Transcript: Nightly Business Report- December 8, 2015

NBR-ThumANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and
Sue Herera.

TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Commodity crush.
It`s not just oil. Iron ore, aluminum, steel, also getting slammed as the
decline in prices takes a toll on companies and markets worldwide.

SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: In jeopardy? Late
reports tonight that Yahoo (NASDAQ:YHOO) may not go forward with its
spinoff of Alibaba, raising questions about the future of its CEO, Marissa
Mayer.

MATHISEN: And dangerous habit. The one thing that`s becoming a
bigger risk on the road than texting while driving.

All that and more tonight on NIGHTLY BUSINESS REPORT for Tuesday,
December 8th.

Good evening, everyone.

A triple digit loss in the market today. But we begin with late
developments tonight on one of the world`s biggest Internet companies,
Yahoo (NASDAQ:YHOO). It seems one of its core strategies may be
unraveling.

CNBC`s David Faber first reported that the tech company may not move
forward with its long-planned spinoff of its multibillion dollar stake in
Alibaba. That`s the giant Chinese Internet company. It will examine a
deal involving Yahoo`s core Internet business. An official announcement of
the change could come as soon as tomorrow.

Shares of Yahoo (NASDAQ:YHOO) moved higher initially after the report.
The moves raise a host of questions, they come to mind.

And, Jon Fortt is here to answer them.

Jon, welcome. Why did the board step in here and make this change in
a long hailed strategic plan.

JON FORTT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It comes down to
taxes. There was an activist investor Starboard, just an investor, pushing
them at first to spin off Alibaba because it`s worth so much.

And then when the U.S. government wouldn`t say, yes, we`ll let you do
this without getting taxed they said, wait a minute, more and more it`s
looking too risky if we have to pay a tax bill on selling that off. We`ll
lose a whole lot of value. Instead, why don`t you sell the core business?

Yahoo (NASDAQ:YHOO) has not yet made it clear that it`s going to sell
Yahoo (NASDAQ:YHOO), the core business. But that`s what a lot of investors
think could be the end game here.

HERERA: What does this mean for the CEO? Because this had been
rumored, planned for some time?

FORTT: It had. I think the question is, if Yahoo (NASDAQ:YHOO) gets
broken up, is there some piece that continues to be independent? Is it big
enough Marissa Mayer sticks around and runs that. If Yahoo (NASDAQ:YHOO)
gets bought by some larger company, does Marissa continue running Yahoo
(NASDAQ:YHOO)? Does she rise up in the ranks of that company?

None of that is clear until we hear more about what Yahoo
(NASDAQ:YHOO) plans to do, is it offering itself up for sale, is it
soliciting investors, is it trying to keep the whole thing together, or is
it willing to break itself into little pieces.

MATHISEN: Its stake in Alibaba is how big?

FORTT: It is sizable. And I don`t remember the number.

MATHISEN: Tens of billions as I recall.

FORTT: It is.

MATHISEN: Is this a victory then for the activist investors, for the
Starboards and others, who have been agitating from within the company? At
first this he say get rid of that $30 billion stake or whatever it is, now
they say, well, wait a minute, maybe we don`t like the tax bite there. So,
we should change.

Are they calling the shots?

FORTT: It`s a victory in a huge way, because one of the things that`s
characterized Yahoo (NASDAQ:YHOO) over the past 15 years is the fierce
desire to remain independent. It wasn`t too long ago — actually, it`s
been awhile, a decade — Microsoft (NASDAQ:MSFT) wanted to take Yahoo
(NASDAQ:YHOO) out. Jerry Yang insisted that that not happen.

Now, Jerry Yang, also investor in Alibaba. Now, he`s gone on to be a
board advisor. It was announced just today of Didi Kuaidi, which is an
Uber rival in China that`s doing quite well. He`s done well as an
investor.

It seems like Yahoo (NASDAQ:YHOO) is warming to the idea of being more
investor friendly with its core business. Does that go all the way to it
no longer insisting on being independent? We`ll have to see.

MATHISEN: Your best guess. Is it an independent company in two
years?

FORTT: My best guess would be no.

