11/30/05: All Indications Suggest The Economy Is Strong
SUSIE GHARIB: The U.S. economy is strong, so
strong that hurricanes and skyrocketing gas prices weren`t enough to slow
it down. The Commerce Department now says that the nation`s gross domestic
product or GDP, grew at 4.3 percent in the third quarter. That`s the
strongest pace in almost two years and a big improvement from the previous
estimate of 3.8 percent growth. Economists say the impact of hurricanes
Katrina and Rita were offset by spending in a number of areas.
STEVE RICCHIUTO, CHIEF U.S. ECONOMIST, ABN AMRO: To see the upward
adjustments that took place in things like non-residential construction
expenditures, corporate equipment investment expenditures and residential
investment expenditures I think broadened out the upward movement and
basically said the economy had a heck of a lot more broad-based upward
momentum in the third quarter than a lot of people had thought. And it
basically suggests that the Federal Reserve, even though they`ve raised
interest rates by 300 basis points, still probably has a lot more to do in
order to get the economy to move back towards economic growth that is going
to be consistent with a non-inflationary path of growth.
GHARIB: Ricchiuto also says today`s release of the Federal
Reserve`s beige book survey of the economy supported the GDP revision. He
believes the Fed will continue its program of raising interest rates at its
next meeting in December.
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.
11/30/05: Is Naked Shorting Shorting Investors?
JEFF YASTINE: Most investors have never heard of naked short-selling, a
practice where traders short stocks they don`t own and haven`t actually
borrowed. Some corporate executives and investors argue naked shorting
manipulates stock prices; others consider it a technical trading issue. As
Darren Gersh reports, regulators are trying to figure out why some
shareholders are complaining they`re losing money to naked shorting.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Every day,
one out of four shares sold on Wall Street is sold short. That means the
seller borrows the shares and then sells them. It is essentially a bet a
stock`s price will fall. The problem is some of those trades come up
short. On Wall Street, it`s called a naked short.
JAMES ANGEL, ASSOCIATE PROFESSOR OF FINANCE, GEORGETOWN UNIVERSITY:
They sell the shares. They don`t borrow the shares and they don`t deliver
them. That`s what naked short-selling is.
GERSH: In most cases, naked short-selling violates SEC rules. One
study suggests that naked shorts are also concentrated in some name-brand
stocks like Krispy Kreme donuts, Tivo and American Airlines. One reason
may be market manipulation or it may be that brokers are trying to help out
some of their big customers.
ROBERT SHAPIRO, CHAIRMAN, SONECON: Very large customers,
principally hedge funds, are being permitted to short-sell stocks without
ever delivering the shares and without ever having to borrow the shares.
GERSH: The CEO of overstock.com says his company has been a victim
of naked short-selling, but other small companies are hurt, too.
PATRICK BYRNE, CEO, OVERSTOCK.COM: The hedge funds can do it --
destroy the value of the stock, reduce a company to a penny stock and in
the process make money. The problem is the company gets left for dead.
GERSH: Prompted by some investor complaints, the association
representing state securities regulators brought together experts to
discuss the issue in Washington. Many analysts say short-selling can help
the markets price stocks more accurately and it`s not clear whether naked
shorting is simply another front in the war between corporate management
and the shorts.
ANGEL: You have a number of investors out there who are complaining
that this stock has been manipulated and we need better disclosure. We
need better information so that investors can find out for themselves
whether it is a problem or not.
GERSH: An SEC official says the commission is watching out for
signs of naked short-selling but will base any action on hard evidence
collected from its regular inspections of brokers-dealers. Darren Gersh,
NIGHTLY BUSINESS REPORT, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
11/30/05: One on One With Xerox Chairman & CEO Anne Mulcahy
SUSIE GHARIB: Xerox is growing again. The giant copier company that
struggled with losses and accounting problems over the past five years is
now predicting double digit earnings growth for 2006. Chairman and CEO
Anne Mulcahy gets the credit for the turnaround. Now, she`s using her
leadership skills to raise money for the earthquake relief effort in
Pakistan as part of a White House task force of business leaders. When I
met with Mulcahy this morning at Xerox`s headquarters in Stamford,
Connecticut, I asked her why President Bush thinks American CEOs can help.
