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08/30/05:
Hurricane Katrina Sinks Oil Rigs & Shakes Up Energy Stocks
SUSIE GHARIB: The cost of Katrina is mounting tonight in
the number of lives lost and the economic impact. The damage from the
powerful hurricane is being called catastrophic. Rescuers in boats and
helicopters struggled to pull victims off roofs of homes and buildings all
across the gulf coast. Flooding in New Orleans is massive due to a break
in the city`s levee system. Late today, we learned three oil refineries in
Louisiana are under water due to the flooding from Katrina. The
deteriorating situation helped push oil prices to a new record today,
$69.81, up $2.61. And wholesale gasoline futures skyrocketed 20 percent to
$2.47 a gallon, also a record. Scott Gurvey takes a look at Katrina`s
impact on energy stocks.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Stocks within
the energy sector generally did well in today`s trading as investors
revised their evaluation of the impact of hurricane Katrina. Strong gains
were posted by both the Amex oil index, which includes producers and
refiners and the Philadelphia oil services index, made up of companies
which make equipment and provide services to the energy industry. Stock
watchers say it is difficult now to asses the impact on earnings of the
major integrated oil companies. They will suffer from loss of production
but gain from higher prices.
FADEL GHEIT, OIL & GAS ANALYST, OPPEHEIMER & CO.: The best thing for
investors is to focus on companies that have no exposure whatsoever to the
Gulf of Mexico but they benefit from the higher price -- the Canadian oil
and gas producers. They are 5,000, 6,000 miles away from the hurricane,
but they sell their oil and gas basically to the U.S., so they benefit from
the rising prices, but their production is not affected whatsoever.
GURVEY: The companies are now at the earliest stages of assessing the
damage to the region, which is home to one quarter of domestic oil and gas
production. Even if refinery damage is minimal, the plants may well be
flooded, without electricity, and without workers who fled the area. While
the producers and refiners face uncertainty, analysts say the service
sector should do well as the rebuilding effort proceeds in the weeks ahead.
Sal Ilacqua owns shares in both Schlumberger and Ashland.
SAL ILACQUA, OIL ANALYST, MONNESS, CRESPI, HARDT & CO.: The service
sector is going to have a bonanza from this thing, because there`s going to
be a lot of repair work. And you can see Schlumberger is probably the best
one in that whole area, but there`s a lot of construction companies that
will get work. There`s one unique operation that we`ve been recommending
is Ashland, because they`re a very big road construction company in the
south, all over the south, and I think they`re going to get a lot of repair
work when this is all settled.
GURVEY: It may be days or even weeks before the extent of
the damage is known because the damage is always visible.
One analyst told me today the leak in an oil line from an
offshore oil rig will be seen immediately. But a leak of natural
gas will not become apparent until they begin production and
pressurize the line. 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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/30/05:
The American Worker Can't Keep Up With The Economic Recovery
PAUL KANGAS: More evidence tonight that American families are treading
economic water. The Census Bureau today reported household income growth
stalled last year and the poverty rate rose. That`s not uncommon after a
recession, but some experts say it means the economic recovery is leaving
many Americans behind. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: At this
Washington, DC, charity, there`s no need to consult official statistics to
know the poverty rate is rising. "So Others Might Eat" is now serving an
extra 10,000 meals a year.
NICK BROWN, SOCIAL JUSTICE COORDINATOR, S.O.M.E.: Between 2001 and
2004, we have estimated there`s been about approximately a 17.8 percent
increase in the number of meals that we serve per day.
GERSH: In much of the nation, it`s the same story. The Census
Department reports another 1.1 million Americans fell into poverty last
year, bringing the nation`s poverty rate to 12.7 percent. Other indicators
show average American families are running in place or falling behind. The
census reports 45.8 million Americans -- 800,000 more than just two years
ago -- had no health insurance. And the percentage of employers offering
coverage dropped to 59.8 percent. And after adjusting for inflation,
median household income was flat at $44,400.
CHARLES NELSON, ASSISTANT DIVISION CHIEF, U.S. CENSUS BUREAU: Now,
this is the second consecutive year that households did not experience an
annual change in real median income after declining in real terms for two
years in 2001 and in 2002.
