JEFF YASTINE: The yield on the 10-year Treasury bond inched back above 4 percent today after falling below that threshold yesterday for the first time since April. Bond prices fell after minutes from the August meeting of the Fed`s Open Market Committee painted an upbeat economic picture. The relatively low level of long-term interest rates underscores an unusual development in the Treasury bond market. Suzanne Pratt explains.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: There`s something funny going on in the bond market, "funny" as in "strange." While the Federal Reserve has raised short-term interest rates three times this summer, long-term rates-- which affect much of consumer borrowing, especially mortgages -- have actually been falling. Some bond market experts say the disconnect is a technical phenomenon. Others attribute it to something more fundamental. They say there`s a growing belief in the bond market that there`s still widespread softness in the U.S. economy. Still, others blame a flight to quality.

JOHN CERRA, FIXED INCOME PORTFOLIO MGR., TIAA-CREF: Over the past couple of weeks we`ve seen a decline in the stock market and I think investors have moved money out of the stock market into the bond market, pushed up prices and as such have pushed down the interest rate levels.

PRATT: Whatever the reason, the fact remains that longer-term interest rates are at their lowest level in six months. Since hitting nearly 5 percent in mid- June, the yield on the closely watched 10-year Treasury bond has fallen sharply, so much so, that it`s now hovering around 4 percent. And because bond yields rise and fall with the outlook for the economy, some say the behavior of the 10-year suggests slower growth in the months ahead. Others disagree. They say the economy`s recent soft patch is temporary and, as a result, believe the 10-year bond will be back at 4.75 percent by year end.

LARRY KANTOR, MANAGING DIR., BARCLAY`S CAPITAL: We think that as it gets established that, in fact, the economy is doing fine and inflation picks up a little bit, we think a lot of these positions, these long positions will be unwound and the bond market will sell off and bond yields will move higher.

PRATT: For homeowners and the housing market, the bond market`s disconnect, however long it lasts, is good news. Mortgage rates are now at their lowest levels since last April. 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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/23/04: Interim Iraqi Prime Minister Ayad Allawi Asks For More Financial Aid

PAUL KANGAS: The interim prime minister of Iraq said "thank you" today to the people of America. Ayad Allawi was in Washington to speak to Congress and President Bush. He painted an upbeat picture of the economic progress in his country, but also asked for billions of dollars more to rebuild. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Both Iraq`s interim prime minister and President Bush insist the situation in Iraq is not as bad as it appears on TV. Ayad Allawi told a rose garden news conference the economy is finally starting to flourish.

AYAD ALLAWI, INTERIM IRAQI PRIME MINISTER: Although this is not what you see in your media, it is a fact.

GERSH: Official facts do show that phone service is up in Iraq. So is electricity generation and schools are being built. And the president promised more help is on the way.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We`ve got more money to spend, and we will spend it when contracts are let and when there`s enough security in certain neighborhoods to be able to spend the money wisely.

GERSH: But that approach is frustrating people now on the ground in Iraq. With crime rampant and the insurgency running strong, retired Major General William Nash says this is not a time to wait for security to be restored. Rather than letting insurgents pay people to throw grenades, Nash says U.S. officers tell him they want to pay people to work right now.

WILLIAM NASH, SR. FELLOW, COUNCIL ON FOREIGN RELATIONS: They would rather hire a hundred people at $5 to $10 a day rather than hire a single backhoe for $300 a day to dig a ditch. And it has taken them a long time to convince the contractors to be inefficient and to use this money to establish jobs.

GERSH: For now, investors seem to be looking at events in Iraq through the lens of the oil markets, but Washington analyst Charles Gabriel warns that may change after the U.S. elections in November and before Iraqis vote next January.

CHARLES GABRIEL, SR. WASHINGTON ANALYST, PRUDENTIAL FINANCIAL: We`re going to have some unfinished business that whoever the next president is will have to turn to, and it will probably call for some stepped-up operations to try to pacify the country before the January elections and with that could come some uncertainties as America sort of heads back to a heightened state of military alert.

GERSH: And the risks of rebuilding Iraq were underscored today as terrorists killed an Iraqi oil company official. The deputy manager of the North Oil Company had survived two previous attacks. Darren Gersh, 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.

