SUSIE GHARIB: Enron, the once-mighty energy trading powerhouse, is near collapse tonight. Its $9 billion proposed merger with Dynegy fell apart today, and analysts say Enron may be forced into bankruptcy. Dynegy scrapped the deal following a string of negative developments in recent days, culminating with today's Downgrade of Enron's credit rating to junk status. Scott Gurvey has more on the stunning demise of Enron.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: As Standard & Poor's, Moody's, and Dynegy pulled the plug on Enron, shareholders headed for the exits. The one-time high-flying shares fell into penny stock territory, closing at $0.61. Down 83 percent. At the beginning of the year, Enron shares traded above $84. At one time the Enron online trading system bought and sold $3 billion worth of commodities each day. Today the screens went blank. Dynegy's offer had valued the larger Enron at more than $10 a share. Talks to negotiate a lower price failed. Dynegy's decision to call off the deal came after the two bond rating agencies cut Enron's credit to junk bond levels. That triggers lending covenants that could force Enron to repay billions of dollars in outstanding debt.

RONALD BARONE, ENERGY ANALYST, UBS WARBURG: This means that there's about $13.9 billion of off-balance-sheet debt, which can come do at any point in time. Enron does not have the liquidity to pay this off. I think the possibility is very real that they may have to seek Chapter XI protection.

GURVEY: Enron's problems had been the talk of Wall Street. It acknowledged overstating earnings by 20 percent over four years, and keeping debt off its balance sheets through questionable business partnerships. With the stock price plummeting, Dynegy said it had cause to kill the deal, citing in a statement, "Enron's breaches of representations, warranties, covenants, and agreements in the merger agreement, including the material adverse change provision." Enron said it is "evaluating and exploring other options." This could be one of the biggest corporate collapses in history. Enron is the nation's seventh largest company in terms of revenue, and analysts say more bad news can be expected.

TODD SHIPMAN, CREDIT ANALYST, STANDARD & POOR'S: Now that Dynegy has announced that they intend to back off of the merger, I think it's reasonable to assume that there will be further rating actions coming in a relatively near term.

GURVEY: More than 180 million shares of Enron changed hands today on the New York Stock Exchange. That's a new exchange record for daily volume for a single issue. Scott Gurvey, "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.

11/28/01: Senate Democrats Lower Defenses & Stimulate The Economic Stimulus Plan

SUSIE GHARIB: That grim beige book report that you just talked about will keep pressure on Washington to produce an economic stimulus package. Action has been stalled for weeks, but there are now new signs of movement. Darren Gersh explains.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The potential breakthrough came after congressional leaders emerged from a breakfast with the President at the White House. Hours later, Senate Democrats cut their demands for more spending on homeland defense from $15 billion to $7.5. Democrats had insisted the new spending be part of any stimulus plan, but now say the issue could be considered as part of a bill to fund the Defense Department.

SEN. THOMAS DASCHLE (D-SD), SENATE MINORITY LEADER: What I hope this will then do is free up the balance of the bill for negotiations.

GERSH: That was good news to the White House, which has sought to hold the line on additional spending. This afternoon, the President urged Congress to move quickly. In a speech to farmers, Mr. Bush warned 415,000 workers have lost their jobs while Congress has debated.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Further delay could put more Americans and more families at risk. So let's move.

GERSH: There is also another idea on the table. Senate Republicans are pushing a one month holiday from Social Security payroll taxes.

TRENT LOTT (R-MI), MAJORITY LEADER: It would be beneficial to all employees, to employers. It can be implemented quickly.

GERSH: But Democrats insist any payroll holiday must replace other items on the President's tax cut agenda and conservatives say the payroll holiday simply replaces Social Security taxes with general tax dollars.

WILLIAM BEACH, TAX ANALYST, HERITAGE FOUNDATION: It doesn't add additional consumption. It doesn't add additional investment. It doesn't add anything. It's sort of going from Peter to pay Paul.

GERSH: Congressional leaders are meeting tonight with Treasury Secretary Paul O'Neill and White House Chief of Staff Andy Card to discuss ways to move the stimulus plan forward. No breakthroughs are expected in what are sure to be tough negotiations. 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.

