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Program: Wednesday, December 31, 2003
12/31/03: 2003 The Year in Review SUSIE GHARIB: No champagne rally on Wall Street today, but investors are still toasting 2003, the first up year for stocks since 1999. The Dow added 28 points today, closing at its highest level in 21 months. The NASDAQ slipped 6 points, closing just shy of a two-year high. Here's Scott Gurvey with a closer look at this comeback year for stocks. SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was not much of a trading day today, but is was a remarkable trading year. After three years of bear market losses, the bull came roaring back. The major averages bottomed in mid-March as the uncertainty over Iraq ended and the war began. The averages gained ground from there on, the Dow Industrials rising 25 percent for the year, the Standard & Poor's 500 up 26 percent, and the NASDAQ Composite gaining a whopping 50 percent. To the surprise of many insiders, the gains were broad-based and retail investors participated in spite of the heavy loses they had sustained in the downturn and in spite of concerns about the economy and world affairs. RONALD HILL, INVESTMENT STRATEGIST, BROWN BROTHERS HARRIMAN: I think we were surprised that after such a drubbing in the bear market people would be willing to go back and embrace risk so quickly. But in fact, they do what investors have always done: buy that which is down the most. So the first leg up, even off a huge bear market, is generally led by the companies that were punished the most on the way down. It was true in the Nifty-Fifty bear market back in '73-'74. Certainly true of the NASDAQ 100 bear market of 2001-2003. GURVEY: Among the Dow stocks, Intel (NASDAQ:INTC), Caterpillar (NYSE:CAT), and ALCOA (NYSE:AA) were the big winners. The losers were Eastman Kodak (NYSE:EK), AT&T (NYSE:T), and Merck (NYSE:MRK). Interestingly, while tech stocks overall did very well, some of the biggest and best known names were relative laggards. These included computer giants IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), and cell phone giant Nokia (NYSE:NOK). This leads many analysts to conclude that the bulls still have room to run, although few see gains anywhere near this year's strong advances. LARRY WACHTEL, MARKET ANALYST, WACHOVIA SECURITIES: Now it becomes more difficult. Twenty-five percent in the Dow and the S&P, 50 percent in the NASDAQ. What do you do for an encore? You can't go at that pace. I think the fourth-quarter earnings arriving in January could keep the rally alive, and I think there'll be some moment of reckoning in February and March, which is historically seasonably poor periods. And then in my mind two things have to take place. Business has to start hiring again. I want to see employment pick up, and capital spending has to kick in, that will supplant the consumer spending. I think we have got legs until the mid part of the year. You know, the stimulus could be running down by then. GURVEY: Most analysts are looking for another up year next year but see gains more in-line with the traditional bull market average of 10 percent. 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.
SUSIE GHARIB: Interest rates on 30-year fixed rate mortgages rose slightly this week, but they're still under 6 percent. Housing experts have been monitoring mortgage rates and other indications of activity, on growing concerns about where the sector is heading. Stephanie Woods reports on the outlook for 2004. STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Signs are pointing to a slowdown in the housing market. New mortgage applications are down to their lowest levels of the year; sales of new and existing homes have also cooled. But analysts say the housing market is nowhere near going cold. STEVEN EAST, ECONOMIST, FRIEDMAN, BILLINGS, RAMSEY: We set all-time highs earlier this year. And we're falling to levels that a year ago would have been all-time records. So I wouldn't describe the housing market as being weak, I would say it's weaker than it has been. WOODS: The Federal Reserve aggressively cut interest rates in 2003, surprising economists and giving an added boost to an already hot housing market. In 2004, the housing sector may have to look elsewhere for a similar lift. Mortgage rates will likely go up, but by most estimates still remain below 7 percent. An increase in the U.S. population could be the key to continued housing growth. DAVID SEIDERS, CHIEF ECONOMIST, MATL. ASSN. OF HOME BUILDERS: The big wildcard is the immigration story. Immigration was seriously underestimated by the Commerce Department in the 1990s, and it looks like the projections they put out in the year 2000 for this decade, once again, are really on the low side. WOODS: Despite rising interest rates, some economists still expect home prices to continue appreciating in the new year. SEIDERS: The increases in interest rates that seem feasible in the long rates, I don't think will be nearly enough to depress prices because they will be occurring in the context of an improving overall economic picture. And the inflation numbers overall are still extraordinarily low. WOODS: But unexpectedly high mortgage rates could send prices lower. EAST: The real wildcard to keep your eye on is the dollar. If the dollar goes down too fast, too much, too soon, that could precipitate a problem in the bond market, which causes interest rates to go up, which would cause housing prices to go down. WOODS: Another unknown is how fast home builders would react to a slowdown in sales. Economists say if they don't overbuild, the housing market should remain on a solid foundation. 