Will name a stock he says will benefit from that. We have all that and more tonight on nightly Business Report for this friday january 31st. Good evening, everyone, and welcome. You heard of the polar vortex . How about the stock market vortex in it sure fell this month like the only thing falling as fast as the temperatures was stock prices. Add it all up or down as the case may be and you get the first january decline for stocks since 2010 and the worst start to a new year since president obamas first month in office. For the month the dow lost 5. 3 . Nasdaq down 1. 7 . The s p 500 split the difference, losing 3. 6 . Pick your poison. Earnings and outlooks have been iffy. The fed is cutting stimulus even more. And emerging markets arent so much emerging as submerging. Just a pullback or something more . Well discuss that in detail tonight. Meanwhile, today the market dipped early, recovered, then swooned again, and heres how it finished. The dow fell 149 points, bouncing off an early 220point loss. The nasdaq was down 19. And the s p lost 11. With money coming out of stocks and going into safe haven bonds the yield on the tenyear treasury fell from thursdays level. You can also blame the bad january on the emerging market crisis and the selloff in those countries. Sarah isen has more on whats causing the turmoil and what needs to be done to stop it. Whats emerged from emerging markets in the last few weeks has been troublesome to investors. Almost 6. 5 billion were drained out of emerging market stock funds this week, the most in more than two years, and 3 billion more from bonds. Why . Interest rates in india, south africa, and turkey jumped this week, with money becoming tighter, gdp growth becomes more difficult. The leader of Indias Central Bank complained about a lack of Global Policy coordination. And the International Monetary fund issued a call to arms, asking Central Banks for vigilance over liquidity. There could be more moves next week as the leaders of boca raton the European Central bank and the bank of england huddle on the heels of lower inflation data in europe and Central Banks in less developed countries, australia, poland, the czech republic, and romania will also be meeting. To some like bank of americas david wu this was bound to happen once the u. S. Federal reserve decided to pare back or taper its economic stimulus. With fewer dollars available the ones that are out there will cost more. Volatility across all markets was near historical low. People thought tapering was going to be a nonevent. I think that was where the market was extremely complacent. Because if qe plays such a big role i think the market is simply underestimating what it means when the liquiditys finally being withdrawn. Stabilization could come from better Economic Data which has been iffy recently at best. Pros say the outlook is bright for emerging markets in the long term but in the short term there are significant head winds, much of which can be traced to china. We all know emerging markets is what, 75 china because emerging markets are either indirectly exporting to china or directly exporting to china. Reporter slow growth to china has reduced the need for imports, raw materials, Energy Sources and for now at least investors would be wise to buckle their seat belts. For nightly Business Report im sarah eisen. A troubling warning today from walmart. The mega store chain cut its profit outlook for the latest quarter for a host reasons including disappointing Consumer Spending here in the u. S. And a cut to food stamps. Investors didnt seem too worried, though, with shares ending just a fraction lower today. But as Courtney Reagan tells us, the retail giant has to tell us if this is a onetime slip or if there are a lot more issues to worry about. Reporter the Worlds Largest retailer warning wall street its Holiday Quarter profit is falling short of the companys original expectation. Walmart says a number of factors are negatively impacting profit including closing a number of stores in brazil, china, and india. In the u. S. The discount retailer calls out the reduction in the governments Food Stamp Program and rough Winter Weather for larger than expected hits to sales and traffic. Walmart isnt the only retailer to warn about a less than stellar Holiday Season but it is the largest leaving investors to wonder if the weakness at walmart is temporary, company specific, or indicative of larger Consumer Spending issues. The consumer has definitely been in a bit of a funk. It was a very difficult Fourth Quarter for retailers, particularly bricks and mortar retailers. But the underpinnings of Consumer Spending are actually a little better right now than they were this time a year ago. The Housing Market is showing signs of recovery. Until recently the stock market has been logging gains and prices at the pump are stable. But wage growth is stagnant, and millions of americans have been unemployed for a long time. Its a lot to wade through for both investors and retailers. The strength of the u. S. Consumer is a key issue Walmarts International ceo, doug mcmillon, will no doubt be tackling as he tak over the top ceo slot at the retailer tomorrow. And it might take more than everyday low prices to reinvigorate shopper spending at walmart. For nightly Business Report im Courtney Reagan. Our market guest tonight says that investors should prepare themselves for volatile and choppy trading for most of the year. Hes jim lowell, chief Investment Officer at advisor investments. Mr. Lowell, welcome back. You see the possibility or the likelihood rather of a pullback on the