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09/01/05:
Fuel Fears, Price Hikes & Gas Gouging
SUSIE GHARIB: Relief and rescue efforts are in high gear
tonight all over the United States to help the victims of hurricane
Katrina. Congress is coming back early from summer recess to approve the
administration`s request for $10 billion to cover immediate needs and
businesses all across the country are pitching in with supplies and cash to
help where they can. But it`s going to be a long haul and Americans are
going to have to deal with one key area of fallout: high gasoline prices.
We have two reports tonight looking at how energy futures are trading and
whether gas price gouging is a threat. We begin with Erika Miller in New
York.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was another
intense day of trading in gasoline futures at the New York Mercantile
Exchange. Traders reported panicked buying.
IRA ECKSTEIN, OIL TRADER, AREA INTERNATIONAL TRADING: This is the most
crazy it`s been since I`ve been trading for over 15 years.
MILLER: Wholesale gasoline for October delivery jumped $0.15 to $2.41
a gallon. The rally`s cause was clear: continued uncertainty about the
impact of hurricane Katrina.
ROBERT MORRIS, OIL ANALYST, BANC OF AMERICA SECURITIES: What`s going
on here is you`ve shut down a lot of refineries on the Gulf coast and a
majority of our gasoline production is from those refineries on the Gulf
coast.
MILLER: Crude oil futures also rose today, despite the government`s
decision to release emergency petroleum reserves. ExxonMobil is one
company that plans to borrow crude from the government`s stockpile: six
million barrels. But experts don`t expect this extra supply to be much
benefit in bringing down gasoline prices.
ECKSTEIN: We haven`t had a new refinery in, let`s say, 20, 30 years.
They can deliver us as much crude as possible. We can`t refine it.
MILLER: That`s why AAA said regular unleaded hit a record today, an
average of $2.68 a gallon. That`s up 18 percent from a month ago and up 44
percent from a year ago. But $2.68 sounds like a dream to motorists in
many parts of the country where prices have soared above $3 a gallon. That
increase has many people outraged. It`s ridiculous
MILLER: But others are taking the price spike in stride.
I`m Italian, it`s like $8 a gallon back home.
MILLER: Some drivers fear the return of long lines and scarcity that
were common during the gasoline crises in the 1970s. Analysts don`t expect
that to happen and they say prices should peak in the next few weeks.
MORRIS: To get $5, I think you`d have to see oil prices go to $80,
$90 a barrel. To see $4 gasoline, I think you`d have to see more
interruptions, more problems, whether it was in the Gulf of Mexico or in
the Middle East.
MILLER: Analysts expect gasoline prices to retreat after electricity
is restored to most Gulf coast pipelines and refineries. Unfortunately,
that could take several weeks at least. Erika Miller, NIGHTLY BUSINESS
REPORT, New York.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: I`m Stephanie
Dhue. In some parts of the country, prices at the pump seem to be heading
higher by the hour. At this station in Georgia, prices topped $6 a gallon.
Those kinds of spikes have states around the country investigating
complaints of price gouging. Florida Attorney General Charlie Crist issued
subpoenas to oil wholesalers who jacked up prices as much as $0.73 a gallon
in the past 48 hours.
CHARLIE CRIST, ATTORNEY GENERAL, FLORIDA: We issued the subpoenas
today. They have 20 days to get this information back to us about their
accounting practices, their pricing procedures and whether there is a
legitimate rationale for why the increases occurred as extraordinary as it
is.
DHUE: But with serious supply disruptions, gouging can be hard to
prove at the wholesale and retail level.
JUSTIN MCNULL, SPOKESMAN, AAA: There certainly is a gray area. To see
at what point a gasoline retailer who knows I just have a couple hundred
gallons left, I`m not getting another replacement shipment because my
branded station is just supplying the people that they`re under contract
with, to say "I`ve got to make these 500 gallons last, let me charge more
for it."
DHUE: The Department of Energy has received over 5800 complaints of
price gouging and will refer some of those to the Federal Trade Commission
for investigation. But consumer advocates say it will be difficult to find
price gougers.
MARK COOPER, RESEARCH DIRECTOR, CONSUMERS FEDERATION OF AMERICA:
Two-thirds of the states or 60 percent of the states, don`t even have laws
that would let them define the problem. And even if they found that few
people, they would not address the underlying disease.
