SUSIE GHARIB: United States bombs Afghanistan for the third day in a row but Wall Street stays calm. The Dow fell 15 points today and the NASDAQ lost 35. Now one source of anxiety for investors, Motorola's earnings. Late today, the company posted its third consecutive quarterly loss, $0.07 a share compared to a profit of $0.28 a share in the year ago period. This was in line with revised analysts estimates. And analysts say there are some positive signs.

DAVE POWERS, SENIOR TECHNOLOGY ANALYST, EDWARD JONES: The sales were a bit light on the top line, but in a difficult market like this, you got to focus on the things that you can control as a company given the weak economic environment that we're in. And from that extent, they are improving the profitability of the company. They're reducing debt and they did generate positive operating cash flow in the quarter.

GHARIB: Now the only long term guide if the company would offer in its earnings release today was a promise to quote, "flourish when economic growth returns."

PAUL KANGAS: Microsoft (MSFT) shares headed south today on news the Supreme Court will not hear an appeal of a lower court finding that the company is a monopoly. Microsoft's appeal was based solely on the conduct of the trial judge. It now heads back to a lower court. And new Judge Colleen Kollar Kotelly says there is no reason this case can't be settled. So she'll appoint a federal mediator on Friday if there's no deal reached in settlement talks between the two sides. If there's no settlement by November 2, remedy hearings will be scheduled for March 11 of next year. But some observers say Microsoft may not want to settle the case now.

ANDREW GAVIL, LAW PROFESSOR, HOWARD UNIVERSITY: It's unclear to me whether they have the incentive to impose on themselves through a negotiated settlement any kind of restrictions given that they won't face any for possibly up to another year.

KANGAS: Today's court decision was widely expected, but Microsoft's stock still fell six percent, or $3.48, to close at $54.56 a share.

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.

10/09/01: Glenn Hubbard, Chairman of the President's Council of Economic Advisers On The President's Stimulus Plan

SUSIE GHARIB: President Bush will meet with congressional leaders tomorrow morning. On the agenda: the ongoing military action in Afghanistan and the president's economic stimulus package. Glenn Hubbard, the chairman of the president's Council of Economic Advisers, gave "NIGHTLY BUSINESS REPORT's" Darren Gersh his assessment of that stimulus plan.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Mr. Hubbard, why don't we begin with the question I think everybody wants to know. What's going on with the economy right now? What's your assessment?

GLENN HUBBARD, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: The economy, I think, has been quite adversely affected by the events of September 11th. The quarter that just ended and the fourth quarter of this year particularly so. Next year the recovery, according to most private sector economists looks to be relatively vigorous starting off slowly at the beginning of the year and then accelerating later in the year. I think it's fair to say those recovery estimates from the private sector already build in some fiscal stimulus of the sort that's being debated in the Congress right now.

GERSH: Are there any bright spots specifically you see right now, pieces of data, reports that you've seen?

HUBBARD: The bright spots are really about the future. The economy before September 11th had unevenness in the slowdown. Much of the slowdown had been in the manufacturing sector, much brighter in the financial services side and in the housing sectors. I think generally now we're seeing weakness in the economy for the remainder of the year.

GERSH: You're spending hours on the phone talking to CEOs, business leaders, people like that. What are they telling you about the economy?

HUBBARD: Most business leaders are saying basically the picture of what I had indicated to you, that right now the economy is weak, is getting weaker as a result of the September 11th events but some optimism toward the middle of next year. A lot of concern though about the need for confidence building package of the sort the president teed up last Friday, something to help stimulate business investment and something to help move household confidence.

GERSH: One of the bright spots people have been talking about is oil prices and gas prices have been coming down and well maintained. And now it looks like, it appears like OPEC may be ready to cut production. Is the administration concerned about that, and might that have an economic impact?

HUBBARD: Well, certainly the administration is concerned about energy prices and the president has a very good relationship with our allies in the Middle East. In general, oil prices appear quite tame at the moment and it doesn't appear to be a problem on the horizon.

GERSH: Even if there was a cutback you think in production, a moderate cutback?

HUBBARD: Quite a large cutback frankly would be required to have a big effect at the moment. Remember, demand is quite weak, not just in the United States but around the industrialized world.

