Program: Wednesday, September 17, 2003

NYSE Chairman Richard Grasso Resigns
Enronitis Infects Merrill Lynch
One On One With Best Buy CEO, Brad Anderson
Money File: An Education In Paying College Tuition
Paul Kangas' Stocks In The News
Market Stats

09/17/03: NYSE Chairman Richard Grasso Resigns

JEFF YASTINE: Sources say the chairman of New York Stock Exchange, Richard Grasso, resigned his post late today. His departure from the world`s largest exchange came after a firestorm of criticism for his $140 million pay package. And Suzanne Pratt is live at the New York Stock Exchange and joins us now with more on that story, Suzanne?

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: That`s right, Jeff. The beginning of the end of Grasso`s tenure in the top job here came in a late day emergency conference call held by the members of board of the directors. The call was set up by Carl McCall, the chairman of the Exchange`s Compensation Committee, and when it was over Grasso`s tenure was reportedly over. The reported resignation capped off a day of turmoil from Washington, D.C. to here on Wall Street. We have two reports tonight, beginning with Scott Gurvey.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The cacophony on the subject of Richard Grasso had built to a crescendo. People were betting on the outcome. The hero of 9/11 had become the goat of 2003. Among those calling for Grasso`s resignation, Alan Hevesi, New York State comptroller and trustee of the state`s $105 billion pension fund.

ALAN HEVESI, N.Y. STATE COMPTROLLER: We were very concerned with the initial revelations that for years Mr. Grasso`s remuneration was a secret, and then stunned by the size of it, and then further surprised by the fact that the first announcement and revelation was $48 million short.

GURVEY: Those calling for Grasso`s resignation have insisted it is a necessary move to restore confidence in the Exchange. They say that even though Grasso`s compensation was fairly earned over a long term of employment, the public perception is that the size of his pay was simply inappropriate.

SARAH TESLICK, EXEC. DIR. COUNCIL OF INST. INVESTORS: Most Americans probably had a general sense, before the current problems were uncovered, that the New York Stock Exchange was a reputable institution, it had pillars, it had been there for hundreds of years, it was kind of quasi-governmental and it would just do the right thing. I think most of us, and I include myself in that, really hadn`t thought twice about that view of the Exchange. But once you`re told that the person who heads it is keeping 40 percent of the profits last year it`s awfully hard to think of it in the same august, Supreme Court kind of way.

GURVEY: Ironically, the outrage over Grasso`s salary would probably not have occurred if the Exchange itself had not decided to make public much more information about its internal operations. The Exchange applied to itself new rules on disclosure it has decided to require its listed companies obey.

MURIEL SIEBERT, MURIEL SIEBERT & CO.: I looked up the last annual report of the stock exchange. It tells you how many new companies we`ve listed, how many shares we`ve traded. It goes into some of the technological developments which have been superb. But nowhere is there the revenues, broken out by what kind of revenues, where do they come from. Nowhere does it state the expenses, including salaries and technology costs and all the other things. And I just think that this is a period of transparency. We`re expecting this of the corporations that are listed on the board. So I think its incumbent on the directors of the board to add transparency and do it quickly.

GURVEY: A late hour board meeting was called, Exchange officials say, because of a growing feeling among the members that the matter had to be dealt with quickly. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Stephanie Woods on Capitol Hill. SEC Chairman William Donaldson says the problem at the New York Stock Exchange was bigger than Richard Grasso`s big paycheck.

WILLIAM DONALDSON, SEC CHAIRMAN: Mr. Grasso has been, in my view, a superb manager of the New York Stock Exchange. And what we`re talking about now is the governance procedures which has to do not only with Mr. Grasso as the chief executive officer, but the board of directors of the stock exchange and the procedures they have in place.

WOODS: But Grasso`s pay became a political hot potato. Democratic presidential candidate Joe Lieberman called on Grasso to step down quote, "for the sake of the confidence in the market," endquote. Congressman Richard Baker called Grasso`s pay out of whack for a regulator, but says he shouldn`t have to resign.

