♪ us >> this is "nightiness report" with sue herera andil griffith. stocks areme pumled as trade tensions escalate. investors understand what's going to happent'here, very difficult. the markets obviously repricing the trade tensions between china and the united states. th dow off by 418 points. it is a 2% day, let's call it across the bdord. >> all 3stocks are in the low. >> we hit 640 points. >> the dow closing lore at 472 points and the nasdaq and the s&p. worst day for the dow since bac in january. >> tonight, what might happen, your at it beicould mean for

mono pep it's "nightly business report." for tuesday, may 7th. good evening, everyone, and welcome. certainty has gripped the stock market. uncertainty over tariff, the risk of an all-out trade war with china and the potential impact on global growth. stocks dropped at the opening bell andhey kept drifting lower until the close. the sell-off wasroad. all 11 s&p sectors were down, all 30 dow scks finished in the red. here are the closing numonrs. the dow industrial average fell 473 points to close below 26,000. the nasdaq slid 159 and the s&p 500 was down 48. bob pisani has more ontoday's deep declines. >> trade tensions were once again top of mind for wall street, and stocks came underau pressure b steve mnuchin said the chinese were reneging, and that's woken up investors

that the odds of a tariff increase are much worse than thk s were expecting and even with the china vicend premier it is still off historic highs and they remain positive around four key factors and first the federaleserve's policy pivot. they don't expect rates to be raised by the fed again at all this year, a trade dl is getting done. ma could happen and before the end of june and china's stimulus program that creates the perception that china's bottom. if one of those four goes away, that might force investors to lower their global growth estimates to lower their earnings estimates for 2019 and 2020. many are worrying about the knock-on effects of the trade farce andanonagra none of them have direct revenue

exposure in china, so why are they down? because the global growth picture is looking a little bleaker the longer that the u.s. china trade wars keep up. so the market might gain 100 points at the s&p if there is a trade deal and if there is no deal at all with much higher tariffs, the mar dts couldp another 300 points very quickly. my point is the risk is to the du down side, not the upside. for "nightly busines report," i'm bob pisani at the new york stock exchlege. >> meanw china officials have been walking a fine line as they try to get a deal done they are also very h aware oow it may be perceived in beijing and that is where we find eunice yun tonight. ♪ the chinese ministry confirmed today that will attend talks on thursday and friday with robert lighthizer a treasury secretary stevenmnuc c cern that the

chinese vice premier along with the delegationouldn't appear in the trade talks. in a strongly worded daily said the u n. should even think about concessions. no matter how you ask, you will not take any step back. the hard line co insides with what the chine said repeatedly that they're willing to negotiate, but not with a gun to their head and they're mindful of the perception back home. they want to make sure thatij g doesn't appear as though it's being cowed by washington. so thatoesn't necessarily bode well for the resolution this week. for "nightly business report" i'm eunice n in beijing. yesterday we talked about trade tensions and what theyor could mean stocks, bonds and commodities. tonight, we're taking a look at a sector that potentially could get hit quite hard and that is

the retail sector. joining us tonight is chaie o'shea, vice president and retail analyst with moody's investor service, welco g back, alwad to see you. thank you. >> so we have seen supply disruptions before. the por a of leles strike comes to mind. given that background, how well positioned do you think some of the retailers are if,de , this trade war escalates? >> i'm going to sound like a broken record, but those guys that are performing well and the bigger ones, tes shouldn't h an impact at all. they've already been dealing as you said, the port inwemploy a. strike it disrunned supply chains formaller retailers. if you're a big retrailer and one of the advantages is you have money and you've adapted the supply chain to dealith most any potential outcome like this one. >> who are we talking about? >> walma cuts and go target and any of the big guys and the big investment g cdepanies that we cover are really well insulated from this. the risk is at the lower end of

lee ratings shere things are already acute for the smaller, highly leveraged retailers and this is the last thing they need is some sort of a tra issue. >> let's slice it another way. what about apparel or furniture? >> the things that you make that are made in china and brought back again? what about those sectors a lot of that stuff has moved into other markets. we've seen vietnam with furniture. just a ecdote. i was in a restoration hardware store, a lot of their furniture has made in vietnam labels on the bac o a lotthe manufacturers been moving away from china for a riety of reasons, one for tariffs and another one is a market andan they diversity and diversification. that's exactly what they need. you cannot put all your eggs in oneasket from a supply chain >>perspective. f indeed we don't get a deal this week, these trade talks have been going for some time

