1/04/06: American Automakers May Be In For A Rough Ride This Year
LINDA O'BRYON: The U.S. auto industry is ringing in the New
Year on a sour note. Sales for the final month of 2005 skidded sharply for
General Motors, Ford and Chrysler, due to high gasoline prices and fierce
competition from foreign auto makers. As Diane Eastabrook reports,
analysts say the industry faces a bumpy road this year, as well.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: For U.S.
auto makers, 2005 turned out to be a disastrous year. Their combined
market share slid and their sales took a hit in the closing months. In
December, vehicle sales for General Motors, Ford and the Chrysler division
of Daimler-Chrysler all plunged compared to the same month in 2004. Sales
for all of 2005 were down for GM and Ford, but up slightly for Chrysler.
Analysts say the outlook for this year doesn`t look much brighter for U.S.
auto companies.
JOHN NOVAK, AUTO ANALYST, MORNINGSTAR: I think you`re going to see
some of the same trends, the trend away from SUVs and into the smaller
crossover vehicles and hybrids and smaller cars. That certainly bodes well
for the Asian manufacturers. It`s a pretty bleak picture for GM and Ford.
EASTABROOK: But there are some bright spots for the domestic auto
companies. Last month, car sales for Ford increased for the first time in
six years, buoyed by new products like the Fusion. Ford plans to roll out
even more new car models this year. Sales of crossovers, vehicles that are
functional like sport utilities but smaller, were also strong and GM said
its full-sized pickups sold briskly in December. It is rolling out an
entirely new line-up of light trucks in the months ahead. Analysts predict
gasoline prices will likely determine what products sell.
LINDA BANNISTER, AUTO ANALYST, EDWARD JONES: Truck buyers buy trucks
because they need trucks, but SUV buyers generally can decide to buy a car
or an SUV. Oil prices, in our mind, are -- is going to dictate that
purchase.
EASTABROOK: Analysts also think higher interest rates and a slowdown
in the housing market could impact vehicle sales, and that in turn could
lead to more incentives.
NOVAK: Consumer have come to expect these incentives and ultimately I
think you`ll see more incentives and probably lower prices as we move
throughout the year.
EASTABROOK: While analysts say this will be another tough year for the
U.S. auto industry, most are confident the auto companies will weather it.
Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
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.
01/04/06:The Outlook For Oil In 2006
LINDA O'BRYON: The price of oil rose again today, hitting its highest level
since mid-October. Crude oil for February delivery closed up $0.28 at
$63.42 a barrel at the New York Mercantile Exchange. The big question is
where are oil prices likely to head in 2006 and what impact could oil have
on the economy this year. Erika Miller got some answers from the experts.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Oil prices
topped $63 a barrel today, but some analysts don`t think it will last.
They are betting crude will fall significantly by late spring, perhaps to
as low as $40 a barrel.
JOHN KILDUFF, ENERGY ANALYST, FIMAT USA: I think as we get through
this winter, a time period when demand slows in the second quarter, you`re
going to see inventories continue to build up globally. You`re going to
continue to see production come back online.
MILLER: Specifically, Kilduff says there could be a big ramp-up in
Iraqi oil production, adding roughly a million barrels per day of extra oil
to the market. But other analysts do not expect oil prices this year to be
much different from last year. A Reuters survey of 30 analysts predicts
crude will average $57.31 a barrel this year, a bit above 2005`s record of
$56.70. A top concern remains tight refining capacity. Another is
geopolitical uncertainty in oil producing areas like Iraq, Russia and
Venezuela. One thing most oil analysts agree on is the likelihood of
extreme volatility.
KILDUFF: I liken it to folks to try to understand it would be as if
the Dow Jones Industrial Average rose and falls 2,000 or 3,000 points every
day, intraday, over a period of days. The volatility just was nothing but
extreme in 2005 and I think that is something that is going to persist in
2006.
MILLER: Even if energy prices stay near current levels, most
economists don`t expect much of a drag on growth, but they warn that could
change if crude heads back to the record level of $70 a barrel.
JAMES GLASSMAN, SR. U. S. ECONOMST, JPMORGAN CHASE: You can see it.
