SUSIE GHARIB: On Wall Street, the blue chips were dragged into the red, and so were stocks on the NASDAQ. The Dow lost almost 40 points, and the NASDAQ lost 62. Also, a sell-off in the oil markets; in New York, crude closed at $31.57 a barrel, the lowest level in a month. As Erika Miller reports, experts are divided on whether even lower prices are in the pipeline.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Trading was more heated than usual in the New York oil pits today. The price of crude oil plunged more than 3 percent. It was the first regular trading day since President Clinton authorized dipping into the Strategic Petroleum Reserves. The government plans to release 30 million barrels of emergency crude oil reserves over the next month. Traders are already seeing the impact.

DAVID NUSSBAUM, INDEPENDENT OIL TRADER, NYMEX: In the last month or so, the market's been really, really strong; so, this sort of took the wind out of the sails. And prices should start softening.

MILLER: But the big question is: how far will they fall? The administration has a price target of $25 a barrel. OPEC's preferred range is $22- $28 a barrel. But oil experts say several factors could keep prices higher. First, the U.S. government's decision may discourage OPEC from boosting output in the future. Another concern is refining bottlenecks; at a time when demand for gasoline has been growing worldwide, refiners have little ability to boost output.

NUSSBAUM: The refiners are pumping at full capacity now. Just because they show up with trucks of crude oil, doesn't mean they can make any more. So it's going to really - you have to - it's going to be sort of a wait-and-see game.

MILLER: There is also the weather wildcard. An extremely cold winter in the U.S. could hinder efforts to rebuild oil inventories, which are now at the lowest level in 24 years.

PAUL TING, OIL ANALYST, SALOMON SMITH BARNEY: I think the most important driver for oil price is going to be inventories. In order for oil prices to really maintain a moderating mode, you need to see inventory gradually build up.

MILLER: The government is leaving open the possibility of dipping into emergency stockpiles again. Once the 30 days are up, President Clinton will reassess the situation, which could help further restrain crude prices. Erika Miller, 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.


09/25/2000: Politics & Prescription Drugs

SUSIE GHARIB: The drug industry has other challenges on its hands this election year. Politicians are rallying voters by attacking high drug prices, and analysts worry that the election could lead to price controls. Darren Gersh takes a look at how drug companies are trying to cure their ailing image with American voters.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: When it comes to prescription drug prices, Frances Austin speaks from experience.

FRANCIS AUSTIN: This is the one that is the most expensive.

GERSH: Listen to Austin and her friends, and it is easy to see why the public image of drug companies has taken a beating.

AUSTIN: If they were really interested in the people, in humanity, they, they would not have such a large margin of profit.

GERSH: Three years ago, a survey by the Kaiser Family Foundation found 62 percent of Americans thought drug companies were doing a good job serving consumers. Now that's down to 45 percent. Pollsters agree rising drug prices are driving public perceptions down.

DREW ALTMAN, KAISER FAMILY FOUNDATION: What the American people are really feeling is not just that the prices are too high, but that they could be lower, that these drug companies are sitting on profits and they really could absorb some significant reductions in the cost of drugs and in the prices they charge without any real pain.

GERSH: That view has helped make the drug industry a political whipping boy in this election.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: The big drug companies want to over charge seniors and then plow more and more of their money into high priced TV ads.

GERSH: In response, the pharmaceutical industry is helping finance what may be the most expensive political advertising and lobbying effort in history. Backed primarily by drug companies, Citizens for Better Medicare is spending $38 million on ads like this one.

COMMERCIAL: My fear is that if the government takes control of this, it is going to hurt a lot of people.

GERSH: Citizens for Better Medicare is also staging news conferences around the country like this sparsely attended event in Philadelphia. The pharmaceutical industry says it's all part of its effort to convince voters that prescription drug coverage should be provided through the private sector.

ALAN HOLMER, PHARMACEUTICAL RESEARCH & MANUFACTURERS: Senior citizens want to be able to make sure that they have access to medicines and if they don't have insurance, they can be frustrated and the key is to be able to make sure that they do have insurance coverage.

