Program: Thursday, November 13, 2003

Wal-Mart's "Bah Humbug" Holiday Outlook
One On One With AMAT`s CEO, Mike Splinter
Medicare Reform Goes Down To The Wire
"Innovation Island"-Part 4: Taipei 101
Paul Kangas' Stocks In The News
Market Stats

11/13/03: Wal-Mart's "Bah Humbug" Holiday Outlook

SUSIE GHARIB: The world`s largest retailer missed earnings by a $0.01 today and investors got the jitters. Dow component Wal-Mart (WMT) tumbled four percent on today`s earnings disappointment and that brought down the major stock indexes. Suzanne Pratt looks at the outlook for Wal-Mart.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Thanks to a turnaround at its Sam`s Club stores and strong international sales, Wal-Mart rang up a 13 percent increase in quarterly profits. The nation`s largest retailer earned $0.46 a share in its third quarter. Still, results were a $0.01 shy of estimates and it was the first quarterly miss for Wal-Mart in more than eight years. Even though revenue was on target for the discounter, gross margins slipped for the first time in eight quarters. Company management said the decrease was mostly due to late summer markdowns. And analysts say while Wal-Mart is doing a good job meeting the needs of its customers, it`s having trouble controlling costs.

GARY BALTER, RETAIL ANALYST, UBS INVESTMENT RESEARCH: They`re seeing healthcare costs go up. They`re seeing other costs that they have with their employees go up. The other area where they`re a little challenged is a market where too many people are selling apparel. They`re starting to see a little of pressure on gross margins. That may be temporary. That may be more weather.

PRATT: As for the fourth quarter, Wal-Mart said earnings should be in line with Wall Street expectations. But the retailer is cautious about the outlook for the economy as a whole. Management says it doesn`t think consumer spending is slowing, but it is not as optimistic as the investment community about the outlook for holiday sales.

BILL DREHER, RETAIL DREHER, RETAIL ANALYST, DEUTSCHE BANK: Both comments from Wal-Mart and Target (TGT) were very conservative on the fourth quarter, that the consumer maybe is not as strong as we would have expected, particularly the middle market and the low end consumer. So it`s not going to be as easy a holiday season as we may have thought a month or two ago.

PRATT: Deutsche Bank (DB) is a shareholder and has an investment banking relationship with both Wal-Mart and Target. One of the reasons Wal-Mart has remained cautious about the outlook for holiday sales has to do with the spending habits of its customers. Wal-Mart says its customers typically shop only around the time that they receive a paycheck and they tend to buy only the lowest priced items in any category. Suzanne Pratt, NIGHTLY BUSINESS REPORT, Linden, 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.

11/13/03: One On One With AMAT`s CEO, Mike Splinter

SUSIE GHARIB: A tough day for Applied Materials. The stock price tumbled more than three percent despite reporting better than expected earnings yesterday and forecasting order growth of 20 percent for this quarter. Earlier today, I asked AMAT`s CEO, Mike Splinter, whether that stellar guidance is sustainable.

MICHAEL SPLINTER, PRES. & CEO, APPLIED MATERIALS: Well, we`re looking at the change that`s happened during this quarter. During this quarter, there really was a turning point in the confidence of our customers to invest in capacity again, really invest in the future. And the thing about this, the reason I`m calling it a turning point is because it was so broad-based. It was across our entire customer base around the world. There -- while Japan was very strong, the rest of the world was also up in the quarter. So while we don`t know how far this is going to go, we`re quite confident about our Q1, which starts in this month.

GHARIB: Mr. Splinter, you did give guidance for something like 20 percent increase in orders going forward. But is there any risk that these could stall out, especially if the economy doesn`t recover on a broad base?

SPLINTER: Well, the 20 percent order increase is what we`re hearing and seeing from our customers. How it`s going to go forward is, of course, anybody`s guess. But what we`re seeing -- we have to look at economies of the world. GDP is starting to go up. The U.S. economy is making excellent progress. We`re seeing progress in Japan. So those things are very, very good. And when you look at the product lines that our customers serve, PC`s are moving up, wireless communication, wireless computing, consumer electronic devices, I. T. spending has started to come back. So that is also broad-based. So it gives us added confidence.

GHARIB: Well, from talking to those customers, what`s your sense of how much capital spending will be up and will it be as big a cycle as it was back in 2000?

