11/10/00:
The Presidential Hopefuls Get Back To Business As Usual
SUSIE GHARIB: Tensions are still high in Florida and all
across the country. The outcome of the presidential election is still not clear,
but both the Gore and Bush camps appear to be digging in for a long battle. From
Washington, Darren Gersh has the latest.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT:With
an unofficial lead of just 327 votes in Florida, candidate Bush brought in the
media to show he was beginning to act like President Elect Bush.
GOV. GEORGE W. BUSH, REPUBLICAN PRESIDENTIALCANDIDATE: I
understand there are still votes to be counted, but I'm in the process of planning,
in a responsible way, a potential administration.
GERSH: The Vice President was publicly not in transition
mode and he left his campaign chairman to point out the Bush team was getting
ahead of itself.
WILLIAM DALEY, GORE CAMPAIGN CHAIRMAN: Waiting is unpleasant
for all of us, but suggesting that the outcome of a vote is known before all of
the ballots are properly counted is inappropriate.
GERSH: Mercifully for the markets, both sides agreed today
to cool their rhetoric. Even so, traders say the political uncertainty continues
to weigh on Wall Street and will for some time. For all the uncertainty there
are now two likely outcomes-a clear winner emerges once absentee ballots are counted
on November 17th or it comes down to the Vice President's decision bow out or
dig in for a drawn out legal fight.
PETE DAVIS, POLITICAL ANALSYT, DAVIS CAPITAL INVESTMENT
IDEAS: Going to court and disturbing the markets in the meantime could roil things
until December 18th when the electoral college meets and at that point it doesn't
matter what the court has done. Once the electoral college votes, it's pretty
much done.
GERSH: Republicans made it clear that a dig in and fight
strategy in Florida could trigger calls for recounts in other states.
JAMES BAKER, BUSH CAMPAIGN REPRESENTATIVE: Let the country
step back for a minute and pause and think about what's at stake here. This may
be the last chance to do that. There is no reasonable end to this process if it
slips away.
GERSH: After a normal election, this building should be
humming with activity. These are the official and now vacant offices of the presidential
transition team. For now, the action is in a state courthouse. There is a hearing
scheduled for Tuesday on voter complaints in Palm Beach County. Darren Gersh,
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.
11/10/00: Out Of The Pits & Into The Arcade
SUSIE GHARIB: Well, technology is replacing tradition for
a growing number of Chicago futures traders. They're abandoning noisy trading
pits and heading to quieter trading arcades. Diane Eastabrook takes us to one.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT:
It's the usual madness in the S&P 500 pit at the Chicago Mercantile Exchange.
EASTABROOK: But the atmosphere is calmer at LaSalle Street
Trading. It is one of a handful of so-called trading arcades springing up in Chicago.
Arcades, popular in Europe for years, let traders electronically buy and sell
futures- as well as stocks and stock options. Leonard Pomerantz left the MERC's
trading pits after more than 20 years.
LEONARD POMERANTZ, MANAGER, LASALLE STREET TRADING GROUP:
It's a silent pit. But the information that you have available to you here is
voluminous and it's even greater than whatever I had on the floor.
EASTABROOK: For 18 years Eugene Connelly was confined to
the bond pits at the Chicago Board of Trade. Now, with the click of a mouse, he
trades a variety of futures products.
EUGENE CONNELLY, TRADER: Now I trade buns and baubles, the
S&P minis.
EASTABROOK: Some veteran pit traders say they get the same
sense of camaraderie at an arcade that they did on a trading floor. And there
are other advantages, too. There's no yelling when making a trade. And taller
traders don't have an advantage over smaller ones.
JAMES OLIFF, PRESIDENT, LST COMMODITIES, LLC: I'm only 5'5".
I was standing next to people that were 6'6" and taller and that weighed
significantly more than I weigh. And being seen and being heard became extremely
difficult for somebody like me.
EASTABROOK: Some industry watchers predict computers will
eventually replace Chicago's colorful futures pits. The MERC and Board of Trade
already have electronic platforms in place and the MERC believes arcades will
enhance business.
