11/21/05: GM Closes Plants & Drives Out Tens Of Thousands of Workers
SUSIE GHARIB: 30,000 layoffs and 12 plant closings. That`s
the new road map announced by General Motors today. The massive
restructuring is the automaker`s deepest round of cuts since 1991. But GM
says the moves will add up to about $7 billion in savings by the end of
next year and help return the company to profitability. Diane Eastabrook
reports.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: The highly
anticipated restructuring plan General Motors unveiled today will reduce
its capacity by 40 percent and make it more competitive. Under the plan,
GM will close plants and eliminate shifts at more than a dozen North
American operations starting next year. As a result 30,000 jobs will be
cut. Chairman and CEO Rick Wagoner called the restructuring tough, but
needed.
RICHARD WAGONER, CHAIRMAN & CEO, GM: The decisions we are announcing
today were very difficult to reach because of their impact on our employees
and the communities where we live and work. But these actions are
necessary for General Motors to get its cost in line with our major global
competitors.
EASTABROOK: Industry watchers applauded the plan.
SCOTT SPRINZEN, AUTO ANALYST, STANDARD & POOR`S: They`re taking some
steps which ultimately could help them to turn things around, but there are
a lot of uncertainties too.
EASTABROOK: Analysts say the biggest uncertainty is approval from the
United Auto Workers and the union appears ready for a fight. In a
statement the UAW said quote, workers represented by today`s action are
protected by our job security program, as well as other provisions and
protections of the UAW/GM national agreement. The UAW will do everything in
its power to enforce those programs, end quote. Another uncertainty is how
much the restructuring will cost.
JOHN NOVAK, AUTO ANALYST, MORNINGSTAR: They`re in the process of
quantifying that now. It`s likely to include non-cash items, cash items.
So we`re looking for a big charge probably in the first quarter of 2006.
EASTABROOK: While Novak says the restructuring does go a long way in
reducing GM`s costs, he says it does nothing to address the company`s other
problems. The automaker still faces an SEC investigation into its
accounting practices as well as pension and benefit liabilities at its now
bankrupt spin-off Delphi Corporation. He says GM also lacks the kinds of
products consumers are now buying.
NOVAK: They don`t have strong cars to fight the Camry and the Accord
and some of Toyota`s and Honda`s hybrids, so really there`s a whole host of
open questions on the product side and you have to wonder where the sales
growth is going to come from in the future.
EASTABROOK: Still, analysts say if GM can get its cost structure in
line, it can spend more time focusing on the products that will drive sales
down the road. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
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.
11/21/05: What's Really Fueling The Gas Price Slide
SUSIE GHARIB: Oil prices edged up $0.49 in New York trading today, closing
at $57.70 a barrel. But that`s way down from the record high of about $70.
Over the last three months, prices for crude have fallen nearly 20 percent.
Suzanne Pratt takes a look at what`s behind the recent price decline and
what lies ahead for oil prices.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: If you haven`t
been to the gas pump recently, now may be a good time to fill up.
According to a recent survey of U.S. gas stations, retail prices plunged
more than $0.18 in the last two weeks. The national average for self-serve
regular is $2.24 a gallon, down from $2.43 in early November. A similar
decline in crude prices is largely responsible for the drop in prices at
the pump. Why are crude prices falling? Experts say better fundamentals.
ERIC BOLLING, INDEPENDENT TRADER, NY MERCANTILE EXCHANGE: There
seems to be plenty of oil out there. There seems to be enough refined
products out there right now to supply the market. So, there`s kind of a
comfortable tone to the market.
PRATT: Just this past week crude prices on the New York Mercantile
Exchange fell to a five-month low, due in part to recent increases in oil
stockpiles. On top of that, temperatures in the north and northeast have
been relatively warm this fall, helping to keep oil demand in check. And,
experts say whether prices will remain lower in the coming months depends
primarily on the weather.
BOLLING: For most of the products down here, the supply situation is
pretty stable now for the year. That`s about it. It is what it is. From
here going forward, it`s going to be really up to Mother Nature.
PRATT: If she gives us a brutal winter, experts say prices could
easily return to the record high of $70 a barrel set in August. If it`s a
mild one, the expectation is that crude will remain in the range of $50 to
$60 a barrel. As for OPEC, which is scheduled to meet next month, it`s not
expected to cut production.
