10/07/04:
The Retail Sector Is No Match For Mother Nature
SUSIE GHARIB: Mother Nature helped put the brakes on sales at the nation`s retailers last month. Sales were lackluster at best in September, as warm weather in the northeast and hurricanes in the southeast kept customers away. But as Scott Gurvey reports, there was one big, or should we say big ticket, exception to that trend.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Sales were slow in September, a month where back to school promotions and cooler weather usually bring a healthy increase in sales. Comparisons were particularly difficult this September, because last year shoppers had fresh tax rebate checks in hand ready to spend. The International Council of Shopping Centers says same store sales rose 2.4 percent in the month, while a similar survey taken by Thompson First Call put the number at 2.1 percent. Still, with retail consumers making up two thirds of consumption, last month`s results can only be described as disappointing.
ROBERT BRUSCA, CHIEF ECONOMIST, FAO-ECONOMICS: What was interesting in the chain store sales is that really only one chain significantly outperformed, and that was Target. Target had very strong numbers compared to everybody else. The Wal-Mart numbers were weak. Half the stores saw sales decline in terms of same store sales.
GURVEY: As bright as results were at Target, they were dismal at most other department stores. Sales fell at May and Sears and were flat at Federated. But stores aiming for high income consumers did unexpectedly well, with sales gains of as much as 6 percent compared to last year.
ROBERT BUCHANAN, RETAIL ANALYST, A.G. EDWARDS: The high end again did better on average than the low end. But with that said, the high-end really came in. So the growth came in from the double-digit level earlier this year to the 5 to 6 percent level if you look at retailers like Neiman Marcus and Nordstrom and Saks Fifth Avenue, the upscale part of the division. So I think there was more commonality, less of a gap between the haves and the have nots.
GURVEY: With the holiday shopping season just ahead, most analysts are cautious about the prospects for retail sales. Many say consumers will wait until the uncertainly of the presidential election is over before making their shopping plans. 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) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
10/07/04:
The Vioxx Pharmaceutical Fallout Continues
PAUL KANGAS: Another drug company is facing problems tonight over one of its blockbuster products. This time it`s Pfizer`s Celebrex that`s coming under scrutiny. Two editorials in this week`s "New England Journal of Medicine" are questioning the safety of the painkiller. Celebrex is in the same class as Vioxx, which Merck abruptly pulled off the market last week. Some heart experts are concerned Celebrex may also raise the risk of heart problem. But Pfizer says there`s no evidence to support that notion, and many analysts agree.
ANTHONY BUTLER, PHARMACEUTICAL ANALYST, LEHMAN BROTHERS: When stocks get weak because of editorials in journals, comments that come out and in the lay press, where there has not been any relevant clinical data for which we`ve been able to uncover. We think you need to buy the stock.
KANGAS: Butler owns Pfizer stock and Lehman Brothers has done business with Pfizer in the past year. The concerns over Celebrex caused investors to sell off Pfizer stock today. The shares closed at $29.99, down $1.19, that`s off almost 4 percent.
O`BRYON: Shares of Merck were down again today as well, on continuing concerns over the safety of Vioxx. New lawsuits have now been filed in Texas, charging that the popular drug caused heart damage in patients. But as Stephanie Woods reports, they are just the latest in legal challenges to Merck over Vioxx.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Paul Sader began taking Vioxx in 1999 for sore joints. The medicine eased his pain, but just over a year into taking the drug, he suffered a stroke that has left him permanently disabled.
PAUL SADER, FORMER VIOXX USER: Had I known that Vioxx could cause my life to diminish, I would live with all that pain.
WOODS: Sader filed a lawsuit against Merck two years ago. His case is one of 400 in California handled by attorney Thomas Girardi. The cases allege Merck knew Vioxx caused heart attacks and strokes years before the company stopped selling it last week.
THOMAS GIRARDI, ATTORNEY, GIRARDI & KEESE: I think that most jurors are going to say, this is despicable. You knew this. You gave this drug to all these people. So I think their liability is massive and believe me, they knew it was massive or they wouldn`t have pulled it off the market.
WOODS: Merck declined to discuss this case, but in a statement to NIGHTLY BUSINESS REPORT says quote, we continue to believe that we have strong and meritorious defenses to the lawsuits brought against us, end quote.
With sales of $2.5 billion last year alone, an estimated 20 million people have taken Vioxx since the drug was launched in 1999. Over the last two years, there have been hundreds of product liability cases filed against Merck. Attorney Victor Schwarz says medical claims can be difficult to prove.
