xfdce NIGHTLY-BUSINESS-REPO-00

Show: NIGHTLY BUSINESS REPORT>

Date: October 31, 2003>

Time: 18:30:00>

Tran: 103100cb.118>

Type: SHOW>

Head: Nightly Business Report>

Sect: Business>

Byline: Paul Kangas, Susie Gharib>

Guest: Derwood Chase>

Spec: Business; Economy>

Time: 00:00:00>

PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: Wall Street makes it out of the scariest month unscathed. Blue chip stocks end the day higher and the major indices continue their stair-step rise despite Wall Street`s spooky October history.

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: But our “Market Monitor” guest tonight says he`s still spooked by high valuations. Coming up, our interview with Derwood Chase, president and chief investment officer of Chase Investment Counsel.

KANGAS: An earnings surprise from ChevronTexaco (CVX) sent its stock gushing, we`ll run down the company`s latest quarterly results.

GHARIB: Then, they`re futuristic and fun. But will they catch on with consumers? An update on the market for electric-only cars from the Tokyo Auto Show.

KANGAS: I`m Paul Kangas.

GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Friday, October 31.

Good evening, everyone and happy Halloween.

More “treats” than “tricks” on Wall Street today: The Dow rose 14 points but the NASDAQ slipped a fraction. Surprisingly though, investors warded off the evil spirits this month and avoided the traditional “October jinx.” All the major stock indexes posted sharp gains in October.

What`s the outlook from here? Suzanne Pratt takes a look back and ahead.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: October is usually considered one of the scariest months for the stock market, but not so this year. Encouraged by better-than-expected corporate profits and a recovering economy, investors gobbled up stocks this month. All of the major market indexes gained solidly in October, with the Dow Jones Industrial Average up almost 6 percent.

RONALD HILL, INVESTMENT STRATEGIST, BROWN BROTHERS HARRIMAN: This month, fairly stable economic growth, stimulative Fed policy, very easy and stimulative fiscal policy all combined to give a good push to revenue growth, profit growth and make investors want to own equities.

PRATT: On a year-to-date basis the blue-chip index is up nearly 1,500 points, or about 17 percent. And, most experts say the bear market is most likely a thing of the past.

HILL: We are I think very much definitely in a new cyclical bull market. Not a bull market likely to go up 18 years like we did from 1982 to 2000, however, another very good year next year most likely as well.

PRATT: While solid earnings growth has clearly powered stocks most recently, experts say an improving economic picture is likely to be the engine for future gains. Just today its was confirmed that the University of Michigan`s consumer sentiment index rose to 89.6 in October from 87.7 in September. And, experts say improving confidence suggests that consumers will spend during the crucial holiday season. On top of that investors got more evidence today that the industrial sector is firing up. The Chicago purchasing managers index expanded to 55 this month from 51.2 in September. A reading above 50 means more firms are expanding business rather than contracting it.

DREW MATUS, SR. MKT. ECONOMIST, LEHMAN BROTHERS: New orders are growing, production is growing, inventories are falling, very sharply. And what that means is that those firms are probably going to have to start rebuilding their inventories sooner rather than later, and that`s good news for employment gains going forward.

PRATT: Another piece of good news for investors: Wall Street historians say November is usually one of the best performing months of the year for both the Dow and S&P 500.

Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York

KANGAS: Wall Street opened with modest gains as investors found no unpleasant surprises in the early reports, showing September consumer income rising 0.3 percent while spending fell that much. After a half hour of trading, the Dow was up 40 points and the NASDAQ Index had gained 8 points. Those basically positive reports on consumer sentiment and Midwest business activity helped the market hold its early advance and so did better-than-expected earnings from Cigna (CI) and ChevronTexaco. At noon, the Dow was still up 33 points, the NASDAQ Index posted a 4-point gain. The market turned narrowly mixed in very quiet afternoon trading as many traders made early exits for Halloween festivities. The Dow Industrial Average closed up 14 1/2 points at 9801.12. And the Dow rose every day this week for an overall gain of 218 2/3 points or 2.3 percent. The NASDAQ Index fell almost a 1/2 point today to 1932.21. And for the week it fell twice, rose three times and had a net advance of 66 2/3 points or 3.6 percent. The Standard & Poor`s 500 Index gained 3.77 to 1050.71 today. In the bond market, the 10-year note climbed to 13/32 to 99 20/32, putting the yield at 4.30 percent.

