SUSIE GHARIB: On Wall Street today, another nail biting day for tech investors. Tech stocks got pounded again, and the NASDAQ fell 115 points. The Dow lost only 44. The outlook for tomorrow is mixed. After the bell, Lucent (LU) stunned investors with another warning for the fourth quarter, its third warnings this year. Lucent now sees 17-18 cents a share, 10 cents lower than estimates; and then in after-hours trading, the stock got slammed, down about eight points. And then Yahoo! and Motorola came out with their earnings. And joining me now to talk about those results is our New York bureau chief, Scott Gurvey. Scott, fill us in.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Susie, it seems that we've turned the earnings season into a sporting event, and if so, this is the opening kickoff today. The focus was on Yahoo!. This company is an Internet favorite. And as such, it has a big psychological influence on the tone of the market. Yahoo! is a portal, which means it is a place many Internet users visit, first and often. And what investors are looking for here is to see if the dot-com downturn has cut into Yahoo's online advertising revenue. Here are the results: the company earned 13 cents a share. The First Call consensus was for 12 cents. Yahoo! traditionally beats the consensus by a penny, so this is really as expected. A year ago, Yahoo! earned seven cents. On the revenue side, third-quarter revenue was $295 million. The company gets about 80 percent of its revenue from online advertising, and official consensus was $280 million - $295 does show slower growth, but is at the high end of expectations.

SCOTT KESSIER, INTERNET ANALYST, STANDARD & POOR'S: Although Yahoo! doesn't specifically break out online advertising revenue versus say e-commerce revenues, the fact that the total top-line revenues, and the growth, were both strong, that suggests to me that maybe we saw the bottom in the past few months, and that the fourth quarter is going to be very strong as a result of increased holiday sales and, frankly, users and usage online.

GURVEY: The other big story of the day is Motorola. This big diversified company is seen as a key indicator of the health of the telecommunications equipment business. It is well-known that there has been some slowing of the growth rates for wireless. The question is: how has it affected the equipment makers? Motorola reported earning 26 cents a share for its third quarter. That meets expectations. And as for the key handset metric, the company reported margins of 6 percent. That is the number Wall Street said Motorola had to hit this quarter. Margins were 4 percent in the second quarter. So in sum, Yahoo! and Motorola - the news could be considered constructive, if not outright positive. But Susie, that Lucent warning you mentioned and which is becoming a habit for this widely-held company, is certainly going to throw a monkey wrench into the technology machine when trading opens tomorrow.

GHARIB: We'll have to see what happens. But you know, you're right about Lucent. Every quarter, they have warned; and a lot of analysts were saying today that they don't think it will be much longer that Lucent's CEO, Richard McGinn is going to keep that job.

GURVEY: That's a good question. They have done a lot of restructuring, reorganization; changed a lot of middle-level management types. He, however -

GHARIB: What's the problem?

GURVEY: The problem seems to be that they are not properly evaluating the demand for their products. They keep saying that some of the newer products are very popular and they can't make the production demands for it, and they were still manufacturing some older products that customers were not so interested in.

GHARIB: You brought up tomorrow. I mean, it's going to be an interesting day because Yahoo! comes out with earnings better-than-expected; its stock goes up in after-hours trading, and then it goes down by about $6. Motorola is down fractionally. Lucent, as we said, is down a lot.

GURVEY: And we have a couple of other semiconductor companies out tomorrow, too. So it's going to be a very interesting day.

GHARIB: Fasten your seat belt. Thank you very much. That was Scott Gurvey, our New York bureau chief.

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.

10/10/00: Earnings Season Analysis

SUSIE GHARIB: It was another rough day for the NASDAQ and so the recurring question for investors, are the boom times over for tech stocks? Here with some answers is Brian Finnerty, Managing Director and Investment Strategist for C.E. Unterberg, Towbin. And he joins us live from his firm's trading floor. Hi, Brian.

BRIAN FINNERTY, INVESTMENT STRATEGIST, C.E. UNTERBERG, TOWBIN: Hi, Susie.

GHARIB: So, a really negative sentiment out there. We have Yahoo! (YHOO) and Motorola (MOT) reporting after the bell. Their stocks go up initially in after hours trading and then they go down.

FINNERTY: That's right.

GHARIB: What's going on here?

FINNERTY: Well, I'll tell you what, Susie, we're never going to sell another semiconductor chip. We're never going to sell on the fiber optic switch ever again. I mean the sentiment is so negative right now that it feels like everybody is just throwing in the towel, get me out, I don't want to have anything to do with tech stocks anymore.

GHARIB: Is the worth over?

