12/22/04:
Raines & Howard Are Out At Fannie Mae
SUSIE GHARIB: A big management shakeup at Fannie Mae leads
to a big win for the stock. Fannie Mae shares rose more than 2 percent
today on news that two top executives were ousted, CEO Franklin Raines and
Chief Financial Officer Timothy Howard. Investors are hopeful that the new
management will help the company get over its regulatory and accounting
problems. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Investors today
seemed reassured that the worst of Fannie Mae`s troubles may now be behind
it. After several days of tense meetings, the mortgage giant`s board
forced out CEO Franklin Raines and CFO Tim Howard after over accounting
errors.
CHARLES GABRIEL, PRUDENTIAL: We`ve resolved a couple of important
question marks. We have a sense that we`ll have a new management. At
least we know we won`t have an embattled management that`s arguably in
disfavor on Capitol Hill and has lost standing and that we also know the
challenge that Fannie Mae faces in terms of having to raise capital.
GERSH: Regulators at the Office of Federal Housing Enterprise
Oversight have concluded Fannie Mae is significantly undercapitalized. As
of September 30, the company is $3 billion below minimum capital standards
and almost $13 billion below the levels regulators are requiring the
company to meet by June. Analysts say that puts the company`s $0.52 a
share dividend at risk of a temporary suspension.
BERT ELY, ELY & COMPANY: As I read the statute that governs their
capital regulation, it appears to me that a very strong case can be made
that they have to stop or suspend their dividend payment until they are
back into an adequately capitalized status.
GERSH: Fannie Mae says no determination has been made on the dividend.
To be sure there are more minefields ahead for the mortgage giant,
beginning with the issue of executive pay. Raines earned $20 million last
year and critics want some of that money back, along with the $245 million
in executive bonuses awarded for meeting earnings targets that now have to
be restated.
ELY: To what extent there will be a claw-back on those bonuses and
stock option gains, I just don`t know and this is something where there
could be quite a bit of fighting.
GERSH: The political fighting is also far from over. The chairman
of the Senate Banking Committee, Senator Richard Shelby, says if anything,
the management changes at Fannie Mae reinforce the need for regulatory
reform. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2003 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/22/04:
Will The Santa Claus Rally Lead To A Green X-mas On Wall Street?
SUSIE GHARIB: With the blue chips rising every day this week, investors
are abuzz about one of Wall Street`s seasonal phenomena: the Santa Claus
rally. Is Santa coming to town this year or is he already here? Suzanne
Pratt checked in with some of Santa`s helpers on Wall Street.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: On Wall Street
this year, it certainly looks like Christmas, but it`s definitely starting
to feel festive as well. That`s thanks in part to a recent rally in
stocks, one that has pushed up the Dow nearly 400 points in the last two
weeks and more than 1,000 points since late October. The blue chip index
is now trading at its highest level of the year and its highest level in
over three years as well. Some experts say the market was simply
oversold. Others are crediting the man in the red suit, who may have come early this
year.
JACK CAFFREY, EQUITIES STRATEGIST, J.P. MORGAN PRIVATE BANK: We`ve
certainly have had a nice Santa Claus rally. It seems to have started a
bit early this year, kicking off really in mid-November and it`s continued
for the last several weeks, with a brief pause where the markets seemed to
need to consolidate some of those gains, that were fairly sharp over the
time frame.
PRATT: According to the "Stock Traders Almanac," Santa Claus tends
to come to Wall Street nearly every year. Along with good cheer, he often
brings a rally in the last five trading days of the year and the first two
in January. Since 1969, Santa`s rally has been good for an average gain of
1.7 percent in the Standard & Poor`s 500. And since 2000, with one
exception, things have been even better. While the numbers clearly
illustrate the phenomenon, the reasons behind it are less clear. Many say
it has to do with investors being in a good mood at this time of the year.
Others say it`s the old story of supply and demand.
LARRY WACHTEL, WACHOVIA SECURITIES: There`s a thin trading
atmosphere. A lot of people have closed up shop. There`s still a lot of
end of year inflows. Bonuses come in, 401(k) money comes in, mutual fund
flows are fairly strong at that period so money is flowing in. It hits into
this thin atmosphere and stocks sometime respond.
