♪ >> announcer: this is "nightly siness report" with s herera and bill griffeth. ♪ >> so close. the s&p 500 finishes just shy of a record. and next week could be a doozy with a fed meeting, are jobs rt and a hea dose of earnings. bargain hunt being. it's hard to do with stocks at losty levels. list of stoe says are worthens a buying. and gaming theame. tonight an investigation into an issue no one wants to talk about in the gaming community, and why it is hurting profits.ri knows sto and moreonight on "nightly business report" for friday, octer 25th. good evening, earn and welcome. bi has the evening off. the stock market flirted with a record to end the wean. the s&p 500 briefly traded above the all-time closing high but

ended the day just shy of that level. the optimis on wall street today driven by.s. china trade and a fresh bash are batch of earnings. the dow jonesus iial average up 152 points to 26958. th nasdaq added 57 and the s&p 500 rose 12. all of the major averages were higher for t t week. and now it's time to look to next week which could determine whether records are broken. bob pisani at the new york stock exchange. >> stocks made another run at record highs come up just short byclose, the s&p riding a three-week win streak. tra trade optimism the number e driver behind the rally after u.s. trade representative robert lighthizer says the u.s. and china made hdway and specific issues appear close to final iedsing some sections of but a couple of other factors helped spur the move higr rst more signs the u.s. consumer going strong. wewe saw that in solid earnings and guide fibrins cdit k

like capital one and vis an second a handful of sni conductor companies at back of newighs intels new beat and good outlook. towering t year rally. the week ahead brimming with market movings kamgtsist and the busiest stretch of earnings season. more from tech titan appears apple abalphabet. color ox and store bks. alibaba and the much buzzed about beyond meat alo with ail giant. federal reserve will meet to decide uponhe fate of u.s. interest rates. the markets expect a quarter-point cut this week. pl the wiley jobs report. economists expec the gm auto strike to shave off a chunk of the gains we would normally see. and plenty of data on tap. gdp. consumer confidence, home sales and manufacturing, a busy bus week as always invesrs watchi closely trade headlines these are the single biggest maet mover as saw in today's session.

for r ghtly business report, i'm bob pisani at the new york stock exchange. >> and if yo a wonder buy i why the dow is not closer to a record, the answer can be found if in three stocks. recent loss ms. boeing, mcdonald's and travelers are holding back the blue kmip index shaving f a few hundred points. so hits turn to david leowitz to talk morebout wh lies ahead next we can. epps the senior equityt strategist ubs wealth management research. nice to see you >> thanks for having me sue. >> i'm already exhausted. there is smuch the market's plate next week. and bob outlined very well for us but if you had to prioritize the event next weekee which are most important to you. ngs. me three t continued information about corporate profits and a we'll w the continuation ofarngs season. we're about halfway done. we have a pretty gd handle on how the earnings season is shaping up but we still want to hear some companies that bob

talked about. and get a final reading on earnings season. theed obvious is very important. look what the fed does mass a big influence on the cost of capital o capital, money, oes haveg what the fed a big influence on the economy. that's going to be very important as well. th i'll be especially looking at the manufacturing sentiment survey. that is a leading indicator for thearkets. d has been our market driver recently. that's going possible important as well. >> what are you expecting to see in that report? iou assumee going tbe looking for further slowdown in he economy and/o manufacturin >> yeah, i think that's exactly i think thehe's been some sentiment that the soft patch that we've been seeing in globam manufacturinht be bottoming a bit. i think that message came through from the earnings reports that we got in the instrial patch. me of the weaker earnings results ened up in stocksg actually mov higher on a

weakak outlook. that's some indication that investors a looking for a bit of a bottoming process in some of that manufacturing data. and that's going to be important to see if its d come through in that survey that comes out next friday. >> if i can tke you b to the fed, the market is expecting a quarter-point cut. bubu the language of the fed chief has been very important lately. what are you expecting to hear from him? >> yeah not only -- i think that's a good point, sue. not only is the cut itself going to be important. but i think the fed is going to be a little bit at potentially a turning pnt, the whi that fed chair powell has beenri characng in is that the cuts they'vey' done -- this wil be the third cut of a quarter point each. haves.een insurance c trying to make sure the economy brexit, the slowdown in manufacturing. and it m mht be possible that the fed is goi to signal that they've taken enough insurance cuts for now and m stop and

