TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Closing record. The NASDAQ reaches a new high as the broader market rallies. And it`s not just techs that are driving the index to all-time highs.
SHARON EPPERSON, NIGHTLY BUSINESS REPORT ANCHOR: No deal. Greece and the creditors failed to reach an agreement at a key meeting, as Greek banks reportedly start to see big withdrawals.
MATHISEN: Finding religion. In sharply worded Vatican report, Pope Francis takes aim at the essence of capitalism — profit and consumption.
All that and more tonight on NIGHTLY BUSIENSS REPORT for Thursday, June 18th.
EPPERSON: Good evening, everyone. I`m Sharon Epperson, in tonight for Sue Herera.
MATHISEN: And good evening from me as well. I`m Tyler Mathisen.
But it was an historic on Wall Street. The NASDAQ rallied past its dotcom era high to its first intraday record in more than 15 years, and it wasn`t just the NASDAQ that rallied this day. Stocks across the board took off on strong economic data.
By the close, the Dow Jones Industrial Average was up 180 points to 18,115, a 1 percent gain on the nose. NASDAQ up 68, the S&P 500 added 20.
Now, unlike in the dotcom era, tech stocks aren`t the only drivers behind NASDAQ`s surge.
Bertha Coombs tell us how this time is different.
BERTHA COOMBS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Tech stocks still make up the majority of the NASDAQ composite, comprising about 53 percent of the index. But that`s not what`s driving the index to all time highs right now. It`s really about small cap stocks right now and in particular biotech stocks, both of those indexes and those sectors closing at all-time highs as well.
The biotechs have been on fire of late because of a lot of merger and acquisition speculation, and also because of a growing pipeline as more of these companies really seek to harness the secrets to try to cure diseases, rare diseases and cancers.
So that`s what`s moving a lot of the stocks these days. BioMarin, a standout today, it also at an all-time high after a positive trial results on a dwarfism drug, a rare disease but one which analysts think will yield a blockbuster drug.
I`m Bertha Coombs at the NASDAQ.
EPPERSON: Some on Wall Street said stocks could have done better if there wasn`t the ongoing concern over the Greek debt talks. Jitters increased today amid word European Central Bank officials reportedly said they weren`t sure Greek banks would open on Monday and there maybe an emergency ECB meeting tomorrow about funding those banks.
Greek savers have been increasingly withdrawing money from their accounts over the past few weeks, some reports saying as much as 2 billion euros. In addition to all of this, questions still remain whether Greece will stay in the Eurozone.
Michelle Caruso-Cabrera has more from Athens.
MICHELLE CARUSO-CABRERA, NIGHTLY BUSINESS REPORT CORRESPONDENT: I`m here on the steps of parliament in Athens where thousands have gathered tonight to protest against the Greek government, saying they` unhappy with the course that they`ve taken in the negotiations. Many of those here tonight are very worried that Greece will leave the Eurozone and hence lose the euro as a currency.
UNIDENTIFIED FEMALE: I`m here because we want to say to the people of Europe that we`re pro-Europe.
CARUSO-CABRERA: You want to stay in the euro?
UNIDENTIFIED FEMALE: Euro, yes. And I want democracy in my country.
UNIDENTIFIED MALE: For the first time, it`s very — you know, it`s very serious.
CARUSO-CABRERA: Keep in mind, there were thousands of protesters here last night also who support the Greek government and want them to continue to take a hard-line against creditors who are demanding new measures when it comes to pensions and taxes in the country, in return for 7 billion euros worth of bailout money.
Time is running out, the D-Day is June 30th, that is the day that Greece`s current bailout program expires and technically the ECB could take a harder line against the Greek banks. That would lead to some very tough
— even tough economic conditions in this country. That`s also the day that Greece has a payment due to the IMF, 1.5 billion euros.
But this government says if they don`t get a deal they like, they`re not going to pay that money and could be in default.
There was a meeting today in Luxembourg, with no result. Time is running out.
For NIGHTLY BUSINESS REPORT, Michelle Caruso-Cabrera, Athens, Greece.
MATHISEN: As Michelle just reported, not deal was reached at that Euro group meeting today in Luxembourg.
Julia Chatterley was there and has more on what Greece`s creditors want to see from the indebted nation.
JULIA CHATTERLEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: More than two hours after the meeting wrapped here in Luxembourg, Greek finance minister Yanis Varoufakis is still inside.
