business report," with tyler mathisen and sue herera. surprise. prices are rising. inflation is here. but investors shrug it off, sending the dow up more than0 points. hunting for yield as inflation ticks r.hig not all dividend stocks are created equal.it and may be time to get more selective. behind the wheel. are you driving one of the most dependable cars on the road? those stories and more tonight on "nightlsiness report" for wednesday february 14th. >> good evening, everyone, and welcome. if you do not understand this stock market, join the club. i don't either. two weeks ago,tne o most violent selloffs in years was triggered or t so swamis say when the monthly jobs report inflation would rise. well, today we learned that

inflation did rise. so what did stocks do in they went up. it's all just a case ofuring that market adage inside outside. in this case, se the rumor, buy the news. after a stumble out of the gate tonight, equties rallied, and strongly, for a fourth straight session. the dow jones industrial average advanced to 24,893. the nasdaq added 130 and the s&p 0 was up 35. babb pisani mightily tries to hy explain w stocks went up todwh most thought he would go down. >> reporter: is the market worried about inflation or not? stocks took a knows dive on february 2nd when the jobs report pointed to strongh. wage grow it fell on today when a read on consumer inflation came in stronger. but by late morning the market recouped all of its losses and move higher. what happened? first volatility has been a big

wory recent. today the main measure of volatility, the vix dropped dramatically, indicating that traders who make bets on volatility were betting that volatility would be lower in the next month. that relieved a lot of people. that's one. second, if you look the composition of the ra aly there pattern. first because interest rates are up, bank stocks which wouldb efit from higher rates have tperformed while real estate have been downs thi all makes some sense. while the markets are down this month grohl growth stocks like technologies and industrials outperformed today. at's good newscause the growth story is intact. that ns traders believe the global economy is expanding and earnings will be holding up that's the growth story. ndeed, earnings are holding up. in facthey are not just going up, they are going up for the first quarter, sec, third, and fourth qurds of2018. ten year yield is going up

275 to 2.9 in weeks, that's shock to everyone. but it's not enough to derail ow the true driver for the markets. i'm bob pisani at the new york stock he can change. what was it about that inflation numer t caught the market and investors off guard? steve liesman digs deeper into e the rt. >> reporter: markets were nripped by a sudden inflation panic this mog when the government reported that the consumer price index leapt by .5%. it rose .3% both more than expected by wall stre . thefth panic sent futures down nearly 500 points in three minutes. then wall street seemed to take a breath and reconsider. maybe it was the pea nine year over year inflation rate, just .1% or the same as last month. or maybe it was the idea that one time items like a strange 1.7% rise in apparel costs in the i think a cellth were unlikely the repeat. whatever the reason, markets

collected lves and collectivelyin ignored the inflation threat torge surge as much as 200 points later in the day. who had it right. >> it's important to keep in mine that nothing over the past two weeks, the elevated volatility, ins into of inflation creeping back in, none of thosere rnt existential threats to this economic xpansion and to this bull market. what you have had is a series of growing pains, growingfrpains real interest rates coming off of hisser toical growing pains associated with inflation expectations reviving after a period of also, you know, very low levels. >> reporter: inflation does seem to be firming with low unemployment, higher wages and stimulus from tax cuts it's likely inflation will grow higher from here. if you see run away inflation or a fed that will hike rates much more than three or four timesy this r? >> we are closer to the target and the economy is still growing

trongly from the starting point of full employment or beyond. in that environment i think the fed is going the keep doing what they chave been doing, ws tighten once a quarter. >> reporter: that's different from aed that raises rates by 3/4 of a point or a full percentage points. cooler heads prevail, it something to be worried about but not cause a pull pledged panic. sectors are feeling theof impact rising prays. morgan brennan has a look now at where inflation is hitting hardest. >> report: if you are wondering whether inflation is pick up look no further than recent enings. from construction equipment to foodto travel companies across industries are reporting higher costs both for materials and labor. tak whirlpool, which recently warned higher commodity costs to ke home afliances will shave hundreds of millions off profits thisyear. we are seeing inflation trend creeping in on many parts of the

