SUSIE GHARIB: Wall Street rallied again today. Stocks powered higher on a positive earnings update from General Electric (GE) and an amazingly strong housing report. The Dow jumped 106 points, and the NASDAQ rose 17. But less optimism in Washington today: hopes are dimming that Congress will deliver an economic stimulus package before the end of the year. President Bush met with Congressional leaders this morning. But as Darren Gersh reports, it didn't seem to break the deadlock.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Time is clearly running out, but White House spokesman Ari Fleischer says the president hasn't given up hope yet that agreement can be reached on an economic stimulus package.

ARI FLEISCHER, WHITE HOUSE SPOKESMAN: Our economy is in recession, and that's why, I say it again, the president simply cannot imagine that the Senate would leave town and go on recess while leaving the economy in recession.

GERSH: But there seemed to be a lot more political maneuvering than serious negotiating on Capitol Hill today. Democrats charged Republicans were mainly interested in providing tax relief for corporations and the wealthy.

SEN. TOM DASCHLE, MAJORITY LEADER: But try to provide one dollar of extended unemployment compensation to workers, and we can't get it done.

GERSH: Health insurance for unemployed workers is a key sticking point. Republicans want to give individuals a tax credit to shop for their own policies. Democrats want to subsidize employer-provided coverage, saying there are no guarantees the unemployed would be able to buy insurance on their own. But Republicans point out this would be the first time the federal government has ever helped unemployed workers buy health insurance.

SEN. CHARLES GRASSLEY (R), IOWA: This is just a tremendous expansion of our social policy for dislocated workers, and I don't see how anybody who wants to say that they are a liberal or a Democrat could walk away from that and look their people in the face.

GERSH: In the end, analysts say, it appears both Democrats and Republicans looked at the $100 billion price tag on this stimulus bill and asked themselves the same question.

RICHARD GRAFMEYER, TAX LEGISLATION DIR., ARTHUR ANDERSEN: Was it worth the pain to either party to do this? And I think the thought was, it was probably not worth it at the moment, because they weren't willing to give that extra inch to get that deal.

GERSH: It is still possible there will be a last-minute breakthrough in the next few days. If not, Congress comes back in late January. If there are no clear signs of economic turn around by then, this stimulus debate could start all over again. 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.

12/18/01: Capitol Hill Hears From Angry Enron Employees

SUSIE GHARIB: General Electric says that the future looks bright, despite the recession. Chief Executive Jeff Immelt told analysts that he's comfortable with fourth-quarter earnings estimates of $0.39 a share, and is predicting earnings growth of up to 18 percent next year. GE's large industrial businesses are expected to lead the way because they're less vulnerable to short-term economic conditions. Analysts say this robust outlook is also expected to benefit GE's stock.

MARTIN SANKEY, INDUSTRIAL ANALYST, GOLDMAN SACHS: We believe that the stock should sell at some premium, which would indicate a valuation in the near-term of over $50 per share, and, if it were to get back to the valuations it achieved in late 2000, as much as $70 per share.

GHARIB: Now another factor that could influence the stock: an aggressive acquisition plan. Immelt said that he expects to make purchases next year in several areas, including medical and power systems and broadcasting.

KANGAS: Energy giant Enron was in the spotlight on Capitol Hill again today. And once again, its chairman, Kenneth Lay, refused to appear at a Congressional hearing. He now says he'll testify in February. Members of Congress heard instead from Enron employees whose 401(k) retirement plans were tied up in company stock. As Stephanie Woods explains, as the stock price collapsed, workers watched their life savings evaporate.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Sixty-three-year-old Charles Prestwood worked for 33 years in the gas business, most of them for Enron. He lost $1.3 million in his retirement account.

CHARLES PRESTWOOD, RETIRED ENRON EMPLOYEE: I had everything financially under control to where, in other words, I could take my retirement, I could take my Social Security and bridge it with a little out of my savings account, and live a fairly decent, happy life, you know. But all those plans are changed now.

WOODS: Janice Farmer lost $700,000 in her retirement account.

JANICE FARMER, RETIRED ENRON EMPLOYEE: I trusted the management of Enron with my life savings. Senators, I won't mince words here: they betrayed that trust. My life savings is gone. I am now left a year away from Social Security with a $63-a- month pension check from another company.

