| 12/29/04:
The Business Of Saving Southern Asia
SUSIE GHARIB: The situation in southern Asia is growing grimmer by the day in the wake of Sunday`s earthquake and tsunamis. Tonight, almost 80,000 people are confirmed dead and that number is expected to rise as help finally reaches remote islands in the region. Also rising, the amount of money the governments of the world are pledging for help, now almost a quarter of a billion dollars. And as Stephanie Woods reports, millions more are coming from businesses in the U.S. and around the globe.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Supplies of antibiotics and medical gear are coming from Abbott Labs (ABT), Bristol-Myers Squibb (BMY) and Johnson & Johnson (JNJ). Pfizer (PFE) is donating $10 million to local and international relief organizations. Singapore Airlines and Federal Express (FDX) are shipping supplies to the region free of charge. Samsung says it has shipped a million dollars in supplies to the region. Banking giant Citigroup (C) is giving $3 million. Computer Associates (CA) is donating $200,000 to UNICEF. Even Amazon.com (AMZN) is devoting most of its homepage to soliciting donations for the Red Cross. It has raised $2.5 million. The U.S. government has already pledged $35 million and recognizes that`s just the beginning. In his first public remarks since the earthquake hit, President Bush says the U.S. is being generous.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: What you`re beginning to see is a typical response from America. First of all, we provide immediate cash relief to the tune of about $35 million. And then there will be an assessment of the damage, so that the relief is -- the next traunch (ph) of relief will be spent wisely. That`s what`s happening now.
WOODS: The U.S. has formed a core group with Australia, Japan and India to coordinate relief efforts. Sri Lankan officials have told the U.S. they are overwhelmed, but Indonesia, Thailand and India have experience coping with natural disasters.
ANDREW NATSIOS, ADMINISTRATOR, USAID: We know, most of the best work that is done is by the people themselves. Our job is to support the people in the cities and in the villages who will begin the reconstruction process, so we`re not here to tell them what to do, but to ask them how we can help them.
WOODS: Disaster assessment teams from the United Nations have already determined that $130 million is needed for immediate relief. The U.N. says much more will be needed for the next six months and it`s planning a coordinated worldwide plea for aid next week. Stephanie Woods, 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.
12/29/04: 4th Quarter Pre-Announcements
JEFF YASTINE: With the fourth quarter of 2004 almost at an end, companies will begin reporting their earnings for the period next week. Wall Street is expecting another quarter of double digit growth, which experts say is a sign that the U.S. economic growth remains solid. Scott Gurvey has a preview.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: With just two trading days left in the year, Wall Street is cautiously optimistic about the prospects for fourth quarter earnings. Analysts report that the tone of fourth quarter pre-announcements is improving. It should be noted that the majority of pre-announcements are usually negative. As of today, just over 42 percent of fourth quarter pre-announcements have been negative, with just over 18 percent positive. That`s more positive than last week`s reading and considerably more positive than the end of the third quarter pre-announcements.
GINT RIMAS, SENIOR ANALYST, THOMSON FINANCIAL: In terms of negative pre-announcements, we`re really about average. Normally we see about two negatives for every one positive and that`s the ratio that we`re seeing so far, although December is really a slow month for pre-announcements so we`ll really pick up next month.
GURVEY: Earnings estimates for the Standard & Poor`s 500 have been holding steady overall at around $0.17.4 per share since October. But a more detailed analysis shows that the energy sector is responsible for holding up the average. If the energy sector is excluded, the estimate is actually falling. Financials, telecom services and consumer staples were the major negative contributors to the decline.
Investors looking ahead to 2005 will find analysts generally predicting another year of growth in corporate earnings. With estimates for calendar year 2004 now running at $66.90 per share, estimates for 2005 are at $73.95, an increase of 10.5 percent. That does however, fall short of this year`s nearly 20 percent growth rate.
JOSEPH MCALINDEN, GLOBAL CHIEF INVESTMENT OFFICER, MORGAN STANLEY INVESTMENT MGMT.: We`re going to be very close to 20 percent. If we top 20 percent in earnings growth for the full year, it will be I think the eighth time since the 1950s where that has happened and it basically speaks to the very powerful, profitable recovery that we have in this economy, with strong productivity and slowly improving pricing power.
