JEFF YASTINE: It was one of Wall Street’s most poorly kept secrets. As we reported it might last night, this morning Credit Suisse First Boston announced a tentative agreement to buy Donaldson, Lufkin & Jenrette for $13.7 billion. As Scott Gurvey reports, analysts say this deal could pave the way for other acquisitions in the industry.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is a European passing play. Paris-based AXA (AXA) sells Donaldson, Lufkin & Jenrette to Swiss-based, Credit Suisse First Boston. Europe is where explosive demand for investment banking services can be found, and where DLJ has been late to the party. In spite of an expensive expansion, DLJ’s European operations continue to lose money. Analysts say AXA decided not to wait, in hope of seeing profits. In acquiring DLJ, Credit Suisse propels itself into the big leagues among American underwriters, and it has a customer base to feed DLJ’s European operations. But there is considerable overlap in terms of customers and employees. On a conference call, executives ducked layoff questions, but industry watchers say, many are vulnerable.

STEVEN EISMAN, BROKERAGE ANALYST, CIBC WORLD MARKETS: It is very problematic. The firms overlap in almost every single level, other than really high yield. There’s duplication of virtually every single employee. I think it’s just going to be - first of all, I think there’s going to be carnage here, in terms of the layoffs that are going to take place. The firms are going to be distracted in terms of who’s going to be left. It’s kind of like the opposite of “Noah’s Ark.” Instead of everybody going hand-in-hand, two-by-two, it’s going to be like “Thunder Dome,” where two go in and one come out.

GURVEY: With this deal coming shortly after Swiss banking giant, UBS (UBS) bought PaineWebber (PWJ), analysts expect more consolidations ahead.

MICHAEL ANCELL, SR. FINANCIAL ANALYST, BANC OF AMERICA CAPITAL MNGT.: There are a number of companies - the names have been mentioned quite frequently. Some of them would be J.P. Morgan (JPM), Lehman (LEH), Bear Stearns (BSC) - and there are a few others, Chase (CMB). They don’t have the kind of positions that they want to have. And they are - I’m sure a deal like this makes them think again about who a good strategic partner would be for them, and we do think there will be more consolidation.

GURVEY: A flip side to this story, is what will AXA do with all the cash? The experts say, it will go shopping for acquisitions - in insurance, brokerage and asset management - here, in the United States. 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.


08/30/2000: The Battle For Circuit City's Appliance Business Heats Up

JEFF YASTINE: Whirlpool (WHR) says its earnings are headed down the drain in the third and fourth quarters. The appliance maker says the trouble stems from Circuit City’s (CC) decision to stop selling appliances, and pricing pressures in North America and Europe. Wall Street had estimated Whirlpool’s earnings at $1.52 in the third quarter, and $1.65 in the fourth; but the company says the numbers will be about 30 percent below that. Whirlpool’s stock closed unchanged at $37.88.

PAUL KANGAS: Meanwhile, Circuit City’s competitors are duking it out to take over its share of the appliance business. As Diane Eastabrook reports, the firms in the fray are some of the biggest in retailing.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Sears (S) is the 600-pound gorilla in the U.S. appliance market. The company’s share of that segment is just under 40 percent, roughly six times that of its nearest competitor. Some analysts predict Sears will surely be the big beneficiary when Circuit City exits the appliance business, this fall.

ASMA USMANI, RETAIL ANALYST, EDWARD JONES: Sears has found in markets where there has been a Circuit City - just in the month of August, their sales have actually surpassed the markets where there hasn’t been a Circuit City.

EASTABROOK: But other analysts are less optimistic about Sears’ prospects, because competition in the appliance business is heating up. Next month, Wal*Mart (WMT) will begin selling GE (GE) appliances in a handful of its U.S. stores, and may expand sales further next year. GE will warehouse, deliver and install the appliances for Wal*Mart, so analysts say that could give the discounter an edge on pricing. Home Depot (HD), which began selling appliances in some of its stores last year, also says it will expand sales to nearly all of its U.S. outlets by the end of next year.

PHILIP ZAHN, RETAIL ANALYST, FITCH: You have a lot of discounted appliances on the market, and you’ve got other players trying to grab that share that Circuit city is leaving on the table. So I would expect it to be fairly competitive over the next few months, and people will try to protect or even gain market share during this time.

EASTABROOK: But despite the new competition, analysts say Sears has an ace in its hand that its competitors don’t have: the Kenmore brand.

