. this is "nightly business report" with tyler mathisen and sue herera. surprise rise. stocks took off despite rising tensions overseas. but how long will the buying mood last? unexpected rejection. eli lilly's arthritis medicine was supposed to be a blockbuster, but the fda said not so fast. mountain of debt. americans owe a lot of money. $1 trillion on their credit cards to be exact. and that is raising some concern. those stories, and tomorrow, tonight on "nightly business report" for monday, april 17th. welcome. i'm sue herera. tyler mathisen is off tonight. given the increase in geopolitical tensions and soft economic data, not many thoughts the dow would rise by triple digits, but it did, and the bulls remained in control until the closing bell. the dow jones industrial average gained 183 points to 20,636, snapping a three-day losing streak. the nasdaq added 51, and the s&p 500 was up 20. given all the negative factors swirling around, why were investors in a buying mood. bob pisani explains. >> stocks rose today, the big question is, why? we opened weak with good reason. the economic data on friday and this morning was poor. as you look at it, you might scratch your head and wonder what happened. for example, retail sales fell for the second straight month. producer prices were down for the first time in seven months. it sounds like the move toward growth is on life support. the markets turned around shortly after the open, because the market became oversold and bounced the most oversold sector, banks, are the ones that bounced the most. other sectors, semiconductors, materials, they performed better today. geopolitical jitters resurfaced last week after being dormant for a very long time. trade brought a lot of protection ahead of the three-day easter holiday. since nothing happened over the holiday, that trade was being unwound somewhat today. there's one final potential catalyst, tax day, ending tomorrow. the weeks leading into tax day have been down modestly for the market, with the modest rally in the weeks after that. that seems to be playing out as well. at least for today. >> comments from treasury secretary also propelled the stock market late today. in an interview with the financial "times," steve mnuchin said the original august timeline for tax reform was no longer realistic and that the delay was caused by failure of health care reform. while that may seem like a negative for the stock market, it was what he said about the controversial border adjustment tax that got investors excited. secretary mnuchin said it was a one of a number of options the government was considering to raise $1 trillion. that tax has split the business community with exports wanting it and retailers opposing it. nusmin still believes the tax reform will be signed into law at some point this year. mark joins us more to talk about what drove today's rally and whether or not it might last. the chief investment strategist. nice to have you here. >> thank you, sue. >> what did you make of today's action? if this was a couple of weeks ago, and these geopolitical concerns were surfacing, we would have probably seen a sell-off in the market. not so today. >> as said by bob earlier, surprising, given the fact that going into the weekend on friday's close, of course, we have a couple of reports on cpa and retail sales that were a little bit disturbing, taken at face value. we have to pull back a little bit and get context for the pattern to determine whether it's just noise or in fact signal. but we had obviously a marked turn-around today with a case of one day's trading we've recovered nearly all of what was given up over the entirety of last week. i still think investors are going to be trepidatious with what's forthcoming not just on earnings center front and center this week and the week subsequent, but rather to geopolitical sense. we've seen recision in that threat. it's likely to resurface before all is said and done. >> does that reinforce your view from the last time you were with us, that risk assets will resume their advance? >> i do. we haven't wavered from that. the market is overdue for a correction of some sort. maybe before this move is all said and done, we'll see we're in the midst of that as we speak. we've got some back. but it's going to take some backing and filling before the investors are satisfied that the drawdown we've seen so far is over. but whether it occurs now or later on, i think still out nine to 12 months, you'll see equities advancing on sturdy if not improving economic data not just occurring here in the u.s. but on a global basis. >> we'll talk a little bit about the data in just a second. but you've mentioned to us in the past that some of the economic data is not reflective of what we're seeing in other parts of the economy. >> absolutely true. there's been a lot of attention brought to this notion that the so-called soft data, and how you feel about things, are topping the charts. whether you're talking about business leaders or consumers. the hard data is corroborating that by virtue of it indicating expansionary conditions, about you nonetheless, not the same level of robustness by way of some of the manufacturing, retail sales data obviously, even labor market conditions that necessarily support the soft data at