite a pullback in today's session. that oneaw the dow jones industrial average fall 69 points to 25,916. nasdaq down 21 and the s&p 500 wasff 7. mi santoli has more on the february rally and what march >> wall street's rebound rally slowed in february, but it didn't ivstop,g stocks one of their strongest ever two-month starts to a ar february's gain in the s&p 500 leads the index up by about 11% so farn 2019, only the fifth time in 70 years that the market was up double tigits f first two months. in past years when stocks have

been up in both january a february, further gains have been typical the remainder of the year, though there have been some jarring exceptions such 1987 when stocks continued to soar into the summer, coming to a dramatic crash that october. the strength in 2019 has largely been a sharp snapback from profound weakness late in 2018, which s the wor december since the 1930s on a mix of severe u.s. slowdown fears a worries that the federal reserve would keep raising rates. a beaten market recovered to within 5% o its september record highs. this despite continued expectations for ac u.s. econo slowdown and sharp cuts to earnings forecasts for tha first of the year. the fed's gentler tone and lack of worrisome inflation have helped treasury yields remain near one-year lows making dividend-yielding stocks appear more attractive to investors. entering march, a big queheion iser a trade deal with china will be reached and

whether one has already been largely priced into stocks. a deal that allowed industrial mpanies to raiserofit outlook to help support stocks after its recent rally. today stronger-than-expected fourth quarter report on.s. gdp further calmed recession fears but raised the prospects of a give-back in growth this quarter which may not bow the worst thing for aall street that has made a fragile peace with the lower backdrop. the economynues to hum along at a healthy clip. fourth quarter gross domestiuc pr came in better than expected and growth for all of 2018 was the strongest i years. steve liesman is in washington >> themy.s. econo registering strong growth in the fourth quarter, stronger than expected by economists and stronger than potentl growth. it came in at 2.6% and wall street was looking for around 2%. how did we get there? well,he consumer ended up

being stronger than had been forecast, and business investment was pretty strong at 6.2%. residential investment, that is the housing market, didfrubtract growth and federal spending was up 0.4%. the numberas sequential weakening from the third quarter. by cnbcts surveyed expect the first quarter to be weaker still at 1.9% which is just around potential growth. one of the reasons weakening is expected is inventories were very strong in the fou quarter, perhaps built up by companies trying to get ahead of the tariffs and those goods landing on american shores in december. that's supposed to run off perhaps in the first quarter. jpmorgan in fact says inventory data had surprised to the upside. this development also may pose a headwind for gdp growth this quarter. theyear-over-year growth rate was 3.1%. the administration took that as a victory. larry kudlow, t director of president trump's national

economic council, expects the strong growth to ce in 2019. >> so people are saying, well, there's a sugar high one year, that's it. they're just plain wrong. these picies are working, so i'm going to say 3% 2018 and i'm going to say3% 2019 and 3% as far as the eye can see. >> as for the federal reserve, this number probably changes their outlook very little.ey xpect the economy to weaken this year and are concerned about risks like global enomic weakness and trade tensions. they'll wait to seeow those issues play out before making any changes to their policy for "nightly business report," i'm steve liesman in washington. let's turn now to brian nick to talk about t economy, the market and some areas where you might want to put some money to work. he's the cheeief investment strategist at nuvene. it's been a pretty good year in twomonths. 11% gains for the s&p 500 so far this yedo. that argue that maybe the best gains of the year have

already been booked and i that might get a little more cautious? >> yeah, we think so. we came into the year relatively cautious with respect to our expectations. i think it's fair to say that january and fruary have exceeded those expectations. but we don't think we've wcessarily hit highs for the year, but do think most of the returns for the year, at least in the united states, are behind us and that's causedt us get out of stocks but to become somewhat more selective and >> what about around the globe we're seeing slowingan economie eventually that does impact us here at home. >>w big a factor is that, if at all. ne of the reasons we think growth will slow in the u.s. in the first quarter is growth overseas has slowed. so we spent a lot of time looking for signs of a bottom or of a soft landing in the economies like china and the eurozone where the data has continued to get worse in most cases. if you look at factory output in

