| 11/26/04:
Mall Mania. Ready Set Shop... Black Friday Begins
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR:
A quiet day on Wall Street but a frenzied one at the nation`s
stores and malls. Today is black Friday, the official start
of the holiday shopping season and retailers pulled out all
the stops to lure consumers. Many shoppers lined up before
dawn to take advantage of special deals. Suzanne Pratt got
a sense of the traffic at two major retailers.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: At
Macy`s in New York`s Herald Square, the 2004 holiday shopping
season got off to a busy start. Enticed by early bird promotions,
shoppers flocked to the store. While the turn out was impressive,
it`s too early to judge whether this year will be a merry
one for Macy`s and its parent, Federated Department Stores.
Still, the company predicts November/December sales will increase
as much as 3 percent and its CEO is upbeat about the current
quarter.
TERRY LUNDGREN, CHAIRMAN & CEO, FEDERATED DEPARTMENT STORES:
We`re expecting this fourth quarter to continue the momentum
of that plus 1 1/2 to 3 percent and if we do that, as we`re
intending to do, we think it`ll be another good quarter and
it will turn out to be one of the best overall years in our
company`s history.
PRATT: Like Federated, most retailers are optimistic about
this year`s holiday season. The International Council of Shopping
Centers expects November/December sales at the nation`s chain
stores to grow 3 to 4 percent. That compares to 4 percent
last year and a disappointing 2002.
MICHAEL NIEMERA, CHIEF ECONOMIST, INTERNATIONAL COUNCIL OF
SHOPPING CENTERS: The composition of the retail sales will
be mixed with the high end generally doing best, low end doing
worse and the middle ground being somewhere in between.
PRATT: At Toys R Us in New York`s Time Square, low end or
high end, `tis the season to spend, spend, spend.
UNIDENTIFIED MALE: Don`t forget ladies and gentlemen, the
door buster sale ends in 15 minutes.
PRATT: Just how well the struggling retailer fares during
the 2004 holiday season, is expected to play a big role in
the company`s future. Toys R Us declined to make specific
sales projections, but its president said today the season
is off to a promising start.
JOHN BARBOUR, PRESIDENT, TOYS R US: We`ve had about 2 1/2
to 3,000 people in the store this morning, which looks really
great and makes the store very exciting. So you know, we`re
looking forward to the holiday season. We`ve a lot of really
great new toys in the stores. There`s some great prices and
we`re feeling good about the way the holiday season is going
to develop.
PRATT: There are also a few calendar-related positives for
this year`s holiday shopping season. First, there are two
more shopping days this year than there were last year. On
top of that, Christmas falls on a Saturday. The last time
that happened was in 1999, a very good year for retailers.
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.
11/26/04:
The Toy Store Wars
JEFF YASTINE: And when shoppers go looking for toys this
season, they`re increasingly headed to the deep discounters
like Wal-Mart while Toys R Us and other toy retailers continue
to struggle. That`s just one of the big changes happening
inside the toy industry these days. When shoppers come to
retailers like Target to shop for toys, it`s Target`s gain
and more pain for specialty toy retailers. Target and Wal-
Mart have come to dominate toy retailing in the past five
years primarily at the expense of firms like Toys R Us, which
at one time was the retailer to beat in the toy business.
TIM CONDER, SR. LEISURE ANALYST, AG EDWARDS: Back in the
late `80s, early `90s, you saw Toys R Us through a better
operating model, put several people out of business. What
you`re seeing now is a better operating model out of Wal-Mart,
Target and a few other retailers, putting pressure on some
of these older traditional toy retailers.
YASTINE: That pressure has resulted in several high-profile
bankruptcies in recent years, KB Toys, an 82-year old chain,
declared bankruptcy earlier this year and FAO Schwarz, the
venerable New York-based toy store has been in bankruptcy
twice in the past two years. And Toys R Us is considering
exiting the toy business altogether, while focusing instead
on the growth of its Babies R Us infant products chain. Toy
manufacturers have also had to adjust to the new retailing
environment. At Play Along Toys, executives are developing
their care bears and cabbage patch kids line of brand name
dolls. Having well-known brands helps, when retailers can
order their own generic toys direct from China.