value chain. > reporter: caterpillar, ford, harley davidson and sherwin williams are a few of the manufacturers grappling with a tighter labor market. after years of concern that stagnant wages and cheap s commoditould trigger inflation the recent increases may welcome since som inflation is good thing. the risk is if it rises too >> oks like it's ast. accelerating. at the very least, aum those fee mem who talked and warned about the worries of deflation, all of those ideas about deflation in the middle of last year, forget about it. 's gone. inflation is headed back to the 2% target. >> reporter: one area to watch, tensportation. ecially for freight. the price to move goo by truck has spiked, in some cases by more than 30% over the past year. a better economy, a diver shortage, new regulations are all to blame. but those aren't expected to let up any time soon.le whi that's good news for ,

truckersit's bad news for companies like tyson, which now predicts higher meat price this is hayear. pe the biggest signal it's merging lies in telecom. sprintobnd t-le are considering moves the dial back discounts, a big potential hift for an industry who is falling costs have helped tach down inflation for years. for "nightly business report," i'm morgan brennan. the head of goldmta sachs risk of the economy overheating is rising. he cited the combination of tax cu and the potential for an increase in spending at a time when the economy is strengthening and people and companies are feeling pretty good. he made t commentsn msnbc's morning joe. >> obviously, the supply side view is it wasn't at full capacity, and so they are putting a little bit more on. i would say from my point ofvi that wouldn't be the move i would take, you know, if the fire issere roing and coals

have caught i don't know that i would be spraying lighter fluid on >> exactly. >> especially if i might need that it looer fluid ater when the coals started to die out. >> that's the thing. >> because at some pointou are not going to take rates much lower than where they are now. they are not necessarily with these ificits g to come up with another stimulus plan you need it. you would like to have some thing in reserve. >> does the economy hve the potential to overheat joining us is russel price from ameriprize financial. good to have you with us. what do you think? there was one of the most respected names in american finance, lloyd bank wine saying he is a littled worr about all of the stimulus that's in the system. are you? >> i do think that the stimulus that we've seen does stand the potential it add ae bit more inflation to the economy and at that will shave off some he consumer purchasing power. it comes at an unusual time when

the economy has been doing quite well. over the last several years people have been complaini e about thnomy being frustratingly slow. it's been still strong enoug for t unemployment rate to come down at a steady pace andon inflatto remain in check. if we do see it exceed the 3% level, if inflation takes off some of that purchasing power businesses, rs and you know, there is some argument to be made that maybe we a little bit of the stimulus that we may see this year and next year. >> if the inflation rate hits that 2%et ta isn't that what we've wanted it to do? we've been waiting a long time for it to do just that. it would seem as though that would be a good thing. >> 2% on the core rate standard outlook. we think it might be a little bit more than that by 2019. generally, we do think that that is the pace. we are n exactly in the catch where we think that inflation is

going to overheat over any time soon. we think some of the fears and concerns may be a ahittle bit ad of themselves. certainly, we are seeing wage inflation. but there is one bigce differe today than historically when we've seen wage insplaigs flags since the 1970s. that is usuallyompanies have to pass those higher wages on t customersder to maintain their margins. this time around they got aza sle tax cut so they have plenty of ability to pass on higher wages and still maintain their prices and still should end up with higher profit margins. >> is there anything that consumers or investors should be doing? because many of them have never lived thrugh an era where interest rates were rising in any kind of a sustaied way, not that they are going to get really way out of hand or thatl inion has been a factor at all. >> right. i think generally speak there re still an awful lot of dynamics in the economy that are very likely to contain inflation not just over the next few years but for the foreseeable future,

hings like demographics and slower population growth and aging societies, and technolog the ability of technology to keep prices in check. those are verrf po dynamics. >> right. >> i think what consumers basically can do is not really worry about it all that much. there is going to be an adjustment phase for financial markets as theyuate the data as it comes forth like. we've se but other than that, i don't think that -- this too shall ha pass and move on. >> you are going to let me sleep tonight russel. thank you.s l prize with ameriprize financial. a number of stooks tend to rise whennflation runs hot. according to one study that examined date t bac 2001 the top p.m.ers in the dow one week after a stronger than expected report on consumer prices inc ude the followinu united technologies, apple, united health, and boeing. on the flip side, due upon and proctor and gamble tend to fall one week after an inflation report tops expectations.

