11/29/05: Home Sales Are Still Hot & Consumers Are Still Confident About Spending
SUSIE GHARIB: Three fresh economic reports out
today reveal a very healthy economic picture. New data on consumer
confidence and durable goods were much stronger than expected, and sales of
new homes soared to an all-time high. The surprising news contradicts
earlier indications that the U.S. economy is slowing down. Erika Miller
reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: The surge in
sales of new homes came as a shock to Wall Street. Most economists
predicted sales would fall as a result of rising mortgage rates. Instead,
new homes sold at a record annual rate of 1.42 million units. It was a 13
percent increase from September, the biggest monthly jump in 12 years.
ELISABETH DENISON, U.S. ECONOMIST, DRESDNER KLEINWORT WASSERSTEIN: It
seems that housing demand is still holding up well in the face of high
interest rates. One thing that it could be is that people are jumping in
to buy homes before interest rates go even higher.
MILLER: In spite of today`s data, most economists still think the
housing market has peaked. They point to signs of cooling within today`s
report. First, the average price of a new home fell from September. It`s
also down from the year-ago level. In addition, the number of new homes
sitting on the market hit an all-time high. Still, economist Steven
Gallagher doesn`t see any signs of a housing bubble ready to burst.
STEPHEN GALLAGHER, CHIEF ECONOMIST, SG CORP. & INVESTMENT BANKING:
What we`re sensing about the housing sector is a little leveling off.
Housing is still very strong. It is slowing down from where it was earlier
this year, but it`s still a very strong sector of the economy.
MILLER: The home sales data wasn`t the only good economic news today.
Consumer confidence bounced to 98.9 in November from 85.2 last month, but
the index still remains below its level before hurricane Katrina hit in
August. The Conference Board which puts out the data says consumers are
feeling more upbeat as a result of falling gasoline prices. Another factor
is an improving job market. Most economists predict confidence will
continue to rise.
GALLAGHER: Gasoline prices are not the threat they seemed to be a
month ago. The hiring numbers, the employment numbers, are more
encouraging. So these factors should be leading to a further rebound in
consumer confidence.
MILLER: Wall Street is betting there will be more good economic news
on Friday in the form of the November employment report. Most economists
are forecasting a healthy surge in the number of new jobs created. Erika
Miller, NIGHTLY BUSINESS REPORT, New York.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright
(c) 2005 Community Television Foundation of South Florida,
Inc. ALL RIGHTS RESERVED. Terms of use.
11/29/05: One on One With Rick Murray, Housing Analyst at Raymond James
SUSIE GHARIB: Our guest tonight is telling his
clients to be cautious about investing in housing stocks. Joining us now,
Rick Murray, housing analyst at Raymond James. Hi, Rick.
RICK MURRAY, HOUSING ANALYST, RAYMOND JAMES: Hi.
GHARIB: So if you`re telling your clients to be cautious, are you
saying that today`s strong housing number is a fluke?
MURRAY: Well, it was a bit surprising Susie. I think, you know, when
looking at new home sales data, you have to be cognizant of the fact that
this is some of the most volatile data that the government reports on the
housing sector and that`s a fact due primarily because it`s generated from
the smallest sample size. The permit and housing start data is much more
reliable. The new home sales data tends to get revised quite frequently.
GHARIB: In fact, a number of economists were saying today that they
are expecting that number to be revised down at the next go around. Are
you in that same camp?
MURRAY: I think we would expect to see that as well. I think one of
the things that was most surprising about this month`s number was the sharp
increase on a year-over-year basis in the south regional data which was
very surprising given that sales have been very sluggish in most parts of
that region excepting Florida. However, we had hurricane Wilma in the
month of October which would have certainly suppressed sales in that part
of the region. So it was pretty surprising.
GHARIB: Well, we saw in other geographies, whether it was in the west
or in California, very strong sales numbers. Are you saying that those
aren`t quite right? Something`s wrong there?
MURRAY: Well, it would seem to be somewhat counterintuitive based on
the recent data points that we`ve seen. Certainly the trends in California
have been of moderating as well as several other markets in the western
region, including Las Vegas, Phoenix. Trends remain fairly healthy, but
have been moderating. I think on a year-over-year basis the west region
data wasn`t quite as surprising as the data from the south region.
GHARIB: Rick, I know you talked to the executives and top management
of a lot of the housing companies that you cover. When you talk to them,
anecdotally, what are they telling you or what are the indications that
they`re giving you about what`s going on in their regions and where they`re
building houses?
MURRAY: Well, I think, you know, the overall consensus seems to be
over the last couple of months that things have cooled off a bit. I think
most executives within the industry have acknowledged that they`ve seen
some slowing of demand. However, things still remain relatively healthy.
