. this is "nightly business report" with tyler mathisen and susie gharib. >> knocked back, the dow jones industrial average losted a gain after a worldwide conden nation from the downed passenger plane. returned to its roots, transformation bringing back energy to its share price? >> special delivery, fedex indicted on drug trafficking charges. what could that mean for the company and shareholders? that and more for "nightly business report." good evening, everyone, i'm sue herrera filling in for susie gharib. >> i'm tyler mathisen, welcome to all of you. a striking and unexpected turn around in the market today with stocks rebounding from

yesterday's big sell off. the snap back came despite growing concern about global terrorism and worldwide condemnation of the downing of that malaysian airliner yesterday but the u.s. believes ukrainian separatists backed by russia. at the white house today, president obama revealed one american, a u.s. and dutch citizen was on board the downed jet while he called for a seize fire by russian separatists and a thorough investigation into the cause of the incident. >> this was a global tragedy, an asian airliner was destroyed in european skies filled with citizens from many countries. so there has to be a credible international investigation into what happened. the u.n. security counsel endorsed this investigation and we will hold all members including russia to their word. >> john harwood joins us from washington with the latest on malaysia airlines 17 and reaction from leaders around the

world. what is the latest out of washington? >> tyler, what the president was trying to do was to put pressure on and isolate vladimir putin. you know, he's been unable through sanctions so far, especially with europeans reluctant to go along with tough sanctions to persuade vladimir putin that the costs of his intervention in ukraine exceed the benefits. he's hoping the shock conscience nature of this event, which the united states clearly believes was done by russian, prorussian separatists trained and supplied by russia is going to change that evasion and cause vladimir putin to change. >> john, does it appear, though, that our european allies are on the same page as those of us in the u.s.? >> i think they are moving in that direction sue. they were talking about halting the sale of french military equipment to russia. they are going to require proof through this international

investigation that russia was behind what happened and one of the points american officials have been making is that russia lacks the separatists in eastern ukraine lack the capability to operate the equipment needed to take down that airplane. so i think it's going to move slowly, but this is a game changer in terms of international public opinion and european public opinion. so i think the odds are good they will be with the united states. >> you know, critics of the president have said that his response in this particular incident and with respect to russia and the ukraine generally, has been notably weak. what would they have him do and what other leverage does he have in that part of the world, which is so far from military power of the united states? >> well, i think everybody agrees that military intervention by the united states is not an option. the president reiterated that today. the criticism is that the president needs to strike a

tougher town, implement tougher sanctions even at the cost of fallout for the u.s. economy. i think this is a moment where those things are possible. the president was cautious today. he said we don't want to get ahead of the facts. we want to see what the international investigation points out. his un representative was a bit stronger in her language saying russia must end this war, but i think the president is edging toward and the rest of the world is edging towards the tougher stance critics would take. >> that sounds like the next step or is there something else that needs to happen before that? >> the next step is to have the investigation take place and get results. when the president was asked today do you blame vladimir putin for this, he said i don't want to get ahead of the facts. don't know who made the decision to fire the missile but as those facts accumulate, this is the thing that is simply powerful enough that it is going to produce the kind of consequences that could change the outcome. i heard that from formal

national security advisors. >> john harwood, thank you very much. despite the lingering questions about the tragedy in ukraine, investors shrugged off worries about the impact on global markets with the dow snapping back with a triple digit gain. investors got help from strong corporate earnings before the bell and leading economic indicators rose in june for the fifth month in a row. here is how major averages looked after kind of an exhausting week on wall street. the dow ending near the house of the session up 123 points and closing above the 17,000 mark. the nasdaq shot up 6 and s&p 500 was up 20 and for the week, the major averages finished in positive territory, despite the volatility with the dow posting the biggest gain of almost 1%. one of the companies posting strong second quarter earnings before the bell was general electric. oddly enough, the only decliner in the dow today, even though

income was up 13% in its latest quarter. shares fell about a half percent as the company spins off more non-core divisions to become a more focused industrial. bertha coombs has more on the changes at ge. >> reporter: ge is in the mist of a big transition with french energy firm and plans to spin off its credit card unit from a move from the ceo to shrink the financial arm ge capital. >> he is really accelerating the rate of change in the portfolio. with the three transactions going on that will change the composition of revenues by over 15%. >> reporter: ge's oil and gas and aviation drove profits in the second quarter while hospitals bought less equipment. with the awesome deal, 75% of ge's earnings will be driven by its industrial businesses by the end of 2016.

