12/15/04: Sprint & Nextel Make The $35B Connection

JEFF YASTINE: Two of the nation`s biggest wireless providers are getting connected. Sprint and Nextel announced today they plan to merge in a $35 billion deal that would create the third largest cell phone provider in the U.S. More importantly, the companies claim the corporate marriage will ring up cost savings of more than $12 billion. Scott Gurvey has the details.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The combined wireless firm will be called Sprint Nextel and existing shareholders of each company will own 50 percent of the new one. It will be the third largest U.S. wireless carrier with 39 million subscribers, behind Cingular`s 46 million and Verizon`s 42 million. The deal comes less than two months after Cingular closed its $41 billion purchase of AT&T Wireless.

KENNETH LEON, TELECOM ANALYST, STANDARD & POOR`S: While Nextel and Sprint had very strong wireless franchises, it`s a numbers game. And if you had two major players that were going to have 40-45 million subscribers, you wanted to have something that was near that. And the only way you`re going to get that done was through a merger and that`s what Nextel was thinking and it certainly was what Sprint was thinking as well.

GURVEY: Reston, Virginia-based Nextel popularized cell phones with a walkie-talkie like feature that became very popular with businesses. Nextel was facing the expensive challenge of upgrading its network and the deal with Sprint will allow it to do that and offer customers advanced services.

TIMOTHY DONAHUE, PRESIDENT & CEO, NEXTEL: This was an offensive strategy, not a defensive strategy. We had said from the outset and I would say it today that we were perfectly comfortable standing on our own, but what we looked at was this compelling story about network spectrum and products.

GURVEY: Overland Park, Kansas-based Sprint will spin off its local phone service into a new company which will pay a dividend. The new Sprint Nextel will not. The new company`s shares will trade on the New York Stock Exchange. Nextel shares currently trade on the NASDAQ.

GARY FORSEE, CHMN & CEO, SPRINT: It is a new company and this new company is going to have a different profile than the two companies that are coming together to create the new company. And I think, as it relates to investor expectations, this is going to be a fantastic story.

GURVEY: The closing for this deal is not expected until the second half of next year because of all the regulatory approvals which are required. Scott Gurvey, 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.

12/15/04: President Bush's Economic Signal & U.S. Treasury Secretary John Snow's Reaction

PAUL KANGAS: Many of the nation`s business and government leaders were in Washington, D.C. today for the start of a two-day summit on the American economy hosted by President Bush. Susie Gharib is in Washington covering that summit and joins us now from the White House. Susie?

GHARIB: Paul, it has been a very busy day in the nation`s capital. This is the third economic summit President Bush has hosted. And even though the president`s inauguration isn`t until January 20, many people say here that this event is the real kick-off for his second term in office. As Stephanie Woods reports, it was here at the White House earlier today, not at the economic summit, where the president made his most revealing remarks on the economy.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: In a meeting with Italian Prime Minister Silvio Berlusconi, President Bush promised to create an economy that would strengthen the dollar against the euro and other world currencies.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We`ll do everything we can in the upcoming legislative session to send a signal to the markets that we`ll deal with our deficits, which, hopefully, will cause people to want to buy dollars.

WOODS: The dollar and deficit reduction weren`t specifically on the agenda at the White House conference on the economy, although they were discussed. The conference is aimed at advancing the president`s agenda for making tax cuts permanent, privatizing Social Security and curbing class action lawsuits. President Bush attended a panel on the cost of lawsuits, where he heard from frustrated business leaders.

ROBERT NARDELLI, CEO, HOME DEPOT: Lawsuit abuse is not a talking point anymore. I think it`s a sore point for all of us and one that has to be addressed.

WOODS: Mr. Bush is promising to push legal reform through Congress. Also heading for Capitol Hill are Social Security and tax reform.

MARTIN FELDSTEIN, PROFESSOR, HARVARD UNIVERSITY: The economy is on track. The economy is doing very well. Personal incomes are up. Job growth is up. And so we can really shift the focus to these longer term issues.

WOODS: The administration wants to create private individual accounts as part of Social Security. But Democrats, not represented in the White House event, call the proposal a risky scheme.

REP. ROBERT MATSUI, SOCIAL SECURITY SUBCOMMITTEE: If the president`s plan is adopted, he shortens the life of the Social Security system by 10 years. And so instead of 2018 being when the crisis occurs, it`ll be 2018, three years from now.

