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09/13/04:
US Airways Makes A Return Trip To Bankruptcy
JEFF YASTINE: U.S. Airways has landed in bankruptcy court
again. For the second time in two years and despite cutting $2 billion
in costs, the carrier is still desperately short of cash. A last-ditch
effort failed over the weekend to get $800 million in concessions from
its labor unions, leaving the struggling carrier with no choice but
Chapter 11. Stephanie Woods reports.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT: Soaring fuel prices set back
U.S. Airways financial turnaround plans by $220 million this year. In
bankruptcy court in Virginia today, the airline admitted it misjudged
revenues by a staggering $1.3 billion. That's because it underestimated
how quickly low-cost carriers would eat into its business. U.S.
Airways CEO Bruce Lakefield says that mistake won't be made again.
BRUCE LAKEFIELD, CEO, US AIRWAYS: I think our people are professional
people. I think they understand the realities of the business today and
I think eventually they will come around to understand what's going on
in the airline industry.
WOODS: What's going on is grim for U.S. Airways. It costs the company
$140 per seat to fly from Philadelphia to Fort Lauderdale. It costs a
discount competitor like Southwest $70 a seat for the same route. With
a ticket price of $100, U.S. Airways is losing its shirt. Labor costs
are a huge part of that discrepancy. The airlines highest paid
employees are its pilots, who have dug in their heels over a new
contract, but who will now be forced to give concessions.
CAPTAIN JACK STEPHAN, AIR LINE PILOTS ASSOCIATION: There are no forgone
conclusions at this point. We will continue to negotiate with the
company. We were making some progress, not enough to get a deal at the
end of the -- by today, but as I said, we will continue in those efforts.
WOODS: With a cash shortage and little chance of any new financing, U.S.
Airways asked the court to skip $110 million pension payment.
Analysts say labor costs must be cut quickly for the company to survive,
and the airline is also trying to abandon leases for its big planes,
keeping its smaller, more fuel-efficient ones.
KEVIN SCHORR, RESEARCH DIRECTOR, CAMPBELL HILL AVIATION GROUP: A key
issue for U.S. Airways right now is to retain delivery and all the
positions of their regional jets, because that is key to them
transforming into whatever carrier they are going to be down the road.
WOODS: The company says passengers shouldn't notice any disruptions from
the financial reorganization. The carrier says it flew 125,000
travelers to 182 destinations today. U.S. Airways says it hopes to
emerge from this bankruptcy quickly. Last time, the carrier spent about
eight months in Chapter 11. Now company management must convince
employees, creditors and customers it can fly right this time.
Stephanie Woods, NIGHTLY BUSINESS REPORT, Alexandria, Virginia.
PAUL KANGAS: Also tonight, Delta Airlines says it is meeting with its
bankruptcy lawyers just in case it needs to file for Chapter 11. But
Delta also says it's hopeful it can reach a deal with its pilots union
by the end of the week to avoid bankruptcy. The company says meeting
with lawyers now is prudent in the event it has to file for bankruptcy.
Delta's sky-high labor costs, as well as rising its jet fuel prices
and expensive borrowing costs are all causing financial turbulence for
the struggling carrier.
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.
09/13/04:
Independent Research May Soon Become The Norm On Wall Street
PAUL KANGAS: The trading scandals on Wall Street sparked a slew of reforms in
the industry, including a push for independent research. For the last
two months, a dozen Wall Street firms have been offering independent
research to clients after charges that the brokers' own analysts were
biased in favor of investment banking customers. Scott Gurvey updates
how that process is going.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Wall Street's
biggest firms will spend more than $430 million over the next five years
to offer independently produced research to their clients. Each firm
nominated three outside consultants to direct the programs. Then
Federal and state regulators selected and assigned the consultants to
the firms and approved contracts that gave the consultants sole
authority to hire the outside research firms for each covered stock.
MARK FICHTEL, INDEPENDENT RESEARCH CONSULTANT: Within that contract we
as independent consultants have absolute freedom. The firm cannot
interfere with any of our decisions. They cannot second-guess the
decisions. They cannot object to the decisions, and only the regulators
can dismiss us.
GURVEY: The settlement has been a boon for the independent firms and for
aggregators of independent research, such as bank of New York's jaywalk
unit.
