10/26/04:
Investors Go On A Buying Binge Despite A Lack of Consumer Confidence
PAUL KANGAS: A relief rally on Wall Street as investors buy up stocks five days of declines. The Dow gained more than 138 points. The NASDAQ closed up 14. Investors shrugged off news that consumer confidence fell sharply this month to its lowest point in seven months. Scott Gurvey reports.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Consumers clearly have a lot on their minds and they seem to be finding most of it troubling. For the third month in a row, the Conference Board is reporting a decline in consumer confidence. There was also a drop in expectations about the future.
LYNN FRANCO, CONSUMER RESEARCH CTR., THE CONFERENCE BOARD: Consumers are kind of cautious today, pretty much how they were when we began the year. And looking ahead, they`re cautiously optimistic. The readings point towards continued economic growth, so we`re not in jeopardy of kind of falling off the track there. But, obviously you know, until the labor market really takes off, we`re going to see confidence numbers around this level.
GURVEY: In addition to the slow pace of job creation as a reason for consumer unrest, the experts point to the increase in energy prices, which is now showing up at the gas pumps and is widely expected to drive up home heating costs this winter. And then, they note, there is another factor to consider.
STEVE RICCHIUTO, CHIEF U.S. ECONOMIST, ABN AMRO: There`s the negative campaigning going on from the election, which is clearly weighing on people. I mean, everything that`s being focused on is negative to one shape or form or the other. It`s continuously being bombarded by the press with regard to that.
GURVEY: Contrary to popular belief, there is little correlation between consumer confidence and consumer spending. Spending accelerated in the third quarter even as confidence fell, with chain store sales running a little ahead of plan. Still, retailers do look to the report for any kind of sign, and the experts say with the key holiday shopping season approaching, there are signs of encouragement.
FRANCO: Confidence today is a lot stronger than it was last October, especially the present situation indicators. So that should bode well for retailers.
GURVEY: There are just a few economic reports left before Election Day, durable goods orders and new home sales tomorrow, and our first look at third quarter GDP on Friday. 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.
10/26/04:
The New Rules To Regulate Hedge Funds
LINDA O'BRYON: The world`s largest insurance broker, Marsh and
McLennan, is making major changes in how it does business. The
changes come one day after the company`s chairman and CEO resigned
under pressure from New York`s Attorney General Eliot Spitzer.
Marsh has permanently eliminated its practice of receiving any
form of contingent compensation from insurers, a practice Spitzer
said amounted to bid- rigging. The company will provide a full
accounting of all revenue earned by Marsh to all of its clients,
and it will insist that insurance companies show commission
rates on all policies and that rates are consistent. Marsh`s
new chairman, Michael Cherkasky says the reforms are critical
to ensuring the firm`s integrity and resolving the legal and
regulatory problems it faces.
To Learn More about this topic, click
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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.
10/26/04:
More Changes For Marsh and McLennan
LINDA O`BRYON: The Securities and Exchange Commission is zeroing in on the hedge fund industry. A sharply divided SEC voted today to regulate those funds, requiring them to register with the agency by February of 2006. Hedge funds were once used only by wealthy investors but they have grown into a trillion dollar a year business. The new rules come after several hedge funds were implicated in the recent mutual fund scandals.
WILLIAM DONALDSON, CHAIRMAN, SEC: This is not an attack on the industry. This is an attack, if it is not an attack at all, it is simply recognizing what our responsibilities are to people that are not running those businesses the way they should.
O`BRYON: But the SEC may have a fight on its hands. Lawyers for several hedge funds say the agency doesn`t have the authority to regulate the industry and they may sue to block the new rules.
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.
10/26/04:
"Road To The White House"- The Role of the Rural Vote
PAUL KANGAS: Independent presidential candidate Ralph Nader will not be on the ballot next Tuesday in Ohio. The Supreme Court rejected Nader`s appeal today, filed after Ohio officials found evidence of fraud on petitions to qualify him for the election. But the two major candidates on the ballot continue to duke it out in Ohio, a key battleground state. So tonight, the "road to the White House" takes us to that Buckeye state, as Darren Gersh looks at how rural voters there may play a starring role on November 2.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The absentee voting is already under way in Logan, Ohio.
UNIDENTIFIED FEMALE: Just drop it in the box, please. Here`s your little sticker. Thank you for voting.
