The lgest publicly traded company today topped earnings estimates and reported record revenue thanks to owth in azure. It is clear that microsoft big investment i the cloud appears to be paying off. At least one analyst said the pace of growth at this scale is unprecedented. That helped lift the stock and initial afterhours trading tonigh john ford has more on microsofts quarter. One take away frommicrosoft earnings today is cloud momentum continues. The companys feet was grounded in azures strength. But not just that. Office and linked in also continue to be strong and ha particularly tt unit including office and linked in helped the profitability of microsoft. Just get Even Stronger than it had been in the past and thats why i trillion Dollar Company and still going on at the end of the fiscal year. For nightly Business Report john. Now to microsofts fellow component boeing. Late today the Aero Space Company said its going to take a nearly 5 billion charge for problems associated with the grounded737 max airplane. It also said the cost to produce the 737 maxs increasing. And sent the stock higher in initial afterhours trading tonight. Phil will bis on the story for t what doe charge cover . Reporter theyre saying its foronsideration and concessions theyre going to have to make to their customers not just the ones theyve me in the second quarter, bill, but those that have to make over the next couple of ythrs. Remember have a number of airlines and Aircraft Leasing companies that wer expecting to be flying the max and theyre not flying it. They have a reduced schedule. Their revenue hast,aken a and they dont have the full compliment of the fleet theyed expeo fly. Thats part of this charge and the most important thing that came out of this announcement, bill, is the fact that boeing is sticking with its plan for its assumption, i should say, to see the b737 maxk in service in the fourth quarter. There have been a number of people thamsaid, you know, not sure this is going to fly in the fourth quarter. Lets push it out to 2020. Boein tsaid its making assumption based on the discussions with regulators it service in the fourth quarter. All u. S. Airlines, to this point, canlled their flights until november 2nd which is in the middle of the fourth quarter. What happens if it goes beyond that . Reporter th have to push out even further. One part that is a particular pain spot for the airlines is that they wereyot o theyve lost the planes they have delivery of and theyre paed and cant be flown. They were supposed to take delivery of more maxes throughout 2019, bill. Those are likely not to be delivered until well into 2020 right. If not late 2020. They wont have the fullnt complior some time. Thank you, phil. Certainly you know one of the biggest risks the market now comes from washington. M lawmaket act to lift the federal debt ceiling otherwise the u. Defaults on its obligations jeopardizing the full faith and credit of the u. S. Government. Today there were some new developments on that ory. Treasury secretary signaling today that the white house and congress are moving closer to a deal to lift the debt. Ceili the outline of their agreement would ise the nations Borrowing Limit for two years and set two years of top line federal spending numbers and include offsets for spending increases. I dont think the market should be concerned. Hi i that everybody is in agreement that we wont do anything that puts the u. S. Government at risk in terms of our issue of defaulting and i think that down in any scenario. I dont think the market should be concerned and were working hard. Well get there one way or another. Reporter a source tells me there are veral issues that need to be resolved. Where to find roughly 150 billion offsets or even more. How to consain future spending and the appropriations bill that have passed the house. The Treasury Department could run out of cash Early September while congress is still on recess. So lawmakers are scrambling to pull together a dealefore they leave over the next two weeks. Mnuchin has been in regular contact with capitol hill. Speaking with the democratic and Republican Leadership over the phone today. We suld not leave here without doing something on the debt ceiling. If thats even means 30 days, it should not come in doubt about the debteiling in any shape or form. Both parties caution that nothing isinal until everything is final. For nigly Business Report. And the treasury secretary did say that investors should not be concerned about this. How have the markets performed in the past during silar times of stress in d. C. . We askedak Dominique Chu to a look. Reporter wall street hasnt generally reacted well to fiscal uncertainty. H the last decade, theree been numerous cases for market volatility was the result of budget and debt ceiling impacts. One happened in the summer of 2011, when lawmakers s wereck in negotiations that could have lead to a government shut down. Ultimately the worst was avoided but the concerns over americas future Fiscal Agency standard and forbes to cut the rating on the u. S. For the and lets not forget the prices are raging at the time marketty volatierved. In the fall of 2013, the government shut down. , the week befo markets were weaker. During that same time period, lawmakers were grappling with the validity of the Affordable Care act. And at the e l oft year, a bunch of impasse lead to the longest partiat government s down in u. S. History. At the same time, invesrs were concerned about Interest Rate policy from a Federal Reserve that looks too tight in financial conditions. In each of thoseth scenarios, e were two common threads. One, that fiscal policy was surrounded by other negative market catalysts in play at the time. And, two, when a resolution was reached, eventually, the initial volatility smoothed out and thed markets e up higher. For nightly busine report. On wall street stocks made modest moves