SPLINTER: Well, that`s very hard to tell. We`re just seeing the turn in this, the return of that confidence. How long and how high it will be, we`ll see as the future unfolds. But right now the confidence is returning and that`s really the observation that I`m making.

GHARIB: So how is Applied Materials preparing for this ramp up in orders? Will you be hiring more people?

SPLINTER: Well, not really. We`re really going to focus on making sure the company is structured right. My philosophy on this is to really get the right capacity in place, be able to serve the customers` needs, get the right supply line in place to feed that capacity and make sure that we can ramp up without extending lead times. And then make sure the management structures, the number of layers in the company are right, the cost structures are right, and be very cautious about adding head count and adding expenses. We`ll add what we need to to service our customers and really manage carefully through this.

GHARIB: You became CEO of Applied Materials about six months ago, back in April. You came from Intel (INTC). What is your goal? What is your strategy for Applied Materials?

SPLINTER: Well, at Applied Materials, first of all, as I said, my philosophy is to make sure we`re really managing the company carefully and that we can be OK financially depending on whatever happens in the market. If we have a big upturn, we`re going to be able to meet our customers` needs. This is a cyclical business, so if it turns out not to be long, then we`ll be financially OK, as well.

GHARIB: Let`s talk a little about AMAT`s stock. A very strong run-up for this year. It`s pretty much doubled. But investors might be inclined to take profits, saying it`s too expensive and maybe this is as good as it gets. How do you respond to that?

SPLINTER: Well, again, what we have to concentrate inside of Applied Materials is how the company is running and are we running it right, are we focused on growth, do we have the right products so that we can grow and take market share, so no matter what happens in the market, we still have the opportunity to grow? And I think our stock and investors` confidence will take care of itself.

GHARIB: All right, Mr. Splinter, thank you very much for your time. We appreciate it.

SPLINTER: Thank you, Susie.

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.

11/13/03: Medicare Reform Goes Down To The Wire

SUSIE GHARIB: Time is running short for lawmakers to come up with a deal on Medicare before they adjourn for the year. President Bush is pressuring lawmakers to get a bill done. But as Stephanie Woods reports, efforts are moving slowly to find common ground.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Speaking to seniors in Florida, President Bush called on lawmakers to end debate, delay and deadlock and pass Medicare reform.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For years our seniors have been calling for a prescription drug benefit. For years American seniors have been calling for more choices in their health care coverage and now we`ll see who`s really listening in Washington D.C.

WOODS: And in Washington, Congressional negotiators spent the day trying to figure out how to give seniors what they want. One key sticking point is adding new competition to the Medicare program, a must have for House conservatives. One proposal by Republican leaders would create a pilot project to let seniors stay in Medicare and pay higher premiums if Medicare is more expensive than private plans. But Senate Democrats say that`s unacceptable.

SEN. TED KENNEDY (D), MASSACHUSETTS: Some 10 million of the 40 million of our seniors would be subject to this proposal, which would be, I think, the beginning of the end of the Medicare system, and we`re not going to be prepared to support it.

WOODS: The tentative agreement also could include up to $20 billion in tax credits for employers, helping them to assure retiree health benefits. But it`s uncertain any compromise can pass. The House approved the original Medicare proposal this summer by only one vote. A meeting with all the conferees is scheduled for Tuesday. If a bill is approved by the committee, the number crunchers still have to tally up the cost. Anything over the $400 billion budgeted may send lawmakers back to the drawing board to cut it down. 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.

11/13/03: "Innovation Island"-Part 4: Taipei 101

SUSIE GHARIB: It`s Friday morning in Taiwan, where ceremonies are under way to open the retailing section of the world`s tallest building: Taipei 101. The tower itself won`t open for another year, but already the glass and steel structure is changing the business climate in Taiwan`s capital city. As we continue our series Innovation Island, Darren Gersh looks the new symbol of Taiwan`s economy.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: If you`re looking for office space in Taipei, there`s one man you have to see. He runs the Taiwan office for the property management firm Jones Lang LaSalle (JLL). Matt Shaw has the biggest job in commercial real estate in the world.

MATT SHAW, JONES LANG LASALLE: We`re now in the lower part of the building. This is level 14, a slightly larger floor plate.

