01/05/06: Retailers Have Little To Celebrate This Season
PAUL KANGAS: The results are in tonight and it looks like it was a ho-hum holiday of sales for the nation`s largest retailers. Most chain stores met their modest December sales goals. But for one huge player, Wal-Mart, the results were disappointing. As Suzanne Pratt reports, that led the world`s largest retailer to tell investors its fourth quarter earnings will be lower than expected.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Most U.S. retailers rang up only respectable sales in the holiday shopping season, making the critical period ho-hum but not a complete disaster. According to an index compiled by the International Council of Shopping Centers, retailers posted an average sales gain of 3.2 percent in December, slightly better than the year before. Analysts say the 2005 holiday season was challenging for most retailers as traffic started weak and stores were forced to use promotions and heavy discounting.
MARK HUSSON, RETAIL ANALYST, HSBC: They really peaked very sharply right at the end of the Christmas trading period. And that means that the retailers would have had to have held their nerve on markdowns until the last couple of days, which they just didn`t do. So the margins were probably rather sloppy.
PRATT: A sampling of the largest retailers showed a fairly wide range of sales in December, although Abercrombie was among the season`s biggest winners, and Gap disappointed. Wal-Mart was also an under performer. It posted only a 2.2 percent gain in sales, the worst performance in five years. On top of that, the world`s largest retailer warned that fourth quarter profits would now come in at the low end of forecasts. Among department stores, luxury retailers were the best performers. Nordstrom was a standout with a nearly 8 percent gain in sales, double what Wall Street expected. And analysts say department stores did what they had to to draw in business.
HUSSON: You`re looking at a highly promotional environment. And what you can see from any of these retailers is that if you put enough blood in the water, you can get the piranhas to feed. And I think that`s what`s happened in some of the department store stocks.
PRATT: Teen-oriented chains showed the strongest growth in the retail sector. Many apparel makers targeting adults, posted fairly disappointing sales growth, something analysts blamed on uninspired fashion trends.
JOHN MORRIS, SPECIALITY RETAIL ANALYST, HARRIS NESBITT: It looks like the adult sector for apparel for holiday just wasn`t really quite the strong gift-giving season that it could`ve been. It wasn`t really a holiday all about apparel.
PRATT: Analysts say January retail sales could be decent thanks to the expected redemption of gift cards, which were very popular this past Christmas. After that analysts predict spending will taper off as consumers grow concerned about energy costs and rising debt. 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.
01/05/06:
One On One With U.S. Treasury Secretary John Snow
LINDA O`BRYON: Treasury Secretary John Snow says the United States is quote, the picture of economic health, end quote and he wants to keep it that way. Today he asked the U.S. Chamber of Commerce to lobby Congress to make President Bush`s dividend and capital gains tax cuts permanent. Before that address to the chamber, Washington bureau chief Darren Gersh sat down with Snow and began by asking whether those tax cuts will be extended next year.
JOHN SNOW, TREASURY SECRETARY: I think it will. It needs to happen. It`s important that it happens. If it doesn`t happen, it`s the prelude to a tax increase.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Let me ask you about the dividends tax and the impact that it`s having, because there were reports out there that private equity partnerships are buying companies. They`re borrowing a lot of money and then they are taking out the cash and taking advantage of the 15 percent dividend break basically in order to get out their investment. Is that really what people intended? Is that what the administration intended when you passed this 15 percent tax cut?
SNOW: What was behind the reduction on dividends of course, was to level the playing field between debt and equity financing. Debt financing has had a huge tax advantage over debt financing. And the reductions don`t eliminate that discrepancy, but they narrow it.
GERSH: But it is a loophole if you have private equity partnerships which are buying companies and essentially flipping them and taking their money out and using this 15 percent dividend tax rate in order to do that?
SNOW: Well, the main thing that`s happened is that more companies are paying dividends now, not this phenomenon you are talking about. And by lowering the tax on equity, we do something that`s awfully important to this economy because equity is the risk capital. Equity is the capital that finances new businesses, entrepreneurship and innovation.
