SUSIE GHARIB: An uneasy day on Wall Street: investors struggled with news of an anthrax scare on Capitol Hill and worries about the arrival of earnings season. The Dow notched up three points, and the NASDAQ ended down seven. Well, Bank of America (BAC) stock rose $2.50 on better than expected earnings news. It posted a third quarter profit of $1.28 a share. That was $0.03 better than what analysts were expecting, but half of what it earned a year ago. Many blue chip companies are scheduled to report this week. Erika Miller reports on the issues confronting corporate America this earnings season.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's no secret that third quarter earnings are going to be downright awful, but there may be even worse news contained in third quarter report cards, warnings that fourth quarter profits are likely to be just as weak.

PETER CANELO, US INVESTMENT STRATEGIST, MORGAN STANLEY: We think that the fourth quarter will be about as bad in terms of profits as the third quarter because we're going to see the worst impact on the consumer, on transport, on investment, and in a number of basic industries.

MILLER: But consensus forecasts are less pessimistic about fourth quarter profits. Analysts are predicting a decline of more than 22 percent for third quarter earnings for the Standard & Poor's 500 companies, but the drop is expected to be half as much in the fourth quarter.

CHUCK HILL, RESEARCH DIRECTOR, FIRST CALL: I don't think the companies nor the analysts have a good feel for fourth quarter earnings yet. I think they've been conservative in what cuts they've made, but we're certainly going to get a lot more as more information becomes available.

MILLER: Part of the problem with forecasting the fourth quarter and beyond is the increasing number of uncertainties. One of the biggest unknowns is whether the terrorist attacks will make consumers more reluctant to spend. There are also questions about the extent of the US military retaliation and the possibility of more terrorist attacks on US soil. In addition, a recent accounting ruling prohibits companies from breaking out costs related to the September 11th attacks as an extraordinary item. That's why some earnings experts fear corporate profits will not show positive growth until the middle of next year at the earliest. But even if corporate profits remain weak, some experts say the market could still start to recover.

CANELO: Investors are generally starting to think that, "yes, we're going to recover from this," and so they're going to look for stocks that can perform well.

MILLER: As remarkable as it may seem, Wall Street remains optimistic about earnings for next year as a whole. Analysts are forecasting a gain of about 17 1/2 percent for calendar 2002. 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.

10/15/01: Market Strategies With Ross Margolies of Salomon Brothers Asset Management

SUSIE GHARIB: Our guest tonight says that the stock market is in transition, but he expects a strong move up in six months. He is Ross Margolies, portfolio manager of Salomon Brothers Asset Management and he joins us live from a midtown Manhattan studio. Hi Ross.

ROSS MARGOLIES, PORTFOLIO MANAGER, SALOMON BROTHERS ASSET MANAGEMENT FUND: Hi, Susie.

GHARIB: Well, you sound fairly positive on your outlook.

MARGOLIES: Yes, I think if you look intermediate and long-term, I'm starting to get more upbeat after having been cautious for a while. I'd say near term there's still danger, but to use an analogy of a hurricane, right now we're right-this earnings reporting period that you were just talking about is right before the eye of the storm passes and I think it starts getting better after that passes.

GHARIB: Do you think, though, that the market has bottomed?

MARGOLIES: I think it's possible. Part of it depends on the political developments and if things turn out to be worse than I expect, it could be delayed. I would expect it to test the bottoms again but I think what we've seen is reasonably close to where the bottom will be absent some new catastrophe happening.

GHARIB: Well, that's the big issue and that's the uncertainty. A lot of people waking up in the morning turning on the news and wondering, you know, now what bad news might we get. With all that uncertainty, are you finding that investors are pulling out some of their money from your funds?

MARGOLIES: Actually, we've seen pretty steady inflows. It's less consistent. It used to be the same amount every day. Now it seems to be more lumpy. But we've been seeing money coming in.

GHARIB: You've actually seen money coming in. All right, so now that you've got this money coming in, how are you managing your portfolios? What is your strategy?

MARGOLIES: Well, a couple of things. We're getting a little bit more aggressive. We've been adding some technology stocks and some beaten down financial service stocks. And I'd say the one thing that we're doing a little bit different is that we're waiting until these earnings come out to get a really good close look at the companies we want to buy. We want to really balance investing for the long-term with avoiding mistakes.

