11/17/04:
Attention K-Mart Shoppers A Major Merger With Sears Is In The Works
SUSIE GHARIB: It is being called a dream deal: Kmart and Sears are merging. The stunning announcement came this morning in New York, where the two big name retailers took the wraps off the $11 billion deal. The new company known as Sears Holdings will be based at Sears headquarters in Chicago. Both stocks surged on the news and surprisingly, both advanced by virtually the same amount. Sears ended the day at $52.99, up $7.79; Kmart at $109, up $7.78. We have two reports tonight beginning with Suzanne Pratt in New York.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: They are two of the biggest and most well known names in retail and together they create the nation`s third largest retailer, behind Wal-Mart and Home Depot. The deal is being billed as a merger of equals, but experts say it appears that Kmart and its chairman Edward Lampert are running the show. Lampert will lead a new board dominated by Kmart directors. Sears CEO Alan Lacey (ph) will be the vice chairman and CEO. The new company will continue to operate both Kmart and Sears stores. Several hundred Kmarts will be converted to Sears. At a news conference in New York today, Lampert said the chance to put Sears stores in off-mall locations will be key to growth.
EDWARD LAMPERT, CHAIRMAN, KMART HOLDING CORP.: I think we have a lot of flexibility to create value, but the clear focus is going to be on creating not just a much more profitable retailer, but using the capital that the retailer generates productively to earn high rates of return.
PRATT: Even though the new company will be called Sears Holdings, both names will continue to be used on stores. The combined company with $55 billion in revenue and about 3,500 stores is expected to have $300 million in annual cost savings. Shareholders could benefit sooner. Under the terms of the deal, Kmart shareholders will get one Sears` share for each of their Kmart shares. Sears stockholders can chose $50 in cash or half a share of the new company. Although most analysts liked the combination, some say the price tag fell short.
BILL DREHER, RETAIL ANALYST, DEUTSCHE BANK: Our fair value for the shares would be something closer to $87. I think $50 is really the low end. It does not give appropriate credit to the private brands nor does it give appropriate credit for the services business.
PRATT: Nevertheless, investors applauded the deal. Shares of both companies closed significantly higher today. Still, UBS analyst Gary Balter, whose firm has recently done business with Sears, says there`s more to the stock story.
GARY BALTER, RETAIL ANALYST, UBS: If you study Kmart shareholding, there`s about 100 million shares. 85 million are owned by Eddie or friends of Eddie. And so there`s very little stock that really floats and there`s a big short position. So a lot of what you`re seeing this morning is essentially a big short squeeze.
PRATT: The deal is expected to close by March of next year. But experts say it will take a lot longer before they know whether it made sense to combine two of the nation`s oldest retailers into one. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Diane Eastabrook. Discounter Kmart and department store giant Sears have a couple of things in common. Both have struggled for years and neither has successfully carved out a niche in the competitive retail industry. But many analysts question if marrying the two companies will help them improve their lackluster sales and profits.
WILLARD ANDER, RETAIL CONSULTANT, MCMILLAN DOOLITTLE: Can you combine these two entities and get the economies of scale, get the cost down and can Kmart then be more cost effective against somebody like Wal-Mart?
EASTABROOK: Executives of the two retailers think the combined company will help both retail chains compete. The merger could help Sears rapidly expand its new larger Sears grand stores by rolling them into underperforming Kmarts. But some analysts are skeptical about putting a fledgling concept into poorly performing Kmart locations.
KIMBERLY PICCIOLA, RETAIL ANALYST, MORNINGSTAR: The underlying value in the real estate is yet to be seen and we are current reviewing our valuation to see how that should factor into the stock price.
EASTABROOK: Kmart could benefit from the combination in a couple of ways. The discounter hopes to learn more about customer service from Sears. It also hopes its alliance with the department store will help it regain some brands it lost when it filed for bankruptcy nearly three years ago. Both retailers hope to benefit by selling each other`s proprietary brands. Kmart sells the popular Martha Stewart collection. Sears has Kenmore appliances and craftsman tools. But Picciola isn`t sure that will boost sales for either retailer if they don`t come up with compelling strategies.
PICCIOLA: Kmart stores now may carry Sears` brands -- Craftsman tools, Kenmore appliances -- yet we believe their merchandising strategy has not worked in the past and will not work necessarily in the Kmart locations.
