SUSIE GHARIB: On this first day of winter, investors were greeted with some warm weather on Wall Street. The NASDAQ finally broke out of its seven-session losing streak. It notched up seven points. And the Dow added almost 170. But despite today's brighter picture, Suzanne Pratt reports that the Wall Street forecast still calls for chilly weather.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Even though today was a better day for investors than yesterday, it still wasn't great. Sure, the Dow managed a solid increase, but the bruised and battered NASDAQ barely eked out a gain. And despite today's mini rally, experts say the mood on most trading floors is still somber.

ASH RAJAN, GLOBAL EQUITIES DIRECTOR, PRUDENTIAL SECURITIES: It's a classic bear market, that's the definition of what I'm saying, in short. And it's going to take a good two quarters for this market to recover because it's predicated on earnings recovery and it's predicated on technology spending. So, I would say end of first quarter, beginning of second quarter, you'll see a sentiment change.

PRATT: At least for now, experts are not looking for fourth quarter earnings to prop up the beleaguered stock market. Not only are earnings warnings flooding Wall Street at a breakneck pace, but profit forecasts are slipping every day. In fact, according to First Call, analysts' expectations for fourth-quarter profit growth for the S&P 500 are now running at an average of 6.5 percent. That's a sharp drop from the 14 percent that was forecast in mid-October. Others predict it will be the Federal Reserve that drives stock prices in the first quarter of 2001. Some say an interest rate cut in January should give stocks the long-awaited catalyst for a rally. As a result, they say now may be a great time for investors to start nibbling.

TRACY EICHLER, INVESTMENT STRATEGIST, PAINEWEBBER: You have one of the five best opportunities in the market that you've seen in the last 20 years on a valuation basis. We're recommending clients move off the sidelines and start committing money to this market. We have not seen these levels since 1998 in our models.

PRATT: As for that Santa Claus rally that investors have been dreaming of - you know, the one that often happens in the last five trading days of the year - experts say, don't count on it for this year. That's because sentiment is simply too negative. Suzanne Pratt, 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: The stocks of California's two biggest electric utilities fell sharply today. PG&E (PCG) and Edison International (EIX) said that they are on the verge of bankruptcy, unless regulators let them raise electricity rates. And late today, regulators said they would consider that at emergency hearings next week. U.S. Energy Secretary Bill Richardson has been involved in meetings with regulators all week to avoid a power crisis in California. He joins me live now. Mr. Secretary, thank you for joining us.

BILL RICHARDSON, U.S. ENERGY SECRETARY: Thank you, Susie.

GHARIB: What do you think is needed to solve this California power crisis?

RICHARDSON: First of all, I believe to protect consumers, not just in California, and the Northwest, we need some regional price caps. Secondly, you need the state, you need regulators, utilities, consumer groups, the federal government to help, but everybody to give a little bit. We have a very serious electricity crunch problem. Those utilities shouldn't be marginalized and let go bankrupt. At the same time, I can't be intervening consistently as I have to make sure that California gets enough power. I've ordered twice emergency powers to have generation pumped into California. We need market solutions, but everybody has to give a little bit.

GHARIB: Well aren't we - aren't we -

RICHARDSON: You have to have a regional -

GHARIB: Aren't we running out on time here? The California Public Utilities Commission says that they're going to have emergency meetings next week. Isn't there a risk for Californians, because I understand they're already talking about rationing electricity this Christmas weekend?

RICHARDSON: We are running out of time, but the good news is that meetings are taking place right at this moment in Washington at the Federal Energy Regulatory Commission. All the parties are trying to work out a solution. I met with Western governors in Western states yesterday. Eventually, California is going to have to deal with this rate issue. So, there is positive movement. But we are running out of time. I did extend my emergency authority another week, till December 28, to give the negotiations more time.

GHARIB: At what point will the federal government intervene? Is it when you get disruption of electricity to hospitals or businesses or factories? At what point will you take stronger action?

RICHARDSON: Well, Susie, I've taken strong action. Had I not taken the action I took twice, hospitals and crops and consumers and businesses would have had rolling blackouts, would have had these serious problems. The federal government cannot intervene, continuously. This is a state issue. This involves state regulatory agencies; this involves other state-related issues. What I can continue doing is getting the federal authorities Bonneville Power Administration, Western Area Power Administration - these are federal power sources, continuing to pump power into California. But beyond that and beyond the emergency powers, we have to bring everybody together; jawbone, negotiate. We're moving in that direction. So, I'm hopeful.

GHARIB: We're running out of time and I want to ask you a few more questions. Do you think that deregulation has threatened the reliability of the whole electricity grid throughout the country?

