SUSIE GHARIB: A high-octane day on Wall Street: the Dow rose 109 points and is now in bull market territory, up 20 percent from its low this year; and the NASDAQ gained 35, closing at a three-month high. Well, the stocks of Conoco and Phillips Petroleum also rallied today in response to news of their $15 billion oil merger. Erika Miller canvassed Wall Street for reaction.

ERIKA MILLER, NIGHTLY BUSINESS REPORT ANCHOR: The deal between Conoco and Phillips Petroleum got the thumbs up from Wall Street today, even though it doesn’t provide shareholders with a premium.

KATHERINE WARNE, SR. ENERGY ANALYST, EDWARD JONES: In the oil industry, it’s better to be bigger, and these companies are both recognizing that there are real advantages to size at this time, with the increase in competition in the global oil market.

MILLER: The combination would create the nation’s largest gasoline refiner and the world’s sixth-largest oil company, based on reserves. The new entity, to be called ConocoPhillips, is being billed as a merger of equals. The companies project cost savings of at least $750 million a year. ConocoPhillips would have a market capitalization of about $35 billion, but its debt load would be almost $19 billion, a concern to some analysts.

FADEL GHEIT, OIL ANALYST, FAHNESTOCK & CO.: Their ability to reduce debt will be very limited, so I personally, or investors, will not feel comfortable with a company that has this high debt level.

MILLER: Another potential challenge will be marketing six different brand names, including Conoco, Phillips 66, and Circle K among others.

GHEIT: If Shell (RD) -Texaco (TX) could not manage two brands at the same time, I find it very difficult that the Phillips-Conoco – the Conoco-Phillips combination will be able to market effectively.

MILLER: The ConocoPhillips deal is the latest in a string of mergers in the oil industry. Analysts predict consolidation will continue, albeit on a smaller scale.

WARNE: I would expect to see more deals in the oil industry in general. I think that many of the smaller companies feel the same pressure that Conoco and Phillips are clearly feeling to become bigger, to have more areas of global operations, and to be able to cut costs.

MILLER: Most analysts give this merger a high likelihood of going through. The deal carries a hefty $500 million breakup fee. And with so few major oil companies left, most potential suitors would have a tough time getting regulatory approval. 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.

11/19/01: President Bush Gives The Aviation Law Its Wings

SUSIE GHARIB: The nation has a new aviation security law tonight. President Bush signed the measure today, giving the federal government control over airport security. And as Stephanie Woods reports, it comes at the busiest travel time of the year.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: At a signing ceremony for the new law, President Bush promised security will be the supreme priority.

GEORGE W BUSH, PRESIDENT OF THE UNITED STATES: Security comes first. The federal government will set high standards, and we will enforce them.

WOODS: The idea is to restore passengers’ confidence, but it will take time. The Transportation Department must hire 28,000 baggage screeners, oversee new screening technology at airports, and put more air marshals on flights. In the meantime, analysts expect more disruptions like the one in Atlanta last Friday, as the transition to a federally controlled aviation security system takes place.

WILLIAM WARLICK, DIRECTOR, FITCH IBCA, DUFF & PHELPS: I think in the short run there’s still a lot of wariness out there. And obviously with the almost daily occurrence of security breaches, it may take some time before we see some real improvement in passenger confidence.

WOODS: This week is traditionally the busiest time of the year for the nation’s airlines. The industry expects holiday travel to be down 15 to 20 percent from last year, and even more during non-holiday weeks.

MICHAEL WASCOM, SPOKESMAN, AIR TRANSPORT ASSOCIATION: Passenger numbers are still off by almost 30 percent domestically, and the number of flights have been reduced by, on average, 20 percent domestically, so we still have a long way to go.

WOODS: Experts say it could be three to five years before the industry recovers to pre-September 11 levels. Until then, the airlines must preserve cash and stop losses of millions of dollars a day. For example, United Airlines (UAL) deferred aircraft orders and received a new line of credit. Its stock got a lift on the news. Longer term, analysts say the key to the industry’s recovery will be an increase in business travel.

WARLICK: I think airline managements are really focused on the timing of that revival in business travel demand. And this is, I think, what we’re looking for, going through 2002, for any signs of real recovery in the industry and an improvement in cash flow generation.

WOODS: Until the outlook improves, analysts expect airlines will look to their unions for wage concessions, and hope that labor disruptions won’t add to their woes. 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.

