this is "nightly business report" with tyler mathisen and sue herera. timing is everything and the debate over when and how to raise interest rates is heating up inside the federal reserve. economic hit, a new report puts an estimate on how the slowdown at the ports out west could hit economic growth and it's something to pay attention to. taking stock. warren buffett makes some big changes to his portfolio. what he's buying what he's selling and what it says about the oracle's vision for the future. all that and more tonight on "nightly business report" for wednesday, february 18th. good evening, everyone and welcome. i'm tyler mathisen. sue herera is off tonight. well no rush to raid. that was the big takeaway from

federal reserve policy makers at their last meeting. according to the minutes released today, many said they were inclined to wait before hiking interest rates because moving too soon could stall the recovery. still, others said the central bank had waited long enough suggesting that the majority is in a real hurry to move away from the zero interest rate policy as followed for some years now. stocks briefly peared their losses on the release of the minutes but failed to end the session higher. at the close, dow jones down to 18,029. nasdaq eked out a gain of 7 and s&p 500, it was just basically flat on the day. and yields on the ten year note fell on signals the fed would continue to be in its words, patient on rates. hampton pearson has more on the minutes and the road ahead for interest rates. >> reporter: fed chair janet yellin and policy makers did not appear to start raising interest rates anytime soon. while job growth is increasing

and the unemployment rate remains below 6% policy makers say they want to see more signs of wage growth. >> remember this was january 28th. and since then we've had a blockbuster jobs report. so their worries about jobs should be even less so now and what's more, since january 28th we've seen oil prices fall by 20%. they've bounced off their lows. if they're worried about inflation not moving back up i think they should be somewhat calmed in the fears by oilrising oil prices. >> reporter: minutes from the end of january show policy makers concerned about the timing for beginning to raise key short-term interest rates. which had been at record lows for more than six years. removing patient from the policy statement officials said could cause an overreaction in financial market. and a premature rate hike could hurt the economic recovery. >> i think the market's going to accept this as a positive and also this is happening in the context where central banks all

over the world are easing. so with the fed being patient and other central banks very accommodative, this is going to be supportive for equities. >> reporter: next week fed chair janet yellin will have a chance to make the fed case for patients with lawmakers when she delivers the semiannual report on fed policy and the economy to congress. for "nightly business report," i'm hampton pearson in washington. >> inflation is unindicator the federal reserve is watching closely and today, a gauge of business prices fell in january. the producer price index recorded the biggest drop in more than five years down 0.08 of 1%. there was a slowdown in new home construction last month. housing starts to fall 2%. that signals a possible uneven recovery in that important economic sector. for more now on the economy and the federal reserve, we're joined by our friend michael

far, of far washington. the producer price index was down for the month. that indicates low inflation or even deflation. the rising dollar effectively means we are in importing disinflation or deflation. in that environment, it doesn't sound like the kind of recipe for increasing interest rates anytime soon. >> it really doesn't, and i think the surprise today in the fed's statement was that there were -- it sounded like there were a lot of the governors who really didn't want to move off the zero benchmark. tyler, you remember that i came on your air after having a presentation with jim bullard, president of the st. louis fed who said they have to raise interest rates, that they will raise interest rates this year and his reasoning is that a near zero rate policy is an emergency condition kind of a rate. that they've got to raise and then they'll wait and see but they really seem determined to

plant some sort of rate hike flag in the ground. and so now i think as an indicator, we look at the word patience. as long as it's in the statement, i think we can say they're not going to do it certainly, at the next meeting. i think maybe september. >> you're thinking september, and that they will indeed raise rates later this year. that's your view. >> yeah. i think it's 50/50, really. the hooks keep telling me. i've talked with jeff lacquer, i've talked with rich fischer recently and jim buler. i'm talking to hawks and they say we have to do this. >> fischer no longer on the committee, is he? >> correct. he's retiring. >> one of the guests in the segment that hampton did there said the overall environment and the sort of zeitgeist within the fed open market committee is open to equities. do you agree? >> no question about it. equities have been trading on every breath and utterance out

of the fed for quite a while. i think that's going to continue. but this dovish tone that we're going to keep rates at zero for a long time i think is very supportive of equities. i was surprised frankly that equities didn't go up more today. the bond market rally was terrific. we saw six basis point move on the ten year treasury. i thought stocks would do better. that was a little puzzling to me. >> michael, we're going to leave it there, with far, miller and washington. you're going to come back later in the program for what promises to be an interesting discussion on the rules governing retirement accounts and whether brokers today or should put their clients' interests first. we'll see you in a couple minutes. >> and i'm charged up about that. i can't wait. >> we're excited too. an explosion in fire erupted at a southern california exxon mobile refinery. firefighters and refinery crews were able to contain a gasoline leak caused by the blast. the company is now looking into the cause of the explosion.

