Program: Thursday, October 30, 2003

Consumers Are Spending, Businesses Are Spending, But Investors Aren't Capitol Hill Isn't Buying Treasury Secretary John Snow Currency Report
"Gas Trap,"-Part 2: The Fertilizer Factor
Commentary: Compensation Committees
Last Word-The Traffic Ticket Test
Paul Kangas' Stocks In The News
Market Stats

10/30/03: Consumers Are Spending, Businesses Are Spending, But Investors Aren't

SUSIE GHARIB: It`s full speed ahead for the U.S. economy. The nation`s gross domestic product, or GDP, accelerated 7.2 percent in the third quarter, the fastest pace in more than 19 years. The strong showing was thanks to more spending by consumers and the return of spending by businesses. But the news didn`t inspire investors: The Dow edged up only 12 points and the NASDAQ slipped almost 4. Here`s Scott Gurvey with more on that strong GDP report.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Finally a growth rate startling because of its size. A 7.2 percent annualized growth rate for the third quarter. Economists were expecting 6 percent.

MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES: It was a great GDP report. First it was a vigorous rate of growth, 7 percent growth is just a striking figure. In addition, we saw broad-based participation. Consumers were active, business firms were investing, and we saw an improvement in exports. It was a good, solid, broad-based growth for the United States economy.

GURVEY: Consumer spending increased at a 6.5 percent rate, the best performance from consumers since the late 1990s. But consumers have been the driving force in recent years. Today`s big story was with business. Businesses have been slow to spend since the recession ended two years ago. Yet today`s report shows a 15 percent increase in business spending on new equipment. And while consumer spending is a result of several factors, including the Bush tax cuts and tax rebates, mortgage refinancing driven by unusually low interest rates and rebates on big ticket items like automobiles, business spending is basically driven only by profits and the belief that investment in new equipment and new production will pay off. This is the kind of investment that is needed to generate a sustainable recovery and stimulate the hiring of new workers.

ROBERT DICLEMENTE, CHIEF U.S. ECONOMIST, CITIGROUP: The combination of wider profit margins, greater profitability, strong, better top-line numbers is finally delivering the kind of profit gains that we need to have before business becomes confident enough to start really investing, really hiring, driving payroll growth. And that`s the sort of thing that would allow the economy to achieve self-feeding momentum that doesn`t require the helping hand of policy.

GURVEY: Seven percent growth rates are rare and not usually sustainable, economists are looking to see a 5 or 6 percent rate for the current and final quarter of the year. 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.

10/30/03: Capitol Hill Isn't Buying Treasury Secretary John Snow Currency Report

SUSIE GHARIB: It looks like the Bush administration has tempered its criticism of China`s currency policy. In its annual currency report released today, Treasury Secretary John Snow decided not to blame China, Japan and other Asian trading partners for manipulating their currencies. As Darren Gersh reports, that conclusion was met with harsh criticism on Capitol Hill.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The displeasure was bipartisan. Democrats and Republicans dressed down the Treasury secretary for issuing an annual report on currency trading and giving China a pass.

SEN. CHARLES SCHUMER (D), NEW YORK: It`s a whitewash. It treats China with kid gloves when it should be taking of the gloves and confronting Beijing about the fact that its manipulating the yuan. Pegging the currency to any set level flies in the face of free trade.

GURVEY: Senator after senator complained that they were losing jobs in their states because the Chinese government pegs its currency, the yuan, at 8.28 to the dollar. Many economists say that gives Chinese products an artificial cost advantage of 27 percent.

SEN. JIM BUNNING (R), KENTUCKY: When I played baseball, we called that kind of behavior cheating.

GURVEY: To stem the exodus of manufacturing jobs, some lawmakers are pushing legislation to raise tariffs on Chinese products.

SEN. ELIZABETH DOLE (R), NORTH CAROLINA: This may be the only way to get the attention of the Chinese leaders. We are the largest export market for Chinese goods, and this may be the only way to convince the Chinese of our seriousness on this issue.

