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Program:
Friday, October 29, 2004
The GDP Grew But Not Fast Or High Enough
Why Diebold & Smartmatic Are Watching & Waiting For The Election Day Outcome
"Market Monitor"- Mario Gabelli, Chairman of Gabelli Funds
"Money File"-Cleaning Up Corruption
Paul Kangas' Stocks In The News
Market Stats
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10/29/04:
The GDP Grew But Not Fast Or High Enough
SUSIE GHARIB: GHARIB: The U.S. economy picked up some steam in
the third quarter, but not as much as economists had hoped. The Commerce
Department said today that the nation`s gross domestic product grew at an
annual rate of 3.7 percent for the period. But despite the lackluster
performance, the report pointed to some encouraging trends. Erika Miller
reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Economic growth heated
up in the summer months, but it was not the steamy quarter Wall Street had
hoped for. Gross domestic product rose at a 3.7 percent annual rate in the
third quarter. That`s up from 3.3 percent in the second quarter, but it was
at least a half a percentage point below consensus forecasts.
JAMES GLASSMAN, SR. US ECONOMIST, JP MORGAN CHASE: It`s not where we want
to be. With the economy underemployed and a lot of hiring to do, we need to
grow faster than 4 percent in order to get the economy back to full
employment.
MILLER: But there was one positive surprise: consumer spending rose at its
fastest clip in over a year.
LAURENCE KANTOR, CHIEF ECONOMIST, BARCLAYS CAPITAL: Part of the reason why
demand rebounded was because gasoline prices and food prices, especially
dairy, came off in the third quarter. So this added a little spending power
for consumers.
MILLER: Another encouraging sign was one of the lowest inflation readings in
decades. The core personal consumption expenditure index, a favorite
indicator of Federal Reserve Chairman Alan Greenspan, rose just 0.7 percent.
That`s the smallest increase in 42 years. Economists say that could help
slow the pace of interest rate increases by the Fed. The U.S. central bank
is widely expected to hike rates at its November 10th meeting, although many
economists predict policy makers will hold rates steady in December.
Meanwhile, the University of Michigan revised its latest reading on consumer
sentiment today. October came in at 91.7, slightly higher than previously
reported. But that`s still down from September.
KANTOR: I think what`s going on there is two things: one is the Iraq war.
I mean, the news we get everyday is not good. And the second is energy
prices. You know people see the problems in the middle east-- higher energy
prices-- that`s something that really weighs on sentiment.
MILLER: Today`s reports are among the last major economic numbers before
Tuesday`s presidential election but analysts say they will likely have
little sway over undecided voters. Erika Miller, 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.
10/29/04:
Why Diebold & Smartmatic Are Watching & Waiting For The Election Day Outcome
SUSIE GHARIB: This election season, some American companies, including Diebold,
will look to the outcome for more than just which candidates take office.
They make the electronic voting systems that more and more Americans are
using these days. Those systems face a crucial test on Tuesday. Darren
Gersh looks at what`s at stake for the industry.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Two years ago,
Maryland became one of just two states to adopt electronic touch-screen
voting state-wide. Here in Montgomery County, election officials say they
have yet to lose a vote.
MARGARET JURGENSEN, ELECTION DIR., MONTGOMERY CTY., MD: Voters really like
the system. It is easy to use. You can -- it moves much faster than the
old punch card system. You make your choices. You have the review feature.
You can confirm your choices and then you cast your ballot and you are out
of there.
GERSH: More accurate, faster and easier for the disabled, electronic voting
machines looked like a sure thing after the Florida election debacle of
2000. Companies that made the new voting systems saw their stocks soar.
But revenue growth was slashed and profit targets missed once critics began
to question the lack of an auditable paper trail, the absence of uniform
standards, and the very security of the voting software itself.
RALPH NEAS, PRES., PEOPLE FOR THE AMERICAN WAY: And of course a lot of
people are afraid that there are going to be hackers and there are going to
be software problems and this might be one way to rig the election. I`m not
saying that is or will happen, but people are worried about that.
GERSH: Worrying needlessly say election officials, who point out these
stand-alone systems are never hooked up to the Internet. Still, Federal
officials say new standards will be needed to assure the public that
electronic voting machines are properly tested, stored and secured.
PAUL DEGREGORIO, MEMBER, ELECTION ASSISTANCE COMMISSION: The Election
Assistance Commission is going to try to bring some reason to this process
so people can have confidence, so vendors can have confidence that they are
going to invest in a product that`s going to be secure, that people like and
that they can make a profit from.