But we are seeing some fairly rapid diminishment of trends in some markets,
particularly the Washington, D.C. and surrounding Maryland and Virginia
markets are some parts of the country that have seen a fairly rapid
erosion.
GHARIB: Now does any of this erosion have to do with whether you`re
talking about high-end homes or lower-end homes, new homes versus older
homes?
MURRAY: Well, primarily, I think the one thing that seems to be common
among the places that seem to be experiencing a faster rate of
deterioration is that these areas tend to be the ones that have experienced
the most rapid rates of price appreciation over the last several years,
which also seems to coincide with a very high level of investors or
speculators in those markets as well. And I think what we`re seeing now is
a cooling in demand in large part from those investors as I think
expectations for price appreciation are beginning to moderate.
GHARIB: And what are you telling your investors exactly about housing
stocks? A lot of them have been buying these because they`ve been so red
hot, making good money, good price appreciation. So what are they supposed
to be doing now? Get out of the sector all together?
MURRAY: Well, we -- you know, we were quite positive on the sector for
a number of years fairly recently, have moderated our position and we think
the best advice that we have for clients at this point, you know, if you
have profits in the sector now might be a time to start thinking about
locking in those gains. We certainly wouldn`t be advising people to commit
wholesale new money into the sector at this point. We think the risk
reward is relatively unattractive.
GHARIB: Well, very interesting information. Thank you so much Rick.
We appreciate you coming on the program.
MURRAY: Thank you.
GHARIB: We`ve been speaking with Rick Murray, housing analyst at
Raymond James.
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.
11/29/05: The FCC Mulls Over A la Carte Cable
JEFF YASTINE: If you`re watching this NIGHTLY BUSINESS REPORT program on
cable tonight, you probably pay for programming that includes a variety of
channels. You may not like or want some of them, but you pay for them
anyway. Now the Federal Communications Commission is making a new effort
to change that. Stephanie Dhue reports.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The FCC is
changing its tune on letting consumers pick and pay for only the channels
they choose. Under former FCC Chairman Michael Powell, the agency found so
called "a la carte" pricing would cost customers more. But today, current
FCC Chairman Kevin Martin says that`s wrong.
KEVIN MARTIN, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION: Based on a
more complete analysis of the cost and benefits of bundling and the
potential cost and benefits of a la cart pricing, our new report concludes
that purchasing cable programming in a more a la carte manner, in fact,
could be economically feasible and in consumers best interest.
DHUE: Martin says a la carte pricing would also give consumers more
control over keeping indecent programming off their sets, an issue that was
put on the front burner after singer Janet Jackson`s now infamous Super
Bowl wardrobe malfunction. Cable companies have resisted efforts to
regulate content, and they have resisted offering a family friendly tier,
for example, Nickelodeon without MTV, which are both owned by Viacom. The
cable industry says a la carte pricing would lead to higher costs and
squeeze out diverse programming.
KYLE MCSLARROW, PRESIDENT & CEO, NATIONAL CABLE & TELECOMMUNICATIONS
ASSOCIATION: It would be very strange and I would think unthinkable, if
somebody went to the newspapers and said, you know what, I like the sports
section. I don`t really read the business section that much, so I`m going
to tell you that you need to sell sports sections and business sections
separately.
DHUE: Consumer advocates say diverse programming may have a better
shot at making it if consumers are given the choice.
JEANNINE KENNEY, POLICY ANALYST, CONSUMERS UNION: Ultimately, what
cable a la carte does is allows the marketplace to reflect consumer demand,
which is not something that can happen right now under the current
structure.
DHUE: Analysts say, for investors, this debate provides lots of
static, but the picture is clear.
SCOTT CLELAND, CEO, PRECURSOR GROUP: Bottom line, we don`t think that
there is any real business model risk or any serious risk of re-regulation
for cable.
DHUE: Instead, analysts expect cable companies to take some political
hits and keep working to make the current V-chip blocking technology more
user friendly. 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.
11/29/05: Last Word-Xmas Tree Price & Strategy
SUSIE GHARIB:In tonight`s commentary, engineering a better global marketplace.
Here`s Laura Unger, former commissioner of the Securities and Exchange
Commission.
LAURA UNGER, FORMER SEC COMMISSIONER: Technology could deliver global
financial markets tomorrow, if market participants could agree on a
suitable regulatory structure. In its recent strategic plan, the SEC
acknowledges the technological reality of the global marketplace. The
agency noted its work with international counterparts to converge on an
agreed upon set of accounting standards and practices. While that meeting
of the minds has been a long one, converging accounting standards may be
easier than one of the other challenges mentioned -- resolving conflicts of
law.