GHARIB: Some closure today on the investment scandals plaguing Wall Street. A federal judge signed off on the $1.4 billion settlement with 10 Wall Street investment firms accused of misleading investors with biased stock research. The firms settled with the Securities and Exchange Commission and other regulators back in April, pledging to change the way they do business by separating their investment banking and stock research divisions. But the judge said today`s settlement does not close off future lawsuits by investors. Right now investors are focusing on scandals in the mutual fund industry.

Mutual fund companies are under investigation for using questionable trading practices. Today, Iowa and Rhode Island followed the lead of Massachusetts and fired Putnam Investments as their pension fund manager. Earlier this week, Putnam was charged with civil securities fraud in connection with improper trading practices. That will be one of the issues that Congress will address next week when it holds hearings on the mutual fund industry.

Here`s Angela Terrell Heath with a preview of what`s at stake.

ANGELA TERRELL HEATH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Investors aren`t the only ones wondering why the Securities and Exchange Commission didn`t do more to stop late trading and market timing in the mutual fund industry.

PAUL ROYE, DIR. INVESTMENT MGMT., SEC: We are asking ourselves why didn`t catch this sooner, why didn`t we catch it earlier? And we are looking at this and we`re trying to learn from this.

TERRELL HEATH: Paul Roye, the SEC`s top enforcer of mutual funds, says what they did learn is changes need to be made in the industry`s oversight. Roye says by the end of next month the SEC will put forward new rules to crack down on late trading and market timing abuses. The SEC will also take aim at front running by mutual fund portfolio managers, and promises there will be better disclosure of mutual fund fees and commissions. But Roye warns there are costs associated with some of these changes.

ROYE: By trying to eliminate the late trading problems, there may be some investors who don`t have as wide a window of opportunity to put their orders in. But we are trying to cut off this abusive activity. So there are going to be some trade-offs.

TERRELL HEATH: Long-term observers says at this point the SEC has no choice except to look tough on mutual funds. Don Phillips says one obvious change would be to require fund companies to say exactly how much they pay portfolio managers.

DON PHILLIPS, MANAGING DIR., MORNINGSTAR: We know to the penny what Michael Eisner is paid to run Disney (DIS), so fund managers have a good sense of what are Eisner`s incentives in trying to grow Disney over time. Stunningly, that same information is not available to a mutual fund investor.

TERRELL HEATH: The Mutual Fund Industry Association introduced new proposals this week but says the most important reform that could be made is one they proposed to the SEC in 1994. It would require every mutual fund to have a compliance officer that would report to the fund`s board and independent directors.

MATT FINK, PRES., INVESTMENT COMPANY INSTITUTE: It`s not a cure-all but I think overall tough compliance procedures overseen by the fund board will be the best way to address the existing abuses and any other possible abuses. It`s strikes me that is the most important reform that could made.

TERRELL HEATH: Industry watchers say recent events clearly show the fiduciary culture of the mutual fund industry has been watered down. Members of Congress will try to restore that sense of responsibility when they begin their investigation into the industry next week.

Angela Terrell Heath, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: MCI could soon be back in business. Late this afternoon a federal judge approved the company`s reorganization plan and cleared the way for the nation`s third largest telecom firm to emerge from bankruptcy, possibly by the end of the year. MCI, the former WorldCom, filed the largest corporate bankruptcy ever in 2002, when an $11 billion accounting fraud was uncovered. MCI will start fresh almost debt free. It has shed $35 billion in debt as part of its reorganization and will now pay its creditors $0.36 on the dollar to end the process, Paul?

KANGAS: And as you know, Susie, common shareholders of the former WorldCom will get nothing.

GHARIB: That`s right.

KANGAS: Now let`s take a look at our “Stocks in the News” tonight.

On a very active 79.2 million shares, Lucent Technologies (LU) topped the list of activity with a $0.04 loss, a little profit-taking. The stock up nicely yesterday on positive comments from the CEO, Patricia Russo.

Elan Corp. (ELN) was up $0.18.

Pfizer (PFE) moved up $0.72. The board of Pfizer has voted to eliminate the company`s 16-year-old poison pill measure, which was supposed to prevent unsolicited takeovers. New governance at work there.

AT&T Wireless (AWE) was down $0.02.

ExxonMobil (XOM) rebounding $0.28. It was down over a dollar yesterday on disappointing earnings.

And moving along, GE (GE), a $0.13 gain.

NorTel Networks (NT) dropped $0.04.

SBC Communications (SBC) gained a half a dollar.

Marsh & McLennan (MMC) down $1.75. As you heard, Putnam mutual fund, one of the company`s units, is losing business due to those questionable trading practices.