You can see the squeeze that is hitting the consumer, because when you look
at the greater amount that we have to pay for energy, there`s not a whole
lot left over. And so income that`s available to people after they make
their energy bills has been growing more slowly since the summer.
MILLER: What`s clear is that oil prices do not have as big of an
impact on the economy as they did in the 1970s. Economists credit improved
energy efficiency on the part of businesses and consumers. 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.
1/04/06: The Abramoff Impact on Lobby Reform
LINDA O`BRYON: Embattled Washington lobbyist Jack Abramoff pleaded guilty
today to a second set of charges brought by Federal prosecutors. Today`s
conspiracy and wire fraud charges involve his multimillion-dollar purchase
of a line of gambling boats in Florida. As part of a plea deal with
prosecutors, Abramoff is expected to implicate a number of public
officials, including members of Congress. As Darren Gersh reports, as this
corruption probe heats up, so does the call for lobbying reform in
Washington.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The
corruption scandal surrounding Jack Abramoff touched down in Miami today.
The former lobbyist entered a Florida Federal courthouse and pled guilty to
fraud charges. It`s all part of a widening scandal involving lobbying fees
worth tens of millions of dollars, lavish golf outings for lawmakers, and
job offers at Abramoff`s firm for former Hill staffers. As the Abramoff
corruption investigation unfolds, the political fallout is almost certain
to lead to new restrictions on the Washington equivalent of insider
trading.
NORMAN ORNSTEIN, CONGRESSIONAL ANALYST, AMERICAN ENTERPRISE
INSTITUTE: We`re going to see now nothing more popular in Congress than
co-sponsoring reform legislation to deal with these awful outrages that
members are shocked, shocked to see going on right under their own eyes,
often in their own offices.
GERSH: Reforms will probably include new restrictions on travel
paid for by lobbyists and faster and more extensive disclosure of lobbying
activities. Members of Congress and their senior staffers are already
banned from lobbying their old offices for one year. It`s possible that
ban will be extended to two or three years.
ORNSTEIN: This has become too much of a revolving door that stinks.
GERSH: Lobbying groups like the U.S. Chamber of Commerce say
Abramoff`s shady dealings were the exception, not the rule, of how things
get done in Washington and they worry reform could go too far.
THOMAS DONAHUE, PRESIDENT, U.S. CHAMBER OF COMMERCE: I do want
everybody to put this in perspective. There are a lot of damn good
lobbyists in this town. They`re honorable people. They`re friends of
yours. I think, from time to time, we ought to think about the other 99-
point-something-percent of the people that play by the rules.
GERSH: A key question is whether those rules were adequately
enforced before Jack Abramoff landed on the front page.
KENNETH GROSS, ETHICS LAWYER, SKADDEN, ARPS, SLATE, MEAGHER & FLOM
LLP: I think there`s going to be more attention paid to the everyday
violations, and then perhaps maybe the ethics committees will get in gear.
They have been dormant, completely out of business for the last couple of
years.
GERSH: The president today joined other top Republicans seeking to
distance themselves from Abramoff`s money. Mr. Bush`s re-election campaign
gave up $6,000 in contributions, donating the money to the American Heart
Association. 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.
1/04/06: Reaching Out To The Octopus
LINDA O`BRYON: Well it launched in Hong Kong back in 1997 as an
easy and efficient way to use public transportation in that region. Well,
today, the Octopus Card has become far more than that. The stored value
card has morphed into a version of digital cash that no resident or visitor
can do without. As Hope Ngo reports, it`s also taking Hong Kong closer to
a cash-free society.
HOPE NGO, NIGHTLY BUSINESS REPORT CORRESPONDENT: From its humble
beginnings as a means to pay to get around Hong Kong, the Octopus Card has
become indispensable for many Hong Kong residents.
UNIDENTIFIED MALE: For travel to working, everything.
UNIDENTIFIED FEMALE: Normally I use it to go shopping supermarket
for myself at home.
UNIDENTIFIED MALE: (INAUDIBLE) and then some shopping.
