12/06/04: Oil Prices Continue To Experience Ups & Downs

SUSIE GHARIB: Oil prices are back up again, closing just shy of $43 a barrel today, rebounding from a three-month low. In New York trading, light sweet crude for January delivery gained $0.44 to $42.98 to a barrel. A terrorist attack in Saudi Arabia sparked the rally. But the market`s also looking for Friday`s OPEC meeting, when the cartel might cut production. Suzanne Pratt reports.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Oil prices were back on surer footing today after tumbling sharply last week. Experts say the market was jittery this morning following an attack on the U.S. consulate in Saudi Arabia. Saudi Arabia is the world`s biggest oil exporter and this latest incident revived concerns that terrorism might threaten oil shipments from that region. After several relatively quiet months, experts say there`s no question world oil markets remain extremely vulnerable to acts of terrorism.

JACK AYDIN, OIL ANALYST, KEYBANC CAPITAL MARKETS: Any terrorist activities eliminating something of, you know, like a 1 percent or a half a percent from the marketplace basically could push up prices drastically.

PRATT: On top of renewed worries about terrorism, this Friday`s OPEC meeting in Egypt is generating plenty of speculation in the oil markets. A number of cartel members would like to see a cut in official production ceilings in order to combat falling prices. Experts say a more likely scenario would be quota compliance, because OPEC members -- Saudi Arabia in particular-- are actually overproducing.

IRA ECKSTEIN, OIL TRADER, AREA INTERNATIONAL: They`re already producing 1.8 million above their quotas right now. So if they say that they`re going to keep their quotas, that`s actually a cut of 1.8 million barrels of oil. So that`s pretty bullish on the market.

PRATT: No matter what OPEC decides, the fact remains that oil prices have spiraled lower by 22 percent since reaching a high of nearly $55 a barrel in late October. And many experts believe oil prices will remain in a tighter trading range in the coming months-- some say between $38 and $46 a barrel.

ECKSTEIN: I think we`re going to be in tight range. But in the northeast, if we get a colder winter, that could throw something else into the equation. I think if we get a cold winter, crude oil could go to that $45, back up to that $50 range, pretty quick.

PRATT: When it comes to oil prices, Mother Nature can work both ways. Because of milder-than-normal weather in the U.S. in October and November, experts say daily demand for winter fuel was off significantly. 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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/06/04: One on One with Thomas Falk, Chairman & CEO, Kimberly-Clark

SUSIE GHARIB: Paper products giant Kimberly Clark is hoping to save some dough. The maker of Kleenex tissues and Huggies diapers said today it wants to cut costs by up to half a billion dollars over the next three years and it`s going to be a challenge. The company is fighting a price war over its diapers and training pants with rival Procter & Gamble, and analysts say that`s putting pressure on profits. Still, today Kimberly Clark also reaffirmed guidance to earn $0.89 to $0.91 a share in the fourth quarter, right in line with what Wall Street had been expecting. And Kimberly Clark chairman and CEO Thomas Falk joins us now to talk more about the outlook for the company. Mr. Falk, it`s a pleasure to have you on our program.

THOMAS FALK, CHAIRMAN & CEO, KIMBERLY-CLARK: Thank you Susie.

GHARIB: Let me begin by asking you about this twin goal of gaining market share and cutting costs. It seems like a real challenge. How are you going to do that?

FALK: We`ve been do it, that`s the great news. We`re really on track in 2004 to deliver strong cost savings and deliver on our earnings growth goal. So we just need to continue that in 2005 and beyond.

GHARIB: As we just mentioned, there`s been aggressive competition in the diaper, in the disposable diaper market. What`s your strategy there to compete against Proctor & Gamble?

FALK: We`ve got a leading share in about 80 markets around the world, in the disposable diaper business, so we compete with Proctor in many categories around the world. It`s really about understanding our customers, shoppers and users and bringing innovative products to the marketplace ahead of our competition.

GHARIB: All right. Where do you see the most potential for new growth? You have so many, a wide range of products, where do you see the real growth?

FALK: Well, certainly the diaper category and related categories has been a big plus for us, the pull ups business which really was kind of a spin off of our diaper business a number of years ago, we`ve seen double digit growth in our pull ups business for the last five consecutive quarters and that`s a business we`re still a very high percentage of our sales are still in the U.S., so we can take that business and have a real global success story there.

GHARIB: I saw that you have spun off your pulp products unit just recently. Now that you`ve done that, are you satisfied with the product lines that you have, or do you see any other changes strategically?

FALK: Yes. We`re really now focused in our global health and hygiene categories. We`ve got three core businesses, personal care, consumer tissue and our business to business operations and we`ve got big brands in big categories.

GHARIB: Do you see spinning off any of your other businesses? I know you in like the surgical gloves and some other health care products. Do you see moving away from that and just being a pure play paper products company?

