SUSIE GHARIB: Just a few more hours before polls open for
Americans to vote on who will be their next president. As the road to the
White House comes to an end tomorrow, the two men who want the job spent
today in a flurry of travel and last-minute appearances. By day`s end,
President Bush will have visited six different states in a 19- hour travel
whirlwind, starting with a pre-dawn rally in Ohio. Democratic challenger
John Kerry blitzed through four states, at one point spending only five
minutes addressing a crowd in Orlando, saying it`s not the day for a long
speech. But from Wall Street to Main Street, it is the day for last minute
assessments of what a Bush or a Kerry presidency would mean for the next
four years. We have two reports tonight, starting with Suzanne Pratt in
New York.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: On the eve of the
election, it appears that Americans are evenly divided in their choice for
president. On Wall Street, however, it`s unanimous. Investors and market
pros agree: stocks are in desperate need of a rally. The recent drop in
oil prices hasn`t been a strong enough catalyst. But, most experts say a
clear and decisive victory for either candidate in tomorrow`s election is
the best hope for a solid gain in stock prices. On the other hand, a
prolonged deadlock over who will be president, similar to what happened in
2000, is likely to be a drag on stocks.
ARTHUR CASHIN, DIR. NYSE OPERATIONS, UBS: It could be a very, very tight
election and you might not know for some period of time. If that happens,
there`s a fear that the market could sell off. They think the dollar could
suffer and they think that the stock market could suffer too, depending on
how drawn out it is.
PRATT: There is of course a good chance that investors will know who will
be occupying the White House for the next four years when they go to sleep
tomorrow night. Some experts say if it`s Senator Kerry, stocks may stutter
for a few days as investors digest the change in leadership.
TOBIAS LEVKOVICH, U.S. STRATEGIST, SMITH BARNEY: Primarily because
investors have positioned for a Bush victory, so, it`s not necessarily an
anti-Kerry statement. It`s more a sense of if we bought certain stocks in
anticipation of a Bush victory, they may not be the right stocks to own in
the event of a Kerry victory.
PRATT: Others believe a decisive Bush victory is probably the best scenario
for the stock market. That`s because they say there`s a lot of cash
waiting on the sidelines and investors could put it to work as early as
Wednesday morning.
JOSEPH MCALINDEN, MORGAN STANLEY INVESTMENT MGMT: The president has been
very clear on his tax policies, which would be pro-capital in many ways and
I think would be well- received by the markets, because as we go into the
election, it is such a close call that no one could take for granted a
second Bush term.
PRATT: There`s also plenty of Wall Street pundits who say the outcome of
the 2004 presidential election means little to the stock market. They say
what really matters are the usual issues: corporate profits, oil prices and
the economy. 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) 2004 Community Television
Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms
of use.
11/01/04:
Swinging Voters To The Polls In The Swing States
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Darren Gersh
in West Chester, Pennsylvania. In all the swing counties in all the swing
states, the outcome of this election is now in the hands of people like
Tara Wheeler and Karen Porter.
KAREN PORTER, KERRY VOLUNTEER: I sort of show up at Kerry headquarters and
do what they need, whether it is empty the trash, draw a map, make phone
calls, do door to door canvassing. We`ve been doing a lot.
GERSH: Tara Wheeler and her sister show up at Bush headquarters. They`ve
put in five hours today and have another eight to go. It doesn`t matter
that it`s Tara`s birthday.
TARA WHEELER, BUSH VOLUNTEER: My sister and I have been going out door to
door and we worked the phone bank over at the Republican committee and
we`ve been out telling everyone to vote for "W."
GERSH: Republicans are working to make suburban Chester County a bulwark to
fend off the surge of Kerry votes expected in nearby Philadelphia. Their
goal: to hit 50,000 homes in the last 72 hours of campaigning.
This may look like a quiet suburban neighborhood, but between all the
interest groups, the labor unions and the political campaigns, some voters
here are getting three calls a day and that doesn`t count all the mailings
or political ads or door knocks.
The voters lists are computerized. But it is the face-to-face contact that
both parties believe works best.
VAL DIGIORGIO, BUSH VOLUNTEER: Politics now is very focused, very
targeted. The idea that you spend all year really IDing your voters and
then you get them out on Election Day.
GERSH: Across the country, 10 million new voters have registered for this
election. Now the key is getting them out tomorrow. Chester County
Republican leader John Waldeyer says four years ago the Democrats won that
ground game in Pennsylvania.
JOHN WALDEYER, POLITICAL DIR., BUSH-CHENEY CHESTER COUNTY: We tip out hat
to them in the sense that we`re now imitating some of the things that they
did four years ago and we`re going to do them better this time.