REP. RICHARD BAKER (R-LA), CHMN., CAPITAL MKTS. SUBCOMMITTEE: My specific focus is only as to his function as a regulator, and being conflicted as the CEO of the corporate side of the business. And perhaps there should be consideration given to a division of those duties, which could then reflect on compensation.

WOODS: The NYSE released recommendations for corporate reforms of its member companies last spring. Now the heat is on for the Exchange to reform itself.

DONALDSON: We are gathering information. We will be taking a hard look at the governance structures. In the interim it`s my hope that the New York Stock Exchange board itself will continue and accelerate its work on their internal organization.

WOODS: The New York Stock Exchange board will present its reform recommendations October 2. Donaldson says given the current climate, those proposals will receive very close scrutiny. 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.

09/17/03: Enronitis Infects Merrill Lynch

PAUL KANGAS: More fallout from the Enron mess: three former Merrill Lynch executives were indicted today for conspiring to help Enron manipulate the now-bankrupt energy company`s financial statements. The three surrendered to authorities in Houston, and were charged with wire fraud, perjury and obstruction of justice. The federal indictment alleges Enron and Merrill Lynch concocted a deal in 1999 involving barges in Nigeria that let Enron show a bogus $12 million profit. Prosecutors say it was what was called an "asset parking" scheme.

CHRISTOPHER WRAY, ASST. ATTY. GENERAL, JUSTICE DEPT.: These allegations of perjury and obstruction of justice by these former high level Merrill Lynch employees are especially troubling. Investigations of this type are extremely difficult and complicated and are made even more so when people deliberately seek to hide the truth from investigators.

KANGAS: All three former Merrill execs have pleaded "not guilty" to the charges. Merrill Lynch itself was not accused of wrongdoing in this indictment but it has now put in place reforms to review all complex financial transactions.

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.

09/17/03: One On One With Best Buy CEO, Brad Anderson

JEFF YASTINE: Sales of big-screen TVs and other consumer electronics helped Best Buy to nearly double its fiscal second-quarter profits. The electronics retailer posted earnings of $0.42 a share. That matched the First Call analysts` consensus estimate. It earned $0.24 a share in the year-ago period. Best Buy also raised its profit forecast for the third quarter, but the company, and its CEO, Brad Anderson, admit the retail chain`s most recent 7 1/2 percent gain in same-store sales is probably unsustainable:

BRAD ANDERSON, CEO, BEST BUY: Well, we`re experiencing double-digit comps in August and so far in September. And we`re just thinking that that level of comp store gain is sort of unheralded. We haven`t seen it in many years. And so we don`t want to plan for the kind of very, very strong comp store we`re currently experiencing. So that`s what we`re referring to.

YASTINE: And I take it this is coming from the tax refund, rebate checks and those sorts of things that - the impetus that has been coming into the economic system here?

ANDERSON: Yes, I think everybody has experienced a surge in the - particularly in the August time frame. Almost all retailers have. And we have particularly seen it in areas like the personal PC and digital television which has just had enormous rates of growth. And so we`re hesitant to forecast that for the balance of the year. We think it will be very good but maybe not quite as robust as what we`re experiencing right now.

YASTINE: So you downplayed expectations and yet at the same time you are telling analysts to up their forecasts or at least the range of expectations for the third quarter should be better?

ANDERSON: Yes, we`re better than we - we started with an optimistic expectation when we began the fiscal year of the second half. And now there`s even more evidence to indicate that we`ll have a very good second half. So what you do see us is raising the expectations for the second half. But we`re also dampening it a little bit because we believe we`re going to project that we`ll have strong sales but not quite as strong as we`re experiencing right now.

YASTINE: Now...

ANDERSON: We...

YASTINE: Go ahead.

ANDERSON: I was just going to say that if we find that sales are at the very robust rate they are running currently - we`re doing spending to make sure that we`re in stock with inventory. We have the right kind of sales assistants there to be able to maintain the kind of results we`re having currently. We are just not projecting it will be quite that strong.

YASTINE: Now explain to us where the sales are coming from. What are people buying? I thought the economy was supposed to be in the doldrums but it doesn`t look like that`s the case with your company?

