Transcript: Tuesday, December 2, 2014

NBR ThumANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Susie Gharib, funded in part by —

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SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: In the fast lane. Falling gas prices and deep discounts got people into the auto showroom and driving off with new cars, as a handful of automakers post their best monthly sales figures in years.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Breakthrough drug? The promising new treatment that could potentially help millions of Americans with Alzheimer`s.

HERERA: Stocking stuffers. Why you might be surprised by the companies that have outperformed during the holiday season over the past 10 years.

All that and more tonight on NIGHTLY BUSINESS REPORT for Tuesday, December 2nd.

Good evening, everybody. I`m Sue Herrera. Susie Gharib has the night off.

MATHISEN: And welcome, everyone. Welcome, Sue. I`m Tyler Mathisen.

Another record-breaking day on Wall Street, with the Dow reaching an all time closing high after solid results from retailers on Cyber Monday, strong auto sales in November — learned about them today — and an increase in construction spending in the month of October. Spending on both public and private construction projects rose more than 1 percent that month. That was the largest gain since May, helped by a boost in the building of new single family homes.

Now, here`s how the major averages ended this turnaround Tuesday. The Dow up a big 102 points, the largest one-day gain in about a month, the NASDAQ up 28, and S&P added 13, ending just shy of its own record high close.

HERERA: Black Friday promotions and a steep decline in gas prices helped to drive auto sales higher last month, putting the industry on pace for its best year since 2003. Detroit`s big three did pretty well. Chrysler sales shot up 20 percent, its best November in 13 years. General Motors (NYSE:GM) sales up 6.5 percent, much more than expected. Sales at Ford were a bit weaker, likely because it stopped making the top selling F-150 pick-up to switch to an all aluminum body.

Investors like what they saw. Shares of all three are trading higher today.

Phil LeBeau takes a look behind the numbers.

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PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: Strong November auto sales driven by three things: a healthy economy, low interest rates for auto loans, and a big Black Friday. SUVs and crossovers, they were the big sellers with Chrysler leading the way. Sales last month up to 20 percent, much better than many were expecting. The Jeep brand had a huge November, powered by the Cherokee (NASDAQ:CHKE) SUV with sales jumping 67 percent.

Meanwhile, strong sales of Chevy Silverado led GM to better-than-expected sales in November.

Ford was one of the few automakers that did not gross sales last month, as it deals with low inventory of the F-Series pickup. But clearly, gas prices impacted the type of vehicles that either sold or sat on.

Crossovers like the Nissan Rogue were on demand in November. By comparison, the sales of the hybrid Toyota (NYSE:TM) Prius were down 13 percent. Sales of the range expended electric car, the Chevy Volt, they dropped 30 percent last month.

Overall, the auto industry is on pace to have its best year since 2006. And this month? Watch the luxury brands. They will be aggressively pushing deals this holiday season.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.

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MATHISEN: Those strong Black Friday that Phil just told us about could translate into strong stock performances for some auto-related stocks.

Dominic Chu crunched the numbers to find out which consumer focused auto shares are traditionally the big winners during the holiday season.

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DOMINIC CHU, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Consumer spending is a huge part of the story this time of year, and that story is translating into the stock market. Market data and analytics firm Kensho looked at the performance of retail and consumer related stocks during the holiday shopping season. Many of the best performers are related to the automotive industry and for good reason.

JESSICA CALDWELL, EDMUNDS.COM: Holiday sales are really important for the auto makers. It`s the end of the year. It`s time to get their old models out and for a lot of them, it`s time to advertise, to talk to the consumer and let them know that there`s deals out there, there`s cars out there to be had, to be sold, and get people into showrooms.

CHU: For instance, large publicly traded car dealerships like AutoNation (NYSE:AN) fared well. Over the past 10 holiday seasons, shares have risen an average of nearly 4 percent between Thanksgiving and Christmas and have been positive eight out of the last 10 times.

Auto parts retailer AutoZone (NYSE:AZO) has also been outperformer risen 6 percent and been positive nine of the last 10 holiday seasons.

As for what you can expect to see on the auto sales front, it may not be those smaller fuel efficient models anymore.

CALDWELL: As it gets colder in the winter months, people tend to buy larger vehicles, SUVs and trucks. They do really well this time of year and with gas prices being so low, they`re probably going to be even better than what we`ve seen in the past.

