PAUL KANGAS: There was an arrest tonight in the case of the phony press release that devastated the stock of Emulex Corporation last Friday. The FBI says 23-year-old Mark Jakob, a former employee of the Internet Wire, was arrested and charged with securities fraud for planting the fake material on the wire service. Jakob’s stock trading records show he made $250,000 trading Emulex off its huge free fall and then bounce back, by selling both short and buying it long. Authorities say the web was the key to committing, and solving the crime.

ALEJANDRO MAYORKAS, U.S. ATTORNEY: I’m extremely proud of the swiftness of our law enforcement response to a crime, they caused losses to investors throughout the country. And that was apparently committed with the hope that the anonymity afforded by the Internet would be the criminal’s protection. We, in law enforcement, however, know how to use the Internet, too.

KANGAS: The Emulex hoax is the fourth time in 18 months that the Internet has been used by cyberbandits. However, there have been - in all the cases, there have been arrests.

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.


08/31/2000: What’s Behind The Gap in The “Gap’s” Retail Revenue

JEFF YASTINE: Shares of Gap (GPS) fell almost 12 percent today, after Wall Street analysts downgraded the stock. Those downgrades followed news we told you last night, that August same-store sales at Gap were down 14 percent. Suzanne Pratt takes a closer look at what’s ailing the retailer.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It wasn’t long ago that Gap clothes were considered a paragon of hip and cool among America’s youth. But lately, the retailer’s fashions have fallen flat. Analysts say a lack of newness in merchandise, as well as an absence of “must have” items, are keeping customers out of stores. In addition, some say poor marketing is to blame, as Gap abandoned its TV ads in August, in favor of in-store promotions.

DANA TELSEY, RETAIL ANALYST, BEAR STEARNS: This year, they tried a promotional shop card of $20 for every $100 you purchase. The lack of that TV presence, where consumers around the country get to see it, definitely hurt their sales.

PRATT: Gap’s problems extend to its once-trendy Old Navy division, where experts say fashion missteps and an inability to appeal to older customers are contributing to poor results. And its Banana Republic unit, which comprises only 10 to 15 percent of the company’s overall business, also experienced anemic sales in August. The retailer has been suffering for several months, and its troubles are well-reflected by the dismal performance of its stock this year. And, as a result of the latest sales figures, analysts at Salomon Smith Barney, Bank of America and C.S. First Boston cut their ratings on Gap shares. Still, some say the specialty apparel retailer has simply hit a rough spot, and can turn its business around, particularly if it slows down its expansion plans.

RICHARD BAUM, RETAIL ANALYST, C.S. FIRST BOSTON: It’s absolutely not hopeless. This is a tremendously strong brand franchise. I think they need to work on the merchandising; they need to work on the marketing part. They did not have a successful back-to- school marketing campaign.

PRATT: Gap may be able to revive its struggling business, but experts say, don’t look for a turnaround in time for the crucial holiday season. That’s because, they say, merchandise decisions are locked in, at least six months in advance. 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.

08/31/2000: Ford CEO, Jacques Nasser Will Testify About Tire Recall

JEFF YASTINE: Well, Ford Motors’ (F) chief executive is ready to face the music. Jacques Nasser said today he will testify next week at a hearing on the recall of Firestone tires fitted on Ford Explorer trucks. Nasser came under criticism for originally offering to send two Ford safety and engineering experts to the hearing instead. Nasser also stressed the recall isn’t a Ford problem.

JACQUES NASSER, PRESIDENT & CEO, FORD MOTOR COMPANY: This is a tire issue, without question. It is not a vehicle issue. We have over half a million vehicles with tires from other manufacturers and they don’t experience these problems. And that makes us feel very confident that it is a tire issue, not a vehicle issue.

YASTINE: Meanwhile, Bridgestone/Firestone faces a strike this weekend by the Steel Workers Union. More than 8,000 workers at nine U.S. plants could walk off the job Saturday. A strike could cripple Bridgestone/Firestone as it scrambles to produce replacement tires for that recall.

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.

08/31/2000: AOL Tunes Into Interactive TV

PAUL KANGAS: Also tonight, America Online (AOL) has begun rolling out its new interactive TV service in Baltimore, Phoenix and Sacramento. But it’s not going to be an easy sell. Stephanie Woods got a demonstration of just how the service works.