GURVEY: In its report, the Treasury points out that China has pegged its currency for a decade, riding out ups and downs in the value of the dollar against other currencies. And under the law, there was no legal basis for citing China for manipulating the yuan.

JOHN SNOW, TREASURY SECRETARY: But, but we`re not happy with the way the Chinese deal with their currency. We`re committed to changing it, we`re engaged in changing it, and I think we`re making real progress.

GURVEY: One example, Snow says, is that China is now working with the Chicago Mercantile Exchange to develop currency futures markets. And he says Chinese leaders have pledged to relax the currency peg "as soon as possible."

SNOW: This is not just talk. This is progress. They`ve reaffirmed their commitment to move to exchange rate flexibility. They have taken a number of very important and specific steps to do so.

GURVEY: In the meantime, the Chinese are reported to be ready to announce deals to buy airplanes and other big-ticket U.S. products, but as many of the senators said today, a shopping spree is not a substitute for long-run action on China`s currency. Darren Gersh, 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.

10/30/03: "Gas Trap,"-Part 2: The Fertilizer Factor

SUSIE GHARIB: Higher natural gas prices are costing U.S. companies millions, but some industries are suffering a lot more than others. One is the fertilizer industry. In part two of our series "Gas Trap," Diane Eastabrook looks at how the struggling industry and its customers are coping with higher natural gas costs.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Midwest grain harvest is nearly complete, and farmers are tallying up healthy profits. Unfortunately, higher costs are already claiming some of their gains. Higher fertilizer prices are the problem. Anhydrous ammonia, a vital chemical that`s applied to fields in the fall and spring, is made almost entirely from natural gas, and higher gas prices have ratcheted up its cost. Farmer Jeff Becker expects to spend about 20 percent more for fertilizer this year than last.

JEFF BECKER, FARMER: It will be a direct impact on the bottom line. There`s no benefit or gain on yield on by that added cost of anhydrous. Our yields will be the same.

EASTABROOK: But the financial pain farmers are feeling is minor compared to the pain the U.S. fertilizer industry is feeling. Natural gas prices have shot up so high, some manufacturers can`t turn a profit making anhydrous ammonia. As a result, about 40 percent of the industry`s capacity has been idled. This Royster Clark plant on the Iowa/Illinois border is open now, but it shut down for a month last winter when natural gas prices more than doubled over the previous year.

JOHN DIESCH, MANAGING DIRECTOR, ROYSTER CLARK: Prices moved extremely rapidly towards the end of February. We saw spot market prices of natural gas as high as $18 on the spot - cash market. With that, the economics just weren`t there to operate based on what the fertilizer price was at that time.

EASTABROOK: U.S. fertilizer producers can`t raise ammonia prices significantly to cover higher gas costs because they face stiff competition from foreign imports. Many countries sell ammonia here at lower prices because their natural gas is cheaper. If U.S. gas prices remain high indefinitely, some economists predict the domestic ammonia industry will disappear.

HOWARD SIMONS, ECONOMIST, NASDAQ LIFFE MARKETS: It is a lot more efficient to import ammonia from places like Trinidad, Indonesia, even Russia, you can import it all the way from the Black Sea ports cheaper than you can make it here. And as long as you can import something cheaper than you can make it, you should do it.

EASTABROOK: Royster Clark has hedged more on natural gas for the upcoming winter than normal. But the company says if the weather is unusually cold and gas prices skyrocket, this plant could shut down again. Diane Eastabrook, NIGHTLY BUSINESS REPORT, East Dubuque, Illinois.

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.

10/30/03: Commentary: Compensation Committees

SUSIE GHARIB: In tonight`s commentary, a few thoughts on compensation committees. Here`s Barbara Hackman Franklin, president and CEO of Barbara Franklin Enterprises and former U.S. Secretary of Commerce.

