PAUL KANGAS: Not a good day for the bulls on Wall Street. The Dow and the NASDAQ both dropped by about one and a half percent. But it was a good day for Microsoft. The stock jumped on news of a major legal victory. The Supreme Court will not hear Microsoft's appeal in that landmark antitrust case. The high court sided with the company, and is sending the case first, to a federal Appeals Court. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: It has been Microsoft's strategy all along to have the case heard by the Appeals Court. The company based much of its legal argument on an earlier Appeals Court decision in a separate case, that bundling the Internet Explorer into Windows is an innovation. Microsoft said today, it expects Judge Jackson's ruling, that the company is an abusive monopoly, will be overturned; but government trustbusters say, otherwise.

RICHARD BLUMENTHAL, ATTORNEY GENERAL, CONNECTICUT: One of Microsoft's problems has been that it consistently has overestimated its hand, and perhaps overplayed it. My feeling is that there is rock solid evidence that supports the judge's finding.

WOODS: Microsoft chairman, Bill Gates once said, all it would take to turn the case is three appellate court judges. Now, seven judges will hear the appeal, and some observers say the outcome is more likely to be in Microsoft's favor.

JONATHAN MASSEY, APPELLATE LAWYER: The last word has yet to be written on the government's case. I think at the end of the day, Microsoft may have the last laugh.

WOODS: But not before what could be a couple of years of legal trench warfare. The Appeals Court will first hear the case, and then it's likely to be reviewed by the Supreme Court. In that time, Microsoft will have to focus on maintaining its bottom line as a mature company; while at the same time, developing and promoting its new dot-net strategy.

WILLIAM WYMAN, ANALYST, LEGG MASON PRECURSOR GROUP: It gives them a lot more time to roll-out onto the web, to strengthen their server-side software. So it really does give them more oxygen and gives them the ability to change the marketplace before the regulators try and impose a remedy on them.

WOODS: The Appeals Court wasted no time taking up the case. The court gave the two sides until Monday to file their first legal briefs. 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.


09/26/2000: Microsoft CEO, Steve Ballmer Reacts To The SCOTUS Decision

SUSIE GHARIB: Well, Microsoft's CEO, Steve Ballmer was in San Francisco today to brief customers on the company's big push for business computing. So, what was his reaction to the Supreme Court announcement? Our Scott Gurvey talked with Ballmer today and Scott joins us live now from San Francisco. Scott?

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hi, Susie. Of course, Microsoft had this planned weeks in advance, and when a company does something like this, they don't want news to come out that knocks their principal target off of the agenda. But the Supreme Court action today was clearly the number one question on everybody's mind, and it was the first question I asked CEO Steve Ballmer when I asked him to react to the news.

STEVE BALLMER, PRESIDENT & CEO, MICROSOFT: Well, it's a fine thing; it's a procedural step. Either decision could have worked. We thought there were some reasons why they should go to the Appellate Court first. We're just happy to have a chance to get on with the appeal, to get things resolved, and we trust, and remain confident in our appeal.

GURVEY: Last Friday, Intel (INTC) surprised a lot of people by talking about weak demand for personal computers, primarily in Europe. You've got Windows 2000 out there; Windows ME out there - what are you seeing in terms of demand?

BALLMER: Well, "weak" implies shrinking. What we see is less growth than we've seen in some years past. But we're talking about a PC market that will be about 135 million units this year, which I consider an aggregate, quite strong. There's certainly still upside though in the PC business. And if it's not this quarter, we'll see it next quarter or, some quarters after that.

GURVEY: Today is a big event for Microsoft Enterprise 2000. The new enterprise servers - a lot of the analysts are telling me that this will really drive Windows 2000 sales. Is that a fair assessment?

BALLMER: I think that's right. I think this line of products that we're bringing out today is a strong lineup, that will help us get Windows 2000 rolling; but even more importantly perhaps, really allow us to let Windows become the backbone for the way a lot of businesses run their backbone applications and web sites.

GURVEY: Exchange Server 2000, Sequel Server 2000 - these products now have new features that make them much more accessible from the web. Is this a key part of Microsoft's strategy?

BALLMER: The key to - for anybody: if you're going to give customers what they need to take advantage of the Internet, it's got to be to embrace the web, embrace XML in a very strong way. And I think with the dot-net Enterprise line, we've done that.