GHARIB: What are some of the companies that you're watching that at the right price you would pounce in on them?

MARGOLIES: Well, ones that we've added in the last several months, two insurance companies, AIG (AIG) and Excel Reinsurance . In the technology area, Converse Technology is a company. They make voice mail for cell phones, as well as Sun Microsystems (SUNW). These are all good companies that we think that even if we're early, we'll still do well over the long-term.

GHARIB: What is it that you find less attractive right now, Ross?

MARGOLIES: Well, you know, it's kind of interesting because usually the less attractive stocks are things you don't like. In many cases the less attractive things now are things that have done very, very well. So to make room for some of those newer stocks I've sold some of my REITs, some of my hospitals and some of my beverage stocks, all of which are good companies but they've done so well the relative value is no longer there.

GHARIB: Ross, in just the 30 seconds that we have left, can you give some advice to investors who are trying to cope with these uncertain times and if they're a long-term investor, what's your best words of advice?

MARGOLIES: Sure, Susie. I think the real key thing is the market will be going up over time and I happen to think it'll happen some time next year. So I would be committing capital slowly and prudently to the market. Invest your budgeted stock allocation over the next three to six months and try to pick good quality situations.

GHARIB: OK, Ross, thank you so much for coming and speaking to us this evening.

MARGOLIES: You're welcome.

GHARIB: We've been speaking with Ross Margolies of Salomon Brothers Asset Management.

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.

10/15/01: Anthrax Scares Up New Security Measures For The Delivery Industry

PAUL KANGAS: Another anthrax scare was reported today, this time on Capitol Hill. A letter mailed to the office of Senate Majority Leader Tom Daschle tested positive for anthrax. It is the third confirmed case of anthrax tainted mail here in the United States, and that has businesses across America changing their routines. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: President Bush first broke the news of an anthrax tainted letter that arrived at Senate Majority Leader Tom Daschle's office this morning.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: His office received a letter and it had anthrax in it. The letter was field tested and the staffers that have been exposed are being treated.

WOODS: Senator Daschle's office is quarantined as employees are being tested and the site is cleaned and investigated. Capitol Hill offices have been asked to return all mail to a central office.

SEN. THOMAS DASCHLE (D-SD), SENATE MINORITY LEADER: I am confident that we can put in place practices that will minimize the exposure to any danger our staff may have to endure.

WOODS: Organizations of all kinds are on heightened alert. This association in Washington is taking extra precautions, wearing gloves and inspecting all mail.

MARION WHITE, MAILROOM SUPERVISOR, INSTITUTE OF SCRAP RECYCLING INDUSTRIES: Since we've had the situation, I check through it and look at the pieces and make sure there's not any dust or anything on it.

WOODS: Pitney Bowes (PBI), which manages corporate mailrooms, is working with the Postal Service to develop standards and systems to help make every piece of mail identifiable and trackable. FedEx (FDX) has instructed its employees to take any actions necessary with suspicious packages. Security consultant Michael Cherkasky says organizations need a systematic approach to protection.

MICHAEL CHERKASKY, PRESIDENT & CEO, KROLL INC.: What we need to do is we need to make sure that we centralize how we get into buildings, how we inspect packages, how we look at mail, really how freight travels across the country. And if, in fact, you centralize it and narrow it, you can be much, much more efficient about how you inspect things.

WOODS: It's those kinds of security measures that analysts say will increase costs for all shippers.

ED WOLFE, AIRFREIGHT/LOGISTICS, ANALYST, BEAR STEARNS: I think there's a lot of extra costs out there on the horizon, between insurance costs, spiking for aircraft and extra safety measures that we're going to have to take for freight. It's going to be across all freight measures and it's eventually going to have to come through to you and I.

WOODS: Already some companies that move freight are adding a security surcharge to shipments. It's just one of the many new costs of doing business since September 11. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

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.

