Program: Tuesday, October 28, 2003

Interest Rates Remain Unchanged But The Markets Go Through Changes
The Tax Break Tug of War
Is "SARS-fest" Really The Best Medicine For What Ails Hong Kong's Economy?
Last Word-Dominos Delivers Big Time On Halloween
Paul Kangas' Stocks In The News
Market Stats

10/28/03: Interest Rates Remain Unchanged But The Markets Go Through Changes

SUSIE GHARIB: No move by the Fed today leads to a big move on Wall Street. The Dow surged 140 points and the NASDAQ climbed 49. Investors bought up stocks on news that Federal Reserve policymakers decided to keep a key interest rate at one percent. The Fed decision was expected, but investors turned bullish because of positive comments by the central bank about the outlook for the job market. Suzanne Pratt has details.

SUZANNE PRATT NIGHTLY BUSINESS REPORT CORRESPONDENT: At its seventh meeting this year, the Federal Reserve's Open Market Committee opted once again to hold interest rates steady. So for now the federal funds rate will remain at one percent, or the lowest level in more than 40 years. Experts say the central bank recognizes that the economy is getting stronger, but added that policymakers are more concerned about the risk of disinflation.

JOHN RYDING, CHIEF MARKET ECONOMIST, BEAR STEARNS: The Fed clearly still believes the balance of risk lies toward low inflation because of the level of unemployment. And until unemployment falls significantly further, I don't see any change in either interest rates from the Fed or the stance of the Fed's balance of risks.

PRATT: The wording of the statement that accompanied today's decision was nearly identical to the September statement. The only change is that policymakers now say the labor market appears to be stabilizing rather than weakening. Still, economists say that more optimistic description does not suggest the Fed is preparing to hike rates.

JOSHUA FEINMAN, MARKET STRATEGIST, DEUTSCHE ASSET MANAGEMENT: They're going to need to see the labor market improving, not just stabilizing, and improving for a significant period of time and by a significant margin before they would start to raise interest rates.

PRATT: It is true that in the last few months the economy has been showing new signs of life. And just today the Commerce Department supplied the latest good news in a report that showed orders for durable goods were up solidly last month. Experts say the data should make the Fed feel more confident about the future of the economy.

FEINMAN: That's very important to the outlook because it's been businesses, particularly their cutbacks in capital spending in the last few years, that were a big part of the reason why the economy is so sluggish. So a turnaround there absolutely imperative.

PRATT: The last Fed meeting of the year is scheduled for right before Christmas on December 9. Right now, Fed watchers put the chances of a change in rates at that meeting at next to none. Suzanne Pratt, 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.

10/28/03: The Tax Break Tug of War

SUSIE GHARIB: Lawmakers gave American businesses a big tax break today. As expected, the House Ways and Means Committee approved a $128 billion tax cut bill, slashing corporate rates from 35 percent to 32 percent. The vote ran along party lines, as expected, with both sides disagreeing over the price tag and just about everything else in it. Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The tax cut bill is designed to replace corporate tax breaks for large exporters like Boeing (BA), G.E. (GE) and Ford (F). The World Trade Organization has ruled those breaks illegal subsidies. Republicans say the way to get around that WTO ruling is to cut taxes for most U.S. companies.

REP. WILLIAM THOMAS (R-CF), CHAIRMAN, HOUSE WAYS & MEANS COMMITTEE: The United States is asserting the fact that if our tax system puts us at a disadvantage, the primary responsibility for removing that disadvantage is on the United States. We need to change our tax code in a number of ways to make us more competitive in today's world.

WOODS: Democrats charge a broad package of tax cuts isn't necessary and will add to an already exploding deficit.

REP. CHARLES RANGEL (D), NEW YORK: They say they want to pull up the tax codes by the roots and eliminate corporate taxes altogether and they're using this problem as a vehicle to do it. This, at worst, is a possible $4 billion problem.

WOODS: Opponents of the bill say it's filled with some fishy provisions. For example, it cuts taxes paid by U.S. manufacturers of fishing tackle boxes and sonar devices suitable for finding fish. U.S. makers of bows and arrows would also get a break. Supporters say the breaks are only fair.

