>> susie: european policymakers give the okay to a multi-billion dollar bailout package for greece. that helps the dow jones industrial average break through 13,000, briefly. >> i'm diane eastabrook in chicago. i'll tell you how food manufacturers are getting more while consumers are getting less. >> tom: we put that question to the c.e.o. of general mills, and hear how he's fighting inflatiot n. its our exclusive interview with ken powell. it's "nightly business report" for tuesday, february 21. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

captioning sponsored by wpbt >> tom: good evening and thanks for joining us. a reprieve in greece, but the risk has not been removed. european policymakers signed off on a $171 billion aid package for greece early this morning. now, private investors have to approve the deal, susie. >> susie: tom, there are some doubts about getting that approval, but investors here on wall street were relieved that greece will not default on its debt. the news powered u.s. stocks, helping the dow break through the 13,000 level, briefly. but by the closing bell, the rally fizzled-- the dow was up by only 15 points, the nasdaq lost three, and the s&p inched

up a point. >> tom: this new agreement to save greece from going bust focuses on getting lenders to forgo loans, and for greece to stick to its budget. this deal is called both ambitious and long-awaited: 130 billion euros-- about $170 billion-- to make sure greece doesn't default next month. it's the second bailout in less than two years. private lenders to greece have to agree to take a bigger than expected loss. for every dollar these lenders handed to greece, they have to agree to take just 46 and a half cents. that's called a haircut. greece gets to cut its debt load, and for the i.o.u.s remaing,reake more time to pay them back and pay much lower interest rates. the goal is to bring down the size of greece's government debt compared to its overall economy. for greece's part, in order to cut its debt, it will have financial officials from the european commission on the ground in athens, making sure it sticks with its spending cuts. this is an unprecedented move, having outside financial watchdogs with "an enhanced and

permanent presence in greece," according to the euro-group. mujtaba rahman is with eurasia group. mujtaba welcome to nba. this deal is nine months in the making does it become a reality? >> i think so. the idea that greece would be able to sinks in to a disorderly default was not a real proposition. we knew we were going to get a deal. we knew that the psi the private sector involvement exchange would go through. i think a real question was a more medium term. the back of the year at the beginning of the next when the program begins to slip and implementation and how will the euro zone policy deal with greece in that situation. >> what you are saying is the risk is not on the private lenders but on the fiscal discipline to greece. >> i think the risk emanatesfroe which greece has to undertake.

germany and bin o bunch of otheo zone countries. that is the real risk. >> when you look at the numbers it's beyond sic psych al. and i think we'll see slippage continue into th into. >> what are the penalties for greece. the private lento lend or is taa big haircut but they want to get something. >>less the ultimate will be two solutions. >> the first will be a massive right down to the official sector and holding greece sovereign debt. >> does that mean the european central bank write down what they loaned or the european monetary fund. >> the european central bank hat to hold on to their super senior

status. what i'm talking about is the bilateral loan. >> that is point one.e second pe off of sovereignty. in order for germany to make that commitment you would see greece give up more economic sovereignty. >> let me ask you about themark. kind of a positive reaction. do you expect that toe continueo continue up through the year if you see slip and. >> i think the market reaction . allowing greece to defraugh defd not be a good out come. they have been holding a sovereign debt and that is likely to create more problems and portugal looks like they are in the market next year and the idea that greece will return to the moore deat market in 2014.

mujtaba rahman is here with us tonight. >> reporter: i'm diane eastabrook. still ahead, sticker shock in the grocery aisle. >> susie: and we talk food inflation with the c.e.o. of cereal maker general mills. retail stocks were in the spotlight today. walmart shares dropped 4% after its fourth-quarter results missed analyst expectations for both earnings and revenues. meanwhile, macy's shares rose about 1%, nearing a 4.5 year high, after it's quarterly results beat analyst forecasts. revenues at the company's macy's and bloomingdales stores jumped 5.5% to $8.7 billion, thanks to strong holiday sales. the department store chain earned $1.70 a share, five cents more than estimates. joining us now to talk more about may see' macy's ceo terry.