GERSH: Here at the Hocking County courthouse, President Bush already has at least one vote.
RICH PETERSON, BUSH VOTER: We need a president who will set the tone for my children`s children`s children.
GERSH: Four years ago, the president`s strong showing in Hocking and Ohio`s other Appalachia counties helped offset his losses in the industrial cities in the rest of the state. But this time, Democrats vow they`ll do better.
REGINA PRATER, HOCKING COUNTY DEMOCRATIC CHAIR: I blame a lot of the reason George Bush took southern Ohio is because Mr. Gore didn`t work southern Ohio like Mr. Kerry is.
GERSH: And work it Senator Kerry has, even appearing in camo toting a shotgun. But the president has also toured the back roads of southeastern Ohio. Even Hollywood celebrities have made the scene here. Ohio`s Appalachia has long been considered a forgotten part of the state, but not in this election. Both sides are spending unprecedented amounts of time and money to reach rural voters who may play a decisive role in this presidential election. This election is an unusual turn in the spotlight for a place like Murray City, where there are few jobs and many worries. While conservative in values, there is a touch of populism here, too. Vicky Webster is voting against President Bush.
VICKY WEBSTER, KERRY VOTER: There`s a lot of us single grandmothers and single moms out there raising kids and we can`t do it on what he is doing. He`s taking everything away from the working people.
GERSH: It is not hard to see how social issues bump up against economics across Hocking County, which is now shifting from light manufacturing to tourism. There are new jobs in hospitality, but they don`t pay that well. With unemployment here at 7.7 percent, shop owner Marty McBroom is attracted by Senator Kerry`s economic message. But she wonders if he can make good on promises to help people like her.
MARTY MCBROOM, OWNER, M.R. MAC`S: My store used to be four times bigger than it is. I had the downstairs and the whole upstairs and I`ve cut down to a quarter of the size.
GERSH: But McBroom also respects the president`s stand on Iraq.
McBROOM: It scares me to think what might happen either way if we pull out or stay in. But I do think in that sense we need to stay in and I`m sort of afraid Kerry is going to pull us right out.
GERSH: Hocking Republican Chairman Rod Hedges says tourism and a new highway bypass are bringing more business to the county. And in the end, he believes the president`s supporters in this socially conservative community will turn out for Mr. Bush.
ROD HEDGES, HOCKING COUNTRY REPUBLICAN CHAIR: He`s morally upstanding. You know, where the man stands with God, country and family. You know where he stands on abortion. You know where he stands on stem cell research.
GERSH: So where do the voters stand? The editor and publisher of the "Logan Daily News" says they are evenly split.
MARK SAMUELS, EDITOR & PUBLISHER, "LOGAN DAILY NEWS": There is still a pool of voters here to be convinced one way or the other, but nobody has had their minds changed.
GERSH: There is one thing everyone here does seem to agree on. After all the dinner time phone calls, all the literature drops, all the advertising and all the attention lavished on rural voters, the people of Hocking County are ready for this race to be over. Darren Gersh, NIGHTLY BUSINESS REPORT, Hocking County, Ohio.
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.
10/26/04:
One On One With William George, former chairman of Medtronic
LINDA O`BRYON: As you know well, this year NIGHTLY BUSINESS REPORT is celebrating our 25th anniversary. As part of that celebration, we worked with the Wharton School of the University of Pennsylvania to select the 25 most influential business people of the last 25 years. Now Wharton and NBR have a published book titled "Lasting Leadership," that profiles those leaders. This week I talked with three of our most influential business people about the challenges they have faced. Tonight William George, former chairman of Medtronic and author of the book "Authentic Leadership." Earlier I asked George what was his greatest challenge.
WILLIAM GEORGE, FMR. CHMN. & CEO, MEDTRONIC: Well, I recall the spring of 1998. I`d been CEO for seven years and going back to my predecessor, Medtronic had had a string of very rapid growth in the range of 18 percent-plus every year for 13 years. And I realized the growth was really slowing down and we had some new products coming, but they were a year or so away from approval by the FDA. We had one major business losing about $50 million and we just didn`t have the growth that we`d had for so long.
O`BRYON: So, a successful company but you need to move forward?
GEORGE: Well, we needed to move forward, but the growth was coming to an end. And a lot of our executive team was really losing confidence that we could keep it going. A lot of them wanted to say, "let`s just have a bad year." Several people suggested we shouldn`t do any more acquisitions because we had not done well with some of the smaller acquisitions we had acquired three or four years before.
