SUSIE GHARIB: A Santa Claus rally today sent investors home for the holiday. The Dow added 148 points; and the NASDAQ surged 177, or 7 1/2 percent. Those triple-digit gains put Wall Street in a festive mood. But not retailers - they've been struggling this holiday season, and now with only two more shopping days until Christmas, they're going all out to get Americans to shop. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's a sign of the times. Retailers are slashing prices to get shoppers in the buying spirit. The National Retail Federation predicts big crowds this weekend, and an after-Christmas spending spree to add up to a 5 percent increase over last year's record sales. But so far this season, shoppers aren't spending like they have in the past.

MIKE ALLEN, SHOPPER: I have two little boys and I was overindulgent last year, in the sense of buying things they didn't really need or want, so I'm trying to be smarter.

WOODS: Retailers say procrastinators, like Alison Moran have been keeping sales down.

ALISON MORAN, SHOPPER: I haven't started Christmas shopping. Today's my first day, but I can see I'm going to be spending a lot of money.

WOODS: Mall traffic for this week is down 12 percent from this time last year. But analysts say it's what isn't in the stores that's the problem.

WALTER LOEB, PUBLISHER, LOEB RETAIL LETTER: I think it's a matter of conservatism in the marketplace and by retailers. Retailers did not look for hot items, they played it safe throughout the year.

WOODS: A slowing economy has also kept shoppers from opening their wallets. High energy prices, six interest rates hikes, a drop in both the Dow and the NASDAQ stock markets have taken their toll.

TRACY MULLIN, PRES., NATIONAL RETAIL FEDERATION: I think this year, we're going to see a lot of Gucci (GUC) belts tightening, because the "wealth effect" really has had an impact.

WOODS: Several snowy weekends, an uncertain election, and the incoming Bush administration talking about a recession, haven't helped put shoppers in a buying mood either. But the president-elect says he's just being realistic.

PRESIDENT-ELECT GEORGE W. BUSH: I keep hearing talks about, you know, well, this is an administration that is trying to talk down the economy. That's foolish talk.

WOODS: Retailers hope pulling out all the stops and offering deep discounts will lure shoppers into buying big this weekend, and keep the Grinch away. But what the Grinch may steal this Christmas, is profits. Stephanie Woods, NIGHTLY BUSINESS REPORT, Crystal City, Virginia.

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.



12/22/00: Corporate Bonds Becoming Attractive On Selective Basis

SUSIE GHARIB: Treasury bonds were up in today's trading. In fact, it's been a great year for bond investors. Scott Gurvey looks at the state of the market and the best bond strategy for the new year.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The bond market closed early and trading volume was light, but Treasuries still continued in rally mode. Long-term bond prices are nearly 15 percent higher than they were at the start of the year. Short-term bill yields are at nearly two year lows. Part of this is caused by a flight to quality. Investors spooked by the stock market have turned to Treasuries as a safe place to stash their cash. But much of the rally of recent days is a result of the market anticipating an interest rate cut by the Federal Reserve. In fact, the market has now discounted several quarter point rate cuts in the next year.

MARTIN MAURO, SR. TREASURY MARKET ECONOMIST, MERRILL LYNCH: It's been an enormous run in the Treasury market. On December 4th, the yield on the Ten-Year Treasury was just over 5 1/2 percent. Right now it's about 5.07 percent. So it's gone down nearly 50 basis points over the span of just a few weeks.

GURVEY: The situation on the corporate side of the bond market is far different. Investors are buying corporates only from the biggest, most credit worthy companies. Spreads between corporates and Treasuries have been widening. Now, experts say, the time is right for investors to broaden their selection, carefully.

WILLIAM CUNNINGHAM, CREDIT STRATEGY DIRECTOR, CHASE SECURITIES: We think investors who have been underweighted or neutral, if you will, in terms of their exposure to corporates should start scaling in slowly. And we stress slowly primarily because it's still up in the air as to how bad this economy really is going to be.

GURVEY: Right after Tuesday's Fed meeting there was great speculation that the central bank would cut rates before its next meeting at the end of January. That talk has died down. But the markets are clearly expecting a rate cut at that time and would be extremely distressed if the Fed does not come through. 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. © 2001 Community Television Foundation of South Florida, Inc.

12/22/00: Japanese Tech Firms' Management Styles Winning Praise

SUSIE GHARIB: Japan's high technology companies are known worldwide for their innovative products like plasma screens and digital products. But tech firms are now also winning kudos for their management skills. From Tokyo, Lucy Craft looks at two component makers competing in a global marketplace.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Nowadays, many electronics parts such as condensers, resistors and semiconductors have become low cost commodities. But some essential components such as coils, used to reduce noise and regulate energy consumption in a host of electronic devices, are still labor intensive, the job of specialists. That's where aggressive and agile players like Tokyo based Sumida Corporation come in. For Sumida, which controls one third the global market for coils, not being big is one of its main assets.

