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9/09/05: Hurricane Katrina Being Blamed For Stirring Up Inflation
SUSIE GHARIB: Is higher inflation around the corner because
of hurricane Katrina? Even though wholesale gasoline prices fell below $2 a
gallon today -- for the first time since the storm slammed into the Gulf
coast -- prices at the pump have not come down nearly as fast. Now that`s
driving costs up for many American businesses. And if they raise prices,
that could drive up inflation. Erika Miller reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s no secret
that gasoline prices have soared as a result of hurricane Katrina. But
don`t be surprised if your grocery bill also goes up, due to supply
disruptions and higher transportation costs.
MICHAEL MORAN, CHIEF ECONOMIST, DAIWA SECURITIES: Many companies are
being pressured by high energy prices and are tempted to pass along these
price increases. And the economy is getting to the point where it`s strong
enough where executives are going to find that they can pass these cost
increases on.
MILLER: The prices for coffee, bananas, chicken and oysters have
already risen as a result of the hurricane, and experts say corn and grain
could be next. Katrina walloped the Louisiana seaports, and closed off
parts of the Mississippi River. That leaves many farmers with no easy
access to global markets, with less than a month before the start of the
corn harvest. It may also cost you more to fix up your home or buy a new
one as a result of Katrina. Lumber prices have also been rising in
anticipation of a massive rebuilding effort in the Gulf coast states. But
it`s too early for Katrina`s impact to be seen in inflation data. Take for
example today`s report on prices of imported goods. They rose 1.3 percent
in August, due to higher energy costs. Economists say it will be at least
another month before Katrina`s impact will be seen in inflation data. But
it`s clear: inflation is becoming more of an economic threat.
DAVID WYSS, CHIEF ECONOMIST, STANDARD & POOR`S: The big threat to
economic growth is the direct cost of energy. It`s really the fact that
consumers are spending more and more money heating their houses, filling up
their gas tanks. That`s really where most of the loss is going. The
additional problems you have, in terms of higher inflation, in the goods
sector because of the higher transport costs is a much smaller problem, but
probably one that is going to increase.
MILLER: Some economists think a rising inflation threat will give the
Fed even more reason to raise rates at its September 20 meeting. But
others think the central bank will pause at that meeting to better assess
Katrina`s impact. Erika Miller, 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.
09/09/05:
"Recovering from Katrina"-The Port of Houston's Business Boom
SUSIE GHARIB: The clouds of Katrina may have a silver lining for the port
of Houston. Traffic there has ramped up in recent days, as shippers look
for ways to get their goods in and out of the country. As we continue our
ongoing series "Recovering from Katrina," Washington bureau chief Darren
Gersh looks at the port and the business boom it`s bringing to Houston.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The cargo ship
"Indotrans" was supposed to dock in the port of New Orleans. And New
Orleans native Dave Morici might have been one of the workers unloading it
there, had it not been for Katrina. Now Morici and the "Indotrans" are
working out of the port of Houston.
DAVE MORICI, NEW ORLEANS LONGSHOREMAN: My attitude is I have a place
to work right now, a place to stay, a place to keep on living right now.
In New Orleans it will probably be a rough road right now, so I am going to
wait until things are up and running good before I make a decision to go
back home.
GERSH: That`s a key challenge in reopening the port of New Orleans.
Its workforce is scattered here and across the southeast. In the meantime,
shippers are bringing order to the chaos, offloading cargo originally bound
for New Orleans in ports like Tampa and Houston.
This ship was supposed to stop in New Orleans. Instead it diverted
here to Houston and it`s now filling up with 27,000 tons of grain bound for
Veracruz, Mexico. But millions of tons of grain usually flows down the
Mississippi to the port of New Orleans, and it will be expensive to
reroute.
JIM EDMONDS, CHAIRMAN, PORT OF HOUSTON AUTHORITY: This port,
Galveston, Corpus, Beaumont, all have grain elevators and we`re about to
approach the end of the harvest season here, there`s going to be some
decisions that need to be made on how they get that across the country and
out into the foreign marketplace.
GERSH: The supply chain disruptions stretch around the world. Coffee
from Vietnam and South America is being held up. Houston does a big
business importing bags of coffee, but for four or five generations, New
Orleans has specialized in bulk coffee and warehouses here say they can
only do so much.
