Yields, and the dollar. Volatility spiked. For weeks wall street mostly sharehold shrugged off any d. C. Drama. Today, the shrugging stopped. It came amid President Trump asked james comey to back off of his investigation of National Security adviser michael flynn. The allegations in an asyet unseen comey memo may mean nothing for the economy, not now and maybe not ever. But the trump gop agenda of tax cuts, deregulation and Infrastructure Spending could founder or fail amid a hail storm of investigations. The Dow Jones Industrial average dropped 372 points to 20,606. Nasdaq off 158. The s p 500 fell 43. Although it was the worst day of the year for the indexes, we should point out that remain near record levels. What was the response in washington that the markets were so focused on . Eamon javers joins us. What was the response from capitol hill and especially republican lawmakers . Reporter for the most part, republicans held firm today in support of the president. Speaker of the house paul ryan came out and said he wants the house to investigate it but paul ryan also said he simply doesnt worry about things he cant control. The concern for the white house is that republicans are taking steps to continue their investigations, particularly the Senate Intelligence committee under senator richard burr, republican. Theyre asking for james comey to come up and testify both publicly and privately on capitol hill. Theyre also asking the fbi today for copies of the comey memo. Did the president , make any public statements . Reporter at the Coast Guard Academy graduation he made a speech. He talked about his sense of grievance here and how unfair hes been treated. Here is what the president had to say earlier t look at the way ive been treated lately. Especially by the media. No politician in history, and i say this with great surety, has been treated worse or more unfairly. You cant let them get you down. You cant let the critics and the naysayers get in the way of your dreams. Reporter now, sue, the white house says theyre pushing forward on the fbi director search. Theyve interviewed four candidates, the president has, at the white house this afternoon. Officials tell me theyre pressing ahead on their legislative agenda. They want to keep their eyes on the reason they say the president was elected in the first place. Thank you, eamon. Todays selloff was broad with bank stocks particularly hard hit. Bob pisani watched it all from the floor of the new york stock exchange. Reporter the markets have been rising because earnings guidance, the main driver of stock prices, have been strong. The economy has been improving. Although there has been weakness in china recently, and geopolitical risk in europe is lower. Investors believe in the trump agenda of lower taxes and Infrastructure Spending. They believe the markets can withstand a certain amount of Political Drama as long as his agenda keeps advancing, even if slowly. But whats happening now is different. Most of trumps tweets in the past, while not odd, were not actionable. This is actionable. Talk about obstruction of justice or an impeachment fight, thats a whole new level of uncertainty. Were faced with the prospect of a president derailed by months of fighting. The risk is that even if he survives, he loses so much Political Capital that the only thing he can get through is something everybody agrees on like infrastructure. The potential for a 5 to 10 pullback has increased. Now, its about time we had that. We havent seen a modest pullback in a long time. The bottom line, traders finally have a downside story with a little meat to it. Where do we go from here . Anything that closes off a path to obstruction of justice or impeachment talk would be a market positive. But if this picks up steam and the prospects of a watergate style hearing, for example, emerge, it could be a long summer. Im bob pisani for nightly Business Report at the new york stock exchange. So is it politics or fundamentals behind the selloff . Sarah hunt is portfolio manager. Steven woods joins us as well, chief Market Strategist at russell investments. He believes investors are getting back to market fundamentals. Thank you both for joining us tonight. Steven, you say you cant hide from fundamentals. And thats what the market is now pricing in. I think so. Theres been a lot of political instability for some time now. But if you look at the fundamentals in the u. S. Economy, the global economy, and earnings, theyre good. But valuations right now, the price of the market, is very expensive. So we think its going to take more than good fundamentals to support these lofty valuations. This is why we preach multiasset and global diversity, it should be equities and fixed income globally. I think fundamentals have come back more to the foreof the calculations. Sarah, a lot of people have been waiting for a bit of a pullback in the market. I mean, there have been records earlier this week, and as we pointed out, were not far from those records even today. Do you think this could be the beginning of that longawaited pullback, and if so, how low might we go . I think the question is really going to depend on how fast and how much, how quickly this moves. Does it move to real discussions of an actual impeachment . Or is that just a lot of hyperbole that weve heard before . If the issues get resolved, well have a couple of days of volatility but then we have to see whether or not this is going to impact the timing of any agenda. To the point about fundamentals, i