GERSH: Of course, if you don`t like this office, Matt has two million more square feet of space to show you. That`s because Matt Shaw`s job is to lease this, Taipei 101, as in 101 floors. At 1,676 feet, it is now the world`s tallest office building. How does it feel to have the biggest challenge in commercial real estate on your hands? The biggest job, certainly.

SHAW: It`s a bit, yes, it`s a bit sobering when you go to bed at night. But, you know, but we`re confident in the product. You know, it`s not going to be an overnight story to lease a building like this. We don`t want it to be. We want to get the right tenants at the right price.

GERSH: Fourteen companies, including some of Taiwan`s biggest banks, have joined together to build this tower under the banner of the Taipei Financial Center Corporation. The $1.7 billion project is designed to give foreign financial institutions a world class address in Taipei. One of Taiwan`s leading bankers, Benny Hu, was in on the ground floor, helping to put together the project. He calls the tower a symbol of Taiwan`s economic strength.

BENNY HU, CHINA DEVELOPMENT INDUSTRIAL BANK: Our slogan is, you know, Taipei 101 -- Bring Taipei To the World and bring the world to Taipei, you know? We feel this is the thing that is connecting us to the outside world. You know, because of this, building we will attract a lot of international attention. People come in, people want to take a look of, you know, of the tallest building in the world. And we make the connection there.

GERSH: Now that Taipei 101 is giving the world a new reason to take a new look at Taiwan, the question is will this new financial center convince foreign investors Taiwan wants their business? Tom McGowan says it`s an open question. A lawyer at Russin and Vecchi and a vice president of the American Chamber of Commerce in Taipei, McGowan says Taiwan has not yet opened its banking system to the outside world, the first step in becoming a true international financial center.

THOMAS MCGOWAN, AMERICAN CHAMBER OF COMMERCE: I would say they`re schizophrenic on the subject.

GERSH: One reason, McGowan says, is Taiwan`s history. The nationalists who fled to this island believe they lost mainland China, in part, because the financial system collapsed. The result has been what McGowan calls an overly cautious stuff it in the mattress approach to regulation.

MCGOWAN: They also believe themselves as being vulnerable to a financial attack from the mainland, that the mainland would play with the market or the mainland would play with the currency in order to try to create a crisis in Taiwan.

GERSH: But the more immediate concern for Taiwan is that it has too many banks. Fifty major players compete for the business of 23 million people. The government is encouraging mergers and acquisitions and taking steps to open up its financial system. Dutch banking giant ING is reported to be interested in buying a majority stake in Chang Hwa Bank. But Tom McGowan is skeptical that foreign banks will find a good deal here.

MCGOWAN: It`s not the best banks in Taiwan that are for sale, it`s the worst banks in Taiwan that are for sale.

GERSH: The government is working hard to convince foreign investors to put more of their money here instead of into mainland China. But Hu says Taiwan really doesn`t need the cash.

HU: This is a country full of liquidity. So there`s no lack of money, you know? When foreigners come in, it`s more the technology they bring in that we appreciate rather than the money.

GERSH: While the office tower won`t be open for another year, Taipei 101 is already reshaping Taiwan`s capital city. Even if you don`t read Chinese, the "for rent" signs are easy to spot. This huge new building is increasing pressure to renovate the old ones.

SHAW: There are a lot of buildings in Taipei which, quite frankly, are obsolete. You know, they`re structurally obsolete, technically obsolete and there`s a very good underlying value in all sorts of other -- for all sorts of other uses, like residential. And so it`s a natural process of urban renewal.

GERSH: And from the observation deck on the 91st floor, it`s also clear this tower is proof of the natural human urge to reach higher. Taipei 101 now holds the title of tallest building, but next month, New York will unveil a new design for the site of the World Trade Center. At a symbolic 1,776 feet, the Freedom Tower will be 100 feet taller than Taipei 101.

Darren Gersh, NIGHTLY BUSINESS REPORT, Taipei.

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.

11/13/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Some profit taking after yesterday`s rally sent Wall Street moderately lower early today. A $2 loss in Wal-Mart`s stock on that earnings shortfall was a negative, as was news of a 13,000 increase in the new weekly jobless benefit claims. At the outset, the Dow fell about 50 points, while the NASDAQ Index was off about 15. The market remained under pressure due to weakness in the retail, computer, networking and semiconductor sectors, but it trimmed its losses gradually. In early afternoon, the Dow was off only 20 points, the NASDAQ down 9. Things improved a bit, but not enough to close in the black. The Dow Industrial Average still ended with a loss of 10.89, at 9,837.94. The NASDAQ Composite ended down 5 3/4 points, at 1,967.35. The Standard & Poor`s 500 Index fell just a fraction, to 1,058.41. In the bond market, the 10-year note climbed one full point, to 99 26/32, putting the yield down to 4.27 percent.

