SUSIE GHARIB: From Wall Street to Washington, today was anything but "casual Friday." A dizzying day in the stock market, and a stunning decision in the oil market. First, oil. Late this afternoon, President Clinton ordered the release of crude oil from the strategic reserves, something the U.S. has done only once before. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Citing the prospect of a cold winter and tight oil supplies, Energy Secretary Bill Richardson announced the release of 30 million barrels of crude oil over the next 30 days, out of the strategic petroleum reserves.

BILL RICHARDSON, U.S. SECRETARY OF ENERGY: The president will do everything within the power of the federal government to ensure that Americans have the fuel they need to heat their homes. This is the right time to do this.

WOODS: Analysts don't expect the release will have a major impact on prices.

KATE WARNE, ANALYST, EDWARD JONES: Basically, 30 million barrels is nothing in terms of supply and demand. I think the main impact is psychological, and that's very difficult to predict.

WOODS: The move comes after a week in which Vice President Gore made the high cost of oil a campaign theme. GOP nominee George W. Bush attacked the release, saying the reserves need to be used in case of war, or a major disruption of energy supplies.

GEORGE W. BUSH, REPUBLICAN PRESIDENTIAL CANDIDATE: Ten months ago, the president and the vice president thought it was a bad idea to release oil out of the strategic petroleum reserve. Now that we're 45 days away from the election, they've changed their mind.

WOODS: Indeed, the strategic reserves were last tapped during the Persian Gulf crisis, but Richardson says the move is not political.

RICHARDSON: We use the strategic petroleum reserve very sparingly. We believe that the home heating oil stocks, the potential shortages, potential disruptions, justify this action. This is not a price issue. We're not trying to manipulate the price.

WOODS: The decision to release the reserves is sure to be discussed when OPEC members meet next week in Venezuela. Some producers may react with harsh words, but analysts don't expect OPEC to change its production levels. 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.


09/22/2000: Intel Warning Puts Pressure On High-Tech Sector

PAUL KANGAS: On Wall Street, after a bad start, the major indices staged respectable comebacks. At its worst, the NASDAQ Index plummeted 214 points, but eventually closed off only 25. The Dow went from negative to positive with a gain of almost 82 points. As Scott Gurvey reports, Intel (INTC) was the culprit.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Intel's announcement that third-quarter earnings would fall below expectations, and below the guidance the world's leading microprocessor company issued last quarter sent the entire semiconductor sector reeling. And with weaker-than-expected sales of personal computers in Europe getting the blame for the shortfall, stocks and PC makers took a dive. As did stocks in companies that make PC software. But after an initial drop, investors seemed to reconsider, and selective buying began. By the end of the day, even in the semiconductor sector, many stocks were up.

DREW PECK, SEMICONDUCTOR ANALYST, S.G. COWEN: I think this is an interesting example of how investors are becoming much smarter, and much more discriminating in how they treat, at least in this particular case, semiconductor stocks. In other words, they're beginning to recognize that what's going on in Intel may have absolutely nothing to do with what's going on at an Analog Devices (ADI) or a Texas Instruments (TXN) or a Broadcom (BRCM) or many other companies. In fact, in many cases, the only thing they have in common is that they use sand as a raw material.

GURVEY: Personal computers now face competition from other devices which can perform some of their functions. While Intel derives the major part of its revenue from the microprocessors found in computers, others deliver components used in a wide range of wireless communications equipment, set-top and cable television boxes, game playing machines, and other consumer electronic gadgets yet to come. Technical analysts say there may be a bounce from an oversold position for tech stocks next week, but they predict continued turmoil through earnings reporting season.

RICHARD MCCABE, CHIEF MARKET ANALYST, MERRILL LYNCH: We'll have to see how things work out as we get to mid and late October, when the bulk of the actual third-quarter earnings reports will be coming out, and maybe some statements about the fourth quarter as well.

GURVEY: Many analysts today noted the unexpected nature of the Intel announcement, and said the new SEC regulation requiring that such announcements be made public to all investors at the same time is the reason. They said we could expect more surprise announcements in the future. 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.

09/22/2000: Treasury Secretary Summers On Economic Impact Of Weak Euro

SUSIE GHARIB: The Euro got a helping hand today. The U.S. joined the European Union, Britain and Japan in intervening for the first time in currency markets to prop up the beleaguered Euro. It worked at least for today. The Euro gained about $0.02, to $0.88.

At a briefing ahead of tomorrow's meeting of G7 finance ministers in Prague, Treasury Secretary Lawrence Summers said that the U.S. joined the action because of concerns about how the Euro's weakness might affect the world economy.