GERSH: Political analyst Curtis Gans figures the president`s national
outreach efforts will do best with religious conservatives and voters in
the military. But that may not be enough.
CURTIS GANS, COMMITTEE FOR THE STUDY OF THE AMERICAN ELECTORATE: All the
polls indicate that the new voters cut pretty strongly to Kerry,
particularly the younger voters.
GERSH: A best guess is that the political parties and interest groups will
spend more than $300 million on their ground games. But what price tag do
you put on the passion that brought Martin Freed down from Alaska to help
Kerry in Pennsylvania.
MARTIN FREED, KERRY VOLUNTEER: If enthusiasm were votes, we would have a
landslide.
GERSH: And just around the corner, how much is it worth to have someone
like Jim Gold volunteering for "W"?
JIM GOLD, BUSH VOLUNTEER: I would crawl over glass to get here just to
make these calls.
GERSH: The polls say Pennsylvania is within the margin of error. The
better question is whether this state is within the margin of effort that
both parties are making to get their people to the polls. Darren Gersh,
Chester County, Pennsylvania.
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.
11/01/04:
"The Road To The White House"-The Impact of the Election on the Financial Markets
SUSIE GHARIB: Back now to our top story, the road to the White House. Joining us
now to talk about the impact of the election on the financial markets,
Vince Farrell. He`s chairman of Victory Capital Management, the New York
money management firm and in Washington, we have Tom Gallagher, chief
political analyst at the International Strategy and Investment Group. Good
evening, gentlemen. Tom, let me begin with you. I know you`ve been
studying a lot of these last minute polls that we`ve just gotten over the
weekend. Any conclusions and analysis that you`ve drawn from them?
THOMAS GALLAGHER, POLITICAL ANALYST, INTL. STRATEGY & INVESTMENT GRP: If I
didn`t have a job like this I think I`d rather say it was too close to
call, but I don`t think I have that luxury, so I just give the slightest
edge to Bush. I think clearly either candidate could win it. The question
is which is the more likely. I think Bush`s polling is just slightly
stronger on the electoral map, is slightly more favorable to him.
GHARIB: Vince, it`s November 3, let`s say it is Bush, let`s say it is
Kerry, which ever way it goes. As a money manager how are you going to
react to these two scenarios?
VINCE FARRELL, CHAIRMAN, VICTORY CAPITAL MANAGEMENT: Not too dramatically
different either way Susie. On the margin you might favor one group of
stocks with one man versus another. But the history tells you the market
does just fine after the election is over. And this market will do just
fine after the election is over, with one exception, that exception being
if there`s a hanging chad chapter 2 that extends for some period of time.
But other than that, markets do fine regardless of who wins.
GHARIB: I know speaking of history, Tom, I know you`ve been also studying
the history books and looking at how the markets respond even when you have
a winner to close elections. What have you found?
GALLAGHER: Well, there is this notion that you have a post-election rally.
But as I was looking at the stock charts for close elections, which we`re
clearly having now, seems to me the extent of the post election rally
depends on the pre-election sell off so, that the market more or less takes
back whatever it lost in the jitters before the election. So maybe we had
our post election rally last week. I agree with Vince, I don`t think it`s
a hugely important issue for the stock market over the time horizon for
most investors. In the short run I do think it`s a source of volatility.
GHARIB: So what happens if we don`t have a decisive winner, that it becomes
a long protracted affair, what would be the market reaction, Tom?
FARRELL: I think you`re likely to see a 10 percent correction or more,
because when there`s some sort of external event, which is what this would
be, going back to World War II and to Eisenhower`s heart attack and
Kennedy`s assassination, you often get a double digit decline and I would
expect that would happen now.
GHARIB: Tom, do you agree?
GALLAGHER: I think the experience of 2000 suggests it probably wouldn`t be
that bad. It`s true stocks didn`t sell off during the Florida impasse, but
they`re selling off before the election and they continued to sell off
after the Supreme Court gave the election to Bush. I think it was a
weakening economy then. If there was ever a market that would have shown
signs of worries about a constitutional crisis, it would be the currency
market and the dollar actually rallied the first couple of weeks after the
election. So I think the market will hold this reasonably well if 2000 is
any guide.
GHARIB: Vince, when we traditionally talk about the impact of the election
on the markets where we`re speaking about the winners` economic agenda and
impact of that economic agenda on the market. But this time, do you think
that foreign policy agendas are going to be more important to the market
than the economic agendas?