GERSH: Median household income is now $1,700 below the peak hit in
1999 and the poverty rate rose the most among working Americans.
ROBERT GREENSTEIN, CENTER ON BUDGET AND POLICY PRIORITIES:
So, for workers and working age people, poverty went up, median household
income went down, the ranks of the uninsured went up. That`s unusual and
very disappointing for the third full year of an economic recovery.
GERSH: Some argue the official poverty numbers understate the problem.
The Census Bureau considers a family of four poor if they earn less than
$19,300 a year. But, for example, here in Washington, DC, where housing
prices are booming, advocates say it can easily take twice as much money to
support a family. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
GHARIB: Even more evidence today about the changing economics
for American families. According to a new survey done for
the AFL-CIO, many Americans fear their standard of living
is declining. Fifty three percent of the workers surveyed
said their income isn`t keeping up with rising health care
and gasoline prices. Forty three percent said they were hopeful
and confident about achieving their financial goals. But that`s
down from 70 percent in a similar survey done just six years
ago. The key area of concern healthcare, with 68 percent of
those surveyed saying they are dissatisfied with the healthcare
system in the United States. Joining us now to talk about
that survey and the outlook for labor, John Sweeney, president
of the AFL, the giant union consortium. Mr. Sweeney nice to
have you back on our program.
JOHN SWEENEY, PRESIDENT, AFL: Thank you.
GHARIB: Let`s start talking about rising health care costs because
this is such a hot button for Americans, what do you think is the solution?
SWEENEY: Oh, I think that we really have to attack the health care
issue in a very aggressive way. We`re the only country in the world and
only industrialized country that isn`t providing a form of national health
care for all of our citizens. And I think we have to have the political
will to make those changes, bring in government employers and
representatives of our workers into the loop to address a national health
care reform.
GHARIB: Looking, Monday is Labor day, but looking a little bit at the
whole labor movement, we see so much union workers losing their jobs,
having to give concessions on health care, on their pensions, the non-
sector the non-union sector seems to be a little bit more secure. What`s
the incentive for a American worker to join a union these days?
SWEENEY: I think the incentive for a worker to join a union is as
strong, maybe stronger than it ever has been. When you talk about
unorganized workers, their priorities are similar to those of organized
workers. They`re talking about the same issues that you`re talking about
here tonight. It`s jobs, health care, retirement security and the only way
that workers are going to achieve some success in this is by coming
together and forming and joining unions.
GHARIB: But we see union membership on the decline quite dramatically,
so why is it that American workers don`t believe that unions are being
responsive to protecting their needs?
SWEENEY: Well, you see, a decline in union membership as a percentage
of the work force. And as the work force grows, its increases in part time
employment and low wage jobs with no health and retirement security. We
have lost 3 million good manufacturing jobs over the past five years and
these are jobs that pay good wages, had good benefits and most of this was
because of bad trade policy.
GHARIB: What about Wal-Mart? Why hasn`t the labor movement been able
to organize Wal-Mart workers?
SWEENEY: Oh, I think that you`re going to see Wal-Mart workers
organizing into unions over the next several years. Wal-Mart workers are
being exploited. They`re really the victims of a very greedy corporation
that`s only interested in profits and their exploitation is a very serious
problem and I think that those workers are going to come together and join
unions and achieve some collective bargaining. It`s not going to be done in
the short run but you can rest assured those workers are interested in
improving their lives and that`s just one example of how workers are being
exploited and how this economy is not working for working families.
GHARIB: There are some experts who I`ve talked to who see that it`s
going to be more the nonunion trend for the future and they`re saying, you
look at what`s going on in the airline industry right now, Northwest of
course right now is going through a strike, is that the airline industry is
going to go the way of Wal-Mart, that the successful business model to make
money these days is low cost and non union. What do you say to that?
SWEENEY: We say that that`s corporate America`s greed attitude. And
interested in the bottom line in terms of how much they can provide for
their dividends and for excessive CEO compensation. But you have some very
strong unions in the airline industry and I think those unions are going to
be successful in achieving improvements for their workers. And this is
something that our government has to take a look at in terms of how these
airlines are changing and how they really impact on travelers in terms of
the services that they`re providing and the fares that they`re charging.
GHARIB: All right. We`re going to have to leave it there, Mr. Sweeney
thank you for coming on our program.
