this is "nightly business report" with tyler mathisen and sue herera. raise the roof. americans are buying new homes at the fastest pace in eight years. as the spring selling season picks up momentum. borrowing is up for the things we need such as houses and cars and education. but are consumers taking on too much debt? power and speed. they're iconic. they're fast. but are muscle cars strong enough to protect you during common collisions? those stories and more tonight on nightly business report for tuesday, may 24th. i'm sharon epperson in for sue herera. >> i'm tyler mathisen. a powerful rally on the street and it wasn't just one

thing but a combination of factors. housing data was strong. oil prices went up. new highs for the year. and there seems to be an increase in confidence that higher interest rates likely won't hurt stock prices very much, if at all. the dow jones industrial average climbed 213 points to close at 17,706. nasdaq added 95. and the s&p 500 rose 28. ari thompson has more on today's big gain. >> reporter: stocks finished strong on the back of a big gain in april's new home sales and the back of strength in the european markets. the u.s. markets rallying from the opening bell. this after a new poll showed that britons are less likely to vote to leave the eu in a brexit. new home sales for the month of april rose to their highest levels in eight years. that data along with the news that prices for new homes were very high levels and the news

that the luxury home builder toll brothers came in with stronger than expected earnings adding fuel to the market's rally. pacing the gains today, strength in health care. in finance and tech stocks, especially semiconductors. these sectors though among the poorest-performing sectors of the year. this led some traders to point out this could be a short covering rally or when investors expect these stocks would fall, reverse their wages. impressive in its all-day staying power traders remain cautious about today's rally if large part because they say the markets continue to face a number of head winds including the potential for higher interest rates and price evaluations. at the snoernlgs, i'm mary thompson for "nightly business report." as mary mentioned those strong new home sales put investors in a buying mood. the commerce department said new home sales climbed more than 16.5% in april to a seasonally adjusted annual rate of 619,000 units, an eight-year high. prices hit a record.

diana olick has more on what's shaping up to be a very strong spring market. >> reporter: there just aren't enough homes for sale. that's one reason builders are seeing big demand. supplies of existing homes are falling nationwide and especially in major cities. inventories down double digits in seattle, atlanta, portland, charlotte, dallas, and kansas city just to make a few. new listings are down as well as potential sellers are afraid they won't be able to find anything to buy. >> we got in the housing market because of the super-tight inventories creating demand and massive job growth. this is a great setup for a slow and steady recovery. >> reporter: slow but not so steady. sales of newly built homes jumps nearly 17% in april after falling in the months before. but it's not just that headline turning heads. it's the price. the median price of a newly built home soared nearly 10% to

$321,100. the highest reading on record. the last peak was in 2006. not only is demand pushing home prices higher, builders are basically absent from the starter home market because most of the action is on the pricier end, which in turn skews that median number higher. that was clear in a big quarterly earnings beat by luxury builder toll brothers raising expectations for 2016 sales and seeing it's already pricey price head even higher to well over $800,000. >> the issue of the millennials or people of that age and deferral in marriage and waiting to buy. then when they buy they're much older and therefore not a starter ho buyer anymore. >> reporter: it bodes well for builders but not so much for buyers. as prices will likely continue to heat up right along with the mercury this summer.

>> to read more about housing head to our website nbr.com. of course most of those people who bought new homes had to take out mortgages to get them. that was one of the reasons why household debt, which also includes auto and student loans, rose in the first quarter of the year. but unlike the period of time leading up to the financial crisis, increased borrowing may not be such a bad thing this time around. steve liesman explains. >> reporter: total household debt climbing a slim 1.1% in the first quarter to 12.25 trillion, the seventh straight quarterly rise, the biggest increase in mortgage debt since the great recession according to the report from the new york federal reserve bank. there are increases in auto and student loans, but declines in credit card and home equity debt. so is consumer debt a problem? are we in the middle of a consumer debt bubble? hardly. total debt remains more than

$400 billion below the peak of 2008. per capita debt continues to decline since the population is to improve. new foreclosures and bankruptcies fell. newly delinquent loans rose by the least since 2005, up $138 billion. in the teeth of a recession delinquent debt surged by more than $400 billion a quarter. delinquencies are down because banks continue to lend to those americans with just the best credit. before the recession, people with the best credit scores got 24% of all mortgages and the worst got 13%. in part because of subprime lending. now the best credits get nearly 60% of all new mortgages. the second tier has fallen in half and there's virtually no mortgage money for americans with the lowest credit scores. the races questions whether banks are too sheepish in their lending or regulations are too tough. some problem areas remain. total auto and student loan debts remain above $1 trillion. the percent of loans that are

