SUSIE GHARIB: A brutal day on Wall Street: stocks across the board were punished. The NASDAQ plunged 4 percent to a new yearly low, 2597. The Composite lost almost 110 points. It has posted losses for four days in a row. Blue chip stocks also got hammered. The Dow tumbled 214 points, or 2 percent. The catalyst for the sell-off was a profit warning from Gateway (GTW) late yesterday. That led to downgrades of technology stocks from Wall Street analysts, today. How much more pain can investors expect? Erika Miller gets some answers.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: In battle, it's called, a surrender. For investors, the word is "capitulation": when they throw up the white flag and bail out of stocks, at any price. While the Dow has dropped dramatically in the past few weeks, market experts say it's nowhere near capitulation. But some veteran traders say the NASDAQ is approaching that stage right now.

BRIAN FINNERTY, MARKET STRATEGIST, C.E. UNTERBERG, TOWBIN: People are selling stocks indiscriminately. They're selling stocks they shouldn't be selling, at prices they shouldn't be selling them at. They're selling stocks they should be buying. There's a lot of irrational action taking place in the market right now.

MILLER: It's hard to tell exactly when capitulation starts, but experts say there are warning signs. The most obvious is a dramatic price decline. The NASDAQ has fallen 36 percent this year, and it is down 49 percent from its March 10 high. Another sign is extreme pessimism on Wall Street and in the media. Experts also look for heavy trading activity. Today, more than two billion shares changed hands on the NASDAQ, that's 30 percent more than average daily volume this year.

ROBERT STOVALL, MARKET STRATEGIST, PRUDENTIAL SECURITIES: I think you'd have to see daily volume on the NASDAQ approaching three billion shares, and even more negative news from the surprise downgrade announcements by the managements, usually followed by the analysts, who like the stock very much at higher prices and then don't like them at lower prices.

MILLER: Most strategists recommend holding on to good quality tech names, but say you might want to dump the more speculative Internet stocks. As for buying, some analysts recommend looking outside of technology.

STOVALL: Look at the several sectors that are making new highs, which get almost no attention in the daily commentaries, such as: utilities and pharmaceuticals and consumer staple stocks, many of which are doing very well.

MILLER: But whatever you do, the coming weeks could be treacherous. Experts predict the NASDAQ could slip as low as 2000 before stabilizing.

LOUISE YAMADA, SR. TECHNICAL ANALYST, SALOMON SMITH BARNEY: What you need to do is wait and see where the price stabilizes, where the capitulation is, where the washout, so to speak, is - where that last investor that is going to sell has sold.

MILLER: Once the NASDAQ has fully capitulated and reached its low, experts warn there will not likely be an explosive rally. They say this bottoming out process is likely to be volatile, and could last six to nine months. Erika Miller, 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.

SUSIE GHARIB: So, what happens next for stocks? Here with some thoughts is the well-respected chief investment officer from First Albany, Hugh Johnson, and he joins us from Albany, New York. Hi, Hugh.

HUGH JOHNSON, CHIEF INVESTMENT OFFICER, FIRST ALBANY: Hi, Susie.

GHARIB: Hugh, I want to ask you some questions that investors have been asking me. First of all, are we officially in a bear market right now?

JOHNSON: I would certainly call it a bear market. After all, the S&P 500, which is what we use as our measure, peaked on March 24th and it's down about 17 percent. So, down 17 percent in an 8-month time span, that certainly qualifies as a bear market. I'd call this a bear market.

GHARIB: The other thing that I keep being asked is, the recession: are we headed for a recession? The economic numbers recently have not been looking good.

JOHNSON: Well when you see declines in stock prices of the magnitude that we've seen, particularly in the NASDAQ, and you see the bond market going up, and you see investors migrating to the safer parts of the stock market, it's usually in anticipation of a minimal slowdown and probably worse, maybe a hard landing or a recession in the economy. It's too close to call right now. I'm hoping that it's just a soft landing or a slowdown in the economy, but you have to take seriously the possibility that this is going to be a hard landing or a recession.

GHARIB: So, Hugh, what's it going to take to turn the markets around; I mean, what's going to be the signal?

JOHNSON: Well, the outlook for the economy in earnings has to stabilize and start to improve. In my judgment, it requires some catalyst. The most logical candidate for that would be if the Federal Reserve were to, first of all, at its December meeting, remove its bias towards restraint; secondly, they followed that up by a reduction in short-term interest rates. I think if that were to occur, you'd see the market stabilize and start to improve, primarily because investors would become at least a little bit more optimistic, that the outlook for the economy was brightening, the outlook for economy and earnings brightening just a touch.