SWEENEY: Thank you.
GHARIB: We`ve been speaking with John Sweeney, president of the AFL-
CIO.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/30/05:
Property Taxes... The Latest Pin Sticking The Housing Bubble
SUSIE GHARIB: The housing boom has made many people feel wealthier.
But along with rising home prices comes something else that many people
don`t feel good about: rising property taxes. As Jeff Yastine reports, they
can be an unexpected downside with some unexpected complications.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Martha Smith
likes to stitch quilts in her spare time and she`s no different than many
people who have watched their home values rise dramatically. On paper, she
could net huge windfall profits by selling this home she has owned for
years. But Smith is not cheering. She was hoping to sell the property, lock
in those gains and live less expensively by buying a smaller home in the
same area.
MARTHA SMITH, HOMEOWNER: Being single, I was looking for other
alternatives to reduce my monthly expenses and my responsibilities. So I
investigated the possibility of downsizing, and in doing so I found that it
just was not cost effective to sell my home and go into something smaller
and it was really because of the property tax.
YASTINE: The property tax. It`s an overlooked factor in many
homebuyers` plans and with home prices soaring in many areas of the U.S.,
property taxes are escalating, too. In fast-growing Fort Lauderdale and
Broward County, it`s led even the elected property appraiser to worry what
the end result could be.
LORI PARRISH, BROWARD COUNTY PROPERTY APPRAISER: Last month in Broward
County, the average home sold for $383,000. That`s about $8,000 a year in
property taxes. I think it`s a crisis that`s coming - it`s already here.
And when people talk about affordable housing, we`re not talking about
providing housing for poor families. We`re talking about the working poor
that simply can`t find a place to live.
YASTINE: It`s a nationwide phenomenon and some taxpayers have had
enough. In New Jersey, a tax revolt group has formed, upset by rising
property taxes and the state`s reliance on those revenues. In Florida, it
has led to sticker shock for unwary buyers. Unlike many states, homes in
Florida are reassessed only when the property is sold. So, if the seller
has owned the house for a long time, it can mean an extraordinary one-year
jump in property taxes. That kind of math did not sit well with Martha
Smith.
SMITH: I would be almost doubling my tax by getting in something
almost half as expensive as what I have now. So, it would be going from
$2,800 to about $5,800.
YASTINE: So she`s staying put in her present home and with what she`ll
save in not paying more property taxes, she can buy a lot more quilting
material. Jeff Yastine, NIGHTLY BUSINESS REPORT, Fort Lauderdale.
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.
08/30/05
"Commentary"-Celebrating The Mutual Fund Scandal
SUSIE GHARIB: Tonight`s commentator is looking at the calendar and has found an
interesting event to remember. Here`s Allan Sloan, Wall Street editor of
"Newsweek" magazine.
ALLAN SLOAN, WALL STREET EDITOR, NEWSWEEK: We`re coming up to an
important birthday. No, it doesn`t involve a person. It`s the mutual fund
scandal, which turns two years old on Saturday. I`d love to have New York
Attorney General Eliot Spitzer who uncovered the scandal, host a big party
and sing "happy birthday," but that`s not going to happen.
So, instead of partying, let`s use the birthday to look at what`s
changed and what hasn`t. The fund management industry has gotten scared,
which is good. Investors are getting $3 billion of fee reductions and
repayments for being cheated. That`s good, too. It`s not much compared with
the trillions invested in mutual funds, but it`s $3 billion more than we
would have had if Spitzer hadn`t found out a hedge fund was skimming money
from mutual funds with fund companies` assistance. Spitzer woke the SEC up,
no mean feat.
Now, there`s lots more disclosure to shareholders than there was and
lots more lawyers and paperwork, alas. And some fund companies have even
cut fees voluntarily. But the biggest thing hasn`t changed, which is:
you`ve got to look out for yourself. You`ve got to pick funds that treat
shareholders as clients to be valued, rather than as customers to be
exploited. It`s fine to celebrate two years of progress, but don`t let your
guard down yet or ever. So let`s wish the scandal a happy birthday and wish
investors many happy returns. I`m Allan Sloan.
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.
