>> tom: take lower oil prices, add in strong february retail sales, and what do you get? wall street's most powerful rally in months. >> susie: but the rising cost of cotton has retailers bracing for higher prices. how one clothing maker is coping. you're watching "nightly business report" for thursday, march 3. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> susie: good evening, everyone. the bulls ran wild on wall street today, with stocks surging across the board. tom, two words tell the story behind the rally-- "oil" and "jobs". oil prices fell slightly, and jobless claims were also down, a sign that the job market might be getting better. >> tom: susie, the major stock averages rose by 1.5% or more, and rallied all day, right from the opening bell. the dow jumped 191 points, the nasdaq added 50, and the s&p 500 was up 22.5.

investors viewed those filings for unemployment benefits as a big positive. initial claims totaled 368,000 last week, down 20,000 from the week before, and the lowest weekly number in about three years. >> susie: we'll get more data tomorrow on the job market with the release of the february employment report. economists expect american businesses added about 200,000 jobs, much stronger than the 50,000 new hires in january. >> tom: adding to today's gains- - strength at the nation's retailers. they turned in surprisingly strong february sales, despite nasty winter weather and a sharp jump in gasoline prices. the thomson reuters retail sales index tracks 25 chains. it posted a better than expected jump of 4.2% jump last month. but analysts worry rising prices at the pump may start to eat into discretionary spending. >> susie: there's another major worry for retailers-- surging cotton prices. the cost of that raw material

has more than doubled in the past year to an all-time high. that's making it more expensive to manufacture everything from clothing to sheets and towels. erika miller visited one garment maker for a closer look at cotton's price jump and what it means for consumers. >> reporter: clothing manufacturer dalia sabari has been feeling the pinch of rising cotton prices for months. her firm, scrub ink, makes scrubs and other uniforms with customized details. the garments are sold through a web site. at first, the company absorbed the higher costs, but a few weeks ago, sabari raised prices by about 10%. how much does this item cost? >> this item costs $26.99 >> reporter: and what would it have cost a few months ago? >> it cost, a few months ago, $24.99 >> reporter: so, it went up $2. >> it went up $2, yes. >> reporter: cotton prices have skyrocketed in the past year to more than $2 a pound. that's the highest price since reconstruction. analyst jeffery klinefelter says it's a classic case of high

demand and low supply. >> the combination of extreme volatility, both down and up, in demand for cotton, combined with some changes in weather patterns in some key planting regions in the far east and middle east really all came together at the same time to create a supply problem. >> reporter: the rising price of cotton is encouraging many designers to look for lower-cost alternatives. but that increase in demand for rayon and other synthetics is pushing up the price of those fabrics, too. brooks brothers, levi strauss, nike, and polo ralph lauren are a few companies that have announced price increases. already, some shoppers are changing their purchases. >> for me, i definitely want my tee shirts to be cotton. but they are probably going to be more blends. >> reporter: but others don't care. >> i'm not going to stop wearing jeans or tee shirts, so i'll have to go with it, unless it's outrageous. >> reporter: analysts predict clothing prices will rise between 5% and 30% this year,

depending on the item. if the increases stick, it could actually be good news for retailers and their stocks. >> clearly, the tradeoff here is going to be how much less product consumers buy if prices go higher. but if its done carefully, strategically, we think, in the end, a slight inflationary environment for apparel is actually a good thing. >> reporter: scrub ink is already bracing for the possibility of another price hike, because the alternative is cutting quality. >> what we haven't done is we haven't tried to blend other fabrics together or stop using cotton. it's essential for the scrubs to be comfortable and soft. >> reporter: she's hoping customers won't mind paying a little more for extra touches. erika miller, "nightly business report," new york. >> tom: here are the stories in tonight's "n.b.r. newswheel." global food prices hit a record high in february, and the united nation's doesn't see them coming down soon. the u.n. says rising oil prices

and food stockpiling by some nations could fuel further spikes. president obama and the president of mexico have agreed to end a fight over letting mexican trucks into the u.s. here's the deal-- if the trucks come in, mexico will drop $2 billion in tariffs on u.s. goods. our congress still has to sign off on it. if you carry on luggage when flying, you're costing uncle sam big bucks. t.s.a. screening of carry-on bags costs the federal government $260 million a year. the agency wants a hike in ticket security fees to cover those costs. still ahea- generation "y" is falling behind when it comes to investing. a look at the trend for those between 18 and 30 years old, and what it could mean for their future. >> susie: the contract dispute between nfl owners and the union representing the players. late today both sides agreed to extend contract talks