JAY FOREMAN, CEO, PLAY ALONG TOYS: The retailers are starting
to go now direct to the factories in cutting out the middle
man. So in order to really be relevant and competitive at
retail and profitable, by bringing the brand names to the
retailer, those are the things they can`t get from a 100 other
guys. When you have cabbage patch, you`re the only guy who
has cabbage patch. You`re the only person that has care bears
and if they like the brand and they want to stock the brand,
they have to get the brand from you.
YASTINE: Toy manufacturers are facing their own competitive
challenges these days, mainly because a lot more younger children
are playing video games and that presents a problem if all
you make are traditional toys. Toy makers like Mattel are
hoping to get back some market share from video game makers
with products like this. It`s part iPod and part digital video
player. It comes with a line of additional memory plug ins
and other accessories. Analysts say Mattel and other traditional
toy makers will need more such products to attract the eight
through 12-year olds whose purchases are now going for video
games.
CONDER: We`re seeing kids as young as six start at that age
to start to seriously play video games and I`m not talking
about learning, educational type of video games. I`m talking
about just regular entertainment-type video games. So that
is an ongoing issue and will be for the foreseeable future
in our opinion for the traditional toy manufacturers.
YASTINE: And industry analysts say traditional toy makers
will have to pack a lot more technology into their dolls,
toy cars and board games if they want to compete with the
new crop of video game offerings.
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.
11/26/04:
Fannie Mae's Reconstruction Period
PAUL
KANGAS: While Fannie Mae has been under fire for accounting
oversights, the mammoth home mortgage company touches the
lives of most Americans who buy a home. Angela Terrell Heath
explains how Fannie Mae drives the nation`s mortgage market.
ANGELA
TERRELL HEATH, NIGHTLY BUSINESS REPORT CORRESPONDENT: You
can see the power of Fannie Mae here at this computer. The
program is called Desktop Originator and it`s the automated
underwriting system developed by Fannie Mae. It helps lenders
like Jim Maclin determine a mortgage applicant`s risk. Filled
with decades of data, the software raises red flags when it
spots potential problems in an application. But it also allows
Maclin to successfully process thousands of mortgage applications
a month.
JIM MACLIN,
PRESIDENT, PREFERRED MORTGAGE: It`s rapidly increased the
approval process. What used to take 30 to 60 days for the
process from beginning to close from finding the house, making
an application for that property and closing, it can be as
short as a week.
HEATH:
When Fannie Mae`s software approves a loan, it`s agreeing
to buy that loan from Maclin later. In return, Maclin gets
cash to make more loans.
MERCY
JIMENEZ, SR. VP SINGLE FAMILY BUSINESS, FANNIE MAE: Whether
you are a first-time home buyer, a borrower on your 20th refinance
or a senior who needs a reverse mortgage, we like to feel
that we`re going to equip our lenders and our partners with
the ability to deliver the right mortgage for each borrower.
HEATH:
So far this year, the company has bought more than $200 billion
worth of mortgages from hundreds of lenders around the country.
The company currently has a total of just over $900 billion
in mortgages and mortgage securities in its own investment
portfolio. Fannie Mae sells most of the homes in the form
of mortgage-backed securities. These are bundles of similar
mortgages sold to investors such as pension funds and banks
around the world. Fannie Mae guarantees that investors will
get the cash flow that the securities promise.
TOM STANTON,
PROFESSOR, JOHNS HOPKINS UNIVERSITY: Fannie Mae is very important
to the financial markets because it`s so big. It`s a $2 trillion
institution. That`s huge. So it`s very important. That`s different
from asking, do we need Fannie Mae.
HEATH:
Congress created Fannie Mae in 1938 to provide a steady flow
of money to finance housing for low and moderate income buyers.
The company is publicly traded but it has a line of credit
with the U.S. Treasury that some say gives it an implicit
Federal guarantee.
KENNETH
GUENTHER, PRESIDENT, GUENTHER CONSULTING SERVICES: When they
go out and borrow money, they can borrow money at a cheaper
rate because the people lending the money, the foreign governments,
the investors of the west, are there saying, well, our money`s
not at risk. Our money is good because the U.S. government
will be there as a backstop.
HEATH:
Critics charge this relationship gives Fannie Mae an unfair
advantage in the marketplace. Some say the company`s portfolio
has gotten too big. They say if the mortgage market sours,
Fannie Mae will be stuck holding a bunch of bad loans, forcing
a government bail out. The company has come under increased
scrutiny. Its regulator, the Office of Federal Housing Enterprise
Oversight released a report two months ago criticizing Fannie
Mae`s accounting on complex transactions.