SHIGEYUKI YAWATA, PRESIDENT & CEO, SUMIDA CORPORATION: That's the point. Our size is just right to experience many things which other big organizations wouldn't or couldn't so easily do.

CRAFT: Moving factories offshore is common for Japanese as well as American manufacturers, but Sumida, proclaiming itself a borderless company, took the drastic step of shifting all its production, even its complex assembly work, to other Asian countries. To speed decision-making, Sumida reorganized into 13 subsidiaries under a holding company, virtually unheard of in the Japanese manufacturing industry. Even the CEO lives in Hong Kong, the region's low cost financing center, commuting to the company's Tokyo headquarters part of each week.

Hirose Electric calls itself a department store of connectors, offering 50,000 varieties of a component that's standard equipment for everything from cars to coaxial cables. Hirose's fixation with its core competency and tireless attention to the bottom line have made it one of Japan's best run companies according to the respected economic daily, "Nihon Keizei Shimbun." Hirose's skin flint managers ride the subway instead of company cars and many work several jobs at once.

MASAO HIROBASHI, DIRECTOR, HIROSE ELECTRIC COMPANY LTD: The biggest difference between us and our rivals is our profit margin. We make only high profit products. As soon as competition drives down the price of an item, we drop it and bring out something new. One third of our product line at any given time is new items.

CRAFT: Most of Japan's blue chip electronics makers are rushing to spin off non-core businesses, slash their work forces and restructure. But analysts say that Japan's best component makers, meanwhile, already are at fighting weight. Many have remained niche players in obscure but extremely lucrative areas of electronics.

EDWIN MERNER, PRESIDENT, ATLANTIS INVESTMENT RESEARCH CORPORATION: These companies are all very focused. They're not trying to go into a whole lot of different products. They're limiting their area and trying to concentrate on that area and also most of them have been very, very careful on cost controls. So they're lean, very lean companies. They're not overstaffed. They don't waste a lot of money. I mean, as an example, Fanuc, which is one of these type of companies, actually was taking back the boxes, the cardboard boxes. After delivering equipment, they would collect the boxes and take them back and reuse them. So that's an example of watching your costs very, very carefully.

CRAFT: Shares of smaller electronics companies have been popular with foreign investors, though foreign brokers have declared the components sector overvalued now. With their intense focus on profits, cash flow and slim work forces, niche electronics companies are showing the rest of Japan how to compete in a global marketplace. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.

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.



12/22/00: Market Monitor: Thomas Herzfeld, Pres., Thomas J. Herzfeld Advisors, Inc.

PAUL KANGAS: My guest market monitor this week is Thomas Herzfeld, President of Thomas J. Herzfeld Advisors, a Miami-based firm which specializes in closed end funds. And welcome back. Great to see you again, Tom.

THOMAS HERZFELD, PRESIDENT, THOMAS HERZFELD ADVISORS INC.: Thank you, Paul. Happy holidays.

KANGAS: And the same to you. Your request has always been that if we want you on the program, always have you on in the month of December. Why is that?

HERZFELD: Because Santa brings bargains to us as Christmas presents every year.

KANGAS: In the form of closed end funds?

HERZFELD: Closed end funds selling at very wide discounts to their net asset value.

KANGAS: Well, for our viewers who may not be familiar with closed end funds, a brief description.

HERZFELD: Closed end funds are just like mutual funds except they trade on the stock exchange like ordinary stocks. Their share price, however, is based on supply and demand in the open market.

KANGAS: In other words, they don't continue to issue new shares all the time like regular mutual funds?

HERZFELD: No, they have a closed capitalization.

KANGAS: Right. And their business is owning the stocks of other companies, actually, isn't it?

HERZFELD: Yes, they're continually managed portfolios just like mutual funds.

KANGAS: Well, why the big bargains in December?

HERZFELD: Every year as investors take losses to establish for tax purposes, they push the discounts of these funds to very wide levels. And then in January closed end funds benefit from a January effect.

KANGAS: Right.

HERZFELD: So they're very depressed in December and they snap back in January.

KANGAS: Well, now, last December, a year ago today practically, I think it was one day off, December 23rd, actually, you said -- of course, the Internet stocks were really hot then -- and you said buy LCM Internet Growth Fund (FND), which is full of Internet stocks. It was 12, it went to 15. I understand you sold it there.

HERZFELD: Oh, we sold it in January, of course.

KANGAS: Right. And of course now it's down to $4.62 net asset value.

HERZFELD: That's right.