PRATT: Whether Santa`s rally continues for the next week or so is
really anyone`s guess. There are, however, some who believe stocks are due
for a pullback, particularly because the market has done so well in the
past two months. 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.
12/22/04:
Thailand Asia's Version Of Motown
SUSIE GHARIB: They call it the Detroit of Asia. Thailand`s booming auto
industry has been leading that region in car and truck production. But
until recently, it was Detroit without the big American automakers. Now,
as Ryan Maelzer reports from Bangkok, a couple of U.S. players are making
Thailand a key player in their global strategies.
RYAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: They`re the
beasts of burden of small business in Thailand, and have hauled this
country into the fast lane of auto making. Thais buy around 300,000 pick
up trucks a year, second only to the U.S. and that large domestic market
has created instant economies of scale for auto manufacturers wanting to
use Thailand as a manufacturing hub. Now Thailand is second to the U.S. in
pick-up production, and the top producer of the one-ton variety. Japanese
auto makers dominate Thailand`s local market and export scene for both
trucks and cars.
But in the past couple of years, American companies have been making
inroads. GM was the first to manufacture minivans locally and it`s jointly
developing vehicles with the local leader in pick-up sales, Isuzu, in which
GM has a 12 percent stake. Ford, meanwhile, is selling more SUVs here than
any other auto maker and has made Thailand a global manufacturing hub.
JOHN FINK, V.P., FORD THAILAND: We export throughout Asean (ph),
around Asia Pacific and our Ranger pick up truck is exported to some 130
countries world wide, as well as the Everest product, which is an SUV
produced here locally off the Ranger platform. It`s also exported to over
50 countries worldwide.
MAELZER: As latecomers on the scene, Ford and GM between them have
only a single figure share of local sales. But when it comes to exports,
Ford is now a top player.
AMMAR MASTER, CHIEF EDITOR, ASEAN AUTOBIZ: They are coming up very
quickly. The auto alliance Thailand plant, the plant over there, it`s the
second biggest exporter of vehicles from Thailand after Mitsubishi.
MAELZER: These days, some Japanese auto makers are manufacturing
compact cars and trucks in Thailand then exporting them to Japan. But so
far, no GM or Ford vehicles are heading from here to the U.S. That could
change if Thailand and the U.S. succeed in hammering out a free trade deal
now in the early stages of discussion. But there`s a lot at stake on both
sides.
MASTER: U.S. Trade representative Robert Zoelick has already alluded
to the fact that automotive segment is going to be one of the thorny issues
in relation to negotiating the free trade agreement with Thailand.
MAELZER: That certainly isn`t slowing down GM or Ford`s plans for
Thailand. Both companies are boosting their investments, with Ford
planning $500 million expansion of its joint venture manufacturing
operation with Mazda.
FINK: The government support, the market size, particularly on pick-up
trucks which Ford is known world wide for pick up trucks -- and the work
force, the ability of the work force make it a very friendly environment to
do business in.
MAELZER: It`s all helped Thailand to double the number of vehicles
rolling out of its factories each year and boost exports tenfold in just a
decade. Ryan Maelzer, NIGHTLY BUSINESS REPORT, Bangkok.
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.
12/22/04:
Corporate Giving-Part 3-How McDonald's McGives Back
SUSIE GHARIB: The McDonald`s corporation has built one of the world`s
best known brands, but it`s also one of the world`s best known leaders in
corporate philanthropy. The Ronald McDonald House charities celebrated its
30th anniversary this year and has helped millions of families around the
globe. As we wrap up our series on corporate giving, Diane Eastabrook
looks at a company that believes serving customers helps to serve
communities.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: McDonald`s
franchisee Paul Clark often takes breaks from serving big Macs at his
restaurant to serve lunch to guests at a local Ronald McDonald House.
PAUL CLARK, FRANCHISEE, MCDONALD`S RESTAURANTS: We`re all given gifts
in our lives and our gift is that we have the ability to make money through
restaurants and we give it back through Ronald McDonald House charities.
EASTABROOK: Ronald McDonald House charities has become one of the
nation`s most successful philanthropies. The McDonald`s Corporation
started the charity 30 years ago to help children. Ronald McDonald houses,
named after the restaurant chain`s mascot, are the cornerstone of the
organization. The 240 homes in two dozen countries are located near
hospitals. They provide rooms and meals for the families of sick
children.
