SUSIE GHARIB: So much for the euphoria on Wall Street. A batch of earnings warnings gave investors a dose of reality. Bank of America (BAC) said today that its fourth quarter profits could come in 27 percent lower than expected. That news slammed financial stocks. Investors also took a bite out of computer stocks in the action to a warning from Apple Computer (AAPL). The Dow plunged 234 points today and the NASDAQ lost about 100, giving back a big chunk of yesterday's record gains. So, what should investors do now? Erika Miller gets some answers.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Today's sharp drop in stocks is a harsh reminder that the market is still vulnerable - vulnerable to worries other than interest rates. Analysts say Greenspan's hints at lower interest rates yesterday were not enough to sustain investor confidence today.

ASH RAJAN, MARKET ANALYST, PRUDENTIAL SECURITIES: It's a sort of a good first baby step for investors to believe that a sentiment change could occur in this market. But, importantly, they should also understand that it's just one of the things that they would like to hear or see.

MILLER: Mostly, he says investors should wait to see evidence of solid earnings growth before jumping back in. Fourth quarter preannouncement season has begun, and warnings are already hurting stocks. Rajan would also like to see stabilization in the euro against the dollar. That would help U.S. multinationals by boosting exports and improving currency translation. Another positive sign would be a continued decline in oil prices; or at least if they remain below $30 a barrel. But other analysts argue those issues are already factored into stock prices, which means now is a good buying opportunity.

RICHARD CRIPPS, MKT. STRATEGIST, LEGG MASON PRECURSOR GROUP: I think you step in here recognizing that stock prices, for the moment anyways, or at least where we are right now, represent a lot of uncertainty; and as the economy goes into next year and we start to get confidence in earnings, we have lower interest rates, stock prices are going to rise.

MILLER: He says investors should start buying select technology names, like Cisco (CSCO), Oracle (ORCL) and EDS (EDS). He also likes financials, like Chase Manhattan (CMB) which benefit from lower interest rates. But for some, particularly financial planners, even a changing interest rate environment doesn't effect the advice they give their clients.

JOEL ISAACSON, FINANCIAL PLANNER, JOEL ISAACSON & CO.: What's important for people is to understand stocks are for the long term. They can obviously be volatile in the short term. And to have a good balance of growth and value in bonds and small stocks, and be patient.

MILLER: Few on Wall Street are predicting smooth sailing for the markets. They say, even prospects for lower interest rates aren't enough to guarantee higher stock prices in coming weeks. 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. © 2001 Community Television Foundation of South Florida, Inc.



12/06/00: Which Stocks Are Surviving Wall Street's Wild Ride

SUSIE GHARIB: It's a confusing time for investors, the big rallies and sharp sell-offs. What's the best investment strategy in these volatile times? Let's find out from Vince Farrell, Chief Investment Officer at Spears, Benzak, Salomon & Farrell, and he joins us live from our New York studio. Hi, Vince.

VINCE FARRELL, CHIEF INVESTMENT OFFICER, SPEARS, BENZAK, SALOMON & FARRELL: Hi, Susie.

GHARIB: Vince, I'm just wondering, this morning when you went to work, was your approach to investing any different today than it was yesterday given those comments by Mr. Greenspan?

FARRELL: No. I think after the comments, though, I would be more inclined maybe to start to dip my toe back into some of the bank stocks. Financial stocks have been very good performers for this year, but financial covers a broad array of stocks. And bank stocks have not been all that good. But lower interest rates typically are very good. I would have thought this morning that you might see better action in the bank stocks, short-circuited by the Bank of America announcement, but I still think you want to be buying some banks here because I think lower rates tend to be very good for them over the next few months.

GHARIB: It was a tough day for the financials. I mean which banks would you be buying?

FARRELL: Chase (CMB), I think, is cheap enough. It's trading at about nine times earnings. It's been washed out. Maybe a regional bank like SunTrust (STI) in a demographic area where people are still moving in. There's no telling where you might get another surprise like the Bank of America surprise today, but I think when you're trading at eight or nine times earnings and those earnings have been marked down, the estimates have been marked down significantly, you're probably close enough to a bottom that you can't worry too much more.

GHARIB: OK. Let me get back, Vince, to my original point about the change in thinking, if any, in the market, to how investors are supposed to interpret comments by the Fed Chairman and today's earnings warnings. How vulnerable are stocks?