09/23/04: One On One With Julius Maldutis, President of Aviation Dynamics

JEFF YASTINE: United Airlines today reported it lost $56 million last month due to lower fares and higher fuel costs. Wall Street analysts widened their forecast for financial losses at American Airlines` parent company AMR (NYSE:AMR) today and tomorrow, U.S. Airways may ask a bankruptcy court to force concessions from the carrier`s labor unions. These developments are adding yet more turbulence to an already rocky airline industry and joining me now to discuss these developments is Julius Maldutis, longtime airline analyst and president of the consulting firm Aviation Dynamics. Julius, welcome back to NIGHTLY BUSINESS REPORT.

JULIUS MALDUTIS, PRESIDENT, AVIATION DYNAMICS: Thank you, good evening.

YASTINE: Let`s talk about U.S. Airways for a second. They`re already in bankruptcy. They want to force more wage and benefit concessions from their unions, let`s suppose they get those concessions. Does that really help U.S. Airways in their competitive position?

MALDUTIS: It will only be temporary. I believe that USAir is in deep financial trouble. I think they made a strategic mistake in reducing their hub at Pittsburgh which is going to just multiply their losses. So I think it`s one of the first carriers that`s going to be liquidated by this time next year.

YASTINE: So you say one of the first carriers you`re expecting not just these sorts of bankruptcies where they continue to operate. You`re expecting more liquidations where the assets of the entity are sold off entirely.

MALDUTIS: Absolutely. Just look back at what happened in the early 1990s when three airlines were liquidated, Pan Am, Eastern and Braniff and set the stage for the industry`s recovery.

YASTINE: What are the names that you think are candidates for liquidation? I think I can guess them, if you`re saying U.S. Airways, United is already in bankruptcy and Delta (NYSE:DAL) is threatening bankruptcy.

MALDUTIS: Well, very good question. The critical question is that if Delta joins the other two carriers in bankruptcy, then the remaining three airlines: American, Continental (NYSE:CAL) and Northwest (NASDAQ:NWAC), in order to maintain cost parity, will also have to file bankruptcy and once in bankruptcy, then I think it`s going to be a free-for-all how many of these carriers really come out of financial reorganization and how many get liquidated. I would guess that again, two or possibly three airline will be liquidated by this time next year.

YASTINE: Does that mean then that the discounters, the Jetblues (NASDAQ:JBLU) and Southwest (NYSE:LUV) - they`re the winners and we all just sort of walk away from this or is there any future yet left for these legacy airlines or what`s left after these liquidations go through?

MALDUTIS: What`s left is they`re going to be very competitive, very strong and they will give the low cost airlines -- the Jetblues, Southwest, the AirTrans (NYSE:AAI), the Spirits who today are leading the industry and they are part of the problem in that they are charging very low fares. So if the legacy airlines can reorganize in bankruptcy, then they can make a go of it and compete with the low cost airlines.

YASTINE: What`s going on here with the legacy airlines? It seems like no matter what happens if there is just a minor tick in the economy, all sorts of chaos happens and they wind up in bankruptcy again like we see with U.S. Airways. Is it all about fuel costs and squeezing the unions for yet more wage and benefit concessions?

MALDUTIS: I`d like to say labor is not the problem but labor unfortunately has to be the solution to the problem. The problem is that the low cost airlines today constitute about 30 percent of the industry. They offer rock bottom fares because they have the lowest cost, they have the most productive employees and the legacy of full network carriers have to change and the only way they`re going to change is if either labor assists them or they will end up going into Chapter 11 and the judge will then do it.

YASTINE: Would you be buying the discount airlines here?

MALDUTIS: No, I would not because I believe that when we get additional carriers that go into bankruptcy, they will be able to compete successfully against the low cost companies. I would not own any airline shares today.

YASTINE: All right. Julius, we appreciate your time with the program.

MALDUTIS: Thank you.

YASTINE: Our guest, Julius Maldutis, president of Aviation Dynamics.

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.

09/23/04: Asia's Big Cities Are Building On Up

JEFF YASTINE: In Asia`s big cities, office and retail space is hard to come by. That`s why architects and city planners are reaching for the sky. The region is home to several of the world`s tallest buildings, and as Karen Koh reports, it`s a trend that`s likely to continue.

KAREN KOH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is the latest addition to the Hong Kong skyline. At just over 1,377 feet and with 88 stories, 2 International Finance Centre, or 2 IFC, is the territory`s highest skyscraper and the fifth tallest building in the world. It was designed by architect (INAUDIBLE) as part of an integrated complex with includes a shorter, 44-story twin tower, a mall, a luxury hotel and service departments. 2 IFC also sits on top of a transport hub that includes the territory`s airport express which brings travelers from the airport about 25 miles away into the center of Hong Kong in under 30 minutes.

