SUSIE GHARIB: Our top story tonight: Xerox. It stunned Wall Street with another earnings warning. After the bell today, Xerox announced its second earnings warning since July, its fifth warning in the last 12 months. It now expects a 15- to 20-cent loss in the third quarter. Analysts were looking for a profit of 12 cents. It blames weakness in the euro and increased competition. Xerox stock closed at $15.31, but in after-hours trading, it got as low as $12. That is a new 52-week low. Xerox calls the results, quote, "disappointing and unacceptable," and says aggressive action is needed to improve profitability. Well, it was also a difficult day for other tech stocks. The NASDAQ lost 104 points, or 3 percent. The Dow gained only 50. The focus today on Wall Street was about, tomorrow, that important meeting of the Federal Reserve. Here's Scott Gurvey with a preview.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Federal Reserve has a way of generating unease on Wall Street, but this time around, peace and calm seem to be the order of the day. A Bridge poll of 21 economists predicts the odds of a rate hike at tomorrow's meeting are only 6 percent. And 20 of the 21 expect the Fed to, once again, state that economic risk still points to higher inflation. That kind of near unanimity is just what Wall Street likes to hear, even if the news causes some concern for long-term prospects. And even that concern has been somewhat muted in recent weeks as economic data showing some signs of slowing have surfaced. So there are a few Fed watchers who think the Fed may change its assessment.

DAVID JONES, CHIEF ECONOMIST, AUBREY G. LANSTON: In a sense, what I would say is we're in roughly equal balance, if you look at the risk to good economic performance. And it's possible the Fed will say that, that there is roughly an equal balance between risks on the upside of higher inflation, and risks on the downside of undesirable weakness in economic growth.

GURVEY: For the Fed to actually consider a rate cut, economists say it would have to see a rise in unemployment, slow growth in consumer spending, and a weakening housing market. None of those have become apparent, yet. For now, the experts say they expect Wall Street to pay little attention to the Fed; and instead, put its collective mind to analyzing upcoming earnings reports.

TRACY EICHLER, INVESTMENT STRATEGIST, PAINEWEBBER: I think we're putting too much emphasis on the whole day-to-day, month-to-month economic data that's released. I think that, you know, the one thing that drives the markets is earnings, and more so than ever, especially here in the third quarter. I think more investors are concerned with the earnings than with what the Fed's going to do tomorrow.

GURVEY: This will be the last Fed meeting before the election, and the Central bankers will have to consider changes in fiscal policy proposals of the winner as they plan their next monetary policy moves. 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.


10/02/2000: FleetBoston To Buy Summit Bancorp

SUSIE GHARIB: FleetBoston Financial (FBF) is reaching for the Summit (SUB). At a news conference in New York City today, FleetBoston announced it will pay $7 billion, or about $40 a share, for Summit Bancorp. This expands its franchise in the Northeast, especially New Jersey, where Summit is a powerhouse. FleetBoston has been on the acquisition trail for the last few years, and its CEO says that the bank's expansion plans are not over yet.

TERRENCE MURRAY, CHAIRMAN & CEO, FLEETBOSTON FINANCIAL: I see dramatic expansion for specialized businesses in the next three or four or five years. We'll continue to expand our bank franchise in the Northeast and little market fillers. But I'd say the major expansion would be in non-traditional banking franchises, some of the things we've done a lot of in the last two years.

GHARIB: One of the reasons that FleetBoston is keen on Summit is because it has the number one market share in New Jersey, one of the country's wealthiest and most densely populated states. Paul?

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.