VICTOR SCHWARTZ, SHOOK, HARDY & BACON: We`re talking about an illness that a lot of people have, heart disease, maybe caused by diet, maybe caused by their parents, heredity. How do you prove that this particular heart attack was caused by Vioxx?
WOODS: Merck also faces consumer fraud lawsuits since it marketed the product directly to consumers with a multi-million dollar ad campaign.
GIRARDI: If I`m a reasonable person and I have some aches and pains and the doctor says OK, let`s try some Vioxx, or I say to the doctor how about some Vioxx, and I use the Vioxx, I don`t really assume that this is going to be bad for me. After all, look at the ice skater. Look at these ads.
WOODS: Vioxx`s high profile may have other consequences for the drug industry. Paul Sader says he is now more cautious about taking drugs that are new to the market.
SADER: I lost my trust. From now on a medicine comes off a doctor`s shelf and he says take this for this purpose, I say well, thank you, no, give me a medicine that has been around for 10 years. Let me see what that can do for me, I don`t want a new drug.
WOODS: Sader will continue with his therapy as he waits for his case to come to trial, but he may have a long wait. Experts say it usually takes years before lawsuits like his are finally resolved. 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) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
10/07/04:
The Outlook for Oil With Peter Rosenthal, editor with Argus Media
LINDA O`BRYON: As we`ve heard, oil prices continued their climb today. A barrel of light sweet crude for November delivery closed at $52.67 in New York. That was up $0.65 on the day. But at one point today, that contract was trading at $53 a barrel. Joining me now to talk about what`s driving these price hikes is Peter Rosenthal, editor with Argus Media. Peter, welcome back to NIGHTLY BUSINESS REPORT.
PETER ROSENTHAL, EDITOR, ARGUS MEDIA: Thanks, Linda, it`s a pleasure.
O`BRYON: Peter, it seems almost daily we`re talking about oil prices setting new records. What was behind today`s price rise?
ROSENTHAL: Those continued concerns about supplies, inventories and the ability of producers in the U.S. especially to catch up after hurricane Ivan. The Energy Department is now forecasting it will take into November perhaps before full production can be restored.
O`BRYON: So do you see the recent runups then as more supply than demand driven?
ROSENTHAL: It seems like everything is pushing prices up at this point. We have a very thin margin of error on the supply side. So any dent into that, whether it`s in the U.S. or a strike in Nigeria or in Norway as we`ve also seen in recent days, that could do it as well as continued strong demand both in the U.S. and growth in Asia, places like China and India.
O`BRYON: Looking at the demand side of the equation, in the past when prices have gone up, people have curtailed gasoline usage. Why hasn`t that happened this time around?
ROSENTHAL: I guess that people just need to go where they need to go. What`s happened is that money maybe is being used on gasoline and fuel purchases instead of other things like retail sales, as you noted earlier, were softer than expected, perhaps that`s playing through and people are just driving bigger cars, so they need to fill up to get to school or church or work and they need to do that.
O`BRYON: Are we also seeing a lag as far as gasoline prices not catching up to the oil prices?
ROSENTHAL: That`s right. In August and in September the price rises seemed to be held in check on the gasoline side while crude oil was rallying higher, first hitting 50, now 53. So we expect that that price on the pump side will continue to rise, especially as we get toward the winter.
O`BRYON: You mentioned earlier global activities and we`re hearing that China`s expansion is driving the fastest demand in a generation. What impact specifically is that having on the oil market?
ROSENTHAL: What it`s meant is that the U.S. has a lot more competition for every barrel of oil and every barrel of finished product like gasoline and diesel, than it had before whereas Japan`s been the number two consumer, but now China is rapidly ascending, so there`s a lot more oil going from the middle east to the far east as well as to the U.S., so there`s a lot of concern that there`s just not enough to go around.
O`BRYON: Well, so far we haven`t seen any big up ticks in inflation in the United States resulting from rising oil prices. Is it your belief that inflation is just around the corner if these price hikes continue?
ROSENTHAL: I guess at some point these fuel prices have to be worked through, whether it`s inflationary measures are not, there are obviously other components to that. But as producers of other goods start to feel it even in China and other places as they import more raw materials like oil and other things, then that should seem to work its way through. But maybe low interest rates are having an effect too.
O`BRYON: Where do you see the top ranges of oil prices?
