♪ this is "nightly business report" with tyler mathisen and sue herera. stocks suffer their worst monthly performance since january. and the week ahead holds several more catalysts investors need to keep an eye on. merger mania. general electric and baker hughes cap off a record month. will the deal-making continue and which sectors might see some action. and a fortune of fright. how one woman turned her love of halloween into millions. all that and more on "nightly business report" for monday, october 31st. good evening, everyone. and welcome. and happy halloween. okay. so there haven't been dramatic drops or crashes as in octobers' past, but the trading month that just ended a couple hours ago on

this halloween evening has had its share of spooky moments. plenty enough to send a chill down a random spine or hair to stand up straight on a sensitive invest investor's neck. the major average did suffer their worst monthly performances since january, and it could have been worse. if banks and some big tech names hadn't held their own and bolstered the performance. and today oil did fall to a one month low over uncertainty about an opec production cut. as for stocks today, not too scary. dow dropping to 18, 142. nasdaq down nearly a point and the s&p off just the slightest fraction. and now to a deal we told you on friday might happen. general electric has agreed to combine its oil and gas business with baker hughes and will create a new publicly traded company which will be majority-owned by ge. ge shares were essentially flat, but baker hughes was down 6%.

morgan brennan has more on the tie-up. >> reporter: it's all about energy. the new baker hughes will combine the world's largest oil field equipment manufacturer, ge, with the number three oiled field services firm, creating approximate $2 billion in revenue, second only to rival, schlumberger. ge will merge with the entirety of baker hughes, a move that will have the industrial giant owning the majority of the new company. without spending tens of billions of dollars to actually make an acquisition. baker hughes shareholders will own the rest, with ge raising more than $7 billion to pay them a one-time special dividend. ge's oil and gas chief lorenzo sim nellie will run the endty, expected by the next year. the structure of the deal will have tax advantages, and will allow for flexibility around capital allocation. >> let's say the industry remains tough. this is still value accretive to both investors and a tough oil

price environment. if pricing gets better, it allows us to benefit that from that, as well. it's a very diversified portfolio in terms of short cycle and longer cycle operations. so i think it just gives us a chance to weather the cycle bett better. >> reporter: the transaction assumes a slow recovery in oil with prices estimated at 45 to $50 a barrel through 2019. the new company will be a one stop services shop for everything from fracking to power generation establishing a formidable competitor to other oiled field services giants like slummer jay and halliburton, which had tried unsuccessfully to buy baker hughes earlier this year. it also leverages ge's big data push through internet of things technology. and analysts say it comes at a time when the broader industry has been engaged in a race to the bottom in terms of pricing. >> if not at the exact bottom, we're pretty close. and we spent a lot of time

listening and reading through earnings calls as of late. we have had seven quarters of margins getting squeezed. it looks like, you know, pricing is starting to hold. we're not seeing meaningful upticks in terms of prices that ofs can sort of market for their services. but we have certainly not seen them move meaningfully down from this quarter to the last. so it looks like we're pretty close to that bottom. >> reporter: the deal could also spark a flurry of consolidation in oil field services. as major competitors look to beef up their own offerings with smaller firms that have been squeezed as service prices plunge. analysts say sfirms with exposure to the basin where energy active continues, might be attractive. as well as energy companies with manufacturing operations like oil states international and fracking-related operations, such as superior energy and rpc. for "nightly business report," i'm morgan brennan. century link will buy level three communications for $25

billion, sizeable deal here. it expands century link's fiberoptic network and high speed data service for corporate clients, also let's century link better compete with the likes of at&t and verizon. shares of century link down sharply off 12.5%, but level 3 was up nearly 4%. and team health is going private. selling itself to private equity firm, blackstone, for a little over $6 billion. the hospital staffing company turned down a $5 billion offer last year. shares of team health jumped on the trading session by better than 16%. and goldman sachs reportedly wants apple to get in on time warner. the new york post says goldman is nudging -- that's banker talk, nudging apple to make a bid. at&t has agreed to buy the media company for $85 billion. the biggest deal apple has ever done so far was in 2014 when it bought beats, the speaker and