agree on the sense that there is the fundamentals are striving to catch up. But a lot of whats being built Going Forward has to do with some of that agenda on tax and regulatory reform. If its slowing down, thats a negative for the fundamentals picture as well. Steven, does this matter for the long Term Investor or is this actually an opportunity, if youre paying attention to the fundamentals . I think a long term discipline really washes away a lot of short term volatility. If you look at political headlines, they have not been really sticky, historically speaking. If an expensive market with unchanged fundamentals were to provide a discount, that would be something of an opportunity. I think a person should take a more global asset so you dont have to take these tough decisions. That could help wash away short term volatility. Longer term, that discipline will help. Sarah, we hear donre dont b much in market timing, i think you dont either. If you are an investor whose time horizon may be shorter rather than longer and are concerned about the possibility of a prolonged slide in prices, what should you do . We always advise people to have some cash on hand if they have short term needs. Obviously thats something you want to think about. I think that youve had a big run in the market. To the point where we were down today, but its the first time youve had a down day for i dont know how long, and were just off the highs. If you want to take some of that off the table to see where this goes, and look at where you might put it, International Asset classes as well. I think there are reasons to take a look at your holdings, us you should be doing that on a fairly regular basis anyway. Right. Steven, which would be the most important fundamentals to you as you make decisions where to allocate cash . The fundamentals right now, the economy looks okay in the u. S. , you dont see a recession. Ill be looking at what the Federal Reserve does and what that means for inflation and what that means for our portfolio. If i were to watch one data stream, it would be what dr. Yellen and the Federal Reserve are doing. Sarah, let me follow up, thats an interesting line of thinking. A lot of people were thinking there are at least two more Interest Rate hikes baked into the cake for the remainder of this year. Do you see it that way, and what if the market goes through a much more volatile phase and slides off . Does it call into question two instead of one . I would say that theres definitely, if the market moves further, i think that youre going to start seeing whether the question of Interest Rate moves will be asked again. Because certainly when we saw brexit in some of the volatility that was around there, you saw the fed pause. I dont think they necessarily the odds of a june hike have come down, but theyre still above 80 . Unless anything major happens between now and then or the market gets much weaker, i dont think june is off the table. But the question about what they do for the balance of the year is going to be an issue. Youve seen whats happened to Interest Rates already. Interest rates have come back down quite tragically, which is positive for dividend stocks and positive for companies for which thats important. All right. Thank you both so much. Sarah hunt with alpine funds, steven wood with russell inve households are taking on more debt, a lot more. In fact they know owe a record amount of it. If all that borrowing conjures up images of 2008, there are differences this time around, as Steve Liesman explains. Reporter the new york fell reserve reports that Household Debt across the nation has hit a dubious milestone. It finally surpassed the peak of 2008 and now stands at 12. 7 trillion. Is there a reason to worry that another financial crisis would be brewing . Its impossible to say, but debt is substantially different now from the debt runup that led to the financial crisis. The Debt Service Cost is at a lower level mostly because Interest Rates are lower. If you go back to precrisis levels, Interest Rates were at a higher rate so the cost of carrying debt for households was higher than it is now. Reporter since 2008, the population has also grown. While total debt is higher, debt per capita is now just 48,000. That compares to 53,000 at the peak. And default rates are quite a bit lower as many have taken on only the debt they can repay. The confidence of repaying the debt is high at this point. Im being very cautious since the 2008 debacle. Reporter but thats not true for all types of debt. Auto and student loan debts have been decreasing. Student loan defaults are in the double digits. I recently finished college, and i have over 14,000 to pay off. Me and my husband recently purchased a home. So my debt level has increased recently because of that. Reporter more Household Debt can be a sign of confidence in the economy. But it can hold back growth if it gets to high. Going forward, it can be seen as a headwind, a sign of strain in the economy that can hold consumers back. We would need to see more continued job strength, more wage growth Going Forward, if we wanted to be able to maintain these levels. Reporter compared with 2008, more mortgages are going to those with the highest credit scores. That means fewer defaults. But it also means big parts of the population can get credit to buy homes. Thats bad for the economy long term. For nightly Business Report, im Steve Liesman. Still ahead, cisco skids. Why the Worlds Largest networking gear maker could put more pressure