♪ this is "nightly business report" with tyler mathisen and sue herera. charging ahead. stocks close at records. the dow adds 1200 points since election day. and now the blue chip index is within striking distance of 20,000. hanging in the balance. an $85 billion deal has an uncertain future as the ceos of at&t and time warner try to make the case that the companies are better together. bidding war. why states may be getting ready to compete more intensely for business. those stories and more tonight on "nightly business report" for wednesday, december 7th. good evening, everyone. and welcome. a burst of buying led to a record day for stocks today. the dow gained nearly 300 points, but it wasn't just the

big blue chips that made those records. the s&p 500 hit all-time highs. small caps did, as well. and the transports surged. here are the numbers. the dow advanced 297 points to 19,549. the nasdaq added 60, the s&p 500 gained 29. as for the small cap russell 2000 index, it pushed further into record territory, and as bob pisani explains, there are some powerful market forces at work. >> the market tone is changing. in november, the market theme was buy trump sector winners. the banks and the industrials, for example. right after the election, there was an extraordinary shift into those banks, the industrials and materials and out of utilities, real estate and consumer staples. financials, for example, outperformed utilities by an extraordinary 20 percentage points in the three weeks after the election. that's amazing. that's changing now. the december market theme is generic growth for 2017, or hopes for generic growth.

gdp advancement. the market is continuing to advance, but the advances are more even with lagging sectors doing better now. so this month, for example, consumer staples has performed better and today lagging groups like telecom and real estate, even technologies were notably stronger. throw in a strong period for the year and you can get slow meltoff. we saw over 340 new highs on the stock exchange today. the new high list still corroborates traded industrials and financials but the lisp is now broadening a bit and some consumer discretionnary stocks like kohl's and best buys and hotels like marriott, and even material stocks like nucore. throw in a midday buy program, which we had, and you have a confluence of some very powerful forces. for "nightly business report," i'm bob pisani at the new york stock exchange. >> telecom stocks were some of the biggest gainers today and the move higher comes as a major

telecom -- hangs in the balance. the heads of at&t and time warner were on capitol hill today, making the case for their proposed acquisition, and eamon javers was there. >> reporter: for randall stephenson and jeffrey buick us, the stakes couldn't have been higher today. an $85 billion deal up in the air and it's fate to be decided in a washington roiled by donald trump's populist campaign victory. >> do you think the mood of populism in this country is going to affect the possibility of this deal happening? >> no, i don't. i think the facts should become clear to everybody, and i think it will be good for consumers and good for competition. >> what do you make of donald trump tweeting out his criticism of individual companies that he doesn't like or thinks have done something wrong? are you worried about that as a leader in business, that this is something you have to focus on going forward? >> well, it's a complicated issue. >> reporter: for the most part, the senate subcommittee rolled out the welcome mat. >> one to the subcommittee on antitrust competition policy and

consumer rights. >> reporter: stevenson and buickous laid out why their deal will be good for consumers. but one democratic senator openedly worried the executives would soften news coverage, particularly on time warner-owned cnn in order to curry favor with the trump administration to approve the deal. >> will you commit that your news coverage will in no way be influenced or impacted by what the president of the united states says about this transaction? >> yes. >> mr. stephenson? >> yes, sir, of course. >> reporter: senator amy klobuchar, the ranking democrat, said after the hearing it wasn't designed to necessarily support or oppose the deal, but to get senators on the record and to get some questions answered. now it will be up to donald trump's department of justice to decide the fate of the deal. for "nightly business report," i'm eamon javers in washington. and a bit later in our program, we'll look at some of the changes that could come to

the media sector under the trump administration. one slice of the market that did not participate in the rally today was the drug sector. health care shares fell on comments from donald trump who was named "time" magazine's person of the year today. in his interview with "time," the president-elect said, "i'm going to bring down drug prices. i don't like what has happened with drug prices" and that sent shares with pfizer and johnson & johnson and merck, only three components to fall in today's session. reforming the health care industry is one of the top priorities of the new congress. donald trump has appointed a fierce critic of the affordable care act to lead the department of health and human services. and house speaker paul ryan said that repealing the law will be one of congress's first acts. >> we have a very, very bold regulatory reform platform we're going to be moving on in the very near part of the year. we're going to be doing, you know, our obamacare legislation. you have to remember, this law

is getting much worse. it is what actuaries say entering a death spiral, high, high premium increases, high deductibles, no choices. so we have to fix this problem. >> the hospital industry, meantime, says a total repeal is not the answer. two main trade groups today issued a warning that repealing the affordable care act could trigger, quote, an unprecedented public health crisis. they also said a surge in uninsured payments could hospitals could cost hospitals $165 billion by the middle of the next decade. the nation's health insurers certainly have their list of demands for the donald trump administration. the insurers want a clear commitment that the government will continue offsetting costs for low-income people and that the young and healthy will continue to be able to use the health care exchanges if the affordable care act is killed. we have a health care policy expert at capital street joining us now to discuss what lies ahead. welcome, so nice to have you back with us.

