SUSIE GHARIB: On Wall Street, financial stocks and tech stocks were in the spotlight today. The Dow rose 50 points on merger news in the financial sector. But the NASDAQ took another plunge: down 130. Meanwhile, in Washington today, Firestone and Ford were in the spotlight. Lawmakers grilled officials from both companies over their tire problems linked to highway deaths. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Despite a massive recall of 6.5 million tires, lawmakers want to know why Bridgestone/Firestone and Ford didn't notify customers, sooner. Long before the recall began in August, dozens of deaths and hundreds of injuries were blamed on the defective tires, especially on the popular Ford Explorer.

SENATOR ARLEN SPECTOR R- PENNSYLVANIA: That is a reckless disregard for the life of another, and that is equated in the law with malice; and that rises to the level of second-degree murder.

WOODS: Ford and Bridgestone/Firestone executives came under fire for not notifying U.S. customers and regulators as they recalled tires overseas last year.

REP. HEATHER WILSON, R-NEW ECONOMY WATCH MEXICO: We've seen claims in the last month that they didn't know until July of this year, and now, you are working around the clock to find out what's wrong. That's rubbish. You knew you had a problem, a long time ago.

WOODS: The CEO of the Japanese tire maker admits the company is still trying to determine what makes the tires fail, but he offered this apology.

MASATOSHI ONO, CEO, BRIDGESTONE/FIRESTONE: As chief executive officer, I come before you. I apologize to you and the American people.

WOODS: Even though they are under a firestorm of criticism from members of Congress, Ford and Bridgestone/Firestone executives continue to point fingers at each other. Firestone blames the accidents on tires that were under-inflated. Ford recommended a lower tire pressure than Firestone. Ford says the Explorer is safe, and blames Firestone tires.

HELEN PETRAUSKAS, VP/SAFETY, FORD MOTOR CO.: Explorers equipped with non-recalled tires haven't exhibited those problems.

WOODS: Lawmakers warned the companies not to fudge the facts, and they promised to go through documents with a fine-toothed comb to ensure they don't. Ford and Bridgestone/Firestone will also remain under scrutiny to make sure they are doing all they can to replace the faulty tires. 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.


09/06/2000: Citigroup To Buy Associates First Capital

SUSIE GHARIB: The nation's biggest financial services company is getting even bigger. Citigroup is buying Associates First Capital, the Dallas-based lending company. It's a stock deal valued at $31 billion. As Suzanne Pratt reports, Wall Street applauded the news.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Citigroup's Sandy Weill is at it again. Considered one of Wall Street's most acquisitive CEOs, Weill is now adding Associates First Capital to the Citigroup family. Not only does the purchase ramp up Citigroup's existing consumer lending franchise here in the U.S., but analysts say, more importantly, it gives Citigroup a stronger presence overseas - particularly in Japan where Associates is the fifth largest consumer finance company. Wall Street analysts also like the deal because it should help to make Citi's earnings less volatile, and because it will be accretive.

DAVID BERRY, BANKING ANALYST, KEEFE, BRUYETTE & WOODS: It adds to Citi's earnings without any kind of cost savings or benefits, and of course, there will be cost savings. This is a Sandy Weill deal. So there are going to be some cost savings, and very likely, the numbers that have been told to us are understating what will actually be done.

PRATT: What Wall Street is being told is that the purchase will result in cost savings of about $600 million in the first few years. In addition, Associates' shareholders will get about three-quarters of a share of Citigroup stock for each of their shares. That works out to about $42 a share, or a premium of about 50 percent based on Tuesday's closing price for Associates. As for trading today, Associates' stock surged, while Citigroup shares dipped. And even more action was seen today throughout the financial services sector, where Citi's deal rekindled speculation that other financial powerhouses would soon tie the knot. But some analysts say while they expect further consolidation in the sector, the recent run-up in stock prices may be overdone.

DIANE GLOSSMAN, BANKING ANALYST, UBS WARBURG: A lot of the juice has already been squeezed out of the orange here. We continue to be quite selective within the banking part of the financial services universe, simply because we're concerned that a number of players may have trouble meeting earnings expectations.

PRATT: Today's deal means Citigroup could be off of the acquisition trail for some time. Even though the transaction is expected to close by year end, analysts say Citigroup will be busy digesting this one for a while. 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.