GURVEY: You've mentioned XML - will XML now be an important part of all Microsoft products?

BALLMER: That's correct. These products have all been enabled for the so-called, XML standard, which lets them be much more easily integrated with other things inside the Enterprise.

GURVEY: I know we'll be seeing more dot-net products over the next few years. What actually will you be releasing next?

BALLMER: Well, the next major product - two products I think you should expect to see, are our Visual Studio dot-net product, which, I think will revolutionize how easy it is to build a web site; and then of course the next version of Windows 2000, which is something like a year from now.

GURVEY: After the interview, Ballmer went to the theater where the Microsoft Enterprise event took place. Here are some of the industry's biggest vendors: showed off systems based on Microsoft applications, and designed to be the workhorse products behind big business computing. So while Ballmer says a smaller rate of growth for personal computers is only revenue delayed, not revenue lost, the company is clearly moving in a new direction, where it plans to play a major role in the big business, Internet-oriented computing of the future. That's territory now controlled by the likes of Oracle (ORCL), IBM (IBM) and Sun (SUNW), among others. Now of course, those companies are not going to concede any ground to Microsoft, and all of the analysts believe the competition is only going to heat up in the months ahead. Susie?

GHARIB: Scott, let's go back a little bit more to Ballmer's reaction to the Supreme Court ruling. Tell us more about that, and also any reaction you picked up from Microsoft employees in San Francisco today.

GURVEY: Well, you know, Ballmer and the senior executives all along have taken a measured reaction to all of the steps in the case. They really think that the District Court made a mistake, and that they will get a better outcome from the Appellate Court. Off camera and in terms of a lot of the - there are a lot of middle-level and even lower-level Microsoft personnel here for this event. I mean, they are ecstatic. They really think that this is the first good news that they've heard on this front in a very long time.

GHARIB: Yeah, it would seem so. But, as we reported also today, that the final say on what happens to Microsoft legally could go on for years yet. What impact will that have on Microsoft just in terms of day-to-day business?

GURVEY: It's quite true. Microsoft however right now is going along, business as usual. They have tried as much as they can to separate what's going on in court, from their business practices. And you know, all this dot-net initiative, the Internet, all of these technologies, the new kinds of directions that they're taking, these really are new stories. And the antitrust case is really dealing with issues that are several years old at this point. So it's still business as usual for Microsoft.

GHARIB: It's hard to imagine that. Well, we'll keep watching it. Thank you very much, Scott, for your report today. Scott Gurvey, reporting live from San Francisco.

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.

09/26/2000: 3rd Quarter Earnings Warnings Say Look Ahead To The 4th Quarter

SUSIE GHARIB: The action in Kodak's (EK) stock was not a pretty picture. It plunged almost 15 points or 25 percent today. Kodak warned that weaker than expected sales will cause it to miss third quarter earnings estimates. Kodak's red flag is just the latest in a string of negative pre-announcements. Suzanne Pratt takes a look at the earnings scorecard.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: With just three days left in the third quarter, Wall Street is fretting big time about earnings. Of course Wall Street is always watchful of corporate profits, but this quarter there's extra angst because of an unusually large number of warnings. According to First Call, negative pre-announcements are running 21 percent ahead of the same period last year. In most cases higher oil prices, a weak Euro or a slower U.S. economy are to blame.

CHUCK HILL, DIRECTOR OF RESEARCH, FIRST CALL: It's all of them, although I think the bigger quantitative impact has probably been the higher energy costs because it affects so many different sectors.

PRATT: Despite the warnings, experts say third quarter numbers should still look great, slipping only slightly from the first and second quarters of this year. And some say it's not the third quarter Wall Street should be worrying about, it's the fourth.

HILL: I think the message to investors as we head into this earnings season is, you know, don't pay attention to how well some of these companies may be doing in their third quarter numbers but, you know, pay attention to what they're saying about the fourth quarter. I mean you always want to look ahead, but especially so right now.

PRATT: And, if the stock market is a leading indicator, as many experts believe, it could be telling investors that more profit troubles lie ahead for corporate America. Right now analysts are forecasting earnings growth of about 15 percent for the S&P 500 in the fourth quarter. But some strategists expect better profit growth even if GDP slows to about four percent from its most recent 5 ½ percent.