>> thank you. good evening. >> let's start, first of all, with how you see this playing out. the trump administration has said that they are going to do away with the affordable care act. but on the other hand, there's a political mine field if in doing that they end up with 20 million uninsured americans. how could you -- could you handicap how you think it's going to play out in congress? >> sure. i think that there's going to be a really fast repeal vote that will go down, because you're not going to have 60 votes in the senate. and then what will happen is, through this budget reconciliation exercise, you can gut major, major portions of the law. so subsidies that help poor people by insurance, the medicaid expansion, the mandate penalties, other industry taxes. so i think it's going to go away pretty soon. but there will have to be a transition of maybe up to two to three years, where the current affordable care act actually stays in place before a new

program comes through. and as you point out, it's very likely that any new gop plan will cover as many as 20 million individuals. >> let's talk a little bit about the hospital business. they are very, very worried, obviously, that they would be hit with an influx of uninsured people very quickly. how dire a situation would that be for them? >> it's not great. and, in fact, if you look at the statements that the hospital groups gave versus the insurance groups gave this week in their letters to congress and to trump, the hospital message was much more dire. we want our cuts back, we agree to $155 billion in reductions to fund the stream of the affordable care act. so the hospitals are really much more detrimentally hurt by this new program that will come in, and that's largely because of medicaid. it's both exchanges and medicaid. but they certainly are much more, i would say, worse off

than the insurers may be in this new gop world. >> house speaker ryan on cnbc this morning basically indicating that they have a plan, that they are going to try and put in place. do we have any details of what is in that plan and how it might impact health care providers? >> sure. paul ryan does have a plan. it's called "the better way." it's not legislation. it is a policy paper. but if you look at the common elements of a lot of these major republican replace plans, there's five or six elements. there's the purchase and sale of insurance across state lines. there's high-risk pools, there is price transparency, there are things that we can pretty much expect to see in any new program. again, will it cover 20 million? probably not. but it gives the individual a tax credit to purchase insurance so that the responsibility is on them. >> i think we're going to be

talking to you a lot in the near future. thank you for joining us tonight. >> thank you. and congress today passed a bill aimed at speeding up the drug and medical device approval process. the industry praised the bill as a way to bring about more innovation and get the necessary treatment to patients quicker. the incoming administration also pledged to cut red tape at the fda. the ceo of boeing spoke by phone with the president-elect. dennis mulen berg congratulated donald trump and said he was committed to working with the new administration to control costs for the new air force one planes. as we reported yesterday, mr. trump tweeted that the cost for boeing's new air force one are out of control. the two also discussed the importance of american manufacturing jobs. donald trump's tweets, along with his push to keep manufacturing jobs in the u.s. were a big topic of discussion made up of the world's biggest companies.

>> nobody wants called out on headline news. having said that, everybody knows government overspends on things. there's efficiencies in government we can get. i like the fact that we're talking about job creation. and keeping jobs here. will it change our behavior? yeah, we'll think about it. but with that, we need some policy reform, like tax reform. >> and there are things -- we get that, we create jobs. look, nobody wants to give up an american job. not one ceo. we want to make it easier. >> do we have a great relationship with boeing. donald trump is not the first person that's complained about their prices. i can assure you of that. someone trying to save money for the u.s. government, like we do all of the time. >> i don't think anybody wants to be shamed, but i think as a leader of a public company, i think what you want to do is what's right for the long-term benefit of all of your stakeholders, your employees, shareholders, the community. if it created a dialogue, if taxes were your problem, and that's why you made some decisions, and that creatated

dialogue, then i think it could be for the good. >> other ceos expressed concern about what the president-elect has said about trade, and the threat of retaliatory tariffs. but in an interview on the "today" show, mr. trump said he's not against all trade. >> i believe in free trade. but i don't believe in stupid trade. and stupid trade is when our companies move out of our country, fire their workers and then come back in, matt. and sell their product back in with no retribution. i'm saying very simply, if they want to fire their workers, move to mexico or some other country and sell their product into our country, they're going to be paying a tax. >> and to avoid a potential tax, some companies may decide not to move jobs abroad, and instead look to other states where it may be less expensive to operate. this following carrier's decision to keep jobs in indiana. many in the economic development business are taking note, because attracting and keeping jobs is their bread and butter. scott cohn reports tonight on what could be a game-changer.