the extent of the damage still being investigated. as you see there, it does look like fairly significant damage. the refinery one of the largest in southern california makes about 1.8 billion gallons of gasoline a year. the price of gasoline in the los angeles wholesale market jumped on the news. as for oil prices more broadly, west texas intermediate $52.14 a barrel and brent crude fell $2 a barrel. shares of boeing soared to a new high today after the company's ceo said it will return significant cash to shareholders. dow component also addressing shareholder concerns saying that as it transitions developing the new 777, production rates won't take a hit. boeing up almost 1% today. caterpillar discussed some not so reassuring news. the heavy equipment maker investigated by authorities regarding the movement of cash among its u.s. and overseas subsidiaries. according to a filing the company believes the probe won't

have a material effect on its financial position. well now to the west coast ports and the economy. deutsche bank said it will subtract a full percentage point off fourth quarter gdp and as the labor secretary tries to broker a deal to end the month's long labor dispute, goods and cargo containers just sitting there stacked everywhere in the yards, out at sea, disrupting billions of dollars in international trade. jane wells was out on the water for a closer look today. >> reporter: as negotiations between management and dock workers entered a second day with labor secretary tom perez directly involved there were about 30 ships parked offshore in los angeles and long beach waiting for space to open up where they could park this up. this has been here since february 12th. it left china last month, one year sitting since february 9th. they're all carrying tons of cargo.

everything as one local sailor put it, from garment gps to hot pans. a demand by the union to be able to fire the arbitrator for the l.a. and long beach areas saying he favors management too much. though the ap reports the arbitrator basically appointed for life is a former union guy. there is some unloading of ships today but increasingly customers pay more to ship elsewhere. one analyst say no 1% of goods shipped to the east coast that's jumped to 30% at twice the cost. and expect to see the word port show up in more earnings reports. already, perry ellis is blaming delays here on a $23 million short fall in sales in the fourth quarter and los angeles mayor eric garcia said even if everything ended today, it would take a long time to unclog the system. >> it's going to be six to eight weeks when it's resolved to dig the boxes out. we have pretty much stopped

exporting. imports are still coming in but that means that our agriculture, that means that our raw materials that we're exporting out of the port of l.a. are not moving. >> reporter: while there are some imports, the delays here are so ridiculous. honda reportedly slowed down production because they can't get parts in a timely fashion. while anecdotally, some customers and consumers start to see some shortages on store shelves, at economics said generally speaking, the american consumer has feel the impact of this port problem. for "nightly business report," jane wells, outside the ports of los angeles and long beach. and still ahead, does your broker have your best interest at heart when it comes to planning for your retirement? the labor department is honoring new regulations in the financial services industry doesn't like what it hears.

warren buffett's bircher hathway disclosed of stock filings at the end of december. increased the stake in ibm, the worst performing stock in the dow last year. he took a new position in deere, which began accumulating in the third quarter of 2015 and started buying 21st century fox. buffet dissolved stake in exxon mobile sold off a small position in conoco phillips and also cut his stake in national oil. dominic chu here with more on buffet's moves and what they might say about his view of the future. when buffet does something, everybody watches. let's talk about the companies that he's sold. exxon, a little bit of conoco national oil well varco.

does this suggest i made my money and don't want more anytime soon? >> i don't think anybody knows what warren buffett is thinking besides warren buffett. and maybe todd colmes but the interesting part about this, it speaks to warren buffett's style and the kind of moves he made. now, warren buffett has always been viewed as a man who has had the long-term view on things. the next five ten, 15 20 years. it was interesting for investors to see him sell out of a large cap oil company in a complete fashion. what does that say about the the future of oil and gas? i don't know what that says about warren buffett, but what's interesting about this is that this is a very high profile exit from a very large position. this was a $3.8 billion position. >> that's what i was going to ask. >> $4 billion worth. 41 plus million shares of exxon mobile. >> he's known as a valued investor but just because a stock is down in price doesn't mean it's a value with the

long-term potential. maybe he's drawing some conclusion about the long-term prospects or maybe not. who knows? ibm, a beaten down stock, he is doubling in on this. >> absolutely. the worst performing dow stock over the last four years in the fourth quarter when they announced the position increase ibm shares down around 17%. so it speaks to this idea that he's a man who obviously does his homework about stock picking. his models his research suggests that ibm is still a compelling value proposition and if he liked it higher and still wants to add to his position he can do so at a cheaper price. what's interesting about this is it wasn't a small increase. it was a position up by 6.5 million shares of ibm during the quarter. this now makes the position a total of about $12.5 billion. >> so almost four times what he sold out of exxon. >> i mean it's a huge huge bet here. and again, remember this is all about ceo jinny rametti.