DAVID DUMEGAN, DEPUTY GENERAL MGR., HENDERSON LAND: A businessman could fly into Hong Kong and jump from the airport onto the tram and come straight into the building, get out of the building in the basement, up the escalator and to his business meeting in 2 IFC.

KOH: Skyscrapers like 2 IFC are becoming familiar sites throughout Asia. Today, aside from the Sears Tower, America`s skyscrapers stand in the shadow of Asia`s giants: the 1,670 foot Taipei 101 in Taiwan; Malaysia`s Petronas (ph) towers at 1,483 feet; and the 1,381-foot Jin Mao (ph) building in Shanghai, China. Most of these buildings were also designed as part of integrated complexes, just like 2 ICF, because of a need for efficient space.

DR. K.S. LO, GREAT EAGLE HOLDINGS: In Hong Kong and in most Asian, urban crowded areas, the only way -- there`s not a lot of land to spare, to go around, so the only way to build actually is to go vertically upwards.

KOH: Developer Dr. K.S. Lo and his company, Great Eagle Holdings, are putting the finishing touches on Langham (ph) Place, which will be the tallest building on Hong Kong`s Kowloon peninsula. Like 2 IFC, Langham Place is an integrated development designed to maximize comfort and convenience for its tenants and visitors. While the fall of New York`s World Trade Center towers on September 11, 2001 may have raised anxieties about the safety of working in skyscrapers across the globe, it has also given developers like David Dumegan of Henderson Land the opportunity to improve upon the design of first-generation skyscrapers and to apply these changes to Asia`s tallest buildings. These changes are important, Dumegan feels, because Asia`s skyscrapers have to stand up not just to potential terrorists, but also to the forces of nature.

DUMEGAN: In this part of the world, the largest load that we have or force that we have to design for is the wind load. We design for typhoon wind loads here, for wind speeds, average wind speeds of 240 kilometers an hour.

KOH: Because of this, both 2 IFC and Langham Place were designed and built with a thick concrete core, which developers say will help protect the building`s integrity and keep it from collapse. But even without the practical need for superstructures, Dr. Lo believes the urge to build skyscrapers will always be there.

LO: Men throughout history have always wanted to build something tall and big and it is something that men admire. So, you look from an owner`s point of view, the pride of ownership of having a very tall building is very attractive and you can tell people you own the tallest building here or there and then for the tenants and for the users, they also like being associated with a name, a famous building, that they can be proud to call, "this is my office."

KOH: And with the astronomical cost of land in many of Asia`s crowded cities, it makes sense for developers to literally reach for the sky. Karen Koh for NIGHTLY BUSINESS REPORT, Hong Kong.

09/23/04: "Commentary"- Will Russia Play The Oil Card To Get Power? JEFF YASTINE: Tonight`s commentator says she sees some ominous signs out of Russia these days. In fact, she has seen them first hand. Here`s Barbara Hackman Franklin, president of Barbara Franklin Enterprises and former U.S. Secretary of Commerce under President George H. Bush.

BARBARA HACKMAN FRANKLIN, PRESIDENT, BARBARA FRANKLIN ENTERPRISES: KGB democracy -- that`s how Russia looked when I visited recently. President Putin has amassed great power through his own re- election and his party`s commanding control of the duma. Now in the wake of the recent terrorism, he aims to stop direct election of regional governors and duma members. He`s also tightening state control over the energy sector. Gazprom, the huge gas monopoly will merge with Rosneft, the state-owned oil group. The result will be a powerful company with just over 50 percent state ownership. To sweeten the deal, Russia will lift restrictions on foreign investment. In other words, Putin welcomes foreign capital but with state control. As global demand for oil and gas grows mightily, Russia emerges as the second largest exporter of oil. Putin seems to think this puts Russia in the catbird seat, giving it a big global bargaining chip. He also calculates that despite the state`s tightened grip, foreign investors will come anyway because they want access to those energy reserves. So far he`s right. But there`s a risk. In the future, will he change the rules and nationalize that investment? Will Russia use its energy clout to get something it wants from us? There are no answers but the outlook is disturbing. I`m Barbara Hackman Franklin.

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.

