SUSIE GHARIB: Post holiday blues on Wall Street today. Investors lost their Christmas spirit coming back from the long holiday weekend. The Dow edged up only 56 points and the NASDAQ slipped 23. Retailers are hoping that shoppers will be more enthusiastic. The week between Christmas and new years is an important last push for sales. Scott Gurvey canvassed the shopping scene.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Many of the stores we went to in Manhattan today were not too thrilled to have a TV camera around. Perhaps they didn't want people to see all the gifts being returned. More likely they didn't want us to show all the sale signs. The sales actually began long before Christmas day. The discounts have only gotten deeper the day after. In spite of the last minute, sale driven surge, this Christmas is clearly a disappointment for retailers. Federated Department Stores (FD) warned that December sales were up only 1 to 2 percent. J.C. Penney (JCP) said it expects to post low to mid-single digit gains, while Wal-Mart (WMT) said holiday sales were up in the mid-single digits. Last year sales gained about 6.5 percent. The most optimistic estimates this year call for growth to be less than half of that.

ROBERT BUCHANAN, RETAIL ANALYST, AG EDWARDS: The Fed raised rates, as you know, six times during the 11 months ending with May of this year. And you combine that with rising oil prices and we're getting a very, very sharp and sustained slowdown in consumer spending, that really goes back to the summer of '99. So I think it's important to call this for what it is, which is a sustained slowdown as opposed to a mere bump in the road.

GURVEY: Even online sales may prove disappointing. While a Goldman Sachs study says online sales volume more than doubled this year, retail analysts say tight margins may mean more revenue did not really produce much more in the profit column. They also warn investors to view the retail sector stocks with caution near term.

DANA TELSEY, RETAIL ANALYST, BEAR STEARNS: We think that this weakness could spill over into the first quarter, as inventory levels remain high. On the macro front, with lower interest rates coming sometime in the month of January, retail stocks are early cycle, and some of these names that are at or near their bottoms, could become interesting, interesting plays to some of the value players.

GURVEY: The final report card on holiday sales will be in on January 4. That's when most US retailers release their December same store sales results. 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.



12/26/00: California Power Problems Are Taking A Toll

SUSIE GHARIB: The California power crisis got the attention of Alan Greenspan today. The chairman of the Federal Reserve met with California Governor Gray Davis in Washington. Coming up in a few moments, I'll be talking live with the governor. But first Pat Anson takes a look at how some California businesses are shutting down because of enormous bills for power and natural gas.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Composite Structures is an aerospace company in Monrovia, California that has seen more than its share of power problems. Seventeen times since last summer, company President Brad Spahr has been forced to turn off the lights and send his employees home with half pay.

BRAD SPAHR, PRESIDENT, COMPOSITE STRUCTURES: We go through to make sure first of all that the people that are working in areas are safely out of the areas and then power down the lights and then eventually the whole plant goes black. And we can generally do it in about 15-20 minutes. We've had practice.

ANSON: Composite Structures, along with hundreds of other companies in California thought it would save money by signing up for a special utility program. In change for lower rates the company agreed to cut power consumption if electricity becomes scarce. At the time electricity was cheap and plentiful. No one imagined the situation today with energy alerts almost daily. During alerts companies in the interruptible power program have just 30 minutes to shut down. If they don't they face stiff penalties. Major companies like Boeing (BA) have paid millions of dollars in fines to keep their plants operating, but that's not an option for small manufacturers like Composite Structures.

SPAHR: It's been very frustrating certainly.

ANSON: At Castaic Brick, the problem isn't electricity, but the soaring cost of natural gas. With the company's kilns burning large amounts of gas to make bricks, Castaic's gas bill has risen to $300,000 a month. That's an enormous cost for a company that sells bricks for about $0.25 a piece. Company officials are debating whether to shut down.

ALERO PINTO, VICE PRESIDENT SALES, CASTAIC BRICK: We talk about it but we can't afford to shut down and at the same time we can't afford to run the kilns. So it's very hard.

ANSON: A growing number of companies in California face similar problems.

JACK KYSER, LA COUNTY ECONOMIC DEVELOPMENT CORP. We're hearing from people in the textile industry, apparel, food processing, that the cost of natural gas has gone up so dramatically that many of them are thinking about shutting down operations.

ANSON: Despite calls for conservation, energy consumption in California remains high and increasingly costly for the state's economy. Pat Anson, NIGHTLY BUSINESS REPORT, Los Angeles.

Nightly Business Report transcripts are available on-line post broadcast.  The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc., Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. © 2001 Community Television Foundation of South Florida, Inc.

