JEFF YASTINE: An old tradition gave way to a new era on Wall Street today. The major stock exchanges began trading some shares in dollars and cents, abandoning prices in fractions. The move is a fundamental shift in the way trades have been made in the US for more than 200 years. Suzanne Pratt reports.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The first phase of the long- awaited and government ordered switch to decimals went off today without a hitch. According to the New York Stock Exchange, computer systems experienced no problems in handling the new quote traffic.

ROBERT BRITZ, GROUP EXECUTIVE VP, NYSE: Today was both a historic and a routine day, obviously historic. First time that this institution has traded in 100 price points, decimals. But routine in the sense that everything went completely smooth as we would have expected it to occur.

PRATT: The big board’s test program for decimals started with quotes listed in pennies for these seven stocks. The American Stock Exchange began its pilot program with six stocks quoted in pennies. And options trading for three of the 13 stocks also switched to decimals at the Chicago Board Options Exchange.

EDWARD JOYCE, PRESIDENT, CBOE: It went very well today. We were a bit apprehensive coming in because it was a major effort, but I can say that it went without a single problem.

PRATT: The move to decimals is designed in part to make the stock market easier for small investors to understand. After all, consumers don’t buy a loaf of bread for a price of two dollars and one-eighth.

DONALD KITTELL, EXEC VP., SECURITIES INDUSTRY ASSN:We’re putting securities trading in decimals the way every other service and commodity in the economy is priced, so it’s something that people are used to and can be more easily understood.

PRATT: Investors may already be acquainted with decimal trading. Not only is it standard practice in the world’s other major financial markets, but US newspapers and financial news shows like “NBR” have also begun quoting stock prices in pennies. In addition to more intuitive quotes, some experts predict investors will get better prices for their shares as the spreads narrow, but regulators say the jury is still out on that one.

SUSAN WYDERKO, DIR., INVESTOR EDUCATION, SEC: Well, we don’t really know what’s going to happen. In the past when stock increments, trading increments fell, the spreads fell slightly. We don’t know if that’s going to happen in the future. It certainly could.

PRATT: By the end of September, the big board and the AMEX will each convert about 50 more stocks to decimals. The remainder will happen at the end of this year or the beginning of next. The NASD’s test program is scheduled to start in March, and all markets must be finished making the switch by April of 2001. Suzanne Pratt, “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.


08/28/2000: A Phony News Report Sends Emulex Stock On A Wild Ride

PAUL KANGAS: The shares of Emulex (EMLX) closed off more than 6 points today at $99.50 each after a hoax news release sent the stock on a wild roller coaster ride on Friday. Technology is being blamed for the rapid spread of the bogus report, but as Scott Gurvey explains, technology could also keep it from happening again.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Today many news organizations wish they had taken a little time to check out the Emulex report before passing the false news release on to their audience. In the roughly 90 minutes the fraudulent data was circulating, Emulex’s stock price fell 60 percent. The first reports appeared on a little-known news service called Internet wire, which now admits it was duped.

MICHAEL TERPIN, CEO, INTERNET WIRE: On Friday, it was our turn to become the third news wire that has had this happen to them, and we’ve now upped the bar to make it much more difficult for this to happen again.

GURVEY: The better-known business wire says it uses proprietary encryption software when receiving data from the companies it serves, but that does not protect the investing public from a false report masquerading under the business wire name. One way to do that is through the use of a digital signature. This is an e-mail from CERT, the Computer Emergency Response Team at Carnegie Mellon University. The cryptic string of characters at the bottom is the signature. It is designed to both confirm that the message came from the place it says it came from, and that it has not been changed since it was written. An electronic signature could be attached to important corporate news releases and earnings reports. The software needed to generate and verify them is readily available, free for non-commercial users and not difficult to use. Some say the sooner the better.