11/19/01: Holiday Turkey Prices Take Flight

PAUL KANGAS: Still ahead on “NIGHTLY BUSINESS REPORT,” there are lots of reasons to be thankful this Thanksgiving. And we’ll introduce you to thousands of them in the Nation’s Capital.

GHARIB: If you’re doing the cooking for Thanksgiving this year, it’s going to cost you a few more bucks to get that meal on the table. Turkey prices are up about 20 percent from where they were a year ago. But as Diane Eastabrook reports, some of the trimmings actually are cheaper.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The cost of preparing a Thanksgiving feast jumped about eight percent this year compared to last year. The American Farm Bureau Federation surveyed 130 shoppers nationwide. Those shoppers found on average they could prepare a Thanksgiving dinner serving 10 people for about $35. That is up less than $3 from last year. The Farm Bureau attributes the higher grocery store bill to higher turkey prices. Frozen turkeys cost about $0.17 a pound more than last year.

JOHN SKORBURG, SENIOR ECONOMIST, AMERICAN FARM BUREAU FEDERATION: The difference between what happened last year and this year, I think, is what happened on September 11. Supermarkets are looking for more people to eat at home this year. They’re looking for more families to get together and because of that, they don’t have to offer the turkeys as a loss leader like they did last year.

EASTABROOK: While turkey and potatoes are more expensive this year, many other trimmings for Thanksgiving dinner aren’t. And over supply of pumpkins should make pumpkin pie less expensive to prepare this year. The same is true for sweet potatoes. Corn meal and wheat prices have also been severely depressed this year, so it should be cheaper to make stuffing. Meanwhile, cranberry prices are basically flat compared to last year. Retail food prices overall rose slightly in October because of higher poultry and dairy prices. Analysts speculate some other food prices could spike modestly this winter if consumers continue eating at home more rather than dining out. But they also point out that more expensive items in shopping carts, like meat, should remain stable or could even drop in price.

TIM HANNAGAN, HEAD GRAIN ANALYST: We’re going to look at the livestock industry to expand dramatically this year due to low feed costs and meat is such a big important part of the consumers’ budget, and that’s going to stay cheap at least for the next 12 months that we can see.

EASTABROOK: Economists predict food prices will increase about two to three percent next year, roughly in line with overall inflation. They say food prices could increase more if there’s a catastrophic flood or drought, but that hasn’t happened in nearly a decade. DIANNE 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.

11/19/01: America Rebuilds-The Volunteer Spirit

SUSIE GHARIB: Thanksgiving this year will be very different than all others. Americans are approaching the holiday with an awareness that the world has changed since September 11. But the events of that day also brought out the best in us. So this week as we continue our coverage of America Rebuilds, we look at some reasons for Thanksgiving. Tonight, from Washington, D.C., Angela Terrell Heath looks at volunteers who are making a difference.

ANGELA TERRELL HEATH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Here at the Arlington Food Assistance Center, it’s all hands on deck to sort 30,000 pounds of food for needy families. Volunteers work in teams to sort, box and measure. One of those volunteers is Christina Caldwell.

CHRISTINA CALDWELL, VOLUNTEER: So all the cereals are going to be 12 it looks like.

TERRELL HEATH: Since the September 11 attacks, she is one of thousands of Americans who were inspired to volunteer.

CALDWELL: Some people can be firefighters and some people can be policemen and some people can, you know, give blood and organize blood drives. And, you know, I can do lots of things, but I can definitely sort canned food.

TERRELL HEATH: And she’s here for another reason—Dan McNeil, a friend of hers from business school who was killed in the attacks. He worked at the World Trade Center as an analyst with the investment banking firm Sanver O’Neill .

CALDWELL: He was working really hard, but he was also taking time to mentor somebody and I know that Dan didn’t think that 28 years was all he was going to get to make a difference. So it made me think, you know, it’s time to get going. I want my life to make a difference.

TERRELL HEATH: Since the attack, 14,000 people have signed up to volunteer with Greater D.C. Cares. The group matches volunteers with non-profit organizations who need them. Mikki Seligman helps run the group and says she’s seen a greater sense of community since September 11.

MIKKI SELIGMAN, VICE PRESIDENT, GREATER DC CARES: And that’s really what we’ve seen in the following weeks is people saying you know what? I really want to be engaged because this is important all the time, not just when there’s a crisis and I have to handle that.

