02/02/06: Amazon.com Stocks Take A Dive
SUSIE GHARIB: Shares of amazon.com fell more than 10
percent in after hours trading today. Investors unloaded the stock after
the Internet retailer posted better than expected quarterly earnings but
missed revenue estimates. Amazon earned $0.47 in the fourth quarter, $0.24
more than estimates, but sharply lower from a year ago. Revenues rose 17
percent to $2.98 billion, but that was $100 million less than what analysts
were expecting. Looking ahead, the company is forecasting first quarter
sales to grow between 13 and 20 percent and as much as 23 percent for 2006.
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.
02/02/06: Securities Fraud Charges Fly For Executives With A Recipe To Cook The Books
PAUL KANGAS: In Washington today, four top insurance executives at two big
insurance companies were indicted on securities fraud charges. Three
former executives of General Re, part of Berkshire Hathaway and one from
American International Group allegedly conspired to cook the books at AIG.
Washington bureau chief Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Justice
Department officials allege former top executives at insurance giant
General Re helped AIG engineer sham transactions that defrauded investors.
ALICE FISHER, ASSISTANT ATTORNEY GENERAL: These transactions were
undertaken for the sole purpose of falsifying AIG`s books to create the
impression that AIG was in better financial shape than it actually was.
GERSH: The 13 count indictment charges former Gen Re CEO Ronald
Ferguson, former CFO Elizabeth Monrad and former Assistant General Counsel
Robert Graham with conspiring to commit fraud with former AIG reinsurance
head Christian Milton. Also today, the Securities and Exchange Commission
announced civil charges against the executives as well as former Gen Re
senior Vice President Christopher Garand. It was New York Attorney General
Eliot Spitzer who first took on the insurance industry, ultimately forcing
out AIG CEO Hank Greenberg. Criminal charges could soon be filed in state
court.
STEPHEN RYAN, MANATT, PHELPS & PHILLIPS, LLP: These people have hit
the legal Trifecta. It`s the negative Trifecta. They have three different
agencies looking at the same conduct and so it will be very difficult for
them to extricate themselves. They also will then have the wave of civil
suits that will follow. So it will be a very messy time for these
companies.
GERSH: These new indictments bring the investigation one step higher
up the corporate ladder nearer to former AIG CEO Hank Greenberg. But
analysts say it`s unclear whether the Justice Department has the evidence
to go any higher. 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.
2/02/06: Buy Backs Vs. Dividends
SUSIE GHARIB: There`s a growing trend on Wall Street these days and Microsoft,
General Electric and American Greetings are part of it. They have all
recently announced big stock buyback programs and they are not alone.
Experts predict 2006 will be a big year for stock repurchases. Suzanne
Pratt looks at just what that means for investors.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: The four-year
economic expansion has made much of corporate America cash rich. Many
companies opt to return the money to shareholders through dividends.
Others use it for mergers and acquisitions or for capital expenditures.
But in the last year, a growing number of companies, from Time Warner to
General Electric, have been designating more of their excess cash to stock
buybacks. Standard & Poor`s estimates that S&P 500 firms spent $315
billion to repurchase shares last year. That`s 60 percent more than in
2004. Experts say this year the number could be even higher.
HOWARD SILVERBLATT: The companies are being pushed by individuals and
institutions to do something with the record amount of cash they have on
hand to invest it somewhere.
PRATT: The logic of buybacks is fairly straightforward. If a company
buys back shares in the open market, it helps support the share price. In
addition, stock buybacks reduce the number of outstanding shares, which in
turn helps boost earnings per share. It can also signal to the market that
management believes the shares are undervalued. For those reasons buybacks
are usually viewed as favorable for investors. Lehman Brothers says
companies that aggressively repurchase their shares typically have better
returns than the broader market.
CHIP DICKSON: We looked back over a fairly long period of time, since
1984. We found that 70 percent of the time, those kinds of companies have
outperformed the market because they really are taking stock out of the
market. But, I also think because they have the wherewithal to.
PRATT: In other words, big buyback plans are often the byproduct of a
thriving business. But skeptics say buyback programs aren`t necessarily
the best thing for shareholders. They argue buybacks artificially prop up
earnings per share. Some even accuse companies of using aggressive buyback
programs to manage earnings during weak periods. As a result, experts
advise investors to focus on the net income number in earnings reports and
not just earnings per share. That`s not always easy.