CARLOS SILVA, VP, AOL - TV: Same e-mail that’s part of your PC experience is now available on your TV set.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: AOL TV exec Carlos Silva says you can also instant message friends, search TV listings or call up your local weather. But getting people to buy into interactive TV hasn’t been easy. Just ask Microsoft owned Web TV. It has signed up fewer than a million and a half users in three years.

JOE POLETTO, VP, MICROSOFT WEB TV: We think it’s going to be challenging, for one. You know, they have a PC centric audience and we’ve found that, you know, folks communicating through television can be different.

WOODS: Web TV lets you play along with JEOPARDY! and WHEEL OF FORTUNE. AOL is also working on interactive programming, but it’s counting on its current subscribers to bring their own interactivity to the TV.

SILVA: The first year is a big experiment using our 23 million members as like the absolute sweet spot.

WOODS: But between the cable box, the Web box, the TV, the VCR and the phone line, getting hooked into interactive takes some patience and once you’re connected, what you can do with it is still limited. And the price isn’t cheap, a couple hundred bucks for the Web box plus a monthly subscription fee. Some shoppers at this electronics store say they’ll have to be sold on the idea.

CONSUMER: We have two computers in the house and we’ve just gotten a satellite TV and I don’t think we’re using all the capabilities of things that we have at the moment.

CONSUMER: I don’t know, it would have to offer me something that I couldn’t get anywhere else.

WOODS: Analysts say it’s a hard sell.

JOSH BERNOFF, TELEVISION ANALYST, FORRESTER RESEARCH: There is a limited number of people in the world who want a separate set top box to deliver interactivity. Web TV sales have pretty much run out of steam and it’s our expectation that the separate AOL TV boxes will be similarly unsuccessful.

WOODS: Bernoff says to succeed, interactivity will have to be built into the cable or satellite boxes. That’s already in the works, so stay tuned. Stephanie Woods, 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.

08/31/2000: Prime Mover: Donna Dubinsky, President & CEO, Handspring

JEFF YASTINE: Handspring (HAND) is giving Palm (PALM) a run for its money in the PDA, or personal digital assistant, market. Handspring’s President and CEO is Donna Dubinsky. She helped create the original Palm Pilot then left Palm in 1998 to form Handspring. The company’s marching orders are to keep it small, simple, affordable and connected. Those principles are what inspired Handspring’s best known product, “The Visor” handheld computer. Handspring has over 260 employees and went public in June. It’s currently trading at around $35 a share. In tonight’s prime movers segment, Donald van de Mark of Myprimetime.com asks Dubinsky when Handspring will reach profitability.

DONNA DUBINSKY, PRESIDENT & CEO, HANDSPRING: We know that this is going to be a company that has a clear path to profitability. We have a strong gross margin. We are spending today below the line, if you will, to generate brand awareness, to expand in multiple geographies, to have lots of products under development such that, you know, it won’t be hard once the sales catch up with that spending to get to profitability. You could expect that, you know, within the next year or two.

DONALD VAN DE MARK, MYPRIMETIME.COM: Well, clearly you have a known model, since you helped create Palm Pilot. It’s interesting that you’re taking on your former company, your former product.

DUBINSKY: Well, you know, we really view them as much a partner as a competitor, to tell you the truth. We left and we licensed from them the Palm operating system, so we pay them a royalty on every device that we sell and we work very closely with them on figuring out where should the O.S. go and we support their developer community alongside of them. And our first product, the Visor, has done very well, so we expect to continue to do well. But we partner with them as much as we compete with them.

VAN DE MARK: It’s interesting the next stage for these little handheld computers. It’s almost more about communicating than it is about computing. Is that true?

DUBINSKY: Yes, we really see that wireless communications is going to have a big part in this category. I think we share the vision that many people in this industry do that more and more wireless capabilities are going to be imbedded in these devices over time.

VAN DE MARK: Let me ask you about an issue that’s important to a lot of companies in the new economy and that is selling through the Internet through a Web site versus selling through old fashioned bricks and mortar. You are now doing both. Why both?

DUBINSKY: You know, that’s a great question and we agonized and debated over this when we started Handspring, of how do we want to sell our product could we create a company that sold only on the Internet? Clearly there’s tremendous advantages in managing inventory and communicating directly with customers. And this is still a new enough space that a lot of people want to buy these products at retail, they want to see them, they want to touch them, they want to try the handwriting, they want to look at the display. And there is a huge demand for the products to be distributed at retail. So we decided that we would sell the product both ways and that we would let the customer decide which way they want to buy the product.

