>> announcer: this is "nightly business report" with bi economic puzzle. americans are earni more money, but they're not spending it. and se economists arerying to figure out why. change of plans. amazon's big push to expand may not be as clear cut as it once seemed. sidewaysdrift. if you think the rally is about to slow, our market monitor h some stocks he says are winners, no matter what. those stories and me tonight on "nightly business report" for good evening, everyone. welcome. bill griffeth is off tonight. march is coming in with a roar. it wasn't a huge rise today, but enough t keep the mood upbeat. the s&p 500 closed above a key psychological level for the

first time in months. today's action extends the bes two-month start to a year for the dow since 1987. the blue chip d index rose 26 points to 26,026. the nasdaq added 62 and the s&p 500 was up 19. the dow snapped nine straigh weeks o gains while the nasdaq rose for its tenth consecutive week. investors spent much of thr dayg to make heads or tails out of the latest economic reports, which showe something you don't often see. steve liesn explai. >> history shows when americans have more money in their pockets, they tending to spend it. a report issued friday which had been delayed b the government shutdown showed that incomes in 1%.ember surged a healthy good news right in the heart of the solidayhopping season. wages were up a strong 0.5%, whh should have sent americans to the mall with some spending abandon, but they didn't go, at least according to the latt

data. consumer spending fell by half a point, the worst decembe decline since the financial crisis. with earnings ahead of savings, the savings rate shot up, hitting 7.6% of disposable income, the most in three years. did americans suddenly turn frugal? unlikely. economists point to a series of one-off factors that boosted income, including farm subsidies and a one-time ecial multi billion dollar dividend. and there'sha skepticism consumer spending was really wat bad. >> the governmen under partial shutdown so we don't know if that is messed up numbrs. we'll eit see those retail sales number revised andve an stronger fourth quarter or get measured in january. >> it's been a good rule of thumb when americans have more money in their pockets, they spend more. december was probably an xception to that rule, not a repeal. for "nightly business report," i'm steve liesman. auto sales had once been hot and af that spending was an

important part of economic activity. but it appears as if demand may be stalling out. february sal dropped compared to the same time last year. cline, buta huge enough to have automakers and dealers asking if sales of new cars and trucks is cooling off. re's phil lebeau. americans appr to be tapping the brakes when it comes to buying now cars and trucks. febrry sales slowed down compared to the same time a year ago, with nissan, toyota and fiat chrysler all reporting lower sales. overall demand for new cars and trucks is still relatively solid. largely because of several key factors. r starters, consumer confidence remains high, and the country continues to add jobs at a healthy clip. mix in cheap gas with a surging stock market and you see why ny americans are still comfortable buying a new car or truck. will auto sales top 17 million vehicles for a fifth straight

year? well, it's too early to tell, since january and february are low vume months. spring is when auto sales traditionally kick into a higher gear, so within the next several weeks, we should have a prett i goa if automakers and auto dealers are expecting another year of solid sales. phil lebeau, "nightly business > we also learned today that the manufacturing sector grew at a slowerace infebruary. according to the institute for supply management, new orders, production and employment all slipped. it that weak data that caught the attention of the energy market, creating concerns over the potential forni wea global demand for oil. that sent the price of domestic crude lower by . optimism over trade with daina also helped give stocks a lift this after a bloomberg report stated that u.s. officials a getting a final agreement ready for president trump and chinese presidt to sign a bit later

this month. eunice yoon is in beijihe >> reporter: march 1st tariff deadline is delayed and president trump and administration are sounding largely bullish that a trade deal can be done. at his press conference thursday in vietnam, president trump said the u.s. and china negotiators were on the w to doing something special. white house economic advisor larry kudlowold cnbc that the two sides were on the verge of an htoric deal, and treasury secretary steven mnuchin said the document is 150ages and very detailed. the buzz is that the u.s. side isoping to have the agreement ready so that president trump down esident xi can s for a summit as early as mid-march. xi ween now and any trum summit president trump will be occupied with the national peoples congress. huawei's cfo is scheduled to have her extradition hearing next week. president trump has hinted that he could include huawei in the

trade deal. at the same time, president hanoi that he could walk away from any deal, including one with the chinese. no official comment from china on his remarks. for "nightly business report," i'm eunice yoo. hat eunice just mentioned extradition hearing of huawei's cfo. today canada said the u.s. has presented enough evidence to proceed with that hearing. u.s. prosecutors have accused the executive of violating u.s. sanctions on iran. according to reuters, china says it is utterly dissatisfied with and opposes canada's decision to allow the extradition case to proceed. to> the next budget battle to rattle inv is fast approaching and that is debate over the debt ceiling. threasury will begin using extraordinary measures to pay its debts, buying time for congress to t. ylan mui has more from washington. >> reporter: the nat debt stands at $22 trillion.