ANDERSON: Not in our case. No. We`re seeing that first of all a lot of customers are coming in and buying computer products, particularly notebooks and now even desktops because the old computers that you had typically don`t work as well as a multimedia device. And more and more customers are using the computer as sort of a multimedia entree (ph) into the home, whether it`s audio or video or information. And so they are upgrading their computer products. And then digital television, we`re only at about 4 or 5 percent of American households today have a digital TV, and that`s a rapidly growing business for us.

YASTINE: Does this surprise you that that level of growth and that level of interest in buying these kinds of products, again, given everything, the jobless situation and all of that?

ANDERSON: Yes, it does. We were - we had to revise in August - the beginning of August, we revised our earnings estimate for the second quarter up very substantially based on results that were much better than what we thought. And as you said we just have revised it up further for the balance of year.

YASTINE: Now given all that, how does that set up then going into the Christmas season? It may be a little early to ask you that question but given what you know now?

ANDERSON: Well, I was just at an international mass retailers conference a couple days ago here. And I haven`t seen this kind of optimism out of retailers in a long time. There was a survey question that was asked and about 87 percent of the people there were very optimistic about where they thought the balance of the year would be. So - and we`re also seeing that in the NRF survey in terms of expecting a very robust holiday season. So it looks good.

YASTINE: Now explain to me one thing, what kind of a competitor is Wal-Mart (WMT) for Best Buy these days? Because Wal-Mart has been upgrading that part of their business and they - it sounds like they are doing a lot more selling of large screen TVs, and those things that you guys sell?

ANDERSON: They are. Wal-Mart is continuing to gain share in this business as we are gaining share. And they are benefiting from constantly lower price points that they have in the business. But at the same time, many more interesting products are coming in that are hard to connect with each other. And so we`re seeing at least as robust growth if not more robust gains in terms of market share than even Wal-Mart is in the business right now.

YASTINE: All right. We`ll end it there. Mr. Anderson, I thank you for joining us today.

ANDERSON: Thanks very much.

YASTINE: Our guest, Best Buy CEO Brad Anderson.

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.

09/17/03: Money File: An Education In Paying College Tuition

JEFF YASTINE: It`s a big concern for every parent: paying for a child`s college education. In the "Money File" tonight, a look at some good and not so good ideas for that. Here`s Kathy Kristof, business writer for "The L.A. Times," and author of "Investing 101."

KATHY KRISTOF, AUTHOR, "INVESTING 101": For the first time in history, American parents have access to a pre-paid tuition plan, no matter where they live. In the past, these plans were offered by a handful of states. You could participate if you lived in one of those states and your child intended to attend a state-run college or university. However earlier this month, a consortium of 225 private colleges and universities formed their own plan, it`s called the Independent 529 Plan. What this plan offers is a guarantee. The tuition units that you buy today will pay the same amount of college costs in the future as they do right now, no matter how much college costs rise in the interim. For risk-averse parents who don`t trust stock and bond returns, that could prove to be a compelling selling point. There`s just one big catch, that`s your child. At the time that these tuition are most affordable is when your child is the youngest, naturally that`s too early to know whether your child is going to be willing or able to go to one of the pricey private colleges that participate in the plan. If they go to a school that does not participate in the plan, the only guarantee that you get is that you`ll get your money back, plus or minus 2 percentage points per year. That means that today`s $50,000 investment could be worth between $35,000 or $70,000 17 years from now, and that`s no huge bargain. 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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

9/17/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Some carry over strength from yesterday`s big rally gave Wall Street a modestly higher opening but most of the Dow`s early 30-point gain was due to a $4 1/2 rise in Altria stock after yesterday`s favorable late day court ruling we told you about last night. The NASDAQ market was narrowly mixed at the outset. A warning from DuPont (DD) said its 2003 earnings would be at the low end of guidance dragged down the blue chips. By late morning the Dow was up only 3 points and the NASDAQ up just a fraction. The market went into a slow afternoon fade, partly due to the distraction of all the furor over NYSE Chairman Grasso`s future. The Dow Jones Industrial Average sank to a closing loss of 21.69 points at 9545.65. The NASDAQ Composite lost 4.15, ending at 1883.10. The Standard & Poor`s 500 Index fell 3.35 to 1025.97. The 10-year note in the bond market rose 25/32 to 100 17/32 with the yield at 4.18 percent.