REP. PAUL RYAN (R), WISCONSIN: Right now, we do not tax imported arrows. We do tax domestically manufactured arrows. And because we do not tax imports, but do tax domestically manufactured arrows, we are losing jobs overseas.

WOODS: One former Congressional staffer and tax lobbyist predicts only a broad package can pass.

RICK GRAFMEYER, PARTNER, TAX SOLUTIONS: Because you have rural legislators who don't have multinational companies in their state, but have domestic manufacturers, and vice versa. And so it's the right mix to be able to pass a bill and get the right amount of votes.

WOODS: But it may not happen this year. European officials have sent mixed signals on how long they'll give U.S. lawmakers to fix the problem before they retaliate. Without that pressure, analysts say a large corporate tax break wouldn't have enough political support to pass. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

SUSIE GHARIB: As we reported this evening, Congress is looking at lowering taxes for American corporations. Tonight's commentator says that's a terrific idea. Here's Chris Edwards, Director of Fiscal Policy at the Cato Institute.

CHRIS EDWARDS, DIRECTOR OF FISCAL POLICY, CATO INSTITUTE: Recent scandals have put the political spotlight on the corporate income tax. Congress is concerned that growing numbers of companies are reincorporating in low tax places like Bermuda. And the Enron scandal revealed that some executives put big efforts into engineering complex tax avoidance schemes. Despite the scandals, most U.S. corporations pay a huge amount of tax. Wal-Mart (WMT), for example, paid $3 billion in federal income taxes last year. In fact, high corporate taxes are putting U.S. companies at a competitive disadvantage in world markets. Consider that the combined federal and average state corporate tax rate is 40 percent. That's much higher than the 31 percent average for the 30 top industrial countries. In recent years, most of our trading partners have cut corporate taxes to boost competitiveness. Competitiveness is also on the agenda because the World Trade Organization recently ruled that a tax break we give to exporting companies is illegal. Some in Congress want to replace this break with yet another narrowly targeted tax break. A better policy would be to cut our corporate tax rate to, say, 25 percent, to make us leaders in global tax competition. A lower rate would allow all U.S. companies to boost their international sales and expand U.S. investment and employment. A tax rate cut would also dissuade companies from moving their headquarters to Bermuda and would reduce incentives to pursue Enron style tax shelters. I'm Chris Edwards.

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.

10/28/03: Is "SARS-fest" Really The Best Medicine For What Ails Hong Kong's Economy?

SUSIE GHARIB: As you know, just six months ago, Hong Kong was in the grip of the SARS epidemic. Now the government has begun a campaign to revive investor confidence and its latest stimulus package involves, of all things, the Rolling Stones. The rock group's concerts next month are part of Harbor Fest, an event that was billed as a money maker but could end up costing taxpayers millions of dollars. As Adrian Brown reports from Hong Kong, the event is making headlines, but for all the wrong reasons.

ADRIAN BROWN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Prince center stage in Hong Kong. The concert part of a campaign to kick start the city's economy. It's called Harbor Fest, a three week long music festival with an eclectic line up. Also appearing, Jose Carreras and the Rolling Stones. They and many other stars were invited to perform here because of what Hong Kong went through earlier this year. One of the world's great economies was at the mercy of a new and deadly epidemic. The World Health Organization warned visitors to stay away. By the time the SARS alarm was over in May, the city's number one industry, tourism, was close to collapse. And so another battle began, a battle to get the tourists back.

JAMES THOMPSON, PRESIDENT, AMERICAN CHAMBER OF COMMERCE: We thought what could we do to get this depressed state elevated here in Hong Kong. And it had to do with getting the local people enthused through music about what was going on here. And we wanted to develop a video that the world could see Hong Kong was rocking and happy.

UNIDENTIFIED MALE: Let's make this beautiful city known all over the world.

UNIDENTIFIED MALE: Jim.

UNIDENTIFIED MALE: Hello, let's rock.

BROWN: And so he became a rock promoter. Better still, the Hong Kong government agreed to underwrite any losses with taxpayers' money. But within days of the festival's start, it was clear things were going wrong. Some concerts less than half full, with free tickets given away to fill seats at others. The government won't say how much it will pay to cover the shortfall from ticket sales, but local media reports say it could be as high as $13 million. The Hong Kong Harbor Fest has generated a lot of publicity, most of it bad. And it could get even worse if the government here fails to produce a detailed and early audit showing exactly how much money has been spent to stage this event. Critics argue that the affair says much about the secretive way the Hong Kong government conducts its affairs.

