JEFF YASTINE: The last trading day of the year on Wall Street ended the way the year did overall: on the downside. The Dow slowed almost 82 points; the NASDAQ lost 87, as investors sold stocks to take advantage of tax losses. As Scott Gurvey reports, it's a fitting end to what has been a frustrating year.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Good-bye. So long. Farewell. Au revoir. Arrivederci. Dosvedanya. Aweibersan. The curtain has come down, the fat lady has sung. It was a lackluster and mostly negative trading day, as Wall Street said good riddance to the year 2000. Since January 3, the Dow is down 6 percent, the S&P 500 down 10 percent, and the NASDAQ Composite off 39 percent. Investors discovered that the darlings of prior years were the dogs of 2000. The S&P Computer Hardware Index fell 37 percent; the Goldman Sachs Computer Software Index, 45 percent; the Philadelphia Semiconductor Index, 18 percent; and the Dow Jones Internet Commerce Index, 78 percent. There were a few winners. The Dow Utility Average gained 45 percent; the Morgan Stanley HMO Index, 116 percent; the AMEX Biotech Index, 62 percent. If only we had known.

RICHARD MCCABE, CHIEF MARKET ANALYST, MERRILL LYNCH: As far as the markets go in 2001, I think we're going to have a better experience in the stock market than we had in 2000. I think the year is going to start with a rally, basically in the first two or three months. I think that could even lift the recently, very depressed technology stocks for at least a temporary rebound. In the spring however, I suspect that we're going to see some kind of a retest.

GURVEY: 2000 also goes down as the year the Fed's steady hand, slipped. The Central Bank had feared the Y2K computer bug would slow the economy, so it kept monetary policy loose. By the time it realized the Y2K impact was minor, the economy had overheated. The Fed then slammed on the breaks, eventually raising interest rates a full percentage point. Now consumers are scared and not spending, companies anticipate disappointing earnings, and market watchers are contemplating the "r" word.

WILLIAM DUDLEY, CHIEF U.S. ECONOMIST, GOLDMAN SACHS: In our view, the economy is definitely slowing, but it looks like a recession will be avoided. First of all, inflation's low, so the Fed has the ability to ease, and ease aggressively if necessary, to prevent that kind of outcome. And also, some of the things that are hurting the economy right now, like an inventory overhang and the higher energy prices, will probably be temporary.

GURVEY: Most economists predict a sluggish first half, but say growth rates could reach 2 to 2.5 percent by the second half, if the Fed cuts interest rates. 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.

SUSIE GHARIB: As we know, this has been a tough year for technology stocks. For next year, the market for wireless Web access is expected to do better. But as Stephanie Woods reports, lots of work still has to be done for the wireless Web to fulfill that promise.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Once touted as the second coming of the PC, expectations for the wireless Web are now coming back down to earth. Even people in the industry are toning down the hype. Bill Davidson heads up wireless strategy for software developer Aether Systems (AETH).

BILL DAVIDSON, WIRELESS STRATEGY V.P., AETHER SYSTEMS: The industry has done itself a bit of a disservice calling it the wireless Internet or wireless Web.

WOODS: Davidson says wireless devices are very different from the PC.

DAVIDSON: That it is not going to be the Internet yet without wires. It will be a view into certain information that you either want to get to on the Internet or on your corporate intranet delivered over a wireless network to a device.

WOODS: There are practical problems to the wireless Web. The bandwidth used for wireless is narrow and that's makes connections slow. There's no standard for how to bring up the Web on different devices. Aether Systems' solution is to program targeted Web pages to run on a range of hand held devices.

DAVIDSON: Just look what's in this case here, all the different screen sizes. And you want to make sure that the data appears in an appropriate way on that screen and looks right to the end user.

WOODS: Brokerage firm Charles Schwab (SCH) uses Aether technology for its pocket broker service. It lets customers call up their portfolios and trade stocks on wireless devises. Internet consulting firm Proxicom (PXCM) says that's a good example of how companies can use wireless technology to establish a closer relationship with their customers. Proxicom Chief Technology Officer Craig Miller says wireless is still developing.

CRAIG MILLER, CHIEF TECHNOLOGY OFFICER, PROXICOM: Is there a lot of experimentation? Absolutely. We haven't yet figured out exactly how to exploit this technology. The power of it is obvious, but everybody's exploring different channels.

