Program: Wednesday, September 3, 2003

New York Attorney General Eliot Spitzer Targets Mutual Fund Maleficence
Capitol Hill Tries To Shed Some Light On The Great Blackout of 2003
Does Injury Prevention Diminish Financial Loss Prevention For Employers?
"Money File"-The Canadian Prescription Drug Connection
Last Word: IRS Errors
Paul Kangas' Stocks In The News
Market Stats

09/03/03: New York Attorney General Eliot Spitzer Targets Mutual Fund Maleficence

SUSIE GHARIB: New York Attorney General Eliot Spitzer is now taking aim at the mutual fund industry. He said today that investors were likely cheated out of billions of dollars as a result of widespread illegal trading activities by several major fund companies. Spitzer also announced a settlement with a small New Jersey hedge fund, which played a central role in the scheme. Erika Miller has more.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: At a news conference today, New York Attorney General Eliot Spitzer boldly attacked some of the nation's top mutual fund families. He accused them of encouraging certain hedge funds to illegally trade shares after hours.

ELIOT SPITZER, NEW YORK STATE ATTORNEY GENERAL: Late day trading, to use a metaphor that I think captures it, is like being permitted to bet on yesterday's horse races. You know who is going to win and even after the race is over, you're permitted to place a bet that will guarantee that you make money.

MILLER: In other words, Spitzer says there was a double standard. Certain hedge funds were able to buy mutual fund shares after the close of trading at the day's closing price. That allowed the hedge funds to profit from news that moved the market in after hours trading. All other investors had to wait and pay the next day's closing price, standard practice in the industry. Spitzer also accused the mutual fund companies of permitting hedge funds to time the market. That involves profiting from the difference between a fund's closing price and its value in the following day's trading.

SPITZER: Timing is akin to playing at a casino with loaded dice: You don't necessarily win, but your odds are improved so dramatically that you have an enormous advantage.

MILLER: The complaints came as Spitzer announced a $40 million settlement with Canary Capital Partners, a small hedge fund based in this nondescript New Jersey building. Spitzer says Canary got special trading privileges from Bank of America's (BAC) Nations Funds, Bank One (ONE), Janus, and Strong. But no legal action has been taken against any of the fund families, and all say they are cooperating with the investigation. Canary did not admit or deny any wrongdoing, but it did agree to help Spitzer in his investigation. Some analysts predict Spitzer could ultimately obtain a settlement that rivals the $1.4 billion he got from Wall Street firms back in April. And like that agreement, Spitzer has promised to pass along part of the fines to injured shareholders. For its part, the Securities and Exchange Commission says it is also looking into the accusations raised by Spitzer.

JACK COFFEE, LAW PROFESSOR, COLUMBIA UNIVERSITY: The SEC, I think, is going to have to investigate how widespread these allegations are. If the mutual fund takes a bribe from this hedge fund to allow it to engage in market timing, one suspects they would take tacit bribes from other hedge funds or from wealthy money managers.

MILLER: Spitzer says the investigation is continuing, and he hinted it may soon expand to include other mutual fund companies as well. 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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/03/03: Capitol Hill Tries To Shed Some Light On The Great Blackout of 2003

SUSIE GHARIB: On Capitol Hill today, the blackout of 2003 was at the top of the agenda. The House Energy and Commerce Committee kicked off two days of hearings into the crisis. Lawmakers want to know what went wrong and what's being done to make sure it doesn't happen again. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Lawmakers want to know who's to blame for leaving 50 million people without power. Energy Secretary Spencer Abraham told the House Energy and Commerce Committee it is premature to speculate on the cause of the blackout.

SPENCER ABRAHAM, ENERGY SECRETARY: We are gathering information on about 10,000 individual events that happened across thousands of square miles in the space of about nine seconds.

WOODS: Abraham promised the joint U.S.-Canadian investigation would focus on the facts, but Democrats accused Republicans of using the blackout to ram through a controversial energy bill that includes drilling in the Alaskan wildlife refuge.

REP. EDWARD MARKEY (D), MASSACHUSETTS: If we don't know what caused the blackout in the first place, how can we know whether the proposed cure is worse than the disease? That's like a doctor telling you he has no idea what caused you to black out, but he would like to see you in the morning for brain surgery.

WOODS: Democrats want to vote on a narrow bill focused on electric reliability issues, but Republicans countered that electricity should not be separated from energy issues like the spike in gas prices and a shortage of natural gas.

REP. CHRISTOPHER COX (R), CALIFORNIA: All of our electric power system, save for nuclear and hydro, operate on sources of energy that are not included in the electricity title and the energy legislation, and we've got to take a look at the entire picture.