WOODS: Democrats say they want to see the budget brought under control before changes are made to Social Security. Clearly that`s not something this administration is contemplating. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: One of the key players in President Bush`s economic game plan is Treasury Secretary John Snow. This afternoon, I sat down with him and I began by asking him what he hopes this conference will accomplish by holding discussions on Social Security reform, taxes and healthcare.

JOHN SNOW, TREASURY SECRETARY: These issues drive the economy and underscoring the importance of them, building support for them, building understanding of them and learning from knowledgeable people from across America more about them and how to proceed, how to move forward, that`s the large objective here.

GHARIB: Mr. Secretary, the president has a very ambitious economic agenda. What would you say is priority number one and number two?

SNOW: Well, the overall priority is to keep the American economy strong, growing, expanding, resilient, dynamic, the best place in the world to do business. To do that we`ve got to deal with the deficits. We know that. They`re too large, need to come down. He`s committed to doing that both short term and long term which makes Social Security a primary issue. I`d say Social Security, tax reform, tort reform. Those would be critical priorities.

GHARIB: How about Social Security reform? How soon will you have a proposal?

SNOW: The sooner the better I think. The president has indicated he`s anxious to have a proposal. He`s anxious to get to the Congress. Right now it`s important though to build public understanding of the fact there`s a real problem there.

GHARIB: There are already a lot of concerns about these personal retirement accounts that would be a supplement to the standard Social Security, concerns about the costs, the regulation, the risks of individuals managing their own accounts. What do you say to people who bring up these questions?

SNOW: What I`d say is this is a good idea. It`s a powerful idea. It`s an idea that is consistent with creating the kind of America that I think we all want to see where people own more of the things that are important to them, their own home, their own retirement account, their own lifetime savings account. This is a way for people to put something away for their retirement years, something that they own, something that can`t be taken away from them by the whim or the will of a future Congress.

GHARIB: One of the concerns for the markets is for Social Security reform the government borrowing $2 trillion perhaps to deal with the problem that would be 20 years down the road.

SNOW: On that score we don`t have a proposal so we don`t have any particular funding scheme in mind at this time. But the important thing to recognize is that the real cost is not acting because if we don`t act, then we`re going to have these huge unfunded obligations in the future. And those will have marked effects upon financial markets on future debt levels, on future tax levels.

GHARIB: Mr. Secretary, as you know it`s a controversial issue to reform Social Security. How are you going to sell this to the American people and to Congress?

SNOW: Well, I think by being honest with people by playing out the facts. The facts are that the arithmetic of Social Security doesn`t work. When the system was set up back in 1935, there were 16 workers for every retiree. Today we`re at a little over three. With the baby boomers coming on stream, it`s going to be under two. And the arithmetic of a pay as you go system, which is what Social Security is just doesn`t hold up. So I think we can, as we talk to the American people about that, they`ll understand it.

GHARIB: The business leaders who I talked to agree with the overall goals of the president but not necessarily the priorities. They think that dealing with the budget deficit should be item number one.

SNOW: It is item number one. The president is deeply committed to reducing the deficit. I`m deeply committed to it and when you see the president`s budget proposal which will be submitted soon, we`ll be on a path to reduce the deficit, to cut it in half over the course of the next few years, bringing it to a level which is low by historical standards. Now to do that, we`ve got to keep the economy growing because a growing economy creates more revenue for the government. More workers paying taxes and more businesses profitable paying more taxes. That`s not enough though. We also have to control spending.

GHARIB: There are a lot of doubters out there that whether the president will be able to cut that deficit in half and whether he`ll be able to impose discipline on spending.

SNOW: Well we`re committed to doing it. One thing about this president is things he makes up his mind to do he does.

GHARIB: We didn`t hear much today at the conference about the record trade deficit or about the plunging dollar. But there are many people on Wall Street who are saying that these pose a risk to not only the U.S. economy but the global economy. Do you think that the record trade deficit poses a risk to the economy?

SNOW: I`d say two things on that. One, we need to save more and that`s where the personal accounts come in. That`s where these life-time savings accounts that the president has proposed come in. That`s where reducing the deficit comes in because the deficit is a dis-saving and we`re working on all of those things. At the same time though, it`s important that our trading partners grow faster so they can buy more of our farm products and our machinery products and our automobiles and all the things we produce in the United States.

