10/12/05:
REFCO's Former CEO Slapped With Securities Fraud Charges
SUSIE GHARIB: The chief executive of the world`s largest
commodities brokerage firms was arrested and charged today with securities
fraud. Phillip Bennett is accused by Federal prosecutors of secretly
borrowing $430 million from Refco. The loan was not disclosed to
regulators and investors when the company went public two months ago. And
since the matter came to light over the weekend, Refco shares have tumbled
more than 60 percent, erasing more than $1 billion in shareholder value.
MICHAEL GARCIA, U.S. ATTORNEY: Bennett signed the company`s
registration statement knowing that it did not disclose the debt to the
company, with the intent to hide this from the public when a fair
marketplace and the law required full disclosure.
GHARIB: On Monday, Refco acknowledged the improper loan and
indefinitely Suspended Bennett. The firm also postponed the release of its quarterly
earnings scheduled for next week and said it will probably have to restate
all of its financial statements since 2002.
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.
10/12/05:
Outlook For The Tech Sector
PAUL KANGAS: Another disappointing day for technology stocks. The NASDAQ
composite lost 23 points. For the year the NASDAQ is down more than 6
percent. Many analysts still predict a rebound before the year ends. But
as Scott Gurvey reports, others suggest investors need to realize the
nature of tech companies has changed.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hope springs if
not eternal then at least perennial for tech stocks and many analysts back
in January forecast a continuation of a NASDAQ rally which began in last
year`s final quarter. It was not to be. The NASDAQ Composite index is
down more than 6 percent since the start of the year and it remains more
than 55 percent below the record it set way back in the year 2000. Part of
the problem is that some of high tech`s biggest success stories are not
translating into big profits. For example, competition for large
television screens has become positively cut-throat. Margins on all but
the most sophisticated and expensive models of personal computers have
shrunk into the single digits. Biotech companies are having a difficult
time bringing new products to market. But beyond that, markets watchers
say, is simple fear. Investors are worried.
JAMES AWAD, PORTFOLIO MANAGER, AWAD ASSET MANAGEMENT: People are
worried about the economy. They`re worried about interest rates. They`re
worried about energy prices. They are spooked by the way the Fed is
speaking aggressively on inflation and interest rates. And the fear is
that the combination of interest rates and energy prices will slow the
economy dramatically in `06. Therefore businesses will not spend on
technology and capital investment and therefore the stocks aren`t going to
do well.
GURVEY: There is little agreement on where tech stocks will go from
here. But some suggest the NASDAQ composite is no longer a proper proxy
for high growth innovative companies because it is dominated by maturing
giants like Microsoft and Intel.
PIP COBURN, CEO, COBURN VENTURES: Of the thousand companies I really
care about, there might be 50 that you`d say are tech stocks per se. The
rest are big companies that are struggling along with whatever content they
have. There are plays like blackberry. There`re plays -- Apple`s a tech
stock. There are tech stocks but there`s not many of them.
GURVEY: Market watchers suggest investors pay close attention to the
forward looking statements tech companies release along with their third
quarter earnings reports. That guidance should help determine the
direction of the NASDAQ in the months ahead. 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.
10/12/05: Fuel Bills This Winter Are Going To Leave Everyone Cold
PAUL KANGAS: Here`s one thing that you can count on this winter, paying
more than last year to heat your home. Just how much more is the key
question tonight as government forecasters say they can`t predict if the
U.S. will face colder than normal winter temperatures. Predicting what
mother nature will bring is especially important this year because of what
mother nature has already brought. Stephanie Dhue reports.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The double
whammy of hurricanes Katrina and Rita has made already tight energy
supplies even tighter. That means higher home heating bills this winter.
GUY CARUSO, ADMINISTRATOR, ENERGY INFORMATION ADMINISTRATION: On
average, we`re expecting about a 1/3 increase in heating fuel expenditures
in this country this winter compared with last winter and that varies
considerably across the type of fuel you use and by region.