GERSH: Well, we also saw last year that companies took half a trillion dollars and used that cash to buy other companies, to merge and make acquisitions, which many business school studies have shown often don`t pay off. They`re often not the best use of corporate cash. Are you disappointed that companies aren`t taking their corporate cash and giving it back to shareholders so that they can reinvest the money?
SNOW: Well, there is with the lower dividends, lower taxes on dividends, managements have an incentive to give more to shareholders. When I was a CEO, I remember -- and participated on a number of boards, several boards, shareholders saying won`t you give us more dividends? And management could then say, but, you know, giving dividends, paying more dividends is very tax-disadvantageous and it was. That`s no longer the case.
GERSH: But companies also took a half a trillion dollars of their cash and just bought other companies with it. They didn`t give it back in terms of dividends to shareholders.
SNOW: Well, look, there are alternative uses of cash. Sometimes the best thing to do is to retain the cash and pursue internal growth. Sometimes the best use may be an acquisition.
GERSH: Let me ask you about tax reform because everybody I talk to who follows tax reform in this town says it ain`t going anywhere this year. We are not going to see a big tax reform this year. Are we going to see big tax reform this year?
SNOW: That remains to be seen. You only get a chance to do tax reform about once every two decades. And we owe it to the president and we owe it to the American people to do it right. So we are not putting ourselves on any timetable to send reform proposals to the president, but we are working very hard to make sure that we are in a position to make good recommendations.
GERSH: And on the Chinese yuan, is this finally going to be a year where we get more action out of the Chinese?
SNOW: Well, China made an important move last year when they de-linked the yuan from the dollar. That was progress. Now the important thing is that they move forward with greater flexibility in the currency. I think that they are working on the platforms to allow hedging to occur, their derivatives to occur and greater flexibility. But we are not satisfied. We want to see action on that.
GERSH: And will we?
SNOW: Well, you know, you`re asking me to make, to speculate. I certainly hope we will.
GERSH: Mr. Secretary, thank you for your time.
SNOW: Thank you.
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.
1/05/06: "Bill of Health"-Minimally
Invasive Procedures
LINDA O`BRYON: Well, there`s no getting around it: all of us are getting older. And for all of us, our healthcare and figuring out how to pay for it are going to be ongoing concerns. That`s why tonight, we`re beginning a year-long series of stories we call "bill of health" that will focus on emerging trends in healthcare. To kick things off, Jeff Yastine looks at a new surgical technique that could help baby boomers.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Knee-replacement surgery has typically been a long and painful process. It`s major surgery and the recovery time has traditionally taken months. But new advances in minimally invasive surgical techniques and also advances in artificial joint construction, are changing who`s getting knee replacements and why. These days, doctors are seeing a lot more patients like David Cohn.
DAVID COHN, TOTAL KNEE REPLACEMENT PATIENT: I consider myself fairly robust in life. I`m a mover. And having to not be as the A-type personality that I am and crashing through life, it slows a lot of things down.
YASTINE: But when Cohn`s surgery is finished, with both knees now fitted with artificial joints, the scuba diver and world traveler won`t be slowed down for long. Newly developed minimally invasive surgical techniques have the typical recovery time from three months to just six weeks. And longer-lasting plastics used in new artificial joints mean less likelihood of the device wearing out in a patient`s lifetime and having to face the risk of major surgery again.
DR. LEN REMIA, ORTHOPEDIC SURGEON, CLEVELAND CLINIC FLORIDA: Technology has improved over the past several years. The plastics that are placed in between the metal components are more durable at least in the lab. And so we are hoping ultimately that the studies will bear out that these will last at least 15 to 20-plus years. And patients understand that and they are asking for the newer techniques.
YASTINE: All that`s meant large jumps in the numbers of knee replacements performed each year in the U.S. In fact, more than 300,000 procedures annually and analysts expect that number to continue rising as the baby-boomer generation ages. The number of surgeries has jumped by more than 30 percent from a decade ago and doctors say they`re seeing younger patients in their 50s opting for total knee replacements or other techniques such as knee resurfacing.