this point. there has to be some compression one moving toward the other at some point either by way of validating through the hard data, sentiment surveys are right and businesses and consumers are going to continue to feed this economic expansion, or conversely, we have recision in the sentiment readings. the worry is it would still do hard economic activity. >> if you're a long-term investor, are there areas of the market where you think there is still value to be found? >> i do. i'll just name three. i think the consumer's in great shape by the way of the recovery on the balance sheets and income states alike. housing industries, do it yourselfers, accommodative mortgage rate environment. and the strength of the consumer. in addition to that, we like energy. but more specifically, oil services companies, particularly those that are positioned to take advantage of the uptick in activity here in north america. shale drilling. names like schlumberger or haliburton might complement that view. health care has a long runway demographically speaking, not just in the u.s., but around the world. within health care, biotechnology stocks, continued stocks for the big pharma companies. >> thank you, mark, as always. >> thank you for having me. softer economic data, we start with manufacturing activity in the new york region which grew at a slower pace than april. orders were not as strong as they had been, despite six straight months of expansion. and hiring remains strong. and new york area manufacturers are still optimistic about future conditions. home builder sentiment also cooled. the national association of home builders survey shows the industry is optimistic heading into the spring selling season. the group is also confident that the president's promise of looser regulation and faster growth will offset challenges like higher costs. as we've been reporting, there is a divide in the economic data. some of the so-called softer data like sentiment is very strong. while other harder data like retail sales is weak. and usual rily when consumer confidence rising is sensitive. steve liesman has more. >> an exuberant consumer is your best customer, at least what the conventional wisdom has been. how is it consumer confidence surged but retail sales are declining? all the major indicators of consumer confidence have taken off since the election hitting levels not seen in more than 15 years. after a strong january, we tail sales have now fallen two months in a row, giving back most of january's gains. so consumers are upbeat, but their spending is in concert with their feelings. the weaker hard data measures what they actually do with their money. >> you can drive a truck through it, okay? the consumer sentiment is through the roof. the hard data is lower. you talk to somebody, how thing's going? it's great. how are your retail sales? not so great. >> some of the reasons offered by economists, sentiment is up on the elections. because people feel upbeat doesn't mean they're going oh spend, because donald trump is in the white house. in the wake of 9/11, sentiment plunged, for example. but sales remained high. now it's the reverse and it's perplexing because job growth is strong. it usually goes along with stronger consumer spending. many tax refunds were delayed this year. which could have reduced spending. whatever the reason, most economists see under 1% growth in the just finished first quarter. but they believe spending and growth will rebound in the second quarter. really, however they feel, a spending consumer is everybody's best customer. for "nightly business report," i'm steve liesman. china's economy is gaining steam. the world's second largest economy grew in the second quarter at the fastest pace since 2015. but some warning signs persist. we have the report from shanghai. >> strong growth in the first quarter. q-1 gdp came in at 6.9% from a year ago beating expectations. the consumer remains the solid headline number was due to bay shipping stimulating the old economy in china, steel mills and property developers, instead of shifting to new growth. retail sales healthier than the previous two months. there's still a lot of uncertainty whether consumer spending is picking up to a meaningful degree. this is what the ceo of young china told me how big a role the consumer is spending in the economy today. >> there are key measures to how consumers are responding. the first is the number of restaurants that you build, and existing restaurants, what are sales looking like. so i think on both those metrics, we've been encouraged. >> industrial output for march accelerated from 6.3% in the first two months. asset and investment expanded 9.2%. the economy is still reliant on fai, and that's raising concerns about rising debt, excess xat ti and how long the uptick can last. on top of that, uncertainty in the china-u.s. relationship has weighed on growth prospects here. though the presidents of the american chamber of commerce in shanghai told me he's encouraged after the trump administration decided to refrain from labeling china a currency manipulator. >> strictly speaking at the treasury department's labeling a country a currency manipulator, china doesn't satisfy the three, that the treasury department has stated. >> he said fears of a trade war