11/02/05:
The Markets May Be Losing Their Luster
SUSIE GHARIB: Stocks rallied today, thanks to falling oil
prices and solid gains in the tech sector. The Dow added 66 points and the
NASDAQ increased by 30 to its highest level in about a month. But despite
today`s gains, the Dow and NASDAQ are in negative territory for 2005 and a
growing number of market pros say stocks are beginning to look attractive.
Suzanne Pratt reports.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Depending on
who you talk to on Wall Street these days, the stock market is undervalued,
overvalued or fairly valued. Opinions vary in part, because stock market
pundits tap varying data to support their position on the relative
attractiveness of the market. Everything from debt levels to the IPO
market is used to argue that stocks have plenty of room to go up or none
whatsoever.
Earnings, however, are the granddaddy of market barometers. P/E
ratio is frequently considered the best measure of value versus earnings.
According to Standard & Poor`s, the P/E of the S&P 500, using trailing
earnings, currently stands at about 18. To put that in perspective in
1982, it was eight. By 2001, after the market`s long bull run, stocks were
selling at a whopping 46 times earnings. And looking back over the last
three decades, 18 is about the average P/E for the S&P 500. The last time
it was at 18 was in the mid-1970s. To some, that means stocks now look
pretty good.
KEVIN BANNON, CHIEF INVESTMENT OFFICER, THE BANK OF NEW YORK: The
argument that I think supports this suggestion that stocks are on the cheap
side is that every day we are seeing another deal or two, and these deals
are generally being done at prices up 20 or 25 percent from the last trade.
PRATT: Those who argue stocks are inexpensive also calculate P/E based
on estimates for future earnings. Using 2006 data, the P/E for the S&P 500
is about 16.
TONY DWYER, EQUITY STRATEGIST, FTN MIDWEST SECURITIES: We`re at the
lowest valuation in forward earnings than we`ve been in in a very long
time, more than 10 years. The last time you were near these valuation
levels, it ended up leading to a 34 percent year for the S&P 500.
PRATT: Still, some experts say no matter what the numbers suggest, if
investors don`t feel like buying stocks, the market will continue to tread
water for the foreseeable future.
PHIL DOW, EQUITY STRATEGY DIR., RBC DAIN RAUSCHER: My guess is that
people aren`t paying as much attention to earnings and financial guideposts
as they are the negative headlines that we see and the generally
frightening kind of environment that we see.
PRATT: On top of that, some experts say investors are ignoring
things like P/E ratios because they question whether the stock
market is the best place to put their money. Not only does
real estate look more enticing to many, but some also perceive
less risk in foreign markets. Suzanne Pratt, NIGHTLY BUSINESS
REPORT, New York.
To
learn more about this topic, click here.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright
(c) 2005 Community Television Foundation of South Florida,
Inc. ALL RIGHTS RESERVED. Terms of use.
11/02/05:
What's Really At Stake In The New Budget Proposals
SUSIE GHARIB: Congress is struggling to cut the deficit for the first time in
eight years. The Senate is considering a wide-ranging plan to cut $39
billion from Federal spending programs over the next five years. The House
is seeking $50 billion in cuts. But as Stephanie Dhue reports, both plans
are having a tough time winning support.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Republican
leaders don`t call them "spending cuts." They call them "reforms." It`s
part of their pitch to gin up support to cut the Federal budget by up to
$50 billion over the next five years.
REP. DENNIS HASTERT, HOUSE SPEAKER: Some things that we do on
spending, we`re looking for reforms. We`re looking for ways to save, but
we`re looking for old programs that haven`t worked very well.
DHUE: But the proposed cuts to food stamps, child support
enforcement and Medicaid have moderate Republicans reluctant to sign on.
REP. MICHAEL CASTLE, (R) DELAWARE: I think that`s what`s heightened
the intensity here, is that this is for real. This means that real people
are going to be calling congressional offices and say, "what did you people
do to me? I can`t get my medical services anymore."
DHUE: Analysts say the process isn`t about reform.
STAN COLLENDER, BUDGET ANALYST, FINANCIAL DYNAMICS: Keep in mind
the budget process tends to be whatever we have to do at this moment to get
through this step. Whatever we do later on is irrelevant, so all they`re
trying to do is re-establish their fiscal conservative credentials and move
on at this point.