GURVEY: That pricing power is showing up now as a little bit of inflation. But it is also flowing right through to the bottom line in the form of higher corporate profits. 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.
12/29/04:
Father/Son Bull & Bear Offer Their Outlooks For 2005
JEFF YASTINE: Just a few days left before Wall Street kicks off a new trading year. How will the stock market perform in 2005? Our guests tonight have opposing views on that, but they share a strong bond otherwise: they are father and son. Joining us now Robert Stovall, strategist at Wood Asset Management, an investment firm in Sarasota, Florida and Sam Stovall, chief investment strategist at Standard & Poor`s. Good evening gentlemen.
ROBERT STOVALL, MANAGING DIRECTOR, WOOD ASSET MANAGEMENT: Good evening Susie.
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, STANDARD & POOR`S: Good evening Susie.
R. STOVALL: Hi, Sam.
S. STOVALL: Hi, pop.
GHARIB: Glad to see got you two off onto the right start there. Bob, let me begin with you. Your forecast for 2005 for stocks, pretty much a flat year. Tell us why you have such a gloomy forecast.
R. STOVALL: I think the market has anticipated a lot of good things that are already happening and anticipated some things that are likely to happen in the new year. The level of confidence is extremely high. The bullishness of market letter writers shows us that and various surveys of consumers as well as investors makes you think that upsets can come along, which would somewhat violate the optimism that permeates many people.
GHARIB: Sam, you`re optimistic. You see strong moves on the Dow, the S&P and the NASDAQ. Give us your analysis.
S. STOVALL: Well, I like to categorize myself as being a single digit bull. I`m not a raging bull but I do believe that 2005 could be fairly good for the equity markets mainly because there really are not good alternatives out there. Nobody really wants to invest a large bundle of cash in cash and get sub par returns. And in a rising interest rate environment, we see that accelerating by about 175 basis points this year. Bonds certainly don`t look all that attractive. So, with good earnings expectations, about 10 percent growth expected this year with the economy looking to advance by about three and a half percent and inflation remaining fairly tame, the feeling is that that`s a fairly good back drop for the equity markets.
GHARIB: Now usually stock investors, Sam are uncomfortable as interest rates go higher. They`re not feeling as comfortable about investing in stocks and yet you still see that as a positive.
S. STOVALL: That`s right. When I look back to 1970 and there were six times that the Fed had raised interest rates two times or more in succession, the market did decline four of those six times, but obviously it rose two times and in this situation because the Fed has done an excellent job in a sense telegraphing their rate increases and it`s likely the occur over a 18-month perfect rather than a 12 month period, I believe that there`s just no surprise to the rising interest rate scenario and as a result, investors have already factored that into their equity prices over the coming year.
GHARIB: Bob, in your view, why is your son wrong?
R. STOVALL: I don`t think he`s necessarily wrong Susie. I think we shouldn`t really focus on market trends, whether it`s a big up or a big down or a flat spot. I think there`s going to be plenty of volatility in 2005, at variance with 2004 when there wasn`t much because the world is awash with a cheapening dollar and lots of liquidity and they`re looking for things to buy. So I`m inclined to think that 2005 is going to be a big year for takeovers, mergers, acquisitions, spin offs, trying to take advantage of weak currencies here and stronger ones elsewhere. So you`ll have plenty of chances to make money. Most bears don`t make money, and I`ve been in the business 50 years. So obviously I make a living of sorts. So I think that it`s going to be a good market year on an individual basis, on a sector basis. I just don`t see the fire power there for the averages to surge up another 10 or 15 percent because as I said earlier, most of what we`re expecting on the positive side is already discounted.
GHARIB: Sam, what do you say to that?
S. STOVALL: Well, I would tend to say that the one thing that would make me even more optimistic about 2005 is all the cash on the books of companies. In the S&P 500, the companies have about $600 billion in cash just waiting to be put to work. And also with the repatriation of earnings from overseas at a 5 percent rate versus the normal 35 percent rate, if these companies start acting like teenagers with money in their pocket as they`re walking through the mall, we could see a lot of this money being put to work in the form of share buybacks, dividend increases, investment in their own operations or M&A as pop just mentioned. And pop, let me tell you, your 50 years on Wall Street, you still look good.
