. this is "nightly business report" with tyler mathisen and susie gharib. >> you're just gaming the system. you're an american company. >> fighting words, the president tells steve liesman companies shouldn't game the tax code by moving headquarters overseas. what he plans to do about it. big loss, amazon surprises wall street with a second quarter loss of $126 million. the stock sinks after hours. is the strategy working or not? sales slump, americans bought fewer new houses in the first half of the year than they did in 2013 and june sales dropped 8% from may. what the design signals for jobs and the economy. that and for for night by business report for thursday, july 24th.

good evening and welcome. i'm tyler mathisen. susie gharib has the night off. facebook sores, amazon disappoints, stocks me aroundia. we begin from strong words from the president. so-called tax inversions were top pick a in a wide-ranging exclusive interview, the president gave today to steve liesman of cnbc that produces this program. liesman began by asking the president if it was unpatriotic or unamerican. >> companies thrive in the united states in part because they benefit from the best university system in the world, the best infrastructure, though, i would like to see it do better on infrastructure. a whole range of benefits that helped to build companies, create values, create profit.

for you to continue to benefit from the entire architecture that helps you thrive but move your technical address simply to avoid paying taxes is neither fair, nor is it something that's going to be good for the country. this is basically taking advantage of tax provisions, that are technically legal but i think most people would say if you're doing business here, you're simply changing your mailing address in order to avoid paying taxes and you're really not doing right by the country and by the american people. >> some people would respond they are doing what they were hired to do. it's plenty american for them to make as much profit as they can, hire as many people as they can. >> keep in mind what we're trying to do, if you simply

acquire a small company in ireland or some other country to take advantage of a low tax rate, you're saying we're magically an irish company despite you may have 12e -- 100 employee there is, you're gaming the system. you continue to benefit in all kinds of ways from being an american company. it is true that there are a lot of things that may be legal that probably aren't the right thing to do by the country. people are paid to maximize profits, but people are also paid to be good corporate citizens and also paid to make sure they are thinking about in audition to shareholder value, how do you grow a company over the long term and this kind of strategy, i think, undermines people's confidence in how companies are thinking about their responsibilities to the country as a whole. >> president, this is your sixth

year in office here. >> yeah. >> democrats seem to support corporate tax reform and the public seems to support it. why isn't there corporate tax reform. your critics suggest you have not put the presidential muscle behind this issue the way you did health care or stimulus early on in your presidency. >> we reached out repeatedly to democrats and republicans and the argument is simple, if we lower corporate tax rates and close loopholes, there is going to be more certainty in terms of what corporations pay. they will benefit from a lower but more certain tax rate. it allows us to close loopholes that permits companies to artificially shift profits overseas to avoid tax compliance. it would allow us potentially to have companies who have profits overseas to start bringing some of those profits back and reinvesting in the united states. there is a bunch of good reasons why we should do it.

i'll be honest, steve, the reason it's not getting done now, congress, you may have noticed is not real productive. >> let's talk about the average americans here, what can you tell average americans. your former economic advisor said we may be in lower growth for a protracted period of time. do you believe in that forecast and are you concerned that means we might not meet the promises without cutting entitlements and raising taxes? >> i'm bullish about america in the long term. if you think about america when i came into office and now, it's hard to think. >> median income families is not doing better. >> you're absolutely right. i think you heard me on the stump talk about this is the source of anxiety for the american people. these are 20, 30-year trends we've been seeing, a larger and larger increase of productivity

and profits according to the very top of the economic period and the middle class, folks trying to work in the hmiddle class not seeing higher incomes, higher wages. there are policies that can help that. some of it has to do with globalization and technology and some of it has to do with what some called a shift to a winner take all economy because capitals are possible. we know if we rage the minimum wage, that's 28 million people that get helped. if we invest in $28 trillion deferred maintenance on infrastructure, you got guys and gals in hard hats who can start going to work. that gives them additional income. that, in turn, means for customers for businesses. historically when the middle class is doing well and people are rising in the middle class, low and behold, business does well, also. >> stock market and investors have shown a lot of interest