through tomorrow. the original deadline was midnight tonight. now the n the nfl's lead attorney and nfl players met late this afternoon in washington, d.c., for more negotiations. the labor showdown could determine whether or not the american public will be able to watch their favorite sport. joining us now to talk about what's at stake, william gould, professor of law at stanford university and the former chairman of the national labor relations board. dr. gould, welcome to nightly business report. >> thank you, good to be with you. >> susie: now you have been through these kinds of labor negotiations before. when there is a last minute extension like what we heard today does this mean that there is going to be a contract settlement within the next 24 hours? what usually happens? >> well, it's not necessarily so. it means that either the differences between the parties are narrowing or that there is a prospect of narrowing differences and they probably have a good deal of confidence in the mediator, george cohen who is using his best efforts

and resources to get those differenceses narrowed further. >> now the difference approximates in this case boil down to money. isn't it always the case with these labor negotiations. and let's take a look at some of the dollars and centses that are at stake. the nfl had $9 billion in revenues last year. the sticking point here is how to divide that up. owners want more. players want the status quo, they currently get 60% of that pie. if they can't agree, by some estimates, here are the costs involved. $1 billion lost before the season-opener in september. $400 million a week lost once games are cancelled in the regular season. so professor gould, who's going to blink, the owners or the players? >> well, it's difficult to say. the owners, i think, on balance have some leverage given the fact that the players's careers are short. you know, it's for many of these players it's now or never. on the other hand, the others are going to lose considerable profits if

there's a stoppage. a lockout. and they undoubtedly will face the prospect of litigation. initiated by a number of the playerses if they are not able to resolve their differences. >> well, actually, the players have been threatening to go to court. what can they expect, what kind of outcome can they expect if they do go to court and sue the owners? >> well, they'll use a tactic known as decertification. it's not technically decertification but they'll abandon their role, the union, as bargaining representative by virtue of a 1996 supreme court ruling, brown against pro football. that's the only way that the players can sue the owners in court for restrictions that they place upon player mobility and the use of the lockout. and the anti-trust law which the players will use has a lot of muscularity, a lot of

strength to it. much more than labor law which they would use if the union was on the scene. and not distancing itself. >> now you were very in the middle of that long contract dispute with major league baseball back in 1995. do you think that a standoff here could end up to be a long drawnout battle like what happened with baseball or is it a different story here? >> i think it could wind up to be a long drawnout battle. i think it will be perhaps a little different than baseball when my agency, the national labor relations board was at the centre, all right. once again, charges have been filed with the agency by the owners this time, but the players will undoubtedly take this case back to judge dodi, a united states district court judge in minneapolis whose had jours diction over these cases ever since the 1970sment.

>> susie: all right, football is getting complicated when it gets to this kind of stage. thank you so much for filling us in on what is at stake. we appreciate it. >> surely. >> susie: we've been speaking with william gould, professor of law at standford university. >> tom: as you just saw some bond selling but most of the most actives all rising. a broad-based rally. let's get you updated in tonight's market focus.

it was the best one-day pop for the major indices since december. all the major sectors were up. the day started out strong for the s&p 500, and continued through the day. the index closed just off its high point. here are the past 30 sessions for the index. this dip in mid-february came as oil prices heated up. today's buying brings the index to just over where we began the week. it was broad-based buying. the market was led by industrial stocks. that sector exchange traded fund rose 2.4%. health care stocks made a run, up 2%. this health care etf is now at a new 52 week high, and the financial select etf added 2%. in financials, investment management firm invesco jumped more than 4%.