10/02/2000: Road To The White House: Swinging Swing Voters

PAUL KANGAS: The major presidential candidates have spent the day sharpening strategies for tomorrow night's debate. With polls showing the race very close, both sides will be trying to reach a relatively small group of so-called, "swing" voters who may hold the keys to the White House. As our coverage on "The Road to the White House" continues, Darren Gersh looks at how those voters' views on the economy have changed over the years.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Martin Guitars are sought after by stars like Willie Nelson, Eric Clapton and Sting. But it's the workers in the Martin factory in Nazareth, Pennsylvania who are the stars in this election. Many are undecided voters, like Joanne Moyer. The economy is good here, so good that unemployment is almost non-existent. But that doesn't mean Moyer is confident about the future. She wants the next president to focus on issues like Social Security and Medicare.

JOANNE MOYER, UNDECIDED VOTER: I would rather have them take care of other things, so when I do reach that age of retirement, I'm better - you know, I'm better off. I don't want to be eating cat food you know when I'm old.

GERSH: Just a few work benches away, James Miller is another undecided voter. He's also thinking long term.

JAMES MILLER, UNDECIDED VOTER: When I was a young man, I didn't think about Social Security; but now that I'm getting closer to that age, you think more and more about it all the time.

GERSH: Martin Guitar has made his home in Pennsylvania's Lehigh Valley for more than 150 years. The Lehigh Valley is also home to one of the largest groups of undecided voters in the country. It's these so-called swing voters who political analysts say will ultimately decide the presidential election. Which is why both presidential campaigns are hoping their economic message will strike the right cord with voters here. The good times have carried over to Mivajo's diner across the street from the Martin plant. Owner, Joe Duarte says he, too, is having trouble making up his mind in this election, but he makes it clear he is interested in tax relief.

JOE DUARTE, OWNER, MIVAJO'S: Small business owner works 90 hours a week, to survive; and a quarter of it goes to the government. So I don't think it's fair.

GERSH: The steel jobs that once fueled the Lehigh Valley economy are long gone, replaced with high tech jobs and long-distance commuters. Bill Brackbill sees signs of the new prosperity every day as president of the Nazareth area Chamber of Commerce. He's amazed at the size and price of the new homes sprouting on old corn fields. And with the influx of new families, the Lehigh Valley now has a new problem, growth.

BILL BRACKBILL, PRESIDENT, NAZARETH AREA CHAMBER OF COMMERCE: Which means more classrooms, which means more teachers, which means more services and as a result, somebody is going to have to pay for that.

GERSH: Brackbill was the first Republican elected to countywide office in decades. But even he is undecided in this race, concerned how the presidential candidates' economic plans will affect local government's ability to deal with the new prosperity.

BRACKBILL: I'm concerned about both candidates saying they're going to spend billions for this and billions for that. Where are these billions coming from? And I think that's going to be a major, major issue in terms of my making up my mind how I'm going to vote.

GERSH: At the nearby Nazareth Speedway, Bob Schechter is about to enjoy a birthday present from his wife, a few spins around the track. Issues that once dominated independent voters concerns, like the federal debt, are now less important to many independents like Schechter.

BOB SCHECHTER, UNDECIDED VOTER: Some years ago, I thought it was very important that we bring down the debt when it was going up and up and up and it didn't seem like there would be any end. At this point, I think a balance between debt reduction and tax cuts certainly would be OK with me, which is why that is really kind of a non factor.

GERSH: The good economy has changed the rhythm of life here. Now undecided voters will be watching the presidential debates to see which candidate is in tune with their hopes for the future. Darren Gersh, NIGHTLY BUSINESS REPORT, Nazareth Pennsylvania.

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.


10/02/2000: Fed Meeting Preview

SUSIE GHARIB: As we've been reporting, the Federal Reserve meets tomorrow and most economists do not expect any change in policy. Let's talk more about this. Our colleague from BridgeNews, Deborah Lagomarsino, joins me live now. Hi, Deborah.

DEBORAH LAGOMARSINO, MONETARY POLICY REPORTER, BRIDGENEWS: Hi, Susie.

GHARIB: Now, I know you regularly talk to Fed officials. What have they been telling you that you can glean that why they're more comfortable about not doing anything about interest rates?