NGO: The card gives people access to exclusive residential
buildings, buys drinks at the local convenience store, coffee at Starbucks
or a Big Mac at McDonald`s. It even lets its holders buy travel insurance
at the border crossing between Hong Kong and its neighbor, the Chinese city
of Shenzhen.
ERIC TAI, CEO, OCTOPUS CARDS: The company started as a non-profit
organization, as a service organization for shareholders. In the year 2000
or just around that time, the shareholders decided that it`s going to be
turning ourselves into a profit organization, rather than a non-profit
organization. So that`s when the move to the retail side of business
started. But to do that, we had to get a deposit taking license from the
Hong Kong monetary authority, which we got in the year 2000.
NGO: Today, the octopus card has a market penetration Hong Kong`s
credit card firms can only dream of. The company says there are 13 million
Octopus cards in circulation, with 95 percent of Hong Kong residents
between the ages of 16 and 65 owning at least one card. Octopus says it
averages over nine million transactions valued at nearly $1 million U.S.
every day.
TAI: Our market segment is for day-to-day usage, so it`s from small
change to small notes type of business. It is a financial instrument
(INAUDIBLE). So there`s no difference to cash at this point.
NGO: In spite of its success, Tai says Octopus has no intention of
moving away from doing what it does best.
TAI: We will never be as big as the big banks in Hong Kong or for
that matter, the small banks, because we are not in all spectrum of
banking. We are basically only on the deposit taking side and the micro
payment side and we`re very comfortable with that.
NGO: Even if Octopus isn`t interested in taking on Hong Kong`s
banking giants, it`s done what institutions have been unable to do: made it
possible to eat, travel and shop with nothing more than this card in your
wallet. Hope Ngo, NIGHTLY BUSINESS REPORT, Hong Kong.
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.
1/04/06: "Money File"-Mapping Out A Tax Strategy For 2006
LINDA O'BRYON: In the "money file" tonight, 2006 is just four days old -- just the
right time to start planning your income tax strategy for this year.
Here`s Terri Cullen, personal finance columnist for the "Wall Street
Journal Online."
TERRI CULLEN, REPORTER, THE WALL STREET JOURNAL ONLINE: if you
were thinking about remodeling your home or buying a new, fuel-efficient
hybrid car this year, Uncle Sam is ready to help you with the bills. In
2006, hybrid car buyers may be eligible for a tax credit of up to $3,400,
depending on the car`s fuel economy. Tax credits are more valuable than
deductions because they lower your tax bill dollar for dollar. Before you
buy, ask about the credit; some hybrid cars aren`t eligible for the tax
credit at all.
Homeowners will also be happy to hear this year that there will be
special breaks for installing energy-efficient windows, doors and
insulation. Changes in the gift tax and estate tax rules this year also
will help families pass on more of their assets to loved ones tax free. In
2006, you can make a gift of up to $12,000 per person to as many family
members or friends as you`d like. That`s up from $11,000 last year. The
increase is a real boon for grandparents who want to help their
grandchildren pay for college.
Wealthier families will also be able to keep more assets and
property in the family when a loved one dies. The amount of assets that
are excluded from Federal estate tax jumps to $2 million in 2006 from $1.5
million last year. The tax deduction most taxpayers choose to take, the
standard deduction, also gets a boost this year to $10,300. Consider
adjusting your Federal withholding if you received a big tax refund last
year. There`s no reason to loan Uncle Sam the extra money again this year.
I`m Terri Cullen.
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.
1/04/06: "Paul Kangas' Stocks In The News"
PAUL KANGAS: Well, that data didn`t budge stocks, which opened little changed.
And that was actually positive, given the lack of profit taking after
yesterday`s big gains. It certainly encouraged buyers, as did analyst
upgrades on ExxonMobil and Google. At noon, the Dow was up 40 points,
NASDAQ up 21. Stocks faded as oil prices rebounded. Then a late comeback
was led by strength in the techs. So the Dow industrial average came in
with a closing gain of 32.75 points at 10,880.15. The NASDAQ Composite up
19 3/4 points to 2,263.46. Standard & Poor`s 500 was up 4 2/3 points
ending at 1,273.46. Over in the bond market, the 10-year note gained 6/32
to 101 7/32, lowering the yield at 4.35 percent.