WOODS: The money channel is still open for wireless firms. Draper Atlantic venture capitalist Jim Lynch says predictions of a billion people a year using wireless devices in the next two years, has investment money flowing into wireless Web ventures.

JIM LYNCH, MANAGING PARTNER, DRAPER ATLANTIC: The wireless space is very, what I would call noisy, because I think there's a lot of enthusiasm, a lot of excitement and not too much focus today on exactly, you know, what's going to be successful.

WOODS: With stock market in a slump, Lynch says success won't be measured in billions of dollars.

LYNCH: I think a lot of the companies that are getting funded are not billion dollar IPO potential and they will be acquired by corporate purchasers for, you know, $20 million to $50 million, but those will be significant successes.

WOODS: Analysts say while the potential for the wireless Web marketplace is huge, it still has to be realized. Stephanie Woods, 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.

12/29/00: Don't Believe The Online Entertainment Hype

JEFF YASTINE: Well, the entertainment industry is famous for its self-promotion, but no amount of hype can make up for a rocky year for its online efforts. As Pat Anson reports, with many Web sites failing, Hollywood is struggling to find an online audience.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: A year that started with a lot of hype in Hollywood about online entertainment is ending with a whimper. First, the Digital Entertainment Network closed its doors, then Pop.com, then Pseudo.com. Other Web sites are laying off staff or sinking in a sea of red ink.

STEVE CESINGER, MANAGING DIRECTOR, PIPER JAFFREY: There's many companies that have had the right idea at the wrong time that just haven't been able to prevail.

ANSON: Analyst Steve Cesinger says Hollywood is learning some painful lessons about the Internet.

CESINGER: Well, it's bandwidth, bandwidth, bandwidth. Really, when you look at what it takes to get an image on screen today and one that's moving, it takes too long for people to get what they want to see.

ANSON: The simple fact is there are not enough people online with high speed connections who are willing to pay for online entertainment. Not only are most connections slow, Hollywood has been slow to develop new content for an online audience. The industry is even more reluctant to put its old content online.

ROBERT LANDES, CO-CHAIRMAN, GUIDANCE SOLUTIONS: Until digital rights management is effective, meaning the protection of intellectual assets online, you are not going to see a success from a major studio, television, movie or otherwise, because why give away something for free that you can still charge money through an old distribution mechanism for?

ANSON: But while the networks and major studios struggle with the Internet, small independent producers are putting it to work. Bruce Branit and Jeremy Hunt use their home computers to create a three minute movie about a jet landing on a Los Angeles freeway. "405", the movie, quickly achieved cult status on the Internet. It's been downloaded for free about three million times.

JEREMY HUNT, PRODUCER, "405": We never thought it would blow up to be what it became.

ANSON: It may be a hit online, but the movie hasn't generated much income for its creators.

HUNT: We never wanted to make money at this. We wanted to leverage this into something next. So, you know, this one is free but the next one, hopefully, will cost somebody.

ANSON: Like everyone else in Hollywood, they're waiting for the day the Internet will finally pay off. 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. © 2000 Community Television Foundation of South Florida, Inc.



12/29/00: 4TH Quarter Report- Scott Marcouiller, Market Analyst & Vice Pres., A.G. Edwards & Sons

JEFF YASTINE: Most people will remember this year's fourth quarter for the stunning declines in tech stocks but there were large gains to be made, too, if you knew where to look. And joining us for a review of the fourth quarter's winners and losers is Scott Marcoullier, Market Analyst at A.G. Edwards & Sons. And Scott, let's take a look first at how the major indices fared in the quarter. The Dow was the only gainer.

SCOTT MARCOUILLER, MARKET ANALYST, A.G. EDWARDS & SONS: Right. It was a low quarter and it was basically a lousy year that one wants to quickly forget. The Dow put up its worst performance since 1981, S&P 500 worst performance since 1977 and for the NASDAQ it was just downright the worst performance.

YASTINE: Well, the biggest gainers on the Dow Jones Industrial Average, you couldn't get more old economy than these, starting with Philip Morris (MO).