headphone company, for $3 billion. and october has been a record-setting month for m & a deals in the u.s. the value of announced deals are adding up to about $337 billion. surpassing the previous high of $82 billion back in january of 2000. richard peterson, senior director at s&p global market intelligence joins us now to talk about whether or not this frenzy in m & a is going to continue. welcome back. >> hello, sue, hello, tyler. >> what do you make of this so far? we have talked a little bit in the past of why this flurry of activity now. and will it continue? >> well, it's really a continuation of what has been transpiring over the past several years. the fact this year in 2016, there's been over $1.4 trillion in announced u.s. m & a and marks the fourth consecutive year of over $1 trillion in deal activity. last year was a record year, over $2 trillion. and even though there's been a flurry of deals this month as

you accurately said, october has over $300 billion, our record month. we're still down year over year from where we were at this time. >> so is it just coincidence that so many of these deals came together in this month? >> well, i think it's -- various factors. with baker hughes, they had the merger with halliburton, called off by regulatory concerns. we are upon ge, stepped in, looking for ideas. i think a former partnership, i think with time warner and at&t. that's a factor of the media consolidation and desire for at&t to own the content, rather than be just a distributor of the product. i think if you look at these deals, just the two top deals this month, in the at&t time warner deal and american tobacco's $58 billion purchase,

just announced, those two deals count for half the deal value this month. >> absolutely. does it have anything to do with the fact that interest rates are low, even though the fed is expected to raise interest rates once this year, you know, the time before the end of the year is getting pretty short. so does that kind of incremental move in interest rates influence these deals? >> i think it's very marginal, the fact you have companies that are awash in cash, that even though corporate profits may be flat for this year, corporate profits still at elevated levels. i think the companies see their peers make acquisitions, whereupon they're forced to make come possible moves. it's like rook takes pawn and bishop wants to take knight. >> you just teed up the next question. where next, who next? more in energy, finance? health care? what, and who might be bought or sold? >> well, it's the usual

suspects. that being top sections this year are consumer discretionary by virtue of media, health care, information technology and real estate, which is actually the reclassified sector, which came out of financial earlier this year. i think i look for probably bigger deals in technology going forward. i think in terms of the media, we have talked that comcast may make a move in light of what at&t did with time warner. and i think also again in financials, considering what happens with the election next year, some companies may desire to quickly merge by the bounce of this year before the change happens in 2017. >> what does history tell us, if anything at all, about how the market performs the year following, you know, a quarter of heavy deal-making? >> sure. there's two ways to look at it. we crunched some numbers at s&p global markets intelligence. you look at the top months for m & a activity, the following

month tend to be negative. so the top five months looking at the following month, the average decline over 2%. conversely, look at the top deals on average, one-year period following those top deal announcements, the average gain was 9%. so some good news for the bears and some for the bulls. >> thank you, richard. appreciate it. richard peterson of s&p global market intelligence. october is finished, and as bill belichick might say, it's on to november. and the first ten days could be nothing short of a super bowl of big data and even bigger decisions. bob pisani has more. >> reporter: wall street keeping an eye on a handful of key catalysts this week, starting with the election. the markets pricing in a clinton victory with the house remaining republican. so any evidence to the contrary could shake things up. already for the month, we have seen health care stocks like cardinal health and mcquestions on down big-time, thanks to drug pricing concerns. it's going to be another busy earnings week ahead with names

like sony, pfizer, facebook and alibaba, all reporting in the next few days. we have ended the earnings recession for now. that's the good news. but we're still waiting on 200 more companies to report results. the federal reserve kicks off its two-day meeting on interest rates tomorrow and the markets are widely expecting them to signal a rate hike in december. but no major surprises expected when both the bank of japan and bank of england meet later this week. finally, any clues from the widely watched october jobs report on friday will help solidify expectations for the fed even further. for "nightly business report," i'm bob pisani at the new york stock exchange. another thing the market is intently watching, anything coming out of the fbi's investigation into new e-mails related to hillary clinton's private server. eamon javers is on the case. what can you tell us, eamon? >> reporter: hi, tyler. what we know of as of this

evening, fbi officials carefully going through the e-mails now that they have a warrant in place to search them. they're using a software program that sorts out any e-mails that were previously turned over to the fbi as part of the investigation. and looking for anything that might not have been turned over. if they find any of that, they'll look through it and try to figure out whether or not there's any classified information in there, as part of this clinton probe. we're also learning a little bit of context here about fbi director, james comey's decision-making to release this information before the election. i'm told by a former fbi official that this is an extraordinary decision for comey to take, in particular because earlier this year, when the fbi and u.s. intelligence agencies were discussing whether or not to name russia as a state entity that was trying to mettle in u.s. elections, comey argued internally and privately, it should not be done publicly, because it was getting too close to the election. so my source saying that's extraordinary, given that he ultimately made the decision to go forward with the clinton