12/26/00: One On One With CA Governor Gray Davis

SUSIE GHARIB: Joining us live now from Washington to talk more about this power crisis in California is California Governor Gray Davis and thank you so much Governor, for joining us this evening.

GOV. GRAY DAVIS (D) CALIFORNIA: You're welcome.

GHARIB: In your meeting today with Fed Chairman Alan Greenspan, did he say that he can help these power companies in California from going bankrupt?

DAVIS: Well, this is a meeting where I was seeking advice from both the chairman and the Secretary of the Treasury. They gave me more than two hours of their time. Suffice it to say, they agreed this is one of the more intractable problems they'd seen in the short term. But we will get through this with more conservation and bringing more supply online. Already we have six plants under construction since April of 1999, my first year in office which is more than the last 16 years of governors have produced in California. So we will meet our responsibility and eventually work our way through this problem.

GHARIB: But in terms of immediate concern, did Alan Greenspan or Treasury Secretary Summers indicate any willingness to intervene with creditors to, that are involved in this power crisis in California?

DAVIS: I didn't ask them to do that. This was more of a situation where I explained the problem and sought their advice and guidance. There are no magic bullets. We just have to work our way through this problem but California's economy is very resilient. And I'm going to find ways to incentive even more conservation, accelerate the development of new supply and eventually when supply and demand come back into something approaching balance, there will be genuine price competition but right now this deregulation experiment has not worked in California and we are going to have to move on several fronts to fix it.

GHARIB: Are you saying that you are going to advocate reregulation?

DAVIS: No, but I'm saying when your leg is broken and you go to the doctor, the doctor doesn't say let nature take its course. The doctor puts a cast on the leg until the leg is mended. Then he takes the cast off. So we'll have to take a number of measures to make sure we can get through this. My constituents are the people and businesses of California and I want to make sure they prosper and contribute to the national economic growth rather than are the victims of a failed experiment. But I think we can eventually work our way through this so down the road deregulation can work.

GHARIB: But for right now, is California on the verge of a recession?

DAVIS: No, our economy will outperform the nation. That is not to say that we enjoy high natural gas prices. They've increased bills by 30 or 40 percent. We don't like high gasoline. We don't like high electrical bills. But we will still outperform the nation in 2001.

GHARIB: But surely, having an unstable power supply, also these high costs, has got to be disruptive to businesses in California, especially all those high technology companies in Silicon Valley and that could have a ripple effect on the rest of the country.

DAVIS: There's no question about it. This is a serious problem. But we will manage it if everyone does their part. I need some help from the generators. They can't be charging eight or 900 percent the cost of electricity. We need more conservation than we have had before and we need to accelerate additional supply. Most of the west is an importer of power at least some part of the year. We need to have a better supply demand balance so that generators don't have the leverage they have over us today.

GHARIB: Governor, besides these conservation measures that you would like to push through, what other action are you going to take to resolve this crisis?

DAVIS: Well, the PUC I believe will take some action in January. Right now they are auditing the two major utilities to see if a price increase is warranted, a rate increase that is and if so to what extent. I will have a number of proposals to make on January 8th when I make my state of the state address but the two overarching issues are more conservation, more supply.

GHARIB: Speaking of the California public utilities commission, they are holding emergency meetings tomorrow and the day after. There's talk of them seeking a 10 percent increase in customer rates. Is that going to be enough that the people of California will get the electricity that they need?

DAVIS: Well, that's a judgment they will make. They will make that judgment based largely on-

GHARIB: But what do you think?

DAVIS: Well, it doesn't matter what I think. The PUC is the legal body that will make a determination as to what if any rate increase is appropriate and their judgment will be based on audits that started today of the two major utilities. I have said that everybody has to be part of the solution, but on the other hand, I'm not going to let these generators making eight or 900 percent, frequently gaming and marketeering the system, unduly drive California to its knees. We contribute to the national economic growth and everyone has to play their part.

GHARIB: But sir, are you fearful that if the California public utility commission comes up with this 10 percent increase, that that is not going to be enough to keep these utilities from going bankrupt, that it's going to require increases of maybe 10, 25 or 30 percent. Are you fearful of that?

DAVIS: Well, that is a judgment they have to make. But let me say this. There are all kinds of dire scenarios that people are painting. And there's no question this is a difficult challenge but we will get through it. We will get through it and still have a strong economy that contributes to national growth. Do we like the fact that the price of electricity is going up at a remarkable rate when everyone's promised it would go down? No. I inherited this problem. But we will manage it and we will manage it successfully.

GHARIB: When do you think this whole crisis going to be resolved? Obviously businesses and California residents are getting frustrated by the length this is taking to resolve it. When will it be resolved?

