10/31/05:
Dell Computes Third Quarter Losses
PAUL KANGAS: All is not well at Dell. The giant computer
maker issued an earnings warning late today, sending its stock sharply
lower in after hours trading. Dell now sees fiscal third quarter earnings
at the low end of its previous expectations, around $0.39 a share. That`s
a penny less than current Street estimates. Dell also dropped its revenue
forecast for the quarter to $13.9 billion. That`s significantly lower than
current analyst revenue expectations of $14.5 billion. Dell blames today`s
warning on a shortfall in its U.S. consumer business and its UK operations.
Dell shares ended the regular trading session up $0.82 at $31.88. The
stock was down almost $2 in after hours trading.
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.
10/31/05:
What's Ahead From The Fed?
SUSIE GHARIB: Americans earned more and spent more in September and that`s
despite hurricanes and skyrocketing prices at the gas pump. The Commerce
Department said personal income soared 1.7 percent last month. Personal
spending also rebounded last month, up 0.5 percent, but inflation rose at
nearly twice that pace, causing real spending to decline for the second
consecutive month. It`s the first time that has happened in 15 years and
some economists are concerned.
JAN HATZIUS, SR. ECONOMIST, GOLDMAN SACHS: You need a lot of growth in
the fourth quarter from the depressed level that real spending was at in
September to get even a modestly positive growth rate for spending in Q4.
So our forecast is only 1.5 percent annualized growth rate of real consumer
spending in the fourth quarter and even that is looking somewhat ambitious
at this point.
GHARIB: That economic data will be scrutinized by the Federal Reserve
when policymakers meet tomorrow. They will be deciding their next move on
interest rates. Here`s Scott Gurvey with a preview of what to expect.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: At a time of
great uncertainty, of one thing Wall Street is absolutely convinced: the
Federal Reserve will raise interest rates for the 12th time in as many
meetings tomorrow, bringing the Fed fund rates to 4 percent.
MICKEY LEVY, CHIEF ECONOMIST, BANK OF AMERICA: At 3.75 percent, the
Fed acknowledges that monetary policy is still accommodative and they want
to remove that accommodation. Secondly, the Fed is very concerned about
constraining inflationary expectations. Even if the core inflation data
had been flat, they want to make sure that expectations are reined in. And
thirdly, following hurricane Katrina, we can look back and say the economy
is still strong and stronger than people had expected.
GURVEY: Just last week, the government reported that the economy grew
at a 3.8 percent rate in the third quarter. That is faster than most
economists believe possible without creating inflation, and inflation,
excluding energy and food prices, is running about 2 percent. Economists
peg a neutral Fed funds rate at 2.5 to 3 percent above core inflation.
That math calls for a Fed fund rate of 4.5 to 5 percent just a few meetings
away if the Fed continues its so-called measured pace of rate hikes. With
little suspense over what the Fed will do tomorrow, the focus of attention
will be on what the central bank says. Some see the Fed dropping that
measured phrase from its statement, if only to give chairman designate Ben
Bernanke more flexibility. But others believe retiring Chairman Alan
Greenspan will stay the course, going out as an inflation fighter by
raising rates at each of his remaining meetings.
KATHLEEN CAMILLI, PRESIDENT, CAMILLI ECONOMICS: It`s hard to say where
the stopping point is. Maybe it will be 4.25, maybe it will be 4.5. More
important is how adversely affected consumption is, personal consumption,
and if we see some weakness in the fourth quarter spilling into the first
quarter, the Fed may pause.
GURVEY: The final meeting of the year is scheduled for December 13.
The futures markets are predicting a better than 90 percent chance of a
rate hike at that meeting. 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.
10/31/05: President Bush's Second Supreme Selection Post Harriet Miers
PAUL KANGAS: President Bush today nominated a conservative Federal appeals
court judge from Philadelphia to fill the seat of retiring U.S. Supreme
Court Justice Sandra Day O`Connor. Unlike his first nominee to the post,
Harriet Miers, Judge Samuel Alito has a long track record of judicial
experience. As Stephanie Dhue reports, the business community is sizing up
the new nominee.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Judge Samuel
Alito says his 15 years on the bench have given him an appreciation of the
duty to interpret the constitution faithfully and fairly.