The most active big board issue on 31.9 million shares, Pfizer (PFE), gaining $1.05. It was $0.40 higher than that. A study has found the company`s Lipitor drug not only lowers bad cholesterol, LDL, but it also slows artery disease. That helped the stock.

Wal-Mart (WMT) down $2.44. That drop hurt the Dow Industrials by 18 points. UBS Securities downgraded the stock from "buy" to "neutral" on that $0.01 shy of earnings.

Lucent Technologies (LU) dropped $0.09.

General Electric (GE) a $0.36 drop.

Ford Motor (F) in there with a gain of $0.08, fifth in big board volume.

Merck & Company (MRK) up $1.55, another strong drug. That helped the Dow by 11 points. The pharmaceuticals are benefiting from a switch out of the recently strong techs into the laggard pharmaceuticals. A little sector switch going on, it appears.

NorTel Networks (NT) down $0.18.

LSI Logic (LSI) moved up $0.91. The company plans to spin-off its storage systems business through an IPO next year. Standard & Poor`s upgraded the stock from "hold" to "accumulate."

And Target (TGT) was down $0.93. Third quarter earnings came in at $0.33. That was in line. But the company warned weak department store sales could hurt its holiday results.

Advanced Micro Devices (AMD), tenth in volume, was up $0.21 a share.

Medtronic (MDT) up $2.02. The story here, good earnings, second quarter $0.39, up comfortably from last year`s $0.25. Revenues up 14 percent. The company plans to buy back up to 30 million of its own shares. Standard & Poor`s upgraded the stock to "buy."

On the other hand, Georgia-Pacific (GP) fell $1.19. C.S. First Boston downgraded it from "neutral" to "under perform." It has a $23 a share target.

And then a big gainer, 4Kids Entertainment (KDE) rising $3.83. Higher earnings, third quarter, $0.20, up from $0.14 last year. Revenues vaulted 109 percent over last year.

Hughes Supply (HUG) did well, up $3.11 after the Robert Baird Brokerage upgraded it from "neutral" to "outperform." It has a $51 a share target for the stock.

One of the big losers, Cornell Companies (CRN), which operates private detention centers. Third quarter earnings lower, $0.11 versus $0.14 a year ago. And the company lowered its full year earnings guidance.

Another big loser was Celltech Group (CLL), down $2.78. Its partner, Pfizer (PFE), plans to delay the development of a key arthritis drug until it sees the results from two large ongoing studies. That could delay the marketing of that drug for over a year.

Tiffany`s (TIF) didn`t do so well today, down $3.43. Third quarter earnings lower, $0.19 versus $0.24. That was in line with Wall Street estimates, but the company says full year earnings will be at least a $0.01 shy of Wall Street estimates.

Orthodontic Centers of America (OCA) down $1.21. After the close yesterday, third quarter earnings lower, $0.24 versus $0.37 the previous year.

Applied Materials (AMAT) topping the active list, down $0.70. You just heard the interview there.

Intel (INTC) a $0.32 loss.

Microsoft (MSFT) fell $0.29.

Dell Incorporated (DELL) ended with a loss of $0.03. Just before the closing bell, Dell came out with third quarter earnings, $0.26 versus $0.21 a year ago, in line with Wall Street estimates. And the company also says it expects to top Wall Street`s revenue projections for the fourth quarter of $11.5 billion. Nevertheless, the stock in after hours trading moved down about $0.30 to $0.40.

Cisco (CSCO) a $0.27 loss, fifth in volume on NASDAQ.

Amgen (AMGN) fell $0.33.

Biogen IDEC (BIIB) did well, up $1.83.

Novell (NOVL) an $0.80 gain.

MedImmune (MEDI) gained $1.53.

And Yahoo! (YHOO), tenth in volume, was up $0.77.

Tessera (TSRA) went public today. The company manufactures packaging goods for semiconductors. 7.5 million shares offered at a price of $13, opened at $15.09, the high of the day $19, and it backed off only $0.50 from there.