a lot say it's her company and warren is backing this particular bet. >> dopminic chu, thank you very much. >> you bet. later in earnings with marriott results beat wall street estimates and g than expected full year and quarter guidance. shares shot up after the close, before the bell shares were up a fraction at $81.45 but hyatt hotels out with mixed results. revenue missed consensus and national markets remaining challenged here while u.s. markets expected to be relatively strong. shares off more than 1% today at $58.79. hilton forecasts lower than expected earnings for the first full year. this as the stronger dollar said hilton makes it more expensive for foreigners to travel here in the u.s. the company's ceo told cnbc hilton plans to return cash to shareholders later this year. >> our view is first instituting a dividend which most of our competitive not all of our

competitive set had. and come in a form of buyback. i think we'll be in the zone of our targeted credit ratio the second half of the year and those things will be on the table at that time. >> hilton shares however dipped a fraction to $28.54. gar min issued down beat guidance for the year sending shares way down. the company citing the effects of the strong dollar and weak demand for car navigation devices for the outlook. earnings in most recent quarter missed estimates. shares tumbled 11% to $50.60. company up the operating profit. laid out plans to achieve the goal saying sony will focus on the video game entertainment and image censoring businesses. close $28.02. shares of sherman williams higher on news of 22%. the new payout of 67 cents a share will be made to

shareholders in march. the stock rose a fraction to $88.05 for sherwin williams. another eye popping valuation put on another tech company. snap chat the mobile messaging company that lets hundred million users send messages that then disappear after a few seconds reportedly raising around a venture capital that could value the company at $19 billion. that valuation would position snap chat as the third largest venture capital backed firm worldwide. now the discussion on the rules governing retirement accounts that we mentioned earlier in the program. the white house through the labor department is expected to announce proposals that would tighten retirement account standards and close what some see as loopholes in existing laws that allow brokers to skirt in some people's view their so-called fiduciary duty. kenneth benson is ceo of industry and financial markets

association. he opposes the change in the rules but micah helpman, the services council with the consumer federation of america is a supporter and michael far is back with us. welcome to all of you. i know this will be a lively and interesting conversation. kenneth, let me start with you. if i really read between the lines of your group's position you seem to be saying that if brokers are required to put their clients' interests first, those brokers will not be able to stay in businesses and will not be able to serve clients. have i got that wrong? >> really, what you have here is if the deal goes forward with the rule like they tried to do in 2010 and establish this new standard then you would have to move these accounts from a traditional brokerage account where most people have their accounts in a commission-based account into a fiduciary account that is more expensive.

what would happen is for the higher balanced accounts they would pay more for services they don't want to buy and the real problem is the lowered balance accounts. most ira accounts are in lower balanced accounts. those don't make economic sense to put a rap account at any fee. they would be left without access. that's the problem with the proposal. as we know it from 2010. >> you say this would be these charges, would be higher cost accounts. i'm curious about that because it would seem to me that what this rule would be aimed at doing is to avoid the higher cost accounts that sometimes get sold to retirement account owners. you see what i'm saying there? they're driven to high commissioned accounts or funds, for example, that have higher expenses. >> well first of all, it's a very competitive marketplace.

