JEFF YASTINE: Good evening, everyone. Wall Street closed the week on an up note, with both the Dow and the NASDAQ posting gains. The blue chips closed up 23. The Tech Index added almost 28. The moves were in reaction to a couple of new economic reports, including the closely-watched report on the nation’s employment picture. Scott Gurvey reports.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is the drop in the Index of Manufacturing Activity, more than the employment report, that brought relief today to Wall Street. The National Association of Purchasing Management Index fell to 49.5 in August, from 51.8 in July. The decline below 50 is significant because it indicates an economic contraction. This is the first “below 50” reading for the Manufacturing Index after 18 months of growth. The report is evidence that the economy is slowing. Further evidence comes from the August employment report. It shows a decline in total non-farm employment of 105,000. While the unemployment rate rose 0.1 percentage point, both numbers indicate unexpected weakness. But there are some special circumstances which confuse the picture. A strike of telephone workers at Verizon (VZ) added to the employment decline. So, did a decline in the number of temporary census workers. The data leads most economists to conclude the economy is slowing, but they disagree as to how much.

EDWARD MCKELVEY, SR. ECONOMIST, GOLDMAN SACHS: I do suspect that we’re going to see modestly slower GDP growth, this quarter, and probably a little bit next quarter, than what we saw in the earlier part of this year. But I would also emphasize that there’s really not that much of a break in the trend of income growth to consumers, and the easing in the labor markets - fairly modest.

GURVEY: Wall Street is hoping that today’s news will cause the Federal Reserve to change its, so-called “directive” on future interest rate moves. Right now, the Central Bank says it is more likely to raise rates than to lower them.

JOHN RYDING, SR. ECONOMIST, BEAR STEARNS: Not only do you have weaker readings in these reports; you also had another big fall in the prices-paid component, to the lowest level since July of last year. So, I think we could see a neutral directive in October.

GURVEY: That change in the way the Fed is leaning, if it happens, should have a bullish impact on the markets. The Fed meeting is October 3. 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.


09/01/2000: The Trouble With Air Travel

PAUL KANGAS: Labor Day Weekend traditionally marks the end of the summer travel season, and what a season it’s been. Record delays and congestion have eroded passenger confidence, and sent complaints sky-rocketing. As Darren Gersh reports, some consumer advocates argue the airlines are making promises they can’t keep.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: We all know how bad rush-hour can be on the road. Now, rush-hour in the air is almost as bad. Consumer advocates say airlines are contributing to the problem, by scheduling more and more flights into popular early morning and evening travel times. Even though the carriers know those flights won’t make it on time.

PAUL HUDSON, AVIATION CONSUMER ACTION PROJECT: There might be as many as twice as many airplanes to take off in a given hour, as the airport has capacity for. So those planes will simply be delayed. Even if you get into the airplane, you’ll wait on the tarmac.

GERSH: There’s no question scheduling does make a dramatic difference. This is a busy airport, during rush-hour. And this is a busy airport, a few hours after rush-hour. Airlines say, their schedules reflect a simple fact: people want to fly at the same time of day. Airlines say they do build extra time into their schedules for push-back and taxiing during peak travel times; the rest is all driven by customer demand.

DAN FUSCUS, SPOKESMAN, AIR TRANSPORT ASSN.: If people want to fly at 5:00, that’s when we schedule the flights. If they want to fly at 3:00, that’s when we schedule the flights. I mean, scheduling and prices are both set by the marketplace.

GERSH: But some analysts say, it may soon be necessary to set prices, based on airport capacity; charging more for flights in peak times.

DARRYL JENKINS, AIRLINE ANALYST, GEORGE WASHINGTONUNIVERSITY: Peak pricing is a short-term way of relieving congestion at the airport, but it does not increase capacity, and that’s our long-term problem, and that is what we need to be focusing our attention on right now.

GERSH: Consumer advocates say peak pricing is unpopular, complicated and may not work. A better solution consumer groups argue would be what they call, “truth in scheduling regulations.”

