11/04/04:
President Bush Gets Back To Business
SUSIE
GHARIB: On Wall Street, election euphoria continued, as stocks
rallied for the second straight day. The Dow posted another
triple digit gain, surging 177 points; the NASDAQ rose 19.
In Washington, President Bush laid out plans for the economic
agenda in his second term. In his first post-election news
conference, the president said his top priorities are simplifying
the tax code and revamping Social Security. Here`s Stephanie
Woods with details.
STEPHANIE
WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: A clearly jubilant
President Bush pledged to turn his election victory into legislative
results.
GEORGE
W. BUSH, PRESIDENT OF THE UNITED STATES: I earned capital
in the campaign, political capital, and now I intend to spend
it.
WOODS:
A lot of that capital will be spent on Social Security reform
and tax code simplification. The president has also promised
to cut the $413 billion budget deficit in half in the next
four years. He says a tax simplification bill won`t add to
the deficit and won`t raise taxes.
BUSH:
The main thing is that it be viewed as fair, that it would
be a fair system, that it wouldn`t be complicated, that loopholes
wouldn`t be there for special interests.
WOODS:
The president made it clear that two popular loopholes, deductions
for home mortgages and charitable giving, will be protected.
However, tax experts say closing loopholes means taking away
popular deductions like the one for state and local taxes.
CLINT
STRETCH, DIR. TAX POLICY, DELOITTE TAX: We`ve been closing
loopholes for so long that now all of the easy-to-find loopholes
are long gone. You have to start tearing out the ceiling tiles
to find any more loopholes.
WOODS:
The second big issue, Social Security won`t be any easier.
BUSH:
Reforming the Social Security system for generations to come
is a difficult issue. Otherwise it would have already been
done.
WOODS:
The problem is that the Social Security will soon start to
pay out more than it takes in. But some economists are skeptical
of the president`s proposed reforms.
BILL GALE,
ECONOMIST, BROOKINGS INSTITUTION: When reformers talk about
Social Security reform, they mean fixing the long-term imbalance.
When President Bush talks about it, he means creating individual
accounts. But individual accounts not only don`t solve the
long-term issue, they could actually make it worse.
WOODS:
Some estimate the tab for adding individual accounts at $2
trillion over 10 years. Asked today about how to pay for that,
the president answered that the cost of doing nothing would
be much higher. Stephanie Woods, NIGHTLY BUSINESS REPORT,
Washington.
GHARIB:
Joining us now with his thoughts is Josh Feinman, chief economist
at Deutsche Asset Management. Hi Josh.
JOSHUA
FEINMAN, CHIEF ECONOMIST, DEUTSCHE ASSET MGMT: Hi. How are
you?
GHARIB:
I`m fine thank you. As you heard at the top of our program,
the president held a news conference and outlined his priorities
for Social Security reform and making those tax cuts permanent.
Let`s first talk about the tax cuts. How realistic is it that
he`ll get any of this through?
FEINMAN:
I think the tax cuts are probably going to be the top priority,
extending them, making them permanent instead of having them
expire the way they`re slated to do and also probably fixing
the alternative minimum tax which is starting to bite more
and more Americans. I think that`s probably going to be top
priority and probably will get done. More fundamental tax
reform though I think is going to be a tougher sell.
GHARIB:
In terms of some of the specifics within the tax policy like
capital gains taxes, dividend tax cuts and all of that, do
you think that those he`ll be able to keep those permanent?
FEINMAN:
Yes, I do. I think it will be - make that a top priority and
will be able to secure that with the Republican Congress.
But think the really key issue is not on the tax side, it`s
on the spending side because if we don`t get some significant
restraint on the spending, something that was notably absent
in the last four years, then these tax cuts or any tax cuts
are simply not going to be sustainable especially when we
look out to the next decade when the entitlement program,
Social Security and especially Medicare, come under severe
pressure.
GHARIB:
President Bush said today that the budget deficit will be
cut in half in five years, mainly because the U.S. economy
will be growing. Do you think that we can grow our way out
of the deficit?
FEINMAN:
I think there is a pretty good chance that we can at least
in the near term see shrinking deficits over the next few
years from a stronger economy. But as I said, the real issue
is next decade, when the entitlement program Social Security
and Medicare come under intense pressure from the retirement
of the baby boomers. Our current tax structure is simply incompatible
with the liabilities associated with those entitlements and
we need fundamental reform.