DHUE: President Bush says the supply disruptions will be temporary and
he urged Americans to conserve energy.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Americans should be
prudent in their use of energy during the course of the next few weeks.
Don`t buy gas if you don`t need it.
DHUE: News today that the colonial pipeline, which supplies much of
the east coast, is back on line may help ease prices at the pump. But it`s
still only operating at 50 percent capacity. Stephanie Dhue, 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.
09/01/05:
One On One With Allan Hubbard, White House Chief Economic Adviser
SUSIE GHARIB: As the White House mobilized to deal with the damage from
Katrina, President Bush met with Federal Reserve Chairman Alan Greenspan
today and then with his economic team. A short while ago, I talked with
Allan Hubbard, the president`s national economic advisor and asked him what
was discussed at the Greenspan meeting.
ALLAN HUBBARD, WHITE HOUSE CHIEF ECONOMIC ADVISOR: Obviously we talked
about Katrina and we talked about the impact of Katrina especially on the
individual people down there with the president so concerned about it. Then
when we talked about the economic impact and basically talked about the
economy in general.
GHARIB: Mr. Hubbard, did Alan Greenspan express any concern about the
direction of the economy because of Katrina?
HUBBARD: Well, obviously you know, I don`t feel comfortable talking
for Alan Greenspan, I think should you speak directly to him, but the
chairman feels very good about this economy. We`re obviously all very
concerned about the people in Louisiana and southern Mississippi and
southern Alabama. Especially those who have lost loved ones, especially
those who have lost their homes and temporarily lost their jobs and the
president is doing everything he possibly can to assist them in using all
the resources of the Federal government.
GHARIB: President Bush said today that he sees the disruption in the
energy sector as temporary, so how long are Americans going to have to pay
$3, $4 a gallon for gasoline? Is it two months? Is it six months? Is it a
year?
HUBBARD: Obviously it`s impossible for me to tell you where gasoline
prices are going to be. It all depends on the market. It all depends on
supply. It all depends on demand. What`s most important is we deal with
the short-term problems that we face. As you know we lost three major
pipelines and I`m happy to report that all three are back up, one at 100
percent, one at 80 percent and one at 50 percent. And they`re soon to be
all be up at 100 percent and that`s very, very important to achieving
gasoline distribution throughout the country to avoid any disruptions and
that`s going to happen very, very quickly.
GHARIB: How much of an economic hit will this be for the economy?
HUBBARD: Well, obviously in the short term it`s going to be a hit.
New Orleans, southern Louisiana, southern Mississippi, southern Alabama are
very important to our economy. So in the third quarter, it will reduce
growth by not an insignificant amount, but the economy will continue to
grow above 3 percent. And then the fourth quarter it could have some
impact. But in the long run, it`s not going to have any impact. And in
fact, as we rebuild those communities, it will have a positive impact on
the economy. What`s most important is to rebuild those communities as
quickly as possible so people can return to their homes, return to their
jobs and return to their normal way of life.
GHARIB: President Bush this afternoon urged Americans not to buy
gasoline if you don`t need it. Is the administration considering any kind
of demand rationing if necessary?
HUBBARD: That is not necessary at all. But as the president said
earlier today, there will be disruptions because we have nine refineries
down and again we`re working very hard with the owners of those refineries
to get those refineries back up. We had the three pipelines that have been
down and again they are back up. The president is doing, has made other
decisions that are very important to making sure the disruptions are as
small as possible and last as short a period of time as possible. Just
today he asked that the Jones act be waived where we can use foreign ships
to move oil and gasoline from Houston to the east coast to make sure that
the east coast is well supplied. He`s also asked for waivers by the EPA so
we can use winter gas right now and again make more gasoline available so
we can use gasoline from Europe right now and again to make more gasoline
available.
GHARIB: Mr. Hubbard, you mentioned a couple of times as we`ve been
talking about the many people who have been homeless and have jobless and
we all see that, I think everybody is very concerned about that. What is
the government going to do in terms of helping those people? Are they going
to be any kind of cash assistance or some kind of financial assistance?
HUBBARD: Again, you should talk to FEMA and to the homeland security
folks about that and to get into those details. But this president and
I`ve seen him in operation this week, he is doing everything in his power.
He`s making decisions on the spot to do everything he can to assist these
people in restoring their lives to normalcy. Obviously that can`t happen
overnight. I mean there were thousands of homes wiped away. The floods in
New Orleans are going to take a long time to deal with. But the president
is committed to doing everything possible to assist these people and to
help them return to their normal lives.