over seas. i want to ask you about russia. are you concerned a lack of conviction and corporation from our european allies may undermine our sanctions against russia? >> there is no doubt the economies of russia and europe have intertwined, primarily around the energy sector and it makes some europeans more concerned about a robust response to the violations of solve earnty and territorial integrity russia is conducting when it comes to ukraine. the good news is despite some of those commercial concerns, we've seen europe move with us, not always as fast as we would like but they get there and sadly, tragically, the shooting down of this malaysian airlines airliner and the recognition that it is likely it was shot down, and it is also likely that it was

conducted by non-state actors that were provided incredibly powerful weapons by the russian government, all that, i think may stiffen the spine of our european partners moving forward. >> steve liesman joins us. congratulations on the interview. among other top picks you covered is whether he had a top marginal tax rate in mind for individuals. what do he say? >> thanks. i've been waiting to ask the president that question for a long time. he wouldn't give me a number. he said there were times in america, by the way, i preface it by saying he raised the rights by 39%. i said is that the right raise? there were times it was much higher. boiling it down, what i think the president was saying, does it sound in favor of a higher top tax rate, tyler, as much as getting rid of loopholes, a higher effective tax rate but i

didn't hear him climbering for a higher rate. >> you also asked him to be the investment advisor in chief today. you asked about the stock market and its lofty levels today. what did he respond? >> he wouldn't say it's a bubble. he said there are savvy investors that know the markets go up and down, so maybe a warning from the investor in chief there. he did connect it to fed policy and said he knew that but believes the fed is doing the right thing by fighting unemployment and inflation being low. >> thank you very much. steve reporting from los angeles. the president's plan for dealing with tax inversions is multi-prong. by various measures a company would have to be 50% foreign before it could skirt the u.s. comparatively high corporate tax rates and would make any changes in law retroactive to may when a flurry of deals were announced. a couple big named ceos weighed

in and as you might expect, weren't terribly impressed. >> we're so distorted and dysfunctional in the tax system that's no wonder it's a big break. that should be the number one policy issue out of our legislators today to get this economy moving and we can't seem to get any traction on that. we were the lowest tax rate in the world. today we're the highest tax rate in the world. that influences what we do. the current u.s. tax system puts u.s. companies at a disadvant e disadvantage. that's a simple fact. some of the companies acting on inversions and doing them are simply trying to level the playing field. if we got a concern about inversions, we need to tackle the tax code. this is something businesses have been asking for for many years and i think it's time to reopen the conversation and move forward. >> republicans also want to tackle the question of inversions but part of a broader rewrite of the tax code. no action on either front is

expected any time soon. mixed economic data with a mixed bag of earnings kept stocks trading in a narrow range all day long today. there was positive news about jobs, first time jobless claims last week plunged to an 8.5 year low but sales of newly built homes in june fell sharply and with that, stocks barely budged. at the closing bell, the dow was down three points, the nasdaq off one but the s&p ended about a point higher, just enough to close at another fresh historic high. it's 27th record high of the year. after the bell, amazon.com surprised wall street with a loss that was far bigger than expected. the $126 million quarterly gap was the company's biggest since 2012. they lost 27 cent as share in the quarter ending june 30th, far more than the 15 cent as share that analysts forecast. revenue up strongly, 23% higher. it was right in line with forecasts but investors who have

already taken the stock down 10% this year punished it even more in initial after hours trading. josh lipton join uses from silicon valley. what is the one key take away you see from amazon's result and when will it start making money? >> tyler, the number that really struck me reading through the release was $19.4 billion, and that was amazon's total operating expenses, which shot up some 20%. that really gets to the push and the pull in amazon ads and investment. amazon involved in a lot of different businesses, they want to be everything to everybody. that means you got to spend a lot of money, which they do from warehouses to cloud computing to hardware that pressures profits so you can see revenue jump double digits but you see the pressure bigger than expected loss. amazon's executives say listen, they are not interested in