MATHISEN: Jon Fortt, thank you. You answered. Appreciate it.

HERERA: Great to have you with us, Jon. Thanks.

And now to commodities which continue their dramatic decline and it`s
not just oil which remains around $37 a barrel. But also iron ore, steel,
aluminum and pretty much every hard metal. The impact is being felt
globally.

AngloAmerican, one of the world`s largest miner, said today it is
cutting 85,000 jobs and selling 60 percent of its portfolio, just one
example of the toll the rout of commodities is taking.

(BEGIN VIDEOTAPE)

HERERA: If 85,000 jobs cuts doesn`t get your attention, the
descriptor will. British miner AngloAmerican, the world`s fifth biggest
mining company by market value, says it`s planning, quote, “radical
changes.” Founded back in 1917 by Ernest Oppenheimer, AngloAmerican says
it will sell off 60 percent of its assets, cut spending by more than half
next year, and suspend its dividend. The latest example of what`s become a
rout in commodities.

AngloAmerican warned profits will be down at least 20 percent this
year. Joining Swiss miner Glencore among the worst stock performers in the
U.K. lately. Both down more than 70 percent on the year.

These are stunning drops especially when taken on top of the fall in
energy prices. S&P 500 energy companies, just energy, have given back
almost $360 billion in market cap this year. But energy is not the whole
story.

JOHN KILDUFF, AGAIN CAPITAL: The infrastructure got built out to try
to satisfy China`s what was seen as almost insatiable demand. If they can
come back, these commodities will come back. For now, we`re just flat on
our backs.

HERERA: Producers are in trouble well — 15 of the 19 core
commodities in the Thomson Reuters (NYSE:TRI) Global Commodities Index are
down this year. The only positives are agriculture-related sugar, cotton,
orange juice, and co. AngloAmerican says it expects to continue digging
for metals such as copper, bulk materials like coal and iron ore and
diamonds.

But demand is down in all of these businesses. And so are jobs. Here
in the United States, despite its somewhat healthier than the rest of the
world job market, employment in mining and logging was down more than 1
percent last month. For the year, mining and logging have dropped 124,000
jobs so far.

KILDUFF: I think it`s a full pallet of elements here for the bears to
pick from. And if it`s not one thing, if it`s not the OPEC meeting falling
apart, then it`s bad Chinese trade data.

(END VIDEOTAPE)

HERERA: What these sharp losses in commodities are telling us is that
this isn`t just oil or an energy issue. The numbers say we are seeing a
big slowdown in the global economy.

MATHISEN: In a rare interview today, the CEO of Chevron (NYSE:CVX)
described the energy market as being turbulent, classic understatement
there.

John Watson told CNBC`s Brian Sullivan that the sector is adjusting to
lower prices by cutting supply. That capital investment will be cut and
that he sees oil prices trading higher one year from now.

(BEGIN VIDEO CLIP)

JOHN WATSON, CHEVRON CEO: There are adjustments taking place in the
business. If you look in the United States, production has fallen, 500,000
barrels a day in the last six months. If you look at the capital that`s
being withdrawn from the business, hundreds of billions of dollars are
being taken out right now. But what you`re also seeing is some companies
are finishing projects under construction. That`s temporarily adding to
supply. But once those projects come online and as people absorb the
current prices, you`re going to see production drop in many parts of the
world.

BRIAN SULLIVAN, CNBC: Do you believe that? Because every time the
U.S. comes down, maybe Iraq goes up or Iran goes up or Russia goes up.
We`ve got 11 million coming out of Saudi Arabia that we know of. There are
countries and companies, John, as you know, that need to keep producing.
Why are you so confident we will see supply drop?

WATSON: Well, there is a natural decline that takes place in our
business. So, as you pull investment out, oil fields decline over time,
and every country has to make choices. Many developing countries in the
world that produce oil have a choice between meeting the fiscal needs and
internal needs with revenue versus reinvesting in the business. And I
think you`ll see that capital is withdrawn. We`ve seen that happen in
companies in the Middle East and we`ve seen that happen in the United
States.

The market and investors do respond to the price incentives that are
out there. And we will see production come into balance.