JACK AYDIN, OIL ANALYST, KEYBANC CAPITAL MARKETS: Unless we see
crude coming down below $50 and maybe they get scared, probably they will
not. And I think at this point there`s no reason. The fundamentals again
has not changed.
PRATT: It may be worth noting that the "Farmer`s Almanac" is
predicting an unusually cold winter for the east coast, one with plenty of
snow. That`s not the best forecast when it comes to oil prices. Suzanne
Pratt, 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.
11/21/05: Verizon's Variety Venture
SUSIE GHARIB: AT&T is back on the big board trading here at the New York
Stock Exchange again, after it was dropped in April of last year. It was
resurrected through its merger with Dow component SBC Communications and
today is the first full day of business for the newly combined company.
The new AT&T is now the nation`s largest communications company. For the
moment, AT&T is trading under the old SBC ticker symbol. But that changes
on December first, when it regains the single letter "T" symbol.
KANGAS: The traditional telephone firms aren`t just changing their
names. The old so-called baby bells are transforming their businesses and
competing to offer a wide range of services. Stephanie Dhue looks at
Verizon`s push into video using Internet technology.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Matthew
Campbell buys his telephone and high speed Internet from Verizon. That
puts him at the center of a battle among communication companies offering
what`s known in the industry as the triple play: voice, video and data
services. Last week, he started buying his television service from
Verizon, too. So far, he likes it.
MATTHEW CAMPBELL, VERIZON CUSTOMER: Number one, I don`t have to have
a satellite dish, also weather doesn`t interfere with the signal,
everything`s on the same bill and then also the availability of high def
right away.
DHUE: Verizon is test marketing video in Herndon, Virginia and
Keller, Texas. AT&T also has plans to offer video service. The companies
are competing with cable, satellite and Internet providers that now offer
phone service. But Verizon and AT&T face huge challenges to offering
video. Technology is time consuming and expensive. They have to buy
content and they need franchise agreements with local governments before
offering customers TV service.
TERRY DENSON, VP PROGRAMMING & MARKETING, VERIZON COMMUNICATIONS:
We`d like to have the content out there, have the offering out there as
quickly as we could so that customers can decide, but the franchise and the
current franchising process is very difficult.
DHUE: Verizon has a statewide franchise agreement in Texas and with
several municipalities. But it will be years before most customers will
have the chance to buy Verizon`s TV service. The company expects to pass
just three million homes with fiber by the end of the year, that`s less
than 1 percent of its current customers. Still, analysts say the
traditional telephone companies have few choices to grow their business.
MARIBEL LOPEZ, ANALYST, FORRESTER RESEARCH: At this point what
Telco`s are looking at is an intensely competitive environment where
everybody either wants to enter their business and sell their services
cheaply or in fact give away their value proposition of networks and voice
for free, so Telco`s really do need to find additional revenue streams.
DHUE: Verizon has spent about $2 billion this year to roll out fiber
to the home. Analysts say it will be five or 10 years before the company
can hope to recoup its investment. 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.
11/21/05: Malaysia's Prescription For Stopping The Spread of Bird Flu
SUSIE GHARIB: Late today the U.S. banned poultry imports
from mainland British Columbia because of avian or bird flu. The
Agriculture Department says a duck at a farm there has tested positive for
avian flu virus, but not the form circulating in Asia. Meanwhile, in Asia,
more than 60 deaths are now being blamed on bird flu and steps are being
taken to slow its spread. In Malaysia, for example, quick action has
contained the virus. Rian Maelzer looked at how that country is keeping
the disease at bay.
RIAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Malaysia may be
bird-flu free. But it isn`t fear free.
TRANSLATION OF: MUSA MOHD, SHARIF/CHICKEN FARMER: Everybody should
feel scared. It`s dangerous. It`s causing people to die. Of course I
also feel scared.
MAELZER: Government veterinarians have been visiting even small farms
like this one to teach what to do to help prevent bird flu. And unlike its
poorer neighbors, Malaysia`s government has pledged unlimited compensation
for farmers if it needs to cull birds.