ROSENTHAL: Well, the numbers just keep getting tossed around, two months ago people would say we`d hit 50 and I`m also hearing 60, perhaps even 100. It just becomes a number after a while and at some point it`s going to click into people`s minds that either on the industrial or the retail side that they`re going to have to either consume less and perhaps that is playing a psychological role already as people start looking at perhaps smaller or more fuel efficient cars. But that evidence so far is just anecdotal.
O`BRYON: But do you think we`ll also see that psychology of inflation coming back?
ROSENTHAL: That`s a possibility and that was the worry a couple years ago when we were first climbing toward $30 a barrel in the evil words of stagflation. So it`s a possibility that these prices that they get worked through and other material prices get pushed up that there could be inflationary pressure certainly.
O`BRYON: It`s hard to recall $30 a barrel. Thank you, Peter Rosenthal of Argus Media.
ROSENTHAL: Thank you.
Nightly Business Report transcripts are available
on-line post broadcast. The program is transcribed by eMediaMillWorks.
Updates may be posted at a later date. The views of our guests
and commentators are their own and do not necessarily represent
the views of Community Television Foundation of South Florida,
Inc. Nightly Business Report, or WPBT. Information presented
on Nightly Business Report is not and should not be considered
as investment advice. Copyright (c) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
10/07/04:
The MSC Concept
LINDA O`BRYON: Paul, the nation of Malaysia is probably best known for pumping millions of electronic goods out of its factories. But a different kind of project launched a decade ago may be about to change that and turn Malaysia into a global IT player. Rian Maelzer reports.
RIAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s known as the multimedia super corridor, or MSC, and area of 10 by 30 miles near Malaysia`s capital Kuala Lumpur. Over the past eight years, some 1,200 companies, including 60 multinationals, have set up in the corridor and employ some 22,000 people. Investors locating in the corridor can get perks that include tax holidays of up to 10 years, and swift clearance to bring in foreign workers.
In reality, only companies located in a handful of hubs within that area -- including the so-called smart city of Cyberjaya and the twin towers - were eligible for the benefits of MSC status, something that has drawn a lot of criticism. The government says that when it began the project, it couldn`t have coped with installing the high speed fiber optics and other infrastructure beyond this area.
But now it says it`s ready to expand the multimedia super corridor concept to other parts of the country, a plan that has won widespread support. Still, analysts say the government needs to be more focused. On top of trying to attract global companies and spawn local technopreneurs, the government has also tried to develop flagship applications for IT, such as wired schools, paperless hospitals and e-government.
OON YEOH, IT COLUMNIST, THE EDGE: I think most of the flagships have not been that successful. I think it was as I mentioned earlier, too grandiose. They wanted to do too many things on too large a scale.
ARIF NUN, CEO, MULTIMEDIA DEVELOPMENT: If you looked at the targets set in 1994, `95 I believe, we have actually achieved all the targets and we feel we have done fairly well in this first phase, but as you say there are potholes here and there.
MAELZER: For one, the MSC has failed to become a center for software development or cutting edge R&D as hoped. But it has had successes, especially in boosting awareness and interest in IT among Malaysians. Also, Malaysia was recently rated one of the three most attractive locations in the world for outsourcing. And some Malaysian e-commerce and technology ventures have proved winners.
Take Iris Technologies. It developed Malaysia`s multi-purpose identity card, which can double up as an ATM card, drivers license and much more. Like Malaysia`s new passport, the card contains biometric identification technology.
TAN SAY JIM,IRIS TECHNOLOGIES: We invented a concept of covert security into national-type documents. The MSC gave us the impetus. One of the flagships of the MSC, which is the government multi-purpose card, gave us the breakthrough.
MAELZER: Analysts believe rolling out the multimedia super corridor initiative into other parts of the country could help spawn more successes like Iris and even greater application of IT across Malaysian society. Rian Maelzer, NIGHTLY BUSINESS REPORT, Kuala Lumpur.
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.
10/07/04:
"Commentary"-The High Risk of Hedge Funds
LINDA O'BRYON: Tonight`s commentator says when it comes to investments, one size does not fit all. Here`s Allan Sloan, Wall Street editor of "Newsweek" magazine.
ALLAN SLOAN, WALL STREET EDITOR, NEWSWEEK: We can already see the disaster coming: hedge funds. Wall Street, always hungry for fees, has found a new way to sucker the masses -- by selling hedge funds to people who have no business buying them. This is Wall Street`s growth business. And you know it`s going to end badly, because hedge funds are risky, high-cost investments, and Wall Street is selling them to people who can`t afford the risks.