ANNE MULCAHY, CHAIRMAN AND CEO, XEROX: In a word or a couple of
words, raise money. This is a situation that truly is a huge humanitarian
crisis. Having been there, you really have a context and a perspective
about it that, you know, is unbelievable. The amount of people homeless
and at risk with the winter coming, I think the size of this crisis really
calls out for both a public and private sector response.
GHARIB: How much money have CEOs contributed to this?
MULCAHY: Well, already we`ve made -- we`ve raised tens of millions.
We`ve set a goal of a $100 million by the end of January. And clearly
we`re on our way there, but a lot more to go.
GHARIB: Let`s talk about Xerox. You told analysts last week that
you expect earnings in 2006 to grow between 10 and 15 percent. What`s
going to drive that growth?
MULCAHY: Well, there`s a few areas that we`ve invested in that are
addressing parts of the market that are growing and exciting, first color,
which is an extraordinary opportunity for Xerox. Seven percent of the
pages today are being done in color, 93 percent to go. Xerox is currently
the revenue leader in color with fabulous technology. Digital technology
is really a great complement to the offset world as well, and that`s a huge
source of new revenue opportunity for Xerox as more and more work in
applications are eligible for digital to print on demand and
personalization. And we`re also building a great services business,
document management services business which solves problems for customers
in the document process base.
GHARIB: There`s no question that color is the wave of the future.
But what is Xerox doing different from your competitors who are also
aggressively moving into this fast-growing market?
MULCAHY: Well, I think even our competitors would acknowledge as
you look at where the vast majority of pages are done at the high end of
the market, we right now have unrivaled leadership. And that comes from
years of investing in research and development. It`s not something that
can happen overnight. So where we see a lot of competitors at the low end
of the market, I think the long-term focus we`ve had on research and
development at the high end really does differentiate us in the
marketplace.
GHARIB: Some people might say that Xerox`s dominance in color will
erode over time just like it did in the black and white copier business.
Your thoughts?
MULCAHY: Well, I think that we`ve certainly learned a lot of
lessons from the past in terms of ensuring that we maintain our leadership
in the marketplace. So part of this is not just about great technology,
but it`s the services and the customer relationships and really being best
in class and the total solution to the customer.
GHARIB: Anne, you`re forecasting revenue growth of 3 percent in
2006. Now, analysts tell me that they`d like to see 5 percent, 6 percent.
Is that possible?
MULCAHY: I think the whole market is adjusting to more reasonable
growth rates over a sustained period of time. So I think there`s been a
recalibration of expectations around top-line growth from an investment
perspective. And growing at 5 percent or more and delivering double digit
earnings growth over a sustained period of time I think is a very solid
business model.
GHARIB: Well, Xerox had about $2 billion of cash. Now, aside from
the stock buybacks that you recently announced, what are your plans for
that excess cash?
MULCAHY: The intent truly is is to continue down the road and as we
continue to generate cash and do additional stock buybacks, so that over
time it won`t just be a $500 million event. It will be a program that
builds and sustained itself over time. So it`s not a one-time approach and
certainly leaving some flexibility and opportunity to do acquisitions in an
opportunistic way is part of the game plan as well.
GHARIB: What kind of acquisitions would you consider? How big?
MULCAHY: I certainly would look at it and say, you know, probably
half a billion dollars or lower is a very reasonable kind of scale for us
to be looking at in terms of opportunities to increment our business in a
very rational way.
GHARIB: So what more does Xerox have to do to get investors
interested in your stock?
MULCAHY: I think we`ve got to continue doing what we`re doing which
is setting expectations, delivering on them, being consistent, clearly
taking advantage of the growth opportunities to deliver the sustainable
top-line growth, which is our number one priority. But really keeping the
commitments as it relates to the kind of profit leverage and cash flow
we`ve seen over the last few years that really have built back the
credibility of Xerox. So we`re going forward with the same level of
execution consistency that hopefully we`re becoming known for with a team
that`s really well experienced and has delivered.
GHARIB: Anne Mulcahy, thank you so much for talking to NIGHTLY
BUSINESS REPORT.
MULCAHY: Thank you, Susie.
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.
11/30/05: India's Airline Industry Is Taking Off
SUSIE GHARIB: Turning now to India, that country`s airline
industry has faced major changes since deregulation a decade ago. And as
Anish Trivedi reports, carriers there are finally starting to see the
fruits of their labor.