GHARIB: So, how do investors know when to get back in? Do you have to see a rally first before you start buying?

JOHNSON: Yeah, you know, that's the problem. It's very difficult to tell. But the first thing you look for is better performance, absolute performance from the stock market itself. If it starts to behave better, that's number one. Number two, you look within the stock market, ask yourself: how are consumer cyclicals or the more economically-sensitive sectors of the market performing? Things like airlines, things like retailers, things like automobile stocks, aluminums, chemicals. Take a look at the technology sector. If it starts to improve, performs well on a relative basis, then you're probably getting a clear signal from the market that the outlook is brightening and we're starting on the up side again.

GHARIB: What's your take on technology stocks? Are they going to make a comeback? Is it time to buy some of these stocks that have been cut, you know in-half?

JOHNSON: Well I'm encouraged by one thing, to be honest with you, Susie, is they've declined from levels which were arguably very, very overvalued, to levels that are, I would call, fairly valued. We tend to do it on - overdo it on the up side, but we also overdo it on the downside, so they're probably going to go down further and get a little bit cheaper. But it's encouraging to see the technology stocks are starting to become much more reasonably valued. And next year, I think when the outlook for the economy starts to improve, technology stocks will once again lead the market; but, I think from somewhat or modestly lower levels than they currently are.

GHARIB: Thank you so much for talking to NIGHTLY BUSINESS REPORT tonight.

JOHNSON: My pleasure.

GHARIB: My guest tonight, Hugh Johnson, chief investment officer of First Albany.

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.



11/30/00:Japan's NTT Wires AT&T Some New Dollars & A New Deal

SUSIE GHARIB: AT&T (T) has a new partner, and some new money. Japan's NTT (NTT) DoCoMo is paying almost $10 billion for a 16 percent stake in AT&T Wireless (AWE). This gives AT&T a leg up on the next generation of wireless communications, the iMode platform, which is NTT's specialty. Over half of its customers use iMode to talk, surf the web, play games, and for e-mail. The chairman of AT&T Wireless says this is a good match.

JOHN ZEGLIS, CHMN. & CEO, AT&T WIRELESS: We will become each other's primary and preferred partner for virtually all, all other mobile carrier activities between our countries. Activities like selling each other's services to travelers; supporting multinational corporations, seamlessly; directing roaming traffic to one another's networks, whenever that's possible. In short, we are committing to be each other's strategic partner in Japan and in the United States.

GHARIB: AT&T Wireless will use the $10 billion to pay down debt and also to get into the upcoming wireless auction. Paul?

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.



11/30/00: Prime Mover: Mitchell Kertzman, President and CEO Of Liberate Technologies

SUSIE GHARIB: Liberate Technologies (LBRT) wants to free web surfers from their computers. Mitchell Kertzman is the company's president and CEO. Liberate is a provider of web access software for set-top boxes, game consoles, smart phones, and PDAs. It was spun off from Oracle (ORCL) four years ago under the name, Network Computer, and Oracle still holds a 47 percent stake in the firm. America Online (AOL) and Comcast (CMCSK) are also among its investors. Liberate is in the red, but its fiscal 2000 had sales of $28 million, a 61 percent jump over 1999. In tonight's Prime Movers segment, Donald Van de Mark of myprimetime.com asks Kertzman to describe the services that Liberate provides.

MITCHELL KERTZMAN, PRESIDENT & CEO, LIBERATE TECHNOLOGIES: Our customers are cable television companies, telephone companies, Internet companies like America Online. And what we do is we provide software that allows them to build and deliver all sorts of interactive applications and services on devices like set-top boxes and game consoles and satellite receivers, that are attached to televisions. So you could think about it as the infrastructure for interactive or enhanced television.

DONALD VAN DE MARK, MYPRIMETIME.COM: So it's the dream of interactive television, but it's finally arrived.

KERTZMAN: Now set-top boxes are affordable with this kind of technology; and we have all of the standards in content and infrastructure of the Internet, which has made development of content much more economical. So, all of that has made it a reality now, where it was just an experiment 10 years ago.

VAN DE MARK: What do you expect people to do with the interactive television, exactly?