pause a bit and be more data dependent and seeingf the data comes in as they expect they may not have to cut further. that's a keen focus for the markets. >> david, we'll leave it there. thanks for yourerspective. vid lefkowitz with ubsub wealth nagement research. there are reports tonight the united auto worker union ratified the agreement with general motors. the newour-ar contract ends the 40 had-day strike. some of the 48,000 members are expectedo return to work tomorrow. the worker stoppage is estimated to have cost the auto maker more than $2 billion. and the uaw has chosen ford as the mext autoer to negotiate with. the federal deficit increased to nea $1 trillion. . accord to the treasury department the federal deficit rose 2 t 9 billion-dollar in fisktle 2019 that's the highest in seven years. easury secretary steven

mnuchin called on lawmakerso help the administration cut spending. consumer sentiment dipped slightly in october. according tthe latest university of michiganerurvey. ans are more worried about the economy now than a year ago but they did remain fairly optimistic when it comes to their job situation and financial health. econom ts watts watch sentiment inditors coastly because in theory the more optimistic the more consumers spend. and spending makes up a large portion of economic activity. dow component verizon topped analt profits and revenue estimates. the largest wireless carrier in the u.s. attracted more customers with less expensive unlimited data plans, and expanded the s 5gvices to four new cities now totalling 15 in alet despite ther thanxpected results though the stock fell a fraction in today's trading session. it'sime to lookt some of toy's upgrades and downgrades. dick's sporting goods upgraded to buy from neutral. goldman sachs. the analyst cites management's effort to increase traffic.

the price target is $45. the stock is up 1% to 40.36. > booking holdings formerly known asya price was downgraded to market perform from outperform at raymond jame the analystiting overly optimistic estimates for next ar and 2021. e firm removed the price targetn the stock despite the downgrade the stock finished higher at 205 a.93. afis budget group downgraded to hold from by at doichl bank. citing softer u.s. pricing and challenging trends in europ the stock is 32 faumg slightly to 29.90. and a number of price target azmodan's target price was lowered at morgan stanley to 10 to to from 2,200 following the earnings report. but the analyst maintains the outperform rating and said they one-ipping ramp up was impressive. credit suisse raised the target

on iel from 5 a to 58 after reporting earnings well abovect exions. and oppenheimer cut the price target on 3 to 46 while maintaining the outperform ti . united airlines one of the top performing airline stocks this year is now trying to turn around its represent tapings and customer service. today the company outlined changes designed to create a better experience for the passengers. phil lebeau has more. >> reporter: united ceo the oscar immune ohs saz it'ss the next phase turning around the cat carry that lags other airlines so it's making changes. a new app automatically books stranded passenger hotels it also gives passengers view of what their seat will look like on the flight. united is also adding a regional jet wit a snack bar inhe frontnd its fleet updated with newer bigger bins to hold more

carry on bags. changes united believes will also help employees who have been frustratewood the carrier's inconsistent performance. >> we needed to rebuild the ust ofor our employeese we could rebuild the w trustith our customers. >> that trust aow .2 years ago whe a passenger was dragged off of a unite u flight that wa oversold. it made united theld post-er chi for those thinking airlines car only about profits not customer >> it was a water shed moment for us accelerated the t tngs that we needed to do. one of the things we do today is introduce enhancements to people. >> in the last two years united added more flights in the u.s. especially from smaller cities. flier lounges.aded frequt along the way, the it's attracted more travelers and grown profits. >> if we canloour kbrochgt profitability back into the product, back into the customer experice, that'soing to drive highe profitability. >> while united has done better

in theast year, those who track the quality of airline service say the carrier still lags competitors. reinforcing a reputation that united still has aays to go to make the friendly skies even frielier. phil lebeau, "nightly business report," chicago. still ahead, finding value a mechanic near new highs. it's hard to do. but our market monitor found a way. ♪ ♪ ♪ >>n the news tonight, two major wildfires are spreading i calirnia. in the northern part of ther state, nilicon valley, the kincade fire turns tens of thousands ofal a california utility pg&e said a broken

jumper line may have been volved in starting that fire. and an analyst at citi warns that disclosure threatens the utility's exit fro bankruptcy. the news shaved 30% off of pg&e's value in today's session. meantime in southern n california,orth of los anles, the tick fire closed majorre fays. jane cells in santa claritia. >> i'm heree in santa claritia n one of onehef t hormones destroyed down in main california. a bigger fire in northern california. . the governor declaring a stacy of emergen in both counties up los angeles county and in sonoma county. ande has set aside $75 million in a new fund to migate the costs of the massive power shut office, the intentional power shut officehe by t utilititi to try to prevent fires. it is it working? well we'll find out. want to show you something first t ght here. i don't know if you can seee in istance while that home is destroyed over there you can see