GERSH: As you're well aware, there is a debate in the financial markets going on about long-term interest rates. And they've been pretty high relative to what's happened to short-term interest rates which have come down since the attack. And the debate is, are the rates higher than they would be otherwise because there's concern about the deficit going forward and the government's fiscal posture? Is that your view? Do you think the markets are concerned about the return of deficits as far as the eye can see kind of thing?

HUBBARD: I don't think so at all. Long-term interest rates are still quite modest. And if one looks at the sort of stimulus packages the president proposed or being discussed in Congress, they just don't have a significant impact on long-term interest rates. The best study of which I'm aware would suggest that policies of the sort that are being talked about at the most could increase long-term interest rates three to five basis points which is pretty close to zero.

GERSH: In the president's stimulus package that he's put forth, what would be stimulative in it? He's talked about accelerating income tax reductions and corporate kinds of incentives to invest, expensing things like that. Where's the stimulative effect on all this?

HUBBARD: On the business side, there's a very important stimulus in the president's call for more expensing, that is for faster write-off of plant and equipment. As everyone knows, there has been a great deal of overhang in the capital goods sector. This investment incentive will help work through that overhang and help stimulate the economy. The call for eliminating the corporate AMT is also quite stimulative. The AMT actually raises taxes on companies during down, the alternative minimum tax, raises taxes on companies during a downturn. Very bad tax policy, particularly in the current environment. On the individual side, very important stimulus from the acceleration of the rate cuts that have already been enacted. One, it puts money in peoples' pockets. Second, it also improves incentives. So it's a very important piece of the stimulus package.

GERSH: Mr. Hubbard, thank you.

HUBBARD: Well, thank you.

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.

10/09/01: Tech Troubles Do Foul Things to Mutual Funds

SUSIE GHARIB: There's an endangered species on Wall Street: technology and Internet mutual funds. As tech stocks have tumbled in the past 18 months, the number of tech based mutual funds that have liquidated or merged has soared. Jeff Yastine has more on what this means to investors.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's not just dinosaurs which are extinct these days. Many more mutual funds have also been made to disappear this year, liquidated or merged out of existence by their parent fund companies. An example, the Open Fund. This Web page an epitaph of sorts, and it's all that's left. The fund's trustees closed it down in August after the fund posted a nearly 50 percent loss in the 19 months of the fund's life. It's joining a long list of other mutual funds that have been merged or liquidated out of existence, 672 so far this year. Analysts say that may yet top last year's record of 982 funds which were taken off the books by fund companies.

RUSS KINNEL, ANALYST, MORNINGSTAR: Funds are often offered up in hot areas. Those areas cool off and then many of those funds will get eliminated. Sometimes it's because they're dedicated to a sector or a part of the world that later cools off and sometimes it's that with hindsight we can see that these were really just gimmicky funds.

YASTINE: So why is that mutual fund companies want to make their poor performing mutual funds extinct? Well, for one reason, they're not just money losers for investors, they're not profitable for the fund companies, either. They're not very good for marketing as well.

KINNEL: You may want to get rid of the fund simply because it's an embarrassment. For instance, we've seen Merrill Lynch and Strong, which have brand names they want to protect, have merged away some of their funds because they don't want the embarrassment of having that fund out there with that awful record that reminds people of how they messed up.

YASTINE: Could one of your funds be a candidate for liquidation or merger? Analysts say it's possible, especially if it's a sector fund and down by 50 percent or more in the past year and a half. What should you do if your fund is scheduled for elimination? Well, here's one opinion.

HAROLD EVENSKY, FINANCIAL PLANNER, EVENSKY BROWN & KATZ: You probably should sell it. The question is if you've been consolidated into something new, look at it as a brand new fund. Would you have purchased it independent of consolidation? Just because you happen to be there is a lousy reason to stick around.

YASTINE: Something else to consider. Fund experts say any effect from the recent attacks in the U.S. would depend on the long-term market reaction. Sector funds that were already down big would still be closed but other funds might be spared as long as they're not down as much in a year or two as they are now. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.

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.

10/09/01: "America Rebuilds"-The WSJ Presses On

SUSIE GHARIB: We turn now from Wall Street to some of the people who cover the news of Wall Street. Several news organizations were forced out of their offices as a result of the September 11 terrorist attacks. Erika Miller looks at how "The Wall Street Journal" is coping as we continue our special series: America Rebuilds.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: This editorial meeting of "The Wall Street Journal" is not happening anywhere near Wall Street. Instead it is taking place in this country setting in central New Jersey, the temporary headquarters of "The Wall Street Journal" and "Barron's." Along with parent Dow Jones, the two publications were based at the World Financial Center, which was severely damaged in the World Trade Center attacks. All 900 Dow Jones employees were evacuated safely.

