SUSIE GHARIB: On Wall Street, the third quarter closed out on a down note. Both the Dow and NASDAQ ended with triple-digit losses. Two stocks dominated the selling today: United (UAL) lost altitude fast after warning that it'll lose money, not only in the third quarter, but also the fourth; but Apple's stock was sliced in-half in reaction to its earnings warning late yesterday. Scott Gurvey looks at why investors have soured on Apple.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is, thankfully, something we don't often see: a well-established company losing more than half its market cap in a single session. That was the fate today of Apple Computer. The company that ushered in the personal computer age and now sells the flashy iMac shocked Wall Street with an earnings warning late yesterday. Flamboyant CEO, Steve Jobs saying the company has hit, what he calls, a "speed bump." And that earnings for the fourth quarter would miss estimates by about 25 percent. Apple shareholders raced for the exits.

WALTER WINNITZKI, ANALYST, CHASE H&Q: Some of the issues that were raised in Apple's pre-announcement reflect, I think, some structural problems that are not going to go away overnight. Most importantly is the launch of major new products that did not take off.

GURVEY: Apple's new product line has received rave reviews for ease of use and clever design, but the company still has only 3 to 4 percent of the PC market. Other PC products are competitive and usually come at a lower price. And other PC makers have expanded their product lines to range from business-oriented systems to hand-held and appliance-type devices. Apple is still basically a PC-only company with few business customers. Shares of other PC makers posted loses today, but none came close to the halving of Apple's share value. Steve Jobs has been basking in favorable publicity, following his return to Apple's helm, but analysts cited his lack of guidance as one of the reasons for today's sell-off.

MEGAN GRAHAM-HACKETT, COMPUTER ANALYST, S&P EQUITY GROUP: They were good in detailing the factors at play for the current quarter, but without any kind of order of magnitude or any kind of details or reasons for the revised lower outlook for the future, it did leave themselves open to this kind of reaction in the market.

GURVEY: Today marks the end of the quarter, and that means all the bad news in terms of preannouncements should be out. Analysts expect the tone of the market to improve as the earnings reports come in. 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.


09/29/2000: Road To The White House: The Energy Plan

SUSIE GHARIB: The high cost of energy is a hot topic for American consumers, and it's also a heated debate on the campaign trail. It was the focus today for both the Republican and Democratic presidential candidates. As we continue our series: "On The Road to the White House," Stephanie Woods looks at the energy plans of both candidates.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: George W. Bush came to an auto parts company in the crucial swing state of Michigan to unveil his energy plan. He took a swipe at Vice President Gore, saying the administration was napping while oil prices were on the rise.

GEORGE W. BUSH, REPUBLICAN PRESIDENTIAL CANDIDATE: They have had 7.5 years to develop a sound energy policy. They have had every chance to avoid the situation that confronts us today. And now they have nothing but excuses and bad ideas, and as the clock runs out, one last ploy: opening the strategic reserve.

WOODS: Bush promised a 10-year $7.1 billion plan to increase the nation's fuel sources, protect the environment, and reduce the country's dependence on foreign oil. It includes tax credits for alternative fuels and opening up drilling in Alaska's protected wildlife. Speaking to the Audubon Society in Maryland, Gore rejected the Bush plan.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: I will fight for consumers, who deserve a reliable, affordable supply of energy, and I will fight for all Americans who deserve to have our environment protected against those who would set the oil companies loose in the most beautiful, fragile parts of our nation.

WOODS: Gore also defended tapping the strategic oil reserves, claiming the move dropped the price of crude oil by 20 percent. In reality, implementing a national energy policy takes a delicate balance of increasing supply, like building new refineries, and decreasing demand, like encouraging conservation; while at the same time, balancing environmental issues. That's an issue politicians have largely ducked since the 1970's.