FALK: No, we`re really out of the paper business per se. We`ve got a great tissue business. We`ve got a great personal care business and our health care business has got tremendous growth opportunities for us, especially as we look outside the U.S.

GHARIB: Looking outside the U.S., what is the growth prospects in the international markets?

FALK: As you look at the developing and emerging markets, places like Brazil, China, India, India, Indonesia, Turkey, we see strong growth opportunities and really double digit volume growth opportunities in those key markets. So that`s something we`re putting a lot of resource and focus against.

GHARIB: Do you find that the weak dollar is helping you or hurting you, because you`re in both international markets as well as in the U.S.

FALK: Well, in most of our markets we have to make our products pretty close to where we sell them. So we`re not a real big exporter. So obviously as foreign currencies are stronger, we move more of our earnings into those other markets, that should be a little boost to our earnings in the future.

GHARIB: Tell us a little bit about your stock. We`ve seen it had a pretty good move over the last couple of months and today you announced that you`re increasing your dividend. You`re buying back some stocks. Are you pleased with the way your stock has being going?

FALK: Well, as we look over longer periods of time, if we looked at a 10 year, a five year or a one-year return in Kimberly Clark shareholders versus the overall market, we`ve outperformed the S&P over those 10, five- year and one-year periods and that`s really the ultimate test, is can we deliver better returns than the overall market as a whole? That`s what we`re really shooting for.

GHARIB: What do you think that investors do not understand about your company?

FALK: Well, we had a great meeting with investors today and I think they`re tracking right with us. I mean they`re focused on our growth prospects. They believe in the growth goals that we`ve set up for ourselves are reasonable. They like the strong cash flow and they really like the fact that that cash flow is coming back to them in the form of higher dividends and higher share repurchases.

GHARIB: It was a pleasure having you on the program. Thank you very much and good luck to you and your company.

FALK: Thank you Susie.

GHARIB: We`ve been speaking with Thomas Falk, chairman and CEO of Kimberly Clark.

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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/06/04: The Risks & Rewards of Social Security Reform

SUSIE GHARIB: The White House is considering borrowing between $1 and $2 trillion to help pay for the transition from the current Social Security system to a system of personal accounts. The administration says leaving Social Security as is would mean massive tax hikes or big benefit cuts for younger workers. As Darren Gersh reports, there could be both risks and rewards for borrowing to reform Social Security.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: You could think of the financial hole in Social Security the way some people look at their mortgage: it is cheaper if you pre-pay it.

MICHAEL TANNER, DIR., PROJECT ON SOCIAL SECURITY, CATO INSTITUTE: So if we can reduce those overall costs by paying some transition right now, we`re much better off. In many cases, it is borrowing a little bit today may save us a lot more borrowing down the road.

GERSH: That`s the way the White House sees it, today suggesting that some borrowing now will ease the way to a better system of personal accounts down the road. Advocates of reform argue this is simply a matter of timing. Social Security will need to borrow trillions to pay benefits in the future, so it shouldn`t matter if some of that is borrowed now.

TANNER: So it could be done and wouldn`t have a severe impact on financial markets or anything of that nature. On the other hand, to the degree that we can fund any transition by reducing government spending or finding non- debt ways to pay for this transition, we would get much more economic bang for our buck.

GERSH: But skeptics worry that the transition to a system of personal accounts will require borrowing at least $1 trillion in the coming decade, but any real savings would come 30 years later. Not only would that hurt the economy, critics say it also replaces a promise to pay Social Security benefits in the future with a commitment to pay investors interest right away.

PETER ORSZAG, SOCIAL SECURITY ANALYST, BROOKINGS INSTITUTION: Frankly there is a lot more flexibility for the government to adjust future benefits than there is for it to renegotiate publicly held debt.

GERSH: And there is a risk that borrowing money could make the Social Security challenge even tougher.

MAYA MACGUINEAS, PRES., COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: The problem-- because Congress is hesitant to say no to seniors on a lot of issues-- is that we borrow the money now. We promise long-term savings in the long run, and then it doesn`t materialize because Congress goes ahead and expands the program.

GERSH: There is also disagreement on how much financial markets have factored Social Security`s problems into current long-term interest rates.

MACGUINEAS: Financial markets are not assuming that we will pay all these benefits. They are assuming that we will make Social Security affordable and part of that will be done by scaling back promised benefits.

GERSH: So as with any loan, whether it makes sense to borrow for Social Security reform depends on what you get for it now and how you plan to pay for it later. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.

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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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

  12/06/04: "Commentary"-The Future of the Falling Dollar

PAUL KANGAS: Tonight`s commentator is looking into his currency crystal ball and sees a development that could change the rules of the game when it comes to the U.S. dollar. Here`s Mark Zandi, chief economist of economy.com.