So, those will definitely be big sellers and as we close out the year, luxury sales tend to do really well.

CHU (on camera): So, as investors get ready for the final weeks of the year, investing in retail won`t just be about department stores and consumer electronics. Some are watching auto industry stocks a closely as a way to strengthen the consumer.

For NIGHTLY BUSINESS REPORT, I`m Dominic Chu.

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HERERA: After notching their biggest one day increase in more than two years on Monday, oil prices continued their skid today. Some say a deal between Iraq and that nation`s Kurdish regional government help out because that`s likely will mean more oil coming on to the global market. Domestic crude fell more than $2 today, closing at $66.88 a barrel. Benchmark Brent also fell $2 to $70.15 a barrel.

The steep and steady decline in oil prices has been a big relief for industries and companies that use a lot of crude.

So, which ones are benefitting?

Jackie DeAngelis has more.

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JACKIE DEANGELIS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Oil moving lower again as North American supply booms, and the dollar strengthens. Not good news for oil producers and servicers but great news for other companies that use oil as a raw material or for shipping, or that relying on consumers hitting the roads fueled by cheap gas prices.

Intermediate under 70 a barrel and a national average for a gallon of regular gas, 2.76, according to AAA.

ANTHONY GRISANTI, GRZ ENERGY: Low oil prices certainly a benefit across a wide range of the economy. Certainly, for more companies, it`s going to benefit and it`s going to hurt at this point. If you look anywhere from manufacturing to airlines, to shippers, they`ll all benefit from this.

DEANGELIS: In fact, average gas prices under $3 for more than a month now and 42 states are seeing those under the $3 level. This is a significant shift that is going to impact a lot of bottom lines.

The companies that will benefit, across a broad range of sectors. Think of airlines and shippers. The bulk of their business relies on cheap fuel — the Deltas, American Airlines, JetBlues of the world. FedEx (NYSE:FDX) and ups have to see a lift from this as well. The autos, GM and Chrysler, saying they`re seeing sales of SUVs pickup and hitting overall sale records this month.

Less obvious, Goodyear, the tire maker. More people upgrade tires when they anticipate they`ll be driving more.

And it doesn`t end there. The retailers like Target (NYSE:TGT), Walmart, T.J.Maxx, to name a few, these companies may see more shoppers in the door ,especially before the holidays as consumers relish these low gas prices.

Even food producers could see a boost. It`s going to cost less to ship their products to the stores. General Mills (NYSE:GIS), ConAgra, Mondelez, some of the names to watch.

For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis.

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MATHISEN: And that plunge in global oil prices, along with tough economic sanctions over its rule in Ukraine has Russia now heading towards a recession. Russia`s economy minister forecast that country`s gross domestic product will contract now by nearly 1 percent next year. That is a sharp reversal from an earlier forecast of 1.2 percent growth.

HERERA: It`s a very different story here in the U.S., where one top fed official says a lift in benchmark interest rates may come sooner than expected.

Federal Reserve Vice Chairman Stanley Fischer says if unemployment continues to decline, the Central Bank needs only to see inflation edge higher and it can start raising interest rates.

MATHISEN: Some CEOs appear to be a bit less optimistic now about the U.S. economy and the prospect for more growth next year. The less survey of chief executives by the Business Roundtable found that fewer CEOs plan to increase their capital spending over the next six months and that forecast for economic growth in 2015 are the same as this year overall, 2.4 percent. But more of them do expect to increase hiring next year.

HERERA: To politics now, and efforts to keep the government up and running past December 11th when a current funding bill expires. House Speaker John Boehner is urging fellow Republicans to pass a spending bill that funds most of the federal government through next September and avoids a showdown over President Obama`s executive order on immigration.

Still ahead tonight: drug makers have tried and tried and failed many times over to develop an Alzheimer`s treatment. Today, Biogen Idec (NASDAQ:BIIB) may have taken the first step in reversing that trend. Details, up next.

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HERERA: Cyber Monday proved to be successful, but just how successful? Kind of depends on who you ask. IBM says online sales rose 8 1/2 percent yesterday, while tracker at Adobe Systems (NASDAQ:ADBE) says that they did even better, up 16 percent. And Walmart simply said Monday was its best day ever for online orders.