FRANCIS LAU, FEDERATION OF LIVESTOCK FARMERS` ASSN.: The farmers, if
there`s any mortality, the farmers will report the fatalities because there
is a compensation (INAUDIBLE) price to be paid. Definitely, the farmers
will let the authorities know.
MAELZER: To protect Malaysia`s one billion dollar a year poultry
industry, the government has banned the import of live birds, including pet
birds. Large-scale poultry farms here already maintain high levels of
hygiene. And backyard poultry rearing isn`t nearly as widespread as in
other parts of Southeast Asia. But in many of Malaysia`s countless
markets, live chickens are slaughtered and processed in conditions just as
unsanitary as in other parts of the region. It won`t be easy to curb those
practices. In recent years, the government has been criticized for its slow
response and lack of openness when dealing with health crises. An example
was the government`s refusal to release air pollution readings even when
the country was enveloped in thick smog, and the government`s handling of a
mystery virus that killed dozens of pig farmers in 1999. But Malaysia`s
government says it has learned from past mistakes.
DR. ISMAIL MERICAN, MINISTRY OF HEALTH: So we are not prepared to
hide anything because we believe in the sanctity of giving the right
information in order to avoid a calamity. We believe in that very strongly
and we proved that when we handled the SARS.
MAELZER: Following the 2003 SARS outbreak, Malaysia can now rapidly
deploy measures to screen for infectious diseases and isolate those who are
infected. Designated state hospitals are equipped with isolation rooms
that have their own air filtration systems. But in other facets of
preparedness Malaysia is lagging badly. The country aims to have enough
anti-viral drugs by year end to treat some 60,000 people. But that`s just
1 percent of what the World Health Organization recommends. The health
ministry is vowing to stockpile much larger quantities of the drugs in the
months ahead. And more measures are in the works.
MERICAN: By early next year we are going to have a simulation
exercise. There`s nothing like having a simulation exercise to see how
ready we are.
MAELZER: Ultimately, though, it may be what Malaysia`s closest
neighbors do or fail to do, that determines whether all this country`s
precautions can help avert a calamity. Rian Maelzer, NIGHTLY BUSINESS
REPORT, Perak, Malaysia.
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.
11/21/05:"Commentary"-The President's Tax Reform Plan
SUSIE GHARIB: Tonight`s commentator has been mulling over the proposals
made by the president`s commission on tax reform. Here`s Mark Zandi, chief
economist at economy.com.
MARK ZANDI, CHIEF ECONOMIST, ECONOMY.COM: Home mortgage lenders are
thwarting the Federal Reserve`s efforts to slow the runaway housing and
mortgage markets. Activity in these markets is fueling broader economic
growth that left unfettered will ignite underlying inflation. The Fed is
diligently raising rates to ward off that possibility, but their efforts
will only succeed if they induce lenders to rein in their underwriting
standards. Lenders ingenuity has empowered first-time home buyers and
investors to keep buying homes despite surging house prices.
The explosive growth in interest-only negative am loans has become
the driving force behind the housing boom. Lenders have little choice to
keep pushing the credit envelope. With industries now large capacity to
produce loans after years of soaring growth, all lenders must keep up with
the most aggressive or risk quickly losing market share. Complicating
matters for policymakers is the economy`s mounting dependence on housing.
It is increasingly difficult to gauge the appropriate amount of tightening
needed to cool housing and broader economic growth without undermining it.
The Federal Reserve should thus gear up the machinery at its
disposal. The Fed not only manages monetary policy, but it is an important
banking regulator. Regulators are currently formulating new guidelines for
mortgage lending. They need to be tough and their application even
tougher. History strongly suggests that it is in the best of times when
nothing could seemingly go wrong, then mistakes, big mistakes, are made.
For the housing and mortgage markets, these are the best of times. I`m
Mark Zandi.
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.
11/21/05: "Last Word"-Yo Quiero Chihuahuas In Japan
SUSIE GHARIB: And finally , when a loan company in Japan started
running television ads featuring a cute little Chihuahua, the campaign
morphed into a huge hit, maybe too huge. So strong is demand for
Chihuahuas now that prices are soaring. In some cases price tags run more
than $2,000. And Japanese pet owners are now reporting a spate of thefts
of the pampered pooches from houses and condominiums across the country.