Then after that news conference, Summers sat down with Washington Bureau Chief Darren Gersh for an exclusive interview. Summers discussed the economic impact of the Euro as well as what's on tap for the G7 finance ministers this weekend.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Mr. Secretary, companies like Goodyear (GT), Gillette and McDonald's (MCD) have all recently been hurt by the weak Euro. What impact do you think the Euro's troubles are having on the U.S. economy?

LAWRENCE SUMMERS, TREASURY SECRETARY: The Euro obviously has fluctuated and the action that we took in conjunction with other central banks was, as our statement explained, at the initiative of the ECB and reflected a set of concerns that were shared.

With respect to the U.S. economy, I believe the fundamentals of the economy are sound for continued economic expansion.

GERSH: Given that we just, the Treasury just moved and it essentially drove the dollar down, what is U.S. dollar policy right now?

SUMMERS: We've stated our policy many times, that a strong dollar is in our national interests. That's been our policy and will continue to be our policy.

GERSH: Intel (INTC) has warned that revenues would fall short of expectations, citing weak consumer demand. The Vice President said that higher oil prices could be crimping consumer demand. Are these signs that perhaps our economy is slowing a bit more dramatically than most people had expected?

SUMMERS: You know, there'll always be fluctuations from quarter to quarter and there will always be revisions in view. But at this point, it appears that the expansion has momentum and it will continue.

GERSH: So no concerns about that maybe we're seeing oil --

SUMMERS: We're always monitoring the economy and clearly the impact of oil prices is something that we look at with, look at with concern and it will clearly be in the interests of both producers and consumers to, in the global economy, to see stability at more normal levels of oil prices. But the basic momentum of economic expansion continues to be there.

GERSH: Well, when you and your colleagues meet in Prague, the finance ministers, you're going to be probably seeing quite a few demonstrators who are going to be saying that the world's financial institutions and rich nations haven't done enough to help highly indebted, very poor countries get out of their debt. The U.S. Congress is considering money to help that effort and to pay off some of that debt. What would you say to the American public, that this is something they ought to be doing to help very poor countries?

SUMMERS: Apart from any moral arguments, debt relief is in our national interest in promoting larger markets for our products, in slowing the spread of diseases that in an increasingly globalized world can come here, in giving struggling countries a chance, which makes the kind of conflicts that we're sometimes drawn into less likely. It is a kind of forward defense in our interests.

GERSH: Mr. Secretary, thank you.

SUMMERS: 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.


09/22/2000:"Market Monitor": Randall Eley, President, The Edgar Lomax Co.

PAUL KANGAS: My guest market monitor this week is Randall Eley, President of The Edgar Lomax Company, an institutional money management firm based in Springfield, Virginia, very nearby our Washington, D.C. studios, where he comes to us tonight, and welcome back, Randall.

RANDALL ELEY, PRESIDENT, THE EDGAR LOMAX COMPANY: Thanks for having me, Paul. Good to see you again.

KANGAS: Looking at the heavy selling on Wall Street this week, it appeared that investors seemed to really believe the weak Euro and higher oil prices will have a very negative impact on corporate earnings. Do you think that's the fact or do you believe the market selloff is over done?

ELEY: On a short-term basis, the market selloff may have been over done and I think that's the reason we saw the NASDAQ come back so sharply today. But on a long-term basis, I don't think it's overdone at all and I think investors are probably seeing this situation correctly.

KANGAS: So this was not a bottom today, this turnaround that we saw, in your opinion?

ELEY: Not in my opinion, by no means.

KANGAS: What is the downside risk from here?

ELEY: I would say for the Dow Jones Industrial Average we could be looking at as much as another 2,000 points. Now remember, this is a worst case scenario.

KANGAS: Did you say 2,000 points?

ELEY: Yes.

KANGAS: My goodness.

ELEY: Somewhere between 8,500 and 9,000 and on the S&P 500, maybe another 200 to 250 points.

KANGAS: What makes you so negative there?

ELEY: Well, when you look at traditional indicators of value, and I know nowadays those are supposed to be old-fangled, out of fashion concepts, but the fact is P/E ratios are normally in the 14 to 15 area. The S&P 500's P/E ratio is 30. It's simply too high. It is assuming too many good things happening in the future and sooner or later all of us human beings have to come down to reality and accept that as Intel (INTC) just announced, that human beings can only produce so much so fast.

KANGAS: Well, you're an investment firm that's practically 100 percent invested at all time in stocks.

ELEY: That's right.

KANGAS: Correct?

ELEY: That's right.

