JEFF YASTINE: The bottom continues to fall out of the price of Enron stock. It fell almost $2, or 28 percent today, to $5.01. The move south comes despite an announcement by the company that it had shored up the remaining $450 million of its new one billion-dollar credit line. But Goldman Sachs downgraded both Enron and its proposed merger partner, Dynegy (DYN), to market perform today. And many other analysts now say the odds are dropping of the deal going through.

MIKE HELM, SECURITIES ANALYST, A.G. EDWARDS: Well, I think at this point, it’s a complete bet on whether the merger moves forward or not. If the merger moves forward, obviously the stock will do well. But I think you have to keep out that realistic chance that the merger doesn’t go through and that the company continues to fall into deeper and deeper problems.

YASTINE: Meanwhile, Enron is facing additional problems from its employees. One is suing the company, claiming he lost $400,000 in his retirement plan due to the plunge in Enron’s stock price. His lawyers say they may seek class action status for the suit, with 20,000 Enron employees possibly eligible to join it.

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.

11/21/01: The Travel Casualties Of The Terrorist Attacks

JEFF YASTINE: Thanksgiving is tomorrow, and today is traditionally the busiest travel day of the year. In the wake of the September 11 attacks, travel industry leaders are hoping for a decent turnout over the next few weeks. But analysts say they should not get their hopes up. This much travel industry watchers know: fewer people will be riding on airplanes to get to their holiday destinations in the next six weeks. Most surveys are predicting about a 15 percent decline in seat bookings compared to last year. But on the highways, industry groups like AAA are only expecting about a 1.5 percent reduction in traffic volume. And those not driving may be riding the rails. Amtrak has added more capacity – about 75,000 seats – to accommodate travelers unwilling to fly or drive. In all, experts say people are more willing to travel as more time passes since the attacks.

TERRELL JONES, CEO, TRAVELOCITY: Our Thanksgiving bookings are a little bit off from last year, but actually our November traffic is up year over year slightly, so that’s a very good sign. We still aren’t back to where we thought we’d be this time of year, but we’re certainly ahead of September 11 levels, and traffic is building, and actually our Christmas bookings are ahead of last year.

YASTINE: Analysts are expecting to see more of the effects of the September 11 attacks in the hotel industry. Some believe the worst will be felt in the top-tier chains, like Hilton (HLT) – those brands aimed at high-end travelers who, in a normal situation, would be most likely to fly, and are not now. But the loss of business for those groups may be a gain for other chains, like Extended Stay (ESA), with a larger focus on the motoring public.

TRIP MCCOY, ANALYST, BEAR STEARNS: Those companies, rather, that have assets that are highway or in suburban tend to do better. And the operating stats since September 11 have shown just that, that the farther down the food chain you go, the more resilience you’re finding.

YASTINE: In all, analysts have low expectations for the chains, like Hilton. And that may be an opportunity with many hotel stock trading near multiyear lows.

MCCOY: We’ve got layoffs, we’ve got terrorism, we have a recession. All these things weighing on people’s minds right now. And the sooner that starts to turn around, I think the sooner, obviously, it’s going to be reflected in the hotel business.

YASTINE: As for Thanksgiving, more people are also taking the bus. Greyhound says advance sales are up 20 percent, with more bookings for trips longer than 1,000 miles.

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.

11/21/01: Insurance Companies Now Consider Terrorism Coverage A Premium Risk

PAUL KANGAS: The events of September 11 are also having an impact on the insurance industry. By year’s end, 70 percent of the nation’s commercial insurance policies must be renewed. But many insurance companies now want to cancel terrorism coverage on those policies. As Darren Gersh reports, the insurance industry wants Congress to share the risk.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: For the last few weeks, Chubb (CB) CEO Dean O’Hare has been roaming the halls of Congress, warning lawmakers that the insurance industry can no longer afford to cover all the financial risks of another terrorist attack. O’Hare argues the federal government must help cover costs of any future attacks, but he insists critics are wrong to call that a bailout.

