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	10/18/00: Sun, Microsoft, & Apple Offer Up Earnings	Text-only
	10/18/00: AOL Beats The Street	Text-only
	10/18/00: A Wall Street Bear's Sell Off Fever Survival Guide	Text-only
	10/18/00: Market Mayhem-The Tech Prospective	Text-only
	10/18/00: "Money File"-Keeping Your Stock Options Open	Text-only
	10/18/00: Paul Kangas' Wall Street Wrap Up	Text-only
	10/18/2000: NBR Market Stats	Text-only

10/18/00: Sun, Microsoft, & Apple Offer Up Earnings SUSIE GHARIB: What a day on Wall Street: down, down, down. The Dow plunged 435 points at the open, but trimmed back to a loss of 114, closing below 10,000 for the first time since March. The NASDAQ also got hammered, falling to the 3000 mark, but finished with only a drop of 41 points. Well, four high-profile tech companies reported earnings today: Microsoft, Apple, Sun Microsystems (SUNW) and AOL. The stocks are split in after-hours trading, with Apple getting hit the worst, down four points. Scott Gurvey reports from Wall Street. SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Three tech titans reported earnings today. Sun Microsystems did it by accident in mid-morning when its news release was inadvertently posted on the company web site. It was a blow-out quarter for Sun. The company earning 30 cents a share. That's an 88 percent increase. The First Call consensus was for 26 cents. Sun makes the big server computers that drive network computing, and in spite of all the fears of slower growth, Sun says its market remain strong. Software giant, Microsoft has seen its stock price cut in-half amid anti-trust concerns and fears that sales of personal computers have slowed considerably. But the company reported earnings of 46 cents a share for the quarter, before adjustments for accounting rule changes. The consensus called for 41 cents. Microsoft said sales of Windows 2000 and its new consumer operating system, Windows ME were strong and that results were solid across all the company's lines of business. ART RUSSELL, TECHNOLOGY ANALYST, EDWARD JONES: The stock's now at a P/E of 24 times forward earnings. That's the lowest valuation level since early '96. And at that time, if you recall, Netscape was going to put them out of business. And we all know how that turned out. So, it's a cheap stock at current prices. And I'd step up to the plate and take a look. GURVEY: Apple Computer had already warned investors that it would not make as much as originally thought in its fourth quarter. Analysts lowered their expectations from 45 cents to 31 cents, and the company managed to make 30 cents after factoring out investment gains. In a statement, CEO Steve Jobs said the company is taking steps to remedy the factors contributing to its sales shortfall. RUSSELL: They really don't have much corporate presence, and you know they've pretty well tapped the Macintosh faithful for upgrades here recently. And a lot of people aren't willing to pay you know 40 percent premium to get the Macintosh technology. GURVEY: Among other tech companies reporting, storage maker EMC (EMC) beat estimates by 5 percent, and semiconductor maker Texas Instruments (TXN) came in right on target. Earnings reports tomorrow include McDonald's (MCD), Coca-Cola (KO), Allstate (ALL) and Sears (S). 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. © 2001 Community Television Foundation of South Florida, Inc. 10/18/00: AOL Beats The Street JEFF YASTINE: Well now let's take a look at those AOL earnings: 14 cents a share, that was a penny better than estimates. The stock rose 8 percent in regular trading after hitting a 52-week low earlier in the session. Investors are edgy about AOL's big merger with Time Warner. Stephanie Woods looks at the issues. STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The days of the dot-com ad blitz appear to be over. That has investors nervous about Time Warner and AOL's advertising revenues. ROBERT BURGOYNE, TECHNOLOGY STRATEGIST, MONUMENT FUNDS: What is important about advertising is that it's so profitable, particularly the incremental advertising, is very profitable, very low-cost to produce an advertisement. So it's very important to profits. WOODS: AOL's third-quarter ad sales topped $649 million, an 80 percent increase over last year; but the ad number wasn't as good as last quarter. ULRIC WEIL, ANALYST, FRIEDMAN, BILLINGS, RAMSEY & COMPANY: In this market environment we have, which is fairly negatively tinged, investors are likely to project out and