>> how is the outlook. >> we have a consistent run forn place and my talented team is in place and we'll feel good about what we are looking at heading into 2012. >> you heard that there are a lot of oil experts forecasting that gasoline prices will be up to $5 a gallon. will this deter shoppers from coming into your stores? >> i don't think so, at least in our case, we have had so many obstacles in the last few years. >> this one seemed like a slighter opposed the gigantic curve ball with the unemployment as high as it has been and the economy so rough. we have had out standing performance the best in the decade. i'm confident we'll be able to nav gam gailtnavigate average as

well. >> what can you do to get people to come into the store and buy even if there are not mas mark s so mac macy's can everyone earn. >> we need the right products with the brands they trust and the prices they are prepared to pay. that is difficult to do when you have 850 stores across the country. but we have managed to do that. it's a longer story than we have time to talk about but it's about a talented group of individuals that are di dispursd around the united states where they are influencing what we are buying. that is the see ye secret and ts going to drive our success into the future. what do you think of the j.c. penney's new strategy on the offering super low discounts on one or two days of the month. does it make sense to you.

>> >> it's a nice condition andther strategy and they have to do different things. noticin the meantime our strates working so well. we have to stay right with our strategy because we have the one that is working. >> >> you said the other day thattg 4000 people this year. is that because growth is so good or that you have been so lean so long. >> we have been hiring. we hired last year and we are hiring again this year. we are opening a brant branltd w fulfillment center. >> we are hiring because we are. >> how about on the flip-side.ws are slowly immoving. im-- improving. is this having an impact on macy's business. >> that is more of a positive. i think more psychological than pure numbers. i think if people are feeling like unemployment is improving.

give them confidence that the job they have they are hanging on to. companies like a ours that are hiring. gives them more confidence on planning four the future. it's good for us and we like to see more retail. >> terry thank you for coming o. >> thanks susie. >> we have been speaking with terry lundgren of macy's. clu

>> susie: a high profile management shakeup tonight at one of the nation's biggest makers of health care products, johnson and johnson. long-time chairman and c.e.o. william weldon is stepping down. he'll leave the company in april. in the company has tapped j&j vice chairman alex gorsky as the new c.e.o. the changes come after an embarrassing string of recalls of j&j's tylenol brand-- 25 recalls over two years. that cost millions of dollars and a big loss of consumer trust. >> j and j shares gained a fraction at the regular session. >> they have been traded at $55. go ahead with the rest of the market focus. >> for the first time since before the financial crisis, the dow jones industrial average touched 13,000, but closed just below that level.

the blue chips finished the session with a small gain, even though the broad market was more mixed. since it's low in october, the dow index is up 21%. but small stocks have done even better in these times of uncertainty. the small-cap russell 2,000 stock index is up 35% since its october low, and the s&p 400 index of medium-sized companies has shot up almost 32%, both indicating investor appetite for risk. but some point to one concerning move by the dow transportation index. transportation stocks can be indicators of things to come, and this exchange traded fund following the dow transportation index has been trending lower since early february. the group of railroad, trucking and airline stocks has been under pressure as energy prices have heated up. crude oil tonight is at its highest price since may. the u.s. benchmark oil price is almost $106 per barrel, up more than $2 today. optimism about the greek bailout deal combined with iranian threats about reducing its oil exports have helped oil go from the mid-$70s to over $105 in the last five months. susie mentioned walmart's stock drop today-- it held today's dow

industrial gains in check. the selling came as the world's largest retailer reported earnings one cent shy of estimates. but some analysts also voiced concern the company may be going too far in cutting prices, and thus impacting its profit margins. its almost 4% drop of its stock price led the losers for the dow industrials. volume was heavy, as well, as it came off a 52-week hit last week. we have a closer look at walmart's stock chart on our web site. it's under the "blogs" tab at nbr.com. now, home depot was able to continue rallying to prices not seen in almost a decade. shares gained a half-percent, but volume doubled as the company reported stronger than expected earnings. the company credits the mild winter weather for helping sales, as homeowners didn't wait for the spring to start home improvement projects.