record of 15 to 20 . So were either a third of the of the way through that if you measure by the dow or a fifth of the way through it if measuring by the s p. How quickly do you think this spasm goes by . Well, its a great question, tyler. The surprise so far this year has really been that this has been sort of an unhealthy pullback. Its been very indistinct, very volatile. Really reflecting i think significant uncertainty as regards not just the equity but the income markets nearterm future. The pullback of a magnitude of 10, 15, maybe as high as 20 would likely be spurred more by fear of assumptions than by fundamentals. At least thats true currently. Were seeing no fundamental signs of a catalyst for any sort of significant selling. But fear has proven to be a significant factor in terms of both the movement up in the market and in the shortterm down drafts that weve seen. So it wouldnt be surprising. Weve been hearing, jim, that dreaded word contagion popping up in a lot of market forecasts. What could be the source of any kind of crisis like that out of the emerging markets or Something Else . Are you looking for any kind of mini crisis out there that will give reason for the pullback . Well, we certainly think chinas going to deteriorate, maybe perhaps measurably, and that the u. S. Markets and the established foreign markets will assume that if chinas economy slows more measurably than currently forecast that that will be very bad news for the Global Markets and likely sell off but we think that selloff will be a kneejerk reaction to something we see increasingly more internal dynamics of china and less linked to the no growth economy in europe and the slightly faster paced economic recovery here in the u. S. So if china sells and the markets sell in sympathy, we would view that as a buying opportunity. You know, i gather you argue for a rather more balanced portfolio for most of your customers and obviously everybodys different but if you start with the benchmark as i think you do of about 30 in fixed income that leaves 60 or 70 for equities. With specific reference to the equity slice of the pie, how do you sliver that between foreign and domestic, between large and small, between growth and value . Great question, tyler. The reality is it changes over time. Weve made good money in the emerging markets, both in the equity and the debt side of that fence, but were gone from that pasture for now. Definitely figuring that the u. S. Multinational battleship Balance Sheet blue chips look reasonably valued if not undervalued by some historic measures, have plenty of cash in the coffers to ride out any sort of tempest in the 2014 teapot. We also like europe. We have been out of europe in any direct way really for years upon years, but we began to move back in in december. We just stepped up the trade back in to increase our position there. We think europe is likely to be the bargain of 2014, but youre going to need a good active manager with a proven track record to hold your hand through what could be some pretty difficult times. We have a little bit of time left. You did mention that investors should balance their portfolios with some bonds. What kind of bonds . Well, surprisingly, of course, the one thing that was supposed to perform the worst this year has been performing the best. Tenyear treasury total bond funds or the barclays aggregate. So we continue to like investment grades, shorter, midterm duration, but we also like junk bonds. Theyre more economically sensitive. And a good diversified wellmanaged fund youre still getting relative yield advantage and youre also getting a chickenhearted way to play the stock market. Im a chicken heart at heart. Jim lowell, always helpful, chief Investment Officer at advisor investments. The top job at microsoft may soon be filled by insider sattia nadela. Is he the right man and what can he do to turn microsoft into a growth machine . A Big Development today in the proposed and longdelayed Keystone Xl Oil pipeline. The state department issuing a report that raised no major environmental objections to the northern leg of the controversial pipeline. It would bring crude from the oil sands of canada more than 1,100 miles south through several states to oklahoma. There the pipeline would connect to the lower leg of the project. That stretch is already in operation, delivering oil to refineries along the gulf of mexico. More worries about a different kind of fuel. The price of propane continues to rise. And a shortage of the gas is expected to continue well into february. Making matters worse the fuel is currently being exported at historically high levels. Thats a big worry for many homeowners, especially as severe Winter Weather shows no signs of letting up. More than a third of households in the u. S. , many of them in rural communities, use propane to heat their homes. As we told you last night, things have heated up in microsofts search for a new ceo, with reports saying that Company InsiderSatya Nadella, is poised to take the top job at the Worlds Largest software maker. Josh lipton with more on nadella and whether hes the right person for the job. Reporter its taken them almost six months, but microsofts Search Committee may have found its ceo. Karen swisher reports that Satya Nadella could be the frontrunner to replace ceo steve ballmer. Analysts say the choice could make strategic sense. Nadella is a 22year veteran of the software giant. Hes held leadership roles across multiple microsoft businesses. Most recently hes been leading microsofts transition to a cloud and services company. Cloud is the epicenter