SAMUEL ALITO, SUPREME COURT NOMINEE: And to do these things with care
and with restraint, always keeping in mind the limited role that the courts
play in our constitutional system.
DHUE: In the legal community, Alito has a reputation as someone who is
sensitive to business concerns. Alito sits on the third circuit court of
appeals, a court that has scored well with some business groups on
liability issues. While Alito has been known for supporting cases of
government intervention, he has also ruled the other way. For example in a
1996 appeal, he argued against Congress regulating private machine gun
possession. Carter Phillips worked with Judge Alito in the solicitor
general`s office and is a personal friend.
CARTER PHILLIPS, SIDLEY, AUSTIN, BROWN & WOOD: I think he`ll be great
for the business community, because he`s smart, he works hard, he knows the
law.
DHUE: Phillips says Alito may be an independent voice on the court.
PHILLIPS: At least at this stage in his career, he either isn`t
playing the game or doesn`t want to play the game, where he isn`t trying to
persuade others on the court of his view by the way he asks a series of
questions. If he asks a question about a case, it`s because he wants to
know the answer to help him decide what the right way to proceed is.
DHUE: But Alito may have issues with conflicts of interest. Three
years ago, he upheld a lower court`s dismissal of a lawsuit against the
Vanguard Group. At the same time he had hundreds of thousands of dollars
invested in Vanguard mutual funds. He later recused himself from further
involvement in the case. Alito may also have to recuse himself from cases
involving high profile businesses. He owns stock in ExxonMobil, Bristol
Myers Squibb and McDonald`s. But observers say those shouldn`t be real
obstacles to his confirmation, which could come by the end of the year.
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.
10/31/05: One On One With David Maurstad, Acting Federal Insurance Administrator
SUSIE GHARIB: As you know , more than a million homes remain without
power in Florida tonight, where the clean up continues from hurricane
Wilma. It`s another reminder of how costly this hurricane season has been.
To learn more about the cost to taxpayers and what can be done to reduce
storm risk, Washington bureau chief Darren Gersh talked with acting Federal
insurance administrator David Maurstad. Darren began by asking how
hurricane Wilma will affect the national flood insurance program.
DAVID MAURSTAD, ACTING FEDERAL INSURANCE ADMINISTRATOR: This one
appears to have caused more wind damage than flood damage. You`ve got some
areas around the keys that are going to be affected from flooding, but
beyond that, it`s mostly a wind event.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: But don`t you
have the issue arising where some homeowners are saying the adjuster is
coming in and saying it was floods, so the other insurance company doesn`t
have to pay for wind damage?
MAURSTAD: Well, you certainly have certain circumstances like that.
We go in and we make sure that the policyholder of the national flood
insurance program is treated fairly and as quickly as possible. And really
in most circumstances a seasoned adjuster can tell the difference. Wind
damage is generally higher. You can see that the roof has blown off or
shingles are blown off or siding has blown off. The flooding, of course,
you generally have standing water, you will have a water line. You will be
able to tell the damage.
GERSH: Now one of the basic assumptions or reasoning behind the flood
insurance program was you will give subsidized insurance to older homes
that are in a flood area. But in return, the communities were going to or
agree to mitigate or put in place building codes, things like that for new
construction so that they would be less damaged by floods or be built out
of the floodplain. Is that still a basic? Does that basic concept still
hold for this program? Or are we finding that maybe it`s not working as
well as we thought?
MAURSTAD: Well, actually, there are three very important elements in
the national flood insurance program. One we map the flood risk. And the
second is we manage the flood risk. And the third component then is the
risk or is the insurance, ensuring the risk which is the part that gets a
lot of attention, naturally.
GERSH: Does it still make sense to subsidize some homes that are
located in known flood risks?
MAURSTAD: Well, the subsidization question isn`t quite as black and
white as some would make it out to be. About 25 percent of the policies
are at less than full insurance risked-based premiums. Seventy five
percent of the policies, the 4.7 million policies are at-risk-based
premiums. I think that subsidization within the program area is sometimes
confused with tax subsidization and there has not been taxpayer funded
resources put into the program since 1996.
