SUSIE GHARIB: On Wall Street today, investors feeling more confident about no more rate hikes this year. Stocks notched higher. The Dow added five points, and the NASDAQ gained 52. One sector that generally benefits from stable interest rates is financial stocks. Erika Miller takes a look at whether it's now safe to make new deposits in financial stocks.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Investors in financial services stocks have been laughing all the way to the bank recently. After a steep sell-off in the first quarter, the sector has mounted an impressive comeback. The Keefe Bruyette Woods Bank Index, or BKX, is up 15 percent since the start of the year. Meanwhile, the overall stock market is about where it started in January.

CHRIS BLUM, FINANCIAL SERVICES ANALYST, EDWARD JONES:Financial services stocks, and banks specifically, have been rallying, because I believe investors have begun to get a sentiment that the Federal Reserve is approaching an end to the interest rate hikes.

MILLER: When rates rise, banks face more pressure on their lending margins, as well as increased risk that borrowers will default on higher priced loans. But that doesn't mean all bank stocks will do well. Analyst, David Berry warns it pays to be selective.

DAVID BERRY, BANK ANALYST, KEEFE, BRUYETTE & WOODS: We're a little cautious on a lot of banks who do commercial lending, particularly those who may be actively involved in syndicated lending. Not so much the folks who originated the credits, but the folks who buy them.

MILLER: He recommends investing in financial companies with significant exposure to capital markets. Berry especially likes the big brokerage companies - like Goldman Sachs , Lehman Brothers; and DLJ Donaldson Lufkin & Jenrette. Many of them surprised investors with stronger-than-expected second-quarter earnings. Going forward, analysts say brokerage firms will continue to benefit from recovery in the stock market. That's because a bull market encourages consumers to buy even more stocks, which, in turn, helps to boost underwriting and investment banking activity. Financial services stocks have gotten more expensive lately, but analysts think they're likely to go up even more through the end of the year. Unless the U.S. economy hits a major recession, analysts say investors can bank on financials to do well. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.


08/23/2000: President Clinton Gives CA Customers Power Over Electric Bills

SUSIE GHARIB: Well, some action today against skyrocketing electric bills. President Clinton announced plans to release more than $2.5 million in emergency funds to help residents and businesses in southern California to pay their power bills. Rates are double what they were last year in some parts of the region. The president also urged Congress to pass legislation that would speed up deregulation of utilities, nationwide.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: To establish a more competitive, efficient and reliable electric power system for our nation, and to beef up efforts to prevent utilities from abusing their market power, to raise rates above competitive levels.

GHARIB: Mr. Clinton says the reforms, along with tax credits for fuel efficiency, could save American consumers $20 billion a year on their power bills.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.

08/23/2000: Improving US/Mexico Economic Alliances

PAUL KANGAS: President Clinton also says he's looking forward to starting off a good relationship with Mexico's president-elect, Vicente Fox. Clinton meets with Fox tomorrow. As Darren Gersh reports, while the relationship may be warm, the United States and Mexico are dealing with hot issues.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: At 6'5", Mexico's president-elect, Vicente Fox is a big man, who must now meet some big expectations. A former Coke (KO) executive, Fox vows to maintain Mexico's blistering 7 percent economic growth. Fox also says he will double direct foreign investment in Mexico over the next six years.

DELAL BAER, CSIS MEXICO PROJECT: I think he must realize that in order to achieve a goal like that, there are certain steps that you'll have to take in terms of liberalization, and so I think that's good for both of our countries.

GERSH: As Mexico's first freely-elected opposition leader, Fox can count on a warm reception in his meetings with President Clinton and Vice President Gore, and later, with Texas governor, George W. Bush. The visits are billed as little more than"get-to-know- you" sessions, but Fox has already put the United States on notice, that he wants to broaden trade relations and increase the number of temporary work visas for Mexicans. It won't be an easy sell.

IRA MEHIMAN, FEDERATION OF AMERICAN IMMIGRATION REFORM: The United States cannot endlessly serve as a safety valve for their economic problems. We can help Mexico get back on its feet economically, but we can't simply take all of Mexico's excess population and bring them to work here.

GERSH: But some analysts say a small increase in legal immigration could relieve pressure along the border.

BAER: Perhaps legalizing more of these workers in temporary worker visas, in very carefully-defined niches of the U.S. economy, might alleviate some of those stresses.