WOODS: Even though investigators are still in the dark about the exact cause of the blackout, human error appears to have been a factor. Michigan's governor says the utilities in her state weren't notified that FirstEnergy (FE) in Ohio was having problems.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: If our utilities had had the ability to identify that a problem was occurring either through the regional transmission organization or some other entity, during that previous hour then this problem of cascading might have been prevented.

WOODS: FirstEnergy has said its not to blame. The CEO of the company will have the chance to make his case tomorrow when the hearing continues tomorrow. 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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/03/03: Does Injury Prevention Diminish Financial Loss Prevention For Employers

SUSIE GHARIB: Workplace injuries cost businesses millions of dollars in lost wages, lost productivity, and higher insurance costs. But some companies are trying to prevent those injuries by treating their workers like athletes. Diane Eastabrook explains.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Allen Edmonds managers are prepping for the office gridiron. Their coach is Fred Ludwig, an injury prevention specialist from Prevention Services, Incorporated. Ludwig's regimen of head rolls and finger flexes are supposed to help prevent ailments like migraines and back problems that often sideline workers.

FRED LUDWIG, INJURY PREVENTION SPECIALIST, PREVENTION SERVICES: They don't carry as much stress through their neck and shoulders as a result of keeping up with the stretching activities throughout the day.

EASTABROOK: For the past six months, Prevention Services has been working with the Wisconsin shoe company to cut down on workplace injuries. On the shop floor, repetitive motion injuries are a common problem. Ludwig scours the plant offering tips to workers on ways of preventing those problems and others.

LUDWIG: That little disc that normally sits in between the bones, actually gets pushed out of its position.

EASTABROOK: Mark Everest founded Prevention Services eight years ago after spending nearly 15 years developing corporate wellness programs. Everest thinks many wellness plans fall short, because they tend to attract the workers who need the least amount of help.

MARK EVEREST, PRESIDENT, PREVENTION SERVICES: You attract the fit, so you're really preaching to the choir. With this program, our trainers go to the worker, so the wellness comes to you, the injury prevention comes to you, the medical counsels come to you. All of this information is disseminated one-on-one coming to you day-in and day-out.

EASTABROOK: Injury prevention plans appear to be cost effective, too. A recent study by risk management firm Aon found such programs reduced insurance indemnity payments, workers compensation claims, and lost time claims across the board.

LUDWIG: Palms out front. Give it a good push.

EASTABROOK: But Allen Edmonds CEO John Stollenwerk thinks the plans offer other benefits.

JOHN STOLLENWERK, PRES. & CEO, ALLEN EDMONDS SHOE CORP.: I think it's really important and it really is a big morale booster, because it's a lot of fun. There is a lot of camaraderie.

EASTABROOK: Allen Edmonds says the Prevention Plus plan is so new here it hasn't yet had a significant impact on health insurance claims, but the company believes it will farther down the road. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Port Washington, Wisconsin.

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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/03/03: "Money File"-The Canadian Prescription Drug Connection

PAUL KANGAS: In the "Money File" tonight, Americans buying prescription drugs in Canada. Here's Kevin McCormally, editorial director at "Kiplinger's Personal Finance."

KEVIN MCCORMALLY, EDITORIAL DIR., "KIPLINGER'S PERSONAL FINANCE": With Congress back in Washington after its summer holiday, one of the big issues to be decided is how to build a prescription drug benefit into Medicare. And tied up in that legislation is the contentious issue of whether to allow Americans to buy American-made prescription drugs in Canada, where government price controls often keep costs far below what you're charged at the corner pharmacy. Now, you'll be forgiven if you didn't know it was illegal for Americans to go up north to stock up; tens of thousands do it all the time. Some senior groups organize across-the-border bus trips to cheap Canadian pharmacies. And increasingly, citizens save big bucks by sending their U.S. doctor's prescriptions to Canadian mail-order pharmacies. One Massachusetts city even openly encourages its employees to get their drugs from Canada to save the city millions of dollars. But this drug re-importation is illegal, or technically illegal, as the proponents like to say; the technicality being that the FDA and the border guards have been happy to turn a blind eye to individuals getting prescriptions for personal use. If Congress changes the law, you won't have to worry about that technicality. But speaking of technicalities, American citizens technically don't need a passport to go to and from our friendly neighbor to the north. All you need is an oral declaration of citizenship. But here's a classic catch-22. The border guard doesn't have to believe you. He or she can demand proof. So if you head up north for some cheap meds, be sure to take your passport or a certified copy of your birth certificate. You want to be sure you can get back into this country with your medicine, whether it's legal or not. I'm Kevin McCormally.