LAGOMARSINO: Well, there's really three main factors. The economy has slowed down markedly from its second quarter pace to about a 2 1/2 to 3 percent from 5.6 percent. Inflation remains under wraps and productivity is surging. All these factors really combine to make them more comfortable with where rates are right now.

GHARIB: But there are some risks and what are the things that are making them nervous?

LAGOMARSINO: There are. There's also three main risks to them. There's oil prices, which they are concerned could seep into core inflation. The tight labor markets are a concern in terms of whether this results in higher wages. And thirdly is demand. We have seen demand slow in the second quarter from the first, but it's picked back up again in the third quarter to about four to five percent from about three percent. If that persists, it's going to be more of a risk on the up side.

GHARIB: All right, so then going forward, what kind of direction, again, from your conversations with Fed officials, what's going to be the direction of the Fed after this meeting and after the elections?

LAGOMARSINO: Well, at this point, people expect the Fed will keep on hold for the rest of the year. But beyond that, it's really an open question with economists I speak to very divided on whether the Fed will ease or raise rates. And what's critical here is demand and inflation, if those continue to taper off or pick back up again.

GHARIB: And we've been hearing a little bit, some talk about maybe a cut in interest rates.

LAGOMARSINO: Right. Right.

GHARIB: Any possibility of that?

LAGOMARSINO: Well, I think it would be a little premature right now since certainly the Fed, as we expect, will continue to warn tomorrow the risks remain weighted toward higher inflation, as they have all year. And some of the factors I've heard that could lead to a move of an easing would be a faltering housing market, a real ramping down of demand and also rise in the unemployment rate.

GHARIB: All right, well the chances of that?

LAGOMARSINO: Well, not very big at this moment. I think it's going to depend. Sort of time will tell on those issues.

GHARIB: All right, besides the Fed meeting tomorrow, there's the first of the presidential debates and one thing that they're going to be talking about is their economic plan.

LAGOMARSINO: Right.

GHARIB: Again, for people you've been talking to, the economists, who do they say has the better plan for the economy?

LAGOMARSINO: Well, as you know, it really depends on who you talk to. And at this point what Greenspan has said is he would prefer the budget surplus be used to pay down the debt and if it's touched....

GHARIB: And neither candidate is saying that.

LAGOMARSINO: Right. Right. And if it's touched at all that it be used to actually lower taxes and not increase spending and we all know that the candidates each want to, you know, lower taxes. And so at this point, what the Fed is counting on is a more stimulated fiscal policy. At bottom, it's really just going to keep them on guard, either candidate's proposals.

GHARIB: All right. We'll see what happens. Thank you so much for keeping us up to date.

LAGOMARSINO: My pleasure.

GHARIB: We've been speaking with Deborah Lagomarsino, Monetary Policy Reporter 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.



10/02/2000: Capstone Turbine Gets A Cheap High From The Fuel Crisis

SUSIE GHARIB: The high cost of oil and electricity has been pumping up some energy stocks. One company, Capstone Turbine (CPST), has been booming since its IPO in June. As Pat Anson reports, this small California company has dreams of being a big player in the energy sector.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: For most of its history, Capstone Turbine failed to generate much interest, a privately held manufacturer that consistently lost money while it worked at developing new power generators. Then the company went public and its obscurity quickly ended. From its initial offering price of $16 a share, Capstone opened at $27 and within a few weeks was trading as high as $98. At one point this tiny company had a market cap of over $7 billion. Capstone's CEO says the company clearly benefited from a sudden interest in cheap, alternative sources of energy.

AKE AIMGREN, CEO, CAPSTONE TURBINE: It's a huge interest in distributed generation, clean power and the fact that Capstone, we do have a product which is available now. It's a real product. I think that's a major part of the explanation.

ANSON: Capstone has developed a small power generator about the size of a refrigerator priced at about $30,000 apiece. These micro turbines run on natural gas or propane and have a wide range of applications. They can be used to power busses, drilling rigs, even retail stores. Most importantly, these micro turbines produce fairly cheap electricity at prices below the peak rates charged by some utilities. Some analysts believe the high energy costs and brownouts of this past summer were no fluke, that strong demand for electricity and power shortages are likely again next summer.