say, well, OK, so maybe they lose a percent each quarter. And before the year - you know, by - before it settles down and stabilizes, maybe they lose another 2 or 3 percentage points growth in this all-important other-revenue category. WOODS: Time Warner executives told analysts they don't see a slowdown in advertising sales and they don't buy the theory that the dot-com shake-out will hurt the company. Some analysts agree. CHRIS DIXON, MEDIA ANALYST, PAINEWEBBER: The reality is that the companies need to advertise in an increasing competitive marketplace. In fact, advertising and marketing spending will outpace GDP, as we see it, for the next several years. And for companies like AOL/ Time Warner, with extraordinary marketing brands, these are the places that advertising will go. WOODS: Time Warner says it's on target to grow its revenue 12 to 15 percent, and once the merger with AOL is complete, will grow 30 percent. But that's before the Federal Trade Commission takes what one analyst called, its "pound of flesh" in concessions. AOL and Time Warner say they are in the home stretch in getting their deal approved. 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. © 2001 Community Television Foundation of South Florida, Inc. . 10/18/00: A Wall Street Bear's Sell Off Fever Survival Guide SUSIE GHARIB: Well, it was an amazing day on Wall Street. And joining me live now to talk about what's next for the markets is a top strategist. Gail Dudack is Managing Director and Chief Investment Strategist at Warburg Dillon Reed and she has been bearish on the markets. Gail, you raise your eyebrows, but, you know, you have been bearish and we're now at your targets, 10,000 on the Dow, 3,200 on the NASDAQ. So is this it? Is the worst over? GAIL DUDACK, CHIEF INVESTMENT STRATEGIST, WARBURG DILLON READ: I wish I could say that it was over. I was expecting that the market would pretty much have discounted a lot of things I was looking for here. But, Susie, it doesn't really look that way to me. It's clear that the market could have a bounce from here, but I doubt that that bounce will be too long lasting. GHARIB: Why are you saying that? DUDACK: Well, the market is very oversold and you can see that people do step up and try to play a very short-term gain with this market. That's been happening again and again. Particularly you see it in the mutual fund flows. But I think that we have some liquidity factors here. Well, first we have the fundamental factors, with the earnings are slowing down, people are adjusting to that. But I'm more concerned about the liquidity factors. There's a lot of borrowed money in the stock market and to me that still remains a risk. GHARIB: Well, one thing that a number of strategists and analysts have been concerned about is the amount of tax selling that's been going on, initially by the mutual funds, and they say the individuals will probably start the tax selling process sometime in November, and so that that could exacerbate the situation. How worrisome is that? DUDACK: Excellent point. And keep in mind that most mutual funds have an IRS tax deadline of October 31. And to the extent that there are capital gains they want to manage those, take losses now to offset those gains so there's no tax consequence at the end of the year. That's going to continue through the end of the year and then it could be also added to by individuals through the end of the year. So at least keep your powder dry until the end of the month. And I think that might prove to be a better buying opportunity. GHARIB: So should you sell into any rallies if there's any momentum? DUDACK: Yeah, well, that's a tough question and, you know, to the extent that you own some very high P.E. stocks where the growth rates may, earnings growth rates may be in jeopardy, the answer to that is simple, yes. It's linked to selling off a lot of stocks or to sell out everything, but I do think there's still risk here. GHARIB: Let's talk about some of the risks. One of the things that's come out is that the number of the tech stocks, that even though they're so cheap, that people are not going in to buy them because they just are worried that the risk is that they're not going to have the growth there going into even the new year. DUDACK: Well, I think that, you know, what we're seeing in this quarter is that a lot of earnings growth rates are coming under question. Now, that happens many times in many different cycles, but this time the P.E.s or the valuations are much higher