TODD STEWART, GULF WINDS INTERNATIONAL: A lot of the coffee that has
been displaced that`s coming in is actually bulk coffee, so unfortunately,
we haven`t been able to lend a huge hand on the bulk side.
GERSH: In the long run, shipping traffic may be permanently rerouted,
though economist Bill Gilmer says ports like Houston will have a hard time
competing with the Mississippi River.
BILL GILMER, SR. ECONOMIST, FEDERAL RESERVE BANK OF DALLAS: If you are
concerned about infrastructure in the New Orleans area, either because of
the levees or its location that close to the Gulf, maybe you just move
upstream.
GERSH: That`s one reason New Orleans natives like longshoreman Armond
Rodriguez are eager to get their port up and running. He says the Houston
union local is treating him well, but he has 15 years experience operating
cranes back in New Orleans.
ARMOND RODRIGUEZ, NEW ORLEANS LONGSHOREMAN: I love being a
longshoreman, I love doing my job. I just have a little bit more seniority
there. I figure that`s where my future is.
GERSH: But if the work does not return home, Rodrguez says he may have
to start over in Houston as the low man on the totem pole. Darren Gersh,
NIGHTLY BUSINESS REPORT, Houston.
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.
09/09/05:
Hurricane Katrina Is Now A Capital Concern On Capitol Hill
PAUL KANGAS: Also in Washington, lawmakers are considering ways to cut red
tape and quickly get more help to the Gulf region in the wake of Katrina.
Obviously that wasn`t on Congress agenda when it recessed for the summer.
But as Stephanie Dhue reports, the storm and its aftermath are redefining
legislative priorities.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hurricane
Katrina is now the number one priority for Congress. In the past week,
lawmakers approved $62 billion in aid, held hearings on surging gas prices,
and moved to ease student loan payments and welfare work rules for people
devastated by the hurricane.
SEN. BILL FRIST, SENATE MAJORITY LEADER: We will continue to focus on
legislation that answers that immediate response and relief. Moving other
business aside, thousands of people need our help and three states need to
recover and rebuild.
DHUE: President Bush will head back to the Gulf region this weekend.
And Katrina overshadowed the president`s schedule today, including a
commemoration for September 11 emergency workers who lost their lives.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In these difficult
days, we have again seen the great strength and character and resolve of
America and we will continue to work to help the people who are struggling.
DHUE: Analysts say Katrina will set back the president`s agenda.
Already, a $35 billion deficit reduction package has been delayed in
Congress. The president`s tax reform panel now says it will be at least
October until its report is finished. And Social Security reform, which
was already on shaky ground, now has almost no chance of passing.
JOE LIEBER, POLITICAL ANALYST, WASHINGTON ANALYSIS: The rest of the
year is going to be filled with Supreme Court nominees, filling those two
vacancies, dealing with post Katrina issues, whether they be appropriations
or revamping FEMA, et cetera, et cetera and with the appropriations
process. And that`s probably it.
DHUE: Analysts say second tier issues, like asbestos liability reform,
creating a new regulator for Fannie Mae and Freddie Mac, and drug re-
importation will get neglected. There may be efforts to tack on unrelated
items, like pension reform, to any new Katrina relief bills. But analysts
say it`s unclear if that strategy will work and they expect many issues to
slide to the back burner. 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.
09/09/05
"Market Monitor"- Randall Eley, President of the Edgar Lomax Company
PAUL KANGAS: My guest market monitor this week is Randall Eley, president
of the Edgar Lomax Company, an investment advisory firm based in
Springfield, Virginia. Welcome back to NIGHTLY BUSINESS REPORT randall,
great to see you.
RANDALL ELEY, PRESIDENT, THE EDGAR LOMAX COMPANY: Thank you and it is
great to see you.
KANGAS: I think you`ll agree that in the wake of the devastation
caused by hurricane Katrina, the U.S. stock market strength has been
impressive, don`t you think?
ELEY: It sure has on a short-term basis. But Paul, I think this is a
knee-jerk reaction and people are going to find that the belief that the
Federal Reserve will stop raising rates on maybe even think about lowering
them is not going to be something that the Fed`s going to be thinking.
KANGAS: But why are people buying, only on that basis or some other
basis?