JAMES CRAMER, COLUMNIST, THESTREET.COM: I didn’t stop to read the release. Had I, I would have seen it was very jumbled. It made no sense. It said, look, call back after 5:00; we’ll know more. But who got that far? I saw the headline, “Emulex SEC revised down. Take no prisoners, get out.” And that’s the way Wall Street works.

GURVEY: Journalists strive to be both accurate and fast. Sometimes those goals conflict. There was a time not many years ago when two wire services were the principal sources of news in the United States. One had the reputation of most often being first, the other of most often being correct. 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.

08/28/2000: What’s Next For Oil Prices?

JEFF YASTINE: The prices of heating oil closed today at a 10 year high. The September futures contract rose about $0.03 to almost $1, a price not seen since the Gulf War. Gasoline prices also closing just under $1 after notching up $0.02 today. So where do prices go from here? Well, BridgeNews reporter Peter Rosenthal is here with some answers. And Peter, the next OPEC meeting is September 10th. The talk is for a 500,000 barrel increase but it sounds like the markets are saying that’s not going to be enough.

PETER ROSENTHAL, SR. ENERGY CORRESPONDENT, BRIDGENEWS: That’s right. Expectations are that OPEC will increase production by about that much, 500,000 barrels per day, based on their price ban mechanism. The problem is inventories of crude oil or refined products such as heating oil and gasoline just aren’t increasing and OPEC has increased production twice this year.

YASTINE: So what kind of output is going to be needed from this OPEC meeting to really make a dent in prices?

ROSENTHAL: Well, I think people really aren’t sure. The more the better, as most people would say, but problem is the kind of oil that OPEC has left to produce is more difficult and costly to refine and would take several months for that end up as a heating oil barrel and some say that will just be too late for the winter season.

YASTINE: So with heating oil prices now closing just under $1, does that look like it’s expected to perhaps move higher? What kind of talk are you hearing there?

ROSENTHAL: It’s showing no signs of abating and you have to remember, we’re in August. Most of the other highs for heating oil were either in the late fall or in January. Last January when we had a severe cold snap in the northeast and there was legitimate concern about inventories as people were actually using heating oil, then prices spiked. But we’re in August and people are trying to see how high it really can go.

YASTINE: Inventory wise for heating oil, does that look as tight as we hear it is for crude oil itself?

ROSENTHAL: Inventories are even worse. I think most people would say for heating oil less than half what they were a year ago. Crude oil stocks are at 24 year lows so both sides we’ve got refineries running near full capacity and reaching record production and so it’s drawing down inventories of crude oil which, though, is not turning out to be more barrels of distillate.

YASTINE: We’ve got about 30 seconds left. I understand there is an American Petroleum Institute report out tomorrow that shows the weekly fluctuation in inventory levels. Can we expect any news, market moving news out of that?

ROSENTHAL: Certainly the market’s going to anticipate that after recent draw downs, inventories should have increased in the last week. But API has surprised traders over the last few weeks and people are extremely nervous, which could be a counter for today’s rise.

YASTINE: All right. It’s been amazing. It’s been a highly volatile indicator, it seems, in recent weeks. We’re out of time, Peter. I thank you for joining us.

ROSENTHAL: Thank you.

YASTINE: Our guest, Peter Rosenthal of BridgeNews.

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.

08/28/2000: Road To The White House: Healthcare & Pharmaceuticals

JEFF YASTINE: Healthcare is in the spotlight in the presidential campaign this week. Today Vice President Al Gore kicked off a campaign tour on the issue by taking aim at the pharmaceutical industry. As Darren Gersh reports, this issue is another whistle stop on the road to the White House.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Vice President hammered away at the issue polls show is his strong suit, health care. Speaking to seniors in Tallahassee, Gore lashed out at efforts by pharmaceutical manufacturers to extend expiring patents.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: They come in with campaign contributions and lobbying and advertising and they introduce these special bills to extend the monopoly period and lots of times the Congress will go along with them. Well, I’ll tell you this, you elect me president and I’ll veto every one of those bills.