than normal. So that creates an added risk. And I do believe that a slower stock market is also hurting their earnings because there is no capital gains. We're seeing this even in Microsoft's earnings, that they were actually good because of capital gains. In a bad market you don't have those. So there's a lot of earnings problems there that are still out there. GHARIB: A lot of-you've got to really read between the lines in all these earnings reports. DUDACK: You have to be critical, yes. GHARIB: All right, critical. You've got some new money, you want to look at areas where you can, you know, put it to work. What would you be telling your clients at this point? DUDACK: The same thing we've been telling them all year, which is that an environment where earnings are under question, look for the most predictable earnings. Electric utilities, very easy to predict those earnings. GHARIB: They've had a great year. DUDACK: They've had a great year because they have great productivity gains. All that money they spent for Y2K is now showing up in their products. GHARIB: What else? DUDACK: Energy, particularly oil service. This whole energy problem is a supply problem, lack of supply. Oil service, good earnings for the next year. GHARIB: Anything in tech land? DUDACK: Tech land there's going to be spots, but I think one of the better techs in this kind of environment, biotech. Think about that. There's aging baby boomers. There's a lot of excitement going on in biotech. GHARIB: All right, we'll take a look. Thank you very much for coming by and talking to us, Gail. DUDACK: My pleasure. GHARIB: My guest tonight, Gail Dudack of Warburg Dillon Reed. 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. © 2001 Community Television Foundation of South Florida, Inc. 10/18/00: Market Mayhem-The Tech Prospective SUSIE GHARIB: More now on the outlook for the markets from a technical point of view. And joining me live is our colleague from BridgeNews, Michael Kahn. He is Chief Technical Analyst. Hi, Michael. MICHAEL KAHN, CHIEF TECHNICAL ANALYST, BRIDGENEWS: Hi, Susie. Good on the back. GHARIB: All right, you heard what Gail Dudack said, she said she doesn't think that the worst is over. What do you think from a technical point of view? KAHN: Well, I think I'm in agreement with Gail. I've been looking at the market and the question is, is this a bear market. And I think the answer is yes. It's hard to say it's a bear market while you're in it. But if you just look at the percentages, the Dow down 12 percent, NASDAQ down 25 percent in just a few months, those are bear market numbers. GHARIB: The Dow down 12 percent is considered a bear market? KAHN: Well, 10 percent is a correction number and then past that, you know, you have to look at a little worse of a market. But I define a bear market as how the individual stocks are reacting to news. And as we've seen over the last few weeks, bad news is getting stocks killed. And even good news they're getting hammered. So in a bull market, bad news is tolerated. In a bear market, even good news is not tolerated. GHARIB: All right, yes, it has been painful. Now, you've got some charts that you want to talk us through. KAHN: Right. GHARIB: Tell us what we should be gathering from these charts here. The Dow. KAHN: Well, first is a multi-year chart of the Dow, and that's going back to the end of that 1994 rotational bear market, as we call it. And you can see that trend line. It's a little deceptive from the chart up here, but that trend line has been broken this month and that tells you that the trend has changed in the Dow, where it's no longer going up. GHARIB: OK, so that's a negative. How about the NASDAQ? That's the next chart. Can you pull that up? OK, here's the NASDAQ. KAHN: Well, the NASDAQ had much more of a rally over the last couple of months and maybe even a bubble top, as we call it. And the key thing here is that we've come down to what might be a support level. It's hard to see on this chart, but we are at a support level from last May. GHARIB: OK, real quickly because we have very little time here, what are some of the stock sectors that have good technicals if investors want to put money in? KAHN: Well, I agree with Gail with the biotechs. A lot of names that are holding up very well in this volatile time. And the other one is semiconductors. I think we've seen a teach washout. It might be time to start looking at some of these and one of the names would be Intel (INTC). GHARIB: OK, so there is a little