DAVIS: The problem is that the generators can charge anything they want today and the only people who have control of them are the Federal Energy Regulatory Commission which has refused to take any control over them. So the only way we can combat the leverage they have on market is to reduce supply to make sure that we do some of the things we could do at times other than peak times and increase demand. Those are the two principle methods.

GHARIB: But real quickly, in terms of, I mean at what point are you willing to take some proactive action whether it is to take over the power companies or the power generators. You have the authority to do that?

DAVIS: Well, I can't make electricity. I can-there are certain emergency powers I have. If I have to use them, I will, but the real threat to the generators that should cause them to think twice if deregulation fails in California, deregulation is over in America. So they have a vested interest in seeing that deregulation down the road can work without sacrificing the California economy that is now contributing disproportionately to the nation's growth.

GHARIB: We'll have to leave it there. Thank you so much Governor for talking to us and good luck to you and everybody in California.

DAVIS: Thank you.

GHARIB: We've been speaking with California Governor Gray Davis live from 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.



12/26/00: Alberto Culver's Stock Style

SUSIE GHARIB: The stock of Alberto Culver surged more than 5 percent today to a new 52-week high. Investors are taking a shine to this beauty products company as it consistently delivers record sales and profits, its ninth year in a row now. And as Diane Eastabrook reports, some analysts say that Alberto Culver is a good defensive stock in an uncertain market.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Alberto Culver has been rolling out its trademark Alberto VO5 products for nearly half a century, and this family-run firm says it is positioning itself to be around another 50 years.

HOWARD BERNICK, PRES & CEO, ALBERTO-CULVER: We're not an old economy company, and we're not a new economy company. We're a real economy company with real sales and real profits and real cash flow.

EASTABROOK: Since Bernick's father-in-law bought the company in the mid-1950's, Alberto Culver has doubled its sales and profits every five to seven years. Bernick predicts that trend will continue. Sales from its core brands are soaring. The company is introducing new line extensions, another Tresemme (ph) shampoo hits store shelves in a few months, and Alberto Culver is branching out further into the billion dollar ethnic hair-care market with last summer's acquisition of Pro-line. The company also plans to nearly double the number of its lucrative Sally (ph) beauty stores, which sell cosmetics and beauty supplies. It also wants to expand its beauty systems group-stores that sell directly to beauty professionals.

BERNICK: The basic Sally business has very good profits margins. We earn approximately 10 percent pre-tax on every dollar of sales. And this business is a low capital business and our return on assets is excellent as well, and we see the beauty systems group having the same profits margin potential.

EASTABROOK: Although a strong dollar reduced sales abroad and shaved earnings per share by $0.03 during the last fiscal year, Alberto Culver still managed to increase its earnings about 14 percent. The company's stock is near its 52-week high. Analysts say, it has been a safe haven for many investors skittish about other volatile stocks.

SALLY WALLICK, ANALYST, LEGG MASON WOOD WALKER: These are the sorts of products consumers buy year-in and year-out, whatever the economy may be doing and the VO5 line in particular, since it's value priced could even attract new customers if the economy slows and consumers are more budget conscious.

EASTABROOK: While currency fluctuations will continue to be a risk for the company, many analysts believe Alberto Culver will maintain its strong earnings momentum and will continue to be a good defensive stock for many portfolios. Diane Eastabrook "NIGHTLY BUSINESS REPORT," Melrose Park, 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. © 2001 Community Television Foundation of South Florida, Inc.


12/26/2000: Paul Kangas' Wall Street Wrap Up

JEFF YASTINE: Well, not much follow through on Friday's jump higher, but volume was pretty low coming as it did after a long holiday weekend. The blue chips began the day where they left off on Friday-higher. The Dow Jones Industrial Average etched out a sawtooth pattern in the early going, as that opening bell strength was met with renewed selling. Bonds were lower, and decliners had a narrow edge on advancing issues. By noontime, the Dow was about 20 points in negative territory. Much the same story for the tech stocks as the NASDAQ Index opened sharply higher, and once again, was met with lots of selling. That remained the pattern, as the Index stair-stepped its way lower throughout much of the afternoon. But in late trading, a slow-motion rally of sorts unfolded, as the Dow and all the indices began to creep higher. Energy issues were big movers today, as a cold snap in much of the country pushed natural gas and crude oil prices higher. Traders said there was also some selective bargain hunting going on. The Dow going on to close with a gain of 56.88 points to close at 10,692. The NASDAQ Composite slipping 23 1/2 to close at 2493 1/2. And there's a look at the volume, falling 802 million shares in a post holiday slumber. Up volume eclipsing down volume by 160 million shares.