ELEY: I think that`s the primary reason, because obviously, at this
point, we are all waiting to see what the post Katrina, so to speak,
statistics are going to be. And in the long run, the economic statistics
are going to be what the market will respond to over the years.
KANGAS: But you think they will keep raising and the measured hikes
that they`ve had, a quarter point at a time, right?
ELEY: I think they certainly intend to. It does not mean they will
not take a temporary break. Obviously there`s probably going to be some
political sensitivity to what the short-term effect of continued rises may
be, but they have to maintain the value of the dollar or there will be
greater economic consequences.
KANGAS: So you feel that the Fed policy is still rather accommodative?
ELEY: Yes. They are moving toward neutral. They told us, in fact,
Fed Chairman Greenspan just told us a couple of weeks ago during one of his
two speeches in Wyoming, that stock prices and real estate prices were too
high. He didn`t use those words, but that was the gist of it.
KANGAS: Well, speaking of high prices, where do you think oil is
headed for the short term and then the long term?
ELEY: Oil prices have risen so dramatically this year, Paul, up 50
percent or so, I am not so worried about where they are likely to go as
what sort of damage may be done to consumers and to people if they are
maintained at the levels they are. So already we`re seeing people begin to
cut back. And the hurricane may have a positive effect there in that
people may adjust to what were already higher prices, more willingly and
more innovatively than theyt would have otherwise.
KANGAS: Well, at least Katrina will be good for something, boy, oh
boy.
ELEY: We certainly hope.
KANGAS: Right. On your last visit with us in February this year, you
recommended the purchase of four stocks. Let`s see how they have done
since then. We had Merck, which is literally, well, almost unchanged. It`s
actually up .3 of a percent.
ELEY: (INAUDIBLE)
KANGAS: Go ahead.
ELEY: It is a pretty high dividend. So with the dividend up about 3
percent.
KANGAS: Well, that`s true, but you originally gave it about a year ago
and it was in the 40s, but you`re staying with it, right?
ELEY: Exactly and we bought more as it went down. So in the long
run, that`s the way a value manager pick stocks.
KANGAS: Right, Altria has done well, up nearly 10 percent. You still
with it?
ELEY: Yes.
KANGAS: And then the other two that you gave us, let`s have a look at
those. Chevron, naturally that`s up 10 percent. But the real clinker,
Eastman Kodak down 24 percent. What do we do with that?
ELEY: Once again, it shows we are not perfect. In the Eastman Kodak
case, I`m going to bail out. The fact of life is, at this point we think
the picture is not clear, and by the way, pun intended. And so we don`t
know what`s going to happen to earnings there.
KANGAS: So you are out of it.
ELEY: Yes.
KANGAS: We just have a minute left for any new recommendations that
you might have.
ELEY: Yes. I`m going to give you three. That`s Dupont, ExxonMobil and
McDonald`s.
KANGAS: We are looking at the Dupont chart here and it`s had quite a
ride on the downside. That`s why you like it.
ELEY: Yes and a very good yield play. You`re looking at 3.2 percent
or so dividend.
KANGAS: Actually better.
ELEY: Yes. Almost twice that of the S&P.
KANGAS: OK and then Exxon you mentioned. Let`s have a chart on that.
ELEY: Exxon has been a work horse of profitability. It`s been in our
portfolios for years and given what has happened in crude oil.
KANGAS: It`s almost like Sara Lee, nobody doesn`t like Exxon these
days.
ELEY: That`s right.
KANGAS: And we got time for one more, Randall.
ELEY: Yes. That`s McDonald`s. Here we`re looking at something like -
- Exxon, a relatively recession-proof stock.
KANGAS: OK, do you own all of them?
ELEY: Own every one of them.
KANGAS: OK. Thank you very much. We appreciate your being with us
again, look forward to your next visit.
ELEY: Always good to be back.
KANGAS: My guest, Randall Eley of the Edgar Lomax company.
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.
09/09/05:
"Last Word"-Bic Inks A Major Milestone
SUSIE GHARIB: And finally tonight, it`s an every day item we take for granted, but
we`re taking a lot of them for granted. This week the Bic company said it
had sold its 100-billionth pen, all disposable ballpoints. Since 1957, Bic
has been selling pens at the rate of 57 times a second, using technology
that kept the product cheap and well-designed. But while Bic pens have
been a huge success story, some of its other ideas haven`t fared so well.
