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Program: Monday, August 30, 2004

The GOP & Labor Day Lead To A Lackluster Day On Wall Street
The Outlook For Housing From David Seiders of the National Association of Home Builders
"Road to the White House"-President Bush`s Health Care Plans
"Commentary"-President Bush Needs To Get Back To The Future
"The Last Word"- Dog Eat Dog Race
Paul Kangas' Stocks In The News
Market Stats

08/30/04: The GOP & Labor Day Lead To A Lackluster Day On Wall Street

SUSIE GHARIB: Republicans opened their convention in New York today and here at the New York Stock Exchange, party leaders rang the closing bell. Ironically, that was the biggest event of the trading day, as volume was extremely light and there was little news to drive trading. The Dow lost 72 points and the NASDAQ fell by 25. Suzanne Pratt reports.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: OK, it`s the Monday before Labor Day at the New York Stock Exchange. It`s supposed to be quiet. This, however, is almost ridiculous. Where is everyone? What`s going on? Well, in a word, the convention. Wall Streeters, afraid of nasty commutes due to the Republican National Convention, are either working from satellite offices, or in many cases not working at all.

ART CASHIN, DIR., NYSE FLOOR OPERATIONS, UBS: Everything is kind of grinding to a halt-- the dog days of August. But, more importantly with the convention in town, there are two excuses not to be here. One is fear of some kind of event risk and the other one is, "gee, it`s going to be tough to get around with so many people in town; let`s go on vacation."

PRATT: And it certainly shows in the statistics. Volume at the New York Stock Exchange in late August is usually very low. In fact, a typical late summer day often competes with Christmas and Thanksgiving for the slowest trading day of the year. But this is unusually low. Average daily volume on the big board this year is about 1.4 billion shares. Today a paltry 848 million shares changed hands, making it the second slowest day of 2004. Last Friday was the slowest. And even though this is a big week for economic data, including the monthly employment report due out on Friday, experts say volume is likely to remain light through Friday. Today traders virtually ignored a fairly upbeat report on consumer spending. Personal income inched up 0.1 percent in July, while consumer spending gained a healthy 0.8 percent.

STEVE RICCHIUTO, CHIEF U.S. ECONOMIST, ABN AMRO: I don`t think we can say that the soft patch is clearly over. I think we have to look at this environment and say an economy that grows at around trend, 3.5 percent, is pretty good, and we`re not going to be able to sustain growth of about 4.5 percent on an ongoing basis.

PRATT: The good news about the stock market`s low volume is it is not expected to continue beyond this week and many optimists believe it could set the market up for a nice post-labor day rally. Suzanne PRATT, 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) 2004 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

08/30/04: The Outlook For Housing From David Seiders of the National Association of Home Builders

SUSIE GHARIB: Economists in the housing industry are predicting that huge price gains in some areas of the nation may not be sustainable. The economists took part in a forum today on the outlook for the industry, organized by the homeownership alliance. The forecast is for a strong second half of this year despite rising interest rates. But experts say some places where job growth has been poor in recent months may see drops in the price of housing. Joining us now to talk more about the outlook in housing is one of the forum`s participants: David Seiders, chief economist for the National Association of Home Builders. Hi, David.

DAVID SEIDERS, CHIEF ECONOMIST, NATL. ASSN.OF HOME BUILDERS: Hello Susie.

GHARIB: Let`s begin with the forecast for a strong second half despite rising mortgage rates. What kind of growth are you expecting?

SEIDERS: I think we`ve had record levels of home sales and housing production say in the second quarter of this year. July was big time, too in terms of housing starts. I think we`re actually looking probably at a little bit of erosion in the second half with the year as a whole easily being a record for sales of new homes, existing homes.

GHARIB: But what kind of growth are you seeing in the economy?

