SUSIE GHARIB: Governor George W. Bush is one step closer to getting the keys to the White House. In a blockbuster ruling today, a Florida state judge rejected Vice President Al Gore's request to overturn election results in three counties. Also today, the U.S. Supreme Court set aside the decision by Florida's Supreme Court to allow manual recounts of some presidential ballots. Well, Wall Street reacted positively to these legal developments: the Dow surged about 200 points, and the NASDAQ slipped only 30. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was a devastating blow to the vice president's hopes for the Oval office. Late this afternoon, Florida Circuit Judge N. Sanders Sauls ruled against Mr. Gore on all counts.

JUDGE N. SANDERS SAULS, FLORIDA CIRCUIT COURT JUDGE: The court finds that the plantiffs have failed to carry the requisite burden of proof. The judgment shall be, and hereby is entered, that plantiffs shall take nothing by this action.

GERSH: Gore campaign lawyers said they would fight on.

DAVID BOIES, GORE CAMPAIGN LAWYER: They won; we lost; we're appealing. This is going to be resolved by the Florida Supreme Court, promptly.

GERSH: But analysts say it may be time for investors to begin preparing their portfolios for a republican president.

STUART SWEET, POLITICAL ANALYST, CAPITOL ANALYSTS NETWORK: In the Sauls' ruling, it seems open and shut - that there is no basis for a successful appeal, on these hand counts. So the idea of the hand counts making a difference seems to - that door seems to have been slammed shut today.

GERSH: This morning, the U.S. Supreme Court also weighed in, setting aside the Florida Supreme Court's decision to extend the deadline for counting votes. Early headlines said the Florida court's decision had been overturned, sparking a mini-relief rally.

LARRY WACHTEL, MARKET ANALYST, PRUDENTIAL SECURITIES: When there was a differentiation between overturned and set aside, then the rally lost a bit of the steam.

GERSH: But legal scholars said the Supreme Court was simply sending the ball back to the Florida Supreme Court. In its unanimous decision, the justices directed the state court to explain its legal reasoning and clarify whether it followed the U.S. Constitution in making its decision to extend the voting deadline.Basically, law professor, Heather Gerken, says, the Supreme Court punted.

PROF. HEATHER GERKEN, ELECTION LAW ANALYST, HARVARD LAW SCHOOL: What they essentially said is, we can't really decide these two federal questions in front of us, because we can't figure out what the state supreme court was doing; so they sent it back to the state supreme court, without addressing any of the questions that were in front of them.

GERSH: And that is a problem for the vice president, who is clearly running out of time.

GERKEN: Time is on Bush's side. Every day that passes makes it harder for Gore to continue with his legal challenges, and so to the extent that we're looking just at the practical politics of this, this is probably a Bush win, because it puts off, yet another day, the ultimate decision here.

GERSH: In after-hours trading, investors voted on the news. Stocks expected to benefit from a Bush presidency: Microsoft (MSFT), tobacco, pharmaceuticals and defense - all showed gains. 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. © 2001 Community Television Foundation of South Florida, Inc.



12/04/00: Pepsico Buys Quaker Oats In A $13.5B Deal

SUSIE GHARIB: The stocks of both Pepsi (PEP) and Quaker Oats (OAT) rose sharply today. Investors reacted positively to the news that Pepsi finally won the food fight for Quaker Oats. Pepsi is paying about $13.5 billion and best of all, it gets Gatorade, the coveted sports drink brand. Diane Eastabrook has details.

DIANE EASTEBROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Pepsi /Quaker deal gives PepsiCo control of Gatorade and will make it the leader in the red hot functional beverage business. Under the deal, Quaker shareholders will receive 2.3 shares of Pepsi stock for each Quaker share they own. But Quaker would face a $420 million break up fee if it bows out of the acquisition. The stocks of both companies climbed today, an indication to analysts investors like this combination.

PATRICK SCHUMANN, FOOD ANALYST, EDWARD JONES: Investors will see that there are a lot of positives for this combination and that ultimately it's going to be a very strong consumer company and this would be a good stock to own for the next three to five years.

EASTABROOK: Beverage companies have been in a tense battle for functional or non-carbonated beverages because their sales are growing about three times faster than carbonated beverage sales. Gatorade is the top selling sports drink and one of the fastest growing non-carbonated beverages. Analysts say Pepsi can ratchet up Gatorade sales more by leveraging its international distribution system and its access to convenience stores here in the U.S.