KERTZMAN: Every time you see "Wheel of Fortune" or "Jeopardy" on any broadcast on television, it contains interactive programming, so that if you have the right kind of set-top device, you could play along with "Wheel of Fortune" or "Jeopardy." What ABC is doing right now with enhanced television, with play along with "Who Wants to Be a Millionaire," right now is being done with a separate PC; in other words, you have to have a PC and a TV. But, the next generation of that will be integrated into the TV, using your TV remote control or a wireless keyboard, you'll be able to play along with "Millionaire" while "Millionaire" is on the air. So, that's a compelling application.

VAN DE MARK: But aren't you going to be competing against the personal computer?

KERTZMAN: No. We don't think that we're competing with the personal computer. We think it's another device by which people can communicate. And communicate with each other, communicate with the Internet. We think you do very different things on the PC and on your TV.

VAN DE MARK: Kertzman is betting that interactive television will appeal to millions of TV viewers in a more laid back way, literally.

KERTZMAN: It's the difference between what is often called, the "lean forward" experience of the PC, versus the "lean back" experience of television. Which is, that if you want to just be entertained, relatively passively, which is the way most people watch television, you'll want to do that sitting in a chair like this, as opposed to, for instance, sitting in the desk chair like the one behind me. So that when you're working on your PC, you tend to be sitting up like this; whereas when you are watching TV, you tend to lean back like this. And it's a different experience. And, if you're an advertiser, if you're a content provider, you want to get to people in both places. And from our point of view, you know, we don't think that consumers have to abandon their PCs in order to take advantage of the compelling things about television. Now, on the other hand, if you want to, let's say, research the next car you're going to buy on the Internet, you want to go to manufacturer web sites; you want to read consumer reviews and things like that. Wow, TV is not going to be a great medium on which to do that. You'll want to - you're going to want to go to a PC or a PC-like device to do that. You're probably going to spend some time doing it. You're going to lean forward while you're doing it. You're going to take notes while you're doing it. Or print out. So that's a very different thing. And I guess the point I'm making is that each has its advantages, and I think that consumers will tend to go to the one that's appropriate.

VAN DE MARK: Thank you very much for joining us.

KERTZMAN: 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.



11/30/00: Commentary: The New President's Economic Issues

SUSIE GHARIB: On January 20th, the next president of the United States will be sworn into office. As tonight's commentator explains, despite the hoopla over getting there, that's when the real work begins. Here's Irving R. Levine, dean of international studies at Lynn University, and former chief economics correspondent for NBC news.

IRVING R. LEVINE, COMMENTARY: When the battle of the ballots is finally settled, U.S. business and markets have some things to look forward to. For one thing: government gridlock. That seems unavoidable because of the tight count in Congress. Financial markets generally like gridlock because it prevents government from passing laws that interfere with business. Also expectable: a tax cut, although not as big as Bush would like or as small as Gore favors. But any tax cut gives people more money to spend, and that helps business. Also likely: a vote by the divided Congress to allow individuals to invest part of their Social Security contributions in stocks. Republicans favor the idea, and House Democrats have proposed that up to 50 percent of Social Security funds go into stocks. The value of stocks in U.S. markets today is about $13 trillion. The investment of say half-a-trillion-dollars of Social Security money in stocks should drive up stock prices. What the new president can expect is a slowing economy. But it was worse in 1877 when Rutherford B. Hayes took office after a contested election; then, the economy was in a depression. Happily, there are no signs that the new president will face that problem. I am Irving R. Levine.

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.




11/30/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Just as expected, following yesterday's post-market earnings warnings from Gateway (GTW) and Altera (ALTR), the stock market opened broadly lower today, with the retreat spearheaded by the tech sector. At 10:00 a.m., the Dow Industrial Average fell to a 68 1/4-point loss, while the NASDAQ Index fell 117 points. An avalanche of brokerage downgrades, especially in the retail and computer-related stocks, caused the sell-off to gather momentum for the rest of the morning; and badly undermined by significant weakness in components like IBM (IBM), Microsoft (MSFT) and Intel (INTC), the Dow fell to a 219-point loss by 12:30 p.m., when the NASDAQ Index was down nearly 163 points. The market continued to plummet in afternoon trading in the absence of any traders willing to buy on an up-tick. As one analyst so aptly put it, "investors aren't looking for a bottom, they're looking for an exit." By 2:00 p.m., the Industrial Average was down 309 points; the NASDAQ off 166. After that, buyers cautiously came off the sidelines, sifting through the wreckage for some bargains, and this helped the Dow Industrial Average trim its closing loss to 214.62 points, or 2 percent putting it at 10,414.49. In today's 337-point trading range, the Dow closed down about 215 points from the best level of the session; up 122 points from the low of the day. The NASDAQ Composite tumbled 109 points to 2597.93. In its 184-point trading range, the Composite Index settled 109 points below its best level of the day; up 75 points from the low of the session.

