Program: Monday, October 6, 2003

Things Are Heating Up In The Oil Market
The Airline Industry Is Still Trying To Fly Above Financial Turbulence
Michael Useem, Professor of Management At The Wharton School On Leadership Qualities
Commentary-Getting Real With The Federal Budget
Last Word-Cashing In On The Classics
Paul Kangas' Stocks In The News
Market Stats

10/06/03: Things Are Heating Up In The Oil Market

PAUL KANGAS: A day of light trading for stocks given the Yom Kippur holiday, but it was a different story in the oil market. Light sweet crude hit a new one-month high before pulling back. Erika Miller reports on what is behind the increase and the outlook from here.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Trading heated up in the New York oil pit today as light sweet crude climbed to $30.76 a barrel. Although the November contract pulled back by the close, it still ended the day up $0.07 at $30.47 a barrel. Traders say they're worried about a massive workers strike set to begin Thursday in Nigeria, an OPEC nation.

BRIAN HAND, INDEPENDENT OIL TRADER: I think you're seeing a lot of people who are short the market getting scared out of their short positions and covering today out of fear that there is an impending strike coming out of Nigeria, which will cause prices to go a lot higher.

MILLER: Also helping to pump up prices, bombings in Israel and Syria over the weekend. Although those two countries produce very little oil, traders are concerned the conflict could escalate to bigger producers in the region. Adding to the supply concerns, Tropical Storm Larry, which lashed into Mexico, disrupting oil shipments to the U.S. Traders also blame the higher oil prices on the return of colder weather to many parts of the U.S.

HAND: There has been a lot of talk going on about a really cold winter. And I think that's starting to creep into the market as well, also holding up prices up.

MILLER: Oil prices have risen more than 10 percent in two weeks. They are rapidly approaching the nearly $32 a barrel hit in early August. If prices remain their current levels, economists warn the recovery could be in jeopardy.

LARA RHAME, ECONOMIST, BROWN BROTHERS HARRIMAN: Rising oil prices is definitely a factor that hinders economic growth in several different ways. It hinders consumption through the prices that people have to pay for gas and it also hinders manufacturing. Energy costs are a very big component of what manufacturers pay out.

MILLER: Analysts say there is little to prevent crude prices from rising to $32 a barrel in the next week or so. And they warn as much as $40 a barrel is possible this winter. 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.

10/06/03: The Airline Industry Is Still Trying To Fly Above Financial Turbulence

SUSIE GHARIB: A new survey out today says business travel may never fully rebound from the terror attacks of September 11, but it appears to have bottomed out. As Stephanie Woods reports, the outlook for the major airlines is still bleak.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The economic pick-up should put more business travelers in the air. But corporate America is demanding lower fares, so increased traffic may not translate into increased revenues for major airlines like United, American, and Northwest (NWAC).

KEVIN MITCHELL, CHAIRMAN, BUSINESS TRAVEL COALITION: The current revenue environment, at least for the major network carriers, is probably as good as it's going to get for the foreseeable future.

WOODS: Black & Decker (BDK) spends about $15 million a year on air travel. That's down about 20 percent since its peak in 2000. The company saves money booking tickets online and flying discount airlines like Southwest (LUV) and AirTran (AAI). Employees are also using Web conferencing to avoid travel.

PETER BUCKHEICT, TRAVEL DIRECTOR, BLACK & DECKER: If the economy comes back, roaring back, then certainly we'll travel more to some extent, but I don't think we're going to be traveling as much as we did, for instance, in the year 2000, or in the 1990s. I think there are effective tools in place to allow us to not travel as much, particularly technology.

WOODS: To compete, the major carriers will have to continue to cut costs. Analysts say one of the biggest cost issues facing the airlines is underfunded pensions.

VAUGHN CORDLE, AIRLINE FORECASTS: There's $47 billion worth of liabilities for the seven major airlines. Now, they have assets, but the unfunded portion is about $20 billion as of this year, so there is some legislation in the works that may provide some temporary relief, but they're going to have to deal with that. That's a major issue for the unions and management.

WOODS: As the airlines face their cost problems, they also have to deal with the thrifty business traveler, one who wants simpler and lower fares. It's a demand that analysts say the airlines can't afford to ignore. 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.

10/06/03: Michael Useem, Professor of Management At The Wharton School On Leadership Qualities

SUSIE GHARIB: NIGHTLY BUSINESS REPORT will soon mark its 25th year on public television, and to celebrate that distinction we have joined with the Wharton School of the University of Pennsylvania to select the most influential business persons of the past 25 years. Our viewers submitted over 700 nominations. Now a panel of Wharton judges will make the final selection, which we will announce early next year. Joining me now to discuss leadership, one of the key elements of the selection criteria, is Michael Useem, professor of management and director of the Center for Leadership and Change Management at the Wharton School. Hi, Mike, nice to have you on the program.

