12/13/04:
Oracle Obtains PeopleSoft
SUSIE
GHARIB:It`s finally a done deal. Oracle has a deal to
buy Peoplesoft after 18 months of wrangling. In the end, Oracle sweetened
its all-cash offer to $10.3 billion or $26.50 a share. That`s up from the
$24 bid Peoplesoft rejected as inadequate. That`s also a 75 percent
premium from Peoplesoft`s market value before Oracle launched its hostile
takeover offer back in June of 2003. The merger of the two software
providers creates the world`s second-largest maker of business applications
and it ends a nasty boardroom battle marked by acrimonious exchanges
between the companies` managers, some of which played out in court.
Oracle`s CEO Larry Ellison, says it`s a great feeling to finally have
Peoplesoft. NBR.`s Scott Gurvey sat down with Ellison this morning. We`ll
bring you his interview a little bit later in the program.
Besides that Oracle Peoplesoft deal, investors were talking about
tomorrow`s Federal Reserve meeting. Another interest rate hike is widely
expected. But the key issue for Wall Street is what clues the Fed will
give about its plans for 2005. Here`s Stephanie Woods with a preview of
what to expect.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: A quarter point
bump up tomorrow would put the Fed funds rate at 2.25 percent. That action
is part of the move by the Fed toward a neutral rate: not too loose, which
could spark inflation, and not too tight which could worsen unemployment.
LAURENCE MEYER, FORMER FEDERAL RESERVE GOVERNOR: The committee wants to
make sure they don`t remove that stimulus too quickly before the economy
has a chance to grow up a trend for a long enough period to converge back
to full employment.
WOODS: Even though the employment report for November showed a slowdown in
the pace of job creation, a weak dollar and signs of inflation make the
case for higher rates now. But it`s less clear what the Fed might do when
it meets next in February.
MEYER: It becomes a tough call some time in that first quarter or so of
next year, when they really have to make a decision. They are caught
between what we call the data and the forecast. The data is pushing them
forward and the forecast is saying, gosh, you`ve got to slow down at some
point.
WOODS: Analysts expect the Fed to keep raising rates next year, but at a
slower pace. A survey of the bond market association`s chief economists
predicts a 3.5 percent Fed funds rate by this time next year.
ROBERT DICLEMENTE, U.S. ECONOMIC ANALYSIS, CITIGROUP: Presuming that the
Fed moves to 2.25 at its upcoming meeting, that would be essentially 125
basis points in 12 months, literally half the pace of tightening that
they`ve done in the first six months.
WOODS: And that pace shouldn`t send broader rates drastically higher.
DICLEMENTE: I think it`s generally true that in a climate where short rates
are going from 2 percent to 3 percent or 3.5, it`s reasonable to think that
long-term interest rates would probably rise some portion of that. So from
4.25 percent, you`re looking at rates in the 4.5 to 3/4 or 5 percent rate,
not 6 percent or 7 percent.
WOODS: Economists say one wildcard in the forecast is the declining dollar.
They fear if the dollar falls too far too fast, it could spark inflation,
burning the Fed`s plan of gradual moves and forcing it to push rates higher
faster. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.
GHARIB: This morning Oracle CEO Larry Ellison sat down with New York bureau chief Scott Gurvey
to talk about what Ellison now calls his odyssey.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was just about 18
months ago that this began. Did you think it was going to take this long?
LAWRENCE ELLISON, CHAIRMAN & CEO, ORACLE: Never in my wildest imagination
did I think it could take a year and a half. No. I thought this was going
to be over in 90 days to 120 days and I was wrong.
GURVEY: That`s right. We were talking about the end of the year for sure
for closing everything.
ELLISON: That turned out to be right, just the wrong year.
GURVEY: You know the first thing Wall Street is going to ask is whether or
not you paid too much. You had to increase at the last minute the share
price a little bit. Tell me, do you think you paid too much?
ELLISON: I think the answer is it`s a great deal for Oracle shareholders.
This is a value creating merger. It is accretive in `06 to the tune of
$0.02 per share per quarter or $0.08 for the full year to `06 and for `07
it`s even more accretive. In fact it`s even accretive in our fourth fiscal
quarter this year for a penny a share. So this is a value creating, not a
value destroying merge.