e-mails on friday, guys. >> how fast, though, can they look at these, as we get -- ever closer to the election? have they made any comment on the speed with which they can investigate? >> the fbi is saying nothing public about this. it's not even clear that director comey will come out and say anything publicly between now and the election. but i talked to a former fbi official today who said that technologically, they can do this in days and have what the source called a preliminary read on these e-mails and have at least a preliminary indication of what's in there. whether they will release that preliminary indication to the public between now and election day is really anybody's guess at this point. one official telling me that we are in uncharted territory here. this has simply never happened before at the fbi. >> do we have a quick count of how many e-mails they're looking at? >> we think the total universe is 650,000. that might be a meaningless number, though, because there are so many duplicates in their attachments and spam and other things. the subset that would apply here would be much, much smaller. >> eamon, thank you very much.

eamon javers in washington. and straight ahead, why the newest trend in what women are buying is great news for the housing industry. ♪ consumer spending rose more than expected last month, spending did rise a half percent in september. a tenth of a percent more than estimates. the increase was due in part to the public buying more automobiles. personal income also inched high e but by less than expected. however, americans did save less last month. amassing nearly $800 billion down from $820 billion in august.

investors and companies are increasingly looking for business models that revolve around services. being dubbed the subscription economy, analysts are looking at the success of amazon's prime service, and calling for other companies to follow suit. mike santoli takes a look at what subscription bundling means for investors, and where the benefits and pitfalls may lie. >> one of the hottest business investing trends is a very old idea. subscriptions. amazon's huge success of its $99 a year prime service has ceos and investors chasing similar business models. adobe systems turned to a cloud subscription format in recent years and shares doubled since 2013, and most other tech giants are trying to follow the same path. at&t's plan purchase of time warner is also a bid for a better subscription bundle of wireless service and entertainment. all this led analysts to propose apple prime, a package of an iphone, itunes and apple tv as a fix for flattening smartphone

sales. one consultant floated disney as a service for disney's entire tv and entertainment output and theme park discounts. so what's behind all of this? subscription fees means steady revenues, with attention so fragmented, the cost of locating and acquiring customers has gone up far faster than the predictable expense of delivering a product or service. even many less virtual are being viewed through the prism of subscriptions. starbucks and duncan brands almost make subscribers out of their customers. as with any wall street trend, there is a risk this idea may be taken too far by others. for now, expect to hear more ceos touting the virtues of subscriptions. for "nightly business report," i'm mike santoli at the new york stock exchange. nike gets hit on a stock downgrade and that is where we begin tonight's market focus. bank of america, merrill lynch

to underperform, essentially a sell down from neutral, citing an increase in competition from companies like adidas and under armo armour. the bank/ed its price target to $46 down from $55, saying it's not convinced nike has innovative products in its pipeline. to 50.18. cost cuts helped turn a profit with results exceeding estimates. the company said its refer knew grew. williams' shares finished the day down more than 1.5% at 29.to 20. southern company topped profit expectations thanks to higher retail revenue and strong performance in a company subsidy area. southern saw its revenue rise. shares rose 87 cents to $51.57. pharmaceutical distributor, cardinal health, said drug pricing pressures caused profit to fall but still results managed to surpass estimates.

the company posted higher than expected sales. however, cardinal cut its earnings outlook for the year, citing short term headwinds in the pharmaceutical business. shares nonetheless rows to $68.69. xerox says it has reached a settlement with its largest individual shareholder who we told you sued the copier maker last month, alleging the company's plan spinoff violated an existing contract agreement. under the settlement, darwin dayson will be given 300,000 shares in the company's two businesses. shares fell marginally to $9.77. and network equipment maker, borrow indicated may be interested in selling itself as first reported by bloomberg, the company is in advanced talks and close to entering the final stages of a sale process. the potential deal which could be reached as early as this week has attracted interest from chip maker broadcom. shares soared almost 22% to $10.60.

