Program: Wednesday, November 5, 2003

Interim NYSE Chairman John Reed's Big Plans For The Big Board
More HealthSouth Horror Stories
Bouncing Back-Part 2: All NBA All The Time
Money File-Playing To Win
Paul Kangas' Stocks In The News
Market Stats

11/04/03: Interim NYSE Chairman John Reed's Big Plans For The Big Board

SUSIE GHARIB: The big talk here at the New York Stock Exchange today was about the NYSE itself and a controversial plan to overhaul the big board. Interim Chairman John Reed unveiled his much anticipated proposal to reform the exchange's structure. But it's already being criticized for not going far enough in eliminating trading abuses and conflicts of interest. Scott Gurvey reports.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT, CORRESPONDENT: Retired Citigroup (C) CEO John Reed was called in to put out the blaze at the New York Stock Exchange following the forced resignation of Richard Grasso. Today he unveiled his fire extinguisher. This 102 page proxy statement details Reed's proposals for structural change at the big board. The plan calls for an eight person board of directors who are independent of the exchange's constituent groups. This board will appoint a separate board of executives to represent the interested parties. Reed has handpicked the eight person slate he is asking the membership to approve and he made it clear as he briefed reporters today that this is a complete package for the members to accept or reject.

JOHN REED, INTERIM CHAIRMAN & CEO, NYSE: I have no agenda. I certainly am not being overly compensated for my work. And so I've tried to come in and say hey, I'm going to be here for a couple of months and then I'm going to leave. And, you know, I'm not -- so to the extent that you can be free of obvious conflict, I am. I do ask in this document for a vote that approves the fact that the board is recommended not by a nominating committee, but by me. And I ask them to acknowledge that and be willing to accept that.

GURVEY: While initial reaction to the board plan has been positive, some are concerned that not all players are represented. Alan Hevesi runs the New York State Pension Fund.

ALAN HEVESI, NEW YORK STATE COMPTROLLER: While the board is independent, the eight member board, the McCall reform proposal that was to be the basis of John Reed's final proposal included on a larger board, 17 members, a number of public representatives and representatives of pension funds and institutional investors. And this proposal doesn't include that.

GURVEY: Also missing from the proposal is any discussion of the specialist system, the NYSE trading method which has come under increasing criticism. Asked about that today, Reed gave the system his endorsement, but also said its review is not part of his mandate.

REED: Our system certainly appears to be superior. That does not mean that it can't change over time or that it shouldn't change over time. And I wasn't brought in here to answer the question you just asked. I was brought in here to bring -- put a governance structure in place that will deal with that question -- and that's why you will see that some of the people on the board are technologically savvy, smart people -- and to find somebody to replace me who will have that problem front and center.

GURVEY: Today's proposal also continues the Exchange's role as a self-regulating organization. The President of the powerful California Public Employees' Retirement System said today, "Investors were expecting a home run proposal to reform the New York Stock Exchange. What we got, I believe, is not even a base hit. Too much has happened to allow the NYSE to self-regulate, particularly since the main board will not have a powerful enough representation by institutional investors." At the meeting, Reed admitted the membership could vote out of office leaders who were tough regulators.

REED: The members own the place. It's very difficult in capitalistic America to disenfranchise the owners. There are things called property rights. And so obviously the stockholders have to vote. I mean that's just the way the systems works. And obviously the members could vote out somebody. I think if it were felt by the SEC that that vote was not something they were comfortable with, they would have to take steps to correct. You know, they could just say to hell with this, we're going to take regulation away or whatever. But the point is all systems can be abused.

GURVEY: The Exchange has yet to reach an agreement with former CEO Grasso on his termination and Reed has commissioned a report on the circumstances for the new board, a report he says he will not make public.

REED: It could be highly embarrassing. I'm sure mistakes were made. And what public good is served by doing laundry in public? I mean, come on.

GURVEY: That stand is also the subject of criticism tonight from some experts on corporate governance.

BETH YOUNG, SENIOR RESEARCH ASSOCIATE, THE CORPORATE LIBRARY: In some ways, without understanding exactly what caused the problems in the past, it's difficult to fully evaluate whether these changes will remedy those problems. So I understand the sensitivity about the investigation and his desire not to besmirch anyone's reputation, but at the same time, I think it may be depriving the Exchange of -- you know, and the public, which has to evaluate this, of an important learning tool.

