for "nightly business report," i'm diana olick in washington. >>> we begin tonight's market focus with a company that lowered its profit guidance while saying results for the holiday season will sharply miss estimates. express says it cease promotional retail environment and challenging store traffic as headwinds. shares plummeted 20% to $10.64. >>> dollar general missed profit and revenue estimates as that discount chain contends with falling food prices and a cutback on coverage in several states. the company posted a surprise drop in same store sales. shares fell 5%. >>> kroger cited lower food prices as a problem. the nation's largest supermarket chain recorded lower profit and cut full year guidance, saying it expects the deflationary environment to continue. the company did see revenue rise above expectations. shares rose 3% to $33.36. >>> land's end posted a wider than expected loss as results at the store were hit by more than $4 million in inventory writedowns. the apparel retailer saw same store sales fall, but said it is executing new initiatives it hopes will improve future

diana olick takes a look at strategies and pitfalls for potential buyers. >> reporter: tyler and marisaullin waited three years and decided to take the plunge into homeownership. >> we're at that stage in our life and in our marriage that the next step would be to purchase a home. >> but the mullins were facing rising home prices and a tight market in the nation's capital with very few listing. that meant making a plan and acting fast. >> we saw a place maybe on a wednesday and we could schedule to go see it on saturday and by saturday morning we would get a phone call, well, it was already under contract. >> reporter: first step, look online at listings in neighborhoods and get a general idea of what you want. >> hey, there. >> reporter: even though you don't need one, most first time buyers will benefit from a real estate agent and remember, commissions can vary widely and be negotiable. >> the internet age is huge. getting all that information is great and doing your homework, especially researching neighborhoods. i always tell people, you know, old school thinking is the agent going

for "nightly business report," i'm diana olick in washington. >> that's a real commitment to your home. let's turn to darren bloomquist to talk more about the u.s. housing market and what he's expecting in the new year. he's the vice president of realty track. great to see you, darren. what do these rising mortgage rates tell you about the housing market? >> well, they tell us that it's time for the housing market to stand on its own two feet and not have kind of some of the artificial supports we've seen over the last few years that have helped the housing market recover, and recover more quickly, i think, than a lot of people anticipated. but the housing market is ready to not necessarily have those artificial supports. one of those is low interest rates. i think the house market is ready, the fundamentals are strong, to recover on its own without those record low interest rates. >> you know, one of the headwinds, i mean, low rates helped, but you had lending standards that were so stringent for the last several years that many people didn't qualify for a mortgage otherwise. has that

for "nightly business report," i'm diana olick in washington. >>> on wall street, stocks closed slightlyower. the major indexes gave up their opening gains after reuters reported a chinese war ship seized a drone deployed by an american vessel in the south china sea. by close, the dow jones industrial average dropped to 19,843. the nasdaq was off 19. and the s&p 500 fell nearly 4. all of the major averages barely budged for the week. >>> two federal reserve officials speaking about interest rates just days after the central bank raised them for the first time in a year. the st. louis fed president, james bullard, changed his outlook because of the recent rise in bond yields and now says there is a need for an additional hike next year. jeffrey lacker said the central bank will likely need to increase rates at a faster pace than its current outlook would suggest. >>> it was a promise donald trump made on the campaign trail. the u.s. should rip up the north american free trade agreement known as nafta. he also talked about slapping a 35% tax on mexican-made vehicles imported into the u.s.