HUDSON: To outlaw deceptive scheduling practices, and see if people won’t choose times that are perhaps slightly less convenient, but do not overload the system.

GERSH: The FAA is now studying whether airlines, even under perfect flying conditions, could keep to their published schedules. In the meantime, almost everyone agrees, travelers will be seeing red more in coming years. Darren Gersh, NIGHTLY BUSINESS REPORT, Dulles airport.

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.

09/01/2000: “Market Monitor”- Douglas Raborn, Chairman, Raborn & Company

PAUL KANGAS: My guest market monitor this week is Doug Raborn, Chairman of Raborn and Company, an investment advisory service based in Delray, Florida. And welcome back to the NIGHTLY BUSINESS REPORT, Doug.

DOUGLAS RABORN, CHAIRMAN, RABORN & COMPANY: Thank you, Paul.

KANGAS: Judging by its strong performance recently, the stock market seems convinced the Federal Reserve is through raising rates because the economy is slowing down. But is this enough to sustain the upturn in the market in the coming months, let’s say for the rest of the year, or do we need something else to keep it going up in the bullish mode?

RABORN: Paul, I’m afraid the bull market is intact and the Fed’s out of the way, so it’s clear sailing, but you’ve got to be selective.

KANGAS: And that’s what you said when you were with us last January, too, and you said we probably would get a very serious sell off in some of those high flying high techs and dot.coms and in the spring we did, indeed. But the comeback has been very impressive. Is it going to last?

RABORN: Paul, I think it will last. You’ve got to remember, there’s demand for stocks is outstripping supply. There’s so much money in people’s 401Ks and stocks are the investment of choice.

KANGAS: But don’t we need some other good news than lower interest rates to keep bullish enthusiasm thus alive?

RABORN: If you look at the earnings reports, Paul, earnings remain very strong and that’s the good news we need. Look at oil above $31 a barrel.

KANGAS: $33 today and so are the oil futures.

RABORN: Look at the Fed raising rates and they haven’t kept this market down. It’s just flat where it was the last time I was here in January.

KANGAS: So is it going to be one of these all encompassing upward moves or is it going to be very selective?

RABORN: Well, we’re bringing everything along now because the big cap indexes have hid how strong the mid cap index has been. Smaller stocks have jumped about 35 percent and this August we had the biggest jump for the NASDAQ in that month ever, 12 percent.

KANGAS: That’s right. It was really impressive. Your last visit with us in late January you recommended just three issues. You said hang on to, you know, most of the biggies, the good blue chips you’ve been with.

RABORN: Right.

KANGAS: One of them was JWGenesis Financial (JWG). It was around $15 and it got into the high 20s, and today, of all days, it got a buyout bid, but a very disappointing one. The stock fell 4 points.

RABORN: Paul, it looks like a take under when they say

KANGAS: A take under, that’s good.

RABORN: First Union (FTU) is offering $10 to $12 a share in cash.

KANGAS: Right.

RABORN: But you’ve got to remember that the holders who hold through the end of this month are going to get a piece of MVP.com , which could be worth $3 to $4 a share. So be patient with this one. You’ll get rewarded.

KANGAS: OK. Source Information Management you liked for some time. It was 14 ½ in January. It’s now down to around 10 ½.

RABORN: Paul, it was rated as the fifth fastest growing company over the last three years in the Fortune 100 magazine—

KANGAS: You still like it?

RABORN: They’ll earn north of $1 this year. That’s an earnings jump of 67 percent year over year.

KANGAS: OK.

RABORN: It’s selling at 10 times earnings. The stock should be $25, not $10.

KANGAS: So obviously it is a buy.

RABORN: It is a buy.

KANGAS: OK. And Salton (SFP) was a recommendation at $34. It went as high as $61 and it’s back down into the high 30s. Did you stay with that or did you take profits?

RABORN: Paul, we’ve stayed with it. We think Salton should, because of its growth rate, should sell at least 15 times earnings and it’ll earn north of $7.00 next year. Our target is over $100.