KANGAS: What do you do with that, buy it back now?

HERZFELD: We happen to be buying that and there actually is a better Internet fund that is very interesting.

KANGAS: OK.

HERZFELD: The Internet stocks, of course, crashed and burned, and you can buy them at less than the value of their ashes right now. There's one fund which has $18.49 in net asset value, consisting of $7 in stocks, $11 in cash and it's trading for $10.

KANGAS: That's almost hard to believe. What is the fund?

HERZFELD: MEVC Draper Jurvetson Fund. The symbol is Mary-Victor-Charlie, M-V-C.

KANGAS: Where? On the big board?

HERZFELD: Yes.

KANGAS: On the big board, yeah. Now, last year also at this time you said, a good time to buy bond funds, closed end bond funds, is now. And they've turned out to be rather well. You liked MFS Charter. It was $8, now it's $8.50, but it had been paying, what, 10 or 11 percent all year long?

HERZFELD: Yes. Well, of course, the discounts narrowed on those and we traded out of them.

KANGAS: Right.

HERZFELD: Right now the -- well, of course, last year the bond market was killed, so the best bargains were in bond funds. Right now I think it's the Internet closed end funds, a few of the foreign equity funds. One municipal closed end fund is very cheap.

KANGAS: Which is that?

HERZFELD: Van Kampen Municipal Trust, VKQ, is very cheap.

KANGAS: On the big board also.

HERZFELD: It's at a 6 1/2 percent tax free yield, a 17 percent discount to net asset value.

KANGAS: In other words, if they sold all of their assets, it would be 15 or 16 percent, you say, or 17 percent higher?

HERZFELD: It's trading 17 percent below its net asset value.

KANGAS: OK, any other suggestions?

HERZFELD: Well, in the foreign equity funds we like Latin America Equity Fund (LAQ), and Emerging Markets Telecommunications Fund (ETF), both trading at 26 percent discount to their net asset value and I think there'll be a good rebound in those issues in the beginning of the year.

KANGAS: How come no one picks up on these things like you do? I mean when they see something selling at a 26 percent discount, you'd think everyone would be onto it.

HERZFELD: You know, I've been, for 30 years I've been asking that and I just don't know the answer.

KANGAS: And you really are acknowledged as the world expert on closed end mutual funds.

HERZFELD: That's very kind.

KANGAS: And there you are.

HERZFELD: Thank you.

KANGAS: And it's a pleasure to have you with us. But any other suggestions here while we're talking about so called bargains?

HERZFELD: Well, I think closed end funds should be viewed really as trading vehicles and, you know, the total return in buying funds, catching dividends, buying them when the discounts are wide, selling them when the discounts --

KANGAS: No long-term gains for you? Just in and out?

HERZFELD: No, and actually we had a very good year with our strategy.

KANGAS: How did you do?

HERZFELD: Well, our equity managed accounts were up 40 percent this year and our bond funds were up about 24 percent.

KANGAS: We'll keep an eye on these closed end funds you recommended. Thanks for being with us. See you next December.

HERZFELD: Happy holidays, thank you.

KANGAS: My guest, Thomas Herzfeld, President of Thomas J. Herzfeld Advisors.

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.


12/22/2000: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened nicely higher in an extension of yesterday's upturn as an increasing number of investors became convinced the recent washout, especially in the technology sector, has run its course. Furthering that belief has been the fact that despite more earnings warnings, many stocks have stopped falling in reaction, and have even moved higher, suggesting a bottom has been put in place. Bolstered by that growing view, the Dow Industrial Average moved to an 80-point gain by 10:30 this morning, and the NASDAQ Index jumped 128 points. Both of those major averages advanced into triple digits late in the morning, but then buyers backed off a bit during mid-session, only to come on strong again by 3 p.m. when the Dow posted a 106-point gain, and the NASDAQ Index was up 119.

In the final hour, the traditional Santa Claus rally was not to be denied, as the Dow Jones Industrial Average surged to a closing gain of 148.27 points, or 1.4 percent putting it at 10,635.56. This week, the Dow fell twice, rose three times, for a net overall gain of 200.60 points, that's 1.9 percent. The NASDAQ Composite today soared 176.90 points ending at 2517.02. But for the week, this Index rose twice, fell three times and actually had a net overall loss of 136 1/4 points, or 5.1 percent on the down side.

Big board volume today just barely over a billion shares, well down from yesterday. No contest between up and down volume. Almost four times as much of the up variety.

The Dow Transport Index up 60 1/10 points.

The Utilities did well, rising 7.27 on the Index.

And the Closing Tick just modestly bullish at +332.

Standard & Poor's 500 up just over 31 points.

A 15 2/3-point rise in the S&P 100.

