SUSIE GHARIB: A shocker from AT&T tonight, for already shell-shocked investors. AT&T said it's cutting its dividend for the first time in its 110-year history. The quarterly dividend will be slashed to $0.0375 per share, down from $0.22. AT&T also says that revenues will grow between 2.5 percent to 3 percent in the fourth quarter, that's compared to previous estimates of 4 to 5 percent. It expects earnings of $0.26 to $0.28 a share versus estimates of $0.29 to $0.33. At least one brokerage firm is telling its conservative clients, to sell the stock.

MEL MARTEN, TELECOM ANALYST, EDWARD JONES: This is not the same AT&T that it once was. This is not a widows-and-orphans stocks. That is not even a conservative diversified growth and income stock anymore. And that's what many of our investors had owned it for. So we've been trying to get the story across to everyone, that AT&T is now an aggressive restructuring play. It's not a conservative telecom investment any longer.

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: In after-hours trading, AT&T's stock traded below 17. That is a new 52-week low and not a good omen for tomorrow. As for today, the bears ripped through Wall Street. The NASDAQ got mauled; the Composite plunged almost 180 points, or 7 percent; the Dow also got hammered, down 265 points, or 2 1/2 percent. Here's Scott Gurvey with more.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The good news is that when stock prices fall to zero, they can't get any lower. The bad news is that few on Wall Street see the humor in that joke. The uncertainty about the presidential election is over, the Federal Reserve has moved to an easing bias on interest rates, and still, investors sell into every rally, leaving no place to hide. Today's sell-off came after another round of downward earnings revisions by a major brokerage. Today, it was Merrill Lynch targeting the tech sector in general, and Cisco (CSCO) in particular.

PHIL DOW, CHIEF STRATEGIST, DAIN RAUSCHER WESSELS: What's frustrating about it is that there was no change in the fundamental analysis, no change in estimates or revenues going forward. Just an opinion downgrade. Yet, a huge volume result today. A ton of people sold Cisco.

GURVEY: Don't even ask about the March highs. Since the beginning of January, the Dow is now down 10 percent, the S&P down 14 percent, and the NASDAQ down 43 percent. This is the new reality. While many stocks have been battered more then they deserve, market watchers say there is more to go. Fund managers want to end their year, showing cash in the bank and not a lot of tech stocks in their portfolio. Many investors have never seen a down market, and they have gone from exuberance to depression in an amazingly short period of time.

THOMAS GALLAGHER, U.S. EQUITIES DIR., CIBC WORLD MARKETS: If you were born before the Beatles, you've seen some bear markets in your life. If you were born after the Beatles, this is the first bear market you've ever seen. And the people who are involved in this bear market have been trained to buy every dip and to think that the market never really goes down. To me, this is a very healthy reaction in the market. It was very unhealthy to see the dot-com stuff going up and trading in the stratosphere. And I think now when we look back on it, we all sort of feel silly about what, you know, valuing these things based upon revenues or clicks or whatever.

GURVEY: For the negative psychology to change, investors must become convinced the economy can avoid recession. Interest rates will fall, earnings will grow, and price-earnings ratios will be reasonable. That's a tall order for the new year. 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. © 2000 Community Television Foundation of South Florida, Inc.

12/20/00: Stock Analysis With Ross Margolies is Portfolio Manager of Salomon Brothers

SUSIE GHARIB: My stock market guest tonight says that he's had "a good year." Ross Margolies is Portfolio Manager of the Salomon Brothers Capital Fund. It's up 15 percent this year. That's terrific.

ROSS MARGOLIES, PORTFOLIO MANAGER, SALOMON BROTHERS: Thanks, Susie.

GHARIB: So far so good, huh?

MARGOLIES: That's right.

GHARIB: Is the pain that we've been experiencing almost over or is there still more pain to go in the stock market?

MARGOLIES: Unfortunately I think that there's still more pain to go. I think it goes absolutely into the first quarter, probably into the second quarter of next year. The good part is that by the second half of next year I think things are going to look pretty positive.

GHARIB: You were telling me earlier that we're in a free fall. Tell us what you mean by that.