KANGAS: All right. Let’s get some new selections in here, since you’re bullish.

RABORN: Well, I also want to say that Salton was number six on “Fortune’s” fast growing list.

KANGAS: OK. You like it.

RABORN: New selection, Sharper Image (SHRP). Everybody remembers the mall based stores, but this company is tripling its Internet business. Its margins are climbing as it migrates to its own in-house developed products, which have higher margins as other—

KANGAS: Symbol and price.

RABORN: SHRP, over the counter. Last week retailers reported weak results in their same store sales. Sharp sales were up 80 percent.

KANGAS: All right. And the price of the stock roughly?

RABORN: It’s at $20. Our target is at least $30.

KANGAS: We only have a half minute left.

RABORN: A half minute left?

KANGAS: Yeah. Any other selections?

RABORN: Well, I’ve got a company, a little bit of JWG (JWG). There’s a big consolidation in the brokerage industry.

KANGAS: Right.

RABORN: Europeans want to get in online trading and they want an American foothold. There’s a small company based out of North Carolina called Global Capital.

KANGAS: Symbol?

RABORN: GCAP, over the counter sells for about $7.50. I think it’ll be a teenager by year end.

KANGAS: OK, Doug, thanks very much.

RABORN: Thank you, Paul.

KANGAS: Great to see you again. My guest Doug Raborn, Chairman of Raborn and Company.

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.

09/01/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: That weaker-than-expected August employment report prompted a spirited opening rally on Wall Street today, which lifted the Dow Industrial Average 95 points, about 40 minutes into the trading session, on top of yesterday’s 112-point advance; while the NASDAQ Index rose 54 points, after rising 102 points yesterday. The market’s strength, of course, was the investment community’s way of saying, the Federal Reserve is probably finished raising interest rates for the time being, because the slowing economy will keep inflation at bay. Even so, the market lost a little of its early luster to profit-takers, as the Dow faded to about a 60-point gain at noon while the NASDAQ was up 22 points. The blue chips continued to ease as traders made early exits in the afternoon, but the NASDAQ market held rather firm. The Dow Jones Industrial Average closed with a diminished gain of 23.68 points, and now stands at 11,238.78. This week, the Dow fell twice; rose three times; and had a net overall advance of

46.15 points. The NASDAQ Composite today gained 27.98 ending at 4234.33. And this week, this Index rose in all five sessions, for an overall gain of 191.65 points, at 4.7 percent.

Big board volume slipped however, well down from a billion shares yesterday, 772.6 million. Up volume did exceed down volume by a little better than a 4-to-3 margin.

The Dow Transport Index down nearly 10 3/4 points.

And the Utility Index set a record high, with a gain of 1.24.

The Closing Tick rather bullish, at +413.

Standard & Poor’s 500 up just over 3 points.

Nearly a 2 1/2-point run-up in the 100.

MidCap 400 hit a record high again, up 5.70.

And the Bridge Futures Price Index gaining 1.04.

New York Stock Exchange Composite had a record high, up just over 3 points.

2 2/3 points advance in the Value Line.

Russell2000 Small Cap Index gained just a little over 4 points.

And the broadly-based Wilshire 5000 up exactly 49 ¾ points.

The weaker-than-expected August jobs data gave the bond market a nice boost today, and so did the drop in last month’s Purchasing Managers Manufacturing Index you heard about.

With bond buyers more convinced than ever that all of these reports would keep the Federal Reserve from another rate boost, tax free and corporate issues closed up 1/8s and 1/4s on average. While the Treasury market was nicely higher across-the-board.

The 5-year notes up 9/32.

The Bellwether 10-year note up 10/32, with the yield down to 5.68 percent.

And the 30-year bond rising 3/32.

And the Lehman Brothers Long-Term Treasury Bond Index was up nearly 4 points.