GURVEY: And there are something like 12,000, almost 13,000 customers that
come to you now.
ELLISON: We double our customer base in the application space. We have
twice as many customers to sell to. We are increasing our sales capacity
by 50 percent. People out there selling the applications, our dedicated
application sales force. We are now the number one application company in
North America, the number one application company in the United States, the
number one application company in banking and the number one application
company in government, in health care, in higher education, in a variety of
other industrial segments that are extremely important to us.
GURVEY: What about the Peoplesoft customers who are out there? What kind
of a message do you have for them? Some of them certainly are a little bit
nervous. They always would be, something like this happens.
ELLISON: Just like the JD Edwards customers were nervous when Peoplesoft
bought JD Edwards. Our message to them is we are going to keep enhancing
the current Peoplesoft product line which is Peoplesoft eight and develop
Peoplesoft nine. In fact, we`re going to keep the Peoplesoft support and
development team separate from the Oracle support and development team and
have them finish up Peoplesoft nine and deliver that to the customers.
They do a good job of answering their questions, providing a high quality
of service and a high rate of product improvement to those Peoplesoft
customers.
GURVEY: One of the interesting things that I think that came out of the
Justice Department`s investigation on the anti-trust issue was the inkling
that Microsoft might want to become a player in this. Do you have any fear
that that will happen?
ELLISON: It`s not a fear. It`s a clear prediction that Microsoft is going
to be here. They`re going to be the price leader. They`re going to be
very very aggressive. They always are. Microsoft bought Nvision, which is
a company in Europe aimed at the mid-market and that`s doing quite well.
They bought Great Plains. It`s not doing as well. It`s a North American
company, a company focused right here in the United States. But
Microsoft has tremendous endurance. I think one of the most interesting
things Bill Gates has ever said is Microsoft is a patient company. So
they`re going to keep at it and they`re going to keep at it until they get
it right. They`re going to keep working, investing in the product. They
are going to be investing in the market and they will be a very, very
serious player.
GURVEY: Tell me a little something about the experience of going up against
the Justice Department. A lot of people thought that was a hopeless cause.
ELLISON: People thought that, you know the hostile... The experts said
hostile takeovers don`t work and they were wrong about that. People said
you can`t... Oracle is kidding itself. We`re Don Quixote like. We`re
just tilting at windmills. There is no chance we can win this case against
the Justice Department. And people similarly were saying there is no
chance that Judge Stein in Delaware is going to pull the pill. We
think that he was more likely to pull the pill than not.
GURVEY: And I guess we should certainly note that the earnings that have
just come out were better than Wall Street was expecting.
ELLISON: Well, this is the first blowout quarter, legitimate blow-out
quarter we`ve had since the bubble days. I mean for a company the size of
Oracle to post EPS growth of 35 percent. It`s not like we weren`t
profitable before. A year ago our profit margins were 37 percent. Not
bad. This quarter they were 41 percent. So it was a wonderful day. We
had a fantastic quarter and we are going into this acquisition in a
position of strength.
GURVEY: And you must be personally happy now to be able to get out of the
courtroom and back to full time running the business.
ELLISON: I definitely prefer working with our engineering teams than
working with our lawyers.
GURVEY: Very good. Thank you, Mr. Ellison.
ELLISON: Thank you.
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.
12/13/04:
Tracking Children With The Help of RFID
SUSIE GHARIB:The world`s largest retailer, Wal-Mart, is about to
roll out what`s called RFID tags to keep better tabs on its merchandise.
But tracking inventory is just one use for the tiny radio-frequency chips.
In Japan, RFID tags are being used for a very different kind of tracking.
Lucy Craft reports from Tokyo.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: When attendance is taken
at Rikkyo primary school, students don`t have to raise their hands and say
"here." All they need do is just show up, like kids always have, at the
school gate. The Tokyo private elementary recently joined a handful of
schools in Japan and the U.S. that are experimenting with something called
radio frequency identification technology.