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. PAUL KANGAS: With us now to review what the major stock indexes did in the fourth quarter and which stocks were among the biggest winners and losers is Paul Cherney, chief market analyst for Standard & Poor's Corporation. And welcome to the program, Paul. PAUL CHERNEY, CHIEF MARKET ANALYST, STANDARD & POOR'S: Hi, Paul. KANGAS: We had a pretty good quarter all and all, did we not? Let's have a look at those major averages first and see how they fared. There we go. CHERNEY: Well, all three posting nice gains. S&P up with a nice gain, especially because you see that in the fourth quarter, it's usually a good omen for the quarter that comes, anytime it's up over 10 percent. KANGAS: Well, as we have seen, little doubt that Wall Street's bulls were in command over the last three months, but what was the major motivating factor? CHERNEY: Well, you know, at the beginning of December, there was a switch, there was some profit-taking in the high fliers of the NASDAQ, and that money actually found its way into the more typical cyclicals you find in the Dow and some extent the S&P 500. KANGAS: Well, speaking of the Dow stocks, let's have a look at some of the best gainers in that 30-stock average. And there we see at the top ALCOA. CHERNEY: A classic cyclical, you know, it's benefiting from the strong economy and demand for basic materials in China. KANGAS: And General Motors (NYSE:GM), I guess we could qualify that as a cyclical. CHERNEY: Absolutely, expect demand for cars to continue as the economy improves. KANGAS: And Honeywell (NYSE:HON) did well. CHERNEY: Another cyclical benefiting from a brokerage upgrade recently. KANGAS: Let's look on the dark side of the Dow, the big losers, Merck, who would believe that? CHERNEY: Well, when you have so many other sectors that are moving briskly, you tend to shy away from something that's not a big mover. And they have sluggish sales, concerns about what's in the pipeline in the future. KANGAS: Mm-hmm, AT&T had kind of a rough quarter. CHERNEY: This is earnings concerns. The former Baby Bells and wireless companies are capturing their long distance market. KANGAS: Mm-hmm. And who would ever expect Wal-Mart (NYSE:WMT) to see - you know, be at - near the bottom of the list? CHERNEY: Well, you know, they had good earnings, but they were towards the lower end of their guidance. And the stocks that did the best in the retailing area were the high-end stores. KANGAS: OK. Now let's turn to the Standard & Poor's 500 Index and look at the best gainers in that 500-stock index. Allegheny Technologies (NYSE:ATI). CHERNEY: That is a leading provider of specialty metals. And this move was mostly in December as the buyers started to take some profits in the high techs that had produced such a great turn and moved into more cyclical stocks. KANGAS: And Novell (NASDAQ:NOVL) did really well. CHERNEY: Well, here's one that was a classic tech rebound stock, networking software. And it was in one of the best performing sectors, expectations for revenue growth and increased margins. KANGAS: OK. The big losers in the Standard & Poor's 500 Index, topped off by MedImmune (NASDAQ:MEDI). CHERNEY: MedImmune - you know, this was hit early in the quarter after Wal-Mart decided not to establish a national flu vaccination program. MedImmune makes FluMist. But since December and since we have had such a big problem with the flu, the stock has actually stabilized and is starting to move higher. KANGAS: OK. And Gateway (NYSE:GTW) fared poorly. CHERNEY: Concerns about declining revenues, the company is trying to diversify itself into digital TVs and cameras for... KANGAS: OK. Let's move quickly to the NASDAQ 100. PanAmSat (NASDAQ:SPOT). CHERNEY: PanAmSat. Yes. Global video and data broadcasting, expecting that HDTV will take off and they'll be delivering the signal. CHERNEY: OK. And NVIDIA (NASDAQ:NVDA) did nicely. CHERNEY: 3D graphics, it was 72 back in the beginning of 2002, it had a tremendous sell-off to 7.20, so this is a rebound stock in the tech arena. KANGAS: And speaking of sell-off, let's look at the dark side of the NASDAQ 100 Index. First Health Group (NASDAQ:FHCC) was not healthy. CHERNEY: No, you know, and the only thing that they really did was warn of a flat '04. There is real concerns about competition in this area of the market. KANGAS: Uh-huh. And MedImmune showed up in this average as well. CHERNEY: Well, when you do that badly - actually, you know, both of these stocks were the worst performers on a yearly basis, too. KANGAS: Yes. Yes. Well, that's very interesting information, Paul. Now, I want to know what your crystal ball says, we have about 40 seconds left. CHERNEY: Well, in the short-term, when you have a 10 percent gaining quarter, as we have just had, you might remember I spoke about this back in the June quarter when we gained 14.9, the S&P tends to follow, eight out of 10 times, with a gaining quarter. But the gain is usually a little bit less than you have got used to. It has averaged about 4 percent. KANGAS: All right. CHERNEY: Odds eight in 10 of a gain. KANGAS: Most interesting. Thanks so much for being with us again, Paul. CHERNEY: My pleasure. KANGAS: My guest, Paul Cherney chief market analyst for Standard & Poor's Corporation. 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. 12/31/03: The World Welcomes 2004 SUSIE GHARIB: And finally tonight, the tiny Pacific island of Kiribati, as it usually does, was the first place on Earth to welcome in the New Year. The rest of the Pacific Rim was next. The city of Sydney, Australia, for example, did things up in grand style. It welcomed 2004 with a huge display of fireworks shot into the skies from the Sydney Harbor Bridge, including 120 multi-colored beams of light. Police say despite tight security, more than a million people crammed the shores of the harbor for the 15-minute display of light, color, and noise. And Paul, one other note from Asia tonight: Celebrating New Year's Eve Western-style is apparently becoming quite popular in China, where the real Chinese New Year will be celebrated on January 22. KANGAS: Well, we on NIGHTLY BUSINESS REPORT, as you know, Susie, will remember that day January 22, this coming one will mark our 25th anniversary on the air. GHARIB: And you have been here for all of those 25 years. KANGAS: Every one of them. GHARIB: And they have been great years. KANGAS: They have.