RICHARDSON: Susie, I don't believe so. I think there's some problems with California's deregulation. It was one of the first in 1996. What I think is needed nationally is electricity competition. We had a bill in Congress that said, to every state, we're going to have fair rules of the road for everybody, because what is needed eventually, Susie, is investment in new power sources. We have a country with a booming economy, but there's been 14 percent more energy demand, so you have to create those new power sources, new investment. That's what's needed.

GHARIB: All right, let me just jump in real quickly. Is this just a California problem? Or - where else in the country is vulnerable? We just have a few seconds left.

RICHARDSON: The Northwest is vulnerable, that is pumping power to California. But if we don't act soon on a national electricity competition bill, our electricity grid needs, refurbishing needs new investment. We've got a booming economy but we've got a third-rate - well, a third-world electricity grid that needs to be improved.

GHARIB: All right, we'll have to leave it there. Obviously, it's going to be an issue for President-Elect Bush's administration.

RICHARDSON: Yes.

GHARIB: Thank you very much, Mr. Secretary. We appreciate you talking to NIGHTLY BUSINESS REPORT.

RICHARDSON: Thank you, Susie.

GHARIB: My guest tonight, U.S. Energy secretary, Bill Richardson.

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.

12/21/00: The EPA Takes On The Diesel Pollution Problem

PAUL KANGAS: From power to pollution. The Environmental Protection Agency today announced regulations to clean up pollution from diesel engines. But industry groups say the rules could mean sharp hikes in trucking costs. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Anybody who has ever driven behind a truck or a bus knows diesel exhaust is a major problem, according to the Environmental Protection Agency administrator, Carol Browner.

CAROL BROWNER, EPA ADMINISTRATOR: The cloud that follows is not only dirty, smoky, cough- inducing; it is a real threat to our health and environment.

GERSH: To reduce that threat, the EPA today put into place new rules requiring manufacturers of diesel engines to cut emissions 95 percent by the year 2010. For the first time, buses and trucks must be equipped with catalytic converters, already required on cars. The new rules also require refiners to eliminate 97 percent of the sulfur in diesel fuel by the year 2010. The new rules will be phased in beginning in 2006 to give the industry time to adapt, but analysts say refineries are already running at full capacity and will have to take production off-line to meet the new standards.

MATTHEW SIMMONS, ENERGY ANALYST, SIMMONS & CO.: Unless we build some new refineries in the United States, we cannot anymore expand diesel fuel, home heating oil, motor gasoline; and this rapid imposition of this really draconian measure from where we are today, probably just won't work.

GERSH: Oil giant, BP Amoco (BP) and independent refiner, Tosco (TOS) have announced their support for the new rules, but others in the industry warn meeting the new standards could increase diesel prices by 15 cents a gallon, far more than the EPA's estimate of five cents.

BOB SLAUGHTER, NAT'L PETROCHEMICAL & REFINERS ASSN.: The problem is really trying to do too much, too fast. We definitely need to be environmentally-sensitive, but we need also to pay attention to our energy infrastructure.

GERSH: President-Elect Bush is reportedly close to naming New Jersey Governor, Christie Todd Whitman to take over at the EPA. This issue may be waiting on her desk when she gets there. Industry groups are planning to ask the Bush administration to review the new rules. 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.



12/21/00: Appian Prepares To Go IPO

SUSIE GHARIB: Sure is nice to see. But, Paul, tumultuous market conditions have had a negative impact on the IPO market. But for some companies, the dream of going public lives on. "Red Herring" magazine recently sponsored a conference showcasing some of the most promising young companies. Erika Miller profiles one of the hopefuls.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Mike Scully is calm as can be, even though there's a lot riding on the speech he's about to give. How well he does could determine whether his optical networking company, Appian Communications, goes public. Appian is one of 16 companies chosen to present its strategy at "Red Herring" magazine's Capital Matters Conference. The companies are competing for the attention of investment bankers and venture capitalists who will decide which businesses, if any, to fund.

MIKE SCULLY, CEO & FOUNDER, APPIAN COMMUNICATIONS: As a pre-IPO company, coming to an event like Red Herring is very important so that we can start talking and educating the market - particularly the buy-side of the market, in terms of Wall Street - about what we're doing and what the opportunities are that we see.

MILLER: It's a beauty contest of sorts. Each company is given seven minutes to make its case.

SCULLY: Good morning, everyone. My name is Mike Scully from Appian Communications, and welcome to the first of the "rapid fire" presentations.

MILLER: After the speech, things are already in motion for Appian.

SCULLY: Yeah, I had a number of people come up to me after the presentation, and one, hand me their business cards. It's good. You know, the next step, is to go talk to them and to further effectively tell the story. It's kind of hard in seven minutes.