He`s been telling journalists that he presented a full and credible program tonight. He said that he feels like the country is being forced out of the Eurozone, though he won`t still contemplate the possibility of a Grexit.
I think Christine Lagarde gave the most eloquent view of the creditors here tonight. And she said, look, we are still waiting for greater, credible information.
But that wasn`t the only concern for the Greeks tonight. There were also rumors of concerns from the ECB that the Greek bank may not be able to open on Monday. The ECB has stringently denied that this was the case or that this was being discussed here tonight, but it just give you a sense of how critical and how tense the negotiations are about the future of Greece in the Eurozone.
Now, these discussions will continue on Monday, with an E.U. summit.
So, that`s Merkel and Tsipras therefore meeting in Brussels. But Greece has to come up with fresh proposals between then and now. Otherwise, there`s going to be little to discuss. We have to wait and see, and the ball very much still in Greece`s court.
For NIGHTLY BUSINESS REPORT, I`m Julia Chatterley in Luxembourg.
EPPERSON: Fed Chair Janet Yellen is closely watching inflation levels. And today, we learned that consumer prices ticked higher in May.
The Consumer Price Index climbed 0.4 percent last month, the largest increase since February of 2013. Higher gas prices contributed to the rise.
In other economic news, fewer Americans that forecast filed for unemployment benefits last week, remaining near a 15-year low. Jobless claims declined by 12,000 to 267,000 last week. The level has held below
300,000 for 15 straight weeks.
MATHISEN: Well, Sharon the House of Representatives has approved fast track trade negotiating authority, something the president needs to complete a 12-nation Pacific trade pact without having to subject it to congressional amendments.
The vote was the second attempt to approve the measure in less than a week. Lawmakers plan to vote separately on extending the program that aids workers who lose their jobs because of imports.
Well, government officials call it the largest crackdown ever on suspected Medicare fraud. Today, Attorney General Loretta Lynch, along with the Department of Health and Human Services Secretary Sylvia Burwell charged nearly 250 people with alleged false billing. The amount of the suspect fraud totals more than $700 million. Forty-six doctors, nurses and other licensed medical professionals were allegedly involved in the scheme.
EPPERSON: Tyler, the Securities and Exchange Commission field enforcement actions against 36 municipal bond underwriting firms. The agency said the firms which include Bank of America`s Merrill Lynch unit, Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) Chase violated federal securities laws by making fraudulent offerings. All have agreed to settle charges without admitting or denying the allegations.
MATHISEN: Mortgage rates pulled back a little bit this week from a seven-month high last week. The latest data from Freddie Mac puts the average rate for a 30-year fixed rate loan at 4 percent. Now, that`s historically low, of course. But today, more and more would-be buyers are renting instead. Apartment construction is booming and so it turns out are rents.
Diana Olick has the striking new numbers.
DIANA OLICK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Developers are putting the final touches on 160 new rental units in downtown Bethesda, Maryland, where construction is finally coming back after the recession.
DOUG FIRSTENBERG, STONERIDGECARRAS: We had a surge here over the last nine or ten months, and it`s really taking off. People were concerned about the oversupply, but the absorption`s been great. It`s really across the board.
OLICK: Demand for mixed use development like this, with retail and restaurants all within a walk to the office is coming from both sides of age scale, millennials and baby boomers.
There`s really a growth and demand by the term people were using, rent by choice. And it`s an older renter looking to downsize, that doesn`t want to own anymore.
OLICK: America`s rental apartments are historically full. The national occupancy rate hit 95.3 percent in May, the highest on record according to Axiometrics. With higher occupancy come higher rents, which grew at 5 percent in May nationally.
LAURIE GOODMAN, URBAN INSTITUTE: Where nowhere near building enough to meet demand.
OLICK: Because Goodman says, rental demand will surge over the next
15 years, largely because most of the new household formed will be minority households, black and Hispanic, who have historically lower home ownership rates. That and something even more widespread.
GOODMAN: The question is, has there been a subtle change in attitudes toward home ownership? Sort of going to be the last eight years, there`s no one can think that home ownership was a store value that my generation once did.
OLICK: Apartment construction is at its highest level in nearly three decades and it shows little sign of slowing down. Still, it may not be enough to keep rents from heading higher and squeezing already cash- strapped residents.
For NIGHTLY BUSINESS REPORT, I`m Diana Olick in Bethesda.
EPPERSON: Still ahead, what you don`t know about your smartphone plan that you probably should.