ART HOGAN, CHIEF MARKET STRATEGIST, JEFFERIES & COMPANY: But I clearly think that you can have robust earnings, especially in the tech and telecom spaces, especially in pharmaceuticals and financial stocks, at that rate. I think four, the 4 1/2 GDP growth rate is supportive of great earnings.

PRATT: Investors should brace for more warnings out of corporate America in the next few weeks as confession season stretches until the second week of October. Beyond the current quarter, experts say those pre-announcements should give Wall Street a better idea about how fourth quarter will shape up. 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.


09/26/2000: Commentary: The Energy Price Crisis

SUSIE GHARIB: Energy and its price is something just about everyone is talking about these days, including tonight's commentator. Here's Louis Uchitelle, Economics Writer for the "New York Times."

LOUIS UCHITELLE, COMMENTARY: The United States is unquestionably in the middle of an energy shock. Crude oil, gasoline, heating oil, natural gas, aviation fuel, all are way up in price and with inventories below normal, these energy prices are not likely to return to their old levels until some time next year. So is the public upset? Not yet, pollsters say. Somehow the spike in energy prices, although more than a year old, has not translated into a crisis for most Americans. That is partly because people use less oil than in the '70s and '80s. Their cars, their appliances and their houses are more energy efficient. But quite apart from consuming less energy people aren't upset because they see high energy prices as a temporary phenomenon. They tell pollsters they expect oil and natural gas prices to drop soon before much damage is done to their family budgets. How soon? Well, probably not before next spring, according to most forecasters. That may not be soon enough. Most Americans heat their homes with natural gas, which shot up in price only over the summer. While heating oil became very expensive last winter, natural gas as a heating fuel will become expensive for the first time this winter. And if the winter is cold enough, millions of Americans who see the energy crisis today as only a temporary nuisance could emerge from the winter with a much angrier view. I'm Louis Uchitelle.

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.



09/26/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: That news of Microsoft's tactical victory in its antitrust case boosted its stock some $4 a share early today, helping the Dow Industrial Average. But it was nowhere near enough to offset a $12 plunge in Eastman Kodak (EK) stock after it issued a third-quarter earnings warning about which we will have details shortly. At 10:00 a.m., the Dow posted an 84-point loss, with 70 points of it due to Kodak's tumble; but Microsoft's strength spread into other technology issues resulting in a 411/2 -point gain in the NASDAQ Index at 10:30 a.m. An earnings warning from Lexmark (LXK) took the wind out of the sails of the hi-tech sector as morning trading continued, and after Guess Inc. (GES) lowered its expectations, the retailing stocks went into a sell-off. Midway through the noon hour then, the Industrial Average was down 146 points; the NASDAQ Index posted a 27-point loss. Higher oil prices and a weakening euro triggered more selling throughout the afternoon, and the Dow Jones Industrial Average sank to a closing loss of 176.83 points, or 1.6 percent, putting it at 10,631.32. In today's 198-point trading range, the Dow closed down 182 points from the best level of the session. The NASDAQ Composite down 52.11 ending at 3689.10. In its 118-point trading range, the Composite Index settled about 107 points below its best level of the day.

Big board volume moved above 1.1 billion shares, well up from yesterday; and about a 3 to 2 margin of down volume over up volume.

The Dow Transport Index down 37 ½ points.

But the Utility Index had a big day on the upside, flight-to-quality buying perhaps, up 10.70.

The Closing Tick still a bit on the bearish side, 290.

Standard & Poor's 500 down nearly 12 points.

The 100 off 9.14.

MidCap 400 fell nearly 3 points.

And the Bridge Futures Price Index edged up .25.

New York Stock Exchange Composite down 4 2/3 points.

A 3 1/2-point drop in the Value Line.

Russell2000 Small Cap off almost 5 1/2 points.

And the Wilshire 5000 dropped nearly 120 1/4 points.

The bond market managed to edge higher today, despite the Conference Board's report of a stronger-than-expected rise in consumer confidence this month; along with early strength in oil prices. The main booster for bonds was flight-to-safety buying, triggered by the broad retreat in the stock market, especially in the afternoon.

Tax free and corporate issues ended with 1/8- and 1/4-point gains.

