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08/23/05:
Taking The Temperature of the Housing Market
SUSIE GHARIB: A cooling in the housing market sent
a chill through Wall Street today. Stocks fell in reaction to a report
showing a bigger-than-expected drop in sales of previously owned homes.
That raised concerns about a slowdown in consumer spending, the key driver
of economic growth. But as Jessica Gottesman reports, the housing market
remains very healthy, at least for now.
JESSICA GOTTESMAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: Sales slowed
in three of four regions nationwide, according to the National Association
of Realtors. But economists agree that the real estate market is still
very strong, with growing employment and low mortgage rates driving home
sales. In the south, total existing home sales were unchanged, while in
the northeast, Midwest and west, sales dipped. And buyers nationwide paid
more, with the median price of a single-family house hitting an all-time
high, at just under $218,000. That`s up almost 15 percent from a year
ago.
It`s this price rise that has economists saying that the party in real
estate isn`t over yet.
DREW MATUS, SENIOR MARKET ECONOMIST, LEHMAN BROTHERS: For one
thing, at least you know we saw an increase in median home prices, so home
prices actually rose. If the party was over, we`d see home prices falling
at the same time that home sales were declining as well.
GOTTESMAN: But prices are rising, with the median sales price up 14.1
percent in the past year. Home prices have risen the most in the west.
And prices aren`t higher because of a lack of supply. In fact, the number
of existing homes for sale hit a 17-year high last month. Economists say
lots of homeowners have been testing the hot real estate market. But has
the market topped out?
DAVID LEREAH, CHIEF ECONOMIST, NATIONAL ASSOCIATION OF REALTORS: I
think we have peaked, I think we peaked in June. We are coming down. But,
you know, I have been wrong before. Every time I say we`ve peaked and
we`ve come down, I`m wrong because mortgage rates start to go down again.
GOTTESMAN: And they were down last month. The average rate on a 30-
year mortgage in July was lower than it was the year before when rates were
above 6 percent. Tomorrow we get another snapshot of the real estate
industry when numbers on new home sales are released. Jessica Gottesman,
NIGHTLY BUSINESS REPORT, New York.
SUSIE GHARIB: Meanwhile, a more sobering assessment of the housing market
from the Mortgage Bankers Association. It released a study today
predicting mortgage rates of 6 percent by the end of the year and 6 1/2
percent by the end of 2006. Those higher rates could put a damper on home
prices, which have surged by double digits in many markets. But the
mortgage bankers say the impact will likely vary in different parts of the
country.
DOUG DUNCAN, CHIEF ECONOMIST, MORTGAGE BANKERS ASSOCIATION: What`s
been unique of the last five or six years is very few in any markets have
seen declines and that`s led to a significant increase in the average.
What we would expect is that we would start to see some markets show
declines in bringing the average down but we still expect the average price
appreciation to be positive.
GHARIB: In fact, the mortgage bankers expect home prices to increase
by an average of 4 percent in 2006. But they point out the key driver will
be regional job growth.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
Rising Gas Prices Lead To A Rise In Fuel Economy Standards
SUSIE GHARIB: Oil prices continued to creep higher today. In New York
trading, October crude futures ended the day at $65.71 a barrel. That`s up
$0.06. The world`s top oil producer, Saudi Arabia, said today it`s
concerned about the quick rise in oil prices because the market has plenty
of supply. Saudi`s foreign minister blames the soaring prices on a
shortage of refineries, adding that oil prices will continue to rise until
the refinery situation is resolved. Meanwhile, OPEC members have been
pumping oil at 26-year highs, trying to build up world inventories before
peak winter demand.
LINDA O`BRYON: With gasoline prices pushing $3 a gallon, the Bush
administration is calling for changes to the nation`s fuel economy
standards. Transportation Secretary Norman Mineta proposed new fuel
standards today for the light truck segment, which includes trucks, sport
utility vehicles and minivans. Those new standards would push average
light truck fuel economy from the current 21 miles per gallon to 23 miles
per gallon by the year 2011. The transportation secretary says the
proposed changes would save an estimated ten billion gallons of gas.
NORMAN MINETA, U. S. SECRETARY OF TRANSPORTATION: The new CAFE is
fully implemented in the year 2011, nearly all manufacturers will be
required to produce more fuel efficient light trucks and will have to
improve the fuel economy in -- of the vehicles in all size categories.
O`BRYON: But critics point out that the changes proposed today
don`t impact fuel economy standards for the largest sport utility vehicles,
like General Motors` Hummer H-2 or passenger cars.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
The FDA Set To Re-write The Rules For Drug Labeling
LINDA O`BRYON: Shares of Boston Scientific headed lower today, falling
almost 5 percent after government regulators warned the firm about quality
control problems in its distribution process. The Food and Drug
Administration says those problems let flawed medical devices be shipped to
hospitals, including a drug-coated heart stent. This is the third warning
sent to the Massachusetts company since May. Boston Scientific says it is
addressing the problems raised by the FDA and none of the shipping errors
resulted in harm to patients.
