this is "nightly business report," with tyler mathisen and sue herera. sharp drop with the markets on edge. is it time for long-term investors to shift their strategy and take on less risk? search for stability. the stocks that may provide some calm in a volatile and changing world. and what to watch. will tomorrow's jobs report seal the deal for an interest rate hike in just two weeks? all that and more tonight on "nightly business report" for thursday, december 3rd. good evening, everyone. welcome. a new reality. the european central bank cut interest rates to kickstart that region's economy. the federal reserve may be on the verge of tightening rates for the first time in nearly a decade. and there's the possibility that yesterday's mass shooting in san

bernardino was an act of terror. all three events, a changing of the macro economy and the fight against terrorism, will play out over the long term. all three weighed on investors' minds today. by the close the dow jones industrial average slid 252 points to 17,477. the nasdaq fell 85. the s&p 500 dropped 29. steve liesman takes a closer look at the events that kept investors on edge. >> reporter: concerns gripped markets today from two completely different sources. in frankfurt, germany the european central bank announced a sweeping new round of easier monetary policies that nevertheless fell far short of market expectations. it strengthened the dollar, sent bond yields surging and weighed on stocks around the globe. and then in the early afternoon new details emerged about the horrific shootings in san bernardino. increasingly the event looks less domestic and more potentially international, with nbc reporting one of the suspects had been radicalized. fed chair janet yellen was asked

about the potential economic effects of terrorism in her testimony before the joint economic committee today. >> those risks are ones that we watch very carefully, and i would agree with you that it does have the potential to have a significant economic effect. i would not say that i see a significant effect at this point. >> reporter: yellen gave every impression that despite risks and concerns that might be out there, including a stronger dollar and weak overseas growth, the committee looks ready to hike. her comments follow an ecb press conference where president mario draghi laid out new measures to ease and stimulate the european economies. they included by extending by six months the minimum amount of time the ecb would buy bonds and broadening the kinds of bonds it would buy. they also cut interest rates another ten basis points, down to negative 30. but it wasn't enough. markets wanted more and expected more and the euro surged against the dollar. stocks fell. then draghi faced a barrage of

questions from reporters, had to defend his moves, saying they were adequate to the task. >> we are confident that these decisions actually are adequate to achieve our objectives. i don't think our communication was wrong. i think these measures need time to be fully appreciated. and we will see. >> reporter: draghi speaks in new york tomorrow and markets around the world will follow his every word, as they will the increasingly awful news of san bernardino. and they will weigh those events against a november jobs report that should show employment in the united states is relatively healthy, likely prompting a fed rate hike. for "nightly business report" i'm steve liesman. >> and asteve just reported, the stock market took a leg lower today on reports that one of the suspects in the san bernardino shootings had been radicalized. in contact with people holding islamist extremist views. jane wells has been covering the story and has more on today's developments.

hi, jane. >> reporter: hey, tyler. we are now right across from where this massacre happened. this is the building behind me where those 14 people died, where 28-year-old syed farook was vague holiday party with co-workers. police say he left and then returned at some point with his wife, tashfeen malik, dressed in tactical gear and began opening fire. we have video shot a short time ago of people bringing some flowers. escorted by chaplains. they tell us that the woman who was very emotional, her fiance is one of those who died in this. and as we show you video of the scene here yesterday right where i'm standing now behind me, a total of 14 people killed. they have now said 21 people were injured. two dead suspects. as we show you where they were killed. they died in a shootout with police in a rented suv that they were supposed to return yesterday. hundreds of rounds exchanged there in their car and in the house the two of them were

renting thousands of rounds of ammunition. a total of 15 pipe bombs including three which were here at the original scene, and police had to neutralize those last night before they could even start to extract the bodies. what we do know is as nbc news is reporting, that syed farook had traveled abroad, he met his wife abroad, brought her here. she's from pakistan. he's a u.s.-born citizen. and that while he was on nobody's radar, he had been "radicalized to some extent" and was meeting with people who are on the radar. still, tyler, the fbi will not characterize this as terrorism yet. they have their hands on computers, thumb drives, cell phones. they're going to try and piece this together. the two had a six-month-old daughter which they left with his mother yesterday morning, saying they had to go to the doctor. we're not sure where that baby is now. but police say that the farooks' relatives have been cooperating, they have been interviewed, and while police believe the situation here is safe and that the two shooters are dead it's not clear if anybody else knew