SEIDERS: GDP growth I think will be good in the second half. We`ve got close to 4 percent in my GDP forecast. Some of the other participants had even higher numbers than that coming off that surprisingly weak number for the second quarter. I think the job market will in fact continue to improve. Pretty disappointing recently, but I think it`s in the cards to see better job numbers. Consumer income growth presumably also will be improving in terms of growth. These are all real positives for housing demand. The counter is probably still somewhat higher interest rates. Fed presumably will be moving ahead with a couple of additional increases. I`ve got 2 percent funds rate at the end of the year. More forecast right now the long term rates are behaving beautifully. I`ve noticed today the 10-year Treasury slipped another couple of basis points, mortgages hanging around 5.8 percent, really great rates.

GHARIB: Well, housing as you well know has been the bright spot in the economy. You`re mentioning higher interest rates and of course home prices have been so high. Do you think that that trend can continue?

SEIDERS: Yeah, I think housing performance has really been phenomenal. We might have sort of passed sustainability in the second quarter. I think we got some home buying out of what we call bench sitters who are planning to buy when they saw the interest rates hit bottom back in March and start to move up. There was an awful lot of talk in the real estate community, obviously the media about prospective Fed tightening which did start at the end of June and long rates going up. And I think we`ve got a surge of home buying that might have taken a little bit of demand away from the second half. Housing`s been a growth engine for the economy now for a couple of years, didn`t miss a beat in the recession, first time that ever happened and the last couple of years, just dynamite. Second quarter, housing`s piece of GDP grew at about a 15 percent annual rate. And I don`t really think we can quite keep up that performance. I think third quarter still some positive support in GDP terms. Then maybe a couple of quarters are flat to slightly down in those terms. Very high levels of housing activity, it`s just hard to keep maintaining that kind of growth and I think we`re probably topped out in those terms.

GHARIB: David, you`re the chief economist for the home building association. What are home builders telling you in terms of trends and do they see any change given that July was a slow month?

SEIDERS: Yes, it`s funny. The July, a mixed bag of data for July on the housing side. Production and permits very strong, existing home sales were down a couple percentage points. New home sales were recorded down about 7 percent in the month of July, a big surprise to me, by the way, some numbers out of the Commerce Department. I survey builders myself on a monthly basis and we have our August survey in hand, and I`ll tell you, the single family home builders are very upbeat about the way things are going right now and their own outlook six months down the road is very good as well.

GHARIB: OK. All right. Well, thanks for giving us, filling us in on a wide range of topics. Thank you so much for joining us.

SEIDERS: Good to be here.

GHARIB: We`ve been speaking with David Seiders, chief economist for the National Association of Home Builders.

08/30/04: "Road to the White House"-President Bush`s Health Care Plans

SUSIE GHARIB: As the Republican convention got underway today in New York City, President Bush campaigned in New Hampshire and Michigan. His acceptance speech is slated for Thursday night and is expected to focus in on the issues that will be the mainstay of his campaign. So as we continue along the "road to the White House," we begin a week long look at the candidate and the issues. Tonight, Stephanie Woods takes a look at President Bush`s health care plans.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: President Bush touts the addition of a prescription drug benefit to Medicare as his key health care accomplishment so far.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You might remember those old debates about Medicare: oh, just elect me, something`s going to get done. But year after year those promises were empty. We got the job done. We`ve strengthened Medicare for our seniors.

WOODS: While that statement generates applause, the Medicare drug plan is hard for many to cheer. Conservatives criticize its $500 billion price tag and complain it doesn`t address Medicare`s long-term funding problem. Liberals say the benefit is skimpy. Analysts say the criticism has kept the president from gaining much political ground.

ALEC PHILLIPS, ANALYST, GOLDMAN SACHS: Whenever you put a big proposal out there, there are always all details that people don`t agree with.

WOODS: To expand health care coverage, Mr. Bush proposes letting small businesses pool coverage for workers and negotiate insurance discounts. The president is promoting health savings accounts, which passed as part of the Medicare bill. An HSA gives individuals tax savings for medical expenses covered by a high deductible health plan. HSAs let employees carry over unused funds from one year to the next and keep the account if they change jobs. The president showcases the new accounts as part of what the campaign has branded the "ownership society."

BUSH: If you own and control your own health care plan, you can move from job to job without worrying as to whether or not you`re going to get health care coverage for your family.

WOODS: And he says the accounts will hold down escalating health care costs.