USMANI: The Kenmore brand, of course, is their private label. If you looked at U.S. homes today, 25 percent of U.S. homes have the Kenmore appliance, or the Kenmore brand.

EASTABROOK: Industry watchers don’t expect to see more retailers jumping into the appliance market, so that could keep this battle for market share, from turning into a war. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.

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.

08/30/2000: What To Expect In The Upcoming Employment Report

JEFF YASTINE: Fed watchers are waiting for Friday’s release of the August employment report and another gauge on whether the U.S. economy is truly cooling off. And with us now to talk more about that expected data is BridgeNews economist Mark Serlin. And Mark, first, what should we be looking for immediately in this report coming out on Friday?

MARK SERLIN, ECONOMIST, BRIDGENEWS: Well, right off the bat census workers are going to be leaving government payrolls so that means you should focus on private payrolls to get around the census workers. Even once you do that there’s the impact of the Verizon (VZ) strike, which should subtract about $85,000 from private payrolls. So to get a real reading on what’s going on you should take the published private number and add $85,000 to it.

YASTINE: So again, the thing to pay attention to here is not the main number, really, but the private payrolls number?

SERLIN: Adjusted for the Verizon strike workers, correct.

YASTINE: All right, now what else should we be looking for in this report?

SERLIN: The labor force participation rate and the employment to population ratio are two major indicators. The unemployment rate has been going nowhere, suggesting the labor market remains very tight. But these two other measures, the labor force participation rate and employment to population ratio, have seen meaningful pull backs, suggesting the labor market is loosening up.

YASTINE: So if that shows to continue again, then that would follow the expectations that most of the market has that the economy is slowing down?

SERLIN: Definitely. If these two ratios move lower that mind set, that slowing mind set will be reinforced.

YASTINE: Now, something else I understand a lot of people look at is the average work week in hours?

SERLIN: Right. The average work week for all workers in all industries. Right now it’s at 34.4, hours bumping along near the bottom of its sideways range. If we go below that 34.4, that would be meaningful. It would suggest that the work week is now short enough that if there is a pickup in demand, new workers won’t need to be hired, employers will just extend the workweek of current workers.

YASTINE: All right—

SERLIN: So that 34.4 hours is key.

YASTINE: And then one of the other keys is average hourly earnings?

SERLIN: Yes. They’re always important as a measure of inflation. The year over year growth rate is of particular concern. The thing you have to watch this time around is that last August we saw a very small increase. So that will serve to inflate the year over year growth rate this year. So when you look at that year over year growth rate, you have to realize it will be inflated by a week year ago level.

YASTINE: Overall, how much of this do you think of this is already sort of expected and factored into the market?

SERLIN: The census workers and Verizon strike, that’s already built in. The labor force participation and employment to population ratio and the work week, not many are talking about that yet and that could be the surprise.

YASTINE: All right, we’ll end it there. Mark, appreciate you talking to us.

SERLIN: Thank you.

YASTINE: Our guest, BridgeNews economist Mark Serlin.

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.

08/30/2000: "Money File"-Tech Mutual Funds

JEFF YASTINE: Well, if you’re thinking of buying mutual funds involved in technology, tonight’s money file commentator has some suggestions to help you make that decision. Here’s John Waggoner, Mutual Fund Columnist of “USA Today.”

JOHN WAGGONER, MUTUAL FUND COLUMNIST, USA TODAY: What’s the matter? You say your technology fund deleted all its profits? You say your Internet fund fried its own motherboard? Well, cheer up, bunky. Technology isn’t going to go away any time soon. And if you bought at the top, you’ve learned a valuable lesson from Professor Bear at Market university: price really does matter. When mutual funds are at their riskiest, they are almost physically painful not to buy. Remember way back in January when people were buying all kinds of wacky Internet funds and stocks? Didn’t you really want a piece of that action? And, in fact, 1999 was a great year for tech stocks. At the end of 1999, the average tech fund was up 146 percent. The very best fund was up nearly 500 percent. Everyone was talking about how the Internet was going to transform our lives and how technology was going to revolutionize business. This could all be true. But Wall Street is not the rational machine some people claim it is. Prices just got too high. So how do you know when prices are too high? There’s no way to know for certain. But consider this rule of thumb. The technology laden NASDAQ Composite Index has gained an average of 24 percent a year over since 1971. In years when tech funds have risen dramatically more than that, their performance tends to lag for the next five years. So it’s best to buy when tech funds have been flat or negative for the previous 12 months. That still hasn’t happened yet, but it could be coming. And if you bought in March, don’t despair. If you’re a long term holder, you’ll do fine. But the long term might be a bit longer than you thought. I’m John Waggoner.

