report" with tyler mathisen and sue herera. 1e6r. stocks flood the bond market on concerns over the health of the global economy. is the u.s. strong enough to withstand weakness overseas? retail route. many thought consumers would spend all that money that they've been saving from cheap gas but today we found out they didn't. and the houston of canada. how the dropping crude at the heart of canada's industry. all that and more tonight on "nightly business report" for wednesday, january 14th. >> good evening, everyone. another rough and unpredictable day on wall street with the major averages falling for the fourth straight session amid concerns about the strength of the u.s. consumer and the u.s.

economy. the big driver for today's selloff is retail sales despite deep discounts, lower gas prices and a robust labor market. combined with more volatility and oil prices and a lower forecast for global economic growth sent stocks on another wild ride. the dow cut an early 350 point loss in half ending the session down 186 points. the nasdaq lower by 22 and the s&p was down 11 points. in the bond market the yield on 30 year treasuries hit record lows while the yield on the benchmark ten year note hit the lowest level in nearly two years. crude bounced between losses and gains spiking higher into the close, up 5.5% to $48.48 a barrel, its biggest one day percent gain since june of 2012. with gas prices down and retail sales falling, what is the state of the u.s. consumer right now? steve liesman takes a look. >> reporter: plunging oil prices

raised a few economic puzzles. first, since the u.s. is now a huge oil producers, wouldn't it be a drag on the economy or a benefit? second, and this is key to the first, what do consumers do with the wind fall? spend it save it pay down debt? consumers only parting reluctantly with the extra dollars in their pocket. >> the consumer is cautious and waiting to see if this gas price thing is real and i think they take a while before they adjust their spending pattern. >> reporter: to be sure the case is not closed. consumer spending strong in october and november leaving some economists the fourth quarter growth sport the rest consumer spending number since the great recession ended. the december data may yet be revised and because consumers took a break doesn't mean the wind fall will find way into more cash registers in january and beyond. >> i think it's a blip in an otherwise strong trend for the consumer because look at the consumer backdrop. healthy job growth, increase in

disposable income lower interest rates, wealth appreciation and consumer sentiment improving. >> reporter: let's go back to the first question. is the plunge in oil good or bad for the u.s. economy? right now, stock markets only see the negative. plunging oil profits and oil stock prices. soon enough capital spending could take a hit as scale back on drilling new oil and then uncertainty. are prices down because demand and growth are weak worldwide? now it's clear why the consumer is so key. spending should be the opposite of the pessimism but so far, it's not. the rule of thumb is every $10 a barrel decline in oil is an extra quarter point to growth but right now, the rule is being challenged as are the optimists who see lower oil prices as a positive for the u.s. economy but are still waiting for proof. for "nightly business report," i'm steve liesman. we are two weeks away now from the federal reserve's first

policy setting meeting of the new year and today, the fed is out with its latest beige book survey of conditions around the u.s. page turner. report of moderate growth across all 12 central bank regions but a pickup in tourism and increased manufacturing. oil prices starting to impact texas and the other energy producing regions. another factor weighing on the market today, global growth concerns. here to talk about this and what it means for investors is john canal. the chief economist strategist at lpl financial. welcome, john nice to have you here. >> good to be here. >> tell me what this market is telling you about global growth or perhaps the lack of it. there's a lot of displacement out there lately. >> they got the ruling today from the european court of justice that will allow them to do this sovereign quantitative easing.

that's a plus for global growth but there's other concerns as well. will the quantitative easing that japan has been doing for the la wil that start the work? will china finally come out and say that they aren't going to grow at 7% next year? they're going to go at 6% but will they do some other kind of fiscal and bhon tear stimulus on top of that and then taking it back to the u.s. here the weak retail sales data this morning, kind of was the clencher and said man, if the u.s. consumer constant grow growing, maybe the economy isn't. that weighed in. the beige book came out today, a much larger view of the economy and pretty much said things were okay not great but still sort of in a muddle through phase here as we wait for big events to fold, bcb, china, things like that. >> john we spend a tremendous time asking our guests how low oil go. the question tonight, how low