JOHN MESERVE, PRESIDENT, BNY JAYWALK: We think that more research is
better. Obviously the spirit of the settlement was to encourage more
unconflicted -- the availability of unconflicted research to the
institutional and, in particular, the retail market place. So we think
that more research will be an important component to the debate and to
discussion for the market.
GURVEY: Rather than being overwhelmed by the amount of information now
available, further reports indicate many retail customers are
enthusiastic to have access to information previously only available to
institutional investors. But there have been problems. Some
consultants think giving everyone that access is giving research firms a
reason to back away from the table.
FICHTEL: One of the concerns I have is that some of these firms, most
of whom have dealt primarily or exclusively in many cases with
institutions, either will decide not to participate -- and we have seen
some of that -- or some may participate for a while and then see that
because the institutions can now access their research through the
brokerage firms for free, they are cannibalizing their business and may
drop out.
GURVEY: The settlement runs for five years, but already some of the
firms not covered by it are offering independent research for
competitive reasons, leading some to believe that retail access to
independent research may be on Wall Street to stay. 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.
09/13/04:
China Takes A Shine To Old Scrap Metal
JEFF YASTINE: Well, one of the newest hot commodities these
days in China is actually something old: scrap metal. Prices
are soaring as China's developing what seems to be an insatiable
appetite for steel to feed its building boom. And as Karen
Koh reports, that trend is providing some unique opportunities
for entrepreneurs to make a profit.
KAREN KOH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hong Kong-based
businessman Ken Chow has seen his fortunes rise dramatically
in recent years, thanks to China's appetite for scrap metal.
The enterprising businessman sources scrap metal from all
over the world, including conflict-torn areas like Iran or
Iraq. Chow says his sources track down high-quality scrap
from both military and civilian sources. Unprecedented levels
of growth in China are fuelling the country's almost insatiable
appetite for all things metal, particularly steel, which is
the backbone of industry.
HARRY BANGA, VICE CHAIRMAN, NOBLE GROUP: What China is going
through today, what Europe went through post second World
War when whole Europe was completely destroyed and had to
be rebuilt. Japan went 10 years later on into a similar phase.
Unlike total destruction in Europe, China is starting from
scratch.
KOH: Chinese demand for scrap steel has sent prices soaring
from $77 a ton in the beginning of 2001, to about $400 per
ton today. Demand isn't limited to scrap steel. Virtually
all forms of scrap metals are now being sent into China to
be re-smelted and reused, including copper and nickel. This
appetite has helped to create a new class of private entrepreneur,
who are literally making millions of dollars as a result of
the country's rapid growth. But though the demand exists,
Chow admits there are risks involved in doing business in
China. If private competition is seen to be threatening a
government enterprise, he says officials will still step in
to save the state business. Recycling scrap has not replaced
the process of smelting ore into high-grade steel.
BANGA: On the production side out of the 260 million tons,
about 30 million tons is going to be produced by virtue of
electric arc (ph) furnace, i.e. using scrap as feed (ph).
Today there is not enough raw material available to expand
the blast furnace route. It's cheaper, but there's no raw
material. So the demand and having demand (ph) in China obviously
calls for additional production, and that's the metal route,
i.e., the scrap route, even though it's expensive.
KOH: China's appetite for raw materials may appear to be
insatiable now, but Banga and other experts like him believe
the country's current levels of demand are just the tip of
the iceberg. China's building boom is expected to hit unprecedented
levels in the next four years, especially in the run-up to
the 2008 Beijing Olympics. Even then, experts say the demand
for raw materials is not expected to plateau until the year
2010. Karen Koh for NIGHTLY BUSINESS REPORT, Hong Kong.
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.
09/13/04:
One On One With Andrew Davis of The Davis Real Estate Fund
PAUL KANGAS: For the past several months, real estate funds have again topped
the list of best-performing mutual funds. One such fund is the Davis
Real Estate fund, which has returned more than 15 percent over the past
eight months and more than 30 percent over the past year. And looking
back over the past decade, its annual returns have averaged better than
13 percent. Andrew Davis has managed Davis Real Estate since its
inception 10 years ago. He joins us now from New York and Andrew,
welcome to NIGHTLY BUSINESS REPORT.
ANDREW DAVIS, PORTFOLIO MANAGER, DAVIS REAL ESTATE: Hi. Thanks, Paul,
nice to be here.