BUSH: If you`ve got people just spending your money and you just take it for granted that the decision-making process is wise, that`s inflationary. As you`re a part of the process, of kind of discerning which is... what`s necessary and what`s not. It`s also is when it`s your money on the line and you see it on your line... On the line, you`ll make better choices about your body. You`ll realize savings by living healthy lives.

WOODS: Mr. Bush also promotes medical liability reform as a way to drive down costs.

BUSH: I`m telling you, your premiums are high because of junk lawsuits, and I`ll tell you why they`re high because of junk lawsuits. A doctor says, I`m getting ready to practice medicine on you and because the lawsuits are around, I`m likely to get hauled into court; therefore, I`m going to practice more medicine than I should practice.

WOODS: With some 44 million Americans without health insurance, President Bush`s proposals could provide almost a quarter of them coverage at a cost of about $100 billion over 10 years. In contrast, Democratic nominee John Kerry`s plan would provide near-universal coverage and would cost an estimated $650 billion.

PHILLIPS In some senses you get what you pay for, and in Bush`s case what you`re getting probably has a lot of bang for the buck, but it`s only going to go so far.

WOODS: For President Bush, the health care issue isn`t just about dollars, but direction. The president stresses personal responsibility and a sense of ownership in his health care proposals. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

08/30/04: Commentary"-President Bush Needs To Get Back To The Future

SUSIE GHARIB: Tonight`s commentator says it`s time for the presidential campaign trail to lead to the future, not the past. Here`s Alice Rivlin, economist at the Brookings Institution, former director of the Office of Management and Budget and former vice chair of the Federal Reserve.

ALICE RIVLIN, SR. FELLOW, THE BROOKINGS INSTITUTION: Isn`t a presidential election supposed to give political parties a chance to tell voters how they would deal with the big issues facing the country right now? So why are they so preoccupied with the past, especially what two young men did over 30 years ago? The problem is that the difficult issues facing America can only be solved with bipartisan cooperation, not party ideology. Was invading Iraq a good idea? I didn`t think so, but it doesn`t matter now. Stabilizing Iraq and leaving a democratic government behind us will take the skills of both parties working together. Were the tax cuts that destroyed the budget surplus a good idea? I didn`t think so, but it doesn`t matter now. Getting the huge Federal deficits under control will force both parties to forgo tax cuts and restrain spending, just as it did in the 1990s. Was adding prescription drug benefits to Medicare without paying for them a good idea? I didn`t think so, but it doesn`t matter now. Figuring out how to help seniors pay for health care, while reining in the escalating medical costs, will take more ingenuity than we have heard from either party so far. Whoever wins this election will have to put aside ideology and work with the other party to hammer out difficult compromises that aren`t even being mentioned on the campaign trail. I`m Alice Rivlin.

08/30/04: "The Last Word"- Dog Eat Dog Race

SUSIE GHARIB: Finally tonight, if you think this presidential election is going to the dogs, you`re not alone. So does a Portland, Oregon, bakery for dogs and that`s why it`s making Bush bites and Kerry waffles. These are dog biscuits shaped like the two main candidates. The bakery says it`s a fun way to let dogs vote, sort of, this election year. And dogs seem to love them. But there is one candidate missing from the lineup of treats. The bakery said it originally planned to make nutty Naders, I mean their biscuits that look like independent candidate Ralph Nader, Paul, but apparently no demand for them.

KANGAS: I guess they were just parking up the wrong tree on that one.

08/30/04: "'Paul Kangas' Stocks In The News

PAUL KANGAS: Investors paid little attention to those lower oil prices today, taking profits after two weeks of moderate gains. The mixed batch of economic reports had little impact. So, in a slow downward spiral, the Dow fell 27 points by midday while the NASDAQ Index was off about 20 points. The market drifted slowly lower, finally closing on, as we mentioned, the second lightest volume of the year. The Dow Jones Industrial Average ended down 72 1/2 points at 10,122.52. The NASDAQ Composite lost 25 1/2 points to 1836.49. Standard & Poor`s 500 index down 8 2/3 points ending at 1099.15. In the bond market, the 10-year note rose 13/32 to par and 18/32, putting the yield at 4.18 percent.