09/06/2000: OPEC Update & Analysis

SUSIE GHARIB: Oil prices were gushing today. They hit another 10 year high fueled by worries that when OPEC ministers meet on Sunday they won't do much to ease high prices. Crude oil futures surged more than $1.00, closing just below the $35 a barrel level. I talked with our colleague from BridgeNews today, Peter Rosenthal, after his meeting today with Saudi Arabia's oil minister and I asked him what OPEC is expected to do next.

PETER ROSENTHAL, SENIOR ENERGY CORRESPONDENT, BRIDGENEWS: Well, he refused to show his hand too much but he did say that they're going to discuss it Sunday and it's not clear whether more crude production is necessary. They have added production this summer and prices remain high. So he's pointing his finger at other parts of the oil market.

GHARIB: Now, the number that's being floated around among all of the traders and analysts 500,000 barrels more. That's what Saudi Arabia is going to propose at the OPEC meeting. But traders are saying even that won't hope to reduce prices.

ROSENTHAL: That's right. This price ban mechanism that OPEC has will be triggered on Friday and add 500,000 barrels a day so-called automatically but they're going to debate whether that much or even more is necessary with countries possibly like Saudi Arabia pushing for more than that and others who can't add any more supply pushing against that.

GHARIB: Now, the other thing that's kind of interesting is this new negotiating tactic. The Saudi Arabian oil minister you spoke with said that Americans should cut their fuel taxes. Now, where is that coming from? That seems very unrealistic.

ROSENTHAL: That's right. OPEC has hammered that point a couple of times this year but when I asked what else the market can do to ease prices, he said cut taxes. And taxes are a lot higher in Western Europe than they are in the U.S. But it is a factor of the oil price. But analysts say it's unlikely that those taxes will be eased any time soon.

GHARIB: All right. Now, the American Petroleum Institute came out with its latest inventory report and we see that the oil inventories have notched up a little bit. They're still low, but they've notched up a little bit. How will that new information impact the OPEC meeting this weekend?

ROSENTHAL: Well, it could ease some of the pressure on prices at the moment but until inventories build consecutive weeks and get above a key level, then prices will remain high and people are going to still look for OPEC to increase output.

GHARIB: I guess the question is, is where is all the oil? I mean with all the increase in production how come prices aren't coming down?

ROSENTHAL: That's a good question. Saudi Arabia said that they increased production by more than twice the amount that people had expected they had done this summer and the question is where has that all gone.

GHARIB: And nobody has the answer just yet. Now, the crown prince of Saudi Arabia is meeting with President Clinton in New York tonight. What should we expect to come from that meeting?

ROSENTHAL: I don't know if we can expect anything, but President Clinton could ask Saudi Arabia, which is the one that holds the key to the most oil at the moment, to increase output. But on the sideline of that is the Jerusalem peace negotiation and how the Saudis feel about Palestine and Israeli.

GHARIB: So, very delicate negotiations going on.

ROSENTHAL: That's right.

GHARIB: And I know you're on your way to go and cover that so we'll let you go. Thank you so much, Peter.

ROSENTHAL: Thank you.

GHARIB: And we have been speaking with Peter Rosenthal, Senior Energy Correspondent with 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.

09/06/2000: The Search For Value In Midcap SPDR

SUSIE GHARIB: The MidCap 400, like the majority of the market indexes, was on the downside today. But so far this year it has been the index to beat. Scott Gurvey takes a look at whether this is a good time to add mid cap stocks to your portfolio.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The American Stock Exchange has been heavily promoting its midcap SPDR, a stock like instrument based on the Standard & Poor's 400 Index. This is a sector that has been attracting quiet but steady attention from investors over the course of this anything but steady trading year. While the Dow Jones Industrial Average and the NASDAQ Composite are basically flat for the year, the MidCap 400 has gained more than 22 percent. Part of this is just a matter of playing catch up. Mid and small cap stocks, particularly those not in the high tech sector, have been trailing the rest of the market for years. But there has also been a growing conviction among both professional portfolio managers and individual investors that this is one place where value can still be found.

SATYA PRADHUMAN, DIRECTOR, MERRILL LYNCH SMALL CAP RESEARCH: For the price that you're paying for the average multiple on a large company versus a small, a midcap stock, they're currently at about a 30 percent discount to the large cap sector. Now, go back to a bull market, the end of a bull market, which is the early 80's for midcap stocks, these stocks sold at a 60 percent premium to the large cap sector. So we're looking at a very disparate market.

GURVEY: There are several words of warning the professionals have for investors considering mid and small cap stocks. While low price earnings ratios can be a sign of value, they can also be a sign that a company is a dog and should be avoided. And market reversals can hit the smaller companies disproportionately hard.