MILLER: But Appian and the other companies presenting here will all face tough scrutiny, lasting much longer than seven minutes.

JASON PONTIN, EDITOR, RED HERRING MAGAZINE: Appian you know, has every possibility of a great IPO, if it executes on everything, and if there isn't a recession in 2001. But I can't promise you there won't be a recession, and I can't promise you that these companies are going to execute as they need to.

MILLER: But Appian pulls it off. This week, the company announces that it is a step closer to going public, raising $60 million in new funding from several top-tier investment banks. Investment banker, Paul Johnson of Robertson Stevens urged his firm to get in on the deal.

PAUL JOHNSON, SR. TECHNOLOGY ANALYST, ROBERTSON STEVENS: Every customer needs more bandwidth. On top of that, they want more flexibility of that bandwidth. Those are just absolute given. The optical capacity that's being put in place is literally between cities and between buildings. But it still hasn't touched the customer.

MILLER: He says Appian fills an important gap, by allowing service providers to bring the power of optical networking directly to businesses. Analysts also say Appian's technology is better than what's currently in the marketplace.

SETH SPALDING, OPTICAL NETWORKING ANALYST, EPOCH PARTNERS: Today, for example, if you want to get a T-1 circuit, which is basically you know, a relatively large pipe, that takes from three to six weeks at minimum to get. By using Appian's software provisioning platform, it allows you to get services up and running much more quickly. And that's a competitive advantage for service providers.

MILLER: Industry analysts say Appian also scores points for its seasoned management team, and first to market advantage. Appian's investment bankers predict that the company will make its public debut by the fall of next year. Although they concede that Wall Street has little appetite for IPOs right now, they maintain that quality companies can go public in any market. 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.


12/21/00: Commentary: A Gift To The Economy

SUSIE GHARIB: Tonight's commentator has a holiday gift suggestion for the economy. Here's Irving R. Levine, Dean of International Studies at Lynn University, and Former Chief Economics Correspondent for NBC news.

IRVING R. LEVINE, COMMENTARY: 'Tis the season for giving, and perhaps receiving. For the investor, with the economy and stock market wavering, a few particular gifts would be welcome; especially a cut in interest rates. However, on Tuesday, Alan Greenspan proved he is not Santa Claus, and denied investors this "wish list" item. But Greenspan showed he is not Scrooge either, by hinting of a belated gift, probably before Valentine's Day. Another belated holiday gift to give the economy a nudge would be a capital gains tax cut. This would lift the ailing stock market and inspire consumers to spend more freely. One other gift would help: elimination of the estate tax. Opponents argue that would benefit only the very rich. But that's not true, because a rich person who dies does not benefit from a tax cut, for the simple reason that he or she is deceased. The beneficiaries of the rich person's estate may not be rich at all. They may be quite needy. There are those who worry that such tax cuts could turn the budget surplus into deficit. But, an invigorated economy means more wage earners and higher profits, and more government revenue. In short, tax cuts are the original gift that keeps on giving. 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.



12/21/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened moderately higher today in what appeared to be an overdue technical rebound following yesterday's 2 1/2 percent drop in the Dow Industrial Average, and a 7.1 percent plunge in the NASDAQ Index. At the outset of trading, however, the Dow advanced only about 57 points, and the NASDAQ just a modest 26 points. So, disappointed buyers turned away, and by 10:00 a.m. the Industrial Average was up only 6 1/2 points, while the NASDAQ Index fell to a 17-point loss. The early rally attempt was also undermined by more earnings warnings from the likes of Lucent Technologies (LU), and as we told you last night, AT&T (T). But when the bad news failed to ignite a broad-based sell-off, buyers cautiously stepped back into action, unable to resist loading up on some of the recently hard-hit stalwarts, like International Paper (IP), Coca-Cola (KO), Wal*Mart (WMT); along with Microsoft (MSFT) and Intel (INTC). By noon then, the Dow rebounded with a 160-point gain and the NASDAQ Index was up 90 points. In heavy afternoon trading, the blue chips held their earlier gains but selling picked up in the high-tech sector, all but wiping out the NASDAQ rally. The Dow Jones Industrial Average posted a closing gain of 168.36 points, that's 1.6 percent. It now stands at 10,487.29. The NASDAQ Composite Index edged up only 7.34 at 2340.12. But it did break a seven-session losing streak with that. Volume down a touch from yesterday. And up volume exceeded down volume by a little over a seven to six margin.

The Dow Transport Index up just over 60 points. Nice move there.

Utility Index however, down nearly six points.

The Closing Tick practically neutral, at +69.

Standard & Poor's 500 up just over 10 points.

A little over 7-point rise in the 100.

