PAUL KANGAS: Investors are breathing a sigh of relief. They're happy it's Friday as stocks end the week on the upside; the Dow gains 83 points; the NASDAQ rises almost 65. Two big stories tonight: the markets, and, a possible mega-merger. First, the talks between Honeywell and United Technologies are off. Honeywell says it is now mulling another offer, and United Technologies says the companies have formally ended negotiations. The question investors are mulling is just who is that no-name bidder? Published reports say General Electric (GE) has made an offer for Honeywell, and several analysts say a GE-Honeywell combination makes sense.

MATTHEW COLLINS, ANALYST, EDWARD JONES: I think GE would be the top buying candidate. They're obviously very inquisitive. They're obviously big enough to do a deal like this. And they're very good at making acquisitions work. And on top of that, AlliedSignal which makes up of the two-thirds of the current Honeywell was run by an ex-GE executive, Larry Bossidy, who knew Jack Welch very well. So, there are some connections between the company in the past.

KANGAS: Collins says he thinks whoever emerges as the winner, they'll pay somewhere between 40- and $50 billion for Honeywell. Investors liked those numbers. Honeywell's stock jumped $10.31, or almost 30 percent, to close at $46 a share.
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.



10/20/00: Wall Street Ends The Week On The Comeback Trail


JEFF YASTINE: Investors also cheered on the overall stock market today. On the eve of the big subway series in New York City, bullish investors are rooting on this market. After striking out earlier in the week, the market staged a stunning comeback. Suzanne Pratt has the play by play.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was an upbeat end to a rather raucous week on Wall Street. Stocks climbed for the second straight session today as investors shrugged off Wednesday's wild selling, and scrambled to scoop up bargains. Better-than-expected profits from eBay (EBAY) late Thursday helped power demand for Internet issues today, though many other technology names were also on investors' shopping lists. All of the major Indexes gained ground today, and for the week, all also showed increases, although the NASDAQ's comeback was by far the largest. Experts say confidence has definitely returned to the stock market, and many now think Wednesday's sell-off was indeed a bottom.

JOSEPH MCALINDEN, CHIEF INVESTMENT OFFICER, MSDW ASSET MGMT.: I think that increasingly, the kind of follow-through we're seeing is suggesting that we made a major reversal, the middle of this past week, and that the September-October correction may be over.

PRATT: The recent selling may be coming to an end, but the fact remains that most of the major Indexes are still down for the year. Experts point out it's taken investors about six months to go from "irrational exuberance" to irrational depression. And they say the reality should be somewhere in the middle. Stocks have been pounded to year-lows recently on worries about slowing profits, rising oil prices, and the weakening euro. All of these concerns still exist, but some experts say investors may now be willing to refocus on the positives.

TONY DWYER, CHIEF INVESTMENT STRATEGIST, KIRLIN SECURITIES: The economic environment has not changed over the last five years; yet, we've already predicted a recession into many of the stock prices that are out there. I don't think that's going to be the case, and I think that's going to allow for a pretty snappy rally going into the end of the year.

PRATT: Experts say if there's one lesson investors should take from this week, it's the importance of diversification. They say technology is not the only game in town, and recommend that investors spread their risks across asset classes and industry groups. Suzanne Pratt, 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.



10/20/00: Regulation F. D.

PAUL KANGAS: Mergers and earnings are two common news events that can really move a stock. Under a new regulation about to go into effect companies must disclose such news to everyone at the same time. The Securities and Exchange Commission calls this fair disclosure. But as Scott Gurvey reports, not everyone on Wall Street is happy about it.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It doesn't go into effect until Monday, but its impact has been felt on Wall Street throughout this earnings season. Regulation F.D. for fair disclosure says whenever an issuer discloses any material nonpublic information, the issuer shall make public disclosure of that information simultaneously in the case of an intentional disclosure and promptly in the case of a non intentional disclosure. What the SEC wants to achieve is an end to the practice of tipping off selected analysts to upcoming corporate news. The analysts then pass along the information to favored clients, who can trade at the expense of others. Companies say the rule will make them more cautious.

ED JORDAN, V.P. & CHIEF FINANCIAL OFFICER, ITXC: I think more information may have been shared with analysts in the past. I think companies may have felt that there was a little more protection in terms of giving more information because they could always rely on the fact that this was the analyst's estimate or the analyst's perspective.

GURVEY: The SEC says the tradeoff is worth it because individual investors should have equal access to corporate data.