MARGOLIES: Well, business has halted. There's a lot of companies that thought they had business orders and the customers have abruptly canceled it and that is kind of feeding its way through the food chain of industry. And that's why you're seeing these stocks going down, because people were told by the company things are fine a month ago and now things are doing very, very poorly. So everybody is kind of stopping and halting and trying to figure out what to do next.

GHARIB: So what's it going to take to change, to stop that free fall?

MARGOLIES: Well, I think we're going to have to actually fall down to a level, as bad as it sounds, we're going to have to fall down to a level that's a steady state. In other words, what's the minimum amount of PCs or business trips or anything that you buy, the minimum amount you're going to go to keep going? Then you'll have a leveling off effect and the winners will start emerging.

GHARIB: Are, you're buying in this market, obviously, otherwise you wouldn't be getting those kind of returns. What are you buying?

MARGOLIES: Well, we've done very well in the energy stocks and we added some on the recent dips. We like the natural gas oriented ones in particular. Also, retailers. Recent additions have been Staples (SPLS), Federated Department Stores (FD) we added to. Costco (COST) is a big holding. And these are companies that even if business declines it's only going to decline a modest amount compared to some of the other companies which will see large declines in earnings.

GHARIB: What about technology? I mean we're looking at some of these stocks like, you know, the four stalwarts of the NASDAQ, Cisco (CSCO), Intel (INTC), Microsoft (MSFT), Oracle (ORCL), I mean the numbers are amazingly low. What's your view on buying these stocks?

MARGOLIES: I would stay away from them for the near term. Those are stocks that some time by the second half of next year you're going to want to start buying. But their business, which has still not halted, eventually will. Their customers, some of their customers are going out of business. Other ones are seeing dramatic slowdowns. Eventually that works its way to the system. And once you see the numbers happen, then you'll get an idea of when you can buy them.

GHARIB: When you say the numbers happen, are you talking about earnings?

MARGOLIES: The earnings and the sales. Once you see it work its way through and then stabilize, that's when you start buying them. And those are the exact companies that you do buy when you're not sure of the timing but you know you have the winners. I call it buying survivors.

GHARIB: What about, I mean are we focusing on earnings or are we focusing on interest rates? There was all this concern yesterday and also today about the Fed potential rate cuts.

MARGOLIES: I think for the near term you focus on earnings. Interest rates eventually will lead earnings. It's a very important forward looking indicator but you're going to need several interest rate cuts before they really kick in and there's a lag. Just like there was a lag when the rates were going up, there will be a lag when they're going down in terms of the impact on the economy.

GHARIB: So what would be your message to a long-term conservative investor at this point right now? What should they do with their money?

MARGOLIES: I think they should sit on it for a few months and then start dollar cost averaging into quality companies and they'll end up with a portfolio that will do well over the long-term.

GHARIB: Just like yours, right? Thank you so much, Ross. We appreciate your coming on the program. We've been speaking with Ross Margolies, Portfolio Manager of the Solomon Brothers Capital Fund.

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.



12/20/00: Meet Paul O'Neill, Treasury Secretary Nominee

PAUL KANGAS: President Elect George W. Bush announced his choice for Treasury Secretary today. As Darren Gersh reports, Mr. Bush turned to corporate America, choosing the Chairman of the aluminum giant ALCOA (AA).

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: With the economy showing signs of slowing down, the President Elect said he was looking for a Treasury Secretary who could calm nerves in the markets and the nation, a man with a steady hand.

PRESIDENT-ELECT GEORGE W. BUSH: Who, when he speaks, speaks with authority and conviction and knowledge and I found such a man in Paul O'Neill.

GERSH: O'Neill was a budget expert in the Ford administration, where he forged lasting friendships with Dick Cheney and Alan Greenspan. Greenspan later joined the board at aluminum giant ALCOA and helped bring O'Neill in as CEO Since then, O'Neill says he's often dropped by the Fed to offer Greenspan advice.

PAUL O'NEILL, TREASURY SECRETARY NOMINEE: What he said to me was it was valuable to him because he didn't have an opportunity to meet with many people who didn't want something.