FINNERTY: I don't know if it's over, Susie. I think the worst is very close to being over. Now, I know I've said this for a while. People are saying this. I believe we're very close to the bottom here. We've gone down so much. The NASDAQ is down over 20 percent for the year, close to 40 percent from the year highs, so we're down a tremendous amount. I mean is this whole technology game over with? I don't think so. And I think third quarter earnings are going to be very, very strong. Those numbers are in the bag. The key is what you people said earlier, you and Scott were talking about earlier, the conference calls and the look forward to Q4 and Q1 of next year. That's what Wall Street wants to know. They want to know three to six months out where are we going to be.

GHARIB: All right, so in the meantime what happens to stocks like Cisco (CSCO) and Oracle (ORCL) and Intel (INTC) and Microsoft (MSFT) that are down like, you know, cut in half, many of them?

FINNERTY: The big blue chip bellwethers.

GHARIB: Why aren't people buying in?

FINNERTY: Because people are scared, sellers are in the marketplace, buyers are saying watch out, I want to buy them cheaper. But Susie, remember this. Remember a couple things. Bull markets are made from strong corporate profits and low inflation and stable interest rates. We're really in that kind of an environment right now. Point number one. Point number two, there's a lot of cash on the sidelines, portfolio managers have a tremendous amount of cash out there. Individuals do still have some cash out there. But really the mutual funds have the most cash and a lot of these individual investment funds, the hedge funds, tremendous amounts of cash out there.

GHARIB: All right, well, for someone ...

FINNERTY: They're going to come to market at some point.

GHARIB: For someone who does have some cash and wants to put to it work and they're a long term investor, would you tell them to buy any of these, let's say Lucent (LU), for example, would you be a buyer of Lucent at $0.23 a share?

FINNERTY: I think from a long-term perspective, Lucent is probably OK at $23 a share. I think Lucent and you mentioned again earlier, there's some management problems there, it's tough to turn a big battleship around. They're in a good business. They've executed very poorly. They've done a very poor job of execution. They're in a good business. All they have got to do is straighten that out. It's going to take time, the long-term stock will be higher.

GHARIB: OK. We just have a few seconds left. Name one or two stocks that you would be buying right now, Brian.

FINNERTY: I love two of the hyper growth semiconductor companies, Applied Microcircuits, AMCC, and PMC Sierra, PMCS. They'll both be reporting earnings later this week. I think they'll have great conference calls going for Q4 and into next year. I think those are great growth stocks to be buying. You know, the earnings are going to be booming.

GHARIB: OK, we're going to keep our eye on them. Thank you so much, Brian.

FINNERTY: Thank you, Susie.

GHARIB: A pleasure talking to you, as always.

FINNERTY: My pleasure.

GHARIB: And we've been talking to Brian Finnerty, Managing Director and Investment Strategist for C.E. Unterberg Towbin.
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.

10/10/00: CEO's For The New Economy: Ned Barnholt, CEO, Agilent Technologies

SUSIE GHARIB: The stock of Agilent Technologies (A) was also on the down side, more than a 1 point today. It has lost 70 percent this year. Agilent was spun off from Hewlett Packard late last year and it's been having difficulties with suppliers. Tonight we begin our special business week series, CEOs for the new economy, talking with the CEO of Agilent. Suzanne Pratt began by asking Ned Barnholt about those supply problems.

NED BARNHOLT, CEO, AGILENT TECHNOLOGIES: Unfortunately we weren't able to achieve all revenues that we wanted to in the third quarter. But those suppliers we've been working with very closely, we've been in contact with our top 100 suppliers to make sure that we've got the parts we need. We've moved a number of people from our production organization into our procurement area to expedite all the critical parts. So all these actions that we've been taking have really started to pay off and we are seeing improvement in our supply chain.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: So are there any areas that you are currently short?

BARNHOLT: Well, I think there's going to be shortages probably for some time. You look back to the '98 time frame when the semiconductor industry was in a down turn, Asia was very, very weak. A lot of people did not expand capacity back then or even into the early part of '99. So when things started to pick up, there was a real need to ramp capacity very quickly. It's taken some time for some people to do that. So we think we're going to be in this period of relatively tight supply perhaps for another six, nine months.

PRATT: Your health care business was also a problem in the July quarter, hurt by weak demand from U.S. hospitals. What sort of progress have you made to reduce losses in that area?

BARNHOLT: We've taken several actions. One is we have restructured the business to reduce our fixed costs. We have reduced our head count in that business by about 750 to 800 people worldwide and that will bring the business, as we go forward into next year, back into a profitable position. We've also been rationalizing our manufacturing in that business. We're moving some of our manufacturing offshore to take advantage of some of the lower costs. And we are continuing to invest in research and development, particularly in some of the hotter higher growth markets in healthcare to try to accelerate the growth again.

