Them. Every major american automaker reported sales that were way above estimates and if this keeps up, the industry is on track to sell nearly 17 million vehicles this year. It hasnt seen that many since 2005. Now, the gains were across the board, chrysler sales up 17 , it was helped by surging demand for jeeps. General motors rose 13 . And thats despite recalling millions of cars. And ford had its best may in a decade. Sales were up 3 . Investors likeded what they saw. Gm shares rose more than 1 . Ford also higher today. Phil lebeau has more on why sales were red hot in may and look ahead to how the summer is shaping up for the automakers. A big day for the Auto Industry, as most of the major automakers reported may sales that were much better than expected. Depending on the automaker, they beat street estimates by between 2 and 6 . And a couple of storylines stand out. First of all, recalls, particularly at General Motors are not keeping people out of the show room. Gm, in particular, reported sale gains of 13 for the month of may. Almost doubled what many were expecting. Also, this is not a case of the industry sweetening the deal in order to push metal in the show room. In fact, the average incentive last month was just under 3,000, roughly where its been for the rest of the industry all year long. And fine linger the big focus now will turn on what kind of inventory levels we see for the remainder of the summer. With this may, many are wondering if sales will remain this robust in june, july and august. And if that happens, will automakers have to increase production . At this point, almost everybody agrees, its little too soon to say that the industrys ready to build more cars and trucks. By the way, june sales, they are expected to be strong but not as strong as they were in may. Phil lebeau, nightly Business Report, chicago. So, which other Companies May be benefiting from last months blowout auto sales . Get some answers from jamie albert teen, Vice President with stiffle equity research. Jamie, welcome. Good to see you. When i thought of which Companies Might be a beneficiary here, i thought of some of the Companies Like masco that make auto interiors, johnson controls, the engine makers. You go a different way. You like a couple of dealers. He do, indeed. I think one of the things i would highlight from the may sales results, two things. The first is retail sales strength across all the manufacturer, virtually all the manufacturer reports were highlighted today. It tells us thats more than sort of fill in the fleet channel, if you will. And the clearest way actually to play the retail sales strength is through the retailers. We look at auto dealers, like penske and lithia and quite frankly, in group one, are three buy rated auto dealer names. We think there is a really Good Opportunity here to benefit from the new vehicle surge, as well as some of the dynamics in Public Service markets as well. Tell us more about the parts and service area because i guess you get a car and you are still have to service it and you dont necessarily have to go to your dealer. Theres warranty service, zero to 40yearold vehicles and customer pay, i think where dealers have a tougher time retaining customers and lose some share to the aftermarket, but the fact that we are seeing new vehicle sales surging earlier in the decade, just now getting that benefit point warranty side of the business and parts and service, their highest profit channel or vertical, if you will. So, thats really strong indicator for Earnings Growth in the year ahead. One of your choices there was monroe muffler. Another was lk hugh, i believe. So its a little bit counterintuitive on the service side. I think as a result of more consumers replacing vehicles rather than repairing, its gonna constrain the comp Sales Recovery i full, at monroe. Thats really good for m a. Thats one of the most fragmented markets in all of retail. We like the acquirers, net share gainers as a result. We recommend mnro. On the lkq side, their auto distribution company, we have also been hearing in addition to sales strength at the retail channel, vehicle miles traveled have been continuing to increase and the outlook for the summer is actually quite strong. More vehicles on the road tends to make for more collisions and lkq is a big distributor in the collision and body market. Jamie, you heard our report and phil was saying this so far, the sometimes are that june is not going to be as strong as the may was. What do you see for the next couple of months for how the Auto Industry sales are going to go and what do you think of kbchlt m and ford . Well, first, on the industry, i think youre going to have to see more months in the sort of mid16 million territory to get to most analysts, including yoursu zk first year. We are still modeling 16. 25 Million Units for the full year, full percent Industry Growth but not likely we will trend higher than that throughout the strong summer selling season. As it relates to ford and gm, i think ford is really more focussed now on a product transition them scaled back production to some degree. They are selling down older units to make way for their more refresh models, not the least of which is the f150 coming late this year, early next year. Gm is a different story, as phil mentioned in his segment, the recall impact has been nil. As we have expected, toyota recalls earlier in the decade subjected, theres not a connection to market share erosion, so, gm in the short term, i think, any selloff related to recalls is an incredible buying opportunity for them specifically. Jamie, thank you very much for helping us tonight. Jamie albert teen, stiffle equity research. Thank you. And sticking with