SUSIE GHARIB: A sharp U-turn on Wall Street today: the NASDAQ staged a stunning turnaround after a brutal triple-digit loss in the morning. It lost only 5 1/2 points by the closing bell. The Dow slipped by 28. What happens next depends on a slew of earnings reports that come out over the next three weeks. Here's Scott Gurvey with a preview.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: If anything can be said for the sell-off that saw the Dow fall 5 percent while the NASDAQ dropped 13 percent over the course of September, it is that the pre-announcement season is, thankfully, now over. It was not just your imagination. There was a significant increase in the number of warnings issued.

CHUCK HILL, DIRECTOR OF RESEARCH, FIRST CALL: We got a significant pickup in the last few weeks. I mean, up until then, it looked like a kind of "business as usual" quarter as far as the warnings went; but in the last couple weeks or so, it really broke out and, as through last Friday, had 351 negative pre-announcements as opposed to 281 at roughly the same period last year. And last year's quarter was a typical quarter for pre-announcements.

GURVEY: Wall Street analysts have lowered their third quarter earnings growth estimates from 18.8 percent on July 1 to 15.9 percent. Since companies in the aggregate generally beat estimates, First Call is looking for the third quarter rate to come in at 18 to 19 percent. That's down from 21.6 percent in the second quarter and 23.6 percent in the first quarter; but still well above the long-term historic rate of 7 percent. There are, however, disturbing signs about the fourth quarter. Slowdowns in consumer spending, higher energy prices, and the weak euro have all been cited in company warnings. All could also impact the fourth quarter, but analysts have not yet reduced their fourth quarter estimates, and many are looking for a market bottom here.

CHARLES BLOOD, MARKET STRATEGIST, BROWN BROTHERSHARRIMAN: The clarity that the stock market needs is to get all the bad news discounted. And at the rate that prices have been going down recently, particularly for technology stocks, we think we are very close to the end of getting all the bad news priced in. Once that happens, then we can start talking about the upside. So we would be optimistic going forward almost from this point in time, on.

GURVEY: The third quarter earnings season can be said to start officially tomorrow, with Yahoo! (YHOO), Biogen (BGEN) and Motorola (MOT) among the companies expected to report. 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.

10/09/00: The Fourth Quarter Forecast

PAUL KANGAS: Meanwhile, joining me now to expand our look at the earnings picture into the fourth quarter is Tom Wolf, Correspondent for BridgeNews in St. Louis. And welcome back, Tom.

TOM WOLF, EQUITIES REPORTER, BRIDGENEWS: It's good to be here, Paul.

KANGAS: Can we expect much of an improvement for corporate results in the final quarter of the year or will we be hearing more and more earnings warnings?

WOLF: Well, right now the analysts' estimates are pretty flat. They're looking at 15 percent gain in the fourth quarter over the year ago period. But the market doesn't seem to be buying that. We've seen earnings warnings in the third quarter from some, through most major sectors and from some big companies such as Intel (INTC) and Microsoft (MSFT). Now, the cost of this, analysts say, is, it's what they call the three Es on Wall Street, a slowing economy, surging energy prices and a slumping Euro.

KANGAS: Oh, yes, a bad combination, indeed. And, of course, I think that the uncertainty surrounding the election might be another factor.

WOLF: Well, that has its play, too, Paul. People don't know who's going to come out on top here so they kind of have to hedge their bets a little bit.

KANGAS: Now, when the cavalry comes to the rescue of the market, assuming it does, what form will it be in?

WOLF: Well, I think the hope is on Wall Street as we get into the earnings season for the third quarter here is that some of the outlook will be more positive than some of the earnings warnings we've heard. And that should, in their view, turn the market around and get some of these technology stocks moving.

KANGAS: All right, how about other parts of the market? I mean will they outdo technology even though it might be on the rebound, some of the old stalwarts, perhaps?

WOLF: Well, the most bright aspect right now is energy and the analysts keep ratcheting up their estimates. Some of the ones that are doing poorly here in the last few months are transportation and basic materials such as chemicals and most of that's due to the higher energy costs.

KANGAS: So in other words we could run into a pretty decent year end rally, is that the way you see it?

WOLF: Well, I think if we get through the month of October and some of the tax selling season that's going on with the mutual funds, as long as these fourth quarter outlooks that are coming out with the third quarter earnings are OK, I think we could see a rally in the year end.

