12/02/05: Positive Job Growth Doesn't Take Root With Wall Street
SUSIE GHARIB: A strong employment report today was good news for the economy, but not good enough for Wall Street. Stocks were little changed after the government reported that businesses added more jobs in November than the previous three months combined. The robust job growth comes on top of several other reports this week showing healthy gains in the U.S. economy. Scott Gurvey has more on today`s employment news.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: The Labor Department reported that job growth was widespread in November, with big gains in construction and in food services. Economists say that means the nation`s labor force is already beyond the effects of the year`s devastating hurricanes. Employers added 215,000 jobs to their payrolls in November after two months of sluggish growth. The unemployment rate held steady at 5 percent. In Washington, President Bush said the administration policy of cutting taxes and restraining spending is responsible for the good news on jobs and that will continue.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We`re not going to rest until every American who wants a job can find one.
GURVEY: Economists say the breadth of November`s job gains is encouraging: 37,000 in construction, 11,000 in manufacturing and 29,000 in business and professional services.
ETHAN HARRIS, CHIEF U.S. ECONOMIST, LEHMAN BROTHERS: Some of the increase is a recovery from Katrina, so it`s not entirely the underlying trend in growth. But I do think we can see job gains of close to 200,000 in the coming months. The labor market has been strong for all of the year and the overall economy continues to look healthy. We should be able to see 200,000 job gains in many months going forward.
GURVEY: There are some signs of inflation in today`s report. Wage growth is 3.2 percent over the last 12 months, its highest rate in several years. This is in part a sign of the recent energy related price shock, but also a sign of tighter labor markets.
RICHARD BERNER, CHIEF U. S. ECONOMIST, MORGAN STANLEY: I don`t think the Fed will be concerned about this. After all, wage growth, especially real wage gains, have been quite subdued and -- but they`ll be watching it because they know when you get tighter labor markets and inflation expectations are picking up a little bit, that`s usually a recipe for faster gains in pay. It`s usually a recipe for overall inflation to pick up.
GURVEY: The Fed funds rate is now 4 percent. The markets are beginning to predict the Fed will continue raising rates until they reach 4 3/4 or even 5 percent. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
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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.
12/02/05: Fed Chairman Alan Greenspan Issues A New Warning About Protectionism
SUSIE GHARIB: Federal Reserve Chairman Alan Greenspan stepped up his rhetoric on the U.S. budget deficit today, warning against a quote pernicious drift toward financial instability. As baby boomers retire, Greenspan says rising medical costs threaten to overwhelm the Federal budget. At his last G-7 meeting in London, Greenspan also spoke out about what he calls a disturbing drift toward protectionism. That`s been a concern of his since the mid-`80s, when he was a commentator for this program. Darren Gersh looks at how Greenspan`s views have evolved over the last two decades.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In the 1980s, Alan Greenspan was a well-respected economist with a deep concern about free markets, warning viewers of this program against what he saw as the evils of protectionism.
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Protectionism, presumably the most politically attractive response, will only serve to lower our standards of living by shutting the door to foreign competition.
GERSH: Shortly before taking on the Fed chairmanship in 1987, Greenspan worried the Japanese would get tired of investing their trade surplus in American IOUs or worse, Congress would force the Japanese to dump their dollars.
GREENSPAN: If barriers to trade are being erected in the United States, foreigners would surely reason capital controls could not be far behind. Since such controls would dramatically lesson the value of externally held dollar securities, massive sales could easily drive the dollar`s exchange rate into a free fall.
GERSH: Fast forward 20 years and Alan Greenspan is an even more widely respected economist still worrying about protectionism.
GREENSPAN: Protectionism in all its guises, both domestic and international does not contribute to the welfare of American workers. At best, it is a short-term fix at a cost of lower standards of living for the nation as a whole.
GERSH: But much has changed over two decades. In 1986, the current account deficit, the broadest measure of America`s trade with the rest of the world, was just over 3 percent of GDP. This year, it is expected to come in at an unimaginable $750 billion, more than 6 percent of GDP. Fears about trade are perhaps not as strong as in the 1980s, but after falling through the booming `90s, pollsters say concern is rising again, though it`s wrong to label the American public`s concern about protecting jobs, simple protectionism.