a large bet on energy in europe that's expected to add to earnings. >> they see it as a credible possibility for them to have a business model that actually grows faster both on the top line and bottom line than what they were doing five years ago. >> reporter: the company expects to race $3.25 billion from the spin off of the credit card unit in an ipo later this year. for some investors them moving parts create too much of a head wind for the stock near term, especially until the deal is finalized. >> i wouldn't be a buyer at these levels. plain and simple. there is too much risk from an execution perspective. >> reporter: once considered a bellwether, he says ge's repositioning say as great deal about the state of business. >> for ge to be increasing their exposure to the energy markets, whether oil and gas or power generation, power distribution, makes a great deal of sense. they are mirroring the way the

economy is shifting. >> reporter: on the conference call, it was said global markets continue to be positive and the awesome and deals are on target to close next year. bertha coombs, "nightly business report." general electric may be striking big international deals but remains based right here in the united states. elsewhere, there are an unprecedented number of corporate inversions with u.s. companies moving corporate tax bases overseas to save millions and today, the biggest one of all was announced, meg terrell has the story. >> reporter: from chicago deep dish to fish and chips, drug maker abbvie is packing up and moving overseas. they are paying $54 billion for sha shire and says the tax rate will shrink in 2016. it's the latest in inversion deals. analysts say it's likely to increase mounting scrutiny from

washington and put pressure on competitors to seek similar deals. >> it raises the pressure to do it. if you're a u.s. company with some cash restriction coming, more and more of your peers will have an advantage over you as we are kind of still paying taxes and if they bayou as thiey migh, they will enjoy the tax benefit. >> reporter: drug maker mylan bought assets from abbott that will allow it to cooperate in the neither lands and benefit from a lower tax rate. miles white today stirred rumors it may be the next to do a deal when he took a stand on corporate inversions in the wall street journal. analysts say the abbvie share deal has other implications, companies that make drugs for rare or orphan diseases. shire has been building up that part of the business and abbvie is expected to continue to do deals in the space. >> abbvie paid so much because

of the rare disease orphan franchise. it's half the company. both drugs are priced very, very high. they generally provide high benefit to the patients and therefore there is limited pressure to controt the prices of the drugs. it's a very attractive business on the perspective of drug companies. >> reporter: drug makers from several companies have potential acquisition targets. it spells more deal making. for "nightly business report", i'm meg terrell. shares of abbvie and shire rose today. abbvie up 2.5%. our market monitor has a list of stocks he says could double in price over the next 12 to 18 months and he's going to share them with us, next.

the calendar says july, school was just out a few weeks ago but retailers are already gearing up for back to school sales and just today the national retail federation predicted parents will spend nearly $8.5 billion this year on tablets and other electronic devices for their kids. that's about 7% more than they spent one year ago. fedex says it will fight charges it helped internet pharmacies distribute drugs illegally. a federal grand jury in san francisco yesterday returned a 15-count indictment against the delivery giant saying senior management at fedex knew what was going on. it's yet another glimpse into

the shadow world of internet drugstores. >> reporter: in california, dan is mourning the death of his wife cheryl. >> there isn't a day that goes by that i don't think of her and miss her. >> reporter: cheryl was addicted to painkillers. she died of an overdose of drugs bought online with ease without a prescription. >> they come via fedex. they come to any address that you want to put them to, as long as there is a credit card to pay for them. >> reporter: fedex is part of the problem. in a sweeping indictment, the government says fedex knowingly ships the drugs, sometimes delivering to parking lots. they have been warning them about the dangers of internet farm spharmacies for a decade. fedex assigned them a different account classification. fedex says they are innocent. the company says it has a

history of cooperating with law enforcement but handles more than 10 million packages every day. we're a transportation company. we are not law enforcement the company says adding customer privacy is at risk and made the case to analysts who for the most part are sticking by the company. >> i think this is relatively more relegateed to headline risk as it stands now with the information we have today. >> reporter: fedex rival ups settled charges for $40 million in a host of reforms. they say the shipping is part of the problem. >> it's pure greed, all they want to do is make money. >> reporter: consumers going outside the u.s. system to save money and internet pharmacies praying on the vulnerable to make it. honey well reports better than many spected profits and hikes the outlook and that's where we begin tonight's market