FARRELL: I think stocks are still pretty vulnerable because Mr. Greenspan said he's thinking about going to an easier stance, but if he lowers rates, is he going to lower rates because the economy is falling apart? It depends on whether he is ahead of the curve or behind the curve and you never know until after the fact. I think what's going to happen is that you're going to get more earnings preannouncements from now to, say, the middle of January, and that's a vulnerable time and I think probably the market is vulnerable from now to then because of that. However, we've got a big washout in many sectors. We're probably getting very close to bottom. So if you feel that there's individual world class companies that have been beaten up, you're probably not going to get the absolute bottom and maybe you start committing a few dollars right now.

GHARIB: There are so many bargains out there and they are tempting for investors who do have some money and are long-term investors. What are some of those world class companies that you would recommend buying at this point?

FARRELL: Let's take them by category first. Let's say in the financial sector I would buy Chase and CIT, a finance company that's trading at only eight times earnings that has been around for over 25 years that has grown earnings every year for those 25 year period of time.

GHARIB: What else?

FARRELL: In the energy sector, I'd go with natural gas, which is at unprecedented prices. Burlington Resources (BR), Unocal (UCL) and Texaco (TX) with a little bit more oily name. Let's go into the tech area, which is where most people would be very interested. Intel (INTC) has been absolutely savaged, but I think at $32, $33 a share, it's starting to show that the absolute most dire circumstance that could befall it in the years ahead and I'd put some money to work at Intel. I'd put some money to work in AOL (AOL) and I'd put some money to work in WorldCom (WCOM), but I think I'd put more money to work in WorldCom because I think maybe that one has been more than over done.

GHARIB: Real quickly, what about these computer stocks that have been hit so hard, Gateway (GTW), Apple (AAPL) today?

FARRELL: I would avoid them because I don't know how bad PC sales will be. They tend to be very linear in their approach. They sell PCs. The PC business is bad. I'd buy them on the way back up, not no the way down.

GHARIB: Any chance of a Santa Claus rally, in a word or two?

FARRELL: I think, at minimum I think that the preannouncements are going to take it out. If it's a Santa Claus rally, it will not last long and at minimum, Susie, you're going to go back down and test that 2500 level on the NASDAQ.

GHARIB: Oh, boy. OK. Thank you very much, Vince.

FARRELL: Thanks.

GHARIB: My guest tonight Vince Farrell of Spears, Benzak, Salomon & Farrell.

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.

12/06/00: What To Expect From The November Jobs Report

PAUL KANGAS: Friday's employment report will be another key indicator of what's happening with the economy. Joining us now with a guide as to what to look for in that November jobs report is Mark Serlin, economist for BridgeNews and welcome back, Mark.

MARK SERLIN, ECONOMIST, BRIDGENEWS: Hi, Paul.

KANGAS: Do you think there will be adequate evidence in the numbers to support the view that U.S. economic growth is slowing so dramatically that an interest rate cut would be justified?

SERLIN: Perhaps the most important evidence to watch for is going to be the work week. Specifically, the work week has been trending lower for about a year. We're at the lowest level in almost five years and if we move lower again, that's going to be of major concern because it suggests when economic activity does pick up, the work week is long enough that employers won't have to hire additional workers and bid wages higher.

KANGAS: Well, it has been actually on the wane. The last time you were with us a month ago, you said it probably will contract, right?

SERLIN: Yeah, the work week and it's been trending lower. Now the uncertainty is how low does it go and do we get confirmation? There's likely to be weakness in the auto industry. The key thing to watch for, do we get a weak services work week also.

KANGAS: All right. How about average hourly wages? I know you look at that closely.

SERLIN: Yeah, that's an important indicator. It looks like we might be increasing going from 0.3 percent to 0.04. The year over year growth rate is definitely going to accelerate.

KANGAS: OK. Are we going to see a move above that 30 year low of 3.9 percent employment? Are we going to go to four or a little more?

SERLIN: People are looking for it. There the thing you have to watch for is confirmation in the adult unemployment rate. Teenagers move the unemployment rate around a lot.

KANGAS: And as far as the interest rate cut possibility is concerned, what would the odds be, do you think, if you see a really weak report this time around?

SERLIN: I don't think they're going to cut any time soon. What they're doing is going back to a neutral bias. Greenspan warned that this is not like the Asia crisis. So I think we're going to sit in neutral for quite a while.

KANGAS: OK. All right, Mark, time is up. But thanks very much for being with us.

SERLIN: Thank you.