ANISH TRIVEDI, NIGHTLY BUSINESS REPORT CORRESPONDENT: For almost
50 years, he was the face of India`s airlines: the Air India maharaja, a
smiling mascot that portrayed oriental grace and hospitality while hiding
the inefficiency of the state-owned carrier. Although private airlines
first took to the skies a decade ago, it`s only recently that the sector
has had the shackles taken off, including increasing the amount of foreign
investment. India`s booming economy is expected to drive increased growth
in the airline industry.
RONOJOY DUTTA, PRESIDENT, SAHARA AIRLINES: Anytime you have GDP
growth of 6, 7 percent, we`ve seen worldwide there`s a multiple rate of
growth in the airline industry. So, with India growing at 7 percent GDP,
you would expect to see 18, 20 percent growth in airline demand. Now, for
a long time, that demand has not been met.
TRIVEDI: The country`s private sector airlines are in a battle to
lure the 15 million people who take trains around the country everyday to
fly instead. The government, which has long controlled air travel, says
it`s moving to open the skies to domestic carriers.
PRAFUL PATEL, MINISTER FOR CIVIL AVIATION, GOVERNMENT OF INDIA: We
have recognized this need. We have also recognized that we just cannot be
inward looking. We cannot just be looking at the public carriers as the
mainstay of civil aviation. And I think as a whole, if we look at the
dynamics of the game, countries like Singapore and Dubai on both sides of
India are shining examples of how aviation has transformed the economies of
these countries.
TRIVEDI: That attitude is having an effect internationally. At the
last Paris air show, Indian carriers, some that are yet to start
operations, were the largest buyers of new aircraft.
JITENDER BHARGHAVA, DIRECTOR P. R. & MARKETING, AIR INDIA: We were
not allowed to grow the way we should have grown, but better late than
never, as they say. Airlines are growing. We have a fleet acquisition
plan which is under consideration now (INAUDIBLE) for 68 aircraft.
TRIVEDI: The airlines have no doubt they`ll be able to fill the
extra seats and make money doing it.
JEH WADIA, MANAGING DIRECTOR, GO AIR: We`ll be talking about
carrying five, seven, eight million passengers in a matter of three years.
Some carriers have taken 10 years in this country to carry close to eight
million passengers or nine million passengers. So, for us, it`s more about
focusing on commoditization, more on focusing on delivering value, and as
far as the profitability is concerned, the profitability will follow.
TRIVEDI: And it`s not only airlines that expect to benefit.
PATEL: It`s not just the planes which will increase. The total
sector will see investments of close to $30 billion in the next five to
seven years. And I think, considering sector specific in India, this will
be one of the top three sectors where the highest investments will be
coming in.
TRIVEDI: That`s all good news for passengers. Airfares are already
down as more airlines chase travelers today. And with cheaper flights,
improved ground services and better connectivity, more people will leave
buses and trains behind on the ground and fly the friendly skies, which
should give the maharaja a real reason to smile. Anish Trivedi, NIGHTLY
BUSINESS REPORT, Mumbai.
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.
11/30/05: "Money File"-Dullness Leads To Dollars In Long Term Investing
SUSIE GHARIB: In tonight`s "money file," when it comes to long-term investing,
boring can be good. Here`s Harriet Brackey, personal finance reporter for
the "South Florida Sun Sentinel."
HARRIET BRACKEY, PERSONAL FINANCE REPORTER, SO. FLORIDA SUN
SENTINEL: Half of all households own stocks. It`s the dull half, I think.
That`s my almost serious view of a recent study from the Investment Company
Institute and the Securities Industry Association. It shows that the
typical investor is middle-aged, married, college-educated. They`re not
rich and most don`t trade stocks even once a year. In a word: dull.
But hold on. The study also shows that people seem to prefer to
invest not on their own, but through their employer`s retirement savings
plan. All this leads me to two conclusions. First, these boring, normal
folks have all the characteristics of good, long-term investors. They`re
not chasing hot stocks. They`ve been putting money into the market in good
years and bad. Many have been doing this for a decade or so. The second
conclusion: there`s something here we could use to encourage more people to
save.
This study is the perfect reason to push automatic enrollment in
401(k) plans. Set up the account for every worker from the first day on the
job, no decisions required. Just set them on the path and this data seems
to say workers -- young, old, modest income or not -- will stick with it.
If automatic enrollment were widespread -- more normal, maybe next time
they do this study, it would be far more than half of households that own
stocks. Now that wouldn`t be dull at all. I`m Harriet Johnson Brackey.