SCOTT GORDON, CHAIRMAN, CHICAGO MERCANTILE EXCHANGE: No
matter how they trade those products, we're growing our business, and the aggregate
of all those users is what makes up our customer base and we're growing that base.
EASTABROOK: Many of these cyber traders aren't ringing the
closing bell on pit trading, either. But some admit sitting shoulder to shoulder
with fellow traders sure beats standing. Diane Eastabrook, NIGHTLY BUSINESS REPORT,
Chicago.
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.
11/10/00: Market Monitor-Arthur Hogan, Chief Market Analyst,
Jefferies & Company
SUSIE GHARIB: Well, despite the deep sell-off in tech stocks
today, our market monitor guest this evening is still a big believer in buying
tech and telecom. We're pleased to have with us Art Hogan, Chief Investment Analyst
with Jefferies and Company. And glad that you're finally our market monitor guest,
Art.
ARTHUR HOGAN, CHIEF MARKET ANALYST, JEFFERIES & COMPANY:
Thanks for having me.
GHARIB: Glad to have you here. All right, we have this tech
sell-off today. The NASDAQ is down 40 percent from its high and yet you like tech
and telecom. Why?
HOGAN: Absolutely, for a couple reasons. I think the most
important reason is the valuations right now are just too compelling. We've sold
off NASDAQ stocks that really don't need to be sold off as much as we have, the
action has created. The other thing is our economy is clearly moving in a direction
that drives technology. Technology is going to be in the front seat going forward
for the next three to five years and I don't think that's changing. So I think
we've really thrown the baby out with the bath water on a lot of, some terrific
names.
GHARIB: Well, name some of the names.
HOGAN: Intel (INTC), great stock, terrible day, terrible
week and obviously getting very, very compelling. Eighty-five percent market share.
It's got a Pentium 4 series coming out in February. It's using Rambus (RMBS) technology,
very, very exciting new technology coming out. People will get excited about the
new Pentium cycle. And I think that it's going to be a buy here.
GHARIB: What else? What else do you like in the tech area?
HOGAN: Cisco (CSCO). The build out of the Internet infrastructure
is just started. It's not at the end, it's at the beginning. We're treating Cisco
like it does not have a future. It also does infrastructure for telecom and telecom
has slowed down but it hasn't stopped and that's, we're treating it like it has
stopped. So Cisco is very compelling. It's at the $50 level right now and always
does well bouncing off of that.
GHARIB: All right, but, you know, even though these tech
stocks are such bargains, given the political uncertainty and which seems to be
triggering any little bit of negative news triggers a knee jerk reaction in the
markets, especially for the volatile tech sector, maybe investors should just
wait until we know who the next president is?
HOGAN: Well, that's a good point and close elections have
always been bad for markets in the short-term. And we've had the closest election
in history so in the short-term the markets have been very mad. The long-term
has been very good. What we're going to get regardless of who the president is,
is status quo. We're not going to have major changes. The economy is in good shape
and they're not going to be able to mess with it. So going forward we're really
going to do well with whoever the new president is because the majority in Congress
will not allow major changes to be pushed through and I think we're in great shape
here. We have just what we want.
GHARIB: You say we're in great shape. There are some market
strategists who are saying, just looking at the fundamentals, aside from this
presidential political uncertainty, that the market could be in for a very serious
downturn and pretty soon. What do you think of that?
HOGAN: I think we've experienced a very serious downturn.
I think if you look at what the market has done this year, we've put in quite
a corrective action. I think we're going through the third leg of testing the
bottoms. We either did that this week or will see it on Monday. I think the March
through May sell-off was from peak to trough 40 percent. The August to October
sell-off, 40 percent. We're testing that low again and I think we're really going
to see a climactic bottom where we bounce off of it. And we're going to notice
that the economy is not quite as slow as we thought it was.
GHARIB: We're all waiting for that bounce, Art. We're all
waiting for that. All right, tell me, you say you also like the oil stocks outside
of the telecom sector. Why do you like oil and name some names.