WOODS: More than two-thirds of the assets in Enron's 401(k) plan was Enron stock. Some members of Congress now want to limit the amount employees can have in company stock in their retirement accounts.

SEN. JOHN CORZINE (D), NEW JERSEY: This is not something that would be accepted in academic theory, it wouldn't be accepted in fiduciary law, and frankly doesn't reach common sense principles.

WOODS: The Boxer/Corzine plan would limit to 20 percent the investment an employee can have in any one stock in a retirement account; put a 90-day limit on how long an employer can force an employee to hold matching stock in a retirement plan; and reduce the tax deduction an employer can take on a matching contribution from 100 percent to 50 percent. James Klein represents employers with 401(k) plans. He says Congress risks taking away the incentives for employers to make matching contributions.

JAMES KLEIN, PRESIDENT, AMERICAN BENEFITS COUNCIL: Many have created great wealth in their retirement plans as a result of employer stock contributions, and we wouldn't want to see Congress cut that off inadvertently.

WOODS: Enron employees are suing to recover their 401(k) money, but even a legal victory won't completely restore their savings. 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.

12/18/01:One On One With Richard Notebaert, CEO, Tellabs

SUSIE GHARIB: But it has been a bitter year for many of the nation's chief executive officers. When a sluggish economy slowed to a crawl September 11, many watched their company's sales and profits and stocks plummet even farther. Tonight, Diane Eastabrook begins a two part series looking at how CEOs are weathering the storm. Tonight, meet Tellabs' (TLAB) CEO Dick Notebaert.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Dick Notabaert says taking over the executive suite at Tellabs a little more than a year ago was like jumping aboard a train headed to a gold rush. At that time, the company was doubling sales of its optical networking and broadband access equipment, thanks to breakneck growth in the telecommunications industry. But within months, that train derailed. Tellabs' fortunes abruptly changed when growth in the telecom industry slowed to a crawl.

RICHARD NOTEBAERT, PRESIDENT & CEO, TELLABS: Orders that would come in they'd say do it later in the year and we got some cancellations. And it started in late March.

EASTABROOK: Today, Tellabs' sales are about half what they were last year and the company's stock has tumbled about 75 percent. Two plants have been closed and 30 percent of Tellabs' workers have been laid off. Notebaert is now as much an accountant as he is a CEO, scrutinizing every expense that crosses his desk.

NOTEBAERT: We watch our cash flow. We look at our receivables. Our financial group has done a wonderful job in making sure the receivables, the timing of them is good. We look at our payables. We look at travel expense, everything, all the way up and down. Everything.

EASTABROOK: Tellabs is also reducing its sales cycles and adopting a just in time delivery strategy, a lesson it learned from old line manufacturers.

NOTEBAERT: I don't know that we can get to the point that Toyota ™ or Ford (F) or General Motors (GM) or others are at, but we can make a lot of progress from where we are.

EASTABROOK: Notebaert believes companies cannot cut their way out of a recession. They must grow their way out. So Tellabs is looking for possible acquisitions. Notebaert admits the next couple of quarters will be tough, but he's cautiously optimistic about the future.

NOTEBAERT: As you look towards next year, you feel better than you did as you looked at this year. Now, again, that's further out into next year. That's not something in the near term.

EASTABROOK: Diane Eastabrook, NIGHTLY BUSINESS REPORT, Naperville, Illinois.

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.

12/18/01: Commentary: The Economist's Great Depression

SUSIE GHARIB: Tonight's commentator says sometimes it's not easy to be an economist, like now. Here's Alan Blinder, partner in the Promontory Financial Group and former Vice Chair of the Federal Reserve.

ALAN BLINDER, COMMENTARY: I don't expect to elicit much sympathy by saying this, but these are depressing days to be an economist. The United States and, indeed, much of world is in recession, which is depressing enough. But on top of that we have to endure daily reports from Washington on economic policy. Start with fiscal stimulus. The need became crystal clear on September 12, giving the President and Congress a real chance to step up to the plate. They did. But they've yet to the take the bat off their shoulders. More than three months have now passed without a stimulus bill proving, I suppose, that partnership runs deeper than patriotism. Both parties share the blame but the House Republican bill set new lows by trying to pawn off an egregious giveaway to corporations as stimulus. Then there's trade policy. Yes, fast track authority passed the House, by a single vote. Good news, I suppose. But the bill was crafted in such a partisan way that hardly any Democrats supported it. And to get even that under whelming level of support, President Bush had to offer shameless protection to, among others, the steel and textile industries. The textile case, which switched the vote of one crucial South Carolina Congressman, is particularly sad since it would renege on trade benefits promised to some of the poorest nations in the Caribbean. We seem to be practicing the Vietnam principle on trade policy-destroying free trade in order to save it. Depressing. I'm Alan Blinder.