time to look at some of today's upgrades and beyond grades. target was raised to outperform from neutral at bair the firm says target stands to benefit from remodelled stores and its ofquisition igs shipped. the stock's price target was increased to 85 from 75. and share rose 2% to 75.35. avis budgetup saw its rating cut to sell from neutral by goman sachs. e firm cites mounting head winds like increased competition from ride sharing companies and rising inter rates. price target cut to $33 a share. sharre fell m than 3% to 38.73. >> mkm partners raise its forecast for facebook. the analyst is urging investigators to be aggressive buyers of the stock. it reiterated its buy rating and the $240 price target. shares ro 3.5% to $179.52

fossil group saw its price target rais by debank. the firm says its focus on wearabletechnology will lead to higher hoirnls. theyte rep better than expected earnings yesterday. the earning reportssparked a 7% rally in that stock. cisco's streak is over, and investors are cheering. cisco is seeing a return to growth. it ended two straight years of rev declines. the dow component reported earnings and revenue that topped expectations, it hiked its quarterly dividend and

authorized a share bibuyback.es the shawere sent initially higher in after hours trading. >> reporter: a positive report from cisco across thear it wasn't just the beat on the top and bottom. malso grossrgins came in retter than expected at 65%. infrastructplatforms, the company's ooed fwraed and butter core networking offings in lation to switching and routing grew 2%. mkm partners highlights the board's decision the to aprove $ billion increase to its stock buyback progam enabilitied by the cash stockpile overseas which it can bring back thanks to recent tax reform.' buying back lots of shares which will drive earnings estimates dramatically higher. at&t reportedly wants a topt antust official at the justice department to testify during its morgeer trial. as reported, the move is designed to challenge the legitimacy of the government's

lawsuit. the government sued at&t to block the atelecomcoy's $85 billion merger with time warner. at&t has edreviously questio the department's motives. to start is expected mid march and represents one of the biggest anti-trust cases in a generation. an ie mae may require a taxpayer funded bailout. this after the mortgage finance fompany reported a loss of $6.5 billion in therth quarter of last year. that loss could trigger the first cash infusi into the company in six years. fannie mae has been undeo rnment conservatorship since the financial crisis. the trump administration has proposed redu ing the time takes to permit infrastructure the projects and has pointed to a bridhat connects new york and new jersey as an example of red tape and bureaucrac run amuck. we have a report on the from new jersey.

200 feet above the strait, construction ctinues to expand the bridge. the project raised the bridge by 64eet to let bigger cargo ships pass. it won't be fully completed until 2019. at that point, the $1.6 billion project will have taken nearly a decade. ome blame the prmitting process and say speeding that up would get businesses to invest e bottom line is, right now it's taking too long. and it's not getting -- 20% of the costs fr the poject is now in the plan approval pcess sp not in the structure itself. >> reporter: the government released a two part increase for infrastructure funding and goals. >> this frameworko will lead a $1.5 trillion investment in rastructure, a faster e approximating process that takes two years instead of ten years. >> reporter: in practice it' more complicated. the bayonne bridge review was

conducted by one federal agency, the coast guard, which completed its permit in 26 months. its construction and engineering took six years because of heavy traffic and harsh northeast winters. the median time topermit the country's largest infrastructur project three and a half years according to the department of transportation. that's nearly cut in half since 2011. amy go smith, t new jersey director of clean water action says furtherer shortening theev ew time would hurt local communities. >> there would be little to no chanism for the public to be engaged because these are complicated projects that require scrutiny. >> reporter: others say permits are meaningless if there is no ooney to pay for the projects. the white huse proposed steepdg b cuts in the building structure like the army corps of engineers. >> all they need is the money. and the army corps has $5 million -- $5 billion year.

it's where is the $85 billion. it's not penalties or real estate views. >> reporter: the busiest ports on the eastern seaboard had ay recordar, processing 5% more cargo with future growth t expecte climb. for "nightly business report," i'm kaela tausche, bayonne, new jersey. and to read more about the infrastructure permitting maze, head to our website, nbr kam. bristol-myers squibb enters one of the largest drug collaboration deals ever. that's where we begin tonight's market focus. bristol-myers will pay nectar therapeutics for the right to its experimental cancer treatment. they could also receive an additional $2 billion from bristol-myers. shares climbed 2% to 65.3a shares nectar popped 11% to $84. the advertising firm interpublic

group reported revenue growth in this quarter that easily surpasseda expeions. it reported weaker client spending for the year but expects that to verse course this year. they forecast organic revenue to rise as much as 3% this year. the share rose 10% to $27.49 increased marketing and a growing user base trnslated to higher profits over at groupon. hey weren't high enough and theyissed analyst's estimates. groupon continued to scale back its presence some international markets and issued a disappointing forecast. the shares plunged 9% to $4.71. >> hotel freighter hilton said an increase ierall bookings and strong growth in its international business helped quarterly profits outpace forecasts. salan were also better t expected. hilton shares were up 3%. they finished the session at $85.97. marriott bell,