ANDREW KOHUT, PRESIDENT, PEW RESEARCH CENTER: There are both protectionists and free trade. In other words, they want to see jobs protected and they`re concerned about the loss of the industrial base. But on the other hand, they also like the idea, the free flow of goods coming this way that benefits them when they`re consumers.
GERSH: Another change? China has replaced Japan as the focus of American trade anxiety. And the Chinese are also increasingly acting as our bankers, holding more than $700 billion in foreign reserves. Greenspan now argues the rise in the U.S. trade imbalance is a natural consequence of increased globalization. There`s more money around the world and investors around the world are more willing to put their money in a fast-growing American economy, keeping our interest rates low. Greenspan does not seem overly alarmed that foreigners now own half of the debt of the United States government.
GREENSPAN: That is part and parcel of the globalization process and I think the presumption that when it stops the whole world is going to collapse, I do not think is correct, unless we fall back on a degree of protectionism which has not existed in the world in the post-World War II period.
GERSH: Greenspan cautions Americans can`t keep borrowing massive amounts from abroad forever. Eventually we will have to rely more on our own savings. But he argues, the adjustment from a huge trade deficit can be gradual, providing protectionism does not restrict the market`s ability to adjust. Ted Truman was the Fed`s top international economist and an advisor to Greenspan.
TED TRUMAN, INSTITUTE FOR INTERNATIONAL ECONOMICS: The pattern in the past has been when people started talking about protectionism, it looked like it was likely the dollar would go down, right? That could set off at the current circumstances a large current account imbalance. That could
set off or contribute to a run on the dollar and loss of confidence in U.S. policies.
GERSH: And that has been Alan Greenspan`s concern for 20 years. It`s also a problem he would not like to leave on his desk waiting for the next chairman. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
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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.
12/02/05: "Market Monitor"-Richard Steinberg, President of Steinberg Global Asset Management
JEFF YASTINE: Our "market monitor" guest tonight says it`s time for investors to load up their portfolios with stocks that favor growth over value and large over small. Here to tell us more -- Richard Steinberg, president of Steinberg Global Asset Management. Rich, nice to have you back.
RICHARD STEINBERG, PRES., STEINBERG GLOBAL ASSET MANAGEMENT:
Good to see you, Susie.
GHARIB: Tell us, large stocks over small stocks and growth stocks over value. What`s your thinking?
STEINBERG: The last two or three years there`s been an enormous move in mid cap and small cap. And we think that endowments and large institutional investors will start to make the shift back to the large cap area and we`re seeing much better fundamentals on the growth side of the equation as opposed to value. And that would be defined by the, S&P 500 growth index.
GHARIB: All right. Let`s go and review some of the stocks that you recommended to us when you were last here back in February and going down to list, Anheuser-Busch. That was one of your picks. It was $48.53 the last time you were here. It`s gone down a notch. I understand you still are holding it. Why so?
STEINBERG: We own Bud still. We think it`s a great franchise. Warren Buffet has come in, has taken a large position in the stock. The beverage stocks are unwanted and unloved. This is the time to buy good brands and you own them.
GHARIB: What about gold? You had a nice move there, it`s up now what, over 50.
STEINBERG: Gold`s over $500 an ounce. We`re still gold bugs. We think you could see $600 by next year. Gold will outperform bonds and that should be a position people continue to hold.
GHARIB: All right and Leucadia National also up from where it was back in February, a nice move there. Are you still holding on to this one?
STEINBERG: Yes. This is a mini Berkshire Hathaway. We still own it, Ian Cummings and Joe Steinberg -- no relation -- are very, very sharp operators. The difference with them is they`re willing to sell anything at any price.
GHARIB: What about Comcast, Rich?
STEINBERG: I`m still recommending that. We`ll talk about it a little bit later. This is a great cable name, another unwanted, unloved area. Stocks down, this is the time to double up on this name.
GHARIB: All right. Let`s talk a little bit more about it in the terms of your new picks. You still have this on your list as a stock for investors to buy in. Give us your thinking on this one.