GURVEY: The NYSE members must first vote to OK these changes. Then they must be submitted to the Securities and Exchange Commission for its approval. Scott Gurvey, NIGHTLY BUSINESS REPORT, at the New York Stock Exchange.

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.

11/05/03: More HealthSouth Horror Stories

PAUL KANGAS: There are more details surfacing tonight about the financial fraud at HealthSouth. On Capitol Hill, a House investigative committee wants to know why the company's board of directors and its auditors did not catch almost $3 billion in overstated earnings. And as Stephanie Woods reports, lawmakers aren't happy with the answers they're getting.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: From the beginning, it was clear Congress had a pretty good idea of the alleged intimidation and manipulation used by former HealthSouth CEO Richard Scrushy.

REP. JIM GREENWOOD (R-PA), CHAIRMAN, HOUSE ENERGY & COMMERCE COMMITTEE: The overarching themes of Mr. Scrushy's indictment are greed and more greed, with a good dose of intimidation.

WOODS: And the details of that intimidation had lawmakers unsettled. For example, now acting CEO Robert May revealed Scrushy hired a private investigator last fall to look into May's background. Now acting Board Chairman Joel Gordon was ousted from the board's compliance committee after he questioned Scrushy's deals and the hiring of a law firm to investigate Scrushy's insider trading.

JOEL GORTON, ACTING CHAIRMAN, HEALTHSOUTH: As things got tough over the last six, eight, 10 months, I saw some of that. I did see on occasionally when I disagreed with him, he would raise his voice and express his dissatisfaction. It wasn't a discussion. It was him demanding why are you saying this, why are you doing this?

WOODS: Lawmakers questioned why board members didn't act swiftly when Scrushy revealed that a change in Medicare reimbursements would cost the company $175 million two weeks after he said it would cost less than $20 million.

GREENWOOD: You're shocked. You said you were shocked. You were amazed that a number that was originally presented at $15 million to $20 million had quickly grown to $175 million. You were an important member of the board of directors. You're shocked, but you yet kept silent?

GORTON: I requested further information.

WOODS: Gordon never got it until the financial fraud was revealed in March. Lawmakers also faulted HealthSouth's auditors, Ernst and Young, for missing the massive fraud. The auditors insist they, too, were victims. Internal Ernst and Young documents show the auditors were concerned about the company's focus on meeting Wall Street expectations. But that information was never shared with HealthSouth's board.

JAMES LAMPHRON, PARTNER, ERNST & YOUNG: I would concede that looking back, you can certainly take a different view of these things. But at the time, on site, they weren't red flags.

WOODS: The challenge now for HealthSouth's new managers is to rebuild the company and restore investor confidence. Lawmakers think they have their work cut out for them. 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.

11/05/03: Bouncing Back-Part 2: All NBA All The Time

SUSIE GHARIB: The NBA is the considered the most high tech of the major sports leagues. Its games are available on everything from laptops to Palm Pilots. So tonight, as we continue our series Bouncing Back, we look at the league's newest entry into the media sweepstakes, NBA TV. Erika Miller reports.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: What does this net have to do with this Net? The answer is a lot. The NBA is betting that bringing its games to computers, handhelds and mobile phones will boost its popularity among fans.

DAVID STERN, NBA COMMISSIONER: We think that technology is very important to enhancing the game experience and cementing our relationship with our fans. In addition, we think that technology is playing a large role now in selling, as well. Fifty percent of the single game tickets are now being bought online. And that number is up dramatically over just a few years ago.

MILLER: Nba.com has become more than just a Website. It has morphed into NBA TV, the first television network created by a sports league. The Website and the TV channel share the same facilities and much of the same content.

GREGG WINIK, EXECUTIVE DIRECTOR, NBA-TV: The producers are creating content for both nba.com, NBA TV. Photographers are out there in the field creating images for nba.com, NBA TV. Videographers and highlight packages are being created across both mediums.