KANGAS: My guest, Mark Serlin, economist for 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.

12/06/00: The Road To The White House: The Congressional Complexion

SUSIE GHARIB: Here's the latest on the presidential election. Late today the Florida legislature announced a special session for Friday. It will choose a slate of presidential electors. Well, while we might not know for sure who the next president will be, we do know that the next Congress will be almost evenly split between Democrats and Republicans. As Darren Gersh explains, that could give power to members in the middle.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Moderate Democrats and Republicans made it clear today they think the next Congress will be their Congress. Anyone who wants to get anything done will have to deal with them. So this group of bipartisan House members is organizing a new working group. All it needs now is a name.

REP. TOM ROEMER (D), INDIANA: Different names have been tossed around. Somebody wanted to call us the R&D Caucus, for Republicans and Democrats. Somebody mentioned the mod squad.

GERSH: They rejected the Mod Squad, but whatever they're called, they won't be alone. Louisiana's John Breaux is organizing the bipartisan Centrist Coalition in the Senate. On fiscal policy, these Congressional moderates tend to be deficit hawks concerned about paying down the national debt. But the government's surplus is so big, moderates acknowledge there will be enough left over for popular tax cuts like eliminating the marriage penalty, cutting estate taxes and making health insurance fully deductible for the self-employed. But given the harsh rhetoric from the right and the left, centrists know it won't be easy to pursue a bipartisan agenda, even though they say that's what voters want.

REP MIKE CASTLE, R- DELAWARE: I think we believe that we're here to make laws, not to make politics.

GERSH: Even before they spoke, the moderates were challenged by conservative majority whip Tom DeLay, who made it clear Republicans control Congress and will push a partisan agenda. Still, analysts say bipartisanship may be the only way to get things done in an evenly divided Congress and it will be the next president who sets the tone.

MARSHALL WITTMANN, POLITICAL ANALYST, HUDSON INSTITUTE: You need someone with political power and capital to move legislation and strike deals and the person who will probably have the most political capital and the most power is the president of the United States.

GERSH: For now, moderates are focused on issues like education and prescription drug coverage for seniors. But they're watching the economy and if it cools, pressure will rise for larger tax cuts. 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.


12/06/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened on a mixed note today, with the Dow Industrial Average falling 80 points by 10 a.m., largely because weakness in IBM (IBM), Hewlett-Packard (HWP) and Intel (INTC), caused by yesterday's post-market profit warning from Apple Computer (AAPL). The NASDAQ Index actually rose 40 points at the outset of trading, as the upward momentum of the record 10.5 percent jump yesterday carried over. But by 10 a.m., even it faltered to a 4-point loss. The blue chips continued to lose ground on profit taking for the rest of the morning, with the makers of trucks and auto parts, along with computer manufacturers leading the way lower. But good strength in telecom-related stocks helped the NASDAQ market resist a major downturn. At 1 p.m. then, the Dow fell to 125-point deficit, but the NASDAQ Index was off only 16 points. At 1:45 p.m., the market went into a tailspin after Bank of America (BAC), as you heard, warned of much lower-than-expected fourth-quarter earnings. With the financial sector leading the way lower then, the Dow Jones Industrial Average tumbled to a closing loss of 234.34 points, that's 2.2 percent, and we now stand at 10,664.38. In today's 278-point trading range, the Dow closed down 234 points from the best level of the session. The NASDAQ Composite fell 93.30 ending at 2796.50. In its 135-point trading range, the Composite Index settled 120 points below its best level of the day.

Big board volume down just a bit from yesterday, about 24 million shares or so. And up volume was exceeded by down volume by about an 8 to 5 ratio.

The Dow Transport Index lost nearly 28 points.

Utilities losing nearly two points.

The Closing Tick however, indicating some improvement near the closing bell, up +225.

Standard & Poor's 500 fell just over 25 points.

Nearly a 15-point drop in the 100.

The MidCap 400 fell just about five points.

The Bridge Futures Price Index was up 2.48. Big rise.

New York Stock Exchange Composite down over 7 1/2.

Just over a 5 1/2-point drop on the Value Line.

Russell2000 Small Cap off about 7 2/3 points.

And the broadly-based Wilshire 5000 down 218 2/3 points.