And then a new issue, First Marblehead (FMD), went public today. This company is involved in the facilitation of educational loans, 12 1/2 million shares, IPO offered at 16, it opened at 18 1/2. The high of the day, $22.86, closed pretty close to that high.

CIGNA Corp. (CI) the start of the day in the blue chips, up $9.08. Third-quarter earnings $1.45, same as last year but the Street was looking for only $1.17. And on top of that, the company upped its guidance for not only this year, but next year earnings as well. Smith Barney brokerage upgraded it from hold to buy.

And as we touched on earlier, ChevronTexaco (CVX) moving up $2.54. Third-quarter earnings of $2.02 versus a loss of $0.85 last year. But that does include an accounting benefit from the company`s investment in Dynegy (DYN). From just operations the company`s third-quarter earnings a $1.86. But that was better than the Wall Street estimate of $1.62, far better.

Archer Daniels Midland (ADM) moved up $0.78. First-quarter earnings very respectably higher, $0.23, up from $0.17 a year ago, $0.04 above the Street estimate. And sales jumped 19 percent.

Church & Dwight (CHD) up $2.17. Prudential Securities upgraded it from neutral to overweight.

And Unitrin (UTR) had a good day, up $2.84. The company is in the insurance and financial services business. Yesterday its president acquired over 35,000 shares through the exercise of options. And today a publication called “Changewave” had very positive comments, including a buy recommendation on the stock.

OM Group (OMG), a specialty chemical company, down $1.45. Yesterday, third-quarter earnings sharply lower, $0.28 versus $0.79. Today Bank of America brokerage downgraded it from buy to just neutral.

Another major casualty, AutoZone (AZO), plunging $7.43. Some of the partners in ESL Investments, a hedge fund which is the largest shareholder in AZO. Well, these fellows plan to sell 5.6 million shares in a public offering.

NASDAQ`s most active, Microsoft (MSFT), edged up $0.02.

Followed by Intel (INTC) with a $0.06 gain.

Cisco (CSCO) rising $0.07.

Amgen (AMGN) gained $0.65.

Applied Materials (AMAT) a $0.09 rise, number five in dollar volume.

Overnite (OVNT), this is a unit of Union Pacific (UNP), and the company is a trucking firm that delivers packages. And it went public, 25 millions shares offered at 19, opened at $21.55. The high of the day, $22.46. It closed much closer to the high than the low.

Qualcomm (QCOM), a $0.53 loss.

InterActive (IACI) fell $1.03.

SINA Corp. (SINA) off $1.69.

Tenth in volume, Dell (DELL), down $0.23.

Sicor (SCRI) up $1.81. TEVA Pharmaceuticals (TEVA), the Israeli pharmaceutical going to acquire for cash and stock worth about $27.35 as of today, 16 1/2 of that is in cash, incidentally.

California Amplifier (CAMP) up $2.96, a huge percentage move. The company increased its third-quarter forecast for earnings from about $0.07 to $0.12 up to $0.13 to $0.17 a share.

CV Therapeutics (CVTX) down $4.82. The FDA may request more clinical information on the company`s chronic angina drug called Ranexa.

And Skyworks Solutions (SWKS), a software company, down $2.16. Fourth-quarter earnings-or I should say, a fourth-quarter loss of $0.07 was wider than expected. CIBC World Markets brokerage downgraded it from sector outperform to sector perform and also cut earnings estimates.

And those are the “Stocks in the News” tonight, Susie?

GHARIB: Thanks, Paul.

Sales of electric cars have stalled recently. And major carmakers are scrapping “pure” electric vehicles in favor of gas-electric hybrids and research into hydrogen powered fuel cells. But as Lucy Craft reports from the Tokyo Auto Show, the electric car crusade is still going strong in Japan.

LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Electric cars going the way of the Edsel? Don`t tell that to the students and teachers at Japan`s Keio University who designed some of the most unexpected battery-powered vehicles on the planet. Inspired by Japan`s famous high speed mass transport, the bullet train, this pair of sleek cars feature maximum speeds of about 200 miles per hour, the leg room of a limo and, count them, eight wheels to boost stability and control, but without sacrificing the electric car`s main virtue, zero tailpipe emissions.

HIROICHI YOSHIDA, PROFESSOR, KEIO UNIVERSITY (THROUGH TRANSLATOR): This chassis is made of aluminum with all the components built in under the floor. So it`s extremely durable against collisions and highly stable. Each of the eight wheels is powered by an individual motor.