GERSH: Drug companies counter, saying it takes so long to research, develop and win approval for a new drug that valuable time is lost on the original patent. Still, tough talk from the Vice President is expected to take a toll on health care stocks, as Gore plans to spend the entire week campaigning on the issue.

JOE LIEBER, POLITICAL ANALYST, WASHINGTON ANALYSIS: That all portends negatively for those sectors for those stocks. It portends negatively for the prescription drug stocks or the drug stocks It portends negatively also for the HMO stocks, because look, you know, face it, what Gore wants to do for those industries is not positive from a stock perspective.

GERSH: Gore has also charged Texas Governor George W. Bush with failing to put forward a specific plan on prescription drug coverage for seniors. Governor Bush has voiced support for plans to subsidize private insurance for drug coverage and the Bush campaign says it will offer a more detailed package in the “not too distant future.” Meanwhile, in ads launched in key battleground states, Republicans attacked Gore for relying on Medicare to buy coverage for seniors.

POLITICAL COMMERCIAL: The Gore prescription plan, bureaucrats decide. The Bush prescription plan, seniors choose.

GERSH: Some political analysts say when it come to health care, Gore may be overplaying his populism.

ANDREW LAPERRIER, POLITICAL ECONOMIST, ISI: Gore does have, is taking a risk here that he’ll be seen as anti-business, that he’ll be seen as not being the best person able to keep the prosperity going.

GERSH: Analysts believe many investors will make up their minds where to place their money on health care and other sectors when the post-Labor Day polls come out. Those polls have traditionally been the most accurate predictor of who will next live in the White House. 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.

08/28/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS; Well, the bulls didn’t exactly decimate the bears, but the stock market did open nicely higher today in an extension of last week’s nice upturn. At the end of the first hour of trading, the Dow Industrial Average posted an 87-point gain. The NASDAQ Index was up 43 points. The Dow got an early boost from good strength in IBM (IBM) after the First Boston brokerage repeated a buy, and also Coca- Cola (KO) stock rose nicely following Bank of America’s “buy” recommendation there. A good run-up in Intel (INTC) bolstered both the Industrial Average and the NASDAQ market. Halfway through the noon hour then, the Dow was up 109 points. NASDAQ Index posted a 50-point gain. The market showed a little further improvement in early afternoon, but then began to fade partly because of weak bond prices. The Dow Jones Industrial Average saw its closing gain cut to 60.21 points at 11,252.84. In today’s 130-point trading range, the Industrial Average closed down 66 points from the best level and up 64 points from the low of the day, right in the middle of the range. The NASDAQ Composite climbed nearly 28 points ending at 4070.59. In its 55-point trading range, the Composite Index settled about 27 points below its high of the day and up 28 points from the low, right in the middle, just like the Dow. Volume perked up a little bit, about 50 million shares over Friday’s snail’s pace and up volume exceeded down volume by about a 4 to 3 margin.

The Dow Transports Index down just about 3 1/2 points.

But the Utility Index snapped back nicely, up 5.17.

The Closing Tick modestly bearish at -280.

Standard & Poor’s 500 up 7.63.

A 5 2/3 point gain in the 100.

The MidCap 400 achieved a record high, up 1 1/4 exactly.

The Bridge Futures Price Index up 1.23.

New York Stock Exchange Composite had a record with that gain of 2.73.

The Value Line edging up .29.

Russell2000 Small Cap Index gained 1.37.

And the broadly based Wilshire 5000 up nearly 67 1/4 points.

The bond market came under moderate selling pressure early today, partly in reaction to the report of a stronger than expected 6/10 percent rise in July personal spending while personal incomes increased only 3/10 percent. Also hurting the market was a $0.84 per barrel rise in New York October oil futures and a growing caution ahead of this Friday’s anxiously awaited August employment report. Against this rather negative setting, tax free and corporate issues fells eights and quarters on average and the Treasury market ended down across the board.

The 5-year notes losing 5/32.