10/15/01: The Cruise Industry Struggles To Stay Afloat In Troubled Economic Waters

SUSIE GHARIB: The travel and tourism industry continues be to hurt by last month's terrorist attacks, especially the nation's cruise lines. As Jeff Yastine reports, the challenge for cruise companies now is to steer their way through choppy economic waters.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It hasn't exactly been a pleasurable voyage for cruise line investors. The slowing economy had already been sinking the stocks of cruise companies, but the events of recent weeks have driven those stocks even lower. Carnival's (CCL) shares gained some ground over the past year but have now moved back towards its old lows. Royal Caribbean (RCL) has fallen even further, to lows not seen since the early 1990's. Analysts say the most immediate problem is getting people on the airplanes to ports like Miami, where the cruise ships are docked.

JASON ADER, ANALYST, BEAR STEARNS: I think in general the American consumer is afraid to travel. The cruise industry for the most part really is in a period of flux. Most of the bookings that occur are between the December to March time frames. So we're just before the period where it's going to be real important for 2002 earnings. But right now most cruise customers who can cancel vacations are.

YASTINE: Complicating the situation is the issue of capacity. Industry wide capacity is scheduled to grow about 10 percent a year every year for the next five years. When the economy is slow, that makes it hard to fill existing ships without discounting heavily on ticket prices. Analysts say some recent indications from shipbuilders may help, though.

ADER: What I'm finally starting to see, at least over the last two weeks, is that the shipbuilders may be willing to delay delivery for operators like Royal Caribbean who, you know, need to come up with a substantial amount of capital next year, and Carnival Cruise Lines. If, in fact, the builders push out supply by, you know, six months, 12 months, that's going to alleviate the supply pressure and should put the pricing environment on more solid footing.

YASTINE: It's too early to tell how next year's cruise bookings are holding up, but analysts expect 2002 to be a recovery year if there are no further terrorist attacks, with earnings growth returning once again in 2003. 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.

10/15/01: Commentary: Who Really Benefits From The $15B Airline Industry Bailout?

SUSIE GHARIB: Congress' $15 billion loan to the U.S. airline industry has been a source of controversy in recent weeks. Tonight's commentator thinks the idea just doesn't fly. Here's Walter Williams, professor of economics at George Mason University.

WALTER WILLIAMS, COMMENTARY: Congress enacted a $15 billion bailout to save the airline industry from bankruptcy. But what if an airline goes bankrupt? Does that mean their airplanes will go poof and disappear into thin air? That's nonsense! Bankruptcy means there is a change in the title to those assets. Someone who thinks he can turn a profit buys them. Does the bailout help passengers? Let's look at it. If flying a given route costs an airline company $40,000 and it earns $60,000, it will fly that route. If they only earn $20,000, they will not fly that route. That decision is independent of the recent $15 billion bailout. So who benefits? The bailout enriches millions of airline stockholders at the expense of millions of others who aren't stockholders. In any economic activity there are risks, both manmade and natural. Those who want to take those risks and rewards buy stock in the company. During the 90's, airline stockholders were claiming large rewards. That's great with me. But today they should be just as willing to accept the downside risk instead of going to Washington and demanding that Congress force non-stockholders to share in that downside risk. I'm Walter Williams.

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.

10/15/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened moderately lower today, unable to follow through on last Friday's late rally which slashed a 200-point deficit in the Dow Industrial Average to a closing loss of only 66 points and which turned a 50- point loss in the NASDAQ Index into a two-point closing gain. Some of the early weakness was no doubt linked to concern about the imminent flurry of corporate earnings reports due out. 180 of the Standard & Poor's 500 companies will release results this week alone. By 11:00 a.m., then the Dow worked its way down to post a 93-point loss. The NASDAQ Index was off 28 points.

The tech sector was put under pressure by JP Morgan which downgraded a number of chip maker stocks on the basis of being too pricey. Even so the market showed some midsession improvement despite a mid-day anthrax scare on Capitol Hill, which we'll have details on in just a moment.

Persistent buying kept the market on the mend throughout the afternoon, enabling the Dow Industrial Average to post a small closing gain of 3.46, putting it at 9347.62. The NASDAQ Index trimmed its closing loss to only 7.09 points and it now stands at 1696.31.

Big board volume pretty slow compared to what it was most days last week, just barely over a billion shares. About a 5 to 4 ratio of down volume over up volume.

The Dow Transport Index up 28 1/2 points.

Utility Index fell nearly 2 1/2 points.

And the Closing Tick moderately bullish at +627.