FARRELL: No. I think the foreign policy agenda might have that episodic
impact on the market, pro or con as things unfold. But the market will
trade in my opinion, off corporate profits, off the perceived rate of
inflation, interest rates, price of oil, stuff like that. Now if you say
price of oil as a macro economic activity, sure. But the stock market will
take the geopolitical kind of in stride and focus in my opinion, more on
the internal dynamics of what corporate profitability is doing.
GHARIB: Tom, do you think geopolitical issues are going to be more
important to the markets than the economic ones?
GALLAGHER: I think they`re going to be very important. I think this a
unique election in that most elections are about the economy. This is
really about war. It`s who`s going to be the better commander in chief and
I think that we can`t really think that all the geopolitical risks are
behind us. I think Iran, November is actually a quite important month
there. It`s really the last chance for things to get better before they
probably get worse, elections in Iraq coming up. So I actually think that
geopolitical risks are an important feature of the economy. I think it`s a
reason why businesses have been cautious in hiring workers and spending
money. So I think it`s an important thing for investors to monitor, not
just the economic policy agenda of the winner but the foreign policy agenda
as well.
GHARIB: I`d like your views on (INAUDIBLE) one minute so, quickly. Your
outlook on the outcome of the House and Senate races and how that would
impact if Bush pushing through his agenda and the same for Kerry if he
wins, Vince?
FARRELL: I think the republicans are going to gain control of the House
quite easily and probably gain about two votes in the Senate the way things
look right now. And I think in that the other party, in that that would
not give them a veto-proof majority, you`re still going to be slugging
things out in the trenches. But I think if you have a Republican president
and a Republican Congress, the Bush agenda will get pushed forward, be that
good or bad.
GHARIB: All right. We have less than 30 seconds. Tom.
GALLAGHER: I think that you get a Republican Congress with the president
being reelected, which is the likely outcome if Bush is reelected, then you
get a lot of activity. You look at the agenda and I think the bond market
gets nervous there because they get worried about the budget deficit
implications there. For Kerry it`s really a factor, it`s stalemate. That`s
why I think the stock market doesn`t worry as much about the dividend tax
increase if Kerry`s elected, as long as there`s a Republican House.
GHARIB: All right. We`ll see what happens. Thank you gentlemen both for
sharing your thoughts with us. We really appreciate it.
GALLAGHER: Thanks Susie.
GHARIB: We`ve been speaking with Vince Farrell of Victory Capital
Management in New York and Tom Gallagher of the International Strategy and
Investment Group in 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.
11/01/04:
China's New Attraction Hong Kong
SUSIE GHARIB: Eighteen months ago,
Hong Kong`s tourism industry was down for the count, hit hard
by an outbreak of the SARS virus. Today, Hong Kong`s tourist
trade has not only bounced back. It`s thriving with growth
rates not seen since the 1997 hand-over from the British.
And as Rob McBride reports, the boost is coming from an unexpected
source.
ROB McBRIDE, NIGHTLY
BUSINESS REPORT CORRESPONDENT: It`s early October, the height
of China`s national day holiday period and Hong Kong is teaming
with tourists who have come from across the border. Some will
not be strangers to Hong Kong, but this could well be the
first visit to the territory for tens of thousands more. A
record number of Chinese are entering Hong Kong as leisure
travelers this year thanks to Beijing`s decision to launch
its individual travel scheme. The plan allows residents from
32 listed Chinese areas easy access to Hong Kong. The areas
in the scheme include Beijing and Shanghai, as well as all
cities and towns located in Quang Dong province which is just
across the border. The plan has resulted in a dramatic increase
in the numbers of Chinese tourist arrivals to Hong Kong.
MARK LETTENBICHLER,
BOARD MEMBER, HONG KONG TOURISM BOARD: If you look at this
year actually we`re going to finish with approximately 12
million mainland Chinese visitors, which makes up approximately
57 percent of our total arrivals for Hong Kong. That`s quite
astronomical from where we were only three years ago at 5.5
million.
McBRIDE: China`s
appetite for Hong Kong and all it has to offer has been a
blessing to the territory`s retail sector, which until recently
has been hurt both by the effects of SARS and an uncertain
economic environment.
LETTENBICHLER:
The Hong Kong tourism board put out some statistics that really
showed from the surveys this year that the mainland Chinese
traveler is superseded really the American traveler who used
to be the top spending traveler and they`re looking at average
approximately 5800 Hong Kong dollars average spent per person.
McBRIDE: It`s
also been a blessing for the territory`s hospitality industry,
which has seen its occupancy rate at their highest levels
since 1996.