HOGAN: OK, we like the oil space but not the fully integrated
oil companies. The fully integrated companies don't do well when the price for
available oil has spiked like it has in the last 18 months then continues to stay
high. Unfortunately, the fully integrated guys like B.P. Amoco (BP) and Exxon-Mobil
(XOM) and the rest of the gang hedge out their sales for too many years. So they
really need the prices to stay very stable. The people that do well are the people
on the fringes, the service folks, the drillers, Halliburtons (HAL), Schlumberger
(SLB), Remington Oil (ROIL), Maverick Tube (MVK), Teekay Shipping (TK). These
are the folks that really garner a lot of the revenue that is gained from the
high price per barrel of oil. The higher the price gets, the further out we can
go look for it and the more we have to transport and that really is profitable
for the folks downstream.
GHARIB: What about the Internet and e-commerce? Are those
stocks ever going to make a comeback?
HOGAN: That's everybody's question and you know, we're going
to actually have to go through this experience that we've gone through at the
beginning of every industry. At the beginning of the auto industry there was 50
domestic car companies. We're down to two. The same kind of shakeout is going
on in the Internet right now. There will be some winners. There's going to be
a lot of losers and unfortunately that was a very painful lesson a lot of investors
went through this year.
GHARIB: Give us a few names of the winners. We just have
a few seconds left.
HOGAN: America Online (AOL), Yahoo! (YHOO), Amazon (AMZN),
we're believers in those three names. They'll be around for quite some time.
GHARIB: OK, thank you. You've given us a lot to think about
and it was a real pleasure to have you on the program tonight.
HOGAN: Thanks for having me.
GHARIB: And our market monitor guest this evening, Art Hogan
of Jefferies and Company.
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.
11/10/2000: Paul Kangas' Wall Street Wrap Up
JEFF YASTINE: Well, another day of stair-stepping to yet
lower levels for all the major indices, and steady relentless selling through
the entire day. The Dow led the way lower, with weakness in IBM, Wal*Mart (WMT),
Microsoft (MSFT) and Intel, hitting the Index right at the open. The Dow dropping
about 150 points in the first hour of trading. Market breadth was weak, as you
might expect, with declining issues outpacing advancers by about a 12 to 7 margin.
By noontime, the Dow was off about 161 points. The NASDAQ fell sharply through
the morning, but moved sideways through the remainder of the afternoon. There
just weren't many places for traders to hide in Techland, as the semis, the network
equipment makers, and most other groups, were sold once again. In late-day trading,
the blue chips moving sideways until about a half-hour before the close, when
it seems most traders just decided to cut and run, and not hold any stocks through
the weekend. And the Dow went on to fall 231 1/3 points to close at 10,602.95.
For the week, the Index rose once and fell four times for a net overall drop of
215 points, or 2 percent. The NASDAQ caved in falling 171.36 to end at 3,028.99.
The Index fell every day this week, for a net overall loss of 422 points, and
that's a 12.2 percent drop.
Big board volume coming in at 965 million shares, that's
52 million shares below yesterday's levels. And down volume closing out the week
on top.
The Dow Transports losing ground falling just over 47 points.
Utilities gaining there a little over 3 points with some
safety buying.
And the Closing Tick somewhat bearish at -358.
Each of the S&P Indices falling about 2 1/2 percent.
But for a second day, the Bridge CRB Index slipping 1/4-point.
And turning to more minus signs here, the New York Stock
Exchange Composite Index falling nearly 9 3/4 points.
The Value Line, the Small Caps and the broadly-based Wilshire
5000 each falling 2 percent or more.
Bonds were stronger today as investors parked money in the
bond market, seeking some safety away from stocks. Most of that activity though
was in the short end. The 30-year bond seeing little buying on concerns about
proposed Bush campaign tax cuts, and concerns that the election issue has put
the future of U.S. fiscal policy on hold. So, corporate and tax-free issues also
gained on the day.