STEINBERG: $2.75 in cash flow, $4 and we think the stock is probably a 30 to 40 percent mover from here. People don`t care yet but voiceover IP, digital cable, this is a big deal and these guys have pricing power now.
GHARIB: So today it closed around the $27 level. What`s your target then on it?
STEINBERG: We have a $38 target. Again, Warren Buffett is now an investor in this. We`re just a couple months ahead of the Berkshire Hathaway team in some of these names.
GHARIB: All right. Let`s talk about some of your other new names. First on your list, Johnson & Johnson.
STEINBERG: Johnson & Johnson just did a great, great maneuver by buying Guidant 15 percent below their original price. These are great execution guys. In the health care area, we`re favoring device and supply companies over the large pharma names like Merck and Pfizer.
GHARIB: And so even though the stock has been a little bit in a downdraft there, that`s not of concern to you.
STEINBERG: Arbitrage related, $3.80 in earnings, I think you could see $80 in the stock.
GHARIB: OK. What about this Genworth Financial? It was just added to the S&P 500 today.
STEINBERG: We got a little bit of a boost this week. This was the insurance arm of GE that was spun off. GE still owns 20 percent. They have a billion dollars in excess capital. They`re in life insurance, health insurance, annuities. It`s a great cash flow business and they`re much cheaper than the rest of their peer group and this is a name that`s high quality that people should own in insurance.
GHARIB: And now your last pick, this one had a very nice move today, Zimmer Holdings. What`s going on over there?
STEINBERG: Zimmer Holdings is a med device company in the hip replacement, knee replacement type of business. We`re a little bit early this morning but they had great news coming out of the Merrill conference today. The stock was very depressed because of pricing and now we think that it`s on its move up. I wouldn`t be a buyer with this huge move today, but if it pulls back a little bit, I think you could see the stock back in the high 70s to low 80s. This is a name that you`ll see consolidation in.
GHARIB: All right. I hope everybody`s taking notes on this. Rich, do you own any of these stocks personally? What`s your firm`s relationship?
STEINBERG: We own all these names with the firm. I own none of them personally.
GHARIB: Rich, always a pleasure to have you on the program, thank you so much.
STEINBERG: Great to see you, Susie.
GHARIB: We`ve been speaking with Richard Steinberg, president of Steinberg Global Asset Management.
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.
12/02/05: "Last Word"-Holiday Shoppers Are Expected To Snap Up Santa Snapshots This Year
SUSIE GHARIB: And finally tonight, here`s a bullish holiday indicator. Sales of children`s photos with Santa are likely to increase 9 to 10 percent this season. Bear Stearns says 40 percent of all Santa photo sales come in the last two weeks before Christmas, with the average tab running just over $18. Part of the data comes from the Noerr Program. This is a Colorado-based program that supplies mall Santas. And Noerr says that Santa snapshots are becoming a growth business with the help of digital technology. And Jeff, it`s pretty obvious, you know, that technology makes it easy to make and sell photos, Christmas cards and even CDs of your kids for the holidays. So it`s a growth industry.
YASTINE: Don`t forget the T-shirts and the coffee mugs.
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.
12/02/05: The Week Ahead
SUSIE GHARIB: Here`s a look at what`s happening next week. Our Friday market monitor guest is Jeffrey Everett, the chief investment officer at Templeton Global Advisors. On the economic calendar: Monday, the Institute of Supply Management`s November non-manufacturing index comes out; Tuesday, third quarter productivity and October factory orders; Wednesday, weekly oil and gas inventories; Thursday, weekly jobless claims; and then on Friday, the University of Michigan`s preliminary December consumer sentiment index and also October`s wholesale trade numbers.
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.
12/02/05:
"Paul Kangas' Stocks In The News"
JEFF YASTINE: Today`s employment report failed to inspire much enthusiasm among traders in a mostly sideways session. The Dow succumbed to profit-taking pressures following yesterday`s triple digit advance. The NASDAQ remained range-bound, but more gains in semiconductor stocks once again provided support there. The Dow finished out the day falling 35 points to 10,877 1/2 and this week, the Dow fell in four out of the last five sessions for a net overall loss of about 54 points.