MATHISEN: In a passionate encyclical released today, Pope Francis, pointedly criticized capitalism, consumerism, technology and politicians for causing, contributing to, or at least acquiescing in the degradation of the planet, leading deeply into the contentious political debate. He said humans are largely the cause of global climate change and that the developed north owes an ecological debt to the planet`s poorer south.
Here to discuss the pope`s message and how it could affect the global economy and investing are Father Matt Malone, editor in chief of the faith- based magazine “America”, that is published by the Jesuits of the United States, and Jim Towey, president of Ave Maria University.
Gentlemen, welcome. Good to have you here with us.
Father Malone, let me ask you, does the Pope dislike, is he anti- capitalist or is he misunderstanding it somehow?
FATHER MATT MALONE, AMERICA EDITOR IN CHIEF: No, I think that he is leveled a very serious critique against the ways in which capitalism has lived out across the globe today. But the church doesn`t have an ideological commitment to a specific economic system. In fact, this pope is distrustful love ideology and in all its forms. He seems to be simply pointing out that there are in justices in the world that are a serious as they are obvious, and that we need to address them, and whatever system best accounts for that is a the solution that we ought to pursue.
MATHISEN: Mr. Towey, how do you feel about that? Is the Pope against capitalism or is as Father Malone says, really just offering a critique of it and politicians?
JIM TOWEY, AVE MARIA UNIVERSITY PRESIDENT: Well, I think the Holy Father brought to bear on this encyclical his life journey. He lived in Buenos Aires he live near the poor. He saw the strains on drinking water, on safe food, the globalization of indifference he`s been talking about since he became pope.
So, I think he was bringing to bear on this discussion, not only his perspective but a continuation of church teaching about capitalism without a conscience.
I don`t think he came out with some indictment of capitalism per se.
I think he was simply bringing to the public square the discussion of the moral dimension to the issues involving the environment
EPPERSON: The issues involving the environment are something that you will be paying close attention to, I`m sure, as a university looking at investment over the future. And I`m wondering if now with the church`s teachings perhaps taking a different turn, will that change it all the way that Catholic universities are investing?
TOWEY: I think it very well may. Ave Maria University has always had a so-called Catholic filter on its investment policy, which means we don`t invest funds — in our millions of dollars in endowment — we don`t invest them in organizations that are actively promoting abortion or during embryonic stem cell research and so forth.
So, that limits the pharmaceuticals and other businesses that you`re going invest with.
So, the Ave Maria University approach has always had a Catholic filter. I think what`s going to happen now is that trustees of Catholic organizations will be meeting to discuss how can you be faithfully Catholic in light of what the Holy Father is just written in, and what about these transnational corporations that he talked about that he has concerns with.
I think it`s going to begin what he wanted, which is an honest debate and dialogue.
MATHISEN: Father Malone, how do you think the encyclical might change global business, particularly companies are involved in the use, heavy use or mining of fossil fuels? And how do you think it will change the political conversation?
He`s coming to America. He`s going to talk to the United Nations.
He`s going to talk to Congress.
MALONE: Well, one of the things that I might change as we just talked about is the policies of our colleges and universities with regard to investments. And I agree that I`d I think that trustees of our universities who are already examining that issue are probably going to look at it anew, and with a much more serious gaze.
I would also say that that the pressure will come from the bottom up as well, because this pope I think is very popular with millennials and with students today, and there`s a way in which this encyclical is really geared toward them.
And the larger question of how it how it affects business writ large, I think the folks who have been slow to see this issue as a big issue have been opposed until now to policymakers and politicians who see it as absolutely crucial. They now stand in opposition to the pope, and I don`t think that that is a place where anyone wants to be at this moment, given that he is at the most credible person on the planet.
MATHISEN: So, let me, let me ask you then, sort of a follow-up question, Father Malone, if I were a Catholic who has questioned overtime how much humans were responsible for climate change, do you think this will change one person`s view on that? In other words, if I were of the mind that climate change either does not exist, or was not attributable largely to the actions of human beings, and I am a Catholic, the pope has now said I`m wrong.
MALONE: I don`t think that`s quite what he said. You know, if you read the document pretty closely, you`ll see that he — what — he`s not making scientific claims. He`s simply stating the fact that the consensus in the scientific community says that human beings are responsible in some measure, perhaps in large measure, for what is happening to this planet.
MATHISEN: But he`s embracing that point of view.
MALONE: Yes, he is, he`s acknowledging that that is in fact the scientific consensus, which it is. And, you know, I think he takes very seriously the consensus of the scientists and feels that we have an obligation and a duty to respond. In fact, the U.S. Catholic bishop said that this morning.