GERSH: But many people who are in floodplain, it`s supposed to be
mandatory that they buy it, apparently it seems like they are not buying
it. Is it time to make the program mandatory, perhaps even for people who
don`t have mortgages, but make it mandatory for everybody who lives in a
floodplain and make sure that they are paying their premiums?
MAURSTAD: I think it`s important that we -- that we continue the
evolution of the national flood insurance program since 1968. And do we
need to broaden the mandatory purchase requirement to include greater
number of policies instead of requiring it in the 1 percent 100-year flood
standard that we look at, 250-year flood or 500 and enlarge that area of
mandatory purchase. I think all those things need to be on the table but I
think we need to look at the mandatory purchase. We need to look at
phasing out the subsidy for the older homes. We need to certainly look at
phasing out the subsidy or maybe even ending the subsidy for second homes
and/or for businesses that are in the pre-flood insurance rate map part of
our program. I think there`s a number of things that we can look at to
strengthen the program. But I also want to make sure that it`s well
understood that if, even if we had no subsidization of that 25 percent of
our policy base, even if we would have had a larger mandatory purchase
area, all those changes wouldn`t have magically provided the additional $20
some billion that we`re going to need to pay all the claims associated with
the 250,000 plus losses from Rita and Katrina.
GERSH: All right. David Maurstad, acting federal insurance
administrator, thank you very much for your time.
MAURSTAD: You are welcome.
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.
10/31/05: Commentary: What's Ahead For The Next Fed Head?
SUSIE GHARIB: Tonight`s commentator says the next chairman of the Federal Reserve
will have a different set of economic realities to deal with than the
current chairman of the Federal Reserve. Here`s Louis Uchitelle, economics
writer for the "New York times."
LOUIS UCHITELLE, ECONOMICS WRITER, "NEW YORK TIMES": The nomination of
Ben Bernanke to be chairman of the Federal Reserve comes at a time when
inflationary pressures are different than they were in the past and harder
to manage with standard interest rate policy. Rising wages and shortages
of merchandise once pushed up the consumer price index. These were big
concerns of Alan Greenspan in the early years of his reign at the Federal
Reserve.
Now globalization dampens those traditional pressures. What we don`t
produce in sufficient quantity, China and other nations produce for us.
And when labor markets tighten, shifting production abroad eases the
pressure. In the former traditional inflation, consumers responded to
higher interest rates by cutting back their purchases. That led to less
production, less demand for labor and less upward pressure on prices. The
new inflation on the other hand centered on stock prices in the 1990`s and
housing and energy now.
Rising petroleum prices do not respond as quickly to rate increases
and rising rates have not so far inhibited the lending that fuels the
housing bubble. Mr. Bernanke in sum, seems more likely than Mr. Greenspan
to be forced to supplement rate increases with other policies that more
directly restrict behavior, particularly the free-wheeling behavior of the
nation`s lenders, whose risky practices feed the new inflation. I`m Louis
Uchitelle.
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.
10/31/05: Last Word: One Spooky Survey
SUSIE GHARIB: And finally, here`s an appropriate story for this Halloween
night. A new survey of Britons show more of them believe in ghosts than in
God. Sixty eight percent of those asked in a new survey said they believe
in the existence of ghosts and spirits; 55 percent said they believe in the
existence of a god. Another interesting note from the survey, of those who
believe in ghosts, 12 percent said they had actually seen one and 76
percent said that spooky films and TV shows like the "Blair Witch Project,"
helped convince them of the existence of ghouls. And Paul, the poll, done
by the British polling service Choices UK also showed 4 percent of the
respondents believe the Loch Ness monster is more than a myth.
KANGAS: Well, Susie, if you really want to scare the family, you ought
to dress up as your winter heating oil bill. That will scare them.
GHARIB: Yes, that will scare a lot of people.
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.
10/31/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Those increases in personal spending and income
gave investors a reason to start the week with a rally. The
bulls were also encouraged by a pick-up in merger activity,
which we`ll detail next and a drop in oil prices. An hour
into trading, the Dow jumped almost 80 points, NASDAQ up 28
points. Profit taking eventually cut into the gains this afternoon.