STANTON:
Fannie Mae is most important because it`s so large. It`s fast
growing. It`s highly leveraged and it`s poorly regulated.
HEATH:
These concerns put reform of Fannie Mae near the top of the
congressional agenda next year, but Congress isn`t the only
group concerned. Investors and housing experts are worried
that Fannie`s problems could impact the entire mortgage finance
system. Angela Terrell Heath, NIGHTLY BUSINESS REPORT, Washington.
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.
11/26/04:
Market Monitor- Bernie Schaeffer, chairman of Schaeffer`s
Investment Research
PAUL KANGAS: My guest market monitor this week is Bernie
Schaeffer, chairman of Schaeffer`s Investment Research and
the publisher of the popular monthly newsletter called "The
Option Advisor." And Bernie, welcome back to NIGHTLY BUSINESS
REPORT. Great to see you.
BERNIE SCHAEFFER, CHMN. & CEO, SCHAEFFER`S INVESTMENT RESEARCH:
Always a pleasure Paul.
KANGAS: For most of this year, you have been extremely cautious
about the stock market`s advance, even though you`ve done
well on the long side of the options market which is your
specialty. Why are you so cautious and why do you feel this
market is in your own words, vulnerable? Vulnerable to what?
SCHAEFFER: That`s the key, vulnerable to something coming
out, coming out of the blue basically and that`s when markets
are most quiescent so to speak when volatility gets extremely
low, when investors focus away from the risks and focus on
the opportunity, which is what we`re getting in this pre and
post election rally. There`s a big rush by the money managers
to have that big year made up from the last couple of months
of the year.
KANGAS: So it`s a combination of things like the weak dollar
and the giddy growth in the economy, things like that?
SCHAEFFER: Well, yeah, of course the growth, particularly
on the earnings side, seems to be decelerating. We`re going
to get into single digit growth in the first quarter of next
year. The Fed is raising rates. Inflation, we had a 1.7 percent
PPI number last month. The dollar is weakening. Gold and gold
stocks are taking off. A little bit of rumblings below the
surface and of course I`m not even mentioning the geopolitical
risk that`s already out there. 1980s, in the mid 1980s, the
market went up, up, up, up, even though the dollar was declining,
even though we had trade and budget deficit problems and then
all of a sudden, a certain breaking point was reached and
the market tumbled and that`s the concern. That`s why I advocate
having an aggressive cash reserve. At the same time.
KANGAS: How much percentage gain?
SCHAEFFER: About 25 percent. I would go even more if you
were a more conservative investor, but at the same time, pursue
the opportunities that are out there in sectors like energy,
gold, utilities, the sectors that I`ve been recommending all
along this year, plus some of those special situations that
I`ve mentioned in those broadcasts.
KANGAS: When you were last with us May 7th of this year,
you were also very cautious but you did give us some tall
recommendations. Let`s have a view of what the record was.
ChevronTexaco was down around 45, then did very well, up nearly
20 percent. You must have cleaned up on the calls there.
SCHAEFFER: Did very well, premiums were modest.
KANGAS: And then Taser really took off and you must have
made a bundle on this one.
SCHAEFFER: Aggressive premiums on a volatile stock and when
that stock takes off, you can make a lot of money trading.
KANGAS: I congratulate you on two great calls there and I
mean calls in the true sense of the word. You had a put recommendation
on Best Buy and I noted that since it was 52 and went as low
as 44 during the period that your put option was still good.
You did do exercise it.
SCHAEFFER: I was looking for a bigger profit there so I guess
you could say I got a little bit greedy and got away from
me, but you got to go for big profits in these options trades.
KANGAS: OK, let`s go for some big profits and some more new
suggestions.
SCHAEFFER: Sure. I got two recommendations on the call side,
XM Satellite Radio, which I own, recommending calls going
out to April of 2005.
KANGAS: What`s the premium percent?
SCHAEFFER: The premium would be about 10 percent of the price
of the stock. The stock has been very volatile, up from the
single digits, still down from its all-time high of 48, but
I think it has a lot of appreciation potential, potential
for a big short covering rally.
KANGAS: OK, number two.
SCHAEFFER: Number two, Pixar Animation, again special situation,
dynamically growing industry, a big short interest, a lot
of potential for aggressive move to the upside, not without
downside risk but with options, you want to take advantage
of that upside potential, about an 8 percent premium there
on Pixar.