Ronald McDonald House charities has also rolled out 20 medical and
dental care mobiles in low income neighborhoods and it recently started
supporting health care in other parts of the world.
KENNETH BARUN, RONALD MCDONALD HOUSE CHARITIES: Our "changing the
face of the world" program is sending teams of doctors to operate on
children with facial deformities, or working with "project orbs" to do
eyesight surgery on children who are losing their eyesight, to UNICEF,
working with UNICEF to immunize 100 million women over the next five years
from tetanus, neonatal and maternal tetanus.
EASTABROOK: Barun credits McDonald`s founder Ray Kroc for instilling a
sense of giving throughout his company. Kroc believed the company and its
franchisees had a responsibility to give back to the communities that
supported them.
McDonald`s raises about a third of the money for the charity through
special store promotions. The charity funnels some of that cash to local
chapters headed by franchisees. The chapters use that money to fund Ronald
McDonald Houses and care mobiles. Paul Clark`s workers come up with
additional fundraising events at his two stores that benefit their
chapter.
Many also volunteer several hours a week at Ronald McDonald Houses.
CLARK: They`re pounding on my office door saying when can we go and
make a dinner for the families? When can we go and donate something?
They`ll come and they`ll freshen the houses up in the spring.
EASTABROOK: Clark says Ronald McDonald House charities has been an
inspiration to him and his employees, demonstrating how their work not only
benefits the company, but the community as well. Diane Eastabrook, NIGHTLY
BUSINESS REPORT, Chicago.
Nightly Business Report
transcripts are available on-line post broadcast. The program
is transcribed by eMediaMillWorks. Updates may be posted at
a later date. The views of our guests and commentators are
their own and do not necessarily represent the views of Community
Television Foundation of South Florida, Inc. Nightly Business
Report, or WPBT. Information presented on Nightly Business
Report is not and should not be considered as investment advice.
Copyright (c) 2003 Community Television Foundation of South
Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/22/04:
Commentary-How To Play Your 401k
SUSIE GHARIB: In the money file tonight, something to consider when planning for
retirement. The topic: how to play your 401(k). Here`s Harriet Brackey,
personal finance columnist for the "Miami Herald."
HARRIET BRACKEY, PERSONAL FINANCE COLUMNIST, MIAMI HERALD: People
change jobs nowadays at the rate of once every four years. When they do,
many workers wonder what to do about their 401(k) account. Your options
are: leave the money at your old company or send it to a 401(k) at your new
job; or roll it over into an IRA account. So how do you decide what to do?
Younger workers too often just take the cash out. Then they have to
pay income tax and a 10 percent penalty and they`ve used up their savings
for retirement. That`s the wrong choice. A much better idea is to roll
the money over into an IRA, then, you can control where the money is
invested. This is also the most popular choice. This year, $174 billion
will flow into IRAs through rollovers.
But there are some things older workers might want to think about. If
you are 55, you can take the money out of a 401(k) after you`ve left the
job without owing the 10 percent penalty. If you rolled it over into an
IRA, you`d have to wait until age 59 and a half to do at. And if you are
even older, here`s an important point. An IRA forces you to start
withdrawing your money at age 70 and a half; a 401(k) doesn`t. So, if you
keep the 401(k), you can delay the day that you`ll owe taxes on your
retirement income. There`s a lot to think about. If you`re changing jobs
in the New Year, your retirement account may need some changes, too. I`m
Harriet Brackey.
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.
12/22/04:
Last Word- Selling A Big Bunch of Bull
SUSIE GHARIB: And finally tonight, are you in the market for a bull -- say a
16-foot, 7,000 pound bronze bull? We know just where to find one: This one
near the New York Stock Exchange is for sale for a minimum of $5 million.
The artist created it 15 years ago as a symbol of hope and strength after
the 1987 stock market crash. Since then the "charging bull," as it`s
called, has become a popular symbol of Wall Street, posing for pictures
with tourists and having its horns rubbed for good luck. But Paul, there`s
a catch to this particular purchase. Whoever buys the bull has to leave it
just where it is and donate it to the city of New York.
