Program: Tuesday, December 30, 2003

FedEx Duplicates & Delivers With Its New Kinkos Connection
The Feds Ban Ephedra
Mad Cow Concerns Prompt A Federal Regulatory Response
The Trend Of "Lofty" Living
Commentary: What Good Can Come Of US Jobs Moving Overseas?
Paul Kangas' Stocks In The News
Market Stats

12/30/03: FedEx Duplicates & Delivers With Its New Kinkos Connection

SUSIE GHARIB: A giant in the shipping business is hoping to duplicate its success in the copying business. FedEx is buying privately-held Kinko`s for $2.4 billion in cash. FedEx says the deal will help it increase its retail presence worldwide. And analysts believe the combination will give FedEx better access to small- and medium-sized companies. Erika Miller reports.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: From students to retirees, many different types of people use Kinko`s. But it is the business customer that FedEx is after. Kinko`s is a magnet for small- and medium-sized companies, firms that frequently send packages and pay full price to ship them.

DONALD BROUGHTON, TRANSPORTATION ANALYST, A.G. EDWARDS: The net-net here is that it allows them to have more access to small customers. Those small customers pay better pricing, better access to customers means customers will use you more because it`s just easier for them to get to you and easier for you to get to them.

MILLER: To get to those customers, FedEx will pay $2.4 billion in cash to Clayton, Dubilier & Rice, a buyout firm. In exchange, FedEx will get Kinko`s 1200 stores in 110 countries. Kinko`s has estimated annual revenues of about $2 billion. The partnership between FedEx and Kinko`s is not new. For 15 years, FedEx has run staffed counters in select Kinko`s branches. Now FedEx plans to offer its services in all Kinko`s locations worldwide. Analysts say the deal is also a competitive reaction to UPS` (UPS) decision to buy Mailboxes Etc earlier this year. UPS re-branded about 3000 Mailboxes Etc. stores as UPS Stores. FedEx says it hasn`t decided whether it will keep the Kinko`s name. But FedEx says one thing is clear: The stores will continue to offer a wide array of services for small businesses, everything from high speed Internet access to video conferencing. By adding those services, FedEx hopes to diversify its revenue base and boost its stock price. The shares have been on the decline since early November, and fell again today.

BROUGHTON: Well, because the market is wondering if they overpaid. And the question is not whether or not it is a strategic fit, it certainly is, the question is, did you pay too much?

MILLER: But FedEx says, in time, shareholders will become convinced that Kinko`s is worth the price. The companies expect the deal to close early next year and start adding to earnings next June. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

SUSIE GHARIB: Earlier today, I talked with FedEx Chairman, CEO and founder Fred Smith. I asked him what Kinko`s brings to FedEx.

FRED SMITH, CHMN. & CEO, FEDEX: Well, Kinko`s brings a number of things to FedEx. Number one, it`s a great business deal. It will be accretive FY `05 earnings beginning next June. Second, it will significantly expand the retail presence for FedEx shipping. That`s particularly important to our fast-growing FedEx Ground network. Third, Kinko`s offers a unique set of services and products particularly for small- and medium-sized businesses. And fourth, it will expand our relationship with some of our larger customers, given the outsourcing document management capabilities that Kinko`s has.

GHARIB: Mr. Smith, to what extent did the UPS acquisition of Mailboxes USA put pressure on you to do a deal?

SMITH: Well, I think MBE, as it was then called, and now the UPS Store, is a very different type of operation than Kinko`s. Just for starters, a Kinko`s store is any place from three to five times larger. It`s a network as opposed to individual stand-alone operations the way MBE was and the UPS Stores are. You can go from a PC or a laptop and print to Kinko`s or print to all Kinko`s over a network.

GHARIB: But my question is really that, did you feel pressure that you had to do some kind of deal like this because UPS, one of your competitors, did a deal with Mailboxes?

SMITH: Well, the good old competitive capitalistic system means that all of us feel pressure from competitors all the time. So certainly we`re interested in expanding that retail presence, but it was much more the $2 billion of existing Kinko`s services and the extension and diversification of services that was more attractive to us than even the retail expansion.

GHARIB: Tell us how you are going to grow Kinko`s, because some of the analysts I talked to today felt that the price was pretty expensive and that there must be assumptions of pretty heavy growth. So how are you going to grow Kinko`s?

