11/11/04:
Small Caps Are Do Big Things
SUSIE GHARIB: A power surge on Wall Streettoday. The Dow
powered up 84 points, pushing the blue chip average into positive
territory for the year. The NASDAQ jumped 26 points. But the
big winner today was small cap stocks. The Russell 2000 surged
7 percent to a new record high. As Erika Miller reports, experts
are divided on whether small stocks can continue to deliver
big gains.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Small
caps have been turning in super sized returns. Since January,
the Russell 2000 index of small cap stocks has gained more
than 10 percent, knocking the socks off other market benchmarks.
Some Wall Street analysts predict small caps will continue
to shine, powered by superior profit growth.
TIMOTHY WOODS, PORTFOLIO MANAGER, SMITH BARNEY SMALL CAP
GROWTH FUND: When it`s all said and done, investors will look
at the smaller cap market and see earnings that are superior
to their large cap counterparts and I think that will be the
reason why small caps will continue to do well.
MILLER: But others are concerned the sector is winded. Assuming
small caps beat large caps this year, it would mark the 6th
straight year of out performance. That`s the longest stretch
in over three decades.
STEVEN DESANCTIS, SMALL CAP ANALYST, PRUDENTIAL EQUITY GROUP:
DESANCTIS: I think next year it gets a little tougher for
the backdrop for small caps. In a slower economy, with earnings
growth slowing down, revision numbers have to come down for
the small cap space. I don`t really think there`s going to
be a big difference between the size segments in terms of
performance.
MILLER: De Sanctis also warns small cap valuations have become
less attractive. He says the price to earnings ratio of the
Russell is now over 17, based on forward earnings. That compares
to 16 for the Standard & Poor`s 500. A falling dollar is also
expected to give an edge to large, multinational firms by
boosting their sales outside the U.S. By contrast, smaller
companies tend to rely more on the domestic market. But one
of the biggest threats to small caps is rising interest rates,
because that makes borrowing more expensive.
DESANCTIS: I think as the rates continue to rise, I think
it`s a very hard case to make where small caps are going to
continue to outperform.
MILLER: How small caps perform this January may hint at how
well they`ll do next year. When small caps beat large caps
in January, they also tend to beat them for the year as a
whole. 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.
11/11/04:
One On One With Nissan CEO Carlos Ghosn
SUSIE GHARIB: Japan`s number two auto maker is marking some milestones. Nissan
is celebrating this week the 15th year anniversary of the launch of its
Infiniti luxury car. Next week the automaker rolls out two new versions
of its pickup truck the "Frontier" and its SUV "Xterra". All this comes as
Nissan posted a 27 percent jump in October U.S. sales, its best month in
history. Joining us now, Nissan CEO Carlos Ghosn, the man credited with
the auto maker`s turnaround. Mr. Ghosn, a pleasure to have you on the
program.
CARLOS GHOSN, PRESIDENT & CEO, NISSAN MOTOR CO., LTD.: Thank you Susie.
GHARIB: Well, you have engineered an amazing turn around. What are your
goals now? What are you aspiring to?
GHOSN: First we have to finish the goals that we set for the short term and
we have one million additional sales that we set for the year to come and
we are working hard to deliver this result. After this, we already set
some goals for the year 2007. There is continuous growth to come not only
in the United States but globally and maintain the company at the top level
of profitability in the industry with a high level of return on investment
capital, while this is going to maintain us really on our toes for the
years to come.
GHARIB: You talk about growth globally. As you look around the globe, where
is growth going to come from?
GHOSN: I think mainly in Asia, China, India, the southeast of Asia,
probably in the Middle East, if, you know, peace comes back, I think that
there is a lot of potential in the Middle East. These are the regions with
the highest rate of growth.
GHARIB: I know that Nissan, like a lot of the car companies has been
banking on strong sales in China, but how are you dealing with the fact
that higher costs in China are cutting into your profits and your margins?.
GHOSN: Well, you know Susie, we never thought that the high margin, the
exceptional margin we were doing three years ago were going to be
maintained for the long term. Now the lending is probably very quick, very
hard. We are still very profitable in China. We think now we are in a more
normal situation with margin more in line with the best markets existing in
the world and we would be very happy that this continues. We think that
that would be growth in China probably not at the 40, 50 percent rates that
we have seen for the last three years, but still at the healthy 10 percent
that what we`re seeing today.