DR. RICHARD LEVITT, DIRECTOR, CARTILAGE REPAIR AND RESTORATION INSTITUTE: This is a sort of picture of a knee joint and this metallic portion is one side of the cap and this is called polyethylene on this and the other side. So when you walk you now have two smooth surfaces to move back and forth. Certainly the advantages are that it`s a much, much smaller procedure. It can almost be done as an outpatient basis, certainly no more than a one night stay in a hospital. People can be walking without crutches or canes or anything within five to seven days and can really go back and resume almost their normal activities within a couple of weeks.
YASTINE: Perhaps the biggest indicator that knee replacement surgery has come of age, two of the companies that make these devices, Stryker and DePuy have both started running commercials on television in recent quarters, marketing these devices in the same way that drug companies have for years. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.
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.
1/05/06: "Money File"-Picking Your Priorities
LINDA O'BRYON: Well, if you`re hoping to improve your business this year, tonight`s commentator has some suggestions that could help. Here`s Tom Stewart, editor of the "Harvard Business Review."
TOM STEWART, EDITOR, HARVARD BUSINESS REVIEW: It`s new year`s resolution time. For me, that usually means dusting off last year`s vows and saying "this year I really will get more exercise. I really will keep my desk clean." But there are two resolutions that I think every manager should make and make stick. The first is to keep track of the agreements you make. I mean the little deals: "I`ll get back to you by Monday"; "I`ll talk to Bob about it." The reason isn`t to manage your to-do list better. The reason is to match your promises with your priorities. The late Peter Drucker said "I have never known an executive who remains effective while tackling more than two tasks at a time. Half the things I promise are things I shouldn`t do at all and I wager that`s true of most managers." The second resolution is to be clear about who has what rights when it comes to making decisions. People waste an enormous amount of time and energy and sew confusion and even anger for themselves and their customers because they are not clear about decision rights. Paul Rogers and Marcia Blenko of Bain & Company say executives need to understand "who has the `D`" -- who`s the formal decision-maker, the one accountable for the decision. There are other roles in decision-making -- recommenders, people who give input, people with veto power, people who have to carry out a decision. But only one person can have the "D." Every business I`ve ever seen would operate better if managers took the time to discuss decision rights before they ran off making decisions wrong. I`m Tom Stewart.
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.
1/05/06: "Last Word"-Opening A Colorful New Window On The World
LINDA O`BRYON: Finally tonight, a story of hope and rebirth. A new restaurant opened today in New York`s Greenwich Village with an unusual set of owners. They are survivors of the World Trade Center collapse who used to work at the Windows on the world restaurant on one of the twin towers. The new restaurant is called Colors and features a menu with food from 22 different countries, all family dishes contributed by the workers. 73 of their friends and colleagues died in the September 11th attack. In the new venture, the waiters, busboys, bartenders, chefs and dishwashers will all have a financial stake. And it`s a chance for all of them to have a new start and a new chance at the American dream Paul.
KANGAS: Well, let`s hope Color`s bottom line is brilliant green.
O`BRYON: Let`s hope so. And that`s NIGHTLY BUSINESS REPORT for Thursday, January 5. I`m
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.
1/05/06: "Paul Kangas' Stocks In The News"
PAUL KANGAS: Stocks moved in a narrow range this morning on a mixed news background. On the plus side, the possibility that computer sciences might get a buy-out bid, as well as a drop of 35,000 in new jobless benefit claims. On the minus side, a downgrade of Merck stock and of course those disappointing December sales from Wal-Mart. At 11:00 a.m., the Dow was off 11 points; NASDAQ was up seven points. Just like yesterday, strong tech stocks helped the blue chips bounce back by the closing bell. So the Dow industrial average actually gained two points putting it at 10,882.15. The NASDAQ Composite was up 13.41 at 2276.87, while the Standard & Poor`s 500 index rose just a small fraction ending at 1273.48. Over in the bond market, the 10-year note was down 2/32 to 101 5/32, putting the yield at 4.36 percent.
Big board volume leader today on 25 million shares was Lucent Technology (LU) with a nickel gain.
Followed by Pfizer (PFE) with a $0.03 rise.