BARBARA HACKMAN FRANKLIN, COMMENTARY: Investors are looking more critically at CEO compensation and what compensation committees are doing. I serve on compensation committees and am co-chairing a blue ribbon commission on this subject for the National Association of Corporate Directors. Our report is not finished, but here are some personal ideas about what compensation committees should be doing. First, be independent. Financial independence will be required, but I`m talking about a state of mind. That means being objective and being willing to just say "no" if necessary. Second, wrestle with the fairness question. What is fair compensation for this CEO job in this company at this time? How much higher should CEO pay be than that of senior officers and the rest of the organization? And what is the best way to benchmark what`s happening in a peer group of companies? Third, hire a compensation consultant to advise the committee, a consultant who does not also work for management. Fourth, insist that pay be linked to performance. Ensure that there are objectives for the CEO, which flow from corporate strategy, and measures of performance, both financial and non-financial. Understand each element of the pay plan, cash, stock, perks, and other benefits, and know what the whole thing costs. And finally, be transparent. The entire board should know what`s in the package, and so should investors. It`s time for compensation committees to take charge. 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.

10/30/03: Last Word-The Traffic Ticket Test

SUSIE GHARIB: And finally , a new study has some surprising findings about who`s involved in car accidents and who`s most likely to get a speeding ticket. The survey of over a million drivers was broken down into 40 occupations. And it shows that students top the list when it comes to accidents and speeding tickets. Doctors, lawyers, architects, and real estate agents round out the top five for accidents. As for speeding violations: enlisted military personnel, manual laborers, politicians, and architects. Paul, the study was conducted by Quality Planning Corporation. It specializes in ranking drivers for the insurance industry. But apparently, they didn`t rank news anchors on the list. And maybe that`s because we`re just so good.

KANGAS: And that`s because there was absolutely no evidence...

GHARIB: Absolutely.

KANGAS: ... of any kind. (LAUGHTER)

GHARIB: I agree totally. That`s NIGHTLY BUSINESS REPORT for Thursday, October 30. I`m Susie Gharib. Good night, everyone.

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.

10/30/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: That unexpectedly big 7.2 percent jump in third-quarter GDP triggered an opening spike-up on Wall Street, which lifted the Dow about 50 points at the outset of trading, while the NASDAQ Index jumped 20 points. The early rally evaporated amid quickly concerns that the sharp GDP rise might be an aberration or that it would be revised lower next month. Some investors sold into the strength in the belief that the market`s good gains since Monday had been factored into the GDP report. By mid-morning, the Dow fell to an 8-point loss, the NASDAQ was down 2 points. An early afternoon rebound gradually fell victim to continuing investor wariness over the GDP figure and lower-than-expected results from Exxon (XOM), which dragged down the blue chips. The Dow Jones Industrial Average salvaged a closing gain of only 12 points at 9786.61. The NASDAQ Composite ended down 3.87 at 1932.69. The Standard & Poor`s 500 Index fell 1.17 to 1046.94. Over in the bond market, the 10-year note fell 10/32 to 99 8/32, putting the yield at 4.35 percent.

Well, they were among the most active on the big board. We`ll see them in just a moment as we take a look at the "Stocks in the News" tonight.

The most active issue on the big board on 55.6 million shares, Lucent Technologies (LU) moving up $0.23. That`s a gain of 7.6 percent. CEO Patricia Russo said business is stabilizing and the company should see sustained profits in 2004. You will recall last week that Lucent reported $0.02 in earnings in the fourth quarter.

There you see ExxonMobil (XOM), dropping $1.51 on those earnings that were $0.07 below the Street estimate. That drop of $1.51 hurt the Dow Industrial Average by about 10 3/4 points incidentally.

Pfizer (PFE) down $0.39.

But NorTel Networks (NT) moved up $0.04.

GE (GE), a nickel`s gain, number five in big board volume.

Micron Technology (MU) gained a dime.

Time Warner (TWX) up $0.12.

Elan (ELN) down $0.62.

FleetBoston Financial (FBF), which will be taken over by Bank America (BAC), up $0.55.

And Providian Financial (PVN), the credit card company, had a bad day, down $1.84. That`s a 14 percent drop. Third-quarter earnings were higher, $0.29 versus $0.15 the year prior. But revenues tumbled 21 percent. And a number of brokerages didn`t like it, downgraded the stock, including UBS Financial which downgraded it from buy to neutral.