GHARIB: You have been a very vocal critic against these big incentives to
give to consumers so that they buy cars and yet American car companies show
no signs of letting up on incentives, so how are you dealing with this kind
of competitive environment?
GHOSN: The market is the market and competitor have their own strategy.
When I was a little bit critical on incentive, I was mainly talking to own
people, because what Nissan is about is about product, about technology.
It`s about quality. That`s what`s we want to promote, so we want to stay
away from the incentives as much as we can. We obviously still have to be
priced reasonably within the market, but we want to spend our time
promoting good products, promoting the benefits but focusing on the service
delivered to the consumers. That`s why we`ve been critical. Obviously we
have no lecture or no lesson to give to anybody. I was mainly talking to
Nissan people.
GHARIB: Tell us a little about your plans for Renault. Soon you`re going to
be the CEO of Renault in Paris and you`re going to continue to be the CEO
of Nissan in Tokyo which to me seems amazing in and of itself. But what are
your plans in terms - will you making any new car models combing the assets
of both companies?
GHOSN: Certainly. The cars will not be common. The cars of Renault will
always be very different from the cars of Nissan and we don`t intend to
change this. But we will have common platform. We`ll have common
suppliers. We`ll have common support functions, back offices, but
everything else will be different. The brands will be different, the
marketing will be different. The executive company, the management will be
different because from the beginning, this alliance is about respecting
different identities, maintaining the different identities but also
developing synergies as long as they make business sense.
GHARIB: So should we assume, then, that this is going to continue to just
be a joint investment and alliance, that there isn`t really going to be a
full-fledged merger in the works?
GHOSN: You can bet on that. There will be no merger.
GHARIB: Why not?
GHOSN: Because merger destroys value. We`re in the business where we need
to create value and each time you put yourself in a situation where people
think that there are some, you know premium citizens and second-rate
citizens. There is a victor and there is a prey, it doesn`t work. We want
people to feel at home in each company and proud of their own company.
GHARIB: Mr. Ghosn, it`s been a real pleasure speaking with you. Thank
you. so much.
GHOSN: Thank you Susie.
GHARIB: We`ve been speaking with Carlos Ghosn, CEO of Nissan.
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.
11/11/04:
"Rx Without Borders"-The True Cost of Buying Drugs In Canada
SUSIE GHARIB: Canadian health officials are beginning to balk at the rising
numbers of Americans crossing the border to buy prescription drugs. It
comes as more and more states are trying to buy low-cost medications from
our northern neighbor. For Americans, buying drugs through Canadian
pharmacies or over the Internet is illegal, but that hasn`t stopped efforts
to allow a more widespread re-importation of Canadian drugs. In part two
of our series "RX Without Borders", Jeff Yastine looks at the impact that
those efforts may have on consumers and the U.S. drug industry:
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Every day, dozens of
U.S. residents cross the border with Canada, to buy cheaper prescription
drugs and bring them back into the United States. But what if the re-
importation of those cheaper, legitimate Canadian prescription drugs were
allowed on a more widespread basis? The House and Senate have both
introduced bills to that effect in recent years. Drug companies say the
results though would be catastrophic. One industry-sponsored study claimed
that in one state alone, Michigan, up to 100,000 jobs could be lost, with
billions more in lost personal income, along with a decline in research and
development spending.
CHRISTOPHER VIEHBACHER, PRES., US PHARMACEUTICALS/GLAXOSMITHKLINE: I
personally lived for years in Europe and I can tell you that the regime of
cost controls that has existed there has steadily eroded Europe`s ability
to compete effectively in research and development. So there`s no question
that there would be a major impact on our industry in terms of jobs and
level of research and development.
YASTINE: But congressional supporters of drug re-importation are not
convinced.
SEN. BYRON DORGAN (D) NORTH DAKOTA: It`s fair to say that the drug
industry needs revenue for research and development, but it`s also fair to
point out that they spend more on promotion and advertising and marketing
than they do on research and development. And more importantly, they do
marginally more research and development in Europe than they do in the
United States and in Europe prices are lower.
YASTINE: So what`s the answer? The drug industry says it`s as much a
communication problem as anything else, noting that 6.2 million Americans
received free medications last year through industry-sponsored patient
assistance programs and that other alternatives do exist.
LORI REILLY, DEPUTY VP, PHRMA: Today unfortunately, the conventional
wisdom is that it`s always going to be cheaper in Canada when in fact that
isn`t the case. There are many different ways for consumers to save in the
United States. One of them is generic medications that are often cheaper
in the U.S. than they are in Canada.