GERSH: Congress has appropriated $3.9 billion to help states buy new voting
systems. But most election officials are waiting until the controversy dies
down. The industry believes the concerns have been over-hyped.
BOB COHEN, SR. VP, INFORMATION TECHNOLOGY ASSN. OF AMERICA: What we will
see is that on November 2, the performance of the machines themselves will
become a non-issue.
GERSH: Roughly one out of three votes this election will be recorded
electronically, making this a crucial test not only for the candidates but
for the electronic voting industry as well. Darren Gersh, NIGHTLY BUSINESS
REPORT, Washington.
YASTINE: One company that has already passed the first hurdle for electronic
voting machines is Smartmatic. The firm`s product made its debut recently
in a hotly contested presidential recall vote in South America. Smartmatic
hopes its machines will soon take their place in U.S. balloting as well.
If you thought U.S. elections are high-stakes, try Venezuela, where
controversial President Hugo Chavez - that`s him on the left next to former
President Carter -- was subject to a recall vote in August. Then million
voters cast ballots, but they did so for the first time, on electronic
voting machines. Those machines were made by Florida-based Smartmatic,
using touch screens and issue paper ballot receipts.
Voters put their paper ballots in a box, which can be compared against the
electronic results to see if they match. Chavez won the recall vote, with
the results certified by the Carter Center, and the Organization of American
States. But perhaps the biggest winner was Smartmatic, in the first real
test of its electronic voting devices. Smartmatic`s machines cannot be used
in the U.S. yet. They still need certification tests, but executives say
they understand why people have a natural suspicion about electronic voting.
JACK BLAINE, PRESIDENT, SMARTMATIC: Change is always-- begs for concern
right and this is a change. And again, that`s why I think it`s so important
to have a paper trail because people don`t know. The average person doesn`t
know what happens after they push the button. However, with a paper trail,
they can see the result. This is exactly how I voted. They put it in the
ballot box, like they used to. And at the end of the day, a manual audit
that used to be done can still be done and it can be compared with the
electronic result. So you have the best of both worlds, again, if it`s done
correctly.
YASTINE: How do you build a machine that people will have confidence in,
that when they push the button, they have the trust that they`re casting a
vote and it`s going to come out of the machine in the way that they
intended?
BLAINE: In building a machine, you`ve got to be very concerned about
security. You`ve got to be very concerned about usability so everybody can
easily use the machine. You got to make sure that it`s accurate, that what
goes in is what comes out. And what we`ve been talking about, is auditable.
Now, once you`ve done the machine that way and the system is that way, you
are in good shape. However, transparency is also very important and that`s
why I keep coming back to the paper vote, because they can actually see the
result, they put it in their ballot box just like they always did and they
know there`s going to be an audit at the end of the day there`s going to
test a certain number of those votes against the actual result that`s been
totaled in the electronic system.
YASTINE: Now your company just came off, in the last handful of months
here, an important election in Venezuela which went well and was certified
and accepted by the international community and the independent observers
who were there. Was the Venezuelan election a turning point for the
company?
BLAINE: Of course. This was a very large election. In fact, we will
probably end up being one of the - having as one of the larger revenues if
you will, in of voting vendor (ph) companies in the western hemisphere this
year. So it had to be a turning point. Now we are looking at coming into
the U.S. market. We`re in the process of getting certified. We have been
invited by many countries in Latin America to work with them and for them to
be able to look at the system and understand it in more detail than they
presently do. So there`s tremendous interest in Latin America. And there is
some interest in Europe already as a -- in the system right now. So it did
get world attention as a result of that success we had in Venezuela.
YASTINE: Our guest, Jack Blaine, president of Smartmatic. Thanks.
BLAINE: 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.
10/29/04:
"Market Monitor"- Mario Gabelli, Chairman of Gabelli Funds
SUSIE GHARIB: Our "market monitor" guest this evening is Mario Gabelli, chairman of
Gabelli Funds. Hi, Mario, nice to have you on the program again.
MARIA GABELLI, CHMN, GABELLI FUNDS: Susie, great to be here and....
GHARIB: Glad to have you. Everybody`s talking about the election, Mario so
let`s start with that. Bush wins on Tuesday or it`s Kerry who wins on
Tuesday, how does that change your stock market investing strategy?
GABELLI: Well, let`s assume it`s a landslide for Kerry, winning both the
House and the Senate. I think the market will go down initially and then
probably go up in January, February, March. And if Bush wins and keeps the
House and the Senate, the market goes up for the first couple of weeks of
post-election.