vesting for the near term. they are making long-term investments but investors frustrated. >> thanks very much for that report. ford and general motors posted earnings showing two auto makers on two different paths. for gm the recall crisis a drag on the bottom line while ford, business has never been better in the u.s. phil lebeau has more. >> reporter: despite a rough spring filled with recalls, congressional hearings and federal investigations, general motors turned a small profit in the second quarter, officially g m's earnings were a penny below estimates. >> if you exclude the impact of recall campaigns that we booked in the second quarter, our earnings on year over year basis were up 20% with margins of about 9.2%. >> reporter: gm took big charges to handle recalls of millions of vehicles, including many with faulty ignition switches. one of them for $400 million covers a composition fund run by

attorney ken feinberg. that fund will settle claims for dozens injured or killed in defective gm models. >> the $400 million estimate that we took in the second quarter is our best estimate based on the data available to us and using outside experts and outside actuaries. >> reporter: meanwhile at ford, steady business in the showroom drove the company to the most profitable quarter ever in north america bringing in $2.4 billion, that helped ford beat analysts estimates, but the good news also extended to europe, where ford's on going efforts to cut losses finally paid off with the first quarterly profit in europe since 2011. >> the quarter profit even though it was relatively small, as you said, it was a signal that we're definitely on the right track and we're definitely going to deliver the profit in 015. so everybody was extremely excited about that.

>> reporter: ford's new ceo mark fields says he won't alter the one ford game plan to turn around the auto maker over the last eight years, and that's music to the ears of ford shareholders, who today briefly pushed the stock above $18 a share for the first time in three years. phil lebeau, "nightly business report", chicago. let's look how the auto makers finished today, gm down 4.5% as phil mentioned ford was up slightly. earnings from caterpillar blew away wall street estimates but fell short on revenue. the construction and earth-moving equipment made $1.69 a share topping the estimate but sales lower as a slump in the global mining industries set a rebound. caterpillar did raise the full-year's earnings guidance but the biggest decliner falling more than 3%. american airlines earned a record billion and a half dollars in the second quarter

and that should make shareholders very happy since the company will pay its first dividend in nearly 35 years. american says shareholders will get 10 cent as share, first payout since 1980 and buy back a billion dollars worth of stocks, ceo doug parker says it's because the merger with u.s. airways has been a success. >> it shows the confidence based on our prospects to do things, to understand that we have enough capital to invest but still return some of the capital to shareholders and debt holders and also to fund our pensions at a higher level than the minimum. >> meanwhile, united continental will buy back stock and revenue rose 3% while it pulled down $10 billion last quarter. not to be out done, southwest airlines posted a record profit last quarter doubling what it made just a year ago by setting records for

seats sold. in the meantime, jetblue saw earnings sore, the 17th in a row in which it turned a profit thanks to higher ticket sales. all the strong earnings report couldn't help. american, united, jetblue, all a little lower. up next, another shakeup in the executive ranks at the largest retailer. what it means for walmart. first, some more big names reporting their profit today. . there is something new

coming to walmart, a new ceo of u.s. operations after the current chief suddenly stepped down today so what is behind the resignation and what's next for the country's biggest retailer. courtney regan has the story. >> reporter: it's well-known bill simon wanted more than just running the u.s. business, he wanted the top job at the world's largest retailer but in november, walmart named doug mcmillan, the youngest ever chief executive office so today's announcement that simon is leaving walmart comes as no surprise to wall street. the current ceo and president of walmart asia will replace simon. he came to walmart three years ago from australia. foran moved to ceo of walmart u.s., his second promotion since june holding the ceo of walmart asia positions for less than two months. there are a number of other executive changes since mcmillan took over in february, including