DHUE: The Energy Information Administration expects households warmed
by natural gas to pay an average $350 more this winter than last, a 47
percent increase. Households using heating oil should expect to pay $378
more, a 32 percent jump. If you use propane, look for bills $325 more, a
30 percent hike. Households that use electric heat fare better this year,
an average 5 percent price increase and just $38 more than last winter.
Energy officials say the northeast could face natural gas supply shortages,
which could spike prices even higher. So where possible, electric
utilities are shifting away from natural gas fired plants.
TOM KUHN, CEO, EDISON ELECTRIC INSTITUTE: There is some flexibility to
obviously rev up to full capacity the nuclear and coal plants, to try and
use natural gas less in this kind of a situation.
DHUE: Gassing up your car will be pricey this winter, too. The EIA
expects national average pump prices to run about $2.68 a gallon. Still,
analysts don`t expect those higher prices to lower demand.
ROGER DIWAN, ANALYST, PFC ENERGY: Demand has been growing less fast on
the margin only and there`s really no evidence yet that you have a major
shift in consumption pattern in the United States because of higher
gasoline prices.
DHUE: Expect higher energy prices into the spring. The EIA says it
will be March before natural gas processing plants on the Gulf coast will
be back in full production. 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.
10/12/05:Small Businesses Are Getting Shut Out of the Big Business Of Katrina Recovery
SUSIE GHARIB: It has been more than a month since hurricane Katrina
plowed through the Gulf coast and tonight more than 60,000 people are still
in shelters with 400,000 in temporary hotel accommodations. For the Bush
administration, rebuilding the Gulf is a top priority and the president
wants small businesses and minorities included in that effort. But as
Darren Gersh reports, it`s not going to be easy to make that happen.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Finding a way
through the insular world of Federal contracting won`t be easy for small
businesses. While many Katrina contracting opportunities are listed online
through the government`s fedbizops web site. Many others are awarded in
so-called mini-competitions among an invited group of contractors.
CHRISTOPHER YUKINS, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL: Small
contractors don`t find out about them, because they are only publicized
within an inner circle. It means that all these standing contracts, these
standing task order contracts, carry somewhere between $40, $60, maybe more
billion dollars of contracting every year. Nobody knows about what`s going
on in these contracts.
GERSH: The Bush administration is reaching out to women and minority-
owned businesses with a new Commerce Department call center that will help
them get Federal contracts to rebuild the Gulf.
CARLOS GUTIERREZ, COMMERCE SECRETARY: We want this to be a first step
of contact for these companies and for these associations so that we in
turn can help them navigate the process.
GERSH: FEMA also announced future disaster relief contracts will be
set aside for minority businesses. And the agency will give preference to
firms hiring workers who live in disaster areas. But that will be hard to
enforce since there is no way to know where the next disaster will hit.
YUKINS: You can`t put a requirement that you contract with particular
small businesses, because you don`t know where those small businesses will
be. You`ll have a very vague general requirement that money flow down to
small businesses in affected areas, but it is going to be very difficult
for FEMA to enforce that contractually, because it will be a very vague
requirement.
GERSH: Reformers say one way to open up the process would be to put
all the opportunities and completed contracts out on the Internet for
everyone to see.
JAMES LOVE, DIRECTOR, CONSUMER PROJECT ON TECHNOLOGY: Support for
doing this is quite bipartisan. It comes from people on the right and
people on the left.
GERSH: The Bush administration was headed in that direction under
former budget director Mitch Daniels. But after Daniels left the
government, the idea of putting Federal contracts on the web faded away.
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.
10/12/05:"Money File"-Turning Loans Into A Willing Proposition
SUSIE GHARIB: Well, maybe William Shakespeare had it right when he said "neither a
borrower nor a lender be". Loaning money is usually a losing proposition.
So in the money file tonight, a look at a winning way to do it. Here`s
Eric Schurenberg, managing editor of "Money" magazine.