This school in Tokyo, working with an electronics firm, came up with its
own kid-resistant, key chain-type tags. The plastic tags, fitted with IC
microchips tinier than a grain of sand are hooked inside each student`s
book bag. Now they are monitored the way Wal-Mart tracks cans of peas or
airlines sort baggage-- instantly and invisibly-- with arrival and
departure times neatly sorted at a central computer. This IC chip creates
a weak radio signal detected by antennas in the school gate up to 30 feet
away. When students enter or leave school property, their parents get
instant notification by e-mail. A mobile version of this system installed
on school buses has also been used to check attendance on class field
trips.
TRANSLATION OF: KOICHI YAMAKWA, PROJECT LEADER, PUBLIC SECURITY SOLUTIONS
DIVISION: Schools used to be considered safe. They never closed their
gates. But a series of recent violent attacks at schools have destroyed
their image as peaceful havens. Japanese society and families believe
precautions are needed.
CRAFT: But the allure of radio frequency tags is as much about convenience
as security. Teachers say they`re glad to be relieved of the anxiety and
drudgery of visually counting heads. While privacy advocates in the U.S.
say electronic monitoring of humans smacks of sinister big brother
intrusion, parents at Rikkyo have embraced electronic tagging. They say
the devices add an element of welcome predictability into sometimes chaotic
school schedules, allowing parents to time dinner and pickup times more
easily.
TRANSLATOR: I have absolutely no qualms about the system. I`m very
grateful for it.
CRAFT: Fujitsu reckons that up to half of Japan`s 200 private schools and
as many as 10 percent of the country`s tens of thousands of public schools
eventually will invest in the tracking technology, which is similar to
barcodes but offers durability and the capacity to monitor each child
individually. Printing companies are jostling for a slice of the child
monitoring market. This firm is field-testing an IC card, which students
swipe over a reader when they arrive at and leave evening tutoring centers.
TRANSLATION OF: AKIRA SAKAMOTO, GENERAL MANAGER, RF-ID BUSINESS CENTER, DAI
NIPPON PRINTING: Rather than safety, it`s peace of mind. Knowing
precisely when kids have arrived and left the tutor gives parents enormous
reassurance.
CRAFT: The price tag for setting up a human tracking device system is
hefty. Still, manufacturers see a lucrative market here in Japan, selling
not only to security-obsessed schools, but also to banks, consumer credit
companies and hospitals. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
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.
12/13/04:
"Commentary"- The Fed's Final Decision For 2004
PAUL KANGAS: Tonight`s commentator says it`s time to close the books on 2004 and look
forward to 2005. Here`s Bernard Baumohl, executive director of the
Economic Outlook Group.
BERNARD BAUMOHL, EXEC. DIR., THE ECONOMIC OUTLOOK GROUP: One of the last
big economic events of 2004 comes tomorrow when the Federal Reserve is
likely to raise its benchmark rate to 2.25 percent. So what can we expect
in 2005? Two headline events are likely to unfold next year: one, a
positive development for the U.S. economy, the other, a potential
calamity. First, the good news. China`s 10-year-long currency peg to the dollar will
soon be history. The renminbi`s peg has served as a steroid for the
Chinese economy, turning it into the seventh largest in the world and
helping their companies grab market share away from foreign competitors
everywhere. But international pressure has been building on China to end
this currency link, and now there are signs officials are prepared to have
the renminbi float within a narrow range against the greenback next year, a
change that could improve the U.S. trade balance.
Now for the bad news. Looming menacingly over the global economy is not a
financial crisis, but a geopolitical one. The flash point is again the
Persian Gulf. If Iran, a state sponsor of terrorism, pursues its ambition
to build nuclear weapons, Israel will not stand idly by. Thus, a
dangerous, high stakes confrontation is shaping up between Iran and Israel,
one reminiscent in intensity to the Cuban missile crisis. How this
conflict is settled will have important ramifications, not just for the
oil-rich region, but the world economy. So fasten your seat belts, 2005
could be a very bumpy year. I`m Bernard Baumohl.
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.
12/13/04:
"Last Word"-The Great Canadian CEO Guessing Game
SUSIE GHARIB:
And then there were nine. A week ago, we told you about an online
betting service called Bet-Fair that had created a Canadian futures CEO
market. The idea was to let people gamble on whether 10 selected CEOs
would still be in office past April of next year. Well, one week later,
one of the CEO`s is out. Paul Tellier , the head the Canadian aircraft
maker Bombardier, stepped down today. Bet-Fair has removed him from the
list and is now taking wagers on the remaining nine. Bet-Fair says there
hadn`t been a huge amount of money in the pool, Paul, since the wagering
was only open for a week, so just a few thousand dollars.
