12/07/05: Ford's Way Forward May Be Through Pink Slips & Plant Closings
SUSIE GHARIB: Big changes could be coming to another big
Detroit auto maker. This time it`s Ford. The auto maker is preparing to
announce massive layoffs and will close several plants according to a
report in today`s "Detroit News." Just a few weeks ago, General Motors
announced a similar restructuring. Erika Miller reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Ford`s board
of directors is meeting today and tomorrow to consider the long-awaited
restructuring plan, but the company is planning to wait until next month to
formally unveil the proposal that it`s calling quote, the way forward.
Already, many analysts are predicting deep job cuts and plant closings
similar in magnitude to what GM announced last month. According to
published reports, Ford could slash up to 30,000 hourly jobs within five
years. The plan also reportedly calls for closing at least 10 assembly and
component plants within that timeframe. If the turnaround plan is along
these lines, analysts say it would painful, but necessary, medicine.
LINDA BANNISTER, AUTO ANALYST, EDWARD JONES: Ford has not posted
an annual profit in its automotive division since 2000, so Ford is dealing
with a situation where its costs are too high, given the number of cars it
is selling. It needs to be smaller and it needs to be significantly
smaller.
MILLER: Edward Jones has done investment banking business with Ford
in the past 12 months. Ford has been struggling with many of the same
financial issues plaguing its larger rival GM. A big problem is eroding
margins as a result of skyrocketing employee healthcare and raw materials
costs. Both auto makers are also grappling with declining U.S. market
share and excess plant capacity. Ford, for example, is using around 86
percent of its North American assembly plant production capability. By
contrast, rival Toyota is running at full capacity. Ford stock rose today,
but it is still down more than 40 percent this year. Some analysts say
steer clear of the shares.
BANNISTER: We have a sell recommendation on Ford equity. We
believe that the domestic auto situation will continue to be competitive
and we believe Ford is at a disadvantage because of its cost structure and
its lack of new products in the pipeline.
MILLER: Experts say Ford`s turnaround plan is likely to take many
years and they say all units and all personnel are vulnerable to cutbacks.
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.
12/07/05: One On One With John Thain, N.Y.S.E C.E.O.
SUSIE GHARIB: Soon, there will be a new ticker symbol trading here at the
New York Stock Exchange, "NYX". The company, the New York Stock Exchange
itself, whose members overwhelmingly approved yesterday plans to take the
exchange public. A short while ago, I talked with NYSE CEO John Thain and
asked him what`s the biggest advantage for being a public company.
JOHN THAIN, CEO, NYSE: The most important thing about going public
is it gives us a currency so that we can participate in the consolidation
that`s going to take place both in the U.S. and globally.
GHARIB: So you are talking acquisitions. What kind of acquisitions
can we expect from the NYSE?
THAIN: There is too much fragmentation in the U.S. market today.
The cash markets are separated from the options market, which are separated
from the futures markets. And there`s probably too many different
individual markets. So there`s a lot of opportunity to consolidate in the
U.S. There`s a lot of opportunity to take costs out because it is expensive
to run all these different marketplaces. And by having a currency, by
having a publicly traded stock, it will put us in a position to participate
in that consolidation.
GHARIB: Why should investors care about all these changes?
THAIN: Well, one of the things we are going to give investors is a
greater degree of choices. The second is we`ll make it easier for them to
trade multiple products. So if you wanted to trade cash stock, but you
also wanted to trade an option, we`ll make it easier for you to do that.
We`ll bring the cost structure down.
GHARIB: So what does that mean for the price of trades? Are they
going to come down?
THAIN: Well, there has been a very rapid decline in the cost of
trading and I think that`s going to continue. Part of that is
competitively driven. Part of that is technology driven.
GHARIB: So John, do you think that the New York Stock Exchange
stock should be a core holding for investors?
THAIN: Well, you know, buying NYSE stock is buying part of the
heart of America`s financial system. We have 2,780 companies listed here.
The market value of the stocks that trade here is over $20 trillion U.S.
We`re the largest equity market in the world by a factor of five. To own a
piece of this marketplace, to participate in the growth in this marketplace
is a great opportunity.
GHARIB: How do all these changes that you`ve been talking about,
the position, the NYSE competitively with -- especially its largest rival,
the NASDAQ?
THAIN: I`m not sure that our largest rival is NASDAQ going
forward. I actually am more concerned about what`s going on in Europe with the
Deutsche Bourse or Euromax (ph) than I am with NASDAQ. They are bigger.
They are - have a broader product mix. They have very large market
capitalizations. This transaction gives us a currency. It gives us a
broader mix of products and our market value based on market share price
will be around $9 billion U.S. So we will be very competitive on a global
scale.
GHARIB: As you know, John, there`s a lot of concern about whether
the New York Stock Exchange will continue regulating itself. What are your
thoughts on this?