KANGAS: Doesn`t sound like a real profit making invest to me but if
you need a huge write-off, this is it.
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.
12/22/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Stocks extended yesterday`s rally this morning getting a
boost from a better than expected 4 percent third quarter GDP growth rate
and a sharp drop in oil prices. The Dow had gained 50 points by noontime
when the NASDAQ was up 10 points. Although the tech-laden NASDAQ market
made little progress this afternoon, the blue chips added modestly to their
gains. The Dow Industrial Average closed up 56.5 points at 10,815.89. The
NASDAQ Composite was up just over six points at 2157.03. Standard & Poor`s
500 up 4.12 at 1209.57. In the bond market, the 10-year note closed down
7/32 to par and 13/32, putting the yield at 4.19 percent.
Big board volume leader once again Pfizer (PFE) today on 47 1/2
million shares. The stock rebounding $0.98 or 3.9 percent. Technical
rebound that meant (ph) many days of losses.
Solectron (SLR) down $0.78. that`s a 13 percent drop. Even though the
company reported first quarter earnings of a nickel versus a loss of $0.06
a share last year, it sees second quarter coming in at $0.04 to $0.06 in
earnings. But the Raymond James financial brokerage downgraded the stock
from "out perform" to "market perform" and Key Bank downgraded it from
"strong buy" to just a "hold."
Citigroup (C) moved up $1.12.
Qwest Communications (Q) no change.
General Electric (GE) fifth in big board volume was down $0.11.
Lucent Technologies (LU) a $0.02 drop.
Time Warner (TWX) fell $0.19.
There you see Fannie Mae (FNM) off $1.57.
And then Motorola (MOT) 13, I should say up $1.57, and then Motorola,
$0.13 gain.
Merck & Company (MRK) a $0.24 gain.
Alcoa (AA) edged up $0.04. The company, one of its units and the
Jamaican government are in agreement to more than double the capacity of
the Jamalco (ph) aluminum refinery in the country of Jamaica.
A.G. Edwards (AGE) the big brokerage, $0.04 gain there. The company in
with third quarter earnings nicely higher, $0.63 versus $0.49 last year,
$0.07 above the Street estimate, behind the stock for the day was $41.83.
ITT Industries (ITT) edged up $0.49. The company received a $16
million Navy contract for night vision goggles.
Amerisourcebergen (ABC) down $4.92. Company cut its first quarter
earnings guidance from the Street estimate of $0.87 a share, all the way
down to $0.60 to $0.65, also cut 2005 earnings estimates to $4 to $4.10
versus the Street estimate of $4.14.
ConAgra Foods (CAG) a $0.35 gain. Second quarter earnings were down 10
percent from last year to $0.47 a share, but that was a penny better than
the Street was expecting.
And the apparel retailer Christopher & Banks (CBK) up $1.91. Third
quarter earnings were actually lower, $0.22 versus last year`s $0.29 and
sales dropped in same store sales by 1 percent. But Standard & Poor`s made
some positive comments on the company`s outlook.
Barnes Group (B) down $1.01. The company cut its 2004 earnings
guidance from $1.60 to $1.65 area, all the way down to $1.34 to $1.39.
And Actuant Corp. (ATU) A $2 gainer. Baird brokerage down - or
upgraded it from "neutral" to "out perform."
And then we see Commercial Metals (CMC) down $3.05. Monday, the
company reported strong first quarter earnings. The stock ran up sharply so
that profit taking moved in today finally.
Nasdaq 100 (QQQ) topped the active list again, moving up a nickel.
Microsoft (MSFT) a $0.10 loss.
Research In Motion (RIMM) down $3.55. Third quarter earnings sharply
higher, $0.46 versus $0.10 last year and the company also increased its
fourth quarter estimate but it did not increase revenue estimates and that
disappointed a lot of analysts.
Intel (INTC) $0.04 loss.
Same story with Cisco Systems (CSCO), fifth in volume.
Symantec (SYMC) up $0.71.
$0.46 gain in QUALCOMM (QCOM).
Google (GOOG) up $2.55.
And then eBay (EBAY) $0.28 loss.
Nextel Communications (NXTL) moved up $0.19.