We had a little strength carry over from the month of August into the first of September today, with the Dow up 23 2/3 points. Of course, it was up nearly 100 in the morning. Broader market higher, though, by a 16 to 12 ratio, 123 new yearly highs, only 23 new lows.

Nokia (NOK) topped the active list on 14.4 million shares, up $2.31. A lot of the European stocks in the telecom business were very strong today.

Clear Channel (CCU) down another $3.88. It was off $4.56 yesterday. All of this activity could be linked to the completion of the company’s merger with AMFM (AFM).

Ford Motor (F) rebounding a bit after sharp recent losses, up $0.81.

Lucent Technologies (LU) gained $1.44.

AT&T (T) up $0.19, rumors out there the company may go through a major restructuring.

America Online (AOL) fell $1.25. Next week, the company and Time Warner are going to plead their case for a merger approval from the European Union.

Motorola (MOT) down $0.19.

Pfizer (PFE) was off $0.06 today.

Compaq Computer (CPQ) dropped $0.25.

And then AXA Financial (AXF) down $1.25. It does have a $53.50 a share bid from Axa Group.

British Sky Broadcasting (BSY) up $8.81. The Futsi 100 Index in London hit an eight month high today.

And Corning (GLW) hit a record high, up $11.38 and it seems like investors can’t get enough of that stock.

France Telecom (FTE) up $15.69. France’s Kak 40 Stock Index hit a record high today.

J.P. Morgan (JPM) down $7.63. Of course, it was up over 16 yesterday after Donaldson Lufkin got that buyout bid from C.S. First Boston.

And for the week, J.P. Morgan is actually up almost 11 percent.

News Limited (NWS) up $2.75 on news the company plans to buy back up to $1.5 billion of its common stock.

And Telefonica SA (TEF) up $5.88. Its first half profits fell only three percent. The Street was expecting about a five percent decline, so the stock rebounded.

Minolta-QMS (MQC) rising $1.94, almost 65 percent. The parent company, Minolta, which already owns 57 percent, is offering $5.25 a share for the rest of the stock that it doesn’t own.

Lamson and Sessions (LMS) up $3.75. This stock was hit badly about a week ago when a Gabelli Investment Group said it cut its stake from 10.1 percent to 8.7 percent. The stock was as low as 18 then. It’s really made a nice rebound.

Intimate Brands (IBI) up $2.00 a share. This is an example of a nice comeback in the weak retailing sector today.

And then Uno Restaurants (UNO) was up, down $1.56. The company says its fourth quarter and fiscal year 2000 earnings will be below expectations. Robertson Stevens Brokerage downgraded the stock from “buy” to just “attractive.”

And then Hertz (HRZ) down $4.81. The company sees lower than expected third quarter earnings in the range of $1.30 and fourth quarter only about $0.51 and also says the fourth quarter of year 2001 will be below the previous year’s fourth quarter. First Boston downgraded the stock. Robertson Stevenson cut estimates.

And Dollar Thrifty Automotive Group (DTG), in the same business as Hertz, down in sympathy, although Dollar Thrifty said it’s comfortable with Wall Street earnings estimates.

NASDAQ trade, a gain of nearly 28 points in the Index today. It was up nearly 192 points or 4.7 percent for the week. Volume today way down from yesterday’s pace, early exodus ahead of the long weekend. About 22 stocks up for every 17 lower.

Cisco Systems (CSCO) topped the active list, losing $0.06.

And then Yahoo! (YHOO) down $7.56. Article in the “Wall Street Journal” today refreshed concerns about weakening online advertising.

VeriSign (VRSN) down nearly $13 a share, profit taking there.

Oracle (ORCL) up $1.69.

Intel (INTC) fell $0.94, fifth in NASDAQ dollar volume.

JDS Uniphase (JDSU) down $0.67.

Global Crossing (GBLX) in that strong telecom group up $5.06.

Microsoft (MSFT) up a $0.38.

And then BroadVision (BVSN) rising $4.56.

Dell Computer (DELL), 10th in volume, down $0.56.

Symphonix Devices