GERSH: In return, Fox could offer U.S. companies access to Mexico's oil and natural gas resources. But that won't be an easy sell back home.

JORGE MARISCAL, LATIN AMERICA INVESTMENT STRATEGIST, GOLDMAN SACHS: Mexicans were glad to privatize their telephone company, glad to privatize their airlines, but they hold something dear about oil. And that's going to be a tough issue, a contentious issue with the opposition in Mexico.

GERSH: Fox clearly can use whatever help Washington can give. Mexico needs to create more than one million new jobs a year, just to keep pace with population growth. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.

08/23/2000: What's Next For IPO's Under Restriction?

PAUL KANGAS: In the wake of a record number of initial public stock offerings that came to market early this year, the time restrictions on the sale of many of those stocks by corporate insiders will soon be lifted. Tom Wolf, Bridge correspondent in St. Louis, is joining us now to discuss what the impact of these sales on the market might be. And welcome, Tom.

TOM WOLF, EQUITIES REPORTER, BRIDGENEWS: Good to be here, Paul.

KANGAS: How big is the supply of stock from this source?

WOLF: Well, there's 4.6 billion shares coming out of lock up in August, September and October this year. To put this in perspective, there was 2.4 billion shares that came out in the April, June and May period of this year when the NASDAQ hit its low. So about twice as much as back then.

KANGAS: So there's going to be a huge supply of this available. But if the future of these companies was promising, why would an insider sell now, creating assumed, a big tax liability if the stock is up?

WOLF: Right. Well, a lot of these companies only put about 10 percent to 30 percent of their stock public when the initial public offering comes out. And so that's about 70 percent or so that they still have. So the insiders hold a great deal of the stock and a lot of them want to diversify their portfolios and of course cash in on the bonanza that they have, that a lot of them have.

KANGAS: Right. Can you tell us the name of some of the stocks that could be most affected?

WOLF: Well, coming up there's Akamai Technologies (AKAM), HomeGrocer.com (HOMG), 360 Networks (TSIX) and the biggest one coming up next month is Infineon Technologies (IFX) and that has about 470 million shares coming out of lockup.

KANGAS: Do you think this will have a negative impact on the NASDAQ market overall since it's so tech heavy laden?

WOLF: Well, you combine that with the fact that there's $60 billion in IPOs and secondary offers in backlog and combined with the number of shares coming on the market or available for sale, that's likely to put pressure on the market over the next couple of months.

KANGAS: But usually the fall is not the worse time for the market overall.

WOLF: No and actually August has been OK, although it's usually a slow month. September is the better month with the last four out of five Septembers being up for the market.

KANGAS: So basically a bullish attitude overall could help the market absorb some of these huge offerings?

WOLF: Well, it sure would help keep some of the prices up, Paul, yes.

KANGAS: OK. Tom, thanks very much for enlightening us on this subject.

WOLF: OK. Thanks, Paul.

KANGAS: My guest Tom Wolf, Bridge correspondent in St. Louis.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.

08/23/2000: "Money File"-"Charging" College Students With Credit

SUSIE GHARIB: In the money file tonight, it's back to school season and if you're sending your child off to college, you'd better warn him or her about all those temptations out there. And we're talking, of course, about those tempting credit cards. Here's author Terry Savage.

TERRY SAVAGE, AUTHOR, "THE SAVAGE TRUTH ON MONEY": We all know that credit is not inherently dangerous. In fact, it's useful and almost necessary to have a credit card these days, if only for a financial emergency. But for students headed back to school, this is the time for a frank conversation about the rules of the money game and a reminder that spending done on credit cards has its costs. Those interest charges can snowball against you. To make that discussion easier, the major credit card companies, Visa and MasterCard, who've been facing a lot of bad publicity for marketing to students, well, now they've come up with a new way to approach the subject. Each has created a reloadable debit card, sort of like a prepaid telephone card. The amount of credit on the card is determined by a deposit made to a special account. The card can be used either for purchases or cash withdrawals at an ATM on a debit card basis. The really interesting twist is the tie in with the Internet. There, on a secure Web site, parents can immediately track their child's spending and cash withdrawals. And they can reload the cards with more cash at the same Web site, or through a touch tone telephone. Now, when you sign up for the card, you'll also get booklets to trigger that discussion process. Students get credit and a lesson in responsibility. Parents get control. Now that's my idea of Terry Savage's Money 101, a course our schools should be offering, but somehow never do. I'm Terry Savage.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.