MATHISEN: Sprint is ramping up the wireless wars. The nation`s number three carrier is taking its fight against the industry giants to a new level starting on Friday. Sprint will let new subscribers page up half of what they were paying right now to AT&T (NYSE:T) or Verizon (NYSE:VZ) for the same amount of talk, text or data if they switch over to Sprint. Shares of Sprint, Verizon (NYSE:VZ) and AT&T (NYSE:T) all lower shares today.

HERERA: Some good news to report in the battle to fight Alzheimer`s. Biogen Idec (NASDAQ:BIIB) says its experimental drug to treat Alzheimer`s showed promise in an early trial by slowing down memory loss. Shares of the company shot up about $20 on today`s news.

But so, where does the pharmaceutical company stand in development of a proven Alzheimer`s medication?

Meg Tirrell has more.

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MEG TIRRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Biogen Idec (NASDAQ:BIIB) stocks soared today as its experimental drug showed unexpectedly positive results in an early study.

ERIC SCHMIDT, COWEN AND COMPANY: This is the first trial that show a benefit in cognitive function. So, it`s really a remarkable result that nobody was anticipating, you know, anything like this degree of success. And that`s why the stocks moved so much today.

TIRRELL: The drug called BIIB037 was in the first stage of testing for safety. But the study showed early signs of efficacy as well. It was shown to help reduce the plaque build-ups in the brain associated with Alzheimer`s, known as beta-amyloid. It also showed a benefit on cognition. Many it could potentially helped stem the declines in memory and thinking clearly, that are hallmarks of Alzheimer`s.

The disease has been referred to as a graveyard of drug development, because there`s been so many failures, most recently from Eli Lilly (NYSE:LLY), Pfizer (NYSE:PFE), and Johnson & Johnson (NYSE:JNJ).

SCHMIDT: Nothing historically has succeeded in any way, shape and form. There are no approved disease-modifying therapies for these patients.

TIRRELL: And the need is great. More than 5 million Americans have Alzheimer`s disease according to the Alzheimer`s Association. Worldwide, more than 35 million people have dementia, of which Alzheimer`s is the most common cause. The potential opportunity for Biogen`s Alzheimer`s drugs? Five billion dollars annually, according to estimates from Deutsche Bank.

Biogen`s trail may have been successful for a few reasons, analysts say. The company screened patients to make sure they actually have the disease, characterized by those build-ups of amyloid plaque in the brain. It treated patients with a milder form of Alzheimer`s, whereas other studies included more advanced patients.

And lastly, the drug may have a better way of targeting the plaque.

SCHMIDT: They may have a better a hammer or they may just have a little bit better of a game plan to design studies.

TIRRELL: Both analysts and Biogen, though, urged caution. The study was small and the results need to be replicated in a larger trial. It will likely be several years before those results are known. And the drug did show some safety concerns, though Cowen`s Schmidt says they`re likely manageable.

SCHMIDT: I think because of the Biogen news, there should be a greater degree of optimism than we`ve seen before.

TIRRELL: The final proof will be a larger study. Biogen says based on these data, it plans to move aggressively into the last phase of clinical trials.

For NIGHTLY BUSINESS REPORT, I`m Meg Tirrell.

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MATHISEN: A multibillion dollar pharmaceutical deal is where we begin tonight`s “Market Focus.”

Avanir Pharma is being bought by Japan`s Otsuka for about $3.5 billion. Avanir develops drugs to treat central nervous system disorders and Otsuka wants to expand its portfolio of neurological disease treatments. Shares spiked almost 13 percent there to $16.92.

Shares of Eli Lilly (NYSE:LLY) spiked on news it has entered an exclusive agreement to develop privately held Zosano Pharma`s experimental osteoporosis patch treatment. The deal could be worth more than $440 million. Lilly up nearly 3 percent to $70.38 today.

And BP moved up on rumors of a takeover bid from rival Royal Dutch Shell. No specific deal numbers were suggested and neither company is commenting on the report, but investors snapped up shares anyway. BP up 2 percent to $40.72. Shares of Royal Dutch Shell also rose almost 3 percent higher. It closed at $69.35.

And MasterCard (NYSE:MA) is hiking its quarterly dividend to 16 cents a share. Also, it`s authorizing a nearly $4 billion stock buyback. The new share repurchase program will become effective after the completion of the current program. Shares were slightly higher at MasterCard (NYSE:MA), finishing a $87.69.