KANGAS: First, a lot people are worried that there is a real estate
bubble that could be about to burst. Do you have any such concerns?
DAVIS: Well, the real estate bubble in my mind really comprises single
family homes on both coasts. But the real estate in the middle of the
country and other parts is certainly not bubble-like. But nonetheless
we're always worried about everything.
KANGAS: Well, your fund is primarily invested in real estate investment
trusts or REITs as we call them and they've had a great run. Some REIT
watchers are saying that REIT dividend yields have dropped to an all
time low of below 5 percent. Does that mean a correction in REIT prices
is imminent?
DAVIS: Well, I think there is reason for some concern, but my argument
is you should be a long term investor in real estate so, if have you a
12-month horizon, I'd be worried. If you have a five-year horizon, I'd
be much more optimistic about things.
KANGAS: I understand that your fund, in your fund, you take the kind of
a value approach, looking for companies that can manage the entire real
estate cycle. Tell us what that means.
DAVIS: Well, that's exactly right. The old style REIT pretty much
bought everything and built huge, huge office buildings as monuments
almost. What we look for are companies that have the ability to buy, to
sell, to develop, anything that you can do to get a return on invested
capital, that's what we're looking for, and the new model of REIT is
capable of doing just that.
KANGAS: What specific real estate companies do you think have stocks
that are fairly priced at this time?
DAVIS: One of our favorite names continues to be a company called Center
Point Properties. They own and build and manage industrial real estate
in the city of Chicago. They have a very small share relative to the
gigantic industrial market that Chicago enjoys, and as a result with
their top flight management we think it's a great investment at this time.
KANGAS: Do you have another favorite?
DAVIS: Sure, General Growth Properties, a name that's been in the news
recently because they were taking over the Rouse company. I tell you,
any other company that had taken over Rouse for the price they paid I'd
be a little more nervous than I am, but General Growth again, top tier
management, 30 percent insider ownership and 10 percent earnings growth,
I think it's still worth holding onto and buying at these levels.
KANGAS: Do you personally own those two stocks you just mentioned?
DAVIS: Oh, yes, we sure do. My family's our largest share holder in the
Davis real estate fund so, you bet, we wouldn't mention them otherwise.
KANGAS: So the family has how big an ownership in the Davis mutual fund?
DAVIS: You know Paul, honestly I don't know exactly what the number is,
but I can tell you this, we are the larger shareholder.
KANGAS: OK. Looking ahead, looking ahead, would you say that anyone who
is looking at investing in REITs or other forms of commercial real
estate needs to be really cautious here?
DAVIS: I think there's always a need for caution in the world of real
estate. I think that's always the case. But again it really depends on
your time horizon. The shorter the time horizon the more nerves I'd have
about it. But if can you afford a four or five-year time outlook, I
think you're in pretty good shape.
KANGAS: So you're still very, very much bullish on the market for the
long period.
DAVIS: Yes, I really am. The world of real estate has changed
dramatically over the last 30 years. It's a much different product.
KANGAS: All right. Andrew, thank you very much, and let's hope that you
can maintain your good record in real estate investing.
DAVIS: Thank you, Paul.
KANGAS: My guest, Andrew Davis of the Davis real estate fund.
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.
09/13/04:
Last Word: Oprah's Great Car Giveaway
PAUL KANGAS: And finally, talk show host Oprah Winfrey knows how to start her
19th season with a bang. She surprised all 276 members of the studio
audience at today's show by giving each of them a new car. The tab for
the $7 million giveaway was picked up by General Motors, which supplied
the Pontiac G-6 sports sedans and is letting all of the winners choose
the color and features they want. Winfrey has been at the top of the
ranks of daytime talk programs since her debut in 1986. This season's
theme is "wildest dreams come true" and just about everyone Paul, would
probably agree with that assessment.
KANGAS: Boy, you talk about your free ride.
YASTINE: Not too bad for a television program. Some of them I
understood actually rode in talking about needing something like that.
KANGAS: Would have been worth waiting in line.
YASTINE: Absolutely. Absolutely.
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.