will bond yield go? record low at 1.8% or thereabouts. what are they saying what is the danger signal here, if any and what should investors do if they own bonds? >> that's the thing. is the bond market sending a signal because yields are at all time lows? i think if you were getting other signals from the economy, and consumer confidence falling sharply instead of rising. if auto sales were at a ten year low instead of a ten year high, that would be a concern. if you've seen things like retail sales, the weekly retail sales we get, if we get that and that was weak that would be a signal that the bond market is telling us something. what we see though is the opposite. it's sort of the opposite of what happened in 2008. in 2008 we saw a big drop in bond yields and it was a global growth signal. today, it's probably a signal of global deflation, disinflation rather than global growth and i think there's things that will help that but may be a couple of

weeblgs or months before markets are convinced it's going to work. >> john what i think i hear you saying is that the u.s. is the strongest around the globe right now but is it strong enough to survive a global either disinflation or deflationary psych snl. >> it's important to remember u.s. gdp is not s&p. derived from overseas. stock markets will get a lot more volatile around the global growth scare. u.s. maybe 10% but other 80 to 95% is global growth. we've been saying u.s. is the cleanest shirt in the hamper or best house on a bad street. as people look around the globe, they ask themselves where they want to be this year in terms of investing. most likely it is in the u.s. until china can show its cards

and can do what it does and the japan can do more. from that perspective, i think the u.s. will be fine. simply because u.s. s&p 500 is a lot different than the make-up of our economy. >> all right john. thank you so much. chief economist at lpl financial. more now on the impact of plunging energy costs. u.s. import prices saw their biggest drop in six years in december tumbling 2.5%. the sixth month in a row of decline of import prices keeping inflation in check. more detail now from the beige book survey. a slide in oil prices. the fed said the recent plunge in crude may be hurting economic growth as some u.s. energy companies are already reporting layoffs and spending freezes. tumbling oil prices is having a big impact north of the border where crude production is a driving force behind the canadian economy.

brian sullivan has more from calgary. >> reporter: here in canada the collapse is front page news and while consumers love the drop of the price of gas lane the oil producers and the government do not. rapidly falling oil prices hit everything from government budget to infrastructure building and canadian dollar and jobs. massive canadian oil company sun corp. announced laying off 1,000 workers, cutting a billion dollars from capital spending plan. the potential downside is great enough that high ranking government officials are speaking out about it. >> oil prices continue to slip. we don't evidently haven't seen the bottom yet and this is opened up an enormous revenue short fall in terms of the government's budget. quie for next year 6 to $7 billion. $5 billion the year after that and $5 billion the year after if we don't take action.

>> reporter: the answer to the growing crisis is complex. the cause of the problem is not. the world is simply producing more oil than it is using. so is supply and demand so out of whack, we asked an oil economist, why don't the big oil producers simply cut back on production? >> when you got a price for, all try to offset by producing more. it's a free for all for the moment but until we see the participants in the global thing start to die off, we're going to see low prices. >> reporter: canada's oil pain is not just a canada story. the stocks in more than 70 major canadian companies trade in the united states. a number of those are oil companies and they have been walloped. shares of bay tech's energy interplus and precision drilling seen shares by more than 50 or even 60% in just a matter of months. some call calgary the houston of canada because of strong job market and fast growth but much of that is tied to the pras of

oil and if oil were to fallower or even stay at this level for a long period of time the building boom that you can clearly see behind us may simply run out of gas. for "nightly business report," i'm brian sullivan in calgary, alberta, canada. still ahead, scaling back. what the republican controlled house did today to two measures important to business. it was not a good day at j.p. morgan chase. the biggest bank reported a 7% drop in earnings last quarter, getting slammed by a billion

dollars in legal costs and a decline in trading revenue. shares fell 3.5% today weighing heavily on the entire financial sector. things a little bit better at wells fargo, the biggest lender rose more than $5 billion thanks to higher revenue from loan interest payments but chief financial officer john shrewsbury said it's not just from loans. >> loan growth from wells fargo in the third to fourth quartt 13%. strong as it's been in some time. some of that is mortgage some is autos, it's in credit cards, it's all categories of commercial and industrial lending. >> despite that like a lot of other financials today, shares of wells fargo closed lower. they were down more than 1% mortgage applications took a big leap last week. the biggest weekly jump, in fact in six years thanks to record low interest rates. diana olick has the story from