HERERA: The showdown between CBS (NYSE:CBS) and Dish is heating up again. Two contract extensions kept CBS (NYSE:CBS) on the Dish Network over the Thanksgiving holiday, but now CBS (NYSE:CBS) has set a new deadline. The company says unless they reach a deal, their programming, including the NFL and college football will go dark this Thursday at 7:00 p.m.

Shares of Dish fell 2 1/2 percent to $75.27. CBS (NYSE:CBS) was also down, but just a fraction to $54.30.

An S&P 500 swap to tell you about. Royal Caribbean will replace Bemis (NYSE:BMS), the packaging products company in the S&P 500, and that will be implemented after the close of trading on Thursday. Bemis (NYSE:BMS)` market cap lags the guidelines for an S&P 500 stock. Royal Caribbean popped 6 percent to $76.75. Bemis (NYSE:BMS) was actually higher too, up 1 percent to $40.59.

Bank of New York Mellon (NYSE:BK) is giving a board seat to a co-founder of the activist hedge fund Trian Fund Management. Trian has a stake in the bank of more than 2.5 percent and although the firm hasn`t made any public demands for changes at the bank, some reports say Trian has privately urged the bank to cut costs. The stock rose 70 cents to $40.28.

And shares of Taser popped after President Obama proposed spending $75 million to help police departments purchase body-worn police cameras, which Taser makes. The action comes in the wake of civil unrest after the fatal police shooting of Michael Brown in Ferguson, Missouri. Shares were more than 5.5 percent higher to $23.34.

MATHISEN: Opening statements today in an Oakland California courtroom where Apple (NASDAQ:AAPL) is being sued in a decade old class action antitrust suit. The plaintiff say the tech giant ran a kind of a monopoly by preventing any music not purchased on its iTunes store from played on certain iPod devices. The case is expected to include videotaped testimony from Apple (NASDAQ:AAPL) cofounder Steve Jobs who died in 2011.

GHARIB: After that massive hack attack on Sony (NYSE:SNE) Pictures, where the hackers posted five unreleased movies on illegal piracy Web sites, the FBI is now warning that the same malware used against Sony (NYSE:SNE) could have been unleashed on a number of other businesses.

Eamon Javers joins us now from Washington with more on that FBI warning.

Good evening, Eamon.

And what is the FBI saying about how destructive this malicious software really is.

EAMON JAVERS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Good evening, Sue.

Well, the FBI is really asking for help here from corporate America. They put out a five-page memo late yesterday and most of the pages of that memo I`m told are just simply ones and zeros. They`re actually the lines of the malware code the FBI said may have been involved in the Sony (NYSE:SNE) hack.

And what they want is for corporate IT departments to scour their system and see if they can find any of that malware actually in their own systems as well and then report back to the FBI. They`re trying to sort of crowdsource the investigation here to find out if any other companies were involved.

One of the possible protagonists in all of this could be the North Koreans. The theory here is that the North Koreans maybe upset about an upcoming film that portrays a satirical look at the assassination attempt against the head of North Korea and that this would have been a retaliatory attack against Sony (NYSE:SNE). That is neither on or off the table at this point. There`s simply not enough evidence one way or the other to say whether or not that`s true, Sue.

MATHISEN: So, Eamon, do we know whether any other companies have been affected? And if so, where are they looking for effects? Other media companies and like Sony (NYSE:SNE), or what?

JAVERS: Yes, that`s right. As of now, we don`t know if any other companies have been affected. That`s what the FBI was trying to get out today by sending this memo last night.

What they`re saying though is that what has been taken here is kind of compelling from Sony (NYSE:SNE). It`s not just the five movies that were stolen from Sony (NYSE:SNE) and then put on the Internet for people to download, but also a lot of internal Sony (NYSE:SNE) documents about things, sensitive as pay scale, when people got races, Social Security numbers of executives, and other things. So, a lot here that`s potentially damaging to Sony (NYSE:SNE) in the long run.

HERERA: So, what can companies do to protect themselves, Eamon?

JAVERS: Well, Sue, that`s the real tricky part. It`s getting tougher and tougher. We`re seeing reports now of highly socially engineered targeting of particular executives. That means the e-mails don`t look like that old Nigerian e-mail spam that you got in the old days that were pretty obviously a spam attack. Now, you`re getting e-mails that might look like they are from somebody you know, about a subject that you discussed with that person written in perfectly fluent English. It`s getting harder and harder now for companies to warn people to not click on those links.