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. 12/31/03: "Paul Kangas' Stocks In The News" PAUL KANGAS: Good news on the jobs front helped spur an opening rally on Wall Street. Thirty minutes into trading, the Dow was up 26 points due to the latest weekly jobless benefit claims falling 15,000 to the lowest level in nearly three years. But that early buying faded on concern the housing market is cooling off, after a 9 percent drop in new mortgage applications last week. We'll have a closer look at that in a moment. At midday, the Dow was down 4 points, the NASDAQ off 12. Some last minute buying in the blue chips lifted the Dow in the back into the black though. So it closed the year with a gain of 28.88 points at 10,453.92. The NASDAQ Composite closed down off 6 1/2 points at 2003.37. Standard & Poor's 500 Index edged about 2 points higher to 1111.92. Over in the bond market, the 10-year note edged up two ticks to 99 31/32, putting the yield at exactly 4.25 percent. For the third straight session, Lucent Technologies (LU) topped the active list on the big board, trading 14 million shares today. The stock down $0.03. Followed by General Electric (GE), a $0.26-gain. The "USA Today" newspaper reports the proposed merger of GE's NBC unit and Vivendi's (V) Universal Entertainment may have hit a snag because U.S. anti-trust officials are concerned the merger could have a negative impact on consumers. Time Warner (TWX) gained $0.09. Pfizer (PFE) moving up $0.26. And then ExxonMobil (XOM) on those high oil prices rising $0.32. Number five in big board volume. Then the big loser of the day, AmeriSourceBergen (ABC) tumbling $7.35. McKesson is going to replace AmeriSourceBergen as the Veteran Administration's prime pharmaceutical vendor. And that contract annually is worth about $3 billion. Wait until you see what McKesson does. It naturally went higher. We'll see it in a moment. An $0.18-gain in EMC Corp. (EMC). Followed by Motorola (MOT), a $0.16 rise. AT&T Wireless (AWE) edged $0.04 higher. Tenth in big board volume, Citigroup (C) rising $0.11 a share. Merck & Company (MRK) moving up $0.70. The company has submitted to the FDA for marketing approval its new arthritis drug called Arcoxia. It is expected to be a blockbuster if it gets approved. IBM (IBM) edged up just a nickel, although the company won a 10-year contract to provide Target (TGT) stores with its mainframe information technology infrastructure. Target, incidentally, moved up $0.02 to close at $38.40 a share. Halliburton (HAL) down $0.22 a share. A U.S. military energy unit is going to take over from Halliburton the job of providing Iraq with fuel. Then McKesson (MCK), the big winner there on that contract, up $1.06. It traded as high as $33.01 after getting word it's replacing AmeriSourceBergen as the VA pharmaceutical vendor. FedEx Corporation (FDX) down $1 1/2. The Bear Stearns brokerage is skeptical about the company's acquisition of Kinko's because it feels that $2.4 billion could be better spent on FedEx's international package network. Mail-Well (MWL) up $0.32. Now that's up on takeover speculation in the wake of FedEx's acquisition of Kinko's. Murphy Oil (MUR) tumbled $2.71. After the close yesterday the company says its fourth-quarter earnings will be only $0.55 to $0.60 a share. That's down from $0.62 a year ago and well below the Wall Street estimate of $0.67 a share. VimpelCom ADS (VIP), this is the big Russian telecom firm. C.S. First Boston upgraded it from neutral to outperform and has an $80 a share target for the stock. Microsoft (MSFT) topped NASDAQ's most active with a $0.15-loss. Followed by Intel (INTC) which gained a penny a share. And then Cisco (CSCO) rising $0.11. And the same with Sirius Satellite (SIRI) up $0.11. Sirius has been very active recently on the good growth prospects for satellite radio. Dell Incorporated (DELL), a $0.53-loss. Number five in dollar volume on NASDAQ. Applied Materials (AMAT) lost a nickel. And then a dime gain in Yahoo! (YHOO). Amgen (AMGN) up - or down $0.18. Broadcom (BRCM) down $0.73. eBay (EBAY) moved up $0.33. Tenth in volume. Intervoice-Brite (INTV) up $1.51. Nice move there. Raymond James Financial began covering the stock with a strong buy and a $16 a share target. And MFC Bancorp (MXBIF) was $2.26. The board of directors has approved the distribution to shareholders of the company's cobalt assets in Uganda and Canada, and it will work out to $17.20 a pound for cobalt - in figuring what those assets are worth. And that's our look at 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.