PRATT: So you expect to be profitable in that business next year you said. Are there any plans for spinning it off? Would you consider selling the business?

BARNHOLT: Well, we do plan to be profitable next year. The actions that we took this year, we think, will begin to bear fruit in our fiscal year '01. In terms of the long term future of the business, what I have said is that every one of our four business segments need to stand on their own.

PRATT: Now, your current quarter ends October 31st.

BARNHOLT: October 31st.

PRATT: The Street is looking for earnings of about $0.38 a share, I believe. Yeah, $0.38 a share. What is your feeling about that number? Are you comfortable with that number?

BARNHOLT: Well, I really can't comment specifically around but we have said that the guidance that we gave last quarter at the end of our quarter to the Street, that we're still comfortable with that guidance and that's basically what we're telling everyone.

PRATT: Now, the stock chart for Agilent is a rough one. Hit a high of 162, now trading, I think, in the high 50's. What message are investors not getting, do you think, about Agilent?

BARNHOLT: You know, earlier this year, I think a lot of technology stocks had very high multiples, particularly in the wireless and the fiber optic area. We benefited from that. Those stocks have since come down in overall value. So my approach is to not focus a lot around the multiple that people attach to us. My focus is on making sure we hit our numbers, that we can deliver consistent results and that we continue to grow the business and outgrow the competition and gain market share. As long as we can do that and do that consistently, I'm sure our stockholders will be, you know, very happy.

PRATT: Thank you for joining us, Ned Barnholt of Agilent Technologies.

BARNHOLT: My pleasure. Thank you.

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.

10/10/00: Commentary: The Trade Deficit Dilemma

SUSIE GHARIB: America's growing trade deficit is on the mind of tonight's commentator. Here's Charles Schultze, a Senior Fellow at the Brookings Institution.

CHARLES SCHULTZE, COMMENTARY: Some people worry that the large and growing deficit in the U.S. balance of payments could be the Achilles heel of U.S. prosperity. Our big trade deficit is being financed by a correspondingly large inflow of foreign capital. The fear is that if the inflow of foreign funds should abruptly start to dry up, the exchange value of the dollar would plummet, import prices and inflation would rise, the Fed would have to raise interest rates and the stock market would take a dive. Well, we can't keep running huge payment deficits forever. But the adjustment is more likely to be manageable than disruptive. If the American economy remains strong and investment opportunities attractive, foreign investors will continue putting their money here. On the other hand, if the economy began to slip badly, the inflow of foreign funds would shrink, the exchange value of the dollar would fall and as a consequence American exports would get a big boost, which would be a welcome help for a faltering economy. And while the weaker dollar would raise import prices and the Consumer Price Index, recent experience suggests that's not likely to filter through into wages and set off an inflationary spiral. In short, with a strong economy, foreign capital will continue to flow in, while if the economy weakens and capital inflows decline, the resulting depreciation of the dollar will provide a needed anti-recessionary boost to U.S. exports. I'm Charles Schultze.
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.

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

PAUL KANGAS: The stock market opened modestly higher on hopes the Motorola and Yahoo! earnings, to be released after the close, would be good enough to snap the high-tech sector out of its recent descent. So at 10:00 a.m., the Dow Industrial Average recouped more than yesterday's 28-point loss by posting a 33-point gain, while the NASDAQ Index wiped out Monday's five-point deficit with a 27.25-point advance. As morning trading continued, hope gave way to doubt that the rash of third-quarter corporate earnings warnings would end after storage technology said its results would be lower than expected. Also, Xilinx (XLNX) and Altera (ALTR) stocks plunged on downgrades from Lehman Brothers and Salomon Smith Barney. By 1:00 p.m., the Dow fell to a 43.25-point loss; the NASDAQ Index was down 76 points. Throughout the rest of the session, the Industrial Average got a boost from a strong energy sector, ExxonMobil (XOM) in particular; but there was no relief in selling in the NASDAQ market down. The Dow Industrial Average closed with a loss of 44.03 at 10,524.40. In today's 135-point trading range, the Dow closed down nearly 100 points from its best level of the session. The NASDAQ Composite retesting its May lows with a drop of 115.02 at 3240.54. In its 154-point trading range, the Composite Index settled 143 points below its best level of the day.

Big board volume moved up over a billion shares, way up from yesterday's partial holiday level of 718 million. And down volume exceeded up volume by about a 4-3 ratio.

The Dow Transport Index up 6.60.

Utilities gained 5.37. Good move there.

The Closing Tick however modestly bearish at -175.

Standard & Poor's 500 off just over 16 points.

Over a 6.5-point drop in the 100.

MidCap 400 fell just over 10 points.

The Bridge Futures Price Index up 2.97, mainly due to higher oil prices.

New York Stock Exchange Composite down 3.19.