DHUE: Lawmakers are still considering ways to soften the impact of
the cuts to individuals. But a proposal to reduce Medicare spending by
eliminating $10 billion in incentives to managed care plans has been met
with a veto threat by the president. The timing on the budget vote is
dicey. Congress is also moving to vote on a tax cut package that critics
say will benefit the wealthy. Meanwhile, the deficit is still going up,
which may make it hard for lawmakers to take much credit for any fiscal
responsibility. 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.
11/02/05: Comcast & Sprint CEO's Share Their Newest High Tech Strategies
SUSIE GHARIB: Four of the nation`s largest cable companies are teaming up
with Sprint Nextel to offer consumers a whole array of new services on
their cell phones. The $200 million joint venture will let cable customers
download TV and Internet content onto their phones using the latest
generation of wireless technology. The service is expected to launch next
year. Earlier today, I talked to two of the men behind the deal: Comcast
CEO Brian Roberts and Sprint CEO Gary Forsee. Roberts explained why the
companies joined forces.
BRIAN ROBERTS, CHAIRMAN & CEO, COMCAST: One thing you know is that
customers want to have their products be in the home and also be out of the
home. And as communications evolves, wireless is critical and as video
becomes available on more wireless devices, who better than your cable
companies to help you try to have that feature set with you. So it`s a
wonderful, natural alliance to figure out how to put our technologies
together for the benefit of the customers and we`re delighted to be with
Sprint who has great technology.
GHARIB: Mr. Forsee, you`re partnering not only with Comcast but
also with Time Warner and Cox Communications. Is your motivation as a way
to grow the number of people that you reach?
GARY FORSEE, PRESIDENT & CEO, SPRINT NEXTEL: From our perspective,
we expect to provide new services, new capabilities. That`s what this is
all about. It`s not a matter of stapling the services together. This is
about creating something new and different.
GHARIB: Mr. Roberts, why did you feel that you needed a wireless
strategy?
ROBERTS: The idea of having an integrated bundle but also an
integrated platform that allows you to have communications wherever you
want, whenever you want it, is clearly the nirvana for a customer and
wireless is a big part of that and here`s a -- we didn`t have to buy into
the wireless business to get there. So there`s so many products and we`re
already hard at work on this road map and I think it`s going to be great.
GHARIB: So when you now bundle your phone, your TV and the
Internet, is the big plus for the consumer that they`re going to be getting
more value because it`s all one provider or is it because of the new
experience they`re going to have with the.
ROBERTS: Yes, it`s both. It`s going to be a combination of one
bill. Comcast will be sending you and cable companies will be sending you a
bill. You can have the same phone that will work anywhere in the country,
so national, something very important and today it`s not the case with your
cable box, for instance in your home. You go to a different area, it
doesn`t work, very important as we go into wireless to have a national
footprint. That`s the power of working with Time Warner, Cox, Advance
Newhouse (ph) and others. We hope the rest of the cable industry will come
together. And of course, innovation where it`s more than just a good
value, but ultimately it`s something you can`t get anywhere else.
GHARIB: So Mr. Forsee, which service do you think consumers are
going to be most interested in?
FORSEE: I think when consumers start to see the real benefit of the
collaboration across the two platforms, I think the services are just going
to tumble out of that probably in ways we can`t imagine. I think if you
think back in the last couple of years, who would have thought the wireless
phone would be used to process millions of pictures that`s occurring. Who
would have thought a wireless device would be utilized to download ring
tones. We lost this week our power vision network which is our brand name
for our third generation, our high speed wireless data network. As we think
about that, the wireless device starts to become that device that enables
you, in our version, to connect in the home to bring those experiences with
you when you leave the home.
GHARIB: I`m sure a lot of other companies are going to come out
with me-too services. What do you think Verizon is going to come out with
to catch up with you guys?
ROBERTS: You know, who knows? And I think the key is we have a
great relationship today with 21.5 million customers, eight million broad
bands, in both cases more than any other company. And if you innovate and
you differentiate and you lead, you go first. I think your customers -- and
you give great service -- that`s not what we`re going to be focused on.
We`re going to be focused on finding the answer to the question you just
asked. What is the right service?
GHARIB: Let`s talk a little bit about the financial side of all of
this. What could this mean ultimately down the road in terms of profits?