on a commission-based account, you pay commission on a transaction by transaction basis. on a managed account, where this would drive many accounts into you're paying an annual fee. over time that's more expensive. you pay for services people like managed accounts with an ongoing service, a discretionary account made on your behalf as opposed to a buy and hold account. investors say i want to buy this hold it for a long period of time. i just want to pay for the transaction. >> jump in here and tell us what you think. would it raise costs to go to this standard to the point that many would not be able to afford it and that many brokers would be driven out of the business? >> no. no. and mr. benson gets a number of things wrong. so first we have a retirement industry in which financial professionals are allowed to hold themselves out as trusted

advisors but not comply with the standards that traditionally apply to those in a position of trust. so you have largely brokers who are allowed to steer their clients into high-cost, low-performing investments that don't serve their clients' best interest they serve the financial advisors. they make the financial advisors a lot of money. that's because the rules that apply to retirement investment advice haven't been updated in 40 years. and they don't serve the modern financial landscape. and so they don't apply to rollovers, to iras, to iras, it costs investors a lot of money. the economic suggests it costs retirement investors as much as $16 billion and $17 billion a year. >> so basically, what you're saying if i'm understanding you correctly, correct me if i'm wrong, mr. haut man, the advisor can't wear two hats. he cannot be a commissioned

salesperson and also have the client's best interest at heart in all cases. it just doesn't work. >> that's not what i'm saying. so mr. benson said commissions won't be allowed. that's just not true. the d.o.l. first of all, hasn't proposed a rule. any analysis about what the rule is going to look like or the impact it's going to have is just speculation. we want the d.o.l. to propose the rule to update it to close loopholes in the rules so it reflects the modern financial landscape and investors are better protected. >> i want to bring in forgive me for interrupting. i want to bring in michael far, who was in this business. he advises clients, a money manager. i do not know t i assume you follow the fiduciary standard. michael, jump in here and speak to the guests. >> tyler, i think it's ridiculous we're still having this debate. i think it's ridiculous that the

securities industry has been able to protect and maintain a suitability standard as long as it has. the difference between a fiduciary and the suitability standard as an example on a mutual fund purchase when a broker recommends a mutual fund all it has to do is be appropriate for that client. that a conservative growth fund is okay for that client. he's not required or she's not required to recommend the lowest fee fund. so i could, if i'm a broker all i need to know is that the fund is suitable and has a 4% low charge fee as a part of it. i can recommend the one with the load rather than the no load. that's the suitability standard. as a fiduciary, as a money manager fiduciary, i have to recommend the best deal for the client and if i am telling the client that i'm going to give them the advice in their interest i think i'm obligated to do that. i don't know how the industry has maintained the position of a suitability stans long.

i think it undermines the credibility of the industry and i agree with you, it puts you at a conflict of interest when you are there to give the client advice and recommend something that's going to pay you. >> i want to get back to mr. benson. you get the last word. >> great. first of all, i want to say it's a mistake to say that this is an unregulated area. this is one of the most highly regulated areas of finance. there's different channels of how they're processed and regulated. on the brokerage side the most heavily regulated with the greatest redressed opportunity to the client. but most important thing is the customer, the theinvestors have been choosing and brokerage model is more cost efficient to them. >> all right, gentlemen. we have to -- i've got to leave it there because we're out of time. i think our facebook page is going to light up on this. mr. benson michael helpman with consumer federation of america and michael far.

we'll come back to this, i promise. some of the biggest hurdles facing the biggest consumer product companies. the biggest consumer companies in the country face a number of head winds from stronger dollar to pick consumers and competition. sara eisen reports. >> reporter: for america's biggest consumer companies, the global environment is tough right now. >> the mood of the consumer around the world is cautious. it varies a little bit from one geography to another. certainly in the u.s. we are seeing a little bit of an upturn. but at a very slow rate because i think consumers remain quite cautious. as we think about regions like europe that's a tough place. >> the strong dollar cuts into overseas profit for mondly's.

for food companies, it helps to have organic healthier options in the brand portfolio which continues to be a dominant trend separating winners and losers in the industry. >> you can't go out there and say buy my product because it contains vitamin c. this product tastes great. consumers are educated. they're reading labels. they understand what gmos are. >> reporter: rice dream, imagine soup and taro chips. i plans to acquire more brands in the future. >> going to move into fresh prepared foods. personal care products. all these years, johnson and johnson used to put formaldehyde in baby products. like oh my god. as a mom or dad you're putting what in my product? personal care is a big deal for us. >> reporter: deal talk is everywhere. with fast growing companies like zilg dairy and horizon milk big

for slower growing companies like coca-cola, pepsi, general mills or kellogg. beyond the deal encouraged by better outlook here in the united states with consumers helped lately by savings at the gas pump. the key question is going to be international growth. that and fast-moving trend changes like healthier eating and knowing what's inside your food and your drink and how all of that changes the landscape for the industry going forward. for "nightly business report," i'm sara eisen. >> and that is "nightly business report" for tonight. we'll see you back here

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