DAVID WEBB, INDEPENDENT STOCK INVESTOR: I don't mind them spending a modest amount on promoting the place as an investment venue for people to come here, set up their regional headquarters and so on. But I think they've stepped over the line when they start intervening and producing commercial events like the Harbor Fest.

EMILY LAU, INDEPENDENT LEGISLATOR: I think many people are getting quite upset, A, because of the money, and then, of course, on the other hand, they are cutting money on health care, on welfare, on education.

BROWN: But James Thompson says the event is not just about making money.

THOMPSON: You know, it probably isn't going to be a financial success. And that was always known from the beginning. And that's why the government chose to support it. But the success will come when we see people like Prince and Santana and the Rolling Stones.

BROWN: Many other acts, though, have canceled, making this is a festival that seems unlikely to lead to an encore. Adrian Brown, NIGHTLY BUSINESS REPORT, Hong Kong.

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.

10/28/03: Last Word-Dominos Delivers Big Time On Halloween

SUSIE GHARIB: And, finally, on Halloween this Friday night, millions of Americans will be opening the front doors of their homes to Domino's Pizza. Yes, the pizza delivery company says Halloween is traditionally one of its busiest nights of the year, as parents scramble to get their kids ready trick or treating and don't want to bother cooking dinner. Domino's estimates it will sell more than 1.4 million pizzas on Friday night, and that's a 20 percent increase over a normal non-Halloween Friday. The company is doubling its staffing and stocking up on dough, sauce and cheese to handle the surge. But, Paul, it's business as usual for pizza choices, so don't try to order yours with spiders or bats on top and things like that.

KANGAS: Spiders? Spiders on my pizza? That would be a Web site for sore eyes.

GHARIB: That's a good one.

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.

10/27/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Wall Street opened moderately higher with the help of two encouraging economic reports. As Suzanne Pratt just mentioned, September durable goods orders rose a respectable 8/10 percent, while consumer confidence ticked up from 77 to 81.1 on the Conference Board's Index. After an hour, the Dow was up 59 points. The NASDAQ Index rose 21. The market held its early advance and gradually improved in anticipation that the Fed would hold rates steady. At mid session, the Dow was up 65 points. The NASDAQ Index posted a 21 point gain. After the Fed's decision was announced, the market rally shifted into high gear, supercharged by some frantic short covering purchases. The Dow Industrial Average jumped 140 points, to close at 9,748.31. The NASDAQ Composite vaulted 49 1/3 points, to 1,932.26. The Standard & Poor's 500 Index rose 15 2/3 points, ending at 1,046.79. Good strength in the bond market, too. The 10-year note rose 22/32, to par and 17/32, putting the yield down to 4.18 percent.

The most active big board issue, Lucent Technologies (LU) traded 33.9 million shares, edging up $0.14.

Bank of America (BAC) down another $0.72. It dropped over $8 yesterday on news it's going to come up with over $40 billion of stock to buy Fleet Boston Financial (FBF).

Fleet Boston down $0.40. Of course, it was up $7.40 yesterday on that Bank of America takeover bid. And also today, the SEC filed a complaint against a former Fleet employee in Argentina, claiming he used insider information to profit from the Bank of America buyout bid.

AT&T Wireless (AWE) was up $0.16.

Agere Systems (AGR) a $0.22 drop, fifth in big board volume.

Time Warner (TWX) moved up $0.23.

Texas Instruments (TXN) gained $1.25.

The whole semiconductor group was strong on a very strong earnings report from Taiwan Semiconductor (TSM). Taiwan's stock was up $1.12, at $11.56.

Pfizer (PFE), a $0.53 gain there.

G.E. (GE) moved up $0.30.

But King Pharmaceuticals (KGA) fell $3.16, even though the company had third quarter earnings higher, at $0.44 versus last year's $0.35. But the company predicted fourth quarter earnings would drop to only $0.31 to $0.34, and today the Bank of America Brokerage downgraded the stock from "buy" to just "neutral."