Until recently, only the financial elite owned hedge funds, which are unregulated funds whose managers are paid a share of the profits. Under securities laws, anyone investing in such a fund has to be a so-called "qualified client" who`s worth at least a $1.5 million and can afford losses and is presumably sophisticated enough to know what`s going on. With investors like that, it`s OK to have hedge funds unregulated. The buyers can take care of themselves.
So how`s Wall Street selling hedge funds to people who aren`t qualified clients? Easy, it uses a loophole. Instead of selling investors a piece of a hedge fund, it sells them shares of a regulated fund that invests in hedge funds. You`ve got to love it. The simplest way to stop this abuse would be for the SEC to rule that anyone buying regulated funds that invest in hedge funds has to be a qualified client. But no one seems to be talking about doing this, except me. So you can bet nothing will change until after lots of people have lost money. I`m qualified enough to predict that. I`m Allan Sloan.
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.
10/07/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Stocks on Wall Street moved broadly lower this morning on those soft retail sales, the sickly drug group and oil hitting $53 per barrel during early trading. Just before noontime, the Dow was off 70 points and the NASDAQ Composite down 14. The market grew weaker this afternoon on nervousness over tomorrow`s employment report, so stocks ended at their lows of the day. The Dow Industrial Average lost 114.5 points, ending at 10,125.40. The NASDAQ Composite fell 22 1/2 points to 1948.52. Standard & Poor`s 500 down nearly 11 1/2 at 1130.65. Treasuries were weak across the board. The 10-year note fell 5/32 putting the yield at 4.25 percent.
The most active issue on the big board was Pfizer (PFE) on 60.3 million shares. You saw the quote earlier, down $1.19. On top of all the potentially bad news about Celebrex, Standard & Poor`s downgraded it from "buy" to "accumulate."
Then came Lucent Technology (LU) with a $0.09 gain.
Followed by Merck (MRK) which hit another new 12-month low, off $0.69.
Corning (GLW) down $0.85. Corning will take a $2.9 billion third quarter charge related to the reduced value of some of its manufacturing assets.
NorTel Networks (NT) fell $0.11, fifth in big board volume.
Disney (DIS) moved up $0.41 probably getting a boost because its ABC television unit got a ratings boost.
General Electric (GE) $0.43 drop.
EMC Corporation (EMC) $0.33 drop.
Advanced Micro Devices (AMD) moved up $0.14.
Citigroup (C), tenth in volume was a $0.02 gainer.
Alcoa (AA), the first of the Dow stocks to report earnings today for the third quarter, $0.32. That was down from $0.33 a year ago and $0.02 below the Wall Street consensus. In after hours trading, Alcoa dropped to around $33.85 a share.
Limited Brands (LTD) up $0.92. September same store sales actually fell 5 percent, but the company`s going to buy back up to $2 billion in common stock through a modified Dutch auction tender offer, which will be priced somewhere between $21.75 a share and $25 a share.
AnnTaylor Stores (ANN) down $1.84. September same store sales were up 1.4 percent, but that wasn`t as good as expected and the company cut its third quarter earnings guidance from the $0.48 to $0.50 range, all the way down to $0.28 to $0.32 a share.
Abercrombie & Fitch (ANF) up $3.09. September same store sales were up 2 percent. Wall Street was expecting a drop in sales of 5 1/2 percent so the stock did well.
Nordstrom (JWN), the big department store chain, up $1.43. It`s September same store sales up a respectable 6.2 percent.
Then Bombay Company (BBA) the furniture retailer, September same store sales plummeted 20 percent and the company also boosted its third quarter loss estimate.
Magnum Hunter Resources (MHR), which is in the oil and gas exploration business is going to seek strategic alternatives to enhance shareholder value that could mean the sale of all or part of the company.
Delta Air Lines (DAL) down $0.40, another 10 percent drop. Smith Barney says there`s a high probability Delta will file for Chapter 11 bankruptcy by the end of October. Of course the high oil prices today hurt the whole airline group. They were all down fractionally practically.
MBINA, MBIA (MBI) I should say, which insures municipal bonds and other things, down $4.21. The company`s going to lose about $50 million because of its exposure to the bonds of a Fort Worth osteopathic hospital that has some serious financial problems.
A new issue today, New York & Company (NWY), women`s apparel retailer, 10 million shares offered at 17, opened at 19, the high of the day 19.70.
Most active NASDAQ Intel (INTC) up $0.11.
Microsoft (MSFT) $0.36 drop.
Google (GOOG) hit a new closing record high, $1.77.
