SUSIE GHARIB: A vote of no confidence on Wall Street today. The Dow lost 160 points, and the NASDAQ fell about 50 on news that Americans are not as confident about the economy. The Conference Board's consumer confidence index fell unexpectedly to 114.3 in August. It is the second downturn in a row, bringing it to the lowest level since April's reading of 109.9. The weakening labor market is to blame. Some economists fear that the downturn in sentiment could lead to a slowdown in consumer spending, which accounts for two-thirds of all economic activity.

EDWARD JARDENI, CHIEF INVESTMENT STRATEGIST, DEUTSCHE BANK ALEX BROWN: Now where we may have some problems is in rising unemployment and rising layoffs, depressing consumer spending. That could mean that the slump that we're in right now lingers into the second half of the year. It may still not be a recession. We may still not get a recession out of it, but we certainly have a slump that's prolonged and lasting into the second half of the year.

GHARIB: Technically, the US economy is not in a recession, but new data could show that it's heading in that direction. Revised numbers for second quarter GDP, gross domestic product come out tomorrow morning. Scott Gurvey gives us a preview of what to expect.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Virtually all economists think the Commerce Department will lower its estimate of the nation's economic output in the second quarter. Its so-called "advance" estimate of the total of goods and services produced, released a month ago, showed a growth rate of 0.7 of 1 percent. The first revision is expected to be zero or even slightly negative. The root cause, most believe, is the tremendous slump in spending by business. And that is seen as an inevitable consequence of a spending bubble financed by stocks selling at extraordinary prices relative to earnings.

STEPHEN ROACH, CHIEF ECONOMIST, MORGAN STANLEY: We allowed this one to go well beyond the fundamentals that could be justified by the actual performance of the US economy. The earnings collapse that has occurred over the past year or so, the down revision of the productivity trend over the last few years draws an awful lot of the excess of that new economy hype into question.

GURVEY: With business on the sidelines, consumer spending is seen as the key to recovery. In spite of the decline in confidence, many see spending rates remaining high, spurred in part by the tax rebates now in the mail.

NEIL SOSS, CHIEF ECONOMIST, CREDIT SUISSE FIRST BOSTON: The Treasury is sending out $3.5 billion a week in tax rebates now. For perspective, retail sales receipts are only about $70 billion a week. So here we are in the height of the back-to-school period and the government is giving households 5 percent of their normal spending in the stores as a rebate.

GERSH: Investors are still expected to remain cautious, at least until they see positive signs of economic growth. This is a major change in sentiment from the recent past, when many had proclaimed the business cycle irrelevant in the Internet age.

CHARLES BLOOD, MKT. STRATEGIST, BROWN BROTHERS HARRIMAN: One of the lessons we learned is that everything is cyclical, that booms are followed by busts, and a lot of it is driven by capital availability. We just thrust immense amounts of money at telecom companies, so of course they spent it. Now we're reluctant. In another year or two, I think the capital flows will be there to help them continue to expand. But it's cyclical. It's not a one-way street in anything.

GURVEY: Further complicating matters, there is now ample evidence that the slowdown is global in nature, and only the United States is doing much to stimulate a recovery. The European central bank meets on Thursday, and many are calling on it to follow the lead of the Fed and lower European interest rates. Scott Gurvey, "NIGHTLY BUSINESS REPORT," New York.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. 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.

SUSIE GHARIB; The Food and Drug Administration is about to enter what's traditionally the busiest time of the year for new drug approvals. Now usually, that's good news for biotech and pharmaceutical manufacturers, but as Darren Gersh explains, this year some analysts say that the FDA is taking too long to clear new drugs.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Wall Street is worried the Food and Drug Administration is slowing down. Analyst Paul Heldman says the FDA has been spooked by a number of high-profile drugs it was recently forced to withdraw from the market for safety reasons.

PAUL HELDMAN, HEALTH CARE ANALYST, SCHWAB WASHINGTON RESEARCH: That had to have gotten the attention of the agency, and has to be... is probably contributing to a more conservative and in-depth look at drugs that are moving through the FDA review process.

