Program: Thursday, September 18, 2003

A New Day At The NYSE
How Best To Regulate The NYSE
Chief Executive Outlook With Albertson's CEO Larry Johnston
A Progress Report On Steel Tariffs
Commentary: What Should The WTO Talks Talk About?
Paul Kangas' Stocks In The News
Market Stats

09/18/03: A New Day At The NYSE

JEFF YASTINE: It was day one at the New York Stock Exchange of the post-Richard Grasso era. The world's biggest stock market is temporarily under the stewardship of Carl McCall. He's one of the directors who signed off on Grasso's fractious pay package and one who voted to ask Grasso to resign. Late today, McCall held a news conference to talk about the Exchange's future. Erika Miller joins us from the NYSE with the latest. Erika?

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: The purpose of the news conference was to brief the media on where the NYSE stands now that Grasso is gone. On the subject of a successor, McCall said he personally was not interested in the job and the board has not had enough time to identify candidates. But possible candidates are being talked about by traders, everyone from former SEC Chairman Arthur Leavitt to David Pottruck, CEO of Charles Schwab (SCH). On another topic, I asked McCall what changes, if any, he'd like to see in the Exchange's structure. He wouldn't answer my question, but he made it clear there will be reforms.

CARL MCCALL, LEAD DIRECTOR, NYSE: The larger issue, the thing that I hope we can focus on now, is that the board of the New York Stock Exchange is fully committed to moving forward with a corporate governance plan that will commit us to spry and commit us to being a model for all other corporations in this country.

MILLER: Just moments ago, a meeting broke up between Mr. McCall, several board members and Exchange members. Several who attended said the discussion was very heated. Tomorrow, McCall says the board will hold a special meeting to consider the many issues at hand.

KANGAS: Thanks, Erika.

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.

09/18/03: How Best To Regulate The NYSE

PAUL KANGAS:One of the big questions facing the big board now is a structural one -- should it regulate the companies it lists? There's a growing consensus that the answer is no. As Scott Gurvey reports, there's also a growing effort to force the NYSE to split up the responsibilities.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The resignation of Richard Grasso is probably not the last of the changes to be made at the New York Stock Exchange. The NYSE's cherished role as a regulator of its listed companies is also likely to end. Grasso described his job as one third regulatory and two thirds entrepreneurial and business. And of the 26 members of the NYSE board of directors, 16 are currently or were recently employed by companies listed on the Exchange, often as chief executive. To many, the conflict of interest is obvious. Board members connected to the regulated companies are setting the salary of their regulator. The 1934 Securities and Exchange Act allowed the Securities and Exchange Commission to have the NYSE monitor its member firms and set governance and reporting standards for its listed companies. It's a move that is still controversial seven decades later.

SARAH TESLICK, EXECUTIVE DIRECTOR, COUNCIL OF INSTITUTIONAL INVESTORS: The trouble starts when you add on the piece that doesn't fit, which is the government coming in and saying to the New York Stock Exchange, by the way, while you're at it, protecting the interests of your members, could you also protect the interests of investors? And those are two different constituencies. What's good for broker/dealers isn't always what's good for investors.

GURVEY: In 2000, the National Association of Securities Dealers decided to separate its NASDAQ stock market from its regulatory functions after concerns arose about conflicts between the two roles.

JOHN MARKESE, PRESIDENT, AMERICAN ASSOCIATION OF INIDIVIDUAL INVESTORS: I think the whole concept of self-regulation is moving away. We need to have unbiased, completely separate, no conflict of interest regulation and I think that means separation of the regulator from the marketplace without question. And every investor, whether they're institutional, public, individual, even the governments should cheer this action. And I think it will come to the New York Stock Exchange.

GURVEY: Today, NYSE officials said they are dedicated to restructuring the marketplace. Many believe if they do not separate the market from its regulatory functions, the SEC or Congress will do it for them. 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. Copyright (c) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/18/03: Chief Executive Outlook With Albertson's CEO Larry Johnston

JEFF YASTINE: While the U.S. economy looks like it might be in the midst of a turnaround, one of the nation's grocers is on the comeback trail, as well. The nation's number two supermarket chain, Albertson's, is fighting to beef up its market share in an extremely competitive grocery and drugstore industry. Over the last year, sales for the industry as a whole have remained pretty steady, showing about two percent growth. And in our Chief Executive Outlook tonight, Albertson's CEO Larry Johnston joins us now from Boise, Idaho with his view of where the U.S. economy is heading. And Mr. Johnston, welcome to NIGHTLY BUSINESS REPORT.