New York exchange volume leader as it is so often today on 27 million
shares, Pfizer (PFE) moving up $0.77.
Then Lucent Technologies (LU) with a $0.03 gain.
Followed by Ford Motor (F) you heard the story there, up $0.18.
Verizon Communications (VZ) up $0.89. The Fitch rating service ended
its long or its downgrade review, saying the company`s acquisition of MCI
poses little credit risk.
Estee Lauder (EL) up $1.66, nice move there. The stock was added to
the Standard & Poor`s 500 index after the close of trading today, so index
fund buying in there today.
EMC Corp (EMC) up $0.32.
Followed by Time Warner (TWX) with a $0.09 gain.
General Electric (GE) dropped a nickel.
Bank of America (BAC) fell $0.50.
And then Citigroup (C) down $0.91. Bank America interestingly
downgraded Citigroup from "buy" to "neutral" on a valuation basis and also
Bank America`s cautious over the U.S. banking sector.
ExxonMobil (XOM) up a dime. Bank America upgraded this one from
"neutral" to "buy," named it as a top pick for 2006.
US Airways Group (LOC) there you see it, up $1.75. You heard the news,
the demise of Independence Air should help it and the chart on this one is
a little different because of course the merger in September with America
West is just a recent occurrence. Let`s have a look at some of the other
airline stocks, all nice fractional gainers. Their traffic figures in
December were quite impressive, just like, well, America West, which is
what it`s going to be called eventually apparently.
Lowes Companies (LOW) was down $0.83. JPMorgan downgraded it from
"over weight" to "neutral."
And then Pediatrix Medical Group (PDX) dropped $4.69 loss. Wachovia
Securities downgraded it from "out perform" to just a "market perform"
rating.
BMC Software (BMC) did well, up $2.06. There`s speculation about a
possible acquisition of the company and also the stock had an upside
breakout so technically strong today.
Boyd Gaming (BYD) down $2.31. As we touched on, the company`s going to
develop a $4 billion world class resort on its 63-acre site on the Las
Vegas strip. After hearing that, Standard & Poor`s cut the company`s credit
rating from "positive" to "stable." $4 billion is a lot of money.
Berry Petroleum (BRY) up $4.91. First Albany brokerage upgraded it
from "buy" to a "strong buy."
Armor Holdings (AH) did well, up $2.74. JPMorgan upgraded it from
"neutral" to "over weight."
And then we see Greensbrier (GBX) up $2.24. The rail car maker had
good first quarter earnings of $0.51, up from $0.35 a year ago and that was
$0.14 above the Street estimate.
Google (GOOG) topped NASDAQ`s most active once again today, up $10.01.
That`s within about $1 of its all-time closing high. And today Bear Stearns
upgraded it from "peer perform" to "out perform" and boosted its price
target for Google from $360 to $550 a share.
Apple Computer (AAPL) up $0.22.
Microsoft (MSFT) $0.13 rise.
Cisco Systems (CSCO) edged up $0.40.
And Intel (INTC) $0.34 gain there, fifth in dollar volume.
Sandisk (SNDK) edged up $0.08.
While Yahoo! (YHOO) was a $0.06 gainer.
Qualcomm (QCOM) up $1.43.
Oracle (ORCL) $0.02 rise.
And then Ebay (EBAY) gained a nickel, tenth in dollar volume.
Particle Drilling Technologies (PDRT) up $1.18, a rather handsome gain
of nearly 23 percent. RBC Capital brokerage began covering the stock with
an "out perform" rating.
On the downside, Steel Technologies (STTX) dropping $3.68. The company
warned its first quarter earnings will be lower than expected at $0.24,
where the Street estimate was $0.35 and last year, they earned $1.11. The
company gets over half of its business from the auto industry, I might
mention.
And then Arrhythmia Research Technology (HRT) up $3.50 a share. The
company`s subsidiary wholly owned Micron Products inked a three-year deal
to make testing products for IDEXX Laboratories.
And 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.