SUSIE GHARIB: The FDA is also getting tougher prescription drug labels.
The agency has been requiring additional warnings for some medications.
This fall, the agency is expected to rewrite some of its labeling rules to
make it easier for doctors and patients to understand the risks of the
medications they`re using. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: They are
called package inserts, those long rolls of fine print that come with many
prescription drugs. Even though many patients also receive them, the
inserts are written for doctors. But with all that small type and basic
chemistry, the inserts are largely ignored. Now the FDA wants to hit the
reformat key.
DR. LESTER CRAWFORD, FDA COMMISSIONER: We`re going to redo all of
that so that it`s more user friendly. And in the moment of a crisis, when
the patient or the physician pulls out the patient package insert, they`ll
be able to find what they`re looking for without having to read all the way
through.
GERSH: Proposed physician labeling rules would require drug makers
to highlight a summary of the most important information. Recent labeling
changes, along with dosage information, warnings and side effects, would be
listed at the top of the package insert. And the summary would have to
presented in a larger font.
CRAWFORD: It will make plain language out of what now is somewhat
confusing, certainly to the consumer and the patient, but in some cases to
the physician.
GERSH: Some analysts worry by highlighting some medical
information, drug markers will be liable for side effects that remain
buried in fine print. Wayne Pines was FDA associate commissioner and now
consults for drug companies. Pines says the issue is balance.
WAYNE PINES, REGULATORY SERVICES & HEALTH CARE/APCO WORLDWIDE: One
of the concerns is that FDA may be tipping over a little bit too far in
terms of emphasizing the risks and if the information is not balanced, then
what can happen is, it`s going to discourage appropriate drug use.
GERSH: But supporters applaud the FDA`s push for better drug safety
information, arguing easier-to-read inserts will help savvy patients. The
new rules are expected later this fall, but consumer groups worry the
industry will delay rules that highlight medical risks.
WILLIAM VAUGHAN, SR. POLICY ANALYST, CONSUMERS UNION: It`s not a
great way to sell a product to say you know if you take this, there is a
chance in two weeks your right ear will fall off. That`s not a way to
encourage drug sales.
GERSH: The labeling rules have been under development for more than
a decade. If they are finally implemented, the FDA hopes they will reduce
the complexity of drug labels and help reduce medication errors. 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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
Walmart Remains Resistant To Union Ways In The U.S.A.
SUSIE GHARIB: Wal-Mart is under fire from labor unions
around the world. A network of 900 unions wants the giant retailer to open
its doors to organized labor in countries where it`s currently operating or
soon might. But as Diane Eastabrook reports, the drive to organize at the
world`s largest retailer could be a tough one.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Wal-Mart
may be the world`s most successful retailer, but a global union network
calls the company a failure when it comes to employee relations. At a
conference in Chicago this week, Union Network International or UNI, says
organizing Wal-Mart workers is its top priority.
PHILIP JENNINGS, GENERAL SECRETARY, UNI: We brought liberty and
democracy to many countries around this world, the union world and civil
society. People do not have a free choice in Wal-Mart to be a member of a
union or not.
EASTABROOK: For labor unions the service sector-- which includes
retailers-- offers the most promise when it comes to organizing. UNI says
retailing is a growing industry that often pays low wages, offers few
benefits and employs immigrants, women and teens. Wal-Mart is a prime
target because it employs more than 1.5 million workers in 10 countries.
While unions have been successful organizing Wal-Mart workers in parts of
Europe and South America, they have yet to be successful organizing workers
in the U.S. and Canada.
JOE HANSEN, PRESIDENT, UNITED FOOD & COMMERCIAL WORKERS: If we send
one organizer into a store, Wal-Mart will fly 50 people in from Bentonville
to combat that, that is they terrorize the workers in the store.
EASTABROOK: Wal-Mart says it is not anti union and follows the laws
and regulations in every country it has stores. In a statement Wal-Mart
says quote, we prefer having direct relationships with our associates, but
where there are unions, work councils or other employee associations, are
relationships are professional and cordial, end quote. Still, labor experts
say Wal-Mart may find it increasingly harder to prevent unions from
organizing its workers.
DAN CORNFIELD, SOCIOLOGY PROFESSOR, VANDERBILT UNIVERSITY: The
timing is right in the sense that there`s a growing have not segment of the
national labor force in the United States that suffers a range of
employment related abuses and all the opinion polls seem to suggest that
that segment, that low-wage service workers, ethnic and racial minorities
and immigrants, have a strong desire to unionize.