Standard & Poor's 500 down 1 2/3 points.

About a 1/3 point drop in the 100.

The MidCap 400 fell 1.22.

And the Bridge Futures Price Index losing 1.41.

New York Stock Exchange Composite off .16.

Similar loss in the Value Line Index.

Russell2000 Small Cap however, gained exactly 1 1/2.

While the broadly based Wilshire 5000 down 8.82.

Bonds moved higher today as some investors sought safe haven amid the widening anthrax scare and also because of growing anxiety as to just how bad corporate earnings would be. Bonds were also bolstered a bit by a $0.21 per barrel decline in November New York oil futures. But a weak dollar was a slight negative.

Tax free and corporate issues managed to rise 3/8 to a 1/2 point on average and the Treasury market did well.

A rise of 7/32 in the 5-year note.

The 10-year note rising 18/32.

The 30-year bond up 29/32.

And the Lehman Brothers Long-Term Treasury Bond Index gained almost 5 points.

Well, we had a pretty fortunate afternoon, a nice rally on Wall Street, and it propelled the

Dow into positive territory with a 3 1/2 point closing gain. Only 18 more issues down than up, and we see 12 more new yearly highs than lows.

EMC (EMC) topped the active list on 15.3 million shares, up $0.29. "Barron's Financial" this week suggests the stock in the high single digits should find a bottom at worst, and it would be a bargain in that range.

Liberty Media (LMG) down $0.37. The company is offering 9/10 of one of its shares for each share of Liberty Satellite & Technology on a buyout bid.

AT&T Wireless (AWE) was down $0.85.

The NASDAQ 100 Index (QQQ) was down $0.15.

Citigroup fell $0.26, fifth in volume.

Bank of America (BAC) down-or up $2.54, as you heard earlier. Their earnings were a little better than expected.

GE (GE) down $0.14 today.

Pfizer (PFE) moved up $0.51.

AT&T (T) a $0.79 loss.

And tenth in volume, AOL Time Warner (AOL), a gain of $0.30 per share.

Dynegy (DYN) fell $1.20 even though the third quarter earnings were at the upper end of estimates, $0.85, up from $0.55 a year ago, about $0.03 better than the average estimate. The company also predicting a 20 to 25 percent earnings growth for next year. Of course, the stock has had a sharp recent rise, so a little profit taking.

General Motors (GM) managed to gain $0.72 even though Standard & Poor's downgraded its senior unsecured debt rating two notches from "A" to "BBB" and that's the third lowest investment grade of all of them.

It did the same thing with Ford (F). Ford's stock showed no change at all.

IBM (IBM) moved up $1.16. The Street estimate for tomorrow's third quarter earnings, $0.89 a share. The company also received a nice data storage contract from Wal-Mart (WMT).

McDonalds (MCD) moved up $0.02. Alex Brown Brokerage upgraded it from "buy" to "strong buy"

Teradyne (TER) losing $1.63. Lehman Brothers downgraded it from "buy" to "market perform."

And Vulcan Materials (VMC) losing $1.26 after the company said it sees lower than expected third quarter earnings coming in around $0.90 a share.

Sturm Ruger & Company (RGR) up $1.29. That stock has been strong since about a week ago when the superior court in the city of New Orleans ruled in favor of the company regarding a firearms manufacturer's liability for the cost of urban gun violence.

WMC (WMC), this is an Australian metals miner, up $1.70 on takeover talk. Some say ALCOA (AA) is interested.

Covance (CVD) moved up $1.19. Bear Stearns upgraded it from "attractive" to "buy" and has a $28 a share target for the stock.

The big loser, Ing Group (ING), down $3.80. The company cut its 2001 profit growth expectations from +17 percent to only +5 percent.

Micron Technology (MU) down $2.35. The chip stocks in general very weak today after that J.P. Morgan downgrade of the group.

And Mylan Labs (MYL) fell $3.11. The company lost an appeals court decision over its generic version of Bristol-Myers' (BMY) anti-anxiety drug called Buspar.

The NASDAQ Index down just over 7 points. It was off almost 50 in the morning. Trading volume well down from Friday, 1.58 billion shares today. 18 stocks up for every 17 lower.

Microsoft (MSFT) topped the acti