VAN DE MARK: How big can this market get in the next two or three years?

DUBINSKY: This market will no doubt exceed hundreds of millions of units over time. I’m not sure the exact time frame, but the PC business today, by comparison, is 100 million units a year. We expect that this market will be far bigger than that.

VAN DE MARK: You’ve been asked about management and leadership before and one of the things you’ve said is that those two things can be taught, but there is also something that you call inner strength that can’t be taught that you need to build a business. What exactly do you mean?

DUBINSKY: Well, I think there’s lots of skills that can be learned. You can learn accounting skills. You can learn product, you know, product innovation skills. You can, there’s skills that you can learn. But there’s a part of a personality, I think, that has leadership aspects or that doesn’t, which makes people want to work with you, that makes people want to follow you, that makes people want to help build businesses together.

VAN DE MARK: Well, congratulations on the IPO and good luck with Handspring.

DUBINSKY: Thank you.

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.


08/31/2000: Commetary: How The Race For The White House Could Impact Wall St.

JEFF YASTINE: Washington’s impact on Wall Street will be felt this fall as the presidential election takes center stage. Or will it? Here’s tonight commentator, Todd Buchholz, Chairman of Victoria Capital and author of “Market Shock.”

TODD BUCHHOLZ, COMMENTARY: Ho hum! Wake us up for Thanksgiving. So far investors don’t seem to care about the presidential race. Oh, the economy is humming a long, jobs are easy to come by. But is the Gore versus Bush just another tweedledee versus tweedledum race? In fact, between now and election day when these southerners square off, investors will wake up and smell the corn pones. This race could shakeup your portfolio. Vice President Gore is a populist. You need someone willing to fight for you and not the powerful drug companies, he says. He argues HMOs are too greedy and was to tame their profits. Governor Bush favors subsidizing Medicare patients so they can afford better drug coverage. Gore fired similar shots at tobacco and oil. If you own tobacco stocks you’ve already been burned as the White House raised cigarette taxes. With oil prices leaping higher this year, Gore pounced on Bush, accusing him of being too cozy with big oil. Bush reminds voters that the White House hiked gas taxes in ‘93. One sector should benefit from the debates, namely defense. Bush charges that U.S. armed forces are badly prepared while Gore boasts of new missile defense plans. No matter who wins, defense stocks are marching on the offense. With all these disagreements, investors would be foolish to sleep through to Thanksgiving. After all, both Democrats and Republicans insist that one of the candidates is a turkey. They just can’t agree on which one. I’m Todd Buchholz.

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.


08/31/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Wall Street’s blue chips opened with a snap-back technical rally today in the wake of yesterday’s 112-point drop in the Dow Industrial Average. And the early upturn was spearheaded by over a 12-point run-up in J.P. Morgan (JPM) stock on takeover speculation following DLJ’s (DLJ) acquisition by C.S. First Boston (CSGKY). That early jump in Morgan (MWD) accounted for about 72 points of a 124-point gain in the Dow at 10:30 a.m., when the NASDAQ Index was doing quite well itself with a 67-point advance. Overshadowing significant weakness in the big retail stocks, triggered by those sluggish sales figures you just heard about, were firm bond prices which helped stocks in general extend their early gains throughout the rest of the morning. Halfway through the noon hour, the Industrial Average posted a hefty 193-point gain, while the NASDAQ Index was up 80 points. Blue chip buyers gradually backed off throughout the afternoon, but the NASDAQ market continued to advance. The Dow Industrial Average had its closing gain trimmed to 112.09 points, exactly what it lost yesterday; and now it stands at 11,215.10 where it was Tuesday. In today’s 206-point trading range, the Dow closed down about 96 points from the best level of the session. Up 110 1/4 points from the low of the day. The NASDAQ Composite rose 102.54, ending at 4206.35. In its 82-point trading range, the Composite settled about 79 points above its worst level of the day.

Big board volume up over a billion shares. Well up from yesterday. One of the most active days recently. And up volume exceeded down volume by nearly a 5-to-4 margin.

The Dow Transport Index fell just over 2 1/2 points.

With the Utility Index coming up with a gain of 3.62.

Closing Tick practically neutral at -83.

Standard & Poor’s 500 up just over 15 points.

Nearly a 6 1/2-point run-up in the Standard & Poor’s 100.

The MidCap 400 achieved another record high, gaining 7 1/10 points.

The Bridge Futures Price Index gained 2.07.