LARRY JOHNSTON, CEO, ALBERTSON'S: Thank you, Jeff. Good evening.

YASTINE: Let's talk about your work at Albertson's for a second. You were brought in about two years ago to help turn around that chain. How is it going so far?

JOHNSTON: Well, it's going very well, Jeff. Yes, I spend 28 years at G.E. (GE) and about two and a half years ago the board brought me in to restructure the company and begin turning it around. We've made a lot of progress. We've gone through quite a rigorous restructuring, closing under performing stores, exiting under performing markets, consolidating divisions and now we're moving on to grow the company.

YASTINE: You know, when I read about the grocery industry, all I ever seem to hear about is Wal-Mart (WMT), Wal-Mart, Wal-Mart, with the super centers. How do you defend your market share in that sort of a situation with that kind of an aggressive competitor?

JOHNSTON: We don't. We wake up every morning across the country and 2,300 stores competing against different competition. Wal-Mart happens to be one of those competitors, but there are hundreds of others. And in every market we have to take everybody seriously and we do. We've been lucky recently and feel very good about the fact that we've been growing our market share and for the first two quarters of the year, comp store sales have been slightly negative. In the first four weeks of the third quarter our comp store sales have been positive. So that feels very good and we see that as a result of our more aggressive marketing coupled with what we think is an improving economy.

YASTINE: Well, let's turn to the economy for a second, as you were mentioning. What's your sense as far as how much of an improvement are we seeing? Because it seems like the economy is beginning to make a turn, but what are you seeing from your end of things?

JOHNSTON: Yes, I think it's too early to make a, you know, a real hard call on this. But I will tell you that there's nothing more basic than food and drug. I'm out in the store constantly. For the last two to three years, you know, during this economic downturn, we've seen a basic, fundamental change in the way people buy. We've seen people opting for hamburger instead of steak, you know, option for private label products instead of branded products. So there's been a change in buying behavior. Over the last four to five weeks, we've seen a shift in that. As I said, comp store sales are beginning to grow again and we're seeing people starting to trade up.

YASTINE: Do you think it's likely that that sort of a surge in spending is likely to continue? We see a lot of that coming with the tax refund checks and the tax cuts that have begun to go through the economy. What's you're sense as far as the longevity of that sort of a trend?

JOHNSTON: You know, once again, I think it's too soon to call whether this is a sustained recovery or not. But certainly when you take an industry as fundamentally sensitive as groceries and you see one of America's largest retailers in that space with 2,300 store reversing its comp store sales trend, that tells you the economy is beginning to improve. So we're optimistic, cautiously optimistic.

YASTINE: What's you're sense, if I can ask you about your union situation, obviously unions are rather restive. They'd like to see more pay come their way. How are you hdlg that with your union?

JOHNSTON: Well, you know, we have 374 separate union contracts so, you know, every day, every week, every month we're talking with our unions. They represent over half of our associates and we look at them as partners. One of the things that we have spent a lot of time doing is explaining to them the environment that we're operating in and we've been very successfully in obtaining contracts going forward that have allowed us to change work rules and, you know, to compete more effectively. So we're pretty optimistic about how we're working better with unions going forward.

YASTINE: Well, Mr. Johnston, we're out of time. So I appreciate your time with us here.

JOHNSTON: OK. Thanks, Jeff.

YASTINE: Our guest, Albertson's CEO, Larry Johnston.

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.

09/18/03: A Progress Report On Steel Tariffs

JEFF YASTINE: Weather permitting, President Bush is scheduled to get a report tomorrow from the International Trade Commission on the impact of steel tariffs on the industry and steel users. Eighteen months ago, the administration slapped extra duties on imports to give the domestic steel industry time to restructure. Now, pressure is rising again on the traffic debate. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is what's left of the old steel industry.

JOHN LEFLER, GENERAL MANAGER, ISG SPARROWS POINT: Yes, the opulent offices of the previous administration is gone. This was another senior officer's office.

GERSH: John Lefler is building the new steel industry. When International Steel Group rescued Bethlehem Steel's (BHMMQ.OB) Sparrow's Point factory from bankruptcy earlier this year, it slashed management overhead and cut the workforce from 3,500 to 2,400. Lefler is part of the new management. Old retirement plans have been slashed or terminated and annual costs are now $200 million lower.