ARTHUR LEVITT, CHAIRMAN, SECURITIES & EXCHANGE COMMISSION: I think that there is a tendency to underestimate the intelligence of America's individual investors. They don't need analysts to interpret things for them. They don't need whisper numbers that some believe and others don't. Let's put that information out for everybody to get at the same time and you'll see America's investors will do all right with those numbers.

GURVEY: Putting out information to the investing community without hints or warnings does seem to increase market volatility. The recent 22 percent drop in Intel (INTC) when it surprised Wall Street with an earnings warning is one example. So was Sun Microsystems's (SUNW) scramble to publish its earnings after part of it was prematurely posted on the company Web site. But many think Wall Street's complaints come because the rule threatens one of corporate America's favorite games. Some executives have traded special access to non-public information to certain analysts and journalists in return for favored treatment. Regulation F.D. should put an end to that. Not all analysts oppose regulation F.D. Some just observe that they will now have to do more homework.

DREW PECK, SEMICONDUCTOR ANALYST, S.G. COWEN: The lesson from all this is that analysts and investors should not use these companies as their primary research sources. The right sources for information is from the customer. Call the P.C. companies, call the mother board manufacturers, call the distributors. Find out what they're saying and that's the only way you're going to get a jump on the marketplace in situations like this.

GURVEY: there is already some pressure to repeal Regulation F.D. but the SEC says that nothing but good can come from fair disclosure and it intends to level the playing field as much as it can. 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.



10/20/00: "Market Monitor"- Elaine Garzarelli, Portfolio Mgr., The Forward Funds

PAUL KANGAS: My guest market monitor this week is Elaine Garzarelli, Portfolio Manager of the Forward Funds and the Chair of Garzarelli Capital Inc. Welcome back, Elaine.

ELAINE GARZARELLI, PORTFOLIO MGR., THE FORWARD FUNDS: Nice to be here, Paul.

KANGAS: Although this question has been asked incessantly this week, I feel compelled to ask someone with your solid market forecasting record, have we seen a market bottom here?

GARZARELLI: Well, Paul, my indicators had turned bearish earlier this year and they've gone from 28 percent to 60 percent. So, you know, that's a big improvement and I think we're going to get a nice rally. A 65 percent reading, however, would be an all out buy signal, a broad based buy signal. So we're pretty close to it.

KANGAS: So you are employing some funds to buy some stocks here?

GARZARELLI: Yes, I am. There are some stocks that have gone down 40 percent to 60 percent that are incredibly cheap and will have fairly good earnings, better than the S&P next year and-

KANGAS: Give us an idea of some specific issues you like here.

GARZARELLI OK. I love the semiconductors. They've corrected 41 percent, the same as they did in 1995. I like Texas Instruments (TXN). I think it's down 50 percent from its 52 week high. It looks excellent. And Intel (INTC). I also like the restaurant group. McDonald's (MCD) is down 45 percent. It's at the lowest relative price to earnings ratio in the history of the company.

KANGAS: OK. And I must tell our viewers that when you were with us in mid March, you were sort of bullish, but your indicators weren't that strong and you did just two weeks later come out with a sell signal on the high techs. That was a great call and I congratulate you.

GARZARELLI: Thank you, Paul.

KANGAS: Now, what would you avoid here in this type of an atmosphere?

GARZARELLI: Yeah, well, we just downgraded to "neutral" from "attractive" the drug stocks, the soft drinks, the alcoholic beverages and the soap industry because they've gone up so much and outperformed so much that they're just overpriced. So we think instead of outperforming the market, they'll probably move in line with the S&P 500.

KANGAS: What about the energy stocks? You liked Occidental (OXY) last time, around $18. It's now above $20. And is this oil price going to hold here? Is it going to go higher? What do you think?

GARZARELLI: I think oil prices will probably come down a little bit in the spring, but I think that at a level of about $28, $25 they can still make a fairly good profit and I still like Occidental. We have about 100 percent out performance potential in that group.

KANGAS: Is that the only one you like in the oil group?

GARZARELLI: No, I like Chevron and I like Exxon.

KANGAS: OK. What about interest rates here?

GARZARELLI: I think they're going to come down. I think the Fed will probably ease in the next three to five months because the Fiber leading inflation index that Greenspan looks at has been coming down for the last five months. It's at -4.9 percent for inflation right now. And I think long-term rates will come down 20 to 30 basis points.

KANGAS: One of the stocks you liked back in mid March was AT&T (T). It was in the early 50s and here we are in the mid 20s. What do you think?

GARZARELLI: I love it.

KANGAS: You love it?