Treasuries were mostly higher.
The 5-year note up 4/32.
The 10-year note gaining 4/32, as well.
And there is the Long Bond, 105 12/32, unchanged, the yield
at 5.87 percent.
And the Lehman Brothers Long Treasury Bond Index fell nearly
two points.
Well, there's not much to say except it was just another
tough, hard day on Wall Street. The Dow Jones Industrial Average falling 231 points
on the day. The advance/decline ratio pretty much 2 to 1 on the down side; 51
new yearly highs, 71 new lows.
Compaq (CPQ) tumbling $1.41, along with many others, of
course, in the tech group, on Dell Computer's (DELL) weakening growth prospects
for next year.
Wal*Mart (WMT) falling nearly 3 ½. Some think the slowing
economy will cripple this year's holiday sales. J.P. Morgan advised caution.
EMC (EMC) continuing to nose dive, today down $2.69. The
company says that the IRS has confirmed that a distribution of McData (MCDT) Class
A shares will qualify as tax-free for investors.
AT & T (T) falling $0.81. That's a new 52 week low for
telephone.
Nortel Networks (NT) falling $0.88.
Disney (DIS), though, rising $.50, getting a "strong
buy" recommendation from C.S. First Boston.
Pfizer (PFE), though, falling that much.
Lucent Technologies (LU) ending off $1.44.
GE (GE) dropped $0.69.
And sellers continuing to grind away at Home Depot (HD),
the stock down more than $2.50. Both Home Depot and Loew's (LTR) will release
third quarter earnings early next week.
Among the widely helds, CIGNA (CI) climbing nearly $6. Merrill
Lynch increased CIGNA's 2001 earnings estimates by $0.25 and there's also some
optimism that HMOs will fare better with a Republican led Congress.
There's a couple other casualties caught in today's tech
wreck, Gateway (GTW) losing nearly $6.50.
Nokia (NOK) falling $3.19.
But Philip Morris (MO) going the other way, gaining $1.25.
Procter & Gamble (PG) also seeing some buyers, shares
up $2.13. The stock was one of only two that actually finished higher in the Dow
today.
And investors bailing out of RadioShack (RSH) after Bank
of America downgraded the stock from "strong buy" to "buy"
and the stock ended down $5.44.
Among the standouts, though, Energizer (ENR) rising $1.75
after Rayovac (ROV) reported better than expected earnings.
And Elan (ELN) gaining $3.75. The company says its acquisition
of Dura Pharmaceuticals (DURA) will be accretive to next year's earnings.
Sybron International (SYB) rising $1.81. UBS Warburg setting
a 12 month price target of $31 a share there.
And Guess (GES) shares torn to shreds on news that third
quarter earnings will only reach $0.13 a share, not the $0.36 that Wall Street
was expecting. The company's bracing for a repeat in the fourth quarter.
Hughes Supply (HUG) falling $2.59. Late yesterday, the company
warned that third quarter sales could fall about 10 percent below expectations.
And Safeguard Scientifics (SFE) losing $1.44. First Union
downgraded the stock from "strong buy" to "market perform."
Here's a look at the NASDAQ, falling 171 points to 3,028,
its lowest level of the year. Volume, though, lighter, on the down side just 1.7
billion shares and pretty much no contest there in terms of decliners versus advancers
today.
Sun Micro (SUN) falling hard today, falling nearly 8 1/2
points.
Intel (INTC) falling $4.38 on that downgrade you heard earlier.
Microsoft (MSFT) dropping $3.50.
Cisco Systems (CSCO) backtracking more than $3 as well.
The company agreed to acquire Active Voice (ACVC) for $266 million in stock. Active
Voice shares show up more than $4 to $19.06 on that news today.
And here's the culprit which prompted today's reversal,
Dell Computer (DELL) falling more than $5 on the day. Broadcom (BRCM) rising $3.81,
though.
Juniper Networks (JNPR) falling $8.69.
JDS Uniphase (JDSU) ended down more than $5 |