GERSH: Through July of this year, the FDA approved 12 new drugs, down from 22 approved in the same period last year. Approvals are also taking longer on average, 15.6 months last year versus 11.6 months in 1999. As a result, analysts are pushing back their estimates of how long it will take new drugs to make it to market, putting biotech and pharmaceutical stocks under pressure. Investors are anxiously awaiting approval of drugs like Amgen's Aranesp , a long-acting version of Epogen to treat anemia; and Eli Lilly's (LLY) Xigris , a breakthrough compound to treat sepsis.

CHRIS JENNER, PORTFOLIO MANAGER, T. ROWE PRICE HEALTH SCIENCES FUND: I think many people currently are very fearful that many of those products may not get through the FDA or if they do get through the FDA, there is a substantial delay in timing.

GERSH: But drug and biotech companies may also be to blame. Analysts say some have tried to save money by skipping expensive research trials, delaying applications. Dr. Sandy Kweder is acting director of the FDA's office of new drug review. As science evolves, she says the FDA is also identifying new potential problems drug companies must address.

SANDY KWEDER, ACTING DIR., FDA NEW DRUG REVIEW OFFICE: Are we going to say, "oh, that's OK, you don't really need to evaluate it," because it wasn't part of the original arrangement when you started development? Of course, not. We are going to say, "have you looked at this under today's scientific standards well enough to say that this is safe when out there and used by people in the real world.

GERSH: Overall, Kweder insists there has been little change in the review process for new drugs.

KWEDER: The rate of approvals for those really hasn't changed very much. It runs 40 percent to 45 percent, and that has been pretty steady over the past five to 10 years.

GERSH: Industry critics also say drug makers have focused on developing so-called "me-too" drugs, products that are similar to profitable medications already on the market. As a result, the FDA has received fewer applications for fast-track approval of breakthrough drugs. In 1999, just over half the applications the FDA received were for fast-track approval of breakthrough drugs. In 2000, only a third of the applications were for breakthrough drugs. Dr. Kweder says the FDA is moving quickly to approve drugs that offer new hope. One example: the leukemia drug Gleevec was approved in a record three months.

KWEDER: Those are making it to the market very quickly once they come in to the agency.

GERSH: But analysts say the FDA is far more cautious when it comes to me-too drugs.

JEFFER: Those are examples where if there is the slightest concern about any type of safety, that's where you are likely to encounter delays on the part of the FDA.

GERSH: Investors have been encouraged lately by three recent recommendations for new drug approvals issued by FDA advisory panels, a sign the FDA is still anxious to get important new drugs into the nation's medicine cabinet. Darren Gersh, "NIGHTLY BUSINESS REPORT," Washington.

GHARIB: A sluggish market for personal computers is taking a toll on Gateway. Late today, the company said that it's cutting about 25 percent of its worldwide workforce and shutting down shop in Japan, Singapore, Malaysia, and Australia. Within the next month, Gateway might decide to pull out of Europe as well. Gateway will also take a third-quarter charge of $475 million. Paul?

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. 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.

08/28/01: Energy Crunch-"Powerful Changes Ahead"

SUSIE GHARIB: Well, you see them in the suburbs and countryside: high- power transmission wires extending off into the horizon. Those wires transmit electricity from power plants to residential industrial users. In industry jargon, it's called the grid. But experts say it's under- funded and inadequate to handle a deregulated electric power industry. As Jeff Yastine reports in the first of a three-part series called "the energy crunch, gridlock," big challenges and big changes are about to shock the industry.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's late morning near Swansea, Massachusetts. And in a muddy power line right of way, a work crew installs new wooden power poles and cross ties.

RICK SERGEL, NA GROUP DIRECTOR, NATIONAL GRID: Stay there and let your load come with you.

YASTINE: A routine job, except these power lines are still active. Each cable carries 115,000 volts of power. That's n0early a thousand times the current inside most American homes. The men use special red-colored non-conducting work tools to handle the lines. Those tools and a high degree of skill, training, and teamwork are what keep the job safe. This kind of work, called live-line, was once used for only certain kinds of projects. But New England-based National Grid (NGG), which owns a number of high-voltage lines in the area, uses it for even common maintenance work. And the reason? Well with so much demand being placed on transmission lines, shutting even one down can create a serious disruption to the network. It's an example of how some companies are trying to manage the criss-crossing networks of high-power transmission lines. It also shows the strains on the system. Since 1990, consumption of electric power has grown by 10 percent a year. More power-generating plants are being built to meet that demand, but there's been much less investment in new long-distance power lines. That's creating big bottlenecks, spots like a congested highway interchange, where there's plenty of traffic, but the road's too small to accommodate the load. And that has created an opening for companies like National Grid, which trades on the New York Stock Exchange. The firm sold its power plants and now owns and manages power transmission lines. Its mission is to squeeze more power, with a higher degree of reliability, through the existing transmission networks.

