SUSIE GHARIB: Wall Street rallied today, ending one of its roughest quarters ever on an up note. The Dow surged 166 points. And for this week, it was up 611 points, a gain of 7.5 percent. The NASDAQ Index rose 38 points today. Stocks rallied despite mixed economic news today. The Commerce Department said gross domestic product grew at a revised 0.3 percent in the second quarter. That was a little bit better than expected. But the outlook is still grim. The University of Michigan's consumer sentiment Index fell to 81.1 in September, down from 91.5 in August. But if you just look at the poll results after September 11, the numbers fell even more, down to 72.2. Economists say it's going to take time to turn things around.

NEIL SOSS, CHIEF ECONOMIST, CREDIT SUISSE FIRST BOSTON: I would think you are dealing with at least a stretch of three months. So it's going to be the turn of the year I would think when you'll see consumer confidence starting to rebound, starting to get the benefit of the fiscal efforts, starting to get the benefit of the lower interest rates or you get the benefit of lower gasoline prices. All of that making them feel more confident in their economic future.

KANGAS: And the economic future of New York City is also in question. Its $500 billion economy has been hit particularly hard. As Erika Miller reports, a turnaround is not expected anytime soon.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Soho is one of New York City's trendiest neighborhoods, located about two miles from ground zero. It's usually filled with crowds drawn to its boutiques and restaurants. But since the September 11th attack, business has dried up. John McDonald owns the chic Canteen restaurant.

JOHN McDONALD, OWNER, CANTEEN: We've scaled back. We've furloughed workers a little bit. We've staggered management shifts and so forth and we try to maintain it as much as we can based on the volume.

MILLER: Hotels are also suffering. The Holiday Inn Wall Street had full occupancy before the attack. Now it's just 40 percent.

FRANK NICHOLAS, GENERAL MANAGER, HOLIDAY INN WALL STREET: The business traveler is starting to slowly come back to us. That's why we're running 40 or 50 percent. The leisure traveler is going to be the challenge going forward in the hotel business.

MILLER: From restaurants to hotels, to retailers, the services industry is reeling as tourists and many locals stay home. That's taking a big toll on New York's economy because the sector employs about 40 percent of the city's workforce. Also hit hard: financial services firms which make up about 5 percent of the city's jobs - but an estimated 19 percent of its salary base.

MARK ZARDI, CHIEF ECONOMIST, ECONOMY.COM: One of the key things to realize here is that the financial services industry in New York drives a lot of other industries-the legal industry, the accounting industry, even advertising in the newspapers.

MILLER: More than 20 million square feet of office space was destroyed; about 5 percent of Manhattan's total. But even businesses that didn't have structural damage have been forced out, at least temporarily. Some have moved across the river to New Jersey and won't return. All told, economic costs are likely to total more than $40 billion. More than $15 billion for medical coverage, lost wages and business income, $14 billion for loss of buildings, equipment and rental income and $11 billion in reduced tax receipts and lower spending. Economists predict some of those losses will be offset by insurance companies, government and private aid. But even with the relief, some experts predict New York's economy will contract 1 percent next year. Before the attack, they had been expecting a slight improvement.

ZARDI: The problems that New York City's economy faces simply by the fact that they got hit by this is being magnified by the fact that the entire national and global economy is contracting. So they're being hammered in many many different ways. So it's going to take at least the better part of a year, two or three before the city actually is able to get back on its feet.

MILLER: It must be said that the staggering impact of the terrorist attacks on New York's economy goes well beyond the dollar value of business lost. For many New Yorkers, the biggest costs are the things that cannot be regained: the more than 6,000 friends, family and co-workers who perished in the attack. Erika Miller, "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.

09/28/01: A New Judge Orders New Talks For Microsoft

SUSIE GHARIB: The new judge in the Microsoft (MSFT) anti-trust trial wants a quick settlement of the case. That's what Judge Colleen Kollar-Kotelly told lawyers for Microsoft and the Justice Department. She ordered the two sides to meet around the clock seven days a week to work out a remedy for Microsoft's anti-trust violations. If they don't settle by October 12, the judge will appoint a mediator. And given the four year history of this case, analysts don't think a deal is now likely.

BILL WHYMAN, PRESIDENT, PRECURSOR GROUP: Microsoft's had a lot of chances to settle this and the bottom line is they have not been able to agree on terms that both sides can accept. The parties remain very far apart.