china, it just hit a two or ree year low. in the eurozone we have german factory output, again, plunging month after month. so we are anxiously looking for a bottom in those economies before we become more optimistic about a balance in u.s.icrowth, econrowth and earnings growth. >> let me take you back to that moment you just made a ago and that was the idea that maybe you don't want to go to cash and get out of stocks but be a little more selective and defensive in the equities that you put in your portfolio. what does that mean in practical terms? does it mean less th andore health care and consumer durables? and in health care, what kind ol stocks are young about, because that's a big, broad spect se? sure. that's exactly where we're positioned. if you rate all theseectors by what's the most cyclical, what's going to do well when growth is accelerating and what's most likely to doell in a recession, we're somewhere in the middle. we think growth will be around

year.%, 2.5% level this not a high chance of a recession. so we're not intilities which is the most defensive but we're not in industrials which have been the mostnd cyclical the best performers. health care ten ds to olid area of growth. that's been our mantra this year. within health car you have some more highly valued stocks that are tied to eotech and you h the insurers and the medical device companies. we're more conservatively positioned within there, asit w aren tech too. so less cyclical and somewhat more kind of structurally secular higher growth rates in terms of earnings but not going forto thoses that were extraordinarily highly valued hed that have been such outperformers forast several years. >> thank you very much, brian. great to see you. brian nick is with nuvene. >> thank you. d as brian just ntioned, w reports out of china do indeed point to economic chlenges. factory activity in that country fell to its lowest level in three years due to weak global

demand and the lunar new year holiday. growth in disposable income slowed in china as well last he year as cost of living rose. that's resulting in fewer sales of cars, electronics and home appliances. and in vietnam, the summit between presint trump and north korean leader kim jonun came t an abrupt end. a eamon javers rep >> reporter: the table was literally set for lunch in hanoi on thursday but talks between president trump and north korean leader kim jong-un broke down before the two men cld break bread. staffers scrambled to cancel the lunch as well as a planneder signingony in hanoi as the president explained why he walkedth away fro table. >> basically they wanted the sanctions lifted in their entirety, and we couldn't do that. they were willing to denuke a large portion of the areas that we wanted, but we couldn't give up all of the sanctions for

that, so we continue to work and we'll see. tit we had to walk away from that plar suggestion. nt had to walk away from it. >> reporter: presirump insisted that relations between the two countries remain good, despite the failed summit. >> this wasn't a walk away like you get up and walk out. w th very friendly. we shook hand we -- you know, there's a warmth that we have, and i hope that stays. i think it will. but we are - you know, we're positioned to do something very special. this has been going on for many decades. this isn't me. th reporter: the president indicated the n koreans offered to take steps to shut down the enrichment facility where much of the country's e nucleaort is centered, but he said american intelligence is aware of othha facilities the north koreans were not offering to dismantle, and that's why he couldn't agree to lift sanctions. for their part, north korean officials insisted t only asked for partial sanctions relief and called their proposal

as air force one lifted off thursday, hanoi on the future of the nuclear talks remained unclear. the president said it a could be long time before the two men see each other again. for nightly business report, i'm eamon javers in hanoi. it is time to takek a loo at some of today's upgrades and downgrades. toll brothers was downgraded to in line from outperform at everco isi. the analyst cites a slow start to thepring selling ason. the price target is $38. the stock fell 2% to $35.60. the firm also downgradedd.r. horton, k.b. home and poltie group for the same reaso> hp wao underperformuy atof ban america mairl lynerri lynch. hp reported a revenue miss last night. the price target is $19. the stock fell 17% to $19.73. and still ahead, revving up risk. cars are getting bigger and more

.xpensive, and so are all those plan . uber and lyft will reportedly offer cash bonuses to some drivers with the option to use that cash to buy ipo shares when the companies go public. according to "the wall street journal" the longest serving or most active drivers would be it's a rare move that lets individual inves access some of the most anticipated iposn

years. some disturbing news today. pedestrian deaths have h a 28-year high. the governors highway safety association said distracted ivers and distracted pedestrians are contributing to the rise. anotherr is the growing number of suvs on the road, and they are bigger andn heavier t sedans. we also got new data on auto loansay that t is renewing concerns the american consumer may be strugglingll financ the percentage of buyers behind on car payments by a couple of months ticked higher in the fourth quarter. phil lebeau has the deta >> it's getting a little tougher for some car buyers to mthe r monthly payment. the credit firm experion which tracks millions of auto loans says the percentage of borrowers missing payments for more tha two months edged higher at the end of last year. just under 1% of all auto loant.