Because there`s no system to record their origins, the loveable lapdogs are
easier to sell than stolen jewelry. And Paul, the Japanese love their
pets, as you probably can imagine. And in fact, the number of household
dogs and cats now exceeds the number of children in Japan.
KANGAS: Sounds like Japan has the leading market in the world for hot
dogs.
GHARIB: Yes, it sounds like that.
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.
11/21/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: That GM restructuring raised hopes for a turnaround, giving
the blue chips a boost this morning. So did big aircraft orders at Boeing,
a 0.9 percent rise in October`s leading economic indicators and a brokerage
upgrade on American Express stock. So at 11:00 a.m., the Dow was up 32
points while NASDAQ was up six. Adding to the market`s upturn this
afternoon were solid earnings from Campbell`s Soup and just a mild upturn
in oil prices.
The Dow industrial average closed up almost 54 points at 10,820.28.
The NASDAQ Composite was up 14.60 at 2241.67. Standard & Poor`s 500 index
gained 6 1/2 points, closing at 1254.85. Over in the bond market, the 10-
year note rose 8/32 to par and 9/32, putting the yield at 4.47 percent.
Big board volume leader was General Electric (GE) moving up $1.09. I
believe that this is the last week`s most active, last Friday`s not
today`s. The volume leader today on the big board was actually Liberty
Media (L) which dropped $0.04 to $7.69 and it traded 25.7 million shares.
Second in volume was GE (GE) which rose $0.45 to close at $36.20. Of
course as we reported last week, GE announced a dividend increase to $0.25
quarterly and a $25 billion stock buyback.
General Motors (GM) was in the active list and down $0.47 at the
close, but it traded as high as $24.94 during the session, then faded a
bit.
And tenth in big board volume was Advanced Micro Devices (AMD). The
company`s flash memory unit called Spansion is going to go public between
$16 and $17 a share.
I think we`re still lacking the proper graphics, but American Express
(AXP) - there we go -- American Express moved up $0.99. UBS financial
upgraded it from "neutral" to an outright "buy."
Then came Boeing (BA) itself with a rise of $2.05. The company
received over $16 billion in orders for a variety of its aircraft models, a
nice day for Boeing and of course that helped the Dow Industrial Average.
Computer Sciences (CSC) a major loser down $6.47. Lockheed Martin and
three private equity firms abandoned talks to acquire CSC. Lockheed stock
incidentally on that news moved up $1.21 to $61.17 a share.
Then we see Medicis Pharmaceuticals (MRX) up $3.82. The company has
rejected Mentor`s stock buyout bid and remains committed to its merger with
Inamed.
Inamed (IMDC) stock was up $0.02 and I think we have a board showing
those Inamad with a $0.02 gain and then Mentor Corp (MNT) itself plunged
$4.79 on the news.
And Allergan (AGN), which is also bidding for Inamed was down $0.65 on
the day, closing at $99.60.
Nike (NKE) fell $1.26. First quarter, oop, let`s make it JPMorgan did
a downgrade from "overweight" to "neutral."
Now we`ll get to first quarter earnings on Campbell Soup co (CPB)
which was up $1.27. First quarter earnings $0.58, nicely above last year`s
$0.54 and $0.02 better than the Street expected and those figures do
exclude one-time items incidentally.
Mattel (MAT) was up $0.44 a share. The company`s going to boost its
annual dividend from $0.45 to $0.50 a share and also is increasing its
stock buyback plan by $250 million.
Pep Boys (PBY) up $1.40. Barrington Partners has purchased a 1.3
percent stake in the firm and is calling for a management shake up.
Now we see Google (GOOG) topping the active list on NASDAQ today and
guess what, a new high again, closed at $409.36 a share. That was up $9.15
and the news is that UBS financial brokerage boosted its price target on
Google from $430 to $500 a share.
Also in the active list on NASDAQ was Sandisk (SNDK) tumbling $9.36 a
share to $46.84. That`s a negative reaction to news of a joint venture
between Intel (INTC) and Micron Technology (MU) for a firm which will make
flash memory chips, direct competition. Intel incidentally was down a
nickel on that news and Micron Technology moved up $0.02 a share.