A loss of 4.86 in the Value Line.

Russell2000 Small Cap Index fell nearly 8 points.

And the Broadly-Based Wilshire 5000 off exactly 185.75 points.

The bond market moved lower for most of the morning because oil prices continued to rise in reaction to an increase in Mideast tensions. Prices were also under pressure from a heavy schedule of new corporate debt offerings this week, from Unilever (UN) and

Telecom Italia (TI) to name just a few. Even so, the market rebounded nicely in late trading with the help of flight-to-safety buying after the NASDAQ market tanked again.

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

And the Treasury market did about the same.

The 5-year notes up 4/32.

8/32 rise in the 10-year note.

And the 30-year bond up 13/32, with the yield at 5.82 percent.

The Lehman Brothers Long-Term Treasury Bond Index was up nearly 4.25 points.

Well, sellers kind of knocked the air out of the stock market again today. The Dow not too bad, just over 44 points. But the broader market definitely lower. For every 11 stocks on the up side, 16 on the down side. Only 37 new highs for the year, 119 new lows.

Nortel Networks (NT) topped the active list on 15.4 million shares, losing $0.13.

Nokia (NOK), in a weak telecom group, down another $2.

Citigroup , financials were weak today, off $1.63.

Motorola (MOT) down $0.63. And then, of course, those earnings came out after the close. The stock rallied to as high as $27.75 and then went back down to where it closed, about.

And then Morgan Stanley Dean Witter (MWD) down $8.31. The stock can't seem to shake off those rumors that we've heard recently that the company may have lost a lot of money in the junk bond market. The company's denied that.

AT & T (T) edging up $0.25.

Lucent Technologies (LU) down $0.94. You heard the story there, another earnings warning.

Pfizer (PFE), a $1 gain. The drug sector today was sort of a refuge for investors.

Chase Manhattan (CMB), another weak financial, down $1.25.

And Texas Instruments (TXN) down $2.31, 10th in volume.

Allegheny Energy (AYE) up $1.88. Merrill Lynch upgraded it from "accumulate" to a "long-term buy."

ExxonMobil (XOM) hitting a record high, up $1.94, as New York November oil futures rose $1.32 a barrel, above 33 bucks.

General Motors (GM) losing $2.56. Merrill Lynch cut third quarter earnings estimates by $0.15, down to $1.40 a share.

Johnson & Johnson (JNJ) up $3.31. That was the best point gainer in the Dow and as I mentioned, the drug stocks were kind of a haven today.

J.P. Morgan (JPM), the big point loser in the Dow, in the weak financial sector, off $5.13.

And then King Pharmaceutical (KG) rose $3.88. The company will get $50 million from American Home Products (AHP) for marketing rights to its all taste inhibitor.

National Discount Brokers Group (NDB) by far the big percentage gainer of the day, up nearly 89 percent. The story here, a unit of

Deutsche Bank is going to bid $49 a share for the 84 percent of National Discount's stock not already owned.

Fletcher Challenge Energy (FEG) up $6.06. Now, Apache Oil and Royal Dutch (RD) are going to pitch in and make a joint bid of both cash and stock for this Fletcher Energy and so it had a nice rise. It's worth about 40 bucks a share as near as I can tell.

Apache (APA) itself was up $7.94 because Royal Dutch is going to buy $100 million of Apache's stock as a part of that deal.

The big loser, Alltrista (ALC), down $6.94. The company's in industrial products and plastics. It sees 2000 earnings down 65 to 70 percent than last year's $2.86 a share.

Westpoint Stevens (WXS), the textile, down $1.75. The company sees third quarter earnings at $0.55 to $0.60 versus its own recent estimate of $0.65.

And then Storage Technology (STK) down $1.75. The company sees lower than expected third quarter revenues in the area of $465 million to $480 million. Standard & Poor's repeated an "avoid" recommendation on the stock.

NASDAQ trading down 115 points. We're getting near the May lows, only about 76 points after the close today. 1.8 billion shares traded well up from yesterday, 13 stocks higher for every 25 lower.

Xilinx (XLNX) topped the active list, tumbling $16.69. Lehman Brothers downgraded it from "outperform" to "neutral," Salomon Smith Barney from "buy" to "outperform."

Applied Micro Circuits (AMCC) down $6.75.

Cisco Systems (CSCO) fell $2.56 a share.

Intel (INTC) off $1.50.

But Juniper Networks (JNPR) bucked the trend, up $6.38.

Altera (ALTR) down $11.06 a share. Like Xilinx, this stock was downgraded by both Lehman Brothers and Salomon Smith Barney.

PMC-Sierra (PMCS) down $19.06.

Sun Micro (SUNW) off $3.63.

Microsoft (MSFT) edged up $0.38. <