CRAFT: Based on a lithium ion battery, the Keio project flouts conventional wisdom in the U.S. and Japan which holds that electric cars cost too much and can`t drive far enough on a single charge to be practical. The big car makers have all but abandoned electric cars to pursue hydrogen fuel cells, a technology that is years or even decades away from practical use. Keio University says its battery mobile has the driving range of a conventional car and will go on sale in 2006. If the car is mass-produced, say its designers, sticker prices could drop to as low as those for a conventional subcompact.

YOSHIDA: We proved it was possible to build an electric car capable of high performance and high speed. Since the battery is expensive, we decided to target the luxury market, a car designed with the CEO in mind.

CRAFT: Meanwhile, what would happen if a toy-maker decided to go into the car business? of course, cars precious inform enough for Hello Kitty or happy enough to stop traffic and police cruisers.

HIROSHI HASHIMOTO, SALES DIRECTOR, CHORO Q MOTORS (THROUGH TRANSLATOR): The image of electric cars is purely commercial delivery vehicles, but we wanted to offer an electric car appealing to every man. So we chose this cute design.

CRAFT: Takara toy company has already sold 500 units of its one-seater cartoony roadsters which have overcome one of the key flaws of electric cars, costliness. Sticker prices for the Choro Q start at around $10,000, more for options like pastel Kitty accents.

HASHIMOTO: Were we to aim for the same performance as a gasoline-powered car, our electric car would end up costing something like $1 million. So we stripped out functions like air conditioning and a stereo system, but for city driving it`s quiet, non-polluting, easy to maneuver and cheap to operate. So for limited use, it`s perfectly adequate and fun.

CRAFT: Battery-powered electric cars may never rise beyond mere niche products in the world auto industry, but proponents insist that electric cars are not just toys, but remain serious contenders in the quest for environment-friendly transportation.

Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.

KANGAS: Monday, Eliot Spitzer goes to Washington. The New York attorney general talks mutual fund abuses with Congress.

GHARIB: Investors continued to pour money into stock funds during the month of September. The Investment Company Institute, which tracks these numbers, says $17.3 billion were invested into equity mutual funds last month. That was the seventh consecutive month of inflows for stock funds. Some of that money came out of bond funds: Investors withdrew almost $6 billion from bond funds last month. So far this year, almost $100 billion have flowed into stock mutual funds.

KANGAS: The Washington Post Company (WPO) posting a big 58 percent decline in third quarter revenues. The publishing giant earned $2.06 a share, that`s less than half of the $4.99 per share earned in the same period last year. The Post says today`s earnings included $74 million in compensation costs at its Kaplan Educational Services unit. But that same unit also posted a 40 percent jump in revenues, helping Washington Post shares today gain $29.75 to close at $737.41 per share.

GHARIB: Here`s a look now at what`s happening next week: Our Friday “Market Monitor” guest is James Dines, editor of “The Dines Letter.” On the economic calendar: Monday the October ISM manufacturing index and September construction spending come out; Wednesday, Federal Reserve Chairman Greenspan testifies on the banking industry in front of the Senate Banking Committee; also on Wednesday, September factory orders; and Friday, it`s the October employment report.

KANGAS: My guest “Market Monitor” this week is Derwood Chase, president of Chase Investment Counsel, a money management firm based in Charlottesville, Virginia.

And welcome back to NIGHTLY BUSINESS REPORT, Derwood. Good to see you.

DERWOOD CHASE, PRES., CHASE INVESTMENT COUNSEL: Thanks very much, Paul.

KANGAS: In your recent visits with us, you have been quite cautious on the stock market because of concerns about its relatively high valuation. Have recent reports showing an improving economy such as yesterday`s huge 7.2 percent jump in third-quarter GDP made you a little less cautious and more bullish?

CHASE: Well, I`m glad to see the economy come through and be responding to stimulative fiscal and monetary policy, but you know, the market doesn`t correlate very well with those outstanding, strong economic reports.

KANGAS: Well, in other words, you still feel it`s a bit highly valued?

CHASE: Yes, we`re worried about valuation. I think the stimulus of the economy is there. And I think this is going to be an earnings-driven market from here on out.

KANGAS: Well, despite your cautious approach to stocks, the recommendations you gave us on your last visit in February did quite well. Let`s have a quick review of what you recommended and how they fared We have SLM (SLM), the old Sallie Mae Corporation, was 36 back there on 28 February, now it`s around the 40 mark, 39 plus change. That`s a nice move. I congratulate you there. Anadarko Petroleum (APC) you like because of the tight natural gas situation, but the stock, after getting to 50 after recommended it, is now down to 43, about 3 points below where it was. What do you think about that?

CHASE: It failed the technical side of our work after our conversation in February and we actually eliminated it.