THAIN: Part of the value of the New York Stock Exchange business is
the trust, is the reputation, is the integrity of the marketplace. That`s
true for listed companies. That`s true for investors. So having a good,
strong, regulatory function, having an independent regulatory function, is
also good for the business of the exchange because it reinforces investor
confidence and investor trust.
GHARIB: We all know that using more technology means using fewer
people, means less jobs. Does this, all these changes lead to the end of
floor traders of the New York Stock Exchange as many people fear?
THAIN: Not at all and here is why. First of all, what technology
really lets us do is trade more volume. So what I think will happen is
that the volume will grow. We will trade more share volume. But we`ll
maintain the, really, the value added that the floor brings. Of the 2,780
companies that trade here, probably only a couple of hundred are liquid
enough to trade electronically at least some of the time. The rest of
those companies really do need people. They need the specialists. They
need the floor brokers to get those stocks to trade better.
GHARIB: So what do you think the NYSE will look like 10 years from
now?
THAIN: Well, 10 years is a very long time. But I think that
certainly for the foreseeable future, we will continue to have a vibrant
floor with people adding value to their customers, deciding when to buy,
when to sell, being able to offer price improvement for their customers,
being able to really make the auction process, discover the fair prices for
buyers and sellers. And we`ll also have a huge amount of technology that
allows people, if they want to, to trade instantaneously and electronically
and what I really believe will happen is we`ll get a dramatic increase in
volume.
GHARIB: So, ultimately, are you saying beyond the foreseeable
future that it is possible that there will not be floor traders.
THAIN: No. If you look at other exchanges, has that happened?
Sure. Do I think that`s going to happen here? No.
GHARIB: John, thank you very much.
THAIN: You are welcome.
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.
12/07/05: Finding Tax Breaks & Shields Is Becoming Taxing
PAUL KANGAS: The House voted today to keep the alternative minimum tax
from hitting millions of middle income taxpayers. Tomorrow, lawmakers will
vote on a broader tax package that includes extending lower rates for
dividends and capital gains. But as Stephanie Dhue reports, it`s getting
harder to find the money to pay for tax breaks.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Republican
leaders are struggling to keep cutting taxes in the face of higher budget
deficits. They say extending lower tax rates on capital gains and
dividends will boost the economy.
REP. ERIC CANTOR, (R) VIRGINIA: These are not, as the Democrats
may say, tax cuts for the rich. I see them as tax cuts for job creation.
DHUE: In passing a stopgap measure to limit the reach of the
alternative minimum tax, the ranking Democrat on the Ways and Means
Committee accused Republican leaders of trying to hide the true cost of
proposed tax cuts they`ll be bringing to the floor tomorrow.
REP. CHARLIE RANGEL, (D) NEW YORK: I think the American people
ought to know that it`s either going to cut deeper into the social programs
that the very poor have had taken away from them or it`s going to increase
the deficit.
DHUE: Treasury Secretary John Snow argues tax cuts need not come at
the expense of deficit reduction.
JOHN SNOW, TREASURY SECRETARY: The important thing is to keep that
low tax environment in place, protect America from tax increases, and
that`s what that legislation is all about. We`re going to do that
consistent with this commitment to cut the deficit in half.
DHUE: While it`s unclear if the House and Senate will be able to
pass a package of tax cuts this year, some analysts say a strong economy
may improve the outlook for cuts later.
GREG VALLIERE, STANFORD WASHINGTON RESEARCH: There are many,
including myself, who think that the deficit numbers next year will look
much better. Receipt growth is the big story and I think when Congress
comes back early next year, we`ll have deficit estimates that are quite a
bit lower. That`ll make it easier to get some further tax reduction.
DHUE: Analysts expect Congress to take final action on at least
some of the tax breaks before recessing for the holidays, but many don`t
expect a resolution on the extension of lower rates on capital gains and
dividends until the New Year. 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.
12/07/05:Kevin McCormally's
"Year-End Tax Tips" - Give & You Shall Receive
SUSIE GHARIB: In our year-end "Tax Tips" segment tonight,
why it`s better to give than to receive, especially when it
comes to the taxman. Here`s Kevin McCormally, editorial director
of Kiplinger`s.