GHARIB:
Speaking of Social Security reform, that was a very contentious
issue during the election campaign. How successful might the
president be in making any progress on Social Security reform?
FEINMAN:
It`s going to be a tough sell. First of all Social Security
is a politically sacrosanct issue and second, the president`s
proposal namely to allow people to divert some portion of
their payroll taxes to private accounts. While it might have
merit on its own, it`s going to in the near term, widen the
deficit because currently people`s payroll`s taxes are used
to finance current retirement benefits for current seniors
so if part of those payroll taxes are diverted to private
accounts, that short fall is going to have to be made up somewhere.
GHARIB:
The president was also asked about the cost of the U.S.`s
continued presence in Iraq. When you work the numbers, how
might the Iraq situation impact the president`s ability to
push through his economic agenda?
FEINMAN:
I think could impact it in two ways, first, just simply monetarily.
It is a burden at least in the short-term. Figures vary but
somewhere $50 to $100 billion a year. But I think even more
important, it could if the Iraq situation doesn`t get better,
it could start to erode some of the political capital that
the president mentioned today that he has built up from this
election and that he intends to spend. If he ends up spending
it on Iraq, he`ll have less of it spend advancing his domestic
agenda.
GHARIB:
We just have a few seconds left. I want to ask you about the
Federal Reserve replacing Alan Greenspan. Any thoughts on
who the president might put into that spot when the Fed chairman
retires in 2006?
FEINMAN:
I think there`s a fairly short list of people. Martin Feldstein
from Harvard, John Taylor who`s currently in the administration
now and two possibilities within the Fed itself. I think the
Fed governor Ben Bernanke and Fed Governor Donald Cohen.
GHARIB:
OK, those are some names for us to think about. Thank you
Josh, appreciate it.
FEINMAN:
Thank you Susie.
GHARIB:
We have been speaking with Josh Feinman, chief economist at
Deutsche Asset Management.
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.
11/04/04:
Retailers Rebound But Exercise Restraint Heading Into The
Holidays
PAUL
KANGAS: At least one indicator of the economy is doing well,
retail sales. Cooler weather helped the nation`s largest retails
rack up some same store sales gains of just over 4 percent
last month. That`s a big rebound from September`s lackluster
performance. But will the trend continue into the holiday
shopping season? Suzanne Pratt reports.
SUZANNE
PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Today`s retail
data shifted the focus away from presidential politics and
back to the U.S. economy. October chain store sales were a
mixed bag, with teen apparel retailers and high-end department
stores outpacing many discounters. Retailers watch October
sales closely to gauge the upcoming holiday season. And even
though all are dreaming of a green Christmas, some retail
experts are worried. The biggest concerns are rising energy
costs and sluggish job growth, which are already affecting
consumer sentiment numbers. And some experts say that could
crimp holiday spending this year. But others say continued
low interest rates should mean a jolly season for retailers.
LINDA
KRISTIANSEN, RETAIL ANALYST, UBS: Most of the factors that
I look at that drive consumer spending are very interest-rate
sensitive. So the fact that we`re not seeing a big upturn
in rates and in fact we`ve seen actually some declining rates,
really means the consumer is going to hold up OK.
PRATT:
The International Council of Shopping Centers is forecasting
a three to four percent gain in retail sales for the 2004
holiday shopping season. That compares to an average increase
of 4 percent last year.
MIKE NIEMERA,
CHIEF ECONOMIST, INTL. COUNCIL OF SHOPPING CTRS.: We think
the holiday season will be relatively upbeat, pretty good
relative to past years, and relatively good compared to last
year.
PRATT:
Still, many retail experts predict 2004 will be another season
of haves and have-nots. The expectation is that luxury retailers
will be the biggest winners. Discounters, which get much of
their traffic from low- income Americans, could have more
trouble, mostly because those customers feel a greater pinch
from higher prices at the gas pump.
KRISTIANSEN:
There`s not going to be any impact on the upper end or none
to speak of. But when you start to get down to a little more
moderate income customer, there`s certainly an impact.
PRATT:
Experts also say no matter what the consumer sentiment numbers
show now, Americans often step up and spend in the last days
of the holiday shopping season. They deal with paying the
bills after new years. 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.
11/04/04: The Securities Industry's New
Effort To Renew Security
PAUL KANGAS:
Heads are continuing to roll in the wake of New York Attorney
General Eliot Spitzer`s investigation of the insurance industry.