YASTINE: But supporters of drug re-importation say often there are no
generic alternatives for the biggest selling prescription brand names. And
trying to stand in the way of people seeking cheaper medications is a
useless task.
DORGAN: I think the drug companies are squeezing a balloon here. You
squeeze it, it pops out somewhere else. They`re going to lose this issue.
Ultimately the American people will be given the right to re-import FDA
approved drugs. The marketplace, the free marketplace will determine where
they purchase those drugs and I think the pharmaceutical industry is
fighting a losing battle.
YASTINE: Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.
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.
11/11/04:
"Commentary"-President Bush Hasn't Won Everyone Over Yet
PAUL KANGAS:
Tonight`s commentator says that while all the electoral votes
have been counted in this month`s presidential election, some
others have not. Here`s Allan Sloan, Wall Street editor of
"Newsweek" magazine.
ALLAN
SLOAN, WALL STREET EDITOR, NEWSWEEK: Now that the elections
are finally over, President Bush and the Republicans are talking
big. You`ve heard it. Cut taxes even more. Set up individual
Social Security accounts. Quote, reform the tax system, which
is code for eliminating the estate tax and making income from
investments tax- free. And I`ll bet we`ll see budget quote
reform proposals so all this makes the deficit look smaller
than it really is. But although America`s voters have been
heard from, there`s another party that hasn`t cast its final
ballot, the financial markets. Not the stock market to which
we pay so much attention, but the currency and debt markets.
Unlike voters, these markets can`t be spun by clever ads or
brilliant election campaigns. You`re dealing with markets,
whose players care about making money, not about playing politics.
The dollar is already falling and interest rates are clearly
headed higher. That`s the price we pay for running huge trade
and budget deficits and becoming dependent on foreigners to
keep the money flowing. I think these markets are going to
limit Bush`s freedom of action. He can`t afford to see the
dollar fall another 50 percent or see a huge rise in interest
rates, either of which could put a big hurt on the economy.
Maybe the president can convince the markets to support his
plans and keep providing cheap financing. But despite his
electoral win, I sort of doubt it. Markets don`t care about
red state or blue states. The only color they care about is
green, the color of money. I`m Allan Sloan.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2004 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/11/04:
"Home Ec"-The Government's Inflation Claim Doesn't Add Up
SUSIE
GHARIB: As business journalists, we cover the big picture
of economics. But there`s a more personal side to the topic,
your economics. So tonight we begin a monthly segment called
home ec, bringing the economy and investment close to home,
quite literally. We`d like to introduce you to our home economist,
Brett Graff, a trained economist and stay-at-home married
mother of two. Tonight, Brett takes on the government and
its take on inflation. The CPI
shows prices are up 0.2 percent while wages are up more than
2 percent, so we should be ahead. But are we really?
BRETT GRAFF, NIGHTLY
BUSINESS REPORT CORRESPONDENT: The Bureau of Labor Statistics
basket of goods looks at 372 items, everything from food to
major appliances, cars and more. Look, economists are smart,
but my guess is they don`t spend nearly as much time as I
do wondering around the supermarket shopping for my family
of four. So if you think your life has gotten fairly expensive,
I`ve got some numbers to prove you right. Let`s create our
own basket of goods from the government`s list, things most
of us buy every week and some weeks several times. Yes, going
up and down the aisles is the research for this analysis and
conclusion. The price of milk is up, hmmm, over 10 percent.
So I called the Bureau of Labor Statistics to ask why. They
told me cows were being slaughtered because their feed was
too expensive. It seems everything made of milk is more expensive.
Butter is up 31.4 percent. Margarine and cheese are higher
too. Yes, they can`t believe it`s not butter. I can`t believe
it`s not cheaper. But eggs are less expensive. Next, the meat
counter. According to the government, the price of steaks
has gone up 14 percent since September 2003. And if you`re
thinking about switching to chicken, that`s up and so is pork.
And if you don`t eat meat, fresh seafood, yep, it`s up too.
There is some better news in the fresh produce section. A
five pound bag of white potatoes has dropped and so have apples,
though bananas are pricier. Well, it`s not like it matters
what they charge. You have to buy it anyway (INAUDIBLE). Your
morning cup of coffee and bowl of cereal are more expensive
and so are bread and carbonated drinks. And if you`re one
of those shoppers who drives around looking for specials,
think again, because unleaded gas is almost 10 percent higher
from the same time last year. Time to do the checkout math.