MICHAEL USEEM, PROFESSOR OF MANAGEMENT, WHARTON: Hello, Susie. Thanks for having me here.

GHARIB: Well, it's a very interesting time to talk about leadership, given the period that we've gone through with so many corporate scandals and corporate America, disappointments with leadership. Tell us what you think are the key characteristics of being a good leader?

USEEM: Well, Susie, it's helpful to distinguish I think between the universals, those capacities we need pretty much for all times, all companies, maybe all countries. I would just mention three there from those that we need especially now. But to get to the universals first, I think we need to be strategic in thought, persuasive in communication, and decisive in action. And just to put a name with each of those to embed it in people whose careers we have followed, on the strategic and thought, Lou Gerstner's turnaround of IBM (IBM) comes to mind, persuasive in communication, Carly Fiorina of HP (HPQ), especially in her struggle to merge with Compaq. I think we know that story pretty well. She was persuasive indeed. And when it comes to decisive in action, I think we only have to go to Larry Bossidy of Honeywell (HON) Allied Signal and he of course literally has written the book on execution.

GHARIB: Let me toss out a couple of other attributes that when we often hear of when we talk about leaders. Creativity, vision, what do you say about things like that?

USEEM: We need a lot of creativity, we need a lot of vision. And would I probably put that in this broader terrain of strategic in thought. Need to see around corners, got to be a visionary of looking five years ahead, have to transcend the present, look to the future, and then of course bring it back to the present. Leaders look to the future and bring the future to the present, helping people understand what they have to do now to get to where they do want to be in the market three to five years out.

GHARIB: Can you be a leader and maybe not be an expert in your field, maybe not be a master, so to speak?

USEEM: You need to be a fast study, and just thinking about Lou Gersner, for example, he did come from RJR (RJR) Nabisco, a food and tobacco maker, to take over at IBM. In a sense, couldn't be more different in the kind of products they made. But through examination of what he was making, what his company was responsible for a IBM as he took the helm there, he in time did master the essence of the content of the products. But of course above all, he needs to be able to animate people, get them focused on an objective, and he certainly brought that. So we need the technical content, don't have to have that necessarily by background. We do need to get it once we arrive in a new position.

GHARIB: Let me go back to what I asked you right from the outset about the whole issue of disappointment of leadership because of the scandals. I mean, to what extent, character and ethics, are they important criteria to have?

USEEM: Well, that gets to this maybe other category of leadership capacities, elements that we really need now didn't maybe think about these as being so paramount five or, say, 15 years ago. Character and integrity right there at the top of the list now for obvious reasons. And just to associate a name or two there, as we think about Warren Buffett and the policies and principles he's followed. Bill George who had headed Medtronic (MDT) for 10 years, he's also written the book on this topic. So character and integrity, I'd put that there now right in with persuasive communications, strategic in thought and decisive action.

GHARIB: All right, a lot of things I'm sure we could keep on talking about this. But you have got us started off on the right food. Thank you very much, Mike, we appreciate you coming on the program.

USEEM: All right, Susie, thank you.

GHARIB: My guest tonight, Mike Useem of the Wharton School.

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.

10/06/03: Commentary-Getting Real With The Federal Budget

SUSIE GHARIB: In tonight's commentary, it's time to start using realistic projections when dealing with the federal budget. Here's Alice Rivlin, senior fellow of the economics study program at the Brookings Institution, and former vice chair of the Federal Reserve.

ALICE RIVLIN, COMMENTARY: Realistic federal budget projections show deficits continuing at around $500 billion a year for the next 10 years, and getting rapidly worse after that. By "realistic projections," I mean estimates that do not rely on silly fantasies that the tax cuts will automatically expire, or the economy will grow even faster than it did in the '90s, or spending will be cut to levels at which no president could actually run the government. We are in deep fiscal trouble, folks, and we had better rein in the politicians before they make things worse. Citizens should demand that every politician, Republican and Democrat, take this simple pledge: I will not advocate new spending unless I have a plan to pay for it. Each spending proposal must be linked to specific cuts in other programs or specific tax increases yielding the same amount of revenue. The president's $87 billion for Iraq is absolutely necessary. We can't pull the troops out, and we have to help the Iraqis rebuild their country. But Congress should offset this spending with equivalent cuts in other programs or tax increases. The same goes for adding prescription drug benefits to Medicare, a fine idea, but we have to pay for it. We had better start these pledges right now. We are really going to need them as we roll into election season. I'm Alice Rivlin.

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.

10/06/03: Last Word-Cashing In On The Classics

SUSIE GHARIB: And finally tonight, if you hear strains of Bach or Rachmaninoff while you're dining out, you're dinner could cost you more. A British study found that classical music compels people to spend more money when eating out. The researchers played pop music, classical music, and no music at all, over a period of 18 evenings at one restaurant. They found that people spent more on dinner when the classical tape of Beethoven, Mahler, and Vivaldi was playing in the background. Paul, the researchers conclude that the classical music makes diners feel more sophisticated, and so they're more likely to spend big bucks, especially on desserts, fine wine, and appetizers.