>> reporter: for donald trump, this deal was more art than science. a relative handful of jobs will stay in indiana. but the message to states and to companies is huge. >> they can leave from state to state. and they can negotiate good deals with the different states and all of that. but leaving the country is going to be very, very difficult. >> 95-plus-percent of all businesses in rhode island are small businesses. >> reporter: states have been battling each other for business for years, of course. but never before with the full backing of the white house. now experts say the game is really on. >> for states, i think it puts them a little bit more in a central position. they're now going to be seen as part of the overall national effort here to grow our economy and to make it more competitive. >> reporter: in indiana, it took subsidies to save the carrier jobs. if that's the new standard, the most generous states over time have been new york, louisiana,

michigan, washington and new jersey. but critics call the deals corporate welfare, and many believe all the dueling tax breaks are a thing of the past. >> i think states have well -- moved well beyond that. so i believe that we're not going to see a re emergence of that sort of competition. competition now is really based upon distinctive regional advantage assets. >> like the supply of skilled workers, the top state work forces in our most recent study, colorado, massachusetts, virginia, north dakota and arizona. the top states for business overall, utah, texas, colorado, minnesota and north carolina. look for all of them to really up their games now. >> of course, it's early yet. the new administration hasn't even taken office, and it's not clear how the policies will play out. but for now, states may be feeling a little bit more empoured, and companies are weighing their options. scott cohn, "nightly business report," mountain view, california. fox com, the biggest

assembler of apple products in preliminary discussions to expand its u.s. operations. fox consays the size and scope has not yet been determined during the campaign mr. trump said he would get apple to build their computers and devices in this country instead of overseas. still ahead, congress has a lot of work to do by friday, or risk another government shutdown. ♪ the government funding deadline looming this friday, congressional lawmakers plan to move quickly on a so-called continuing resolution that would continue funding the government through the end of april of

2017. but could there be special attachments to the bill? ed mills is a senior financial and policy analyst of fbr capital market. he joins us now to discuss. what do you say, ed? i thought we got past that point where we sort of put all kinds of christmas tree ornaments on bills. >> reporter: well, i don't think it's going to be christmas trees on this bill. but the very fact we're only going to extend this into the spring is all about having kind of christmas in april, if you will. because what the trump administration, the incoming trump administration wants is they want a must-pass bill early on in his administration. where they can pass a number of things that would be vetoed today by president obama, signed into law by president trump, and, you know, that's six years of house republican riders that have been sitting dormant, waiting for that bus to leave the station. >> so what can we expect? he's talked about tax reform, he's talked about infrastructure spending. and what about the honeymoon

period? how much will he be able to get done and will congress be able to get done in this period? >> yeah, i'm looking at the first half of next year, a real concerted effort to get the infrastructure bill done. they're going to first attempt to get that with 60 votes in the senate. there are ten democratic senators up for re-election in 2018 that are from trump state. so they're going to want to have something they voted with him on. and, you know, having that deadline of sometime in april for the spending bill might be that vehicle. but soon after that, the honeymoon ends. because in two years, they're going to want to say, here's where i worked with them. and here's where i opposed him. >> is there any possibility that there's going to be a government shutdown between now and april, number one. and what, if anything, could be attached to this continuing resolution that needs to get done by the end of the week? >> yeah, i think there is -- if we go into the next couple of days and we're not able to cut a deal that gets us into april,

you'll get a week or so. there is zero chance, basically, that the government is going to shut down in the near-term. pretty soon, the most powerful kind of caucus or influence in d.c. kicks into gear, which is the congressional spouse caucus. members of congress will start hearing from their husbands and wives. it's time to get home for christmas and they'll get something done punted to next year. in terms of what's get added on to the bill, probably a rider that eases the confirmation process for the secretary of defense, you know, nominee general mattis. he has not been out of the military for more than seven years. that's going to require a waiver. they're going to try to see if they can get that in this bill. so that they can hit the ground running early in january. >> ed, thank you very much for helping us through that. ed mills with fbr capital market. abbott labs wants to call off its plan to take over va layer. and that's where we begin. abbott has filed a suit seeking

to end its acquisition of the diagnostic test company sega layer is no longer the company abbott agreed to buy ten months ago. allaire says the lawsuit is without merit and will take all necessary actions to compel abbott to finalize that merger. allaire shares fell to $36.67 shares of abbott up to $38.48. xerox splits into two businesses, which is by the end of this year. the company also said it's optimistic sales will pick up in the second half of 2017. shares rose nearly 2% to $9.48. royal caribbean will add cuba to its list of travel destinations. the cruise operator was given the green light by cuban authorities to establish routes from the u.s. royal caribbean rose to $83.15. sun power will lay off a quarter of its total work force.