have subsided among american businesses here, though many still expect to see trade skirmishes. still ahead, eli lilly's much anticipated arthritis drug is stopped in its tracks. now investors want to know, what's next. netflix isn't signing up as many new users as expected. subscriber growth in the u.s. and abroad flowed in the fourth quarter. the company reported earnings of 40 cents a share, 3 cents better than forecast. revenue grew nearly 35% to more than $2.6 billion in line with expectatio expectat. afr an initial dip, shares of netflix moved back higher. julia boorstin has more on netflix's quarter and its subscribers. >> netflix continues to grow its subscriber base saying the company is on track to hit 100 million members this weekend. the growth came in a little bit slower than expected, $9.5 million net subscribers fewer than the company projected. well, that weighed on the stock. the subscriber outlet for this quarter was more bullish. netflix suggesting the new subscribers more than expected. netflix said the customers are getting more valuable, seeing a steady migration of users to the highest quality video tier which is the most expensive plan. that will keep revenue growth above membership growth. julia boorstin in los angeles. united airlines under fire for forcibly removing a passenger from a flight last week reported brp expected quarterly earnings. the airline earned 41 cents a share, 3 cents better than estimates. revenue was up slightly from a year ago to nearly $8.5 billion. the report along with an upbeat outlook was enough to lift shares initially in after-hours trading. given the ongoing controversy around that airline, the ceo again addressed the passenger incident, apologized, and said the company must do a better job serving its customers. susan lee has more. >> despite the controversy over the forcible removal of a passenger last week, united airlines is guiding for a strong quarter this quarter, pre digting the first quarter of net revenue growth in two years, despite the public relations stain and international outrage after the violent removal of a passenger from an overbooked flight. the ceo addressing the incident in the earnings release saying, it is obvious from recent experiences that we need to do a better job serving our customers. this incident has been a humbling experience, and munoz goes on to say that he takes full responsibility and it will prove to be a watershed moment for the airline. higher fuel costs cut down on profits. but still, united beat estimates. five straight quarters they have beaten and only missed twice in 13 quarters. united shares are up 25%-the past year, and continuing to outperform the rest of the airline sector. we'll get more clarity and hopefully some more answers when united hosts their conference call tomorrow morning. susan lee for "nightly business report." delta will offer up to roughly $10,000 in some cases to fliers on overbooked flights who agree to give up their seats. delta's new cap is roughly seven times higher than its previous limit. and plies to passengers who voluntarily gives up the seat. it comes in the wake of the removal of the passenger dragged off the plane last week. eli lilly's experimental rheumatoid arthritis drug was expected to reach blockbuster status. the food and drug administration rejected the application saying it needed more clinical data. that send shares lower by more than 4%. eli lilly's partner on the drug was off 10%. meg takes a look at the setback and what eli lilly may do next. >> they expected an approval. the rheumatoid arthritis drug has already been approved in euro. analysts pointed to favorable data from clinical trials on both the drug safety and how well it works. >> the clinical data for this drug has been str strong. very good efficacy, very good side-effect profile. >> the fda said friday it wants to see more data on the dosing and safety of the drug. analysts speculated the drug may not be approved for a year or two. it would enter a big market. rheumatoid arthritis affects more than 1 million americans, causing pain and stiffness in the wrists, hands and feet. it's also a crowded and pricey class of drugs. many blockbusters are already on the market. >> the prices that have been charged for these drugs, particularly the by oh logics have been off the charge. between the large number of patients and large price, you get a very large market. >> how would they have a chance? it's a pill taken once a day versus injections for many of the other drugs on the market. the only other drug approved is pfizer's zell jans. for lilly, it follows a decline in the shares after a major alzheimer's drug failed in a late-stage clinical trial. the "morning star" seeing sprite spots in the portfolio. >> this is a setback, one thing we keep in mind they've got a lot of other drugs re senly approved looking like they're doing extremely well. >> he pointed to a recently approved psoriasis drug as one example. the smaller of the two partners took a harder hit today. analysts said the rejection puts more pressure on the immunotherapy for cancer. we'll have closely watched updates at the research conference in early june. as for the rheumatoid arthritis drug, most on the street expect it to be approved. the question is, how long will it take to