GARZARELLI: It's going to be a takeover

KANGAS: If you liked it there, you've got to love it here, right?

GARZARELLI: Absolutely.

KANGAS: And you would be buying here at these levels?

GARZARELLI: Yes, I would. As a matter of fact, I bought some for myself today.

KANGAS: OK. And how about the financial group right here?

GARZARELLI: I love the financials. I like Citibank and I like Chase Manhattan Bank (CMB) and I like Bank of America (BAC). Bank of America is down 42 percent from its 52 week high. I think as the Fed eases and even if they don't the group is so cheap it has about a 45 percent out performance potential.

KANGAS: Back in March, one of your favorites was Centex (CTX), the home builder. It was 23. Now it's in the early '30s. Are you staying with that?

GARZARELLI: Yes, I think it has probably another 30 percent to 40 percent upside from here.

KANGAS: All right. And you got out of Dell (DELL) but it's had a tremendous fall and I haven't heard you recommend any of the high techs here.

GARZARELLI: Well, I like the semiconductors, as I mentioned, and I also like Dell. It's down 52 percent from its 52 week high. It's a bargain.

KANGAS: And Intel. You liked Adobe. Back in March it had a spill, but it's still way up from where it was then.

GARZARELLI: Yeah. Adobe looks OK. I think a market performer for that stock.

KANGAS: OK. Fair enough. And Comerica (CMA), I must say, at 41, it's now 55. Are you out of that?

GARZARELLI: No, we still like it.

KANGAS: OK. And BellSouth (BLS)?

GARZARELLI: BellSouth I still like as well. So-

KANGAS: That's only down a few points from where it was back in mid March.

GARZARELLI: Yeah, yeah. We still have it on our "attractive" list, probably 30 percent to 40 percent out performance potential at yesterday's prices.

KANGAS: All right. So your indicators are at 60, a little above 60, which is getting very bullish, correct?

GARZARELLI: That's right, 65 percent.

KANGAS: All right. OK. All right, so you're turning positive here.

GARZARELLI: Right.

KANGAS: In a pretty good way, too. Thanks very much Elaine.

GARZARELLI: Thank you, Paul.

KANGAS: My guest Elaine Garzarelli, Portfolio Manager of the Forward Funds.


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.




10/20/00: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: The blue chip Dow Industrial Average was hurt in early trading today by over a 7-point drop in United Tech's stock because it overshadowed a 5-point gain in Honeywell, another Dow component. That was part of the reason why the Industrial Average was down 21 points at 10:00 a.m. But the NASDAQ Index posted a 7 1/2-point gain on top of yesterday's massive 247-point run-up, thanks in part to a 6-point early jump in eBay's stock following yesterday's better-than-expected post-market earnings report. Profit takers moved into the blue chip sector over the next hour, sending the Dow to a 50-point deficit at 11:00 a.m. But high-tech issues continued to attract buyers, lifting the NASDAQ Index to a 52-point gain. Further strength in the NASDAQ market gradually helped pull the Dow stocks out of negative territory in mid-session and throughout-the-afternoon trading, and despite the usual pre-weekend caution, the market ended on a positive note. The Dow Industrial Average posted a closing gain of 83.61 points, putting it at 10,226.59. This week, the Dow fell twice, rose three times, and eked out an overall gain of 34.41 points. The NASDAQ Composite climbed 64.54 points today, ending at 3483.14. And for the week overall, the Composite Index rose twice, fell three times, but has a net overall gain of 166.37 points, or 5 percent.

Big board volume today dwindled a bit, but still active at 1.2 billion shares. About a 7 to 4 ratio of up volume over down volume.

The Dow Transport Index edged up 9 1/4 points.

Utilities down 1.24.

The Closing Tick just slightly bullish at +171.

Standard & Poor's 500 up nearly 8 1/4.

Just over a 4 1/4-point rise in the 100.

The MidCap 400 up 7 1/3 points.

And the Bridge Futures Price Index edged down by .14.

New York Stock Exchange Composite up 3 1/2.

A gain of nearly 3 in the Value Line.

Russell2000 Small Cap Index was up 6.15.

And the broadly-based Wilshire 5000 up 114.60 points, nearly a 1 percent gain.

The bond market moved in a narrow trading range today. But with a slight upward bias created by some buying prompted by the continuing turmoil in the MidEast which, in turn, caused over a $1 per barrel rise in New York oil futures. Those plus factors for bonds were somewhat offset by overall weakness in the dollar. In any case, tax free and corporate issues ended with gains averaging 1/8-point. While the Treasury market was up a trifle, in the long end mostly.