on stocks when the opening bell rings tomorrow. Dow component cisco warns revenue for the Current Quarter will come in below analysts estimates. It will also cut jobs. It earned 2 cents better than estimates. Revenue fell to nearly 12 billion. Investors punished the stock in initial after hours trading. Seema mody has more on ciscos quarter. Reporter cisco, the networking giant, issuing weak guidance for the fourth quarter. Revenue has now fallen for a sixth quarter in a row, although earnings did beat street expectations. Cisco also extending its restructuring plans, which will impact an additional 1100 jobs. The cuts come on top of the 5100 job cuts announced last august, as cisco tries to stay competitive in the fast moving world of technology and invest in new areas. For nightly Business Report, seema mody. Amazon shook up the Retail Industry and has forever changed the way americans shop. And now, according to a cnbc report, the ecommerce giant could potentially shake things up in the multibillion dollar pharmacy industry. Shares of potential drugstore rival cvs health and walgreens down 3 yesterday on that report. Christina farr, health and Technology Reporter for cnbc. Com, broke the story and joins us now from San Francisco. Christina, welcome, congratulations on the scoop. What have you heard about amazons intentions and why are they considering this now . Reporter amazon has been thinking for a long time about breaking into the pharmacy market. But now it seems to be getting serious. Our sources are telling us that amazon is hiring a gm to lead a business unit, and they will strategize how exactly amazon can break into this market. Amazon has been selling drugs or trying to sell Prescription Drugs in japan. Would that be like a test market for them before they come to the United States . Reporter absolutely. We were able to dig up this page in japan that shows that they were starting to sell drugs there, along with things like cosmetics. If it takes off in japan, its possible they could bring that to the u. S. Next. And its something weve seen amazon do time and time again. They try out an experimental new product somewhere else, and then bring it here. How concerned are they about competition . Amazon obviously is no stranger to competition, they compete every day and very successfully. But there are some big players here like cvs health, like walgreens, and insurance plans that are tied into those incumbents. Reporter absolutely. Certainly they are seeing a lot of threats from the established players. We saw some stock moves today on the back of the news, and from some of the biggest pharmacies. There are companies that will try to block amazon if they were to enter this space. But amazon has huge resources at its disposable. And i can imagine they could go in guns blazing and shake up this market almost from the getgo. What does that mean then for consumers . Because usually amazon means lower prices. Does that translate to the Prescription Drug market . Reporter great question, sue. Its very possible that amazon could some day bring down prices on drugs, especially if they had data at their disposal and were able to prove, if we could get easier access to our drugs on amazon, that people were filling them more frequently and additionally taking their drugs, if they could show improvement in compliance. A lot of possibilities there, a lot of folks would love to see amazon shedding some transparency and light on this whole murky world of drug prices. Fascinating story. Christina farr, thank you very much, from San Francisco tonight. Sales fall less than expected at target. Thats where we begin tonights market focus. The retailer, which is in the midst of a turnaround, beat revenue and same store sales expectations. But had a drop in customer traffic and spending. Earnings also topped estimates and the company reaffirmed its guidance that samestore sales will fall in the low Single Digits this year. Shares rose almost 1 to 55. 04. Sales at American Eagle outfitters beat analysts expectations but profit didnt fare as well. The teen retailer said slower mall traffic and increase in promotional activity caused earnings to drop and miss estimates. The company sees adjusted profit for the Current Quarter coming in below street targets. Shares plunged 14 to 11. 05. Colgate policy mostly sun ps its open to selling the business. Shares were up nearly 6 to 75. 69. Johnson johnson bet some of its pipeline products will turn into blockbusters. The company said it has more than ten treatments for various diseases it plans to launch or file for approval within the next few years. The companys ceo poke spoke to meg terrell about it. If you look over the last five years weve been able to introduce 12 new compounds, 11 of which were blockbusters, billion dollar plus. What were really talking about today is how excited we are for the future. Weve got ten between now and 2021. We think weve got 50 line extensions, 11 of which have a half billion dollars potential. This down market day, shares fell only tractionally to 126. 67. The Justice Department is suing unitedhealth group, alleging the Health Insurer received 1 billion for false medical claims. This is the second lawsuit the government has brought against the company this month. Still, shares up today, 74 cents at 168. 86. Southwest airlines will launch a 2 billion Share Buyback plan and also raise its Quarterly Dividend 25 to more than 12 cents a share. The yield is now just under 1 . Southwests shares were off 2 at 57. 