shares are now up more than 60% of their summertime low. for health care, insurance firm coventry health continue its climb, up more than 5.5% to a new high. investment firm stifel nicolaus upgraded it to a buy. for industrials, caterpillar. it led the dow with this 3.2% gain. volume was strong today, too. speaking of a dow industrial stock, watch walmart tomorrow. after the close, it hiked its annual dividend 21% up to $1.46 per share per year. the company says it has ample cash flow to pay the dividend, make acquisitions, and open new stores. will it be enough to kick-start the stock? shares were up 1% from this close after the announcement. shares have been falling as gasoline prices have been rising and a disappointing outlook for

its u.s. sales. speaking of gasoline prices, check out this move in refinery valero-- almost an 8% pop. shares had been under pressure for two weeks over higher oil prices crimping profit margins. employment service firms also rallied nicely ahead of tomorrow's february jobs reports. robert half was up 5%. sfn gained almost 5%. manpower added more than 3.5%. a promising diabetes drug from eli lilly, amylin and alkermes may not be so promising. tests on the medicine taken weekly failed to show it's as good as a different treatment taken once a day. amylin saw the brunt of the selling, losing a quarter of its value. still, it remains just above this fall in october, when the fda asked for additional tests for the drug. alkermes fell 11%. eli lilly was a tad stronger.

finally, zagg-- the company makes protective coverings, such as those that fit around iphones and ipads. this is the past 30 sessions. zagg dropped yesterday over worries its covers wouldn't fit with the new ipad cover. today, it said some of its products will and shares recovered 20%. and that's tonight's "market focus." >> tom: investors looking for a stream of cash for their portfolio have had to go from lenders to owners,

holding bondses to buying stocks of companies that pay dividends. that has been the case for one of the oldest and biggest income mutual funds. ed perks is the lead portfolio manager of the franklin income fund, $60 billion in assets and it's nice to see you. welcome to nightly business report. >> thanks for having me. >> tom: so a year ago b two-thirds of your fund was in bonds, a third in stocks. that's whanged now to about half-and-half. why the change? >> you know, it was really in part a function of the environment we were in. coming out of the financial crisis, the opportunity in credit and corporate bonds in particular was very attractive. not only to help us continue to pay an attractive income distribution to our investors but also tremendous opportunity for total return. and as that played out and we saw the valuations in credit improve, we began to really look at other income opportunities and that's where we've also seen this broader shift in companies from fix the balance sheet to now start to think about paying dividends, growing

dividend-- dividends, creating shareholder owner value and that is something that is really attractive. >> tom: how much has been driven by the low yield environment out there generally speaking for bonds. >> certainly that played into one of the things that we saw that was very interesting. and you know, really a bit of an anomaly when you can invest in a company's equity of being owner and actually have a dividend yield that might exceed, match or exceed the rate you can match on that same company. >> tom: and that's the case for one of these you want to talk b intel, clearly not a classic dividend may at all. but has certainly been seen as a very big dividend player and one that has room to grow. >> yeah, certainly. mean intel, clear global leader in semiconductor manufacturing design, something that we think is very entrenched. tremendous manufacturinging process and a continued commitment to research and development of new products. >> tom: the market has got very concerned about tablets. and i have an ipad, i love tablets but we think it's a

an extreme-- extreme overaction in terms of the health of intel as a company. we think they will be a foremidable competitor in tablet design. >> tom: does a found like the franklin income fund buy intel for its 3.5% dividend or stock appreciation. >> it's certainly both. and i would add on top of that, the opportunity for dividend growth over time. >> tom: okay. >> we're looking at the overall balance sheet, the cash flow characteristics of the company going forward, and that all adds to the process. >> tom: a couple more interesting ones i want to choose which is pepsico, another not classic dividend player in the consumer space and with gasoline over $4 a gallon, are people still going to buy their snacks and pepsi cola. >> certainly not a classic dividend payer. one of the things i think is very healthy about dividend investing today is you do have the opportunity across so many different sectors. maybe these nontraditional areas to get attractive dividend yields. pepsico is one that we like. we think there's both unique company characteristics that we like about it. the opportunity for

synergies around the bottling acquisition that they have done but also a tremendous play on the global markets. >> tom: i've got just a half minute left. i do want to mention financials. because those are expected to begin or continue or increase dividends once again in the coming year. jpmorgan is your choice here. >> yeah, it's one where you have owned a number of jpmorgan securities equities as well as yield or consequented securities. we do think we are at a point where company is doing much better, losses are coming down, reserves for losses are coming down, creating a tremendous amount of capital, excess capital potentially going forward. we do think they will be very close to the starting to think did about dividend growth. >> tom: discloseures for these stocks. the fund has positions in all three. >> correct. >> tom: all right, ed perks with us, portfolio manager at the franklin income fund. >> susie: here's what we're watching for tomorrow: jobs! as we reported, the february employment report is out. we'll see if it meets or beats expectations. chris orndoff of western asset management is back as our "market monitor" guest.