starting tomorrow, the treasury department can't borrow any more to pay the nation's bills. that's because the debt limit comes back into force after congress suspended it two years o. they'll have to act again or risk defaulting on our debt. no one k exactly when treasury will run out of cash. the cbo projects it could happen late this fiscal yearr early in the next one. in a letter to congress, trsury secretary steven mnuchin said honoring the full faith and credit of the united stes is a critical commitment, and he urged congress to raise the debt limit. but those negotiations have yet to begin in earnest on capitol hill. >> i think on a bipartisan level we should sit down together and find a way that we can stop the spending behavior of this vernment and actually curb where we could pay off our debt. >> reporter: to make this even complicated, the deadline for the debt ceiling is smack in the middle of two other big fiscal fights. the deadline to fund the tvernment and prevent another shutdown and deadline for avoiding automatic spending cuts

that would chop $125 billionut of the federal budget. >> unless we get a budget deal, sequestration returns in fiscal year 2020. that would mean steep cuts inha programs invest in america and support working families. >> reporter: for now, the cck is ticking. for "nightly business report," i'm . ook at is time to take a some of today's upgrades and downgrades. american airlines and delta downgraded to hold from buy at deutsche bank. the analyst cites global economic headwinds. the price target for american is $40 and $55 for delta. american fell more than 2., delta was down more than 1%. rtz was upgraded to equal weight from underweight at barclays. the analyst cites strength in rental car prices. the price target is $18. the sto j closedt above that level to $19.35. a number of brokerages increased their price targets on

thega including an advisory group which has a $40 target on that stock. this follows the decision by gap to split the company and separate out old navy, something we told you about yesterday. they rate the stock an ou rerform. share 16% to $29.51. , will gap's decision to separate from its better erforming businesses bec trend setter for the other companies to follow suit on wall street? joinin us to talkbout that is mike bailey, director of research with fbb capital mirtners. welcome, , nice to have you here. >> thanks for having me back. >> you make the p you split up the businesses, the two companies or in this case es several compaan really focus on their separate businesses, both the pluses and the minuses. >> absolutely. i think that's a really good thing about spin-offs. you may have one company with a nch of different businesses thrown together. the companies figure out that it sometimes can be kind of a mess

and they say let's split up and focus. i think in some ways that helps t terms of the management's time. new ceos can focus and get their projects done. additionally you think about money. if you've got a big umbrella and a bunch of companieser you've only got so much money to sprinkle around. if you've got thatou separated can do that in a better way, a little more smartly. so there are a couple of things we think that helps as companies break up. >> so do you think this will become a trend on wall street? if so, are there companies that you think are likely >> in terms of thinking about spin-offs, these things, we seen ffs all the time. sometimes they're more in the headlines, sometimes they'll go away for a littlewhile. we're hearing a little bit more about spin-offs these days but don't know that i'd call it a major trendi. we see mergers happening all the time. bristol myers is buying celgene e're seeing both sides of it. sp spin-offs will likely continue.

it's tough to say if you're going to see a big wave of them. one factor that could lead to more spin-offs, if you look at interest rates, if interest rates were to move up a lot, that would make i really expensive for companies to do big merger deals and that might slow the mergers down and you might see more spin-offs afterwards. there's a few things happening but you'll probably see more but we don't expect a massive wave coming. >> does it pertain more toreas that are struggling? for instance, we know that the gap was struggling for ae. wh it's in the retail sector. retail is tou right now. is that type of atmosphere when a company is struggling in a difficult niche? is that when you tending toee re spin-offs or does it not apply? >> they're all over the map. you can see sometimes a company where basically the entire business is allenged. you look at gap, you've got half the business or the gap and banana republic definitely struggling. old navy is doing better so you'veot a mix there. some of the best spin-offs we've seen is where you've got an

der,ature business that's doing fine, doing okay, and they have a really great exciting asset that's buried and they want to release that and let it go off on its own. ini don't think we're s that in the case of gap. there's otheres apparel compa we prefer as opposed to it. so i think they're going t have somechallenges. >> mike, thank you so much. >> thank you. >> mike bailey with fbb capital partners. stil speaking of splitting up, that same theme extends to ama it is a dma worth of an amazon prime video. new yorky jilted amazon tries to win the company back as its marriage to virginia is on the rocks. meantime amazon's own expansion plans are a mystery. i'm scott cohn. we'll have the story coming 3w4r57