ERIC SCHURENBERG, MANAGING EDITOR, MONEY MAGAZINE: When a hard-pressed
friend asks you for a loan, face it, you`re in a bind. You want to help,
but you sense there`s a good chance you won`t see the money again. That
sense is right. About one in every seven loans to friends and family never
gets paid back. For regular bank loans, the default rate is more like one
in a hundred. But what do you do if you get asked? Well, the first thing,
delay. Take a day or two to decide, explaining that while you want to
help, you need time to look over your finances and see if you can help.
During this pause, consider what`s at stake. From a purely financial point
of view, the right answer is usually no.
But this isn`t purely financial, so you need to weigh the risk of
damaging the friendship if you say no, against the risk of losing the money
and damaging the friendship if you say yes. If you decide to say no, be
diplomatic, explaining that your money was earmarked for something
essential, a down payment on a home, say, will go down easier than bluntly
stating that your friend has a lousy track record with money and you don`t
want to take the risk. Then offer to help out in non-financial ways.
If you decide to lend the money, set rules. Be specific about when
you expect to be paid back and address what will happen if your friend
misses payments. Then, get it in writing. That not only prevents
misunderstandings, but it also reinforces the idea that the money isn`t a
gift. If your friend balks at signing, explain that it`s the best way of
ensuring that your friendship outlives the loan. I`m Eric Schurenberg.
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.
10/12/05: The Internet Idolmaker
SUSIE GHARIB: And finally tonight, the Internet is a great partner for the
music industry and the combo is booming in China. The world`s most
populous country is seeing its pop stars upload songs onto the special web
sites, aimed at drumming up a fan following. It`s a new pathway into the
music business there with music agents surfing the web to find tomorrow`s
music stars. From China, Nick Mackie reports.
NICK MACKIE, NIGHTLY BUSINESS REPORT CORRESPONDENT: It`s a far cry
from a sophisticated studio but this is China`s number one Internet pop
star retracking a song that made her famous.
It`s not rock `n` roll, just a quirky song about a pig, its snorting
nose and its curly tail. The lyrics may not win awards in America, but in
China`s pop world this is the stuff of stardom. Xiang Xiang`s song of pig
has notched up a billion downloads and audio files are free so there is no
fee for her. China`s Internet today is purely a way to build up a fan
base.
TRANSLATION OF: XIANG XIANG, POP SINGER: It is unprofitable to
publish a song on the Internet. There is no money. It`s purely a kind of
communication. I get feedback and suggestions or comments on my work and
then I can make changes.
MACKIE: Xiang Xiang chose this Chongqing-based online enterprise soon
after it set up 12 months ago. She wanted to get known and land a
recording deal. The web site receives five million clicks per day. As
China is mainly a cash society with little e-commerce, online services are
free. The company makes its money from advertising. Editors bet the
quality of this huge number of songs uploaded. If they are good they are
placed on the web site`s front page.
TRANSLATION OF: ZHENG LI, CEO, WWW.163888.NET: Anyone who has a
computer and who likes singing can use our platform and so we have
developed fast. By mid-June this year we had roughly 1.7 million members
who upload their songs.
MACKIE: Xiang Xiang`s Internet popularity landed her a 12-month
contract with a promoter who produced her first album and keeps her busy
with product endorsements and concerts. At a unit retail price of $5,
she`s now sold 800,000 authorized CDs. In addition, an estimated three
million pirated copies at just over $1 each have left the shelves.
Xiang Xiang is also earning from fans with mobile phones by offering
her song as a ring tone. These sell for around $0.40. Her cut is under 50
percent. China`s music industry is developing a new technology-based
business model. There are would-be stars among the country`s 102 million
online users and money to be made from the 300 million strong mobile phone
market. Even high-tech piracy is not an enemy, for fakes also endorse an
artist`s popularity and boost other incomes. Instead of being purely a
showcase, the Internet could be a key revenue stream for tomorrow`s online
stars. Once the Chinese have developed a way to make small online
payments, Xiang Xiang could be earning cash while she does her makeup.
Nick Mackie, NIGHTLY BUSINESS REPORT, Chongqing.
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.