SMITH: Well, of course, the analysts haven`t seen Kinko`s` books the way we have. Kinko`s was a privately-owned company. It`s solidly profitable. It generates strong cash flow. It has got a significant growth opportunities both in terms of the number of stores domestically it can at least double internationally, the growth is very, very substantial in terms of numbers of outlets. And in addition to that, the unique services that Kinko`s offer have a lot of growth in them too. So we`re very confident in the outlook for Kinko`s and we think the price we paid was perfectly in-line and a good price.

GHARIB: The sense I get from talking to analysts and others who are expert on FedEx is that your company is moving towards being a full service outsourcer for businesses, whether they`re big or small, doing everything from back office stuff like inventory and logistics planning to shipping, printing, teleconferencing, is that the bigger strategy here?

SMITH: Well, certainly, we are expanding sort of on both flanks, as you just said. Our core operating companies of Express, Ground and Freight have an awful lot of growth opportunities just in their own right. But this expansion is sort of into the front office, and probably the back office too are certainly growth opportunities for us as well.

GHARIB: All right. Thank you very much, Mr. Smith. Good luck to you.

SMITH: Thank you.

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.

12/30/03: The Feds Ban Ephedra

PAUL KANGAS: The Food and Drug Administration moved today to ban the diet supplement Ephedra from the market. The move comes after years of debate about the safety of the product., and, as Stephanie Woods reports, after many retailers have already stopped selling it.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Ephedra was once widely marketed as a way to lose weight, enhance sports performance, and increase energy. But the plant-based supplement can cause heart attacks and strokes. The FDA has reports of 155 deaths linked to Ephedra, including the death last February of 23-year-old Baltimore Orioles pitcher Steve Bechler. The FDA says the supplement presents an unreasonable risk.

DR. MARK MCCLELLAN, COMMISSIONER, FOOD & DRUG ADMIN.: Any responsible manufacturer and retailer should stop selling these products as soon as possible. Everyone involved in marketing Ephedra should be on notice that as soon as the rule becomes effective, we intend to shut you down.

WOODS: Metabolife, the nation`s largest maker of Ephedra products, announced last month it would stop using the stimulant in its products. Retailers like CVS (CVS) and GNC stopped selling Ephedra-based diet products earlier this year. New York, Illinois and California have already passed Ephedra bans. The watchdog group Public Citizen, which pushed for the ban two years ago, says the FDA should have acted sooner.

DR. SIDNEY WOLFE, PUBLIC CITIZEN: The FDA is the last person or agency on the block to do something, and that`s a message to industry that we can get away with murder, or we can get away with manslaughter to the extent that they are knowingly selling something that is dangerous for years and years before anything happens to them.

WOODS: Unlike drugs, which must be proven safe and effective before they are marketed, the government must prove supplements are dangerous before it can take action. The supplement industry doesn`t oppose the Ephedra ban but worries about the precedent it might set.

JOHN HATHCOCK, V.P., CENTER FOR RESPONSIBLE NUTRITION: I hope they are doing this on the basis of proper scientific rationale, following the letter of the law, so that this action will be restricted to just this and it will not have any implications for some other action.

WOODS: Health and Human Services Secretary Tommy Thompson says it should be easier to get dangerous supplements off the market. But he says it`s up to Congress to change the law. 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.

12/30/03: Mad Cow Concerns Prompt A Federal Regulatory Response

SUSIE GHARIB: The Department of Agriculture said today that it is imposing new rules on meatpackers to reduce the spread of mad cow disease. It`s the first regulatory response to the discovery of the disease in the U.S. Effective immediately, the USDA is banning so-called "downer cows" from being used as meat for humans. They are cattle, like the Holstein that was infected with mad cow disease, that are too sick or injured to walk on their own when they reach the slaughterhouse. Agriculture Secretary Ann Veneman says the new regulations should not impact beef prices.

ANN VENEMAN, AGRICULTURE SECRETARY: We slaughter somewhere in excess of 35 million head a year, and it`s estimated that the downer cattle were in the range of 150,000 to 200,000. So as you can see, that`s a very small percentage. So I would not anticipate an economic impact.

GHARIB: Meanwhile, trading in cattle futures at the Chicago Merc continues to be volatile. Paul, 30,000 contracts were traded today. That`s about twice the normal volume.

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.