MARCOUILLER: Exactly. Philip Morris investors were comfortable in the defense of stocks. They had a steady advance all year and they're showing much better earnings consistency. Then we have two cyclical stocks on here, International Paper (IP) and Caterpillar (CAT). This is kind of curious. When the market peaked in March, dollars began to flow into those stocks that had been beaten down over the prior two years and this is the reemergence of value stocks and this is classic behavior when the market begins to look out to the end of Fed tightening to eventual easing ahead.

YASTINE: Now, if we turn to the biggest losers on the Dow, you had AT&T (T) leading the list followed by two tech stocks. You can see where the money was leaving versus where it was going with the cyclicals.

MARCOUILLER: Exactly. AT&T had all kinds of problems with earnings or restructuring or slashing in their dividend and a heavy debt burden. Hewlett-Packard (HWP) dropped a bomb with their fourth quarter earnings report and Microsoft (MSFT) had their legal woes along with warnings of earnings and revenue shortfalls themselves.

YASTINE: Let's move on to the gainers in the S&P 500 for the quarter. Again, defensive all the way, a health company and a food company.

MARCOUILLER: Exactly. The market went defensive and HEALTHSOUTH (HRC) had very good earnings. Archer-Daniels-Midland (ADM), kind of a surprise to find this on the list, but they have been a beneficiary of the energy crunch. They have an alternative fuel, which is ethanol.

YASTINE: Now, for the S&P quarterly losers, no surprises here, Xerox (XRX) being one of the bigger ones as well.

MARCOUILLER: Right. First on Sapient (SAPE), that was just a victim of guilt by association and the Internet. With Xerox, they surprised with a third quarter loss then warned about the fourth quarter and they also exhausted the last of their $7 billion credit line.

YASTINE: Now, there were some NASDAQ stocks that actually did make NASDAQ size gains in the past three months but only one was a tech stock, MicroTouch Systems (MTSI).

MARCOUILLER: Yeah, they were both takeover stories, MicroTouch being bought out for $21 in cash and Ag-Chem Equipment (AGCH) is being bought out for cash and stock valued at about $26.

YASTINE: Although many stocks dropped on the NASDAQ during the quarter, these next ones were the worse, led by NaviSite (NAVI) there.

MARCOUILLER: Yeah, and I would note this stock was at $329 in March, a Web hosting company, and it was really just a victim of concern about growth. And OmniVision Technology (OVTI), a specialty semiconductor chip maker, it was hit hard in the selling in November in the technology stocks.

YASTINE: Well, thank goodness, you know, we've got the full year out of the way. We can notch off all of our gains and all of our losses. But what do you think, Scott, are the key issues here for the early part of 2001 as we look forward?

MARCOUILLER: Well, all eyes are going to be on Alan Greenspan, how quickly and to what magnitude will the Fed act and how quickly will we get over this despair in the market and how soon will investors be willing to look to the better times ahead.

YASTINE: All right, Scott, we appreciate very much your time on this show. Thank you. Our guest, Scott Marcouiller, Market Analyst at A.G. Edwards & Sons.

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.

12/29/2000: Paul Kangas' Wall Street Wrap Up

SUSIE GHARIB: Well, investors had been hoping for a rally to cap off what has been a tough year, but they didn't get that champagne rally. Stocks kicked off trading on this last market day of 2000 with a sluggish open. There was mild buying interest in the blue chips, but the NASDAQ opened in the red. The trend continued throughout the morning: the NASDAQ was pulled down by selling in computer chip and Internet stocks, and the Dow hovered near breakeven as investors were hesitant to make any fresh commitments, holding off until the new year. By noon, both the Dow and the NASDAQ were trading in the minus column, but the losses were not major. During the lunch hour, there was some buying in bank and brokerage stocks, but selling in Microsoft (MSFT), Intel (INTC), ALCOA (AA) and AT&T (T) pulled the Dow lower. In afternoon trading, the Dow turned positive again, but tech weakness still plagues the NASDAQ, as it has all year long. Then in the last hour, both Indexes turned negative, flirting with a triple-digit losses. Market watchers said that last-minute selling by investors to lock in tax losses jeopardized Wall Street's chance to close out a sobering year with a winning streak. By the closing bell, the Dow was down 82 points to 10,787. That's 700 points lower than where it started the year. For the week, blue chips rose three times, fell once, for a net overall gain of 151 points, or 1.4 percent. The NASDAQ ended the year with a 3 percent loss, down 87 points today to 2470. For the year, it lost 39 percent, its worst performance in history. As for this shortened holiday week, the Composite Index rose twice and fell twice, for a net overall loss of 46 points.