and that's tonight's "market focus." >> susie: kraft says price hikes helped it make more money in the fourth quarter of last year. but those higher prices also cost the food manufacturer customers. food companies have been raising prices to cover higher commodity costs. as diane eastabrook reports, sometimes, it takes a skilled eye to notice them. >> reporter: this is the sound of sticker shock at the grocery store. for the past year, customers at harvestime foods in chicago have been getting squeezed by higher prices from the produce aisle to the cereal aisle. higher commodity prices are to blame. store owner chris dallas shows how food manufacturers have been passing the higher costs on in subtle and not-so-subtle ways. >> breyers ice cream, which used to be a half gallon-- it's no longer a half gallon. we're now missing quite a few ounces from there.

couple of items here that we had an incredible price increase. one was the ancient harvest quinoa went from $4.50 to almost $8.00. >> reporter: coffee has also gone through the roof. analysts say its up almost 30%, year over year. chicken prices have increased roughly 15%. larger chains like walmart and costco can absorb the hikes more easily than a small grocer like harvestime. still, dallas tries to give his customers a break when he can. >> if an item went up, let's say, 15%, we might raise our price 10%. >> reporter: morningstar consumer products analyst ken perkins thinks the worst may be over. >> i expect there to be some inflation, but a lot of the companies have been saying they expect these costs to have peaked. but we still expect them to flow through the next couple of quarters. >> reporter: once commodity costs stabilize, perkins thinks many food manufacturers may actually reduce prices. but dallas says don't expect them to give back every price hike they've taken over the last

several quarters. diane eastabrook, "nightly business report," chicago. >> tom: j.m. smucker, campbell soup and heinz are among those food companies that have raised prices to fight higher commodity prices. in some cases, those higher prices have led shoppers to buy fewer of their products. general mills is among them. from cereal to snack bars to ice cream, general mills products are in the cupboards and freezers of most americans. c.e.o. ken powell says his input cost-- in other words, inflation-- is the highest he's seen in 30 years. we spoke exclusively to him today after general mills warned last week higher costs mean it won't reach its financial goals this fiscal year. we have a very, very high focus on the whole you know issue of globalization and demand driven. 80s or $ 90s inflation has been benign. our planning is going to be mid

single digit. that means we have a high focus on productivity. something we call hoe lis holisc market manag management we so wn absorb as much as we can. in a typical year we can cover most of it with our productivity. this year we couldn't. no one in the industry could. hence you saw the pricing across the ca categories. >> are you changing packagingsi? >> this year all of our prices have been increases or changes in the promotional plan from time to time. from time to time we have adjusted the size of packages but that is less th one or 2% of the pricing we take. the pricing tenldz t tenldz to e straight-forward. one stratagy that general mills is using to combat is it

rolling out dozens of products worlds wide. wide -- worldwide. in june they will be rolling out 50 new products. we have new crye varities of chs and fiber one brow bars an haäan dazs secret sensation we have launched in europe. a products with a liquid center and o a wonderful product. across our cereal line, all of our cereals we have increased the whole grain content. we continued to increase it over the last months and even more. now the number one ingredient in our cereals. there is renovation if you will across established brands and lots of new products. that is typical for a company like general mills. it karv can be 50% of our net s.

and international business it makes up a quarter of their sales. less than a yearal ago 20% came from overseas fee spite the dese warning they will come up short it won't impact future difficul- difficuldividend changes. >> we continue to advertise ando what driver drives our businessr the long term. really the impact of high inflation in the short term we know that will moderate over time of the. thank you very much ken powell the ceo of general mills. >> thank you very much appreciate it. >> susie: with more and more companies facing huge payments to their pension plans this year, more and more americans might be asked to share the risk. that could come in the form of a