now. o we do come that impasse come friday and the 25% tariff goes in. the big retailers may be able to survive that for a while. >> right. >> but this has been a very long process. how long do theically have? >> it's a really good questn. the bigger guys can ride this out. i wouldn't worry about them. one of the stories that ran on your network is potential ripple effects is consumers have to pay more about what other sectors could get hit andhat's an ope question and the timeframe is really important here. we're in the midst of negotiations and i'm not going to presume to know what's going on in that room, but this could be a very short-lived tariff for all we know. c ld also last for an awfully long time. challenge that the for the retailers is we can't overreact to this. we can't all of audden say, oh, my gosh we have to completely supply our supply

chainnd the better retailers are positioned to do that. >> i think we'll be seeing a lot of thesech charles. lie o'shea with moody's investor service. >> agriculture is another importantco sector of themy watching the latest round of talks very closely. farmers say that trade uncertainty is not helping them and some fear that they're getting caught in the political crosshairs of washington. on mui has that tonight. >> it's planting season on gregi mint's farm southwestern georgia. the soybeans and corn arere y in the ground, cotton is a work in progress and the seeds of aha harvest the hopes can year. a rough >> we need a super harvest. >> that's because like farmersi like have become collateral damage in politicaltl bat happening hundred of miles away in the nation's capital. >> first, there is a trade war with china, and the meeting between topne c and u.s. officials in washington this week. >> farmers feaea that beijing won't lift tariffs on

american soybeans and grains tumbled to the lowest level in more than four decades. >> we need to see some type of trade agreement worked out and the pricersot helping us at all. on top of h trade troubles, mint has been waiting for months for federal disasterelief and his farm suffered a direct hit from hurricane michael back in october. his cotton harvest stock, blown away a his equipme shed and farm shop are still in shambling and there's been little hel om uncle sam. congress is proposing li b in direct aid and that's been caught up in a partisan fight over release with puerto rico. >> it's put t down get to the end zone and let's get through this. no more pitical games here, folks, we've got people back home that need this package, but wn on the farm, mint doesn't expect answers any time soon. >> think you get to the point

where you're thinking i don't think we're going to see anything outf it. so it may be even pas frustration and more -- i guess hopeless. >> for "nightly business report," i'm elon mui in washington. some of today's market angst may have also come from the vice chair of the federal reserve. rich cdrita said that some of the softness in inflation can be explained by temrary factors. that's exactly what the fed chief said last week and what the market didn't seem to like. clarita said he was comfortable with monetary policy as is and pushed back against speculation that the fed would cut interest rates to boost inflation. >> here's a bright spot, though. the number of job openings increased in mar. according to a new labor market survey there are nowil 7.5on job openings and 1.3 million more available jobs tn people. vacancies increased the most in the construction and trssportation industries well as in the real estate

sector. >> it is time to take ak lt some of today's upgrades and downgrades. boeing was downgraded to equal weight to overweht at barclays. the analyst expects the recovery of the 737 max production to take longer than expected. the price target is $367. the stocks fell to 357.23. lululemon was downgraded from . underperfo the company cites the company's new management team and international profitability and the price target is $159 and lulu lemon fell with the rest of the market and it was down 2% to 173.98. >> beyond meat got its first buy rating and the stock was initiated with an outperform rating in new coverage. the analyst cit the alternative of the meat market to $7 billion in th next decade. the stock was up 6% to $79.17. record price tag, a new drug

is about to go on sale for $2 million. if it provides a cure is it worth it? ♪ ♪ ♪ we often talk about the rising pri rising price of prescription drugs. tonight a new drug is expected to hit the market soon with the biggest price tag er. meg terre has more. >> the debate over the price of constant mere pressure pharmaceutical stocks, and it's about to take on a whole new dimension with a drug expected tbe approved by the fda this month. it's a medicine for a rare and devastating childhood disease called spinal muscular atrophy