TERRELL HEATH: Vanessa Vaughn and Don Timmons are getting married in April and now see volunteerism as part of that union.

VANESSA VAUGHN, VOLUNTEER: Over the past several years it’s something that I’ve had as a personal goal for myself but haven’t always been able to make the time to do it. And so I decided to make it much more of a priority than what I have in the past.

DON TIMMONS, VOLUNTEER: We’re not doing it to be noticed. We’re doing it because it’s important and everyone needs someone to care.

TERRELL HEATH: Greater D.C. Cares, United Way and other charities often find the stream of contributions and volunteers starts to fade 30 to 60 days after a disaster. So Washington area grant makers and companies are joining non-profit groups to try to quickly figure out how to keep this enthusiasm going all year long. The groups say they are working on an advertising campaign with one goal in mind.

KAE DAKIN, EXECUTIVE DIRECTOR, WASHINGTON GRANTMAKERS: Capture the current mood, capture the current generosity, the current giving, the current volunteering, package it and move it forward so it continues to sustain the work of the region.

TERRELL HEATH: Work that will be done by Christina and volunteers like her.

CALDWELL: It would be important to me to know that I left behind something better than I found it.

TERRELL HEATH: Sorting through crates and boxes of food is their small way of helping turn tragedy into good. Angela Terrell Heath, 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.

11/19/01: Commentary: Ways To Get The Rail System Back On Track

SUSIE GHARIB: Tonight’s commentator says that Americans have been working on the railroads, but he says those railroads still need more work. Here’s Paul Krugman, Op-Ed columnist for “The New York Times” and author of “Fuzzy Math.”

PAUL KRUGMAN, COMMENTARY: Something good recently happened in my home state of New Jersey, about 30 years too late. A new rail station finally opened up at Newark Airport. Finally it’s possible for arriving travelers to get into New York, or, for that matter, for me to go to Princeton, without having to face the increasingly nightmarish traffic on New Jersey’s highways. But even as the new airport stop opened, Congress announced that Amtrak is in trouble because of its failing to achieve financial self-sufficiency. And New Jersey Transit, which is desperately overcrowded, lacks the money to expand service. There’s something wrong with this picture. Why, exactly, do we demand that passenger rail pay its way when we heavily subsidize road and air travel? In the Northeast Corridor, anyone who takes the train instead of driving does his fellow citizens a substantial favor. Each additional car on the roads contributes to traffic delays. At a conservative estimate, your decision to drive from Central New Jersey to Manhattan imposes $20 or more in lost time and increased gasoline consumption by other commuters. And that’s not even considering the impact on air pollution, or on our dangerous dependence on imported oil. We like to think of America as the land of great open spaces, but my part of the country is as crowded as any European nation. It’s time that we learn something from Europe and get ourselves a quality rail system. I’m Paul Krugman.

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.

11/19/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: The stock market opened the week on a firm note, buoyed by the growing belief the US economy is bottoming out and should be recovering nicely by mid-2002. Investors were also encouraged by the rapid progress being made by allied forces in Afghanistan, with hopes running high for the imminent capture of Osama bin Laden. At 10:00 this morning, the Dow Industrial Average added 80 points to last week’s advance of 259 points, while the NASDAQ Index posted a 27-point gain on top of its 70-point run-up last week. With several analysts warning that because of its strong recent rally, the market may be getting a bit ahead of itself, stocks had a hard time extending their gains as morning trading progressed. But they did hold on to most of their early advances. At noontime, the Dow was still up 52 points, NASDAQ up 16 points. The market’s resilience to profit-taking convinced more buyers to come off the sidelines in the belief that a run to the 10,000 level was in the offing. And the Dow Industrial Average came very close, with a closing gain of 109.47 points, ending at 9976.46. The NASDAQ Index up 35.84, ending at 1934.42.

Big board volume dropped a little below 1.3 billion shares, down a bit from last Friday by 48 millions shares fewer. But just about three times as much up volume as down volume, that was impressive.

And the Transport Index up 35.15.

Utilities, however, fell 2 2/3 points.

The Closing Tick, about as strong as you’re going to see it, +1017, that’s very bullish.

Standard & Poor’s 500 up nearly 12 1/2 exactly.

A 7-point rise in the 100.

The MidCap 400 up exactly 6 1/4 points.

Bridge Futures Price Index edged up .58.

A gain of nearly 5 1/2 on New York Composite.