The most active issue on the New York exchange in a not very active list was Lucent Techologies (LU), traded 9.7 million shares today and dropped $0.02 a share.

Then Pfizer (PFE), $0.36 loss.

NorTel Networks (NT) dropping a dime.

Texas Instruments (TXN) fell $0.63.

Fifth in volume was Hewlett-Packard (HPQ) with a $0.34 loss.

Everyone of the 10 most actives fractionally down as you can see. General Electric (GE) down $0.20.

EMC Corp. (EMC) fell $0.11.

Corning (GLW) a $0.19 drop.

Citigroup (C) fell $0.31.

As did ExxonMobil (XOM) which was tenth in volume.

Tyson Foods (TSN) down $1.51. That`s an 8 1/2 percent drop. The company lowered its 2004 earnings forecast from about $1.43 on average to about $1.30 a share, citing unfavorable results from grain hedging operations and also higher costs related to its prepared food products.

It did affect some of the other poultry producers, like Pilgrim`s Pride (CHX) down $1.97.

And Sanderson Farms (SAFM), which tumbled $11 last Tuesday on the same type of warning, down another $0.87 today.

United Rentals (URI) fell $4.39. The company received notice the SEC is conducting a non-public fact finding inquiry about the company. Now that does not mean it has broken any law says the SEC, just an inquiry.

LNR Property (LNR) a gain of $3.71. (INAUDIBLE) Capital Management has formed a new company called Riley Property Holdings to acquire LNR and the price is $63.10 a share.

Charles Schwab (SCH) down $0.29. UBS may buy the company`s capital markets operations and its Soundview technology research unit for $265 million according to the "Wall Street Journal." Just about eight or nine months ago, Schwab paid $360 million for those same assets.

Nippon Telegraph & Telephone (NTT) was down $1.38. Another Japanese Internet service provider called Softbank has unveiled a discount phone service which could undermine Nippon`s business, down went the stock.

BlackRock (BLK) moved up $2.41. Prudential Equities upgraded it from "under weight" to "neutral."

And then Patina Oil & Gas (POG) up $0.86, traded as high as $27.16 after Keybanc brokerage upgraded it from "hold" to "buy."

Webster Financial (WBST) fell $0.72. The financial services and commercial banking company got a downgrade from a Bear Stearns from "outperform" to just "peer perform."

Most active NASDAQ issue, Microsoft (MSFT) down $0.16.

Intel (INTC) $0.42 drop there.

Cisco Systems (CSCO) fell $0.44.

eBay (EBAY) a $0.40.

And Accredo Health (ACDO) tumbling $5.75. The company had higher fourth quarter earnings out today, $0.40 versus last year`s $0.36, but it cut its 2005 earnings guidance from about $1.90 down to $1.49. This company provides specialty pharmacy services and it`s losing some of its business that it gets from Aetna. Aetna is forming a similar company of its own.

Yahoo! (YHOO) $0.84 drop.

Oracle (ORCL) fell $0.18.

Applied Materials (AMAT) $0.37 loss.

Amgen (AMGN) down $0.67.

And QUALCOMM (QCOM) completing this blizzard of minus signs, down $0.72.

ImClone Systems (IMCL) tumbling $4.03. July sales for the company`s Erbitux cancer drug fell below June sales according to IMS Health. That`s what they reported and that`s unusual apparently.

QLT Inc. (QLTI) down $1.38. The BMO Nesbitt brokerage downgraded this stock from "out perform" to just "market perform."

And then Performance Food Group (PFGC) down $1.89. Deutsche Bank downgraded it from "hold" to "sell" on concern over declining sales at the company`s prepackaged food unit.

And Sierra Wireless (SWIR) was down $3 or 13 percent. GMP securities downgraded this from "hold" to "reduce" and cut its price target on the stock by $5, down to $19 a share.

Those are the stocks in the news tonight.