Virbac Corporation (VBAC), which makes products for animal health, is going to delay the release of its third quarter results due to an inquiry by the company`s audit company. Down went the stock, $1.85.

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.

11/13/03: Market Stats

			     
                   
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE
DOW CLOSE              9837.94     -10.89       - .1
HIGH                                         9852.90
LOW                                          9792.01

NASDAQ COMP.           1967.35      -5.76        -.3
HIGH                                         1970.40
LOW                                          1956.41

VOLUME                                       1,366.6
PREVIOUS                                     1,151.8
UP VOLUME                                      689.6
DOWN VOLUME                                    656.7

DOW TRANSPORTS         2948.45      -4.75       - .2
DOW UTILITIES           249.07       -.53       - .2
CLOSING TICK                                    +651

S&P 500                1058.41       -.12       - .0
S&P 100                 522.99      -1.20       - .2
MIDCAP 400              562.89      +1.29       + .2
REUTERS/CRB             255.00      +1.87       + .7

NYSE COMPOSITE         6036.81     +17.87       + .3
VALUE LINE              348.55       +.48       0.14
RUSSELL 2000             541.2       +.54        0.1
WILSHIRE 5000          10329.9      +2.92       0.03

U.S. TREASURIES
5-YEAR NOTE 3.375%
Nov. 15,2008         100 13/32     +24/32       3.29

10-YEAR NOTE 4.25%
Aug. 15,2013          99 26/32     +1           4.27

30-YEAR NOTE 5.375%
Feb. 15, 2031        103 28/32   +1 17/32       5.11

LEHMAN BROS.
LONG BOND INDEX        1723.50     +23.19


DOW CLOSE              9837.94     -10.89       - .1
ADVANCES                                        1862
DECLINES                                        1393
NEW HIGHS                                        316
NEW LOWS                                           8

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
PFE    Pfizer            33.45      +1.05       +3.2
WMT    Wal-Mart Stores   55.52      -2.44       -4.2
LU     Lucent Tech        3.15       -.09       -2.8
GE     GE                28.34       -.36       -1.3
F      Ford Motor Co     13.14       +.08        +.6
MRK    Merck & Co        45.80      +1.55       +3.5
NT     Nortel Networks    4.20       -.18       -4.1
LSI    LSI Logic         10.14       +.91       +9.9
TGT    Target            39.00       -.93       -2.3
AMD    Advanced Micro    18.29       +.21       +1.2

NASDAQ CLOSE           1967.35     - 5.76       - .3
VOLUME                                       1,871.3
PREVIOUS                                     1,875.5
ADVANCES                                        1576
DECLINES                                        1589

NASDAQ ACTIVES
AMAT   Applied Matl      24.74       -.70       -2.8
INTC   Intel             33.78       -.32        -.9
MSFT   Microsoft         25.69       -.29       -1.1
DELL   Dell Inc          35.64       -.03        -.1
CSCO   Cisco Systems     22.70       -.27       -1.2
AMGN   Amgen             59.95       -.33        -.6
BIIB   Biogen IDEC       35.25      +1.83       +5.5
NOVL   Novell             9.73       +.80       +9.0
MEDI   MedImmune         26.53      +1.53       +6.1
YHOO   Yahoo!            43.30       +.77       +1.8

AMEX CLOSE             1077.66     + 1.51       + .1

INDEX SHARES
DIA    DIAMONDS TRUST    98.72       -.08        -.1
QQQ    NASDAQ 100        35.78       -.02        -.1
SPY    S&P DEP.RECEIPTS 106.36       +.03        +.0

STOCKS IN THE NEWS
MDT    Medtronic         46.39      +2.02       +4.6
GP     Georgia-Pacific   25.81      -1.19       -4.4
KDE    4Kids Entertain   28.01      +3.83      +15.8
HUG    Hughes Supply     43.49      +3.11       +7.7
CRN    Cornell Cos       11.13      -3.33      -23.0
CLL    Celltech Group    12.52      -2.78      -18.2
TIF    Tiffany & Co      44.70      -3.43       -7.1
OCA    Orthodontic Cntr   7.53      -1.21      -13.8
TSRA   Tessera Tech      18.50      +5.50      +42.3
VBAC   Virbac Corp        6.50      -1.85      -22.2