this is "nightly business re sue herera. risks to the market. earnings are expected to be weak economic data has been so-so, and now there's a new potential head wind for stocks. cold shoulder. investors turning their backs on the transports. that could say a lot about where the economy is headed. a rare occurrence is happening on capitol hill and it could mean changes are coming to medicare. all that and mor t on "nightly business report" for thursday march 26th. >> good evening, everyone and welcome. the stock market as i don't need to remind you is a perplexing place. some days it rises despite global shocks.

"charlie hebdo," rose 112 points. other days world events bring stocks down. today was one of those days. not only was there word that that germanwings aircraft deliberately crashed by the coe pilot but new risks arose in the chaotic middle east. still, the world's biggest oil producing region. saudi arabia and the pew of regional airlines began rebel strongholds in yemen where the government disintegrated. ground troops may be next. all that with economic and profit worries more than the market could withstand today. the dow jones industrial average dropped 40 points to 17,678. nasdaq fell 13 and the s&p 500 was down almost 5. the conflict in yemen felt in the oil markets, west texas intermediate shot up more than $2 a barrel to $51.43. brent prices also spiked higher.

jackie deangelis has more now on the mideast tensions and why they're rattling oil. >> reporter: oil prices seeing a significant setback on geopolitical turmoil in the east. reports of saudi air strikes in yemen and saudis and egyptians in the country, taking west texas intermediate to the since march 4. the reason they care about yemen is because it lies next to a key strait to moves nearly 4 billion barrels of oil to the suez canal. saudi arabia the largest oil producer taking on the conflict because the rebels are reported shias, that's by iran. saudi arabia trying to tamp down the influence in the middle east. a lot of international crude imports. a different grade crude than at home and has specific uses. the markets have been nervous

about libya and iraq as tensions made their output volatile adding the yemen conflict to the list has rattled some nerves. having said that we see volatile moves in crude as of late in both directions. traders are saying we need to monitor the situation abroad and see how it plays out. still, no one wants to be short when tensions are running high. for "nightly business report," i'm jackie deangelis. another issue facing the market the transports. usually seen as a leading indicator of economic growth the group has started to slow with some on wall street concerned the transports could be showing some cracks. and that could lead to even bigger troubles. morgan brennan has more. >> reporter: 2015 has been rough on transport stocks. the dow jones transportation average is down more than 4% so far this year. vastly underperforming the broader stock market. today it tested a key technical level briefly falling below 200 day moving average. experts are watching the group

closely since transports are correlated with economic growth. >> i think it's been a fear of slower global growth than what people thought and a day like today when you have oil rally, the transports it's hard for them to act positively in an environment like that. >> reporter: the reason rallying crude is pressuring these stocks which tend to trade opposite oil on the presumption that lower fuel means higher profits but a bigger issue may be beginning to take root as well. a slowdown in freight volumes across different modes of transports. this week, the american trucking association reported that trucking fell 3% in february from the month prior. and according to weekly numbers from the association of american railroads, car load traffic has been wayning as well led by crude oil and products used for drilling. as the quarter c h it will affect earnings.

kansas city southern affected gienls. all of it could be pointing the a slowdown in u.s. economic growth. still, the dip means there are potential deals within the transport space. many analysts still like companies cater to consumers, parcel carriers and airlines like jet blue as well as trucking companies such as swift transportation and night transportation which stand to benefit from the ongoing backlogs at the west coast ports. for "nightly business report," i'm morgan brennan. >> joining us now to discuss the head winds to the market is steve off, chief investment officer. his firm manages more than $360 billion and reeva ba la vice president of global analysis at strathfor, a global firm. welcome to both of you. >> thank you. >> steve, as we began the broadcast, we talked about stocks able to step past tensions around the world. lately not so much. how worried should investors be

that what's going on in yemen, the southern arabian peninsula could be something that will trip stocks not just for a day or two but for a longer period? >> well tyler, as you know we're long-term bulls. we think the market is much higher but we have been calling for 5% to 10% correction. sometimes the markets get stretched and they almost look for a reason to sell off. we have four of five we think are going to come into play here. and we're starting to see them. one is concerning the fed and interest rates. two is oil. three is the economic numbers in the first quarter. we think they are going to be still off and then certainly, earnings we think the first quarter earnings number could be the worst earnings season in a while. and there's a lot of near term concerns. the other and, if you look through to the second half of the year almost everything we're worriet now is going to reverse. we're convicted on that and we think we're going to have a strong back after the year tyler and at some point, people start looking through that but

