12/19/05: FPL & Constellation Make A "Power-ful" Connection
SUSIE GHARIB: There`s a power play in the works tonight to
create one of the nation`s largest electric utilities. FPL Group is buying
Constellation Energy for about $11 billion in stock. The combined company,
which will keep the Constellation name, would serve more than six million
electric and natural gas customers in Florida and Maryland. The new firm
is expected to have a market cap of about $28 billion, with annual revenues
slightly below that. The companies say it`s a good strategic fit and the
combination will make an immediate contribution to earnings. Analysts say
it continues a consolidation trend in the energy industry, the third
blockbuster utility merger in the last year.
Well, energy companies aren`t the only ones seeing a pickup in mergers
and acquisitions in 2005. Across corporate America, this is likely to be
the best year for buyouts since 2000 and merger experts are predicting even
more deal-making next year. Suzanne Pratt reports.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: `Tis the season
to celebrate, and this year Wall Street has a big reason to party. Merger
mania is back. Not since the dot-com boom in 2000 have corporate marriages
been so plentiful. According to Thomson Financial, M&A activity will top
$1 trillion this year, compared to $825 billion last year. Five years ago,
U.S. merger volume peaked at a record $1.7 billion. Experts credit the
resurgence in deal-making to relatively low interest rates, which make
banks willing to lend. In addition, they say corporate coffers are fatter
than they`ve been in years.
OLIVER CROMWELL, PRESIDENT, BENTLEY ASSOCIATES: Corporations have
cash on their balance sheets, which make them in good position to make
acquisitions. And I think it adds a psychological boost for them to go out
and make acquisitions.
PRATT: On top of that, cash-rich private equity funds are using their
own financial muscle to bid up prices, often enticing public companies to
go private. Experts say the same themes that spurred M&A activity this
year on Wall Street are likely to continue into next.
CROMWELL: We still see the private equity funds, the corporate funds
and we are increasingly seeing hedge funds in the market making
acquisitions, which is a new factor over the past few years. I think all
those pieces are still in place.
PRATT: This year`s top deals were spread throughout a variety of
industries, but the biggest pairing came in consumer products, with Procter
& Gamble buying Gillette, followed by ConocoPhillips` purchase of
Burlington Resources and Bank of America`s pairing with MBNA. Some M&A
experts predict deals in 2006 will be concentrated in retail, energy and
utilities.
RICHARD PETERSON, SR. RESEARCHER, THOMSON FINANCIAL: The fact that
the energy deregulation that was passed by Congress last year has permitted
non-utilities to make bids or to acquire utility assets. So it`s possible
that next year we could see oil companies, investment banks, private equity
firms make bids for electric utility companies.
PRATT: Most experts say corporate deal-making in 2006 is likely to top
this year`s numbers. But they also say M&A could come to a quick stop if
the economy stumbles badly or interest rates rise too sharply. Suzanne
Pratt, NIGHTLY BUSINESS REPORT, New York.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright
(c) 2005 Community Television Foundation of South Florida,
Inc. ALL RIGHTS RESERVED. Terms of use.
12/19/05: S&P;s Scott Kessler Weighs In On The Google/AOL Deal
SUSIE GHARIB: Billionaire investor Carl Icahn weighed in today on a possible
deal between Google and AOL. He told Time Warner`s board that it could be
on the verge of a quote disastrous decision if it agrees to sell a 5
percent stake in its AOL unit to Google. Joining us now to talk more about
the deal Scott Kessler, Internet equity analyst at Standard & Poor`s. Hi,
Scott.
SCOTT KESSLER, INTERNET ANALYST, STANDARD & POOR`S: Hi, Susie, nice to
be with you.
GHARIB: Nice to have you on the program. So, tell us, would it be
disastrous if Google joins up with AOL as Carl Icahn is suggesting?
KESSLER: Well, it`s our belief that this statement from Carl Icahn is
largely saber rattling. Our sense -- and I don`t cover Time Warner,
another analyst at S&P equity does -- but he believes frankly that
management at Time Warner is doing a decent job at actualizing value and
it`s our sense that Mr. Icahn might want to delay any types of deals
related to investments in AOL until some time next month when he and Lazard
put out some type of valuation assessment at this point.