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.
11/30/05:
"Paul Kangas' Stocks In The News"
JEFF YASTINE: Today`s better-than-expected report on the nation`s
economic growth failed to excite investors, producing another choppy
trading session as we close out the month of November. The Dow remained
marginally positive at the start, but around 2:00 Eastern, the Fed released
its beige book survey, pointing to rising inflationary trends within many
of the Fed districts around the country. That put the Dow decidedly in the
red, with many of the financial stocks leading the way lower with the Dow
finishing down over 82 points to 10,805.87. The NASDAQ holding its own,
edging up a fraction to 2,232.82 and the S&P 500 falling eight points to
1,249 1/2. Today`s reports -- strong economic growth and increasing wage
pressures, price pressures -- put the kibosh on bonds, with the 10-year
note falling 3/32 to 100 2/32, the yield at 4.49 percent.
And topping our list today, Time Warner (TWX) gaining $0.11. Carl
Icahn says he will hold Time Warner`s board personally responsible if they
sell the America Online division for too cheap of a price.
Pfizer (PFE) losing $0.27.
Nortel Networks (NT) gaining $0.06. The company`s new CEO Mike
Zaparovsky (ph) firing two senior executives and analysts think more
departures are on the way in the first steps of a major reorganization of
the company.
Ford Motor Co (F) falling $0.40.
Lucent Technology (LU) dropping $0.04.
ExxonMobil (XOM) off $0.31.
And there`s a look at GE (GE) dropping $0.21.
Citigroup (C) falling $0.54. It was among a weak financial sector
today amid another uptick in interest rates and here`s how a few other
financials in the group faring.
American Express (AXP) losing 1 percent.
JPMorgan (JPM) falling nearly 2 percent.
Wachovia (WA) down $1.03 or nearly 2 percent as well.
Liberty Media (L) slipping a nickel.
And AT&T (SBC) losing $0.14.
General Motors (GM) falling $1.10. The auto maker releasing sales
results for November tomorrow. Analysts bracing for another weak
performance from the company.
TDC A/S (TLD) jumping $1.33. This is a Danish telecom firm. Five of
the world`s largest private equity firms, a consortium of them, offering
$12 billion to acquire the company, but some think a higher bid may yet
emerge for TDC`s assets.
Shares in Donaldson Co (DC) perking up $1.84. It reported record
first quarter results.
And Jack in the Box (JBX) ending off $0.03, but traded as high as
$36.20. Fourth quarter profits coming in at $0.64 a share. That was $0.03
above analysts. However, a lower tax rate and the sale of a dozen
restaurant units helped that performance.
Forest Oil (FST) rising $1.78. Citigroup raising its price target on
that stock to $60 a share.
And some losers to tell you about, Tiffany & Co (TIF) falling $1.44.
Profits rose 37 percent during the quarter, but analysts noted lower than
expected same store sales growth in the U.S. and Japan, which accounts for
a large share of Tiffany`s International revenue.
Gamestop (GME) finished down $1.35. The video game retailer posting a
third quarter loss yesterday and analysts at Bank of America believes the
downturn in video game sales worsened this month.
Stewart & Stevenson Services (SVC) dropping $1.50. S&P cutting its
2006 earnings target on the defense contractor, noting shrinking margins at
the company`s tactical vehicles division.
And Chiquita Brands Intl (CQB) falling $0.84. The late season tropical
storm Gamma damaging over 5,000 acres of banana plants at the company`s
farms in Central America.
Over at the NASDAQ, shares in Google (GOOG) finding some support,
rebounding $1.37 from yesterday`s 5 percent drop.
No change in Microsoft (MSFT).
Apple Computer (AAPL) losing a little there, down $.28.
Yahoo! (YHOO) up a fraction.
Intel (INTC) losing a dime.
And there is Research in Motion (RIMM) plunging nearly $4 and as Susie
mentioned, a judge throughout a preliminary settlement within the company`s
patent dispute with NTP and of course a turn for the worst for the
Blackberry device maker.
Cisco Systems (CSCO) up a fraction.
Dell (DELL) down $0.27.
eBay (EBAY) gaining $0.31.
Biocryst Pharmaceutical (BCRX) gaining $4.43. Roche Holdings has
agreed to license that company`s experimental drug which helps organ
transplant patients.