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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/03/03: Last Word: IRS Errors

SUSIE GHARIB: And finally tonight, it appears the tax advice that many Americans seek from the Internal Revenue Service may not be much help. The Treasury Department sent its investigators into several IRS centers last year, seeking answers to a number of tax law questions. Well, the testing showed that IRS workers gave correct answers only 57 percent of the time. That means the half-million people who visited the centers during the time of the study could have received the wrong answers to their questions. The IRS disputes that figure, but admits its employees do need to be more accurate. Paul, the agency is setting a goal of being right 80 percent of the time this year and 85 percent by next year.

PAUL KANGAS: I hope they don't confuse that percentage with top tax bracket percentages. Boy.

GHARIB: That would b a problem.

KANGAS: Oh boy.

GHARIB: Nobody's perfect.

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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

9/03/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Wall Street opened modestly higher in an extension of yesterday's impressive late rally, which lifted many popular stock averages to 15- and 16-month highs. After 30 minutes of trading, the Dow was up 32 points and the NASDAQ Index posted a 17-point advance. A lower-than-expected 0.2 percent rise in July construction spending slowed the upturn in mid-morning, but another brokerage upgrade of the enterprise software sector restored upward momentum. At mid-session, the Dow was up 45 points, NASDAQ up 18. The market maintained its gains thanks to the Federal Reserve's Beige Book survey showing the economy continued to improve in July and August. The very active volume on the rally was another positive. The Dow Industrial Average closed up 45.19 points at 9568.46. The NASDAQ Composite rose 11.42 points ending at 1852.90. The Standard & Poor's 500 Index gained 4.28 points and closed at 1026.27. Even the bond market was higher, the 10-year note edged up 2/32 to 97 8/32, putting the yield 4.60 perent.

Big board volume leader on very active 40.7 million shares was Lucent Technologies (LU), up $0.13 a share.

Followed by NorTel Networks (NT) which was $0.29. NorTel got a $1 billion order to provide Verizon (VZ) with next generation voice and networking equipment.

And there you see it Caremark (CMX) up - or down $2.10. It's going to have to come up with $6 billion in stock and some cash to buy AdvancePCS. And that could represent some earnings dilution. We'll see Advance in a moment.

GE (GE) was up $0.68 a share. J.P. Morgan upgraded it from underweight to neutral.

Pfizer (PFE), number five in big board volume, gained $0.42.

And then AOL Time Warner (AOL), a $0.24 gain.

Ford Motor (F) was down $0.37. Of course, its sales in August were down 15 percent.

AT&T Wireless (AWE) gained a dime.

Nokia (NOK) rising $0.21.

And Agere Systems (AGR.A) gained a dime, number 10 in big board volume.

AMR (AMR), parent of American Airlines, doing well, up $1.07. Merrill Lynch repeated a buy recommendation and put it on its Focus One list.

The airlines were generally strong, and that includes AirTran Holdings (AAI), up $1.07. Its August revenue passenger miles up a whopping almost 33 percent.

And Continental Airlines (CAL) did well, rising nearly a dollar. It traded as high as $18.15. Its August passenger traffic estimated to be up about 4 to 5 percent.

Eli Lilly (LLY), a casualty today, down $4.70 on concern the FDA's conditional approval of its incontinence and depression drug called Cymbalta might face delays.

And then SAP (SAP), this is the big European software firm, up almost $3 a share. Morgan Stanley upgraded it from equal weight to overweight. And C.S. First Boston upgraded it from neutral to outperform.

On the downside, Pepsi Bottling Group (PBG) down $2.36. The company cut its third-quarter earnings guidance to the low end of its earlier $0.66 to $0.70 estimate. It's due to increasing competition, according to the company.

Charles River Labs (CRL) tumbled almost $5 a share. The company cut its 2003 earnings estimate from $1.67 down to about $1.58 at worst.

Shaw Group (SGR), big percentage gainer, up $1.72. The company's Stone & Webster received a $570 million construction contract from Astoria Energy.

And Omega Protein (OME) up $0.93. And it traded as high as $7.85. This is a producer of fish oil and fish meal and it received a $9.50 per share cash buyout bid from an Argentinean firm. But the company isn't absolutely sure of the bid's validity. Incidentally, Zapata (ZAP), which owns 60 percent of Omega, rose $3.62 to $60.90 a share.

NASDAQ's most active issue, Microsoft (MSFT) on the strong high-tech area, up $1.04.

Cisco (CSCO) gained $0.75. Cisco's CEO said its August sales exceeded its expectations, but he's still cautious.

Intel (INTC) down $0.52.

Oracle (ORCL), a $0.37 gain.

And there you see AdvancePCS (ADVP), up $7.45. That buyout bid from Caremark is for 2.15 shares of Caremark for each share of Advance. That works out to a value of about $50 a share as of today. Ninety percent will be in stock and 10 percent in cash.

eBay (EBAY) down $2.26. This is the two-for-one split stock, keep in mind.