Almost a 5-point run-up in the Value Line.

Russell2000 Small Cap Index up 6.40.

And the broadly based Wilshire 5000, up just about 120 1/4 points.

The bond market finally staged an overdue technical rebound today after six straight sessions sharply on the downside, and some of the buying was also prompted by the report that October new housing starts fell 1.3 percent. The upturn was hindered somewhat, however, by the solid rally in stocks.

Tax free were mostly unchanged. Corporate rose about 3/8 of a point on average. And Treasury market was moderately higher across the board.

The 5-year notes up 8/32.

The 10-years up 11/32.

The 30-year bond up 19/32.

The Lehman Brothers Long-Term Treasury Bond Index was up just over 15 points.

Investors had a hearty appetite for stocks today. The Dow Industrial Average coming within 23 1/2 points of the 10,000 level, strictly psychological, but it still would be nice to get past there. The broakder market nicely higher, by a 19 to 12 margin, 98 new yearly highs, only 24 new lows.

Xerox (XRX) topped the active list on 35.8 million shares, moving up $0.72. That’s an 11 percent gain. The news, G.E. Capital has signed an $800 million financing pact with Xerox.

Nortel Networks (NT) moved up $0.52. The company received a contract from Dacom of South Korea to build an optical network there.

Lucent Technologies (LU) a $0.38 gain.

AOL Time Warner (AOL) up $0.85. Its Harry Potter movie took in a record $90 million over the weekend.

EMC (EMC) a $0.53 gain, fifth in volume.

And then Disney (DIS) moved up $0.74.

Pharmacia (PHA) had a good day, up $3.85. The FDA has approved the company’s osteoarthritis drug called Bextra. S.G. Cowan and J.P. Morgan Brokerage both issued “buys” after that.

Corning (GLW) was up $0.17.

ExxonMobil (XOM) down $0.53. New York December oil futures down $0.31 a barrel today.

Enron (ENE) was a $0.06 gainer.

BJ’s Wholesale (BJ) down $3.82. Third quarter results due out first thing tomorrow. Last Friday,

Midwest Securities issued a “sell” recommendation on BJ’s.

DaimlerChrysler (DCX) up $2.19. The company is going to extend its zero percent financing on new vehicles until January 8 of next year.

Northrop Grumman (NOC) up $4.45. The defense group was very firm today.

And then Conoco (COCb) moving up $1.68. Alex Brown upgraded it from “market perform” to buy.

And Phillips (P) up $1.53. The story there, Prudential upgraded “hold” to “buy” for Phillips with a $66 a share target.

Valero Energy (VLO) fell $1.71. Bear Stearns downgraded it from “neutral” to “unattractive.”

USAirways (U) up another $1.63. It was up $1.27 last Friday as the company completed $404 million in financing and it’s now quite liquid.

UAL (UAL) up $2.48. The company has restructured contracts with Boeing (BA) and Airbus to take delivery of just 24 jets over the next two years, not 67, as originally contracted for. That’ll free up $2.5 billion.

Skechers USA (SKX) up $1.75. A First Boston analyst optimistic on the sales outlook for footwear retailers.

And Dr Reddy’s Labs (RDY) one of the big percentage losers, down $4. FDA says the company is not eligible for six month marketing exclusivity for its generic form of Prilosec.

CryoLife (CRY) down $4.10. The company’s BioGlue surgical adhesive in tests caused some severe nerve damage in animals when the glue was misapplied, but the company says it can cure that.

And LSI Logic (LSI) down $1.55. Michael Murphy’s “California Technology Letter” says “sell” the stock. It says high tech changes are going to hurt the company, but a spokesman for the firm says we respectfully disagree.

Nasdaq trading, a gain of nearly 36 points, almost 2 percent, and volume picked up about 200 million shares from last Friday, 22 stocks higher for every 14 lower.

Microsoft (MSFT) topped the active list, up $0.79.

Followed by Intel (INTC), up $0.36.

Cisco Systems (CSCO) a modest gain of $0.69.

Then NVIDIA (NVDA) down $1.15. It traded as low as $48.50 after the SEC charged 15 people, including 11 employees of NVIDIA of alleged insider trading regarding Microsoft’s X Box, which NVIDIA supplied some of the graphics for.

And then QUALCOMM (QCOM) up $2.39.

JDS Uniphase (JDSU) a $0.66 gain.

And Applie