MILLER: Part of what makes NBA TV unique is that it's all basketball, all the time. Viewers can watch nearly 100 NBA games not shown on the league's network partners, ABC, TNT and ESPN. Another big draw is that half of the games are in high definition. Next year, the NBA hopes to air all programming that way. NBA TV is getting a huge boost in viewership this year. Until recently, the network was only available only to 20 million customers with satellite dishes. But now, cable giants Cox Communications (COX), Cablevision (CVC) and Time Warner have agreed to carry the programming, which means the network will be available to twice as many homes. But the NBA is clear: it is positioning NBA TV as a complement, not a competitor, to its partner networks.

WINIK: Our long and short-term goals are making sure that our network partners are growing the pie, that we're driving viewers to the big games, because we think that the spill off will be, you know, the programming we have.

MILLER: However, in the international Arena, NBA TV is being far more aggressive. It is currently seen in 39 foreign countries, up 30 percent from a year ago. Experts say it's part of a shrewd strategy to internationalize the NBA brand.

TERRY LEFTON, EDITOR-AT-LARGE, "SPORTS BUSINESS DAILY": Any business, when it reaches a point where it sees that its core product and its core customers are sort of, may be reaching the end, they'll look for new methods of distribution and new places to distribute. So you see the NBA reaching out to new lands, new countries.

MILLER: Already, 42 percent of the traffic on nba.com comes from fans outside the U.S., a percentage Internet analysts call huge. The NBA won't comment on the profitability of its Website, but some experts say it's one of the most popular sites on the Web. And as far as the TV network goes, the NBA predicts it will be in the black by the end of this season. So, the league hopes its fast break to TV and online will help rack up points on the bottom line. Erika Miller, NIGHTLY BUSINESS REPORT, Secaucus, New Jersey.

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.

11/05/03: Money File-Playing To Win

SUSIE GHARIB: In the Money File tonight, how to win at the game of investing. Here's Bill Barnhardt, Financial Markets Columnist for the "Chicago Tribune."

BILL BARNHARDT, FINANCIAL MARKETS COLUMNIST, "CHICAGO TRIBUNE": One of the most popular books this year among investment managers is "Moneyball" by Michael Lewis. It's a great book about baseball, but it appeals to investment pros because it's all about picking bargains. The subject is recruiting better and cheaper ballplayers through statistical analysis. But the analogy to beating the stock market has not been lost on Wall Street. In the book, John Henry, who's a professional investor and owns the Boston Red Sox, explains the connection this way: "People in both fields operate with beliefs and biases," he says. "To the extent you can eliminate both and replace them with data, you gain a clear advantage." Lewis explores why baseball team owners have been reluctant to use statistics in fielding teams. On Wall Street, studious money managers may be taking note. But there is no chance that these ideas will ever be mentioned by leaders of the mutual fund industry. In his version of moneyball analysis, Vanguard Fund's founder Jack Bogle has discovered that investment returns of low cost mutual funds beat high cost funds by four percentage points a year. He's also found that funds tend to perform worse as they get bigger. It's obvious, therefore, that most mutual funds will not share with their ordinary customers the secrets of statistical analysis. But that's no reason why you can't become a moneyball investor yourself. Don't pay excessive fees and don't chase investment fads. The stats prove conclusively that these strategies alone will make you a winner. I'm Bill Barnhardt.

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.

11/04/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Stocks on Wall Street opened lower, continuing yesterday's modest pullback. There was a slightly negative reaction to a 3/10 percent rise in September new factory orders, since a 6/10 percent increase was expected. So the Dow Industrial Average was off 42 points an hour into the session. The NASDAQ Index posted a 13 point deficit. The market didn't get much of a boost from a bigger than expected jump of 1.4 percent in the Purchasing Managers' October Service Activity Index. And midday, the Dow was still down 50 points and the NASDAQ Index down 15. The market gradually improved late in the day, so the Dow Industrial Average trimmed its closing loss to just 18 points, putting it at 9,820.83. The NASDAQ Composite gained 1.41, to 1,959.37. The Standard & Poor's 500 Index fell almost a 1 1/2 points, to 1,051.81.

In the bond market, the 10-year note fell 14/32, to 99 6/32, with the yield at 4.35 percent.

As usual, as lately, Lucent Technologies (LU) topped the active list, trading 36.7 million shares on the big board today and moving up $0.04 a share.

AT&T Wireless (AWE) gained $0.11.