GERSH: O'Neill says he won't be jawboning his good friend even though he has long believed the economy could grow more quickly without generating inflation than most economists thought.

O'NEILL: I do believe that, but I also understand my place in this and that place is to let Alan Greenspan make monetary policy.

GERSH: While CEO, O'Neill is credited with turning ALCOA into an operational powerhouse. He also remained active on social policy issues.

DR. JOHN MURRAY, PRESIDENT, DUQUESNE UNIVERSITY: This is a man who just wakes up in the morning and hopes that he can do something for others in terms of making a contribution to solving the problems of society.

GERSH: Those who've worked with him in Washington say O'Neill is synonymous with good government.

RUDY PENNER, SENIOR FELLOW, URBAN INSTITUTE: I suppose hard headed and soft hearted would be one phrase that could be applied to him.

GERSH: But conservatives grouse about O'Neill's support for higher gas taxes and some on Wall Street gripe O'Neill doesn't have the experience to stare down a major financial crisis.

DAVID BLITZER, CHIEF STRATEGIST, STANDARD & POOR'S: Quietly, there is a little bit of disappointment that it's not one of our own. Certainly when we had somebody from Wall Street, Robert Rubin, there was a certain amount of confidence on Wall Street just because he was a know quantity and well respected.

GERSH: Mr. Bush says savvy people on Wall Street will quickly learn what a good pick Paul O'Neill is. And Mr. Bush says he'll be glad to have O'Neill working across the Street from the White House. 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.


12/20/00: Oil Price Outlook

SUSIE GHARIB: In the oil markets, prices have been going down. Crude oil futures in New York are now trading at a seven month low. Joining me to talk about the outlook is our colleague from BridgeNews, Peter Rosenthal. Hi, Peter.

PETER ROSENTHAL, SENIOR ENERGY CORRESPONDENT, BRIDGENEWS: Hi, Susie.

GHARIB: So what's going on with these prices? Why are they going down?

ROSENTHAL: Well, inventories are starting to increase, which is unusual for this time of year, and there's starting to be fear that OPEC's production increases over the past 12 months will lead to too much supply by early spring.

GHARIB: So how does this impact the home heating bills for consumers?

ROSENTHAL: Unfortunately a lot of the home heating oil suppliers have already bought their inventory. Stocks of that type of fuel remain low and natural gas prices, the other primary residential fuel, are also extremely high, near record levels. And that's going to mean higher bills.

GHARIB: What does this mean out in California? Those high natural gas prices, we've seen it's causing problems for consumers.

ROSENTHAL: That's right. It's going to be more to heat your home if you live in the northern part of the state. And for electricity producers, they've had to pay more for the gas and are passing those along in the higher wholesale electricity costs. And the utilities, the two biggest one in the state, Edison International (EIX) and Pacific Gas & Electric (PCG), are threatening bankruptcy because they can't pass on those higher costs to their consumers and we've got federal and state regulators and governors talking about this issue as we speak.

GHARIB: A very serious situation. Let's turn just a little bit in the time that we have left to talk about the outlook for 2001. From the analysts and the experts that you've been talking to, what's the outlook for oil prices in the new year?

ROSENTHAL: Well, it looks like we're starting on a similar footing as we did in 2000. The difference is the trend is going to be lower and the question is can OPEC hold the price above $20 a barrel, which most people say is going to be difficult.

GHARIB: So, what are they saying, we're not going to see these $30 prices anymore?

ROSENTHAL: It's unlikely, although what we saw last year, the other lesson was that capacity is tight, refineries are tight and the methods to move from the supplier to the tank are very tight and therefore could mean tight supply.

GHARIB: All right, well, we'll see what happens in the new year. Meanwhile, I hope you have a happy holiday.

ROSENTHAL: Thanks.

GHARIB: And we've been talking with Peter Rosenthal, Chief Energy Correspondent of 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. © 2000 Community Television Foundation of South Florida, Inc.



