Program: Monday, October 20, 2003

Citigroup and 3M Push Stocks In The Right Direction
Market Outlook With Jim Awad of Awad Asset Management
Barbara Kahn, Professor of Marketing at Wharton On What Makes A Leader?
Commentary: Tax Havens... Asset Or Liability?
Last Word: The Record Industry's New Warning Label
Paul Kangas' Stocks In The News
Market Stats

10/20/03: Citigroup and 3M Push Stocks In The Right Direction

SUSIE GHARIB: Strong earnings from two Dow components today pushed stocks higher. The Dow gained 56 points, and the NASDAQ rose 12. Both Citigroup and 3M (MMM) reported that profits surged 20 percent in the third quarter. Erika Miller takes a closer look.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Wall Street was banking on strong third-quarter profits from Citigroup, and that`s just what it got. The world`s biggest financial institution earned $0.90 a share in the period, a nickel better than expected and up from $0.76 a year ago. Nearly every division posted double-digit earnings growth, but the big standouts were the consumer and investment banking units. Analysts say the outlook for the fourth quarter is even brighter.

BROCK VANDERVLIET, BANK ANALYST, LEHMAN BROTHERS: I think the revenue growth will be even better in the fourth quarter, with seasonally higher results in some of the trading businesses. And the expense control will continue in the fourth quarter and into next year.

MILLER: Lehman Brothers has an investment banking relationship with Citigroup. Citigroup shares fell today on concerns about valuation. The stock is up 36 percent this year, but some analysts still rate Citigroup a buy.

VANDERVLIET: The shares are trading at just 13 times earnings. It`s still one of the least expensive stocks in the bank group, and we`re still very excited about it. It remains our best idea in large cap banks.

MILLER: 3M also reported better-than-expected third-quarter earnings. Profits rose to $0.83 a share, from $).69 a year ago. Wall Street was expecting $0.79. Sales were stronger in all businesses except electronics and communications. 3M also issued a rosy outlook for the fourth quarter. It says earnings will be between $0.73 and $0.75 a share. The consensus forecast had been $0.73. That positive guidance helped lift 3M shares to their highest level of the year. The stock is now up 22 percent since January, which has some analysts concerned.

JAMES SANDERS, CAPITAL GOODS ANALYST, STANDARD & POOR`S: Long-term shareholders, I advise them to hold the stock right now. I have a 12-month price target of $71, which I just raised today from $67.

MILLER: Citigroup and 3M are the first of 10 Dow components reporting earnings this week. Telecommunications giants SBC (SBC) and AT&T (T) will release their numbers tomorrow. 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.

10/20/03: Market Outlook With Jim Awad of Awad Asset Management

SUSIE GHARIB: With today`s market gains, the Dow Jones Industrial Average is now up 17 percent for the year, and it`s getting closer to the 10,000 level. Earlier today I asked money manager Jim Awad of Awad Asset Management how much longer before the Dow crosses that milestone.

JAMES AWAD, CHMN., AWAD ASSET MANAGEMENT: Well, you`re in a powerful cyclical bull market driven by the fact that corporations are in great shape, there`s a lot of stimulus in the economy, the economy`s growing at a good rate, earnings are growing. So if the Dow is to retake 10,000 it should happen between now and the end of the year when all the news is good.

GHARIB: So Jim, what would be the significance if the Dow hits 10,000?

AWAD: Fundamentally, 10,000 means nothing. Psychologically, what it does is it helps people to think that we`re climbing back up the mountain that we went down so rapidly and in such a devastating way. And so I think it would bolster people`s spirits, make them more confident, pull in investors who have been waiting on the sidelines, but really fundamentally, in a long-term sense, it`s just another number.

GHARIB: So what`s driving stocks, is it earnings, or is there more to it?

AWAD: We are in a sweet spot in the stock market right now where there`s tremendous stimulus in the systems due to low interest rates, refinancings, tax cuts and so you`re getting a burst in economic activity, superimposed on corporations that have really cut costs. So you`re getting very good profits. And it`s profits that drive stock prices and then that`s encouraging people to try to make back the money they lost over the last few years. The investment question is: Are we going to continue to grow at 4 or 5 percent next year, or when the sugar shock of the tax cuts wears off, are we going to slip back to 2 to 3 percent, in which case we will be getting too optimistic now.