lump-sum penson pay-out. it's a move putting working americans directly in control of their retirement planning. as darren gash reports, it's something that can be both empowering and risky. >> reporter: generally, video of a pile of cash does not make for exciting television. but if you are one of the millions of people who could be offered a big pile of cash this year, this picture gets pretty interesting. in the pension world, a big pile of cash is called a lump sum. a lump sum is a check for the current value of a stream of pension payments promised over many years. >> lump sums provide an opportunity for plan sponsors to give those assets to participants, and have the participants share the gain and losses and risks attached to those investments. >> reporter: we're talking about lump-sum payments now because congress changed the pension rules back in 2006 to make it cheaper for employers to offer former workers a lump-sum pay- out instead of keeping them in a pension plan. those rules were phased in and

took full effect this year. one out of ten employers already offer a lump-sum payment as a way to reduce their pension risks. and five in ten say they are somewhat or very likely to offer lump-sum payments to former employees in the next two years. as you might expect, many former employees are more than happy to take that big pile of cash. >> they like control over their finances and their money. and they like that sense of control and they feel like they are capable of doing it. and the other reason is if the money were paid out to them slowly over time, they're afraid they won't live long enough to recoup it all. >> reporter: but experts warn all the reasons employees say they like lump sums are also reasons not to take them. they're going to be... face the risk of potentially outliving their assets at some future point in time and becoming

destitute. >> reporter: the decision between the lump sum and the pension plan is a complicated one. financial planners say it's important to think carefully before jumping at that big pile of cash. darren gash, "nightly business report," washington. >> susie: as we reported, oil futures traded at a nine-month high today on fresh worries about supply disruptions. tonight's commentator worries those higher oil prices could hurt the u.s. economic recovery. he's simon constable, columnist at "the wall street journal." >> something in the middle east has a good chance of blowing a hole in your pocketbook. a growing spat between israel and iran has oil prices surging. a row between sudan and south sudan is making it worse. right now, oil costs $106 a barrel, up from $98 at the beginning of the month. what that means for you is higher gas prices-- much higher. a gallon nationally now averages $3.57, up 13% from a year ago, according to the latest spending pulse report.

it will likely breach the dreaded $4-a-gallon level soon. it's already hit $4.04 in california, according to aaa. heck, it's not even summer driving season yet. so, what? well it's likely that this surge in prices will worsen and put the brakes on a very fragile u.s. economy. think of it like a tax hike just when we don't need one. these higher gas bills will suck money out of your wallet that could have been spent on other things. it will be bad for jobs. it means it could be time to hunker down and save whatever extra cash you have. i'm simon constable. >> tom: finally tonight, content is king. remember that phrase from the late '90s? it still rings true, especially when a new star emerges, like new york knicks point guard jeremy lin. his sudden popularity helped end a black-out of the knick's msg network on time warner cable. it's on tonight's "beyond the scoreboard" with rick horrow. >> reporter: there's no way of knowing how big of a catalyst jeremy lin was in settling madison square garden's month and a half fight with time warner cable. what's certain is, in these cable disputes, the sports content providers like msg have

all the leverage. sporting events are one of the few things people still watch live, and with most games still difficult to watch on the internet, having access to channels such as msg is an incentive not to cut the cable cord. however, as the costs of sports rights increase, cable subscribers are paying the price. disney's espn, which has multi- billion dollar tv deals with the nfl, nba, mlb, and several college conferences, charges cable companies nearly $4.70 per month to include it on their channel line-ups. by comparison, tnt is the second most expensive national network and receives just $1.16 a month in subscriber fees. the challenge for sports tv is that content providers stiff-arm their way into homes, driving up your cable bill. for instance, 99 million americans have to pay to have espn, whether they watch the

channel or not. if rights fees continue to skyrocket, non-sports fans could rebel and drop cable altogether in favor of digital tv- everywhere models. in response, cable operators could move towards a-la-carte programming, in which consumers choose specific channels they want rather than general tiers. but that may threaten their own bottom lines with subscribers signing up for fewer channels. i'm rick horrow. >> susie: here's what's on tap for tomorrow: we look at whether a turnaround is finally gaining ground in the housing market with the latest data on existing home sales. we get hewlett-packard's quarterly report, the first earnings report under new leader meg whitman. and it's not your mother's tupperware-- we stop in the tupperware kitchen for a conversation with c.e.o. rick goings. that's "nightly business report" for tuesday, february 21. 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: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org r