GERSH: While Americans are suspicious of the industry's high profits and prices, at the same time they admire its ability to develop new drugs. Bill McInturff does public opinion polling for the pharmaceutical industry. He says drug companies have largely maintained their favorable ratings with the public because patients understand new drugs have improved their lives.

BILL MCINTURFF, PUBLIC OPINION STRATEGIES: They all have that kind of powerful story about their life being better where they are the living representatives of the value of pharmaceuticals. And then guess what? And then they say but I wish it didn't cost so much.

GERSH: But when it comes to what to do about high drug prices, Americans are undecided. Even Frances Austin is wary of price controls.

AUSTIN: The government gets into your life too much, but I-something needs to be done.

GERSH: But polling also shows the public believes the pharmaceutical industry is trying to block health care reform. And some analysts say consumers are now more willing to demand action.

ALTMAN: I would say overall that the public is more supportive of price controls than the political discussion would lead you to expect, but it is not a unanimous overwhelming support and certainly the mere mention of price controls hits a real nerve with the American people and that is their cynicism about government.

GERSH: Despite industry efforts, the public view of drug companies is likely to get worse before it gets better. Analysts say when you're page one of the presidential campaign, there's not much you can do to change your image. Darren Gersh, 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.

09/25/2000: Third Quarter Outlook & Analysis

SUSIE GHARIB: Just four more business days left in the third quarter and considering all the earnings warnings we've been hearing recently, let's get an update of what to expect from our colleague at BridgeNews, Stephanie Elam. So are you all geared up to start this earnings season?

STEPHANIE ELAM, SR. EQUITIES EDITOR, BRIDGENEWS: It's that time. We've been geared up for a while with all these outlooks coming out.

GHARIB: That's exactly right. Tell us, what have you been hearing of what we can expect? When it's all said and done, how will the earnings for the quarter look?

ELAM: Well, they will still come in the double digit range. That's what First Call is expecting. However, they're still not going to be as strong and First Call is telling me Chuck Hill is saying that they just couldn't sustain the levels that they were at for the first quarter. So the first quarter saw double digit growth of about 23.6 percent. The second quarter was 21.6. And now they're expecting about 19 percent for the third quarter.

GHARIB: All right. And what sectors are going to do particularly well? Who are going to be the winners and losers?

ELAM: Well, of course energy. Energy is going to do really well, especially the drillers. That sector is really going to do well going forward. The pharmaceutical companies should be fine. They are seeing a little impact from the Euro, but overall they should be fine. The other companies that we're hearing trouble for are the retailers and the auto parts companies. Those companies are really taking a hit having to do with the Euro, having to do with the slowing economy. And that is going to hurt them going forward.

GHARIB: All right, one of the things that we noticed with the whole Intel news last week was that the focus wasn't about earnings, it was about revenue, the top line, not the bottom line. Are we going to be seeing more emphasis, are we going to be hearing analysts talking more about revenue growth or lack of it?

ELAM: Definitely we will because this is what investors think is really going to tell them what is going on at the company. They feel that a lot of the outlooks are too in tune with what analysts are expecting, there's too much conversation going on behind the scenes and so they don't really know what's happening. So now if they can get a look at what's going on with the revenues, they can see what's going to happen at the bottom line. And so they figure if they know that, then they know whether or not the company is really doing what it's doing. If you're not selling anything, you're not making money.

GHARIB: So the next thing that we're going to hear is First Call having estimates on what the revenues are doing?

ELAM: Definitely, we might definitely hear about that because a lot of companies are already doing that, the Internet companies. Because they weren't making money they were doing that, so now we're seeing more of that.

GHARIB: All right, let's look at the calendar. When do we get the first batch of the big name companies reporting earnings?

ELAM: Well, they will start trickling out on the 5th of October. You can look to hear from PepsiCo (PEP) and Alcoa (AA). Of course, Alcoa, everyone's going to keep their eyes on after this revision that they came out with, which they haven't done in recent history. Then on the 9th, the week of the 9th we'll hear from International Paper (IP), G.E. (GE) and Motorola (MOT), perhaps.

GHARIB: OK, a lot of Dow components. OK, we'll mark our calendar. Thank you so much, Stephanie, for the update.

ELAM: Thank you.

GHARIB: And we've been speaking with Stephanie Elam, Equities Reporter at 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.