MARK ZANDI, CHIEF ECONOMIST, ECONOMY.COM: The value of the dollar has fallen steadily over the past three years and more sharply in recent weeks. To date, this has meant little to the average American. This is about to change. The dollar`s value is determined by global investors, who are constantly scouring the globe to find the best investment. When investors believe returns on U.S. assets will not measure up to returns elsewhere, the dollar falls. Investors have indeed been eyeing European assets more favorably. The euro is at a record high vis-a-vis the dollar. But the dollar`s decline is not over. I believe the dollar is set to decline substantially against the Chinese currency, the yuan, early next year. The Chinese manage the yuan so that it remains fixed in value against the dollar. While this policy has historically worked well for China and the U.S., it is now a problem for both. For the U.S., it means an out-of-control trade deficit. For the Chinese, it means an overheating economy. Chinese-made products are ubiquitous. A stroll down any Wal-Mart store aisle will attest. A stronger yuan will force retailers to drop their everyday low pricing policies and pass along their higher prices to you and me. The day the Chinese give up their yuan peg will be the day most of us realize the implications of a lower dollar. U.S. consumers have benefited enormously from the previously strong dollar. Adjusting to a weaker dollar will be a consequential economic hardship.

This is Mark Zandi.

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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/06/04: Paul Kangas' "Stocks In The News"

PAUL KANGAS: Those higher oil prices had Wall Street in retreat this morning. The blue chips were also undermined by brokerage downgrades of Pfizer and Alcoa. Just before noon, the Dow was off 55 points, NASDAQ off eight. Modest strength in computer and biotech stocks helped the NASDAQ market firm up this afternoon, but the blue chips remained on the defensive. The Dow industrial average closed down 45.15 at 10,547.06. The NASDAQ Composite ended with a 3 1/4 point gain at 2151.25. Standard & Poor`s 500 lost almost a point ending at 1190.25. In the bond market, the 10-year note rose 8/32, putting the yield at 4.22 percent.

New York exchange volume leader on nearly 36 million shares, Pfizer (PFE) down $0.68. Merrill Lynch downgraded it from "buy" to "neutral" because Merrill sees just modest upside potential for the stock from this level.

Lucent Technologies (LU) no change there.

Motorola (MOT) moved up $0.45.

Time Warner (TWX) a $0.14 gain. CEO Dick Parsons said Time Warner has turned around and is heading in the right direction. Also he said the company still wants to acquire Adelphia Cable.

Advanced Micro Devices (AMD) up $1.63. A magazine called "Maximum PC" named the company`s Aflon (ph) processor as the best central processing unit or CPU as they call it.

EMC (EMC) was up $0.41.

Citigroup (C) $0.52 gain there.

NorTel Networks (NT) dropped $0.02.

Merck & Company (MRK) $0.57 loss.

And Hewlett-Packard (HPQ), tenth in big board volume, rose $0.34.

Alcoa (AA), a Dow stock, down $0.44, traded as low as $31.95 today after Goldman Sachs downgraded it from "outperform" to just "in line."

And Navistar International (NAV) down $2.42. The company sees its first quarter earnings coming in at lower than expected $0.25. Wall Street was expecting $0.37. Also Standard & Poor`s thinks Navistar stock is fully valued at this particular level.

Circuit City Group (CC) down $1.08. Third quarter same store sales down 4.3 percent. The SunTrust Robinson Humphrey brokerage downgraded the stock from "buy" to "neutral." Raymond James financial brokerage downgraded it from "strong buy" to just a "market perform" rating.

Sears Roebuck & Company (S) moving up $0.91. An analyst at Smith Barney is speculating that Vornado, which owns 4.3 percent of Sears, may, along with a partner, counter Kmart`s $10.8 billion buy out bid. He sees the stock at $70 to $80 a share.

Sola International (SOL) the eyeglass maker, up $5.41. A newly formed company headed by Carl Zeiss AG will acquire Sola for $28 a share in cash.

American Real Estate Partners (ACP) up $1.90. A "Barron`s" article notes that this company is just like a Carl Icahn hedge fund. He owns 87 percent of the stock and its net asset value is over $30 a share.

DaVita (DVA) up $3.32. That`s a positive reaction to a "Wall Street Journal" report saying the company is close to buying the dialysis operations of Sweden`s Gambra Corporation for about $3 billion.

And Fleetwood Enterprises (FLE), the RV maker, losing $0.90. Second quarter earnings higher, $0.14 versus $0.10 last year but the company is projecting a third quarter net loss.

The volume leader on the NASDAQ 100 (QQQ) up $0.14, very active today.

And then Sirius Satellite Radio (SIRI) continuing to move higher, up $0.54, good percentage move.