FORSEE: We have very high expectations of what we`re going to be
able to deliver. We decided to make this a 20-year arrangement. And so
we`re in here not just for what`s going to happen in the first quarter of
`06. We`re in here for the long term and we`re going to do this the right
way. We`ve got a very comprehensive structure in mind to do that with.
GHARIB: Mr. Roberts, on a completely different subject, Dick
Parsons of Time Warner confirmed today that his company is talking to other
media companies about developing a strategic relationship with AOL. And we
hear separately that Comcast is one of those companies. What`s so valuable
about the AOL franchise?
ROBERTS: Not going to comment on any rumors or potential
transactions in the future, but I can tell you that the Internet is seeing
advertising take off at an unprecedented pace. And frankly, a lot of that
happens on wireless devices in the future as well. So the possibility of
having content that accelerates any Internet growth is something that we`re
always interested in talking about.
GHARIB: Since the Nextel merger was completed, Sprint stock has
been on the decline. Do you think it`s justified, Mr. Forsee?
FORSEE: I think our track record has been built both by Sprint and
by Nextel around executing (INAUDIBLE) plans and doing what we say we`re
going to do quarter after quarter, executing and delivering those plans.
And I think as we do that, our shareholders can look back at the record in
the recent past of how both companies now merge together, will produce
value.
GHARIB: And how about in the case of Comcast Mr. Roberts? Are you
going to step up the pace of your stock buybacks, something like what Time
Warner announced today that they`re increasing the stock buybacks.
ROBERTS: We will have announced additional buybacks tomorrow with
our earnings announcement and we said we continue to take our free cash
flow. The first priority, innovate on the business. The second priority,
you know, take advantage of ways to return the money to shareholders.
GHARIB: Gentlemen, thank you very much. Mr. Roberts, Mr. Forsee,
good luck to both of you.
ROBERTS: Thank you.
FORSEE: Thank you.
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.
11/02/05: "Money File"-The True Value of CD's & Global Mutual Funds
SUSIE GHARIB: In the "money file" tonight, it`s usually a good idea to diversify
your investment risk, but it may not be such a good idea to gamble with
your money. Here`s Kathy Kristof, business writer for the "Los Angeles
Times" and author of "Investing 101."
KATHY KRISTOF, AUTHOR, "INVESTING 101": Anyone who thinks that
certificates of deposit are boring hasn`t seen the world currency CDs
offered by Jacksonville, Florida-based Everbank. Most CDs are the essence
of risk-free investing. You put money in, earn a set rate of interest and
know exactly how much you`re going to pull out at the end of the term. Not
Everbank CDs. These CDs could pay a fortune or cause you to lose a fortune,
virtually overnight.
That`s because the CDs are bets on the value of the dollar. You plop
down an amount ranging from $2,500 to $20,000 and you pick the currency or
blend of currencies, that you want to invest in. The bank then buys
government bonds issued by the country of your choice. These bonds pay a
set rate of interest, but the real return or loss comes from the exchange
rate. If the currency the investor bought is comparatively stronger than
the dollar when the investment is cashed in, the investor can win big. Some
world currency CDs have paid 20 and 30 percent annual returns.
On the other hand, if the value of the dollar rises, it takes more
foreign currency to buy one dollar, so you could end up with less than what
you started with. Like most potentially high-return investments, this one
is high risk. It`s worth noting that many experts believe investors should
always have some exposure to foreign markets in their investment
portfolios, but there are also other potentially less risky ways to do
that, like buying global mutual funds. I`m Kathy Kristof.
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.
11/02/05: "Last Word"-Celebrating The Sandwich
SUSIE GHARIB: And finally, tomorrow, Thursday, November 3, is national
sandwich day and to mark the occasion, the town of Sandwich, New Hampshire
is renaming itself to Blimpie, New Hampshire, in honor of the restaurant
chain. The town was chartered back in 1763, named for the fourth earl of
Sandwich, John Montague. The earl is credited with being the first person
to slap meat between two pieces of bread, which became known as, yes, a
sandwich. Blimpie will donate $250 to Sandwich, the town, for an official
proclamation changing its name for that day. Paul.
KANGAS: Susie, years ago, who would have believed the sandwich would
turn out to be such a big breadwinner? Amazing.
GHARIB: Amazing, yes it is.
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.
11/02/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: After opening narrowly mixed, stocks began to rally on better
than expected earnings and an expanded stock buyback plan from Time Warner.