washington. >> reporter: mortgage applications spiked 49% last week and that was adjustment for the new year's holiday. a sharp interest rate drop combined with fannie loans responsible for the move. a 66% driver for the week the highest level since july of 2013. jumbo quadrupled but more sensitive to interest rates. applications for a loan to purchase a home up 24% from the previous week. they're also up 2% from a year ago and that's the first time in over a year that they've been higher annually. all this as the average contract rate on the 30 year fix conforming loan dropped to 3.89%, the lowest level since may of 2013. adding to the momentum fannie mae's new 3% down payment loan and an announcement that it would cut annual insurance premiums by half a percent.

that doesn't go into effect for a few weeks but borrowers are applying and absolutely lowing. that is huge. one lender in northern virginia calls the response unbelievable. he says people who have been debating buying a home are now going ahead with prequalifications in the homes they'll find the house while rates are still low. all bodes well for the spring housing market with one caveat. more people may want to buy homes at the new rate but still two few homes for sale. they don't want to list their home if they can't get something else to buy, "nightly business report," diana olick. trying to reverse immigration policy and wall street banks. john harwood joining us from washington now. john let's start with the efforts to roll back or postpone i guess, some of the

provisions of the dodd frank law. what does today's house vote try to do here? >> well what they're trying to do is delay by two years the imposition of the boca rule. this was something that originally wasn't in the dodd frank bill so this was added during the legislative process. you could have members of the financial community arguing that this was marginal to the importance of dodd frank and republicans agree with that argument. they're trying to roll it back. the administration has drawn a line and said no they accepted some weakening of dodd frank in legislation at the end of 2014 but they put a veto threat on this bill. elizabeth warren and democratic liberals. it's future in the republican-led senate where dmats have a little more power because the power of the minority in doubt. >> it's almost d.o.a. is there some hope? >> well there's a whole lot, as you know of lobbying going on

by wall street to try to target various portions of dodd frank. we don't know where all of those efforts are going to lead. i would say that as a stand alone at this moment it looks bleak but you could have back and forth as other various pieces of legislation dlug tax reform get debated. >> let's move on to the other key vote here. the house vote that ties the funding of the homeland security department to undoing elements of the president's late last year executive order on immigration. does this have chance of passing in the senate? >> more definitively i would say it does not. the leader put out a statement after the house passed this bill saying you might as well forget it. this has no chance of clearing the senate the united states. in both cases, by the way, you had defection of significance within each party you had on the dodd frank legislation, 29 democrats joined republicans to say, yes, we should put off the

boca rule. 26 republicans joined with democrats to say, no don't stop the president on immigration. >> all right, thanks very much john. john harwood reporting tonight from washington. takeover talks sent blackberry spiking right before the closing bell and that's where we begin tonight's market focus. reuters is reporting samsung recently approached blackberry about a potential takeover. it proposed an initial priets range between $13 and $15 for the smartphone maker. blackberry has not engaged in those reported discussions. as you can see, blackberry closing 30% higher at $12.60 but then shares fell slightly after hours. samsung trades in korea. general motors sent shares lower. expects to hike capital expenditures as looks to grow luxury brand but investors were disappointing when the company's cfo said there are no plans for a dividend hike. shares fell almost 3% to $34.30.

one stock that participated in the selloff was freeport mac ma ran, the mining company impacted wi copper prices falling to a five year low. copper is a major part of that company's business. the shares plujed about 11% to $18.74. tough day for foot locker too. goldman sac downgraded to $8. cited concerns that peak margins on basketball sneakers may be a little risky. shares down 4% to $53.21. final finish line fell in sympathy of that. a unit of entertainment file for bankruptcy in chicago. this is according to to a court filing. a group of the casino operators bondholders filed the papers to force the decision into involuntary chapter 11. been trying to gain creditor's support for restructuring of program.