KANGAS: So what is your present strategy with this bearish outlook?

ELEY: It's to hold a whole lot of those stodgy, old economy stocks that most people don't think can go anywhere, but the fact is their prices never got as much out of line as the rest of the market.

KANGAS: Well, when you were last with us April 7th of this year, the Dow was at 11,100 and you said the market is going to be heading basically lower and here we are. You said to sell AT&T (T). It was at $56 and now it's below $30.

ELEY: Yes.

KANGAS: You said sell General Motors (GM) at $85. It's now $68. Right on. Very good moves. But you said with the funds buy DuPont (DD) and 3M (MMM) and those are both down, but not as much as the others.

ELEY: That's right. Well, we can't get them all right, at least not on the exact bottom date.

KANGAS: You also said to buy Philip Morris (MO) and believe it or not, that stock is actually up about 2 1/2 points.

ELEY: That's right.

KANGAS: And you liked Raytheon (RTN), which is up 5 points.

ELEY: Yes.

KANGAS: So, how are you overall for the year?

ELEY: Year-to-date, our portfolios are down maybe four to four and a half percent. But let me tell you, the fact is that is a shock to much of the investment community and that is on the plus side, because most people in the month of June and July actually thought that most value portfolios, the kind of stocks we pick, would actually end up as much as 15 to 20 percent down.

KANGAS: So you're looking to buy the stocks that will go down the least, basically?

ELEY: That's right. And the stocks that will go down the least in the kind of markets where we must maintain most of our money and that's a bear market, which we haven't seen for a long time.

KANGAS: What kind of stocks are these that you're in now?

ELEY: I would take the list from last time. I would stick with Dow Chemical (DOW), Chevron (CHV), DuPont (DU), Eastman Kodak (EK) and we would add International Paper (IP) to the group and also stick with Philip Morris. But I would get rid of, eliminate, you know, from the portfolio 3M (MMM), Sears (S) and Limited. So you see, I mean all of the names we're giving you are names that are not a part of the technology revolution. We have nothing against technology. The fact is most investors have not been very excited about them so we can buy them at cheap prices.

KANGAS: Of course, you only buy stocks that are in the Standard & Poor's 500 Index, correct?

ELEY: That's right. Absolutely correct.

KANGAS: And you just named us your favorites. How about bonds here? The economy may be slowing, interest rates coming down. Do you have any interest there?

ELEY: The fact is I think bonds could do relatively better over the next year than they have in the past year, but I'm still, I'm not absolutely positive what the Fed Reserve policy is going to be able to be in the near future.

KANGAS: OK. All right. Randall, thanks so much for being with us again.

ELEY: Yes, and thanks an awful lot again for inviting me.

KANGAS: My guest Randall Eley, President of The Edgar Lomax 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.



09/22/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: An opening 14-point tumble in Intel's stock on the revenue shortfall news gave Wall Street an early bruising today with Intel's precipitous drop, accounting for some 86 points of a 136-point deficit posted by the Dow Industrial Average at 10:30 a.m. And it was also a major contributor to the NASDAQ's 149-point loss an hour into the trading session. Over an 8-point gain in Hewlett-Packard (HWP) stock after the firm announced a $1 billion stock buyback, and said it's comfortable with analysts' fourth-quarter earnings estimates of $1.03 per share set the stage for a mid-morning rally. Not just in the tech sector, but in some of the old-economy stocks, like Procter & Gamble (PG) and Coca-Cola (KO), and the drugs like Merck (MRK) also attracted the attention of buyers well into the mid-session hours. By 2 p.m., the Dow was down only 29 points and the NASDAQ Index posted a 92-point loss.

A comeback in the Euro against the dollar and a drop in the price of oil provided plenty of fuel for a nice afternoon rally on heavy volume. The Dow Jones Industrial Average snapped back to close with a gain of 81.85 points at 10,847.37. This week, the Dow fell three times and rose twice, and had a net overall loss of only 79.63 points. The NASDAQ Composite today finished down only 25.11 at 3803.76. For the week, the NASDAQ Index rose twice, fell three times, had a net overall loss of just 31 1/2 points.

Big board volume today fairly heavy, 1.17 billion shares. And just a little bit more up volume than down volume, about 20 million shares.

The Dow Transport Index up 9.69.

Utilities came roaring back, with the Index up 8 - nearly 8 3/4 points.

The Closing Tick neutral at -23.

Standard & Poor's 500 down 1/3 of a point. But not much improved over early in the day.

Standard & Poor's 100 off 6.31.

The MidCap 400 made it into the plus territory, up 12 - 2.13.