about this and may have helped in some way. many, many questions. back to you. >> that is certainly some part of the ongoing investigation. early today, jane, you recited some remarkable numbers about the arsenal that was discovered in that home in i believe it's redlands, california. you remember some of those statistics. it was truly mind-blowing. >> reporter: in the home there were a total of at least 4,500 rounds of ammunition either for the assault, semi-automatic rifles they had or for the semi-automatic handguns. there were 12 pipe bomb-type devices is how police describe them. there were tools to make i.e.d.s. there was a lot of stuff in this home where the two of them were renting, and in the suv in addition to the 4,500 rounds at least in the home, in the suv there were 1,600 rounds. as for the guns, police believe they were all legally bought.

they are common. they are common sporting rifles or handguns. but in this case of course, it was used obviously to deadly intent. >> all right. jane wells in san bernardino. thank you. well, in light of what we've just told you about, is it time for long-term investors to shift their strategies and start taking on less risk? hugh johnson joins us. he's chief investment officer of his own money management firm. hugh johnson advisers. hugh, this is a great night to have you here because i know you take a long yes-term view and i think you can give our viewers some great advice. so if i am a longer-term investor, given the changing global environment on many different levels, what would you do right now? >> well, first of all, i wouldn't get too caught up in day-to-day events. certainly, there were a lot of surprises today with the european central bank, what draghi did was a little bit of a surprise. it wasn't quite as much as we'd expected and certainly the events in california were very,

very much a surprise. when you get that kind of surprise, sue, you get a lot of volatility and significant declines in the stock market. what i'm simply saying is don't get caught up in the day-to-day volatility of the markets. take a longer-term point of view. i think if you do that, sue, quite frankly i'm trying to ask myself the question is there any reason to really change my now somewhat positive but cautious on the basis of valuation, but somewhat positive view about where the stock market economy and interest rates are going. and i'm not going to change my view based on what i've seen today. what i've seen today was a surprise, but i'm not changing my view. >> but can you blame, hugh -- hugh, you and i have known each other a long time, which speaks more to our age than anything else. but can you blame individuals who are sitting there and looking at the three factors you mentioned, the european central bank -- don't know how that's going to play out. the federal reserve. don't know how that's going to play out. and now the possibility that this individual or those individuals involved in san

bernardino were some kind of domestic terror cell. can you blame them for wanting to step back and say hey, i want to wait and see, i want to take some money off the table? >> no, i can't blame anybody for being a little bit frightened by this. it even frightens me. but i think if i do back away and i continue to do a hard-boiled analysis of the current state of affairs, you know, we've known about the divergence in monetary policy. we know that's going to put upward pressure on the dollar. we know that's going to hurt exports. we've known about that for some time. terrorism is not new. coming to our shores is perhaps a little bit new. it's gone global. and that to some extent means maybe you have to take a look at companies such as a raytheon or northrop or a lockheed martin. add those to your portfolio. but as far as changing your basic strategy, i wouldn't do that. but i certainly understand when somebody gets scared by these events, they're new and they want to step back, hold the line for the time being and see it settle down.

i certainly understand that, and that's just fine. >> very quickly, you also like lowe's, hugh, in consumer discretionary and in technology apple and google. so you do see some value in the market. >> well, i see some value in the market. i see some value in those names. and those names are in our portfolios and we'd add to them. i think my only concern right now as far as the market goes is that it's a little bit overvalued. we've come from being very overvalued a couple of days ago down to being fairly valued. but you've got to pick your entry points. in my judgment a good entry point is going to be lower than we currently are. so exercise some patience. exercise with discipline. and if you want to sit it out for a couple of days because you're concerned about the changing events as tyler points out, that's just fine too. but again, a lower entry point i think is what you have to wait for. >> thank you so much, hugh. good to see you again. hugh johnson with johnson advisers. and still ahead, the great

divide. why opec's meeting tomorrow is expected to be more contentious than ever. ♪ ♪ as steve liesman reported earlier, tomorrow's employment report is expected to reflect a healthy job market. and today the number of americans filing for unemployment benefits last week remained at a level consistent with a strengthening job market. a separate report from outplacement firm challenger gray & christmas says layoffs last month were at a 14-month low. hampton pearson takes a closer look now at tomorrow's employment report. >> reporter: ahead of the november jobs report the labor