KEVIN MCCORMALLY, EDITORIAL DIR., KIPLINGER'S : Tonight,
I want to focus on how giving in to the tug of generosity
this time of year can lighten your tax load. First, if you
plan a substantial charitable gift, consider giving appreciated
securities rather than cash. If you`ve owned the stock or
mutual fund shares for more than a year, you get to deduct
the full market value at the time of the gift but you don`t
have to pay capital gains tax on the appreciation. That supercharges
the tax benefit. And if you don`t really want to part with
the stock, you can buy back the shares in the open market
and start the tax clock fresh. Now, if you`re thinking of
giving away a car this December, remember that new rules apply
this holiday season. In most cases, your write-off is limited
to what the charity gets when it sells your vehicle. That
means you`re stuck with the lower wholesale value rather than
the fair-market or retail value that you could deduct in the
past. Although it`s more work for you, both you and the charity
would probably do better if you sell the car and make a cash
donation. Finally, as part of its efforts to help in the wake
of hurricane Katrina, Congress lifted a couple of restrictions
on charitable contributions. One generally limits write-offs
to no more than 50 percent of adjusted gross income. Another
reduces the value of deductions by 3 percent of the amount
by which your AGI exceeds about $146,000. But this year, cash
gifts made between August 28 and December 31, when added to
earlier gifts, can be deducted up to 100 percent of AGI. And
contributions made during that same period aren`t trimmed
by the 3 percent haircut, either. So if you have the will
and the means, the law is making it easier for you to give
big and deduct big this year. I`m Kevin McCormally.
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.
12/07/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Wall Street started the day on the defensive thanks to
early weakness in General Motors stock, higher interest rates and rising
oil prices. Around 11:00 a.m., the Dow was off 25 points. NASDAQ was down
about eight. A sell-off in financial and housing stocks this afternoon
helped send the Dow down almost 100 points, but an easing in oil prices
trimmed the losses by the final bell. The Dow Industrial Average closed
down just about 46 points at 10,810.91. The NASDAQ Composite fell 8 3/4
points ending at 2,252.01. And the Standard & Poor`s 500 Index down about
6 1/3 points to 1,257.37. Over in the bond market, the 10-year note fell
8/32 to 99 28/32, putting the yield at 4.52 percent.
Most active big board issue on 20.2 million shares, International Coal
Group (ICO) down $0.43. The company priced a 21 million share offering of
its common stock at $11. The proceedings will be used to cut debt and fund
acquisitions.
Pfizer (PFE) dropped $0.04.
General Electric (GE) $0.23 drop.
Time Warner (TWX) fell $0.13.
XL Capital Ltd (XL) up $0.90. The company said it`s planning to sell
about 34 million of its shares at a price of $65.
General Motors (GM) a $0.65 gainer. Later today, the company said it`s
in talks with Kirk Kerkorian`s Tracinda (ph) Corp., owns 9.9 percent of GM
stock to put a representative on the board of directors at GM.
ExxonMobil (XOM) down $0.67.
Ford Motor Co (F) and there you see it, up $0.09.
Ishares of Japan (EWJ) dropped a nickel.
And tenth in volume Johnson & Johnson (JNJ) losing $0.43.
Newmont Mining Corp (NEM), the granddaddy of the golds, up $0.84 on
the close, but it traded as high as 50 1/2 today. And of course as you saw,
New York February gold at $517.80 and now it`s up $4 today. Let`s look at
some others in the group.
Anglogold Ashanti (AU) doing well.
And Glamis Gold (GLG), these are both two new highs for each of those
stocks.
The housing industry on the other hand, those stocks were down.
Several reports out today predicting a pull back in the housing market next
year. DR Horton (DHI) down $1.37 on that news.
Beazer Homes (BZH), Hovnanian Enterprises (HOV), KB Home (KBH) and
Lennar (LEN) all significantly lower today.
ITT Industries (ITT) down $8.34. The company`s in fluid controls and
electronics, things like that. Prudential downgraded it from "overweight"
to "neutral" on concern that next year`s revenues may fall significantly
due to cuts in U.S. defense spending.
On the upside, EW Scripps co (SSP) rising $0.82, traded as high as
$48.10 today on news its stock will replace Georgia Pacific in the Standard
& Poor`s 500 after the close on the 15th of December.
Navigant Consulting Inc (NCI) up $1.69. Index fund in there buying
(ph) This stock will be added to the Standard & Poor`s madcap 400 index
after the close this Friday, the 9th, replacing York International which of
course is being acquired.
Federated Dept Stores (FD) rose $1.75. UBS Financial brokerage began
coverage with a "buy" recommendation.
And then Angelica Corp (AGL) rising $1.77. This company provides linen
management services to the U.S. healthcare industry and the company says it
sees significantly higher earnings next year.
Amrep Corp (AXR), this is a real estate developer up $2.29. The
company declared a special cash dividend of $3.50 per share.
Volume leader on NASDAQ as it so often has been Google (GOOG) down
$0.32.
Apple Computer (AAPL) a dime loss.
Cisco Systems (CSCO) moved up $0.22.
Intel (INTC) $0.52 loss there.
And Microsoft (MSFT) edged up $0.06, fifth in dollar volume on NASDAQ.
Dell (DELL) a $0.12 gain.
Yahoo! (YHOO) $0.08 loser.
$0.36 drop in Ebay (EBAY).
Amgen (AMGN) fell $0.77.
And Oracle Corp (ORCL), tenth in volume was down a penny.