today despite a t focus ee things. Earnings, which so far have been mixed iran, after President Trump said the u. S. Destroyed an iranian drone, and the fedll ing comments today from his senior beneficial who said e a central bank will t more aggressive stance to ease Monetary Policy. But all of that was not enough to move the needle. The dow industrial average was od three points to 27,222. Nasdaq added 22 points and the s p rose by 10. Clearly wall street has a huge wall of worry to deal with now. Economic and political issues both domestically and abrobu, lately the market has not been reacting to a whole lot of that. So what exactly ist waiting for . Were joined tonight by hris zach really chief Investment Advisor at independent alliance. Thank you. Thank you. Years ago i would have contributed it to the summer doldrums but we dont have itan ore. Its essential acting that way now. Why do you think that isou well, see the market is going sideways. Theyre waiting to see what is going toit happencorporate earnings where they kicked off the last couple of weeks. Were about10 f the way through the s p 500 reporting season andut a 3 4 of the companies are beating expectations. Those ex ctations have been lowered. In fact, earnings are expected to be flat even slightly down for the first half of this year. So the markets not reacting positively or negatively off that news. Its going to take some type a surprise a positive or negative in order to move the market. Now that the Federal Reserve and china seem to be on the back t burner f time being. Yeah. I mean, today out after fed president williams said he feels the fed should be more aggressive with Monetary Policy the feds funds futures are anticating a 50 basis point cut by the fed later this month. Is the market setting itself up with expectations or a bit too g hi do you think . Its possible. I think most of the market is probably saying a 25 basis poin cud to your point, its recently starting to price on 50 s. Sis poi its possible its a little bit too much for what the fed will do. If you listen to what the fed president said today, he was talking about makinrastic cut and making one in advance of it bein necessary. So theyre talking about insurance rate cut, potentially doing more in shortereriod of time. So he may have been hinting that actually the market was right they were going to cut but actually they were going to cutc twice as as expected. So its possible the fed in this case is leading the market and thats why i think youre seeing a repricing. Quickly, as far asrade goes, expectations here about as low as they can possibly get. A thinistration has been guiding lower, it seems, every day. So i guess, if anything, the next move would be higher if we get some development on it. I think thats exactly right. The most likel scenario they kick the can down the road, continue to negotiate, and neither talks completely fall apart nor an agreement is reacd in the near term. I would expect us to go if theres any type of positive developments in trade negotiations, a sign we are getting closer to the end a an agreement will be reached, i think that would be good stock market. Chris, thank you for jning us tonight. The mantra in the media for years, of course, has been the content is king and netflix may be learninhe that hard way. The streaming service add fewer sub skribers than expected in the past three months. It sent then stock d 10 today. In part, the company said because of its line up of shows. Ixlia arbostein has the details. Reporter net seemingly has endless content. But turns out its a hitdriven business. The mpany added 2 million fewer subscribers than expected. In the u. S. , it lost subscribers for the first time in eight years. Netflix said was in part due to the fact it didnt he enough big new shows. What we learned is that original content, big hits drive subs. Stranger things returning kicks off a strg second half of the year. According to the ceo. A number of popular shows are returning with new seasons, sh as the crown and 13 reasons why. Theres the irishmen debuting in december. If content iscrhat des subs, content is coming in the second half of years. Wi thi be the strongest content theyve had in a long time. It should lead to good numbers. Reporter oneha thing can give them an advantage shoes from the big tv producers suchd as r rhymes is lured over from the networks with pricey exclusive deals. Ryan murphys show the politician hits netflix in september. The content chief said continuing to innovate to create shows and t moviehat drive water cooler conversation will be the companys priority. Especially as it loses some of the most popular licensed shows such as the office and friends. We grow through that by making the investments in original programming and getting our consumers and members tuned to the expectawere going r create their next favorite show. Porter with disney and apple launching competitors in the fall, and then hbo max and Nbc Universal streaming services coming out next ye, the competition to find the next favorite show is going to be more fierce than ever. Time to take a look at the upgrades and downgradesoday. We begin with shares of apple. Outgraded to perform at Raymond James with the analyst citing confidence. Price target 250. The stock rose 1 . Microdevices downgraded to neutral. Th tanalyst cited stocks evaluation after a nearly 80 gain so far this year. Price target 37. Sharefell more than 1. 5 to 33. And call come downgraded to weight to overweight. The analyst said the stock will be range bound going into next year. Price target 75. That stock fell nearly 2 to 74. 