(END VIDEO CLIP)

MATHISEN: Watson also said Chevron (NYSE:CVX) will do what it must to
make money at whatever oil`s market price is and that the stock`s dividend
is safe.

HERERA: That worsening commodities rout weighed on major averages.
For the second day in a row, the Dow Jones industrial average fell 162
points to 17,568. The NASDAQ was three points lower and the S&P 500
dropped 13 points.

MATHISEN: In Washington, Congress is taking a close look at the
proposed merger that would create the world`s largest beer company.
Anheuser-Busch InBev wants to buy SABMiller for more than $100 billion in a
deal that would control a third of all beer sold worldwide. Today, it was
clear that the combination has some very staunch critics on Capitol Hill.

Hampton Pearson reports.

(BEGIN VIDEOTAPE)

HAMPTON PEARSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: There were no
cold ones on the table when Senate lawmakers began to examine the proposed
$100 billion merger between the world`s twos top beer producers. Anheuser-
Busch InBev has offered to buy SABMiller for $107 billion.

CEO Carlos Brito says the merger is needed to expand AB InBev in the
rest of the world, not just the U.S.

CARLOS BRITO, ANHEUSER-BUSCH INBEV CEO: The purpose of this
transaction is to enhance our ability to serve new markets particularly in
Africa, Asia, and Central and South America. It`s about bringing more
choices to more consumers around the world.

PEARSON: In hopes of winning regulatory approval, the merged company
will spin off the Miller brand to Molson Coors, a major divestiture that
also keeps alive the Miller versus Bud rivalry here in the United States.

BRITO: The divesture of Miller Coors ensures that our market share in
the U.S. will not change as a result of the combination.

PEARSON: Lawmakers want to ensure competition from the 4,100 craft
brewers, a nationwide industry that continues to grow. The main concerns
from those brewers — the distribution and pricing power of AB InBev and
the SABMiller combination.

BOB PEASE: If you want to grow your business as a craft brewer, if
you want to get your beer into a chain store, if you want to get your beer
into the stadium, you need to use the Anheuser-Busch distributor or the
Miller Coors distributor.

PEARSON: Anti-trust enforcers at the Justice Department will make the
final decision on the merger. And they`ve been saying no to a lot of deals
lately. Seventy-seven deals worth some $263 billion abandoned so far this
year, according to “The Wall Street Journal.” The ranking Democrat on the
anti-trust subcommittee says there`s a reason for the resurgence.

SEN. AMY KLOBUCHAR (D), MINNESOTA: It`s not like they`re turning down
every merger. It is more that, I think, you`re seeing so many mergers and
they`re being diligent in doing their job and they must.

PEARSON: Critics of the deal are calling on Anheuser-Busch and
SABMiller to make even bigger concessions to deal with concerns about
competition.

For NIGHTLY BUSINESS REPORT, I`m Hampton Pearson in Washington.

(END VIDEOTAPE)

HERERA: From beer to burritos, the Chipotle outbreak is growing. As
we reported last night, a number of Boston College students fell ill after
eating at the chain. Today, it appears the norovirus may be to blame, not
E. coli but the bad news continued to pressure shares which fell again
today.

Morgan Brennan reports on the outbreak and its potential fallout.

(BEGIN VIDEOTAPE)

MORGAN BRENNAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Investors
aren`t the only ones steering clear of Chipotle.

UNIDENTIFIED MALE: Actually noticed that the Chipotle in my office,
the line`s gone way down.

BRENNAN: For health woes continue to hit the Tex-Mex chain which
since mid-October has battled an E. coli outbreak confirmed in nine states,
affecting 52 people according to the CDC. Now, college students in Boston
have become the latest to the fall ill after eating out of Chipotle.

Boston College says 80 students reported gastrointestinal symptoms
after consuming food at the company`s Cleveland Circle restaurant.
Chipotle closed the location and is looking into the incident, which a
spokesman says may not actually be E. coli, but instead, quote, “likely a
norovirus” which also seems to be the direction health officials in Boston
are moving.