Nortel Networks (NT) moved up $0.06.
And then Ford Motor (F) up $0.34 despite the downgrade of its credit rating that you heard about.
Qwest Communications (Q) down $0.26. That was fifth in big board volume.
And then Sprint Nextel (S) with a $0.09 loss.
Followed by a big gain in Fannie Mae (FNM) up $4.43. Fannie Mae traded as high as $54.80 today. The stock up on hopes that the ongoing internal accounting investigation will not turn up any new problems.
Nokia (NOK) $0.45 rise.
Verizon Communications (VZ) gained $0.36.
And then General Motors (GM) with a gain of $1.11. As you heard, the company`s auto sales were very strong in China.
IBM (IBM) down, I should say up $0.55. UBS financial brokerage repeated a "neutral" rating and cut its price target on IBM stock from $100 to $90 a share. It also lowered its 2006 earnings estimate by $0.07 down to $5.65 a share. And after the close, big blue said it will drop its defined benefit pension plan in 2008 in favor of 401(k) plans, quite a change there.
Merck (MRK) managing to gain $0.05 a share, even though Goldman Sachs cut it from "in line" down to "under perform" in the belief the company`s earnings outlook is too optimistic.
Wal-Mart Stores (WMT), there you see it, down $0.63 on those rather disappointing December same store sales and it did cut its fourth quarter earnings estimate to the low end of its previous guidance which was $0.82 to $0.86 a share. But there were some positive results of retailers. Let`s have a look at some stocks that did well in December.
Topped by Men`s Wearhouse (MW) and then Gamestop (GME), Aeropostale (ARO), Nordstrom (JWN) and Guess Inc (GES), all nicely on the upside.
But on the downside we had some real big losers. Payless Shoes (PSS) off $2.44.
And New York & Co. (NWY), Ann Taylor Stores (ANN), Kohl`s Corp (KSS) and JC Penney (JCP) also on the downside due to disappointing December sales.
And there we see Boeing (BA) with an $0.84 drop. Bank of America downgraded it from "buy" to "neutral" on a valuation basis. As you can see, stock`s had quite a run up.
Computer Sciences (CSC) up nearly $4 a share. The "Wall Street Journal" today reported that Blackstone Group and Hewlett-Packard are exploring a buyout bid and the company hopes to fetch about $65 a share.
Davita Inc (DVA), which is in the kidney dialysis business, got an upgrade from Morgan Stanley from "equal weight" to "over weight."
And then Acuity Brands (AYI) moving up $2.43. This company`s in the lighting equipment business and yesterday it was out with strong first quarter earnings, $0.48, up from last year`s $0.30. Today the Baird
brokerage upgraded it from "neutral" to "outperform."
And Yum! Brands (YUM) up $2.01. December same store sales up 3 percent paced by gains at KFC and Taco Bell restaurant chains.
Goodrich Corp (GR) down $1.63. Bank of America downgraded it from "buy" to "neutral," citing the slowing aircraft parts orders.
And also on the downside, Southern Peru Copper (PCU) off $5.26. UBS financial downgraded it from "buy" to "neutral," saying the downside in the stock is increasing despite record high copper prices.
Topping the active list on NASDAQ, Google (GOOG) up another $6. That is a new record high close. Kariss and Company today upgraded it from "above average" to "buy."
Cisco Systems (CSCO) up a half a dollar. Citigroup says Wall Street has underestimated the company`s potential, repeated a "buy" and has a $22 a share price target.
Intel (INTC) $0.36 gain.
$0.02 rise in Microsoft (MSFT).
Apple Computer (AAPL) down $0.59. That was fifth in volume.
Broadcom (BCOM) up $1.56.
Sandisk (SNDK) gained $1.25.
Ebay (EBAY) up $1.37.
Oracle (ORCL) edged up $0.17.
And Dell (DELL), tenth in volume, was down $0.01.
Nuvelo (NUVO) up $3.66. The company`s in a pact with Beyer AG to develop a blood clot treatment.
And Pixar (PIXR) down $2.16 after CS First Boston downgraded it from "out perform" to "neutral" on a valuation basis.
