SUSIE GHARIB: On Wall Street today, a volatile open gave way to a stable close. The Dow was almost unchanged, and the NASDAQ edged up seven points. While investors shrugged off encouraging comments from three Federal Reserve bank presidents, one said the economy will improve before the end of this year. Another predicted that it has a " excellent chance of avoiding a recession." But the latest report on consumer credit suggests that there could be more trouble ahead. Scott Gurvey reports.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Just what are consumers up to? It is the question of the hour for an economy that has been propped up by consumer buying for months. The Federal Reserve said today that consumer credit, a measure of credit card and non-mortgage loan debt, was virtually unchanged in July. That following a revised $1.8 billion decline in June. Most economists were predicting an increase for July. And the June decline was greater than first reported. The two numbers taken together support those who see consumers slowing their consumption. Many expect the Federal Reserve to once again lower interest rates in an attempt to counter a growing loss of consumer confidence in the economy. J.P Morgan went so far today as to predict three quarter point rate cuts, one before the next Fed meeting on October 2nd, one at that meeting, and one afterward.

CALVIN SCHWURE, ECONOMIST, JP MORGAN SECURITIES: Monetary policy typically takes a very long time to work through the economy and all of its potency, but it does have some immediate impact on confidence. What the Fed needs to do now is send a message to the markets that they are committed to bolstering economic growth as much as they can and they can do that with a few more moves in the next couple of months.

GURVEY: The Fed has already cut interest rates seven times this year, from 6 down to 3 1/2 percent. There are some signs that the Fed actions are working. The long-suffering manufacturing sector appears to be stirring. 75 percent of domestic economy is manufacturing, but consumers remain focused on the tech sector and on a barrage of news about layoffs.

TOBIAS LEVKOVICH, MARKET STRATEGIST, SALOMON SMITH BARNEY SMITH BARNEY: There is some really good news out there in terms of inventory correction, some new order entry. We saw wholesale inventories drop again in the non-tech sectors. Things are starting to turn around and gel. They're reacting to the interest rate cuts, but again, the focus isn't right there right now. We think it will probably give us another month until people really get some conviction here but nonetheless, in the near term, it's some rough sledding.

GURVEY: The consumer credit itself may be causing some rough sledding. According to a study by cardweb.com, last year on average, Americans carried a total of $8,000 in credit card debt. The average interest rate was 15 percent. Scott Gurvey, "NIGHTLY BUSINESS REPORT."

Copyright (c) 2001 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

SUSIE GHARIB: The year-long slide on Wall Street has confused many investors. When do you know when it's a good time to buy or sell? Well, one long-time market watcher says that stocks still aren't cheap enough to draw in big money. Jeff Yastine talks with Paul Desmond, editor of the 63-year old "Lowry's Reports" newsletter, on what it will take for a true market bottom.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: We may all be tired of watching our stocks or mutual funds go down, but according to long time market watcher Paul Desmond, investors will have to feel worse about the stock market before a lasting bottom is put in.

PAUL DESMOND, PRESIDENT, "LOWREY'S REPORTS": : We're starting to move from complacency to concern, to maybe alarm. But they're not anywhere near the normal ending stage that we see in these kinds of markets, which is a panic stage. What you generally have to get to is the point where investors start throwing in the towel. And we really haven't seen that at all. And so we think that the market's probably headed even lower.

YASTINE: Desmond says it's not a matter of particular chart patterns or the actions of the Federal Reserve. Instead, he says watch the trading volume. In 1998, on the Dow Jones Industrial Average, he says there were a series of 90 percent downside days when 90 percent of the volume was in stocks going down. On this chart, they are marked in red. Eventually, there were several 90 percent upside days marked in green. When stocks got that cheap, mutual funds and other investors were attracted back into the market in huge numbers. Most of the major bottoms in recent decades, Desmond says, have had the same general pattern. 1990 had five huge downside days and three large up volume days over a four-month period. 1987 featured a long series of large volume up and down days before the market moved convincingly higher. 1974 had four big volume selloffs and a three 90 percent up side days that followed signal a new bull market. So far in 2001, though, Desmond says there have been no 90 percent upside days, even after the declines and subsequent bounce back in the spring. Despite that, he says, most investors have been sitting tight on their losses waiting for their stocks to come back. Perversely, he says, that's why the markets are having so much trouble bottoming out.

DESMOND: And the sellers are really not in a mood yet to give up on this market, and historically, what you find is that they generally tend to give up right at the bottom. It's right in that final 90 percent downside days where they throw in the towel and say, "OK, I don't think this thing is ever going to come back," and that's when they sell.

YASTINE: Where might that give-up point be for most investors? Well, Desmond doesn't have a downside target, except that, by his definition, there's been little panic selling in the market so far. And until there is, he says, the broader market trend will be lower. Jeff Yastine, "NIGHTLY BUSINESS REPORT," Miami.