DAVID CLEMENT, CAMBRIDGE ENERGY RESEARCH ASSOCIATES: It's our only business. We focus on it, and as a consequence we know what it takes to do it well. So for example, we would put devices to measure real-time measure the temperature on a transmission line so that we can get the maximum efficiency out of that line, rather than relying on a line rating, which would be determined off the average, some sort of temperature profile.

YASTINE: Analysts say that focus on transmission efficiency is long-overdue. In the past decade, the rest of the industry changed radically. Electricity is now marketed, swapped, and sold like any other commodity, but the overall structure of the transmission networks has changed little from what's existed in decades past. The nation's grid grew in an organic fashion. Typically a utility would build as much transmission as it needed to serve its own territory, and then for reliability reasons, would interconnect to a neighboring utility. But clearly there was no intention of establishing a true national grid when the transmission system was constructed. In short, analysts say the transmission system in the US Is being asked to do things it wasn't designed to do. And it will be up to government regulators, utilities, and other industry participants to make it work. Jeff Yastine, "NIGHTLY BUSINESS REPORT," Swansea, Massachusetts.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. 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.

08/28/01: Commentary: How To Put The Economy On The Fast Track To Recovery

SUSIE GHARIB: It's a question that's been troubling experts for months: just what will it take to light a fire under the American economy? Tonight's commentator says there's no easy answer. Here's Louis Uchitelle, economics writer for the "New York Times."

LOUISE UCHITELLE, COMMENTARY: The slowdown in the American economy is now 13 months old and the upturn is still not in sight. That's troubling. The Federal Reserve's numerous interest rate cuts should be stimulating the economy by now, as rate cuts almost always have this many months into previous downturns. Gradually, in fact, the nation's forecasters are coming to realize that this downturn is different, just different enough so that no forecaster can know what will happen next. The forecasters must first determine when the bottom has been reached. By now, the lower rates should be stimulating consumer spending and home construction and they are. But the economy moves sluggishly along anyway. While consumer spending and housing pull in one direction, shrinking profits and shrinking business investment pull in the other. Until profits and capital spending show signs of rising, the economy is not likely to shake off its sluggishness. Quite the contrary, corporate America is responding to the shrinking profits by laying off workers to cut costs and by canceling plans to invest in new equipment. So what's next? One hope is that the tax rebates and tax cuts will give consumer spending a fresh lift. That lift will then restart capital spending and economic growth will be on its way up again. Or consumers will not respond, in which case the economy could float along the bottom for quite awhile. I'm Louis Uchitelle.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. 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.

PAUL KANGAS: Taking its cue from yesterday's light volume, modest downturn, the stock market opened narrowly lower today as the Dow Industrial Average drifted down 30 points by 10:00 a.m., while the NASDAQ Index posted a non-eventful 3 ½-point loss in slow trading. Moments later though, a sharp sell-off erupted in reaction to the 10:00 a.m. release of that report, showing an unexpected decline in August consumer confidence, which badly undermined the growing belief that the resilient US consumer, the lifeblood of our economy, was poised to spend us back into prosperity. A burst of selling sent the Dow to a 126-point, or 1.2 percent, loss by 12:30 p.m. The NASDAQ Index was down 35 points, or 1.8 percent. The market continued to founder for the rest of the session as buyers were as scarce as a summer snowstorm. The Dow Jones Industrial Average fell to a closing loss of 160.32 points, or 1.5 percent and now stands at 10222.03. The NASDAQ Composite Index ended with a loss of 47.43 at 1864.98.

Big board volume moved up on the sell off, 972 million shares but still not that active but a lot more down volume than up volume by about a 7 to 3 margin.

The Dow Transport Index off 3/4 of a point.

Utility Index edged up .84.

The Closing Tick practically neutral at +81.

Standard & Poor's 500 off almost 17 3/4 points.