of microsofts future success. Theyre really going for the golden jewel within the enterprise. More and more spending is going toward the cloud. For microsoft to be a very relevant player they need to have success in the cloud, which speaks to why mr. Nadella is sort of front and center as the potential ceo. Our servers are all getting upgraded. Reporter nadella also has the Technology Credentials for the job. He has a deep background in electrical engineer ellinging and commuter science. There are concerns about choosing nadella, however. Many on wall street want an outsider to take charge of microsoft. Taking a longtime insider could disappoint investors who want dramatic change at the company. At the end of the day the optimism around microsoft is that you could get a fresh perspective, an outsider, someone that was willing to make the tough decisions with the enterprise, the concerned business, do you spin off xbox. Now theyve gone with an insider, it looks like. Thats off the table. Reporter another worry, nadella might have run business divisions but hes never worked as a ceo. I think for satya never having been a ceo and stepping into what will soon be a 130,000person company, hes going to be a work in progress probably for a while, kind of ramping up. Theres so much for him to accomplish strategically and operationally. Ultimately, though, the job of the next ceo at microsoft is so big, involving Strategic Decisions on everything from the future of windows to whether the company should keep trying to crack the consumer that it will take more than just one man or woman to meet these challenges. Josh lipton, nightly Business Report, silicon valley. We begin tonights nightly focus with chevron and a big drop in its stock. The Big Oil Company said net income plunged 32 as Global Production slowed and refined product margins weakened. Revenues missed estimates by 9 billion. Chevron also gave a weak outlook for this year. Shares tumbled 4 to 111. 63. Americans spent 600 billion this past Holiday Season, and much of that was charged on their mastercard. Profits at the Credit Card Company rose 3 . But that was less than wall street expected. Disappointed investors sold the stock. Mastercard fell 5 today to 75. 68. Mattel also took a hit in todays session. The toy maker posted weaker than expected earnings as revenues fell 10 in north america and International Sales were flat. Sales of barbie and fisher price preschool items slid 13 . But mattel still increased its dividend by more than 5 . Despite all of that the stock fell 12 to 37. 84. It was a very different story at tyson food. The countrys largest meat processor reported better than expected First Quarter results, driven by higher chicken and beef sales. Tyson also reaffirmed sales and meat production forecasts for 2014. It did warn, however, that a virus will cut pork production by 2 to 4 . Shares rose anyway up almost 8. 5 to 37. 40. Shares of chipotle were hotter than a habanero in todays session. In its earning report out last night the mexican food chain said more customers ate at its restaurants, boosting sales. The company also told investors its considering upping prices later this year, and that contributed to the stocks gain today. Look at that move. Up almost 12 to 551. 96. Our market monitor guest says the january selloff is a normal pullback even though its been painful for investors. Hes michael jones, chairman and chief Investment Officer at riverfront investment group. Michael, you probably heard jim lowells commentary at the top of the program. What do you think . Is this just a pullback . It certainly feels like something more than that. I think it feels so bad because its been so long since we actually experienced a normal pullback. Remember that for more than a year the feds been printing 85 billion a month. And with that kind of liquidity coming into Financial Markets we simply havent experienced a normal correction in over a year. Now that theyre starting to taper, were going to have to get used to the fact that the markets going to go back to its ordinary longterm behavior, and thats three steps forward, two steps back. Volatility is a natural part of the process. The last couple years have been unusual with respect to that. In other words, we havent had the pullback. We havent had the volatility. And certainly the month of january and this week were volatile indeed. Lets get to a couple of stock picks. Companies that you like, beginning with disney. Why . Well, as our disney analyst, paul lui, likes to say, whats not to love . This is a company that owns virtually every marquee entertainment franchise in the industry. Marvel, espn, star wars, indiana jones. I mean, the list goes on and on. And now with frozen for the first time in over a decade they have a true franchise animated feature, which means broadway musicals. It means ice extravaganzas. But most importantly, it means more traffic at their parks. Theres a lot of momentum behind the earnings of this company. We also love their innovation. They just entered into an agreement with netflix for some original content on secondary characters from marvel. Its a great lowrisk way to get even more money out of that franchise. Okay. You also like discover Financial Services, the Credit Card Company. Tell us why you like dfs. Well, they are first of all growing faster than the other Credit Card Company. 6 loan growth that they reported in the Fourth Quarter. Theyre at a significant discount to all the other credit card issuers. And probably as importantly, people underestimate the power of the discover payment network. Remember, the