O`BRYON: In the end, then, how did you overcome those kinds of challenges?
GEORGE: Well, we had a board meeting we scheduled in Switzerland. It was really to look at our European business, but we used it to spend a whole day with our board talking about the alternatives and finally got the board`s support to go forward with putting acquisitions on the table that they could consider. And we went out and made a series of five acquisitions in the space of the next five months. Spent $9 billion on those acquisitions, and it actually, literally, transformed the company. We were very lucky that they all fell into place, and some of the executive committee members were rather disgruntled that we had gone ahead without their support. But I just felt it was the right thing to do at that time.
O`BRYON: So when you can`t hit the numbers, what do you do?
GEORGE: Well, you can do one or two things. You can kind of hedge the accounting which we chose not to do or you can get on the phone with all your investors, in this case about 350 of them, security analysts and say let`s face it, we`re not going to make the numbers. We stand behind this acquisition and the other four acquisitions we did. We think they`ll be great, strategic for this company, but we`re going to have one quarter we don`t make the numbers. And I did that and boy did I get blasted from all sides. People called us a liar. You didn`t tell us the truth. You knew you weren`t going to do well. I said look folks, I`m not clairvoyant. I can`t always see the future. There`s big risk in business but I can tell you, this is the right thing to do.
O`BRYON: You have been described as the unofficial spokesperson for responsible leadership. How did you end up with that description?
GEORGE: Well, it`s a nice description. But all I can say is not many people spoke out against the bad things that were going on in business over the last several years. And I felt obliged to do that because we`re setting a terrible role model for our young leaders coming along. Far too many leaders hedge the numbers, not just the people that did illegal things, but people that let their companies go downhill because they wouldn`t face tough issues and they wouldn`t stand in there and just say, look, we`re not going to make the numbers so we`re going to have to make some changes.
O`BRYON: And you have said we need new leaders, not just new laws to get us out of this corporate crisis that is seeing the likes of Enron, Tyco, and WorldCom. How do you see today`s new leaders?
GEORGE: Well, the good news is I think we have some very authentic leaders stepping up and taking over companies, ones that aren`t as concerned with facing the outside world and more concerned with their customers, their employees and getting back to doing the right kind of business.
O`BRYON: And yet there is enormous pressure from Wall Street for performance.
GEORGE: That pressure has not been reduced one bit. If anything it`s worse. I think it`s far too much on short term performance. That doesn`t tell the tale. What tells the tale, can you build your business over the long term, not the short term numbers. Do you make the expectations for the quarter? What really determines the success of a company is do you have the right strategy going forward? Do you have the long-term view and are you prepared to get there and do whatever it takes and build a team of people around you that have to make it happen?
O`BRYON: You mentioned the team and we hear a lot about teams in corporate America. But you also contend that leaders really need the courage and confidence of their own decisions. How do you reconcile the two?
GEORGE: Well, my style is always to listen to the inputs from everyone. But in the end, you have to kind of withdraw, look inside yourself, and say, what`s the right thing to do? And it`s too easy to get buffeted by all those outside forces, this investor wanting you to do that or this team member wanting you to do something else. You really have to decide in the end, what`s the right thing to do? And I think great decisions require that inward-looking, reflective approach. And then you go forward and ask everyone to be with you.
O`BRYON: Then from your personal challenges, what are the lessons learned that might help the next generation of leaders?
GEORGE: First of all, focus on your customers and your employees, not on the outsiders who are telling you what to do. Second of all, build a strong team around you and get them committed to go with you. And third, when it comes to big decisions, look inside yourself and make the right decision for you and have the courage to take the road less traveled and make that decision to make your company, to enable your company to go forward.
O`BRYON: Thank you very much. We`ve been speaking with William George, former CEO of Medtronic.
To Learn More about this topic, click
here.
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.
10/26/04:
"Commentary"- Terrorism Takes a Toll
LINDA O'BRYON: In tonight`s commentary, a look at the impact of terrorism on job growth and the American economy. Here`s Barbara Hackman Franklin, president of Barbara Franklin Enterprises, and U.S. former secretary of Commerce under President George H. Bush.