SCHUMANN: It can be a great opportunity to enhance the presence of Gatorade in the mom and pops and the convenience stores because that's a higher margin proposition than the large store format.

EASTABROOK: Another plus for Pepsi is Quaker's granola and cereal bars, fast growing segments that Pepsi's Frito Lay division has not yet tapped. But many analysts don't think there will be a place at Pepsi for Quaker cereals and some of its other food lines.

WESLEY MOULTRIE, BEVERAGE ANALYST, DUFF & PHELPS CREDIT RATING CO.: I would say that those products that you mentioned probably don't fit overall with Pepsi's overall product portfolio, so they probably stand a very good chance of being sold or spun off in some sense.

EASTABROOK: Quaker Oats CEO Robert Morrison will become a Vice Chairman for PepsiCo once the deal is finally approved. The company expects that will happen some time within the next four to six months. 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. © 2001 Community Television Foundation of South Florida, Inc.

12/04/00: Euro Activity Analysis

PAUL KANGAS: As we know in the world of currencies, the Euro has been on a steady downward course against the U.S. dollar. But one who believes it may have bottomed out and is poised for a comeback is James Thornhill, Currency Reporter for BridgeNews in New York City. Welcome to NIGHTLY BUSINESS REPORT, Jim.

JAMES THORNHILL, CURRENCY REPORTER, BRIDGENEWS: Hi. Good evening.

KANGAS: Tell us why you think the Euro is going to snap back as we take a look at the chart showing just how far it has fallen. My goodness, it's just been a steady downward spiral, hasn't it?

THORNHILL: Yeah, the chart doesn't make particularly good reading for the year. I think my basis for thinking that we might have seen the bottom is the relative growth outlooks in Europe and the U.S.. I think the world is going to enter a slowdown phase the first half of next year, but I think the Euro is probably not going to slow quite as fast as the U.S. is and I think that should help the Euro form a bottom and kind of rise back to the $0.90, maybe to the $0.95 cent level in the first half of next year.

KANGAS: So, that's your target, $0.95?

THORNHILL: Yeah, I think $0.95 is realistic. I think we might overshoot and hit parity again, but I think that would be an over shoot. I think-

KANGAS: It has got a long way to go to the old high of around 118, doesn't it?

THORNHILL: Yeah, that's kind of dream land, I think.

KANGAS: Right. Now, you say the U.S. economy is going to slow down more on a relative basis than the European community economy, correct?

THORNHILL: Yeah, sure.

KANGAS: What is the strongest economy there now? Is it Germany or France or Italy? Which one?

THORNHILL: Yeah, I think Germany has got a slight edge. Italy has got a lot of problems. We've seen all the flooding and the kind of natural problems they've got, which is going to cost billions and that's going to certainly be a drain on resources there. But Germany is looking like it is moving in the right direction. Growth hasn't been too bad and it's moving down the path of structural reform. So, Germany is quite hopeful in the future there and I think that could be a potential Euro positive next year.

KANGAS: Of course, Germany is just very, very afraid of inflation. Do you think they could influence an interest rate increase for the European Community Bank?

THORNHILL: Well, I think the members of the Bundesbank who have an influence in ECB will certainly be on the hawkish side. I personally think there is another high left of ECB at least, maybe two. And if we're talking, we're starting to talk about cuts in the U.S., that's obviously going to be another beneficial factor for the Euro in that the yield advantage for the U.S. will be diminishing next year.

KANGAS: We just have a few moments left but I understand Greece will become the 12th member of the European Community?

THORNHILL: Yeah, that's correct, on January 1st.

KANGAS: Do you view that as a good or a negative development?

THORNHILL: From the outset it's going to be probably negative.

KANGAS: OK, there we have it. Thanks very much, Jim.

THORNHILL: Thanks. James Thornhill, Currency Reporter, 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.

12/04/00: Can E-Toys Survive The Holidays?

SUSIE GHARIB: The holiday shopping season is crucial for many retailers, but this year the pressure for profits is really intense for eToys (ETYS). As Pat Anson reports, analysts say that this could be a make or break year for the online toy seller.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Faced with a critical period in its company's history, the CEO of eToys seems to be taking it all in stride. Toby Lenk says the skeptics have been wrong before.