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.

08/30/2000: Typewriter Repairmen Still Hunting & Pecking Up Business

JEFF YASTINE: And finally tonight, computers seem to have invaded just about every corner of our lives. But don’t write an obituary for the typewriter just yet. As Mont Fennel reports, for two Massachusetts men, keeping the machines alive and well is the name of the game.

MONT FENNEL, NIGHTLY BUSINESS REPORT CORRESPONDENT: At this typewriter repair shop, it’s like stepping back in time. Here the clock is circa 1970, the old maps likely missing a few newer streets. The place is crammed full of old Remingtons and modern, so to speak, IBMs. Ed Vandewalle works on the machines, getting his tools out of classic file cabinets, doing paperwork on heavy metal desks.

ED VANDEWALLE, AAA BUSINESS MACHINES: We thought those were pretty up to date, but...

FENNEL: You won’t find a computer anywhere near AAA Business Machines.

TONI FURRIER, AAA BUSINESS MACHINES: Oh, yeah, yeah, I don’t like them.

FENNEL: You don’t like computers?

FURRIER: No, I don’t like them.

FENNEL: Because?

FURRIER: They’re infringing on us.

FENNEL: When Vandewalle, an ex-adding machine salesman, started the typewriter business in 1967, he had 20 times the sales he does now. In its heyday, he had a dozen employees. Now it’s just two. The 74-year-old actually works for Tom Furrier, who bought the business from Vandewalle 10 years ago.

VANDEWALLE: I enjoyed the typewriter itself. I’m still fascinated fixing them. It’s a mechanical miracle that it types so fast and the intricate mechanisms and how it works.

FENNEL: Still, with computers dominating society, isn’t the typewriter business dying?

FURRIER: I guess it is a dying business, but I think it’s a slow death.

FENNEL: You see the two are busy repairing about 60 typewriters per week with Furrier traveling to about 35 companies. Now, because so many repair shops have gone out of business, AAA isn’t hunting and pecking for work. In fact, Furrier pockets more money now than Vandewalle did in the old days. It’s pretty ironic something that’s dying and yet you’re profitable?

FURRIER: Yeah, it’s—I have to pinch myself sometimes to still believe that we’re that busy.

FENNEL: So if your typewriter’s on the fritz, don’t fret. There’s likely still a repair shop in your neighborhood. Mont fennel, NIGHTLY BUSINESS REPORT, Arlington, Massachusetts.

YASTINE: We’ll have to get our Smith Coronas out, right?

KANGAS: Yeah, right.

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.


08/30/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: That Donaldson Lufkin buyout by CS First Boston bolstered the financial sector on today's stock market opening. But the blue chips in general extended yesterday's 37 3/4 -point downturn in the Dow Industrial Average as it fell another 38 points by 10:30 this morning. While a little lingering demand for technology issues enabled the NASDAQ Index to post a 1 1/2 -point gain. As morning trading dragged on into mid-session, the market drifted steadily lower - out of neglect, more than anything else - because so many investors and traders had already made early exits for the upcoming long Labor Day holiday weekend. What's more, there was little in the way of major news to spur much movement overall. By 2:30 this afternoon then, the Dow fell to a 110-point loss; the NASDAQ Index was down about one point. The tech sector started showing signs of life on the upside for the rest of the session, but the blue chips continued to languish and the Dow Industrial Average closed down 112.09 at 11,103.01. In today's 114-point trading range, the Industrial Average closed down 107 1/4 points from the best level of the session. In other words, right near the bottom. The NASDAQ Composite finished with a gain of 21.64 at 4103.81. In its 50-point trading range, the Composite settled 38 points above its low of the day.

Big board volume 817 million shares. About 48 million ahead of yesterday's pace. And just a little bit more down volume than up volume. Looks about 28 million shares more.

And the Dow Transport Index down 34 1/4 points.

Utilities moved up 1.71.

And the Closing Tick just barely bullish at +112.

Standard & Poor's 500 down 7 1/4.

The 100 down 6 1/3 points.

But the MidCap 400 hit another record high, with a gain of 1.49.

Bridge Futures Price Index edged up 0.71.

New York Stock Exchange Composite down nearly 3 points.

About a-third of a point gain in the Value Line.

Russell2000 Small Cap up nearly 2 3/4 points.

The broadly-based Wilshire 5000 down nearly 21 3/4 points.