SILVERBLATT: Some may not spell it out at all. There`s not a
requirement to explain the differences. It may be there in the numbers and
the spreadsheets, but that`s not the same (ph) as there on the front page.
PRATT: In addition, it also pays to consider whether a company has
been using buyback programs to offset the growing number of options they`re
offering to their employees. Without the buybacks, many shareholders would
see their positions significantly diluted by the options.
DICKSON: Often buybacks have been done really to just neutralize all
the options that have been issued. But you`ve seen the level of options
come down a lot as companies have had to expense them.
PRATT: Experts say companies often chose buybacks over dividends
because dividends are viewed as a more permanent commitment. Once a
company pays a dividend, shareholders expect it to continue. Not so for
buybacks. 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.
2/02/06: One On One With United Chairman & CEO Glenn Tilton
SUSiE GHARIB: Shares of UAL Corporation, parent of United Airlines, began
trading again today, one day after the carrier emerged from bankruptcy.
United executives rang the opening bell at the NASDAQ today, remotely, from
United`s terminal one at O`Hare airport in Chicago, the carrier`s largest
hub. The stock is trading under the ticker symbol "UAUA." While it started
out strong today, it ended down, losing $4.11 to close at $35.89.
Also in Chicago today, NIGHTLY BUSINESS REPORT Midwest bureau chief
Diane Eastabrook talked with United`s chairman and CEO Glenn Tilton. She
began by asking him about the company`s prospect for getting back into the
black.
GLENN TILTON, CHAIRMAN & CEO, UAL CORPORATION: We turned an operating
profit in the third quarter of last year for the first time since 2000. So
our ability to do so in the third quarter was very encouraging. Oil prices
since have gone up. So it`s very difficult to predict the competitive
landscape and oil price for 2006. But, oil price affects all of our
competitors, so what I`m really saying, Diane, is United is going to be
competitive in its results among its network competitors, regardless of
what the oil price is.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: What happens,
though, if oil reaches $70 or more a barrel?
TILTON: Well, Diane, one of the things that we`re seeing now is that
there`s a tighter correlation between the ability to raise fares, to
correlate with higher fuel price, than there was two years ago. So I think
all of us, including the low-cost carriers -- and I`m sure you saw low-cost
carrier results yesterday that suggested this is a difficult time for them
as well. So we`re all recognizing that this oil price is going to affect
us all and my sense is, that there will be rationality in pricing if oil
price were to go to $70 or beyond.
EASTABR0OK: You have stated that there is going to be consolidation in
the airlines industry. Is United going to acquire another carrier or are
you looking to be acquired?
TILTON: We would be a very large company to be digestible by somebody
else. So that would just be something to contemplate. Our view is that it
should happen, it perhaps will happen, and if it does, I want to be in a
position to be able to make a decision to the benefit of our shareholders
and United, one way or another, but the landscape is equally unpredictable.
With two carriers in reorganization now, others working hard to do what
they should while they`re not in reorganization, I think we`ll just have to
let the market sort itself out, and then we`ll see what opportunities may
be there.
EASTABROOK: Do you still think that United needs to repair its
relationship with its labor unions?
TILTON: I think our relationship with our unions is characterized by
the statements they made yesterday, which were all forward looking, all
investor focused, and all saying, we`ve done the hard work. We want to get
on with it. We want to get out there and compete. We want to create value
for our shareholders and our employees and our customers. My sense though
of what they said yesterday was it was perfectly aligned with everything
that I`m saying today.
EASTABROOK: There`s been some speculation that you came to United just
to simply shepherd this company through bankruptcy. Are you planning to
stay on?
TILTON: I`m here today talking to you in the opening of a new chapter.
I`ve got a contract with my new board, which is exciting as well. We put
together a new board. They`ll have its first meeting this month that has
another 18 months to go on it. There are many things that I have said this
company can do that others have said we can`t do, that I`d be delighted to
prove them wrong once again. So in that regard, I`ve got a lot of work to
do yet.
EASTABROOK: Thank you for joining us.