Big board volume a record 1.515.3 billion shares. That is an all-time one-day record, and well up from yesterday's pace, of course.

Two-and-a-half times as much down volume as up volume.

The Dow Transport Index down nearly 48 1/4 points.

Utility Index dropped nearly 3 points.

The Closing Tick interestingly almost neutral at -57.

Standard & Poor's 500 off nearly 27.

A loss of 15.19 on the 100.

The MidCap 400 fell 9.69.

Bridge Futures Price Index had a rather large gain of 1.72.

New York Stock Exchange Composite down 7 2/3 points.

Similar loss on the Value Line.

Russell2000 Small Cap off 8 2/3.

And the broadly-based Wilshire 5000 losing 244 1/3 points, or 2 percent. Just the same percentage drop as the Dow.

After the market closed, the Federal Reserve reported, in the week ending November 20, the M-2 money supply rose $7.5 billion. The bond market extended its three-week rally today with fresh news of a steadily slowing economy, including a 0.2 percent decline in October personal income, that's the first drop in two years. And that was coupled with a rise in the latest weekly jobless claims to a two-year high. What's more, the Chicago Purchasing Managers Business Barometer fell to its lowest level since 1991. In hopes the Fed would soon counter all of this with a rate drop, tax-free and corporates rose 1/8s and 1/4s on average.

And the Treasury market was strong again.

5-year notes up 4/32.

The 10-year notes up 9/32, with the yield at exactly 5.5 percent. That's about the lowest since the Fed started raising rates.

And the 30-year bond up 17/32.

And finally, the Lehman Brothers Long-Term Treasury Government Bond Index jumped nearly 12 points.

Just as expected, following yesterday's post-market earnings warnings from Gateway (GTW) and Altera (ALTR), the stock market opened broadly lower today, with the retreat spearheaded by the tech sector. At 10:00 a.m., the Dow Industrial Average fell to a 68 1/4-point loss, while the NASDAQ Index fell 117 points. An avalanche of brokerage downgrades, especially in the retail and computer-related stocks, caused the sell-off to gather momentum for the rest of the morning; and badly undermined by significant weakness in components like IBM (IBM), Microsoft (MSFT) and Intel (INTC), the Dow fell to a 219-point loss by 12:30 p.m., when the NASDAQ Index was down nearly 163 points. The market continued to plummet in afternoon trading in the absence of any traders willing to buy on an up-tick. As one analyst so aptly put it, "investors aren't looking for a bottom, they're looking for an exit." By 2:00 p.m., the Industrial Average was down 309 points; the NASDAQ off 166. After that, buyers cautiously came off the sidelines, sifting through the wreckage for some bargains, and this helped the Dow Industrial Average trim its closing loss to 214.62 points, or 2 percent putting it at 10,414.49. In today's 337-point trading range, the Dow closed down about 215 points from the best level of the session; up 122 points from the low of the day. The NASDAQ Composite tumbled 109 points to 2597.93. In its 184-point trading range, the Composite Index settled 109 points below its best level of the day; up 75 points from the low of the session.

Big board volume a record 1.515.3 billion shares. That is an all-time one-day record, and well up from yesterday's pace, of course.

Two-and-a-half times as much down volume as up volume.

The Dow Transport Index down nearly 48 1/4 points.

Utility Index dropped nearly 3 points.

The Closing Tick interestingly almost neutral at -57.

Standard & Poor's 500 off nearly 27.

A loss of 15.19 on the 100.

The MidCap 400 fell 9.69.

Bridge Futures Price Index had a rather large gain of 1.72.

New York Stock Exchange Composite down 7 2/3 points.

Similar loss on the Value Line.

Russell2000 Small Cap off 8 2/3.

And the broadly-based Wilshire 5000 losing 244 1/3 points, or 2 percent. Just the same percentage drop as the Dow.

After the market closed, the Federal Reserve reported, in the week ending November 20, the M-2 money supply rose $7.5 billion. The bond market extended its three-week rally today with fresh news of a steadily slowing economy, including a 0.2 percent decline in October personal income, that's the first drop in two years. And that was coupled with a rise in the latest weekly jobless claims to a two-year high. What's more, the Chicago Purchasing Managers Business Barometer fell to its lowest level since 1991.

In hopes the Fed would soon counter all of this with a rate drop, tax-free and corporates rose 1/8s and 1/4s on average.