HERERA: Very scary stuff, Eamon.

Thank you very much, Eamon Javers in Washington.

MATHISEN: And still ahead, there`s Black Friday, Cyber Monday, and today is Giving Tuesday. So, tonight, if you`re looking to make a donation, we have some advice on how to choose a charity.

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HERERA: More trouble tonight for the struggling RadioShack chain. One of the companies key financial backer, Salus Capital, notified the store that it is in breach of the terms of its $250 million term loan which was finalized just a couple of months ago. Salus is not impressed by how some of that money has been spent.

MATHISEN: It is so-called Giving Tuesday. The charitable answer to Black Friday and Cyber Monday, the ease of online donations to increase the giving on this day as it has in years past. How can you be certain the charity you`re giving to is not a scam? That your contribution, big or small, will have max impact?

Sharon Epperson is here to tell us what to do to make sure you choose a charity wisely.

How can you make sure, Sharon, whether a charity is reputable or not? Where do you go look?

SHARON EPPERSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: There are a couple of places that you can check them out. I mean, you want to do some research on your own, and go to web sites like guidestar.org or charitynavigator.org or also charitywatch.org. Those organizations will tell you a little bit about the financial health of the company. You want to make sure that the charity has a form 990 on file with the IRS. You can also check that out at IRS.gov to make sure that it`s a tax exempt organization. That way you`ll know it`s a legitimate, reputable charity.

HERERA: Is there a way for you to find how your contribution is going to be used? Or can you specify that?

EPPERSON: Well, Charity Navigator says that you should consider about 70 percent of the money, the funds, going to programming. And if that benchmark is not met, then maybe you don`t want to be with that particular charity.

So, you need to ask some questions and find out also, what`s the impact of the money that you`re giving. Is it really going to a lot of people and is there a measurable effect about the money that you`re giving? Givewell.org is another great Web site to go to find that kind of information.

MATHISEN: Now, what if you want to give to a charity but you don`t know which one, you want some tax benefit for making a donation, I understand there`s alternatives to explore.

EPPERSON: Yes, a lot of people don`t know where to give. I`ve gotten so many emails today, and I`d love to give to all, but I`m not ready.

So, what can you do? You can set up a donor advice fund. A lot of investment institutions have them, from Fidelity to Vanguard to Schwab, and basically, you make a contribution, you get the tax deduction now and then you can decide where to send the money at a later date. And so, you don`t have to decide on which charity will get your money right now.

HERERA: That`s great because there`s so much pressure at the holiday season.

EPPERSON: Exactly.

HERERA: You know, maybe you don`t know. You want to give. You know, you had a good year. The stock market has been strong, but don`t know what to do.

EPPERSON: You could put investments in that as well. That`s why it`s a great place to put the money. It`s like a charitable savings account but could have a lot of different assets on there.

HERERA: I was going to say, because if you`ve had a big gain in a stock, you might want to take the tax advantages and donate that stock.

EPPERSON: Exactly.

MATHISEN: Sharon Epperson, a giver. You`re a giver.

EPPERSON: I`m a giver.

MATHISEN: All right. Sharon, thanks very much.

HERERA: All right. Finally tonight, they say that college is supposed to be the best four years of your life, but more and more of us are taking longer than that to graduate. A new report from a group called Complete College America says that only 19 percent of full-time college students earn their undergraduate degrees in four years and that those students or their parents are spending extra $23,000 on average for each extra year until they finish.

MATHISEN: You got three.

HERERA: We`ve got three. That`s so scary. It really is.

All right. That`s NIGHTLY BUSINESS REPORT. I`m Sue Herera, in for Susie.

And we want to remind you, this is the time of year that your public television station seeks your support.

MATHISEN: And I`m Tyler Mathisen. On behalf of your public TV station, thank you for your support.

Have a great evening, everyone. We`ll be taking attendance. We`ll see you here tomorrow.

END

Nightly Business Report transcripts and video are available on-line post broadcast at http://nbr.com. The program is transcribed by CQRC Transcriptions, LLC. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Nightly Business Report, or CNBC, Inc. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c) 2014 CNBC, Inc.

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