11/28/01: One On One With Pharmacia Chairman and CEO Fred Hassan

SUSIE GHARIB: Pharmacia (PHA) got a bad reaction from Wall Street after the drug company met with analysts today. The stock tumbled $2.56, or 5 1/2 percent, to $43.95. Now, that's even though it announced plans to spin off its agricultural subsidiary, Monsanto (MON), a stock buyback plan. Joining me live now from midtown Manhattan, Pharmacia Chairman and CEO Fred Hassan. Mr. Hassan, a pleasure to have you on the program again.

FRED HASSAN, CEO, PHARMACIA: Good to be here, Susie.

GHARIB: So tell us why the big drop in Pharmacia's stock today?

HASSAN: Susie, our stock has gone up very dramatically in the last month. It's gone up by 12 percent. So you would expect some profit taking at some point and we were anticipating this to occur and it did occur today.

GHARIB: One of the things that some analysts told me is that they-what made them a little nervous today was your forecast that your biggest market, these Cox II inhibitor drugs, those special painkilling drugs, will be growing only in single digits next year. That surprised them.

HASSAN: Yes, the market has slowed down. But we're still doing very well in this market and we anticipate increasing our market share. So we feel pretty good about our future. Our parade, Celebrex, is emerging as the gold standard. It's for arthritis and pain and it's receiving excellent acceptance in the market.

GHARIB: Well, if you see that the growth prospects are kind of slowing down, what does this mean for your newest drug, Bextra?

HASSAN: Oh, we're very pleased with the new approval that we got from the FDA. This is a product also for arthritis and for dysmenorrhea, menstrual cramps. And this drug is going to be introduced next year. And we're looking forward to expanding the Cox II market, our share of the Cox II market with Bextra, in addition to Celebrex.

GHARIB: But if you're saying the overall market is slowing down a bit, isn't this going to reduce the sales growth prospects for Bextra?

HASSAN: Oh, we'll do well this in market because our drugs are very sound. They're well proven. So we plan to expand our market share in this market.

GHARIB: How disappointed were you that Bextra, it sounds like there's a lot of possibilities for it but that you didn't get that kind of general pain medication label, only for severe pain? Will that limit sales growth, do you think?

HASSAN: We got a very good label with Bextra. We got arthritis, rheumatoid arthritis arthritis, osteoarthritis and dysmenorrhea and we look forward to getting the pain later on. If you go back to our product Celebrex, which is going to be a $3 billion product this year, that's the way we got that product approved. The pain indication came later.

GHARIB: OK.

HASSAN: But in due course, Bextra will do very well.

GHARIB: Another one of the concerns from analysts who I talked to today was saying that, you know, if everything is looking so promising for Pharmacia, why wasn't management much more aggressive in its earnings forecast?

HASSAN: Our basic philosophy, Susie, is to be very conservative, to be very sober with our forecast and then to deliver, and that's the way we plan to be doing down. But we feel very good about our company going forward.

GHARIB: One last question. The last time that we talked in July, you said that you really weren't interested in pursuing any kind of merger partner but given that now that you've spun off this Monsanto (MON) agricultural unit, some analysts think that Pharmacia is in a better position to merge, maybe with Pfizer (PFE).

HASSAN: We're, we have a great platform, growth platform, a great management team, great growth story for our company for a long, long time and we're number seven in the U.S. market in size. So we don't believe we need a merger.

GHARIB: OK. Well, thank you very much for coming and talking to us tonight. We appreciate it.

HASSAN: Thank you very much, Susie.

GHARIB: My guest tonight, Fred Hassan, CEO of Pharmacia.

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.

11/28/01: No Small Change-The Price Of Change

SUSIE GHARIB: Well, it's been called the biggest logistical challenge since WWII. Starting January 1, hundreds of millions of Europeans will be trading in their francs, guilders and marks, among other currencies, for new euros. In the second part of our series, No Small Change, Paul Miller looks at the costs of the euro changeover, which will be borne mostly by businesses.

PAUL MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: At Disneyland, 20 miles from Paris, the Christmas season runs until January 6. The season for paying in either French franks or euros runs five weeks beyond that. But all of Disney's many different businesses will have switched over to the euro by New Year's Day.

STEFAN ROHDE: We have a true operating activity. We have merchandise, food, ticketing. And all of those activities have different systems which at some stage speak together for interfaces and the coordination of all that has to be carefully planned.