cars, some news today about the people who make a lot of those american cars. The United Auto Workers voted to raise membership dues by 25 . Thats the first increase in 47 years. The historic vote will shore up the unions struggling finances. The increase goes from two hours of pay per month to two and a half hours and it could raise an additional 15 million a year. A little bit of profit taking on wall street today with the dow and the s p 500 closing just below mondays record highs. The major averages were down slightly, even though a new report showed strong pickup in factory orders for april. Heres a look at the closing numbers for a tuesday. The dow fell 21 points, the nasdaq down 3. The s p slipped a fraction. Now, among the decliners in the dow today, at t. And thats surprising, because today, the Telecom Giant raised its fullyear revenue forecast for the second time. Thats after signing up more wireless subscribers. But shares slipped a fraction. Heres Morgan Brennan with a look at whats behind the companys rapid growth and why the stock didnt respond. Its the second time at t has upped its 2014 outlook and it speaks to a larger shift in how the Telecom Giant is making money. The stronger forecast comes from higher sales of wireless devi s devices, driven by the growing popularity of pricing plans like the next program. Nexttolast customers to buy smartphones without a contract, using a monthly installment plan to upgrade more frequently and at the phones full price, meaning at t doesnt have to shell out for a costly subsidy, something thats long been associated with twoyearannsx contracts. Next field 40 of smartphone sales in at ts Fourth Quarter around this quarter, drive more than half of all phone sales. Experts say it marked a fundamental shift away from subsidies, but at the expense of wireless services. Thought process here is that the consumer has more visibility in terms of what they are firing handsets versus what they are paying for service and what at t has done with their Service Plans is they have reduced the pricing plan for the Service Plans to be more competitive in the marketplace. Reporter at t is adding new monthly customers, expected to gain more than 800,000 in the second quarter. That would be the biggest quarterly increase since 2009. But investors are nonplussed. The stock barely moved on the news, ending the day down half a percentage point. Thats because its not yet clear whether at t can translate its growth in revenue into growth in profit. Put and takes, from a relative perspective, clearly seeing some benefit from the equipment side. However, you know, obviously, the existing base being priced down could be negative longer term. Reporter analysts note at t has many moving parts now. Pricing competition is fierce among wireless providers like competitor tmobile. And of course, theres the merger. At t has proposed to buy satellite tv provider, directv, for 49 billion. That faces a steep approval process and analysts have questioned the move. For nightly Business Report, im Morgan Brennan. Still ahead, what Office Landlords are doing to manage not only where you work but also where you live and play. Thats coming up. The city of chicago is taking on big far ma. It is suing five of the Worlds Largest painkillermakers, accusing them of hiding the health risks of potent drugs, like oxycontin. Of violating local laws against false advertising, conspiracy, Insurance Fraud and Consumer Fraud by marketing the painkillers as rarely addictive and the city says that listed benefits lack any scientific support. The Companies Named in the lawsuit are activist, endo health solutions, janssen pharmaceuticals, a unit of johnson johnson, perdue farm la andself lon, a division of tefa. Meanwhile, cries the country in seattle washington, an historic vote raising the citys minimum wage to 15 an hour. It will be phased in over three to seven years and will be the highest minimum wage in the country. And double the current federal rate of 7. 25 an hour. So, will this be a test case for other American Cities and states and does 15 an hour make economic sense . Gary better plus, an economist at the Brookings Institute spores a minimum wage hike and jane shirk, at the heritage foundation, is opposed. James, let me first of all, welcome, gentlemen. And james, let me begin with you. Why are you opposed to it . You think 15 doesnt make economic sense, huh . You need more than good intentions. You need good results. We are talking about an already weak economy, where businesses are struggling with the cost of the Affordable Care act and obamacare and now youre proposing doubling the cost of hiring entry level workers . The only way they are going to be able to respond is by cutting jobs and raising prices. I assume you like or embrace the concept of a minimum wage to begin with, but why should the government, and especially a city, be engaged in the business of setting labor prices . Well, its little easier to justify to the federal government, the federal government is raising the minimum wage on a nationwide basis. It means that fundamentally, employers get to take wages out of the negotiating with their workers. The minimum wage workers are receiving this minimum wage and it has a much less severe, adverse employment affect. You just do it in one city the danger is that in that one city, businesses in that city are going to lose out to businesses thatvk8; are in the suburbs, the minimum wage remains lower. Thats the danger here. Mmhmm. Let me ask you, james, go back ajuau of all, what do you think of what gary just said and also, what you be in favor of a higher minimum wage higher than what the Obama Administration proposed of 10 and change or do you want to keep things status quo . I think it makes more sense if youre going to have a minimum wage, to do at the state or local level, learn the federal level. 