No E. coli cases linked to Chipotle have been confirmed in the state
of Massachusetts. The company believes this could be an isolated incident
involving a different illness at a specific store unrelated to the broader
E. coli outbreak, a suspicion backed by a recent report of health code
violations at the Cleveland Circle restaurant.

Still, the stock fell again down, down more than 15 percent since
early November when the first E. coli cases came to light. Analysts say
each incident raises more questions about the company`s supply chain and
whether the situation is out of Chipotle`s control.

IVAN FEINSETH: But the stock has priced to perfection. One small
hiccup in that process can cause a big downturn in the stock. That`s been
the risk. And that`s what we`ve had. The stock dropped from over $700 to
almost $500. That`s a big loss in value in a short period of time, for one
of what looked like a very small isolated event but now it`s two events.

BRENNAN: Indeed, as health officials continue to look into the E.
coli outbreak, the food culprit behind it has yet to be identified.

Last Friday, the Chipotle warned the same store sales could be down
dramatically this quarter, with earnings also markedly lower than analysts
anticipated. It could get much worse because with every report, consumers
are becoming increasingly skittish even here into Manhattan, a market that
has not affected by E. coli or any other food-borne illness.

UNIDENTIFIED MALE: We`re going to going there last week, Wednesday.
The person I was with was, did you hear they had something wrong with their
food? I was like, maybe I`ll have a salad.

BRENNAN: For NIGHTLY BUSINESS REPORT, I`m Morgan Brennan in New York
City.

(END VIDEOTAPE)

MATHISEN: So how much damage will the crisis at Chipotle do to the
company`s brand? Not to mention its stock price?

Here to discuss this is Dean Crutchfield, a brand expert with his own
firm, the Dean Crutchfield Company.

Mr. Crutchfield, welcome. Good to have you with us.

How does Chipotle come back from this? What doo they need to do?

DEAN CRUTCHFIELD, THE DEAN CRUTCHFIELD COMPANY: It`s a big question.
Is this a close shave or a deep cut? How far does this go?

You know, the stock price might rebound maybe. We hope so, but the
public has a memory that can last forever. And the public can make or
break a brand. So, they are absolutely the focus for Chipotle right now.
It`s putting the public at easy because they`ve been let down and there`s
fear.

HERERA: How damaged do you think the brand is?

CRUTCHFIELD: I think the damage is, you know, you can repair this
damage. It`s a question how they go about it. I haven`t seen enough to
satisfy me regarding Chipotle`s response. I believe all channels of
communication should be wide open. And the CEO should be speaking more
without being beached on a sludge bank of corporate puff.

So, it`s about communicating to everybody in every way from video to
statements. This needs to be done across all channels. A good example was
Mattel (NASDAQ:MAT) some years ago with the lead scare opened up 300
channels of communication within 24 hours.

Where is Chipotle?

MATHISEN: Beached on a sledge bank of corporate puff is the best
phrase I`ve heard in weeks, Dean. And we love you for it.

So, the first thing it seems to me they need to do is figure out what
the heck happened in those cases of E. Coli because unless you can explain
that and say that you fixed that problem, you have a hard time winning back
trust, don`t you?

CRUTCHFIELD: You do. And this is a leadership problem. Leadership
is about turning the hard into the possible. And that`s seriously the case
for Chipotle. That leadership needs to come out. They need to east what`s
going on wrong.

But here`s another thing — who is responsible for this? We need to
know who is responsible for this catastrophe. Because that`s all about
accountability and transparency. At the moment, it`s not there. People
kind of want to know there`s a witch hunt going on to find out what the
problem is.

HERERA: You say turn your customers into representatives for the
brand. How do they best do that?

CRUTCHFIELD: They do that by getting them to talk more. That`s what
I mean by all channels of communication. Get to where people are
comfortable, get to where people are accessing their information. It
doesn`t just have to be Facebook (NASDAQ:FB). There`s lots of other
channels of communication that can be done.

But the public in a sense are a brand`s best friend. They`re like the
reps of a brand because they talk about it that they like it because they
love it. Now, a brand is about recognition, it`s about association and
loyalty. The last thing that Chipotle wants to be recognized for is a bad
process when it comes to handling food. I mean, that`s its business.