EASTABROOK: UNI is confident when it closes its conference at the
end of the week, it will have a strategy in place to help unions organize
Wal-Mart stores both here and abroad. 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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
"Commentary"-A Lesson In Trade With China
SUSIE GHARIB: In tonight`s commentary, learning a lesson or two about trade with
China from the European Union. Here`s Lionel Barber, U.S. managing editor
of the "Financial Times."
LIONEL BARBER, U.S. MANAGING EDITOR, "FINANCIAL TIMES": Americans
are not often in the business these days of borrowing ideas from Europe,
but here`s an exception. The Bush administration is considering copying a
patchwork deal agreed between the European Union and China to curb China`s
surging textile exports. The way the deal has unraveled should be a
warning to all. Because Beijing swiftly filled its agreed import quotas,
millions of Chinese-made pants and pullovers are now under lock and key at
ports all over Europe. Retailers from Cardiff to Copenhagen face shortages
of bras, t-shirts and men`s sweaters. Many small businesses now face
bankruptcy.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
"Last Word"-Hilton In Your Home
SUSIE GHARIB: And finally tonight, Hilton wants to help you recreate the
hotel experience at home. It`s now selling the Hilton collection, from
sheets and comforters to bath and body products. Hilton says what`s ours
can be yours. The chain is selling all of its custom made, luxury room
products on its web site. You can even take home the Hilton suite dreams
mattress and box springs set. A king-sized set will run you almost
$1,500.
Or you could buy Hilton`s goof proof clock radio, with an easy-set alarm
and battery back-up for $60. But Linda, that`s doesn`t come with a wake-up
call from the front desk, so you`re on your own on that.
O`BRYON: I guess you just can`t have everything.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
"Paul Kangas' Stocks In The News"
LINDA O`BRYON: Blue chips traded modestly higher at the outset, but quickly
reversed course on that news of slowing home sales. Traders worried about
slowing mortgage and consumer loan business. That was reflected in shares
of bank stocks. The Dow was in negative territory through much of the
morning. By midday, the blue chips were off 67 points while the NASDAQ was
down eight points. With few economic reports out today, most stocks
outside the housing and bank sectors were little changed. The Dow ended
the day off 50 points at 10519. The NASDAQ composite fell over 4 points to
2137. The S&P 500 had a similar drop to settle at 1217 and in the bond
market, the 10-year note up 8/32nds at 100 17/32nds, putting the yield at
4.18 percent.
Lucent Technology (LU) headed up the big board`s most active list,
trading over 30 million shares, the stock rising $0.11. Prudential Equity
Group upgraded Lucent shares in the belief the company will see stronger
than expected sales for wireless networking equipment.
Pfizer (PFE) fell $0.26.
Time Warner (TWX) dropped $0.19.
Citigroup (C) ended off $0.64 with investors reacting to a change
in management. Marge Bagner, a top executive overseeing the company`s
very profitable consumer division, has decided to step down.
Boston Scientific (BSX) fell $1.23. As you heard, the biotech firm
is getting reprimanded for the third time now by government regulators.
Merck & Co (MRK) ended off $0.31.
ExxonMobil (XOM) finished down $0.07.
No change in General Electric (GE).
Hewlett-Packard (HWQ) picked up $0.18.
Motorola (MOT) advanced $0.35.
Now here`s a quick snapshot of a number of housing stocks under
pressure due to the wider than expected drop in existing home sales. We see
Centex (CTX), DR Horton (DHI), Lennar (LEN), Pulte Homes (PHM).
There were also pockets of weakness in home furnishing retailers as
consumers are seen putting off major purchases due to higher energy prices
and rising interest rates.
Furniture Brands (FBN), La-Z-Boy (LZB) Pier 1 Imports (PIR) each ended
down.
Now on to other stocks making news. Shares in Westcorp (WES) surged
over 12 percent after confirming it is in merger talks. The company
stressed talks are preliminary and other options are being considered.
Today`s "Wall Street Journal" reports Wachovia may be the interested suitor
for WES` assets. The stock surged over $9 on the prospect for a deal.
Allmerica Financial (AFC) rose more than $3 on news that Goldman
Sachs will take $275 million up front for the company`s variable life
insurance and annuity businesses, plus an additional $210 million over
three years.
Resmed (RMD) jumped nearly $7 as profits in the fourth quarter
jumped over 30 percent on a 35 percent jump in sales.
We see shares in Carmax (KMX) riding high. As we heard, they
climbed over $3 thanks to that upbeat outlook.
Now on the downside, Toro co (TTC) ended off $1.49. The lawn
equipment maker cutting its full year revenue forecast because of high
prices for raw materials and the poor weather conditions.
Over in NASDAQ trading, Google (GOOG) rose over $5. Today`s "Los
Angeles Times" reports the popular search engine is venturing out into
instant messaging.