GHARIB: And if they stay apart, the judge has set March 11, 2002 for the beginning of a formal remedy proceeding. In that case, both sides would formalize penalty proposals in December.

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.

09/28/01: The Terrorist Attack Has Hollywood Going Through Changes

SUSIE GHARIB: As we've seen, the fallout from the September 11 attacks is hitting all areas of American life, including our entertainment. The industry is already suffering from a slowdown before the tragedy. And now as Pat Anson reports from Hollywood, the concern is about content.

PAT ANSON, NIGHTLY BUSINESS REPORT CORRESPONDENT: Security at many Hollywood studios today is even tighter than it is at some airports. Every vehicle, every package is being searched in the wake of a reported threat to the studios that was uncovered by the FBI. The heightened security has further chilled an industry that was already rattled by a shaky economy.

PAUL DERGARABEDIAN, PRESIDENT, EXHIBITOR RELATIONS: I think the studios right now are really a little bit jittery. Production levels are way down from a year ago. Every major studio has their production at much lower levels. I think this, again, reflects uncertainty about what is going to happen in the future.

ANSON: The uncertainty is also effecting the box office. The release dates of 45 movies have been postponed to avoid offending audiences with violent scenes or story lines about terrorism.

UNIDENTIFIED ACTOR: He is a man consumed by hate.

ANSON: One film, Arnold Schwarzenegger's "Collateral Damage," has postponed indefinitely because it includes a terrorist explosion in a high rise. In times of trouble like a war or recession, Americans looking for entertainment diversions and movie attendance goes up. This time, however, Hollywood isn't sure what to expect or what kind of entertainment to offer.

JACK KYSER, L.A. COUNTY ECONOMIC DEVELOPMENT: They don't know what they need to produce. There is a huge debate going on in Hollywood about what type of content is going to be appropriate. The other thing is people forget the studios are generally all parts of major conglomerates and they're feeling the pain from the advertising revenue slowdown. And so you have to say where do we go from here?

ANSON: Economist Jack Kyser says the studios may have to regear and begin producing less violent, more family oriented entertainment.

UNIDENTIFIED DIRECTOR: Quiet on the set, please. Quiet.

ANSON: They could also produce movies closer to home. Hollywood has been losing money to so-called run away productions, movies shot in cheaper, foreign locations. That trend could be reversed as actors and production crews balk at going overseas.

KYSER: People, I think, are very nervous about right now getting on a airplane and so some of the more exotics locations like Morocco, Africa, I think people would stay away from that.

ANSON: Despite a gloomy economy, 2001 has been one of the best years ever for the box office, with ticket sales up about 10 percent. Hollywood will be watching the rest of the year very closely to see if a boom suddenly goes bust. Pat Anson, NIGHTLY BUSINESS REPORT, Los Angeles.

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.

09/28/01: Market Monitor-Scott Marcouiller, Vice President and Market Analyst for A.G. Edwards

PAUL KANGAS: Now that this year's third quarter has ended, it's time to review what the major averages did and check out which stocks were the big winners and losers over the last three months. Joining us now to run through the numbers and the reasons behind them is Scott Marcouiller, Vice President and Market Analyst for A.G. Edwards in St. Louis. Welcome back, Scott.

SCOTT MARCOUILLER, VICE PRESIDENT & MARKET ANALYST, AG EDWARDS: Thank you, Paul. Glad to be back.

KANGAS: A lot of those bulls on Wall Street are saying the best part about the third quarter was the fact that it's over and I'm sure you'll agree.

MARCOUILLER: Absolutely. It did not make for pretty readings.

KANGAS: Let's have a look at some of the reading right now. My goodness.

MARCOUILLER: The S&P 500 and the Dow put up their worst quarter since the fourth quarter of 1987 and the NASDAQ 100 decline ranked right up near the top of its all time record negative performance for a quarter.

KANGAS: OK, let's go into the Dow big gainers, led by SBC Communications (SBC).

MARCOUILLER: Well, it was a place to hide in rough economic times. You and me don't give up our telephones.

KANGAS: Yes.

MARCOUILLER: And analysts made several comments about their stable revenue and cash flow and their ready access to capital.

KANGAS: The same thing with AT&T (T)?

MARCOUILLER: Well, it was a little different story. Up until last week it was flat. It had this entire rally this week and it's viewed as a defensive area.