EASTABROOK: Despite their combined assets, industry watchers say neither Sears nor Kmart has a strong brand position and some wonder if both retailers won`t eventually be scrapped for a completely new one.
ANDER : It`s just not enough to take two really tired and fading retail brands and put them together and assume you`ve got a glorified brand that all of the customers are going to come running to.
EASTABROOK: Sears holdings admits bringing the two retailers together will be an enormous undertaking, and what will be key is a strategy that will help both Kmart and Sears win with customers. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
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.
11/17/04:
The Devil May Be In The Details Of The C.P.I.
SUSIE GHARIB: Consumer prices rose 0.6 percent last month, slightly more than what economists had expected. But if you take a closer look at those prices and other indications of economic activity out today, there are signs that inflation may not be a problem. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Consumer prices up last month 0.6 percent. That`s inflation. Combine that with strong growth in industrial production up 0.7 percent in October and that strong housing market and you have a classic recipe for an inflation-fearing bond market sell off. Instead, after dropping yesterday, bonds rallied today. Go figure.
JAN HATZIUS, SR. ECONOMIST, GOLDMAN SACHS: Today you get a CPI report which is also worse than expected, but perhaps not quite as bad as feared after the PPI report, so the market rallies a lot. Now that makes absolutely no sense, because you`ve got two reports which are both worse than expected and the net effect is that bond yields are lower than they were before.
GERSH: The explanation may be found in the details. Excluding the volatile food and energy sector, core consumer prices were up 0.2 percent last month, consistent with a 2.4 annual rise in core prices and that was slightly better than expected. Most of the problem with the October CPI was in gasoline, up 8.6 percent. But that`s already old news. In recent weeks, the price of oil has drifted down from $55 a barrel to around $46. So overall, economists say the inflation story is consistent with a mild, but steady up tick in prices.
STEVE EAST, CHIEF ECONOMIST, FRIEDMAN BILLINGS RAMSEY: I think that when the core rate of inflation if and when it goes above 2.5 percent, that that`s when you start to worry a little bit. I think the Fed would really like to see it stay below 2 percent. I wouldn`t get too concerned until it went over 2.5 percent.
GERSH: For now the economy is showing plenty of strength in the face of high energy prices and economists are hoping that fuel prices will continue to settle down in coming months. Darren Gersh, NIGHTLY BUSINESS REPORT, 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.
11/17/04:
"The Wheels Of Fortune"-The NASCAR Craze
SUSIE GHARIB: Here`s a question for you. What`s the second most-watched sport on television behind professional football? Well, it`s stock car racing. The sport has come of age in recent years, attracting legions of new fans and a lot of interest from corporate America. Tonight, we begin a series called "the wheels of fortune," as Jeff Yastine looks at the booming business of the phenomenon known as NASCAR.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The whine of engines, the roar of the crowd. Music indeed for NASCAR, its fans, and corporate sponsors who`ve made this kind of racing the fastest growing spectator sport around. What is NASCAR? At one time, it was an acronym for the National Association of Stock Car Auto Racing. But today, NASCAR is a brand-name unto itself. In an era that has seen other sports struggle to increase their fan base and popularity, NASCAR has notched big gains in both departments. Nowhere is that more evident than by taking a stroll through the merchandising areas near the tracks, where fans queue up for their favorite racing gear and souvenirs.
WOODY MEADOWS, NASCAR FAN: It`s like the drivers appreciate the fans a little bit more than other sports, I mean with the big sports like baseball and football and stuff. Well, they`re really remote to the fan, whereas with NASCAR you can -- there`s a potential that you could walk up to any one of these trailers and actually just chit chat with one of the drivers for a couple minutes, you know?
YASTINE: Some drivers, like Dale Earnhardt, Jr.-- that`s "junior" for short-- have achieved nearly rock star status. This man has Earnhardt`s face permanently tattooed on his arm. How many people will tattoo the face of their favorite quarterback or pitcher permanently on their arm like this man.
UNIDENTIFIED MALE: I`m a real big fan of Dale Earnhardt, Jr. I`ve got probably -- everything he probably has come out with, I`ve got it at home.