LEFLER: Once we get our flexibility totally straightened out so that our productivity matches our plan, we will be able to produce steel to match anybody in the world of cost.

GERSH: ISG is getting some help with its restructuring plans. Eighteen months ago, the Bush administration put in place steel tariffs of up to 30 percent on foreign producers.

TERRY BOWMAN, VICE PRESIDENT SUPPLY CHAIN MANAGEMENT, YORK INTERNATIONAL: ISG wouldn't have been able to do that, to raise the money to buy these facilities and provide a future for it if there wasn't an opportunity to make a profit. The tariffs gave us the breathing room to do that.

GERSH: But about 50 miles from Sparrow's Point, the steel tariffs have made the breathing room tighter for companies like York International (YRK). York bends and shapes steel into chillers that air condition office buildings. The company buys 100,000 tons of steel a year and higher steel tariffs have cost York International tens of millions of dollars. It's Terry Bowman's job to find a way to offset that cost.

BOWMAN: It acts almost as a tax on U.S. product and foreign competition can bring finished products in at -- without that tariff. So it's made it very, very difficult to compete on a domestic market.

GERSH: Bowman says the higher steel prices have forced him to put more pressure on York's suppliers to keep their prices down. In one case, Bowman says he knows a company that used to form, weld and paint steel in the U.S. that is now outsourcing in Asia, bringing in a finished part at half the previous price and avoiding the domestic steel tariff altogether.

LEFLER: Now they're buying the assembly offshore and so now there's no steel volume, there's no welding, there's no painting needed. So really it's not a good balance.

GERSH: The tariffs are supposed to expire in 2005, but after reviewing a report of the impact of the first year and a half of the tariffs, the president has the option of repealing them. Lefler says that would be a mistake. He says the industry still needs protection as it restructures.

LEFLER: You've got to readjust the workforce. You've got to readjust your market. You've got to readjust your facilities. We're not there yet.

GERSH: Bowman says lifting the tariffs would help York International.

BOWMAN: It would be more of a psychological lift to domestic manufacturers that they can -- the pressure would be off to move product elsewhere. So it would keep manufacturing in the U.S.

GERSH: So in this election year, the president will have to decide whether to help save jobs at companies that use steel or those that make it. Darren Gersh, NIGHTLY BUSINESS REPORT, Sparrow's Point, Maryland.

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.

09/18/03: Commentary: What Should The WTO Talks Talk About?

JEFF YASTINE: Tonight's commentator looks at last weeks' failure of the World Trade Organization talks at Cancun and she doesn't like what she sees. Here's Barbara Hackman Franklin, President and CEO of Barbara Franklin Enterprises and former U.S. Secretary of Commerce.

BARBARA HACKMAN FRANKLIN, COMMENTARY: The failure in Cancun is a blow to the Doha round of trade negotiations. The developing countries that stood up to the wealthier ones may have shot themselves in the foot. This round has an important agenda, notably reducing agricultural subsidies, and that would help developing countries. The WTO has a big challenge. It's a consensus organization and it's difficult to run a large organization that way. Yet that's the way its predecessor, the GATT, was set up 50 some years ago. Then, there were only 23 member countries. Today, there are 148, any one of which could block action. So how do we break this impasse? Well, some want to reform the WTO but finding a consensus for that seems unlikely. Another approach is to forget the global round and focus instead on bilateral and regional trade agreements. But these agreements create unequal conditions, as some countries get benefits that the others don't have. Still another approach is for smaller groups of countries to get together informally before the next meeting. Then, every country should return to the WTO negotiating table, this time willing to be more flexible. I vote for getting back to the WTO table. A multilateral agreement is still the best and fairest way to produce more global trade. The question is whether the member countries have the political will to do it. I hope so. I'm Barbara Hackman Franklin.

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.

9/18/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Taking the Grasso resignation in stride, Wall Street headed higher at the outset of trading, bolstered by a lower than expected drop of 29,000 in new weekly jobless benefit claims. The financial sector rose on news of strong quarterly earnings for Bear Stearns (BSC). So, after an hour, the Dow as up 50 points and the NASDAQ up 8.

The rally gained momentum on news of a 4/10 percent rise in the August leading economic indicators, the fourth monthly increase in a row. By early afternoon, the Dow was sporting a 100 point gain and NASDAQ up 20 points.