08/23/2000: Surviving The Sims

SUSIE GHARIB: And finally, it could be America's favorite fake family. They're the Sims and they're now probably appearing on a computer screen near you. That's because, as Scott Gurvey explains, they're the fastest selling CD-ROM game in the country.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: If you dream of being in control this is the game for you. Create a family. Give each member distinct personality traits, build them a house and turn them loose. You may shocked by the result. This is the Sims, the top grossing PC game in North America for the first six months of the year, according to industry monitor PC Data. It is the creation of Will Wright.

WILL WRIGHT: Sims is a game about real life, you know? Most people don't realize it, but every aspect of their lives down to the minute to minute decisions they make is like a strategy game.

GURVEY: The Sims has been translated into 13 languages and has sold nearly two million copies worldwide. It is published by Maxis (MXS), a unit of Electronic Arts (ERTS). Maxis and Wright have been responsible for a whole line of Sim titles beginning with Sim City more than a decade ago. Urban planning was the theme of that game and while there are people, the player does not have control over the minute details of their lives. That minutiae is what the hot selling sequel is all about. Make a Sim neat and outgoing and he'll attract friends. Marriage is a distinct possibility. Make him an unemployed slob and all he'll attract is flies. If you forget to have them eat, they'll get sick and die. Forget to have them go to the bathroom and, well, you don't want to know. These games tend to foster creativity.

WRIGHT: These games tend to foster creativity. Everybody who comes and makes a city in Sim City or designs a family and a house in the Sims is going to make something completely different. And their experience of playing the game is going to be completely different.

GURVEY: In an age when computer games are viewed as something for children, take note. This best selling game is a hit with adults. There is even a Web site where players can download new Sims, home furnishings and other game objects and trade notes. The creators aren't talking, but sources say Sim Mars will be released next spring. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.

Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date.

The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT.

Information presented on Nightly Business Report is not and should not be considered as investment advice.

©2000 Community Television Foundation of South Florida, Inc.


08/23/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: As Wall Street opened for trading today, bank stocks were quite firm in the wake of the Fed's decision yesterday to hold interest rates steady, but the stock market in general moved lower as profit takers moved in. After all, since the beginning of the month, the Dow Industrial Average had gained 617 points, or 5.9 percent, while the NASDAQ Index had risen 191 points, or 5.1 percent. So, at 10:30 this morning, the Dow posted a 59-point loss, and the NASDAQ Index was down 42. Upon seeing rather light volume on the early sell-off, buyers soon came off the sidelines, looking for stocks that would do well in what was now perceived as a stable scenario for interest rates. At 11:30 this morning, the Industrial Average cut its deficit to only three points; the NASDAQ Index snapped back with a 14-point gain. A bullish call on the energy group by Merrill Lynch gave the blue chips firm support in afternoon trading, but the tech stocks were the standouts on the upside as the NASDAQ Index moved to its highest level since late July. The Dow Jones Industrial Average limped in with a gain of only 5 ½ points at 11,144.65. In today's 113-point trading range, the Dow closed down about 27 points from the best level of the session, but up 85 points from the worst level. The NASDAQ Composite came in with a gain of 52.80 at 4,011.01, highest close since July 25. In today's 109-point trading range, this Index settled a fraction below its very best level of the day. Big board volume moved up some 42 million shares from yesterday's pace, and about a 4-to-3 ratio of down volume over up volume.

The Dow Transport Index plunging 87 3/4 points as higher oil prices hurt the airlines.

But the Utility Index gained nearly 4 points to a new record-closing high.

Closing Tick just almost neutral at +70.

Standard & Poor's 500 up 7.84.

Nearly a 4 1/4-point gain on the 100.

The MidCap 400 hit a record high with that gain of 2 1/3 points.

Bridge Futures Price Index edged up 0.44.

New York Stock Exchange Composite at a record high, with that gain of 0.60.

A loss of 0.29 in the Value Line.

Russell2000 Small Cap up 0.42.

Broadly-based Wilshire 5000 just a modest gain of 79 2/3 points.

Bond buyers were in an upbeat mood today because they felt the Federal Reserve was over and done with raising rates, at least for the rest of the year, given a lengthening list of signs that the economy's growth is slowing. Another plus was solid demand for the Treasury's $10 billion offering of 2-year notes, and they were priced to yield 6.204 percent. Higher oil prices were a negative.