KANGAS: And so is Procter & Gamble (PG), I assume, in your opinion?

MARCOUILLER: Yes. And the company has made some very important steps in revamping the company and it's paid off in helping the company through these times.

KANGAS: Right. Let's look at the Dow's three big losers, led by Hewlett Packard (HWP), down 43.7 percent.

MARCOUILLER: The whole story here is the market did not like the idea of a combination of Hewlett and Compaq (CPQ). It looked like we were creating one large company with execution problems and weak key product areas.

KANGAS: Right. And Boeing (BA) didn't fly too high.

MARCOUILLER: No, they were not. The sharp drop in business travelers after the 9/11 attacks and revisions down in estimates and the reductions in orders and deliveries. It went right from there.

KANGAS: Of course, United Tech (UTX) makes a lot of engines. I guess that was one of the reasons why it was down.

MARCOUILLER: Exactly. It got caught up in that same picture.

KANGAS: OK, let's look at the Standard & Poor's 500. We see two good gainers.

MARCOUILLER: The first one is Auto Zone, improved industry trends, a new strategic plan led to good third quarter earnings and at the same time the company projected better than expected earnings for the fourth quarter.

KANGAS: And PG&E (PCG), that's a power producer, I guess.

MARCOUILLER: Right. The company has had good growth. Investors believe that the worst of the California power crisis is over and management reaffirmed guidance for earnings going forward.

KANGAS: OK, the two big losers on the S&P 500 led by US Airways (U). I guess we know the story there.

MARCOUILLER: Well, and it had started before 9/11. It was their failed merger with UAL.

KANGAS: And Global Crossing (GX) down 79 percent.

MARCOUILLER: Right. Early in the quarter they slashed their growth outlook. They made job cuts. There were circulation, poor quality revenues, a cash strain and possibly a potential for bankruptcy.

KANGAS: Let's look at the NASDAQ 100. Two big gainers, WorldCom (WCOM) and Immunex (IMNX).

MARCOUILLER: Right. WorldCom, the shares steadily slid throughout the quarter until early this week and now it's being cited as a prime takeover candidate.

KANGAS: And, you know, is it true there were only thee gainers in the entire NASDAQ 100 Index?

MARCOUILLER: Yes, it is, WorldCom, Immunex and Biogen (BGEN).

KANGAS: Oh my goodness. And the down side, Excite@home (ph) led the list.

MARCOUILLER: Led the list. Internet service providers had a lot of obstacles in its path. It's facing a severe cash drain.

KANGAS: And McCloud.

MARCOUILLER: Much the same thing. Sharp changes to forward earnings and there has been a need for a cash infusion.

KANGAS: OK, very interesting, Scott. Nice review there. And what is A.G. Edwards' current view on the market? How are you positioning your clients?

MARCOUILLER: We're in uncharted waters. We all know what we have been through but history has told us that these disasters have proven to be good investment opportunities. We saw the big downdraft the first week the market was open, stabilization this week. We think it will be a choppy road book back. There'll be disappointments along the way. We see an upward bias but the Fed, Congress is stepping in to do everything they can.

KANGAS: OK. All right, looking on the bright side. Thank you very much, Scott.

MARCOUILLER: Thank you, Paul.

KANGAS: My guest, Scott Marcouiller, Vice President and Market Analyst, A.G. Edwards.

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.

09/28/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened moderately higher today with the help of buyers who were encouraged by yesterday's come from behind rally which lifted the Dow Industrial Average to a 114-point closing gain. By 10:00 this morning, The Dow was up 42 points. The NASDAQ Index posted a 15-point gain. The market continued to rise steadily for the rest of the morning as bullish enthusiasm was fueled by those reports on GDP and consumer sentiment. As noon time approached, then, the Industrial Average jumped to a 145-point gain and the NASDAQ Index was up 34 points. The market not only held its own but added to its gains in afternoon trading thanks to end of quarter window dressing purchases by institutional investors. The Dow Industrial Average went onto to close with a gain of 166.14 or 1.9 percent putting it at 8847.56. The Dow rose in four of this week's five sessions for an overall advance of 611 3/4 points exactly. That's 7.4 percent. The NASDAQ today climbed 38.09 or 2.6 percent ending at 1498.80. And this week, the Composite Index fell twice, rose three times for a net overall gain of 75.61 points or about 5.3 percent.