So the Dow Industrial Average ended higher by a more modest
37.30 points at 10,440.07. NASDAQ gained 30.42 at 2120.30.
Standard & Poor`s 500 up 8.60 at 1207.01. Over in the bond
market, the 10-year note rose 3/32 to 97 19/32, putting the
yield at 4.56 percent.
A familiar name at the top of the leader board here volume-wise,
Pfizer (PFE), 26.7 million shares traded. The stock moved
up $0.24.
Followed by Lucent (LU) with a $0.06.
ExxonMobil (XOM) on those lower oil prices dropped $0.17.
Motorola (MOT) doing well, up $1.07.
Ford Motor (F) fifth in volume gained $0.30 a share.
Wal-Mart Stores (WMT) helping the Dow out with that gain
of $1.81.
Wal-Mart now sees October U.S. same store sales rising 4.3
percent. That`s better than the high end of the previous guidance
of 2 to 4 percent.
Placer Dome (POG) big winner on the day, up $3.44. Barrett
(ph) Gold has made a takeover bid at $20.50 a share cash or
about 3/4 of a share of Barrett plus $0.05 per share in cash.
Barrett stock fell $1.95.
GE (GE) $0.14 loss.
Time Warner (TWX) an $0.08 gain. AOL`s co-founder Steve Case
has resigned from the Time Warner board.
Nokia (NOK), tenth in volume, was up $0.53 a share.
Caterpillar (CAT) doing well, up $1.52. The company told
analysts today it will have $50 billion in annual sales by
the year 2010.
General Motors (GM), another Dow stock, edging up $0.14.
GM is going to maintain its regular quarterly dividend of
$0.50 for the fourth quarter of this year.
Anheuser-Busch (BUD) rising $0.69. This week`s "Barron`s"
financial magazine has a positive article suggesting the stock
could rise 40 percent with the help of boutique beers, innovative
marketing and moves into the Chinese and Hispanic markets.
SWS Group (SWS) up $1.53. "Barron`s" also had positive comments
on this stock. The article says - this of course is the parent
of Southwest Securities - and says the stock is worth about
$22 a share, could get there sometime in the next 12 months.
Kellogg (K) losing $2.29. Third quarter earnings were higher,
$0.66, up from $0.59 last year, but the company also noted
its profit margin fell in the period and sees 2006 earnings
at $2.55 a share and that is $0.07 below the Wall Street consensus.
Valero Energy (VLO), the refining company, up $5.74. Third
quarter earnings jumped to $4.37 versus $1.57 a year ago.
Revenues soared 62 percent. Standard & Poor`s repeated a "strong
buy" recommendation.
Nam Tai Electronics (NTE) losing $1.50. Third quarter earnings
a bit lower, $0.43, a penny below last year and sees fourth
quarter earnings dropping to only $0.26 to $0.28 a share.
RTI International Metals (RTI) which produces titanium products,
down $4.46, even though it turned the third quarter into a
profit of $0.38 versus a loss last year, but that profit was
$0.21 below the Wall Street estimate.
And here`s one we haven`t seen in a while, Matsushita Electric
(MC) up $1.32. Third quarter earnings $0.13, up from $0.09
last year. Standard & Poor`s upgraded it from "buy" to "strong
buy."
Google (GOOG) topped the active list hitting a new record
closing high, up $13.97. The Internet group was strong today
on optimism regarding the holiday season.
Apple Computer (AAPL), you heard the story about the iPods
and the videos, up $3.12 there.
Microsoft (MSFT) $0.17 gain.
Qualcomm (QCOM) dropped $1.31. Merrill Lynch today downgraded
it from "buy" to just a "neutral" rating.
Cisco Systems (CSCO) a $0.31 gain there.
Intel (INTC) $0.17 rise.
Yahoo! (YHOO) one of the strong Internets, up $1.39.
Same story with eBay (EBAY) up $1.18.
And then Dell (DELL), you heard the story, it closed up $0.82,
then dropped about $1.50 on that profit warning after the
close.
Amgen (AMGN) down $0.16.
Orckit Communication (ORCT) up $5.49. This is an Israeli
telecom equipment manufacturer and third quarter turnaround,
earnings of $0.45 versus a loss of $0.45 last year.