12/30/03: The Trend Of "Lofty" Living

SUSIE GHARIB: Thanks to low interest rates, the market for residential real estate is still hot these days. But one sector is sizzling: lofts. They are a long-time fixture in cities like New York, but as Jeff Yastine reports, developers are taking the "loft lifestyle" to places that are miles from Manhattan.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The wrong side of the tracks, just outside downtown Fort Lauderdale, Florida. But rising amidst the barbed wire in this old warehouse district is a new structure, a building of loft apartments.

ALAN HOOPER, LOFT DEVELOPER: As you can see we`ve got all this open space.

YASTINE: Developer Alan Hooper took a chance in constructing this 20-unit loft building, the first of its kind in the city which has been slowly redeveloping its downtown core.

HOOPER: Now the loft is very compatible with the architecture around here. People aren`t expecting that there would be trees and brick sidewalks and people pushing strollers, like you would in a regular neighborhood. What they expect is more of an edgy, urban feel, which is what this warehouse district kind of played into when we brought the loft product to this area.

YASTINE: Loft-living may have been popularized in Manhattan, but it`s now a nationwide phenomena. Loft-style apartments have popped up all over, from Seattle to Houston to Washington, D.C. Of course, most people think of lofts as being in old buildings, historic structures as are most lofts that are sold nowadays are new construction. The developers have to build in the exposed ductwork, the expansive windows and other items that make a loft a loft. Ironically, exposed pipes in the ceilings make new loft construction more expensive, not less. Higher quality workmanship is necessary because the pipes are on public display. So you`re not going to find starving artists here. The buyers are single professionals and working couples who don`t want a suburban commute. But real estate analysts say that also increases the risk for developers.

JACK WINSTON, REAL ESTATE CONSULTANT, GOODKIN RESEARCH: The buyers who respond to that particular design element are really limited to certain classifications, mainly your younger buyers, certainly not families with children, and in many cases, not your older, more mature buyers who really don`t want to live in that unfinished kind of look.

YASTINE: Prices for new lofts have climbed steadily, creating a whole new category, luxury lofts, starting at $400,000 and up. Alan Hooper`s units sell for about two-thirds that amount, but he is no less enthusiastic about their sales potential.

HOOPER: The demand for the product is definitely there. We`re going to build another - in addition to these 20, another 80 units. We`ve bought two more properties in the area. So, at the end of the day, we may be building 140 to 200 units of product. So, it has been well-received.

YASTINE: Jeff Yastine, NIGHTLY BUSINESS REPORT, Fort Lauderdale.

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.

12/30/03: Commentary: What Good Can Come Of US Jobs Moving Overseas?

SUSIE GHARIB: Tonight`s commentator says there may be a silver lining in the cloud of American jobs moving overseas. Here`s Mukul Pandya, editor of "Knowledge@Wharton" and professor of business at the Wharton School of the University of Pennsylvania.

MUKUL PANDYA, COMMENTARY: News reports this month say IBM (IBM) plans to move some 4000 jobs to India. Lots of companies are shipping work overseas to China, India or the Philippines. This scares people in the U.S. because, unlike the past, it isn`t low-wage that is going offshore. These are creative, highly-paid jobs like designing the latest microprocessors or doing complex financial analysis. Fear, though, isn`t the right response. It is critical to recognize that the same digital networks that make it possible for workers in China or India to provide services to the West also create new opportunities for people in the U.S. Consider a former colleague of mine who went to work in New Delhi, teaching Indian workers how to deal with American clients. Another consultant has set up shop in Shanghai. These people didn`t worry that their work was moving to low-wage countries. Instead, they created work there for themselves. As economies like India and China thrive, such opportunities will multiply, and they will soon result in the creation of whole new companies putting American ingenuity to work in doing business overseas. In our interdependent world, the U.S. has nothing to fear and everything to gain from stronger economic growth in China, India and the rest of the developing world. And so, as 2003 winds down, it is time to ring out fear and ring in hope. I`m Mukul Pandya.

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.

12/30/03: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Stocks on Wall Street opened modestly lower on light profit-taking after yesterday`s impressive rally. Thirty minutes into trading, the Dow was down only 12 points and the NASDAQ Index off 4. The market lost a little more ground on news that December consumer confidence eased lower, November existing home sales dropped 4.6 percent, while the Chicago purchasing managers` manufacturing index edged down. By early afternoon, the Dow was off nearly 30 points and the NASDAQ off 5. The blue chips languished for the rest of the day while bargain hunting in the techs helped the NASDAQ market firm up a bit. The Dow Industrial Average closed down almost a 25 points at 10,425.04. The NASDAQ Composite squeaked out a closing gain of nearly 3.5 points at 2009.88. The Standard & Poor`s 500 Index gained just a fraction to 1109.64. Over in the bond market, the 10-year note slipped 4/32 to 99 29/32, putting the yield at 4.26 percent.