The MidCap 400 up nearly 3 1/2 points.

And the Bridge Futures Price Index rose 1.19.

New York Stock Exchange Composite gained 4.31.

Nearly a point and a quarter gain in the Value Line Index.

Russell2000 Small Cap up nearly 3 1/4 points.

And the Broadly-Based Wilshire 5000 up just over 65 1/4 points.

After the market closed, the Federal Reserve reported in the week ending December 11, the M-2 money supply rose $5.8 billion.

The bond market showed little reaction to today's report that third quarter gross domestic product grew only 2.2 percent, not the 2.4 percent as estimated last month. Probably because that news was already discounted by the recent rally. Some traders decided to take profits, especially in light of the solid upturn in blue chip stocks, but the selling was light. And at the close, tax-free and corporate issues were mostly unchanged. While the Treasury market was slightly higher on balance.

The 5-year notes moving up 4/32.

The 10-year notes edged up 1/32. Look at the yield, just over 5 percent.

30-year bond down 6/32.

And the Lehman Brothers Long-Term Treasury Bond Index fell 1.30.

It was a rather solid rally in the blue chip sector today. Question is: Will it last? But anyway, up over 168 points on the Dow. Broader market nicely higher by about a 17-12 margin. And 209 new highs for the year; only 197 new lows. Only!

Lucent Technologies (LU) topped the active list on a heavy 44 million shares. Down $1.31. After the company predicted a third-quarter loss in the range of $0.25 to $0.30. The Street was expecting a loss of only $0.01 per share. Standard & Poor's said, "avoid" Lucent stock.

AT& T (T) down $1.88 after slashing the dividend 83 percent yesterday.

Nokia (NOK) fell $1.19 in the weak high-tech sector.

Compaq (CPQ) down $0.78.

But America Online (AOL) managing to move up $0.41.

Fifth in volume.

EMC (EMC) up $3.63. Making a nice technical rebound.

Pfizer (PFE) lost $3.75 on news Swedish regulators have delayed approval of the company's schizophrenia drug, called Zeldox.

Nortel Networks (NT) edged up $0.31.

And GE (GE), a gain of $0.44.

AT&T Liberty Media (LMGA) was tenth in volume. Up $1.06 a share.

Alza (AZA) rising $4.75. Robertson Stephens Brokerage began covering Alza with a "buy" recommendation today.

Estee Lauder (EL) down $3.94. Merrill Lynch downgraded it from "accumulate" to just "near-term neutral."

IBM (IBM) was the biggest point loser in the Dow today.

J.P. Morgan (JPM), the biggest point gainer. Up $8.25.

TRW (TRW) moved up $3, even though the company said it sees lower-than-expected fourth-quarter earnings in the range of $0.50 to $0.55, when the Street was expecting $0.74. Interestingly, the market ignored the bad news. Sometimes, that's good news.

Xerox (XRX) down another $1.19. Another new low of course, for the year. The company now hints its fourth quarter may be even worse than originally expected.

Qwest Communications (Q) up $5.13. The story here: the company expects to meet or beat fourth-quarter earnings estimates of $0.14 a share.

National Data (NDC) up $2.63. Second-quarter earnings $0.48, up from last year's $0.44. Two cents above the Street estimate. Revenues rose 8 percent.

Quiksilver (ZQK), the clothing manufacturer, down $5.88. Fourth-quarter earnings were higher $0.42, up from last year's $0.34. Sales up 22 percent. But the company says 2001 earnings will be lower-than-expected at $1.50 to $1.56. And sales will only be up about 15 to 20 percent.

Convergys (CVG) fell $5.38. This firm says a cellular partnership in which it owns a 45 percent stake is likely to have earnings 3 to $4 million below projections.

Edison International (EIX) down $2.94.

PG & E (PCG) down $2.69. You heard about the energy crisis in California. Standard & Poor's downgraded both these stocks from "hold" to "avoid" today.

NASDAQ trading, a gain of 7 1/3 points, breaking a string of seven consecutive losses. Volume down a bit from yesterday's pace, 17 stocks higher for every 22 lower.

Cisco Systems (CSCO) topped the active list, rebounding $2.38.

Microsoft (MSFT) moved up $1.94.

But Palm (PALM) fingered for a $12 1/2 loss per share. Second-quarter earnings met expectations of $0.05. Up from $0.03 last year. But revenues fell short of the consensus. Hard to believe that stock was $165 earlier this year.

Juniper Networks (JNPR) lost $4.24.

JDS Uniphase (JDSU) off nearly $3.

Sun Micro (SUNW) fell $0.50.

Intel (INTC) bucked the trend there, up $1.19.

Brocade Communications (BRCD) down $10.38.