DEAN O’HARE, CHMN. & CEO, CHUBB CORP.: You have me on camera so I can’t express my true feelings, but it annoys the hell out of me because the insurance industry is not looking for a bailout. We are paying all the claims associated with the World Trade Center.

GERSH: It may not be a bailout now, but the National Taxpayers Union’s David Keating warns it might become one. Keating says members of Congress will be giving the federal government a huge new financial risk, but they aren’t authorizing the government to collect premiums up-front to pay for it.

DAVID KEATING, SENIOR COUNSEL, NATIONAL TAXPAYERS UNION: I think they are afraid of having a bailout word attached to this, but they are not doing anything to avoid having that happen.

GERSH: But O’Hare says individual insurance companies can’t afford to take on a risk that ought to be spread across the entire industry or society as a whole.

O’HARE: Going forward, I have no obligation to sell something that I know I am going to lose my shirt on, so I just stop selling it.

GERSH: Under the Terrorism Risk Protection Act the House of Representatives is set to take up next week, the industry would pay the first billion dollars in losses, but the federal government would pay 90 percent of losses after that, to a maximum of $100 billion. The coverage expires after one year, but could be extended for an additional two years. But critics say if the bill becomes law, insurance companies will have little incentive to force clients to improve security. And they warn if the federal government doesn’t charge a fee up front, as it does for flood and deposit insurance, it will never get out of the business of terrorism insurance.

KEATING: Republicans like to say they are in favor of markets. Well, here they are offering a plan that says, “let’s not charge anything, and the market will reemerge.” It is not going to happen.

GERSH: Franklin Nutter is president of the Reinsurance Association of America. He says the plan that Congress finally passes will most likely require insurance companies or policy holders to pay the government back for any terrorism claims. But Nutter says there are no guarantees legislation will solve the basic problem.

FRANKLIN NUTTER, PRESIDENT, REINSURANCE ASSOCIATION OF AMERICA: I can’t say that we won’t get to a point where we all feel as if the risk of acts of terrorism in this country are still too great, that the insurance industry is going to say, “well, we’re comfortable insuring.” I don’t know that we’ll get there. I hope that we would get there.

GERSH: Congress is expected to pass terrorism insurance sometime next month, but insurance companies aren’t waiting. They’re already taking action, canceling policies, limiting coverage, and in some cases doubling their prices. 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.

11/21/01: America Rebuilds-Lessons Learned

JEFF YASTINE: Americans are finding many reasons to count their blessings this Thanksgiving. We’ve been through a terrible trauma and many of us now look at this holiday through different eyes. So tonight as we wrap up our America Rebuilds, a reason for Thanksgiving series, we look at how one school has learned a special lesson from the events of September 11. Suzanne Pratt reports from New York City.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: For those who know architecture and interior design, the Rockwell Group is synonymous with hip boutique hotels and sleek, trendy restaurants. Recently, however, the firm has also left its mark on a less glitzy locale, the temporary school building for Manhattan’s P.S. 234. The elementary school was located only blocks from the World Trade Center. So on September 11, the staff and 650 students not only had the misfortune of witnessing the terrorist attacks, but they were also displaced. Since early October, they’ve taken over an empty building in the West Village that once housed a Catholic school. Anxious to make a contribution to the relief effort, David Rockwell and his firm volunteered to help make the rundown structure more comfortable.

DAVID ROCKWELL, PRESIDENT, ROCKWELL GROUP: Our goal was to create as much as possible a place where kids would feel a sense of delight, they would feel acknowledged. These kids had gone through a very traumatic experience in terms of being uprooted.

PRATT: In just five days, Rockwell and his team of artists and designers worked tirelessly to spruce up the school, donating time and materials for what he calls an urban barn raising. There are now large whimsical banners hanging in the basement cafeteria. A lighthearted sculpture guards the entrance to the school. And a mural by children’s book author Maira Kalman (ph) decorates a second floor hallway. So how do the kids like it?

EMMA DRIES, STUDENT: I like the mural over there and I like the faces in the cafeteria. And I also like this school because it sort of feels like you’re back in time.