YASTINE: Bob Slifko and his wife Beth used to be big Pittsburgh Steelers football fans.
BOB SLIFKO, NASCAR FAN: NASCAR I feel is a family atmosphere-type of environment. I`ve had my three little ones here for about four races, and they kind of like it, too. Junior`s my oldest boy`s favorite. My youngest boy is Tony Stewart. My daughter likes Jeff Gordon.
YASTINE: There`s also something we`ll call the "NASCAR lifestyle." The racetrack infields crammed with dozens upon dozens of RVs are to NASCAR what tailgate parties are to football.
UNIDENTIFIED MALE: This is (INAUDIBLE) and what they do, we put tomatoes, onion, fresh basil.
YASTINE: Lots of food and lots of folks, like Tom Langston, who brings a pair of RVs to two races a year.
TOM LANGSTON, NASCAR FAN: (INAUDIBLE) meet all your friends, where we get together at. We don`t have time, (INAUDIBLE) time of the year, everybody get together here at the race track.
YASTINE: NASCAR is also using technology to bring fans closer to the action in a way that other sports cannot. It`s not just the in-car cameras that put TV viewers literally in the driver`s seat. At the tracks, concessions like this one, selling radio scanners, are hugely popular. With one of these or via a subscriber fee on the Internet, fans can listen in as drivers and crew chiefs talk strategy during the race at 180 miles an hour. It all means big bucks for NASCAR and its partners. Most tracks have sellout or near sellout crowds. TV ratings are up 40 percent in recent years and executives see more of the same looking down the road.
BRIAN FRANCE, CEO, NASCAR: I think NASCAR is a sport now that has, for all the right reasons, is poised to have some growth ahead. We`ve got the best media partners. Our athletes are really relatable, accessible. We have the number one group of "Fortune" 500 companies investing with us, believing in us.
YASTINE: Fast cars and fast bucks, fast friends. Jeff Yastine, NIGHTLY BUSINESS REPORT, Charlotte, North Carolina.
KANGAS: Tomorrow, the marketing of NASCAR: why so many American businesses are revving up to join up.
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.
11/17/04:
"Money File"-The Free Credit Report"
PAUL KANGAS: In the money file tonight, getting credit where credit is due or in this case getting your credit report. Here`s Chuck Jaffe, senior columnist of CBS Marketwatch.
CHUCK JAFFE, SENIOR COLUMNIST, CBS MARKETWATCH: Beginning December 1, consumers in the western United States can get a free copy of their credit report from the three major credit bureaus. The rule making that possible, the Fair and Accurate Credit Transactions Act, rolls out across the country from west to east, with Midwesterners getting free reports beginning next March and southerners gaining free access in June. Residents of eastern states get their turn next September.
Reviewing your credit files should be an annual financial chore. It`s quick and easy. It involves just going to the web sites for the major credit bureaus. And it`s essential for ensuring that the elements that go into your credit score are correct and that you haven`t been the victim of identity theft. But being eligible for a free credit report is different from actually getting one. Some states have had rules allowing free credit reports for years, only to have few residents take advantage of the offer. Studies show that people in free-report states like Massachusetts, Colorado and Georgia, do not review their credit files more than people in states where a payment is required to see the file.
In general, people check their credit only when they`ll soon need a loan and are nervous about what the lender`s going to be looking at. But with credit reports forming the basis for credit scores and with those scores determining everything from the loan rates to the job opportunities someone can get, reviewing credit histories is a critical personal financial chore. So put "check my credit report" on your to-do list for 2005. The fact that it`ll be free is a bonus. I`m Chuck Jaffe.
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.
11/17/04:
"Last Word"-President Bush Refuses Biscuits & Gravy For Thanksgiving
SUSIE GHARIB: And finally tonight, the White House was the scene of an annual Thanksgiving ritual today: the pardoning of the national turkey. This year`s gobbler is named Biscuits and President Bush officially spared him from the block. But the president didn`t spare onlookers from some turkey inspired political jokes, like saying the recent election was "neck and neck" and a scurrilous new film called "Fahrenheit 375 degrees at 10 minutes a pound." President Bush also pardoned the backup turkey, whose name is-- of course-- Gravy. On a more serious note, the president also said the nation had much to be thankful for this year, Paul, including family, friends and freedom.