While the Treasury market was firm across the board.

5-year notes up 6/32.

The 10-year notes up 9/32, with the yield down to 5.81 percent.

And the 30-year bond gained 20/32.

The Lehman Brothers Long-Term Treasury Bond Index edged up .77.

Another rough day on the down side for the Dow Industrial Average. It closed near its worst level of the session, as we see, a loss of nearly 177 points. The broader market definitely lower, 16 stocks down for every 12 higher; 95 new highs for the year, 122 new lows.

Lucent Technologies (LU) topped the active list today, 19.4 million shares, down $0.38. That's a new two year low. Rumors persist the company may not make fourth quarter earnings estimates.

Texas Instruments (TXN) down $2.75.

Motorola (MOT) lost $1.69.

And, of course, Eastman Kodak (EK) really hurting the Dow. After investors heard all the bad news about the earnings outlook I guess they said no lika.

Nortel Networks (NT) is down $2.81, fifth in volume.

GE (GE) edged up $0.25.

AT & T (T) down $0.75. Comptrollers of New York State and New York City are asking for a meeting with AT&T Chairman Michael Armstrong to discuss ways to boost its stock price. Between them, the city and the state have about 25 million shares of the stock.

Compaq Computer (CPQ) up $0.46.

And EMC (EMC) down $3.69.

Advanced Micro Devices (AMD) fell $1.50, 10th in volume.

Boeing (BA) was the best point gainer in the Dow, up $2.25. The Euro Commission, the European Commission, that is, is close to clearing the company's purchase of Hughes Electronics satellite assets and also Boeing said it received a $400 million order from Egypt to upgrade helicopters.

Dollar General (DG) losing $2.94. Goldman Sachs removed the stock from its "recommended" list, now rates it just a "market performer."

Dynegy (DYN) lost $0.25 even though the company will be put in the Standard & Poor's 500 Index after the close next Monday.

J.P. Morgan (JPM) the biggest point loser in the Dow, off $3.69.

NRG Energy (NRG) up $2.50. The company sees third quarter earnings at $0.45 a share. That's $0.05 above the Street estimate.

And PP&L (PPL) up $1.75. That's the old Pennsylvania Power & Light. Morgan Stanley upgraded it from "neutral" to "outperform," increased earnings estimates and also its price target up to $52 a share.

Urban Shopping Centers (URB), the star of the day, up nearly $13. The company will be acquired by Rodamco North America for $48 a share.

United Dominion Industries (UDI), a machinery maker, up $5.25. The company says it's in talks with several suitors for a possible sellout.

M.D.C. Holdings (MDC), the home builder, up $2.19. The company sees third quarter earnings exceeding the high end of Wall Street estimates, $1.10 to $1.27. The company says higher home prices are helping.

And there you see Guess Incorporated (GES) plunging $10.19. The company sees lower than expected third quarter earnings at $0.35 to $0.38. The Street was looking for at least $0.44.

SITEL (SWW) dropping $1.63. The company sees only, well, earnings around anywhere from $0.04 to $0.05, a penny to two pennies below the $0.06 Street estimate and fourth quarter may be a little lower, too.

Lexmark International (LXK) plunging $15.31. This company sees lower than expected third and fourth quarter earnings, $0.10 to $0.15 below the Street estimates.

NASDAQ trading, a loss of 52.12 in the Index, volume up a bit from yesterday at over 1.8 billion shares; 1,380 up, 2,551 on the down side.

Intel (INTC) topped the active list, losing $2.06.

Microsoft (MSFT) moved up $1.44 on today's news.

Cisco Systems (CSCO) down $2 even.

Sun Microsystems (SUNW) lost $0.50.

And then JDS Uniphase (JDSU) dropping $3.75, fifth in NASDAQ volume.

CIENA (CIEN) down $0.44.

Juniper Networks (JNPR) up $2.63.

And then Oracle (ORCL) gained $0.69.

Network Appliance (NTAP) was down $2.50.

Tenth in volume was QUALCOMM (QCOM), gaining $3.38.

CoSine Communications (COSN) went public today and what an offering it was, 10 million shares offered at $23. It opened at $68, the high of the day $71 and they stayed near the high.

Documentum (DCTM) had a good day, up $14.56. Broadvision (BVSN) has