And the Treasury market was strong again.

5-year notes up 4/32.

The 10-year notes up 9/32, with the yield at exactly 5.5 percent. That's about the lowest since the Fed started raising rates.

And the 30-year bond up 17/32.

And finally, the Lehman Brothers Long-Term Treasury Government Bond Index jumped nearly 12 points.

AT&T shares were up $0.63 to close at $19.63. AT&T Wireless gained $0.06 closing at $18 even. But the Dow Jones Industrial Average closed down 214.62, or 2 percent today. Now the month of November was a bad one. The Dow fell 556 2/3 points for the month, that's 5.1 percent. Today, for every 10 stocks higher, almost 19 lower. Only 127 new highs; 234 new lows on that record volume.

Compaq Computer (CPQ) topped the active list on nearly 23 million shares. Down $1.20. Traded as low as $18.16. Lehman Brothers downgraded it from "buy" to "outperform."

EMC (EMC) bouncing back $1.19 after losing over $6.00 yesterday.

Calpine (CPN) down $3.81. A little profit taking. After the close today, that stock was added to the Standard & Poor's 500. It had run up in anticipation.

Gateway (GTW) plunging $10.50 on the close, but it traded as low as $17.50.

Citigroup was up $0.38, fifth in volume.

AT & T (T) there you see it, up $0.63.

Lucent Technologies (LU) lost $0.25.

Nortel Networks (NT) up $2.20.

And then America Online (AOL) fell $2.75.

And tenth in volume, General Electric (GE) down $0.13.

Bear Stearns (BSC) fell $3.06 after CIBC World Markets Brokerage downgraded it from "strong buy" to just a "hold."

Best Buy (BBY) down $4.06. Its third-quarter same-store sales were up 5.9 percent, in-line with expectations. But a lot of analysts said promotionals hurt profit margins.

Deere & Company (DE) up $1.81. UBS Warburg Brokerage upgraded it from "hold" to "buy."

MetLife (MET) up $1.75. As we mentioned, after the close yesterday, Standard & Poor's will add MetLife to the Standard & Poor's 500 Index, replacing Seagram's (VO). But the date is yet to be announced.

United Tech (UTX) was the best point gainer in the Dow. Up only $1.44. But the company is comfortable with fourth quarter and year 2000 earnings estimates on the Street. And says 2001 earnings should rise by 15 percent.

WellPoint Health (WLP) up $7.31.Cerulean Companies has agreed to WellPoint's sweetened $700 million cash buyout bid. That beat out Trigon's (TGH) bid.

Lanier Worldwide (LR) by far the best percentage gainer of the day. A low-priced issue but not as low-priced as it was yesterday. Ricoh Company Ltd. is offering $3.00 a share cash to acquire Lanier.

Community Health Systems (CYH) up $2.75. Goldman Sachs and Chase Hambrecht & Quist Brokerages say the stock is catching up with its peer group. Was running blow and now is playing catch-up.

Talbots (TLB) up $4.31. Here's a retailer that did well.

November same-store sales up 22 percent.

On the other hand, AnnTaylor Stores (ANN) dropped over $8.00 on November same-store sales dropping 2.9 percent. Salomon and Bear Stearns both downgraded AnnTaylor.

Abercrombie & Fitch (ANF) another weak retailer, off $7.31. Its November same-store sales down 8 percent. Jefferies & Company downgraded it from "buy" to "hold."

And DeVry (DV) off $8.38. Barrington Research downgraded it from "long-term buy" to just a "hold." Analysts believe the company's student enrollment is running behind expectations.

NASDAQ trading a loss of 109 points today. For the month of November, this Index fell 771.63, or 22.9 percent. Look at that volume, second on record - second record volume, 2.7 billion shares. About 13 stocks up for every 27 down.

Microsoft (MSFT), the biggest point loser in the Dow, topped the active list. Off $7.69.

Cisco (CSCO) off $3.81.

Sun Micro (SUNW) off $3.69.

Intel (INTC) dropped $4.69. Lehman Brothers downgraded it from "buy" to "outperform."

Juniper Networks (JNPR) bucking the trend on news it, in a joint mobile Internet venture with LM Ericsson (ERICY).

JDS Uniphase (JDSU) down $7.44

Brocade Communications (BRCD) up $14.19. After the close yesterday, its fourth-quarter earnings $0.22, up from $0.03 last year. Brocade also announced a 2-for-1 stock split.

Oracle (ORCL) doing well, up $3.63.

Veritas Software (VRTS) up $9.56.