12/20/00: UPS's Holiday Shipping Secrets

PAUL KANGAS: Santa gets most of the credit for the gifts found under Christmas trees, but shippers like UPS (UPS) deserve some credit too. Nineteen million packages went through the company's hands yesterday, the single busiest day of the year. Diane Eastabrook reports from UPS's largest sorting center.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: It takes a lot of elves, 11,000 to be exact, to sort through the avalanche of packages descending on this giant UPS facility outside Chicago.

MIKE JOHL, COMMUNITY RELATIONS MANAGER, UNITED PARCEL SERVICES: On a typical day in the summertime, we process about 14 million packages. Here we sort about 1.4 million. Today, our peak day, we're looking to sort somewhere between 1.7 and 1.8 million packages.

EASTABROOK: The Chicago area consolidation hub, or catch, is ground zero for UPS. All packages heading across the U.S. pass through this center. They arrive here by air, by truck and by train. Workers first hand check packages by computer to make sure destinations and zip codes match on their bar coded labels. Then the packages make their way over some of the 65 miles of conveyer belts, where they are sorted mechanically three more times. The entire trip takes about 15 minutes. UPS says the technology it has here allows it to constantly monitor the system and make changes, a necessity on a frantic day like this.

JOHL: We can not only tweak things on a daily basis, but we can actually make ongoing changes to tactics as we are moving.

EASTABROOK: On an average day, UPS handles about six percent of the nation's gross domestic product. But during the holidays, especially a day like today, the company estimates it handles about nine percent of the nation's GDP The Internet is a big reason. Analysts estimate online shopping will increase 85 percent this holiday season over last. UPS partly credits online shopping for the additional 200,000 packages it expects to handle on this peak day versus last year's.

JAMES KELLEY, CHMN. & CEO, UNITED PARCEL SERVICES: We'll deliver more than 50 percent of everything that is ordered over the Internet during this holiday season. So it is having a very dramatic effect on our business right now and we believe going forward it will have an even bigger impact.

EASTABROOK: Once processed, the packages are then reloaded onto trucks, trains and airplanes. Within days they'll wind up at homes and businesses, hopefully just in time for the holidays. Diane Eastabrook NIGHTLY BUSINESS REPORT, Hodgkins, Illinois.

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.


12/20/2000: Paul Kangas' Wall Street Wrap Up

Those downgrades on IBM (IBM), Hewlett-Packard (HWP) and Cisco by Merrill Lynch, coupled with earnings and revenue warnings from International Paper (IP) and Coca-Cola (KO) set the stage for a sharp opening sell-off on Wall Street today. The Dow Industrial Average after losing 61 points yesterday, plunged 205 points at the outset of trading; while the NASDAQ Index plummeted 140, before some bold souls did enough buying to trim those losses by 11:00 a.m. to 140 points, and 102 points respectively. Some lingering disappointment that the Fed did not cut interest rates yesterday in the face of what could be a hard landing in the economy, along with a continuing barrage of year-end tax-loss selling, pushed the market into a renewed downward spiral during the mid-session hours. At 2:30 this afternoon, the Dow was off 227 points; the NASDAQ down 167 points. With winter officially here tomorrow, it was bears who - or should say - the bulls who went into hibernation, rather than the bears, as relentless selling undermined stocks for the rest of the session. The Dow Industrial Average posted a closing loss of 265.44, that's 2 1/2 percent; we now stand at 10,318.93. The NASDAQ Composite plunged 178.93, that's 7.1 percent and now stands at 2332.78. That, of course, a new 21-month low point.

Big board volume moved up just a touch from yesterday, but still fairly active, 1.4 billion shares. No contest between up and down volume. About three times and then some of the down variety over the up variety.

Transport Index down nearly 48 points.

But the Utility Index, a safe haven beneficiary, up 6.29.

Closing Tick minus 346, not as bad as you might expect.

Standard & Poor's 500 down nearly 41.

About a 25 1/3-point drop in the 100.

MidCap 400 down nearly 16 3/4.

Bridge Futures Price Index lost nearly a point.

New York Stock Exchange Composite off the better part of 15 points.

A 10 3/4-point drop in the Value Line.