GHARIB: Well, let`s analyze this a little bit further because Icahn
also says that he doubts whether Google is the best partner to quote unlock
the value of AOL and he said that any deal between Google and AOL would
preclude mergers with other companies like eBay, for example or Yahoo! or
IAC Interactive. Would AOL be better off with one of those companies?
KESSLER: Well, really, the devil is in the details. Clearly what`s on
the table right now is Google investing a billion dollars in AOL that
accounts for about a 5 percent stake in that particular business. It`s our
sense that that`s actually a pretty sizable valuation for the firm given
that, I think, some Wall Street analysts were looking for a valuation
considerably lower than that just a week or two ago. I think the other
benefit that Google brings to the table is that they, unlike Microsoft,
from what we understand, at this point is interested in investing
substantial assets and cash, more specifically in AOL at this point which I
think is something that AOL and Time Warner have an interest in.
GHARIB: Do you think that the Time Warner board is going to approve
this when they meet this week?
KESSLER: Well, you know, it`s interesting. On one hand I think it`s
fair to assume that they think that this offer from Google and the
extension of the contract that the two companies already have really is
better than what Microsoft can offer. And that`s one of the reasons why
the companies have decided to go forward in exclusive negotiations.
However, their pronouncement from Carl Icahn today suggests to me that he
is admonishing the board to be very, very care in these types of
determinations because if they are determined to be unsuitable, then I
think you might see some additional actions on behalf of Carl Icahn and
Lazard, for example.
GHARIB: You know what`s interesting to me, Scott, is not too long ago,
a lot of people were talking about the demise of AOL. Why is it suddenly
such an attractive product that everybody seems to want to have a piece of
it?
KESSLER: I think that`s an excellent and very important question. You
know, it`s interesting, over the last couple of years what people have been
hearing a lot about relative to AOL is every single quarter they see a
decline in their subscription members. And one of the reasons that is is
because people are migrating away from AOL dialup and they`re going to
broadband afforded by cable or DSL access. But what AOL has done over the
last six to 12 months is essentially changed its focus from subscriptions
to online advertising which is booming right now and AOL`s right in the
middle of it. They`re undergoing a transformation and I think a lot of
folks are interested in potentially undervalued assets at AOL.
GHARIB: Apparently so. Let`s talk a little bit about Google stock this
morning. The stock just skyrocketed. It was up more than 3.5 percent. And
then as the day went on and by the close, it was actually down $5 and off
by I guess about -- you know, some 2 percent. So what happened and what`s
your view on Google`s stock? Is it worth it to own it?
KESSLER: Well, our sense is that I think the Street might have been
somewhat rattled not only by the Carl Icahn letter and the proxy statement
filed today, but also the NASDAQ and technology stocks in general took a
dip later in the day. Frankly, we look at Google and say this is a very
good company but it`s reasonably priced right now so our recommendation is
hold. We are not recommending that investors buy it.
GHARIB: Al right. We`re going to have to leave it there. By the way,
in disclosure, do you own Google yourself or your firm?
KESSLER: No, we don`t.
GHARIB: OK great.
KESSLER: No I don`t. Thank you.
GHARIB: Thank you, Scott. We`ve been speaking with Scott Kessler,
Internet equity analyst at Standard & Poor`s.
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.
12/19/05: Congress Gets Productive As The End of The Year Draws Near
PAUL KANGAS: A flurry of activity on Capitol Hill today, as Congress moved
to wrap up work before the Christmas holidays. A laundry list of items was
on the agenda, from oil drilling to terrorism insurance to entitlement
cuts. As Darren Gersh reports, even President Bush took the opportunity to
inject his views into the debate.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The race to wrap
up the congressional session is not always pretty to watch, but it is
looking productive. After decades of debate, Republicans prepared to let
oil companies drill in the Alaskan National Wildlife Refuge. But they did
so by promising to use royalties from the drilling to help states hit hard
by hurricane Katrina and the controversial provision was tucked into a
massive bill to fund the Department of Defense.
SEN. TED STEVENS (R) ALASKA: This bill sells itself. It was approved
by the House overwhelmingly. It has bipartisan support.
GERSH: But some Democrats sounded willing and eager to fight.
SEN. FRANK LAUTENBERG (D) NEW JERSEY: This is a package, a Christmas
package designed for delivery to the oil industry. And we have got to
fight as hard as we can to stop that delivery.
GERSH: The House of Representatives met in a marathon session over the
weekend that ended in the early hours of this morning, passing $29 billion
for Katrina victims, an extension of the terrorism insurance program, and
$40 billion in entitlement spending cuts, the first in a decade.
MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A RESPONSIBLE FEDERAL
BUDGET: The fact that Congress has gone through learning what it is like
to deal with these entitlement programs will only help when they have to
face the real challenges and look at something even bigger than what they
have passed this year.
GERSH: In a news conference dominated by the war in Iraq and questions
over secret wiretaps, the president took time out to talk up the economy
and pitch once again his economic medicine.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: To keep our economy
growing, we need to keep taxes low and make the tax relief permanent. We
must restrain government spending and I am pleased that the House today has
voted to restrain government spending by $40 billion and I urge the United
States Senate to join them.
GERSH: But extending tax cuts is not cheap. It will cost some $70
billion, far more than the spending cuts congressional Republicans hope to
put in place this week. 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.
12/19/05: Commentary: Budget Cuts Aren't Always Something To Celebrate
SUSIE GHARIB: Tonight`s commentator says when it comes to working up a workable
budget, Congress has still a lot of work to do. Here`s Alan Blinder,
partner in the Promontory Group and former vice chair of the Federal
Reserve.
ALAN BLINDER, FORMER VICE CHAIR, FEDERAL RESERVE: If you`ve paid only
sporadic attention to the haggling over the Federal budget in recent weeks,
you may have come away with the impression that Congress was engaged in a
serious struggle over reducing the deficit. Well, not exactly. It is true
that Congress is struggling to reach an agreement. But it`s not serious
and it`s not over reducing the deficit. In fact, the whole budget debate
has taken on a startling aura of unreality.
Remember that infamous bridge to nowhere in Alaska? Yes, it was
cancelled with great fanfare. But was that a victory for fiscal sanity?
Not exactly. The money was simply allocated to other, unspecified projects
in Alaska. It didn`t save taxpayers a dime. Digging deeper, many of the
proposed economy measures are one-shot items or gimmicks that will improve
the budget next year -- which is not very important -- while doing nothing
for the long-run budget picture, which is where the real problem lies.
Most troubling of all, when you get down into the budgetary weeds, you
learn that the tax cuts passed by the House this month are almost twice as
large as the expenditure cuts it passed. Let me repeat that. Despite the
huge budget deficit, the House actually voted to cut taxes by twice as much
as it cuts spending. What are these people thinking? This is a democracy.
So maybe it`s time for the people to send their elected representatives a
message. Earth to Congress: we have a problem. I`m Alan Blinder.
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.
12/19/05: "Gifts & Gadgets"-Picture This
SUSIE GHARIB: All right, you holiday shopping procrastinators -- and you
know who you are. It`s December 19. Time is rapidly running out to get
the things on your gift list. So if you need a few last-minute suggestions
for the shutter bug on your list, here are some suggestions from Scott
Gurvey, as he wraps up his report on gifts and gadgets.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Cameras remain
best sellers this holiday season, with products in a wide range of
capability and price.
JOHN ZITTRAUER, SALES PROFESSIONAL, BEST BUY: The digital camera
demand is always going to be there as well, because the technology keeps
improving and keeps getting more affordable.
GURVEY: It used to be you had to decide between a video camera and one
that takes stills. But now there are several which handle both well. The
Kodak easy share cameras cannot be beat for simplicity. Full-featured
models now cost as little as $200.
Once you`ve captured your image, the fun really starts. For
processing images, you can do no better in terms of quality or price than
the Adobe elements bundle, containing premier elements and Photoshop
elements, priced as low as $130. This package includes a home version of
Adobe premier, a far more expensive professional product. It has most of
the functions of its big brother to help you produce your movies and burn
them to DVD. The package also contains Photoshop elements, a home version
of Adobe`s industry leading professional tool for still pictures.
Ease of us is the key to Microsoft`s $90 digital image suite.
Automatic correction of defects like red eye are this product`s specialty.
Both Adobe and Microsoft make it easy to keep track of the images you have
on your computer.
ANNMARIE THOMAS, MARKETING MANAGER, MICROSOFT: What digital image suite allows you to do is organize them in a way
that`s meaningful for you, so that you can find that one picture or find a
dozen pictures from one particular year and share them with your family and
friends -- because let`s face it, a picture is only valuable if you can
find it.