A drop in oil below $60 a barrel was also bullish. At noontime, the Dow
posted a 59- point gain, while the NASDAQ Composite was up 21. Continuing
strength in the tech sector and talk of the start of a year-end rally
helped the market close near its best level of the day. Dow Industrial
Average rose just shy of 66 points at 10,472.73. The NASDAQ Composite was
up 30 1/4 points at 2144.31 and the Standard & Poor`s 500 gained exactly 12
points to 1214.76.
The Treasury said today the new 30-year bond will go up for auction
on February 9, with the total amount available for sale to be announced on
February 1. The government stopped selling the long bond in 2001. The
Treasury hopes to raise between $20 and $30 billion in 30-year sales next
year. Meanwhile, in the bond market trading today, the 10-year note fell
10/32 to 97 7/32, lifting the yield to 4.61 percent.
Most active New York issue on 66.1 million shares was Qwest
Communications (Q) moving up $0.19. The company cut its third quarter loss
to only $0.08 from $0.31 a year ago and it has also offered $400 million to
settle shareholder lawsuits regarding its accounting scandal.
Lucent Technology (LU) in there with a $0.04 loss.
Then Pfizer (PFE) moved up a nickel.
Time Warner (TWX) gaining $0.33. Third quarter earnings up 80 percent
from last year to $0.19 a share. That was $0.02 above the Street estimate
and the company plans to double its stock buyback plan to $12.5 billion and
also confirmed that it is in talks to sell its stake in its AOL unit.
Motorola (MOT) was up $0.84. That was fifth in big board volume.
Nortel Networks (NT) rose $0.11. The company cut its third quarter
loss to $0.02 a share from $0.06 a year ago, but the Street was actually
looking for a profit, maybe around $0.02 a share.
Sprint Nextel (S) up $0.88. You just heard about the cable operator`s
deal with the company.
And then Guidant (GDT) down $2.70 as Johnson & Johnson kind of backed
off from that planned acquisition. Incidentally, J&J stock was down $0.60
to $61.30.
ExxonMobil (XOM) moved up $0.98.
Texas Instruments (TXN), tenth in volume, gained $1.09.
Cigna (CI), the big insurance firm, down $7.18. Third quarter earnings
$1.94 on an operating basis, up from $1.69 last year and $0.32 above the
Street estimate. But the company says 2006 guidance will be about $7.30 a
share at best and that`s $0.70 below the Street estimate. Also, the company
sees only 1 to 2 percent increases in 2006 health memberships.
AMR (AMR), parent of American Airlines moved up 87 percent (sic), 6
1/2 percent gain there after Bear Stearns upgraded it from "peer perform"
to "out perform."
And then CBOT Holdings (BOT), that`s the Chicago Board of Trade that
just went public recently as you can see by that chart, the stock up nearly
$18 today. The company reported a 3 1/2 percent rise in October average
daily exchange volume over a year ago.
CB Richard Ellis Group (CBG), this is the big commercial real estate
services company and third quarter earnings absolutely charged ahead $0.74,
up from $0.16 last year. Revenues up 29 percent. Standard & Poor`s upgraded
the stock from "hold" to a "buy."
And the Brinks Company (BCO) a $3.10 rise. Third quarter earnings
heavily above last year, $1.15 versus only $0.68 a year ago.
And then Chiquita Brands (CQB), the banana merchant, down $2.95. It
had a third quarter profit of $0.01 a share versus a loss last year. Sales
were up 44 percent, but the BB&T brokerage downgraded the stock from "buy"
to just a "hold."
Google (GOOG), there you see it, another record high after a big gain
yesterday, edging up another $0.30, the highest its ever closed.
Followed by Microsoft (MSFT) with a half dollar gain.
Symantec (SYMC) down $4.63. The company`s in the security software
business. Second quarter earnings higher, $0.23 versus $0.19 a year ago,
$0.03 above the Street estimate. But the company cut its 2005 revenue
forecast and its chief financial officer resigned unexpectedly.
Apple Computer (AAPL) up $2.45. A number of analysts today expressed
great optimism about the company`s new line of iPod products.
Intel (INTC) $0.72 gain there. That was fifth in dollar volume.
Dell (DELL) up $0.10 after a big loss yesterday.