08/30/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Higher oil prices and lower stock prices were the story this
morning as investors waited for damage reports from Katrina. The Dow fell
60 points early on while the NASDAQ lost 15. The selling picked up as
minutes from the Fed`s August 9 meeting showed concern about inflationary
pressures from swelling energy prices. The Dow industrial average and
NASDAQ headed into the close, very close to their worst levels of the day,
but some last minute bargain hunters trimmed the losses a bit. Dow
Industrial Average came in with a loss of 50.25 points at 10,412.82.
NASDAQ Composite down 7.89 at 2,129.76. Standard & Poor`s 500 lost 3.87 at
1,208.41. In the bond market, the 10-year note rose 21/32 to 101 8/32,
putting the yield at 4.10 percent.
The big board volume leader on 18 1/2 million shares Time Warner
(TWX) moving up $0.42. Carl Icahn and investment group apparently are
planning to boost their 3 percent stake in the company to 10 percent.
General Electric (GE) down $0.36.
Wal-Mart Stores (WMT) losing $0.46. Wal-Mart had to close 123 of its
stores because of hurricane Katrina.
Pfizer (PFE) $0.04 gain.
$0.19 rise in ExxonMobil (XOM) in a firm energy group on those higher
prices.
Motorola (MOT) up $0.67.
Citigroup (C) fell $0.28.
Nortel Networks (NT) a nickel loss.
Lucent Technology (LU) down $0.04.
And Corning (GLW), tenth in volume, pretty good percentage gain, up
$0.77.
This is a really good gain, McDermott Intl (MDR) up $6.75. The
company and several asbestos claimants have agreed on terms of a revised
settlement in the Chapter XI proceeds of Babcock and Wilcox of which
McDermott will retain full control.
CB Richard Ellis (CBG) up $2.95. CS First Boston upgraded it from
"neutral" to an "out perform" rating.
Abercrombie and Fitch (ANF) losing $3.93. Robert S. Singer, the
president and chief operating officer, is going to leave this company and
in a separate note, Abercrombie said it had a 24 percent rise in August
same store sales.
Federated dept stores (FD) down $1.18. The company today did close on
its acquisition of May Department stores for $11 million.
AMR (AMR), parent of American Airlines, down $0.71, representative of
a very weak airline group on the higher oil prices.
Dycom Industries (DY) losing $3.23. After the close yesterday, the
company reported a fourth quarter loss of $0.25 versus earnings of $0.35
the year before. Revenues dropped 3.6 percent and the company warned its
first quarter will come in around $0.17 to $0.23 a share in earnings, well
below the $0.36 Street estimate. Even so, Standard & Poor`s did repeat a
"strong buy" on the stock.
Indymac Bancorp (NDE) down $1.92. Bank of America downgraded it from
"buy" to "neutral."
And then on the upside, Invacare (IVC) rising $0.95. It was as high
as $43.24 this morning after KeyBanc upgraded it from "buy" to an
"aggressive buy."
And Golden West Financial (GDW) down $1.63. Bank of America
downgraded it from "buy" to just a "neutral" rating.
Microsoft (MSFT) topped the NASDAQ active with a $0.03 gain.
And Google (GOOG) fell $1.18. A survey found that baidu.com is
stealing local market share from Google in China. Baidu stock was up $2.40
to close at 81 today.
Intel (INTC) $0.16 loss.
Apple Computer (AAPL) up $0.73.
Cisco Systems (CSCO) $0.13 drop. That was fifth in dollar volume.
Ebay (EBAY) $0.23 gain.
$0.07 rise in Amgen (AMGN)
Dell (DELL) $0.20 gain there.
Yahoo! (YHOO) down $0.50.
And a very weak retailing group Sears Holding (SHLD) down $2.95.
Vasogen (VSGN) off $1.87, a 44 percent drop. The company halted late
stage trials for its heart disease treatment because it proved largely
ineffective.
And then Finish Line "A" (FINL) down $2.16. The athletic shoe
retailer cut second quarter earnings guidance from around $0.49, all the
way down to about $0.38 a share.
Then over on the American exchange, DHB Industries (DHB) down $1.56,
big percentage drop. The company said because the National Institute of
Justice revoked certification of all bullet proof vests with Zylon, the
company is ceasing production of all of its bullet resistant products
containing Zylon.