The bond market followed through nicely on yesterday's strong rally with the help of the report that third-quarter U.S. worker productivity rose 3.3 percent, while a Federal Reserve's Beige Book Survey on the economy showed that it continue to slow in October and November, with steady consumer price levels. The other plus today of course was flight-to-quality buying prompted by the sell-off in stocks. These factors lifted tax free and corporates by 3/8 to 3/4 of a point on average. And the Treasury market did even better than that.

The 5-year notes up 12/32.

The Bellwether 10-year note up 26/32, with the yield all the way down to 5.32 percent.

And the 30-year bond up just over one point.

And the Lehman Brothers Long-Term Treasury Bond Index up about 18 1/3 points.

The market overall just could not stand any prosperity that we saw yesterday, down 234 1/3 points, and the broader market participated in the sell-off, only 12 stocks up for about every 17 lower;

166 new highs for the year, interestingly, and only 92 new lows, though.

Nokia (NOK) topped the active list, that's a triumph, holding steady at $51.38, traded as high as $53.75 in the morning. 22 1/2 million shares changed hands. Of course, yesterday the company gave investors a very upbeat outlook.

Lucent Technologies (LU) dropping $1.69.

And then Compaq Computer (CPQ) off $4.30. The Apple news didn't help there and today First Boston Brokerage downgraded Compaq from "strong buy" to just a "hold."

Citigroup savaged a little bit by that Bank of America (BAC) announcement.

And America Online (AOL) managed to gain $0.53.

Chase Manhattan (CMB), another weak bank, down $1.25.

Nortel Networks (NT) lost $0.50.

AT & T (T) bucked the trend, up $0.31.

Bank of America (BAC), there you see it, down $3.19, traded as low as $36.38. It warned fourth quarter earnings will come in around $0.85 to $0.90, not $1.17 like the Street was expecting. And Bank America also sees these pressures extending into the first quarter of next year.

Finally, Motorola (MOT) 10th in volume, down $1.19.

Celestica (CLS) bucked the trend, up $3.25. The company signed a $1 billion wireless telecom supply deal with Motorola (MOT). First Boston repeated a "strong buy" on Celestica.

Enron (ENE) up $3.69. Natural gas hit a record high level today on strong demand and of course we have this cold weather embracing the nation.

Hewlett-Packard (HWP) dropped $3. Merrill Lynch was not optimistic about revenue growth on the outlook, but Hewlett says it's comfortable with 2001 earnings projections.

IBM (IBM) was the biggest point loser in the Dow today, off 663. The Apple news didn't help there either.

Newmont Mining (NEM), the gold stock, up $1.31. New York February gold futures up $4 to $277.30 the ounce.

New York Times (NYT) gained $3.06, the company very upbeat and sees its 2001 earnings growth at 10 to 15 percent.

Musicland Stores (MLG) one of the better percentage gainers, up $2.25. The company confirmed that it is in talks with an unnamed third party about a possible business combination.

Sprint PCS Group (PCS) up $3.19. As I mentioned earlier, there's a growing belief that the wireless telecom business has the best growth prospects.

Circuit City Stores (CC) hitting a new low, down $3.13. The company sees a third quarter loss of $0.05 to $0.07 a share. Third quarter same store sales were down 10 percent.

Visteon (VC) and the auto parts business down $3.38. The company warned its fourth quarter at best would come in around $0.35 a share. That's down from the $0.66 per share earnings from the Street estimate.

Great Atlantic & Pacific Tea Company (GAP) down $1.50, 19 percent drop. The company is going to discontinue a $10.10 per share quarterly cash dividend.

And Water Pik Technologies (PIK) down $1.24. Sellers really put the pressure on it. Fourth quarter sales are going to be lower than expected, says Water Pik, due to the slowdown in the economy.

NASDAQ trading, a loss of 93.30 or 3.2 percent on the Index. Volume was down a bit from yesterday's pace, but only 15 stocks higher for every 23 lower.

Juniper Networks (JNPR) down $15.70, but it didn't quite give up all of what it gained yesterday. That's the story for most of these stocks.

Cisco (CSCO) down $0.69.

A 1/4 point drop in QUALCOMM (QCOM).

Intel (INTC) hit a new low for the year, down $4.25. Salomon Smith Barney said it thinks the company's fourth quarter could be the worst in a decade.

Microsoft (MSFT) was down $3.19.

Sun Microsystems (SUNW) fell $1.63.

JDS Uniphase (JDSU) off $2.50.

And CIENA (CIEN) down $4.44.

SDL (SDLI) down $7.63.

And Network Appliance (NTAP) down $5.19.