DOUG CHRISTOPHER, SR. ANALYST, CROWELL, WEEDON &COMPANY: The most near-term solution, unless we want to face more brownouts and blackouts and really come into a severe power constraint, is to install the micro turbines. The technology is there. They're very efficient, clearly cheaper.

ANSON: Some analysts say Capstone is a good "long term buy." But short term, after such a big run up, it may cool off just like the weather.

BRETT HENDRICKSON, ANALYST, B. RILEY & COMPANY: We know that there's been institutions out there actively trying to shore up some of these stocks to try and pick the top.

ANSON: Would you say companies like Capstone are overvalued at this point?

HENDRICKSON: I think investors who are buying companies based on kind of real bottom up analysis really have to start questioning the valuations now. It's really hard to place a value on them because most of the companies aren't making any money.

ANSON: With sales climbing and a strong backlog of orders, Capstone hopes to generate profits in about two years. Pat Anson, NIGHTLY BUSINESS REPORT, Los Angeles.

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.



10/02/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened with a very modest technical rally in the wake of last Friday's broad sell-off, as buyers showed caution ahead of tomorrow's Fed meeting, and the specter of still more disappointing corporate earnings announcements. At 10:00 a.m., the Dow Industrial Average recouped only 19 ½ points of Friday's 173-point tumble; while the NASDAQ Index got back just 23 1/2 points of Friday's 105-point decline. Good strength in IBM (IBM), General Motors (GM), ExxonMobil (XOM) and J.P. Morgan (JPM) overcame a six-point drop in Boeing (BA) stock after Lehman Brothers downgraded it from "outperform" to "neutral." So at noontime, the Dow managed to post a 63 2/3-point gain, but weakness in the tech sector pushed the NASDAQ Index to a 7 ½-point loss. Persistent selling in the technology bellwether stocks like Intel (INTC), Microsoft (MSFT) and Sun Microsystems (SUNW) - dragged the NASDAQ market down for the rest of the afternoon, and it trimmed the closing gain in the Dow Industrial Average to 49.21 points putting it at 10,700.13. In today's 90-point trading range, the Dow closed down 21 points from the best level of the session; up 69 points from the low of the day. The NASDAQ Composite ended with a loss of 103.92 points at 3568.90. In its 155-point trading range, the Composite Index settled 145 points below its best level of the day.

Big board volume just over one billion shares. Down a bit from last Friday. And up volume exceeded down volume by almost a 5 to 4 ratio.

The Dow Transport Index losing 57.22.

But the Utility Index hit a record high again, up 3 1/4 points exactly.

The Closing Tick slightly bearish at -204.

Standard & Poor's 500 off a little over 1/4 point.

But the 100 up nearly 3 1/2 points.

MidCap 400 fell just over 7 1/2 points.

Bridge Futures Price Index down .39.

New York Stock Exchange Composite up 3 1/3 points.

But the Value Line down 4.44.

Russell2000 Small Cap Index dropped nearly 9 3/4 points.

And the Wilshire 5000 Broadly-Based Index down just over 91 points.

The bond market edged lower today on news that the Purchasing Managers September Index of Manufacturing Activity rose a bit, while August Construction Spending increased 1.4 percent. That was the first rise in four months. The sell-off was cushioned, however, by safe-haven buying prompted by the steep sell-off in NASDAQ stocks. Tax free and corporates lost only about 1/8-point on average. And the Treasury market did end mixed.

Actually a little gain of 1/32 in the 5-year note.

But the 10-year note dropping 4/32, with the yield at 5.82 percent.

30-year bond dropped 18/32

And the Lehman Brothers Long-Term Treasury Bond Index fell 7.18.