GHARIB: Have you been talking to our trading partners?

SNOW: Absolutely. Absolutely. I`ve been telling our trading partners that we`re going to do our part. I`ve also told them that it`s important that they grow because as they grow faster, then our trade deficit will reduce.

GHARIB: Looking at the president`s economic agenda, it`s a really tall order. Will you be able to successfully lead this economic agenda through Congress?

SNOW: One thing about this president, he puts his mind to something, he`s pretty good at getting it done. We`re there to help him. And I`m confident that you`re going to see a lot of results in the months ahead.

GHARIB: The Treasury secretary also told me on the issue of tax reform that the president will soon appoint a panel to study options for simplifying the tax code and then make recommendations to the president. So, Paul, it looks like the president is really determined to leave an economic legacy.

KANGAS: Susie, how involved is the president at this summit?

GHARIB: Actually, Paul, he`s quite involved. As we reported he participated in the afternoon session. On the issue of legal reform, he was very vocal and very passionate, saying that the high cost of litigation is making it difficult for American companies to compete with other countries. Tomorrow he`ll be back and participating on a panel about Social Security reform and I`m sure he`s going to have a lot to say about that.

KANGAS: What else is on the agenda for tomorrow?

GHARIB: Tomorrow morning there`s going to be a panel called financial challenges. That`s going to deal not only with Social Security reform but also with the budget deficits. Then later on, there`s a panel about jobs and training workers and educating the work force. And then the president will deliver closing remarks. And of course, I`ll be back here tomorrow night with a complete wrap-up of the day`s events. I`m Susie Gharib, reporting from the White House.

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.

12/15/04: Kevin McCormally's Tax Tips-Tis The Season To Prepare

SUSIE GHARIB: Americans are devoting a lot of their time these days to getting ready for the holidays. But we all should be devoting some time to getting ready for something else: tax time. These are some things you can do now -- there are some things you can do now to make April 15 a little less taxing. So, with our year-end tax tips, here`s Kevin McCormally, editorial director of "Kiplinger`s Personal Finance."

KEVIN MCCORMALLY, EDITORIAL DIR., "KIPLINGER`S PERSONAL FINANCE": If tax planning is a year-round sport, then year-end is sudden-death overtime. What you buy and what you sell, what you give away and what you put away between now and December 31 will make a big difference in what you owe on April 15. Tonight, what you buy and what you sell. If you have your eyes on a hybrid vehicle like the Toyota Prius for your personal use, buying by the end of the year earns you a $2,000 deduction even if you don`t itemize. If you`re looking at a less-environmentally friendly SUV for your business, taking delivery by December 31 can pay off big time. Even after a crackdown, a $60,000 SUV can deliver a $46,000 write-off. And speaking of business, December 31 brings an end to the bonus depreciation rule the Congress created after the 9/11 terrorist attacks. Say that you need $50,000 worth of new computer equipment for your business. Under the normal rules, that would create a $10,000 first-year write-off. Buy if you by December 31, the 2004 deduction jumps to $30,000. When it comes to selling, scour your portfolio for paper losses. Selling by year-end lets you use those losses to offset capital gains. And up to $3,000 of net losses can be deducted against other kinds of income, like your salary or retirement benefits. Think about selling winning stocks, too. If you realized some losses this year or have carryover losses from last year, maybe now`s the time to take some profits and let those losses sop up the tax bill. Tomorrow, what you give away and what you put away. I`m Kevin McCormally.

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.

  12/15/04: Last Word: Gifts For Geeks

JEFF YASTINE: And finally tonight, everyone has gotten the occasional goofy holiday gift but how about a geeky one? With the help of the Internet, if there`s an academic or scientist in your family, there are gifts out there just made for him or her. How about scintillating "Fuel Cell Technology Handbooks" for just under a hundred bucks? Or refrigerator magnets in the shape of plants and animals billed as an organism for everyone on your gift list? Or T-shirts listing only dates, leaving observers guessing who or what they refer to? One example, Paul, is a shirt that dates 1480 to 1819.

KANGAS: Of course, everyone knows that`s - right except to me it sounds more like the price of a tank of gas and what it used to be.

YASTINE: Well as Monte Python used to say, no one ever suspects the Spanish inquisition.

KANGAS: Right.

YASTINE: I`ve been waiting years to say that.

KANGAS: There you go.