Bridge Futures Price Index down .43.

New York Stock Exchange Composite gained 5.11.

Just over a 1/2-point rise in the Value Line.

Russell2000 Small Cap up nearly 4 1/2 points.

And the broadly-based Wilshire 5000 up 40.34.

Bond prices moved modestly higher early today, thanks to safe-haven buying in reaction to the stock market's nasty early selloff. But when the Euro rallied after several central banks, including the Fed, intervened to support it, and stocks snapped back, tax-free and corporate bonds fell back to close down 1/8s and 1/4s.

While the Treasury market ended lower across the board.

5-year notes down 9/32.

10-year notes down 12/32, with the yield at 5.85 percent.

30-year bond dropped 8/32.

And the Lehman Brothers Long-Term Treasury Bond Index was up 5.05.

It was wild and woolly, but a very impressive comeback, indeed. The Dow Industrial Average coming from as much as a 140 point loss to a closing gain of nearly 82 points. But the broader market still lower by about a 15 to 13 margin. Fifty-seven new yearly highs, 126 new lows.

Lucent Technologies (LU) on 22 million shares topped the active list. It recovered but still closed down $1.75 a share.

AT & T (T) fell $0.56.

Chase Manhattan (CMB) moving up $1.69.

And Nortel Networks (NT) gained $1.38.

Micron Technology (MU) dropped $10.88. Today, Salomon Smith Barney brokerage downgraded it from "buy" to just "outperform."

Pfizer (PFE) edged up $0.88 in the firm drug group.

Motorola (MOT) losing $1.19.

Compaq Computer (CPQ) down $1.13.

And Advanced Micro Devices (AMD) fell $2.56 after Chase Hambrecht & Quist, Alex Brown and Prudential brokerages all downgraded the stock.

Citigroup (C), 10th in volume, was down $0.31.

AXA (AXA), the big insurance company, rising $4.38. Merrill Lynch upgraded it from "accumulate" to a "near term buy."

And Hewlett-Packard (HWP) up $3.75 on the close. As I mentioned, the company expects to meet fourth quarter Street estimates of $1.03 a share and plans that $1 billion stock buyback.

J.P. Morgan (JPM) up $5.44. That was the best point gainer in the Dow Industrial Average.

Novartis (NVS), the big drug company, up $2 a share. The company received an FDA approval letter for its cancer drug called Zometa.

And PepsiCo (PEP) rising $2. Prudential increased earnings estimates and also its price target for the stock from $50 to $57; repeated a "strong buy."

Charles Schwab (SCH) gained $2.25. The company reportedly has had merger talks with Goldman Sachs.

York International (YRK), the ventilation, air conditioning and refrigeration company, up $4.63. The company reportedly got a buyout offer from a group led by Hicks Muse but no further details.

And then PE Corporation - Celera Genomics (CRA) up $10.88. Prudential Securities began covering the stock with an "accumulate" rating.

AmSouth Bancorp (ASO) the big loser, down $3.13. Going to take a $280 million third quarter charge in restructuring and it sees its third quarter profits 10 percent below the Street estimate. UBS Warburg brokerage downgraded the stock from "buy" to just a "hold."

And StarTek (SRT) down $7.69. No company official was available to talk to us and no news on the wires, a big percentage loss.

Triton Energy Limited (OIL) down $6.31. The company has plugged an abandoned offshore well near Equatorial Guinea. No gas or oil found in commercial quantities.

And Valassis Communications (VCI) down $3.38. The company sees lower than expected third quarter and full year earnings. First Boston, Morgan Stanley and Merrill Lynch all downgraded the stock.

NASDAQ trading down 25.11 on the Composite Index. Volume heavy, 2.16 billion shares. Seventeen stocks higher for every 21 lower.

Intel (INTC) topped the active list, ending down $13.55. The low of the day was $46.50. Anyway, the loss was 22 percent, the biggest one day loss it's had, I believe.

Down $0.81 on Cisco (CSCO).

Dell Computer (DELL) lost $2.

And then Juniper Networks (JNPR) bucking the trend, up $14.53 a share.

Microsoft (MSFT) lost just $0.94.

JDS Uniphase (JDSU) rising $3.50.

Sun Micro (SUNW) up $1.63.

Oracle (ORCL) gained $1.80 a share.

Applied Materials (AMAT) losing $3.50.

But SDL (SDLI) had a good day, up $14.19 a share.

INRANGE Technologies (INRG) went public today. The company manufactures telecom switching products. 7.7 million shares offered on the IPO at a price of $16. The stock opened at $38.50 and had a high of $50.50. It came back a little bit.