reported stronger than expected revenue as the hotel operator said results were helped by an increase in more exnsive bookings. profits though slipped from year earlier. marrowott shares initially in the extended session but they did end the regular day up 3% at $145.24. according to a regulatory filing warren buffett's berkshire hathaway took a new stake in tel aviva. shares of tel aviva rose adding a 4% gain during the regular session. inflation is inching ,high when that happens dividend stocks are less ttractive to investors. what should you keep in mind when investing in dividend ru(si us through that i

a guest. what are things you should look atntn the environwe are in right now when considering whether to add a dividend ping ock into your portfolio? >> you want to focus on the fundamentals. ulthe dividend sbe ancillary to what it is you are investing in. there are some things we do look at. wwant to focus on low payout ratios. coverage ratio, how much cash flow is available to pay out the dividend. we also want to be mindful of arverage ratios. companies that highly indebted would tend to have higher debt servi costs. and dividend growers. companies that grow dividen over time will likely continue to do that in the future. >> you used some technical terms there. lcut to the chase. i don't blame you. that's what you do for a living. tell me where i find companies that have these particular attributes today, and by comparison, describe o somethe companies where the dividend or

the fuamentals aren't healthy in a rising interest rate, rising nflation environment. >> absolutely. so in this type of environment as e sawlier in the show we want to focus on financials. banks specifically. interest margins basically compressed to zero since 2008. as rates do rise banks will be more profitable overtime. additionally, financial institutions like prudental shou benefit becauseinsurers have related assets and liabilities. as more capital becomesf available share repurchases and dividend as regulations come off, we should see that come back to shareholders as well. >> we showed so of the stocks you like. let's start with mcdonald's. you don't own it directly but hy would that make the list? >> mcdonald's is a great story about being able to take advantage of changes in consumer behavior. theyrave done very, v well when it comes to taking

advantage of food delivery. the dinner portion of that delivery has reallycr ised. what is funny is that people order more deserts atinner time when they have it delivered. mcdonald saidhey have figured out freshfrench fry delivery. and prudential, for the reasons we talked t, deregulation, ically important institution, if that designation comes off it will free up fund to come backto shareholders. coming up, the most dependable cars on the road today.

a new study shows that cars and trcks a more dependable than ever. jd posers' annualvey of people who own three-year-old models also points to an interestitrend. mass market brands are closing the quality gap with lucky ones. phil lebeau has the details. >> reporter: it may be the most important question people buying a car or truck will ask themselves in a showroom, how reliable is this model? jd power's annualn survey vehicle dependabis ty sho three yearly models are holding up better than ever. the brand with the fewest problems, lexus, rscha, and buick, the highest rated mass marketed brand in the survey of over 30,000 owners. overall mass market brands including chevrolet, toyota and hyundai are closing the quality gap with luxury lineups. while porscha owners still report few problems than those driving ot more common

models, the difference between the two is shrinking. what's notng ch is the frustration owners a experiencing with in-car info-tainment systems and features like voice recognition. this remains the top complaint ttcording to jd power. the three brands in this year's is your shay, fiat, ld rover, and chrysler, which declined to comment on the results. if an automaker struggles or does well in a survey like this, does it hurt or help sales? maybe not immediately, but jd power points out that vehicle dependability is becoming more important han everor those looking to buy a new vehicle. phil lebeau, "nightly business report," chicago. >> and before we go on this valentine's day, americans are expected to spend a nr record amount. the national retail federation puts spending at close to $20 billion. much of th will be on jewelry, yes. followed by a night out at dinner. no. flowers yes. candy, eh. and get this, more than $00

million will be spent on gifts for coworkers. >> hmm. >> hmm. >> hmm here. here's one more look at the gains in stocks. the dow advanced 253 pnts. the nasdaq added 130. and the sppd was up 35.a you arways so good on thols your love will he wife. >> happy lentine's day. >> happy valentine's day to you and to all of you. that does it for us. i'm suherera. >> i'm tyler mathisen. have a great valentine's day dinner, everybody we'll see you tomorrow.

>> this is "bbc world news america." funding of this presentation is made possible by the freeman foundation, and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inng, and exciting is a lot easier than you think. you can find it here in aruba.es familicouples, and friends can all find their escape on the island with warm, sunny days, cooling trade winds, and the c crystal blibbean sea. nonstop flights are available