STEVEN DESANCTIS, DIRECTOR, PRUDENTIAL SECURITIES SMALL CAP RESEARCH: Large caps do the best in market corrections, midcaps the next best and small caps typically under perform. And so you should really, it is a concern, the volatility. Also, they're not as liquid as large caps and so it's a little tougher getting in and out, especially when you need to.

GURVEY: At this point, many investors have caught on to the midcap move, leaving others to look to even smaller companies for value opportunities. Remember, in general, the smaller the company, the greater the risk. 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.

09/06/2000: "Money File"-Stocks Vs. Bonds

SUSIE GHARIB: It's a classic question for investors: are you better off buying stocks or bonds? Some possible answers are in tonight's money file. Here's Eric Schurenberg, Assistant Managing Editor of "Fortune" magazine.

ERIC SCHURENBERG, ASSISTANT MANAGING EDITOR, "FORTUNE" MAGAZINE: Is there any investment more useless than a bond? Right now the 10 Year Treasury yields about 5.7 percent, pitiful compared to the 20 percent plus that stocks have delivered over the past five years. Ed Kerschner, the strategist from Paine Webber, argues that long term investors don't need bonds. Yes, they're safer than stocks and a portfolio of stocks and bonds will wobble less from year to year than one entirely in stocks. But if you're saving for a far off goal like retirement, who cares about year to year fluctuations? Your risk isn't that you'll have a bad year, it's that you won't have the money to retire when you want. And that argues in favor of keeping your money in stocks. As Kerschner points out, there has never been a period of 20 years or more in which stocks failed to beat bonds. John Bogle, the Chairman Emeritus of the Vanguard Group, agrees the big risk for a long term investor is coming up short. But he reaches the opposite conclusion. He says you do want some of your money in bonds in case stocks veer from their previous practice and turn in a lousy long term performance. Now, whose guidance you follow, I think, depends on how you answer two questions. First, how confident are you that stocks will beat bonds in the future? History favors stocks, but history doesn't offer money back guarantees. Second, if stocks have a bad stretch, a '73-'74, say, how confident are you that you'd stick with them? Stocks long term record will look less like a sure thing at the bottom of the bear than it does today. Having some of your portfolio in bonds might make it easier to stand your ground. You see, that's the thing about stocks for the long run, you only get those returns if you're really there for the long run. I'm Eric Schurenberg.

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.

09/06/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Wall Street's blue chip stocks opened with a rollicking rally today, partly on the report that second-quarter U.S. productivity jumped a better-than-expected 5.7 percent, which pushed unit labor costs down 0.4 percent, all of which of course quashed inflation fears. Meanwhile, the financial sector got a boost, not only from news that Citigroup planned to acquire First - Associates First Capital (AFS) which we'll have complete details on next; but also, from a report that Deutsche Bank (DTBKY) was planning to buy J.P. Morgan (JPM). At 10:00 a.m., the Dow Industrial Average was up almost 113 points, with about half of that gain due to an 11-point run-up in J.P. Morgan stock. The NASDAQ Index, however, was down 14 points as tech stocks were still weak because bellwether Intel (INTC) continued to fall after yesterday's downgrading by the Piper Jaffray brokerage. For the next three hours, the blue chips, including some of the old cyclicals, continued to outperform the tech sector. At 1:00 p.m., the Dow was up 135 points; the NASDAQ down 51 points. Continuing deterioration in the NASDAQ market due to persistent selling of the tech sector, gradually undermined the blue chips in afternoon trading, and the Dow Industrial Average saw its closing gain cut to only 50.03 points, putting it at 11,310.64. In today's 148-point trading range, the Industrial Average closed down about 91 points from the best level of the session, and up about 58 points from the low of the day. The NASDAQ Composite tumbled 129.84 points ending at 4013.34. And for the second day in a row, this Index closed at its worst level of the session.

Big board volume moved up toward a billion shares today. Well up from yesterday's pace. And about 32 million more shares of up volume than down volume.

The Dow Transport Index up 23 2/3 points.

And the Utility Index, another record high, with that gain of 5 points exactly.

The Closing Tick neutral at +36.

Standard & Poor's 500 down nearly 15 points.

The 100 off 9 1/4. Or nearly so.

And the MidCap 400 fell 1.17.

Bridge Futures Price Index down 1/10 of a point.

New York Stock Exchange Composite fell nearly 1 3/4 points.

Almost a 1/4-point gain in the Value Line Index.

The Russell2000 Small Cap Index down nearly 2 3/4 points.