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.
01/05/06:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10959.87 -2.49 - .0
HIGH 10992.69
LOW 10921.53
NASDAQ COMP. 2317.04 +.35 +.0
HIGH 2321.70
LOW 2308.16
VOLUME 1,569.5
PREVIOUS 1,704.3
UP VOLUME 753.6
DOWN VOLUME 784.3
DOW TRANSPORTS 4147.10 -1.28 - .0
DOW UTILITIES 415.85 +3.04 + .7
CLOSING TICK +622
S&P 500 1287.61 +1.55 + .1
S&P 100 584.62 +.37 + .1
MIDCAP 400 766.73 -.31 - .0
REUTERS/CRB 336.84 +2.13 + .6
NYSE COMPOSITE 8025.94 +17.85 + .2
VALUE LINE 428.60 +.53 + .1
RUSSELL 2000 708.44 +1.65 + .2
DJW 5000 12944.52 +15.97 + .1
U.S. TREASURIES
5-YEAR NOTE 4.25%
Jan. 15,2011 99 27/32 +8/32 4.29
10-YEAR NOTE 4.50%
Nov. 15,2015 101 3/32 +13/32 4.36
30-YEAR NOTE 5.375%
Feb. 15, 2031 112 18/32 +28/32 4.53
LEHMAN BROS.
LONG BOND INDEX 1778.43 +15.81
DOW CLOSE 10959.87 -2.49 - .0
ADVANCES 1844
DECLINES 1485
NEW HIGHS 114
NEW LOWS 17
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 2.65 -.06 -2.2
TYC Tyco Intl 27.12 -3.19 -10.5
NT Nortel Networks 3.22 -.15 -4.5
TWX Time Warner 17.27 -.21 -1.2
F Ford Motor Co 8.55 -.01 -.1
GPS Gap 17.42 -.44 -2.5
S Sprint Nextel 23.35 +.57 +2.5
PFE Pfizer 24.67 +.09 +.4
GM General Motors 20.37 -.59 -2.8
AMD Advanced Micro 34.13 -1.22 -3.5
NASDAQ CLOSE 2317.04 + 0.35 + .0
VOLUME 1,783.5
PREVIOUS 2,057.1
ADVANCES 1666
DECLINES 1331
NASDAQ ACTIVES
GOOG Google 466.25 +2.62 +.6
AAPL Apple Computer 85.59 +1.30 +1.5
SNDK SanDisk 72.83 -4.39 -5.7
YHOO Yahoo! 39.90 -.99 -2.4
INTC Intel 25.79 -.18 -.7
MSFT Microsoft 27.19 +.05 +.2
CSCO Cisco Systems 18.92 -.28 -1.5
AMAT Applied Matl 20.15 -.67 -3.2
RMBS Rambus 34.25 +.53 +1.6
SUNW Sun Micro 4.71 +.31 +7.1
AMEX CLOSE 1815.46 + 22.64 + 1.3
INDEX SHARES
DIA DIAMONDS TRUST 109.57 -.19 -.2
QQQ NASDAQ 100 42.98 -.02 -.1
SPY S&P DEP.RECEIPTS 128.68 -.12 -.1
STOCKS IN THE NEWS
IBM IBM 83.17 -.40 -.5
X US Steel 50.12 +.58 +1.2
WLP Wellpoint 74.89 -2.05 -2.7
AET Aetna 89.94 -1.53 -1.7
CI Cigna 114.39 -.78 -.7
UNH UnitedHealth Gp 60.94 -1.59 -2.5
RSH RadioShack 22.90 +1.41 +6.6
ANF Abercrombie & Fit 63.76 -2.37 -3.6
LEN Lennar 63.99 -1.24 -1.9
PHM Pulte Homes 42.48 -.37 -.9
RYL Ryland Group 78.78 -.66 -.8
SPF Standard Pacific 41.12 -.38 -.9
TOL Toll Brothers 37.74 -.47 -1.2
HANS Hansen Natural 104.31 +12.16 +13.2
NKTR Nektar Therapeutic 20.00 +1.89 +10.4
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