We`re now spending almost 11 percent more on these items than
we did a year ago. And remember, paychecks have risen an average
of 2.3 percent for the same period. So why is the government`s
price index seemingly so much rosier? It`s the items we don`t
buy every week or even every year. Televisions are down, camera
equipment, major appliances and cars are cheaper too. And
so are computers, down 8 percent with a near guarantee, in
my experience, the price I paid will fall even further as
soon as I bought mine. So the moral of the CPI number story
from this home economist. If you`re not into buying too many
groceries each week or filling up your car and you`re much
more interested in those big ticket items, well, you`re actually
ahead of the game. Brett Graff, NIGHTLY BUSINESS REPORT, Miami.
GHARIB: That`s
when they talk about the core rates, excluding food and energy.
KANGAS: Who needs
that?
GHARIB: Who needs
to put gas in their car?
KANGAS: Hey, potatoes
were down.
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.
11/10/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Wall Street opened with a solid rally as oil prices fell about 2
percent. Also, Yasser Arafat`s death revived hopes of peace in the Middle
East. The Dow rose 45 points at the outset of trading while the NASDAQ
Index gained 10 points. After a brief bout of profit taking, the market
resumed its rally this afternoon as oil continued to weaken. So the Dow
Jones Industrial Average came in with an 84 1/3 point gain of 10,469.84.
The NASDAQ Composite was up 26 3/4 points ending at 2.061.27. Standard &
Poor`s 500 index rose 10 1/2 points to 1173.48. No bond numbers to report
tonight. That market was closed for the Veterans Day holiday.
New York exchange volume leader on 27 million shares, NorTel Networks (NT)
down $0.21. The company`s extended the delay in releasing financial
statements to permit resolution of various accounting matters. Also the
company says 2004 revenue growth will be in the low single digits.
Pfizer (PFE), second in volume, $0.32 loss.
Followed by Time Warner (TWX), $0.22 gain.
Lucent Technologies (LU) moved up $0.07.
Nalco Holdings Company (NLC), this is an initial public offering. This
company is in the water treatment business, 24.4 million shares offered to
the public at 15. The stock opened at $15.15. The high was where it closed,
$16.20.
Coca-Cola (KO) down $0.21 and it traded as low as $39.59 during the day.
The company sees weak results in its key North American and European
markets and it sees that weakness extending into next year. UBS Securities
issued a "reduced" rating with a $36 a share target for Coke shares.
Motorola (MOT) was up $0.41.
Merck & Company (MRK) $0.26.
Advanced Micro Devices (AMD) did well, up $1.30 after Merrill Lynch
upgraded it from "neutral" to "buy," citing improving profit margins and
market share.
And then Blockbuster (BBI), an $0.82 gain. Blockbuster is offering to buy
Hollywood Entertainment for $11.50 a share. Hollywood stock moved up $1.13
to $10.93 a share.
Tiffany & Company (TIF), not too sterling today, down $1.84. Company in
with third quarter earnings of $0.14, $0.05 below the Street estimate. It
also cut 2005 earnings estimates from a high of $1.60 to as low as $1.43 a
share.
Rayovac (ROV), highly charged day there, up $3.23. The battery company had
fourth quarter earnings of $0.52, up from $0.39 last year and sales shot up
50 percent. Standard & Poor`s repeated an "accumulate" rating on Rayovac
stock.
GenCorp (GY) up $3.35. An investment fund called Steel Partners II is
offering $17 a share cash on a takeover. GenCorp is in the aerospace and
defense business incidentally.
Then we see Rogers Wireless Communications B (RCN.B) stock. Now the company
wants to exchange each share of this particular stock for 1 3/4 shares of
Rogers Class B non voting stock. This is a voting stock you see here. The
offer is estimated to be worth as of today, $41.27 a share.
Pep Boys (PBY) down $1.15, $0.14 in third quarter earnings, way down from
$0.24 last year and the Street was looking for $0.20. The stock traded as
low as $13.06 today.
And finally we see a good (INAUDIBLE) and Goodrich Petroleum (GDP) up
$2.26. Third quarter earnings $0.21, way up from $0.06 last year. Revenues
jumped up 52 percent.
Google (GOOG) up $15.16.
Microsoft (MSFT) in there with a $0.25 gain. Yesterday, Microsoft said it`s
going to start its own search engine and it`ll be called Under Dog. It`ll
compete with Google.