MILLER: Disney has spent almost four years getting ready with a full-time project team. Apart from changing software for cash registers and computers, the main expense has been in training people to use the euro. The approach is to train the trainer. One hundred people went to the Bank of France to touch notes and see the security threads or foil patches with holograms and the 62 other security features. They are now holding half day training sessions for hundreds of Disney workers to pass on what they learned.

ROHDE: One other half day is more technical, to get the people used to the new systems and to the new processes they have to use. MILLER: Disney won't say how the changeover will cost, but a company official said profits at the French amusement complex could fall by a percentage point. Many other businesses may also see profits fall.

DR. JURGEN PFISTER, VICE PRESIDENT, COMMERZBANK: Well, this is certainly the case in some parts where it plays a big, money plays a big role and cash plays a big role. So I would say in the banking industry and partly in the retail sector.

MILLER: Part of the cost already for temporary employment to help collect the old currencies and distribute euros.

ERIC CHANEY, ECONOMIST MORGAN STANLEY: Administrations, banks, security companies, they will have to hire a lot of people. For a country such as France, it is estimated that more than 1,000 people will be hired for two or three months during the transition period.

MILLER: The director of the Dutch Banking Association estimates that the transition in his country alone will cost $4 billion. And banks and retailers will pay 95 percent of the cost of actually introducing the currency. And that's the way the scheme was set up. The European Central Bank figured the best way to swap money was to have people give retailers old currency.

PETER WALTER, CHIEF CASHIER, BUNDESBANK: They get back euros as a change. And so the deutschmark flows back to the retailers, from the retailers to the banks, only in one way. The retailers don't give change in deutschmarks. They give it in euros.

MILLER: And banks will give people euros when they need them. The critical date for them is January 1, when all ATM machines are supposed to have euros. There are 60,000 ATMs in Germany alone. It's expected any costs not covered by price increases will be offset over the next five years through greater efficiencies. For one thing, people can go back to doling in just one currency. Paul Miller NIGHTLY BUSINESS REPORT, Marne Lavelle , France.

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.

11/29/01: Money File-How To Pay Those Student Loans

SUSIE GHARIB: In the money file tonight, an important lesson for college graduates about paying off all those student loans. Here's Kathy Kristof, a business writer for the "Los Angeles Times."

KATHY KRISTOF, AUTHOR, "INVESTING 101": The day of reckoning is almost here for indebted college graduates. Six months following the end of school, student loans become due and payable. That spells December for last June's college graduates. Unfortunately the souring economy has prevented many graduates from getting, or keeping, their jobs. Indeed, a surprising number of companies made offers to students prior to the end of term, only to rescind them months later. That could make it difficult or even impossible for these students to repay their loans. The good news is that student loans provide options in circumstances such as these. Those options, in a nutshell, are deferral and forbearance. Loan deferrals buy students time. If you are unemployed, back in school, or earning so little that you qualify for other government aid programs such as food stamps, you can put your loan payments on a temporary hiatus. Loan payments can be delayed indefinitely for those who have reenrolled in school. They can be delayed for up to three years for unemployment or economic hardship. The only catch? Interest continues to accrue on non-subsidized loans during the deferral period. That means that when you do start repaying, you'll owe more. If you don't qualify for a deferral, or if you prefer to pay, but you can't afford to pay quite as much as is due, talk to your lender about forbearance. Forbearance programs are less formal. They're approved or denied on a case by case basis. But they're also more flexible. With forbearance, lenders can temporarily reduce your interest rate, delay or reduce your payments. Forbearance programs last for a maximum of one year. If you need more time, you'll need to reapply. I'm Kathy Kristof.

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.

11/28/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: The stock market opened broadly lower not only because of the concerns over the Enron- Dynegy merger deal, but also because investors were now coming to believe the strong rally from the September lows was overdone in light of the economy's continuing problems.

Against this dismal setting, the Dow Jones Industrial Average fell 98 points by 11:00 a.m. On top of yesterday's 110-point loss, while the NASDAQ Index posted a 19-point deficit. Stocks regrouped and staged a modest rebound during mid-session as the Dow cuts its loss to 77 points and NASDAQ was down only six points.

But the upturn fell apart after Dynegy officially announced it terminated the merger deal with Enron around 1:00 p.m. An hour later, the market was further undermined by the Fed's Beige Book Survey showing the economy in most areas weakened further in October and November. The Dow Industrial average went on to fall to a closing loss of 160.74 points, or 1.6 percent, at 9711.86.

The NASDAQ Composite tumbled 48 points, or 2.5 percent, to 1887.97.