10/11/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Wall Street`s blue chips opened higher with the help of Pfizer
which had a favorable court decision in the U.K. and Harley Davidson which
posted better than expected earnings. At the outset of trading, the Dow
rose 50 points while the NASDAQ showed little change. A Prudential
downgrade of the semiconductor industry put the NASDAQ market into retreat
and that helped drag the Dow off as much as 60 points this afternoon, but
some late bargain hunting trimmed the losses. Dow industrial average
closed down 36 1/4 points at 10,216.91. The NASDAQ Composite down 23.62,
ending at 2037.47. The Standard & Poor`s 500 down 7.19 at 1177.68. Over in
the bond market, the 10-year note fell 13/32 to 98 14/32, lifting the yield
to 4.45 percent.
Big Board volume leader was Pfizer (PFE) on 33.7 million shares, up
$0.54 on the closing bell, but it traded as high as $25.40. A British court
ruled a key patent on the company`s Lipitor after a cholesterol drug is
valid until 2011, but another patent is not valid. In any case, India`s
Ranbaxy Limited is precluded from making a generic for the time being. Both
firms will appeal the rulings that went against them.
Advanced Micro Devices (AMD) down $2.29, despite after the close
yesterday reporting excellent earnings third quarter, $0.18, way up from
the previous year`s $0.12. Sales up 23 percent. But today, Prudential
downgraded the semiconductor industry from "neutral" to "unfavorable" and
that undermined Advanced stock.
Time Warner (TWX) down $0.31.
Motorola (MOT) $0.78 loss.
And then Refco (RFX) tumbling another $3. As you heard, company`s ex-
CEO charged with securities fraud and analysts are predicting a flurry of
lawsuits to be filed against the company and its underwriters.
Lucent Technology (LU) down $0.04.
Ford Motor Co (F) dropped $0.02.
General Motors (GM) rising $0.28.
Texas Instruments (TXN) $0.73 gain.
General Electric (GE) showed no change, tenth in big board volume.
Schering-Plough (SGP) moved up $0.78, traded as high as $21.25. That
British court ruling precluding a generic of Pfizer`s Lipitor drug could
mean less generic competition for Schering`s cholesterol drug called
Vytorin. As a matter of fact, Merrill Lynch upgraded Schering`s stock from
"neutral" to "buy" on the positive outlook for Vytorin.
Medtronic (MDT) up $1.92. The company boosted its earnings guidance
for the next three years, says next year initial guidance of about $2.12 a
share will go up to as much as $2.23. The Street estimate for `06 is
$2.16.
Titan Intl (TWI) up $3.98. The company received an $18 a share cash
buyout bid from One Equity Partners, which is a affiliate of JPMorgan
Chase, nice move in the stock on that news.
Titanium Metals (TIE) rose $4.84. The company boosted its 2005
operating income guidance from about $130 to $1.60 citing higher selling
prices for its products and lower than expected raw material costs.
Advo (AD), this is the number one direct mail marketing company in the
nation. The company cut its $0.42 Street estimate for fourth quarter
earnings down to about $0.26 a share. CS First Boston downgraded the stock
from "outperform" to just a "neutral" rating.
Johnson Controls (JCI) up $2.75. Deutsche securities upgraded it from
"hold" to "buy" on the belief the company will post strong earnings not
only next year, but the year after.
NASDAQ`s most active, Apple Computer (AAPL) down $2.34. Fourth quarter
iPod sales reported after the close yesterday were a bit below Street
expectations, but after the close today, Apple Computer unveiled a new iPod
with video capabilities that can hold up to 150 hours of video. Apple also
entered into a partnership with Disney to supply content. Short films from
Pixar will also be available. The stock showed little movement in after
hours nevertheless.
Google (GOOG) down $5.13. The company and Comcast reportedly are
considering taking stakes in America Online.
Intel (INTC) was down $0.18. Low today was $22.79. Prudential
downgraded it from "neutral" to "under weight" and cut its price target by
$11 a share, all the way down to $20 a share.
Microsoft (MSFT) an $0.11 loss.
Cisco Systems (CSCO) up $0.24.
Then we see Sandisk (SNDK) down $3.86.