ImmuCell Corp. (ICCC), look at that percentage gain, 121 percent, up
$5.14. The company got $1.5 million in licensing payment from Pfizer for
its (INAUDIBLE) product used to treat lactating dairy cows.
Merix Corp. (MERX) off $1.45. Needham Securities downgraded it from
"buy" to "hold." Yesterday the company reported lower earnings.
And finally Riviera Holdings (RIV) up $6.35. The Las Vegas casino
company did not return our calls.
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.
12/22/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10815.89 +56.46 + .5
HIGH 10822.68
LOW 10739.19
NASDAQ COMP. 2157.03 +6.12 +.3
HIGH 2163.48
LOW 2145.18
VOLUME 1,390.9
PREVIOUS 1,483.0
UP VOLUME 855.3
DOWN VOLUME 493.9
DOW TRANSPORTS 3790.62 -1.47 - .0
DOW UTILITIES 336.27 +.70 + .2
CLOSING TICK +29
S&P 500 1209.57 +4.12 + .3
S&P 100 575.34 +1.98 + .4
MIDCAP 400 657.65 +2.15 + .3
REUTERS/CRB 284.26 -2.47 - .9
NYSE COMPOSITE 7190.14 +23.11 + .3
VALUE LINE 400.57 +1.74 + .4
RUSSELL 2000 648.46 +2.26 + .4
DJW 5000 11924.89 +43.69 + .4
U.S. TREASURIES
5-YEAR NOTE 3.50%
Dec. 15,2009 99 23/32 -0/32 + 3.56
10-YEAR NOTE 4.25%
Nov. 15,2014 100 13/32 -7/32 + 4.19
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 3/32 -13/32 + 4.83
LEHMAN BROS.
LONG BOND INDEX 1762.93 -5.67
DOW CLOSE 10815.89 +56.46 + .5
ADVANCES 1975
DECLINES 1369
NEW HIGHS 381
NEW LOWS 4
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 25.95 +.98 +3.9
SLR Solectron 5.25 -.78 -12.9
C Citigroup 48.31 +1.12 +2.4
Q Qwest Comms Intl 4.50 unch. unch.
GE GE 36.84 -.11 -.3
LU Lucent Tech 3.77 -.02 -.5
TWX Time Warner 19.19 -.19 -1.0
FNM Fannie Mae 71.92 +1.57 +2.2
MOT Motorola 17.44 +.13 +.8
MRK Merck & Co 32.22 +.24 +.8
NASDAQ CLOSE 2157.03 + 6.12 + .3
VOLUME 1,814.9
PREVIOUS 2,000.4
ADVANCES 1732
DECLINES 1407
NASDAQ ACTIVES
QQQQ Nasdaq 100 39.73 +.05 +.1
MSFT Microsoft 26.97 -.10 -.4
RIMM Rsch In Motion 83.49 -3.55 -4.1
INTC Intel 23.45 -.04 -.2
CSCO Cisco Systems 19.32 -.04 -.2
SYMC Symantec 25.68 +.71 +2.8
QCOM Qualcomm 44.44 +.46 +1.1
GOOG Google 186.30 +2.55 +1.4
EBAY eBay 113.42 -.28 -.3
NXTL Nextel Comms 30.19 +.19 +.6
AMEX CLOSE 1407.79 - 4.13 - .3
INDEX SHARES
DIA DIAMONDS TRUST 108.01 +.60 +.6
QQQ NASDAQ 100 39.73 +.05 +.1
SPY S&P DEP.RECEIPTS 120.68 +.29 +.2
STOCKS IN THE NEWS
Display Name
AA Alcoa 31.30 +.04 +.1
AGE A G Edwards 41.59 +.04 +.1
ITT ITT Industries 84.01 +.49 +.6
ABC Amerisourcebergn 57.09 -4.92 -7.9
CAG Conagra Foods 28.05 +.35 +1.3
CBK Chrstphr & Bank 18.69 +1.91 +11.4
B Barnes Group 26.50 -1.01 -3.7
ATU Actuant Corp 52.10 +2.00 +4.0
CMC Commercial Metal 48.52 -3.05 -5.9
ICCC Immucell 9.39 +5.14 +120.9
MERX Merix Corp 11.30 -1.45 -11.4
RIV Riviera Hldgs 41.80 +6.35 +17.9
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