10/23/01: Computer And Communication Companies Announce 3rd Quarter Losses

PAUL KANGAS: Big news tonight from the world's biggest online retailer, Amazon.com (AMZN) . Late today, the company posted a loss of 16 cents per share in the third quarter, in line with analysts' estimates. But more importantly, Amazon told Wall Street that it still expects to turn a pro forma operating profit next quarter, despite the aftermath of the September 11th attacks. That would be the first profitable quarter in Amazon's history and analysts say cutting costs is its key to making money..

JEFF FIELER, INTERNET ANALYST, BEAR STEARNS: I think one of biggest points on the company's reiteration of their goal to reach Q-4 operating profitability resides around the fact that they have made such headway on the coast side. Their costs reduction both in Q-3 and on a year over year basis were a year ahead of what we were expecting and I think that is what really gives Amazon confidence that they are going to reach their goal in Q-4.

KANGAS: Bear Stearns has an attractive rating on Amazon stock, because it thinks the online retailer is uniquely positioned in the sector with a high level of consumer acceptance.

GHARIB: Compaq (CPQ) and AT&T (T) also out with earnings after the close: Compaq posted a wider- than-expected loss of seven cents a share, a penny worse than estimates, but in line with its lowered forecast. Compaq says it was hit hard by several factors: the weak economy, the September 11th attacks, and its merger plans with Hewlett-Packard (HP). Earnings at AT&T plunged 88 percent in the third quarter, four cents a share, versus 35 cents last year. But today's number was in line with street estimates. AT&T blames the drop on increased competition and weak prices in the long-distance market..

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.

10/23/01: Prescriptions & Plans For Battling Bio-Terrorism

SUSIE GHARIB: New developments today concerning anthrax. Anthrax spores were discovered in an offsite mail facility for the White House and President Bush authorized $175 million for immediate safety improvements at the nation's post offices. Meanwhile, Health and Human Services Secretary Tommy Thompson threatened to ask Congress for authority to override the patent on Cipro-this is the anthrax treatment-if manufacturer Bayer (BAYZY.OB) does not offer the government a better price for the drug. As more evidence of bioterrorism spreads, Darren Gersh reports on new approaches to fend off these attacks.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: When bioterrorists unleash a deadly virus or bacteria, scientists can now begin reading the bug's genetic code in a matter of hours. Dr. William Haseltine is CEO of Human Genome Sciences. He says advances in genomics will help scientists analyze biological weapons and eventually develop powerful new anti-viral drugs to combat them.

DR. WILLIAM HASELTINE, CEO, HUMAN GENOME SCIENCES: It allows us to pinpoint new targets for sensitivity. It allows us to create vaccines that may recognize broad strains of many different variants, not just one variant. So this new technology that we have gives us extraordinary power.

GERSH: Scientists are now working on new classes of antibiotics and anti-toxins to combat anthrax and other deadly diseases. In five years, scientists hope to have a DNA-based vaccine for smallpox that is safer and more effective than the existing vaccine. But until then, there is an urgent need on the front lines of bioterrorism for rapid diagnosis in the field. Dr. Robert Belshe is director of the Center for Vaccine Development at St. Louis University Medical School.

DR. ROBERT BELSHE, VACCINE DEVELOPMENT CENTER, ST. LOUIS UNIVERSITY MEDICAL SCHOOL: I think that the diagnosis of these infections is critical and biotech companies will make a major contribution by miniaturizing the diagnosis to make it fast and easy and we could use it under field conditions so that patients don't necessarily have to be seen in the emergency room for a diagnosis.

GERSH: Dr. Belshe is now researching the potency of a dilute smallpox vaccine. But he says new vaccines may be of limited use for other rare but fatal diseases.

BELSHE: Yes, you might want to vaccinate all postal workers, for example, against anthrax. But you may not want to vaccinate the entire public against anthrax, particularly if you can identify the threat and eliminate the source.

GERSH: But the federal government is preparing to spend billions of dollars on research and production of new vaccines. The money may help provide what has traditionally been seen as a commodity business.

DR. KRIS JENNER, PORTFOLIO MANAGER, T. ROWE PRICE HEALTH SCIENCES FUND: Because so many people have actually left the vaccine business, for those companies that still have vaccine technology and the future of developing a vaccine for prevention, I would say that the vaccine business actually is very attractive.

GERSH: But unless there is an attack, there is no commercial market for vaccines to combat rare diseases. Dr. Haseltine suggests the government may want to offer a guaranteed return on investment for companies that develop treatments for biological attacks.