$1.11 loss in Qualcomm (QCOM).
Amgen (AMGN) fell $1.57.
Ebay (EBAY) dropped $1.04.
Tenth in dollar volume was Yahoo! (YHOO) with a $0.17 loss.
Sunlink Health Systems (SSY) over on the American exchange, up $1.28.
North Atlantic Value Limited partnership, which already owns about 16
percent of the firm, has offered to buy all the other shares for $10.25 a
share. This company operates community hospitals.
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.
10/12/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10216.91 -36.26 - .4
HIGH 10308.88
LOW 10186.09
NASDAQ COMP. 2037.47 -23.62 -1.2
HIGH 2064.66
LOW 2032.79
VOLUME 1,904.8
PREVIOUS 1,729.6
UP VOLUME 436.6
DOWN VOLUME 1,424.2
DOW TRANSPORTS 3626.89 -60.84 - 1.7
DOW UTILITIES 400.23 -8.06 - 2.0
CLOSING TICK -275
S&P 500 1177.68 -7.19 - .6
S&P 100 547.39 -1.92 - .4
MIDCAP 400 675.03 -8.88 - 1.3
REUTERS/CRB 332.10 +1.64 + .5
NYSE COMPOSITE 7322.74 -58.07 - .8
VALUE LINE 386.08 -4.49 - 1.2
RUSSELL 2000 621.57 -8.51 - 1.4
DJW 5000 11734.20 -96.01 - .8
U.S. TREASURIES
5-YEAR NOTE 3.875%
Sept. 15,2010 98 2/32 -6/32 + 4.31
10-YEAR NOTE 4.25%
Aug. 15,2015 98 14/32 -13/32 + 4.45
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 17/32 -31/32 + 4.66
LEHMAN BROS.
LONG BOND INDEX 1763.57 -10.75
DOW CLOSE 10216.91 -36.26 - .4
ADVANCES 684
DECLINES 2678
NEW HIGHS 13
NEW LOWS 336
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 24.84 +.54 +2.2
AMD Advance Micro 21.00 -2.29 -9.8
TWX Time Warner 17.49 -.31 -1.7
MOT Motorola 19.77 -.78 -3.8
RFX Refco 10.85 -3.00 -21.7
LU Lucent Tech 3.05 -.04 -1.3
F Ford Motor Co 8.69 -.02 -.2
GM GM 26.70 +.28 +1.1
TXN Texas Instrument 30.10 +.73 +2.5
GE GE 33.80 unch. unch.
NASDAQ CLOSE 2037.47 - 23.62 - 1.2
VOLUME 2,072.6
PREVIOUS 1,885.1
ADVANCES 739
DECLINES 2307
NASDAQ ACTIVES
AAPL Apple Computer 49.25 -2.34 -4.5
GOOG Google 300.97 -5.13 -1.7
INTC Intel 23.24 -.18 -.8
MSFT Microsoft 24.30 -.11 -.5
CSCO Cisco Systems 17.43 +.24 +1.4
SNDK Sandisk 48.06 -3.86 -7.4
QCOM Qualcomm 42.35 -1.11 -2.6
AMGN Amgen 74.77 -1.57 -2.1
EBAY eBay 39.42 -1.04 -2.6
YHOO Yahoo! 33.93 -.17 -.5
AMEX CLOSE 1622.87 - 30.10 - 1.8
INDEX SHARES
DIA DIAMONDS TRUST 102.03 -.50 -.5
QQQ NASDAQ 100 37.49 -.45 -1.2
SPY S&P DEP.RECEIPTS 117.50 -.98 -.8
STOCKS IN THE NEWS
SGP Schering-Plough 20.62 +.78 +3.9
MDT Medtronic 54.79 +1.92 +3.6
TWI Titan Intl 17.26 +3.98 +30.0
TIE Titanium Metals 41.31 +4.84 +13.3
AD Advo 24.44 -4.86 -16.6
JCI Johnson Controls 63.60 +2.75 +4.5
SSY Sunlink Health 9.75 +1.28 +15.1
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