Big board volume moved up a touch on the sell-off 1.4 billion shares, and five times as much down volume as up volume.

The Dow Transport Index off 51 1/3 points.

Utilities plunged nearly 8 ½ points.

And the Closing Tick rather bearish at -3.39

Standard & Poor's 500 off nearly 21 points.

And almost a 12 point drop in the 100.

MidCap 400 off 7 2/3.

CRB Bridge Futures Price Index fell 1.27.

A loss of 9 1/3 points for the New York Stock Exchange Composite.

Value Line off over 6 3/4 points.

Seven point drop on the Russell2000.

And the Wilshire 5000 dropping almost 187 points.

The bond market moved higher early today with the help of safe-haven buying prompted by the collapse of the Enron Dynegy deal, and prices also got a little later boost from that weak Beige Book report on the economy. The upturn evaporated however when the Treasuries $21 billion two-year note auction got a lukewarm reception a best. By the close, tax-frees and corporates were mostly unchanged and treasuries were modestly lower.

The 5-year notes off only 1/32.

The 10-year notes down 1/32 as well.

The 30-year bond fell 12/32

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

The catalyst was Enron (ENE) for the sharp sell-off today, but worries about the economy are reemerging. The Dow Industrial Average down 160 ¾ points, twice as many issues down as up, only 56 new highs as against 42 new yearly lows.

Enron (ENE) topped the active list on 182 million shares on the New York exchange. That is a record one day volume for one stock. And plunging $3.53. You heard the story.

But Citigroup affected, down $2.75, because the company loaned hundreds of millions of dollars to Enron.

General Electric (GE) down $1.72 in the general sell-off.

EMC (EMC) fell $1.16 after recent gains.

And then Dynegy (DYN) itself plunging $4.92, fifth in volume.

JP Morgan (JPM) down $2.30. It, like Citigroup, loaned millions of dollars to Enron.

AOL Time Warner (AOL) down $1.26.

Nokia (NOK) fell another $1.62.

Compaq Computer (CPQ), a $0.46 drop.

And Pharmacia (PHA) down $2.56, as you just heard.

Calpine (CPN) off $2.19. That's collateral damage from the Enron debacle. Of course, Calpine has energy contracts with Enron. We don't know how they'll be resolved.

The Gap (GPS) was down $0.79. The stock traded as low as $13.35 after Prudential downgraded it from "hold" to "sell."

IBM (IBM) lost $2.05. The company is cutting about 1,000 jobs or 4.6 percent of the workforce in its semiconductor division due to flagging demand for the product.

Infineon Technologies (IFX), that's the big German chip maker, the European Union is probing a loan the company received to build a plant in Dresden, Germany.

Medtronic (MDT) moved up $1.74. Second quarter earnings higher, $0.29 versus $0.25 last year, and revenues were up 17 percent. And UBS Warburg Brokerage repeated a "strong buy."

Then Morgan Stanley Dean Witter (MWD) down $3.55. The Heard On the Street column in today's "Wall Street Journal" notes that this is one of several major brokerages being probed by the SEC for improper, alleged improper IPO allocations.

Orbital Sciences (ORB) the best percentage gainer of the day, up only $0.79. But look at the gain percentage wise. PanAm Sat (ph) has exercised its option to buy two additional orbital built Sea Ban (ph) spacecraft.

Airlease Limited (FLY), another low priced issue, but a good percentage gain, up $1.39. The company leased two of its MD-82 aircraft to CSI Aviation Systems.

Gateway (GTW), the computer maker, up $0.93. It traded as high as $9.60. Lehman Brothers made positive comments about the company's solid sales over the Thanksgiving holiday.

USAirways (U), big percentage loser, off $1.58. That looks like a delayed reaction to yesterday's resignation of Rockish Gungwal (ph) as the President and Chief Executive Officer of the firm.

EOTT Energy Partners (EOT) down $2.71. This is a unit of Enron. Need I say more?

And Continental Airlines B Stock (CAL) down $2.40. The company priced an offering of 6.74 million of these shares at $22.50.

Nasdaq trading, exactly a 48 point drop on the Index. Volume, however, trailed off a bit on the sell-off. Volume, I should say, the advance/decline ratio heavily weighted in decliners, as you can see.

Intel (INTC), Microsoft (MSFT) and Cisco Systems (CSCO) all fraction