At least six employees have been fired from broker Marsh &
McLennan and insurer Ace Limited. Ace said today it dismissed
two employees and suspended three others for improper business
practices. Among those let go from Marsh is William Gilman,
the marketing director of its global broking unit, who was
named in Spitzer`s lawsuit against the firm. Both Marsh and
Ace are cooperating with Spitzer`s investigation.
SUSIE
GHARIB: But the insurance industry isn`t alone in coming under
the microscope. Stung by mutual fund and other scandals, the
securities industry said today, more focus is needed on developing
what it calls a culture of clarity. Jeff Yastine was in Boca
Raton, Florida, today, for the start of the trade group`s
annual meeting.
JEFF YASTINE,
NIGHTLY BUSINESS REPORT CORRESPONDENT: There have been a host
of market-based scandals in recent years. And as the heavyweights
of the brokerage industry gather in Boca Raton, leaders are
hoping to steer a path free of similar problems in the future.
The idea is a renewed focus on transparency to customers and
regulators in everything the industry does.
RICHARD
THORNBURGH, VICE-CHAIRMAN, CREDIT SUISSE FIRST BOSTON: Disclosure
is a term that`s often been used. It was even used by Stephen
Cutler. Disclosure solves all ills. We don`t think so. We
think understanding of what`s disclosed is very important.
So when you step back and look at our commitment to clarity,
it`s around the understanding of what`s communicated and lays
down principals about what items should be communicated.
YASTINE:
With that in mind, the Securities Industry Association is
promoting a handful of ideas to its member broker/dealers,
among them: a bill of rights for investors. It would laying
out what brokerage customers should expect from the firms
they deal with. It would also include more disclosure on mutual
fund fees and costs and there would be more disclosure of
so-called soft-dollar arrangements. Those are essentially
an exchange of research for trading commissions from fund
advisors. Executives say while those soft-dollar deals should
be disclosed, the arrangements serve a specific purpose.
MARC LACKRITZ,
PRESIDENT, SECURITIES INDUSTRY ASSOCIATION: They`re research
dollars that are being spent by funds on research that they
couldn`t otherwise get from a number of independent small
research providers. And as a result, it increases the amount
of research in the marketplace. It helps investment managers
make better decisions on behalf of their mutual fund investors.
YASTINE:
Industry executives don`t expect these ideas to be adopted
immediately, but they hope their efforts will help Wall Street
firms to focus on best practices, that is running a brokerage
business in the most ethical, customer-friendly way possible.
If it all sounds vaguely familiar, it is. The securities industry
has talked about the need for transparency before. But as
the mutual fund scandals have shown, creating a culture of
ethics and responsibility is a lot easier to talk about and
much harder to achieve. Jeff Yastine, NIGHTLY BUSINESS REPORT,
Boca Raton, Florida.
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.
11/04/04:
"Commentary"-The European Commission Power Struggle
SUSIE
GHARIB: Tonight`s commentator says events outside America`s
borders are about to pose big challenges for the U.S. Here`s
Lionel Barber, U.S. managing editor for the "Financial Times."
LIONEL
BARBER, U.S. MANAGING EDITOR, "FINANCIAL TIMES": While the
world has been transfixed by the U.S. presidential election,
a small earthquake has erupted in Europe. To the consternation
of governments in Berlin, Brussels, London and Paris, the
European parliament has refused to endorse the slate of new
European commissioners led by Jose Manuel Barroso of Portugal.
The result is a power vacuum at the European Commission, the
executive branch responsible for anti-trust trade negotiations
and many other issues crucially important to business. Mr.
Barroso will now be forced to reshuffle his team, in particular
Rocco Buttiglione (ph) of Italy, whose conservative remarks
on homosexuality and a woman`s place being in the home offended
parliamentarians in the first place. This spat involves more
than political correctness. The outcome will determine whether
Mr. Barroso can pursue his liberal economic agenda effectively.
More broadly, it is part of an unfolding struggle to establish
legitimacy in the institutions of the European Union and it
signals that the 732 strong European parliament -- once dismissed
as the let`s pretend parliament-- is increasingly a force
to be reckoned with. Business should take note. Europe is
not a sideshow. The newly enlarged EU of 25 nation states
is coming of age. I`m Lionel Barber.
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.