KANGAS: Now there is a statement that shouldn`t ruffle any political feathers.
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.
11/17/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: On Wall Street, the bulls ran at the opening today, with tech stocks strong on Hewlett-Packard`s solid earnings we told you about yesterday and retail stocks rallied on that Kmart-Sears merger. A brisk 6.4 percent jump in new home construction was a plus, and a rise in consumer prices last month, which we`ll detail shortly, didn`t rattle investors.
So at noon, the Dow was up 110 points, NASDAQ up 33. However, oil prices rose this afternoon as stocks faded from their highs of the day. The Dow Industrial Average still gained nearly 62 points ending at 10,549.57. The NASDAQ Composite rose 21 points at 2099.68. Standard & Poor`s 500 up 6.5 points at 1181.94. Treasuries had a strong showing today. The 10-year note gained 21/32, pushing the yield down to 4.12 percent.
Hewlett-Packard (HPQ), second in volume, was up $0.52, traded as high as $21.20. After the close yesterday as we reported, fourth quarter earnings came in at $0.41 a share, $0.04 better than the Street was expecting.
Lucent Technologies (LU), a $0.12 gain.
And there you see Sears (S) up $7.79 on the merger news.
EMC Corp. (EMC) was up $0.62, fifth in big board volume.
NorTel Networks (NT) rose $0.14.
Citigroup (C) $0.13 gain there.
Altria Group (MO) up $3.03. The tobacco group strong. As we mentioned, the Fed panel questioning if the government has the authority to fine the big cigarette makers all that money under the racketeering laws.
General Electric (GE) $0.25 gain there, tenth in volume.
Taiwan Semiconductor (TSM) a half dollar gain.
Dillard`s (DDS), Federated Department Stores (FD) and May Department Stores (MAY) all doing well. The retail sector was up generally on speculation that there might be more consolidation in that sector after the day`s Kmart-Sears merger.
Martha Stewart Living Omnimedia (MSO), there`s a connection there too. First of all Standard & Poor`s upgraded it from a "strong sell" to "sell" in the belief that Sears Kmart merger could help sales for Martha Stewart Living products.
And Whirlpool (WHR) up $2.90. Same story here, Sears carries Whirlpool appliances, same true of Maytag and Maytag stock edged $0.59 higher today incidentally.
Phillips-Van Heusen (PVH) buttoned up a gain of $1.88 today. Third quarter earnings $0.52, well above $0.34 last year. Revenues up 4.4 percent. The company boosted 2004 earnings guidance to the $1.30 area. That`s up from the Street estimate of $1.21, so a good day for that stock.
Too Inc. (TOO), the children`s apparel retailer, third quarter earnings strong, $0.33, up from $0.13 last year. Same store sales jumped 11 percent and the company plans to buy back up to $125 million of its own common stock.
Quiksilver (ZQK), another apparel retailer, up $1.47. Company boosted its fourth quarter earnings guidance from the $0.36, $0.37 per share range, all the way up to $.40 and the company says it sees no signs of slowdown in its business at all.
Brown Shoe Company (BWS) down $1.15. Company cut its 2004 earnings estimate from about $3 all the way down to $2.43, also as you see had lower third quarter earnings.
And Biovail Corporation (BVF) dropping $1.55 on concern about growing competition for its Welbutrin drug.
Kmart Holding (KMRT) volume leader on big board, I mean on NASDAQ, up $7.78 as you heard.
Google (GOOG) fell a nickel.
Intel (INTC) $0.48 gain.
Microsoft (MSFT) was up a nickel.
And then Dell (DELL) $0.20 loss, fifth in dollar volume on NASDAQ.
Applied Materials (AMAT) rose $0.58.
Cisco Systems (CSCO) $0.16 gain.
Research In Motion (RIMM) up $5.50.
And eBay (EBAY) up $1.45.
Sun Microsystems (SUNW) $0.39 gain there, tenth in volume.
Network Appliance (NTAP) up $4.55. Positive reaction first of all to Hewlett-Packard`s good earnings and the company had higher earnings itself. Second quarter, $0.15 up from $0.13 last year. Sales jumped 36 percent and it`s upbeat on 2005 as well.