One such resolution occurred just last week in France. Recognizing
that whistleblowers can help companies maintain corporate integrity,
Sarbanes-Oxley requires that public companies establish a hotline for
employees to anonymously report suspected wrongdoing. Protecting
whistleblowers is good corporate governance. It will help companies deter
and detect fraud. That whistleblower requirement sent the French data
protection agency, the CNIL, into a regulatory tailspin.
As reported, French data protection laws would prohibit companies from
collecting information about someone based on anonymous accusations. This
regulatory conundrum meant French companies that trade in the U.S. and U.S.
companies operating in France would be forced to violate one country`s
laws. The CNIL reached an interpretive accommodation that will let
multinational companies comply with the strict letter of the Sarbanes-Oxley
law by developing different whistleblower programs for their French
operations. This is but a small snapshot of the challenges facing
regulators as we move to the global marketplace. I`m Laura Unger.
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.
11/29/05:
"Paul Kangas' Stocks In The News"
JEFF YASTINE: Those home sales and consumer confidence numbers were not the
only good news about the economy today. The Commerce Department says new
orders for durable goods rose a larger than expected 3.4 percent last
month. That number was boosted by a surge in demand for aircraft,
especially military aircraft, which posted its biggest increase in five
years and the initial market reaction to all that economic data was an
early rally, with the Dow running 70 points higher in the first half. That
marked the highs of the day, as worries about Friday`s November employment
report, profit taking from last week`s rally, and a spike in Treasury
interest rates eroded the day`s gains.
The Dow ended the session down 2 1/2 points to 10,888 and a fraction.
Meanwhile, the NASDAQ dropped 6 2/3 points to 2232.71 and the S&P 500 index
edging up a fraction to 1257.48. Bond prices fell sharply on new worries
the Federal Reserve may not be close to wrapping up its cycle of interest
rate hikes. The 10-year note falling 18/32 to 100 5/32, the yield at 4.48
percent.
And starting things off Pfizer (PFE) losing $0.12 and leading the
active list.
Time Warner (TWX) dropping $0.22. Billionaire Carl Icahn turning up
the heat for changes at the media giant. He`s hired the Lazard investment
firm to explore ways maximize shareholder value. Icahn owns 135 million
shares of Time Warner and believes a new slate of directors will do a
better job of unlocking value.
General Electric (GE) down a nickel.
Interpublic Group (IPG) losing $0.44. A large block of about 6.9
million shares crossed at $9.30 each. A few weeks ago, investors rejected a
proposal to put the ad agency up for sale.
ExxonMobil (XOM) losing $0.40.
And then here`s a look at Wal-Mart Stores (WMT) shares dropping $0.99.
AT&T (SBC) losing a fraction.
Liberty Media (L) was unchanged.
Merck & Co (MRK) gaining $0.46.
And Citigroup (C) off $0.21.
A look at one of the home builders, DR Horton (DHI) falling a
fraction. The home builder boosting a stock buy back plan by $500 million,
but other than that, little reaction in the home building sector to today`s
13 percent gain in new home sales.
And United States Steel (X) gaining ground. JPMorgan added the stock
to its focus list. The analysts there think shares are significantly
undervalued and that there could be more mergers and buyouts ahead for the
industry.
Shares of Weyerhaeuser Co (WY) advanced $1.32. The company selling off
its wood panel business and shutting down a box making plant in an effort
to streamline operation.
And Ferro Corp (FOE) rising over $2. The company`s CEO Hector Ortino
died last night of natural causes. The COO, James Kirsch was named to
replace him and at least one analyst thinks they`ll do what`s necessary to
get the company back on track. Year to date, their stock was down more
than 15 percent.
And shares in Genworth Financial (GNW) slipped a fraction, but it was
up $1.50 in after hours and that on news that the stock will be added to
the S&P 500 index after the market closes on Thursday. It will replace
Calpine.
And South Jersey Industries (SJI) climbed $1.75. This one`s being
added to the S&P 600 small cap index and that becomes effective after the
close on Friday.
Shurgard Storage Centers (SHU) jumping $1.75. The company`s looking to
sell itself and has signed confidentiality deals with public storage and
some other possible bidders so they can get a closer look at Shurgard`s
books before making an acquisition offer.
On the downside, Las Vegas Sands (LVS) falling nearly $2. The resort
and casino operator looking for $2.5 million so it can build a Venetian
branded casino in Macao, China`s offshore gambling haven. But JPMorgan
downgraded the stock, believing the project could cannibalize business at
the Sands other property, Macao, the Sands Macao.
Now let`s look at the NASDAQ where the big action was in Google (GOOG)
sliding nearly $20 today, a decline of almost 5 percent and about twice the
average volume on the stock. Merrill Lynch analysts said there`s more risk
than reward in the shares and Sanford Group cut its rating, saying Google`s
efforts to buy American Online reflect an increasingly competitive
environment which could slow Google`s growth, quite a down shot for Google
there.