TOBY LENK, CEO, ETOYS: Every holiday season since I've started, people have said we're an underdog and we can't do what we're going to do. And every holiday season we prove them wrong. And I like that.

ANSON: But this year, investors don't share in Lenk's optimism. EToys' stock has fallen from the mid-80s down to single digits. Despite growing sales and an increasing number of repeat customers, eToys has yet to make a single dollar in profits. In its four year history, eToys has lost about $300 million. Besides the red ink, what alarms analysts is that the company continues to borrow money to finance its day to day operations. At its present burn rate, analysts say eToys will run out of cash by next summer.

ROBERT LANDES, CO-CHAIRMAN, GUIDANCE SOLUTIONS: I think this Christmas could possibly be a make or break for them.

ANSON: Robert Landes is an online business developer who says eToys still hasn't proven its ballots model works.

LANDES: Unfortunately, I don't have a lot of hope for eToys from a financial standpoint. And it's not because the management and the company isn't terrific and that the site isn't wonderful. But unfortunately there's one thing that eToys can't change and that's gross margin.

ANSON: But eToys claims its margins are improving and the company predicts it should be profitable in two years. That's a long way off for many analysts who say instead of competing with brick and mortar chains, eToys should merge with one. EToys has what many chains lack, an order fulfillment system and a popular Web site.

DOUG CHRISTOPHER, SR. ANALYST, CROWELL, WEEDON & CO.: I think that if there was a larger company, larger bricks and mortar retailer that wanted to get into the ballots and have that infrastructure, absolutely. I think it makes sense for a Toys "R" Us (TOY) or a toy related company, a Wal*Mart (WMT).

ANSON: Toby Lenk says he'd like eToys to remain independent but he won't rule out a merger or alliance.

LENK: We'll see how we do this holiday season. We'll see how effective we are at improving all of our metrics. And then we'll come out after the holiday season with our new plan for 2001.

ANSON: So you're going to be around in 2001, 2002?

LENK: Well, my hair on top of my head may not be around but I expect we'll be around serving people well.

ANSON: EToys will ship over 10 million toys and gifts over the holidays. The bigger issue for investors is whether the company can also deliver profits. Pat Anson, NIGHTLY BUSINESS REPORT, Los Angeles.

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.


12/04/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: It was a mixed opening on Wall Street this morning, with the Dow Jones Average falling 46 points at the outset, on top of last Friday's 41-point loss; and the NASDAQ Index moved some 23 points higher following its 47-point gain last Friday. The tables then suddenly turned, as buyers moved into the old-line blue chips, like Caterpillar (CAT), du Pont (DD), IBM (IBM) and 3M (MMM), figuring they have come down to price levels which already reflect the slowdown in the economy that seems to be taking place. In the meantime, the technology sector was besieged by sellers. At 11 a.m. then, the Dow jumped to a 101-point gain, while the NASDAQ Index posted a 47-point loss. About an hour later, the blue chips got even stronger on word the U.S. Supreme Court sent back to the Florida Supreme Court for further consideration, its ruling to extend the deadline for hand-counted ballots. The Dow Industrial Average went on to close with a gain of 186.56 points, or 1.8 percent; now stands at 10,560.10. In today's 285-point trading range, the Dow closed down 43 points from the best level of the session; up 241 points from its worst level. The NASDAQ Composite ended with a loss of 29 ½ points at 2615.75. In its 104-point trading range, the Composite Index settled about 55 points below the best level; up 48 points from the low of the day. About right in the middle of the range.

Big board volume down a bit from Friday. Not quite - 1.1 billion shares. About a 3 to 2 margin of up volume over down volume; not too impressive.

The Dow Transport Index up 4.62.

A 2 2/3-point rise in the Utility Index.

The Closing Tick however rather bearish at -450.

Standard & Poor's 500 up 9 3/4.

Just over a 5 1/4-point run-up in the 100.

The MidCap 400 fell 1.80.

The Bridge Futures Price Index up 3.18.

New York Stock Exchange Composite gained nearly 6 points.

But the Value Line down just over ½ point.

Russell2000 Small Cap was off nearly 6 ½ points.

The broadly-based Wilshire 5000 a modest move, up about 46 ¾ points.