TILTON: My pleasure.
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.
2/02/06: "Bill of Health"-Paper Vs. Technology
SUSIE GHARIB: These days, it seems just about every industry has gone
digital, every industry but one, that is. The medical industry is still
behind the curve, with most doctors` offices and hospitals still relying on
paper instead of electronics, for patient records. In tonight`s "Bill of
Health" report, Jeff Yastine says that situation is now changing, but
changing slowly.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The problem is
getting hospitals and doctors to spend the money. By some estimates, it
costs a medical practice about $50,000 per physician, to set up all the
computers and software necessary to create a fully digital practice. With
numbers like that, it`s no wonder it`s taking a long time for healthcare
practitioners to get online.
Computers have long been used for billing and scheduling, but using
them to easily store, update, and access patient health information lags
far behind. A 2005 study found only about one-third of hospital emergency
departments and 17 percent of doctors offices, have electronic medical
records to support patient care. But hospitals and practices are slowly
loosening their purse strings. A Data Monitor survey estimates a 7.5
percent annual growth rate in spending on healthcare information
technology, to nearly $40 billion by 2008. One of the industry`s problems
is that medical software systems, sold by different companies, can`t talk
to each other. The Federal government is prodding the industry to change
that, a move that would help doctors and patients.
DIANE BRADLEY, CHIEF MEDICAL OFFICER, ECLIPSYS: So you have Federal
initiatives that focus on interoperability, so making sure that the data
that is collected by your family practice doctor is available to the
emergency room physician, is available when you`re admitted for your
surgery, so that focus is something that we`re seeing pushing the adoption.
YASTINE: Hospitals have also been reluctant to spend on IT because,
until now, there`s no proof they`ll get any return on their investment.
That too, is beginning to change.
BRADLEY: What has made adoption and selling of complex electronic
health record software easier is the early adopters, our current customers
are starting to document outcomes. So not only are they seeing things
legible handwriting, illegible handwriting go away, but now they`re
starting to see savings in paper costs, in printing.
DR. MANUEL DIAZ, HOSPITALIST, DOCTORS HOSPITAL MIAMI: Prior to the
computer became widespread in the hospital, we had to rely on paper records
and these things needed to be hunted down by the nursing staff, by the
clerks on the floors and at the nursing stations and that was a time
consuming process. Oftentimes, paper records get lost or they get
shuffled. It takes a while to access them, to read them.
YASTINE: So the conversion from paper medical records to electronic
ones is on. But experts say it`ll take 10 to 15 years before the majority
of hospitals and medical practices make the conversion. 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.
2/02/06: "Commentary"-The Business of the Superbowl
SUSIE GHARIB: Well, get those nachos ready, order that pizza to be delivered.
Sunday is the Super Bowl, the nation`s favorite football game. Tonight`s
commentator says it`s not just national pride that`s at stake. There`s a
lot of money on the line as well. Here`s Rick Horrow, president of Horrow
Sports Ventures.
RICK HORROW, PRES., HORROW SPORTS VENTURES: Super Bowl XL in Detroit
on February 5 is extra large in every way, but none more so than from a
sports business vantage. I worked with Bill Ford, former Detroit Mayor
Dennis Archer, and the National Football League in 1996 to develop plans
for the stadium that was to become Ford field. And while we knew we were
creating only the third cold climate Super Bowl in history, we had no idea
that the game the facility would host in 2006 would be one of the most
eagerly-anticipated match ups since the contest`s inception.
Consider some extra large viewer numbers. Regardless of which teams
get in, the Super Bowl is watched each year by nearly 140 million
Americans, 40 percent of all households. And no other event, not even the
Academy Awards, captures this kind of consumer loyalty among men and women
alike.
Internationally, close to 500 media credentials have been issued for
the game, for a possible worldwide audience of one billion people. Super
sized as well is the cost of a 30-second ad at $2.6 million, a 5,000
percent increase from Super Bowl I. That compares to a top price of
$750,000 for an ad during the upcoming Turin winter Olympic games. The
Super Bowl has clearly evolved from a football game to its own selling
season, filling the gap between Christmas and Valentines Day. And for the
motor city itself, the promise of more than a $350 million Super Bowl boost
seems to have come in the nick of time. I`m Rick Horrow.