9/23/04: "Paul Kangas' Stocks In The News"

PAUL KANGAS: Wall Street`s blue chips extended yesterday`s sell-off this morning while the tech sector attracted some bargain hunting. News of a 0.3 percent drop in the August leading economic indicators was a market negative, so by mid session, the Dow Index was off 74 points, but the NASDAQ was up 2 points. An afternoon rally was derailed by a rebound in oil prices. Market went on to close near the low of the day. Dow Industrial Average off 70 1/4 points at 1038.90. The NASDAQ Composite gained a fraction to 1886.43. Standard & Poor`s 500 feel 5.20 points to 1108.36. Treasuries ended lower. The 10-year note as you`ve heard fell 9/32 putting the yield back above 4 percent.

Big board volume leader Fannie Mae (NYSE:FNM) on 24.6 million shares. Yesterday it was down nearly $5, off another $3.54. Federal regulators are asking the company to take immediate steps to remedy its accounting problems.

Pfizer (NYSE:PFE) in there with a $0.27 loss.

Calpine (NYSE:CPN) dropped a dime a share. The company will offer $1.4 billion in notes. $600 million of those notes will be convertible, little earnings dilution potential.

ExxonMobil (NYSE:XOM) down $1.10. Deutsche Bank downgraded it from "buy" to "neutral."

Lucent Technologies (NYSE:LU), a $0.04 loss there, fifth in big board volume.

Citigroup (NYSE:C) fell half a dollar.

And there you see General Electric (NYSE:GE) dropping $0.31.

AT&T Wireless (NYSE:AWE) off a penny.

But Wal-Mart Stores (NYSE:WMT) bucking the trend, up $0.84. UBS Securities says this stock is the best near-term value among the large cap retailers.

Freddie Mac (NYSE:FRE) down $2.02,no doubt in sympathy with Fannie Mae and its problems that it`s having.

Continental Airlines B (CAL.B) down $0.43. Merrill Lynch downgraded it from "buy" to "neutral" as did - with the whole sector for that matter. Let`s have a look at some of the others. Merrill Lynch downgrade the same way and AirTran Holdings (NYSE:AAI) which was down $0.44.

AMR Holdings (NYSE:AMR), parent of American, down $0.68. CS First Boston increased AMR`s third quarter loss estimate from only $0.30 a share to minus $1.80 a share.

Delta Air Lines (NYSE:DAL) was off $0.13, also got the Merrill Lynch downgrade.

Computer Associates International (NYSE:CA) up $1.60. If the company continues to cooperate with an ongoing Federal inquiry, all charges of alleged inflated sales and earnings figures could be dismissed.

Martha Stewart Living Omnimedia (NYSE:MSO) up $2.57. The company is in a pact to have Mark Burnett (ph), the creator of the "Survivor" series, have advised (ph) on all TV matters and that struck a positive chord.

Global Payments (NYSE:GPN) up $6.03. The company is in the credit card transaction processing business and it had higher earnings, first quarter $0.62 versus $0.41, also boosted next year`s guidance. Smith Barney repeated a "buy" recommendation.

Texas Industries (NYSE:TXI) in the construction materials business had a good first quarter, $1.51 in earnings versus a loss of $0.74 a year ago.

Darden Restaurants (NYSE:DRI) up $1.33. First quarter earnings higher, $0.44, versus $0.40 last year, a penny above the Street estimate.

Then we see McMoran Exploration (NYSE:MMR) down $1.38. The company is going to offer 5 million common shares and $75 million in convertible notes, a little earnings dilution potential.

And Ameron International (NYSE:AMN), in the industrial coatings business had a big third quarter loss of $1.05 versus earnings of $0.94 on - revenues were flat during the period.

Microsoft (NASDAQ:MSFT) topped the actives on NASDAQ, up $0.23.

Intel (NASDAQ:INTC), $0.44 loss.

eBay (NASDAQ:EBAY) down $1.32.

Cisco Systems (NASDAQ:CSCO) $0.06 drop.

Research In Motion (NASDAQ:RIMM) an $0.81 gain, fifth in volume.

Google (NASDAQ:GOOG) had a good day, up $2.44.

Yahoo! (NASDAQ:YHOO) down, up $0.57.

$0.09 drop in Oracle (NASDAQ:ORCL).

Applied Materials (NASDAQ:AMAT) gained a nickel.

And tenth in volume was Dell (NASDAQ:DELL), a $0.17 loss.

Finally we had two new issues, Beacon Roofing (NASDAQ:BECN), 13 1/2 million shares offered at 13 and moved nicely higher on the day.