Big board volume moved higher on the rally. That was encouraging, 1.65 billion shares traded and about five times as much up volume as down volume. That was impressive.

The Dow Transport Index up 125.63.

Utilities had a good day, up 7 3/4.

And the Closing Tick extremely bullish at +1098.

Standard & Poor's 500 up 22 1/3 points.

A gain of 11.14 in the 100.

The MidCap 400 up 10.61.

Bridge Futures Price Index down .69.

An 11 1/2 point rise in the New York Composite Index.

Value Line rising 8 1/3 points.

Russell2000 Small Cap up almost 12 points.

And the broadly based Wilshire 5000 gained almost 213 points or 2.3 percent.

The shorter end of the bond market headed lower today, partly because of those reports on gross domestic product and consumer sentiment. They were picturing the economy a little bit stronger than expected, which in turn, could make the Federal Reserve less aggressive in easing interest rates. The solid rally in stocks also prompted investors to switch into equities out of safe-haven bonds. Tax-free and corporate issues ended with losses of 1/8 and 1/4s on average, while the Treasury market closed on a mixed note.

A loss of 9/32 in the 5-year note.

The 10-year note down 8/32.

But the long bond up 9/32.

While the Lehman Brothers Long-Term Treasury Bond Index up 2.91.

It was a lousy quarter, but it was a nice way to end it, with a very, very handsome rally, with the Dow up 166 points. Incidentally, for the month of September the Dow dropped 1102 ½ points, just over 11 percent. A lousy month, too. Advces just swamped decliners today, 25 to 7. Only 60 new highs for the year; 105 new lows.

General Electric (GE) topped the active list on 26.3 million shares, moving nicely higher, $1.25.

Qwest Communications (Q) rebounding a mere $0.20 after dropping $2.90 yesterday.

Cendant (CD) moved up $1.36. Now, Furst & Company (ph) says its third quarter earnings would come in around $0.32, a $0.01 below Street estimates. But Cendant went on to say that its 2002 earnings will be up 15 to 25 percent.

AOL Time Warner (AOL) moved up $0.75.

EMC (EMC) losing $0.14, fifth in volume.

Citigroup a $0.63 gain.

A $0.35 rise in Pfizer (PFE).

AT&T (T) up $0.60.

Nortel Networks (NT) gained $0.36.

And copmleting these fractional gains, the NASDAQ Cubes (QQQ) up $0.50.

Calpine (CPN) had a good day, rising $3.06. The company says it will meet its forecasts for 2001 earnings of $2 to $2.05 a share.

Delta Air Lines (DAL), representing a strong group there today, up nearly $2.

And Mirant (MIR) was up $2.30. First Union Brokerage issued a "buy" on that stock.

Rob Half International (RHI), the staffing company, up $1.19. Salomon Smith Barney upgraded it from "neutral" to "outperform."

Safeway (SWY), the big grocery cahin, up $1.22 Third quarter earnings up 15 percent to $0.60 a share versus $0.53 a year ago and the company sees fourth quarter earnings of $0.81, up from $0.71 a year ago.

Finally, Sony (SNE) down $3.99. The company cut its fiscal year 2002 earnings forecasts.

APW Limited (APW), which manufactures electronic products, a huge percentage gain, up $1.78. The company announced amendments to its multi-currency credit facility, giving the company a better chance to restructure and raise capital.

Core Labs (CLE) up $2.31 after the Ryan Beck Brokerage (ph) upgraded it from "buy" to "strong buy."

Carmax Circuit City (KMX) up $1.72 a share. Morgan Stanley upgraded it from "outperform" to a "strong buy."

The big percentage loser, Cordiant Communications (CDA), tumbling $2.30. The company sees 2001 revenues falling five percent, resulting in a significant cut in its profitability.

Cullen Frost Bankers (CFR) down $6.45. The company cut guidance for 2000 earnings from the range of $2 to $2.15 all the way down to $1.74 to $1.80. Prudential Securities downgraded the stock from "buy" to "sell."

And Universal (UVN) down $5.40. This is a leaf tobacco company. It sees lower than expected fiscal 2001 income. BbaT Capital downgraded it from "strong buy" to a "long-term buy."

NASDAQ trading, a gain of 38 points in the Index today. Trading volume moved up a touch from yesterday, 25 stocks higher for every 11 down.

Microsoft (MSFT) up $1.21.

And then Intel (INTC) lost $0.11