focus. the results were driven by higher sales of the turbo charges, new fuel efficiency regulations increased demand for the parts. raising the lower end of the 2014 profit range. shares up more than 1.5% closing at 96.82. shares of johnson controls went the other way as its earnings fell in the third quarter, restructuring and charges offset a small increase in revenue and even though the results were generally in line, investors were not cheered at all. shares down more than 1%. they finished at $49.16. shares of the f corps fell after a reported drop in gross margins. the company that owns brands like north face and timber land gave a disappointing forecast and the stock drop to $60.95. bank of new york saw the second quarter profit fall dragged down by hefty charges

and decline in fees but posted results that topped estimates. the company announced that it will not be selling the corporate trust unit, which has been under review for a possible sale. the shares as a result, rose 1% to $38.43. two ipos to tell you about, shares of terra form power surged in the solar plant owners market debut. also trupanon started trading. investors weren't excited about that. tera form closed at 33.09. shares of amazon were higher after the retailer announced its rolling out a new subscription service for kindle divisions. that new service will give users unlimited access to the library of e books and audio books for about $10 a month. shares were nearly 2% higher to $358.66 a share. there is growing concern another well-known stock, that

of the luxury fashion retailer michael kors may have shot up too fast, and may be in a bubble right now. so may that bubble be about to burst? >> reporter: since the ipo in december of 2011, michael kors shares have been unstoppable. until about three months ago. cors stock returned more than 300% to shareholders in the 31 months since going public. but the premium accessory maker has begun to show signs of weakening, leaving some wondering whether the kors' bubble has finally burst. >> it may be shift in relevance or preference, at the same time something else we've been tracking to date is market share in north america for this brand and we really see them as having 18% market share at this point. 20% is the threshold where we would begin to be concerned they are demonstrating a saturation point. >> reporter: google trends in u.s. search data for the term michael kors have declined year

over year for five straight weeks. there has only been one other week of decline since going public. kate spade, however, seen a recent uptick in google search trends. william blare and stern ag ex pressed concerns about kors this week. beyond saturation, analysts point to inkreecreased promotiod margins as other worries. not everyone is bearish on kors. it's maintaining a buy rating and erin murphy is reit raising her over wait. >> this is a global story misunderstood by the street. it's growing across multiple categories, over the next two to three years, the near term or that intermediate term upside comes from the european market, what they are doing there. it's extremely transformational. >> reporter: while many compare michael kors to coach which suffered from market share and stock price declines, murphy

thinks ralph lauren is a better competitive to kors since both have large product lines. the sales growth has been seller, a performance level only sustainable for so long. however, piper's survey still indicates kors is a top desired handbag brand potentially giving the brand some back to school sales strength. for "nightly business report", i'm courtney regan. our market monitor guest tonight says there are pockets of opportunity, you need to know where to look. welcome, nice to have you here. >> thanks for having me up here. >> there are pockets of opportunity. i assume that means evaluations are not stretched as they appear to be in some sectors. >> i think it's like that joke about the man who draowns six inches deep, the same in the market. the average looks fairly to maybe a little over valued but

there are extreme pockets of over evaluation and some really extreme pockets of under evaluation, places like energy and energy services. so we've tried to dig in the value areas. >> the markets snapped back today after yesterday's sale off regaining virtually all of what it lost. >> yes. >> i wonder when you heard the news of this downing of the plane. did you do anything? did you change your portfolio at all, buy or sale? >> it's a great point. we didn't do anything. we try not to react. we try to be more proactive. you can't be proactive to a tragedy, if you don't know it's going to happen. we got a little lucky. we lightened up on russian exposure last week trying to lower volatility risk generally, but that's just luck. overall, we try not to react particularly in big down days or up days. you don't want to sale on a big down day, and you don't want to buy on a big up day. >> how much of this is because it's summer, volumes have been low. >> yes.