9/13/04:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: On Wall Street, energy stocks surged on those fears of possible
disruptions in oil supplies. Couple that with a strong semiconductor
group and investors were in a buying mood. By late morning, the Dow was
up 25 points and so was the NASDAQ Composite. But buyers backed away
from the blue chips this afternoon in slow trading and that undermined
the tech sector. So the Dow Industrial Average faded to close with a
gain of only 1.69 at 10,314.76.
The NASDAQ Composite salvaged a 16-point gain closing at 1910.38.
Standard & Poor's 500 Index gained almost two points ending at 1125.82.
Over in the bond market, the 10-year note rose 12/32, putting the
yield at 4.14 percent.
Most active big board issue on 27 ½ million shares, Lucent Technologies
(LU) moving up $0.17.
Followed by NorTel Networks (NT) with a nickel gain.
Then Texas Instruments (TXN) in the strong semiconductor group, up $0.23.
Pfizer (PFE) gained $0.27.
EMC Corporation (EMC) a $0.38 rise, fifth in volume.
National Semiconductor (NSM) gained $0.62 and was high at $15.51 during
the day. The Sanford Bernstein brokerage upgraded National Semi from
"market perform" to "out perform" and has a $20 a share target.
General Electric (GE) down $0.13.
Motorola (MOT) off $0.01, although it was in the plus ground for part of
the day.
AstraZeneca (AZN) losing $1.94. Last Friday an FDA panel rejected the
company's blood clotting drug called Xanta (ph). Today CS First Boston
downgraded the stock from "outperform" to just a "neutral" rating.
Advanced Micro Devices (AMD) rising $0.69, tenth in volume.
Time Warner (TWX) a $0.06 loss. The company has withdrawn its buyout
proposal for MGM which was estimated at $11 a share or $4.6 million.
This after Sony bid about $5 billion and that's worth just about $12 a
share. MGM stock moved up $0.44 to $11.55. Sony was a $0.53 gainer today.
Rogers Wireless Communications "B" (RCN), the Canadian cable giant,
Rogers Communications has reached an agreement to buy back 48.6 million
shares in its majority-owned wireless arm from AT&T Wireless. The price,
$36.37 a share in Canadian. This deal gives Rogers Communications 90
percent ownership in Rogers Wireless, what you see here. The news
triggered speculation that this company right here might ultimately be
taken private.
Tribune (TRB) losing $1.35. Friday the company cut circulation figures
at two of its New York newspapers and today Goldman Sachs downgraded
Tribune stock from "outperform" to just an "in line" rating.
Regal Entertainment, (RGC) the theater chain, an $0.80 gain there. The
company boosted its quarterly dividend from $0.20 to $0.30 a share and
also plans to buy back up to $50 million in its own common stock.
CKE Restaurants (CKR) losing $1.19. Company in with a second quarter
loss of $0.20 a share versus earnings of $0.11 a year ago. The company
cites debt refinancing costs for that loss.
And then Lear Corporation (LEA) up $1.58. Bank of America upgraded it
from "neutral" to "buy."
Then the women's clothing retailer Chico's FAS (CHS) up $1.83. Banc of
America upgraded it from "neutral" to "buy" in the belief the company
can grow earnings by 25 percent annually over the next several years.
Sherwin-Williams (SHW) up $0.80. CS First Boston upgraded it from
"neutral" to "outperform," has a $46 a share target.
NASDAQ's most active, Intel (INTC) in the firm semiconductor group, up
$0.23.
Microsoft (MSFT) lost $0.24.
eBay (EBAY) a $2.03 gain.
Broadcom (BRCM) gained $2.60. Over the weekend, Broadcom cut its third
quarter revenue guidance but the Schwab Soundview brokerage says that's
already been factored into the stock. It did have a 52-week of $47 keep
in mind.
Cisco Systems (CSCO) was down $0.21 and fifth in volume.
Applied Materials (AMAT) $0.12 gain.
Amgen (AMGN) $0.62 rise.
QUALCOMM (QCOM) $0.91 rise.
Yahoo! (YHOO) up $0.79.
Tenth in volume Oracle (ORCL) gaining $0.16 a share.
DigitalNet Holdings (DNET) up $6.27. BAE Systems will acquire this
company for $30.25 in cash per share.
MicroStrategy (MSTR) jumping $6.03. The First Albany brokerage upgraded
it from "buy" to "strong buy" on optimism about the company's new products.