GHARIB: Well, what is your answer to that question about where it goes from here into 2004?

AWAD: My opinion is that next year will frustrate both the extreme bulls and the extreme bears, that economic activity will slow down enough so that stocks that are currently overvalued or need dramatic economic growth to do well or some of the speculative stocks that have done well this year won`t go up any further and some of them will come down. On the other hand, there will be enough economic growth so that if you buy the right stock at the right price and are sensible about it, you`ll make money next year. So I think the trade here is a quality trade out of the momentum stocks, out of the speculative stocks, into some of the more glamorous stocks,. I think next year will be with a more sound, sincere, thoughtful market, rather than the emotional momentum market that we`ve experienced this year.

GHARIB: Well, against that backdrop, what is your strategy? How are you managing your funds?

AWAD: What you want to do is to stay fully invested because bonds aren`t paying a lot, money markets aren`t paying a lot. But you want to upgrade the quality of your portfolio because it`s very possible that analysts and economists are getting too optimistic this year about next year. So what you want to do is take some of the risk out of your portfolio, sell the stocks with the high P/E ratios, sell the stocks of companies that are losing money, sell the stocks with a lot of debt on the balance sheet, buy some of the more sound, conservative names at sensible valuations and understand that this was a momentum bounce-back year and next year is going to be a more thoughtful, gradual climb of the mountain. So equities for next year, but a different type of equity than those that did the best this year.

GHARIB: So tell us what, you think, are the equities for the long term?

AWAD: I think what you want to buy are companies with growing earnings, good balance sheets, self-financing, some of the most recent names that we`ve been buying or adding to are Rayovac (ROV) in the battery area, Allstream (ALLSA), which is the old AT&T of Canada, third largest telecom in Canada, Brink`s (BCO), which is the home security company that just got out of the coal business. Special situations with low valuations like that will do better than bonds and the money markets and the broad averages next year.

GHARIB: So on those stocks you can disclose, do you own them personally or does your firm?

AWAD: I don`t own them personally. We have no investment banking relationship with them, but we own them for our clients in all the client portfolios.

GHARIB: Jim, thank you very much.

AWAD: My pleasure.

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.

10/20/03: Barbara Kahn, Professor of Marketing at Wharton On What Makes A Leader?

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 is Barbara Kahn, professor of marketing at Wharton. Hi, Barbara.

BARBARA KAHN, MARKETING PROFESSOR, WHARTON: Hello.

GHARIB: Let me begin with talking about one of the characteristics of leaders, which is people who come up with new business opportunities or look at existing businesses and then fully exploit them. What would you say is the mindset of those kind of leaders? What makes them think that way?

KAHN: I think leaders like that are really creative in a different sense than the creativity you might associate with artists or with performers. They`re able to see things differently. They`re able to examine an idea in a different way and recognize the value to customers by looking at it in a different way.

GHARIB: Well, you know, there are a lot of people - businesspeople, who come up with let`s say a new idea. But it`s not necessarily successful, so what is the kind of leader who can take an idea and really make it work?

KAHN: First of all, you have to recognize, in a business environment, that it`s something of value to the customers. And then you have to believe in this idea. So an example of something like this would be Mary Kay Ash who had the creative idea of thinking about selling cosmetics directly and also utilizing a workforce that hadn`t been used before, women, housewives generally. And then she motivated them to sell this product. That was - and she motivated them in an unusual ways, using pink Cadillacs. So I think one of the things that makes a really successful leader is to find this creative idea, believe in this creative idea and then motivate the organization to follow through on the creative idea.

GHARIB: Barbara, how important is branding in terms of creating new business opportunities?

KAHN: Well, if you have a clear brand image that offers something that`s differentiated from competition, a brand can be a huge advantage in building your business. A very good example of that is what Andy Grove allowed to happen with Intel (INTC) Inside. This was a very creative, out-of-the-box idea. At the time of Intel Inside, it was considered ludicrous to brand a component inside the computer. But he recognized the advantage, the long-term advantage of branding that component. And that`s been part of Intel`s amazing success over the years.

GHARIB: Now, we`ve seen that some leaders brand themselves. We see this a lot in the fashion world, whether it`s, like, Calvin Klein or Donna Karan, but also in the business world like Michael Dell and Dell Computer (DELL). How powerful is this as a way to build a company?