Topping the active list on the big board, trading 29.4 million shares, NorTel Networks (NT) edging up $0.13.

And then Altria Group (MO), parent of Philip Morris, up $4.19. That`s a 10 1/2 percent rise, and it helped the Dow by 29 1/2 points. Otherwise the Dow would have been down 50 points. Of course, this is a positive reaction to the Illinois Supreme Court ruling that we told you about last night that lowered the bond on that company`s liability case.

Lucent Technologies (LU), no change.

AOL Time Warner (AOL), a $0.26 gain there.

General Electric (GE) lost $0.21, fifth in volume.

And then Sprint PCS (PCS) gained $0.26.

While Micron (MU) gained $0.56.

Pfizer (PFE), a $0.12 rise.

Citigroup (C) gained $0.24, tenth in volume.

ExxonMobil (XOM) down $0.87 a share.

DuPont (DD), which is a member of the Dow Industrials, down $1 1/2. That hurt the Dow Industrials by 10 1/2 points. The company now sees 2003 earnings at the lower end of its July 4 forecast which was between $1.60 and $2.10 a share.

And now we see Best Buy (BBY), down $1.18. And although it was a dollar higher this morning after reporting second-quarter earnings, $0.42, up from $0.24, but the company says its third quarter will drop to about $0.35. Keep in mind that stock has a 12-month low at 17 so it has had quite a run.

Circuit City Stores (CC) down $0.23. A second-quarter loss of $0.60, but most of it was due to charges from the sale of its customer credit card portfolio.

New York Times Class A (NYT) down $1.65. The company`s August advertising revenues dropped 1.4 percent. And the New York Times sees third-quarter earnings around $0.30 to $0.32. The Street was expecting $0.39 a share.

FedEx (FDX) up $0.43 although it traded as low as $65.21. First-quarter earnings higher, $0.61 versus $0.52, $0.04 better than the Street expected. But the company sees fiscal 2004 at $3 to $3.15 a share. The Street was expecting $3.21 a share.

Talbots (TLB), big department store chain, up $1.95. Merrill Lynch upgraded it from neutral to buy and did the same with AnnTaylor (ANN) whose stock move up $1.30.

And then a big loser, Jack in the Box (JBX) tumbling $2.93. The company issued first-quarter earnings estimate of $0.53, $0.08 below the Street estimate. And says its earnings for the year will be $1.68. Wall Street was expecting $2.16 a share there.

Then FactSet Research Systems (FDS) down $3.22. The company provides database services to the financial community and it wasn`t too kind to it today. C.S. First Boston downgraded it from outperform to neutral and Morgan Stanley downgraded it from overweight to equal weight.

Worthington (WOR) was a major loser percentage-wise, off $1.04, 7 1/3 percent. First-quarter earnings sharply lower, only $0.07 versus $0.32 on a 5 percent drop in sales. The company is in the steel processing business.

NASDAQ`s most active issue was Intel (INTC), losing $0.03.

Followed by Microsoft (MSFT), a $0.40 drop there.

Cisco (CSCO) dropped $0.15.

Oracle (ORCL), down $0.25.

And completing this see of red ink, Amgen (AMGN) down $0.18, just fractional losses, however.

Nextel Communications (NXTL), ah, there is a gainer, $0.51.

Qualcomm (QCOM) down $0.65.

Yahoo! (YHOO), an $0.18 rise.

Dell Incorporated (DELL), a $0.02 drop.

And Applied Materials (AMAT) was down $0.26 a share.

Roxio (ROXI) moved up $2.09. The company and Samsung will soon launch a new line of digital music players using Napster`s latest technology.

And then we see another good gainer in Introgen Therapeutics (INGN). The stock rising $1.96. The FDA has granted fast track status to the company`s cancer drug called Advexin.

And then finally a loser, on the downside here, Repligen (REGN) down $1.60. A judge has ruled the company has insufficient evidence to challenge five patents owned by Bristol-Myers (BMY) for products that it uses to treat rheumatoid arthritis.