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10453.92 +28.88 + .3
HIGH 10462.44
LOW 10407.04
NASDAQ COMP. 2003.37 -6.51 -.3
HIGH 2015.23
LOW 1996.62
VOLUME 985.7
PREVIOUS 978.1
UP VOLUME 521.0
DOWN VOLUME 433.6
DOW TRANSPORTS 3007.05 -14.90 - .5
DOW UTILITIES 266.90 -.80 - .3
CLOSING TICK +292
S&P 500 1111.92 +2.28 + .2
S&P 100 550.78 +1.71 + .3
MIDCAP 400 576.01 -3.46 - .6
REUTERS/CRB 255.29 -.48 - .2
NYSE COMPOSITE 6464.00 +20.40 + .3
VALUE LINE 362.67 -2.39 - .7
RUSSELL 2000 556.91 -8.56 - 1.5
WILSHIRE 5000 10799.62 +.18 unch.
U.S. TREASURIES
5-YEAR NOTE 3.375%
Dec. 15,2008 100 23/32 +1/32 + 3.22
10-YEAR NOTE 4.25%
Nov. 15,2013 99 31/32 +2/32 + 4.25
30-YEAR NOTE 5.375%
Feb. 15, 2031 104 14/32 +2/32 + 5.07
LEHMAN BROS.
LONG BOND INDEX 1726.78 + .27
DOW CLOSE 10453.92 +28.88 + .3
ADVANCES 1561
DECLINES 1698
NEW HIGHS 433
NEW LOWS 8
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 2.84 -.03 -1.1
GE GE 30.98 +.26 +.9
TWX Time Warner 17.99 +.09 +.5
PFE Pfizer 35.33 +.26 +.7
XOM Exxon Mobil 41.00 +.32 +.8
ABC AmerisourceBergen 56.15 -7.35 -11.6
EMC EMC Corp 12.92 +.18 +1.4
MOT Motorola 14.07 +.16 +1.2
AWE AT&T Wireless 7.99 +.04 +.5
C Citigroup 48.54 +.11 +.2
NASDAQ CLOSE 2003.37 - 6.51 - .3
VOLUME 1,778.3
PREVIOUS 1,552.5
ADVANCES 1363
DECLINES 1866
NASDAQ ACTIVES
MSFT Microsoft 27.37 -.15 -.6
INTC Intel 32.05 +.01 +.0
CSCO Cisco Systems 24.23 +.11 +.5
SIRI Sirius Satellite 3.16 +.11 +3.6
DELL Dell Inc 33.98 -.53 -1.5
AMAT Applied Matl 22.44 -.05 -.2
YHOO Yahoo! 45.03 +.10 +.2
AMGN Amgen 61.79 -.18 -.3
BRCM Broadcom 34.02 -.73 -2.1
EBAY eBay 64.61 +.33 +.5
AMEX CLOSE 1173.55 - 1.64 - .1
INDEX SHARES
DIA DIAMONDS TRUST 104.57 +.24 +.2
QQQ NASDAQ 100 36.46 -.10 -.3
SPY S&P DEP.RECEIPTS 111.28 +.10 +.1
STOCKS IN THE NEWS
MRK Merck & Co 46.20 +.70 +1.5
IBM IBM 92.68 +.05 +.1
HAL Halliburton Co 26.00 -.22 -.8
MCK McKesson 32.16 +1.06 +3.4
FDX FedEx 67.50 -1.50 -2.2
MWL Mail-Well 4.61 +.32 +7.5
MUR Murphy Oil 65.31 -2.71 -4.0
VIP Vimpelcom 73.50 +4.30 +6.2
INTV Intervoice 11.87 +1.51 +14.6
MXBIF MFC Bancorp 18.42 +2.26 +14.0
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