11/04/04:
"Last Word"-The Curse of the Bambino Could Soon Be A Blessing
SUSIE
GHARIB: And finally, it looks like Babe Ruth may have the
last word when it comes to the curse of the bambino. You`ll
recall that infamous curse: the Boston Red Sox hadn`t won
a World Series championship since trading Ruth to the Yankees
back in 1918. They finally won last month. Now the original
sales contract sending Ruth to New York is up for sale. Its
owner bought it back in 1993 for $90,000. He put it up for
sale on eBay last week, with an opening bid of $50,000 and
tonight as far as we know, the bidding is over a million,
and Babe Ruth may have the last laugh as well, Paul, because
all the proceeds from the sale will be donated to charity.
KANGAS:
Sounds to me like the real winner of the World Series is charity
Susie.
GHARIB:
I`m still brooding over the Yankees loss so I can`t be too
charitable tonight.
KANGAS:
I understand.
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.
11/04/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS:
This morning saw a continuation of yesterday`s blue chip rally,
but weak semiconductor stocks pushed the NASDAQ market lower.
Early on, the Dow was up 20 points,the NASDAQ index down 10.
Then came a sizable drop in oil prices at midday and it gave
stocks a big lift amid growing post election bullish sentiment.
As several major indices pushed easily above resistance levels,
the rally gathered momentum and the market ended at its best
levels. The Dow industrial average gained 177 3/4 points to
10,314.76. NASDAQ Composite up 19.30 at 2023.63. Standard
& Poor`s 500 up 18 1/2 to 1161.67. Treasuries ended mixed
today. The 10-year note edge up 1/32. The yield now stands
at 4.08 percent.
And there
it is, Pfizer (PFE) on 56.9 million shares, topped the active
list and it was down $0.39 on the close, but the low of the
day was $27.60.
Altria
Group (MO) moving up $4.23. That gain boosted the Dow by about
30 points. Altria is looking to maximize shareholder value
by possibly splitting up into two or three separate companies.
It`s believed its tobacco assets are significantly undervalued.
Merck
& Company (MRK) down $0.85.
General
Electric (GE) moved up $0.76.
Motorola
(MOT) $0.35 gain there, fifth in big board volume.
Nokia
(NOK) gained $0.33.
Similar
rise in Calpine (CPN). Calpine today reported third quarter
earnings of $0.05, way down from $0.51 last year, but last
year was enhanced by a $0.23 non-recurring gain. Actually
revenues fell 4 percent but the stock still managed to rise.
Time Warner
(TWX) up $0.35.
Wal-Mart
Stores (WMT) up $1.78. That helped the Dow. October same store
sales at Wal-Mart up 2.8 percent. That was below the 3 percent
street estimate, but the company still sees third quarter
earnings at the high end of its previous estimate of $0.52
to $0.54 per share.
NorTel
Networks (NT) was down $0.13. That was tenth in volume.
The Gap
(GPS) up $1.90, nice move there. October same store sales
up 3 percent. The Street was looking for only 1.7 percent
rise. The company sees third quarter earnings at $0.27 to
$0.28 a share. That`s better than $0.26 Wall Street estimate.
Federated
Department Stores (FD) up $2.76. October same store sales
a better than expected rise of 4 percent.
J.C. Penney
Company (JCP) did well, up $2.82. Its October same store sales
were up 2.1 percent and the company boosted its third quarter
earnings outlook, good news for Penney.
Christopher
& Banks (CBK) Corporation, a nice move. The women`s specialty
apparel retailer had October same store sales rising 7 percent.
And Abercrombie
& Fitch (ANF) up $3. This October same store sales up 11 percent.
The Street was expecting only a 2.3 percent rise, so much
better than expected.
Argosy
Gaming (AGY) jumping $4.57. Penn National Gaming will acquire
this company for $47 a share in cash and Penn National Stock
jumped $10.78 itself to close at $52.22 a share.
Keithley
Instruments (KEI) rose $1.40. Fourth quarter turnaround, earnings
of $0.27, $0.08 above the Street expectation and that`s versus
a $0.05 per share loss last year.
Alcan
(AL), the aluminum company, up $1.93. Third quarter earnings
nicely higher, $0.45 versus only $0.26 a year ago.
And then
brewing company Boston Beer Company (SAM) down $2.20. Third
quarter earnings lower, $0.21 versus last year`s $0.28 and
revenues fell 1 1/2 percent.
Google
(GOOG) topped the active list on NASDAQ tumbling nearly $7.
More profit taking there.
Microsoft
(MSFT) a $0.53 gain.