GUY CARUSO, ENERGY & NATIONAL SECURITY PROGRAM, CSIS: That's one of the inhibitions on energy policy is that with a one- two- or three-year time horizon, it's difficult for a politician to really think about this comprehensive, long-term national energy strategy.

WOODS: Whether or not energy policy stays on the political agenda after the election may have more to do with the price of oil than who's in the White House. 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.

09/29/2000: US Telecomm Companies Seem Disconnected In Japan

SUSIE GHARIB: Still getting those earnings warnings. Well, Paul, for American telecommunications equipment and service providers, the market to watch is Japan. After the U.S., it's the world's richest telecom market, valued at $130 billion. But as Lucy Craft reports from Tokyo, it's still untapped by non-Japanese companies.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: In theory, U.S. telecom firms should be making a killing in Japan. The U.S. leads the world in Internet related equipment, software and service. Japan lags years behind. Japan, the world's second largest economy, ranks 21st in per capita Internet use behind Taiwan, Austria and Ireland. The main culprit, exorbitant connection fees.

THOMAS LOGAN, VP, JAPAN/AMERICAN ELECTRONICS ASSN: The potential is great and the difficulty in getting in is also great.

CRAFT: Some U.S. firms have prospered here, in areas such as fiber optics, Internet protocol telephony and satellite technology. But traditional business customs and mountains of red tape continue to frustrate many American telecommunication companies here.

TAKEHIRO IKEUCHI, CHAIRMAN, LEVEL 3 COMMUNICATIONS: Relatively speaking, already the Japanese market has been quite liberalized. But still we have to challenge the way of doing business in Japan. It may be a traditional Japanese way of doing business, this is maybe a barrier, but this is also changing. So we have a very high hope.

CRAFT: But despite the high hope for change, industry watchers say many American suppliers are taking a wait and see attitude.

LOGAN: They're sort of standing at the door and they're waiting to see what the next commitments are going to be from the Japanese government in terms of freeing up rights of way and freeing up the access to networks and whatnot.

CRAFT: Japan's telecom market is still dominated by the politically powerful former government monopoly, NTT. But market experts predict U.S. equipment sales will surge as new foreign carriers gain acceptance as a discount alternative to NTT.

TAKAO SHIINO, TELECOM CONSULTANT, NOMURA RESEARCH INSTITUTE: These companies are using the U.S. equipment so this is a kind of experimental laboratory. So if the Williams and the (INAUDIBLE) shows that this U.S. equipment works very well and is cost effective, NTT will, you know, think about using the U.S. equipment also.

CRAFT: With great fanfare, Japan recently unveiled what it calls e-Japan, a national strategy for making Japan the world's leading Internet superpower in just five years. If the plan proves more than just hype, industry players say it could prove a windfall for U.S. telecom suppliers. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.

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.


09/29/2000: 3rd Quarter Market Wrap

PAUL KANGAS: It's the end of the third quarter and to help us review once again what happened to the major averages and to give us some of the big movers both up and down is Scott Marcouiller, Market Analyst at A.G. Edwards. Welcome back, Scott.

SCOTT MARCOUILLER, MARKET ANALYST, A.G. EDWARDS: Thank you, Paul.

KANGAS: Let's go straight to the boards and have a look at the major averages and what they did over the last three months. The only plus I see here is for the Dow Industrial Average.

3rd Quarter Averages DJIA 10650.92 +203.03 +1.94% S&P 500 1454.60 -18.09 -1.24% NASDAQ 3672.82 -293.29 -7.39%

MARCOUILLER: That's right, up just a little less than two percent. As you can see, the S&P 500 was lower. And despite their recent history of better performance for the S&P 500 in September, this year it certainly lived up to its reputation as being the worst month of the year. And the NASDAQ, which historically has had good Septembers, posted its worst result in the last 20 years.

KANGAS: Well, that's because of all these earnings warnings, including Apple (AAPL) yesterday, right?

MARCOUILLER: And a hard hit on the technology group across the board weighed down all the averages.