And the extended its gains all throughout the afternoon, to close near its best level of the day. The Dow Industrial Average surged 113 1/2 points, or 1.2 percent, to close at 9,659.13, a new 52 week high. The NASDAQ Composite was up 26 1/2 points, or 1.4 percent, ending at 1,909.55, while the Standard & Poor's 500 Index gained 13.61, ending at 1,039.58.

In the bond market, the 10-year note edged up 5/32 to par and 22/32, putting the yield at 4.16 percent.

The most active issue on the New York Exchange, Lucent Technologies (LU), trading 40.8 million shares and moving a $0.05 higher, even though UBS Financial Brokerage downgraded it from "neutral" to "reduce."

NorTel Networks (NT) down $0.18 even though C.S. First Boston increased its price target from $3 to $5 a share and repeated an "outperform" rating.

Citigroup (C) had a nice gain of $1.71. Chairman Sandy Weil made upbeat comments on the economy. Meanwhile, Merrill Lynch today resumed coverage of Citigroup with a "buy" recommendation.

General Electric (GE) moved up $0.39.

Number five in big board volume, Pfizer (PFE), down $0.06.

Then Corning (GLW) moved up $0.38 a share.

AOL Time Warner (AOL) rising $0.14. The board of directors has voted to drop AOL, as we touched on earlier. AOL from the corporate name will vanish and it'll become Time Warner again and the New York Exchange trading symbol will go back to TWX.

Sprint PCS Group (PCS) down $0.04.

J.P. Morgan Chase (JPM), in a very strong financial sector, up $1.08.

Hewlett-Packard (HPQ) was up $0.61, number 10 in big board volume. One of the reasons for the strength in the financial sector was Bear Stearns' (BSC) earnings. The company out with second quarter results, $2.30, up from last year's $1.23 and way up from the Street estimate of $1.65. Bear Stearns cited a strong bond business as being a major factor there.

And another major brokerage with excellent earnings, A.G. Edwards (AGE) up $2.61. Second quarter earnings, $0.46, up from $0.33 last year. Revenues up a respectable 11 percent and those earnings of $0.46 were $0.12 above the Street estimate. That led to strength in the whole brokerage sector.

Goldman Sachs (GS) up $2.25.

A $1.62 gain in Lehman (LEH).

And Merrill Lynch (MER) itself up $2.13.

Then American Express (AXP) rising $1.73. Yesterday, a federal appeals court upheld a ruling that could enable American Express to issue credit cards through banks that are members of rivals Visa and MasterCard. Potentially long- term positive development there.

Mony Group (MNY) up $3.77. AXA Financial (AXA), AXA, is offering to acquire the company for $1.5 billion in cash. That works out to $31 a share. But many money shareholders are complaining that that bid is far too low. There could be some problems in accepting it there.

Then along we have a new issue that was offered today, 9.1 million shares of National FInancial (NFP). The stock offered at $23 a share, opened at $26.25, the high of the day was $26.60. And, incidentally, the CEO of this financial services company is Jessica Bibliowicz, who is the daughter of none other than Sandy Weil.

On the down side, Clarcor (CLC) fell $3.30, over a seven percent drop. The company makes filters and packaging products. Third quarter earnings were higher, $0.56 versus $0.48, but the company predicting fourth quarter earnings will come in around $0.59, and that's $0.02 below the Wall Street estimate.

Another stock on the down side, Avery Dennison (AVY), which is in adhesives and office products. The company says continuing pricing pressures could reduce by a $0.05 a share its previous third quarter earnings estimate of $0.70 to $0.75 a share.

And then Bayer AG (BAY), the big German firm, yup $1.33. A U.S. court has denied national class action status for lawsuits relating to the company's cholesterol drug called Baycol.

The NASDAQ's most active issue, Microsoft (MSFT), up $1. The company is going to enlarge its board of directors from eight to 10 members.

Intel (INTC), a $0.28 gain.

The same for Cisco (CSCO).

Applied Materials (AMAT) down $0.33.

Yahoo! (YHOO), fifth in volume, gained $1.58 a share.

And then Qualcomm (QCOM) up $1.49.

Dell Incorporated (DELL), a $0.36 rise.

Oracle (ORCL), an $0.08 gain there.

KLA-Tencor (KLAC) dropped $0.64.

Interactivecorp (IACI), a $2.07 gain. A nice move there.