Nortel Networks (NT) down $0.16.

Pfizer (PFE) a $0.20 gain.

Fifth in volume was General Electric (GE), down $0.23 a share.

Time Warner (TWX) lost $0.07.

Calpine (CPN) moved up $0.36. Third quarter earnings higher, $0.51 versus $0.34 a year ago, but the company did cut its full year forecast from the $0.25 to $0.35 range, down to $0.18 to $0.22. That's from operations.

Sprint PCS Group (PCS) up $0.11.

A $0.29 drop in Exxon Mobil (XOM).

And Schering-Plough (SGP), tenth in volume, was down $0.27.

Symbol Technologies (SBL) had a good day, rising $2.04. Third quarter earnings came in at a $0.05 a share. That was a $0.01 below last year's level, but about in line with estimates. The company is upbeat on its growth outlook. J.P. Morgan added the stock to its focus list. Morgan Stanley upgraded it from "under weight" to "equal weight."

One of the big percentage losers, International Multifoods (IMC), down $5 a share. The company sees fiscal 2004 earnings at about $1.35. The Street estimate way up there at $1.71. And US Bancorp (USB) says the company's getting tough competition from General Mills (GIS) and Duncan Hines.

News Corp. (NWS) closed up $0.38. After the close, the company in with first quarter results, $0.29 in earnings, $0.09 better than Wall Street expected. And in after hours trading, the stock was as high as $38.80 a share.

Louisiana Pacific (LPX) down $1.30. Lehman Brothers downgraded it from "over weight" to "equal weight."

And Alliance Capital Management (AC) down $3 a share. The "New York Times" today says regulators are considering taking action next week against the company's management for improper mutual fund trading.

Thor Industries (THO), the R.V. manufacturer, was downgraded by the Robert Baird Brokerage from "outperform" to just a "neutral" rating.

Tommy Hilfiger (TOM) up $1.24. Second quarter earnings higher, $0.71 versus $0.67 a year ago. The company sees full year earnings around $1.35 to as high as $1.43. Wall Street estimates only $1.18, much better than expected then.

And then Thomas Nelson (TNM), one of the biggest printers of bibles, makes for some good corporate financial reading today. Second quarter earnings $0.45, way up from last year's $0.28. Sales were up a respectable 2.8 percent.

Home builder Toll Brothers (TOL) up $2.79. Fourth quarter closings, the company said up 24 percent from last year. Contracts up 46 percent and the company's backlog up 39 percent from where it was last year.

Watson Pharmaceuticals (WPI) gained $3.88. Third quarter earnings $0.47, $0.03 above the Street estimate and way up from $0.38 a year ago. Revenues up a respectable 17 percent. Standard & Poor's upgraded Watson's stock from "hold" to "accumulate."

Then Amerisource-Bergen (ABC) up $4.32. Fourth quarter earnings higher, $1.04 versus $0.86 a year ago. The company sees 2004 earnings rising at least 15 percent.

The NASDAQ's most active, Interactive Corp. (IACI), down $2.81. Third quarter earnings $0.17, a $0.01 below the Street estimate. And analysts were rather disappointed over the company's outlook.

Cisco Systems (CSCO) closed up $0.22. After the close, the company in with first quarter earnings, $0.17, versus $0.08 a year ago and $0.02 above the Street estimate. Sales were better than expected at $5.1 billion. In after hours trading, the stock as high as $23.05 a share.

Intel (INTC) moved up $0.08.

Microsoft (MSFT) a $0.03 gainer. You heard the story there.

Qualcomm (QCOM) down $0.73. Qualcomm, after the close, reported fourth quarter earnings higher, $0.35 versus $0.23 a year ago. In after hours trading, the stock as high as $47.30.

Applied Materials (AMAT) gained a $0.05.

Dell (DELL) down $0.08.

Amgen (AMGN) a $0.15 gain.

Priceline.com (PCLN) plunging $7.59. The problem here, third quarter earnings were higher, $0.24 versus a loss last year, $0.03 above the Street estimate. But the company cut its fourth quarter guidance because of soft airline ticket sales outlook, and that's what really hit the stock.

Ivanhoe Energy (IVAN) was up $0.29. Company officials are in talks with top Iraqi officials and it may result by the company getting some oil and gas projects in Iraq.