KAHN: Well, this kind of brand that`s tied to an individual can easily be a double-edged sword. So when the individual is there associated with the company, being very successful, it`s a very powerful tool because it`s not only a simple, clear idea, but it`s also associated with a dynamic person. But the brand can then become too tied up with the person and not exist independently of the person, or if the person gets into trouble, like someone like Martha Stewart (MSO), obviously, there can be repercussions from having the company too closely associated with the brand of the leader.

GHARIB: And we`ve just seen that. Well, thank you very much. Interesting talking to you.

KAHN: Oh, thank you.

GHARIB: We`ve been speaking with Barbara Kahn, professor of marketing at 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.

10/20/03: Commentary: Tax Havens... Asset Or Liability?

SUSIE GHARIB: In tonight`s commentary, the value of tax havens in a global economy. Here`s Daniel Mitchell, senior fellow at the Heritage Foundation.

DANIEL MITCHELL, COMMENTARY: According to politicians from places like France and Germany, tax havens are an immense threat because they lure economic activity away from high-tax nations. Working through the Paris-based Organization for Economic Cooperation and Development, or OECD, these European welfare states are trying to put tax havens out of business. Thankfully, this effort has hit a major roadblock. At a meeting in Canada last week organized by the OECD, so-called tax havens told representatives from high-tax nations that they would not emasculate their attractive tax and privacy laws to prop up the bad tax laws of other nations. And they certainly had no intention of being turned into vassal tax collectors when many OECD nations like Switzerland and Luxembourg also are tax havens, but somehow did not get put on the OECD`s discriminatory blacklist. This is good news. Tax havens are a vitally important safety valve in the global economy, which is why tax competition between governments should be celebrated rather than persecuted. Let`s look at an analogy. Imagine if there was only one gas station in a town. Knowing that motorists had no options, that gas station might charge monopoly prices and provide inferior service. The same principle works for government. If politicians think taxpayers can`t escape, they are likely to raise taxes and make government even bigger. Tax havens make it harder for politicians to treat taxpayers like lambs being fattened for slaughter. If high-tax nations are worried that jobs and capital are fleeing to low-tax jurisdictions, they should fix their bad tax laws rather than trying to create an OPEC for politicians. I`m Dan Mitchell.

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.

10/20/03: Last Word: The Record Industry's New Warning Label

SUSIE GHARIB: And finally the record industry is getting ready to file a new set of lawsuits against people who download music from the Internet. But there`s a new twist this time: The targets are getting a warning notice. The Recording Industry Association of America says it plans to send out letters giving recipients 10 days to get in touch and work out a settlement to avoid a lawsuit. Paul, the industry hopes to avoid the embarrassment that it suffered last time when the people it sued included a 12-year-old girl and a grandmother who said that she was falsely accused of swapping rap songs.

KANGAS: I don`t know about, that, Susie, I`ve seen some pretty gallivanting grandmas who like that rap music and they`re in their 40s, of course. Crazy.

GHARIB: I have nothing to say about that.

KANGAS: I`ll never have to worry about a lawsuit from that.

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.

10/20/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Wall Street staged a modest opening technical rebound from Friday`s sell-off, and it got an added boost from those better-than-expected earnings from Citigroup and 3M. After 30 minutes of trading, the Dow was up 40 points and the NASDAQ Index rose about 9. The market lost its early upward momentum on the report of an unexpected 0.2 percent decline in the September index of leading economic indicators, and that`s after four straight months of increases. By late morning, the Dow was barely in the plus column, while the NASDAQ Index fell to about a 3-point deficit. A rally attempt was undermined by word that Treasury Secretary Snow predicted higher interest rates next year, but when the White House said he was just suggesting higher rates would naturally reflect a stronger economy, the market came back nicely in late trading. The Dow Industrial Average snapped back with a closing of 56.15 points, putting it at 9777.94. The NASDAQ Composite gained 12 3/4 points to 1925.14. Standard & Poor`s 500 Index rose 5.36 to 1044.68. In the bond market the 10-year note closed up 2/32 at 98 29/32, putting the yield at 4.39 percent.

The most active issue on the New York Exchange on 25 billion shares, Lucent Technologies (LU) moving up a dime a share.

EMC Corp. (EMC) following it with a $0.23 loss.

And then Citigroup (C) down $0.24 despite that 20 percent rise in third-quarter earnings. But the stock has had quite a move in anticipation.