KANGAS: OK.

CHASE: We still like the company but we eliminated it for technical reasons.

KANGAS: All right. There are two other stocks you recommended back then, Suncor Energy (SU) which has done nicely. It`s up about $3 a share. That`s done decently. And then the big winner, International Game Technology (IGT) was back there just under 20 then, now it`s up almost $33 a share. That`s a huge percentage gain. That one I have really got to compliment you on there. Are you still with it?

CHASE: Yes. That`s, of all the stocks I mentioned, our largest position is in International Game Technology. And we still like that as you know.

KANGAS: And you own it yourself.

CHASE: I do own that stock myself. And they are by far and away the leader in manufacturing of slot machines, particularly the new paperless generation of slot machines. I think the Harrah`s (HET) order for 11,000 machines is the largest one they`ve ever had.

KANGAS: And you are recommending it at this level, is that true?

CHASE: Yes. we`re still holding it and we`re still adding to it for new clients.

KANGAS: All right. I think we have a chart on IGT. Let`s have a look at that. We can see the progress it has made since you recommended it back in February, almost straight on up. And you still like it. You are not afraid of this big jump?

CHASE: Well, I don`t think any of the stocks I`m going to mention today are really cheap but they are getting through our technical screens and they certainly have sound fundamentals.

KANGAS: OK. Let`s have another one that you like.

CHASE: Electronic Arts (ERTS), the world`s largest producer of interactive, entertainment software, and we`re talking about games like Madden football and Tiger Woods golf. They have all the Harry Potter releases as well.

KANGAS: I see.

CHASE: That`s at a pretty solid 20 percent growth rate. And it`s a very strong company. They`ve got cash of $1.7 billion and.

KANGAS: OK. We just have a minute left, do you have more suggestions?

CHASE: Staples (SPLS), which would be the largest office supply retailer. They are doing very well with their North American superstores and their international operations as well as delivery. And finally, TEVA Pharmaceuticals (TEVA) is the largest of all the generic drug manufacturers. They have got about 145 products. And we think over the next three years with 40 billion prescription branded drugs coming off patent that they`ll have great opportunities…

KANGAS: Big news on TEVA, incidentally, I`m sure you`re aware that TEVA is buying Sicor (SCRI), that was out today. Incidentally, TEVA in Hebrew means “nature,” are you aware of that?

CHASE: No, I wasn`t.

KANGAS: Well, let`s hope it`s a natural winner. And you own all of these do you?

CHASE: Well, I own International Game and TEVA. But of course, I own the Chase Growth Fund and the Chase Midcap Growth which owns some of these.

KANGAS: All right. Derwood, thanks very much for being with us.

CHASE: My pleasure.

KANGAS: Derwood Chase, president of Chase Investment Counsel.

GHARIB: Recapping today`s market action, a mild finish to a strong October. The Dow rose 14 points and the NASDAQ lost a fraction. And please be sure to join us at our World Wide Web site, NBR.com.

And that`s NIGHTLY BUSINESS REPORT for Friday, October 31. I`m Susie Gharib. Good night, everyone. Have a safe and fun Halloween weekend.

And you too, Paul.

KANGAS: And you as well, Susie.

I`m Paul Kangas, wishing all of you the best of good buys.

END

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH e-Media, Inc. 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. c 2003 Community Television Foundation of South Florida, Inc.

TO PURCHASE A VIDEOTAPE OF THIS PIECE, PLEASE CALL 888-266-3601

(Copy: Content and programming copyright 2003 Community Television Foundation of South Florida,

Inc. Formatting and transcription copyright 2003 FDCH e-Media, Inc. (f/k/a Federal Document Clearing House Inc., eMediaMillWorks, Inc.), No quotes from the materials contained herein may be used in any media without attribution to Community Television Foundation of South Florida, Inc. This transcript may not be copied or resold in any media.)

xfdce NIGHTLY-BUSINESS-REPO-00

Show: NIGHTLY BUSINESS REPORT>

Date: October 24, 2003>

Time: 18:30:00>

Tran: 102400cb.118>

Type: SHOW>

Head: Nightly Business Report>

Sect: Business>

Byline: Paul Kangas, Jeff Yastine>

Guest: David Pottruck>

Spec: Business; Economy>

Time: 00:00:00>

PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: The high profile trial of a former high flying Wall Street banker ends without a verdict, as a mistrial is declared in “The Government v. Frank Quattrone.” Now prosecutors must decide whether to retry the man who came to symbolize the stock market bubble of the 1990s.JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: And a baby shower on Wall Street. Shares of children`s apparel maker Carter Holdings surge on their debut as a publicly traded company. Experts say Carter`s success may be a sign the IPO market is on the rebound.