Dress Barn (DBRN) gaining nearly $5. The apparel retailer saw net
earnings nearly triple to $20 million or $0.64 a share. Same store sales
rose 9 percent.
Here`s another one, Semtech (SMTC) jumping over $3. Profits came to
$0.15 a share and the supplier reported strong parts sales.
And finally, Quality Systems (QSII) tumbling $7. An analyst at Piper
Jaffray downgrading the stock because of increased competitive pressures
and the possibility of slowing earnings growth.
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.
11/30/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10805.87 -82.29 - .8
HIGH 10924.82
LOW 10803.87
NASDAQ COMP. 2232.82 +.11 unch.
HIGH 2243.41
LOW 2230.19
VOLUME 1,795.0
PREVIOUS 1,611.3
UP VOLUME 653.7
DOWN VOLUME 1,124.1
DOW TRANSPORTS 4113.80 -16.09 - .4
DOW UTILITIES 400.15 -3.42 - .9
CLOSING TICK +791
S&P 500 1249.48 -8.00 - .6
S&P 100 574.56 -4.28 - .7
MIDCAP 400 733.66 unch. unch.
REUTERS/CRB 314.27 +3.04 + 1.0
NYSE COMPOSITE 7645.28 -47.71 - .6
VALUE LINE 411.12 +.40 + .1
RUSSELL 2000 677.29 +3.60 + .5
DJW 5000 12521.92 -53.68 - .4
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 12/32 -2/32 4.42
10-YEAR NOTE 4.50%
Nov. 15,2015 100 2/32 -3/32 4.49
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 31/32 -3/32 4.70
LEHMAN BROS.
LONG BOND INDEX 1744.14 -3.11
DOW CLOSE 10805.87 -82.29 - .8
ADVANCES 1619
DECLINES 1720
NEW HIGHS 95
NEW LOWS 65
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
TWX Time Warner 17.98 +.11 +.6
PFE Pfizer 21.20 -.27 -1.3
NT Nortel Networks 2.90 +.06 +2.1
F Ford Motor Co 8.13 -.40 -4.7
LU Lucent Tech 2.79 -.04 -1.4
XOM Exxon Mobil 58.03 -.31 -.5
GE GE 35.72 -.21 -.6
C Citigroup 48.55 -.54 -1.1
L Liberty Media 7.68 -.05 -.7
SBC AT&T 24.91 -.14 -.6
NASDAQ CLOSE 2232.82 + 0.11 unch.
VOLUME 1,955.3
PREVIOUS 1,796.7
ADVANCES 1770
DECLINES 1292
NASDAQ ACTIVES
GOOG Google 404.91 +1.37 +.3
MSFT Microsoft 27.68 unch. unch.
AAPL Apple Computer 67.82 -.28 -.4
YHOO Yahoo! 40.23 +.04 +.1
INTC Intel 26.68 -.10 -.4
RIMM Rsch In Motion 61.13 -3.79 -5.8
CSCO Cisco Systems 17.54 +.03 +.2
DELL Dell 30.15 -.27 -.9
EBAY eBay 44.81 +.31 +.7
BCRX Biocryst Pharm 16.24 +4.43 +37.5
AMEX CLOSE 1689.80 - 6.89 - .4
INDEX SHARES
DIA DIAMONDS TRUST 108.22 -.65 -.6
QQQ NASDAQ 100 41.24 -.10 -.3
SPY S&P DEP.RECEIPTS 125.41 -.68 -.5
STOCKS IN THE NEWS
AXP American Express 51.42 -.71 -1.4
JPM JPMorgan Chase 38.25 -.71 -1.8
WB Wachovia 53.40 -1.03 -1.9
GM General Motors 21.90 -1.10 -4.8
TLD TDC A/S 29.85 +1.33 +4.7
DCI Donaldson Co 33.44 +1.84 +5.8
JBX Jack In The Box 33.60 -.03 -.1
FST Forest Oil 44.81 +1.78 +4.1
TIF Tiffany & Co 40.70 -1.44 -3.4
GME GameStop 33.64 -1.35 -3.9
SVC Stewart&Stevenson 20.50 -1.50 -6.8
CQB Chiquita Brands 20.80 -.84 -3.9
DBRN Dress Barn 33.38 +4.78 +16.7
SMTC Semtech 19.91 +3.21 +19.2
QSII Quality Systems 81.12 -7.00 -7.9
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