Dell (DELL), it was up $0.58.

Amgen (AMGN) down $1.53.

KLA-Tencor (KLAC) fell $1.83.

And Qualcomm (QCOM) down $0.84 per share.

Take-Two Interactive Software (TTWO) had a great day, up $6.63. This is a video game publisher and its third-quarter earnings came in at $0.18, nicely higher than last year's $0.12. Revenues up a respectable 27 percent. And the company plans to acquire TDK Mediactive for cash and stock worth about $22 ¾ million. Also Take-Two says expect more acquisitions to come.

And those are the "Stocks in the News."

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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/03/03: Market Stats

								      NET    PERCENT
                          CLOSE     CHANGE     CHANGE
						  
						  
DOW CLOSE              9568.46     +45.19       + .5
HIGH                                         9597.38
LOW                                          9514.49

NASDAQ COMP.           1852.90     +11.42        +.6
HIGH                                         1863.55
LOW                                          1846.51

VOLUME                                       1,650.8
PREVIOUS                                     1,447.5
UP VOLUME                                    1,025.9
DOWN VOLUME                                    598.3

DOW TRANSPORTS         2761.47     +15.63       + .6
DOW UTILITIES           244.84      +1.37       + .6
CLOSING TICK                                    +204

S&P 500                1026.27      +4.28       + .4
S&P 100                 514.50      +3.64       + .7
MIDCAP 400              525.67      +1.56       + .3
REUTERS/CRB             241.70       +.41       + .2

NYSE COMPOSITE         5759.80     +27.53       + .5
VALUE LINE              331.56      +1.92       0.58
RUSSELL 2000            510.71      +3.21       0.63
WILSHIRE 5000          9947.15     +41.71       0.42

U.S. TREASURIES
5-YEAR NOTE 3.25%
Aug. 15,2008          98 15/32      +3/32       3.59

10-YEAR NOTE 4.25%
Aug. 15,2013          97  8/32      +2/32       4.60

30-YEAR NOTE 5.375%
Feb. 15, 2031        100  9/32      -7/32       5.35

LEHMAN BROS.
LONG BOND INDEX        1668.37      -1.72


DOW CLOSE              9568.46     +45.19       + .5
ADVANCES                                        2048
DECLINES                                        1211
NEW HIGHS                                        507
NEW LOWS                                           6

                                      NET    PERCENT
NYSE MOST ACTIVE     4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        2.12       +.13       +6.5
NT     Nortel Networks    3.51       +.29       +9.0
CMX    Caremark RX       23.30      -2.10       -8.3
GE     GE                31.12       +.68       +2.2
PFE    Pfizer            30.88       +.42       +1.4
AOL    AOL Time Warner   16.76       +.24       +1.5
F      Ford              11.94       -.37       -3.0
AWE    AT&T Wireless      8.82       +.10       +1.2
NOK    Nokia             16.69       +.21       +1.3
AGRa   Agere Systems      3.25       +.10       +3.2

NASDAQ CLOSE           1852.90    + 11.42       + .6
VOLUME                                       2,340.0
PREVIOUS                                     1,781.1
ADVANCES                                        1854
DECLINES                                        1348

NASDAQ ACTIVE
MSFT   Microsoft         28.30      +1.04       +3.8
CSCO   Cisco Systems     20.24       +.65       +3.3
INTC   Intel             28.22       -.52       -1.8
ORCL   Oracle            13.76       +.37       +2.8
ADVP   AdvancePCS        47.45      +7.45      +18.6
EBAY   eBay              52.49      -2.26       -4.1
DELL   Dell Inc          34.17       +.58       +1.7
AMGN   Amgen             66.31      -1.53       -2.3
KLAC   KLA Tencor        56.53      -1.83       -3.1
QCOM   Qualcomm          40.37       -.84       -2.0

AMEX CLOSE              982.81     + 4.57       + .5

INDEX SHARES
DIA    DIAMONDUST        96.02       +.56        +.6
QQQ    NASDAQ            33.85       -.04        -.1
SPY    S&P DEP.IPTS     103.36       +.56        +.5

STOCKS IN THE NEWS
AMR    AMR Corp          12.73      +1.07       +9.2
AAI    AirTran Holdings  15.04      +1.07       +7.7
CAL    Continental Air   17.49       +.99       +6.0
LLY    Eli Lilly         62.10      -4.70       -7.0
SAP    SAP AG            34.06      +2.96       +9.5
PBG    Pepsi Bottling    21.90      -2.36       -9.7
CRL    Charles River     31.50      -4.97      -13.6
SGR    Shaw Group        10.47      +1.72      +19.7
OME    Omega Protein      7.08       +.93      +15.1
TTWO   Take Two          36.38      +6.63      +22.3