GHARIB: And how about with businesses, like the airlines, that were
vulnerable even before Katrina. Is the government considering any kind of
aid for the airline industry?
HUBBARD: Again, the economy overall remains very, very strong. We are
without question the fastest growing economy of any developed country in
the world. We have very low inflation. We have very low unemployment.
We`ve produced over four million jobs in the last two-plus years. And
there`s nothing to suggest that the economy is not going to continue to
grow and continue to prosper and that we`re not on a sustainable basis just
like we were before Katrina. There`s no question, there are additional
challenges to businesses. But I`m confident these businesses will respond
positively and will continue to prosper.
GHARIB: All right. We`ll we`re going to have to leave it there. Mr.
Hubbard, thank you very much for speaking with NIGHTLY BUSINESS REPORT.
HUBBARD: Thank you very much.
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.
09/01/05:
The New Orleans Renaissance Will Reach New Standards
SUSIE GHARIB: In the short term, the work is clear cut on handling the aftermath of the
storm: rescue and recovery. In the longer term though, the work will focus
on rebuilding and as Darren Gersh reports, that`s going to be a long and
expensive process.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: After the water
is drained away, the years or decades, of hard work will begin. New
Orleans will rebuild, but the new city is likely to be a very different
one.
JOHN SILVIA, CHIEF ECONOMIST, WACHOVIA: I don`t think this is simply a
two or three quarter, nine months or two-year project where you`re simply
going to rebuild the same building on the same property that you had
before. I don`t think that is going to be feasible simply because the
safety concerns are so high. You cannot have a hurricane like this come
through every 20 years and have this kind of an impact.
GERSH: At a minimum, levees will be modernized with homes cleared from
high danger areas and new building standards may be strengthened as they
were in Florida after hurricane Andrew. That could mean coastal and
riverboat casinos, which make up some 5 percent of the region`s economy,
may take more time to restore if insurance companies and local officials
demand safety and engineering upgrades.
SILVIA: They`re not going to be rebuilt, perhaps not in the same
spot, but certainly not with the same technology you used to build them in
the first place. They will become more expensive to build.
GERSH: The financial system will also be reshaped in the process. In
the short-run, bank regulators say there is little risk of insolvency.
DONALD POWELL, FDIC CHAIRMAN: History tells us that there has been no
bank failures because of natural disasters.
GERSH: But in the long run, the region`s 152 banks will be forced to
write off losses and then decide which homes and businesses should be
rebuilt.
POWELL: They`ll, in my view, extend the credit and have the capital
necessary to rebuild their communities, to rebuild their cities. That`s
good business. They`ll take probably a little bit more risk than they have
in the past, but some of that risk may be subsidized in the form of some
government guarantees or aids or state grants.
GERSH: But the unanswerable question is how many people will return to
reclaim their old lives?
CHRIS VARVARES, PRESIDENT, MACROECONOMIC ADVISERS: If people believe
that their prospects of being gainfully reemployed very quickly are not
very good they are going to move out with friends and relatives and perhaps
try to find jobs elsewhere. Some percentage of those folks may never go
back or it may be years before they go back.
GERSH: Optimists believe a new, improved city will rise again here. A
hopeful thought amid so much suffering. 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.
09/01/05
"Commentary"- The Good Guys Vs. The S.O.B.'s
SUSIE GHARIB: Tonight`s commentator looks at the good, the bad and the ugly of
corporate leaders. Here`s Myron Kandel, founding financial editor at CNN.
MYRON KANDEL, FOUNDING FINANCIAL EDITOR, CNN: The title of my
commentary is "nice guys can finish first." I`m convinced those kind of
people -- and include women, of course-- will be the most successful
leaders in business and other fields. I`ve always resented the articles
that used to appear in "Fortune" listing the 10 toughest bosses in America,
articles that implied you had to be an S.O.B. to make it big. Sure, that
is true in many cases and I bet we can all name some.
But I disagree with the premise. In fact, I think the opposite is
true. Nice guys will be the winners of the future. There isn`t an exact
definition of nice. My Webster`s unabridged includes such terms as "good,"
"kind," "considerate" and "tactful." And being nice doesn`t preclude being
tough or demanding. You don`t succeed by being a patsy, but you can
succeed by creating a corporate culture that encourages teamwork, cares
about people, recognizes hard work and shares success. And above all, one
that`s fair.