KANGAS: That's for sure. Well, let's go to the Dow big gainers, and it's all topped off by Boeing (BA).

DJIA 3rd Quarter Winners Boeing 63 +21.19 +50.7% JP Morgan 163.75 +53.63 +48.7& Citigroup 54.06 +8.88 +19.6%

MARCOUILLER: Very good business there, stronger sales. They've got margin expansion going on with their ongoing cost cutting and they're very comfortable with earnings estimates going forward.

KANGAS: And, of course, J.P. Morgan, a strong financial sector there.

MARCOUILLER: Part of merger mania. Chase Manhattan (CMB) agreed to buy the bank at $207 per share. Then Citigroup © brings up the list. The big banks had a good quarter. The merger main mania validated what Citigroup has been doing for some time, being very aggressive in their acquisitions, especially after their recent bid.

KANGAS: Right. Let's look at the laggards in the Dow. Intel topped that.

DJIA- 3RD Quarter Losers Intel 41.56 -25.28 37.8% Eastman Kodak 40.88 -18.63 -31.3% Microsoft 60.31 -19.69 -24.6%

MARCOUILLER: No surprise there. Last week's bombshell, the company warned that third quarter revenue growth would be about one half of the analysts' expectations.

KANGAS: And a big negative for Kodak (EK) again.

MARCOUILLER: The company could not follow through on its planned increased sales. They had a fallout from the weak Euro and the higher cost of raw materials there with them.

KANGAS: Strange to see Microsoft (MSFT) with a minus front of it, isn't it?

MARCOUILLER: Yeah. Well, there was no one event here. It's just been the multiple uncertainties surrounding their antitrust case and that's kept analysts on the defensive, or investors on the defensive.

KANGAS: OK. Let's move to the Standard & Poor's 500 best gainers, Manor Care (HCR).

S&P 500-3rd Quarter Winners ManorCare 15.69 +8.69 +124.1% Humana 10.75 +5.88 +120.5%

MARCOUILLER: A nursery home operator. It had a steady rise throughout the quarter. A few analyst upgrades and the Clinton administration is going to be allocating more money to Medicare for the nursing homes in the new fiscal year.

KANGAS: And Humana (HUM) almost caught up with Manor Care.

MARCOUILLER: Stocks suffered early in the year, but it came on. They've been making a lot of steps to get their operating performance back on track and this is viewed as a chief way to play what's been an industry wide rally.

KANGAS: On the down side, Owens Corning (OWC), not to be confused, of course, with Corning (GLW).

S&P 500 -3rd Quarter Losers Owens Corning 2.63 6.61 71.6% American Power 19.19 -21.63 -50.31%

MARCOUILLER: No. There's been ongoing investor concerns about their never ending asbestos litigation. They've been hurt by a slowing in home building, softening demand for building products and rising energy costs.

KANGAS: Right. And I thought the power stocks were supposed to be strong, but American Power wasn't.

MARCOUILLER: Well, analysts cut their third and fourth quarter estimates after company guidance and they cited weak demand for some of their products and worry about European sales for the rest of the year.

KANGAS: OK, turning over to the NASDAQ, here we see Read-Rite (RDRT) leading the list, up 407 percent.

NASDAQ-3RD Quarter Winners Read Rite Corp. 11.25 +9.03 +407.0 Xetel Corp. 8.00 +5.94 +287.9%

MARCOUILLER: This is a parts maker for disk and tape drives. The company's pricing on their products has been firming up. Customers are accepting their next generation products.

KANGAS: And then?

MARCOUILLER: Xetel (XTEL) provides electronics manufacturing services. It's just been a rapidly improving earnings story this year.

KANGAS: And the notable losers on NASDAQ, Paradyne (PDYN).

NASDAQ-3rd Quarter Losers Paradyne Networks 5.41 -27.16 +83.4% RSI Communications 2.00 -9.44 -82.5%

MARCOUILLER: Paradyne, a networking products company. Early in the third quarter they reported a second quarter earning short fall, have gone, undergone analysts' downgrades and yesterday warned on the third quarter.