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.
2/02/06: "Paul Kangas' Stocks In The News"
PAUL KANGAS: Those strong retail sales couldn`t prevent a broad sell off in
stocks. Investors were concerned over a 3.5 percent rise in fourth quarter
unit labor costs and disappointing productivity, which could foreshadow
wage inflation and more interest rate hikes by the Fed. At noon, the Dow
was off 100 points and the NASDAQ down 27.
The market remained broadly lower for the rest of the session. So the
Dow industrial average closed off nearly 102 at 10,851.98. The NASDAQ
Composite tumbled almost 29 points, ending at 2281.57. Standard & Poor`s
500 down 11 2/3 points to 1270.84. Over in the bond market, the 10-year
note fell 1/32 to 99 16/32, putting the yield at 4.56 percent.
Now let`s look at the rest of our stocks in the
news tonight.
Most active big board issue on 32.1 million shares, Tyco Intl (TYC)
losing $1.30. First quarter earnings, excluding one-time items $0.39, up
from last year`s $0.34 and a penny better than the Street expected, but the
company`s second quarter earnings forecast was short of expectations by
about $0.05 a share in earnings.
Time Warner (TWX), which had better than expected earnings out
yesterday, moved up $0.02.
So did Lucent Technology (LU) $0.02 gain there.
General Electric (GE) down $0.24.
Citigroup (C) $0.66 drop, fifth in big board volume.
Pfizer (PFE) fell $0.27.
No change in ExxonMobil (XOM). Texas - incidentally Texas - getting
back to ExxonMobil, a Federal judge gave preliminary approval for a $1
billion judgment between the company and service station dealers. The
dealers sued ExxonMobil over a discount for a cash program a few years ago.
Texas Instruments (TXN) gained a penny. And then a $0.29 - lost a
penny.
Then a $0.29 loss in Ford Motor Co (F).
Motorola (MOT) down $0.98, tenth in volume.
Altria Group (MO) down $1.47. The Oregon supreme court confirmed a $79
1/2 million punitive jury verdict against the company`s Philip Morris unit.
The company wants the U.S. Supreme Court to review that award.
Intl Paper Co (IP) dropped $0.12, although its fourth quarter
earnings, including items were $0.12, a nickel better than the Street
expected. For the full year, the company earned $2.21 versus a loss the
year before.
Whirlpool (WHR) doing well, up $5.89. Fourth quarter earnings $1.83,
way up from expectations and that`s up from $1.44 last year. Sales were up
9 percent during the period.
And Clorox Co (CLX) up $3.12. Second quarter earnings were lower,
$0.55 versus $0.72 last year, because last year there was a big one-time
gain, not like, not this year. Actually, there was earnings of $0.55 or
$0.08 better than the Street expected.
Then the electrical supply firm, Wesco International (WCC) up $6.05.
Fourth quarter earnings came in at $0.80, almost $0.20 above the Street
estimate, way up from $0.38 last year and sales rose 25 percent.
On the downside, Thomson (TMS), the big media company, down $3.42. The
company had a disappointing rise of only .8 of a percent in its December
sales.
And then New York & Co (NWY), the women`s apparel retailer, off $1.77.
Its January same store sales were down 0.6 percent. The Street estimate was
for a rise of 3.8 percent in sales.
Oshkosh Truck (OSK), the truck company, up $6.15. First quarter
earnings $0.72, up from $0.56 last year and the company boosted this year`s
earnings forecast.
Nice gain in M/I Homes (MHO), up $4.80. Fourth quarter earnings $2.84,
up from $181.70 last year. Revenues jumped 30 - or 45 percent.
Finally, Phelps Dodge (PD) down $3.66, even though the board approved
a two for one stock split and a special $4 per share dividend on the pre-
split shares.
Google (GOOG) topped the active list, down $5.74 on NASDAQ.
Intel (INTC) $0.35 loss.
Apple Computer (AAPL) off $3.32.
Microsoft (MSFT) down $0.36.
And then Broadcom (BCOM) managed to buck the trend with an $0.89 gain.
Cephalon (CEPH) up $5.50. The company reached a settlement with Barr
Pharmaceutical over a drug patent.