the ceos of walmart.com and walmart canada. some executives have left the retailer all together, though, the replacements have been insiders moving up. foran is stepping into a big job at a tough time. locations open for at lease a year have fallen for five straight quarters and traffic is lower for six consecutive quarters. >> they are really subjected to the overall economy and there isn't a whole lot they can do to move from the drop. bill has done terrific things running walmart u.s. >> if you follow economics, customers are doing okay. lower income customers are feeling a little more stressed. >> reporter: walmart says simon isn't sure what his next role will be and his retirement agreement prohibits him from working for another retailer for two years, which means all those other retailers looking for a ceo target, dollar general, j.c. penney, american eagle and others can't ask for simon's

resume. he may have to abide by a non-compete but don't feel too bad, his retirement gift includes more than $9 million in cash, benefits and consultation fees. investors continue to hit the like button on shares of facebook and that is where we begin tonight's market focus. we told you about facebook's blowout earnings. investors got a chance to react to profits today and bought up shares of the giant and then some. with today's gain, facebook now at a record high cracked the top 15 most valuable companies in the s&p 500. it's $190 billion market value makes it bigger than coca-cola and at&t. the stock 5% higher at 74.98. some newer drugs helped bristol myers, cost controls and strong sales of the blood clot and drug melanoma treatment boltered results.

higher taxes and its exit from the diabetes business. still, shares there up slightly $49.46 the close. another drug maker, eli lil lilly's profits fell as top drugs expired. the company backed the full-year earnings guidance today and shares were higher, a little so, $64 $64.37 was the close. visa reported results that beat the street easiest mitts but the company cut revenue targets and that sent shares down initially after hours. as you see there, during the regular session, the stock was up a bit. it finished at $222.74. the dow component 3 m rose. the maker of post it notes said sales of the face mask and water filters in china are up. that helped results overall and

reaffirmed the full year earnings guy denls. shares rose to $145.13. two coffee chains out with profits. duncan saw shares shift. revenue was short of consensus. the company blamed that on bad weather. it was the opposite story at starbuc starbucks, those earnings rose on strong sales and hiked the lower end of the profit estimate for this quarter. shares of duncan down to 41.0 2 close and starbucks fell but the stock was 1.5% higher at $80.45. online real estate company zillow and trulia popping, zillow believed to be buying trulia.

trulia up to $53.74. coming up, home builders got hammered last month and we'll take a look at what is ailing the housing market but first, more earnings on a very busy day. home builders closing, still a bit lower than expected. orders for new homes were lower but on the plus side selling price higher. shares down 3%.

sales slumped last month. sales of newly built homes fell 8% in june, the biggest decline in a year. shares of home builders and housing related stocks tanked on the report. diana olick on what is going on in housing. >> reporter: the nation's home builders got hammered in june, sales of newly built homes plunged 8% from may, but even worse, may's impressive sales figure was revised down dramatically. >> new home sales are beginning to fade off and have ever since interest rates went up in early part of last summer, so there is clearly something going on with affordability that is leading to fewer home sales. >> reporter: while sales plunged, prices rose, 5%. newly built homes come at a premium to existing homes and in today's tight credit market that premium is hurting. >> a brand-new house here will cost you more. as for a resale, ready to go. >> reporter: the rios family is house hunting in virginia where

the supply of homes for sale like much of the country is tight. >> probably for a new house, you have to wait until they are constructed to get it ready for you to move in. as for a resell, all you have to do is wait for the bank to approve everything and then eventually, closing and you're moving into your home already. >> reporter: sales of existing homes faired slightly better in june, up from may but still down from a year ago. home builders like pulte are focussing on the higher end of the market as first time buyer demand struggles. dr horton reported disappointing earnings launched an entry level product express homes. >> there are builders that made a decision to trade price for volume so they are wanting to keep prices high and trade volume for it. they made the trade off during the bust and recovery. >> reporter: part of this is

because the land they have is scarce and expensive so they are building more expensive homes on it, which makes sense because that's where the demand is. that is "nightly business report" for tonight. i'm tyler mathisen. thanks so much for watching. we hope to see you back here tomorrow evening.

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