RJR Reynolds (RJR) moving up $5.72. As we reported to you after the close yesterday, RJR and British American Tobacco (BTI) are going to combine their U.S. tobacco businesses and form a new publicly held holding company. RJR will own 58 percent of it and British American 42 percent ownership.

Over on the American Exchange today, British American Tobacco moved up $2.87, at $24.89 a share. Incidentally, RJR today reported a third quarter loss of $3.4 billion.

Lockheed Martin (LMT) down $0.78. The company did have higher third quarter operating earnings. Well, let's make it the same as last year, $0.66. But that was $0.08 above the Wall Street estimate. The stock still lost some ground.

Verizon (VZ) down $0.15. Third quarter earnings way down, $0.64 versus $1.60 a year ago.

Air Products and Chemicals (APD) down $1.61. Fourth quarter earnings fell to $0.58, down from $0.65 last year, and that was a $0.01 below the Wall Street estimate.

Jones Apparel Group (JNY) moved up $2.48. Its third quarter earnings were lower, $0.71 versus $0.95, but $0.03 above the Street estimate and the company predicting this year's earnings would come in around $2.48 a share.

Teradyne (TER), another semiconductor related stock, doing well on that Taiwan Semiconductor news. And today the company also said it's in partnership with Causeworth Technology (ph) to supply assembly line vehicle tests for Ford Motor Company. Teradyne had a good day.

Sonic Automotive (SAH), on the other hand, tumbling $4.84. Third quarter earnings sharply lower, $0.41 versus last year's $0.74. And the company sees this year and next year results falling short of Wall Street estimates.

On the up side, McMoran Exploration (MMR) moved up $1.78. Yesterday, it announced a promising oil discovery and today's Jeffries & Company Brokerage began coverage with a "buy" recommendation on McMoran.

Omnicom Group (OMC) up $4.22. Third quarter earnings nicely higher, $0.72 versus last year's $0.68. Revenues up a respectable 15 percent. And Standard & Poor's today upgraded the stock from "accumulate" to "buy."

On the down side, Oxford Health Plans (OHP) tumbled $4.36. Third quarter earnings came in higher, $1.19 versus $1.04 last year. The company did initiate a $0.10 quarterly cash dividend. But it also noted that the enrollment environment is very challenging. The competition was stiff, and that's what hurt the stock.

MEMC Electronic Material (WFR) up $1.61, one of the better percentage gainers of turnaround on the third quarter. Earnings of $0.16 versus a loss of $0.25 last year, and those earnings were $0.04 above the Wall Street estimate.

Microsoft (MSFT) topped the active list on NASDAQ. A $0.29 gain there.

Followed by (INTC) in the strong semiconductor group, up $1.25.

Applied Materials (AMAT) up $1.83. Taiwan Semiconductor's strong results helping that stock, as well.

Cisco (CSCO) up $0.97.

Sina Corporation (SINA), the Chinese Internet portal, up $0.15.

Dell Computer (DELL), a $0.10 loss.

Amgen (AMGN), a $0.02 gain.

KLA Tencor (KLA) moved up nearly $4.

Qualcomm (QCOM) gaining $2.76. Morgan Stanley made upbeat comments on Qualcomm today.

And eBay (EBAY) moved up $1.66.

China.com Corporation (CHINA) moved up $1.44. Third quarter turnaround, earnings of $0.06 versus a loss of $0.03 last year, and the company says this year will be its first profitable year since it's started.

Ditech Communications (DITC) up $2.48. The company increased southern California revenue guidance to as much as $13.9 million. That would be a 30 percent rise from first quarter levels.

And Bank of Bermuda (BBDA) up $4.89. HSBC Holdings (HBC) is going to acquire the company for $45 a share in cash.

And finally, FreeMarkets (FMKT). This is a business to business online auctioneer. A bigger than expected third quarter loss of $0.11, bigger than last year's $0.07 loss per share. The company cut its fourth quarter sales forecast to about $36 million, at best, down from the Wall Street estimate of $42 million.

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.