But what claim this document makes on a conscience up an individual Catholic will depend, first of all, on how that Catholic receives this.
But it`s also important to point out that the further we get away from the central truths a Christian revelation, the least authority to bind particular announcement has.
EPPERSON: Jim, let me ask you a question about what impact this could have on the business community. You`ve talked about the impact they will have perhaps on colleges and universities. But what about businesses and those that have significant investment and make their money from investing in fossil fuels?
TOWEY: Well, I think they`re obviously going to be aware of what the Holy Father has put out today. I think there`s going to be discussion. It will continue in September when he comes to America and has the pulpit, so to speak.
I think businesses are always aware of the pressures they face from shareholders to drive money to the bottom line. And a lot of times in doing that, and this is what the pope wrote about, that can lead to adverse consequences for the world`s poor.
So, there`s going to be you know a new realization that there`s not only a focus on profits, but also there`s a matter of conscience that`s going to be now elevated I think with what the Holy Father said today and what people are going to say behind them.
But this is still up a little bit of a political football on the question of global warming. And even with our students at Ave Maria University, they`re going to be wanting to study this 184-page document.
There`s a lot of beautiful theology, but there`s also a lot that calls all of us with wealth to question on how we spend it.
MATHISEN: Fascinating conversation, gentlemen.
Jim Towey of Ave Maria and Father Matt Malone of America Media, I appreciate it. The intersection of faith and the economy right there today. Thank you, gentlemen.
MALONE: Thank you.
TOWEY: Thank you.
EPPERSON: In other news, takeover talks lift shares of Martha Stewart Living and that is where we begin tonight`s “Market Focus”.
Sequential Brands is nearing a deal to acquire the publishing and merchandising company, this according to Dow Jones. Martha Stewart Living`s market value is around $350 million, including today`s move.
Shares popped 26 percent to $6.44.
A mixed quarter for Kroger (NYSE:KR). The grocery store chain`s bottom line topped estimates, while revenue was off. The company lifted a key sales target for the year, which investors seemed to like. Shares were a fraction higher to close at $73.50.
For the first time in 40 years, McDonald`s is going to shrink. The burger chain plans to close more restaurants in the U.S. than it opens this year. This as the company trims the fat to improve lagging sales performance. Despite that, the stock was 1 percent higher to $96.17.
MATHISEN: Well, Rite Aid (NYSE:RAD) reported earnings that topped estimates today, while revenue was just in line. Same store sales rose in the drug store chains most recent quarter, but the company did lower its full-year outlook. Shares today off 3.5 percent in an up market, to $8.60.
Fitbit made its Wall Street debut and shares soared, even though the stock was priced well above the expected range. The firm, which makes those wearable fitness tracking bracelets, raised around $730 million with the sale. The CEO says they plan to be more than just a wearable maker.
(BEGIN VIDEO CLIP)
JAMES PARK, FITBIT CEO: We`re really broad focused company. We`re more than just wearables. We have different products, clippable products, wrist-worn wearable products, scales, et cetera. We`re going to be focusing a lot on software and services. So, again, the mission of the company, it`s really to get people healthier and more active.
(END VIDEO CLIP)
MATHISEN: Shares popped 48 percent to $29.68.
An activist investor disclosed a 7 percent stake in Conagra. Jana Partners wants to change the company`s board of directors and turn around what it describes as a disastrous deal, referring to Conagra`s $5 billion purchase of private label food company Ralcorp. Shares moved higher initially after-hours on that report. The stock finished the regular session at $39.12.
EPPERSON: Last night, we told you AT&T (NYSE:T) was slapped with a record $100 million fine by regulators. The FCC says the wireless carrier misled customers by slowing down Internet speeds, even though they purchase unlimited data plans.
So, how do you know if you`re really getting what you signed up for?
Here to answer that is Roger Cheng, executive editor at CNET.
Roger, thank you for joining us.
How do consumers know what they`re getting? A lot of them may not have unlimited plans. But as they`re signing up for new plans, what are the questions to ask?
ROGER CHENG, CNET EXECUTIVE EDITOR: You know, that`s the big thing.
I think T-Mobile really kicked off this trend of blowing up contracts and as a result your CV`s carriers offering a myriad of different plans and options and it could be overwhelming for consumers.
EPPERSON: And so, should they be looking at whether or not they`re getting unlimited data? Or what should they be looking at within their mobile plans and how can they make sure that their speeds are getting slow down?