KANGAS: Then, there are reports a Baby Bell may be thinking again about gobbling up its Ma. Shares of BellSouth (BLS) lose some ground in trading on the news, but AT&T`s (T) stock heads higher.

YASTINE: And tonight`s market monitor says he`s about as bearish as you can get, except for one very specific investment, and he`ll tell you what it is. He`s Michael O`Higgins, President of O`Higgins Asset Management.

KANGAS: I`m Paul Kangas.

YASTINE: And I`m Jeff Yastine.

Susie Gharib is on special assignment tonight.

And this is NIGHTLY BUSINESS REPORT for Friday, October 24.

Good evening, everyone.

A federal judge declared a mistrial this afternoon in the trial of Frank Quattrone, a man who was one of Wall Street`s best known investment bankers. The decision came after jurors said they were deadlocked on obstruction of justice and witness tampering charges against Quattrone. Now federal prosecutors must decide whether to refile the charges, which could send Quattrone to prison for 25 years if he is convicted. As he left the court, Quattrone showed no reaction and declined comment. But Quattrone`s lawyer repeated his belief in his client`s innocence.

JOHN KEKER, QUATTRONE ATTORNEY: Frank Quattrone is a man of integrity and is a man who has followed the rules. And our feeling at this point is disappointment.

YASTINE: A hearing is scheduled for November 5 to determine the next step in the legal process. In the Internet boom of the late 1990s, Quattrone was one of the most influential investment bankers on Wall Street, with big name clients like Cisco Systems (CSCO) and Amazon.com (AMZN).

KANGAS: An initial public offering took center stage on Wall Street today. Shares of kids` clothing maker Carter Holdings went public and the stock soared, closing up almost 30 percent. That`s a $5.65 gain, to $24.65.

As Suzanne Pratt reports, the Carters deal comes at a time when the IPO market seems to be toddling toward recovery.

SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: For 138 years, the Carter name has been synonymous with everything from receiving blankets to baby bodysuits. And, now the nation`s largest brand of baby clothes has added stock to its layette. By going public, Carter Holdings has raised $119 million, some of which will be used to pay off debt. Experts say the Carter IPO was well received in the market today because it`s an established name with a solid outlook for growth. Others say it was also the right price.

JOHN FITZGIBBON, IPO ANALYST, 123 JUMP.COM: The dealers brought the IPO public at a discount to the multiples of publicly traded companies in that sector. This is normal. It`s been going on for years.

PRATT: The Carter deal comes at a time when the IPO market is showing signs of life. After three very slow years, some say the driest stretch since the 1970s, activity is finally picking up. According to Renaissance Capital (RENN), its looks like 12 deals will be priced this month, the best October since 2000. In fact, most experts agree the worst is over in the IPO market.

KATHLEEN SMITH, MANAGER, RENAISSANCE IPO PLUS FUND: Substantiation for that includes the pickup that we`re seeing in pricings, in filings. The backlog of IPOs is beginning to build and the overall stock market, it looks like to us, is at the beginning of a — it`s in — we`re in a bull market, the beginning of a cyclical upturn.

PRATT: And there are several solid deals in the pipeline. Next week, Overnite Transportation and the student loan processor First Marblehead are scheduled to come to market. In coming months, investors can look for Motorola (MOT) to spin off its semiconductor business and for Orbitz and search engine Google to go public. Experts say the Google and Orbitz deals look much different than the technology IPOs of the 1990s.

SMITH: Well, here we`re going to see these new dot-com IPOs come out with a much longer track record and earnings that we hadn`t seen prior.

PRATT: Experts say the IPO market is definitely in recovery mode. But it is nowhere near what was once considered normal activity for new offerings. To get to that level, we`d need to see something closer to 30 new deals a month.

Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.

KANGAS: Wall Street opened broadly lower, undermined by losses in Microsoft`s (MSFT) stock, prompted by the company`s less than upbeat outlook we told you about last night. After an hour of trading , the Dow was down 70 points, the NASDAQ Index down 27.

Joining the tech sector on the downside were the drug, healthcare and homebuilding stocks, while the golds were about the only issues showing strength. By early afternoon, the Dow was off 106 points, the NASDAQ Index down 40.