prove to the fda it's both safe and effective enough to enter the market. for "nightly business report," i'm meg turrell. clause kleinfeld resigned from his position after the board of directors said he showed, quote, poor judgment when he contacted activist investor elliott management without the board's consent. elliott has been pushing for changes at the company including calling for kleinfeld's ouster. arconic shares rose. the maker of cape cod potato chips said chief executive carl lee was retiring. and would be replaced by interim ceo and current board member brian driscoll. the company also warned earnings for the current quarter would likely miss expectations, partly due to increased promotional spending. and china based amp financial offered to buy money gram. an affiliate of ecommerce giant alibaba raised its price by nearly 40%, valuing that revised deal at nearly $1 billion. shares popped more than 7% to $17.79. the hospital operator hca holdings issued a bleak outlook for the current quarter, warning profit and sales would miss estimates. the company cited fewer hospital admissions and more patients on less profitable government issued plans. shares fell more than 2% to $85.65. boeing meantime is planning more job cuts. in a memo to employees, the aircraft maker said it would lay off hundreds of engineers in its commercial airplanes division. the latest cuts are expected to take place in june. shares of boeing rose nearly 2% on the news to $179.02. walmart is reportedly close to buying the men's online clothing company bonabos. the two companies have settled on a takeover price and they're finalizing the deal. the latest move represents walmart's desire to expand its ecommerce business. walmart shares rose 34 cents to $73.49. coming up, americans are giving their credit cards quite a workout. but should investors be concerned about the mountain of debt that's piling up. here's what to watch for tomorrow. a number of dow components report earnings including goldman sachs, johnson & johnson and united health care and ibm. they'll discuss the future of the insurance exchanges with president trump. housing inventory tight, investors will pay attention to the march housing starts report. and that's what to watch for on tuesday. jnkts consumer credit card debt is rising. according to the federal reserve, americans owe more than $1 trillion in credit card debt. that's up more than 6% from a year ago. but what could that mean for the economy and for you? scott hoyt joins us, the senior director of consumer economics. welcome. nice to have you here, scott. >> nice to be here. >> put this in perspective. that's a big round number, $1 trillion. but how does it compare to the overall debt load that the consumer carries in the economy? >> well, actually, consumer debt loads are quite low right now. credit card debt makes up less than 10% overall outstandings. mortgages obviously the big piece at-70%. there's not a lot of mortgage debt out there right now. interest rates are low, so payment burden on consumers is relatively low. >> for the mortgage, but credit card debt tends to carry a very high interest rate. is that not worrisome? >> well, it can be, but right now, total consumer debt payments on all forms of debt relative to their income is at historic low. even though credit card debt fairly high with interest rates low and other forms of debt low, consumers are not overly burdened by their debts right now. >> so, what should we be watching for in terms of possible hits to the economy? does this number, this $1 trillion number have to get significantly higher for it to be an issue for the economy, or do interest rates have to go significantly higher, or maybe both? >> i was going to say, i think you probably need both. but i think the other thing to watch is other forms of borrowing. as i said before, particularly mortgages. right now, debt payments is a share of disposable income are low. that's the number that we focus on. when debt payments as a share of disposable income start rising, in particular when they rise more than a little bit, that's when we might start worrying about the consumer's ability to pay back their debts. >> we always think of the financial crisis, the 2008 financial crisis and debt issues that occurred out of that. but this seems to be a very different time, would you agree with that? >> yeah, this is a totally different time. as i said before, debt burdens are lower than they were, even in the late 1980s when you think of it as payments of a share of income. whereas, prior to the financial crisis, debt burdens were at record highs. >> all rig. on that note, thank you so much, scott. scott hoyt with moody's analytics. >> my pleasure. before we go, another look at the day on wall street. the dow jones industrial average gained triple digits, 183 points, to 20,636, that snapped a three-day losing streak. surprised a lot of people on the street as well today. the nasdaq added about 51 points, and the s&p 500 was up about 20. we'll see whether or not it continues into tomorrow's trading session. on that note, that is "nightly business report" for tonight. i'm sue herera. thanks for joining us. having a great evening, everybody, and we'll see you right back here to

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