KANGAS: How about a little Ozzie Osbourne? Easy on the bill.

GHARIB: All right, I'm not going out to dinner with you.

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.

10/06/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Wall Street opened at slightly higher ground, but the gains were limited by caution in the wake of last week's big rally. At the end of the first hour of trading the best the Dow could do was post a 6-point gain, while the NASDAQ Index was up 5 points. The market showed some further improvement on guarded optimism that last Friday's report of the first rise in jobs in eight months was a harbinger of what is ahead for the U.S. economy. By mid-session the Dow was up 37 points, the NASDAQ up 12. Hampered by light trading volume because of the Yom Kippur holiday, the market did quite well to hold on to most of its midday advance right on to the final bell. The Dow Industrial Average closed up 22 2/3 points at 9594.98. The NASDAQ Composite was up 12.89 points, ending at 1893.46. The Standard & Poor's 500 Index ended with exactly a 4 ½- point gain at 1034.35. In the bond market, the 10-year note advanced 7/32 to par and 20/32, putting the yield at 4.17 percent.

The most active big board issue by far on 25.8 million shares, Motorola (MOT), moving $1.22. That's a 10 percent rise. And of course, you heard the news, it's going to spin-off its semiconductor unit as an initial public offering.

Lucent Technologies (LU) moved up $0.08.

Followed by NorTel Networks (NT), a $0.16 rise there.

Pfizer (PFE) was down $0.03.

And GE (GE) was down $0.03 as well. GE's earnings due out this Friday.

Sixth in volume was Micron Technology (MU), down $0.17.

Followed by Medtronic (MDT), down another $1.10 after dropping $2.37 Friday when the company issued a second-quarter earnings warning.

And Biovail (BVF) tumbling another $2.40 after losing nearly - well, a little over $6 ½ last Friday when it cut its third-quarter earnings guidance. And today Merrill Lynch downgraded Biovail from buy to neutral.

Sprint PCS Group (PCS) was up $0.31.

Tenth in volume, AOL Time Warner (AOL), a $0.20 rise there.

Celestica (CLS) moved up $0.72. It was about $0.10 higher at its best level of the day after C.S. First Boston upgraded it from neutral to outperform.

And then Europe's largest software firm, SAP (SAP), moved up $1.01. Merrill Lynch today upgraded that stock from neutral to buy.

Lexmark (LXK) gaining $1.55. The Smith Barney brokerage upgraded it from hold to buy.

The biggest percentage loser on the New York Exchange today was Williams Coal Seam Gas (WTU), and down $3.70, a 29 percent drop. It's a business trust with gas royalty interests. And this week's "Barron's" financial magazine noticed - have notes that the biggest shareholder in this company has been selling rather heavily. And a number of analysts apparently also see the stock as being overvalued.

TransTechnology (TT) down $1.58. The company is involved in industrial fasteners and aerospace products. And it has hired a fact-finding accounting firm after it learned that the U.S. Attorney's Office is probing the company's operations, especially one unit.

Duane Reade (DRD), that's the big New York City drug store chain, down $3.31. The company lowered its third-quarter sales and earnings outlook. And Merrill Lynch downgraded the stock from neutral to sell.

Boyd Gaming (BYD) off $1.59. The company sees lower-than-expected third-quarter earnings because of weak earnings at its Stardust and Paradise properties.

On the upside, Industrial Distribution Group (IDG) doing very well today. It's an Atlanta, Georgia-based company involved in supplying power and machine tools, lubricants, adhesives. And "Barron's" financial this week quotes money manager Neil Goldman (ph) who sees the stock tripling sometime over the next 18 months, very bullish report.

Pharmaceutical Resources (PRX) was up - or down $3.64. Merrill Lynch downgraded it from buy to neutral. The company is in the generic drug business.

NASDAQ's most active issue, Microsoft (MSFT), moving up $0.11.

Followed by Intel (INTC), a nickel loss there.

And Rambus (RMBS) rising $7.07. You heard this story, a favorable Supreme Court ruling and lots of new royalties going to be flowing in.

Cisco Systems (CSCO), a $0.04 gain.

And SINA.com (SINA), that's one of those Chinese Internet portals, up $3.05, a very volatile stock.

Dell Incorporated (DELL), a $0.06 gain.

Nextel (NXTL) moved up $0.84.

Yahoo! (YHOO) a $0.54 rise.

Amazon.com (AMZN) gained $1.26.

Tenth in volume was Oracle (ORCL) moving up $0.21 a share.