AINSLIE CHEUNG,
HOTEL EXECUTIVE: In relation to 10 years ago, Hyatt Regency
Hong Kong didn`t really have a China market. Now, 2004, we`re
seeing a market which is our third largest market that did
not exist for us 10 years ago, became our number 10 market
three years ago. It`s now our number three market, accounting
for approximately 10 to 12 percent of the occupancy.
McBRIDE: But even
with relaxed regulations, China`s outbound travel market continues
to be highly regulated by the government. Travel officials
here say Beijing continues to keep a close watch on outbound
visitor traffic, so China can shut its doors when the need
arises. These experts also believe China is not keen on sending
its tourists to destinations like United States and Australia
in great numbers, because despite its status as a special
administrative region, Hong Kong is considered to be a domestic
destination. This makes tourist traffic into the territory
easy to manage. Given China`s reluctance to relinquish control
over the movements of its nationals, it is unlikely that visa
restrictions to all but a handful of select destinations like
Hong Kong will be relaxed any time soon. Rob McBride for NIGHTLY
BUSINESS REPORT, Hong Kong.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2004 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/01/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Wall Street opened with little direction ahead of the election as
we`ve mentioned with the major indices drifting up and down in the single
digits. A drop below $50 a barrel in oil prices prompted a late morning
rally lifting the Dow to a 40 point gain with the NASDAQ up seven. The
market moved narrowly for the rest of the day however and ended just
modestly higher.
The Dow Industrial Average closed up almost 27 points at 10,054.39. The
NASDAQ Composite was up 4.88 en ding at 1979.87. Standard & Poor`s 500
rose just a fraction to 1130.51. The Treasury market settled lower. The 10-
year note down 13/32 putting the yield at 4.08 percent.
New York exchange volume leader on 44.1 million shares, Merck & Company
(MRK) hitting another new low, down $3.03 or 9.7 percent. The "Wall Street
Journal" today reported the company for years tried to keep safety concerns
over its Vioxx painkiller drug quiet. Prudential today downgraded the stock
from "overweight" to "neutral." Standard & Poor`s repeated an "avoid"
rating.
Pfizer (PFE) down $0.15.
Citigroup (C) $0.06 loss.
Exxonmobil (XOM) down $0.40.
SBC Communications (SBC) up $0.41, fifth in big board volume.
And then a $0.26 loss for Time Warner (TWX).
General Electric (GE) fell $0.07.
Lucent Technologies (LU) $0.02 drop there.
Tyco International (TYC) $0.55 gain. Fourth quarter earnings excluding one-
time items $0.45, $0.02 better than the Street was expecting but the
company says its first quarter earnings will be $0.40 to $0.42 and that`s
down the $0.44 Street estimate.
Texas Instruments (TXN) $0.35 gain, tenth in big board volume.
Valero Limited Partnership (VLI), not to be confused by Valero Energy which
owns 46 percent of the limited partnership, but the limited partnership is
going to acquire Kaneb Services and Kaneb Pipelines for a total of $2.8
billion.
Let`s look how Kaneb Services (KSL) did, up $11.20. That bid from VLI
is worth $43.31 a share in cash.
Then let`s look at the pipeline Kaneb Pipe Line Partners (KPP) up $6.84.
VLI will acquire it for $61.50 a share in VLI stock.
Kinetic Concepts (KCI) which makes medical equipment, up $5.82. Fourth
quarter earnings $0.46, $0.07 better than the Street was looking for.
Revenues up 30 percent. The company also boosted its full year earnings
forecast. That stock just went public in February, $30 a share.
Marvel Enterprises (MVL) moved up $1.58. JPMorgan upgraded it from
"neutral" to "overweight," stock reacted.
Lubrizol Corporation (LZ) down $1.85. Third quarter earnings $0.73. That
was $0.02 below the Street consensus. It sees full year coming in around
$2.30 and that`s well below the $2.53 per share Street estimate.
Humana (HUM) moved up $1.20, good earnings, third quarter, $0.52, up from
$0.38 last year and the company also boosted its full year earnings
guidance.
Oregon Steel Mills (OS) down $1.20. Third quarter earnings of $1.87 versus
a $0.79 loss last year, but the company sees fourth quarter falling to
about $1.10 a share on lower shipments and lower profit margins.
Google (GOOG) topped the active list on NASDAQ moving up $5.39.
Microsoft (MSFT) an $0.11 gain.
$0.18 rise in Intel (INTC).
PeopleSoft (PSFT) as you heard reacting to that sweetened $24 a share
buyout bid from Oracle.