PAUL STEIGER, MANAGIING EDITOR, "THE WALL STREET JOURNAL": The thing that I will never forget, that I can't get out of my mind, is the first time I saw people falling and jumping from those towers. But, you know, anyway, when it became clear that we had to, we were going to have to evacuate the building, I tried to take the steps necessary to get us to be able to produce a paper down here in the Princeton area.

MILLER: The September 12 paper made it to press just an hour and a half late, despite crippled phone service and a staff that was scattered. In the days that followed, some employees worked from home. Others scrambled to create a newsroom. But not all aspects of Wall Street can be covered from central New Jersey. About 70 "Wall Street Journal" reporters and editors are working temporarily from this Dow Jones office space in Manhattan's trendy Soho district. Many here say they are happy to be back in an office setting.

TOM HERMAN, SENIOR SPECIAL WRITER, "THE WALL STREET JOURNAL": It was difficult at home, especially when you only have one home phone line. And in the apartment we're in right now, there's no phone at all. So I can't work at home at all.

MILLER: For some it has been hard getting back to business.

SCOT PALTROW, SENIOR SPECIAL WRITER, "THE WALL STREET JOURNAL": Initially, I was just a reporter. I was, went into work mode. But as the days passed and I thought about, you know, what kind of world I'm bringing my daughter into and all that and then the tremendous loss of life and what some of my colleagues had gone through, you know, it was really kind of dealing with that sadness and sense of how the world had changed and still doing my job.

MILLER: But others point out the positives that have come from being displaced.

TERI AGINS, SENIOR SPECIAL WRITER, "THE WALL STREET JOURNAL": I just think that it's added a lot. It's strengthened the bond that we already had in the newsroom at "The Journal" because a lot of people have had, they've been thrown together and had to like pull together these stories.

MILLER: The company says one of the lessons of the past few weeks is the value of enterprising employees.

STEIGER: It's the people who are important. If you have good people, you can be disrupted in where you are working, but you can still get the job done.

MILLER: So while Manhattan's financial district has been forever changed, publication of "The Wall Street Journal" continues uninterrupted, even as most of its staff work far from the famous Street which gave the paper its name. Erika Miller, NIGHTLY BUSINESS REPORT, South Brunswick, New Jersey.

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.

10/09/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Taking a cue from generally firm stock markets in Europe, Wall Street opened slightly higher today in an attempt to extend yesterday's late partial recovery, which cut the closing loss in the Dow Industrial Average to 51 points and gave the NASDAQ Index a fractional gain. The Dow rose about 15 points at the outset of trading, while the NASDAQ Index edged up only two points. That disappointing rally attempt prompted a quick sell-off which sent the Industrial Average to a 42 point loss by 10:30 this morning, while the NASDAQ Index fell to a 24 point deficit. The market remained mired in negative territory for the rest of the morning and into mid-session as investors remained wary because of all the uncertainties surrounding the US bombing attacks in Afghanistan. Another undermining factor was the anxiety about the upcoming flurry of third quarter corporate earnings reports. At 2:30 p.m. then, the Dow fell to a 41 point loss. NASDAQ down 29 points. Bargain hunting braced up the blue chips a bit for the rest of the session, but the tech sector continued to fade on weakness in Microsoft after an adverse court ruling which we'll talk about shortly. The Dow Jones Industrial Average trimmed its closing loss to 15 1/2 points exactly, putting it at 9,052.44. The NASDAQ Index closed with a loss of 35.76. That's 2.2 percent and now stands at 1570.19.

Big board volume picked up, 1.2 billion shares from yesterday's slow pace. Down volume exceeded up volume by about a 3-to-2 margin.

The Dow Transport Index off 54 1/2 points.

Utilities down 5.30.

And the Closing Tick practically neutral at -75.

Standard & Poor's 500 off 5.69.

Just over a 3 point loss in the 100.

The MidCap 400 off the smallest of fractions practically, .02.

And the Bridge Futures Price Index fell 1.61.

New York Stock Exchange Composite off just over 1/2 point.

Almost a 2 1/2 point drop in the Value Line Index.

Russell2000 Small Cap off exactly 3 1/2 points.