for "nightly business report," i'm diana olick in washington. >>> coming up, the beardstown ladies. they've been picking stocks for decades. tonight they'll tell us what sectors they like as the market rallies. >>> remember the beardstown ladies? well, they're one of the best-known investment clubs. after picking stocks for more than 30 years, kate rogers went to visit the group to see what they make of this market rally. [ bell ringing ] >> reporter: the beardstown ladies have seen it all, from the stock market soaring in the 1980s to the housing collapse in 2008 and the recession that followed. through it all, they've continued to meet once a month in beardstown, illinois, contributing a modest $25 each for what they call the three e's: education, enjoyment, and earnings. >> we've been through a lot of ups and downs. we've seen the market go up and we've all smiled at the meetings. when it goes down, we don't get sad. we look for bargains. >> right. >> it's a sale. it's like a discount sale in a department store. >> black friday, let's go shopping. >> reporter: after launching in

diana olick looks back on the year that was. >> reporter: 2016 was marked by the first big move from first-time millennial home buyers. >> to me, once we got married, i just wanted our own place, something to call our own. >> reporter: as well as downsizing baby boomers. >> this is it, you know, this is the last house you're going to have. you've got to get what you want. >> reporter: the two largest generations and the two biggest drivers of 2016 home sales. the pace was the highest in a decade, although 1 million more homes sold in 2006 than 2016. >> low interest rates were definitely a factor, and i also think that rising prices. you know, real estate became again a good deal, a good investment. you saw real returns. you saw prices appreciate. >> reporter: the popular 30-year fixed mortgage rate sat below 4% for much of the year, hovering near a record low, and only surged higher following the presidential election. home price gains, which had been easing at the start of the year, revved up again over the summer, thanks to very tight supply of homes for sale. older buyers, most of

diana olick explains. >> reporter: this five-bedroom colonial in bethesda, maryland, sat on the marketor three months but finally went under contract this month. the housing market isn't as cold as you might think at christmas thyme. >> if you're in the market in december, you're one of maybe in your price range and location seven or eight homes, which guarantees every time a buyer is out looking, they're forced to see your house. there's no other choices for them. >> reporter: sellers who sat for a while tend to take their homes off the market during the holidays, hoping to relaunch them into the spring market. that isn't always the best tactic. >> the winter buyer is a serious buyer. because it is not fun to look at houses when it's snowing, raining and freezing cold. so the buyer that comes across your threshold in december, while there may not be many of them, those people will buy a house within 30 days. >> reporter: and this december, there is an added bonus. the soaring stock market. not only are there more high-end homes on the market than entry-level, but high-end buyers now h

i'm diana olick in washington. >>> facebook takes aim at fake news. the social media company will team up with some media organizations to be third party fact checkers. facebook said it will target the worst of the worst, peddlers of fake news, and hopes it will make it easier for its nearly 2 billion users to spot and report the imposters. shares of facebook rose a fraction. >>> general motors will begin to test its autonomous vehicles on public roads in michigan immediately. ceo mary barra said the automaker will begin to produce the next generation of self-driving cars. early next year gm was up 29 cents at 36.24. >>> waste management is buying back up to $750 million worth of its shares. this replaces its previous $575 million buyback. the company is also raising its quarterly dividend by nearly 4% to 42.5 cents per share. shares of waste management tacked on six cents. >>> pier one surged today following strong third quarter results. the home furnishings retailer saw e-commerce sales rise 38%. sales trends rebounded in the second half of november

for "nightly business report" i'm diana olick in woug. >> washington. >> until they can clean the bathroomrewer, thank you for watching. >> i'm bill griffin. have a great evening, happy new year. see you on monday. >> "nightly business report" has been funded in part by -- ♪ >>> our value principles are patient first and we want to deliver the highest quality care. >> the goal of creating and sustaining value is all about putting the patient at the center of the equation. >> the purpose of this organization is to help people get back to what they need and love to do. ♪ ♪ amy: the u.s. retalliates against russia. a war of words over middle east peace and a ceasefire in syria. we ring in 2017 with a look of the global issues facing the president and his successor tonight on "washington week." as the clock ticks down towards a new year, the white house tackles some unfinished business sparking tensions between the outgoing president and the president-elect. president obama made good on a promise to punish russia for hacking the u.s. elections and the president-elect dismisses as an action say

