PAUL KANGAS: A sizzling summer rally for the brokerage stocks buoyed by reports that one of them is about to be bought out by a larger rival. That target is reportedly Donaldson, Lufkin, and Jenrette (DLJ). That possible buyer, Credit Suisse First Boston. DLJ has been believed to be on the market for some time, shopped by its majority owner French insurer Axa (AXF). Today's report sent brokerage shares soaring and of course this one led by a 24 percent gain in DLJ stock. Bear Stearns (BSC) , Goldman Sachs (GS), J.P. Morgan (JPM) and Lehman Brothers (LEH) all closed on the upside. Analysts say they could eventually be targets as well.

STEVEN EISMAN, BROKERAGE ANALYST, CIBC WORLD MARKETS:Clearly the Europeans are very, very hungry to buy American investment banks because they really can't figure out how to do it on their own. Whether that means that Lehman Brothers or Bear Stearns or J. P. Morgan is going to get bought out, I really don't know. I don't think they have to sell out to do well, but you know, it's not going to stop anybody from speculating.

KANGAS: And it was just last month that Switzerland's USB Bank agreed to buy brokerage firm PaineWebber (PWJ) group for $10 billion.

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.


08/29/2000:Investor Interest In Blue Chips May Help Wall St. Bounce Back

JEFF YASTINE: Outside the brokerage sector, the dog days of summer hit Wall Street with a thud. The Dow lost 37 points after a healthy gain yesterday and the NASDAQ finished up 11. But despite today's mixed bag, some experts say stocks are poised to move higher. Suzanne Pratt reports.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: As summer draws to a close on Wall Street, stocks have been showing a few signs of life. Big cap names have provided leadership for a market that has been quietly gaining ground in recent sessions. Analysts attribute investors newfound interest in blue chips to late summer optimism about the Fed, interest rates, and the economy.

ASH RAJAN, SR. MARKET ANALYST, PRUDENTIAL SECURITIES: They're also convinced that a soft landing is about to occur, that there's no boom-bust phenomenon in this market. And that the Fed would have managed to sort of doctor a soft landing, which helps the fact that growth stocks will still get the earnings but not heat up inflation.

PRATT: After a terrible spring and early summer, the Dow has gained nearly 700 points in the last month. The blue chip index is now only 4 percent shy of its January all time high. The S&P 500 is in even better shape, almost even with its March high. Only the NASDAQ lags well behind its record March high. Even though the NASDAQ is back over 4,000, experts say many tech stocks have been suffering because of uncertainty about profits.

RON HILL, INVESTMENT STRATEGIST, BROWN BROTHERS HARRIMAN: A lot of the smaller companies and the dot-coms have had more problems here because of the lack of earnings and the lack of visibility going forward. So breadth is, I think, has deteriorated within the NASDAQ even though the index itself has been doing better.

PRATT: Yet some Wall Street pros think tech stocks will re-emerge as market leaders this fall. They say solid earnings growth could surprise investors. And although experts say market indexes won't repeat the gains of recent years, stocks should end the year higher.

PHIL DOW, CHIEF EQUITY STRATEGIST, DAIN RAUSCHER WESSELS: I would say on the popular indexes maybe 8 percent to 10 percent more this year beginning almost immediately. My guess is when folks come back from vacation, the professional community, they will see that the market's already moved. And one thing is they can't afford to miss the next up move.

PRATT: If the market does move higher in the coming month, it will be, in a way, out of character, especially when you consider that in the last 50 years, September tops the list as the worst performing month for the S&P 500. 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.

08/29/2000: Is It Time For Investors To Disconnect From AT&T?

PAUL KANGAS: AT&T (T) got some disappointing news today. Standard & Poor's says it may lower the company's long-term corporate debt rating or credit rating on concerns about AT&T's overall strategic direction. As Stephanie Woods reports, Standard & Poor's isn't the only one that's worried about that.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: When he took over Ma Bell three years ago, Michael Armstrong brought CEO star power and a bold vision for a new AT&T. It worked for a while, doubling the company's stock price. But now Wall Street is losing patience. The stock now trades at almost the same level as when Armstrong started.