Big board volume today: one billion shares. Up a bit from yesterday.

The Transports rose 55 points, or 2 percent.

But Utilities slipped 2 1/4.

And the Closing Tick, +186. So which is mildly bullish.

In the broader market, the S&P Indexes fell on average about one percent or more.

As for the CRB Index, it rose 1.37.

The NYSE Composite down three points today.

The Value Line lost four.

The Russell2000 fell 10 1/2.

And the Wilshire down almost 150 points.

In the bond market, Treasuries rose in an abbreviated pre-holiday session. Traders shrugged off today's economic report from Chicago Purchasing Managers. The Index showed that regional factory activity picked up slightly. The report didn't change expectations that the Federal Reserve will cut rates in January. Looking at the closing numbers for Treasuries.

The 5-year rose 6/32.

The Benchmark 10-year added 2/32.

The 30-year gained 8/32.

But the Lehman Brothers Long Bond Index fell just over 2 1/2 points.

An unhappy ending for Wall Street. The Dow lost more than six percent for the year and was up more than one percent for the fourth quarter. Here's the final the Dow close for year 2000, 10,787, down 81 points today. The advance/decline was very close and there were 321 new highs versus 40 new lows.

Lucent (LU) rose $0.38 in the new year. Lucent rose $0.38 today. In the new year, investors will be looking for a new game plan from beaten down technology stocks like Lucent, which are trading at historic lows.

AT& T (T) added $0.38.

AOL (AOL) fell $0.45 on word that rivals are stepping up efforts to get access to its instant messaging service. Also, there was some disappointment that AOL and Time Warner (TWX) couldn't get government approval this year for their big merger.

Compaq (CPQ) lost $0.57.

And Nortel (NT) rose $0.44 to $32. In the fourth quarter alone, this stock has lost half its value.

Kmart (KM) edged up a 1/4.

Time Warner (TWX) dropped $1.36. As we said, time ran out for the government to approve its acquisition of AOL this year.

Conseco (CNC) rose $1.69 to more than $13. It had a strong fourth quarter and that's thanks to a recent investment by Warren Buffet.

GE (GE) was down $0.50.

And Citigroup dropped $0.19.

Among the widelies, Airborne (ABF) fell $0.19.

American Standard (ASD) gained $1.81. It continued to benefit today from the company's cost cutting plans that were announced yesterday.

Exelon (EXC) moved up $0.85. This stock was the big gainer in the utility index this year.

J.P. Morgan (JPM) dropped $7.50 and after the close it announced plans to change its name to J.P. Morgan Chase once the acquisition of Chase Manhattan Bank (CMB) is complete.

Providian Financial (PVN) advanced $4.50. It's agreed to pay $105 million to settle class action lawsuits. It'll take a fourth quarter charge of $22 million or $0.07 a share.

And Southwest Air (LUV) rose $0.13. This stock, by the way, was the biggest gainer in the Transport Index this year.

Keithley Instruments (KEI) soared over $5 after announcing it expects earnings to grow more than 25 percent next year.

And here's one stock that was cooking on Wall Street, Williams Sonoma (WSM). It rose $2. Bargain hunters snapped up the stock of this home products retailer, which plunged after a September profit warning.

America West Holdings (AWA) climbed $1.25 on a repeated "buy" recommendation from C.S. First Boston today.

Pentair (PNR) advanced $2.13, another beneficiary of bargain buying.

Information Holdings (IHI) gained $1.69, still benefiting from its forecast yesterday that fourth quarter results will be double Street estimates.

And Panavision (PVI) fell $1 to a new 52 week low.

Over on the NASDAQ, the Composite closed the year at 2000 at 2470, down 39 percent for the year and as we said, that's its worst yearly performance in history. It lost another 87 points today.

As for the most actives, Applied Micro Circuits (AMCC) lost $2.39.

Cisco (CSCO) fell $1.31.

Juniper (JNPR) dropped $12.56.

Microsoft (MSFT) lost $1.19.