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.

12/18/01: Electronic Gifts Are Doing Shockingly Well This Season

SUSIE GHARIB: And finally tonight, only six more shopping days until Christmas and chances are you, like many Americans, are in the market for last minute gifts for friends and loved ones. We know this will be a tough season for holiday sales, but as Scott Gurvey reports, the grinch isn't stealing everyone's Christmas.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Video games are just about the only products selling out this holiday season. Some of that is due to the fact that, on a relative basis, video games are inexpensive entertainments. Sales for Sony's PlayStation and Nintendo's Game Cube are off the charts. But the big winner is the sector's newest entry, Microsoft's X Box.

ROBBIE BACH, CHIEF XBOX OFFICER, MICROSOFT: The most exciting thing for me is watching somebody play, because you see that sparkle and that smile that shows they're having fun. And that's what this is all about is enabling people to have fun.

GURVEY: The leading game publisher, Electronic Arts, supports all the systems. This year's stars include Cell Damage for Nintendo and X Box; James Bond: Agent Under Fire for Sony PlayStation; and for the personal computer, the popular SIMS have a new add on, the SIMS Hot Date. Microsoft has a new train simulator for PC gamers, as well as a major revision of best selling Flight Simulator. Games can be educational, as well. Toon Talk from Animated Programs actually teaches kids how to program computers. You may have trouble finding this one in the stores. You can probably find it on the Web. Still, it's not all fun and games. Retailers report brisk sales of personal handheld computers and organizers, where prices have really fallen this year. And if you usually have your hands full while talking on your cell phone, you'll appreciate this stocking stuffer. Plantronics (PLT) makes headsets for virtually every make and model of wireless telephone. They can prevent many an accident on the road.

KENNETH KANNAPPAN, PRESIDENT & CEO, PLANTRONICS: Seventy percent of our consumers have been saying that the reason they buy a cellular headset is because they feel safer. You know, when you turn a corner at 90 degrees, most people pass hand to hand and it's really hard to do it with just one hand. And so a headset allows you to have both your hands free, even if you're going straight.

GURVEY: It's not just a matter of safety, it's the law. In some locales, from Miami to New York, it is now illegal to drive and talk unless you can do it hands free. 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.

12/18/01: Paul Kangas' Wall Street Wrap Up

PAUL KANGAS: Stocks on Wall Street opened sharply higher today, benefiting from a number of positive developments starting with an upbeat outlook from General Electric's chief executive. And we'll have the details on that shortly. Buyers were also encouraged by better than expected earnings by consumer electronics retailers Best Buy (BBY) and Circuit City (CC), as well as an unexpectedly strong rise of 8.2 percent in November new housing starts. By 10:30 this morning. then, the Dow Industrial Average tacked on 103 points to yesterday's 80-point gain, while the NASDAQ Index, which gained 34 points yesterday, rose another 16. Then Solectron (SLR) poured some cold water on the rally after reporting a quarterly loss. At 1:00 p.m., the Dow was still up 92 points though, and the NASDAQ posted a 13-point gain. A brokerage upgrade of old stalwart DuPont (DD) gave the rally new life in afternoon trading, and the Dow Jones Industrial Average moved back up to post a closing gain of 106.42 points, or 1.1 percent, putting it at 9998.39. The NASDAQ Index came in with a gain of 17.31 at 2004.76.

Big board volume up just a touch from yesterday at 1.33 billion shares, about an eight to five ratio of up volume over down volume.

The Dow Transport Index up nearly 38 1/4 points.

Utilities up nearly 4 1/2.

The Closing Tick rather bullish at +758.

Standard & Poor's 500 up just over 8 1/2.

Almost a 4 1/2-point rise in the 100.

The MidCap 400 up 6 1/10 points.