MATHISEN: Very quickly, would you take your children to Chipotle
tonight?

CRUTCHFIELD: I wouldn`t out of principle that there is a concern.
But if they really loved it, I might do it.

MATHISEN: All right. Dean, thank you very much.

CRUTCHFIELD: Thank you.

MATHISEN: And don`t get beached on a sludge field of corporate
puffery.

(LAUGHTER)

MATHISEN: Dean Crutchfield with the Dean Crutchfield Company. Come
back anytime, man.

CRUTCHFIELD: Thank you, mate.

HERERA: Still ahead, a new danger on the road and behind the wheel.

(MUSIC)

HERERA: Online lender Prosper reportedly made a $28,500 loan to San
Bernardino shooter Syed Rizwan Farook as first reported by “Reuters”. The
FBI is examining the couple`s financial activity before the shootings.
Prosper says it is prohibited by law from disclosing any nonpublic
personally identifiable information on any loan originated through its
platform.

MATHISEN: A new survey of drivers shows they are more distracted than
ever before. Thy are not just texting and driving, they`re surfing the
web.

Phil LeBeau has the story.

(BEGIN VIDEOTAPE)

PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT: Most drivers know
the dangers of texting and driving. But they still do it. In fact, a new
survey by State Farm found drivers are not only texting, they`re using
their smart phones to do a whole lot more. More than a third of those
surveyed admit they text and drive, while almost as many are now surfing
the web while behind the wheel.

And there`s also a sizable number of people taking pictures or
recording videos while driving.

CHRIS MULLEN, STATE FARM: There are probably a number of reasons why
someone might choose to either text or visit sites on the internet while
driving. We did ask folks when they`re more likely to do that. And they
reported while they`re stopped at an intersection, which may seem fine
because your car is stopped. But federal data shows that 40 percent of
crashes are at intersections.

LEBEAU: Mullen believes drivers are doing more on their phone because
their phones can do more. In other words, it`s easier and quicker to get
on the internet through a smartphone, so more people are doing it while
driving. Even though many surveyed admit they know it`s a dangerous
decision.

Last year in the U.S., almost 33,000 people were killed in auto
accidents. While drunk driving is responsible for almost a third of those
deaths, almost 3,200 people were killed in crashes caused by distracted
driving.

Despite numerous public service campaigns and many states making it
illegal to even hold your phone while driving, it hasn`t stopped many
people from doing it.

And that`s the bad news about this latest survey of drivers.
Americans know they shouldn`t be on their phone when they`re out on the
road and they`re doing it anyway.

Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.

(END VIDEOTAPE)

HERERA: We begin tonight`s “Market Focus” with Southwest Airlines
(NYSE:LUV) which was the worst performing S&P 500 stock today.

The carrier announcing that a key revenue metric could slip in its
current quarter. The airline did say passenger traffic improved by almost
14 percent in November. Nonetheless, shares tumbled 9 percent to $45.04.

Fairchild Semiconductor has received an unsolicited buyout offer from
an undisclosed buyer. Bloomberg reports that a group led by China
Resources Holdings is the bidder. The nearly $2.5 billion offer trumps an
agreed upon deal Fairchild had with ON Semiconductor (NASDAQ:ONNN). Shares
rose 5 1/2 percent to $20.62.

And another merger news: Norfolk Southern (NYSE:SO) rejected Canadian
Pacific`s revised merger offer, calling it inadequate. The new bid
attempted to ease concerns that the railroad deal would be shut down by
regulators. Norfolk tumbled more than 5 1/2 percent, Canadian Pacific off
by more than 3 percent.

MATHISEN: Eli Lilly (NYSE:LLY) is hiking its quarterly dividend by a
penny to 51 cents a share. The drug maker`s payout will be made March
10th. The yield is about 2.3 percent. Shares rose a few pennies to
$86.41.

Meantime, MasterCard (NYSE:MA) will raise its dividend and the firm
announced a new buy back program. The new payout is 19 cents a share and
its repurchase plan adds nearly $800 million to its existing buyback
program. Shares rose in an initial after-hours trading, as you see right
there, during the regular session, the stock was a fraction higher to close
at $9.18.