Vans Incorporated (VANS) had a big move up, almost $2. It's into casual footwear and apparel and the company increased its first quarter earnings guidance to at least $0.15 better than its previous $0.58 a share estimate.

And finally, ID Biomedical (IDBE) rose $2.48 a share. Recent trials of the company's influenza vaccine are apparently quite promising. The stock did well.

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.

09/18/03: Market Stats

			
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9659.13    +113.48      + 1.2
HIGH                                         9662.84
LOW                                          9538.28

NASDAQ COMP.           1909.55     +26.45       +1.4
HIGH                                         1910.51
LOW                                          1874.30

VOLUME                                       1,493.2
PREVIOUS                                     1,317.6
UP VOLUME                                    1,144.4
DOWN VOLUME                                    332.6

DOW TRANSPORTS         2825.07     +63.87      + 2.3
DOW UTILITIES           249.23      +4.14      + 1.7
CLOSING TICK                                    +742

S&P 500                1039.58     +13.61      + 1.3
S&P 100                 522.60      +7.17      + 1.4
MIDCAP 400              531.45      +2.31       + .4
REUTERS/CRB             237.57       -.89       - .4

NYSE COMPOSITE         5855.97     +68.88      + 1.2
VALUE LINE              335.66      +2.99        0.9
RUSSELL 2000            519.46      +4.36       0.85
WILSHIRE 5000         10076.16    +124.37       1.25

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

10-YEAR NOTE 4.25%
Aug. 15,2013         100 22/32      +5/32       4.16

30-YEAR NOTE 5.375%
Feb. 15, 2031        104 12/32      +7/32       5.08

LEHMAN BROS.
LONG BOND INDEX        1729.53      +2.59

DOW CLOSE              9659.13    +113.48      + 1.2
ADVANCES                                        2146
DECLINES                                        1072
NEW HIGHS                                        285
NEW LOWS                                           9

                                       NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        2.36       +.05       +2.2
NT     Nortel Networks    4.45       -.18       -3.9
C      Citigroup         46.65      +1.71       +3.8
GE     GE                32.11       +.39       +1.2
PFE    Pfizer Inc        32.05       -.06        -.2
GLW    Corning Inc        9.73       +.38       +4.1
AOL    Aol Time Warner   16.45       +.14        +.9
PCS    Sprint Pcs Grou    6.20       -.04        -.6
JPM    Jp Morgan Chase   35.74      +1.08       +3.1
HPQ    Hewlett-Packard   20.97       +.61       +3.0

NASDAQ CLOSE           1909.55    + 26.45      + 1.4
VOLUME                                       2,016.3
PREVIOUS                                     1,905.3
ADVANCES                                        1962
DECLINES                                        1217


NASDAQ ACTIVES
MSFT   Microsoft         29.50      +1.00       +3.5
INTC   Intel             29.16       +.28       +1.0
CSCO   Cisco Systems     21.42       +.28       +1.3
AMAT   Applied Matl      20.79       -.33       -1.6
YHOO   Yahoo!            37.58      +1.58       +4.4
QCOM   Qualcomm          45.73      +1.49       +3.4
DELL   Dell Inc          34.94       +.36       +1.0
ORCL   Oracle            12.36       +.08        +.7
KLAC   KLA Tencor        56.77       -.64       -1.1
IACI   Interactivecorp   36.21      +2.07       +6.1

AMEX CLOSE              990.46     + 1.79       + .2

INDEX SHARES
DIA    DIAMONDS TRUST    96.95      +1.00       +1.0
QQQ    NASDAQ 100        34.79       +.53       +1.6
SPY    S&P DEP.RECEIPTS 104.60      +1.22       +1.2

STOCKS IN THE NEWS
BSC    Bear Stearns      76.20      +3.73       +5.2
AGE    A G Edwards       39.51      +2.61       +7.1
GS     Goldman Sachs     93.25      +2.25       +2.5
LEH    Lehman Bros       70.85      +1.62       +2.3
MER    Merrill Lynch     57.29      +2.13       +3.9
AXP    American Express  47.08      +1.73       +3.8
MNY    Mony Group        33.10      +3.77      +12.9
NFP    Natl Financial    26.25      +3.25      +14.1
CLC    Clarcor           42.50      -3.30       -7.2
AVY    Avery Dennison    52.39      -2.48       -4.5
VANS   Vans              11.08      +1.98      +21.8
IDBE   ID Biomedical     18.01      +2.48      +16.0