KANGAS: All right, so-and it could be a rather brisk one, do you think, or just sort of mediocre?

WOLF: Well, I think if the technology sector can get going again, we could have a brisk rally. But I don't think the market's really betting on that at this point, Paul.

KANGAS: OK. All right, Tom, thanks very much.

WOLF: OK, thanks.

KANGAS: My guest, Tom Wolf, Correspondent for BridgeNews in St. Louis.

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.

10/09/00: The E-tailing Outlook

PAUL KANGAS: The stock of Amazon (AMZN) hit a 52 week low today. Investors are getting more and more concerned about the company's ability to make money. This is also a concern for other e-tailers and the big test will be this holiday season on how much business they do online. As Stephanie Woods reports, the e-tailers have a lot to prove.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Traditional retailers are decking their halls. But they are also making their presence known online. Many of the Internet only e-tailers who stumbled last year are gone. Those who remain face increasing competition from traditional brick and mortar companies who are also selling on the Web.

FIONA SWERDLOW, SR. ANALYST, JUPITER COMMUNICATIONS: And it's going to be those people who ultimately get the business basics right and who have the wherewithal to carry it off. So a lot of it's going to be traditional players and anyone who can actually get product into, to the recipient on time and as promised.

WOODS: Investors demanding profits have forced new economy companies to play by old economy rules. Luxury e-tailer Ashford (ASFD) expects to double its sales to $40 million this holiday season, this year, with the goal of making money.

KENNY KERTZMAN, CEO, ASHFORD.COM: The winners and losers will become much more clear coming out of this holiday season. Those of us that take care of the customers will build loyalty, will lower our cost of customer acquisition and will be right on path to get profitable.

WOODS: Once high flying stocks of Internet merchants are now suffering. Last holiday season, Ashford traded in the 20s. Now it's a little more than $2. EToys (ETYS) was in holiday cheer in the 50s. It's now at $4 a share. Sports retailer Fogdog (FOGD) was in the mid teens. Now it's less than $1. Analysts says e-tailers will need near flawless execution to be able to raise capital next year. For those who don't, e-tail consultant Lauren Freeman expects they'll be looking for partners.

LAUREN FREEDMAN, PRESIDENT, THE E-TAILING GROUP: A number of the ones that were going to go out of business probably have. So I don't expect, you know, a windfall of going, you know, out of business virtual players after the holiday season. Certainly there will be some more victims, but I think what you're going to more see is consolidation.

WOODS: Consolidation is already taking place. One example, last year Toys 'R Us (TOY) stumbled in the online space. This year it's teaming with Amazon to improve distribution. 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.

10/09/00: Delta CEO Leo Mullin's Flight Plan For Profits

SUSIE GHARIB: Delta's (DAL) stock was down today and it's been losing altitude for more than a year. But Delta CEO Leo Mullin is trying to change course. Here's Susan Hoffman of Georgia Public TV with a profile of the man piloting the turnaround.

LEO MULLIN, CHAIRMAN & CEO, DELTA AIRLINES: Hi, Leo Mulllin. Nice to see you.

SUSAN HOFFMAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Delta is Leo Mullin's fifth stop on a varied career path and he says his best by far.

MULLIN: I enjoy the people of Delta tremendously. I mean I feel like it's a privilege for me to be working here.

HOFFMAN: Mullin took over three years ago, determined to build employee morale and substantially improve service. At the time, the carrier ranked 10th in 10 in on time performance. By just last month, Delta ranked second. Despite Delta's improved statistics, Mullin says Wall Street has not caught on.

MULLIN: I will admit to you it is a disappointment that that has not been recognized sufficiently, in my judgment, by the stock market.

HOFFMAN: The stock is only up slightly. Mullin says Wall Street's captivation with dot.com companies is to blame.

MULLIN: It's been a funny world in the stock market, as you know, in the last couple of years as the dot.coms have drained a lot of investment funds towards them. As a, as what one would call an old economy company, we're hoping to get some of that respect back.

HOFFMAN: Dot.com companies may be to blame for the stock but Delta itself is making a huge commitment to the Web. In fact, they're offering bonus Sky Miles if you purchase your tickets through Delta.com.

MULLIN: Typically the mechanism for doing that has been through travel agents and now, starting about three years ago, we have taken the share of tickets that we sell to customers on the Web from 0 percent to roughly 10 percent now.