R. STOVALL: Thank you Sam.
GHARIB: Bob, what are your -- in this environment that you`ve described, what are your favorite stocks and stock sectors?
R. STOVALL: I can be very specific about that, because at Wood Asset Management, we have less than $2 billion under management, only 35 stock positions. And our biggest ones, one we`ve had the longest I think is Johnson & Johnson, which I own myself and it`s an outstanding company in the health care business and it seems to move into the areas of greater perceived growth, so I like that one. And WellPoint (WLP), which is a home, a care operator, care giver rather. In addition I think the sectors that will do well in this new coming year include energy. We have several energy positions. About 12 percent of our money is in energy stocks, such as Devon (DVN) and Kerr-McGee (KMG) and British Petroleum (BP), BP, Exxon (XOM), quite a few of them.
GHARIB: OK, Bob, I hate to cut you off, but we only have a few seconds left and I want to hear from Sam too. Sam, what would be your favorite stocks? Do you agree with any of the ones your father is recommending?
S. STOVALL: We do have buy recommendations on WellPoint in the managed care area. We`re not that optimistic on the pharmaceuticals, but if you do want to play that sector, our suggestion is biotech in the form of the profitable companies like Amgen (AMGN), like Genentech (DNA), ICOS (ICOS) and Invitrogen (IVGN) and if you want to play sort of contrary, go to consumer finance companies, because consumers are not going to be able to wipe off their debt with low rate refinancing, so basically they`re going to have to pay the higher rates.
GHARIB: Hate to leave it there but we`ve run out of time. Thank you both, father and son, we really appreciate having you on the program.
R. STOVALL: Thank you.
S. STOVALL: Thanks Susie.
GHARIB: We`ve been speaking with Robert Stovall of Wood Asset Management and Sam Stovall of Standard & Poor`s.
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.
12/29/04:
"Money File"-Interest Rates & The Economy
JEFF YASTINE: In the "Money File" tonight, a look at interest rates and the economy. Here`s Bill Barnhart, financial markets columnist for the "Chicago Tribune."
BILL BARNHART, FINANCIAL MARKETS COLUMNIST, CHICAGO TRIBUNE: What`s wrong with this picture? As we mark the end of 2004, we`re also at the six-month point of the Federal Reserve`s campaign to boost short-term interest rates. Credit-tightening is likely to continue in the new year.
But so far, the side effects have been benign. Compared to previous Fed rate hikes, the stock market is behaving normally at this point. A nice rally is under way. The economic recovery from recession seems to have matured into a sustainable expansion. Inflation is well behaved, sticking to the playbook.
A couple of things are out of whack. The dollar is weaker than it should be at this point in a period of rising short-term U.S. rates. The reasons are complicated and not necessarily troubling. More ominous, long-term interest rates are well below their normal pattern. The yield on 10-year Treasury notes has declined since the Fed rate hikes began at the end of June. That`s opposite the historical trend.
So what? Lower long-term rates look like the icing on the cake, the gold in the Goldilocks scenario. But investors know that abnormal economic trends often revert to the mean. With job growth still sub-par and profit growth slipping, higher long-term rates next year would paint a very different picture.
I`m Bill Barnhart.
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.
12/29/04:
Last Word- Yums Fast Food Fitness Plan
SUSIE GHARIB: And finally, the owners of Pizza Hut, Taco Bell and KFC want you to stay healthy. So the Yum! Brands (YUM) restaurant chain is giving out free gym memberships to customers beginning January 1. Anyone visiting any of Yum!`s 18,000 restaurants and that includes Long John Silver and A&W in the month will get a complimentary, four-week enrollment at a Bally Total Fitness health club. The partnership is part of a new effort by the nation`s fast-food companies to counter claims that their food is making Americans fat. Earlier this year, Yum! Brands tried offering roasted, as well as fried chicken at its KFC outlets, Jeff, but not very successfully.
YASTINE: One of those complementary gym memberships last about as long as most of our new year`s resolutions, about four weeks. So we`ll see what happens.
GHARIB: I don`t think you have to worry about any of that, Jeff.