Elsewhere on NASDAQ we have Alamosa Holdings (APCS) up $2.09 at
$18.35. There you see it. This is a company that`s involved in wireless
voice and data products and Sprint Nextel will acquire the company for
$18.75 a share in cash.
And over on the American exchange, Metretek Technologies (MEK) up
$1.84, a mere 45 percent move up. The company`s PowerSecure subsidiary has
gotten verbal orders for up to $45 million in new generation projects.
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.
11/21/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10820.28 +53.95 + .5
HIGH 10835.33
LOW 10761.05
NASDAQ COMP. 2241.67 +14.60 +.7
HIGH 2242.30
LOW 2219.25
VOLUME 1,555.7
PREVIOUS 1,806.6
UP VOLUME 1,042.9
DOWN VOLUME 493.9
DOW TRANSPORTS 4156.48 +15.79 + .4
DOW UTILITIES 397.69 +1.23 + .3
CLOSING TICK +488
S&P 500 1254.85 +6.58 + .5
S&P 100 577.15 +2.46 + .4
MIDCAP 400 735.07 +6.17 + .9
REUTERS/CRB 313.63 +.89 + .3
NYSE COMPOSITE 7676.64 +42.06 + .6
VALUE LINE 411.37 +3.20 + .8
RUSSELL 2000 678.96 +6.74 + 1.0
DJW 5000 12570.44 +75.33 + .6
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 15/32 +4/32 4.40
10-YEAR NOTE 4.50%
Nov. 15,2015 100 9/32 +8/32 4.47
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 16/32 +12/32 4.66
LEHMAN BROS.
LONG BOND INDEX 1750.97 -.11
DOW CLOSE 10820.28 +53.95 + .5
ADVANCES 2083
DECLINES 1238
NEW HIGHS 197
NEW LOWS 129
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
L Liberty Media 7.69 -.04 -.5
GE GE 36.20 +.45 +1.3
LU Lucent Tech 2.91 +.07 +2.5
TWX Time Warner 18.09 +.06 +.3
GM GM 23.58 -.47 -2.0
F Ford Motor Co 8.32 -.09 -1.1
PFE Pfizer 21.74 +.14 +.7
SBC AT&T 24.37 -.01 -.0
XOM Exxon Mobil 59.37 +1.12 +1.9
AMD Advanced Micro 27.04 +.30 +1.1
NASDAQ CLOSE 2241.67 + 14.60 + .7
VOLUME 1,717.6
PREVIOUS 2,060.9
ADVANCES 1892
DECLINES 1160
NASDAQ ACTIVES
GOOG Google 409.36 +9.15 +2.3
SNDK SanDisk 46.84 -9.36 -16.7
MSFT Microsoft 28.16 +.09 +.3
AAPL Apple Computer 64.96 +.40 +.6
YHOO Yahoo! 42.27 +.73 +1.8
EBAY eBay 46.19 +1.52 +3.4
CSCO Cisco Systems 17.06 +.04 +.2
AMZN Amazon.com 47.99 +.01 +.0
INTC Intel 25.25 -.05 -.2
DELL Dell 30.04 +.19 +.6
AMEX CLOSE 1715.45 + 13.13 + .8
INDEX SHARES
DIA DIAMONDS TRUST 108.16 +.63 +.6
QQQ NASDAQ 100 41.55 +.10 +.2
SPY S&P DEP.RECEIPTS 125.76 +.63 +.5
STOCKS IN THE NEWS
AXP American Express 50.90 +.99 +2.0
BA Boeing Co 69.00 +2.05 +3.1
CSC Computer Science 48.38 -6.47 -11.8
MRX Medicis Pharm 31.57 +3.82 +13.8
IMDC Inamed 83.33 +.02 +.0
MNT Mentor 51.35 -4.79 -8.5
AGN Allergan 99.60 -.65 -.7
NKE Nike Inc 86.44 -1.26 -1.4
CPB Campbell Soup Co 30.97 +1.27 +4.3
MAT Mattel Inc 15.61 +.44 +2.9
PBY Pep Boys 14.50 +1.40 +10.7
APCS Alamosa Holdings 18.35 +2.09 +12.9
MEK Metretek Tech 5.89 +1.84 +45.4
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