GURVEY: These products also excel at printing chores, with a multitude
of projects you can make with your images. Sharing images online is also a
big deal this year. There are scores of sites offering this service. Most
also have photo gifts and printing available. I`ve found two good ones,
Shutterfly and Snapfish.
You can also display and share images with electronic screens like the
Ceiva digital photo receiver. Upload your pictures to the Ceiva web site.
The receivers plug into a standard telephone jack and download the images
automatically. For $160, you can get two: one for you and one for the
grandparents.
And if you need an easy way to carry your images around, try the store
`n go U-3 smart drive from Verbatim. This one-gigabyte gadget actually
lets you make any PC your own, because it stores applications and settings
as well as your data. It sells for about $80. Happy holidays. 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
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.
12/19/05: "Paul Kangas' Stocks In The News"
PAUL KANGAS: Blue chip stocks moved higher this morning paced by Pfizer on
a patent victory we told you about Friday and there was also a brokerage
upgrade on Merck. That FPL/Constellation merger was another plus. So just
before noon, the Dow was up 35 points, but the NASDAQ was off 5 points.
Weak tech stocks dragged the blue chips down this afternoon, as did a
homebuilders` survey showing a drop in positive sentiment. The Dow
industrial average closed with a loss of 39 points at 10,836.53. The
NASDAQ Composite tumbled 29 3/4 points ending at 2222.74. Standard &
Poor`s 500 down 7.40 at 1259.92. Over in the bond market, the 10-year note
slipped 1/32 to par and 15/32, putting the yield at 4.44 percent.
New York exchange volume leader for the seventh consecutive session,
Pfizer (PFE) today on 81.4 million shares, the stock traded as high as
$25.18. Of course the upholding of its patent on Lipitor prevents generic
competition for the next five to six years and Citigroup boosted its target
price to $26 a share.
Then came Merck & Co (MRK) up $2.24. Deutsche securities upgraded
Merck from "hold" to "buy" and Citigroup did too.
Lucent Technology (LU) $0.07 gainer there.
A nickel loss in Time Warner (TWX). We`ll have more on that later. You
already heard a good deal of it today.
General Electric (GE) down $0.24 a share. That was fifth in volume.
Ford Motor (F) a $0.07 loss there.
Conocophillips (COP) rose $1.25.
ExxonMobil (XOM) down $0.36 in a mixed oil group.
Schering-Plough (SGP) another strong drug stock, up $0.97 in sympathy
with Pfizer and Merck.
And then tenth in big board volume, Verizon Communications (VZ) with a
$0.03 gain.
Caterpillar (CAT), the biggest point loser in the Dow industrial
average, off $2.81. There`s concern the economy may be slowing just like
its truck sales and engine sales have in the last several months. So down
went that stock.
Bank of America (BAC) was off $0.44. Prudential downgraded it from
"over weight" to just a "neutral" rating.
On the upside, Tektronix (TEK) gained $2.07. Last week, late in the
week, second quarter operating earnings were reported, $0.31, down from
$0.39 the year before, but $0.03 above the Street consensus and today, Bank
America upgraded Tektronixs from "neutral" to a "buy."
Circuit City Stores (CC) did well, up $1.45, a real turnaround. Third
quarter earnings of $0.06 versus a loss of $0.03 in the same period a year
ago. Those earnings $0.02 above the Street consensus and U.S. same store
sales rose 13 percent. The company boosted its 2006 revenue growth forecast
on top of all of that.
Clorox co (CLX) up nearly $2 a share. The company boosted its second
quarter earnings guidance by about $0.03 to as much as $0.49 a share.
On the downside, Alcon (ACL) lost $6.17. A judge has upheld a May
2005 decision that the company infringed on Advanced Medical Optics patents
and awarded $214 million in damages against Alcon to Advanced Medical
Optics.
Google (GOOG) topped the active list losing $5.55 on the closing bell.
Earlier in the day, it was up as high as $4.46 21 (ph). It was added after
the close to the NASDAQ 100 Index but then the stock fell after you heard
dissident Time Warner shareholder Carl Icahn express his disenchantment for
the possible sale of 5 percent of AOL to Google.
Microsoft (MSFT) $0.07 drop.
$0.27 gain in Apple computer (AAPL).
Intel (INTC) a $0.60 drop.
And then Oracle (ORCL) down $0.37.
Sandisk (SNDK) up $1.68.
A nickel drop in Cisco Systems (CSCO).
Yahoo! (YHOO) off $1.27.