Copyright (c) 2001 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

SUSIE GHARIB: They're easily recognizable in those distinctive brown trucks, but UPS (UPS) workers have been doing much more than just delivering the goods recently. Some have also been delivering good works. A group of United Parcel Service workers has been dispatched to do community service across America. And as Erika Miller reports, the reason might surprise you.

UNIDENTIFIED MAN: You know, look at that craftsmanship over here, huh?

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Fixing bicycles in the sweltering heat is not the challenge you'd expect these UPS managers to be tackling during the workday. But this is not just any workday. They have been dispatched by their employer to perform community service projects in New York City. For this one, workers help teenagers repair donated bicycles so they may be sold to the public. It's all part of UPS's unusual training program: build better managers by exposing them to a wide variety of people and situations.

ANDY HEPFINGER, UPS VOLUNTEER: I think it's all about dealing with people, dealing with different people, people with different backgrounds and whatever the case may be, understanding or at least getting a little bit closer to their perspective on life.

MILLER: Bike repair is just one of the day's activities. The UPS staffers also help volunteers from Meals on Wheels deliver food to the elderly. And they spend several hours teaching interviewing skills and resume writing at a job training center. They also pitch in at a day care center before calling it a night. UPS estimates it spends about $10,000 per employee for the program, for a grand total of about $500,000 a year. But the company says it's money well spent.

DON WOFFORD, COMMUNITY INTERNSHIP COORDINATOR, UPS: We feel that economic payback because when our managers return to their work areas, they are better able to communicate with their workforce, they're better able to understand the conditions that they are dealing with and better able to inspire and motivate those individuals to work.

MILLER: Fifty managers are selected each year based on performance. Most have worked at UPS for at least a decade. Declining is not an option. Some are sent to big cities, others to rural areas, usually far from home. While they're away, workers draw full pay, but contact with the office is forbidden. The internships last four weeks and are anything but cushy. For example, the New York interns live and eat at the Henry Street Settlement, a social services agency on the Lower East Side, and they often work 10 hours a day. UPS founder Jim Hasting founded the project over 30 years ago.

WOFFORD: Well, we had a problem really in 1968, a white male management group. We knew we needed to immerse our managers within the community so that they would know more about the people that we were hiring at that time.

MILLER: After the internship, the workers return to their old jobs, but with new perspectives. Andy Hepfinger is back in charge of keeping this hub in Chicago up and running. But he says he's not quite the same person he was before the internship.

HEPFINGER: Understanding challenges that others face on a day to day basis, I think, makes us a better person and a better manager. You know, everything's great living in the suburbs of Chicago. It doesn't work that way for everybody. So it definitely helps in understanding where people are coming from.

MILLER: That's why UPS has found that putting some of its workers on the front lines pays off on the bottom line. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

Copyright (c) 2001 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

SUSIE GHARIB: If you want to get out of debt, taking money from your right pants pocket and putting it in your left probably won't do the trick. But tonight's commentator says that tricks like that are happening with the funding of Social Security. Here's Alan Blinder, Partner of the Promontory Financial Group and former Vice Chair of the Federal Reserve.

ALAN BLINDER, COMMENTARY: President Bush's Social Security Commission is in a bind. Everyone knows that fixing Social Security will require a large infusion of cash. But the tax cut has given all the money away. So what to do? Unfortunately, the Bush administration has established a precedent: whenever money is short, they fudge the accounting. Some people worry that the Social Security Commission may be pressured to do the same. The Center On Budget And Policy Priorities has recently warned of three accounting gimmicks that have already been proposed, though not by members of the Commission. The first is double counting. Suppose you credit some payroll tax receipts to the Social Security trust fund but actually deposit the money in private accounts. In business, that gets you arrested. In government, Congress can make it happen by what is called directed scoring. The second trick is cleverer. If the trust fund is short, it can borrow the rest. Of course, borrowing doesn't get you out of debt, but here's the catch: Social Security accounting is done on a 75 year period, so paying back a loan more than 75 years from now won't count as an outlay. Sounds shameless, but it's legal. The third approach is dynamic scoring. The idea is to claim that privatization will produce more revenue by making the economy grow faster. If that reminds you of supply side economics and the Laghler Curve, sit should. Hopefully the Commission will reject each of these three gimmicks. But if you hear any of them being discussed, hold onto your wallet and call your Congressman. I'm Alan Blinder.