SAM LEVINE, STUDENT: It feels more at home and all the people that helped make this school good. And that makes us feel comfortable. So as long as we’re comfortable, I think we’ll be fine.

PRATT: The adult response has been equally enthusiastic. In fact, the school’s principal says Rockwell’s dedication to the project changed the way she and the teachers viewed the move.

ANNA SWITZER, PRINCIPAL, P.S. 234: It truly became an opportunity to learn about what people can be like in a crisis, how you can turn your life round, how people can be generous, how you receive gifts and how you, in turn, are gracious and grateful for them. And so I think we’re pretty happy here.

PRATT: Exactly when the students and staff of P.S. 234 will return to their original school is still unknown. But if they are here for an extended period of time, Rockwell says he hopes to do more to make this school feel like a second home. Suzanne Pratt, 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.


11/21/01: Money File-The Long & The Short Of Long Term Investing

JEFF YASTINE: In the money file tonight, you say you’re a long-term investor, but are you really? Our commentator says there’s a big difference between saying and doing. Here’s Charles Jaffe, Personal Finance Columnist for “The Boston Globe.”

CHARLES JAFFE, PERSONAL FINANCE COLUMNIST, “BOSTON GLOBE”: Two recent studies seem to show that many Americans are fooling themselves when it comes to their investing habits. The first study, released by the Investment Company Institute, showed that 97 percent of mutual fund shareholders describe their fund investments as long-term and that 83 percent of shareholders aren’t overly concerned with short-term market gyrations. The second study, published by the Financial Planning Association, showed that the amount of time investors actually hold their funds shrank from an average of 5.5 years in ‘96 to 2.9 years in 2000. Seeing as this study defines long-term as anything above 10 years, it’s obvious that average investors are moving in the wrong direction. The study compared what the average investor by jumping around to what they could have earned by simply dollar cost averaging into their funds. Sticking with a typical fund, an investor would have earned 10.92 percent annually over three years. By jumping around, that investor’s actual return dropped to 8.7 percent. Investors who move their money frequently may say they’re investing for the long haul, but they’re not. They’re pursuing hot funds, meaning they’re chasing performance. It’s the old problem of looking for winners but catching losers. The moral of this story is there’s a significant difference between saying you’re a long-term investor and actually being one. I’m Charles A. Jaffe.

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.



11/21/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: The stock market opened moderately lower today as investors took more money off the table in the belief the recent rally from the September 21 lows was too steep to sustain in light of a US economy which is still struggling to stage a comeback. At 10:00 a.m., the Dow Industrial Average fell 50 points on top of yesterday’s 75- point decline, while the NASDAQ Index fell only five points thanks in part to a rally in biotech stocks after Amgen (AMGN) issued a bullish earnings forecast. The market continued to sink in slow trading for the rest of the morning amid a general lack of interest, coupled with a Salomon Smith Barney downgrade to neutral of bellwether stock Microsoft (MSFT), which promptly fell nearly $2 per share. By 1:00 p.m., the Dow was off 90 points, the NASDAQ Index posted a 24-point loss. As many traders exited early for a long Thanksgiving holiday weekend, selling pressures eased, especially in the NASDAQ market, and prices firmed up generally. The Dow Industrial Average trimmed its closing loss to 66.70 points at 9834.68. And the NASDAQ came in with a lose of only 5.46, ending at 1875.05. Big board volume just barely over a billion shares. Pretty slow, I thought I’d never say a billion shares was slow, but it was compared to yesterday. Down volume exceeded up volume by almost a 2 to 1 ratio.

The Dow Transport Index off 3.84.

The Utilities down nearly 5 3/4 points.

The Closing Tick just slightly bullish at +146.

Standard & Poor’s 500 down 5 2/3 points.

A 3 2/3-point drop on the 100.

The MidCap 400 fell 1.91.

The Bridge Futures Price Index edging up 0.60.

A loss of 2 3/4 points on the New York Composite.

Value Line off 1 3/4 points.

The Russell2000 Small Cap off 1.59.

And the broadly based Wilshire 5000 losing just over 48 1/2 points, or 1/2 percent.