Aetna (AET), the big insurance company, down $2.49. Third-quarter operating earnings were higher, $1.27. And that was $0.04 above the Street estimate. But revenues fell from $4.8 billion to $4.5 billion. And Wall Street didn`t like that idea.

Capital One Financial (COF) down $3.70. After the close yesterday, the company forecast 2004 earnings will be around $5.30 a share. And that is at the low end of Wall Street projections. That`s what hurt the stock today.

Merck & Company (MRK) losing nearly a dollar. It traded as low as $43.88. New research indicates the company`s Vioxx painkiller may boost the risk of heart attack.

Beckman Coulter (BEC) up $2.09. Third-quarter earnings, $0.62, up from $0.49 last year. Sales up 6.6 percent. And the company signed a three-year $90 million renewed hematology pact with Novation. Standard & Poor`s rates Beckman an accumulate.

BMC Software (BMC) up $1.46. Second-quarter earnings $0.10, $0.05 above the estimate on Wall Street, and up from $0.08 last year. Revenues up a respectable 15 percent.

N

ewell Rubbermaid (NWL) up $0.60. The stock traded as high as $24.20 today. Third-quarter earnings were a bit lower, $0.40 versus $0.46 last year. But that was a little better than expected. And the company sees fourth-quarter earnings rising to $0.51 to $0.54 a share. That helped the stock.

Asbury Automotive (ABG) gaining a $1.75, one of the better percentage movers. Third-quarter earnings higher, $0.53 versus $0.47 a year. And that was a penny better than the Wall Street estimate.

Tommy Hilfiger (TOM) stock just over dollar. C.S. First Boston upgraded it from neutral to outperform, citing the strong performance of the company`s men`s sportswear line.

Martha Stewart Living (MSO) up $0.41, and it traded as high $11.25. Third-quarter loss narrowed to only $0.08. Wall Street was looking for a loss of $0.14 a share. So better than expected.

Omega Protein (OME), one of the biggest percentage losers, off $1.33, or 21 percent. The company produces fish oil and meal. And it`s third-quarter earnings dropped to only $0.03 versus $0.14 last year. Revenues tumbled 8 percent. The company blamed adverse weather on its problems.

And RehabCare Group (RHB) down $2.35. Third-quarter earnings, $0.20 down from $0.27 a year ago. Revenues dropped about 5 1/2 percent. And the company cut its 2003 earnings guidance to only $0.95 to $1.10. Standard & Poor`s downgraded the stock from buy to just accumulate.

NASDAQ`s most active issue, Microsoft (MSFT), down $0.62. European regulators are probing the company`s licensing policies over there.

Intel (INTC) was up $0.09.

Cisco (CSCO), a $0.04 gainer.

Yahoo! (YHOO) up $0.64.

Gilead Sciences (GILD) up $2.34 after tumbling about 7 1/2 yesterday on disappointing earnings. A little comeback there.

Applied Materials (AMAT) up $0.66.

A $0.96 gain in Amgen (AMGN).

eBay (EBAY) was down $0.27.

Netease.com (NTES) down another $5. It tumbled $15 yesterday on news the Chinese government is clamping down pornographic downloads, that`s part of the company`s business.

A $0.07-gain Nextel Communications (NXTL).

Akamai Technologies (AKAM), a computer services firm, up $2.04. Third-quarter loss narrowed to only $0.03 versus a $0.42 loss last year. And the company`s anti-virus software, apparently a great success in patching some of Microsoft`s problems.

InfoSpace (INSP) up $3.76. Third-quarter earnings of a nickel versus a loss of $0.87 last year. The company says its fourth quarter will also be about a nickel in earnings.

And Biopure (BPUR) tumbling $2.37. FDA is asking the company for more information on its blood substitute. Meanwhile the company is laying off up to 30 percent of its workforce.

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.