09/25/2000: "Money File"-Big Caps Vs. Small Caps

SUSIE GHARIB: It's a big decision that could have big implications for your portfolio: should you invest in big or small cap stocks? In the money file tonight, some things to consider before you make that decision. Here's John Waggoner, Mutual Fund Columnist for "USA Today."

JOHN WAGGONER, COMMENTARY: We love it when little guys clobber big guys. David versus Goliath, Bugs Bunny versus, well, just about anybody. But when it comes to investing, little guys don't often come out on top. You've probably heard that small company stocks outperform large company stocks in the long run. The problem, it's been a long time since that's been true. The past 15 years, large company stock funds have clobbered small company stock funds. A fluke? Probably not. First of all, small company funds have one fatal flaw: in order to remain small company funds, they have to sell their stakes in companies that get too big. By definition, those are the most successful small company stocks. Second, big companies are often big for a reason. They are very good at what they do. They can demand lower prices from suppliers and drive other companies out of business. Those companies are often small companies. Many experts point to a celebrated study by Ibbottson and Associates (ph) that shows that small company stocks outperform large company stocks. But the Ibbottson study looked at the stocks of companies so small, that many small company stock funds won't buy them. So should you abandon small company investing entirely? Well, if you're a very aggressive investor, you might consider a micro cap fund which invests in tiny stocks, the type that the Ibbottson study examined. Some of these funds have spectacular records. But for most people, small company stock funds are probably best left alone. We all want to root for the plucky little guy. But it's probably best to put our money with the 500 pound gorilla. 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.



09/25/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Those lower oil prices, coupled with carryover buying from last Friday's late rally, which turned a 140-point loss in the Dow Industrial Average into an 82-point closing gain, led to a higher opening on Wall Street today. At the outset of trading, the Dow rose some 43-points, and the NASDAQ Index, which cut a 214-point midday deficit last Friday, into a closing loss of only 25 points; gained as much as 57 points early on. Stocks lost their luster as morning trading continued, partly because of lingering concerns about the corporate earnings' outlook in the wake of Intel's (INTC) revenue warnings last Thursday. Nearly a 2-point drop in General Motors (GM) stock on news Carl Icahn sold his recently acquired stake because the company has bigger problems than he expected, was one of the reasons why the Industrial Average posted an 8-point loss by 1:00 p.m. when the NASDAQ Index was up only 22 points. The market continued to fade for the rest of the session as investors braced themselves for more disappointing earnings' pre-announcements, and the seasonal weakness that often plague stocks in the early autumn didn't help either. The Dow Industrial Average slumped to a closing loss of 39.22 putting it at 10,808.15. In today's 114-point trading range, the Dow closed down 89 points from the best level of the session. The NASDAQ Composite ended with a loss of 62.54 points at 3741.22. In its 131-point trading range, the Composite NASDAQ Index settled 127 points below its best level of the day, pretty close to the low.

Trading volume down considerably from Friday's pace on the big board, 982 1/4 million shares. And about 30 million more shares of down volume than up volume, but almost a standoff there.

The Dow Transport Index down 41 1/2 points.

The Utility Index managed to gain 2.45.

The Closing Tick modestly bearish at -319.

Standard & Poor's 500 down 9.69.

Just over an 8-point drop on the 100.

The MidCap 400 was up just over 2 3/4 points.

The Bridge Futures Price Index lost .22.

New York Stock Exchange Composite edged up .14.

A loss of just over 1 3/4 in the Value Line.

Russell2000 Small Cap Index down nearly 3 1/2 points.

And the broadly-based Wilshire 5000 down just over 73 1/2 points.

The bond market rose at the outset of trading today, thanks in part to that drop in oil prices. But news of strong existing home sales prices last month, about which we'll have the details shortly, acted as somewhat of a drag on the early rally. Nevertheless, buyers continued to hold the upper-hand in the afternoon, in the growing belief the slowing economy will keep the Federal Reserve on the sidelines for the rest of the year. Although tax free and corporates ended mostly unchanged, longer Treasuries ended with modest gains.

The Short-Term 5-year note down 9/32.

But the 10-year note edged up 2/32, with the yield at 5.85 percent.