The bond market headed higher early today on more signs of a slowing economy. Namely, a 0.2 percent drop in the October Index of leading economic indicators, and a 2.6 percent decline in October new home sales, although that was not as big as expected. The consensus was for a 4.9 percent drop. The market faded in the afternoon however, following the U.S. Supreme Court ruling on the election, because it seemed to favor Bush who wants a tax cut, and that's considered a negative for bonds. In any case, tax free and corporates ended down 1/8 to 3/8 of a point on average. And the Treasury market closed on a mixed note.

A gain of 2/32 in the 5-year notes.

10-year notes down 7/32.

The 30-year bond down 19/32.

And the Lehman Brothers Long-Term Treasury Bond Index was up 0.78.

Well, it was a great day for the Dow. The Dow Jones Industrial average up 186 ½ points, 1.8 percent. But you can see the broader market is absolutely flat, actually, four more declining issues than gainers and just about a stand-off between new yearly highs and lows.

Citigroup topped the active list on 15.2 million shares, down $1.13.

Then Robert Half International (RHI) up $2.06. That stock was added to the Standard & Poor's 500 Index after the close of trading today. Obviously index fund buyers in there.

Nortel Networks (NT) fell $1.25.

Motorola (MOT) off $0.19.

And Xerox (XRX) down $1.25 to a new low. The company is disappointed. Moody's cut its credit rating because the company says its turnaround plan is right on track.

Wal*Mart (WMT), one of those good old blue chips, doing well, up $2.63.

AT & T (T) edged up $0.25.

There you see PepsiCo (PEP) rising $1.44 on its bid for Quaker Oats.

Lucent Technologies (LU) down $0.38.

And then Pfizer (PFE), 10th in volume, was up $0.69.

American Express (AXP) fell $2.25. The Alex Brown Brokerage downgraded it from "buy" to just a "market perform" rating.

DaimlerChrysler (DCX) rose $1.73 even though Standard & Poor's cut its credit rating and Morgan Stanley cut its 2001 earnings estimates from $4.20 a share all the way down to $2.58.

Delta Air (DAL) off $0.88. The company canceled about 300 flights over the weekend because its pilots won't work overtime while their union is negotiating for a new contract with the company.

General Motors (GM) was up $1.25 even though Banc of America downgraded it from "buy" to "market perform."

Philip Morris (MO) was up $0.06 but in after hours trading it hit 40 following that Florida judge's ruling.

And Union Carbide (UK), another big old blue chip, doing well, up $4.31.

Corus Group PLC (CGA) rose $2.63, one of the best percentage gainers. UBS Warburg Brokerage upgraded a group of European steel stocks just like this one.

And Agribrands International (AGX) rising $8.75. Cargill is going to buy it for $54.50 a share in cash. And Agribrands (AGX), in the meantime, has terminated its proposed merger with Ralcorp (RAH).

Bindley Western Industries (BDY) up $5.88. Cardinal Health (CAH) is going to acquire Bindley for nearly a half a share of Cardinal's stock. That works out to a value of about $45 today.

And then we see IBP (IBP) moving up $2.25 on that news that Tyson Food Corporation (TSN) is going to buy it for $26 a share in half cash and half in stock of Tyson.

And Tyson Foods itself fell $1.38 on that news.

And Four Seasons Hotels (FS) dropping $4.50 after the Bear Stearns Brokerage downgraded it from "buy" to just a "neutral" rating.

NASDAQ trading, a loss of 29 ½ points in the index. Volume well down from Friday's pace, just a little over 1.8 billion shares. But about 1,000 more issues down than up.

Cisco Systems (CSCO) topped the active list, down $2.69. But keep in mind, in after hours trading, most of these stocks were at least $1 to $3 higher.

Intel (INTC) hit a new yearly low today after S.G. Cowen said that its first quarter is going to be ugly and Prudential cut fourth quarter and 2001 earnings estimates on Intel to $0.42 and $1.60 respectively. But even that stock was up to around $34 in after hours trading.

Microsoft (MSFT) down $0.19. It improved after hours.

Sun Micro (SUNW) up $1.94.

Juniper Networks (JNPR) down $2.39.

QUALCOMM (QCOM) up $7 a share after China reaffirmed its intent to use QUALCOMM'S CDMA wireless technology.

Broadcom (BRCM) a $7 gainer as well.

JDS Uniphase (JDSU) up $2.38.

Veritas Software (VRTS) was down $8.19.

And SDL (SDLI) moved up just over $10 a share.

RF Micro Devices (RFMD) had a good day, up $5.7