department says first-time unemployment claims actually went up last week but the less volatile four-week moving average declined by 1,750 jobs to just over 269,000, an historically low level. earlier this week a closely watched survey of private sector job growth forecast an increase of 217,000 new hires, the most jobs in five months. on capitol hill today fed chair janet yellen was accentuating the positive about jobs and the overall economy. >> we want to see the economy being on a path where we'll continue to erode that labor market slack over time. so we'll be looking very carefully at that. but we can't overweight any particular number. we need to be looking at underlying trends in the data and not overweighting any

number. >> reporter: in october employers added 271,000 jobs. the biggest monthly increase this year. and headline unemployment fell to 5%. the november consensus forecast projects 200,000 new jobs and a steady unemployment rate. but there are potential speed bum tops job growth. new datefrom at institute for supply management shows a showdown in both manufacturing and the service sector. it turns out service sector businesses last month grew at their slowest pace since may. and services have been an engine of job growth, adding 2.5 million jobs. 85% of jobs created according to the labor department. still leading economists say the overall job market is robust. unemployment is at a seven-year low. and wages, while stagnant, are finally showing some signs of improvement.

trends, the economists say, that support a change in monetary polts at the fed. >> i think we're getting very close to full employment. i think it would be prudent for the federal reserve to start to normalize monetary policy. >> reporter: tomorrow could turn out to be the most important jobs report of the year, coming just two weeks before the federal reserve meets to decide if now is the time to raise key short-term interest rates for the first time in nearly a de. for "nightly business report" i'm hampton pearson in washington. new orders for factory goods bounced back in october. this follows two straight months of declines. the commerce department reports that new orders for manufactured items rose 1 1/2% on rising demand for transportation equipment. but the overall manufacturing sector remains pressured by a strong dollar and a cutback in spending by the energy sector. oil prices rose today, recouping all of yesterday's losses. the dollar fell sharply against the other major currencies after

the ecb disappointed the market with the amount of stimulus it announced and the falling dollar increased demand for most commodities including domestic crude. at the settle prices rose nearly 3% to 41.08. despite the rise today, oil prices remain relatively low. that will be the main focus of discussion at tomorrow's gathering of the largest oil producers in the world. but will it be enough for the cartel to act? jackie deangelis takes a look at what to expect from tomorrow's big opec meeting? >> reporter: for oil prices it's a moment of truth. the last opec meeting of the year tomorrow. the event that global oil producers and investors have been waiting for. consensus going in is that there will be no cuts to production. the cartel is expected to stand firm, to cope with low prices and to maintain market share, to force other players to reduce their output. do they have a choice? profits have been lost in a low-price environment, creating a need to pump more product.

propelling a vicious cycle that will only contribute to the current oil glut. >> opec's inaction could be the action. in other words, that if they don't cut, other countries won't cut either. and you'll have a world that's even more awash with oil and prices will trade lower. >> but could there be a mutiny coming inside the cartel? countries like venezuela and ecuador are choking on low oil prices. saudi arabia has more tolerance to wait it out. >> they're struggling right now. they're struggling to pay their bills. and i think that what's happening is and what you see with opec is they're producing 31.77 million barrels a day on a 30 million quota. that's other countries cheating because they can't get the revenue they have from past oil prices. so as the price drops they have to produce more. >> reporter: the iranians, they're planning to bring 500,000 to a million barrels a day online as soon as they can. saudi arabia has said it will cut production but only if all producers cut. that means the u.s. and russia too. cooperation like that is hard to

come by. yet there's always a chance that opec goes rogue, and that's why crews are steady into the meeting. but many think investors will sell on the news and into the end of the year. for "nightly business report" i'm jackie deangelis. kroger beats and hikes guidance. that's where we begin tonight's market focus. the grocer increased its profit estimates as sales rose in the company's most recent quarter. the firm said the performance shows signs that consumer confidence is still strong. shares rose nearly 5% to 39.91. costco reported same-store sales for november that were basically flat but that was better than forecast, which was for declines. the stock was more than 1 1/2% higher to 163.67. sears saw its revenue fall 20% in its latest quarter. this as apparel and consumer electronics sales declined. the company also said it plans to continue to take significant actions to alter its capital structure and position it for profitability. the shares tumbled 7%, or nearly

so, to $19. avon is in talks to sell its north american business to a private equity firm according to dow jones. this comes as the cosmetics company has been under activist shareholder pressure. shares rose nearly 7% to $3.99. express saw earnings rise 80% in the company's latest quarter, and it hiked its guidance for the year. the clothing retailer offered fewer discounts, and that turned into higher profits. shares were 6% lower nonetheless to $16.33. mixed quarterlies from dollar general. the company's core customer base spent less. but bottom line results were better than expected as the company kept its costs down. the stock up 4% in this otherwise nasty day. it finished at 68.12. michael's saw its profits jump but currency headwinds weighed on results. the reerltd cut its 2015 guidance because of fewer store openings. shares were off 1% at 21.69.