YASTINE: Thanks. I could lose a few pounds probably.
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.
12/29/04:
Paul Kangas' "Stocks In The News"
JEFF YASTINE: It wasn`t rising mortgage rates, but rising oil prices that cooled off Wall Street today. Oil prices kicked back above $43 a barrel. We`ll have more on that in a minute. But those gains provided a good excuse for some selling, with the Dow down nearly 60 points in the early afternoon. The NASDAQ, in a light-volume session, posted meager gains before giving it back late in the day. The Dow, on the other hand, managed to curb some of its losses late in the day and finished off just 25 points at 10829.19. The NASDAQ dipping a fraction to 2177 even and the S&P 500 closed virtually unchanged at 1,213.45. And a poorly-received treasury auction of 2-year notes put a crimp on bond prices. The 10-year note falling 9/32 to 99 12/32 and that puts the yield up to 4.33 percent.
And topping our list, Pfizer (PFE) rising $0.32, another gain for that drug stock.
And Lucent Technologies (LU) gaining two pennies.
Fannie Mae (FNM) gaining $0.54. Fannie selling up to $5 billion of preferred stock to meet its new minimum capitalization requirements. Fannie of course still has to restate its financials for the past 3 1/2 years.
Nortel Networks (NT) gaining $0.05.
And so did Sprint FON Group (FON). Sprint and Time Warner (TWX) confirmed they are in talks that would allow Time Warner to offer cell phone services, part of a package deal to its cable subscribers.
General Electric (GE) slipping $0.13.
EMC (EMC) gaining $0.22.
Citigroup (C) also down for the day.
Time Warner (TWX), there`s the reaction there, losing $0.13.
And ExxonMobil (XOM) gaining $0.08 on somewhat higher oil prices today.
Boeing (BA) sliding $1.18. China has decided to halt for one year deliveries of new commercial aircraft made by Boeing apparently as part of an effort to cool down the roaring Chinese economy. However, after the close, Continental (CAL) said it would become the first U.S. carrier to order the new 7E7 jetliner from Boeing so good news for the company in that regard.
Shares in Lockheed Martin (LMT) taking a hit, falling $1.51. The Pentagon is proposing spending cuts in the FA22 raptor fighter aircraft program as the Defense Department looks for ways to offset the costs of the war in Iraq, as well as general budget tightening.
Shares in PetroKazakhstan (PKZ) jumping a little over 3 1/2. The stock`s been volatile this week as PetroKazakhstan and its Russian partner Lukoil negotiate a dispute over oil exports. The two are parties in a joint venture there.
Shares in VimpelCom (VIP) bolting 7 percent higher. Shareholders were concerned in recent weeks the Russian government might squeeze the company for much higher back tax payments for 2002, but it turns out they`ll only have to pay about $21 million, a lot less than some expected.
Reynolds & Reynolds (REY) jumping $1.39. The company says its cost controls are working as it raises its first quarter earnings guidance to as high as $0.36 a share. The company makes software for the auto dealer industry.
And Applied Industrial Technologies (AIT) down a little over $2. The company says sales remain good, but it`s being squeezed by supplier price increases.
And Martha Stewart Living Omnimedia (MSO) off a little less than $2 a share. One of its stakeholders said it cut its share ownership from 8 percent to 6 percent.
Over on the NASDAQ, the NASDAQ 100 (QQQQ) tracking stock up a nickel.
Microsoft (MSFT) down as much.
Intel (INTC) was down a fraction.
eBay (EBAY) up $1.41.
Sirius Satellite Radio (SIRI) down another $0.52.
Cisco Systems (CSCO) rising a nickel for today.
Oracle (ORCL) down $0.12.
Taser International (TASR) up a little over 2 1/2. A new all-time high for Taser.
Amazon.com (AMZN) up $0.19.
And Apple Computer (AAPL) up a little over a quarter.
CSP Inc. (CSPI) jumping 2 1/2. The company, a provider of information technology services, reporting a half million dollar profit, about $0.14 a share compared to a similar loss last year.
Here`s a look at OraLabs Holding (OLAB) gaining $1.51. The company wants to make its oral care products business a private entity, while assuming ownership in NBC Lighting Investment Holdings, which is a lighting fixtures business based in Hong Kong.