The market stabilized and then firmed up on late day bargain hunting. The Dow Industrial average closed off only 30 2/3 points, putting it at 9,582.46. This week the Dow rose twice, fell three times, had a net overall loss of 139 1/3 points, or 1.4 percent. The NASDAQ Composite lost nearly 20 points, to close at 1,865.59 today. It, too, rose twice and fell three times this week, losing 46 3/4 points, or 2 1/2 percent overall.

The Standard & Poor`s 500 Index fell 4.86 points, to 1,028.91 today.

Over on the bond market, the 10-year note rose 17/32 to par, pushing the yield down to 4 1/4 percent.

YASTINE: It has been a challenging week for the brokerage firm Charles Schwab (SCH). Its stock has lost ground, despite news on Tuesday that it was back in the black in the third quarter.

As we wrap up our special series, California Crossroads, we get an outlook tonight from the nation`s fourth largest brokerage.

Susie Gharib sat down with Schwab CEO David Pottruck and asked for his take on investor confidence.

DAVID POTTRUCK, PRESIDENT & CEO, CHARLES SCHWAB: Well, I think investors are becoming much more confident of the market. And I think the reason for that is that the market is making moves based upon underlying economic strength. So they read stories each day. They see corporate profitability go up. They see stories of corporate confidence growing, investment happening, capital investment, inventories building. So all of this gives rise to the notion that the market is going up because the underlying fundamentals are solidifying.

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Mr. Pottruck, many people consider the New York Stock Exchange the icon of the U.S. financial markets. With the whole uproar over everything from the Exchange`s corporate governance to Dick Grasso`s pay package, has it shaken investor confidence?

POTTRUCK: I think people separate Dick Grasso`s pay package for — with does the New York Stock Exchange help me invest my money fairly, economically, wisely, reasonably and so forth. So I don`t think those things get intertwined. But I think there`s a fundamental frustration and somewhat of a disgust with this notion of CEO greed, that Dick is just part of a larger mosaic that embarrasses everybody in the business community.

GHARIB: I see that Schwab had a pretty good pick up of business in the third quarter that you reported this week. How much of that is because the stock market is improving?

POTTRUCK: This third quarter of 2003 is the first quarter we`ve had a year on year revenue increase since the second quarter of 2000. And that is very much a function of the combination of the stock market doing better and Schwab doing better. Both are happening. So Schwab is bringing a lot of net new money into the company, over $10 billion in this quarter, plus the value of the clients` holdings that are up at Schwab are going up and the environment has encouraged people to trade a little more. And the combination of all of that results in a $100 million pick up or a $200 million pick up in revenues. And our cost cutting has brought a lot of that money to the bottom line.

GHARIB: As you know, New York Attorney General Eliot Spitzer continues to uncover improper trading practices in the mutual fund industry. How widespread do you think these problems are and what should investors do?

POTTRUCK: I don`t think we know the answer yet of how widespread the practices of late trading are. So all of us are looking very carefully to see if there are any examples of late trading practices that would be something that we`d all be embarrassed by. So I don`t think we know yet whether this is a very widespread thing. We will know and the story will come out, probably over the next month or so.

In terms of what investors should do, there`s no reason of why one group of important hedge funds should be advantaged over the average investor and a mutual fund. But I don`t really think it`s a reason for people to run away from mutual funds or leave the market. I think the overall impact is relatively small on the average investor`s portfolio.

GHARIB: Let`s talk a little bit about California. During the recent recall election, you joined some other prominent CEOs from California and you wrote this letter saying that California has become one of the worst places to do business, not only in the United States, but in the world. Why is California the worst place to do business?

POTTRUCK: What has happened is that our state legislators, our city legislators here in San Francisco, have passed rule after rule, law after law, regulation after regulation, that makes it very tough to do business here in California. And so people move their companies or they move as many jobs as they can move to other places.

GHARIB: A year from now, what do you think we`ll be saying about Arnold Schwarzenegger`s tenure as governor? Will California be a better place to do business?

POTTRUCK: The question here is whether Governor Schwarzenegger is going to be able to forge a coalition with an essentially Democratic and somewhat angry legislature to get new laws and new ways of doing business passed. So I don`t know how successful the governor is going to be, in spite of how hard he may work at making California a better place to do business. I have no doubt of his sincerity in wanting to do this. Whether he will be successful or not, he can`t do it alone. I think we`re going to have to wait and see.

GHARIB: Mr. Pottruck, thank you very much.

POTTRUCK: My pleasure.

KANGAS: Now let`s take a look at some stocks in the news tonight.

The most active New York Exchange issue today on 44.2 million shares, Nortel Networks (NT), down $0.29. The company did report earnings in the third quarter of $0.04 and Wall Street was just looking for just break even. But revenues did fall short of Street expectations and the company said it`s going to restate results from 2000 to the first half of 2003.