Spherix Inc (SPEX), look at that percentage gain, up $1.17. The FDA
has approved late stage trials for the company`s diabetes treatment.
Then we see Hurco Companies (HURC), this is involved in computer and
software, up $4.50. Fourth quarter earnings more than doubled from last
year, $0.77 versus $0.36 then and sales up 20 percent.
Sigmatel (SGTL) a $2.03 loss. The company designs and markets
integrated circuits. The Thomas Wiesel (ph) brokerage downgraded it from
"out perform" to "peer perform" on concerns flash memory chip shortages
could hurt fourth quarter results.
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.
12/07/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10810.91 -45.95 - .4
HIGH 10868.06
LOW 10764.01
NASDAQ COMP. 2252.01 -8.75 -.4
HIGH 2264.91
LOW 2244.62
VOLUME 1,584.3
PREVIOUS 1,603.5
UP VOLUME 543.6
DOWN VOLUME 1,012.5
DOW TRANSPORTS 4110.25 -18.24 - .4
DOW UTILITIES 401.09 -2.97 - .7
CLOSING TICK +289
S&P 500 1257.37 -6.33 - .5
S&P 100 575.85 -2.80 - .5
MIDCAP 400 738.90 -3.14 - .4
REUTERS/CRB 324.66 +.37 + .1
NYSE COMPOSITE 7731.28 -44.57 - .6
VALUE LINE 414.98 -1.97 - .5
RUSSELL 2000 683.01 -4.57 - .7
DJW 5000 12606.18 -61.39 - .5
U.S. TREASURIES
5-YEAR NOTE 4.50%
Nov. 15,2010 100 8/32 -4/32 4.44
10-YEAR NOTE 4.50%
Nov. 15,2015 99 28/32 -8/32 4.52
30-YEAR NOTE 5.375%
Feb. 15, 2031 109 21/32 -17/32 4.72
LEHMAN BROS.
LONG BOND INDEX 1743.35 -4.04
DOW CLOSE 10810.91 -45.95 - .4
ADVANCES 1223
DECLINES 2151
NEW HIGHS 114
NEW LOWS 83
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
ICO Intl Coal Group 10.90 -.43 -3.8
PFE Pfizer 21.10 -.04 -.2
GE General Electric 35.57 -.23 -.6
TWX Time Warner 18.12 -.13 -.7
XL XL Capital Ltd 66.55 +.90 +1.4
GM General Motors 23.04 +.65 +2.9
XOM Exxon Mobil 59.02 -.67 -1.1
F Ford Motor Co 8.20 +.09 +1.1
EWJ iShares Japan 12.87 -.05 -.4
JNJ Johnson & Johnson 60.04 -.43 -.7
NASDAQ CLOSE 2252.01 - 8.75 - .4
VOLUME 1,787.9
PREVIOUS 1,603.5
ADVANCES 1151
DECLINES 1875
NASDAQ ACTIVES
GOOG Google 404.22 -.32 -.1
AAPL Apple Computer 73.95 -.10 -.1
CSCO Cisco Systems 17.78 +.22 +1.3
INTC Intel 26.15 -.52 -2.0
MSFT Microsoft 27.75 +.06 +.2
DELL Dell 31.78 +.12 +.4
YHOO Yahoo! 40.11 -.08 -.2
EBAY eBay 44.33 -.36 -.8
AMGN Amgen 79.01 -.77 -1.0
ORCL Oracle 12.51 -.01 -.1
AMEX CLOSE 1749.92 + 2.19 + .1
INDEX SHARES
DIA DIAMONDS TRUST 108.10 -.59 -.5
QQQ NASDAQ 100 41.86 -.08 -.2
SPY S&P DEP.RECEIPTS 126.08 -.74 -.6
STOCKS IN THE NEWS
NEM Newmont Mining 49.59 +.84 +1.7
AU Anglogold Ashanti 45.98 +1.17 +2.6
GLG Glamis Gold 25.04 +.81 +3.3
DHI D.R. Horton 35.06 -1.34 -3.7
BZH Beazer Homes 68.25 -2.90 -4.1
HOV Hovnanian Enterp 48.73 -1.80 -3.6
KBH KB Home 68.27 -2.38 -3.4
LEN Lennar 56.58 -1.78 -3.1
ITT ITT Industries 98.65 -8.34 -7.8
SSP EW Scripps 46.88 +.82 +1.8
NCI Navigant Consult 22.50 +1.69 +8.1
FD Fed Dept Stores 67.71 +1.75 +2.7
AGL Angelica Corp 15.75 +1.77 +12.7
AXR Amrep Corp 27.95 +2.29 +8.9
SPEX Spherix 4.92 +1.17 +31.2
HURC Hurco Companies 27.33 +4.50 +19.7
SGTL Sigmatel 13.65 -2.03 -13.0
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