BARBARA HACKMAN FRANKLIN, PRESIDENT, BARBARA FRANKLIN ENTERPRISES: Those who say the Bush presidency is the first since Hoover to produce a net job loss surely know better. Comparing today with 70 years ago is ridiculous. Job creation is happening, but has been slower coming out of this recession than in the past because the business environment is very different. Two of the differences are productivity and terrorism. U.S. productivity has increased 4 percent for the past two years -- a stunning increase.
This dampens job growth in the short term, but makes the U.S. more competitive in the longer term. The terrorism impact is impossible to quantify. We know this is a global war against an illusive enemy. The terrorism threat has become part of each of us. We have internalized it and it impacts our everyday behavior and decisions in unconscious ways. The National Association for Business Economics, in its recent policy survey, rates terrorism as the biggest threat to the U.S. economy.
I believe terror insecurity is one reason executives are slower to create jobs now. They don`t say their decision-making is different because of this uncertainty, but it`s in the mix. It`s the 800-pound gorilla in the closet. I hope the American people understand how different things are today, and choose the leader who is the stronger and steadier in the war against terror. 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) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
10/26/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Reforms by Marsh and McLennan helped boost the insurance sector, which boosted Wall Street in general this morning. At midday, the Dow was up 70 points, NASDAQ up just a modest two. But convinced that the blue chips were oversold, buyers came on even stronger this afternoon resulting in some very impressive gains. The Dow industrial average closed up 138 points at 9888.48. The NASDAQ Composite rose 14 3/4 points to 1928.79. Standard & Poor`s 500 up 16.29 at 1111.09. Over in the bond market, the 10-year note fell 8/32, putting the yield to 4.01 percent.
Big board volume leader on 48.3 million shares AT&T Wireless (AWE) a $0.06 gain. FCC has given final approval to Cingular`s $41 billion takeover of AT&T Wireless.
Then came CIT Group (CIT) moving up $2. This stock will replace AT&T Wireless in the Standard & Poor`s 500 Index.
American International Group (AIG) up $4.23. That`s a positive reaction to the fact that no criminal charges will be filed against Marsh McLennan.
And Lucent Technologies (LU) a $0.03 drop.
Pfizer (PFE) moved up $0.55, fifth in volume.
Marsh & McLennan (MMC) itself did well, up $2.48 or $2.45. It kind of led that whole rally in the insurance group.
General Electric (GE) a $0.73 gain.
Delta Air Lines (DAL) moved up $0.85. That`s a good percentage move. JPMorgan upgraded it from "underweight" to "neutral" after the company got $600 million in financing from American Express.
Citigroup (C) rose $0.76.
And Hewlett-Packard (HPQ) a nickel loss, tenth in big board volume.
DuPont (DD) $0.78 loss even though the company turned around in the third quarter, earnings of $0.33 versus a loss of $0.88 a year ago, but the company did warn that high energy prices could dampen demand for its chemicals.
Pulte Homes (PHM) up $3.02. Third quarter earnings out $1.99, way up from $1.25 last year and the company is very upbeat on next year.
And Meritage Homes Corporation (MTH) up $7.55. The company boosted this year`s earnings guidance by $0.50 to $9.05 to as high as $9.30 a share. It did report third quarter earnings sharply higher also, $2.61 versus only $1.86 last year.
Centex Corporation (CTX) another home builder, up $1.93. After the close, the company reported second quarter earnings of $1.61, up comfortably from $1.44 last year and that was $0.02 above the Street consensus.
Allmerica Financial (AFC) did well, up $3.3.6. Third quarter earnings jumped 55 percent to $0.33 a share, up from $0.21 last year.
And then DaVita (DVA), which is a provider of dialysis got the Department of Justice subpoena regarding the operations of the company and the company`s units as well.
WellPoint Health Networks (WLP) up $4.67. Third quarter earnings strong, $1.97, up from $1.63 last year. Revenues up 16 percent. Wachovia Securities upgraded the stock from "market perform" to "outperform."
Google (GOOG), volume leader on NASDAQ coming down $5.60 after hitting a record high yesterday.
Microsoft (MSFT) $0.27 gain.
$0.09 rise in Intel (INTC).
eBay (EBAY) down $.66.
Cisco Systems (CSCO) gained a nickel. That was fifth in dollar volume.
QUALCOMM (QCOM) fell $1.64. Morgan Stanley downgraded it from "equal weight" to "under weight."