The bellwether 10-year note down 12/32 with the yield at 5.78 percent.

The 30-year bond lost 10/32.

And the Lehman Brothers Long-Term Treasury Bond Index down just over 8 1/4 points.

Well, the market overall very firm, up 60.21. But not the best level of the day for the Dow. The broader market lower not by quite a 14 to 13 margin, but 101 new yearly highs as against only 24 new lows.

Lucent Technologies (LU) on 14 1/4 million shares topped the active list, moving up $1.38.

And then General Electric (GE) a $0.69 gain, but that is a record high for the stock on the close.

Compaq Computer (CPQ) moved up $0.75.

AT&T (T) down $0.13. After the close, AT&T said a change in plans regarding the integration of Excite@home from the fourth quarter to the third quarter will cut its earnings, at least its projected earnings, by about a $0.05 to $0.35 to $0.38 for the third quarter.

America Online (AOL) down $0.75.

And then IBM (IBM) moving up $1.44. First Boston had a “buy” out and said it’ll meet or beat the third quarter Street estimate earnings of $1.07. And First Boston also increased its price target for Big Blue from $125 to $150 a share.

Citigroup moving up $1.05. Our market monitor guest Friday, Joan Lappin , was very positive on the company during our interview.

And Ford Motor (F) down $1.31. Goldman Sachs cut third quarter earnings estimates by $0.06, down to $0.52 a share.

Verizon Communications (VZ) was up $0.81.

Pfizer (PFE), 10th in volume, down $0.94.

American Express (AXP), the best point gainer in the Dow, up $3.31.

And the whole financial sector was firm today, helping Donaldson, Lufkin (DLJ) rise up $4.75.

General Motors (GM) had a good day, up $3.06. No specific news.

Maytag (MYG) down $2.81, a little profit taking after rumors of a takeover by Electrolux (ELUX) sent the stock up last week.

Merrill Lynch (MER) up $3.31 just prior to the 2 for 1 split, which is effective this coming Thursday.

And UnumProvident (UNM) gained $1.25. The company has gotten Swiss Re to reinsure its in force life insurance and Unum also plans to sell its Provident Assurance unit to Allstate (ALL).

Washington Homes (WHI) one of the stars of the day percentage wise, up $1.38. The company will be acquired by Hovnanian Enterprises (HOV) for $10.08 a share cash or 1.39 shares of Hovnanian Class A shares.

The Shaw Group (SGR) up $5.25. This company signed a letter of intent to build an ethylene plant along with BASF Corp. (BASF) in China.

Kyocera (KYO) rising $16.50 a share. The company has increased its own earnings projection for this year and next and expects those earnings to come in at record levels.

Elcor (ELK) up $1.19. Last week, the stock down sharply on lower fourth quarter earnings but today the company said it’s going to buy back up to $10 million worth of its own common stock.

Loews Cineplex Entertainment (LCP) down $0.94, big percentage drop there. The company is forecasting a second quarter loss and expects to default on a loan by the end of this month.

Whirlpool (WHR) losing $4.34 after Prudential Securities downgraded the stock from “hold” and, get this, to “sell,” an outright “sell” recommendation. It’s not often you see that on Wall Street.

NASDAQ trading, a gain of nearly 28 points in the Index, volume up a touch from Friday. About 21 stocks higher for every 18 lower.

Intel (INTC) topped the active list, edging up $0.94.

Yahoo! (YHOO) down $12.90. Lehman Brothers is concerned about a slowdown in advertising revenues online.

Microsoft (MSFT) was up $0.69.

Cisco Systems (CSCO) up $0.56.

And Applied Micro Circuits (AMCC) down $4.75.

Sycamore Networks (SCMR) lost $9.81.

Juniper Networks (JNPR) up $8.13.

CIENA (CIEN) hitting a record high with that $11.50 gain.

Sun Microsystems (SUNW) close to a record, up $3.06.

And Oracle (ORCL) gained $2.13, 10th in NASDAQ volume.