in the meantime not surprised to see some pullback here. you know the mideast concerns are what they are. that kind of goes on and on. yemen is not a big oil producer. >> right. >> i think this will pass. >> let me turn to reeva on that note. perfect segway steve, thank you. put it into perspective for us. although the conflict and the fighting in yemen certainly is disturbing on perhaps many different levels the worry from an investment standpoint and oil standpoint is really concerning with saudit correct? >> yes, absolutely. i mean even as we see with the saudi led coalition leading an air campaign as well as a naval blockade on yemen's port the intent there is also to protect the battle strait. those blockade operations are not necessarily going to impede transport through that strait. there's always the risk of some sort of harassment and retaliation, but iran for example, has very difficult

projection capabilities when it comes to conventional military capability in that area. so really the focus is going to be on saudi arabia and the blowback from these operations. that involves cross border attacks and the persistent threat of jihadist attacks in saudi arabia. that's something that's always going to continue to spook the markets and certainly, the idea of a saudi led force in yemen where collateral damage is a part of any big military operation like this that is prime foder for the number of jihadists operating in this region and see saudi as a prime target as well. reeva quick answer if you may. i have at a presentation some time ago where the presenter from the ram corp. said even as worried as the u.s. and west are about iran and the potential for them to have a nuclear weapon, most of the arab counties are

even more worried about iran. do you agree with that? >> well naturally. the saudis are not comfortable with the idea of a u.s./iranian. they see a u.s./iranian deal giving a pact to the iranians and proxy conflicts whether it's making sure the conflict in syria is focused on isis and not the assad regime and ensuring in yemen that the saudis obviously have an interest in applying a lot of force there. the u.s. can basically provide logi support but it's going to be playing all sides of this conflict. it still needs a working relationship with the iranians. and therefore, you see an assertive alliance led by saudi arabia. >> given the fact that reeva just outlined and you mentioned the problems in the middle east are going to be with us for some time. if you take that out of the market equation where do you see stock prices going long-term

bullish and where would you invest given we're seeing weaker economic data and the transports seem to be weaker lately? >> first off, right now, be behind the transports. i'd be selling oil. we think there's an oil oversupply problem that has yet to be corrected, sue, and we see oil piercing the olos and probably heading down into the 30s before this is over. i think those were still, the stocks waiting a chance to get out. defenses here and like the interest rate that's going to right about where things are heading. head lower. those interest rate stocks will perform with it and near term we'll be defensive and in here in the next couple of mont get through this earnings season i think that will be the chance to reload the boats on the cyclicals and the industrials and the text and the financials. but i wouldn't do it in here. >> steve, thank you very much. steve off with fed rated invest

investorsin the consumer financial bureau with new rules for payday loans. requires lenders to verify customers can afford to pay debt before allowing them to take out a loan. the plan under review for months would be to reignn in the industry from taking more debt. a bipartisanship on capital hill. we told house democrats and republicans were closed to a long standing problem over how medicare pays doctors. the deal got done. john harwood joins us from washington. john what was the medicare reform that the house passed today? >> reporter: first of all, y it got done but with 392 votes out of 435 members. that's an extraordinary level of support for any member in the congress. what they did was regularize the

patients for medicare patients. it was interrupted by a formula that didn't pass back in the 1990s and the result was that doctors were uncertain about their incomes and medicare beneficiaries uncertain about doctors as a result. that's a bad formula for politicians and that's why ultimately this $200 billion package was agreed to by both parties. john boehner and nancy pelosi. now, here comes the senate. and what happens next? >> there are some objections by some democratic senators in particular to the fact that the children's health insurance program which is part of this deal is only extended for two years rather than four. some question about abortion language. it looks like it's not going to be able to pass tonight before lawmakers leave on a two-week recess but it is very likely to pass as soon as they back in two weeks and it's quite remarkable to have a deal that draws overwhelming support for parties with medicare reforms,

people with high incomes of $133,000 with higher medicare preem premiums and won't be able to have deductibles for doctors and that will increase their costs in hopes of getting them to use less medical care. >> does this tell anything about chances for action on other issues tax reform or the budget? >> not likely. one can always hope but i talked to a republican member of congress the other day about the prospects for corporate tax reform and it seems clear both from the republican perspective and the white house perspective that's going to be a bridge too far in this congress. john thank you very much. john harwood in washington. still ahead, we've been telling you about the backlog at the west coast ports but now the problem is starting to come home to roost for some companies. we'll tell you which ones in a.