The NASDAQ Composite rising over six points to 2,273 and that index was down on Monday and Tuesday, but advanced in the last three sessions for an overall gain of 10 1/3 points. The S&P 500 index climbing a fraction to 1,265 and today`s employment report had little effect on bonds, the 10-year note ending unchanged at 99 28/32, the yield at 4.52 percent.
We start things off with General Electric (GE) losing $0.25.
Nortel Networks (NT) slipping a fraction.
Motorola (MOT) dropping $0.61.
And there`s Time Warner (TWX) gaining $0.11. Now the "Financial Times" reports that Carl Icahn and other dissident shareholders want to split Time Warner off into four units: cable, Internet, publishing and a movies and television unit.
Hewlett-Packard (HPQ) ending off $0.33.
And Pfizer (PFE) slipping $0.08.
Wyeth (WYE) though gaining $2. Wyeth is set to reach a settlement with Teva Pharmaceuticals which wants to sell a generic version of a Wyeth anti-depressant drug.
AT&T (T) losing $0.23. AT&T will receive $902 million as a payment from the IRS, part of a deal to settle claims that date back to the late 1990s and separately, AT&T`s 12,000 union workers authorized a strike if they cannot reach a deal by December 10th with the company.
Ishares - Japan (EWJ) showing little movement, but the Nikkei index rising about 15,400 for the first time in five years this morning.
Texas Instruments (TXN) picking up $0.26, part of a strong semiconductor group today.
Shares in Boston Scientific (BSX) rising $0.65. Takeover speculation that perhaps Abbott Labs or GE`s healthcare division might buy the company. Abbott Labs rejecting that idea. GE and Boston Scientific not commenting on those market rumors.
Shares in Zimmer Holdings (ZMH) getting a nice lift. The stock climbing over $5. Executives giving a convincing presentation at an investment conference yesterday regarding pricing pressures and slowing growth for implant (ph) devices. There`s also some talk about consolidation among implant makers.
And speaking of that, another medical device maker, Smith & Nephew Plc (SNN) jumping nearly $2. Again, rumors that Johnson & Johnson is weighing a buyout of that company.
Verifone Holdings (PAY) gained $0.95. Fourth quarter profits tripled from year ago levels for that company.
And Valeant Pharmaceuticals (VRX) advancing $1.36. It acquired a new hepatitis drug Intergen, which analysts think could provide significant growth for the firm.
Now for a big loser, Quanex (NX) tumbling nearly $7 or 11 percent. Fourth quarter profits doubled, but executives see lower first quarter profits of $0.70 to $0.80 a share. Analysts were projecting earnings of $1.20 a share.
And here`s a look at a new issue, DCP Midstream Partners LP (DPM). It finished up $1.55. This is a natural gas pipeline operator created by Duke Energy and Conoco Phillips who went public with nine million shares priced at $21.50 each.
Now let`s turn over to the NASDAQ where shares in Google (GOOG) continued a bit of rebound, climbing $3.61.
Apple Computer (AAPL) rising a little over $1.
Intel (INTC) gaining $0.25.
Microsoft (MSFT) advancing $0.12.
Cisco Systems (CSCO) losing a nickel.
Sandisk (SNDK) falling $1.57.
And Dell (DELL) losing just a fraction.
Adobe Systems (ADBE) gaining $1.09. Foreign antitrust regulators have given their stamp of approval to Adobe`s purchase of Macromedia and that $3.4 billion deal was approved by U.S. regulators in October. Adobe believes the acquisition will give it a leg up on Microsoft as those two companies face off over online publishing and video viewers.
Ebay (EBAY) gaining $0.23.
Yahoo! (YHOO) advancing $0.14.
And here`s a look at Omnivision Technologies (OVTI) which jumped more than $3. This specialty semiconductor company reporting an earnings gain of more than 25 percent. Net income rising $0.41
MTR Gaming Group (MNTG) advancing $2. The CEO and executive VP offering to take that company private at $9.50 a share.