SCOTT CLELAND, CEO, LEGG MASON PRECURSOR GROUP: What Wall Street wants is they want a fast growing or the possibility of a fast growing business. And right now AT&T is trying to hold onto the business it has and grow it, and so its growth rates are going to be probably sub-expectations and sub what Wall Street wants.

WOODS: Armstrong promises to deliver AT&T into the Internet age. He bought cable assets TCI and Media One, planning to upgrade the network to deliver video and speedy Internet access in addition to traditional phone service. So far, analyst Lisa Pierce says AT&T is on track with that strategy, despite the sagging stock price.

LISA PIERCE, ANALYST, GIGA INFORMATION GROUP: I do not think AT&T should change its strategy. If anything, since it is being punished for those long-term investments, it should accelerate them if at all possible, bite the bullet, get it done, get on with winning the marketplace.

WOODS: When Armstrong was in deal making mode, Wall Street liked it. But running a huge telecommunications company-cutting costs and actually building a new network-is a lot less fun and a lot more work.

PIERCE: In deal making there is lot of activity that is very, very concentrated over a very short period of time. That's a lot of flash. It's obviously important, but execution is something that is often very, very prolonged.

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.

08/29/2000: One On One With Randy Komisar, "Virtual CEO"

JEFF YASTINE: Here's a question. How do you make new economy companies profitable? How about by applying old economy business practices? One Silicon Valley entrepreneur says there's a lot each side can learn from the other. Randy Komisar, author and self proclaimed virtual CEO, talked with NBR's Rodney Ward about what the new economy has come to mean.

RANDY KOMISAR, "VIRTUAL CEO": Well, the term new economy has been bandied about an awful lot in the last four or five years and in my mind most often when you hear the term new economy, think excuse for bad business practices. By and large, we've used it to excuse lack of profitability, over investment in non-core businesses, lack of business models. We call that new economy. The reality is that there is a lot new about the economy. With the large network infrastructure of the Internet and the network effect of people and business on the Internet, we're ending up with something that has much greater reach, much more leverage and is characterized by much greater speed. But, in reality, everything we know about business from the past still applies.

RODNEY WARD, NIGHTLY BUSINESS REPORT CORRESPONDENT: So you say let's let go of those legacies of the past?

KOMISAR: Well, legacy is a term that has had a very negative connotation in the last few years as the insurgents from where I'm from, Silicon Valley, have taken on the incumbents. But the reality is that legacy is not the problem. People are the problem. Legacy actually can provide you with a tremendous amount of leverage and platform for entering into new businesses if you know how to use it. It's when your management gets stuck in thinking like the legacy business rather than thinking about the future that you end up with problems.

WARD: How so?

KOMISAR: Well, what happens is when management becomes completely obsessed with building and justifying a business model that has been essentially rooted in past thinking and rooted in past technology and rooted in current customer bases, that's legacy thinking. What you really need are people who have their heads in the future but are able to use the resources, successes and experience of the past to successfully compete.

WARD: But if these are the things that are providing the profits, the revenues, the success of the company, stay with it.

KOMISAR: Well, I think that's right. But the capital markets, by and large, give you a negative incentive. The capital markets will ding you if your legacy business, for instance, isn't on a fast growth potential that they can then apply high multiples to, if you're not at the cutting edge of whatever the new technology or new buzzword is. So what you end up having is a wholesale sort of destruction or jettisoning of an actual business which is producing good profitability and is steady in order to get into a business that Wall Street will reward you for.

WARD: So what do you do?

KOMISAR: Well, you've got to cannibalize yourself. You've got to run your cash cow businesses successfully and you've got to take your learning experience from those businesses and apply them to whatever's new in the marketplace. But you shouldn't be jettisoning it just because it is not what is favored by the analysts on Wall Street today. You've got to bridge the two.

WARD: But you talk about making changes, but you have these guys who are sitting there on Wall Street-I mean you talk about, you talk about Internet time, these guys are working at hyper Internet time. They want to see profits, earnings, changes, like that.