despite worries about rising interest rates and housing, he isn't afraid to buy government bonds. but he's doing it in a way that's a little different. a florida federal judge has put his january ruling that the obama health care law is unconstitutional on hold. district judge roger vinson stands by his decision, but he thinks it's in the nation's best interest for states to keep following the law for now. he wants an appeals court in atlanta to rush its review process. that way, his ruling and the law's validity can be considered by the u.s. supreme court. >> tom: meantime, cigna healthcare faces a $100 million gender discrimination lawsuit. a female manager is suing the company, claiming it unfairly blocks female employees from promotions and high paying jobs. the lawsuit is seeking class- action status. cigna says it's reviewing the complaint, adding the company is committed to diversity and equal opportunity.

>> susie: in silicon valley, the land of high tech, there's nothing more sacred than intellectual property. but tonight's commentator says, unfortunately, that's not true everywhere. he's harry lin, c.e.o. of taaz.com, a venture capital-

backed technology start-up in san diego. >> there's a strong rumor that an internet company known as the "facebook of china" is going to go public on the u.s. market this year. renren, which means "everyone" in mandarin, is a popular social-networking site in china. unlike facebook, which dominates social networking in this country, renren has many competitors, or clones. see, in china, the difference between competition and copying is blurry. the notion of protected intellectual property, copyright, and trademark is strong in the u.s., but vague in china. i love that street in shanghai that's around the corner from that city's version of rodeo drive that blatantly sells knockoffs of gucci, armani, nike, louis vitton. i love all the restaurants that sport logos that look eerily similar to other well-known restaurants. and of course, let's not even mention dvds, video games, and software. even renren's color scheme once matched facebook's.

my own tech company's software was illegally copied by a chinese company last year. in talking about our case with the fbi's i.p. violation group, i realized firsthand what i've heard about from so many companies-- that "competition" in china often means "copying what you do for less." as long as that exists, innovation and invention wont be the basis of chinese competition. i'm harry lin. >> tom: and finally tonight, the mantra for investing is "start early and take risks when you're young." but generation "y"-- adults between 18 and 30-- may not be listening. anna olson looks at why they're not investing and what it could mean for their financial future. >> reporter: sara cameron speaks for many members of her generation when she says she can't afford to invest. >> i do not invest right now, and i do not have enough disposable income really to put it out there. >> reporter: she's not alone. just 21% of gen-y'ers are investing, according to a recent harris poll. 53% haven't started saving for

retirement. and 33% say they have no savings at all. jack vanderhei at the employee benefit research institute says not planning for retirement could spell trouble for gen-y'ers. >> the fact that you're ignoring all those years of contributions that are going to have decades worth of investment return being generated is going to be put you in a very, very bad situation. >> reporter: gen-y'ers seem to understand that. the problem is many of them haven't been able to really get started. >> it's not a bad idea, if you can afford it >> i feel like investing is definitely worthwhile, and you're going to see returns on your money in the future. but at this point in my life, i don't have enough disposable income to be able to invest a lot. >> reporter: with many people in their 20s, unemployed or settling for low-paying jobs, some experts say gen-y'er's wages could lag for a lifetime. in other words, an entire generation may never have as much money as their parents did to invest.

that's why vanderhei says even putting aside a small amount for retirement in your 20s is important. >> if anything, it would increase the desirability to start young and stay with it every year. >> reporter: but bob pozen, chairman of mfs investment management, thinks twenty- somethings still have time to get on track. >> i'm not sure we should be that concerned that people in their 20s are not investing a lot, because their more long- term behaviors will be determined pretty much by what they do in their 40s, when they have a lot more income >> reporter: and while that might be true, gen-y'ers who wait until their 40s to invest will still have to play catch up. anna olson, "nightly business report," washington. >> susie: that's "nightly business report" for march 3. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is

made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org