and it could cost as much as $2 million. many on wall street argues it's a price that makes sense. >> this new gene therapy drug which could cost $2 million or more is a life-ving therapy. these babies and these infants would be eheentially n in a year and now they're growing up to possibly be normal children living a normal's life. pretty impressive. novartis one of the new group of immediates that could improve if not cure the disease. they make up for ones that cause e. there's one on the market in th. u. spark therapeutics which treats a rare formf blindness. it costs $850,000. the analyst micha yee has many more are on the horizon. >> i could see five or ten new gene therapy drugs coming out n over theext five years, and i think wre going see a lot more. >> though their price tags are large. he says gene therapies could be

bargain, compared to medicines the patients have tohe take. >> existing therapy could cause tens of million be they have to be paid and used every year for the rest of their life and the total sum of the patients and you could argue that's that it's a one-time patient, and such a hefty pri tag would only dial up the debate. for "nightly busreess rt" i'm meg terrell. >> let's turn to chris otmecons r instance of the high cost of drugs in the u.s. he is research analyst at raymond james. thanks for joining us tonight. >> thanks for having me. >> an insuran industry analyst said the other day that if this drug, even if it's effective, it's useless if nobody can afford it. how do you read this situation? >> yeah, i think there's n

question that a drug in the pharmacy is no use to expect and when you have babies that pass away without this dr, the upside is very encouraging for what we see, but there has to be a way to find a good balance. i think that most insurers are veryov likely to a drug like this because of the positive impact that grew see, and i think it's really difficult to see novartis from a political standpoint, thenality to pay for the child to die, and we hope a good person, perspective, and the company will step in to be that those that need it most will be able to have access to the drug because they don't want congress and the administration to step in, and to try and lower the price ask interfere in the market market. yes, if it comes into $2 million and the $2 million price tag is

eye-popping at first and otherh therapiesere administered over the life of the patient could end up cover thing more and it's j not the initial sticker shoc >> i think that's fair and in this instance, it's 18 months andt doesn't have a lifetime of taking drugs and this is a life or death product for these individuals. and what you've sn in d.c. is most politicians are not looking at the initial cost of the drug even if it's really high with the exception obernie sanders. that's a bait whether or not are increased afr drugs aread alon the market. what's the reason, for the 6 to $7% and in thisinstance it's curing the disease for less than a thousand kids that die every year and that's a big deal. >> very quickly. what about the possibilityive o

heaper versions. >> we saw the president in the oval office meeting we wanted hhs to look at drug importation and this is a big deal andk i don't thhe market is fully appreciating is the idea that administration could allow at least on an limited cheaper drugs from canada, import or europe and it's something that we need to be watching in the weeks and month ahead. >> which we will do. chris mecum joining us today. >> they're waitingn the company's turnaround plan and that's where we begin tonight's market focus. the pharmaceutical company reported lore than expected rail and a cle view of the potential revamp of the company's strategy which investors wer hoping to hear. shares lost nearly quarter of 24% and five 3 and its worst

bads in strong sales on botox which is still its most profitable product. the company also raised its full year guidance. should investors have called for the ceo roleso be split and allergan to share assets and it fell 4% to $141.36. regeneron's earnings fell short of expectations as resultshuere by a surge in expenses and the pressure to keep drug costs low. the company did cite new treatments as future growth drivers. still, the shares were off 6% to 322.40. dean foods reported weak sales as it continues to struggle with lower consumer demand an prices are falling as lower people keep drinking milk and walmart hav owned their own dairy operations and the nation's biggest dairy producer also said it was cutting costs as have, and that's noorly 5% to $1.76.