as we mentioned earlier, unsettling news out of europe today. the co-pilot of the germanwings flight appears to have deliberately crashed that plane into the french alps killing all 150 people on board. officials say the 28-year-old german national andreas louis wanted to destroy the aircraft and lock the pilot out of the cockpit. joining us now is someone familiar with the airline industry former continental ceo gordon bosoon. >> so glad to be here. >> from a business perspective, airlines do they need to be held to a higher standard in terms of knowing background information about their employees given the fact that they are taking people putting them in a plane and flying them to various destinations or is the standard the same as any

other business that's being run? >> i think, you know, various companies have different approaches. most of them do psychological battery exams. there's a lot of interview and a lot of background course. you have to have technical proficiency. they get what i consider extraordinary screening. >> whether that screening is thorough enough at the initial point, is it repetitive enough gordon gordon so that people who may run into personal problems, not in year three of employment but year 23 of their employment are checked up on periodically sufficiently? >> well there is kind of an information system within each company. there is employee assistant programs for alcoholism and other forms of depression. so while it may not be a formal one, they're so close together for so much times they do have a way to report on abnormal behavior but no there's not any

type of examinations on a regular basis that i know of. >> it's a high pressure job though being a pilot or co-pilot. is it not? >> well actually it's kind of boring. the airplane is so -- >> really? >> well the excitement of taking off and landing is always exhilarating but the 12 hour trip to hong kong pretty much straight and level and the airplane is doing the flying. so it's not as exciting, you know as you might think. >> we made the doors to the cockpit much more impregnable in the wake of 9/11. and other protocols were put in place. do you see anything in the airline protocols that could or should be changed to make this kind of incident less likely to happen? i understand that in the u.s. if a pilot leaves the cockpit, another crew member needs to be in so there's always two people

in the cockpit, that that practice was not followed routinely in europe. >> that's true tyler. and i think that may be the fatal flaw here. it is a good idea. always have a back-up. you never know and when you're in there by yourself it's anything can happen. so i think they will probably follow the u.s. kind of process in their regulatory requirements to have an additional crew member in the cockpit at all times. >> what about liability, quickly, gordon if you would. the liability for airlines is the bar set higher? does it cost them more because of the nature of their business? >> well whole insurance, and other things very expensive because you're insuring expensive airplanes, personal liability, your track record is amongst the brokers' discussion but each airline has its own insurance program, but it's never been safer. i know this is a horrible

accident. everybody is upset about it but air travel is safe as it's ever ever been and the overall damage to the liability i don't think the going to make a difference here. >> all right. on that reassuring note gordon thank you, nice to see you again. gordon basoon former ceo. >> and a pilot himself. shares dipped to a one year low. that's where we begin market focus. san disk cut for the full year cited lower than expected sales of enterprises and lower pricing in some areas of business. shares fell 18% to $66.20. earnings from the mobile homemaker winnebago shifted into low gear missing analysts estimates. company blamed higher expenses because of initiatives and increase in legal and maintenance costs. shares fell 14% to $20.39. strong holiday sales at

lululemon helped beat wall but the company issued a weak outlook for the current spring quarter citing shipping delays at west coast ports and bad winter weather. even with the warning, shares of lulu were up 5% to $63.97. scholastic posted a wider than expected loss as a stronger dollar hit international sales and the company saw declines in other business segments. the publisher said it offset from the mine craft video game that's big in my house and also the children's book business. shares off fractionally at $37.94. con agra's quarterly profit came expectations thanks to cost cuts and company raised earnings forecast for the year but the maker of slim jims and chef boy yn ardee. west coast had an impact. con agra fell half a percent,