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

12/15/04: Paul Kangas' "Stocks In The News"

PAUL KANGAS: The major stock indices posted single digit gains early today. It was a reaction to that Sprint-Nextel merger and better than expected earnings from Best Buy and Lehman Brothers. Then, a surge in oil prices on a disappointing inventory report sent the Dow to a 30-point loss and NASDAQ to a seven-point deficit by noon. The mild setback attracted enough buying this afternoon for the market to end slightly higher. Dow Industrial Average closed up exactly 15 points at 10,691.45, NASDAQ Composite up 2.71 at 2,162.55. Standard & Poor`s 500 up 2 1/3 points to 1,205.72. Over in the bond market, the 10-year note rose 14/32 to 101 13/32, putting the yield at 4.08 percent.

Volume leader on the big board, Sprint (FON), 46 million shares traded and it lost $1.08 in that Nextel deal. As a matter of fact, Nextel fell $1.29.

Then NorTel Networks (NT) off $0.17. After the close yesterday, Nortel belatedly reported third quarter results, a loss of $0.06 per share.

Lucent Technologies (LU) dropped $0.04.

And then Pfizer (PFE) moving up nearly $1.

Time Warner (TWE) showed no change despite that rather sizable find you just heard about.

Merck & Company (MRK) up $0.86. Raymond James financial brokerage upgraded it from "market perform" to "strong buy" in the belief that the company`s Vioxx debacle is obscuring its really true value.

Hilton Hotels (HLT) was up $0.27. There was a block of 14 million shares of Hilton that traded at $21.85.

Then the star of the day, Las Vegas Sands (LVS), the Sands Hotel deal went public today, 23.8 million shares offered to the public at 29, opened at 41.90 and the high of the day $49.10. That was a good gamble if you were able to get the stock.

News Corp. A (NWS.A) up $0.57.

And then Motorola (MOT) rose a dime. That was tenth in big board volume.

DuPont (DD) $0.94 gain there. Smith Barney upgraded it from "hold" to "buy."

Lehman Brothers (LEH) had a good day, up $2.25. Fourth quarter earnings jumped 22 percent over last year to $1.96 versus $1.71. Street estimate was only $1.69 a share, much better.

Best Buy (BBY) up $2.82. Third quarter earnings up 22 percent over last year to $0.45 versus $0.37 then. That was a penny better than the Street expected. Standard & Poor`s repeated a "strong buy" on Best Buy.

Lennar (LEN), the home builder, up $5.52. Fourth quarter earnings jumped 34 percent to $2.29 a share, way up from $1.69 last year. Revenues jumped 21 percent and the company boosted next year`s earnings projections from $6.60 a share, all the way up to $6.90.

Oregon Steel Mills (OS) up $1.39. The company plans to permanently shut down it large diameter pipe mill in Napa, California and sell the assets and real estate and it will have a gain on that.

Playtex Products (PYX) edging up $0.66. Goldman Sachs upgraded it from "under perform" to "in line."

And then we see NBTY (NBTY) used to be called Nature`s Bounty, it`s the vitamin company, down $1.47. Fourth quarter earnings, $0.30, up from $0.23 last year, but that was $0.09 below the Wall Street estimate.

And then Weight Watchers International (WTW) fell $1.31 after Goldman Sachs downgraded it from "in line" to "under perform."

NASDAQ`s most active, NASDAQ 100 (QQQ) down $0.15.

Microsoft (MSFT) a $0.12 loss.

Nextel Communications (NXTL) as I mentioned earlier, down $1.29 on that merger news.

Google (GOOG) rose $1.09.

Research In Motion (RIMM) off $2.84. It was off well over $4 yesterday on a ruling against the company by a Federal appeals court and so we see continuing (INAUDIBLE) today. The low of the day was $80.57.

Intel (INTC), $0.10 loss there.

Oracle (ORCL) off $0.14.

Cisco Systems (CSCO) a $0.12 gain.

eBay (EBAY) moved up $1.18.

And Symantec (SYMC) was tenth in volume and down $0.07.

Here`s something interesting. Two new public offerings, Great Wolf Resort (WOLF), 14 million shares offered at 17, opened at 22 1/2, high 23.

And then another, The9 Limited (NCTY), that`s the name of the company. It`s an on game game developer in - on line game developer in China, 6.1 million shares offered at 17 and both as you see were offered at 17 and both closed $4 higher, very unusual indeed to have two that did the same thing.