KANGAS: OK. And last but not least, RSL (RSLC).

MARCOUILLER: Long distance and wireless carrier. They've struggled financially and there's a lot of concern about their real ability to raise cash to fund their operations.

KANGAS: OK. We just have a few seconds left, Scott. Can you give us an idea of what A.G. Edwards is looking forward to in the fourth quarter?

MARCOUILLER: Well, we expect a much better quarter. We're finally going to get the good earnings coming out soon. The economy is in great shape. Inflation is benign and we expect a nice rally from here to year end.

KANGAS: OK. It's nice to hear an encouraging word. Thanks very much, Scott.

MARCOUILLER: Thank you, Paul.

KANGAS: My guest, Scott Marcouiller, Market Analyst, A.G. Edwards.

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.



09/29/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks opened lower along a broad front on Wall Street today, and of course, the core of the problem was Apple's post-market earnings warning yesterday, which renewed fears that more shortfalls in corporate results were to come just when they seemed to have run their course as evidenced by Thursday's impressive rally. At the outset of trading, the Dow Industrial Average gave back 62 points of yesterday's 195-point gain, while the NASDAQ Index erased 50 points of yesterday's 122-point run-up. After a brief and unsuccessful comeback attempt, the market resumed its early sell-off throughout the rest of the morning as a host of brokerage downgrades undermined other computer-related stocks: like Gateway (GTW), Hewlett-Packard (HWP) and Intel (INTC). The airline group joined the downturn after UAL (UAL) said it expects to report losses for both the third and fourth quarters. At noon then, the Dow was down nearly 131 points; NASDAQ Index posted a 79-point deficit. Afternoon brought more selling as institutions kind of adjusted their portfolios, ridding them of losing issues to dress them up for the end-of-quarter reports. Pre-weekend selling pressures also helped send the Dow Industrial Average to a closing loss of 173.14 points, or 1.6 percent, putting it at 10,650.92. The Dow rose only once and fell four times this week for a net overall loss of 196.45 points, that's 1.8 percent. The NASDAQ Composite today fell 105.50 to close at 3672.82. The Index fell four times and rose only once this week for a net overall drop of 130.94 points, that's 3.4 percent.

Big board volume today was down about 60 million shares, still active though at 1.13 billion shares, and about a 5 to 4 ratio of down volume over up volume. Not really that bad.

The Transport Index took it on the chin after that United Airline news, down 50 2/3 points.

But the Utility Index interestingly at a record high with that gain 1.85.

And look at the Closing Tick, if that's anything neutral, that's it, -1.

Standard & Poor's 500 down 21 3/4.

Nearly a 13 1/2-point drop on the 100.

The MidCap 400 fell just over 3 1/2.

And the Bridge Futures Price Index moved up 1.18.

New York Stock Exchange Composite off nearly 4 3/4 points.

About a 2 2/3-point drop on the Value Line.

Russell2000 Small Cap Index fell 2.44.

Broadly-based Wilshire 5000 down 172.80, or 1.3 percent.

The bond market showed little reaction to the report that consumer income rose 0.4 percent in August while consumer spending outpaced it with a 0.6 percent rise, all of this resulting in the lowest savings level on record. The market's main bolstering agent was safe-haven buying prompted by the stock market sell-off. A firm U.S. dollar also helped tax-free and corporates to hold steady throughout the session, while Treasuries ended mostly higher.

We see a 3/32 gain in the 5-year notes.

And a 1/32 gain in the 10-year note.

No change at all on the 30-year bond.

And finally, the Lehman Brothers Long-Term Treasury Bond Index up just over 3 points.

The Dow Industrial Average down 173, lost all but 20 of what it gained yesterday. But interestingly, look at the advance/decline ratio, slightly in favor of advances, 47 more up than down. 135 new yearly highs and 67 new lows.