$234.75. extenseure raised forecast for the second time and posted revenue growth of 5% for the latest quarter thanks to growth in its outsour business. shares rose 7% to $94.17. back to the economy now. americans applying for unemployment benefits fell to a low, a good sign for the labor market. fell by 9,000 to seasonably adjusted 282,000. that's the lowest level since mid february. fed officials, money managers and chief executives are in detroit for a two-day symposium offering their views on the economy and the markets. and steve liesman was there. >> atlanta federal reserve president still sees a rate hike from the central bank likely this year. maybe as soon as june or late as september. but he said the economy was soft right now and the strengthening of the dollar is a bigger factor than he thought it would be. >> in the beginning when the

dollar declined i was prepared to to some extent dismiss the influence of the dollar as being not great because our economy is not so export dependent but i'm upgrading it as a factor to watch. >> said economic weakness from of a dollar likely transitory. engage the conference to bring together 1300 students from around the country for a two-day deep dive into finance and economics. also one of the engaged panels td ameritrade president said recent stock market volatility up 200 down 200 another day is here to stay and connected it to potential interest rate increases by the federal reserve. >> i've been saying for six or nine months now that there's so much stimulus in this system for monetary stimulus for the federal reserve banks, most of the developed world to be honest that when they start to pull that away there's no way to come without volatility. that right now. >> reporter: among the student

attendees involved in managing portfolios keep a close eye on markets. >> i think stratus continually a strong company and continue to hold it intot year. >> why european? >> it's an interesting position we have. it's long european equities that do most of their business outside of europe but are based on the continent and it's also a hedge position. so it goes long dollar short to the euro. >> reporter: who said you can't be both young and wise? for "nightly business report," i'm steve liesman in detroit. coming up how slippers are back distressed properties and selling them for a quick profit but this time there's a twist. we'll tell you

here's a look at what to watch tomorrow. federal reserve chair janet yellin is giving a speech on monetary policy in san francisco. the third and final read on fourth quarter gdp is due out before the opening bell and the university of michigan sentiment index gives us a read on how the consumer was feeling about the economy this month. well, as home prices continue to rise, house slippers are coming many markets. they're buying rehabbing and quickly selling but this time around is different. they're doing it with a new brand of funding. diana olick explains from bolingbrook, illinois. >> reporter: ben is flipping suburban chicago homes full-time at a fast clip but he's getting no help from the big banks. >> w 2 without a pay stub won't

process the application. >> reporter: in e new era of tight lending, wall hood to the crowd, a platform called realty shares. founded the company two years ago. >> we're not in place for real estate investing. they can create a free account and have investments across the country. >> reporter: like wallhood chicago area homes. for a minimum of $5,000 a credited investor can get in on it and in turns, gets the money. albeit a higher interest rate than the big bank. >> you can say we're making less profit because we pay the higher rates. i would look at it a different way. if we were trying to work with the banks, we'd be lucky if we did one or two projects a year. and working with realityty shares we've done 12 in 12 months. >> reporter: did the project in as little n hour. demand is clearly strong even for high end house like one in los angeles which realty shares also facilitated, but

risk he said is not high. >> so far, no defaults. no major issues with any projects and i think that's good for criteria of the strictness to which we ad to and looking at property. >> reporter: only one in ten properties that come through realty shares get lifted but once they do they turn a fast profit. wallhood slipped homes like this to half a million dollars, rarely knowing who funded the deal. >> i've had one investor reach out to me via linked in and say thanks for putting my money to work. great job. keep it up. for the most part it's anonymous. i never get to find out who's investing in the projects. >> reporter: he does get to see a return. big return. for "nightly business report," i'm diana olick in bolingbrook, illinois. and it's the end of an era for downton abbey fans of which i am one. the producers of the program said the drama will end after the upcoming sixth season.

show has won three golden globes and became the most nominated non-u.s. show in emmy history with 51 nominations. season six on masterpiece on pbs in january. sad. that's "nightly business report" for tonight. i'm sue herera. thank you for joining us. >> i'm tyler mathisen. thanks from me as well. have a great evening. hope you join us right back here

jim brown: join us for 50 years with peter, paul and mary. it's an anniversary special featuring america's favorite folk group singing the songs that changed history and became the soundtrack of our lives. fifty years with peter, paul and mary, on pbs. explore new worlds and new ideas through programs like this. made available for everyone through contributions to your pbs station from viewers like you. thank you.