For example, Paul, Bic`s ideas for disposable underwear and perfume both
flopped.
KANGAS: But fortunately, Bic had the right product to write those
losses off with.
GHARIB: And I write with it every night. I have one here on the set.
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.
09/09/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Stocks moved steadily higher this morning, paced by Texas
Instrument`s upbeat forecast we told you about yesterday and by McDonald`s,
which reported a solid gain in August sales. By the noon hour, the Dow was
up 85 points. NASDAQ rose 11. Stocks held their gains amid growing
speculation the Fed would pause in its rate hikes. And an easing in oil
prices was also a plus. So for the day, the Dow industrial average closed
up 82.63 points at 10,678.56.
In this four-day trading week, the Dow fell once and rose three times,
had a net gain of 231.19 points. The NASDAQ Composite up 9 1/2 today to
2175.51. It, too, fell once and rose three times this week, had an overall
gain of 34.44 points. Standard & Poor`s 500 gained 9.81 to 1241.48 today.
In the bond market, the 10-year note rose 6/32 to 101 1/32, lowering the
yield at 4.12 percent.
The most active New York exchange issue on 26.2 million shares,
Albertson`s (ABS), the big grocery chain, up $1.81. Reportedly, several
investment groups including Goldberg, Kravitz, Roberts, Apollo Advisors and
Baine Capital are interested in acquiring Albertsons.
Time Warner (TWX) up $0.18.
ExxonMobil (XOM) gained $1.90. Goldman Sachs today upgraded the oil
and gas sector from "neutral" to "over weight," the whole group quite
strong.
EMC (EMC) a $0.23 rise.
And Pfizer (PFE) down $0.18, fifth in big board volume.
Motorola (MOT) was up $0.22.
Texas Instruments (TXN) ending with a $0.01 loss. It traded as high as
$34.50 this morning. Yesterday as we reported, the company gave an upbeat
outlook for its third quarter revenue and earnings.
Taiwan Semiconductor (TSM) rose $0.13.
Hewlett-Packard (HPQ) a $0.04 loss.
Tenth in volume was General Electric (GE) with a $0.13 gain.
McDonald`s (MCD) rose $0.77. Its August same store sales rose 3.2
percent. Overall, sales were up 3.4 percent.
Another Dow stock, Boeing (BA) up $0.81. The company may avoid
prosecution by reaching a $500 million settlement with the Department of
Justice.
Meritage Homes (MTH) up $5.82 after JMP Securities upgraded it from
"out perform" to "strong buy." JMP did the same thing with Pulte Homes,
whose stock rose $1.88.
Biovail (BVF) a gain of $4.31. The company got FDA final approval for
its Tramadol pain killer and CS First Boston brokerage upgraded it from
"under perform" to "neutral" with a $23 a share target. It was just about
there.
Alberto Culver (ACV) up $2.56. Bear Stearns upgraded it from "peer
perform" to "out perform" with a $54 a share target.
Devon Energy (DVN) up $1.32. Citigroup upgraded it from "hold" to a
"buy."
And Shaw Group (SGR) gained $1.47. The construction and engineering
firm received a $100 million FEMA contract to provide support services in
Katrina`s aftermath.
And then look at this high-priced issue, not so high-priced anymore,
White Mountain Insurance (WTM) plunging %43.50, traded as low as $6.22
today. The company estimates total net losses from Katrina on its insurance
and re-insurance operations will be anywhere from $150 to $300 million on a
pre-tax basis.
And then Build-a-Bear Workshop (BBW) up $1.37. Standard & Poor`s
repeated a "buy" after the company reaffirmed its 2005 earnings estimate of
$1.24 to $1.30 per share.
NASDAQ`s most active Intel (INTC) down $0.84. Yesterday the company
cut its third quarter revenue forecast.
Google (GOOG) up $3.70.
Apple Computer (AAPL) widespread acceptance of its new iPod products,
up $1.53.
Microsoft (MSFT) down $0.03.
Amgen (AMGN) a gain of $2.22, fifth in dollar volume.
Cisco Systems (CSCO) up $0.21.
Qualcomm (QCOM) gained $1.07.
Sears Holdings (SHLD) doing well, up nearly $5.
Ebay (EBAY) was down $0.31.
And Dell (DELL), tenth in dollar volume, gained $0.08.