and valiant pharmaceuticals isn't out of the woods quite yet. bloomberg said the former ceo and cfo are being investigated by authorities regarding potential accounting fraud. the report added the investigation could lead to charges within weeks. valiant said it had previously disclosed that investigation. valiant shares tanked more than 12% on the news to $17.84. wells fargo will pay $50 million to settle a lawsuit accusing the bank of overcharging hundreds of thousands of homeowners for appraisals that were ordered after they defaulted on their mortgages. the settlement would resolve claims that wells fargo charged more than it paid for third-party appraisals. mortgage agreements do let banks charge owners for those appraisals. but the lawsuit says wells charged up to $125 when their actual cost was $50 or even less. traditionally, males and married couples have been the main buyers of homes. but now single women are

becoming home owners more than men. in fact, this year females have bought twice as much as their male counterparts. diana olick has more on the new trend in housing. ♪ adrian nassau just closed on this three-bedroom home in maryland. it's a fixer upper, but she is looking forward to the project. >> i actually think i'm simplifying my life. >> reporter: nassau, widowed, now 15 years, sold her large family home on the eastern shore and intends to sell the con low she is living in now in nearby bethesda. even in her retirement, she still thinks ownership is worth it. >> i think when you own, you can do with a house whatever you want. you can make it your own. you can make whatever improvements you feel comfortable with. >> reporter: nassau is one of a growing share of single women in the housing market. they now make up 17% of home buyers, more than twice the share of single men. this, despite the fact that

women still earn less than men for the same jobs. >> there are women in the workplace who earn good money. who are professionals. and who are independent in their thinking and feel they're able to cope with taking on a house. >> reporter: in the past, women had a harder time getting mortgages on their own, and obvious had to have someone else cosign the loan. that discrimination is gone today, but men do tend to have higher credit scores than women, likely because men make more money. after living with her daughters for a while and then renting for a year, 68-year-old barbara just bought a condo in a community using part of her retirement savings and a reverse mortgage. >> instead of $1400, i'm paying $400 a month and that's all i'll have to pay for as long as i live in this condo. >> reporter: she still works full time as a teach e but her salary was barely covering the rent. by buying in the same building where she was rentding, she not only saves money, but has something to show for it.

>> for me, this is the first time that i have ever owned in america in my life. so i walk in every day, i say "hello beautiful home," it's mine. >> reporter: a greeting more and more women are now embracing all on their own. for "nightly business report," i'm diana olick in chevy chase, maryland. coming up, how giving people a good scare has turned into good business. that's next. ♪

here's what's to watch tomorrow, folks. as we mentioned earlier, the federal reserve begins its two-day policy meeting where it will decide whether or not to raise interest rates. we get a look at the manufacturing sector when the institute for supply management releases its october index and the dow component pfizer will post its latest quarterly results. and that is what to watch tuesday. and finally tonight, who wouldn't want a job they love? well, one media pro took her fascination with halloween to a whole new level. quitting her day job to make millions in the horror space. kate rogers bravely takes us to randall's island, new york. for some people, being terrified is actually fun. and melissa carbone is cashing in. >> fear is america's favorite drug. like, 100%. fear is actually a real physical reaction. >> oh, i know.

>> oh, my gosh. this is a dead end! >> reporter: the founder of 1031 productions always loved halloween, but it wasn't until she began decorating her own home in los angeles years ago that it hit her. there might be a real business behind scaring people. >> i didn't realize that it was such a thing for me. trick or otreating and handing out candy wasn't enough. it kept building for me and then i realized how much i love the genre. >> reporter: at the time, she was working in marketing at clearly channel worldwide. she and her co founder, allison richards, began saving and plotting for a large-scale haunted hayride. they raised half a million dollars from friends and family, as well as their sponsor, mini cooper, to launch in l.a. in 2009. >> i feel like we have pioneered a whole new industry. >> they're not going to get too close to me, right? see, that's not bad. they're cute. >> reporter: 1031 broke even

their first year and continued to grow. this is their second year hosting the new york haunted hayride on han dahl's island. the company has eight attractions from february through november in new york and california, raking in $3 million last year and securing a $2 million investment from mark cuban on "shark tank" and another anotherin undisclosed investment. >> i get to make a living by building and creating these environments that people typically would not get to experience. that people can remember physically and not necessarily mentally. >> reporter: hayride attendees will experience a storyline that's a full year in the making with more than 100 live actors. between new york and los angeles, about 130,000 people will attend the event this year. the scariest part, the blackout maze. even in the daytime. [ screaming ] for "nightly business report," i'm kate rogers, trying to escape from randall's island, new york. >> she just took the

emergency -- >> never going to be the same. >> kate doesn't scare easily. >> that's the emergency exit she went out. that does it tonight for "nightly business report." i'm sue herera. thanks for joining us. >> i'm tyler mathisen. happy halloween. we'll see you tomorrow.

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