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for that let's get to diana olick. >> well, carl, existing home sales up just a little bit, 0.7%, to a seasonally adjusted annualized rate of 5.61 million units in november. the october number was revised down slightly, so it's actually basically flat and just what the street was expecting. the realtors put out a very large year over year number, up 15.4%, that number doesn't mean anything. here's why. in november of 2015 that was when the new mortgage rules went into effect, remember, they were called trid and really delayed a lot of sales. pushed them into december. so december sales last year were artificially low, so sales are up from a year ago but definitely not by 15%. we did see another drop in inventory. that's the big problem in this market. just 1.85 million homes for sale down 9.3% from a year ago to a four-month supply. we were at a five-month supply a year ago. balanced is considered a six to seven month supply. that low supply is pushing home prices higher, the median home price in november $234,900. tha

diana olick, this rally has been fueleded with low rates and now, we're getting up in a neighborhoodof the steam could come off. >> yeah, the worry may be rising with the rates. but yes, monthly sentiment took an epic jump in december. this is all about optimism for trum trumpenomics. the survey is weighted toward custom builders. they are back down again, despite the broader rally. that's likely due to rising mortgage rates. up seven points to 70 on the builder index. that's the highest level, t the first read since the election and largest gain in 20 years. last december, it was 10 points lower. of the three component, current sales concerns up to 76. expectations nine points to 78 and buyer traffic rose to 53 and that's the first time traffic topped 50, which is the crossover to posztive territory since 2005. the lowest in the at 53 15i. some say this month could an out lier. confidence measures the direction of change, not necessarily the degree and mortgage rates again could throw water on this. one note, this survey used to track housing starts very closely. not anymore. confid

let's go to diana olick for those numbers. >> sara, home builders sentiment in september spiked seven points to 70 on the national association of home builders monthly index. the street was looking for flat. that is the highest level on this index since the middle of 2005 before the housing crash. it's the first read since the election. and the builders say it's all about trump. quote, a post election bounce as builders are hopeful that president-elect trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability. that from nahb chairman ed brady. this survey is weighted towards smaller custom builders, not the big public. the seven-point move is the largest one-month gain in 20 years. last year at this time the index was ten points lower. of the index's three components, current sales conditions increase seven points to 76. sales expectations in the next six months jumped nine points to 78. and buyer traffic rose six points to 53. and that's the first time buy

diana olick has that story. diana?yeah, because those rising rates are pricing some buyers out of the housing market. but there is a way to get some of those borrows back in. and, yes, it was the villain of the housing crash, but the adjustmentable rate mortgage is a good option for some people. the average rate on the 30-year fixed mortgage today is around 4.25%, a full percentage point higher than a five-year arm. still, barely 6% of mortgage applications today are for arms, compare that to 35% during the housing boom. but today's arm is not the arm of old. it is far safer, new regulations that protect lenders and borrowers, no longer allowing interest only arms, negative amore tization arms, crazy low teaser rates. so for most loans, you now have to pay principle along with interest and the lender has to underwrite the borrower for the full length of the arm. arms can be fixed for five, seven, ten, 15 years. there are some interest only products, but they're not common and they are more expensive. today's lending st

let's bring in diana olick. so, rates are still very, very low historically, but they have crept up. are you seeing any indication that this is impacting potential buyers? >> we are. we just saw it in the november pending home sales. a lot of people say, okay, they went from about 3.5% to the 30-year fixed to 4.25%, that's not that big of a jump, but today's buyer is on on the margin because home prices are rising that ooempb the small jump affected buyers. recording how many people signed contracts in november, so their out shopping and we saw the number drop 2.5%. it was expected to rise. that was the jump in mortgage rates, post election. in november. so, yes, we are seeing the impact. >> so, there's two sides to every tree. are people more reluctant put their homes on the market because they're being put off by this jump in mortgage rates? >> absolutely. think about it. say i mean, everybody and their brother refied twice during the last couple years, so say you have a mortgage rate around 3%, 3.25 and you'r