Palmsource (PSRC) up $7.89, a 78 percent gain. Access Company of Japan
will acquire it for $324 million. That works out to $18.50 a share in cash.
And Baidu.com (BIDU) up $12.76. Remember that stock just went public
last month on the fifth at 27. Today it was up on renewed takeover
speculation. Also both "Schaeffer`s Research Letter" and the Templeton
fund manager Jeff Everett say that they like the stock`s near term
prospects.
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.
09/09/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10678.56 +82.63 + .8
HIGH 10695.92
LOW 10593.94
NASDAQ COMP. 2175.51 +9.48 +.4
HIGH 2177.23
LOW 2164.41
VOLUME 1,473.6
PREVIOUS 1,444.3
UP VOLUME 1,110.9
DOWN VOLUME 351.3
DOW TRANSPORTS 3622.39 -28.91 - .8
DOW UTILITIES 421.05 +5.12 + 1.2
CLOSING TICK +1019
S&P 500 1241.48 +9.81 + .8
S&P 100 574.13 +3.80 + .7
MIDCAP 400 720.56 +5.75 + .8
REUTERS/CRB 323.32 -1.39 - .4
NYSE COMPOSITE 7663.82 +69.18 + .9
VALUE LINE 417.19 +3.24 + .8
RUSSELL 2000 678.05 +4.58 + .7
DJW 5000 12418.05 +91.08 + .7
U.S. TREASURIES
5-YEAR NOTE 4.125%
Aug. 15,2010 99 24/32 +2/32 + 3.93
10-YEAR NOTE 4.25%
Aug. 15,2015 101 1/32 +6/32 + 4.12
30-YEAR NOTE 5.375%
Feb. 15, 2031 114 26/32 +16/32 + 4.40
LEHMAN BROS.
LONG BOND INDEX 1817.24 +3.86
DOW CLOSE 10678.56 +82.63 + .8
ADVANCES 2318
DECLINES 972
NEW HIGHS 267
NEW LOWS 16
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
ABS Albertson's 24.86 +1.81 +7.9
TWX Time Warner 18.34 +.18 +1.0
XOM Exxon Mobil 63.20 +1.90 +3.1
EMC EMC 12.97 +.23 +1.8
PFE Pfizer 26.33 -.18 -.7
MOT Motorola 22.88 +.22 +1.0
TXN Texas Instrument 33.74 -.01 -.0
TSM Taiwan Semi 8.36 +.13 +1.6
HPQ Hewlett-Packard 27.81 -.04 -.1
GE GE 33.98 +.13 +.4
NASDAQ CLOSE 2175.51 + 9.48 + .4
VOLUME 1,656.5
PREVIOUS 1,633.5
ADVANCES 1829
DECLINES 1168
NASDAQ ACTIVES
INTC Intel 25.25 -.84 -3.2
GOOG Google 299.09 +3.70 +1.3
AAPL Apple Computer 51.31 +1.53 +3.1
MSFT Microsoft 26.58 -.03 -.1
AMGN Amgen 84.51 +2.22 +2.7
CSCO Cisco Systems 18.58 +.21 +1.1
QCOM Qualcomm 42.81 +1.07 +2.6
SHLD Sears Holdings 132.74 +4.93 +3.9
EBAY eBay 38.62 -.31 -.8
DELL Dell 34.65 +.08 +.2
AMEX CLOSE 1718.31 + 22.23 + 1.3
INDEX SHARES
DIA DIAMONDS TRUST 106.80 +.89 +.8
QQQ NASDAQ 100 39.62 +.22 +.6
SPY S&P DEP.RECEIPTS 124.60 +1.10 +.9
STOCKS IN THE NEWS
MCD McDonald's 34.14 +.77 +2.3
BA Boeing Co 65.40 +.81 +1.3
MTH Meritage Homes 84.68 +5.82 +7.4
BVF Biovail 22.58 +4.31 +23.6
ACV Alberto Culver 45.08 +2.56 +6.0
DVN Devon Energy 64.33 +1.32 +2.1
SGR Shaw Group 23.55 +1.47 +6.7
WTM White Mountain In 659.00 -43.50 -6.2
BBW Build A Bear Work 21.23 +1.37 +6.9
PSRC PalmSource 17.98 +7.89 +78.2
BIDU Baidu.com 96.30 +12.76 +15.3
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