. the gross reindust got a bit of a surprise today. amazon is reportedly making a big push into that business with plans to open a dozen food stores in several cities. and you can see when theews ossed midday. kroger shares fell sharply. deidre bosa has more on what amazon may be considering. reporter: amazon may be getting deeper into the grocery business. a$650 billion market in the s. the e-commerce giant is planng to launch a new chain ofry gro stores, adding to its portfolio whole food the report says that amazon is anning dozens of these stores across the country and the first will open in los angeles as early as 2019. amazon has been experimenting with online groceries for over a

decade. es 2017 purch of whole foods was a major step into the ick-and-mortar format and it has fther expanded its physical footprint with amazon go, a cashierless concept. shares of food retailers like kroger, target and walmart, they all moved lower on the news and the threat of amazon pushing further on their territories. whole foods pricing reputation has led to the nickname whole paycheck. amazon has beens lowering price and offering discounts to prime members, but some customers say that it hasn't been enough. a report says that the new stores are not designed t compete directly with whole foods and they offer a wider variety of products. deidresa san francisco. when it comes to amazon, new york isn't u giving on its second headquarters project despite the company's decision twooeeks that it is pulling out of a deal in queens.e, meanwhrotests are growing in arlington, virginia, home to

another part of the project. in the balance is amazon'sit al expansion plans, which no longer appear as clear-cut as they onceed se. scott cohn reports from aey amazon facility in silicon . >> azon needs torow and it needs people. for now they're spread across 17 keos locations athe country, like this research campus where they develop new devices the hq2 was supposed to let amazon expand its footprint iny. big >> this is the largest economic development initiative that has ever beenone by the city or the state. >> it hasn't worked out that way.ad first amazon to split the project between new york and virginia. no one location had enough workers. then protests in new york overin se -- over incentives and housing. amazon pulled out, emboldening activists in virginia. >> david hit goliath and goliath

ran out of new york. and so down here weight be david or a lot of little davids and we think we've got a chance. >> now new york sees an opening to win amazon back. governor cuomo has spoken t jeff bezos personally and dozens of community leaders have signed on to an open letter in "the new york times." pire oons are strong in new rk, sometimes strident. we consider it part of the new york charm. >> the fundamental reasons why amazon wanted to be here remain the same. it's a spectacular oppldtunity to borld class headquarters in a fantastic neighborhood. its ownnia is doi damage control with amazon. >> we're going to find that magic space where our interests align with their values, with their potential path for growth. >> there is no sign that any o this is changing amazon's mind. for now the companyo plans put those 25,000 workers who were going to new york in its existing facilitie like this one. but that in itself marks a major oscaling back a project that

once held an entire continent transfixed. for "nightly business report," scott cohn, sunnyvale, california. walgreens sh caught a chill and that's where we begin tonight's market focus.po the dow cnt said its outlook is being clouded by drug reimbursement headwinds as well as pressure from lower prices for gen medicines. but oned analyst sai he's encouraged by management's move to cut costs. nonetheless, the stock more than 6% to $66.61, ming it the worst performing stock in the dow today. customers spent more on sneakers at foot locker, hping that company report strong sales in its most recent quarter. the retailer easily topped wall street'sim earnings ees and says it's looking to further improve its margins. alsolans to close 165 stores this year. the shares sprinted ahead, up 6% to $63.57. helped by strong advertising

revenue during election season. tribune is getting acquired by nexstar media group for more than $4 billion. shares roselightly to $46.42. masco willxplore strategic alternatives for its cabinet reanddow businesses. it includes kraftmaid and meryl lab.o they plan complete the review by june. it was up 6.5% t$4 a share. and puma biotech beat earnings andevenue estimates. the drug company also issued better-than-expected year guidance. the strong results were helped by sales of its breast cancer w drug, whie up more than 200% since last year. the shares rose nearly 40% to finish at $38.93. and it's time now for ourly market monitor, who likes companies, he says should hold up if we get a pullback or a

ys market. joining us is bill stone, chief investment officer with avalon advisers. od to see you again, bill, welcome back. >> thank you. >> let's start with your first pick, walt disneycompanies. i have to say i was there last week. the parks definitely have pricing power and they were really, rllycrowded. >> so you really played into it. the themes are really o is that people really are valuing experiences over goods so that's it, right, going to the parks. the second one, which i don't think peoe think about as much, is real eat cord-cutting idea. so disney h the content to go direct to the consumer over the long run. i think tt's where things go. so obviously everyone thinks about the disney movies, et cetera, but also think about abc, thi about espn. they're also in the process of acquiring some of those properties from 21st century fox. so they are goingbe in a position to really offer that direct. >> and they offer a dividend as well. >> yeah. so i think it's a rinlly intere -- you know, there's some worries about that