PAUL KANGAS: Apparently this is the Canadian futures market`s version of
"Survivor."
GHARIB: It appears so. Yes apparently.
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.
12/13/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: That belief that the economy is growing and the Oracle-Peoplesoft
deal sparked an opening rally in the blue chips this morning. The Dow
jumped 50 points at the outset while the NASDAQ Composite rose 12. Profit-
taking cut the gains over mid-session, but the setback was mild, so
investors figured the path of least resistance was up and up it was. The
Dow Industrial Average surged to a 95-point closing gain at 10,638.32.
The NASDAQ Composite was up 20 1/2 points at 2148.50. Standard & Poor`s
500 gained 10 2/3 points to a high for the year at 1198.68. Over in the
bond market, the 10-year note rose 1/32, leaving the yield at 4.16 percent.
New York exchange volume leader on 27.7 million shares, Sprint Fon Group
(FON) up $0.30. Speculation continues the company and Nextel are well
along in merger talks. Meanwhile, Deutsche Bank Securities downgraded
Sprint from "buy" to "hold" today.
Lucent Technologies (LU) a $0.09 loss.
Pfizer (PFE) gained $0.07.
Motorola (MOT) $0.86. Companies going to reorganize its five business units
into four in order to streamline its operations and cut costs. CS First
Boston said although a Sprint Nextel merger would have a modestly negative
impact on Motorola, the stock`s recent decline has already factored that
in.
Time Warner (TWX) moved up $0.45. That was fifth in volume.
And then General Electric (GE) a $0.79 gain.
Charles Schwab (SCH) up $0.24.
Citigroup (C) up $0.86. After the market closed, American Express and
Citibank announced an alliance where Citibank will issue American Express
branded credit cards globally. No terms disclosed of the deal. Citibank is
only the second bank behind MBNA to co-brand with American Express.
American Express shares in after hours trading moved up about $0.50 from
their closing price.
J.P. Morgan Chase (JPM) a $0.62 gain. There`s a "Barron`s" article about
JPMorgan this weekend and it makes both positive and negative comments.
Tenet Healthcare (THC) down $0.97. The company says fourth quarter results
will be below third quarter levels. Standard & Poor`s repeated a "sell"
recommendation on Tenet.
Honeywell International (HON) up $1.14. Positive reaction to news the
company will acquire British industrial company Novar PLC for about $1.7
billion.
And then Guidant Corporation (GDT) $0.65 loss. Both the "Wall Street
Journal" and the "New York Times" reported the company is seeking over $75
a share from Johnson & Johnson to any (ph) buy out bid. J&J stock was
$0.39 today.
NS Group (NSS) a pipe manufacturer, up $5.35. Raymond James financial
brokerage upgraded it from "outperform" to "strong buy" and boosted its
price target by $8 a share up to $40 a share.
And then World Fuel Services (INT) up $4.09. Very positive article in this
week`s "Barron`s." The company boasted a strong balance sheet, smart
management and a stock at a low P/E ratio of only 13 times next year`s
estimated earnings.
Stelmar Shipping (SJH), the tanker company, up $3.36. Overseas ship
holding group will acquire this firm for $48 a share. Overseas stock was
up $4.59 itself.
And then another company in the same business, oil tankers, General
Maritime (GMR) up $4.15 on speculation they`ll be further merger activity
in that particular industry.
NASDAQ 100 (QQQ) topped the active list, up $0.35.
There you see Oracle (ORCL) up $1.35, positive reaction to the takeover.
And then Microsoft (MSFT) $0.17 gain.
Nextel Communications (NXTL) up $0.23.
PeopleSoft (PSFT) itself up nearly to that $26.50 a share buyout bid from
Oracle, nice gain of $2.47.
Intel (INTC) $0.07.
Sirius Satellite Radio (SIRI) moved up $0.45. This stock will be added to
the NASDAQ 100 Index next Monday.
Cisco Systems (CSCO) $0.15 loss.
And then Electronic Arts (ERTS) moving up $3.38. JPMorgan upgraded it from
"neutral" to "over weight."