90-days plus delinquent rose for autos but fell for mortgages, credit cards and student loans. it's not a worrisome picture of consumerism debt, not suggesting we're in the later innings of a credit or economic cycle. jack mcintyre joins to us talk more about household debt, the consumer, and the economy. he's the fixed income portfolio manager at brandy wine global. listening to steve liesman's report it appears we're doing better in managing our debt as consumers. why is that, and why are consumers doing a better jonathan before the financial ? >> you know, i think there's a couple of things. steve pointed out, i think first of all, i think lending standards have been ratcheted up since the global financial crisis. so it's a little more difficult to take on debt. but i think more importantly the debt is in the hands of the consumer that is in a better position to be able to service and pay back that debt.

and the other part which i think is certainly as important, that debt, it's mortgage debt. it's going into housing. housing is an asset that should appreciate over time. so there will be some wealth created along with that. so i think the takeaway, it's gradual increase in debt and that it's not -- borrowing and people that are just overextended, the people that already have pretty good balance sheets. >> so loans being made to better borrowers. let's talk a little bit about what effect rising interest rates might have on those borrowers. is it going to pinch them in any sort of meaningful way? >> i don't think in the end, initial phase. i'm in the camp i think if the fed is in a position to slowly, i think it's important to go slow in terms of tightening policy, that that's associated with the u.s. economy that's doing better and as part of that economy doing better wages should start to move higher. so it's a little bit of a battle between a consumer that has

better income versus, maybe i have to pay a little bit more for that mortgage or credit card or whatever type of debt it might be. >> so what point should we be concerned about the level of household debt? when did debt become bad? >> debt becomes bad when the u.s. economy teeters on a recession. we're not there yet. again, i think we have had a kind of cultural shift in terms of how consumers think about debt. i think -- i just don't see the days that we are borrowing to consume anywhere like we were ten years ago. i think consumption's going to be more a function of income, of wages, which means that we should have a little bit less economic volatility. but no, if the fed makes a policy mistake, u.s. dollar rallies sharply, the u.s. economy slows down to a recession, obviously debt, it's not going to be your friend in that kind of environment. >> right now seems like we're on a good track. so hope that continues. jack mcintyre with brandy wine global investments, thank you.

the president of the philadelphia federal reserve is echoing recent comments of other fed officials. patrick harker said the central bank should raise interest rates at the next policy meeting in june. that is unless there's a shift in the economic data between now and then. he added that he can easily see two to three more interest rate hikes this year. an update to a potential merger that we've been reporting on. monsanto has rejected behr's $62 billion offer, calling it "financially inadequate." monsanto's ceo said the initial offer failed to address financing and regulatory risks. however, the world's largest food company is open to continuing talks. behr says it's looking forward to gaining in constructive discussion. shares of monsanto climbed more than 3%. the deal news hewlett-packard will spin off its enterprise services business and merge it with computer sciences corporation. the combination creates a

company with $26 billion in annual revenue, expected to deliver $8.5 billion to hp enterprise shareholders. separately, hewlett-packard enterprises which is itself a spinoff of hewlett-packard reported earnings in line with wall street estimates. shares of hpe rose sharply in after-hour trading on news of the deal. shares of computer sciences also spiked as you see there. still ahead, a high-stakes trial in silicon valley that has the entire tech industry on ed oracle and google, two of the world's biggest tech

companies, are battling it out in court and the outcome could extend far beyond these two companies. deer ra bosa at the courthouse in san francisco tells us what's at stake. >> reporter: two tech titans, $9 billion. and a decision that could send shock waves across the industry. the stakes are high in the oracle versus google lawsuit that rests with a jury. oracle claims that google violated its copyright when it used java programming to create android, now the most popular operating system in the world. google contends it was fair use of that code. but the case goes beyond the two companies. at its heart is open source, a pillar of the software industry that a huge community of developers and startups rely on. and they may not be able to defend themselves as google can if oracle wins. >> if indeed the fair use defense is not set to hold here and the jury does find google's liable, companies and software

programmers are going to have to sure that they secure the rights, not just go along assuming that no one's going to call them to the carpet and when there's time for infringement. >> reporter: this trial has been dragging on for nearly six years. as lawyers made their closing statements the rhetoric became increasingly heated. oracle's lawyer told the jury, you don't take people's property without permission and use it for your own benefit. google took a shortcut, and they took a shortcut at oracle's expense. meanwhile, google's attorney told jurors that oracle is accusing google of unfair copying because it failed in its own attempts to enter the smartphone market. he said they now want all the credit and a whole lot of money. that is not fair. now that is up for the ten jurors to decide and it needs to be unanimous. until then the tech industry remains on edge. dierdre bosa for "nightly business report" in san francisco. meanwhile, google's former