Broadly-based Wilshire 5000 off nearly 157 1/4 points.

That big jump in second-quarter productivity failed to help bond prices today after Richmond Federal Reserve bank, President Alfred Broaddus said that it might just be a temporary phenomenon. The market was also under pressure from a heavy forthcoming schedule of new corporate debt offerings, and even worse was today's rise in New York October oil futures.

Tax free and corporate issues closed down 1/8s and 1/4s on average.

While the Treasury market was down across-the-board.

5-year notes dropping 5/32.

Bellwether 10-year note down 9/32 with the yield up to 5.73 percent.

30-year bond lost 18/32.

And the Lehman Brothers Long-Term Treasury Bond Index off exactly 6 1/2 points.

Well, the blue chips were certainly in style today with the Dow outperforming the NASDAQ by a considerable margin. The Industrial Average, of course, was up 100 but settled for a 50 point closing gain. The broader market higher, 1,608 to the plus side, 1,236 down, 169 new yearly highs, only 35 new lows.

Citigroup topped the active list on nearly 23 million shares, losing $3.00, as you saw, on the acquisition for stock of Associates First Capital (AFS), which had a good day, up $10.81. That deal worth a little over 40 bucks, as you saw earlier.

Micron Technology (MU) down over $9.50. Donaldson Lufkin Brokerage downgraded it from a "buy" to an "under performer" and lowered its price target all the way down to $50 a share.

Pfizer (PFE) off $1.19, a weak drug group.

General Electric (GE) moving up $0.25, fifth in volume.

Nokia (NOK) down $1.44.

AT&T (T) lost $0.94.

Lucent Technologies (LU) off $0.81.

Compaq Computer (CPQ) dropped $1.19.

And 10th in volume was Ford (F), down $0.38 per share.

HJ Heinz (HNZ) down $1.75. The company in with first quarter earnings a little bit higher, $0.68 versus last year's $0.65, but sales were down slightly and the company is guiding second quarter earnings estimates lower, to about $0.68 a share. That would be flat with the first quarter.

Honeywell International (HON) up $0.94. It was up as high as $41.75 after First Boston began covering the stock with a "buy" recommendation.

And J.P. Morgan (JPM) up $7.81. It traded as high as $171.63 but this move accounted for 44 points of the Dow's gain. As I mentioned earlier, there was a German business magazine called "Vutschafts Volker," roughly translates to "Business Week," that says Deutschebank is planning a stock buyout bid and preparing for it by stepping up its effort to list its own stock on the New York Exchange.

Keycorp (KEY) up $1.25. CIBC World Markets upgraded it from "hold" to a "strong buy."

Pepsi Bottling (PBG) down $1.59. Merrill Lynch downgraded it from "buy" to just "near term accumulate."

And RadioShack (RSH) had a good day, up $2.63. Its August same store sales were up a handsome 14 percent.

Shaw Industries (SHX), the nation's largest carpet manufacturer, up $6.44. Warren Buffett's Berkshire Hathaway Corporation (BRK) is offering to acquire up to 86 percent of Shaw's stock for $19 a share in cash.

And Mohawk Industries (MHK), another carpet maker, rolled up a nice gain of $3.06 in sympathy with that bid for Shaw Industries.

Heller Financial (HF) a $3.00 gainer. Of course, that's in sympathy with another consumer finance company, Associates First, which got that Citigroup buyout bid. And Heller also hosted an upbeat meeting in Chicago with analysts today.

Household International (HI) yet another strong consumer finance company.

Litton Industries (LIT) down just over $13. Fourth quarter earnings of $1.52 versus a loss of $0.48 last year. But the company says the first quarter of its new year sales will be down as much as 50 percent from fiscal year 2000.

And Huffy (HUF), the bike manufacturing, down $1.81. The stock's been weak since the "Wall Street Journal" last Tuesday said its hot scooter sales are bound to slow down.

NASDAQ trading, nearly a 130 point loss, 3.1 percent. Volume up a touch from yesterday. Seventeen stocks higher for every 23 lower.

Intel (INTC) topped the active list, down $3.55, still smarting after that Piper Jaffrey downgrade yesterday.

Juniper Networks (JNPR) off $10.44.

Sun Micro (SUNW) down $7.44.

Cisco (CSCO) in this weak high tech group off $1.75.

WorldCom (WCOM) dropped $2.25.

Microsoft (MSFT) losing $0.69.

CIENA (CIEN) off nearly $8.00 a share.

QUALCOMM (QCOM), the only gainer in the 10 most active, up $2.4