37. Still ahead, the price of privacy. An app goe viral and washington calls for an investigation. The house ved to raise the federal minimum wage fon a first time decade. They move to 15 an hour by the 2025. Some cities and states already made that move including seattle, san francisco, new york, and all ofni calif amazon adopted the 15 minimum last year. Es other compaave done the same but experts say theres little chance that these measure will be taken up by the senate. President trump said today that his administration is looking closely at a cl udcomputing contract the pentagon is doing to award soon. Amazon and microsoft are the two finalts for the contract that could be worth 10 billion. Mr. Trump said hes received complaints from other Tech Companies some of whom said such a large and important contract should be awarded to more than one company. Also, in washington, a wildly popular app is coming under scrutiny. A leading senator is calling for the fbi to investiga it and the Democratic National committee is warning against using it all together. Andrea day explains why. Its the app tha can make you look decades older or younger in seconds. Il withons tapping into the technology. Posting shots all over social media. The viral hit is under fire with fears that personal data could be shared with the russian government. The companyehind it is located in saint petersburg. This is the field cto at Data Security company baronas. People are realizing im uploading potentily very personal information to a company in russen. E minority leader Chuck Schumer calling on the fbi and ftc to investigate. D he dnc urging president ial campaigns to delete the app immediately. Lattoday, the app maker adding a warning that pops up when you photo. Leaving users to decide if they still want to go ahead. According to face app, we only upload a photo selected by a user for editing. Wensnever tr any other images from the phone to the soud. Most imare deleted from our server within 48 hours. L we dont s or share any user orta with any third parties. Even though ther d team is loaded in in russia the user data is not transferred to russia. He still has we have to assume once we give somebody our data, theyll do whatever they wt with it. Even using the app once andn delet could still be an issue. And getting face app to delete your data also takes some work. Liu have to on settings and support and then send an email and therestill no guarantee. Im andrea day for nightly Business Report. Well talk about the growing privacy concerns involving face app. Hes, of course, executive editor at c net. Hi. This has been around for awhile. What happened . All of a sudden its onyb evys radar screen. Yeah. A couple of celebrities started posting onli their photos of their aged faces and it kind of took off. It was really amazing. I saw it just starting to pop up in my twitter timeline a couple of my friends did it. So the photo actually has the face app logo in the bottom right of the photo. You automatically know where it came from. You search t app stond download it which is what i did and took a photo, aged and uploaded it. I was part of the whole thing but it was a thing that took off in the middle of the day. Right. But youre not as concerned about the surity issueshat some are. I mean, Chuck Schumer, as we said, is calling for an fbi i guess mainly because this is developed by a russian developer, yes . Yeah, i mean, i havent seen any hard evidence that shows that this or something to about. What im glad about, though, and this is something weve talked aboutn c net many times is you need its reminding people to bo thoughtful what permissions theyre giving apps when they download them to the phone. When you start up the app for thest fime, itll ask you if you can give it access to your photos. All of your photos. And i said no, of course, but a kay. Of people just press because theyre used to that. And thats one of the things it ,started this conversati think, is really healthy. About where is our data going. Wh are we trusting it with and how are we handli it . Its not something weve done in the past. We all have the memories of what came out of the 2016 election. The involvement of the russian government or Russian Developers of se kind. I guess maybe were learning something but are we too paranoid at this point . Well, that is beingoo paranoid, at this point, is not a bad thing when it comes to the app world. The thing we have treminded of there are developers out there annoif you dont who youre dealing with you should be thoughtful about who your giving your data to. Thats a good lson to learn. Now just assuming this is is a bad company and a bad app because it comes from russia is a little over the line. Right. Would like to see more evidence that its dangerous, first. But im happy to see people thinking about these things now instead of waiting for a big hack or some other horrible thing to happen and say i should have thought about it before. Indeed y tha for joining us tonight. Thank you for having me. Elsewhere United Health group sees ang gro growth in the membership. Thats where we begin tonights market focus with the parent o the nations Largest Health at insurer g estimates. An increase in premiums and services. The Company Raised the full year guidance. Shares fell more than 2 to 2. 60. Morgan staey reported better than expected earnings and revenue thanks to gains in the Wealth Management and fund divisions. P but the compated a 14 decline in revenue from equities trading. That was the steepest of the major banks, as matter of fact. The stock rose 1. 5 to 44. 43. Union pacific topped earnings estimates thanks to cost cuts and pricincreases to combat midwest flooding and trade tensions between the u. S. And china. Despi d evidence of a slown in the transportation sector, Union Pacific ceo said hes not concerned about a possible freight slump. We see a little impact from the coal and Energy Markets and then we do see a little impact from tra but, you know, i dont i cant say we see some kind of nt inflection p occurring now that would make me think that the Third Quarter or fouquh arter is getting much worse than what we see nowon uni pacific rose nearly 6 today to 174. 25. Tobacco company