We see no change in the 5-year note.

The 10-year note, no change there.

And an 11/32 gain in the 30-year bond.

And the Lehman Brothers Long-Term Treasury Bond Index was up nearly 4 1/2 points.

Well, we had a nice ending for the bulls on Wall Street today. We see the Dow Industrial Average up 83.61 and of course for the week it was up only 34 points. But it's still in the plus territory. About 16 stocks higher for every 12 lower today but 40 more new yearly lows than new highs.

Circuit City Stores (CC) topped the active list on 26.6 million shares, down $7.63 a share. The company sees a third quarter loss of $0.05 to $0.10 due to slowing sales in its home electronics business. The Street was looking for earnings of $0.16, so down it went.

Honeywell International (HON), as you heard earlier, up $10.31. Some say it's G.E. (GE) that's the bidder now.

AT&T (T) up $2.19. There is speculation that AT&T may create a tracking stock for its long distance unit instead of spinning it off.

Tyco International (TYC) up $2.88.

And Nokia (NOK) up another $1.06 after gaining over $8 yesterday on much better than expected earnings.

Nortel Networks (NT) up $2.69.

But United Tech (UTX) down $3, although that's much improved from a $7 loss early on.

General Electric (GE) itself down $3.38.

Lucent Technologies (LU) fell $0.81, 10th in volume.

America Online (AOL) rose $1.13.

Bear Stearns (BSC) up $5.81 on renewed takeover speculation.

Best Buy Company (BBY) tumbling $8.44. That's, of course, hurt by the Circuit City (CC) stores earnings warning.

Federated Investors (FII) was up $0.88. The company's going to purchase the Kauffman Fund (ph) for $400 million.

International Rectifier (IRF) up another $4.63 after gaining $7 yesterday when it reported much better earnings than expected after the close, $0.63 versus $0.10.

Merck (MRK), as you heard earlier, had those good earnings and this is a new yearly high for the stock, up $4.31. That certainly helped the Dow.

SCI Systems (SCI) gained $6.44. The company is in a multi-year, multi-billion dollar outsourcing pact with L.M. Erickson.

Symbol Technologies (SBL) one of the stars of the day, up $7.88. Third quarter earnings came in at $0.28, a penny above the Street estimate, well up from $0.22 last year. Revenues up a handsome 28 percent.

Scientific-Atlanta (SFA) up $12 a share. First quarter earnings better than expected, $0.38, up from $0.16 last year. Revenues up a massive 71 percent. First Boston today upgraded it from "hold" to "buy."

Galileo International (GLC) rising $3.25. The company says it's exploring strategic alternatives, including a possible sale of the company.

And Texas Industries (TXI) one of the big percentage losers, down $5.19. The company sees higher energy costs hurting operations and earnings for the rest of this year.

Quest Diagnostics (DGX) tumbled $23.81 a share. The company yesterday reported third quarter earnings of $0.60 a share, $0.04 above the Street estimate. But sales volumes were well below expectations and that's what hurt the stock today.

Harcourt General (H) tumbling just over $10 a share. The "Wall Street Journal" reported the company received two takeover offers but both were about 15 percent below the company's goals.

NASDAQ trading, 64 1/2 point gain in the Composite Index, up 166 on the weaker five percent. Volume down a bit from yesterday but still active at 2.16 billion shares; 23 stocks higher for every 17 lower. Let's make it 16 lower.

Microsoft (MSFT) topped the active list on a nice move up, 331.

JDS Uniphase (JDSU) up $12.44.

Cisco (CSCO) lost $0.94.

SDL (SDLI) up nearly $50 a share. Yesterday it reported third quarter earnings $0.45, $0.07 above the Street estimate.

Intel (INTC) up $1.13.

Sun Microsystems (SUNW) gained $1.

Juniper Networks (JNPR) falling $0.58.

And CIENA (CIEN) had a good day, up $9.61.

And Veritas Software (VRTS) up $6.44.

And Power-One (PWER) up $10.86. After the close today, that stock was added to the Standard & Poor's 500 Index so obviously it had index fund buying.

High Speed Access (HSAC), we know what they do, up $1 a share. Two firms associated with Paul Allen, the cofounder of Microsoft (MSFT), have invested $75 million in High Speed Access.

Mercator Software (MCTR) tumbling $7.66. Yesterday the company posted a third quarter loss of $0.14. That was a loss $0.05 bigger than Wall Street was expecting.

And Perry Ellis International (PERY) dropping $2.22. The company sees l