GHARIB: I know you`re not in the business of giving market forecasts, but
you did tell me that you have a 10-week, a 10-month, and a 10-year strategy
or outlook. Give us your 10-week and 10-month outlook.
GABELLI: Well, 10 months from now, Susie, we will have the summer of `05
looking into the summer of` `06 and the market discounts the future and I
think it`s going to look pretty bright. The challenges of fiscal and
monetary policy, how are we going to slow those down, they become a head
wind, not a tail wind. The economy will be behind us. We`ll get a better
understanding of oil and how the consumer reacts to a cold winter. Earnings
will be quite good and I think interest rates will settle in and the Fed
will get to normal rates. Over the next 10 months, Susie, between now and
then, it`s kind of interesting times.
GHARIB: Let`s talk a little bit about the interesting times. You mentioned
oil. There`s also interest rates, the quality of earnings. What are your
views on that in terms of factoring that information into the stocks that
you pick?
GABELLI: Well, earnings, I think, are going to be quite good over the next
12 months. They`re shifting a little bit more towards the corporate sector.
I think the multiple on earnings will continue to be constrained by rising
interest rates. I`m the camp (ph) that says that the 10-year that`s 4.05
tonight probably moves up to five. The short rate continues to inch up so
interest rates become a head wind and in terms of the stocks that we pick,
there are a lot of variables. We like a catalyst. We like mergers and
consolidations. We like takeovers. We like cheap stocks. So we`re
value-oriented and we`ve always been and there`s a lot of bargains out
there, Susie.
GHARIB: Let`s talk about the stocks that you see as bargains. Right now
you`ve got a long list to go over for us. Let`s start with your first pick.
GABELLI: Well, I`m looking... I don`t have a first pick per se but let`s
start somewhere. So let`s talk about an industry that`s out of touch. In
theory, it`s my look and examination of the world. We have three billion
new consumers, 1.5 billion in China that have a voracious appetite, many of
them for things American. So what does America export in terms of movies,
in terms of farm equipment, in terms of goods and services? MTV, but also
right now in Macao, gaming is hot and it`s going to come in in other parts
of southeast Asia, Singapore and so on.
GHARIB: So name the stocks, Mario.
GABELLI: You take a company like MGM that is merging with Mandalay Bay.
They have the scale and the size to participate in all of these venues. The
stock`s around $53. Companies like Ashtar which are takeover
candidates, companies like (INAUDIBLE) so...
GHARIB: What else?
GABELLI: So MGM - a second area Susie would be sticking with the theme of
globalization. John Deere, farm equipment. American farmers are working
very hard. Their crops have been extraordinarily valuable. The weaker
dollar gives them an ability to compete more effectively globally. The
World Trade Organization. So John Deere at these levels, people are
concerned about saturation.
GHARIB: OK.
GABELLI: And third one would be the mobile home industry, sticking closer to
home. I think there`s a shift demographically. The industry has bottomed
out after 10 years, companies are making money at the bottom of the cycle.
Warren Buffett put $10 billion into the industry, Champion home builders.
GHARIB: You usually like media companies. Tell us about your choices there.
GABELLI: Well, I think `06 will be a great year. In `05 you`d worry about
the absence of political (ph) which is helping some companies and my choices
would be (INAUDIBLE) television, TVL on the New York Stock Exchange. I
think they`ll earn a $1 in `06. I think that basically from here today you
can make at least 50 percent on your money. It`s one that will be part of a
consolidation trend.
GHARIB: One last one real quickly.
GABELLI: Well, I would like to focus on Disney. I think it`s a company
that`s going to be a lot in the news. The stock`s 25, two billion shares,
$50 billion market value. And when you saw Dreamworks go public and have
the kind of valuation similar to Pixar and you look at the fact that....
GHARIB: I`m going to have to jump in. I`m told we`ve really run out of time
Mario, sorry.
GABELLI: I`m delighted to be with you Susie.
GHARIB: We`re always happy to have you. Thank you so much Mario. We`ve been
speaking with Mario Gabelli, chairman of Gabelli Funds.
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.
10/29/04:
"Money File"-Cleaning Up Corruption
SUSIE
GHARIB: In tonight`s money file, cleaning up corporate and market corruption.
Here`s Bill Barnhart, financial markets columnist for the "Chicago Tribune."