KANGAS: Very reasonable for such a volatile stock.
SCHAEFFER: For an April 2005 and I have no ownership in it.
KANGAS: No ownership in the Pixar calls I take it. Do you
have a put recommendation?
SCHAEFFER: I have a put recommendation. My biggest concern
is big cap and tech big cap is a subset of that concern. Cisco
Systems I`m recommending puts on that, January 2006, option
premiums are very low, only 8 percent for a 14-month put on
Cisco.
KANGAS: And it`s already had quite a drop but you think it`s
going to have an even bigger drop.
SCHAEFFER: Yeah, Cisco, although it did get down to about
8 at its lows, yes, I think Cisco has the potential to move
down to the low teens and I have a position, an ownership
position in Cisco.
KANGAS: All right. Bernie, thanks very much for your insight.
It`s great to have you with us again.
SCHAEFFER: Always a pleasure.
KANGAS: My guest Bernie Schaeffer of Schaeffer`s Investment
Research.
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.
11/26/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Wall Street chocked up modest gains this morning
amid optimism over good holiday retail sales and a continuing
recovery in the U.S. economy. At mid-morning, the Dow was
up 20 points and the NASDAQ rose eight points. A lack of corporate
news and very few analyst reports, along with extremely light
volume, caused a fade in stocks by the early 1:00 p.m. closing
bell. The Dow Industrial Average ended with a gain of only
1.92 at 10,522.23. The Dow rose in all four of this week`s
sessions for a net gain of 65 1/3 points. The NASDAQ Composite
fell .57 today, to end at 2101.97. This week, it fell twice
and rose twice, had a net gain of 31 1/3 points. The Standard
& Poor`s 500 Index gained .89 to close at 1182.65 today. Over
in the bond market, the 10-year note fell 9/32, putting the
yield at 4.23 percent.
Big board volume leader on a measly 9.3 million shares, Pfizer
(PFE) up $0.37. Nine million made the most active list. That
shows you what a slow day it was.
Then Nortel Networks (NT) edged a penny higher.
El Paso Corp. (EP) had a good gain of $1.16. The story here,
last Tuesday late in the day El Paso reported a second quarter
profit of $0.03 a share versus a loss of $2.07 the year before.
GE (GE) was down $0.18. Today`s "Wall Street Journal" says
GE is going to provide $140 million of internal liquidity
or interim I should say liquidity to U.S. Air in a leasing
and financing deal.
Lucent Tech (LU) fell $0.03. That was fifth in big board
volume.
Merck (MRK) moved up $0.48.
Calpine (CPN) $0.18 gain there.
Citigroup (C) lost a dime a share.
Time Warner (TWX) an $0.08 loss.
Tenth in big board volume was SBC Communications (SBC) with
a gain of $0.12 per share.
US Steel (X) look at that gain, up $3.30. As you heard, the
steel group is strong on the news that Nissan is stopping
some car production in Japan due to steel shortages over there.
Let`s have a look at that whole steel group.
Look at AK Steel Hldg (AKS) and Allegheny Tech (ATI) and
International Steel Group (ISG) Nucor (NUE), all big gains
on that news.
Boston Scientific (BSX) edged up $0.72. The new "BusinessWeek"
magazine quotes M&R Capital Management as saying this company
is undervalued and it has a very strong product pipeline.
Saks Fifth Avenue (SKS) up $0.85. The new "BusinessWeek"
also notes that this company`s real estate holdings are undervalued.
Martha Stewart Living Omnimedia (MSO) up $2.89. That`s a
new high for the one year. That`s on renewed confidence apparently
the company will benefit quite a bit from the Kmart and Sears
merger.
Sprint Corporation (FON) up $0.27. UBS financial increased
its price target from $24 to $27 a share and repeated a "buy"
on Sprint. And Supervalue down $0.45. UBS financial downgraded
this from "buy" to "neutral" because UBS sees little upside
potential from this level. It`s very close to its 12-month
high incidentally.
Google (GOOG) topped the NASDAQ active list, up $4.63. Followed
by Microsoft (MSFT) with a $0.04 loss.
Apple Computer (AAPL) gained a half a dollar.
Intel (INTC) a $0.40 loss.
Sirius Satellite Radio (SIRI) moving up $0.26 a share, fifth
in volume.
Cisco Systems (CSCO) a $0.02 gain.
eBay (EBAY) was down 0.21.