ceo eric schmidt spoke about google's legal fight with oracle at a major conference in europe designed to help startups grow faster. he made the comments to our julia chatterly who interviewed a number of other well-known business leaders. she has more now from amsterdam. >> reporter: i'm in amsterdam for the 2016 startup fest europe. this is effectively speed dating between european startups in the tech sector and potential investors. there are a whole host of speakers today. tim cook of apple kicked off the proceedings. he spent a great deal of time talking about recent privacy issues. we think if you send a message, we're more like the fed ex carrier, right? we take the message sealed and bring it over. and so that's our point of view and it's not a new point of view. it's a point of view that we've had and we've constantly added

more and more security. and i realize that some people have a different view. but i hope the people that do at least understand where we're >> reporter: i got the chance to speak to the alphabet changer rick schmidt. we talked about today's court case between oracle and the company and he says if the ruling goes in oracle's favor there's only one loser. >> we're part of the open source movement. so i think it really hurts oracle. because they own java and they need to promote it into this new world. and it just doesn't make sense to me that they're in that path. >> reporter: i couldn't let eric leave without talking about u.s. politics. it's common knowledge he's backing a startup that's looking at data analytics for hillary, the same for president obama. i picked up on donald trump's recent comments that data is overrated. i asked eric for his views. >> let us start by saying with donald trump that his candidacy has largely been fueled by

twitter. last time of which i checked was a tech company that used a lot of data. >> reporter: the speed dating here in amsterdam is going to continue for the week throughout the country. it may be the first event of its kind. but the hope here is if you can attract talent like tim cook and eric schmidt, it won't be the last. for "nightly business report," i'm julia chatterly. a fast-growing silicon valley startup could soon be valued at more than $20 billion. snapchat, the popular messaging app, is seeking at least $200 million in investment capital and that's according to tech crunch. that number implies that whopper of a valuation. three years ago facebook offered to buy snapchat for $4 billion. the company has about 100 million daily users. best buy warns of a profit slowdown. and that's where we begin tonight's "market focus." the electronics retailer posted better than expected quarterly results but sees profit falling

below expectations after an earthquake in japan impacted the supply of its high-margin products. best buy also said its chief financial officer is stepping . shares fell more than 7% to 30.55. verizon is warning of ongoing labor strike may negati impact its second-quarter results. the telecom giant says while it has been able to manage maintenance requests it has not been able to meet new customer demands. nearly 40,000 employees have been striking since april 13th. shares finished the day up almost 1% to 49.58. pharmaceutical do eli lilly says it has the potential to launch 14 new drugs by 2023. in areas like diabetes and oncology. the company's ceo thinks lily is well positioned over the next deca finally able to take the science and turn it into products and demographics are in our favor. two-thirds of the medicine that you take in your lifetime you're going to take after the age of

65. so people are going to need the products that come out of our labs. i think that's a great sort of lineup to have as we look 10 or 20 years into the future. >> shares rose a little over 1% to 74.99. under armour is upping its game signing what's believed to be the largest apparel deal in ncaa history. it is a 15-year arrangement with ucla. it's worth $280 million. the new partnership begins in july 2017. shares of under armour up more than 2% to 38.22. domino's pizza might owe some of its employees a lot of dough because of the new york attorney general who is suing the nation's largest pizza delivery chain and three of its franchisees, alleging employees at 10 new york locations were underpaid by more than $500,000. investigation by the state found cot was knowingly using a computer system for years that inaccurately calculated workers'

wages. shares of domino's up fractionally at 122.52. auto zone's latest results hit a speed bump. profit rose nearly 6% at the automotive parts retailer ought stow zone but that wasn't good enough to beat estimates. revenue also missed as the company cited a legal charge and bad weather in several of the regions of the country it serves. nonetheless, shares of auto zone up nearly 2.5% to 760.42. the fast-growing industry of competitive video gaming just took a big step forward. this friday you'll be able to watch other people play games on your living room television. before it had just been available on your computer. is e-sports popular enough to be the next big sports business? julia boorstin tells us whether it is ready for primetime. >> reporter: believe it or not, 220 million people love to watch other people play video games.