Any leader who does that will be able to attract, motivate and retain
talented colleagues who will make the organization a winner and, by the
way, will make him or her look very good. That culture will become more
and more important in the future as the baby boom generation leaves the
work force, and good people then become hard to find and keep. Therefore,
take it from me, nice guys not only can, but will, finish first. I`m Myron
Kandel.
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.
09/01/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Stocks began the day with modest losses as investors focused
on the updates of storm damage. The market grew weaker on news that the
level of national manufacturing fell 5.3 percent in July. The Dow was down
50 points in late morning, NASDAQ off seven. A drop in longer term bond
yields put stocks briefly into positive ground this afternoon, but those
soaring gasoline prices chased buyers away. So the Dow industrial average
lost 21.97 points at 10,459.63. The NASDAQ Composite was down 4.19 ending
at 2147.90. Standard & Poor`s 500 gained 1.26 to close at 1221.59. Over
in the bond market, the 10-year note fell 5/32 to 101 24/32, lifting the
yield at 4.04 percent.
The most active big board issue on nearly 23 million shares,
ExxonMobil (XOM) moving up $1.78 on that soaring gasoline prices. Exxon
also said it plans to borrow six million barrels of oil from the strategic
petroleum reserve.
General Electric (GE) down $0.47.
Pfizer (PFE) $0.17 drop.
There you see General Motors (GM) losing $1.22 on those sagging sales.
But meanwhile, Kirk Kerkorian`s Tracinda Corporation said it wants to buy
another 13.1 million shares of GM. That`s 2.3 percent and that would lift
Tracinda`s stake to 9.5 percent.
Valero Energy (VLO) up $3 a share. Company says that its Louisiana
refinery should be operative within two weeks.
And then we see Wal-Mart Stores (WMT) edging up $0.04. The company had
a 3.3 percent rise in same store sales in August, although that was at the
low end of expectations.
Motorola (MOT) a $0.32 gain.
Citigroup (C) down $0.06.
Time Warner (TWX) dropped a penny.
Tenth in volume was Ford Motor Co (F) losing $0.24 a share.
7-Eleven (SE), one of the stars of the day, up $6.32. Japan`s Seven &
I Holdings Company, the largest retailer in Japan, is offering to buy the
27.3 percent of 7-Eleven that it doesn`t already own and it`s willing to
pay $32.50 a share in cash. That would be about $1 billion.
United States Steel (X) up $1.74. UBS brokerage upgraded it from
"reduce" to "neutral" because it sees near term risks starting to ease for
the steel industry.
Newmont Mining (NEM), the granddaddy of the golds, up $1.35, recent
whiff of inflation helping gold move higher. New York December gold up
$8.40 today at $446.50 the ounce.
ConocoPhillips (COP) up $3.06. Lehman Brothers upgraded it from "equal
weight" to "over weight," did the same thing with Sunoco and Sunoco stock
jumped $5.34 to $78.04.
TXU Corp (TXU) up $6.70. Citigroup has upgraded it from "hold" to a
"buy."
The Limited Brands (LTD) down nearly $1 and August same store sales
fell 3 percent. The Street was expecting a drop of only about 1.1 percent.
Chicago Mercantile Exchange (CME) stock up $23.53. Company says
yesterday was the most active trading day in its history.
Freddie Mac (FRE) down $2.41. First half earnings dropped to $2.22,
down 60 percent from a year ago and way off the estimate on Wall Street
which is $3.71 a share.
MDS (MDX) up $1.98. This is a drug development firm and it announced a
restructuring which will include the elimination of 500 jobs.
Pioneer Natural Resources (PXD) up $4.29. The company will buy back up
to $1 billion of its own stock and it`s boosting the dividend by 20 percent
from $0.20 to $0.24 on an annual basis.
Microsoft (MSFT) topped the active list for the third day running,
down $0.18.
Then the big gainer, Chiron Corp (CHIR) up $6.49. Novartis is offering
to buy the 58 percent it doesn`t already own and will pay $40 a share cash.
Looks like that bid might be sweetened.
Intel (INTC) a $0.46 drop.
Google (GOOG) up $0.25.
Cisco Systems (CSCO) a $0.03 gain. That was fifth in volume.