>> any moves in the market tend to be more exaggerates than if we were in the fall earnings season or summer? >> it's a great earnings season. i tweeted out when you take events plus no one at the desk, you get volatility and that's exactly what you see this time of year, and around holiday weekends, you see it, too. 4th of july you saw it. a big announcement about some company and suddenly that stock takes off, a lot of short covering. so low volume is tough. >> let's get to some picks leading off with vip shop, not a company i know. tell me about it. >> it's actually a really amazing story. we've been involved for awhile since the private equity stage of this business. think of it as tjmaxx without stores in china. so they sale discount merchandise online. >> what gets my attention is 433% -- >> that will get your attention. so here is the thing. this business is a fantastic business because they are doing to retail kind of what cell

phones did to land lines in emerging markets. they leap frogged. so the same thing if you don't have to put the infrastructure in place, they put together a great management team, the best behind alibaba and put together this plan to become tjmaxx of china. $40 billion company. they have higher margins and population and go up a lot. >> you mentioned the energy sector. >> in the gold rush, who got rich? levi, california, so i was in texas tuesday, wednesday, meeting with some energy folks and one of the things they talked about is to get the oil out of the ground, the gas out of the ground, you have to drill more holes longer laterals than the horizontal drilling, more

fracking sand. you have to do more to get it out because the decline rates are so high. so a company like halliburton which specializes in people drilling holes will make a lot of money. >> your last one, quickly, is horizon pharmaceuticals, a couple sentences. >> the bottom line is specialty pharmacy is the big companies, big companies, they need product, so the specially pharma companies are taking products and specialty areas like inflammation and putting packages of drugs together that are attractive to a bigger acquirerer. >> any disclosures in terms of if you hold it or you clients? >> we own all three of those companies in our mutual fund. >> thank you so much for joining us. >> thanks for having me. coming up, the deadline to comment on one of the fcc's most controversial propels is fast approaching and dividing some of the biggest players on the internet.

some new data from the labor department shows in june 33 states added jobs, 17 lost them compared to the month before. and with that, the unemployment rate dropped in 22 states from may to june. it rose in 14 states and it stayed the same in some 14 others. right now mississippi and rhode island have the highest unemployment rates at 7. 9%. north dakota has the lowest as 2.7%. the deadline for anyone wanting to weigh in on the fcc's controversial proposal concerning so-called net neutrality was extended to eastern time midnight tonight. julia boorstin takes a look at what net neutrality is, what the

fcc is proposing and what is at stake. >> reporter: the fcc has a record of more than 1 million k078 comments ahead of the deadline. the commission was forced to extend the deadline from tuesday because it was so slammed with comments, the website crashed and many people weren't able to file objections. >> i think a lot of times, we get hung up on the slogans, net neutrality, open internet, paid priorization. the key question is how do we preserve the internet for invasion and investment? >> reporter: net neutrality means everyone has equal access to the internet. the fcc is proposing that broadband providesers be allowed to charge content companies for a fast lane of service to give consumers faster access to content. the proposal would ban internet providers from discrime natzikd against websites but disadvantage companies that can't afford to pay.

a pay for priority platform, the internet association, it represents three dozen web companies from giants netflix, amazon and google to smaller companies like ube rruber. netflix asked for a public utility and prevent them from favoring certain websites for others. supporting the proposal, internet service providers like comcast, verizon, timewarner and at&t. comcast says it supports the fcc enforcing transparency, no blocking and anti discrimination rules. as a condition of the purchase, comcast has to follow the old rules until 2018. >> it seems the fcc shouldn't be in the business of preemptively determining for an entire industry how the business arrangements should be develo d developed. marketplace and we should wait before taking

preemptive action. >> reporter: the agency will accept responses to comments through mid september. it's expected to make a decision by the end of the year. for "nightly business report", i'm julia boorstin in los angeles. >> comcast, which julia just mentioned in her report is the parent company of cnbc, which produces this broadcast. >> on that note, that does it for "nightly business report" for tonight. i'm sue herrera, thanks for joining us. >> i'm tj yler mathisen, have a great weekend, everybody. we'll see you back here on monday. >> you got it.

( clock ticking loudly) ( alarm rings) (horn honking) i just don't see why it suddenly landed in my lap. good morning! i'm on my way now, sir. move, gerry! good morning! is it? third time lucky. good morning, brian. ah, sod the lot of you! ♪ it's all right, it's okay ♪