with the average loan amounting hitting $545 a month, there's concern americans may be gettinx ovnded, taking out bigger auto loans than they can afford. >> the bottom line is the trend is not our friend when you think about the economy is really ro . why are people falling delinquent when we're creating jobs. >> after the best eafour-yo stretch of auto sales the u.s. has ever seen, there's still a healthy appetiteer for new models, especially trucks and suvs. hat's the reason consumers are borrowing more money. those bigger vehicles come with bigger price tags that keep climbings automakers add more technology and features. in fact, the averageun amo paid for a new vehicle has jumped 41 since 2010. th i news not much better when

it comes to used cars. late last heyear, average loan for a used model topped $20,000 for the first time ever. higher prices are not slowing down demand for preowned models. lastr y an estimated 40 million used cars were sold in th united states, and that number is expected to move slightly higher this year. phil lebeau, "ghtly business report," chicago. the world's largest brewer is focused on drinksith less alcohol. that's where we begin tonight's market focus.ay anheuser-busch sales with beers with lower or no alcohol grew 8%. the company plans to grow that figure to 20% by 2025. that demand helps offset a declinen sales of its flagship bud and bud light beers its most recent quarter. shares of bud rose 5% to 78.16. struggling retailer j.c. penney reported better-than-expected earnings and revenue.

the company was able to reduce the glut of unsold inventory. as part of itsturn-arounplan, it will close 18 stores this year and shut 9 of its home and furniture locations. j.c. penney surged more than 22% $1.52. horiz s pharmad that it had positive test results for a drug designed to tereat thyroid disease. patients showed improvement compared to less than 10% with a placebo. if approved by the fdaru the will be one of the first on the market to treat the disease. horizon's ceo said the results are >>significant. his is a great day for patients with thyroid eye disease. if you look at this disease, it typically occurs where patients' eyes begin to bulge due to inflammation causing it difficult for them to close their eyelids, they get dry eyes. if you ask them, hey say closing their eyes is like rubbing sand paper over their

eyelids. >> the news sent shares soaring, up nearly 33% to $29.01. the drug maker bristol myers squib is coming under increasing opposion to i proposed $74 billion takeover of the biotech compan celgene. starboard value called the potential dealqu e, poorly conceived and ill advised, end quote. just a day after investment firm wellington management criticized it as too risky and expensive. but bristol defended the deal saying it would create significort benefits shareholders. shares were up more than 1% to 1.66. 3.12.ne was down 9% at california's largest utility, pg&e, took a $10.5 billion charge linked to last year's deadly camp fire and says there quote, substantial doubt over its prospects as a going concern in a filing. it said it wouldn't be able to provide operating earnings iidance for the year given the

uncertainty ove liabilities. the company filed for bankruptcy last month. pg&e fell more than 4% to $17.03. nordstrom reported better-than-expected earnings but revenuetl as a l light. the retailer noted a doub-digit rise in digital sales and plans to open new stores this year. investors did like what heard, sending the stock up in initial after-hours trading. and the gap pns to split itself into two independent publicly traded companies with old navy becoming a stand-alone firm. the other company, which is yet to be named, will consist of the gap brand, athleta and the banana republic brand. the retailer says the split will allow the companies to have separate strategies. that sent the stock sharply higher in initial after-hours trading. > youtube is disabling comments on videos with minors following reports of anctive pedophile network in the comments section. youtube outlined its strategy to

combat the issue in a blog post. the company will also launchne tool that it believes will be more effective at identifying d removing predatory comments. a federal trade commission h investigatio led to its first-ever settlement related to fake online reviews. the ancy alleg that a third party was paid to post false reviews of a supplement product on amazon. the ftc says that when a company buys fake reviews to inflate its amon ratings, it hurts both shoppers and companies that play by the rules.on am said that it is pleased the ftc is taking action. but a recent study shows that the practice is widespread. 30% of amazon reviews are fake or unreliable, according to the study. 52% of p reviewsted on walmart.com are, quote, inauthentic andun liable. other studies show the problem could be even worse. so, what can companies do, like amazon, to crack down on