Microsoft (MSFT) gained a dime.

And so did Intel (INTC).

Apple Computer (AAPL) up $3.10. JPMorgan boosted 2005 and 2006 revenue and earnings estimates for Apple. Bear Stearns boosted its price target from $60 to $72 a share.

Research In Motion (RIMM) down $2.18.

Cisco Systems (CSCO) $0.39 gain.

Google (GOOG) fell $4.11.

Oracle (ORCL) a $0.31 gain.

And tenth in dollar volume on NASDAQ was eBay (EBAY) with a loss of $0.07.

Look at this horrendous loss, down almost 60 percent. Corgentech (CGTK). The story here in the biotech firm`s late stage trials of main grafts failed to meet expectations and down went the stock.

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) 2003 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

12/06/04: Market Stats

                  
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE

DOW CLOSE             10547.06     -45.15       - .4
HIGH                                        10591.99
LOW                                         10526.82

NASDAQ COMP.           2151.25      +3.29        +.2
HIGH                                         2157.43
LOW                                          2138.21

VOLUME                                       1,352.8
PREVIOUS                                     1,562.5
UP VOLUME                                      559.8
DOWN VOLUME                                    742.5

DOW TRANSPORTS         3707.25     -19.49       - .5
DOW UTILITIES           322.21      +2.53       + .8
CLOSING TICK                                    +538

S&P 500                1190.25       -.92       - .1
S&P 100                 566.59       -.49       - .1
MIDCAP 400              642.96      -1.87       - .3
REUTERS/CRB             284.84       +.44       + .2

NYSE COMPOSITE         7082.58     -10.04       - .1
VALUE LINE              394.33      -1.12       - .3
RUSSELL 2000            639.03      -3.18       - .5
DJW 5000              11721.95     -13.32       - .1

U.S. TREASURIES
5-YEAR NOTE 3.50%
Nov. 15,2009          99 20/32      +2/32     + 3.58

10-YEAR NOTE 4.25%
Nov. 15,2014         100  6/32      +7/32     + 4.23

30-YEAR NOTE 5.375%
Feb. 15, 2031        107  1/32     +12/32     + 4.91

LEHMAN BROS.
LONG BOND INDEX        1740.05      +5.39


DOW CLOSE             10547.06     -45.15       - .4
ADVANCES                                        1429
DECLINES                                        1906
NEW HIGHS                                        234
NEW LOWS                                          34

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
PFE   Pfizer Inc         27.21       -.68       -2.4
LU    Lucent Tech         3.87      unch.      unch.
MOT   Motorola           18.30       +.45       +2.5
TWX   Time Warner        18.19       +.14        +.8
AMD   Advanced Micro     24.85      +1.63       +7.0
EMC   EMC Corp           14.80       +.41       +2.9
C     Citigroup          46.17       +.52       +1.1
NT    Nortel Networks     3.67       -.02        -.5
MRK   Merck & Co         28.11       -.57       -2.0
HPQ   Hewlett-Packard    21.33       +.34       +1.6

NASDAQ CLOSE           2151.25     + 3.29       + .2
VOLUME                                       2,150.8
PREVIOUS                                     2,431.4
ADVANCES                                        1399
DECLINES                                        1752

NASDAQ ACTIVES
QQQQ  Nasdaq 100         40.27       +.14        +.4
SIRI  Sirius Satellite    8.09       +.54       +7.2
MSFT  Microsoft          27.33       +.10        +.4
INTC  Intel              24.01       +.10        +.4
AAPL  Apple Computer     65.78      +3.10       +5.0
RIMM  Rsch In Motion     89.82      -2.18       -2.4
CSCO  Cisco Systems      19.82       +.39       +2.0
GOOG  Google            176.29      -4.11       -2.3
ORCL  Oracle             13.34       +.31       +2.4
EBAY  eBay              116.34       -.07        -.1

AMEX CLOSE             1408.54     - 7.04       - .5

INDEX SHARES
DIA   DIAMONDS TRUST    105.35       -.31        -.3
QQQ   NASDAQ 100         40.27       +.14        +.4
SPY   S&P DEP.RECEIPTS  119.21      unch.      unch.

STOCKS IN THE NEWS
AA    Alcoa              32.42       -.44       -1.3
NAV   Navistar Intl      38.73      -2.42       -5.9
CC    Circuit City       15.13      -1.08       -6.7
S     Sears              53.21       +.91       +1.7
SOL   Sola Intl          27.52      +5.41      +24.5
ACP   Amer Real Estate   25.95      +1.90       +7.9
DVA   Davita             36.82      +3.32       +9.9
FLE   Fleetwood Enterp   12.95       -.90       -6.5
CGTK  Corgentech          7.71     -11.29      -59.4