Jut over a 10 point drop in the 100.

The MidCap 400 off 5.69.

Bridge Futures Price Index fell .43.

A loss of 7 1/10 points in the New York Composite.

A 4 1/3 point drop in the Value Line.

Russell2000 Small Cap off nearly 4 3/4 points.

And the broadly based Wilshire 5000 down 155 1/4 points or nearly so.

The bond market got a big boost from the news of that unexpected drop in consumer confidence because it cast doubts about the prospects for any near-term recovery in the economy and raised the prospects for more Fed rate cuts. Add to these factors a lot of flight-to-safety buying due to the sharp sell-off in stocks, it was no surprise to see tax free and corporates post 1/2- to 5/8-point gains, while the Treasury market rallied sharply across the board.

5-year notes up 12/32.

10-year notes up 22/32, bringing the yield down to 4.84 percent.

30-year bond up 26/32.

And the Lehman Brothers Long-Term Treasury Bond Index edged up .73.

Not too many gains on the big board today. The Dow off 116 1/3 points. For every 12 stocks higher, 18 lower. 111 new yearly highs, 51 new lows.

Lucent Technologies (LU) for the fourth consecutive trading session topped the active list today on 29.1 million shares, moving up $0.27, continuing optimism about the company's restructuring

Texas Instruments (TXN) fell $0.29.

Taiwan Semiconductor Manft (TSM ) moved up $0.63.

Goldman Sachs boosted earnings estimates a bit.

General Electric (GE) down $0.94 .

And the NASDAQ 100 Shares (QQQ) cubes or Q's as they're also called down $1.25.

Global Crossing (GX) fell $0.06.

Motorola (MOT) $0.17 drop.

Nokia (NOK) lost $0.56.

And then American International Group (AIG) rising $0.45.

Pfizer (PFE), tenth in volume, down $0.80 per share.

AT&T (T), one of only two gainers in the Dow, moving up $0.24. It was the Dow's best gainer. The other one was Philip Morris (MO) which edged up only $0.09.

Enron (ENE) up $0.40. The company's named Greg Whalley as the president and CEO and Mark Frevert as the vice chairman. This is after Jeffrey Skilling unexpectedly resigned last week.

Sony (SNE), a $0.03 gain. The company and LM Erickson (ph) are going to merge their mobile phone businesses worldwide.

SunGard Data Systems (SDS) down $0.82. Robertson Stephens Brokerage cut its $33 a share target for the stock down to $24.

Xerox (XRX) moved up $0.30. Salomon Smith Barney is still convinced the company can far exceed Wall Street's expectations for performance next year.

And XL Capital Ltd. (XL) up $1.68. This stock will replace Wachovia in the Standard & Poor's 500 Index on a date to be announced.

Extended Stay America (ESA), one of the better gainers today, rising $1.37. This stock will replace Bergen Brunswig (BBC) in the

Standard & Poor's midcap 400 Index. Bergen Brunswig of course is merging with AmeriSource (AAS).

And then Skechers USA (SKX) up $1.21. The company makes young folks footwear and possibly the stock is higher on hopes that back to school sales were strong.

Highlands Insurance Group (HIC) down $1.19, big percentage drop. The company's major lenders have eased restrictions on the company's use of leverage and that is preventing its default for the moment.

Dycom Industries (DY) down $2.91. Yesterday the company had fourth quarter earnings sharply lower, $0.32 versus $0.51 the year before. Revenues fell 18.6 percent.

Cryolife (CRY) down $5.51. Spokesman told us no news to account for that but he did also note the sharp gain the stock has had in recent weeks and said probably just profit taking. No other news.

HEICO (HEI) down $2.11. Third quarter earnings lower, $0.18 versus $0.22 last year. Revenues down 19 percent.

NASDAQ trading a loss of nearly 47 ½ points or 2 ½ percent. Volume picked up on the sell off. Thirteen stocks higher for every 22 lower.

Intel Corp. (INTC) topped the active list, down $0.64.

Followed by Microsoft Corp. (MSFT) which fell $1.57.

Cisco (CSCO) losing $092.

Sun Microsystems (SUNW) a drop of $0.94. Goldman Sachs cut 2001 earnings estimates on Sun from $0.37 down to $0.28 a share.