01/04/06:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10880.15 +32.74 + .3
HIGH 10892.64
LOW 10833.90
NASDAQ COMP. 2263.46 +19.72 +.9
HIGH 2265.28
LOW 2246.07
VOLUME 1,840.0
PREVIOUS 1,915.8
UP VOLUME 1,292.4
DOWN VOLUME 523.5
DOW TRANSPORTS 4246.94 +47.78 + 1.1
DOW UTILITIES 414.44 +.89 + .2
CLOSING TICK +433
S&P 500 1273.46 +4.66 + .4
S&P 100 580.69 +1.44 + .3
MIDCAP 400 754.08 +5.06 + .7
REUTERS/CRB 338.49 +2.12 + .6
NYSE COMPOSITE 7962.94 +50.53 + .6
VALUE LINE 420.60 +2.73 + .7
RUSSELL 2000 689.25 +5.20 + .8
DJW 5000 12773.48 +59.60 + .5
U.S. TREASURIES
5-YEAR NOTE 4.375%
Dec. 15,2010 100 13/32 +4/32 4.28
10-YEAR NOTE 4.50%
Nov. 15,2015 101 7/32 +6/32 4.35
30-YEAR NOTE 5.375%
Feb. 15, 2031 112 15/32 +8/32 4.54
LEHMAN BROS.
LONG BOND INDEX 1779.67 +2.71
DOW CLOSE 10880.15 +32.74 + .3
ADVANCES 2470
DECLINES 947
NEW HIGHS 301
NEW LOWS 17
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
PFE Pfizer 24.55 +.77 +3.2
LU Lucent Tech 2.72 +.03 +1.1
F Ford Motor 8.01 +.18 +2.3
VZ Verizon Comms 31.27 +.89 +2.9
EL Estee Lauder 35.00 +1.66 +5.0
EMC EMC Corp 14.00 +.32 +2.3
TWX Time Warner 17.74 +.09 +.5
GE GE 35.32 -.05 -.1
BAC Bank Of America 46.58 -.50 -1.1
C Citigroup 48.38 -.91 -1.9
NASDAQ CLOSE 2263.46 + 19.72 + .9
VOLUME 1,964.5
PREVIOUS 2,064.9
ADVANCES 1888
DECLINES 1161
NASDAQ ACTIVES
GOOG Google 445.24 +10.01 +2.3
AAPL Apple Computer 74.97 +.22 +.3
MSFT Microsoft 26.97 +.13 +.5
CSCO Cisco Systems 17.85 +.40 +2.3
INTC Intel 25.91 +.34 +1.3
SNDK Sandisk 67.78 +.08 +.1
YHOO Yahoo! 40.97 +.06 +.2
QCOM Qualcomm 45.43 +1.43 +3.3
ORCL Oracle 12.62 +.02 +.2
EBAY eBay 44.51 +.05 +.1
AMEX CLOSE 1799.93 + 4.94 + .3
INDEX SHARES
DIA DIAMONDS TRUST 108.74 +.41 +.4
QQQ NASDAQ 100 41.74 +.43 +1.0
SPY S&P DEP.RECEIPTS 127.31 +.61 +.5
STOCKS IN THE NEWS
Display Name
XOM Exxon Mobil 58.57 +.10 +.2
LCC US Airways Grp 39.20 +1.75 +4.7
AAI AirTran Hldgs 16.76 +.43 +2.6
AMR AMR Corp 22.34 +.50 +2.3
CAL Contl Airlines B 21.62 +.46 +2.2
LUV Southwest Air 16.94 +.51 +3.1
LOW Lowes Companies 66.24 -.83 -1.2
PDX Pediatrix Med 85.30 -4.69 -5.2
BMC BMC Software 23.07 +2.06 +9.8
BYD Boyd Gaming 46.09 -2.31 -4.8
BRY Berry Petroleum 63.94 +4.91 +8.3
AH Armor Holdings 44.63 +2.74 +6.5
GBX Greenbrier Cos 30.50 +2.24 +7.9
PDRT Particle Drill 6.35 +1.18 +22.8
STTX Steel Tech. 25.15 -3.68 -12.8
HRT Arrhythmia Res. 12.25 +3.50 +40.0
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