HASELTINE: I believe we can create artificial market incentives to drive pharmaceutical discovery and at once address problems of bioterrorism as well as address problems of disease in the less developed parts of our globe.

GERSH: But the most important resource may not be money. Analysts are confident the United States has the scientists and knowledge needed to prevail in the fight against bioterrorism. Darren Gersh, 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.

10/23/01: One On One With J. Barry Griswell, CEO, The Principal Finanical Group

SUSIE GHARIB: A new stock started trading here at the New York Stock Exchange, Principal Financial Group (PFG). It's a mutual insurance and financial services company that's based in Des Moines, Iowa. CEO Barry Griswell rang the opening bell this morning and the new stock rallied by 13 1/2 percent, up $2.50 to $21.00 from its offering price of $18.50. When I talked with Griswell earlier today, I asked him why Principal decided to go public.

J. BARRY GRISWELL, CEO, THE PRINCIPAL FINANCIAL GROUP: We really wanted the flexibility that a public company has to access the capital markets. We have aspirations of being a global company. We have made a rather large acquisition in 1999 so we really wanted the flexibility to tap into the capital markets. I think, too, it's important to retain-attract and retain world class talent and I think there's a real quality of branding that goes with being a public company.

GHARIB: Well, Mr. Griswell, usually insurance companies or private companies go public so that they can make acquisitions. Is that your plan?

GRISWELL: Well, I would not expect any large acquisitions in the near term, but clearly getting this stock established to have currencies to do an acquisition in the future is in our plans, probably.

GHARIB: Principal Financial has been private for 120 years. Why do it now? To what extent did you feel that to be competitive you had to go public, like many other large insurance companies, like Prudential or Met Life (MET)?

GRISWELL: Our business mix had changed quite dramatically over the years and we felt like the public company structure fit us much better than a mutual company. Our customers, many of them, were the kinds of customers that were traditionally barred from mutual funds and the like. So we thought this structure fit very well.

GHARIB: You have said that Principal Financial will deliver a return on equity, ROE, of 12 percent in 2003. Can investors bank on that?

GRISWELL: Now where did you get that number? Yes, clearly, that is our goal and that's a key strategy of ours. And I wouldn't say they can bank on it, but I can say we're very, very focused on delivering that result.

GHARIB: Where do you see growth coming from?

GRISWELL: Our 401K, our defined contribution business is our franchise. We see lots of growth opportunities in that market in the coming years. It's an under penetrated market and we have the leading market share. So we really see that as a driver. We see the international marketplace, we have good operations in selected markets around the world. We see lots of good growth there.

GHARIB: Well, to what extent do you think the weak economy will dampen sales of 401Ks?

GRISWELL: Well, there are certain sectors within the economy that are doing well. And also, as you may know, legislation was passed earlier this year that really incensed small businesses to start a 401K. So we think there are some positive factors going on and yes, there's some negative. We think in the main we're going to have more growth in this market than we've had traditionally.

GHARIB: Since September 11, what impact has that had on your life insurance sales?

GRISWELL: We've published information that the actual loss to the company was $9 million to $12 million as a result of this tragedy, but not a significant impact on our company. Life insurance sales have begun to tick up. There's no question that the general public is more aware of the need to have life insurance today. And we think that'll probably build over time.

GHARIB: Mr. Griswell, why should investors be interested in buying Principal Financial's stock?

GRISWELL: A hundred and twenty-two years of success, a great track record, great people, great culture and great prospects for the future.

GHARIB: Mr. Griswell, thank you very much for talking to NIGHTLY BUSINESS REPORT.

GRISWELL: And thank you for having me.

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.

10/23/01: Shippers & Retailers Shop Around For Holiday Help

SUSIE GHARIB: Many retailers and shippers are planning for a strong holiday season, and that's despite the weaker economy. Even though unemployment is on the rise, many companies are still having a difficult time finding temporary workers. Diane Eastabrook explains why.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: At St. Rita's High School on Chicago's South Side, United Parcel Service is looking for a few good men, several hundred to be exact.

MICHAEL JOHL, MEDIA RELATIONS MANAGER, UNITED PARCEL SERVICE. Tell you what, just keep this close by. That's my phone number. You can give me a call and I'll set you up for an interview.

EASTABROOK: UPS has been going to college recruitment fairs at high schools and to college campuses to find another 3,000 to 4,000 workers for this distribution facility outside Chicago. It's even offering incentives like tuition reimbursement. But despite rising unemployment, the company says recruiting new employees is still very difficult.

JOHL: I do know that we have stepped up our recruiting activities because obviously we're coming into a heavy season. But we're also just recruiting as normal. We have been recruiting at this level for the better part of this year.