KOMISAR: Sure. And you end up with some 28-year-old analyst who doesn't have a clue about your core business or how to run it who is then suddenly dictating the elements of your strategy to you. You've got to have some strength. You've got to have some resolve. I could never imagine Jack Welsh , for instance, responding to some 28-year-old telling him that his core business in turbines is not the right place to be. So you've got, to as a leader, be able to explain to the analysts, to the capital markets how you're going to use what you have to get where you want to go.

WARD: You take the analysts where you want to go. You also have to do that with your employees.

KOMISAR: Absolutely. And, in fact, you may need different employees. You can't be wedded to necessarily taking everybody with you. Not everybody will make the transition. Not everybody has the skills or the intellectual interest in making that transition. And I think what's going to distinguish great leaders in making this transition are those leaders who are capable of weeding out the leaders down into their organization who are not going to make the transition with them, replacing them with the leaders who will.

WARD: Mr. Komisar, thank you.

KOMISAR: Sure.

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.

08/29/2000: Commentary: The Trade Deficit Silver Lining

JEFF YASTINE: Well, it's an old adage about the glass being half empty or half full. Tonight's commentator says you can apply that thinking to America's international trade. Here's Irving R. Levine, Dean of International Studies at Lynn University and former Chief Economics Correspondent at NBC news.

IRVING R. LEVINE, COMMENTARY: In the latest monthly report, America's trade deficit hit a record of almost $31 billion. A typical news item called the trade deficit the sole blot on the otherwise vibrant U.S. economy. But rather than a blot, it can be argued that the trade deficit is a bonus, because it shows just how vibrant the U.S. economy is. The conventional concern is that goods made by foreign workers take jobs away from Americans. But the fact is that unemployment in the U.S. is at a near record low with many businesses unable to find workers to fill available jobs. It is because of the strong economy that Americans can afford to buy so many foreign made goods. Despite the soaring imports, American factory output is up 42 percent since 1996 and much of the U.S. factory output is going to other countries. U.S. exports are up 12 percent so far this year. Another thing, since many foreign goods are comparatively inexpensive, that helps keep inflation down. As for the dollars going out to buy foreign goods, some come back to buy stocks, helping to keep the stock market on the rise. In short, when it comes to the U.S. trade deficit, the song to sing is don't worry, be happy. I am Irving R. Levine.

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.


08/29/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened on a mixed note today with the blue chips feeling the sting of some profit taking in the wake of six straight higher sessions which lifted the Dow Industrial Average 206 points; that's 1.9 percent. At 10:00 this morning, it was down 26 1/4 points, but the NASDAQ Index extended yesterday's 28-point rise with a 13-point gain. A downturn in bond prices kept stocks on the defensive as slow morning trading continued, and even the light selling took its toll because an awful lot of potential buyers were unwilling to step in ahead of Friday's August employment report, not to mention the long upcoming weekend.

At 11:30 a.m. then, the Dow fell to a 53 3/4 -point deficit, and that helped drag the NASDAQ Index down to a 3-point loss. The market began churning around its midday levels in afternoon trading, but the cross currents of month-end institutional portfolio shuffling seemed to help the Dow Industrial Average trim its closing loss to 37.74 points, and now stands at 11,215.10. In today's 60-point trading range, the Dow closed down 41 points from the best level of the session, up 19 from the low of the day. The NASDAQ Composite rose 11.58, ending at 4082.17. In its nearly 38-point trading range, the Composite settled 26 points above its worst level of the day.

Big board volume 789.2 million shares, about 63 million ahead of yesterday's pace and up volume was exceeded by down volume by about 44 million shares.

The Dow Transports Index down 26 1/4 points.

Utilities losing 2.71.

And the Closing Tick neutral, -39.

Standard & Poor's 500 off exactly 4 1/4 points.

Nearly a 2-point drop in the 100.

The MidCap 400 however, managed to gain 1.77 to a record high as indicated by asterisk.

And the Bridge Futures Price Index edged up .84.

New York Stock Exchange Composite down 1.82.

The Value Line gained 1.20.

The Russell2000 Small Cap Index up 3.15.

But the Wilshire 5000 down nearly 11 1/4 points, a mixture indeed.