Research in Motion (RIMM) up $2.22.
Oracle (ORCL) $0.32 gain.
Ebay (EBAY) fell $0.55.
Apple Computer (AAPL) down $0.63.
And Applied Materials (AMAT), tenth in dollar volume, a loss of $0.59.
Bebe Stores (BEBE) down $5.57. That`s almost a 24 percent loss. August
same store sales were up 17 percent, but the company was expected to post
21.4 percent rise in sales. Also it cut its first quarter sales
projections.
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.
09/01/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10459.63 -21.97 - .2
HIGH 10513.76
LOW 10425.80
NASDAQ COMP. 2147.90 -4.19 -.2
HIGH 2157.32
LOW 2142.32
VOLUME 1,705.8
PREVIOUS 1,794.5
UP VOLUME 942.5
DOWN VOLUME 741.1
DOW TRANSPORTS 3670.83 -10.03 - .3
DOW UTILITIES 416.23 +8.77 + 2.2
CLOSING TICK +570
S&P 500 1221.59 +1.26 + .1
S&P 100 564.38 -.06 - .0
MIDCAP 400 711.46 -.03 - .0
REUTERS/CRB 336.20 +6.78 + 2.1
NYSE COMPOSITE 7543.85 +47.76 + .6
VALUE LINE 411.27 +.64 + .2
RUSSELL 2000 668.45 +1.94 + .3
DJW 5000 12233.81 +16.68 + .1
U.S. TREASURIES
5-YEAR NOTE 4.125%
Aug. 15,2010 101 9/32 +4/32 + 3.84
10-YEAR NOTE 4.25%
Aug. 15,2015 101 24/32 -5/32 + 4.04
30-YEAR NOTE 5.375%
Feb. 15, 2031 116 12/32 -29/32 + 4.31
LEHMAN BROS.
LONG BOND INDEX 1839.70 -4.73
DOW CLOSE 10459.63 -21.97 - .2
ADVANCES 2028
DECLINES 1281
NEW HIGHS 290
NEW LOWS 28
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
XOM Exxon Mobil 61.68 +1.78 +3.0
GE GE 33.14 -.47 -1.4
PFE Pfizer 25.30 -.17 -.7
GM GM 32.97 -1.22 -3.6
VLO Valero Energy 109.50 +3.00 +2.8
WMT Wal-Mart Stores 45.00 +.04 +.1
MOT Motorola 22.20 +.32 +1.5
C Citigroup 43.71 -.06 -.1
TWX Time Warner 17.91 -.01 -.1
F Ford Motor Co 9.73 -.24 -2.4
NASDAQ CLOSE 2147.90 - 4.19 - .2
VOLUME 1,664.0
PREVIOUS 1,724.5
ADVANCES 1527
DECLINES 1506
NASDAQ ACTIVES
MSFT Microsoft 27.20 -.18 -.7
CHIR Chiron 42.93 +6.49 +17.8
INTC Intel 25.26 -.46 -1.8
GOOG Google 286.25 +.25 +.1
CSCO Cisco Systems 17.65 +.03 +.2
RIMM Rsch In Motion 80.52 +2.22 +2.8
ORCL Oracle 13.31 +.32 +2.5
EBAY eBay 39.94 -.55 -1.4
AAPL Apple Computer 46.26 -.63 -1.3
AMAT Applied Matl 17.73 -.59 -3.2
AMEX CLOSE 1681.35 + 25.40 + 1.5
INDEX SHARES
DIA DIAMONDS TRUST 104.53 -.34 -.3
QQQ NASDAQ 100 38.92 -.06 -.2
SPY S&P DEP.RECEIPTS 122.49 -.09 -.1
STOCKS IN THE NEWS
SE 7-Eleven 34.66 +6.32 +22.3
X US Steel 43.66 +1.74 +4.2
NEM Newmont Mining 40.93 +1.35 +3.4
COP ConocoPhillips 69.00 +3.06 +4.6
TXU TXU Corp 103.72 +6.70 +6.9
LTD Limited Brands 21.01 -.97 -4.4
CME Chicago Mercantil 301.13 +23.53 +8.5
FRE Freddie Mac 57.97 -2.41 -4.0
MDZ MDS Inc 18.18 +1.98 +12.2
PXD Pioneer Natural 53.69 +4.29 +8.7
BEBE Bebe Stores 17.95 -5.57 -23.7
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