Morgan Stanley (NYSE:MS) will cut 1,200 jobs. A good portion of the
positions are debt and commodities traders as well as salespeople. The
bank will take a 150 charge to cover severance expenses. Shares fell
nearly to $34.06.

And Smith & Wesson reported late earnings that topped estimates. The
gun-maker saw sales rise 15 percent in its most recent quarter. Shares
volatile after close during the regular session. The stock was almost 5
percent higher to $21.39.

And coming up, a new investigation into the firearm maker Remington.
And a surprise decision by a Kansas City judge.

(MUSIC)

MATHISEN: Here is what to watch tomorrow on the data front: a report
on wholesale trade. The weekly mortgage application numbers come out, as
well and “Time” magazine will reveal its Person of the Year. It won`t be
me. That`s what to watch tomorrow.

HERERA: A federal judge in Kansas City has postponed final approval
of a nationwide class action suit involving an allegedly unsafe rifle we
first investigated five years ago. The surprise ruling comes just hours
after we unveiled a new trove of documents about the Remington 700, the
most popular bolt action rifle in the world, which the company still
maintains is safe.

Scott Cohn is here with us with an all new Remington investigation.

Good to see you, Scott.

SCOTT COHN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Good to see you,
Sue, Tyler.

This class action settlement involves 13 different Remington models
all with a similar design to the iconic Model 700.

The allegation is that the guns have a design defect that allows them
to fire without the trigger being pulled. Remington maintains the guns are
safe but it wants to put the issue in the past, it says, so it is agreeing
to replace every trigger. But critics have argued in court that Remington
downplayed the settlement and the alleged risks.

So, today, just hours after our new investigation appeared online,
U.S. District Judge Ortrie Smith said he was sending the parties back to
the drawing board because so few people have filed claims. Now, this
process which has taken decades is a far cry from the process with most
products. The Consumer Product Safety Commission which can order recalls
on everything from Teddy Bears to air rifles is barred by law from having
anything to do with firearms because of the Second Amendment guarantee of
the right to bear arms.

Arthur Bryant heads the legal watchdog group Public Justice.

(BEGIN VIDEO CLIP)

ARTHUR BRYANT, PUBLIC JUSTICE: I think Second Amendment rights are
critically important and need to be protected. But so do First Amendment
rights, Fourth Amendment rights, Fifth Amendment rights, all of our
constitutional rights, so do our right to life, liberty and happiness. And
if your gun fires when no one pulls the trigger, you can kiss all the rest
of those rights good-bye.

(END VIDEO CLIP)

COHN: Public Justice fights against court secrecy and got the new
Remington documents released. You can see some of what they found and more
in our new investigation “Remington Under Fire: The Reckoning”. You can
see that on our Web site, NBR.com.

MATHISEN: So, Scott, did the judge give any hint what he wanted the
parties to do when they go back to the drawing board?

COHN: Well, he mainly wants them to come up with a better way to
notify the public. There is in the settlement a Web site. There were
print ads, some direct mail. But, clearly, people have not been responding
yet and so, he`s going to be looking for a more forceful way, a more
powerful way of notifying the public.

HERERA: If you own one of these guns, what does it mean for you?

COHN: Well, it means that the settlement, if you choose to take
advantage of it, is delayed but you can still file a claim right away. And
in this story at NBR.com, you can see how to do that. It probably is a
good idea if you`re going to do this to go ahead and file a claim, and then
we`ll see what the results are.

But there are a lot of guns, 7.5 million guns and Remington already
was predicting it would take about 12 weeks to get the repairs done.

HERERA: All right. Once again, everybody can see it on NBR.com.
Thank you so much, Scott.

MATHISEN: Good to see you, Scott.

HERERA: And does it for NIGHTLY BUSINESS REPORT for tonight, I`m Sue
Herera. Thanks for joining us.

MATHISEN: And thanks for me as well. I`m Tyler Mathisen. Have a
great evening, everybody. And we`ll see you back here tomorrow night.

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) 2015 CNBC, Inc.

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