But not enough to keep tax-free and corporates from closing with gains of 1/4 to 3/8 of a point.

And the Treasury market ended with good gains as well.

A 9/32 run-up in the 5-year note.

The 10-year note up 12/32 with the yield down to 5.73 percent.

The 30-year bond up 19/32. Yield at 5.68 percent.

Lehman Brothers Long-Term Treasury Bond Index up nearly 6 1/2 points.

Well, it was a touchdown score today. It was up $6.19 or 16 percent, ending at $43.94 a share. Not exactly a runaway rally on Wall Street for the blue chip Dow, up only 5 ½ points, and the broader market actually lower by a 14 to 13 margin. But 104 new highs for the year versus only 50 new lows.

Compaq Computer (CPQ) topped the active list on, let's see, 17.4 million shares, stock down $0.69.

And then Albertson's (ABS) plunging $8.31. As we reported here, after the close yesterday the company reported second quarter earnings would be in around $0.50, $0.12 below the Street estimate. Today, the Alex Brown Brokerage (ph), UBS Warburg and Standard & Poor's all downgraded Albertson's stock.

Lucent Technologies (LU) down $0.88.

America Online (AOL) fell $0.13.

And then AT&T (T), fifth in volume, down $0.44.

General Electric (GE) up $1.69, nice move there helped the Dow.

Kroger (KR) down $1.19. The story on Kroger, it got downgraded by the UBS Warburg Brokerage from "buy" to just a "hold."

Nokia (NOK) losing $0.44.

Texas Instruments (TXN) coming back after a couple of days of weakness on profit taking.

And then Citigroup down $0.88, 10th in volume.

Colgate-Palmolive (CL) rising $2.13 after First Boston Brokerage upgraded it from "hold" to "buy."

Corning (GLW) down $4.13. The company has filed a universal shelf registration for up to $4 billion in various types of securities. A little potential dilution, possibly.

Delta Air Lines (DAL) down $2.56 in that weak group after New York October oil futures rose $0.80 a barrel to $32.02.

Dynegy (DYN) up $4.19. First of all, keep in mind this is a 2 for 1 split stock and the company said its expansion is going as planned, and on top of this, Merrill Lynch issued that bullish call on the energy group today.

And that helped ExxonMobil (XOM) rise $1.44.

Hewlett-Packard (HWP) up $2.75. That was the best point gainer in the Dow Industrial Average.

Quanta Services (PWR) had a good day, rising $6.25. The story here, the company's in a pact with Everest Connections (ph) to install its broadband in the Minneapolis-Minnesota area.

Too Incorporated (TOO) up $2.56. PaineWebber Jackson Brokerage optimistic about the company's third quarter outlook. The firm sells trend setting fashions for young girls and it's just about back to school time.

Smith International (SII), this is the oil drilling services company, up $3.38. Merrill Lynch named it a focus one stock and raised it a "long-term buy."

On the down side, big percentage loss, CSK Auto Corporation (CAO), in the auto parts business, down $4.25 after the company says it's going to have lower than expected second quarter earnings of only $0.30 a share. The Street was looking for $0.49. And the company also says sales will be flat. Lehman Brothers and First Boston both downgraded the stock.

Gtech Holdings (GTK) down $2.19. This company supplies gaming technology to Camelot. That's the company that's been running Britain's national lottery and today that company lost out on a new contract. It was voted out. So apparently Gtech going to lose some business there.

Fluor (FLR) down $2.56. Third quarter earnings came in at $0.28, way down from $0.66 last year. Revenues actually dropped 6 ½ percent and the company says 2000 operating earnings will be about 15 percent below 1999 levels. The stock traded as low as 26 today.

The NASDAQ Index up nearly 53 points or 1.3 percent. Volume up about 47 million shares from yesterday's pace, but 72 more issues closed on the down side than on the up side.

Cisco Systems (CSCO) led the active list, up $2.38.

Siebel Systems (SEBL) lost $5.00.

Intel (INTC) moving up $2.50.

Juniper Networks (JNPR) edged up $0.31.

Sun Microsystems (SUNW) up $4.50.

Microsoft (MSFT) down $0.50.

And then a $1.50 loss in JDS Uniphase (JDSU).