it plans to cut about 2500 jobs and shut down an overseas factory as it works to slash costs. shares of sunpower spiked 14% to $7.95. profit and sales rose at lululemon in its latest quarter with results topping analysts' estimates. the yoga apparel maker says it was launching a $100 million share buyback. following the news, shares initially soared in after hours trading on top of finishing the regular session up 4% at $59.84. we reported earlier in our program that the ceos of at&t and time warner were on political today defending their proposed merger. but what happens next depends on the incoming administration. and many in the industry are trying to figure out what changes may be coming for the broader sector. julia boorstin explains. >> reporter: president-elect donald trump brings some big question marks for media giants, especially as he vowed during the campaign to block at&t's

acquisition of time warner, which would put a chill on other media deals. now industry watchers say trump could actually prompt a wave of deal-making. >> are we going to see the randy regulatory trump or are with he going to see the populist trump? it looks like in the communications arena, we are more likely to see the randy regulatory donald trump and if that's the case, it's especially good news for the infrastructure providers in media less clear that it's good news for the internet companies. >> reporter: randall stephenson, ceo of at&t, agrees, saying just yesterday that the new administration will drive investment in the distribution of media, the way companies like at&t get content into our homes and on to our phones. another big question for media companies is how trump approaches regulation of net neutrality. he rolls back the regulations mandating broadband companies to treat all content equally that could raise costs for netflix, hulu and youtube and other

companies. barry diller, who owns streaming video company vimoeo says it would create a problem if rolled back. >> big companies like at&t who want to control things as communications have been controlled prior to the internet for close to 100 years. that -- they -- hope this will be tossed. and that they will again put their pincer movement on media, consolidated more, and control it more. that's terrible. >> reporter: the other wild card, whether trump maintains his aggressive tone with the media outlets that cover him from attacking "saturday night live" on twitter to threatening to sue the "new york times," to criticizing cnn. this is all certainly uncharted territory for those outlets and their media giant parents. for "nightly business report," i'm julia boorstin. coming up, behind closed

doors. how does fedex handle 2 million packages a day, and get them where they need to be? we'll show you. ♪ chase's new credit card may be just a bit too popular, and it is costing the bank a lot of money. according to bloomberg, the sapphire card will reduce jpmorgan chase's profit by 200 to $300 million in the fourth quarter. the losses are due to the lavish awards offered to entice users to take the cards. one analyst estimates it will take more than five years before chase breaks even on the card. as we told you, the dow

transportation index reached its highest level today in more than two years. that milestone comes at one of the busiest times for the sector, especially for shipping and delivery companies like fedex. morgan brennan gives us a mind the scenes look at the company's high-tech complex in memphis. >> reporter: after dark, this is the busiest airport in the world. and during the peak holiday season, it gets even bu busier. 160 planes land each night, carrying 2 million packages destined for door steps. >> the planning process started literally as soon as we were done and now headed into our super bowl. that's what this is. >> reporter: between thanksgiving and christmas eve, they plan to handle more than 155 million packages, 10% more than last year. many pass through here, sorted along 32 miles of conveyor belts in what's come to be known as the matrix. leading up to christmas, this

hub will operate around the clock with even longer times and even more planes coming through. as last-minion line shopping spikes and with it demand for express service. will it all be enough to get packages delivered on time? and without company costs climbing. that's a challenge that plagued both fedex and u.p.s. in recent years, helping fuel a fierce competition for business. >> the battle between fedex and u.p.s. continues. and fedex continues to win market share. the most recent quarter, u.p.s.' volumes up 5%. that's very strong in the current economic conditions. but fedex's were up 10%. >> reporter: all the investments and planning in the world can't change the weather. to minimize mother nature's impact, fedex has a team of 15 meteorologists watching the globe. >> we're called upon to give forecasts days in advance. so if we see there is going to be a major event, say in indianapolis in one of our hub locations, we do have some flexibility to divert some of the packages.

>> reporter: right now, fedex forecasts relatively mild weather in what it expects to be another record-breaking peak season. for "nightly business report," i'm morgan brennan in memphis, tennessee. >> how do they get all of those packages in the overhead bins? >> i don't know, ty. >> i can't get my bag in there. >> 15 meteorologists onset, wow. that does it for "nightly business report" tonight, i'm sue herera, thanks for joining us. >> and i'm tyler mathisen. thanks from me, as well. we'll see you back here tomorrow night. music)

♪ (male #1) oi, fat boy! on a romantic date with your missus? (male #2) like always on a friday night! ♪ (female #1) phone the council in the morning. (male #1) muppets! (laughter) (male #2) write to the council! (female #2) look at ya. ain't you nothing better to do? (male #1) i can give you some more rubbish, if you want. (male #2) should stick your chewing gum on the floor so you can tread in it, keep it on your shoes! (jeering and laughing) ♪ (male #1) see you later, mate, bye! ♪