Cisco Systems (CSCO) $0.21 loss.
Starbucks (SBUX), an eye opener, up $3.04. First quarter earnings
$0.22, up from $0.17, $0.02 better than the Street expected.
Amgen (AMGN) was down $1.53.
And Dell Computer (DELL) a $0.76 drop.
And finally, we had a new issue come to market today, the Thomas
Weisel investment bank, (TWPG), six million shares offered at $15, opened
at $19, the high of the day $20.37, had a nice debut.
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.
02/01/06:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10864.86 -35.06 - .3
HIGH 10923.45
LOW 10862.14
NASDAQ COMP. 2305.82 -.96 -.0
HIGH 2311.83
LOW 2292.95
VOLUME 1,981.5
PREVIOUS 1,680.8
UP VOLUME 854.3
DOWN VOLUME 1,111.2
DOW TRANSPORTS 4367.54 +13.05 + .3
DOW UTILITIES 413.84 +.13 + .0
CLOSING TICK +839
S&P 500 1280.08 -5.12 - .4
S&P 100 578.77 -2.90 - .5
MIDCAP 400 781.02 +4.46 + .6
REUTERS/CRB 348.66 -1.40 - .4
NYSE COMPOSITE 8106.55 +1.30 + .0
VALUE LINE 436.56 +.66 + .2
RUSSELL 2000 733.20 +2.33 + .3
DJW 5000 12953.63 -25.80 - .2
U.S. TREASURIES
5-YEAR NOTE 4.25%
Jan. 15,2011 99 3/32 unch. 4.46
10-YEAR NOTE 4.50%
Nov. 15,2015 99 27/32 +3/32 4.52
30-YEAR NOTE 5.375%
Feb. 15, 2031 110 5/32 +12/32 4.68
LEHMAN BROS.
LONG BOND INDEX 1749.98 +.14
DOW CLOSE 10864.86 -35.06 - .3
ADVANCES 1785
DECLINES 1549
NEW HIGHS 299
NEW LOWS 31
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
TWX Time Warner 17.53 -.02 -.1
GE General Electric 32.75 -.18 -.6
PFE Pfizer 25.68 -.26 -1.0
XOM Exxon Mobil 62.75 -.36 -.6
LU Lucent Tech 2.64 -.03 -1.1
BSX Boston Scientific 21.87 +.97 +4.6
EMC EMC Corp 13.40 -.26 -1.9
GT Goodyear Tire 15.64 -3.12 -16.6
BAC Bank Of America 44.23 -.25 -.6
JNJ Johnson & John. 57.54 -.86 -1.5
NASDAQ CLOSE 2305.82 - 0.96 - .0
VOLUME 2,388.1
PREVIOUS 1,968.0
ADVANCES 1636
DECLINES 1411
NASDAQ ACTIVES
GOOG Google 432.66 +5.84 +1.4
MSFT Microsoft 28.15 +.15 +.5
AAPL Apple Computer 75.51 +.51 +.7
INTC Intel 21.26 -.40 -1.8
CSCO Cisco Systems 18.57 -.32 -1.7
YHOO Yahoo! 34.38 -.68 -1.9
SEPR Sepracor 56.91 +8.53 +17.6
VRSN Verisign 23.75 +.71 +3.1
SNDK SanDisk 67.36 +1.07 +1.6
AMGN Amgen 72.89 +.57 +.8
AMEX CLOSE 1860.83 + 21.94 + 1.2
INDEX SHARES
DIA DIAMONDS TRUST 108.27 -.64 -.6
QQQ NASDAQ 100 42.00 -.19 -.5
SPY S&P DEP.RECEIPTS 127.50 -.94 -.7
STOCKS IN THE NEWS
AA Alcoa 31.50 +.97 +3.2
MO Altria Group 72.34 -1.57 -2.1
MRK Merck & Co 34.50 +.04 +.1
UNM UnumProvident 20.33 -3.70 -15.4
HAE Haemonetics 52.00 +7.64 +17.2
ADM Archer-Daniels 31.50 +2.76 +9.6
HSC Harsco 79.22 +6.04 +8.3
HEES H&E Equipment 23.10 +5.10 +28.3
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