The big board volume leader for the second day running, Lucent Technologies (LU) today, on 16.2 million shares, showing no change whatever.

Pfizer (PFE) moved up $0.07. UBS financial increased 2004 earnings estimate by $0.02 a share up to $2.12 for Pfizer.

AT&T Wireless (AWE), a $0.12-gain.

GE (GE) fell $0.11.

Fifth in volume was Time Warner (TWX), dropping $0.08 a share.

Qwest Communications (Q) moved up $0.17.

ExxonMobil (XOM) gained a dime.

And then Ford Motor (F) dropping $0.17.

Followed by Verizon Communications (VZ) with a $0.68-gain.

And Bristol-Myers Squibb (BMY) was up $0.71, the subject of some favorable comments in the "Heard on the Street" column in "The Wall Street Journal" today.

Boeing (BA) was up $0.28. It traded as high as $43.35 today. After the close yesterday, as we reported to you, the company got an $8 1/2 billion order from the U.S. Navy for 210 F/A-18 Super Hornet fighter jets. The stock backed off a little later today.

General Motors (GM) down $0.15 even though Bear Stearns boosted fourth-quarter and 2000 (sic) earnings estimates, and also increased its price target for GM stock from $51 to $60 a share.

FedEx (FDX) down $0.94. You heard the story, it`s going to have to come up with $2.4 billion in cash to buyout Kinko`s.

And then Symbol Technologies (SBL) moved up $0.38. The company`s chief exec, Richard Bravman, is stepping down amid a continuing accounting investigation at Symbol.

Lennar Corporation (LEN) down $2.25. The homebuilding group a bit weak today on news of that 4.6 percent drop in November existing home sales. Other stocks in the group were: (UNINTELLIGIBLE) Beazer (BZH) down $2.51; Centex (CTX) fell almost $2; and then Pulte Homes (PHM) off $1.63; Ryland Group (RYL) down $2.31 a share.

United Auto Group (UAG) had a good day, up $3.31. Bear Stearns increased its rating on the stock from peer perform to outperform mainly on the promising earnings outlook, especially through its expansion in the United Kingdom.

RehabCare Group (RHB) up $2.36. The company is selling its unprofitable nurse staffing unit for undisclosed terms.

And EDO Corporation (EDO) rose $0.91 a share. Raymond James financial brokerage repeated a strong buy, especially after yesterday. The company received a contract for electronics from the U.S. Army estimated to be worth around $35 million.

NASDAQ`s most active was Microsoft (MSFT), moving up $0.06.

Followed by Intel (INTC), down $0.11.

Cisco (CSCO), a $0.28 loss there.

And Applied Materials (AMAT) dropped $0.23.

Sirius Satellite Radio (SIRI) up $0.47, pretty good percentage move there, fifth in volume.

Dell Incorporated (DELL) gained a quarter.

And then Amgen (AMGN) rising a dime.

Qualcomm (QCOM), down $0.44.

Rambus (RMBS) moving up sharply with a $3.27 gain. That`s basically on a report that its rival, Micron Technology (MU), may admit to U.S. officials it conspired with other companies to fix prices of computer memory chips.

KLA-Tencor (KLAC), tenth in volume, was up $0.72.

Trinity Biotech (TRIB) up another $1.05 a share. Yesterday it gained $1.86 on getting FDA marketing approval for its HIV test.

ChromaVision (CVSN), look at that percentage move, 218 percent in one day. The news here, the FDA approved the company`s breast cancer test system.

And over on the American Exchange, Advantage Marketing Systems (AMM) fell $1.36, a nearly 24 percent drop. Now the company does market Ephedra and a few of its diet products. But it says the FDA ban on Ephedra today should have no major impact on the company results.

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.