Bridge Futures Price Index fell 0.61.

A gain of nearly 4 3/4 in the New York Composite.

Almost a 4-point rise in the Value Line.

Russell2000 Small Cap up just over 5 1/2 points.

The broadly based Wilshire 5000 up exactly 87 points.

The bond market stabilized and firmed up nicely today following yesterday's volatile session caused by heavy selling linked to hedging operations. That surge in new housing starts had little negative impact because it was viewed as largely due to unseasonably mild weather.

Even the strong stock market rally couldn't deep tax free and corporate issues from posting closing gains of 1/4 to 3/8 of a point on average.

While the Treasury market higher across the board.

The 5-year notes rising 7/32.

The 10-year notes up 13/32.

And the 30-year bond rose 16/32.

The Lehman Brothers Long-Term Treasury Bond Index up just over 23 points.

This looks like stage two of the Santa Claus rally, up 106.42 today on top of an 80 point rise yesterday and the advance/decline ratio pretty impressive by the bulls, 19 to 11 in favor of advancers. 118 new yearly highs, only 54 new lows.

Solectron (SLR) topped the active list, ironically, the big loser, down $2.71. The company reported a first quarter operating loss of $0.08 a share versus earnings of $0.29 last year. Revenues tumbled 45 percent.

Then GE (GE) closing up $1.42. It was as high as $40.06 during the day.

Lucent Technologies (LU) a $0.09 loss.

AOL Time Warner (AOL) down $0.80.

As was Dynegy (DYN) and Dynegy, fifth in big board volume.

And there you see Pfizer (PFE) edging up $0.31.

Williams Companies (WMB) down $0.85. Yesterday, Bank of America downgraded it from "strong buy" to just "buy."

EMC (EMC) fell a $0.10.

And Calpine (CPN) rebounding $1.10. A little reflex rally there.

And Citigroup, tenth in volume, up $0.73 a share.

ALCOA (AA) up $1.15. But after the close, the company said fourth quarter results will fall below expectations. They've come in around $0.10 a share. The Street was expecting $0.30. In after hours trading, ALCOA I saw as low as $34.60 a share.

Best Buy (BBY) moving up $3.55. Good third quarter earnings, up 40 percent from last year, $0.37 versus $0.27 then.

And then DuPont (DD) rose $1.10 after Merrill Lynch upgraded it from "near term buy" to "near term strong buy."

Micron Technology (MU) moved up $1.11. The company's going to acquire Toshiba's Dominion semiconductor unit in the state of Virginia. But after the close, Micron reported that it had a first quarter loss of $0.44 a share. That's $0.05 more than estimates and in after hours trading the stock dropped to just over $30 a share.

Motorola (MOT) up $0.34. After the close, however, the company said it's going to cut another 9,400 jobs and it sees a first quarter operating loss of $0.11 to $0.14 a share. The stock dropped about $0.40 in after hours trading from that price you see.

Sabre Holdings (TSG) moving up $1.85. The company sees a break even fourth quarter, maybe even earnings of as much as $0.05 a share, and that was better than expected.

Input/Output (IO), which is in the seismic data business, moving up $1.40. A spokesman said the stock appears to be at a reasonable level and business for the company should pick up in the latter half of next year.

Winnebago Industries (WGO), the R.V. maker, up $4.20. First quarter earnings, $0.51, well up from last year's $0.40 and a 9.1 percent jump in revenues.

Coach (COH), this is the luxury accessories firm, up $2.91. Salomon Smith Barney began covering the stock with a "buy" and a $41 a share target.

And Lennar (LEN), the home builder, up $2.75. The company says fourth quarter earnings will exceed the $1.81 that Wall Street is expecting by 25 percent.

ACLN Limited (ASW), which transports cars and ships to the continent of Africa, down $4.25. The company today confirmed the cancellation of a ship building contract in Malaysia and apparently that quashed hopes that the company was expanding.

Fleming Companies (FLM) down $1.10. Analysts linked the weakness to the company's connection to K Mart (KM). It's K Mart's exclusive food distributor and, of course, K Mart having its problems these days.

Nasdaq trading, a gain of 17 1/3 points in the Index.

Volume up about nine million shares from yesterday. 20 stocks higher for every 15 lower.

Microsoft (MSFT) topped the active list, moving up $0.29.

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