Mercury Interactive (MERQE) plunging $9.34. The company`s chief
executive officer, chief financial officer and general counsel all resigned
due to investigation of stock grants to them. Now the company`s unable to
post third quarter results on time. Standard & Poor`s issued a "sell"
recommendation on the stock.
Cisco Systems (CSCO) $0.15 gainer.
Qualcomm (QCOM) up $0.89.
And Sandisk (SNDK), tenth in dollar volume, up $2.81.
Electronic Arts (ERTS) up $4.44. Second quarter earnings were lower,
$0.16 versus $0.31 last year, but the Street was looking for only a nickel
in earnings. Also the company will develop video games based on Fox
television`s "Simpsons" series.
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.
11/02/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10472.73 +65.96 + .6
HIGH 10493.54
LOW 10388.76
NASDAQ COMP. 2144.31 +30.26 +1.4
HIGH 2144.56
LOW 2110.87
VOLUME 1,997.9
PREVIOUS 1,786.8
UP VOLUME 1,603.1
DOWN VOLUME 377.0
DOW TRANSPORTS 3928.04 +88.00 + 2.3
DOW UTILITIES 393.02 +2.48 + .6
CLOSING TICK +1072
S&P 500 1214.76 +12.00 + 1.0
S&P 100 559.12 +4.74 + .9
MIDCAP 400 712.78 +12.28 + 1.8
REUTERS/CRB 316.45 +.62 + .2
NYSE COMPOSITE 7509.82 +84.64 + 1.1
VALUE LINE 400.04 +6.27 + 1.6
RUSSELL 2000 657.05 +14.03 + 2.2
DJW 5000 12168.15 +137.43 + 1.1
U.S. TREASURIES
5-YEAR NOTE 4.25%
Oct. 15,2010 98 29/32 -5/32 4.50
10-YEAR NOTE 4.25%
Aug. 15,2015 97 6/32 -10/32 4.61
30-YEAR NOTE 5.375%
Feb. 15, 2031 108 10/32 -21/32 4.80
LEHMAN BROS.
LONG BOND INDEX 1734.02 -3.69
DOW CLOSE 10472.73 +65.96 + .6
ADVANCES 2473
DECLINES 831
NEW HIGHS 162
NEW LOWS 76
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
Q Qwest Comms Intl 4.54 +.19 +4.4
LU Lucent Tech 2.70 -.04 -1.5
PFE Pfizer 21.60 +.05 +.2
TWX Time Warner 17.90 +.33 +1.9
MOT Motorola 23.04 +.84 +3.8
NT Nortel Networks 3.32 +.11 +3.4
S Sprint Nextel 24.73 +.88 +3.7
GDT Guidant 60.40 -2.70 -4.3
XOM Exxon Mobil 57.38 +.98 +1.7
TXN Texas Instrument 29.64 +1.09 +3.8
NASDAQ CLOSE 2144.31 + 30.26 + 1.4
VOLUME 2,223.4
PREVIOUS 1,975.4
ADVANCES 2135
DECLINES 894
NASDAQ ACTIVES
GOOG Google 379.68 +.30 +.1
MSFT Microsoft 26.46 +.50 +1.9
SYMC Symantec 19.37 -4.63 -19.3
AAPL Apple Computer 59.95 +2.45 +4.3
INTC Intel 23.37 +.72 +3.2
DELL Dell 29.34 +.10 +.3
MERQE Mercury Interact 25.66 -9.34 -26.7
CSCO Cisco Systems 17.63 +.15 +.9
QCOM Qualcomm 40.38 +.89 +2.3
SNDK Sandisk 62.13 +2.81 +4.7
AMEX CLOSE 1681.21 + 28.62 + 1.7
INDEX SHARES
DIA DIAMONDS TRUST 104.70 +.56 +.5
QQQ NASDAQ 100 39.35 +.51 +1.3
SPY S&P DEP.RECEIPTS 121.75 +1.26 +1.1
STOCKS IN THE NEWS
CI Cigna 110.37 -7.18 -6.1
AMR AMR 14.19 +.87 +6.5
BOT CBOT Holdings 112.89 +17.89 +18.8
CBG CB Richard Ellis 56.32 +6.72 +13.6
BCO Brinks Co 41.91 +3.10 +8.0
CQB Chiquita Brands 24.55 -2.95 -10.7
ERTS Electronic Arts 60.23 +4.44 +8.0
|