CHENG: Sure. First thing you want to know is how much they are you actually using. I mean, there`s a lot of hubbub about having a limited plan for. But for a lot of consumers, they`re not actually using that much data, and they then to overpay for that limited access. So, knowing how much you use is the critical thing.
MATHISEN: Let`s talk about travel. When you go overseas, your data can cost you a lot. What you need to know about that?
CHENG: Well, you have to look at the options. All the carriers have different plans and different offers. You remember that the data you`re using overseas isn`t the data, say, from AT&T (NYSE:T) or T-Mobile, right?
You`re basically using or borrowing data from a foreign carrier and you`re paying that extra charge.
So, T-Mobile, for instance, offers unlimited data overseas, but it`s very slow. It`s like almost a dial-up connection. But is free and you`re not getting charge for it. There are different options. The whole point is asking your carrier for the right option for you.
EPPERSON: Roger, I know that people have different ways that they use data. But is there a best plan out there in your opinion? What should they be looking for?
CHENG: You know, there`s no best plan for anyone. I think it`s really based on your usage. There are a lot of people out there who just email, just text message and getting a very bare-bones plan that`s perfect for them. Then, there are heavy users like me who constantly stream music and video. And, you know, they need to have or I need to have a more aggressive plan. I`m constantly hitting my cap.
So, yes, it`s definitely different for everyone. There are tools out there. There are data calculators that you can go on the carrier web sites were to calculate how much data you use, and that will give you a good idea what kind of plan you really should be getting.
EPPERSON: And think about who else is using your plan, especially if you have a teenager, right, Roger?
CHENG: For sure. You got a family plan juggling all those multiple users is definite hurdle.
EPPERSON: All right. Thank you so much.
Roger Cheng with CNET, joining us.
MATHISEN: Coming up, Texas wants to do something no state has done before. It wants to get back its gold.
MATHISEN: Gold futures rallied today past $1,200 an ounce, to their highest level in nearly a month. This follows yesterday`s Federal Reserve meeting where Chair Janet Yellen signaled the Central Bank will raise rates at a gradual pace.
Gold futures settled up 2 percent to $1,202 an ounce.
And as gold prices rise, Texas wants to do something with its precious metal that no state is done before. It wants to get its gold back.
Kate Kelly reports from Austin.
KATE KELLY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It may be more than 150 years since Texas seceded from the Union, but an independent spirit still prevails here, and that spirit is now being channeled via gold balls of all things.
On Friday, Texas Governor Greg Abbott signed a new law establishing the Texas bullion depository, a state owned and operated storage facility for gold and other precious metals.
Officials are hoping the depository which will be located and stacked in the coming months will achieve a few objectives. One is to generate profits for Texas, hopefully by luring gold, silver and other metals from Northeast vaults, and storing them for a fee. Another is to reestablish gold as the basis for everyday transaction, so that when you`re buying something, you can pay with a check or credit card backed by gold, as opposed to just dollars.
And lastly, there`s the state pride, which involves protecting Texas gold and other metals from getting into the hands of the federal government.
Under the 10th Amendment, Texas claims it can guard against U.S.
intervention, which occurred in 1933 when President Roosevelt took back citizens gold under threat of fines or prison in order to shore up the flailing economy at the time.
Backers of Texas` new law say it may have other benefits too.
REP. GIOVANNI CAPRIGLIONE (R), TEXAS: A lot of people when they talk about currency and making payments, they always think in dollars, and that`s for people all over the world and I absolutely believe that we should maintain our current system. But, would I like to see other option?
Sure, I personally, I have bitcoins, right? I think that gold and silver are legitimate, constitutional, allowable payment system and I`d like to see the state be able to do that.
KELLY: A lot still remains to be seen, including whether rates here will be competitive enough to lure back some $1 billion worth of physical gold now stored out-of-state. But for now, lawmakers like Capriglione are enjoying a victory lap.
For NIGHTLY BUSINESS REPORT, I`m Kate Kelly in Austin.
EPPERSON: And finally tonight, the Treasury says a woman will replace Alexander Hamilton on the $10 bill. We want to know what you think, change it, leave it alone, or you just don`t care? Go to NBR.com to vote.
And that`s NIGHTLY BUSINESS REPORT for tonight, I`m Sharon Epperson.
Thanks for watching.
MATHISEN: And thanks for me as well. I`m Tyler Mathisen. Have a great evening, everybody. And we hope to see you right back here tomorrow night.
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.