BILL BARNHART, FINANCIAL MARKETS COLUMNIST, CHICAGO TRIBUNE: I note that CNN
will stage its election night coverage at NASDAQ`s photo-op installation on
Times Square. NASDAQ, which is an electronic market with no trading floor,
uses this facility as a tourist attraction and backdrop for televised market
reports. Anchoring coverage of the most important presidential election in
decades at a facade of capitalism seems odd. Despite the talk about the
ownership society and the investor class, almost nothing in the Bush and
Kerry campaigns has comforted investors who are left alone to build their
retirement nest egg.
Despite the shocking scandals of Enron and Worldcom, neither candidate has
mentioned corporate and market corruption as an issue. Meanwhile, New York
Attorney General Eliot Spitzer is plowing a fertile field of malfeasance in
commonplace business practices: stock research, mutual fund trading and
recently insurance brokerage. What sets Spitzer`s targets apart from Enron
and WorldCom is that there was nothing secret or distinct about the
shenanigans he has exposed. Spitzer simply holds generally accepted
business practices up to the light and shocks the public. We`re told
Spitzer is politically ambitious. Well I hope so. We need politicians who
understand how the world really works and can lead the way out of the casual
corruption that robs consumers and investors alike. I`m Bill Barnhart.
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.
10/29/04:
Paul Kangas' "Stocks In The News"
JEFF YASTINE: And that GDP report had little sway over the markets, pushing them
in either direction, all eyes on next week`s election. The Dow jumping
about 40 points at the open, testing yesterday`s highs, then pretty much
went to sleep. The bulls took comfort in the Chicago purchasing managers
report that was better than expected, but stocks went sideways pretty much
straight to the end of the day. The Dow closing up about 23 points at
10,027.47.
This week, it rose in four out of five sessions for an overall gain of
almost 270 points or 2.8 percent and today the NASDAQ fell about 3/4 of a
point to 1974.99 and for the week it fell in two out of five sessions, but
still gained about 60 points or 3 percent and the S&P 500 rising 2 3/4
points today. Bonds were a touch higher, the 10-year note rising 8/32 and
that lowers the yield to 4.03 percent.
And topping our list as it almost always does, Lucent Technologies (LU)
losing a few pennies. They`re down $0.03 to be exact.
Avon Products (AVP) losing $3.66. The company reported a 33 percent increase
in third quarter profits, but said its fourth quarter sales and profits
would be lower.
Pfizer (PFE) rising $0.24. It announced a $5 billion stock buyback program
yesterday.
GE (GE) gaining $0.09.
And Merck (MRK) falling $0.26. Arcoxia (ph) is Merck`s successor drug to
Vioxx which of course has been pulled off the market, but the FDA says it
wants more data from Merck before giving any approval there.
Motorola (MOT) dropped $0.08. Strategy Analytics put out a survey showing
Motorola lost market share during the quarter. Nokia stock had a different
reaction. We`ll get to that in a moment.
Lab Corp. of America (LM) rising $0.89. The company replacing South Trust in
the S&P 500 index at the close of today`s trading.
Texas Instruments (TXN) advanced $0.11.
ExxonMobil (XOM) gaining $0.61.
And Citigroup (C) advancing $0.11.
Here`s a look at an IPO. This is U.S. Shipping Partners (USS). It`s yet
another oil tanker shipping company. There`s been a lot of those coming
public lately, up $1 today, had 6 million shares priced at 22 1/4 each.
And here`s Nokia (NOK) which held steady. Nokia`s market share of the global
cell phone marketplace rising by nearly 2 percentage points in that latest
survey.
Archer Daniels Midland (ADM) advanced $1.56. This is ADM`s highest stock
price since June of 1998. The stock has had quite a run. It`s doubled in the
past year, profits rising 77 percent to $0.41 a share, thanks to a drop in
gain prices and continued strong demand for grain and soy processing
products.
ParkinElmer (PK) rising $1.34. The company raised its profit forecast for
the full year and reported over 70 percent jump in third quarter results.
And here`s a look at Washington Post "B" (WPO) which jumped 38 1/2 to $915
per share. Profits in the third quarter quadrupled thanks to strong showings
in its education unit and TV broadcast operations.
And here is Phelps Dodge (PD) which gained $2.85. Record prices in cooper
put Phelps Dodge earnings over the top, with the company noting record
demand in China and expecting more of the same in the fourth quarter here.
Aon Corp. (AOC ) falling nearly $1. The number two insurance brokerage firm
missing earnings by a wide margin and also it withdrew its 2004 forecast.
Choice Hotels (CHH) tumbled nearly $10. Choice warned that its 2004 results
will likely be lower than expected and third quarter results also came in
less than estimates because of rising costs.