faken reviews their websites? joining us to talk about that is eric gordon, arofessor with the university of michigan's ross school of business. welcome. welcome back, eric, good to see you as always. what can companies -- >> hi, sue. >> what can companies d to combat this? they obviously need to do sothing given the percentages that we just cited here. what can they do? >> so companies like amazon have amazing datac analy capabilities. so far they used it mostly to generate data toonvince companies to buy ads on amazon. they need t divert some of that money and turn more of their atteion to real-time data analytics to spot the patterns, the predictable patterns that indicate that these reviews are. fa for example, typical fake review. it's great, five star that's with no explanation about why it's great. to the amazons, the walmarts,

they have to inv more of their expertise into cleaning this up. >> so is what's going on here, professor, the idea company that has a product, a diet supplement or somethingse is actually paying individuals to post these reviews and write up and submit them, thereby inflating their rati, whichrives in more business, which helps not only the seller of the product, but it also helps the online company, bet walma or amazon? >> 'syes. th exactly what's going on. much to the surprise of most of us. so the whole premise for most of us is if we read a review, we think it's from somebody like us. we think it's not an ad and, therefore, we trust it. so it's sneaky, but it's very we ul. it influences how high up a product is in the first screen that you see so you don't have to scroll down and influences us

to think, wow, this must be really esgood. folks really liked it. >> so the company, say amazon or tlmart, shouldy be held responsible for those reviews, especially when ite concerns m a diet supplement or something else that could affect people's health? >> you know, tt's a tricky thing, sue, because if we hold them responsible for everything there,no i don't how anybody could humanly do this. but i think t they have rise to a higher standard. they have to say, well, it's just as important to clean up these fake ads as it is to go out and sell the ads. >> nice to see you again. eric gordon with the university of michigan's ross school of business. thanks. and coming up, why some are in for a surprise when they file their taxe

there has been a lot of talk recently about smaller refunds this tax filing season, but today the treasury secretary said they are starting to rebound. >> taxfu s are up 17% week over week. that basically getss to the same level as last year. and i would just eemphasize,n if people had perfectly done their withholding, andhi i withholding is complicated, we encourage people to go to the withholding calculator people really should be focused on they're paying lower taxes. those lower taxes is money back into the economy and that's why we have the economic growth we do. >> and it was tt issue of not changi paycheck withholdings that caught many by surprise when they went to file their taxes. sharon epperson has more from harrington park, new jerse

>> eat a little something because we're going out tonight. >> reporter: 63-year-old dzhokharly and his wife, cheryl, were always happy ton break eve on their tax refunding. they never had to write a big check. after the tax overhaul, joe sought the help of his taxad sor who delivered bad news. >> we are going to owe more this year than prior years. >> reporter: nearly $4,000 more. his reaction. >> dismayed, to say the least. >> reporter: the t foundation estimates 80% of filers paid less because of the tax cuts and jobs act. on5% saw their taxes go up. still, many people are surprised when they d their taxes. finding out they're getti smaller refunds or they owe. one reason that's happening, under the new tax code, withholding tables changed. companies lowered themount of federal taxes taken out of employees' paychecks, giving them more take-home pay.

maybe too much more. >> unless you went that extra step and said, okay, but what are all the other changes d goi to me as a taxpayer, what deductions am i going to se, at is my tax situation going to look like, maybe that decrease in withholding shouldn't have occurred. >> reporter: last year the irs urged taxpayers to checkwi fedel holding amounts on their payches. onetudy found only 16% did. 't paying ny wer enough in federal taxes all year long, which is now impacting the amount of theirrefund. the new tax law also capped the local on for state and taxes. that's had a big impact on residents in high-tax states. >> thatnte section is limited now to $10,000, where in the past that could have been , 30,40, $50,000 for some people. >> reporter: with other tax breaks limited or eliminated, millions of taxpayers are finding themselves in an unfamiliar situation, taking thd standauction instead of

itemizing. which may raise their tax bill. it did for the carlys, so now they're planning how to manage their 2019 taxes. >> one thing we have done is try to put more into a 401(k) to have a positiveax impact. >> reporter: making more retirement plan contributions may reduce their taxable income and their next tax bill. for "nightly business report," i'm sharon eppetoon, harri park, new jersey. >> and that is "nightly business report" tonight. i'm sue herera. thanksor joining us. and thanks from me as well. i'm tyler mathisen. have a great evening, everybody, and we'll se

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