Copyright (c) 2001 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

PAUL KANGAS: Stocks on Wall Street opened lower under the pressure of carryover selling from last week's 3.5 percent decline in the Dow Industrials and 6.5 percent tumble in the NASDAQ Index. Other negatives included sell offs averaging 3 percent in Asian and European stock markets along with growing concern regarding US consumer debt that you just heard about. Fifteen minutes into the trading session, the Dow was down 105 points and NASDAQ off 16. Because the early downturn had less than impressive volume and lacked selling depth, buyers soon appeared in the belief the market was oversold and due for a rebound. As prices firmed up for the rest of the morning, bargain hunters and short covering purchases helped the Industrial Average rebound with a 53-point gain by 12:30 p.m. when the NASDAQ Index posted a 10-point advance. In afternoon trading, the NASDAQ market held steady but buyers lost their appetite for the blue chip sector and the Dow Industrial Average gave up all of its mid-day gains to close with a loss of .34, putting it at 9605.51. The NASDAQ managed to gain 7.68, ending at 1695.38.

Big board volume dropped to 1.24 billion shares, down from Friday, 1.4 billion pace and about a 6-to-5 ratio of down volume over up volume.

The Dow Transports Index down 36 2/3 points.

The Utilities off nearly 2 1/4 points.

But the Closing Tick just slightly bullish at +190.

Standard & Poor's 500 up 6 3/4 points.

A 4 2/3 point rise in the 100.

But the MidCap 400 was down nearly 3 1/2 points.

Bridge Futures Price Index down .88.

A gain of almost 2 points in the New York Composite.

Value Line lost just over 2 1/2 points.

Almost a 4 1/2 point loss in the Russell2000 Small Cap.

And the broadly based Wilshire 5000 up just about 38 points or 4/10 of a percent.

The bond market gave back most of last Friday's big gains, which were triggered by the big jump in August unemployment. The relatively stable stock market today also deprived the debt market of safe haven buying. Another negative was increasing talk about more measures to stimulate the economy, such as further tax cuts.

Tax-free and corporates ended with losses of an 1/8 to 3/8 of a point. The Treasury market was lower across the board.

5-year notes dropping 2/32.

10-year notes down 14/32.

30-year bond lost 1 full point.

And the Lehman Brothers Long-Term Treasury Bond Index off just about 9 points.

It was a volatile session, not particularly high volume, but the Dow was up well over 50 points and ended up with a 1/3 point loss. The broader market definitely lower by a 19 to 11 margin. Only 67 new yearly highs as against 207 new lows.

And there you see Qwest Communications on 20.7 million shares topping the active list. Sometimes what sounds like bad news is interpreted as good news. Apparently that's what happened today. The stock traded as high as $20.

EMC (EMC) moving up $0.62.

And then AOL Time Warner (AOL) gained $2.13. The "Wall Street Journal" reported the company has made a buyout bid for AT&T's (T) cable television unit.

General Electric (GE) down $0.31.

Compaq Computer (CPQ) fell $0.24, fifth in big board volume.

Citigroup down $0.97.

Nokia (NOK) moving up $0.48.

AT&T (T) a $0.05 loss.

And Wachovia (WB) gained $0.58. The company said it won't buy back any more of its own stock the remainder of this year, but perhaps next year it will.

Motorola (MOT) moved up $0.75.

Boeing (BA) down $1.72. The company said if its appeal of the decision to scrap the building of the A12 fighter is unsuccessful, the company could take a pre-tax charge of up to $1.4 billion.

Bristol-Myers (BMY) moved up $1.94. The FDA is giving priority review to broaden the use of the company's Plavix heart drug.

Circuit City Stores (CC) down another $1.18. Goldman Sachs cut second quarter core electronic business estimates last Friday. Circuit City reported a second quarter same store sale drop of nine percent in sales.

JC Penney (JCP) lost $1.22 today. The company is offering $500 million in seven year notes convertible into the common stock, meaning there could be some earnings dilution there.

McDonald's (MCD) fell $1.04. The first case of mad cow disease has been reported in Japan overnight.

And SAP (SAP) up or down $1.75. Morgan Stanley downgraded it from "outperform" to just "neutral" and Bear Stearns says "sell" SAP.

Louis Dreyfus Natural Gas (LD) the big gainer of the day, up $5.72. Dominion Resources (D) will acquire the company for $2.3 billion. The terms, one share of Louis Dreyfus will get $20 cash and a third of a share of Dominion. And today that would be worth about $39.50 a share.

Dominion's stock dropped $2.37, but this acquisition will increase its natural gas assets by 60 percent.

The MIIX Group (MHU) up $1.51. That used to be called the Medical Interinsurance Exchange. And this is a positive reaction, apparently, to a "New York Times" story today about how medical malpractice insurance premiums are rising at the fastest pace since the mid-'80s.

Global Power Equipment (GEG) up $1.07. The company is comfortable with Wall Street earnings estimates for the third quarter of $0.23, of $0.24 in the fourth quarter and $0.90 for the year.

Pep Boys-Manny Moe & Jack (PROBABLY) down $1.37. Auto parts distributors like this one have bee