The bond market moved lower at the outset today, partly in a negative reaction to the report of a much larger-than-expected 14.7 percent jump in July new home sales, indicating the economy is still very much alive and possibly in need of another hike in interest rates to cool it down. A modest dip in August consumer confidence and a drop in oil prices partly offset those negatives, but tax-free and corporates still closed down eighths and quarters on average and the Treasuriy market was down across the board.

A 4/32 drop in the 5-year note.

The 10-year note down 8/32 with the yield at 5.81 percent.

The 30-year bond down nearly a point with the yield up to 5.75 percent.

And the Lehman Brothers Long-Term Treasury Bond Index down just about 6 ½ points.

The market itself a little bit on the soft side, at least as far as the blue chip Dow is concerned, down 37 3/4 points. The broader market lower by a 14 to 13 margin, but 81 new yearly highs as against only 41 new lows.

AT&T (T) topped the active list on 19 1/2 million shares. It traded as high as 32. A lot of people thought it would go lower on yesterday's post-market news that we reported when the company lowered its own third quarter earnings estimates by a nickel a share, reflecting earlier than expected integration of Excite@home. And then you heard the Standard & Poor's news on top of that.

Lucent Technologies (LU) up $2.19. The S.G. Cowan Brokerage upgraded its price target from $43 to $53 a share.

Motorola (MOT) edging up $0.25. The company announced today it'll buy out Prim Track International for $160 million in cash.

Compaq Computer (CPQ) down $0.25.

And then Pfizer (PFE) lost $0.50. The "Wall Street Journal" today reported the company's calcium channel blockers called Norvask and Procardia are less effective than others in treating high blood pressure, at least according to a study.

Ford Motor (F) down $0.69. The Firestone tire fiasco is hurting earnings there.

Santa Fe Snyder (SFS) lost $0.06 a share.

And then we see General Electric (GE) coming off a record high yesterday with a $0.25 loss.

Citigroup up $0.13.

Nortel Networks (NT) dropped $1.50.

AG Edwards (AGE), this is still another brokerage up on the speculation of more and more consolidation in that industry.

Computer Associates (CA) up $1.75. A Euro debit system is going to use a management solution of Computer Associates.

Ingersoll Rand (IR) up $4.63 a share. Morgan Stanley rates the stock a "strong buy," sees this company as a good power generation play.

Johnson & Johnson (JNJ) down $1.75. Believe it or not, this was the biggest point loser in the Dow Industrial Average today.

JP Morgan (JPM) the biggest point gainer, up $3.88.

And then Rio Tinto (RTP) down $3.94 on news that it'll bid $1.85 a share cash for Ashton Mining Limited (ASH.AX). It's a diamond miner. That's worth about $345 million American and it outbid DeBeers by $0.23 a share.

Donaldson Lufkin Jenrette (DLJ) the big percentage gainer of the day, up $16.06.

And then its tracking stock, DLJdirect (DIR), had a rather good day, up $2.25. DLJ still owns 82 percent of this tracking stock, incidentally.

MasTec (MTZ) up $6.56.

Mainly because Dycom Industries (DY) up $7.25. The companies are both contracting firms that install fiber optic and other telecom systems and today Dycom had tremendous earnings out, fourth quarter, $0.51, up from $0.36 last year and sales up a whopping 57 percent. First Union Securities upgraded Dycom from "buy" to "strong buy."

Pediatrix Medical Group (PDX) up $1.06. The State of Arizona's probe into the company's billing practices concluded that no fraud was committed.

And then Huffy (HUF) back pedaling by $1.88. The "Wall Street Journal" says the company's hot sales of lightweight scooters, a big summer craze, are likely to cool down.

NASDAQ trading up a little over 11 1/2 points. Volume up a touch from yesterday, 115 million shares, to be exact. And about 20 stocks up for every 19 down.

Broadcom (BRCM) on profit taking down $13.19. That stock hit $273 a share last Thursday.

Microsoft (MSFT) down $0.38.

A $0.50 gain in Cisco Systems (CSCO).

Intel (INTC) up $0.19.

Oracle (ORCL) managed to gain $1.00 exactly, fifth in