now they'll be able to watch these e-sports face-offs on television. today kicks off the first tournament hosted by e-league, a partnership between turner and agency wme. after four days of streaming competitions played in front of live audiences in than tat finals will air friday on tbs. first of 20 e-sports events turner plans to broadcast on television this year, chasing a younger demographic, particularly desirable for advertisers. >> they're going to see a very high-end product with a lot of engagement from a very sought-after demo. and eventually we'll see a conversion of advertisers moving into this space. >> reporter: the em-league sponsors include arby's, buffalo's wild wings, and credit karma. coca-cola is an ongoing partner of riot games league of legends competition. the ceo of the immortals team says e-sports has a big advanta i think what a lot of brands are realizing if you're trying to reach an 18 to 34-year-old

male demographic it's this or netflix and netflix doesn't sell advertising. >> reporter: former nba player rick fox who owns a team competing says this tournament is a turning point for e-sports. another way that teams can cash in on their growing fan base. >> there's traditional sports, the traditional sport attack to it, which is your ticket sales, media rights, sponsorship, merchandising, all the ancillary and traditional ways you would see a traditional sporting france cheese capitalize on their investment. >> reporter: the range of media, game, and tech giants are betting on e-sports' appeal, espn launching an online vertical dedicated to e-sports. tavis and electronic arts are investing. google's youtube is building its app for watching game play. amazon spent $1 billion to buy twitch, the leading destination for streaming video games. >> on twitch you're averaging 80 to 90 minutes of engagement.

in the 18 to 35 demographic, which is what everyone wants to hit. >> reporter: the industry is projected to grow to $1.9 billion in 2018. up from $750 million last year. for "nightly business report," i'm julia boorstin in coming up, do muscle cars live up to their names when put to the crash tes the he have security for the tsa is out. kelly hogan was removed from his post as frustration mounts over long security lines at airport checkpoints. hogan came under fire from bonus payments he received during his

tenure a homeland security report found tsa failed to spot 95% of concealed weapons and explosives. toyota and uber are teaming up. the world's largest car manufacturer is establishing a strategic partnership with the world's largest ride sharing app. the collaboration includes an investment by the automaker in uber. under the agreement uber drivers will lease their vehicles from toyota and cover their payments through earnings made while driving for uber. volkswagen also getting into the ride-sharing market. the german automaker investing in an israeli startup, get, considered to be a rival to uber. separately a federal judge said vw is making progress toward a final settlement in its diesel emissions scandal. it will include compensation for owners of more than 480,000 vehicles whose exhaust systems were rigged to foil emissions tests. the deal is expected before late june. a new series of crash tests is raising questions about the

safety of muscle cars. we're not talking about classic versions of the cars that first became popular in the late'dyes. no, these tests focus on the newest muscle cars packed with more horsepower and more features to help protect you in a crash. phil lebeau has more. >> reporter: be honest, muscle cars like the chevy camaro, the latest version of ford's mustang, or the redesigned dodge challenger, are primarily about power and speed. they all come with versions packing more than 500 horsepower. but how safe are they? the insurance institute for highway safety put these muscle cars to a series of crash tests and the results were mixed. >> people do drive muscle cars faster. more horsepower we put in, the faster we see vehicles go. and that means they're going to crash at higher speeds and they need state-of-the-art crash protection. >> reporter: one particular test

which replicates a common and deadly collision with the front corner of the car raised some concerns. the iihs rated chevy's camaro as good and ford's mustang as acceptable. but the dodge challenger's performance was called marginal by the iihs. a spokesperson for dodge says no single test determines overall vehicle safety. fca u.s. vehicles mead or exceed all applicable government safety requirements. none of the muscle cars tested did well enough to earn the insurance institute's best rating of top safety pick. but it's unlikely that will slow down their popularity. since 2009 the camaro, mustang, and challenger have all seen strong sales growth. and that's likely to continue with new models of these muscle cars on the way. the big three know speed and power still sell, which is why more than 250,000 muscle cars were sold in the u.s. last year. and this year that number is

expected to be even higher. phil lebeau, "nightly business re to read more about the muscle car crash test, head to our website, nbr.com. before we go, here's another look at the big rally on wall street helped by a strong report on housing. look at the dow up 213 points, more than 1.2%. 17,606. nasdaq, 2% higher, up 95. the s&p 500 up 28. that's "nightly business report" for tonight. i'm sharon epperson. thanks so much for watching. >> thanks from me, tyler mathisen. have a great evening, everybody, see you back here tomorr

presents revolutionaries. >> building things is part of research. everything we do you'll have something built in a year. i want something built in the second year. it may not be awesome and the thing we want, i think the research gets better. in his 55 year history -- tonight invasion director dan talks about darpa's past. >> this is actually a great time to talk about darpa. because there is a w