And those are the stocks in the news today.

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.

12/15/04: Market Stats

                  
                                      NET    PERCENT
                         CLOSE     CHANGE     CHANGE

DOW CLOSE             10691.45     +15.00       + .1
HIGH                                        10706.16
LOW                                         10636.47

NASDAQ COMP.           2162.55      +2.71        +.1
HIGH                                         2171.27
LOW                                          2151.31

VOLUME                                       1,693.9
PREVIOUS                                     1,544.8
UP VOLUME                                    1,109.2
DOWN VOLUME                                    541.9

DOW TRANSPORTS         3759.61      +2.58       + .1
DOW UTILITIES           327.97      +2.27       + .7
CLOSING TICK                                   +1181

S&P 500                1205.72      +2.34       + .2
S&P 100                 573.45      +1.03       + .2
MIDCAP 400              655.90      +4.07       + .6
REUTERS/CRB             284.52      +5.15      + 1.8

NYSE COMPOSITE         7159.65     +35.04       + .5
VALUE LINE              399.47      +2.34       + .6
RUSSELL 2000            648.61      +5.07       + .8
DJW 5000              11883.09     +37.86       + .3

U.S. TREASURIES
5-YEAR NOTE 3.50%
Dec. 15,2009         100  3/32      +6/32     + 3.48

10-YEAR NOTE 4.25%
Nov. 15,2014         101 13/32     +14/32     + 4.08

30-YEAR NOTE 5.375%
Feb. 15, 2031        109 27/32     +31/32     + 4.71

LEHMAN BROS.
LONG BOND INDEX        1780.48      +8.68


DOW CLOSE             10691.45     +15.00       + .1
ADVANCES                                        2271
DECLINES                                        1074
NEW HIGHS                                        338
NEW LOWS                                           5

                                      NET    PERCENT
NYSE MOST ACTIVES    4PM CLOSE     CHANGE     CHANGE
FON   Sprint Corp        24.02      -1.08       -4.3
NT    Nortel Networks     3.52       -.17       -4.6
LU    Lucent Tech         3.60       -.04       -1.1
PFE   Pfizer             28.32       +.99       +3.6
TWX   Time Warner        19.38      unch.      unch.
MRK   Merck & Co         30.48       +.86       +2.9
HLT   Hilton Hotels      22.11       +.27       +1.2
LVS   Las Vegas Sands    46.56     +17.56      +60.6
NWSa  News Corp "A"      18.37       +.57       +3.2
MOT   Motorola           16.96       +.10        +.6

NASDAQ CLOSE           2162.55     + 2.71       + .1
VOLUME                                       2,381.4
PREVIOUS                                     2,255.0
ADVANCES                                        1836
DECLINES                                        1315

NASDAQ ACTIVES
QQQQ  Nasdaq 100         40.33       -.15        -.4
MSFT  Microsoft          27.11       -.12        -.4
NXTL  Nextel Comms       28.70      -1.29       -4.3
GOOG  Google            179.78      +1.09        +.6
RIMM  Rsch In Motion     82.60      -2.84       -3.3
INTC  Intel              23.14       -.10        -.4
ORCL  Oracle             14.09       -.14       -1.0
CSCO  Cisco Systems      19.40       +.12        +.6
EBAY  eBay              117.39      +1.18       +1.0
SYMC  Symantec           27.38       -.07        -.3

AMEX CLOSE             1415.78    + 11.55       + .8

INDEX SHARES
DIA   DIAMONDS TRUST    106.85       +.08        +.1
QQQ   NASDAQ 100         40.33       -.15        -.4
SPY   S&P DEP.RECEIPTS  120.88       +.09        +.1

STOCKS IN THE NEWS
DD    Du Pont Co         48.39       +.94       +2.0
LEH   Lehman Bros        87.90      +2.25       +2.6
BBY   Best Buy Co        58.86      +2.82       +5.0
LEN   Lennar             56.35      +5.52      +10.9
OS    Oregon Steel       19.59      +1.39       +7.6
PYX   Playtex Products    7.70       +.66       +9.4
NTY   NBTY Inc           22.83      -1.47       -6.1
WTW   Weight Watchers    42.93      -1.31       -3.0
WOLF  Great Wolf Resort  21.00      +4.00      +23.5
NCTY  The9 Ads           21.00      +4.00      +23.5