Russell2000 Small Cap off almost 15 points.

And the Broadly-Based Wilshire 5000 down 417.86. That was one percentage point worse than the Dow's loss.

The bond market showed little reaction to today's report that new housing starts rose a solid 2.2 percent because traders saw that as an anomaly in an economy that is slowing overall. The big plus for bonds was the surge of safe haven buying, triggered by that nasty sell-off in the stock market.

Over a $2 per barrel drop in New York February oil futures also helped tax-free and corporate issues rise ¾ to 7/8 of a point on average.

While Treasuries did even better than that.

The 5-year notes up 20/32.

And the 10-year note, look at that yield, 5.05 percent with that nice gain.

30-year bond down to a 5.41 percent yield.

And the Lehman Brothers Long-Term Treasury Bond Index was up nearly 15 1/2 points.

Well, the bears are in anything but hibernation as we approach winter tomorrow. The Dow off 265.44, 2 1/2 percent. Every 10 stocks up, 19 lower and 13 more new lows for the year than new highs.

Nortel Networks (NT) topped the active list on 25 1/4 million shares, down 2 1/2 points.

And then America Online (AOL) down 361. The company warned federal regulators that if they don't approve its merger with Time Warner (TWX), it would burden the company.

EMC (EMC) down $7.38 in the weak high tech sector.

Lucent (LU) off $1.88, a former official suing the company, saying she was forced to retire after urging Lucent to lower its sales projections.

Nokia (NOK) down $4.38, fifth in volume.

AT& T (T), as you heard after the dividend cut, trading below 17 after the after hours trading.

Compaq (CPQ) down $1.53.

AT&T Liberty Mutual (LMGA) down $1.75.

GE (GE) losing $2.69.

And Citigroup down $2.25.

Corning (GLW) down $6.75, the former champion of the high tech group. Standard & Poor's today downgraded it from "buy" to just "accumulate."

First Union (FTU) off $1.31. It's cutting its annual dividend by 50 percent from $1.92 to only $0.96 a share.

ExxonMobil (XOM) off $2. An Alabama jury fined the company, found the company had actually defrauded that state on natural gas royalty and returned a $3.5 billion verdict against Exxon.

IBM (IBM) down $4.13 after Merrill Lynch downgraded it from "near term accumulate" to just "neutral."

Newmont Mining (NEM), the gold miner, up $1.50. New York February gold rose $2.70 an ounce.

USAirways (U) plunging $8.75. Analysts are reporting that United Airlines' (UAL) proposed acquisition of the company likely to be challenged on anti-trust grounds. Standard & Poor's reported a "sell" on USAirways.

Park Electrochemical (PKE) a big gainer, up $7.25. Third quarter earnings were big, $0.78, up from $0.34 last year. Sales up 32 percent. Those earnings $0.14 better than the Street estimate.

Johns Manville (JM) up $2.13. Warren Buffet's Berkshire Hathaway Company (BRK) is going to acquire Johns Manville for $13 1 share.

Tootsie Roll Industries (TR) wrapped up a gain of $7.13. It's going to be added to the Standard & Poor's Midcap 400 Index, date to be announced.

Jabil Circuit (JBL), the big loser, down $6.81. The company in with first quarter earnings late yesterday, $0.24 versus $0.14, $0.02 below the Street estimate.

CompX International (CIX) was down $2.81. It sees lower than expected fourth quarter earnings of $0.23 to $0.25.

Vishay Intertechnology (VSH) losing 3 3/4. The company sees fourth quarter earnings 10 to 20 percent below the $1.20 Street estimate.

NASDAQ trading, a loss of nearly 179 points or 7.1 percent. Volume up about a half a million shares or half a billion shares. 816 up, 3,239 down.

Cisco (CSCO) topped the active list off 5 1/4. Merrill Lynch downgraded it from "buy" to "accumulate."

Microsoft (MSFT) off $3.31.

Sun Micro (SUNW) a gainer of $0.50.

Juniper Networks (JNPR) was down $15.56.

JDS Uniphase (JDSU) dropped $5.75, fif