04. Athena retail warned it would miss Third Quarter sales and earnings targets as a result of, what else, slower customer traffic. That will do it to you. The owner of ann taylor and dress barn lowered year outlooks, saying it expects prospects to remain challenging. Shares finished down 1 at 2. 82. But then following the news, it got crushed in afterhours trading, initially losing a third of value. The recent Global Ransomware attack that spread to more than 100 countries has shed light on one of the most pressing challenges facing the Cyber Security industry. Its a labor shortage. Some experts say that shorter fall has reached crisis levels. Aditi roy reports tonight from san francisc reporter cloud passage, a Cyber Security startup in San Francisco, has 122 employees. When executives are looking to hire, they have a tough time finding qualified cyber warriors. Were based in San Francisco. But we find we cant just hire in San Francisco anymore. Those people are so scarce, we scour the country for them. When we find them, we hire them wherever they are. We have people who work in denver or florida. Reporter theyre not the only ones. Experts say the labor shortage in Cyber Security is dire. A cisco report estimates there are 1 million unfilled Cyber Security positions going to bely. Here in the u. S. , that number is 100,000. Its almost a crisis point. Reporter a crisis that some say directly hurts the ability of companies and governments to curb hacking. This week, executives in more than 100 countries were reeling from a global cyber attack. And disneys ceo bob iger reportedly told employees that online criminals are demanding a ransom for a movie they claim to have stolen through hacking. One report shows cyber crimes cost u. S. Companies an average of 14 million per year. The hardest hit sectors, financial services, utilities, and energy and technology. But academics like Jesse Goldhammer say no one is safe. If youre making pet food, you need Cyber Security. Reporter industry watchers say the root of the problem is that Traditional CollegeComputer Science programs dont provide the necessary skills to battle todays cyber thieves. They dont get any training at school. And we have a mentality of perimeter defense. So the mentality in security is, if i lock the front door, no one can get to my assets behind it. But the trouble today is that people dont break down the front door anymore. They dig tunnels or steal the front door key. Reporter hackers also have a financial advantage. Experts say often all it takes to break into a major companys Computer System is a laptop and some hacking tools you can buy online for a couple of hundred dollars. But companies can spend up to millions of dollars to protect themselves. Even an amateur hacker can find sophisticated tools that can bypass protections. Reporter experts are working on a number of solutions. A recent uc Berkeley White paper suggests that governments start an incubator to build up the cyber workforce. I. T. And ibm are teaming up to provide automated tech. The u. S. Government sponsors hackathon tournaments for college, Even High School students, to build up the nations pipeline of cyber warriors. For nightly Business Report, im aditi roy, San Francisco. Coming up, going once, going twice. Why the fine art industry will be put to the test this week. It is the biggest week of the year for the fine art market. More than a billion dollars of art pieces expected to be sold. The question is, will sellers get the prices they want . Robert frank reports from new york. Reporter the markets may look ugly. But the big auction houses are hoping wealthy collectors havent lost their terror attacks attraction for fine art. Christies kicked off the action monday night with this brancuzzi sculpture for 57 million or nearly twice its estimate, and a record for the romanian artist. This picasso went for 45 million, also well above its estimate. The biggest lots come up tonight and tomorrow night with the postwar and contemporary sales which collectors now prefer. It will mark a big test whether the stock market declines and washington headlines will derail an art recovery that began after the election. The market has proven to be very resilient. We already experienced the market resistance. Reporter the most expensive painting of the week is likely to be this untitled piece being sold by sothebys that could fetch over 60 million. The other big star is this triptych by francis bacon. This twombly could top 50 million. Theyre a far cry from the 100 million plus sales we saw in 2014 and 2015. The next two days will determine whether the art market is at all colored by the trump turmoil in washington. For nightly Business Report, im robert frank. Before we go, the drama in d. C. Spreads to wall street. The dow drops 372 points, nasdaq off 158. The s p 500 fell 43. Add to go the intrigue, former fbi director Robert Mueller will be appointed special counsel in the russia investigation. Well see if that impacts the markets tomorrow. That is nightly Business Report tonight. Im sue herera. Thanks for joining us. Thanks from me as well, im tyler mathisen. Have a great evening, everybody. Well see you right back here tomorr this is bbc world news america. Funding of this presentation is made possible by the Freeman Foundation and kovler foundation, pursuing solutions for americas neglected needs. Planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. You can find it here in aruba. Families, couples, and friends can all find their escape on the