And the 30-year bond up 8/32, with the yield at 5.90 percent.

Lehman Brothers Long-Term Treasury Bond Index edged up .12.

The Dow Industrial Average down 39 ¼ points after being up nicely in the morning. The broader market lower by a 15 to 13 margin, 81 new yearly highs, 98 new lows.

Lucent Technologies (LU) on 21.4 million shares topped the active list, down $1.06. That's a new two year low and there were some rumors around the company might miss its fourth quarter revenue and earnings targets, just rumors.

Micron Technology (MU), anything in the semiconductor industry was-looked like it was hit by a semi today, down 456 there.

And then we see Sprint PCS (PCS) doing well, up $3.50. Lehman Brothers upgraded it from "neutral" to "buy" and says this stock could possibly double in the next 12 months.

Vodafone (VOD) edged up $0.81.

Nortel Networks (NT) losing $0.06, fifth in big board volume.

AT & T (T) lost $0.75. That's a new yearly low.

Chase Manhattan (CMB) up $0.19.

Texas Instruments (TXN), another weak semiconductor, down $4.69.

General Electric (GE) edged up $0.75.

Advanced Micro Devices (AMD) gained $1. It's going to supply Hewlett-Packard (HWP) with flash memory devices over the next three years.

Emerson Electric (EMR) had a good day, up $1.75 after Salomon Smith Barney upgraded it from "outperform" to "buy."

General Motors (GM) down $1.56. As I mentioned earlier, Carl Icahn sold the stake he recently acquired because he sees bigger than expected problems for GM ahead.

IBM (IBM) one of the bigger losers in the Dow, off $2.31.

3M (MMM) was the biggest point gainer in the Dow, up $1.75.

News Limited (NWS) down $0.63. Rupert Murdoch has picked John Malone to engineer a stock swap that'll give Malone a big say in News Corporation's management.

And Northeast Utilities (NU) dropping $1.25 after the ABN AMRO Brokerage downgraded it from "outperform" to just a "hold."

Del Webb (WBB), the home builder, up $5 a share. The company has rejected a $30 a share buyout bid from rival J.F. Shea, said that that bid was deficient.

White Mountains Insurance Group (WTM) up $37.50. Now, this is a Bermuda based insurance company but it's managed out of Hanover, New Hampshire, and this is apparently positive reaction to the company's plan to buy the property and casualty operations of British based CGMU Group and the price is $2.1 billion.

Sotheby's Holdings (BID) up $3.13. The company has settled anti-trust class action lawsuits. It'll pay out $286 million and most of it will come from the chairman, A. Toddman (ph).

United Rentals (URI) moving up $2.44. The stock will be added to the Standard & Poor's MidCap 400 Index after the close this Thursday.

International Flavors & Fragrances (IFF) dropping $2.81 on news it will buy flavors and aroma chemical company Bush Boake Allen (BOA) for $970 million. International Flavors also going to cut its quarterly dividend from $0.38 to $0.15 and said third quarter earnings will come in at $0.33, not $0.48 like the Street expected. Incidentally, Bush Boake and Allen's stock rose $4.66 to $47.63. That offer is worth $48.50 a share.

Triton Energy (OIL) down $4.63. The company says two of its oil wells in Colombia are expected to show a 15 percent decline in production next year.

NASDAQ trading a loss of 62 1/2 points in the Index, volume way down from Friday at 1.7 billion shares; 17 stocks up for every 22 lower.

Intel (INTC) topped the active list, ending with a loss of $2.56, although it traded just above $0.50 earlier in the day.

Cisco (CSCO) down $3.13.

Juniper Networks (JNPR) moved up $2.25.

CIENA (CIEN) was up $6.81. The company won a South Korean contract to supply gear for high speed links in seven cities. No terms were announced.

JDS Uniphase (JDSU) down $0.19, fifth in NASDAQ dollar volume.

Sun Microsystems (SUNW) lost $0.06.

But Commerce One (CMRC) up $5 a share.

Applied Micro (AMCC) was up $0.50.

Network Appliance (NTAP) was down $16.94.

And Microsoft (MSFT) fell $2, 10th in volume.

Net.Genesis (NTGX) up $2.56. Chase Hambrecht &am