New York Stock Exchange Composite up just over 4.

Just over a 3-point gain in the Value Line.

And the Russell2000 Small Cap Index up just over 5 1/2 points.

The broadly-based Wilshire 5000 up about 154 2/3 points.

After the market closed, the Federal Reserve reported in the week ending August 21, the M-2 money supply rose $20.9 billion.

The bond market rallied nicely today, for several reasons, including: the slow August retail sales mentioned earlier; news of a record 7.5 percent tumble in July; new factory orders; and, a slowdown in Chicago area manufacturing activity - all of which might convince the Fed, no more rate hikes are needed. A smaller-than-expected 1/4-point hike in European interest rates also helped tax free and corporates rise 1/4 to 1/2 point, on average. While boosting Treasuries across the board.

The 5-year notes up 12/32.

The 10-year notes up 22/32, with the yield at 5.72 percent.

30-year bond gained just over one point.

And the Lehman Brothers Long-Term Treasury Bond Index just over an 11-point gain.

As we end the month of August, was it a good one for the blue chips? You bet it was. The Dow up 693.12 or 6.6 percent for the month overall, today, up 112, 17 stocks higher for every 12 lower, 139 new yearly highs, only 31 new lows.

Clear Channel Communications (CCU) topped the active list on 24.8 million shares, down well over $4.00. The company has completed its merger with AMFM.

The Gap (GPS) down $3.00. You heard all the bad news and the downgrades there.

Ford Motor (F) down $1.81. You heard the bad news there.

And Target (TGT), another weak retailer, off $2.69 and Standard & Poor’s downgraded it from “accumulate” to just a “hold.”

AT&T (T) off $0.13. The “Washington Post” says Chief Executive Officer Michael Armstrong is considering a major restructuring of AT&T.

Lucent Technologies (LU) fell $1.13.

Compaq (CPQ) moving up $0.81.

Mattel (MAT) in there with a loss of $0.56.

Nokia (NOK) gained $3.13. That quarter point rise in European interest rates was smaller than expected and helped a lot of the European based stocks.

Wal-Mart (WMT), another weak retailer, down $0.75.

Calpine (CPN) rose $4.38. J.P. Morgan began coverage of the stock today with a “market perform” rating.

Coca-Cola (KO) down $1.56. Sanford Bernstein Brokerage cut its earnings estimates for the year 2001 from $1.79 to $1.75.

Edwards Lifesciences (EW) gained $1.94. The company received FDA approval for its mitral heart valve.

J.C. Penney (JCP) down $1.19. August same store sales up only, I should say down 4 1/2 percent, another weak retailer.

J.P. Morgan (JPM), the star of the day, up $16.13. And that rise in J.P. Morgan accounted for 90 points of the Dow’s 112 point run-up today.

MONY Group (MNY) up $3.00 a share. It’s going to be added to the Standard & Poor’s Midcap 400 Index after the close of trading tomorrow.

Dot Hill Systems (HIL) up $1.56, positive reaction to the company’s naming its Co-Chief Executive Officer James Lambert as the sole CEO.

Dave & Buster’s (DAB) with the restaurant and entertainment complex company in with earnings. Second quarter, $0.17, up from last year’s $0.15, and sales up a whopping 35 percent.

Lexmark International (LXK), the printer company, up $8.25. Salomon Smith Barney upgraded it from “neutral” to “buy.”

Oceaneering International (OII) gained $1.88. Lehman Brothers issued a “buy” recommendation and has a $25.00 a share target for the stock.

Best Buy (BBY), another weak retailer, down $9.13. Second quarter same store sales up 5.1 percent. That was disappointing to some analysts.

And HEICO (HEI), this is a company that’s in the jet engine replacement parts business, third quarter earnings higher, $0.29, up from $0.24, $0.03 above the Street estimate. But the company says it sees flat fourth quarter earnings at best.

NASDAQ trading, a gain of 102.54 today. For the month of August, that index rose 439 1/3 points or 11.7 percent. Volume heavy today, almost 1.9 billion shares; 24 stocks up for every 16 down.

Cisco Systems (CSCO) toped the active list, up $2.06. The company’s going to acquire Pickstream Incorporated for $369 million in Cisco stock.

JDS Uniphase (JDSU) up nearly $6.50.

Dell Computer (DELL) up $3.69.

Microsoft (MSFT) fell $0.19.

Broadcom (BRCM) snapping back with an $11.56 gain.

Intel (INTC) up $1.38.