MKS Instruments (MKSI) rising $1.88. "Barron's" quoted a hedge fund
manager who thinks this stock can get to $30 a share within the next 18
months.
And then ImClone Systems (IMCL) up $3.26. The ST Robinson Humphrey
brokerage upgraded it from "neutral" to "buy."
And those are our 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.
09/13/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10314.76 +1.69 + .0
HIGH 10348.39
LOW 10292.57
NASDAQ COMP. 1910.38 +16.07 +.9
HIGH 1919.21
LOW 1897.73
VOLUME 1,299.1
PREVIOUS 1,263.6
UP VOLUME 814.8
DOWN VOLUME 471.8
DOW TRANSPORTS 3223.22 -1.16 - .0
DOW UTILITIES 291.05 -1.86 - .6
CLOSING TICK +887
S&P 500 1125.82 +1.90 + .2
S&P 100 546.11 -.14 - .0
MIDCAP 400 592.70 +3.65 + .6
REUTERS/CRB 273.47 +1.86 + .7
NYSE COMPOSITE 6581.81 +13.51 + .2
VALUE LINE 361.12 +2.12 + .6
RUSSELL 2000 573.10 +3.19 + .6
DJW 5000 10965.53 +28.60 + .3
U.S. TREASURIES
5-YEAR NOTE 3.375%
Sept. 15,2009 100 2/32 +6/32 + 3.37
10-YEAR NOTE 4.25%
Aug. 15,2014 100 28/32 +13/32 + 4.14
30-YEAR NOTE 5.375%
Feb. 15, 2031 106 15/32 +24/32 + 4.94
LEHMAN BROS.
LONG BOND INDEX 1752.50 +4.61
DOW CLOSE 10314.76 +1.69 + .0
ADVANCES 2036
DECLINES 1282
NEW HIGHS 179
NEW LOWS 14
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 3.47 +.17 +5.2
NT Nortel Networks 4.01 +.05 +1.3
TXN Texas Instrument 22.17 +.23 +1.1
PFE Pfizer 32.13 +.27 +.9
EMC EMC Corp 11.53 +.38 +3.4
NSM Natl Semiconduct 14.86 +.62 +4.4
GE GE 33.75 -.13 -.4
MOT Motorola 16.64 -.01 -.1
AZN AstraZeneca 41.80 -1.94 -4.4
AMD Advanced Micro 12.90 +.69 +5.7
NASDAQ CLOSE 1910.38 + 16.07 + .9
VOLUME 1,761.3
PREVIOUS 1,616.5
ADVANCES 1881
DECLINES 1188
NASDAQ ACTIVES
INTC Intel 20.80 +.23 +1.1
MSFT Microsoft 27.25 -.24 -.9
EBAY eBay 92.10 +2.03 +2.3
BRCM Broadcom 30.30 +2.60 +9.4
CSCO Cisco Systems 20.25 -.21 -1.0
AMAT Applied Matl 17.02 +.12 +.7
AMGN Amgen 57.92 +.62 +1.1
QCOM Qualcomm 40.40 +.91 +2.3
YHOO Yahoo! 31.87 +.79 +2.5
ORCL Oracle 10.62 +.16 +1.5
AMEX CLOSE 1246.18 + 1.91 + .2
INDEX SHARES
DIA DIAMONDS TRUST 103.50 +.30 +.3
QQQ NASDAQ 100 35.59 +.44 +1.3
SPY S&P DEP.RECEIPTS 113.47 +.41 +.4
STOCKS IN THE NEWS
TWX Time Warner 16.46 -.05 -.3
RCN Rogers Wireless 30.94 +1.89 +6.5
TRB Tribune Co 39.97 -1.38 -3.3
RGC Regal Entertain 18.94 +.80 +4.4
CKR CKE Restaurant 11.35 -1.03 -8.3
LEA Lear Corp 55.83 +1.53 +2.8
CHS Chico's FAS 37.73 +1.64 +4.5
SHW Sherwin-Williams 41.26 +.74 +1.8
DNET DigitalNet Hldgs 29.79 +6.23 +26.4
MSTR MicroStrategy 43.07 +5.97 +16.1
MKSI MKS Instruments 15.73 +1.87 +13.5
IMCL Imclone Systems 52.69 +3.05 +6.1
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