ViaSat (VSAT) ending $1 higher. It has a deal worth $60 million from the Pentagon for new communications gear.
And on the downside, Financial Institutions (FISI) dropping $2.69. The company says its dividend and earnings are at risk because it did not properly review loans from a pair of banks. It calls it material weakness.
And those are our "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.
12/29/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10829.19 -25.35 - .2
HIGH 10853.72
LOW 10795.57
NASDAQ COMP. 2177.00 -.19 -.0
HIGH 2182.33
LOW 2170.99
VOLUME 926.4
PREVIOUS 984.3
UP VOLUME 517.0
DOWN VOLUME 384.1
DOW TRANSPORTS 3810.29 -1.33 - .0
DOW UTILITIES 336.16 +.46 + .1
CLOSING TICK +209
S&P 500 1213.45 -.09 - .0
S&P 100 576.53 -.63 - .1
MIDCAP 400 662.97 +.52 + .1
REUTERS/CRB 284.30 +.03 + .0
NYSE COMPOSITE 7242.24 -3.57 - .1
VALUE LINE 404.18 +.31 + .1
RUSSELL 2000 653.34 -1.23 - .2
DJW 5000 11981.98 +.58 unch.
U.S. TREASURIES
5-YEAR NOTE 3.50%
Dec. 15,2009 99 4/32 -5/32 + 3.69
10-YEAR NOTE 4.25%
Nov. 15,2014 99 12/32 -9/32 + 4.33
30-YEAR NOTE 5.375%
Feb. 15, 2031 106 8/32 -13/32 + 4.95
LEHMAN BROS.
LONG BOND INDEX 1742.10 -2.60
DOW CLOSE 10829.19 -25.35 - .2
ADVANCES 1887
DECLINES 1415
NEW HIGHS 244
NEW LOWS 8
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 27.26 +.32 +1.2
LU Lucent Tech 3.76 +.02 +.5
FNM Fannie Mae 70.38 +.54 +.8
NT Nortel Networks 3.49 +.05 +1.5
FON Sprint 24.88 +.05 +.2
GE GE 36.56 -.13 -.4
EMC EMC Corp 14.64 +.22 +1.5
C Citigroup 48.01 -.34 -.7
TWX Time Warner 19.42 -.13 -.7
XOM Exxon Mobil 51.13 +.08 +.2
NASDAQ CLOSE 2177.00 - 0.19 - .0
VOLUME 1,508.5
PREVIOUS 1,590.7
ADVANCES 1452
DECLINES 1676
NASDAQ ACTIVES
QQQQ Nasdaq 100 40.02 +.05 +.1
MSFT Microsoft 26.90 -.05 -.2
INTC Intel 23.25 -.03 -.1
EBAY eBay 117.57 +1.41 +1.2
SIRI Sirius Satellite 7.29 -.52 -6.7
CSCO Cisco Systems 19.31 +.05 +.3
ORCL Oracle 13.72 -.12 -.9
TASR Taser Intl 31.09 +2.66 +9.4
AMZN Amazon.com 44.82 +.19 +.4
AAPL Apple Computer 64.44 +.26 +.4
AMEX CLOSE 1426.73 + .35 + .0
INDEX SHARES
DIA DIAMONDS TRUST 108.27 -.14 -.1
QQQ NASDAQ 100 40.02 +.05 +.1
SPY S&P DEP.RECEIPTS 121.36 +.18 +.2
STOCKS IN THE NEWS
BA Boeing Co 52.07 -1.18 -2.2
LMT Lockheed Martin 55.25 -1.51 -2.7
PKZ PetroKazakhstan 36.51 +3.52 +10.7
VIP Vimpelcom 33.77 +2.27 +7.2
REY Reynolds & Rey 26.35 +1.39 +5.6
AIT Applied Industrial 27.58 -2.12 -7.1
MSO Martha Stewart 28.97 -1.97 -6.4
CSPI CSP Inc 10.46 +2.50 +31.4
OLAB Oralabs Holdings 4.09 +1.51 +58.5
VSAT Viasat Inc 23.90 +1.05 +4.6
FISI Finl Institutions 23.56 -2.69 -10.3
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