10/30/03: Market Stats

			     
                              
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9786.61     +12.08       + .1
HIGH                                         9838.76
LOW                                          9754.01

NASDAQ COMP.           1932.69      -3.87        -.2
HIGH                                         1957.53
LOW                                          1929.77

VOLUME                                       1,620.7
PREVIOUS                                     1,522.5
UP VOLUME                                      799.3
DOWN VOLUME                                    803.0

DOW TRANSPORTS         2925.28     +23.73       + .8
DOW UTILITIES           253.51       +.65       + .3
CLOSING TICK                                    +594

S&P 500                1046.94      -1.17       - .1
S&P 100                 517.53      -1.13       - .2
MIDCAP 400              547.36       -.12       - .0
REUTERS/CRB             247.73      -2.03       - .8

NYSE COMPOSITE         5951.37      -1.02       - .0
VALUE LINE              341.28      unch.          0
RUSSELL 2000            530.37      -1.44      -0.27
WILSHIRE 5000         10195.52     -11.78      -0.12

U.S. TREASURIES
5-YEAR NOTE 3.125%
Oct. 15,2008          99  8/32     -13/32       3.29

10-YEAR NOTE 4.25%
Aug. 15,2013          99  7/32     -11/32       4.35

30-YEAR NOTE 5.375%
Feb. 15, 2031        102 16/32     -11/32       5.20

LEHMAN BROS.
LONG BOND INDEX        1708.09      -8.89 


DOW CLOSE              9786.61     +12.08       + .1
ADVANCES                                        1647
DECLINES                                        1634
NEW HIGHS                                        451
NEW LOWS                                          12

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        3.24       +.23       +7.6
XOM    Exxon Mobil       36.30      -1.51       -4.0
PFE    Pfizer            30.88       -.39       -1.3
NT     Nortel Networks    4.49       +.04        +.9
GE     GE                28.88       +.05        +.2
MU     Micron Tech       14.70       +.10        +.7
TWX    Time Warner       15.41       +.12        +.8
ELN    Elan Corp Plc      4.95       -.62      -11.1
FBF    FleetBoston Finl  40.10       +.55       +1.4
PVN    Provident Finl    11.16      -1.84      -14.2

NASDAQ CLOSE           1932.69     - 3.87       - .2
VOLUME                                       2,164.1
PREVIOUS                                     1,973.1
ADVANCES                                        1461
DECLINES                                        1692

NASDAQ ACTIVES
MSFT   Microsoft         26.12       -.62       -2.3
INTC   Intel             32.89       +.09        +.3
CSCO   Cisco Systems     20.86       +.04        +.2
YHOO   Yahoo!            43.72       +.64       +1.5
GILD   Gilead Science    54.34      +2.34       +4.5
AMAT   Applied Matl      23.24       +.66       +2.9
AMGN   Amgen             61.11       +.96       +1.6
EBAY   eBay              56.93       -.27        -.5
NTES   Netease.Com       45.60      -5.04      -10.0
NXTL   Nextel Comms      24.11       +.07        +.3

AMEX CLOSE             1060.19     - 2.75       - .3

INDEX SHARES
DIA    DIAMONDS TRUST    98.30       +.43        +.4
QQQ    NASDAQ 100        35.39       +.06        +.2
SPY    S&P DEP.RECEIPTS 105.40       +.22        +.2

STOCKS IN THE NEWS
AET    Aetna Inc         56.30      -2.49       -4.2
COF    Cap One Finl      59.68      -3.70       -5.8
BEC    Beckman Coulter   48.56      +2.09       +4.5
BMC    BMC Software      17.12      +1.46       +9.3
NWL    Newell Rubbermd   22.80       +.60       +2.7
ABG    Asbury Auto Grp   17.00      +1.75      +11.5
TOM    Tommy Hilfiger    14.90      +1.05       +7.6
MSO    Martha Stewart    10.40       +.41       +4.1
OME    Omega Protein      4.96      -1.33      -21.1
RHB    Rehabcare         15.75      -2.35      -13.0
AKAM   Akamai Tech        8.00      +2.04      +34.2
INSP   Infospace         25.77      +3.76      +17.1
BPUR   Biopure            3.68      -2.37      -39.2