Microsoft (MSFT) dipped a fraction.
And so did Intel (INTC).
Shares in Amylin Pharmaceuticals (ALMN) surged over $6 after mid-
stage trials of its diabetes treatment. Studies show that patients
receiving a once a week shot of the drug called Vietta (ph) saw glucose
levels drop and lost an average of nine pounds compared to those taking a
placebo.
Dell (DELL) fell $0.55.
Cisco Systems (CSCO) edged up a fraction.
But Yahoo! (YHOO) fell $0.09.
Baidu.com (BIDU) spiked up over $9. After the close, the Chinese
firm dubbed China`s Google posted impressive quarterly results.
Research in Motion (RIMM) fell $0.73.
Apple Computer (AAPL) ended off $0.13.
So overall Susie, higher oil prices, combined with slowing existing
home sales taking their toll on many of 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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/23/05:
Market Stats
Market Stats
DOW CLOSE 10519.58 -50.31 - .5
HIGH 10577.46
LOW 10496.73
NASDAQ COMP. 2137.25 -4.16 -.2
HIGH 2145.71
LOW 2131.02
VOLUME 1,276.7
PREVIOUS 1,218.4
UP VOLUME 482.7
DOWN VOLUME 766.5
DOW TRANSPORTS 3661.34 -63.98 - 1.7
DOW UTILITIES 398.94 +2.27 + .6
CLOSING TICK +161
S&P 500 1217.57 -4.16 - .3
S&P 100 565.41 -2.13 - .4
MIDCAP 400 703.16 -1.80 - .3
REUTERS/CRB 317.56 +.44 + .1
NYSE COMPOSITE 7453.78 -32.76 - .4
VALUE LINE 406.65 -1.11 - .3
RUSSELL 2000 655.47 -2.00 - .3
DJW 5000 12159.31 -33.86 - .3
U.S. TREASURIES
5-YEAR NOTE 4.125%
Aug. 15,2010 100 12/32 +5/32 + 4.04
10-YEAR NOTE 4.25%
Aug. 15,2015 100 17/32 +8/32 + 4.18
30-YEAR NOTE 5.375%
Feb. 15, 2031 114 26/32 +15/32 + 4.40
LEHMAN BROS.
LONG BOND INDEX 1813.23 +4.85
DOW CLOSE 10519.58 -50.31 - .5
ADVANCES 1434
DECLINES 1861
NEW HIGHS 77
NEW LOWS 26
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 2.98 +.11 +3.8
PFE Pfizer 25.10 -.26 -1.0
TWX Time Warner 17.81 -.19 -1.1
C Citigroup 43.56 -.64 -1.5
BSX Boston Scientific 25.92 -1.23 -4.5
MRK Merck & Co 27.58 -.31 -1.1
XOM Exxon Mobil 59.00 -.07 -.1
GE GE 33.97 unch. unch.
HPQ Hewlett-Packard 26.71 +.18 +.7
MOT Motorola 21.26 +.35 +1.7
NASDAQ CLOSE 2137.25 - 4.16 - .2
VOLUME 1,382.9
PREVIOUS 1,396.1
ADVANCES 1327
DECLINES 1674
NASDAQ ACTIVES
GOOG Google 279.58 +5.57 +2.0
MSFT Microsoft 26.87 -.04 -.2
INTC Intel 25.72 -.34 -1.3
AMLN Amylin Pharm 28.00 +6.07 +27.7
DELL Dell 35.73 -.55 -1.5
CSCO Cisco Systems 17.76 +.07 +.4
YHOO Yahoo! 33.11 -.09 -.3
BIDU Baidu.com 82.00 +9.31 +12.8
RIMM Rsch In Motion 76.76 -.73 -.9
AAPL Apple Computer 45.74 -.13 -.3
AMEX CLOSE 1611.07 + 7.22 + .5
INDEX SHARES
DIA DIAMONDS TRUST 105.28 -.38 -.4
QQQ NASDAQ 100 38.73 -.11 -.3
SPY S&P DEP.RECEIPTS 122.23 -.24 -.2
STOCKS IN THE NEWS
CTX Centex 65.57 -.74 -1.1
DHI D.R. Horton 34.92 -.15 -.4
LEN Lennar 58.93 -.79 -1.3
PHM Pulte Homes 83.48 -.68 -.8
FBN Furniture Brands 19.29 -.22 -1.1
LZB La-Z-Boy 13.57 -.42 -3.0
PIR Pier 1 Imports 13.36 -.50 -3.6
WES Westcorp 64.51 +7.16 +12.5
AFC Allmerica Finl 42.10 +3.28 +8.5
RMD Resmed 75.36 +6.98 +10.2
KMX Carmax 32.06 +3.39 +11.8
TTC Toro Co 37.71 -1.49 -3.8
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