Dell (DELL) $0.31 loss.
Research in Motion (RIMM) gained $1.62.
Applied Materials (AMAT) down $0.19.
Yahoo! (YHOO) an $0.11 gain there.
Mace Security International (MACE) up $2.48. The company developed a new gel form of its Mace pepper spray. It shoots out of a canister up to 25 feet away.
And now we see an initial public offering today, Shopping.com (SHOP), an Israeli firm and this firm, what it does it`s an online price comparison website, 6.9 million share IPO at $18, opened at $22.95, the high of the day, $29.75 and then it settled back a bit.
And those are the stocks in the news tonight.
10/26/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 9888.48 +138.49 + 1.4
HIGH 9888.48
LOW 9749.55
NASDAQ COMP. 1928.79 +14.75 +.8
HIGH 1928.80
LOW 1905.49
VOLUME 1,687.7
PREVIOUS 1,379.8
UP VOLUME 1,354.8
DOWN VOLUME 313.8
DOW TRANSPORTS 3435.61 +55.44 + 1.6
DOW UTILITIES 314.54 +4.16 + 1.3
CLOSING TICK +293
S&P 500 1111.09 +16.29 + 1.5
S&P 100 531.69 +7.69 + 1.5
MIDCAP 400 592.52 +4.08 + .7
REUTERS/CRB 288.19 +1.62 + .6
NYSE COMPOSITE 6598.45 +77.55 + 1.2
VALUE LINE 359.79 +3.35 + .9
RUSSELL 2000 577.61 +5.94 + 1.0
DJW 5000 10893.78 +145.77 + 1.4
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 16/32 -3/32 + 3.27
10-YEAR NOTE 4.25%
Aug. 15,2014 101 31/32 -8/32 + 4.01
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 30/32 -10/32 + 4.77
LEHMAN BROS.
LONG BOND INDEX 1784.98 -2.55
DOW CLOSE 9888.48 +138.49 + 1.4
ADVANCES 2331
DECLINES 961
NEW HIGHS 141
NEW LOWS 38
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
AWE AT&T Wireless 14.98 +.06 +.4
CIT CIT Group 40.10 +2.00 +5.3
AIG American Intl Grp 60.33 +4.23 +7.5
LU Lucent Tech 3.45 -.03 -.9
PFE Pfizer 28.33 +.55 +2.0
MMC Marsh & McLennan 28.87 +2.45 +9.3
GE GE 33.63 +.73 +2.2
DAL Delta Air Lines 4.63 +.85 +22.5
C Citigroup 43.34 +.76 +1.8
HPQ Hewlett-Packard 17.86 -.05 -.3
NASDAQ CLOSE 1928.79 + 14.75 + .8
VOLUME 1,833.7
PREVIOUS 1,607.2
ADVANCES 1840
DECLINES 1221
NASDAQ ACTIVES
GOOG Google 181.80 -5.60 -3.0
MSFT Microsoft 27.90 +.27 +1.0
INTC Intel 21.40 +.09 +.4
EBAY eBay 95.25 -.66 -.7
CSCO Cisco Systems 18.11 +.05 +.3
QCOM Qualcomm 39.50 -1.64 -4.0
DELL Dell Inc 34.25 -.31 -.9
RIMM Rsch In Motion 86.09 +1.62 +1.9
AMAT Applied Matl 15.69 -.19 -1.2
YHOO Yahoo! 35.09 -.11 -.3
AMEX CLOSE 1311.57 + 3.57 + .3
INDEX SHARES
DIA DIAMONDS TRUST 99.07 +1.39 +1.4
QQQ NASDAQ 100 35.84 +.23 +.7
SPY S&P DEP.RECEIPTS 111.54 +1.63 +1.5
STOCKS IN THE NEWS
DD Du Pont Co 41.40 -.78 -1.9
PHM Pulte Homes 54.52 +3.02 +5.9
MTH Meritage Homes 83.24 +7.55 +10.0
CTX Centex 50.65 +1.93 +4.0
AFC Allmerica Finl 29.10 +3.36 +13.1
DVA Davita 29.40 -2.86 -8.9
WLP Wellpnt Hlth Net 92.90 +4.67 +5.3
SHOP Shopping.com Ltd 28.80 +10.80 +60.0
MACE Mace Security 5.45 +2.48 +83.5
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