EASTABROOK: UPS (UPS) isn't the only company having a hard time recruiting new workers. Some retailers say they aren't finding it any easier recruiting for the holiday shopping season. Target (TGT), Wal*Mart (WMT), Land's End (LE) and Spiegel (SPGLA) all say they are adding about as many holiday workers this year as they did last year. But those retailers say they are not being flooded with job applications even though the economy has deteriorated in the past year and jobless rates have climbed. The outplacement firm Challenger Gray and Christmas says many of the estimated 1.3 million people who lost jobs through September worked in higher paying sectors like manufacturing, technology and even travel, and those workers may not be willing to settle for lower paying positions.

JOHN CHALLENGER, CEO, CHALLENGER, GRAY & CHRISTMAS: If you were in a skilled job paying $15 an hour or more, to go back and take a $10 an hour job is just something that you're not going to do, at least for now while unemployment is still in place and the prospects of another job still seem possible at the rate you were making before.

EASTABROOK: But Challenger admits if the economy continues to slide, an $8 an hour job at UPS may start to look more attractive. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.

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.

10/23/01: Commentary: What's Ahead On The Recovery Horizon?

SUSIE GHARIB: In tonight's commentary, despite the bear market and recessionary environment, America is still a rich country. So says Todd Bucholz, author of "Market Shock."

TODD BUCHHOLZ, COMMENTARY: Remember how people used to rush to their computers to check their stock holdings 10 times a day? When day traders bought and sold with every breath they took? Boy, have things changed in the past 18 months. Now what do I hear from friends? Oh, I don't look at my stock portfolio every day. I wait for the monthly statement and then I toss that in a file without opening it. Even before the dastardly acts of September 11th, Americans had lost their love for fast trading. No surprise there. After getting smacked in the teeth almost every day for 18 months they learned that the gold rush was over, that the quick bucks had come and gone. Now the Dow Jones average has fallen all the way back to where it sat in early 1999, back when we all felt poor. Poor? Wait a minute, in early 1999, didn't the newspapers proclaim that Americans were rich, that the Dow Jones average soaring above 9,000 was something to admire, maybe even too high for its own good? Here's the point. Despite the recession of 2001 and the September 11 atrocities wiping out wealth, we are still a rich country. And with the Fed turning on the money spigot, American consumers still have the buying power to fuel an economic rebound. It will come. The U.S. economy suffered through nine recessions since WWII. And what do you know, nine recoveries followed. We're nine for nine. I bet you we'll come out of this 10 for 10 in 2002. I'm Todd Bucholz.

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.

10/23/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened moderately higher today, thanks to some carryover strength from yesterday's impressive late rally, which lifted the Dow industrial average to a nearly a 173-point closing gain and enabled the NASDAQ Index to rise nearly 37 points. At 10:30 this morning the Dow rose another 40 points, while NASDAQ posted a 29-point gain. The early upturn lasted until late morning, when sellers took the upper hand following some disappointing quarterly results from well-known firms like Exxon -

Mobil (XOM), SBC Communications (SBC), Pharmacia (PHA) and Lucent (LU).

Midway through the noon hour, the Dow fell to a 37-point loss. NASDAQ was up only 7 points. The market stabilized in early afternoon, and then had a shallow sell-off on new reports of anthrax exposure. At 3:00 P.M. the Dow was off 61 points; NASDAQ down about 9. That relative resilience prompted some late buying, which cut the closing loss in the Dow Industrial Average to 36.95 points at 9340.08. The NASDAQ index ended with a modest loss of only 3.64 at 1704.44.

Big board volume moved up a touch from yesterday to 1.31 billion shares and about a 6 7 to 6 ratio of down volume over up volume.

The Dow Transports Index was up nearly 58 1/2 points. Some of the airlines were firm and the rails particularly.

Utility however, down nearly 7 1/2 points.

The Closing Tick practically neutral at -86.

Standard & Poor's 500 off 5.12.

Nearly a 3 1/2 point drop S&P 100.

The MidCap 400 off 1.16.

And the CRB Bridge Futures Price Index edged up .08.

A loss of 2.82 in the New York Stock Exchange Composite Index

Just over a 1 point drop in the Value Line.

Russell2000 Small Cap Index off 3.13.

And the broadly based Wilshire 5000 dropping just about 47 points or 1/2 of a percent.

The bond market was narrowly mixed today as it absorbed yesterday's big debt offering from Ford Motor (F) and braced for tomorrow's two year Treasury note option. A 41 cent per barrel decline in December oil futures and some safe haven buying following word that traces of anthrax were found at a remote White House mail sorting site. We'll have details shortly. All of that brings prices up just a little bit as tax free and corporate ended unchanged. But the Treasury market closed just a touch lower for the most part.