And those are the "Stocks in the News" tonight.

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.

09/17/03: Market Stats

			
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9545.65     -21.69       - .2
HIGH                                         9594.43
LOW                                          9536.81

NASDAQ COMP.           1883.10      -4.15        -.2
HIGH                                         1894.74
LOW                                          1876.24

VOLUME                                       1,317.6
PREVIOUS                                     1,368.4
UP VOLUME                                      611.6
DOWN VOLUME                                    668.4

DOW TRANSPORTS         2761.20     -12.18       - .4
DOW UTILITIES           245.09      -1.22       - .5
CLOSING TICK                                    +555

S&P 500                1025.97      -3.35       - .3
S&P 100                 515.43      -1.93       - .4
MIDCAP 400              525.04      -1.43       - .3
REUTERS/CRB             238.46       +.79       + .3

NYSE COMPOSITE         5787.09     -13.09       - .2
VALUE LINE              332.67       -.64      -0.19
RUSSELL 2000             515.1       -.56      -0.11
WILSHIRE 5000          9951.79     -27.25      -0.27

U.S. TREASURIES
5-YEAR NOTE 3.125%
Sept. 15,2008        100  8/32      +7/32       3.07

10-YEAR NOTE 4.25%
Aug. 15,2013         100 17/32     +25/32       4.18

30-YEAR NOTE 5.375%
Feb. 15, 2031        104  6/32   +1 20/32       5.09

LEHMAN BROS.
LONG BOND INDEX        1726.94     +17.00


DOW CLOSE              9545.65     -21.69       - .2
ADVANCES                                        1574
DECLINES                                        1658
NEW HIGHS                                        192
NEW LOWS                                          13

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
NT     Nortel Networks    4.63       +.13       +2.9
MO     Altria Group      44.65      +4.19      +10.4
LU     Lucent Tech        2.31      unch.      unch.
AOL    AOL Time Warner   16.31       +.26       +1.6
GE     GE                31.72       -.21        -.7
PCS    Sprint PCS Group   6.24       +.26       +4.4
MU     Micron Tech       14.18       +.56       +4.1
PFE    Pfizer            32.11       +.12        +.4
C      Citigroup         44.94       +.24        +.5
XOM    Exxon Mobil       36.84       -.87       -2.3

NASDAQ CLOSE           1883.10     - 4.15       - .2
VOLUME                                       1,905.3
PREVIOUS                                     1,796.2
ADVANCES                                        1543
DECLINES                                        1613

NASDAQ ACTIVES
INTC   Intel             28.88       -.03        -.1
MSFT   Microsoft         28.50       -.40       -1.4
CSCO   Cisco Systems     21.14       -.15        -.7
ORCL   Oracle            12.28       -.25       -2.0
AMGN   Amgen             69.63       -.18        -.3
NXTL   Nextel Comms      20.00       +.51       +2.6
QCOM   Qualcomm          44.24       -.65       -1.5
YHOO   Yahoo Inc         36.00       +.18        +.5
DELL   Dell Inc          34.58       -.02        -.1
AMAT   Applied Matl      21.12       -.26       -1.2

AMEX CLOSE              988.67     + 5.31       + .5

INDEX SHARES
DIA    DIAMONDS TRUST    95.95       -.05        -.1
QQQ    NASDAQ 100        34.26       -.14        -.4
SPY    S&P DEP.RECEIPTS 103.38       -.20        -.2

STOCKS IN THE NEWS
DD     Du Pont           42.47      -1.50       -3.4
BBY    Best Buy Co       51.48      -1.18       -2.2
CC     Circuit City      10.97       -.23       -2.1
NYT    NY Times          42.87      -1.65       -3.7
FDX    FedEx Corp        66.51       +.43        +.7
TLB    The Talbots       36.10      +1.95       +5.7
JBX    Jack In The Box   19.86      -2.93      -12.9
FDS    Factset Research  46.98      -3.22       -6.4
ROXI   Roxio             10.46      +2.09      +25.0
INGN   Introgen Thera    10.66      +1.96      +22.5
RGEN   Repligen           6.66      -1.60      -19.4