CTI Molecular Imaging (CTMI) up a half a dollar, but it traded as high as $12.75 during the day after Bear Stearns upgraded it from "peer perform" to "out perform."
And then GeoResources (GEOI), this is an oil gas exploration firm, third quarter more than doubled $0.11, up from a nickel last year and revenues jumped 43 percent.
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.
11/17/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10549.57 +61.92 + .6
HIGH 10602.85
LOW 10481.83
NASDAQ COMP. 2099.68 +21.06 +1.0
HIGH 2112.18
LOW 2090.72
VOLUME 1,688.0
PREVIOUS 1,361.1
UP VOLUME 1,251.5
DOWN VOLUME 416.5
DOW TRANSPORTS 3600.46 +28.27 + .8
DOW UTILITIES 326.19 -2.96 - .9
CLOSING TICK +669
S&P 500 1181.94 +6.51 + .6
S&P 100 565.72 +3.46 + .6
MIDCAP 400 635.05 +5.13 + .8
REUTERS/CRB 288.86 +3.22 + 1.1
NYSE COMPOSITE 7013.46 +54.16 + .8
VALUE LINE 387.94 +3.28 + .9
RUSSELL 2000 622.97 +5.08 + .8
DJW 5000 11600.88 +65.53 + .6
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 100 5/32 +14/32 + 3.47
10-YEAR NOTE 4.25%
Aug. 15,2014 100 31/32 +21/32 + 4.13
30-YEAR NOTE 5.375%
Feb. 15, 2031 107 31/32 +1 1/32 + 4.84
LEHMAN BROS.
LONG BOND INDEX 1764.49 +11.84
DOW CLOSE 10549.57 +61.92 + .6
ADVANCES 2299
DECLINES 1029
NEW HIGHS 409
NEW LOWS 12
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 27.99 +.67 +2.5
HPQ Hewlett-Packard 20.20 +.52 +2.6
LU Lucent Tech 3.95 +.12 +3.1
S Sears Roebuck 52.99 +7.79 +17.2
EMC EMC Corp 13.50 +.62 +4.8
NT Nortel Networks 3.28 +.14 +4.5
C Citigroup 46.18 +.13 +.3
MO Altria Group 57.42 +3.03 +5.6
GE GE 36.35 +.25 +.7
TSM Taiwan Semi 8.60 +.50 +6.2
NASDAQ CLOSE 2099.68 + 21.06 + 1.0
VOLUME 2,231.0
PREVIOUS 1,911.9
ADVANCES 2064
DECLINES 1078
NASDAQ ACTIVES
KMRT Kmart Holding 109.00 +7.78 +7.7
GOOG Google 172.50 -.05 -.0
INTC Intel 24.32 +.48 +2.0
MSFT Microsoft 27.17 +.05 +.2
DELL Dell Inc 40.20 -.20 -.5
AMAT Applied Matl 17.34 +.58 +3.5
CSCO Cisco Systems 19.54 +.16 +.8
RIMM Rsch In Motion 87.34 +5.51 +6.7
EBAY eBay 109.37 +1.45 +1.3
SUNW Sun Micro 5.35 +.39 +7.9
AMEX CLOSE 1365.96 + 16.76 + 1.2
INDEX SHARES
DIA DIAMONDS TRUST 105.62 +.49 +.5
QQQ NASDAQ 100 38.99 +.40 +1.0
SPY S&P DEP.RECEIPTS 118.31 +.47 +.4
STOCKS IN THE NEWS
DDS Dillard Dept Strs 26.65 +1.60 +6.4
FD Fed Dept Strs 56.68 +1.31 +2.4
MAY May Dept Strs 30.75 +2.23 +7.8
MSO Martha Stewart 18.49 +1.09 +6.3
WHR WhirlPool 66.43 +2.90 +4.6
PVH Phillips-Van Heu 26.98 +1.88 +7.5
TOO Too Inc 24.98 +2.37 +10.5
ZQK Quiksilver 29.62 +1.47 +5.2
BWS Brown Shoe Co 28.90 -1.15 -3.8
BVF Biovail 15.70 -1.55 -9.0
NTAP Network Appliance 29.57 +4.55 +18.2
CTMI CTI Molecular 11.84 +.53 +4.7
GEOI GeoResources 4.45 +1.94 +77.3
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