And finally we see Google (GOOG) which was tenth in dollar volume on NASDAQ
losing $1.20.
Tippingpoint Technologies (TPTI) up $4.94. 3 Com Corporation will acquire
this company for $47 a share in cash.
And Tuesday Morning (TUES) a retailer of lamps and flatware, china, et
cetera, sees fourth quarter earnings about the same as they were a year
ago, $0.83. The Street was looking for somewhere in the neighborhood of
$1.05 a share, hence the big loss in 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.
12/13/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10638.32 +95.10 + .9
HIGH 10642.53
LOW 10543.21
NASDAQ COMP. 2148.50 +20.43 +1.0
HIGH 2148.50
LOW 2132.19
VOLUME 1,434.1
PREVIOUS 1,443.5
UP VOLUME 1,056.4
DOWN VOLUME 361.9
DOW TRANSPORTS 3724.96 +38.93 + 1.1
DOW UTILITIES 325.03 +5.34 + 1.7
CLOSING TICK +715
S&P 500 1198.68 +10.68 + .9
S&P 100 570.41 +4.91 + .9
MIDCAP 400 645.80 +4.50 + .7
REUTERS/CRB 279.25 +2.63 + 1.0
NYSE COMPOSITE 7102.41 +73.90 + 1.1
VALUE LINE 394.02 +2.97 + .8
RUSSELL 2000 638.03 +5.79 + .9
DJW 5000 11790.29 +98.32 + .8
U.S. TREASURIES
5-YEAR NOTE 3.50%
Nov. 15,2009 99 26/32 -1/32 + 3.54
10-YEAR NOTE 4.25%
Nov. 15,2014 100 25/32 +1/32 + 4.16
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 13/32 +8/32 + 4.81
LEHMAN BROS.
LONG BOND INDEX 1769.67 +1.74
DOW CLOSE 10638.32 +95.10 + .9
ADVANCES 2298
DECLINES 1025
NEW HIGHS 240
NEW LOWS 16
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
FON Sprint Fon Group 24.44 +.30 +1.2
LU Lucent Tech 3.71 -.09 -2.4
PFE Pfizer 27.16 +.07 +.3
MOT Motorola 17.15 +.86 +5.3
TWX Time Warner 18.93 +.45 +2.4
GE GE 37.48 +.79 +2.2
SCH Charles Schwab 11.50 +.24 +2.1
C Citigroup 46.77 +.86 +1.9
JPM JPMorgan Chase 38.25 +.62 +1.7
THC Tenet Healthcare 11.07 -.97 -8.1
NASDAQ CLOSE 2148.50 + 20.43 + 1.0
VOLUME 2,087.1
PREVIOUS 1,817.4
ADVANCES 1949
DECLINES 1190
NASDAQ ACTIVES
QQQQ Nasdaq 100 40.28 +.35 +.9
ORCL Oracle 14.63 +1.35 +10.2
MSFT Microsoft 27.25 +.17 +.6
NXTL Nextel Comm 29.99 +.23 +.8
PSFT Peoplesoft 26.42 +2.47 +10.3
INTC Intel 22.63 +.07 +.3
SIRI Sirius Satellite 8.04 +.45 +5.9
CSCO Cisco Systems 19.27 -.15 -.8
ERTS Electronic Arts 57.57 +3.38 +6.2
GOOG Google 170.45 -1.20 -.7
AMEX CLOSE 1399.05 + 6.97 + .5
INDEX SHARES
DIA DIAMONDS TRUST 106.45 +.97 +.9
QQQ NASDAQ 100 40.28 +.35 +.9
SPY S&P DEP.RECEIPTS 120.37 +1.02 +.9
STOCKS IN THE NEWS
HON Honeywell Intl 36.45 +1.14 +3.2
GDT Guidant 70.90 -.65 -.9
NSS NS Group 26.00 +5.35 +25.9
INT World Fuel Svc 44.20 +4.09 +10.2
SJH Stelmar Shipping 47.68 +3.36 +7.6
GMR Genl Maritime 47.95 +4.15 +9.5
TPTI Tippingpoint 46.60 +4.94 +11.9
TUES Tuesday Morning 30.01 -6.27 -17.3
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