diana olick joining us from washington to explain. >> a lot of folks like me got smart home devices thiseet my new nest thermostat. isn't she cute? 201 is expe 2017 is expected to be a bigger year. companies are getting smarter and realizing they have to be much more consumer friendly. >> they're confused what is the value they're getting. consumer could be spending upwards of a thousand dollars if they go the retail market. they don't understand what is the value? energy savings, fun and won't want to use it in a couple of weeks' time. >> so education will be key next year. in 2016, 80 million smart home devices were sold. nest, august smart door locks, ring smart doorbells and big chunk of it was personal home assistants, like google home and alexa. 2017 could bring more consumers to smart tech because bigacquir devicemakers. companies will also broaden from home security and thermostats, specifically to your appliances. maybe you ask your smart home assistant for a meatloaf recipe and then you choose one, it goes ahead and preheats your oven for you just perfectly. the focus will also

diana olick joins us with more. >> reporter: this was the year for smart technology.est thermostat. it was part of the package when i had my air system replaced. more companies are incorporated smart home tech into their upgrade packages. whether you're replacing the furnace or the alarm system or whatever. now, in 2016, 80 million smart home devices were delivered worldwide. a 64% increase from 2015 and that's all according to a new market. that's your nests, smart door locks, smart doorbells. and a big chunk was personal home assistance. like google home, alexa. wynn hotels set it will install alexa in each home suite. like comcast buying smaller home tech companies and alarm.com as well expanding their offerings. the focus for 2017, though, will be educating the consumer, lowering the price, and enhancing security to prevent cyber attacks. there will be improvements in the technology, of course. but company wills have to push consumers because so far most consumers don't ask for it. they expect the smart home tech from their new construction from the home builders.

diana olick joins us from washington.nds as it always does on where you are and what you're talking about. >> reporter: absolutely. i mean, look. all real estate is local. we know that. but nationally we are seeing no letup in home prices. the gains continue to grow and several major metro markets have hit new price peaks. the s&p shiller index hit an all-time high for a few months in a row. with a drop in november pending home sales. remember, november was when mortgage rates spiked post-election. and pending home sales are people out signing contracts in november. clearly those higher rates hurt. now, the average on the 30-year fixed mortgage is solidly over 4% right now. agents are citing that potential buyers are starting to lower their price ranges. that's a problem because the supply of lower priced homes for sale is the leanest of everything out there. so here's a thought. what about buying down the mortgage rate? you can do that with more cash up front. you pay a certain percentage of the loan and that gets you a

here is diana olick. >> reporter: the housing market was on a tear this year.ction surging ahead. but 2017, we'll see big changes. home sales will slow. don't get me wrong, there is plenty of demand for homes, but listings continue to drop and mortgage rates are starting to rise. younger potential buyers may want to get out of those pricey rentals but with affordability weakening, they may just not have the means. mortgage rates will rise. mortgage rates spiked after the presidential election and the gains will continue albeit at a more moderate pace. job growth is fueling the rates but will not be enough to counter the higher costs. especially for first-time buyers of getting a loan. on the other hand, if the president-elect does make a big move into banking deregulation. it could get easier to get a mortgage. mortgage is more expensive but more available. home prices will cool. the spike in mortgage rates has already made homes more expensive for buyers. some may have to come down a bit if they want that offer. pushing prices higher far faster than income gro

let's ask diane olick. diana? >> reporter: mortgage rates took a big jump after the presidential election and just consumer sentiment on going. so if you were in the market to buy a home last summer but you just couldn't pull the trigger, well, it's going to cost you more now on that monthly payment for the same priced home. already we've seen the hit from rising rates. pending home sales dropped in november unexpectedly to the lowest level in almost a year and were lower than november of 2015. pending sales measure contract sign, not closing, so people out shopping in november factoring in those higher rates. average rate on the 0-year fixed is now well over 4% and while it has been moving in a narrow range the last few weeks, the expectation that it will move higher in the next year as the economy strengthens. add even faster rising home prices to the mix and you have something of a toxic cocktail for housing in 2017. but there is an antidote. you can buy down your mortgage rate. it's not as complicated as it so