HOFFMAN: Delta is also hoping for a boost from China. In the wake of the Chinese trade agreement, the Transportation Department is awarding one U.S. based airline the China route. Capitalizing on routes to Latin America could also help. In three years, Delta has earned eight percent of the market share with flights to most all capital cities.

MULLIN: We're really thrilled with that and it has been very profitable and successful for us.

HOFFMAN: Despite success in Latin America and Europe, where Delta services more cities than all U.S. airlines combined, some dark clouds loom overhead. United (UAL) and US Air (U) are trying to merge. Mullin doesn't like the deal and he hopes the Justice Department shoots it down, but believes Delta will hold steady regardless.

MULLIN: What United will inherit on the east coast, which is where we have the principal competitive relationship with US Airways, is the old US Airways and we're highly used to competing and winning against that particular organization. So I think we'll do fine under any circumstances.

HOFFMAN: Mullin also says if the two do merge, it could lead to more industry consolidation in the future. In the meantime, Mullin will continue to revamp Delta, a challenging task, but one he certainly enjoys.

MULLIN: Landing in a company like this late in my executive career and find it to be as service oriented as it is and the vast majority of people are really dedicated to the company and have a great sense of allegiance and belief and pride it in. And it's very unusual, I think, in America today to find that degree of spirit.

HOFFMAN: Susan Hoffman, for the NIGHTLY BUSINESS REPORT, Atlanta.
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.

10/09/00: Now May Be The Time For Investors To Check In To Hotel Stocks

SUSIE GHARIB: Investors have been checking out of hotel stocks for months, but now some analysts say that the group is set for a rebound and this is a good time to grab the bargains. Jeff Yastine has more.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It has been a painful couple of years for shareholders in the major hotel stocks. Well established companies like Hilton (HLT) have dropped by 50 percent or more over the past several years as investors exited the group, fearing a hotel construction boom had led to an oversupply of hotel rooms. But some analysts say it may be time to take a second look on a value basis.

KEITH MILLS, ANALYST, PAINEWEBBER: That's true, you know, throughout the industry. There's, stocks are trading at a pretty good discount to replacement value and they're trading at low multiples of cash flow, six to seven times cash flow generally. Historically they've traded closer to eight to 10 times.

YASTINE: Analysts point out that the growth rate of new hotel construction has moderated, lowering supply. But demand has remained strong, leading to a round of upgrades for companies in the group. Extended Stay America (ESA) is among the companies in the beaten down sector, dropping from $22 to $7 over a three year period before rebounding. Steady earnings growth is another plus here, as it's continued grabbing market share in its category with an ambitious expansion plan.

GEORGE JOHNSON, CEO, EXTENDED STAY AMERICA: Our company has 18 people out looking for real estate. Every other company that does what we do, because they've run out of capital, has disbanded their development team. So there will be no new product but ours coming on for the next two to three years.

YASTINE: But analysts say the turnaround in the overall hotel sector does come with some caveats. For one, oil prices can't rise beyond current levels, otherwise some fear it may prompt a reduction in corporate travel. Also, the supply of new hotel rooms needs to stay low. A renewed building boom in hotels would hurt the group. The Fed also plays a role.

MILLS: In my mind, what it would take will be one, some sense on the part of investors that the worst, with respect to the economy, is over, that, you know, the Fed has stopped tightening and that, you know, it's about as bad as it's going to get.

YASTINE: In short, the U.S. economic slowdown needs to be a soft landing and not a hard one. If that happens, analysts say investors could reap rewards among hotel stocks. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.
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.

10/09/00: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Judging from today's mixed opening on Wall Street, a 22-point gain in the Dow Industrial Average at 10:00 a.m. suggested investors think the outlook for blue chip earnings reports is looking up, but a 60-point drop in the NASDAQ Index early on indicated the worst isn't over for the tech sector. A growing belief that the recent signs showing the U.S. economy is slowing will have a bigger negative impact on technology companies than on the more seasoned blue chips kept the tech-laden NASDAQ market falling in mid-morning, and that steep downturn also finally hurt the Dow as it posted a 1 1/2 -point loss at 11:30 when the NASDAQ Index was down nearly 125 points, all the way at the 3236 level. Early afternoon brought a solid comeback in the tech sector as investors looked for bargains, but in the process, the Dow Jones Industrial Average faltered a bit and closed down 28.11 at 10,568.43. In today's 95-point trading range, the Industrial Average closed down about 73 points from the best level, and up 22 points from the low. The NASDAQ Composite came in with a loss of only 5.45 at 3355.56. In its 144-point trading range, the Composite Index settled about 21 points below its high of the day and way up 122 points from its worst level of the session.