And the MidCap 400 gained exactly 18 points.

And the Bridge Futures Price Index fell .36.

New York Stock Exchange Composite up a little over 10 1/4 points.

Nearly an 11-point rise in the Value Line.

Russell2000 Small Cap Index gained just about 16 points.

And the broadly-based Wilshire 5000 had a very good day, rising 346 points, or 3 percent.

The bond market edged slightly higher today amid reports of mixed economic news, including a solid 2.3 percent rise in November durable goods orders, along with a 0.4 percent increase in personal income. Offsetting that hint of economic strength was the University of Michigan's latest consumer sentiment index which fell to its lowest level in two years.

At today's early 2:00 p.m. close then, tax-free and corporate issues were little changed.

But the Treasury market ended modestly higher.

5-year notes edging up 2/32.

As did the 10-year notes, bringing the yield down to 5.03 percent.

30-year bond up 6/32.

And the Lehman Brothers Long-Term Treasury Bond Index up just over 7 1/2 points.

Wall Street's bulls were singing, "here comes Santa Claus, here comes Santa Claus" today. A pretty decent rally, up nearly 150 points on the Dow, 1.4 percent there. And the broader market certainly participated. For every 20 stocks up, only nine lower and 210 new yearly highs, only 91 new lows.

Lucent Technologies (LU) topped the active list on 23.1 million shares, down another $0.56. Yesterday's stock down sharply after the company forecast a first quarter loss in the range of $0.25 to $0.30 a share. Pretty tough to recover from that kind of news.

Compaq Computer (CPQ), however, in a high tech rally, up $1.29.

AT& T (T) moved up $0.75.

Nortel Networks (NT) up $1.19.

And EMC (EMC) had an extremely good day, rising $9, leading that high tech rally on the big board.

Pfizer (PFE) was up $1.75 on reports it's in advanced talks with a German firm to co-market a new lung disease treatment.

America Online (AOL) was up $0.62.

AT&T Liberty Media (LMGA) gained $1.50.

And Corning (GLW) on that high tech rally gained $1.75.

General Electric (GE) gained $1 exactly.

ALCOA (AA) one of the better gainers of the old stalwart list in the Dow Industrial Average, rising $3.06.

Ethan Allen (ETH) up $1.38. Now, here's a good example of a company that came out with bad news and the stock rallied today, like I talked about earlier. Ethan Allen sees lower than expected second quarter earnings of $0.56 to $0.59 and sales up only four to six percent, the stock higher.

IBM (IBM) was the best point gainer in the Dow Industrial Average today, rising $7.44.

Merck (MRK) was the biggest point loser in the Dow, off $2. No specific news. But Merck has been fairly strong recently, a little profit taking, apparently.

Scientific Atlanta (SFA) dropped $3.06. CIBC World Markets brokerage cut earnings estimates on Scientific Atlanta.

Tiffany & Company (TIF) up $2.88, a rather sterling performance. Goldman Sachs added the stock to its "recommended" list.

Delco Remy (RMY), a maker of auto parts like starters and things, up $2.81, the best percentage gain of the day on the big board. The company has received an $8 a share cash buyout bid from a unit of Citigroup (C).

And Chromcraft Revington (CRC) up $3.25. Another unit of Citigroup is bidding $10.30 a share cash to take this company private.

Litton Industries (LIT) one of the stars of the day, up $15.31. The company has agreed to be acquired by Northrop Grumman (NOC) for $80 a share.

And Northrop Grumman (NOC) fell $7.81 on that news. It's going to have to come up with $5.1 billion to acquire Litton.

Crown Pacific Partners (CRO), this is a lumber firm, down $5.19. The company cut its fourth quarter outlook. It says its earnings will be significantly below the $0.20 per share Wall Street estimate.

And Lamson and Sessions (LMS) down $1.19. This company cut its fourth quarter earnings estimate from $0.25 to $0.35, down to $0.17 to $0.20, and it sees the softness in market conditions extending into the first quarter of the new year.

NASDAQ trading, a gain of nearly 177 points or 7.6 percent on the Index today, but as you heard earlier, it was down 5.1 percent on the week. Trading volume well down from yesterday, but 26 stocks higher for every 13 lower.

JDS Uniphase (JDSU) topped the active list, down $2.13.

Microsoft (MSFT) adding $3 a share.

Juniper Networks (JNPR) had a big day, up over $29.

Cisco Systems (CSCO) up $2.63.

SDL (SDLI) down $11 even.

Sun Microsystems (SUNW) gained nearly $5 a share.

CIENA (CIEN) up $17.13.

Intel (INTC) fell $0.19.

And QUALCOMM (QCOM) up $9.19.

Brocade Communications (BRCD) a gain of $16.63.