Intel (INTC) $0.31 gain there. Paul Otolini (ph) will replace Craig Barrett
as the CEO. Barrett becomes chairman, replacing Andy Grove who will remain
as a consultant.
eBay (EBAY) $4 a share rise.
Cisco Systems (CSCO) $0.30 gain, tenth or fifth in volume I should say.
Research In Motion (RIMM) up $2.66.
TASER International (TASR) up $3.12.
Dell (DELL) $0.40 gain. After the close, Dell in with third quarter
earnings, $0.33, up from $0.26 last year, right in line with estimates.
Then Oracle (ORCL) a $0.24 loss. As we reported, after the close yesterday,
PeopleSoft has rejected the $24 a share buyout bid from Oracle. Tenth in
volume was Oracle moving up $1.13.
And 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.
11/11/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10469.84 +84.36 + .8
HIGH 10486.65
LOW 10386.95
NASDAQ COMP. 2061.27 +26.71 +1.3
HIGH 2061.40
LOW 2039.74
VOLUME 1,397.1
PREVIOUS 1,505.6
UP VOLUME 1,043.8
DOWN VOLUME 348.2
DOW TRANSPORTS 3623.30 +48.94 + 1.4
DOW UTILITIES 326.07 +3.63 + 1.1
CLOSING TICK +667
S&P 500 1173.48 +10.57 + .9
S&P 100 560.18 +4.64 + .8
MIDCAP 400 627.28 +5.97 + 1.0
REUTERS/CRB 284.07 -.55 - .2
NYSE COMPOSITE 6950.97 +59.75 + .9
VALUE LINE 382.68 +3.86 + 1.0
RUSSELL 2000 616.30 +6.69 + 1.1
DJW 5000 11504.42 +105.38 + .9
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 99 23/32 unch. + 3.56
10-YEAR NOTE 4.25%
Aug. 15,2014 100 -1/32 + 4.25
30-YEAR NOTE 5.375%
Feb. 15, 2031 105 29/32 +1/32 + 4.97
LEHMAN BROS.
LONG BOND INDEX N/A N/A
DOW CLOSE 10469.84 +84.36 + .8
ADVANCES 2426
DECLINES 888
NEW HIGHS 361
NEW LOWS 15
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
NT Nortel Networks 3.37 -.21 -5.9
PFE Pfizer 27.15 -.32 -1.2
TWX Time Warner 17.25 +.22 +1.3
LU Lucent Tech 3.83 +.07 +1.9
NLC Nalco Holdings 16.20 +1.20 +8.0
KO Coca-Cola Co 40.96 -.21 -.5
MOT Motorola 17.59 +.41 +2.4
MRK Merck & Co 26.15 -.26 -1.0
AMD Advanced Micro 18.59 +1.30 +7.5
BBI Blockbuster 8.20 +.82 +11.1
NASDAQ CLOSE 2061.27 + 26.71 + 1.3
VOLUME 1,780.5
PREVIOUS 1,863.7
ADVANCES 2041
DECLINES 1063
NASDAQ ACTIVES
GOOG Google 183.02 +15.16 +9.0
MSFT Microsoft 29.98 +.25 +.8
INTC Intel 23.17 +.31 +1.4
EBAY eBay 107.84 +4.00 +3.9
CSCO Cisco Systems 18.74 +.30 +1.6
RIMM Rsch In Motion 84.00 +2.66 +3.3
TASR Taser Intl 57.95 +3.12 +5.7
DELL Dell Inc 37.25 +.40 +1.1
ORCL Oracle 13.14 -.24 -1.8
YHOO Yahoo! 37.79 +1.13 +3.1
AMEX CLOSE 1340.93 + 5.70 + .4
INDEX SHARES
DIA DIAMONDS TRUST 105.06 +.67 +.6
QQQ NASDAQ 100 38.27 +.48 +1.3
SPY S&P DEP.RECEIPTS 117.86 +.89 +.8
STOCKS IN THE NEWS
TIF Tiffany & Co 30.29 -1.84 -5.7
ROV Rayovac 28.20 +3.23 +12.9
GY Gencorp 17.50 +3.35 +23.7
RCN Rogers Wireless 41.17 +4.89 +13.5
PBY Pep Boys 14.03 -1.15 -7.6
GDP Goodrich Petro 14.45 +2.26 +18.5
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