Apple Computer (AAPL) losing a little bit, $1.56 on profit taking.
Microsoft (MSFT) slipping a fraction.
Intel (INTC) down by nearly the same amount.
Yahoo! (YHOO) losing $0.92.
Cisco Systems (CSCO) edging up a fraction.
Sandisk (SNDK) losing a little more than half a dollar.
Dell (DELL) gaining $0.20.
Ebay (EBAY) losing $0.87.
Qualcomm (QCOM) down half a dollar.
Here`s Nvidia (NVDA) climbing, excuse me, tumbling over $2. The stock
was cut from "hold" to "sell" by an analyst at Deutsche Bank.
And American Woodmark (AMWD) sliding over $4. Lower second quarter
results and it also warned on third quarter profits. The cabinet maker
saying that lower production forecast from home builders, higher interest
rates and uncertain consumer confidence are all hurting cabinet sales for
the company.
And those are our 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.
11/29/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10888.16 -2.56 - .0
HIGH 10959.79
LOW 10888.07
NASDAQ COMP. 2232.71 -6.66 -.3
HIGH 2253.25
LOW 2232.54
VOLUME 1,611.3
PREVIOUS 1,498.7
UP VOLUME 813.4
DOWN VOLUME 757.9
DOW TRANSPORTS 4129.89 +8.09 + .2
DOW UTILITIES 403.57 +1.60 + .4
CLOSING TICK +398
S&P 500 1257.48 +.02 unch.
S&P 100 578.84 -.29 - .1
MIDCAP 400 733.66 +2.90 + .4
REUTERS/CRB 311.23 -1.49 - .5
NYSE COMPOSITE 7692.99 +5.57 + .1
VALUE LINE 410.72 +.59 + .1
RUSSELL 2000 673.69 +2.19 + .3
DJW 5000 12575.60 +1.94 + .0
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 14/32 -11/32 4.40
10-YEAR NOTE 4.50%
Nov. 15,2015 100 5/32 -18/32 4.48
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 1/32 -1 4/32 4.70
LEHMAN BROS.
LONG BOND INDEX 1747.25 -11.86
DOW CLOSE 10888.16 -2.56 - .0
ADVANCES 1968
DECLINES 1360
NEW HIGHS 119
NEW LOWS 80
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 21.47 -.12 -.6
TWX Time Warner 17.87 -.22 -1.2
GE GE 35.93 -.05 -.1
IPG Interpublic Group 9.30 -.44 -4.5
XOM Exxon Mobil 58.34 -.40 -.7
WMT Wal-Mart Stores 49.01 -.99 -2.0
SBC AT&T 25.05 -.03 -.1
L Liberty Media 7.73 unch. unch.
MRK Merck & Co 30.02 +.46 +1.6
C Citigroup 49.09 -.21 -.4
NASDAQ CLOSE 2232.71 - 6.66 - .3
VOLUME 1,796.7
PREVIOUS 1,606.0
ADVANCES 1557
DECLINES 1490
NASDAQ ACTIVES
GOOG Google 403.54 -19.94 -4.7
AAPL Apple Computer 68.10 -1.56 -2.2
MSFT Microsoft 27.68 -.07 -.3
INTC Intel 26.78 -.08 -.3
YHOO Yahoo! 40.19 -.92 -2.2
CSCO Cisco Systems 17.51 +.03 +.2
SNDK SanDisk 51.41 -.52 -1.0
DELL Dell 30.42 +.20 +.7
EBAY eBay 44.50 -.87 -1.9
QCOM Qualcomm 45.54 -.50 -1.1
AMEX CLOSE 1696.69 - 1.16 - .1
INDEX SHARES
DIA DIAMONDS TRUST 108.87 -.16 -.2
QQQ NASDAQ 100 41.34 -.20 -.5
SPY S&P DEP.RECEIPTS 126.09 -.14 -.1
STOCKS IN THE NEWS
DHI D.R. Horton 35.50 -.07 -.2
X US Steel 45.24 +2.75 +6.5
WY Weyerhaeuser Co 66.24 +1.32 +2.0
FOE Ferro Corp 19.52 +2.12 +12.2
GNW Genworth Finl 34.00 -.04 -.1
SJI South Jersey Inds 28.40 +1.55 +5.8
SHU Shurgard Storage 59.37 +1.75 +3.0
LVS Las Vegas Sands 42.80 -1.85 -4.1
NVDA Nvidia Corp 35.48 -2.40 -6.3
AMWD American Woodmark 25.50 -4.66 -15.5
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