Also on the American, BSD Medical (BSM), look at that gain, up 60
percent. A Duke University study shows the company`s therapy, along with
radiation and chemotherapy drove cervical cancer into remission in 90
percent of 68 patients in the study.
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) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
08/30/05:
Market Stats
Market Stats
DOW CLOSE 10412.82 -50.23 - .5
HIGH 10461.54
LOW 10350.00
NASDAQ COMP. 2129.76 -7.89 -.4
HIGH 2132.21
LOW 2118.27
VOLUME 1,455.2
PREVIOUS 1,246.8
UP VOLUME 567.8
DOWN VOLUME 864.2
DOW TRANSPORTS 3648.30 -36.91 - 1.0
DOW UTILITIES 403.18 +.27 + .1
CLOSING TICK +103
S&P 500 1208.41 -3.87 - .3
S&P 100 560.11 -2.12 - .4
MIDCAP 400 700.15 -2.79 - .4
REUTERS/CRB 331.19 +7.96 + 2.5
NYSE COMPOSITE 7397.06 -16.92 - .2
VALUE LINE 404.67 -1.40 - .3
RUSSELL 2000 653.76 -1.56 - .2
DJW 5000 12082.59 -35.58 - .3
U.S. TREASURIES
5-YEAR NOTE 4.125%
Aug. 15,2010 100 22/32 +15/32 + 3.97
10-YEAR NOTE 4.25%
Aug. 15,2015 101 8/32 +21/32 + 4.10
30-YEAR NOTE 5.375%
Feb. 15, 2031 116 9/32 +25/32 + 4.32
LEHMAN BROS.
LONG BOND INDEX 1827.46 +8.27
DOW CLOSE 10412.82 -50.23 - .5
ADVANCES 1404
DECLINES 1866
NEW HIGHS 104
NEW LOWS 46
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
TWX Time Warner 17.89 +.42 +2.4
GE GE 33.24 -.36 -1.1
WMT Wal-Mart Stores 45.19 -.46 -1.0
PFE Pfizer 25.14 +.04 +.2
XOM Exxon Mobil 58.61 +.19 +.3
MOT Motorola 21.92 +.67 +3.2
C Citigroup 43.26 -.28 -.6
NT Nortel Networks 3.00 -.05 -1.6
LU Lucent Tech 3.05 -.04 -1.3
GLW Corning 19.94 +.77 +4.0
NASDAQ CLOSE 2129.76 - 7.89 - .4
VOLUME 1,498.1
PREVIOUS 1,274.4
ADVANCES 1172
DECLINES 1829
NASDAQ ACTIVES
MSFT Microsoft 27.18 +.03 +.1
GOOG Google 287.27 -1.18 -.4
INTC Intel 25.57 -.16 -.6
AAPL Apple Computer 46.57 +.73 +1.6
CSCO Cisco Systems 17.51 -.13 -.7
EBAY eBay 39.70 +.23 +.6
AMGN Amgen 80.16 +.07 +.1
DELL Dell 35.40 +.20 +.6
YHOO Yahoo! 33.18 -.50 -1.5
SHLD Sears Holding 135.28 -2.95 -2.1
AMEX CLOSE 1623.99 + 3.54 + .2
INDEX SHARES
DIA DIAMONDS TRUST 104.03 -.60 -.6
QQQ NASDAQ 100 38.62 -.14 -.4
SPY S&P DEP.RECEIPTS 121.05 -.64 -.5
STOCKS IN THE NEWS
MDR McDermott Intl 32.15 +6.75 +26.6
CBG CB Richard Ellis 46.19 +2.95 +6.8
ANF Abercrombie & Fit 53.80 -3.93 -6.8
FD Fed Dept Stores 69.48 -1.18 -1.7
AMR AMR Corp 12.69 -.71 -5.3
DY Dycom Industries 18.02 -3.23 -15.2
NDE Indymac Bancorp 39.70 -1.92 -4.6
IVC Invacare 40.05 +.95 +2.4
GDW Golden West Finan 60.30 -1.63 -2.6
VSGN Vasogen 2.38 -1.87 -44.0
FINL Finish Line "A" 14.06 -2.14 -13.2
DHB DHB Industries 5.10 -1.56 -23.4
BSM BSD Medical 4.33 +1.63 +60.4
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