shares up a fraction today to $12.71. chipotle off with pulled pork after the company found out one of the suppliers was not complying with its animal treatment standards and a supplier said it will pick up the slack for the rest of the short fall but investors concerned after one analyst said the issue could impact the restaurant's first quarter results and shares down today to $709.07. adobe announced a new $2 billion stock buyback program. the purchase plan extends through 2017 and shares initially rose after hours. before the close though the stock was down slightly at $69.99. and coming up the industry that's getting the attention of venture capitalists out in silicon valley and raking in record money.

if you're expecting to get a tax refund this year be prepared to wait a little longer to get it. because of budget cuts the irs said people who file paper tax returns may have to wait an extra week or longer to get the refund. the commissioner also said the irs met any returns with errors face delays and fewer calls to the help line go unanswered. on the other hand the budget cuts may mean fewer audits as well. et si is going public and planning to raise $300 million. the brooklyn based seller of handmade crafts and hipster clothing.

so not me. a reporter plans to have an initial public offering as soon as this quarter. well ty if vintage clothing and crafts aren't your thing, another place to put your money is health care start-ups, attracting a lot of interest from some big tech investors. josh lipton has more. >> reporter: talked to venture capitalists in silicon valley and asked them which they're trying. odds are high they'll say health care. so it's no surprise that money is surging into start-ups that focus on that intersection of health care and technology. in 2014 venture funding for these start-ups hit a record $4.1 billion. that was a 125% year over year jump

jump. health care undergoing a technology transformation making the industry more efficient, convenient and cost-effective. one such start-up is omata health connecting those at risk for chronic diseases like diabetes to a comprehensive lifestyle program that includes a personal health coach and digital support group. the company's ceo said start-ups because there's health care and tech. >> id google before going to medical school. i'm a huge tech i can. i love technology and i love health care and, you know, you have entrepreneurs that are now able to combine both and, you know i think the venture capital investing community sees the chance for the next wave of folks that really, you know take health care to a digital era. >> so which start-ups in the space are most likely to go

public this year. they're tracking the space with the maker of fitness trackers zok dock to find and book appointments online practice fusion a cloud based electronic health records provider proedyus injectable and genetic family history. one note of caution for investors though five digital health companies went public in 2014 according to rock health raising a total of $1.7 billion. but three of those five stocks are now selling at below their offering price. and enthusiasm for this sector could cool if that trend continues this year. for "nightly business report," i'm josh lipton in silicon valley. >> recap now. another volatile and losing session on wall street. the worries about the strength of the u.s. consumer economic growth globally. the dow off 186 points half the

losses from early in the trading day. nasdaq lower by 22. s&p down 11. oil, a sharp jump near the close up 5.5%. dominic chu is here with us now. should we expect more of this for example, tomorrow? >> you know, it's interesting because we've become so accustom to not seeing these kinds of swings. you forget that this kind of thing can happen from time to time. over the course of the past the qe era, we'll call it the fed's involvement in the markets. we haven't seen a huge amount of volatility for the move. tomorrow it's going to be very interesting because you've got a number of macro and micro to picture. on the macro front, you've got to worry about what's happening with the manufacturing picture overall. so you've got the philadelphia manufacturing and the economy, the empire state, that's new york. also inflation data. the producer price index coming up. the macro picture. on the micro front, tech financial. the heavy sectors in the s&p will be well represented in earnings tomorrow.

you've got the likes of bank of america and citi on the financial side and then after e bell you have intel, one of the biggest ship producers in the world. all of those give you a picture of corporate america amidst this backdrop of volatility. >> i'll be interested to see if intel talks about currency and the impact of the stronger dollar on the earnings. >> i would be surprised if any large cap company with international exposure does not talk about the strength of the dollar in terms of earnings report. that will be a real key. >> as you say, volatility is back. 2014 very low. 2015, so far everyday has been a 100 point day shared with some moves end up and down but somewhere a hundred points in them. >> experts say it's one of the times to deal with that kind of volatility. maybe not running for the exit but buckle your safety belts. >> dominic chu, thank you very much. that will do it for "nightly business report" for tonight. i'm sue herera. thanks for joining us. >> and i'm tyler mathisen.

have a great evening, everybody and we hope to see you right back here tomorrow night.

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