Transports slipping 10 1/3 points. Year to date that index is down about 4 1/2 percent.

Utilities bolting 13 1/3 points higher to close at a record 416. Year to date, that Index is up about 47 percent.

And the Closing Tick slightly bearish at -189. Small pockets of strength in the broader market, each of the S&P Indices edges higher.

The Bridge CRB Index advancing about 2/3 of a point.

The New York Exchange Composite Index picking up 6 1/2.

The Value Line rising 1 1/2.

The Small Caps, you can see them gaining 3 2/3 points.

And the broadly based Wilshire 5000 gaining 72 1/4 points.

Well, a quiet day for bonds with most traders in the US and Europe off for the holidays. A pricing error on one electronic trading system triggered a round of sell orders-but much of the loss was made up when the error was discovered. In all a quiet day.

Tax-free and corporate issues falling a fraction, and the Treasuries fell across the board.

The 5-year note dropping one tick.

The 10-year note falling 8/32.

And the 30-year bond losing 13/32, the yield at 5.43 percent.

Finally, the Lehman Brothers Long Bond Index losing 4 1/3 points.

The blue chips managing to squeeze out a slight gain on the continued Santa Claus rally with the Dow advancing 56.88 points. Advancers with a mere (ph) 9 to 6 lead over declining issues, 276 new yearly lows; 106 new, rather, new highs rather, 106 new yearly lows.

Lucent Technologies (LU) slipping $0.13.

AT& T (T) falling $0.19, still reeling after the aftershocks of last week's profit warning.

Nortel Networks (NT) dropping $1.25.

Compaq Computer (CPQ) slipping $0.39. Analysts think a PC price war is imminent because of few holiday sales and bloated inventories in that sector.

And America Online (AOL) rising $0.22.

Motorola (MOT) moving up $1.25.

EMC (EMC) ended off $2.94.

General Electric (GE) gaining $0.44.

Pfizer (PFE) rising $0.31.

And Citigroup gaining $0.88.

Among the widely helds, oil and natural gas producers taking center stage thanks to the latest cold spell and growing optimism OPEC may cut oil production next month. Crude prices rising $0.46 a barrel today.

And Apache (APA) shares climbed with it to a new 52-week high.

Caterpillar (CAT) edged up $1.13. The heavy equipment maker is among the Dow standouts in the fourth quarter. It's up about 50 percent so far.

IBM (IBM) falling more than $4. The Dow big loser of the day.

Pharmacia (PHA) rising $1.19 after the FDA approved the company's Detrol bladder control treatment.

Philip Morris (MO) advancing more than $1. It's also up more than 50 percent in the fourth quarter and has more than doubled in the past 10 months.

Wal-Mart (WMT) falling $1.88. The company lowered its forecast of same store sales growth from 3 to 5 percent to 1 to 2 percent.

Demand is heating up for shares in Barrett Resources (BRR). The stock rising more than 8, participating in the sharp rally in the oil and gas sector today. Here's another one.

Louis Dreyfus Natural Gas Corp. (LD) jumping nearly 6. Natural gas prices briefly rising to contract highs today.

And here's another one, actually an energy marketing company, rather. Williams Companies (WMB) charging $4.50 higher after forecasting fourth quarter earnings will easily top estimates of 17 cents a share.

Visx (EYE) ending off more than 3. The company says the slowing economy is prompting it to increase reserves by $18 million. It also issued a fourth quarter profit warning..

AK Steel Holding (AKS) falling $0.88. A sharp drop in steel spot prices will drag fourth quarter results lower.

And Zale (ZLC) falling $0.69. The jewelry store chain said holiday same store sales will fall 4 percent. It issued a profit warning for its year end quarter.

Here's on the NASDAQ, slipping 23 ½ points and 2493. Volume falling below the average for the year, 1 ½ billion shares, 617 more issues down than up. And here's the dollar volume leaders here. Cisco Systems (CSCO) falling $0.75.

JDS Uniphase (JDSU) rising $0.94, that's despite DB Alex Brown.downgrading the stock from "strong buy" to "buy."

Juniper Networks (JNPR) falling more than 6.

Microsoft (MSFT) edged up $0.44.

And Sun Micro (SUNW) falling $1.50.

CIENA (CIEN) finished down $2.81.

SDL Inc. (SDLI) gaining 3 1/4.

And Intel (INTC) slipped a fraction today.

Broadcom (BRCM) dropped $1.69.

And WorldCom (WCOM) ended up $0.13.

Blue Martini Software (BLUE) surging 3 1/2.