12/30/03: Market Stats

   
                                      
                                      
                                      NET    PERCENT 
                         CLOSE     CHANGE     CHANGE 
  NET    PERCENT 
                         CLOSE     CHANGE     CHANGE 
DOW CLOSE             10425.04     -24.96       - .2 
HIGH                                        10456.07 
LOW                                         10405.85 

NASDAQ COMP.           2009.88      +3.40        +.2 
HIGH                                         2010.13 
LOW                                          1997.82 

VOLUME                                         978.1 
PREVIOUS                                     1,055.7 
UP VOLUME                                      513.1 
DOWN VOLUME                                    413.4 

DOW TRANSPORTS         3021.95     -16.20       - .5 
DOW UTILITIES           267.70       +.89       + .3 
CLOSING TICK                                    +952 

S&P 500                1109.64       +.16       + .0 
S&P 100                 549.07       -.16       - .0 
MIDCAP 400              579.47       +.17       + .0 
REUTERS/CRB             255.77       +.18       + .1 

NYSE COMPOSITE         6443.60      +1.40       + .0 
VALUE LINE              365.06       +.93       + .3 
RUSSELL 2000            565.47      +1.59       + .3 
WILSHIRE 5000         10799.44      +6.84       + .1 

U.S. TREASURIES 
5-YEAR NOTE 3.375% 
Dec. 15,2008         100 22/32      +1/32       3.23 

10-YEAR NOTE 4.25% 
Nov. 15,2013          99 29/32      -4/32       4.26 

30-YEAR NOTE 5.375% 
Feb. 15, 2031        104 11/32     -14/32       5.08 

LEHMAN BROS. 
LONG BOND INDEX        1726.51      -9.01 



DOW CLOSE             10425.04     -24.96       - .2 
ADVANCES                                        1904 
DECLINES                                        1345 
NEW HIGHS                                        588 
NEW LOWS                                           8 

                                      NET    PERCENT 
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE 
LU    Lucent Tech         2.87      unch.      unch. 
PFE   Pfizer             35.07       +.07        +.2 
AWE   AT&T Wireless       7.95       +.12       +1.5 
GE    GE                 30.72       -.11        -.4 
TWX   Time Warner        17.90       -.08        -.4 
Q     Qwest Comms Intl    4.17       +.17       +4.3 
XOM   Exxon Mobil        40.68       +.10        +.3 
F     Ford Motor Co      15.99       -.17       -1.1 
VZ    Verizon Comms      35.00       +.68       +2.0 
BMY   Bristol Myers Sq   28.42       +.71       +2.6 

NASDAQ CLOSE           2009.88     + 3.40       + .2 
VOLUME                                       1,552.5 
PREVIOUS                                     1,417.2 
ADVANCES                                        1743 
DECLINES                                        1452 

NASDAQ ACTIVES 
MSFT  Microsoft          27.52       +.06        +.2 
INTC  Intel              32.04       -.11        -.3 
CSCO  Cisco Systems      24.12       -.28       -1.2 
AMAT  Applied Matl       22.49       -.23       -1.0 
SIRI  Sirius Satellite    3.05       +.47      +18.2 
DELL  Dell Inc           34.51       +.25        +.7 
AMGN  Amgen              61.97       +.10        +.2 
QCOM  Qualcomm           54.38       -.44        -.8 
RMBS  Rambus             29.77      +3.27      +12.3 
KLAC  KLA Tencor         58.34       +.72       +1.3 

AMEX CLOSE             1175.19     + 4.05       + .4 

INDEX SHARES 
DIA   DIAMONDS TRUST    104.33       -.35        -.3 
QQQ   NASDAQ 100         36.56       +.14        +.4 
SPY   S&P DEP.RECEIPTS  111.18       +.02        +.0 

STOCKS IN THE NEWS 
BA    Boeing Co          42.28       +.28        +.7 
GM    GM                 53.55       -.15        -.3 
FDX   FedEx              69.00       -.94       -1.3 
SBL   Symbol Tech        17.23       +.38       +2.3 
LEN   Lennar             97.20      -2.25       -2.3 
BZH   Beazer Homes       99.09      -2.51       -2.5 
CTX   Centex            108.33      -1.98       -1.8 
PHM   Pulte Homes        94.12      -1.63       -1.7 
RYL   Ryland Group       89.80      -2.31       -2.5 
UAG   United Auto Group  31.31      +3.31      +11.8 
RHB   RehabCare          23.01      +2.36      +11.4 
EDO   Edo Corp           25.52       +.91       +3.7 
TRIB  Trinity Biotech     6.19      +1.05      +20.4 
CVSN    ChromaVision      3.92      +2.69           +218.4 
AMM     Advantage Market    4.35      -1.36          -23.8