acquisition, so i think it's a really interesting piece going forward. >> okay. eli lilly, they spun off their animal health business but you say they have a diversified set of drugs and very strong one as well. >> yes. obviously anoth theme, we know the graying of america, frankly obe, thereg of the is -- you know, it's a guarantee we're going to have more demand fordrugs. the good thing to know about eli lilly is they have very little patent expirations coming up here soon. the second part is even some of their drugs when they come off the patent are very difficult to take generic because the insulins are very hard to recreate. the last piece is they ha very good pipeline, particularly they have a couple cancer drugs. again, you have to get through the testing and get through the fda, but if they do, there's some real blockbusterupside to those. >> now, the last pick is exxonmobil, and it' been an underperformer if you value it against theom&p for time

now. why do you like that stock? >> i think one thing s energ as a whole has just been a dog for years. so what has changed, right? i think what has reallyhanged is particularly for an exxonmobil, and i'll talkbout them in particular, they have changed their business to make more money at aower oil price. they also focused on actually aking money rather than just producing oil. and that obviously as a shareholder means a lot. lastly, that also means that they can pay aery large dividend. so you're talking a more than 4%, like 4.2% dividend yield which i think will grow over time. >> bill ste, thank you s much. >> thank you. >> w avalon advisersto ead more head to our website, nbr.com. coming up, the space race is ready for liftoff. >> from launch pad 39a at the kenned space center, i'm morgan brennan. it is a key test launch for spacex but also for america. we've got that storynioming up ontly bu" >

ere's a look at what to watch for next week. on tuesday, nachina's nat peoples congress gets under way. investors will be looking for any economic policy changes. on tsdnesday, target rep earnings, which will provide a fresh look into the state of retail and the of the consumer. and on friday, the government releasesth its mon employment t report, at's what to watch for next week. wells fargo officials have reached a record settlement with areholders over the bank's fake account scandal. the deals requi spinsurers for current and former executives to pay $240 million to the bank. it resolves claims thates executreached their fiduciary duties by failing to

stop the creation of the bogus accounts which were made without customer authorization. the officials denied any wrongdoing. the ride-hailing company lyft has filed to go public. the firm is looking t much as $100 million in its initial public offering, though that amounng could be changed based on investor demand. it will list on the nasdaq under the ticker symbol ft it reported it lost more than $900 million last year on more than $2 billion in revenue. lyft's ipo is expected to be among the first of a wave of public offerings this year. and finally tonight, atory at is literally out of this world. spacex is readying for a launch that could usher in a new era of space exploration. morgan brennan is at the kennedy space center in florida. >> reporter: it's a critical test tha m wouldk a major milestone for commercial space

flight and for america. spacex's demo 1 launch for nasa. if all goes as planned, it will be the fst time a commercially built spacecraft will launch into space, visit the international space station and do so for the gove dment. >> we'ng things that are really risky that most normal do.an beings don't and the designs and at complexity of what we have to do, we're strapping human beings on top of rockets with millions of pounds of thrust and hurling into orbit to go attach to a space station to do world-cutting research. that isn't >>trivial. eporter: the last time astronauts launched from american soil was from this very same launch pad, 39a, in 2011. sinc the space shuttle progr ended, the u.s. has not had the capability to send humans int orbit. instead, we have paid large sums to the russians to do it for us. to address that, nasa awarded two contracts, one to spacex to

develop the capsule for $2.5 billion. the other to boeing for just over $4ts billion for cst 100 starliner. spacex and boeing own and operate the capsules and nasa will lease them for missions it's a different business model than the and one that speaks to how crucial the private sector has become in is >> space flight is basically the core mission of spacex so we're really excited to do this. iere's nothing moreortant for us than this endeavor. we really appreciate the opportunity from nasa to actually do this and have a chance to fly up tthestation. >> reporter: this mission won't have people on board, but spacex is the first to get this far in the testing process. boeing is expected to do its unmanned fght next month. it all means the spacecraft could be carrying astronauts as soon as this summer.

t first, things need to go right tonight. spacex will launch its capsule with a falcon 9 rocket as it begins a week-long journey to the space station and back. tly business report," i'm morgan brennan at the kennedy space center in florida. here's a look at the numbers on wall street. at the close the dow rose 110 points, the nasdaq added62, s&p 500 was up 19. the dow snapped nine straight weeks of gains while the nasdaq rose for its tenth consecutive and that is "nightly business report" for tonight. i'm sue herera. th have a great weekend. we'll see

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