the pink on the ro, the check droppe by the firefighters on the homes which to try to save the neighborhood which they didf hundreds thousands of penal with power intentionally cut off in the tech capital othe world. what sort of technology are we using to try and better predict there well there are a couple of pilot programs going on for the first time in year. onof them is called wi fire a $200,000 fire program out of uc n diego and using cameras and to predict where the fire is going. and l.a. county fire chief darryl boss ohs by told me it's workg here. >> when he look at the projection, a press conferenc last night there was a low in the a fire things looked calm but the y fire production is sbapgted thioing to take a turn and jump the 14 freeway. and it did dplkt whad it s it was going to do. >> but the big concern is what to do about the u and where to turn them off. as you can see they're trying to work onus in-hoe which has been

damaged. knows power shut oe are going to continue through t weekend. the governor is furious way they handl this saying it cost the economy billions of dollars. pg&es arguing that it's prevent the fires by doing this ironically hower the main fire up in northern calififnia may -- may have been started by a pg&e trotsmission line which was turned off. clitaa.ng from santa janeells back to you. >> there may be a new arms race developing. the u.sodernizing weapon systems and that could mean lucrative contracts forom of the country's major defense companies morgan brennan looksn at thetry as next chapter. >> when china celebrated its 70th anniversary it unveiled new weapon including missiles making defense experts very petros. the df 41 sbrkle business hitting the u.s. in 13 minut.

an shorter range missiles represent a new threat all togeth. hypersonic. but formidable for different reasons but strike at the heart of modernization. and what the u.s. needs as a new arms race becomes reality. let's beg with what america has. the nuclear trydd currently threeing minute man intercontinental ballistic missiles proceroes boeing. lockheedmages and cruise miflts from aircraft. all modernizedut none hypersonic. the u.s. has anti-missile systems including aegis targets inteediateteange missiles and the boeing made ground based mid-course defense. the only system to protect the homeland security from from icbm but the experts worn they may not stop the hypersonic misisle they move superfast if five mes the speed of sound but with cruise missile like maneuvering. unlike ballistic mitchells hypersonics nigh a lower and

thanging altitudes harder to see and fli uncertain path. making detectiti them and intercepting near impossible protect types with through a ing handful of programs in development stage buto far lockheed martin won some contracts as has aerodine and northrup grahamg and rat onmerging with united technology to advance the tech. all the next gen missiles sparking a new arms race with china and with russia aus well. which is buildin its own protect types. hypersonics and modernization of the nuclear triad were key topics on contractors earni calls and over the comin c decade all of this could result in billions if not trillions of dollars in future contracts. for nightly busrtess re i'm morgan brennan. >> competition hits some of the

f corps top frands brands. the airline peril p maker misse. vf also rea abdirahaman firmed full year guidance shares dropping 7% to 84.5. phillips 66 reported better than expected results drive. by higher retail fuel mgin. the refiner helped by a nearly 20% drop in oil prices i the latest quarter which reduced gasoline and aviation fuel shares rose about 3.5% to 114.42. lower salesn china and higher costs caused the biggest beer company in the world, ab inbev to miss estimates. cutting the full-year forecast. the sharesell more than 10% to 81.83. time now for a weekly market monitor who says he finds value in some overlooked names. craig hodges joins us, ceo of hodges capital manage. welcome back, craig. nice to see you again. >> tha you, sue. pleasure beingon. >> letet right to the picks.

century communities, you're playing these stock have to with the home sales business, the home building business. why do u like century? >> century is a very interesting in tms of low multiple but the relay on century are the millennials. the millennials are just weaching their 30s process. as we k into our 30s we have a pelham, buy houses, buy cars and that sort of thing. it's the biggest demographic in history. so there is going to be a lot of entry level new home uyers for the first time. and century focuses on the entry level, the l end. and the stock you know trades about a little less than tengs times earn but i think the next four or five years are going to be tremendous for home building because w e don't haveugh homes for the amount that's going to be coming out. and century is going to be a good w t play that play. >> now, a little bit outside of that group, an airline, american airlines, why? >> yes, american has been the worst performing kirlines. w you just highlighted united a while ago by has been one of the best.

but we like american in that they have been very, very hurt by the boeing grounding of the max 8. they've got -- they've got about 24 of the planes. and there's beenee 8,000 of the flights cancelled last quarter. it's been a real hit to the earnings. hence, the stock doing poorly. we think that's going to be resolved if not the fourth firstr early in the quarter. and with the stock down 30% vers the t averageirline stock being kind ever flat for the year, we think american has a lot of room to makeup. and then let's not forget, warren buffett ownf 10%it. >> true. >> if it's good if you have for witharren, right. >> let's finish up with generac holdings, a play on homes as well. >> they make generators. and the generator business is tremendous right now. but wh you will a the alternative energies you see what's going on in california with the blackouts. the severe weather. so there is a lot more

unreliable, you know, electricity out there. and generatorre becoming -- that's also a housing play like you said in that aote of peo are now budgeting in the new houses you know a $5 tora 10,00 ger we in tornadoes go through dallas in my neighborhood. >> i know. >> there is 16,000 homes that have been without power a week long. but you can drive around and you ssee the os with generators and they're the smart ones. gener 17es earnings but the next four or five years shoul f be tremendou this company. >> on that note, tg thanks so much. >> my pleasure, sue. >> coming up, the gaming the game. video games are a hot industry and that means hackers arecalso trying th cash in.