08/30/04: Market Stats

NET PERCENT CLOSE CHANGE CHANGE DOW CLOSE 10122.52 -72.49 - .7 HIGH 10196.78 LOW 10122.52 NASDAQ COMP. 1836.49 -25.60 -1.4 HIGH 1855.78 LOW 1836.49 VOLUME 848.4 PREVIOUS 848.1 UP VOLUME 160.7 DOWN VOLUME 673.5 DOW TRANSPORTS 3085.35 -23.45 - .8 DOW UTILITIES 287.00 +.49 + .2 CLOSING TICK +205 S&P 500 1099.15 -8.62 - .8 S&P 100 536.55 -4.33 - .8 MIDCAP 400 572.22 -6.71 - 1.2 REUTERS/CRB 273.47 +2.01 + .7 NYSE COMPOSITE 6414.54 -40.98 - .6 VALUE LINE 347.16 -3.99 - 1.1 RUSSELL 2000 544.56 -7.11 - 1.3 DJW 5000 10665.92 -89.10 - .8 U.S. TREASURIES 5-YEAR NOTE 3.625% July 15,2009 100 18/32 +8/32 + 3.38 10-YEAR NOTE 4.75% May 15,2014 100 18/32 +13/32 + 4.18 30-YEAR NOTE 5.375% Feb. 15, 2031 105 24/32 +16/32 + 4.98 LEHMAN BROS. LONG BOND INDEX 1741.69 +4.22 DOW CLOSE 10122.52 -72.49 - .7 ADVANCES 1279 DECLINES 1991 NEW HIGHS 76 NEW LOWS 14 NET PERCENT NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE LU Lucent Tech 3.12 -.02 -.6 PFE Pfizer 32.29 -.36 -1.1 NT Nortel Networks 3.73 -.10 -2.6 TXN Texas Instrument 19.71 -.63 -3.1 HPQ Hewlett-Packard 17.92 -.34 -1.9 GE GE 32.57 -.20 -.6 EMC EMC Corp 10.64 -.11 -1.0 GLW Corning 10.02 -.19 -1.9 C Citigroup 46.41 -.31 -.7 XOM Exxon Mobil 45.13 -.31 -.7 NASDAQ CLOSE 1836.49 - 25.60 - 1.4 VOLUME 1,008.5 PREVIOUS 1,016.3 ADVANCES 977 DECLINES 2092 NASDAQ ACTIVES MSFT Microsoft 27.30 -.16 -.6 INTC Intel 21.60 -.42 -1.9 CSCO Cisco Systems 19.03 -.44 -2.3 EBAY eBay 85.51 -.40 -.5 ACDO Accredo Health 22.05 -5.75 -20.7 YHOO Yahoo! 28.46 -.84 -2.9 ORCL Oracle 10.11 -.18 -1.8 AMAT Applied Matl 15.99 -.37 -2.3 AMGN Amgen 59.01 -.67 -1.1 QCOM Qualcomm 37.71 -.72 -1.9 AMEX CLOSE 1224.33 - 5.17 - .4 INDEX SHARES DIA DIAMONDS TRUST 101.41 -.75 -.7 QQQ NASDAQ 100 33.96 -.63 -1.8 SPY S&P DEP.RECEIPTS 110.53 -.92 -.8 STOCKS IN THE NEWS TSN Tyson Foods 16.26 -1.47 -8.3 PPC Pilgrims Pride 24.95 -1.97 -7.3 SAFM Sanderson Farms 35.78 -.87 -2.4 URI United Rental 16.00 -4.39 -21.5 LNR LNR Property 62.81 +3.71 +6.3 SCH Charles Schwab 9.47 -.29 -3.0 NTT Nippon Telegraph 21.69 -1.38 -6.0 BLK Blackrock 73.73 +2.41 +3.4 POG Patina Oil & Gas 26.75 +.86 +3.3 WBS Webster Finl 48.95 -.72 -1.5 IMCL Imclone Systems 51.97 -4.03 -7.2 QLTI QLT Inc 14.69 -1.38 -8.6 PFGC Performance Food 22.05 -1.89 -7.9 SWIR Sierra Wireless 20.05 -3.00 -13.0

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