bit of a silver lining in this market. KAHN: There sure it. GHARIB: Thank you so much, Michael. And we've been speaking with Michael Kahn of 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. © 2001 Community Television Foundation of South Florida, Inc. 10/18/00: "Money File"-Keeping Your Stock Options Open SUSIE GHARIB: In the money file tonight, when it comes to asset allocation, you need to keep tabs on your employee stock options. Here's Terry Savage, author of "The Savage Truth On Money." TERRY SAVAGE, AUTHOR, "THE SAVAGE TRUTH ON MONEY": Have you checked your options lately? And I mean that question literally. A new Oppenheimer Funds survey shows that 11 percent of respondents have allowed in the money employee stock options to expire worthless simply because they weren't paying attention. That's like throwing money away. Even worse, many employees are finding their net worth is shrinking dramatically as stock prices fall. Some options that were once in the money are now under water. And while employee stock options don't give you the flexibility of exchange traded options, surely you'll want to consider whether it's worth exercising early if you have that privilege and taking some gains before they might disappear. For what it's worth, companies are having option problems, too. Out of the money options can't be repriced without taking a charge to earnings. And issuing more options at lower prices creates an overhang that worries institutional investors. So how do companies motivate employees without coming up with more cash? That's their problem. But if you're the employee, you should check to see which type of employee stock option you have-nonqualified stock options or incentive stock options. That can make a big difference in your income tax situation on any gains. Even more important, check out the terms of your options. When do they vest? When can you exercise? When do they expire? Now, it's not disloyal to exercise company stock options and then sell. After all, you depend on your company for your job and you probably have company stock in your retirement plan. So don't let your asset allocation get out of balance. Remember, it's your option. I'm Terry Savage. 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. © 2001 Community Television Foundation of South Florida, Inc. 10/18/00: Paul Kangas' Wall Street Wrap Up JEFF YASTINE: And as you heard Susie mention, the roller-coaster ride continued for the market: a tug-of-war all day between bargain hunters and sellers who just wanted out. The Dow Jones Industrial Average opening up 430 points lower on those weak IBM (IBM) and Chase Manhattan (CMB) results, but buyers immediately showed up and put a bid under both companies. Intel (INTC) also picking up some buying interest, and before you know it, a big short-covering rally was in the works; although declining issues still outnumbered advancers by a 3-1 margin. By noontime, the Dow had recovered nearly 300 points of that opening loss. Afternoon trading was the real tug-of-war as buyers showed up for some of the NASDAQ stocks that gapped lower at the open; and for stalwarts like Sun Micro, which, again, as you heard, posted record profits, the Index peaked into positive territory four times during the day. But in late trading, the Dow managed to break above the 10,000 level before more sellers came in. And the Blue Chip Index going on to close below the 10,000 mark, down 114 to 9975. In today's wild 438-point range, the Dow closed up 323 points from its worst level of the day. The NASDAQ Composite slipping 42 to 3171in its 232-point range, the Index settling 86 1/4 points below its high of the day. Big board volume jumping to 1.4 billion shares. Down volume exceeding up volume by almost 200 million shares. The Dow Transports in retreat, falling 22 1/2 points. The Utilities moving - pulling back to just over 7 points. And the Closing Tick fairly bullish at +324. In the broader market, the S&P 500, 100 and MidCap 400 escaping larger losses from earlier in the day. And the Bridge CRB Index ending down about a point. And the Big Board Composite Index falling about 4 1/3 points. A similar loss percentage-wise in the Value Line. The Russell2000 falling 4 1/2. And the broadly-based Wilshire 5000 dropping 94 1/2 points. Bonds were stronger, but they gave up much of their gains through the day as it became clear that the Dow's opening loss wasn't going to turn into Armageddon. Early flight-to-safety buying outweighed an important consumer