Cisco Systems (CSCO) down $0.40.
And eBay (EBAY) fell $1.61. That was fifth in dollar volume.
Sirius Satellite Radio (SIRI) continues to move higher, up $0.13,
$0.96 gain in Research In Motion (RIMM).
Oracle (ORCL) up $0.05.
Yahoo! (YHOO) dropped $0.18.
And then Applied Materials (AMAT) an $0.08 loss.
Another new issue, IntraLase (ILSE), this is a company that designs software for Lasix surgery, 6.6 million shares offered at 13. Opened at $15.75. The high of the day, $16.50, then it backed off just a little bit.
Those are the stocks in the news tonight.
10/07/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10125.40 -114.52 - 1.1
HIGH 10240.95
LOW 10124.52
NASDAQ COMP. 1948.52 -22.51 -1.1
HIGH 1970.26
LOW 1948.03
VOLUME 1,450.1
PREVIOUS 1,423.9
UP VOLUME 347.7
DOWN VOLUME 1,091.4
DOW TRANSPORTS 3341.87 -46.85 - 1.4
DOW UTILITIES 299.07 -2.28 - .8
CLOSING TICK +165
S&P 500 1130.65 -11.40 - 1.0
S&P 100 542.28 -5.61 - 1.0
MIDCAP 400 598.33 -7.57 - 1.3
REUTERS/CRB 285.54 -.22 - .1
NYSE COMPOSITE 6654.22 -63.21 - .9
VALUE LINE 365.02 -4.75 - 1.3
RUSSELL 2000 582.60 -10.06 - 1.7
DJW 5000 11047.92 -116.36 - 1.0
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 99 10/32 -1/32 + 3.53
10-YEAR NOTE 4.25%
Aug. 15,2014 100 1/32 -5/32 + 4.25
30-YEAR NOTE 5.375%
Feb. 15, 2031 105 16/32 -15/32 + 5.00
LEHMAN BROS.
LONG BOND INDEX 1741.41 -5.11
DOW CLOSE 10125.40 -114.52 - 1.1
ADVANCES 879
DECLINES 2395
NEW HIGHS 245
NEW LOWS 21
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 29.99 -1.19 -3.8
LU Lucent Tech 3.48 +.09 +2.7
MRK Merck & Co 30.98 -.69 -2.2
GLW Corning 10.50 -.85 -7.5
NT Nortel Networks 3.50 -.11 -3.1
DIS Disney 24.75 +.41 +1.7
GE GE 33.95 -.43 -1.3
EMC EMC Corp 12.35 -.33 -2.6
AMD Advanced Micro 14.11 +.14 +1.0
C Citigroup 44.76 +.02 +.0
NASDAQ CLOSE 1948.52 - 22.51 - 1.1
VOLUME 1,744.3
PREVIOUS 1,938.9
ADVANCES 931
DECLINES 2138
NASDAQ ACTIVES
INTC Intel 21.24 +.11 +.5
MSFT Microsoft 28.17 -.36 -1.3
GOOG Google 138.85 +1.77 +1.3
CSCO Cisco Systems 19.13 -.40 -2.1
EBAY eBay 94.99 -1.61 -1.7
SIRI Sirius Satellite 4.00 +.13 +3.4
RIMM Rsch In Motion 77.36 +.96 +1.3
ORCL Oracle 12.29 +.05 +.4
YHOO Yahoo! 34.78 -.18 -.5
AMAT Applied Matl 17.16 -.08 -.5
AMEX CLOSE 1278.50 - 11.29 - .9
INDEX SHARES
DIA DIAMONDS TRUST 101.48 -1.12 -1.1
QQQ NASDAQ 100 36.25 -.41 -1.1
SPY S&P DEP.RECEIPTS 113.48 -1.14 -1.0
STOCKS IN THE NEWS
AA Alcoa Inc 34.08 -.08 -.2
LTD Limited Brands 22.80 +.92 +4.2
ANN AnnTaylor Stores 21.80 -1.84 -7.8
ANF Abercrombie &Fitch 35.09 +3.09 +9.7
JWN Nordstrom 40.48 +1.43 +3.7
BBA Bombay Co 6.21 -1.06 -14.6
MHR Magnum Hunter 13.46 +1.46 +12.2
DAL Delta Air Lines 3.45 -.40 -10.4
MBI MBIA Inc 55.82 -4.21 -7.0
NWY New York & Co 19.30 +2.30 +13.5
ILSE IntraLase 16.25 +3.25 +25.0
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