Well, anyway, the Lucent parent did all right today. We'll see that in a just a moment. It was in the actives. Up 49.21 on the Dow. The broader market lower by a 16 to 13 margin; 116 new highs for the year, 87 new lows.

Lucent Technologies (LU), the parent of Avaya, topped the active list on 17.6 million shares, moving up $2.16.

Then Nortel Networks (NT) rising $2.44. UBS Warburg Brokerage expects the company to meet third quarter earnings estimates of $0.17 a share and rates NorTel a "buy."

Dynegy (DYN) lost $4. The company is planning the sale of a 10 million share block. But it was added to the Standard & Poor's 500 Index after the close of trading today.

AT & T Corp Liberty Media (LMGA) edged up $0.38.

King Pharmaceutical (KG) up $2.75. That stock will be added to the Standard & Poor's 500 Index after the close of trading tomorrow, obviously index fund buying today.

Summit Bancorp (SUB) up $3.63. As you heard earlier, it's going to be acquired for $7 billion in stock, it works out to roughly $40 a share, by Fleet Boston.

And FleetBoston Financial (FBF) itself down $0.63.

General Electric (GE) moved up $0.81.

Motorola (MOT) dropped $0.31.

And AT & T (T) 10th in big board volume, down $0.38 a share.

Boeing (BA) was down $4.38. Lehman Brothers downgraded the stock from "outperform" to "neutral," as I mentioned earlier.

ExxonMobil (XOM) hitting a new high, up $2.31, and of course New York November oil futures moved up $1.34 a barrel today.

General Motors (GM) up $2.13. The cover story in this week's "Baron's Financial" suggests Carl Icahn may move back into General Motors stock after just selling some of it.

IBM (IBM) up $5.31. That was the biggest point gainer in the Dow and the move apparently in anticipation of an announcement soon of a mainframe computer upgrade by Big Blue.

Norfolk Southern (NSC) down $1.19. The company sees lower than expected third quarter earnings of $0.22 to $0.26 a share and it cites problems of higher fuel costs.

Texas Instruments (TXN) moved up $2.69. The company unveiled its fourth generation digital signal processor, which is designed for Web music devices.

Navistar International Holding (NAV) up $6.56. The company reportedly received a buyout bid from the truck maker, PACCAR (PCAR). But PACCAR today said it doesn't know anything about it, denied that it made a bid.

IBP (IBP), the old Iowa beef packers, up $3.44. A unit of Donaldson Lufkin will acquire this company for $2.4 billion in cash. That works out to $22.25 a share.

Waddell & Reed Financial (WDR) up $4.19. The company says it has had exploratory talks with a number of parties about a business combination.

Warnaco (WAC) the big percentage loser, down $1.56. The company sees a third quarter loss in the range of $0.45 to $0.50. The Street was expecting a loss of only $0.23 a share.

Tefron Limited (TFR) off $4.19. The company sees just a break even third quarter due to the negative impact of foreign exchange.

And Dot Hill Systems (HIL) off $1.88. The company sees a loss in the third quarter of $0.05 to $0.15 a share.

NASDAQ trading, nearly a 104 point drop in the Index, volume down from Friday's pace, about 14 stocks up for every 26 lower.

Cisco Systems (CSCO) topped the active list, moving up $0.25.

But Intel (INTC) dropped $1.44.

JDS Uniphase (JDSU) off $4.75.

Sun Microsystems (SUNW) off $3.19.

And Juniper Networks (JNPR) dropped $12.81, fifth in volume.

Ariba (ARBA) down $16.20.

No change in Oracle (ORCL). That was a triumph in the tech sector.

Microsoft (MSFT) fell $1.19.

And MedImmune (MEDI) dropping $20.50 a share. Bank of America cut 2001 earnings on MedImmune by $0.11, down to $0.75 a share.

And Dell Computer (DELL) off $1.56, 10th in big board or volume on NASDAQ.

Professional Detailing (PDII) had a good day, up $23. Th