Research
In Motion (RIMM) up $3.56. One analyst made some very positive
comments about the company`s Blackberry device.
QUALCOMM
(QCOM) down $1.80. The company issued a revenue and earnings
warning for the current quarter.
Intel
(INTC) with a $0.21 gain.
eBay (EBAY)
$1.62 to the plus side column.
Cisco
Systems (CSCO) $0.24 rise.
Apple
Computer (AAPL) $0.86 drop.
TASER
International (TASR) up $5.47. The company declared another
two for one stock split. That`s the third two for one split
announced this year.
And finally
Yahoo! (YHOO), tenth in volume was down $0.31 a share.
Those
are the stocks in the news tonight.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may be
posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly Business
Report is not and should not be considered as investment advice.
Copyright (c) 2004 Community Television Foundation of South
Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/04/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10314.76 +177.71 + 1.8
HIGH 10318.23
LOW 10127.98
NASDAQ COMP. 2023.63 +19.30 +1.0
HIGH 2023.72
LOW 1992.07
VOLUME 1,790.0
PREVIOUS 1,773.3
UP VOLUME 1,450.5
DOWN VOLUME 322.1
DOW TRANSPORTS 3562.84 +68.20 + 2.0
DOW UTILITIES 321.54 +6.68 + 2.1
CLOSING TICK +1205
S&P 500 1161.67 +18.47 + 1.6
S&P 100 555.62 +8.89 + 1.6
MIDCAP 400 618.33 +8.72 + 1.4
REUTERS/CRB 282.67 +.13 + .1
NYSE COMPOSITE 6885.20 +97.80 + 1.4
VALUE LINE 375.28 +4.99 + 1.4
RUSSELL 2000 602.13 +6.80 + 1.1
DJW 5000 11371.20 +166.41 + 1.5
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 3/32 -4/32 + 3.36
10-YEAR NOTE 4.25%
Aug. 15,2014 101 12/32 +1/32 + 4.08
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 9/32 +7/32 + 4.82
LEHMAN BROS.
LONG BOND INDEX 1772.43 +1.61
DOW CLOSE 10314.76 +177.71 + 1.8
ADVANCES 2595
DECLINES 747
NEW HIGHS 453
NEW LOWS 8
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 29.06 -.39 -1.3
MO Altria Group 54.23 +4.23 +8.5
MRK Merck & Co 27.02 -.85 -3.1
GE GE 35.09 +.76 +2.2
MOT Motorola 17.05 +.35 +2.1
NOK Nokia 16.12 +.33 +2.1
CPN Calpine 2.77 +.34 +14.0
TWX Time Warner 16.94 +.35 +2.1
WMT Wal-Mart Stores 56.26 +1.78 +3.3
NT Nortel Networks 3.40 -.13 -3.7
NASDAQ CLOSE 2023.63 + 19.30 + 1.0
VOLUME 1,833.4
PREVIOUS 1,967.1
ADVANCES 1853
DECLINES 1212
NASDAQ ACTIVES
GOOG Google 184.70 -6.97 -3.6
MSFT Microsoft 29.00 +.53 +1.9
RIMM Rsch In Motion 88.08 +3.56 +4.2
QCOM Qualcomm 38.07 -1.80 -4.5
INTC Intel 22.88 +.21 +.9
EBAY eBay 100.87 +1.62 +1.6
CSCO Cisco Systems 19.52 +.24 +1.2
AAPL Apple Computer 54.45 -.86 -1.6
TASR Taser Intl 46.81 +5.47 +13.2
YHOO Yahoo! 37.66 -.31 -.8
AMEX CLOSE 1329.48 + 6.16 + .5
INDEX SHARES
DIA DIAMONDS TRUST 103.32 +1.61 +1.6
QQQ NASDAQ 100 37.62 +.21 +.6
SPY S&P DEP.RECEIPTS 116.56 +1.56 +1.4
STOCKS IN THE NEWS
GPS Gap 22.14 +1.90 +9.4
FD Federated Dept 52.62 +2.76 +5.5
JCP J C Penney Co 37.42 +2.82 +8.2
CBK Christopher& Banks 18.75 +2.34 +14.3
ANF Abercrombie Fitch 42.17 +3.00 +7.7
AGY Argosy Gaming 45.32 +4.57 +11.2
KEI Keithley Inst 17.68 +1.40 +8.6
AL Alcan 49.31 +1.93 +4.1
SAM Boston Beer 22.94 -2.20 -8.8
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