A $0.47 I should say, Taser Intl (TASR) closed at 47 with
a loss of
$3.51. A "New York Times" article today suggests Tasers stun
guns are not
as safe as a recent Federal study claims.
Yahoo! (YHOO) $0.20 gain there.
Tenth in big board dollar volume was Dell Inc (DELL) with
an $0.18 loss.
Oracle (ORCL) $0.13 drop. The company has nominated four
candidates to serve on Peoplesoft`s board of directors.
And finally the shares of United Therapeutics (UTHR) rose
nearly $4 after its Remodulin drug won FDA approval to treat
high blood pressure in the lungs intravenously.
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.
11/26/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10522.23 +1.92 + .0
HIGH 10543.29
LOW 10508.56
NASDAQ COMP. 2101.97 -.57 -.0
HIGH 2110.38
LOW 2101.81
VOLUME 504.4
PREVIOUS 1,152.1
UP VOLUME 307.6
DOWN VOLUME 189.6
DOW TRANSPORTS 3647.99 +.40 + .0
DOW UTILITIES 333.58 +.84 + .3
CLOSING TICK +226
S&P 500 1182.65 +.89 + .1
S&P 100 562.65 -.05 - .0
MIDCAP 400 640.43 +.48 + .1
REUTERS/CRB 291.17 -.59 - .2
NYSE COMPOSITE 7046.69 +30.34 + .4
VALUE LINE 391.19 +.89 + .2
RUSSELL 2000 631.16 +1.66 + .3
DJW 5000 11635.64 +14.42 + .1
U.S. TREASURIES
5-YEAR NOTE 3.375%
Oct. 15,2009 99 12/32 -5/32 + 3.64
10-YEAR NOTE 4.25%
Aug. 15,2014 100 5/32 -9/32 + 4.23
30-YEAR NOTE 5.375%
Feb. 15, 2031 107 4/32 -9/32 + 4.89
LEHMAN BROS.
LONG BOND INDEX 1758.21 -4.29
DOW CLOSE 10522.23 +1.92 + .0
ADVANCES 1845
DECLINES 1231
NEW HIGHS 406
NEW LOWS 1
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 27.16 +.37 +1.4
NT Nortel Networks 3.38 +.01 +.3
EP El Paso Corp 11.50 +1.16 +11.2
GE GE 35.46 -.18 -.5
LU Lucent Tech 3.98 -.03 -.8
MRK Merck & Co 27.70 +.48 +1.8
CPN Calpine 3.57 +.18 +5.3
C Citigroup 45.42 -.10 -.2
TWX Time Warner 18.01 -.08 -.4
SBC SBC Comms 25.48 +.12 +.5
NASDAQ CLOSE 2101.97 - 0.57 - .0
VOLUME 673.8
PREVIOUS 1,644.6
ADVANCES 1704
DECLINES 1218
NASDAQ ACTIVES
GOOG Google 179.39 +4.63 +2.7
MSFT Microsoft 26.60 -.04 -.2
AAPL Apple Computer 64.55 +.50 +.8
INTC Intel 23.21 -.40 -1.7
SIRI Sirius Satellite 6.51 +.26 +4.2
CSCO Cisco Systems 19.23 +.02 +.1
EBAY eBay 111.50 -.21 -.2
TASR Taser Intl 47.00 -3.51 -7.0
YHOO Yahoo! 37.81 +.20 +.5
DELL Dell Inc 40.58 -.18 -.4
AMEX CLOSE 1407.14 + 23.74 + 1.7
INDEX SHARES
DIA DIAMONDS TRUST 104.92 -.11 -.1
QQQ NASDAQ 100 39.17 -.18 -.5
SPY S&P DEP.RECEIPTS 118.30 -.17 -.1
STOCKS IN THE NEWS
X US Steel Corp 51.25 +3.30 +6.9
AKS AK Steel Hldg 13.13 +1.66 +14.5
ATI Allegheny Tech 22.93 +2.15 +10.4
ISG Intl Steel Group 40.72 +1.62 +4.1
NUE Nucor 54.00 +2.85 +5.6
BSX Boston Scientific 34.32 +.72 +2.1
SKS Saks Inc 14.64 +.85 +6.2
FON Sprint Fon Group 22.69 +.27 +1.2
SVU SuperValu 31.87 -.45 -1.4
ORCL Oracle 12.66 -.13 -1.0
UTHR United Therapeut 45.51 +3.97 +9.6
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