And finally we see Bon-Ton Stores (BONT) rising $3.39, positive
reaction to its $1.1 billion purchase of Saks Northern department
store group, which we talked about earlier.
And 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.
10/31/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10440.07 +37.30 + .4
HIGH 10486.65
LOW 10403.17
NASDAQ COMP. 2120.30 +30.42 +1.5
HIGH 2125.73
LOW 2094.37
VOLUME 1,905.3
PREVIOUS 1,751.0
UP VOLUME 1,467.8
DOWN VOLUME 424.8
DOW TRANSPORTS 3815.46 +73.65 + 2.0
DOW UTILITIES 401.11 +5.10 + 1.3
CLOSING TICK +1217
S&P 500 1207.01 +8.60 + .7
S&P 100 556.74 +2.26 + .4
MIDCAP 400 700.38 +10.87 + 1.6
REUTERS/CRB 316.29 -5.84 - 1.8
NYSE COMPOSITE 7433.12 +63.57 + .9
VALUE LINE 394.93 +5.70 + 1.5
RUSSELL 2000 646.61 +11.28 + 1.8
DJW 5000 12063.24 +115.88 + 1.0
U.S. TREASURIES
5-YEAR NOTE 4.25%
Oct. 15,2010 99 4/32 +1/32 4.45
10-YEAR NOTE 4.25%
Aug. 15,2015 97 19/32 +3/32 4.56
30-YEAR NOTE 5.375%
Feb. 15, 2031 109 1/32 +6/32 4.76
LEHMAN BROS.
LONG BOND INDEX 1740.54 +2.83
DOW CLOSE 10440.07 +37.30 + .4
ADVANCES 2539
DECLINES 786
NEW HIGHS 98
NEW LOWS 68
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 21.74 +.24 +1.1
LU Lucent Tech 2.85 +.06 +2.2
XOM Exxon Mobil 56.14 -.17 -.3
MOT Motorola 22.16 +1.07 +5.1
F Ford Motor Co 8.32 +.30 +3.7
WMT Wal-Mart Stores 47.31 +1.81 +4.0
PDG Placer Dome 19.95 +3.44 +20.8
GE GE 33.91 -.14 -.4
TWX Time Warner 17.83 +.08 +.5
NOK Nokia 16.82 +.53 +3.3
NASDAQ CLOSE 2120.30 + 30.42 + 1.5
VOLUME 1,962.7
PREVIOUS 1,902.6
ADVANCES 2197
DECLINES 862
NASDAQ ACTIVES
GOOG Google 372.14 +13.97 +3.9
AAPL Apple Computer 57.59 +3.12 +5.7
MSFT Microsoft 25.70 +.17 +.7
QCOM Qualcomm 39.76 -1.31 -3.2
CSCO Cisco Systems 17.45 +.31 +1.8
INTC Intel 23.50 +.17 +.7
YHOO Yahoo! 36.97 +1.39 +3.9
EBAY eBay 39.61 +1.18 +3.1
DELL Dell 31.88 +.82 +2.6
AMGN Amgen 75.62 -.16 -.2
AMEX CLOSE 1656.62 + 14.04 + .9
INDEX SHARES
DIA DIAMONDS TRUST 103.89 +.05 +.1
QQQ NASDAQ 100 38.87 +.55 +1.4
SPY S&P DEP.RECEIPTS 120.13 +.29 +.2
STOCKS IN THE NEWS
CAT Caterpillar 52.59 +1.52 +3.0
GM GM 27.40 +.14 +.5
BUD Anheuser-Busch 41.26 +.69 +1.7
SWS SWS Group 17.71 +1.53 +9.5
K Kellogg Co 44.17 -2.29 -4.9
VLO Valero Energy 105.24 +5.74 +5.8
NTE Nam Tai Electron 22.65 -1.50 -6.2
RTI RTI Intl Metals 33.52 -4.46 -11.7
MC Matsushita Elec 18.40 +1.32 +7.7
ORCT Orckit Comm 21.39 +5.49 +34.5
BONT Bon-Ton Stores 20.05 +3.39 +20.4
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