General Electric (GE) moved up $0.23.

And then fifth in volume, Motorola (MOT), down $0.28, a little profit-taking after a nice recent run.

Pfizer (PFE) up $0.44 a share.

And now it`s just Time Warner (TWX), no AOL anymore, and the symbol TWX, up $0.14.

NorTel Networks (NT) dropped $0.04.

Micron Technology (MU) showing no change.

Number 10 in big board volume, Corning (GLW), down $0.19 a share.

Texas Instruments (TXN) closed the regular session with a gain of $0.71. And then right after the close the company in with third-quarter results, excluding a gain on the sale of its Micron Technology Stock, TI earned $0.12 a share in the third quarter, up from $0.09 last year, and $0.03 above Street estimates. In after hours trading, the stock of Texas Instruments was as high as $27.70, more than $2 higher.

Wal-Mart (WMT), up $0.16. The company reassured investors that its October sales are on track. They should be up 3 to 5 percent.

Unilever (UN) down $3.52. The Dutch-based consumer products company now sees 2003 leading brand sales growth at or even below 3 percent. That obviously a disappointment to its investors.

News Corp (NWS), the American depositary shares, doing well, up $0.62. News was the subject of a positive cover story in this week`s "Barron`s" financial magazine. And the article notes the company`s strong balance sheet and strong growth prospects and suggests the stock could double over the next two years. A rather positive article.

Lexmark International (LXK), which makes printers, doing very well today, up $6.75. Third-quarter earnings were better-than-expected at $0.79, up from $0.70 a year ago. Revenues were up 11 percent. And Merrill Lynch repeated a buy recommendation on Lexmark.

Aztar Corp. (AZR) up $1.97. Deutsche Bank Securities upgraded it from hold to buy, citing the $245 million expansion of Aztar`s Atlantic City Tropicana Casino Hotel.

Radioshack (RSH) edged up $0.86. The company will boost its annual dividend from $0.22 to $0.25 a share.

And then Southwest Airlines (LUV) edging up $0.59. Third-quarter results, $0.13 in earnings versus $0.09 last year, that was in-line with Street estimates. But without the federal government`s payments to help the airlines after 9/11, Southwest`s third-quarter earnings would only be $0.06 a share. So the federal government helped a lot there.

Sybron Dental Specialties (SYD) down $1.57. The Robert Baird brokerage downgraded a number of dental equipment makers because of peak valuations in their stocks and the slowing equipment sales growth. Let`s look at some other stocks in that sector that were affected: Dentsply (XRAY) down $1.51; Patterson (PDCO) bucked the trend with a $0.46 gain; and then Young Innovations (YDNT) down $0.98 a share.

Varian Medical Systems (VAR) moved up almost $3 a share. The company sees fourth-quarter earnings rising 26 to 27 percent over a year ago. And sales should be up 16 percent.

NASDAQ`s most active issue, Amgen (AMGN), down $1.12.

Followed by Intel (INTC) which moved up $0.50.

Then Microsoft (MSFT), a $0.42 gain.

eBay (EBAY) was up $1.74.

Amazon.com (AMZN) fell a dime a share, number five in big board (sic) volume.

Cisco (CSCO) up $0.44.

An $0.08-gain in Dell (DELL).

Applied Materials (AMAT) up $0.48.

SanDisk (SNDK) moving up $2.88.

And MedImmune (MEDI) a $0.46 gain, tenth in dollar volume.

BTU International (BTUI) had a big day, look at that, up over 50 percent with a rise of $1.50. Needham & Company brokerage started covering the stock with a buy and has a target of $7 a share.

The big loser was POZEN Incorporated (POZN), tumbling $5.83. The FDA has rejected the company`s MT-300 migraine headache treatment because it fails to relieve nausea that goes with those terrible headaches.

And Endo Pharmaceuticals (ENDP) plunging $4.78. The FDA is requesting more information on the company`s Oxymorphone pain treatment. And Endo Pharma`s partner, Penwest Pharmaceuticals (PPCO) stock, tumbled $5.58 down to $17.08 a share.

And finally Eclipsys Corp. (ECLP) tumbling $7.13. The software company came in with a larger-than-expected third-quarter loss of $0.24 a share, $0.03 worse than the Wall Street estimate.

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.