Bond prices sold off sharply today on fears that a snap-back in the economy may be in the offing, as suggested by today’s report of an unexpected drop of 15,000 in new weekly jobless benefit claims, along with a surprisingly strong rise in the University of Michigan’s November Consumer Sentiment Index.

Against this setting, tax-free and corporate issues ended with losses of 3/8 to 5/8 of a point, and the

Treasury market posted similar losses.

The 5-year notes dropping 18/32.

The 10-year notes down 24/32.

The 30-year bond down 17/32.

And the Lehman Brothers Long-Term Treasury Bond Index fell just over 10 1/2 points.

It looked like there was kind of a partial blue chip buying embargo on Wall Street today. Traditionally, the day before Thanksgiving is a very positive one for the market, but not today, down about 66 3/4 points on the Dow. Advancing issues outnumbered by decliners, an 18 to 13 ratio. 55 new highs for the year, though, and only 34 new lows.

Enron (ENE) topped the active list again today, on 73 1/2 million shares. It traded as low as $4.58 and, of course, you heard the news, and the downgrade from Goldman Sachs.

Xerox (XRX) moved up $0.67. Alex Brown Brokerage upgraded it from “market perform” to “buy.”

Lucent Technologies (LU) a $0.03 loss there.

Rite Aid (RAD) in there, down $0.19. It was a big block trade.

EMC (EMC) down $0.51, fifth in volume.

Nokia (NOK) moved up $0.23.

AOL Time Warner (AOL) down $0.50.

General Electric (GE) lost $0.65.

NorTel Networks (NT) down $0.24.

And tenth in volume, Texas Instruments (TXN) lost $0.15.

Conseco (CNC) a $0.59 drop. The Fitch Investor Service has cut the company’s debt rating from BB- to B-.

Dillard Department Stores Class A (DDS) down $0.50. It traded as low as $14.55, after the company reported a third quarter loss of $0.48 a share. That was $0.06 worse than the Street estimate.

Eli Lilly (LLY) moved up $2.19. The FDA has approved the company’s drug to treat sepsis. It’s called Zygris.

GlobalSantaFe (GSF), this is the new merged company from Global Marine (GLM) and Sante Fe

International (SDC). Salomon Smith Barney began covering it today with a “buy” recommendation and a $40 a share target for the stock.

Goodyear Tire (GT) fell $1.31. The company’s October operating figures were rather weak. North American consumer replacement tire shipments were down 10 percent. Standard & Poor’s repeated a “sell” on the stock.

And New Corp. was up $1.08 a share. J.P. Morgan repeated a “buy,” particularly in light of the shutdown of LTV’s steel operations. J.P. Morgan says that’s a plus for New Corp.

Osmonics (OSM) up $2.10. A company spokesman told us the stock may have received a positive mention on the CBS Market Watch program.

Saks Fifth Avenue (SKS) up $1.31. After the close yesterday, the company reported a loss in the third quarter of $0.17 a share, but that wasn’t as bad as the $0.22 a share loss that the Street was expecting.

Wilson Greatbatch (GB) gaining $2.77. The company says it’s benefiting from its supplier relationship with Guidant (GDT), whose stock was up $3.48. A company sponsored trial suggested heart attack survivors receiving implantable defibrillators like Guidant makes have improved survival rates.

And Quiksilver (ZQK) down $1.20. The company says its domestic business has been hurt after the September 11 attacks. It sees fourth quarter earnings coming in at only $0.09 to $0.10 a share. The Street was expecting $0.24.

And finally, WMC Limited (WMC), this is the Australian mining company, has rejected ALCOA’s (AA) buyout bid as inadequate.

Nasdaq trading, a loss of 5.46. It made a nice comeback late in the day, but volume down about 400 million shares from yesterday. For every 70 -- well, we see actually 64 more stocks losing ground than gaining.

Intel (INTC) topped the active list, up $0.86.

Microsoft (MSFT) down $1.35.

Amgen (AMGN) moved up $4.07. The company sees 2002 earnings up 20 percent and then continued 20 percent earnings growth t