price index report that showed a larger-than-expected 0.3 percent gain in the core CPI, which excludes food and energy prices. The Broader Index was also about 0.1 point higher than expected. But, as things improved on the stock market, more money moved out of bonds and back into equities, and that whittled away the gains for bonds today. So, tax free and corporate issues closed unchanged. Treasures gained ground. The 5-year note was up 2/32. The 10-year note gaining 2/32 as well. The 30-year bond was unchanged, the yield at 5.77 percent. And the Lehman Brothers Long Bond Index fell roughly half a point. As you heard, Big Blue's woes pulling the Dow down today below the 10,000 mark, falling 114 points, and you can also see for the third session in a row declining issues getting the upper hand, of course. Issues hitting new highs dwindled to 19, new yearly lows, 298. America Online (AOL), though, finding support, rising $3.31 after nose-diving over $9 yesterday and you heard a little bit ago the $0.14 a share earnings that beat estimates by a penny. Chase Manhattan (CMB) falling $1.06, reporting a 32 percent drop in third quarter earnings. The stock opened at 32 1/2 but made up much of that lost ground. The company's vice chairman said he expected better results in the fourth quarter. Big Blue (IBM), of course, getting a black eye, the stock losing $17.50, trading huge volume, about 30 million shares today. AT & T (T) ending off $0.38 today, hitting a new 52 week low, British Telecom (BTY) and AT&T denying talks had stalled on a merger of the two companies' business services units. Nokia (NOK) falling $0.69. Earnings were due out for October 26th next week, but the company said late today it would move up its release date to tomorrow at 8:00 A.M. Texas Instruments (TXN) ending off $3.31, getting a downgrade to neutral from Lehman Brothers and earnings after the close were $0.33 a share. That was in line with the Wall Street estimates. Nortel (NT) dropping $4.19, the company announcing a joint venture with another firm, Antech , to create a new broadband cable access company and essentially Nortel (NT) is selling Antech a large piece of another company it owns, Aris (ARSC), and then Nortech (NSYS) will then own about 46 percent of Antech. No change in Lucent (LU). And Citigroup rising $0.19. Analysts liked what they saw in Citigroup's earnings report yesterday, but it fell in conjunction with Chase's weak report this morning. Micron Technology (MU) slipping $0.44 after its earnings release earlier this week. And among the widely helds, Eastman Kodak (EK) rising $1.81. Ford (F) edged up $0.63. Profits in the third quarter fell just over 16 percent because of the Firestone recall. Shares in International Paper (IP) advancing $3.19. Third quarter earnings of $0.53 a share. That topped revised estimates by a penny. I.P. will also cut 2,500 jobs and shut three paper plants. Better than expected results at J.P. Morgan & Co. (JPM), not enough to break the stock's losing streak, and it followed Chase Manhattan lower. Solectron (SLR) gaining 1 3/4. It's entered into an outsourcing agreement with Sony (SNE) and will also acquire two manufacturing plants that make car stereos and satellite navigation systems. United Technologies (UTX) slipping $1.31, third quarter net income rising 14 percent. Results were $0.02 above Street estimates. Among the issues showing some strength, Media Arts (MDA) rising $1.63. The company's, one of the company's board members wants to take it private at $6.25 a share. Stryker (SYK) climbing $7.81. Third quarter earnings were up 32 percent. That was in line with forecasts. The Gap (GPS) jumping more than $2, Merrill Lynch upgrading the stock from "neutral" to "buy" on optimism about fourth quarter sales. And ITT Educational Services (ESI) losing 5 1/4. The Department of Education is investigating the company over compensation of student recruiters. Earnings were also out, $0.31 a share. That was in line with expectations. Cornell Companies (CRN) ending off $1.38. Full year net income will be less than expected because of lower occupancy rates and higher costs. The company's an operator of private prisons. And Owens & Minor Holding (OMI) closing down 2 3/4. The company matched Wall Street expectations with profits of $0.24 a share. Revenues grew less than expected. In NASDAQ trading, you can see the losses there in the Composite Index. Trading volume 2 1/2 billion shares, third heaviest in NASDAQ history, 25 stocks down for every 14 u