And Inspire Pharmaceuticals (ISPH) falling $2.50. The company not getting its chronic dry eye disease treatment or it was rejected rather by the FDA.
And finally, over on the American exchange, shares in Foodarama Supermarkets (FSM) bolted over $12 higher. The super market`s chain founder has offered to take it private at $52 a share.
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.
12/02/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10877.51 -35.06 - .3
HIGH 10921.37
LOW 10861.66
NASDAQ COMP. 2273.37 +6.20 +.3
HIGH 2273.61
LOW 2261.13
VOLUME 1,528.9
PREVIOUS 1,891.1
UP VOLUME 717.0
DOWN VOLUME 780.8
DOW TRANSPORTS 4138.55 -19.38 - .5
DOW UTILITIES 403.03 -.24 - .1
CLOSING TICK +1011
S&P 500 1265.08 +.41 + .0
S&P 100 579.61 -.61 - .1
MIDCAP 400 745.34 -.08 - .0
REUTERS/CRB 323.38 +2.67 + .8
NYSE COMPOSITE 7760.85 +4.31 + .1
VALUE LINE 418.09 +.38 + .1
RUSSELL 2000 690.57 +.36 + .1
DJW 5000 12692.76 +7.66 + .1
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 8/32 unch 4.44
10-YEAR NOTE 4.50%
Nov. 15,2015 99 28/32 unch 4.52
30-YEAR NOTE 5.375%
Feb. 15, 2031 109 21/32 +1/32 4.72
LEHMAN BROS.
LONG BOND INDEX 1740.68 +4.68
DOW CLOSE 10877.51 -35.06 - .3
ADVANCES 1767
DECLINES 1567
NEW HIGHS 214
NEW LOWS 41
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
GE General Electric 35.50 -.25 -.7
NT Nortel Networks 3.05 -.03 -1.0
MOT Motorola 23.59 -.61 -2.5
TWX Time Warner 18.27 +.11 +.6
HPQ Hewlett-Packard 29.23 -.33 -1.1
PFE Pfizer 21.30 -.08 -.4
WYE Wyeth 43.20 +2.00 +4.9
T AT&T 25.07 -.23 -.9
EWJ iShares - Japan 12.74 -.01 -.1
TXN Texas Instrument 34.11 +.26 +.8
NASDAQ CLOSE 2273.37 + 6.20 + .3
VOLUME 1,815.3
PREVIOUS 2,093.0
ADVANCES 1618
DECLINES 1408
NASDAQ ACTIVES
GOOG Google 417.70 +3.61 +.9
AAPL Apple Computer 72.63 +1.03 +1.4
INTC Intel 27.43 +.25 +.9
MSFT Microsoft 28.01 +.12 +.4
CSCO Cisco Systems 17.64 -.05 -.3
SNDK Sandisk 47.75 -1.57 -3.2
DELL Dell 30.82 -.01 -.0
ADBE Adobe Systems 34.97 +1.09 +3.2
EBAY eBay 45.19 +.23 +.5
YHOO Yahoo! 41.21 +.14 +.3
AMEX CLOSE 1726.45 + 16.97 + 1.0
INDEX SHARES
DIA DIAMONDS TRUST 108.82 -.26 -.2
QQQ NASDAQ 100 42.11 +.10 +.2
SPY S&P DEP.RECEIPTS 126.89 +.20 +.2
STOCKS IN THE NEWS
BSX Boston Scientific 27.33 +.65 +2.4
ZMH Zimmer Holdings 69.66 +5.44 +8.5
SNN Smith & Nephew 47.02 +1.86 +4.1
PAY Verifone Hldgs 24.20 +.95 +4.1
VRX Valeant Pharma 17.82 +1.36 +8.3
NX Quanex 54.65 -6.77 -11.0
DPM DCP Midstream 23.05 +1.55 +7.2
OVTI Omnivision Tech 21.56 +3.31 +18.1
MNTG MTR Gaming 9.73 +1.84 +23.3
ISPH Inspire Pharma 4.90 -2.53 -34.1
FSM Foodarama Super 49.50 +12.50 +33.8
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