AT & T Corp Liberty Media (LMGA) topped the active list on 23.1 million shares, edging down $0.81.

Compaq Computer (CPQ) fell $3.09. And of course yesterday the company said Michael Capellas, the CEO, will become the new Chairman as Ben Rosen retires.

Lucent Technologies (LU) down $1.19.

Nortel Networks (NT) lost $3.50.

AT & T (T) was up $0.63, fifth in volume on the big board.

Pfizer (PFE) up $1.13.

Micron Technology (MU) tumbled $4.75. The Robertson Stephens Brokerage cut its fiscal 2001 earnings estimates for Micron from $4.72 down to $4.45.

Citigroup managed to gain a 1/4 of a point.

And then Nokia (NOK) down $1.50.

General Electric (GE) is down $1.17, 10th in volume.

Bear Stearns (BSC) up $6.06. Takeover speculation on again today. The stock traded as high as $65.88.

Boeing (BA) was down $1.63 on news that its rival, Airbus, received a major jet engine or jet plane order from Singapore Air.

Gateway (GTW) down $9.15 in the down draft in the computer sector.

Hercules (HPC) moved up $1.06. Gene Marcial's Inside Wall Street column in the new "Business Week" magazine notes the company might be a possible takeover target of International Specialty Products (ISP) and might fetch as much as $25 a share.

Hewlett-Packard (HWP), another weak computer related stock, off $9.88, the biggest point loser in the Dow, incidentally.

And then UAL (UAL), parent of United Air (UAL), down $2 as the company warned it's going to have losses in both the third and fourth quarter.

This is a new issue, Wilson Greatbatch Technologies (GB). This is named after the company's founder, Wilson Greatbatch, who invented the implantable pacemaker, although the company now makes the batteries for pacemakers and Mr. Greatbatch is no longer in active management, but I'm sure he's got some stock. Five million shares offered to the public at $16, opened at $20 and it closed right at the high of the day, $22.88.

InterTAN (ITN) up $3.75. The company didn't return our calls. No news on the wires. This is sort of the Canadian equivalent of Radioshack (RSH), whose products it sells in its retail outlets.

Southdown (SDW), the big cement maker, up $15.25. The company will be acquired by the Mexican cement maker CEMEX (CX) for the price of $73 a share cash.

Mail-Well (MWL) big percentage loser, down $1.38. The company sees third quarter earnings of $0.15 to $0.17 versus the Street estimate of $0.31.

And Head N.V. (HED), I believe this is an Austrian firm that's the ski manufacturer. Also makes tennis rackets and scuba gear. In any case, 20.8 million shares offered here at a price of $10. Then it kind of took a header. It opened $7.75, the high of the day $8.25.

Airborne Freight (ABF) down $2.06. The company sees $0.05 to $0.10 loss in the third quarter and First Boston downgraded the stock.

NASDAQ trading, a loss of 105.50. For the week, down 131 points or 3.4 percent. Volume over two billion shares, 18 stocks up for every 21 down.

And, of course, Apple Computer (AAPL) topped the active list, tumbling $27.75 on 132.6 million shares. That's the eighth heaviest volume for a single stock on record for one day.

Intel (INTC) down $2.88.

Cisco Systems (CSCO) fell $4.19.

And then Microsoft (MSFT) losing a $1.

Sun Microsystems (SUNW) fell $6.88.

JDS Uniphase (JDSU) down $2.69.

A similar loss in Dell Computer (DELL).

Juniper Networks (JNPR) down $9.06.

PMC-Sierra (PMCS) down nearly $12.

And to complete this sea of minus signs, SDL (SDLI) down $7.69.

Here's a new issue, Ciphergen Biosystems (CIPH). That's a biotech company. Five and a half million shares offered at $16, opened at $32.50, the high of the day $37.13.

Proton Energy Systems (PRTN), here's anot