Over in the NASDAQ, Google (GOOG) falling somewhat today. A week ago, some
thought the stock could hit $200 a share. Today it hit a high of $199.95.
Microsoft (MSFT) down a little bit.
Cisco Systems (CSCO) gaining about a quarter there.
Intel (INTC) up a penny.
Dell (DELL) gaining $0.43.
Apple Computer (AAPL) advanced on the day.
And eBay (EBAY) losing $1.24.
Symantec (SYMC) losing about 2 1/2 today.
Research in Motion (RIMM) up a nickel.
Amgen (AMGN) gaining $0.38.
Shares in @Road Inc (ARD) riding high, up $1.80. It`s an Internet firm
selling vehicle location and dispatching services. It posted strong
quarterly results and landed a bit contract with the SBC Communications.
And finally Sapient, (SAPE) down $1.20. The company`s revenues a little bit
light because of delays in getting government contracts.
And those are our stocks in the news tonight.
10/29/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10027.47 +22.93 + .2
HIGH 10044.14
LOW 9990.83
NASDAQ COMP. 1974.99 -.75 -.0
HIGH 1984.18
LOW 1963.83
VOLUME 1,501.7
PREVIOUS 1,631.0
UP VOLUME 876.5
DOWN VOLUME 583.7
DOW TRANSPORTS 3497.42 +12.97 + .4
DOW UTILITIES 313.34 +2.08 + .7
CLOSING TICK +941
S&P 500 1130.20 +2.76 + .2
S&P 100 540.65 +1.17 + .2
MIDCAP 400 602.22 +1.32 + .2
REUTERS/CRB 283.70 +.43 + .2
NYSE COMPOSITE 6692.71 +22.21 + .3
VALUE LINE 364.83 +.21 + .1
RUSSELL 2000 583.79 -1.84 - .3
DJW 5000 11068.95 +19.71 + .2
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 13/32 +4/32 + 3.29
10-YEAR NOTE 4.25%
Aug. 15,2014 101 26/32 +8/32 + 4.03
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 22/32 +14/32 + 4.79
LEHMAN BROS.
LONG BOND INDEX 1778.35 + 8.54
DOW CLOSE 10027.47 +22.93 + .2
ADVANCES 1918
DECLINES 1361
NEW HIGHS 157
NEW LOWS 21
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 3.55 -.03 -.8
AVP Avon Products 39.55 -3.66 -8.5
PFE Pfizer 28.95 +.24 +.8
GE GE 34.12 +.09 +.3
MRK Merck & Co 31.31 -.26 -.8
MOT Motorola 17.26 -.13 -.8
LH Lab Corp of Amer 45.80 +.89 +2.0
TXN Texas Instrument 24.45 +.11 +.5
XOM Exxon Mobil 49.22 +.61 +1.3
C Citigroup 44.37 +.11 +.3
NASDAQ CLOSE 1974.99 - 0.75 - .0
VOLUME 1,653.3
PREVIOUS 1,828.5
ADVANCES 1543
DECLINES 1564
NASDAQ ACTIVES
GOOG Google 190.64 -2.66 -1.4
MSFT Microsoft 27.97 -.04 -.1
CSCO Cisco Systems 19.21 +.26 +1.4
INTC Intel 22.26 -.01 -.0
DELL Dell Inc 35.06 +.43 +1.2
AAPL Apple Computer 52.40 +.21 +.4
EBAY eBay 97.63 -1.24 -1.3
SYMC Symantec 56.94 -2.43 -4.1
RIMM Rsch In Motion 88.20 +.05 +.1
AMGN Amgen 56.80 +.38 +.7
AMEX CLOSE 1311.39 + 3.79 + .3
INDEX SHARES
DIA DIAMONDS TRUST 100.38 +.11 +.1
QQQ NASDAQ 100 36.86 -.10 -.3
SPY S&P DEP.RECEIPTS 113.20 -.04 -.0
STOCKS IN THE NEWS
USS US Shipping Ptnr 23.25 +1.00 +4.5
NOK Nokia Corp 15.42 unch. unch.
ADM Archer-Daniels 19.37 +1.56 +8.8
PKI PerkinElmer 20.54 +1.34 +7.0
WPO Washington Post 915.00 +38.50 +4.4
PD Phelps Dodge 87.54 +2.85 +3.4
AOC Aon Corp 20.41 -.96 -4.5
CHH Choice Hotel 49.90 -9.79 -16.4
ARDI @ Road 6.30 +1.80 +40.0
SAPE Sapient Corp 8.05 -1.20 -13.0
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