10/20/03: Market Stats

			     
                                  
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9777.94     +56.15       + .6
HIGH                                         9777.94
LOW                                          9705.57

NASDAQ COMP.           1925.14     +12.78        +.7
HIGH                                         1925.16
LOW                                          1905.39

VOLUME                                       1,175.7
PREVIOUS                                     1,296.3
UP VOLUME                                      666.1
DOWN VOLUME                                    485.5

DOW TRANSPORTS         2856.79      +9.51       + .3
DOW UTILITIES           252.58       +.48       + .2
CLOSING TICK                                    +356

S&P 500                1044.68      +5.36       + .5
S&P 100                 521.43      +3.31       + .6
MIDCAP 400              538.01      +2.01       + .4
REUTERS/CRB             243.46      -2.53      - 1.0

NYSE COMPOSITE         5930.68     +23.56       + .4
VALUE LINE              337.67       +.65       0.19
RUSSELL 2000            521.44      +1.08       0.21
WILSHIRE 5000         10140.24     +41.86       0.41

U.S. TREASURIES
5-YEAR NOTE 3.125%
Oct. 15,2008          99  3/32      +2/32       3.32

10-YEAR NOTE 4.25%
Aug. 15,2013          98 29/32      +2/32       4.39

30-YEAR NOTE 5.375%
Feb. 15, 2031        101 30/32      +6/32       5.24

LEHMAN BROS.
LONG BOND INDEX        1699.71      +2.43


DOW CLOSE              9777.94     +56.15       + .6
ADVANCES                                        1799
DECLINES                                        1427
NEW HIGHS                                        166
NEW LOWS                                          12

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        2.48       +.10       +4.2
EMC    EMC Corp          12.92       -.23       -1.8
C      Citigroup         48.14       -.24        -.5
GE     GE                28.78       +.23        +.8
MOT    Motorola          13.20       -.28       -2.1
PFE    Pfizer            31.00       +.44       +1.4
TWX    Time Warner       15.72       +.14        +.9
NT     Nortel Networks    4.52       -.04        -.9
MU     Micron Tech       12.85      unch.      unch.
GLW    Corning           10.81       -.19       -1.7

NASDAQ CLOSE           1925.14    + 12.78       + .7
VOLUME                                       1,544.2
PREVIOUS                                     1,749.8
ADVANCES                                        1621
DECLINES                                        1566

NASDAQ ACTIVES
AMGN   Amgen             61.89      -1.12       -1.8
INTC   Intel             32.16       +.50       +1.6
MSFT   Microsoft         29.35       +.42       +1.5
EBAY   eBay              56.60      +1.74       +3.2
AMZN   Amazon.com        59.59       -.10        -.2
CSCO   Cisco Systems     21.08       +.44       +2.1
DELL   Dell Inc          36.49       +.08        +.2
AMAT   Applied Matl      21.60       +.48       +2.3
SNDK   Sandisk           77.56      +2.88       +3.9
MEDI   MedImmune         28.64       +.46       +1.6

AMEX CLOSE             1020.28     + 1.91       + .2

INDEX SHARES
DIA    DIAMONDS TRUST    97.97       +.67        +.7
QQQ    NASDAQ 100        35.02       +.41       +1.2
SPY    S&P DEP.RECEIPTS 105.04       +.78        +.8

STOCKS IN THE NEWS
TXN    Texas Instrument  25.67       +.71       +2.8
WMT    Wal-Mart Stores   59.00       +.16        +.3
UN     Unilever NV       57.25      -3.52       -5.8
NWS    News Corp Ltd     34.88       +.62       +1.8
LXK    Lexmark Intl      74.00      +6.75      +10.0
AZR    Aztar             19.01      +1.97      +11.6
RSH    Radioshack        30.56       +.86       +2.9
LUV    SW Airlines       18.99       +.59       +3.2
SYD    Sybron Dental     22.99      -1.57       -6.4
XRAY   Dentsply Intl     44.43      -1.51       -3.3
PDCO   Patterson Dent    62.61       +.46        +.7
YDNT   Young Innovat     33.91       -.98       -2.8
VAR    Varian Medical    60.75      +2.93       +5.1
BTUI   BTU Intl           4.46      +1.50      +50.7
POZN   Pozen             11.94      -5.83      -32.8
ENDP   Endo Pharm        15.19      -4.78      -23.9
ECLP   Eclipsys          11.15      -7.13      -39.0