The bond market ended three days of weakness with a mild comeback today, which was helped along by month-end institutional buying. And the report that the Conference Board's July Index of leading economic indicators fell 0.1 percent for the third straight month, suggesting that the economy really is slowing down a bit. The buying was cautious, however, ahead of Friday's release of the August employment report.

Tax free and corporate issues edged up about a point on average.

And the Treasury market also had some small closing gains.

Like the 5-year notes edging up 2/32.

The Bellwether 10-year note up 2/32 as well. With the yield now at 5.80 percent.

And the 30-year bond a 9/32 gain there.

And the Lehman Brothers Long-Term Treasury Bond Index was up 2.58.

The blue chips a little bit blistered by profit taking today, giving back some of their nice recent gains, down 112 points on the Dow Industrial Average. The advance/decline ratio practically in a stand-off, seven more down than up. However, 55 more new yearly highs than lows.

Lucent Technologies (LU) topped the active list, down 15.7 million shares, down $1.63. A little profit taking. It was up over 2 yesterday after the S.G. Cowan Brokerage (ph) increased its price target to $53 a share.

AT&T (T) down $0.19.

And then Axa Financial (AXF) a $0.06 gain. Now, Axa Group, the parent, is offering to buy all the shares of the financial subsidiary not already owned for a price of $53.50. Sixty percent of that would be in cash and 40 percent in Axa Group stock.

Compaq Computer (CPQ) fell $0.81.

And Pfizer (PFE) losing $0.25, fifth in big board volume.

General Electric (GE), after hitting a series of recent record highs, down $2.38 on some profit taking.

But Nokia (NOK) up $1.00.

And Ford (F) managed to gain $0.56.

America Online (AOL) rising $1.00.

Motorola (MOT) was down $0.75, 10th in big board volume.

Axa Group down $6.06 on speculation the company may use the proceeds of its Donaldson Lufkin sale to buy another insurance firm.

Conseco (CNC) moved up $0.50. Standard & Poor's thinks the company is nearing a deal with its lenders and likes the stock over the long-term.

Corning (GLW) up $15.38. Merrill Lynch increased earnings estimates and also boosted its price target for Corning's stock from $375 to $400 a share over a 12 month period.

Donaldson Lufkin (DLJ) itself up $6.50, getting that $90 a share cash buyout bid for shareholders of DLJ.

The Gap (GPS) was down $0.25. After the close, the stock fell to as low as $22 when the company said August same store sales were down 14 percent and it also warned about third and fourth quarter earnings results.

Lincoln National (LNC) was up $5.00 on mild speculation that Axa Group might be looking at it as a potential takeover.

Neff Group (NFF) up $1.56. The company's policy is not to comment on stock movement. But it was the biggest percentage gainer. And enough about Neff.

Esterline Technologies (ESL) up $2.50. Third quarter earnings nicely higher, $0.45, $0.03 above the Street estimate and up from $0.34 last year. Sales were up 12 percent. The company is predicting sharply higher fourth quarter earnings as well.

Startek (SRT) up $5.00 even. The chairman said that this could be a little bottom fishing after recent weakness. Also noted positive comments in the "Fortune" magazine where this company was chosen as one of the 100 best small companies in America.

Cooper Companies (COO) up $3.56. Good earnings out today, third quarter, $0.56, up from $0.46 last year. Revenues up 17 percent and the company predicting fourth quarter earnings of $0.63 on a 21 percent rise in revenue.

Blyth Company (BTH) down $3.56. Second quarter earnings were higher, 38 versus 34 last year, in line. But Blyth also warned that full year earnings will be $0.05 to $0.10 below the First Call estimate of $2.20 a share.

Silverline Technologies (SLT) down $2.44. This is an Indian software firm. It ran up last week on reports of a possible merger, but now the company's decided to delay any acquisitions or mergers.

NASDAQ trading, a gain of 21.64 on the Index, volume up a touch from yesterday. Twenty-one stocks higher for about every 19 lower.

JDS Uniphase (JDSU) down $3.50.

But Juniper Networks (JNPR) rose $7.75. Juniper is going to replace Visix (ph) in the NASDAQ 100 Index on September 7th.

Broadcom (BRCM) down $13.50 on news Intel (INTC) is suing, claiming patent infringement. Microsoft (MSFT) fell $0.94.

No change in Cisco Systems (CSCO), fifth in NASDAQ volume.

And then Commerce One (CMRC) up $10.88. It seemed to be renewed interest for this