And the broadly based Wilshire 5000 off 48.83 or 1/2 of a percent.

The bond market moved lower across a broad front today as some traders sold out of fear the market was due for a technical correction. Also, there was little flight to safety buying support since the US military strikes against Afghanistan appeared to be going smoothly and quite effectively. The biggest negative however, was concern over a heavy supply of forthcoming Treasury debt offerings. As a result, tax free and corporate issues ended with losses of 3/8 to 1/2 point, and the Treasury market sustained even larger losses on that.

5-year notes down 10/32.

But the 10-year note down 23/32.

30-year bond fell 31/32.

Lehman Brothers Long-Term Treasury Bond Index off 12.17.

The blue chips on Wall Street performed a little bit better than the NASDAQ stocks today, the Dow off only 15 1/2 points, 2/10 of a percent. The broader market lower by just a 16 to 15 margin, negative. 53 new yearly highs; 72 new lows.

Topping the active list on 27.6 million shares, Equity Office (EOP). This is a real estate investment trust and the stock fell $0.25 although after the close today it was added to the Standard & Poor's 500 Index, replacing Texaco (TX), which, of course, is being taken over by Chevron (CHV).

EMC (EMC) down $0.60 a share.

AOL Time Warner (AOL) moving up a $0.25.

And then Motorola (MOT) down $0.67. As you heard, earnings are-or I should say the results, a loss of $0.07 in the third quarter. Those were reported well after the final bell.

General Electric (GE) gained $0.02 a share, fifth in volume.

Compaq Computer (CPQ) down a $0.05.

U.S. Bancorp (USB) up $0.78.

Qwest Communications (Q) rose $0.84. The Hibernia Bank Brokerage began covering Qwest with a long-term "strong buy" recommendation.

Citigroup was up $0.28.

And then Texas Instruments (TXN) fell $1.94 in that weak high tech group.

Burlington Resources (BR) lost $1.10. The company will acquire Canadian Hunter Exploration Corporation (HTR.TO) for $2.1 billion.

And Chevron (CHV) up $1.94. Shareholders did approve the merger with Texaco and the name of the new company, Chevron Texaco, logically enough.

And then Credit Suisse First Boston (CSR) down $0.75 a share on news the company plans to cut 2,000 jobs and also is forecasting a third quarter loss.

First Data (FDC) up $5.43. After the close yesterday, the company reported better than expected third quarter results, earnings of $0.69, up from last year's $0.58. The J.P. Morgan Brokerage today issued a "buy" recommendation.

Micron Technology (MU) down $1.15. The ABN Amro Brokerage downgraded it from "buy" to just a "hold."

And Puget Energy (PSD) down $1.48. Merrill Lynch downgraded it from "buy" to "long-term accumulate."

American Medical Security Group (AMZ) one of the best percentage gainers, rising $2 a share. The company sees third quarter earnings of $0.25 a share. That's well up from its earlier estimate of only $0.14 to $0.16 in earnings.

Fair Isaac & Company (FIC) gained $9.25. The company expects to meet or beat management's previous fourth quarter earnings estimate of $0.56 a share.

Sturm Ruger & Company (RGR) up $1.09. The City of New Orleans was turned down by the Supreme Court in its bid to revive a lawsuit seeking to hold firearms manufacturers like Sturm Ruger liable for the costs of urban gun violence.

Federal Agricultural Mortgage (AGM) stock up $3.30. UBS Warburg Brokerage began covering it with a "strong buy."

Pediatrix Medical (PDX) down $4.41. Yesterday it was off over $5.50. The company couldn't account for the loss. Today, the firm says third quarter earnings will be $0.39 to $0.40, better than $0.35 to $0.37 earlier guidance. But it also said the fourth quarter will be about the same as the third quarter. That's apparently what hurt the stock.

And Benchmark Electronics (BHE) losing a $1.45. Needham Securities downgraded it from "buy" to just a "hold." Standard & Poor's repeated an "avoid" rating.

NASDAQ trading, a 35 3/4 point loss there, 2.2 percent. Volume picked up to 1.5 billion shares. 14 stocks higher for every 20 lower.

Microsoft (MSFT) topped the active list, down $3.48. You heard the story.

Intel (INTC) off $0.79.

Cisco Systems (CSCO) dropped $0.46.

QUALCOMM (QCOM) a loss of $0.37, fifth in volume.

Applied Materials (AMAT) dropping $2.71.