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.

11/05/03: Market Stats

			     
                              
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9820.83     -18.00       - .2
HIGH                                         9859.34
LOW                                          9778.31

NASDAQ COMP.           1959.37      +1.41        +.1
HIGH                                         1966.15
LOW                                          1938.22

VOLUME                                       1,361.4
PREVIOUS                                     1,384.5
UP VOLUME                                      681.6
DOWN VOLUME                                    654.5

DOW TRANSPORTS         2932.74      -8.82       - .3
DOW UTILITIES           252.82       +.24       + .1
CLOSING TICK                                    +608

S&P 500                1051.81      -1.44       - .1
S&P 100                 520.25      -1.13       - .2
MIDCAP 400              555.74      +1.92       + .4
REUTERS/CRB             250.13      +3.56      + 1.4

NYSE COMPOSITE         5966.58      -9.34       - .2
VALUE LINE              345.59       +.16       0.05
RUSSELL 2000            538.91       +.04       0.01
WILSHIRE 5000          10263.1      -8.36      -0.08

U.S. TREASURIES
5-YEAR NOTE 3.125%
Oct. 15,2008          99  2/32     -11/32       3.33

10-YEAR NOTE 4.25%
Aug. 15,2013          99  6/32     -14/32       4.35

30-YEAR NOTE 5.375%
Feb. 15, 2031        102 23/32     -26/32       5.19

LEHMAN BROS.
LONG BOND INDEX        1710.24      -8.13


DOW CLOSE              9820.83     -18.00       - .2
ADVANCES                                        1638
DECLINES                                        1588
NEW HIGHS                                        276
NEW LOWS                                           9

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
LU     Lucent Tech        3.19       +.04       +1.3
AWE    AT&T Wireless      7.11       +.11       +1.6
NT     Nortel Networks    4.33       -.16       -3.6
PFE    Pfizer            31.65       +.20        +.6
GE     GE                28.43       -.23        -.8
TWX    Time Warner       15.50       -.07        -.5
CPN    Calpine            5.11       +.36       +7.6
PCS    Sprint PCS Group   4.50       +.11       +2.5
XOM    Exxon Mobil       36.03       -.29        -.8
SGP    Schering-Plough   14.52       -.27       -1.8

NASDAQ CLOSE           1959.37     + 1.41       + .1
VOLUME                                       2,029.4
PREVIOUS                                     2,102.9
ADVANCES                                        1593
DECLINES                                        1562

NASDAQ ACTIVES
IACI   InterActiveCorp   34.19      -2.81       -7.6
CSCO   Cisco Systems     21.80       +.22       +1.0
INTC   Intel             33.74       +.08        +.2
MSFT   Microsoft         26.10       +.03        +.1
QCOM   Qualcomm          46.59       -.73       -1.5
AMAT   Applied Matl      24.95       +.05        +.2
DELL   Dell Inc          36.11       -.08        -.2
AMGN   Amgen             61.24       +.15        +.3
PCLN   Priceline.com     21.66      -7.59      -26.0
IVAN   Ivanhoe Energy     6.95       +.29       +4.4

AMEX CLOSE             1064.56     + 1.58       + .2

INDEX SHARES
DIA    DIAMONDS TRUST    98.56       -.02        -.0
QQQ    NASDAQ 100        35.80       +.29        +.8
SPY    S&P DEP.RECEIPTS 105.90       +.07        +.1

STOCKS IN THE NEWS
SBL    Symbol Tech       14.58      +2.04      +16.3
IMC    Intl Multifoods   18.10      -5.00      -21.7
NWS    News Corp Ltd     36.48       +.38       +1.1
LPX    Louisiana Pacific 17.80      -1.30       -6.8
AC     Alliance Capital  31.10      -3.00       -8.8
THO    Thor Industries   61.49      -3.97       -6.1
TOM    Tommy Hilfiger    15.62      +1.24       +8.6
TNM    Thomas Nelson     16.85      +1.77      +11.7
TOL    Toll Brothers     40.28      +2.79       +7.4
WPI    Watson Pharm      42.32      +3.88      +10.1
ABC    AmerisourceBergn  60.72      +4.32       +7.7