10/28/03: Market Stats

			     
                              
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9748.31    +140.15      + 1.5
HIGH                                         9749.94
LOW                                          9609.72

NASDAQ COMP.           1932.26     +49.35       +2.6
HIGH                                         1932.26
LOW                                          1892.43

VOLUME                                       1,638.3
PREVIOUS                                     1,356.5
UP VOLUME                                    1,227.3
DOWN VOLUME                                    390.3

DOW TRANSPORTS         2883.27     +41.88      + 1.5
DOW UTILITIES           252.25       +.08       + .0
CLOSING TICK                                    +704

S&P 500                1046.79     +15.66      + 1.5
S&P 100                 518.64      +7.87      + 1.5
MIDCAP 400              544.91      +7.90      + 1.5
REUTERS/CRB             249.07       -.27       - .1

NYSE COMPOSITE         5945.93     +75.75      + 1.3
VALUE LINE              338.96      +5.33        1.6
RUSSELL 2000            525.85     +10.50       2.04
WILSHIRE 5000          10181.2    +153.98       1.54

U.S. TREASURIES
5-YEAR NOTE 3.125%
Oct. 15,2008         100  5/32     +16/32       3.09

10-YEAR NOTE 4.25%
Aug. 15,2013         100 18/32     +22/32       4.18

30-YEAR NOTE 5.375%
Feb. 15, 2031        104  3/32     +23/32       5.09

LEHMAN BROS.
LONG BOND INDEX        1732.32     +12.09


DOW CLOSE              9748.31    +140.15      + 1.5
ADVANCES                                        2229
DECLINES                                        1034
NEW HIGHS                                        307
NEW LOWS                                           9

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        2.89       +.14       +5.1
BAC    Bank Of America   72.85       -.72       -1.0
FBF    FleetBoston Finl  38.80       -.40       -1.0
AWE    AT&T Wireless      7.31       +.16       +2.2
AGRa   Agere Systems      3.48       -.22       -6.0
TWX    Time Warner       15.44       +.23       +1.5
TXN    Texas Instrument  29.35      +1.25       +4.5
PFE    Pfizer            31.50       +.53       +1.7
GE     GE                28.52       +.30       +1.1
KG     King Pharm        12.85      -3.16      -19.7

NASDAQ CLOSE           1932.26    + 49.35      + 2.6
VOLUME                                       2,083.8
PREVIOUS                                     1,519.7
ADVANCES                                        2257
DECLINES                                         928

NASDAQ ACTIVES
MSFT   Microsoft         27.20       +.29       +1.1
INTC   Intel             32.67      +1.25       +4.0
AMAT   Applied Matl      22.55      +1.83       +8.8
CSCO   Cisco Systems     20.90       +.97       +4.9
SINA   Sina Corp         43.57       +.15        +.4
DELL   Dell Inc          35.98       -.10        -.3
AMGN   Amgen             60.85       +.02        +.0
KLAC   KLA Tencor        57.84      +3.98       +7.4
QCOM   Qualcomm          47.00      +2.76       +6.2
EBAY   eBay              57.53      +1.66       +3.0

AMEX CLOSE             1066.95    + 45.77      + 4.5

INDEX SHARES
DIA    DIAMONDS TRUST    97.63      +1.34       +1.4
QQQ    NASDAQ 100        35.36      +1.15       +3.4
SPY    S&P DEP.RECEIPTS 105.04      +1.41       +1.4

STOCKS IN THE NEWS
RJR    RJR Tobacco Hlds  48.97      +5.72      +13.2
LMT    Lockheed Martin   45.51       -.78       -1.7
VZ     Verizon Comms     33.08       -.15        -.5
APD    Air Prods & Chem  44.50      -1.61       -3.5
JNY    Jones Apparel     34.78      +2.48       +7.7
TER    Teradyne          21.83      +2.96      +15.7
SAH    Sonic Automotive  22.00      -4.84      -18.0
MMR    McMoran Explor    14.40      +1.78      +14.1
OMC    Omnicom Group     77.55      +4.22       +5.8
OHP    Oxford Health     41.63      -4.36       -9.5
WFR    MEMC Electronic   12.15      +1.61      +15.3
CHINA  Chinadotcom       10.38      +1.44      +16.1
DITC   Ditech Comms      11.30      +2.48      +28.1
BBDA   Bank Of Bermuda   44.89      +4.89      +12.2
FMKT   FreeMarkets        6.40      -1.80      -22.0