Dell (DELL) $0.65 loss.
And Amgen (AMGN) off $1.36.
Ault Incorporated (AULT) which deals with power conversion products is
going to be bought out for $2.90 a share in cash by SL Industries.
And Pharmacyclics (PCYC), that`s a huge loss of $5.90. The company`s
cancer treatment failed to reach its end point in late stage trials.
And over on the American Exchange, Access Integrated Technology (AIX)
got a contract to install 2,300 digital cinema projection systems for
Carmike Cinema.
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.
12/16/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10875.59 -6.08 - .1
HIGH 10940.34
LOW 10869.27
NASDAQ COMP. 2252.48 -8.15 -.4
HIGH 2263.89
LOW 2251.67
VOLUME 2,090.3
PREVIOUS 1,612.5
UP VOLUME 1,008.5
DOWN VOLUME 1,051.6
DOW TRANSPORTS 4142.49 -3.28 - .1
DOW UTILITIES 417.82 -.07 - .0
CLOSING TICK +216
S&P 500 1267.32 -3.62 - .3
S&P 100 579.08 -1.77 - .3
MIDCAP 400 742.16 -3.83 - .5
REUTERS/CRB 326.36 -2.25 - .7
NYSE COMPOSITE 7814.00 -1.71 - .0
VALUE LINE 416.46 -.97 - .2
RUSSELL 2000 683.09 -1.65 - .2
DJW 5000 12688.71 -35.77 - .3
U.S. TREASURIES
5-YEAR NOTE 4.375%
Dec. 15,2010 100 3/32 +3/32 4.35
10-YEAR NOTE 4.50%
Nov. 15,2015 100 16/32 +7/32 4.44
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 25/32 +11/32 4.65
LEHMAN BROS.
LONG BOND INDEX 1755.19 + .87
DOW CLOSE 10875.59 -6.08 - .1
ADVANCES 1615
DECLINES 1724
NEW HIGHS 142
NEW LOWS 77
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 22.58 -.21 -.9
TWX Time Warner 18.00 +.16 +.9
GE General Electric 36.06 +.06 +.2
C Citigroup 49.37 +.27 +.6
XOM Exxon Mobil 58.06 -1.43 -2.4
LU Lucent Tech 2.83 +.02 +.7
MOT Motorola 22.41 -.41 -1.8
S Sprint Nextel 24.53 -.37 -1.5
Q Qwest Comms Intl 5.92 +.10 +1.7
PG Procter & Gamble 58.11 -.88 -1.5
NASDAQ CLOSE 2252.48 - 8.15 - .4
VOLUME 2,562.2
PREVIOUS 1,819.8
ADVANCES 1384
DECLINES 1657
NASDAQ ACTIVES
GOOG Google 430.15 +7.62 +1.8
ORCL Oracle 12.69 -.14 -1.1
MSFT Microsoft 26.90 -.02 -.1
INTC Intel 26.38 -.20 -.8
AAPL Apple Computer 71.11 -1.07 -1.5
ADBE Adobe Systems 38.82 +3.89 +11.1
CSCO Cisco Systems 17.52 -.24 -1.4
QCOM Qualcomm 44.95 -.79 -1.7
AMGN Amgen 78.99 -1.45 -1.8
SNDK SanDisk 58.04 +1.84 +3.3
AMEX CLOSE 1760.98 - 2.27 - .1
INDEX SHARES
DIA DIAMONDS TRUST 108.51 -.04 -.0
QQQ NASDAQ 100 41.58 -.29 -.7
SPY S&P DEP.RECEIPTS 126.36 -.39 -.3
STOCKS IN THE NEWS
UTX United Tech 58.03 +.43 +.8
CCL Carnival Corp 52.65 -2.19 -4.0
ABS Albertson's 24.33 +.34 +1.4
FDP Fresh Del Monte 24.54 +1.85 +8.2
DRI Darden Restaurant 38.81 +4.01 +11.5
PLB American Italian 7.60 +1.77 +30.4
RSH RadioShack 22.19 -1.53 -6.5
PRX Par Pharmaceutical 32.45 +2.79 +9.4
ITT ITT Industries 101.87 +4.05 +4.1
PUMP Animas 24.03 +5.83 +32.0
OSUR OraSure Tech 8.46 -2.91 -25.6
SPSN Spansion 13.55 +1.55 +12.9
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