Big board volume very light as you might imagine. Yom Kippur and the Columbus holiday both lending to that. Less than 718 million shares. And about 70 million more shares of down volume than up volume.

The Dow Transport Index off just over 53 points.

And the Utilities edged up 2.52.

The Closing Tick just barely bearish at -40.

Standard & Poor's 500 off nearly 7.

A loss of 6 3/4 in the 100.

The MidCap 400 edged up .12.

And the Bridge Futures Price Index was up 1.41.

New York Stock Exchange Composite down 2.57.

A loss of .15 in the Value Line.

And the Russell2000 down 1.49.

And finally, the Broadly-Based Wilshire 5000 Index fell 42.35 points.

The bond market was closed for the Columbus Day holiday.

The Dow ended down a little over 28 points. For every 12 stocks higher, there were 15 lower. Only 23 new yearly highs, 87 new lows.

Motorola (MOT) topped the active list on 12.3 million shares, down $0.13. A little caution ahead of tomorrow's earnings report.

Nortel Networks (NT) moved up $1.13.

And then Nokia (NOK) down $0.69.

Lucent Technologies (LU) fell $0.94. And a lot of these stocks were a lot lower than this during the day, incidentally.

General Electric (GE) fell $0.81 on the close.

SBC Communications (SBC) dropped $0.88.

AT & T (T) down $0.63. The Senate Judiciary Committee Chairman warned that ties between AT&T and a merged AOL (AOL) and Time Warner (TWX) would threaten competition.

EMC (EMC) edged up $0.25.

Texas Instruments (TXN) down $1.75.

And America Online (AOL) down $2.05.

Corning (GLW) had a good day, up $2.38. The company is going to explore out of, an out of court resolution with Litton Industries (LIT) regarding a patent infringement suit. And Corning today also said it's entered into a pact with Sycamore Networks (SCMR) to develop optical switching technology.

Computer Sciences (CSC) down $6.81 on disappointment that Electronic Data Systems (EDS) was awarded a contract by the U.S. Navy, five years, $4.1 billion worth of contract for a new computer system.

Hewlett-Packard (HWP) was the best point gainer in the Dow today, up $3 at $75.

And United Tech (UTX) was the big point loser in the Dow. And it was only off $1.94.

Xerox (XRX) fell $0.31. After the market closed the company announced it's cutting its quarterly dividend from $0.20 down to just $0.05 a share.

Network Equipment Technologies (NWK) gained $1.94.

That was the best percentage gainer on the big board. A spokeswoman told us it could be a delayed reaction to last week's announcement that AT&T Italia is going to use the company's new broadband platform.

Eircom PLC (EIR) up $1.25, good percentage move. The company's in talks to sell it's ear cell mobile unit.

Equant N.V. (ENT) up $3.56. Reportedly this company is in talks to be acquired by France Telecom (FTE).

SafeGuard Scientifics (SFE) up $1.63. Of course, this is a high tech incubator and no doubt the stock today benefited from that nice high tech rally. And SafeGuard traded as high as $18.50 today.

Williams-Sonoma (WSM), the big loser of the day, tumbling $7.94. The household products retailer sees third quarter earnings of only $0.04 to $0.06. The Street was expecting $0.18 a share. Also, the company's Chief Financial Officer, John Tate resigned.

And Calgon Carbon (CCC) falling $1.81. The company sees third quarter sales down 13 percent from last year's $73.8 million and says earnings could fall below last year's $0.05 a share.

NASDAQ trading, a loss of nearly 5 ½ points. But don't forget, it was down nearly 130. Trading volume low at 1.42 billion shares, well off Friday's pace;

1480 up, 2327 down.

Cisco Systems (CSCO) topped the active list, still down $2.50, but it was worse off than that in the morning.

Juniper Networks (JNPR) rising $9.81, a good rally.

Intel (INTC) off $0.88.

And Sun Micro (SUNW) down only $0.69 at the close.

Those stocks were a lot lower during the day.

As was Microsoft (MSFT), which closed down $1.38.

JDS Uniphase (JDSU) up $2.19.

Oracle (ORCL) fell $0.88.

PMC-Sierra (PMCS) dropped $9 on the close.

CIENA (CIEN) off only $0.25.