Research In Motion (RIMM) up $4.70, fifth in volume.
Then eBay (EBAY) up $1.65.
No change in Dell (DELL).
Cisco Systems (CSCO) gained a nickel.
QUALCOMM (QCOM) down $1.04 on confusion over some accounting changes the
company`s about to make and the impact on earnings.
Travelzoo (TZOO) up $19.23. Rose (ph) Analytics said 80 percent of this
stock is in short position. There was a flurry of short covering.
DoubleClick (DCLK) up $0.76. The company`s retained Lazarre (ph) Frere and
Company to explore strategic alternatives, including the possible sale of
the company.
And over on the American exchange, IVAX (IVX) tumbled $4.20 despite sharply
higher third quarter earnings, 17 versus 9, but that was $0.04 below the
Street estimate.
And those are the stocks in the news tonight.
11/01/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10054.39 +26.92 + .3
HIGH 10076.59
LOW 10010.15
NASDAQ COMP. 1979.87 +4.88 +.3
HIGH 1983.91
LOW 1969.32
VOLUME 1,396.9
PREVIOUS 1,501.7
UP VOLUME 718.6
DOWN VOLUME 657.3
DOW TRANSPORTS 3504.07 +6.65 + .2
DOW UTILITIES 314.38 +1.04 + .3
CLOSING TICK +658
S&P 500 1130.51 +.31 + .0
S&P 100 540.50 -.15 - .0
MIDCAP 400 602.25 +.03 unch.
REUTERS/CRB 281.77 -1.93 - .7
NYSE COMPOSITE 6699.86 +7.15 + .1
VALUE LINE 365.84 +1.01 + .3
RUSSELL 2000 587.00 +3.21 + .6
DJW 5000 11079.11 +10.16 + .1
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 1/32 -5/32 + 3.37
10-YEAR NOTE 4.25%
Aug. 15,2014 101 11/32 -3/32 + 4.08
30-YEAR NOTE 5.375%
Feb. 15, 2031 107 28/32 -27/32 + 4.84
LEHMAN BROS.
LONG BOND INDEX 1767.33 -11.02
DOW CLOSE 10054.39 +26.92 + .3
ADVANCES 1930
DECLINES 1371
NEW HIGHS 192
NEW LOWS 13
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
MRK Merck & Co 28.28 -3.03 -9.7
PFE Pfizer 28.80 -.15 -.5
C Citigroup 44.31 -.06 -.1
XOM Exxon Mobil 48.82 -.40 -.8
SBC SBC Comms 25.67 +.41 +1.6
TWX Time Warner 16.38 -.26 -1.6
GE GE 34.05 -.07 -.2
LU Lucent Tech 3.53 -.02 -.6
TYC Tyco Intl 31.70 +.55 +1.8
TXN Texas Instrument 24.80 +.35 +1.4
NASDAQ CLOSE 1979.87 + 4.88 + .3
VOLUME 1,559.3
PREVIOUS 1,653.3
ADVANCES 1609
DECLINES 1534
NASDAQ ACTIVES
GOOG Google 196.03 +5.39 +2.8
MSFT Microsoft 28.08 +.11 +.4
INTC Intel 22.44 +.18 +.8
PSFT PeopleSoft 22.93 +2.16 +10.4
RIMM Rsch In Motion 92.90 +4.70 +5.3
EBAY eBay 99.28 +1.65 +1.7
DELL Dell Inc 35.06 unch. unch.
CSCO Cisco Systems 19.26 +.05 +.3
QCOM Qualcomm 40.56 -1.04 -2.5
TZOO Travelzoo 88.48 +19.23 +27.8
AMEX CLOSE 1305.03 - 6.36 - .5
INDEX SHARES
DIA DIAMONDS TRUST 100.71 +.33 +.3
QQQ NASDAQ 100 37.00 +.14 +.4
SPY S&P DEP.RECEIPTS 113.51 +.31 +.3
STOCKS IN THE NEWS
VLI Valero Lp 57.21 +1.01 +1.8
KSL Kaneb Svcs 42.60 +11.20 +35.7
KPP Kaneb Pipe Line 57.60 +6.84 +13.5
KCI Kinetic Concepts 55.65 +5.82 +11.7
MVL Marvel Entrprses 16.98 +1.58 +10.3
LZ Lubrizol 32.89 -1.84 -5.3
HUM Humana 20.35 +1.20 +6.3
OS Oregon Steel 13.32 -1.20 -8.3
DCLK Doubleclick 7.12 +.76 +12.0
IVX Ivax 13.90 -4.20 -23.2