Atlantic Coast Airlines (ACAI) up $2.03, as I touched on earlier, Mesa Air (MESA) is offering to buy the company for stock worth about $10.40 to Atlantic Coast shareholders. That's 9/10 of a share of Mesa for each share of Atlantic Coast. Mesa was down $0.99 to close at $11.56, incidentally.

And then American Pharmaceutical Partners (APPX) down $4.18. This week's "Barron's" financial magazine notes some analysts are questioning if the company's cancer drug will get FDA approval.

And Knight Trading (NITE), which, of course, is a NASDAQ market-maker, up $1.85. The company increased its third-quarter earnings guidance to as much as $0.21 a share. That's well up from the $0.12 Wall Street estimate.

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.

10/06/03: Market Stats

			                                 
								
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9594.98     +22.67       + .2
HIGH                                         9624.91
LOW                                          9562.53

NASDAQ COMP.           1893.46     +12.89        +.7
HIGH                                         1894.22
LOW                                          1876.00

VOLUME                                       1,005.1
PREVIOUS                                     1,552.2
UP VOLUME                                      669.5
DOWN VOLUME                                    323.7

DOW TRANSPORTS         2796.67     +11.82       + .4
DOW UTILITIES           253.85       +.68       + .3
CLOSING TICK                                   +1085

S&P 500                1034.35      +4.50       + .4
S&P 100                 517.04      +1.87       + .4
MIDCAP 400              532.91      +2.30       + .4
REUTERS/CRB             242.61      -1.29       - .5

NYSE COMPOSITE         5858.02     +26.24       + .5
VALUE LINE              334.15      +2.29       0.69
RUSSELL 2000            516.72      +4.44       0.87
WILSHIRE 5000         10040.28     +49.98        0.5

U.S. TREASURIES
5-YEAR NOTE 3.125%
Sept. 15,2008        100 10/32      +6/32       3.06

10-YEAR NOTE 4.25%
Aug. 15,2013         100 20/32      +7/32       4.17

30-YEAR NOTE 5.375%
Feb. 15, 2031        104 15/32     +13/32       5.07

LEHMAN BROS.
LONG BOND INDEX        1737.16     + 6.09


DOW CLOSE              9594.98     +22.67       + .2
ADVANCES                                        2090
DECLINES                                        1123
NEW HIGHS                                        327
NEW LOWS                                           1

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
MOT    Motorola          13.50      +1.22       +9.9
LU     Lucent Tech        2.30       +.08       +3.6
NT     Nortel Networks    4.47       +.16       +3.7
PFE    Pfizer            30.75       -.03        -.1
GE     GE                30.79       -.03        -.1
MU     Micron Tech       13.49       -.17       -1.2
MDT    Medtronic         44.78      -1.10       -2.4
BVF    Biovail           28.70      -2.40       -7.7
PCS    Sprint PCS Group   6.29       +.31       +5.2
AOL    AOL Time Warner   15.59       +.20       +1.3

NASDAQ CLOSE           1893.46    + 12.89       + .7
VOLUME                                       1,379.0
PREVIOUS                                     2,016.1
ADVANCES                                        2003
DECLINES                                        1126

NASDAQ ACTIVES
MSFT   Microsoft         29.19       +.11        +.4
INTC   Intel             29.56       -.05        -.2
RMBS   Rambus            25.80      +7.07      +37.8
CSCO   Cisco Systems     20.80       +.04        +.2
SINA   Sina.com          40.75      +3.05       +8.1
DELL   Dell Inc          34.97       +.06        +.2
NXTL   Nextel Comms      21.46       +.84       +4.1
YHOO   Yahoo!            39.78       +.54       +1.4
AMZN   Amazon.com        54.15      +1.26       +2.4
ORCL   Oracle            12.19       +.21       +1.8

AMEX CLOSE             1012.48     + 6.51       + .7

INDEX SHARES
DIA    DIAMONDS TRUST    96.20       +.28        +.3
QQQ    NASDAQ 100        34.41       +.22        +.6
SPY    S&P DEP.RECEIPTS 103.86       +.47        +.5

STOCKS IN THE NEWS
CLS    Celestica         17.70       +.72       +4.2
SAP    Sap               33.91      +1.01       +3.1
LXK    Lexmark Intl      66.85      +1.55       +2.4
WTU    Williams Coal      9.04      -3.70      -29.0
TT     Trans-Tech         7.05      -1.58      -18.3
DRD    Duane Reade       13.80      -3.31      -19.4
BYD    Boyd Gaming       13.57      -1.59      -10.5
IDG    Industrial Distri  5.05      +1.71      +51.2
PRX    Pharm Res         67.86      -3.64       -5.1
ACAI   Atlantic Coast    11.05      +2.03      +22.5
APPX   American Pharma   26.20      -4.18      -13.8
NITE   Knight Trading    13.95      +1.85      +15.3