> the video game industry is on a tare with revenuen the. ri but there is an issue that many video game developers do not want toutalk a and that is cheating. hackers try and find e line, vulnerabilities that let players get specialadvantages. ecent survey by the security company air dt o found 60% of online games were negatively impacted by cheaters. and main -- many players to actually will playing if they think the competitors are cheating. josh lipton has our n, investigatioaming the game. >> aid the terrists. >> take a close look. this is the exact same video game but in the version on the right the pla has special or cheats, tha makes it easier

to win. >>s in a bot behind this wall we see himse a cond. >> in thi modified game, you can see the enemy throughalls. a distinct advantage. bill demirkoppa is an en 18-year-old r high school graduate but don't l l his age fool you. he is an expert i hacking video games to create cheats. mething he knows could ruin the game. >> i don't think that i'm either good guy or necessarily a booed e bad guy. but i think that a lot of what i do can be interpreted as being the bad guy. >> to find cheats hackers finds vulnerab in the game code. it's an advanta people are willing to pay for. >> for the higher end cheats i've made i've sold them for hundds of dollars a month. usually $100. >> the gamingnsiders and cybersecurity experts tell cnbc that cheats are a huge threat to the growing video game industry. >> why would you want to play a game you can't win. i want not fun anymore.

>> alex hammer stone works for information security firm trusted sese helps vidame makers keep t games psecure. >> u here you buy cheats or addr ones f things for tgame. >> he showed cnbche websites can bayonne a sell cheats. > these are can be professional athlete using steroids or a performanceg enhanc drug. >> from the halo tournament on the 99th floor to the 16-year-old winning $3 million at the fortnite world cup in new york. the video game is on fire. expected to bring in $174 billion in global revenue. but in order for games to succeed, playersay developers must stop cheaters. >> extreme hacacrs in fortnite people entire the map hitting me and head shotting me and instantly killing me which is like crazy. >> but gamers say it's uncommon to find cheaters at tournaments

with money on the line. >> somebody hacking a trnament they would definitely get disqualified i hope so. >> at mostam touts the organizers control the computerers and con cles the game is played on. and trikt watch. >> but at home it's an ongoing challenge forame makers. >> you are fighting a battle you already lost because when i have my computer from upon front of me i have physical access it's difficult to perceptive me supercheating and the best thing they can do is make the bar high enough to where it's not worth my time. >> hacking games was a presentation topic at this year's defcon, a hackingti coon in las vegas with an estimated 30,000 attendees. demirkoppa and security l researcher jack baker. >> because there is so much mone on the line now there's been a lot more of a focus on how can make money off of that? let's say you're a developer pupuisher what canou do to prevent the cheats. >> they wind chill por patterns

signatures there are ways they can look at behin the scenes see if people are using these. but lot of it is still rely nlt on user reporting. >> microsoft 343 industrs is the maker of first person shooter game halo. >> halo has never had a huge issue with hacking thankfully. for us as developerompetitive integrity and eerience of players online is crucial. >> epic games, the maker of fortniteeclined an interview saying in part we will aursue alilable options crewing revoking access to fortnite to make sure our games a fun, demirkoppa says he hasn't sold cheats since last year. today, heo has recigarettes. >> i'm trying to transition more into the informationecurity field. game hacking has been an extremely valuable learning opportunity. >> for nightly biness report, um i'mosh lipton. >> demirkoppaed cheating on

rainbow six siege. the uber soft told us in part rainbow six siege does not tolerate kmeets and exploits used in game. playersed found using cheats are penalized or band accdingly end quo quote. we should no note the demoe wns ag bts or computers. another look at the day's numbers on wall street. d the up strong 152 points. the nasdaq adding 5opinion the s&p 500 rose 12 all major averages higher for the week. that's "nightly business report" for tonight. i'm sue herera. thanks for jning u have a great weekend. we'll see you monday. ♪ ♪ ♪

female announcer: this is "bbc world news america." male announcer: funding for this presentation is made possible by the freeman foundation; by judy and peter blum kovler foundation, pursuing solutiod for america's negleceds; and by contributions to this pbs station from viewers like you. thk you. welcome to "hardta," with me, zeinab badawi, from tate modern in london, where my guest has a major exhibition.