And Valley Bancorp (NASDAQ:VLLY) based in Las Vegas, 925,000 IPO at 18. It too had a pretty decent day.

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.

09/23/04: Market Stats

                  
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE

DOW CLOSE             10038.90     -70.28       - .7
HIGH                                        10108.74
LOW                                         10031.16

NASDAQ COMP.           1886.43       +.72        +.0
HIGH                                         1894.67
LOW                                          1883.32

VOLUME                                       1,286.5
PREVIOUS                                     1,379.2
UP VOLUME                                      427.5
DOWN VOLUME                                    827.5

DOW TRANSPORTS         3173.97     -20.69       - .7
DOW UTILITIES           293.08      -1.60       - .5
CLOSING TICK                                    -437

S&P 500                1108.36      -5.20       - .5
S&P 100                 534.20      -2.64       - .5
MIDCAP 400              585.29      -1.83       - .3
REUTERS/CRB             280.06       +.57       + .2

NYSE COMPOSITE         6521.43     -27.13       - .4
VALUE LINE              356.48       -.65       - .2
RUSSELL 2000            565.80       -.09       - .0
DJW 5000              10820.90     -40.73       - .4

U.S. TREASURIES
5-YEAR NOTE 3.375%
Sept. 15,2009        100 11/32      -7/32     + 3.30

10-YEAR NOTE 4.25%
Aug. 15,2014         101 28/32      -9/32     + 4.02

30-YEAR NOTE 5.375%
Feb. 15, 2031        108 23/32      -8/32     + 4.79

LEHMAN BROS.
LONG BOND INDEX        1779.40      -4.65


DOW CLOSE             10038.90     -70.28       - .7
ADVANCES                                        1488
DECLINES                                        1789
NEW HIGHS                                         90
NEW LOWS                                          26

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
FNM   Fannie Mae         67.15      -3.54       -5.0
PFE   Pfizer             29.93       -.27        -.9
CPN   Calpine             3.43       -.10       -2.8
XOM   Exxon Mobil        47.76      -1.10       -2.3
LU    Lucent Tech         3.25       -.04       -1.2
C     Citigroup          43.88       -.50       -1.1
GE    GE                 33.42       -.31        -.9
AWE   AT&T Wireless      14.75       -.01        -.1
WMT   Wal-Mart Stores    52.54       +.84       +1.6
FRE   Freddie Mac        64.38      -2.02       -3.0

NASDAQ CLOSE           1886.43     + 0.72       + .0
VOLUME                                       1,402.3
PREVIOUS                                     1,606.1
ADVANCES                                        1401
DECLINES                                        1632

NASDAQ ACTIVES
MSFT  Microsoft          27.35       +.23        +.9
INTC  Intel              20.38       -.04        -.2
EBAY  eBay               90.10      +1.32       +1.5
CSCO  Cisco Systems      18.90       -.06        -.3
RIMM  Rsch In Motion     74.41       +.81       +1.1
GOOG  Google            120.82      +2.44       +2.1
YHOO  Yahoo!             33.04       +.57       +1.8
ORCL  Oracle             11.05       -.09        -.8
AMAT  Applied Matl       17.16       +.05        +.3
DELL  Dell Inc           34.90       -.17        -.5

AMEX CLOSE             1261.46     + 6.78       + .5

INDEX SHARES
DIA   DIAMONDS TRUST    100.45       -.68        -.7
QQQ   NASDAQ 100         34.94      unch.      unch.
SPY   S&P DEP.RECEIPTS  110.95       -.56        -.5

STOCKS IN THE NEWS

CAL   Contl Airlines      9.07       -.43       -4.5
AAI   AirTran Holdings   10.48       -.44       -4.0
AMR   AMR Corp            8.06       -.68       -7.8
DAL   Delta Air Lines     3.57       -.13       -3.5
CA    Computer Assoc     26.90      +1.60       +6.3
MSO   Martha Stewart     17.55      +2.57      +17.2
GPN   Globl Payments     53.03      +6.03      +12.8
TXI   Texas Industries   48.57      +2.56       +5.6
DRI   Darden Restaurant  22.51      +1.33       +6.3
MMR   McMoRan Explorat   13.30      -1.38       -9.4
AMN   Ameron Intl        32.21      -4.55      -12.4
BECN  Beacon Roofing     15.99      +2.99      +23.0
VLLY  Valley Bancorp     21.03      +3.03      +16.8