barnes & noble reported a wider than expected loss. they did it late today. the book retailer saw sales of its nook e-reader drop by more than 30%. shares tumbled initially after the close. during the regular session the stock was off more than 4%. it finished at 12.05. coming up, searching for stability. "fortune" magazine's investor guide for 2016 has a list of names you may want to own in this volatile world. ♪ ♪ here's a look at what to watch for tomorrow. as hampton reported, it is jobs friday. we'll find out how many jobs the economy added in november.

also on the data front, a read on international trade. european central bank president mario draghi will speak at the economic club of new york. and that is what to watch for on friday. and after more than two years the securities and exchange commission case against the billionaire hedge fund founder steven cohen is set now to move forward once again. cohen will face the regulators' allegations that he failed to supervise two former fund managers over insider trading. a legal stay had stalled those proceedings. a judge has now lifted that stay and scheduled a prehearing conference for later this month. standard & poor's cut the credit ratings of eight major global banks. the downgrade decision comes after the federal reserve adopted a new rule that would limit future emergency lending to failing companies. the downgrade affects the holding companies of bank of america, bank of new york mellon, citigroup, jpmorgan chase, morgan stanley, state street, goldman sachs, and wells

fargo. "fortune" magazine has just published its investor guide for 2016. it includes a list of stocks that it says offer a measure of stability in the midst of chaos. susy gharib is here to discuss it. senior special correspondent at "fortune" and "nightly business report" contributor. always good to see you. how did "fortune" come up with this list of good stocks for bad times and does "fortune" really think 2016's going to be bad? >> nobody knows what it's really going to be. but what they decided to do, the "fortune" team was looking for companies that given all the volatility that's going on, especially on a nervous day like today, that offers some safety. they're reasonably valued companies. they are established high-quality companies and these are kidnap that don't depend on a supercharged economy to perform well. obviously, tyler, no company is yes, ma' immune to some of these forces but at least they offer stability as you said in a volatile world. >> one of them, one sector

anyway, susie-s airlines. i kind of question that because a lot of investors have been burned by losses and bankruptcies and troubles with mergers and the like. >> we remember all of that, don't we? we reported on all of that. well, airlines are now making money. we all complain about the extra fees we have to pay for baggage or more comfortable seats but we do pay them and the airlines are making money off of that. jet fuel prices are lower as you know. and you're not seeing the price wars like we used to because of all the mergers and consolidation. the two companies that "fortune" chose, delta and virgin america, delta is prepared for takeoff. it's made a lot of smart moves. its earnings are expected to go up. ditto for virgin america and virgin america also ha a dividend, 5%. >> good stocks. this will do it. >> every time i get on a plane these days, susie, i say there are too many people on these planes. >> i know the feeling. >> let's move on to banking. what's the attraction here?

your two choices are not the big banks but a big broker, schwab, and capital one. >> exactly. and look, we talk every day about what the fed's going to do. ultimately interest rates are going to go up. as rates become more normal. these are two companies that will benefit. it's expected that the profitability on money market funds will triple. that's a big area for schwab. so that's in its favor. capital one known for credit cards, but it's been expanding its branches. it has a lot of deposits. it will also benefit from higher rates. >> and in technology one new tech and one older tech, susie. >> that's right. microsoft, a lot of people consider as old tech. but the ceo, nadella, you've got to hand it to him. he's transforming the company. the stock has been up 17% this year. and it's expected to continue next year. google officially now alphabet. what can i say? it's firing on all cylinders. the stock up more than 40% this year. it's got a lot of cash. most likely that's going to help to make that stock go even

higher. >> susie, great to see you. >> nice seeing you too. >> susie gharib, special correspondent with "fortune" and "nightly business report" contributor. >> you guys coordinated your colors. >> how do you like that with the tie? >> very good. that does it for "nightly business report" for tonight. i'm sue herera. we'd like to remind you this is the time of year your public television station seeks your support. >> i'm tyler mathisen. thank you very much for your support. and we hope to see you right back here on jobs friday. ♪ ♪

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