15 an hour i think is going to hurt a lot of people in seattle. That would be like dropping a nuclear bomb if on the economies of West Virginia or arkansas. Youve got huge differences in cost of living across the country. And something that in an urban area, would be quite painful in would be absolutely devastating in rural and areas with lower cost of living. So, i dont think you would want one federal grade r you would want to allow the flexibility for local areas. But roughly speaking this is a weakened economy. The the Affordable Care act is making it harder to hire less skilled workers for fulltime position. An unprecedented level, which is what 10. 10 an hour would be is a huge mistake. Your point is that at 15 an hour the businesses in seattle may lose out because over in bell view, the minimum wage maybe 10 an hour and they can charge less. Correct. I want to come back to the question i asked initially, why do we need a minimum wage in the first place . You seem to answer by saying that we need it because it takes a salary negotiation off the table when youre dealing with lowwage workers. But why philosophically is minimum wage a good idea . A, something that a great majority of american citizens support. They think that the federal government should put its thumb on the scale, helping lowwage workers earn standard of living through their own efforts, it brings them closer to the middle income level. And b, it is a very easy kind of Labor Regulation to enforce. It is much cheaper than raising taxes and redistributing money to people. Those are the two main advantages. It agrees with american views about how lowpaid labor should be paid and second, it is much cheaper to do than most other ways of making poor families better off. Lets just get you to respond to what james was saying this is not a good thing for the economy because its not fully recovered right now. Do you agree with that . Some do argue that if you raise wages for the lowest workers, they are going to have more money to spend. And that would be a good thing for the economy. Sort of like a catch22 here. I think that we want to keep it straight r are we talking about raising the federal money him or just one citys minimum . From what i understand, the seattle area is actually doing quite well. Its in spite of having the highest minimum wage in the country on a state basis in washington, the washington economys doing pretty well. But in particular, the seattle economy is doing pretty well, which i think is the reason seattle is the first city to enact such a high minimum wage. They feel prosperous. They feel like they can give the lowpaid people in the city a wage hike and thats what the citizens elected their mayor to do and thats what the mayors trying to do all right. Gentlemen. Thank you both very much for joining us. Really appreciate it. Gary better plus with the Brookings Institute and james shirk at the heritage foundation. The Purchase Price for hill shire brands is fattening up, that is where we begin tonights market focus. Pilgrims pride upped its offer for themaker of jimmy dean sausages to 55, valuing the company at about 6. 7 billion. That trumps a 50 a share offer from tyson foods. The new price is a nearly 50 premium to hill shires Closing Price before the takeover bid on may 27th. That was 45 a share. Hill shire shares popped another 9 to 58. 65 while shares of pilgrims pride fell 2 to 25. 34 and so did tyson. It closed at 42. 08, down 3 . Dollar general says it expects Gross Margins to improve as it focus on more profitable products like accessories. The discount retailer reported lowerthanexpected profit but the company reiterated the fullyear outlook, it is continuing to open new shore stores. That sent shares up to 56. 41. A rough day for casino stocks. Las vegas sands, wynn resort, mgm all tim belled after a Deutsche Bank report that said cow gaming revenue was up less than expected last month. All three companies were down at least 2. 5 . Sands closed at 7544. Win at 20823, in. Gm 232538. Another highprofile investors betting big on fannie mae and freddie mac, carl icahn. The billionaire investors bought 51 million in Common Shares of the Mortgage Companies from mutual fund manager, fair home funds. Bill ackman is another activist investor who has a large position in that company. Shares of fanny up 4 1 2 to 4. 64. Freddie rose more than 3 to 4. 59. Soaring green coffee costs is rising prices. The products will go gown 9 . Smucker is the owner of folgers and dunkin donuts. Shares rose a fraction to 102. 94. And panera is changing up the recipe for its menu offerings. The company will remove all artificial colors, flavors, sweeteners and preservatives from its food by the year 2016. It didnt say how much the effort will cost or whether it will impact prices. Shares were off slightly to 154 and change. A changing landscape in the real estate market. The commercial sector is trying a new business approach to catch up with the housing sector where price and sales have been soaring. The number of Office Building landlords are now turning to technology to lure small Tech Startups and hopefully rent out Vacant Office space. Diana olick has our story. Reporter in a sparse space in crystal city virginia, more than a dozen Small Companies barely stand out from each other, but they are plugged in, into a fund that aims to serve them at every level. What we are doing kind of doing it top down from here. We are saying, hey, lets dangle all this money in front of the high Group Companies and make them a compelling offer of where they can live, wor