ashlgs cr is exploring its options including a psible sale of the company after receiving interest from abunnamed bare. bloomberg says there is no indication of a pential sale price. shares rose 9% to 31.08 a 52-week high. after the bell electronic arts beat analyst estimates helped in part by the launch of the apex legends title, a competitor to the wildly popular game called fortnite. ea gave strong guidance f the full year. shares rose in after-hours trading tonight and they did end the regular session down 9 force 92.73 an after the bell, lyft reported its f one since coming public two months ago. the ride sharing company reported a huge loss, but i did make strides in growing its active ridership. lyft also issued guidance above expectations for the current quarter. the stock which has been

struggling since its i'm was vol volatile in the after-hours session to 59.34. with the uber ipo expected in just a few days how do the ride share business models compare deidrebosa with the details. >> lyft and uberatreing each other for riders,rs dri and market share. >> it's very much a iand grab hethe united states where lyft operates right now. we think that only 2% of all passenger miles are currently being travelled on these sheer transportation networks like lyft and we think that will go a lot higher. >> b when it comes to the longer tomorrow they look like very different companies and lyft operates in north america while uber's footprint is from north america, to latin ur america, ee, australia and the middle east and ber's portfolio spans ride sharing,

food delivery and trucking and fine cars. >> both haveew a f important things in common. one of them, huge losses. >> they don't even have fidelity around the idea of profits and they're, you know, i don't want to say i would -- i actually do want to say, they're sort of arrogant about it and we never have to be profitable, but if these guys don't have any fidelity to basic things like earning profits 20 years from now, we have a problem. >> it's not clear which business model if any, would lead either company toof ability, but both are making big bets on self-driving cars which they see as the future of ride sharing and the way to cut costs and the question is i and when that technology will be commercially available andow they deploy it. "nightly business report" deidre bosa. >> they have raised equity from a group of investors. it raised 19 billion dollars.

gm cruze is pushing to launch a taxi service some time this year. >> comingup, what to do now and that's the question investors are asking. a game plan next. ♪ ♪ amazon's futuristist food e called amazon go has opened its first new york city location, butunlike earlier versions of the store where customers simply pick upn item and walk out, this store will accept cash. critics have been saying that cashier-free stores discriminate against consumers who are unbankednd don't have access to credit or debit cards and they respond to become the first city to ban cashless

stores earlier this year. new jersd follo with a statewide ban and similar laws are being considereanin new york in san francisco. after two days of steep declines in the stock market some of you may be feeling a little bit nervous about what's happening, and wondering what to do next. so tim nower is with us, he's here with some advice. he's director of personal finance with bam alliance.e welcback, tim. nice to see you. >> thank you very much. >> it's great to have you here. you know, for our discussion let' o assume that investors have a game plan. how should they react to the two days of volatility that we've seen and maybe more to come? >> l meay this first. if you're invested in the market and you experience these downturns over the course of the past couple of days it's perhaps each natural to feel a sense of xiety. in fact, we learn from the behavior of field economics there is a nameor this.

it's called the endowment effect and the bottom line is what we se in the market hits us twice as hard as the joy we might feel when we gain from marke bucks. so it's perfectly normal for us to feel aense of anxiety, it doesn't mean we should be acting, but we should be >> nobody likes to see the balance in their portfolio g down? >> how do you keep yourself from acting especially if you fear there's more to come on the down side, bring it to from the subconscious it's the consciousness ask that's a willingness to embrace volatility and it's the reaso we have a justifiable reason to a higher return rather than investing in a fdic-insured or savings account.

volatility is a natural part of the market and it's a good sign that you shouldbably have higher expected rates of return longer term, but that bring us the third and final step. it's not that inaction is the only course he. if we see enough movement on the upside or the downside, they perfecesponsible thing to do as an investor is to rebalance that portfolio lde sue s at the beginning we're presuming that someone does have a plan and they do have a portfolio that's designed to grow out into the future and when youee meaningful deviations based on volatility hat's the natural time to do the natural market adjustment and buy low and sell high. >> all right. on that note, tim, appreciate it. >> one of these days we'll have you o when the market's going up. you always help us out. >> sue, thank you. >> tim nower with bam alliance. >> i feel better already and however we did have this kind of oday today. a sell-of trade jitters and the dow was off 273 points an a below 26,000 and the nasdaq was down 159.

technology, of course, o of the hardest hit gripes in the situation involving t trade talks with china and it was down 48 points and of course, we have the trade talks to begin on thursday and the tariffs maybe ing in on friday. >> so that means you need to tunen tomorrow night. that does it for "nightly business report." i'm sue herera. >> i'm bill griffith. sleep well tonight. wel see you tomorrow. ♪ ♪

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