No change at all on the 5-year notes

But the 10-year notes fell 2/32.

And the Bellwether 30-year bond down 1/32.

And a loss of just over 5 points in the Lehman Brothers

Long-Term Treasury Bond Index

Just a modest loss of 37 points in the Dow today and 74 more issues on the down side than on the up side at the final bell. Three more new yearly lows than new highs.

Principal Financial (PFG), there you see it, it traded 32.2 million shares today. The high of the day, incidentally, was $21.38. It closed pretty close to that.

Then Lucent Technologies (LCN) losing $0.25. The company reported a fourth quarter loss of $8.8 billion, which works out to $2.18 a share in the red. But from operations, the loss was $0.27 a share. But even that was triple last year's $0.09 per share loss operating.

Enron (ENE) down another $0.86. The stock was hard hit yesterday when the SEC was probing the company's limited partnership deals with its chief financial officer.

Pharmacia (PH) down $4.37. Third quarter earnings higher, $0.41 versus $0.33, just in line with estimates. But there is concern about the sales of Celebrex and also there's concern about Pharmacia's majority owned Monsanto (MON) unit.

SBC Communications (SBC) down another $2.62. Yesterday, it was off over $2 after reporting third quarter earnings 31 percent lower. Today, Goldman Sachs and Merrill Lynch both downgraded the stock a notch.

AT&T Wireless (AWE) moving up $1.26. Third quarter earnings better than expected, $0.03 versus a loss of $0.01 last year, and that $0.03 was a $0.01 above the Street expectation.

EMC (EMC) lost $0.04 a share.

And then Citigroup edging up $0.23.

AOL Time Warner (AOL) gained $1.24.

And then the NASDAQ Qs (QQQ) in there with a gain of $0.18.

Barr Laboratories (BR) down $7.90. The company had a big first quarter, $1.80 in earnings, way up from $0.28 last year, $0.03 better than expectations. But there is concern, and great concern, about forthcoming competition for the company's sales of its generic form of Prozac. And, of course, that accounted for much of the big earnings rise.

British Airways (BAB) up $2.30. The European Union has approved a financial aid package for airlines without adequate insurance. Also, there's speculation that British Air might form an alliance with KLM.

Cardinal Health (CAH) dropping $5.60. First quarter earnings higher, $0.55 versus $0.46 last year, but there's concern about the revenue growth in the company's drug distribution operations.

DaimlerChrysler (DAJ) edged up $0.83. It traded as high as $37.01. The company had better than expected third quarter earnings, $0.26, down from $0.30 last year, but $0.03 above the Street estimate. And the company's upbeat on its outlook.

ExxonMobil (XOM) fell $0.25. Third quarter operating earnings fell 22 ½ percent, $0.48, down from $0.60 last year, $0.02 below the Street estimate.

And finally, Waters Corp. (WAT) up $2.92. Third quarter earnings $0.28, up from $0.27 last year. Sales up 5.6 percent. All of those figures in line with expectations.

McCoran Exploration (MMR) up $1.15, one of the best percentage gainers. The company announced a promising test well for oil near Eugene Island off the Louisiana coast in the Gulf of Mexico.

Titan Corp. (TTN) up $2.80. The company's method of sanitizing medical instruments might be useful in sanitizing the mail.

Administaff (ASF) up $2.59. An investor by the name of Lange Gerhardt has cut his stake in the company from 9.1 percent to six percent and it seems that that overhanging supply of stock might have been depressing the stock and now that it's gone, up she went.

Shaw Group (SGR) down $4.90. The company fabricates piping systems and the company's policy is not to comment on the movement of its stock. No other news.

Monsanto (MON) down $4.23. A third quarter loss of $0.15, bigger than last year's $0.13 per share loss, and sales fell five percent.

And Furniture Brands (FBN) losing $2.04. UBS Warburg Brokerage downgraded it from "strong buy" all the way down to just a "hold."

Nasdaq trading, a loss of 3 2/3 points in the Index, very modest. But volume perked up to 1.8 million shares. 16 stocks higher for every 18 lower.

Microsoft (MSFT) topped the active list, edging up $0.27.

Followed by Cisco (CSCO), down $0.42.

And then Intel (INTC) dropped $0.30 a share.

QUALCOMM (QCOM) gained $1.02.

Fifth in volume was Applied Materials (AMAT), down $0.90 a share.

Juniper Networks (JNPR) edged up $0.64.

eBay (EBAY) had a pretty decent day, up $2.50 a shar