Lucent Technologies (LU) down $0.17.

AT&T Wireless (AWE) fell $0.12.

Concord EFS (CE) down $0.39. As we told you yesterday, the Department of Justice has moved to block the acquisition of Concord EFS by First Data Corporation.

Sprint (PCS) was down $0.16, fifth in volume.

And then First Data (FDC) down $0.25.

Time Warner (TWX) gained $0.20.

SBC Communications (SBC) rose $0.60.

EMC (EMC) losing $0.03.

And General Electric (GE), tenth in volume, was down $0.09 a share.

AT&T (T) moving up $0.74 on the news that the company has renewed merger talks with BellSouth.

BellSouth, incidentally, dropped $0.09, to $25.85.

Marsh & McLennan (MMC), the big insurer, down $1.19. The “Wall Street Journal” reports the company is replacing four of its Putnam investment managers because they did short-term trades in the very funds that they oversaw.

Scottish Re Group (SCT), a reinsurance company, down $3.60. Third quarter operating earnings fell to only $0.02 a share, down from $0.42 a year ago.

Scientific Atlanta (SFA) a major casualty today, tumbling $6.35. It did have first quarter earnings sharply higher, $0.28 versus $0.07 a year ago, but bookings fell 21 percent from the previous quarter and the Soundview Brokerage downgraded the stock from “outperform” to just a “neutral” rating.

Gateway (GTW), the computer maker, down $1.48. A third quarter loss reported of $0.43 a share, much bigger than last year`s loss of $0.15 a share. And the company predicting a fourth quarter loss of anywhere from $0.09 to $0.15 a share.

Cablevision Systems (CVC) down $1.94. Smith Barney Brokerage downgraded it from “buy” to “hold” after the company restructured its plan to spin off its satellite television service.

The Shaw Group (SGR) up $2.10, one of the better percentage gainers. First Albany Brokerage upgraded it from “under perform” to “neutral” after a 20 million share offering was priced at $10 a share. And apparently the demand was quite good.

Crane Company (CR) doing well, up $2. Third quarter earnings better than expected, $0.47, up from $0.34 a year ago. Sales up a respectable 10 percent. And the Bear Stearns Brokerage upgraded the stock to “outperform.”

And finally we see Newmont Mining (NEM), the granddaddy of the golds, up $0.75. It traded as high as $42.80. As you may have seen earlier, New York December gold settled in at $389.20 the ounce, up $4.20.

The NASDAQ`s most active issue, Microsoft (MSFT), down $2.30. That`s an eight percent drop and the loss of $2.30 accounted for 16 1/2 points of the loss in the Dow Industrial Average today.

Intel (INTC) off $0.14.

Cisco Systems (CSCO) fell $0.36.

Amgen (AMGN) moved up $1.73.

And Sina Corp. (SINA) up $4.72. This is a Chinese Internet portal company and Wells Fargo said it`s among its favorites in that group.

Electronic Arts (ERTS) was down $0.44.

Yahoo! (YHOO) a $0.13 gain.

Sohu.com (SOHU) up $4.39. This is a Chinese Internet search engine and it reported strong third quarter profits and said more of the same coming in the fourth quarter.

Dell (DELL) a $0.37 loss.

And Netease.com (NTES) was up $5.75, another Chinese Internet portal. They`ve been a very strong group recently.

Extreme Networks (EXTR) moved up $1.20 a share. The company in with first quarter earnings of $0.02 versus a loss of $0.04 in the same period the prior year.

And then Centillium Communications (CTLM) tumbling $3, almost a 37 percent loss. The company designs broadband products and it reported third quarter earnings of a $0.01 a share versus a loss of $0.15 last year. But the Adams Harkness Brokerage downgraded the stock from “strong buy” to “market perform” on concern about near term prospects for the DSL market.

And Advisory Board Company (ABCO) tumbling $9.58. The company is a business research firm. Third quarter earnings a little higher, $0.25 versus $0.20 last year. But revenues tumbled 22 percent and the Think Equity Brokerage downgraded the stock from “over weight” to “equal weight.”

And those are the stocks in the news tonight. Jeff?

YASTINE: Monday, the economic outlook from Texas (TXN), Texas Instruments, that is. We sit down with its chief executive officer.

Coca-Cola (KO) is adding some fizz to its battle against PepsiCo (PEP) for control of the health drink industry. Coke is launching a new orange juice called Minute Maid Premium Heart Wise. That reduces cholesterol levels. Coke says it has a good customer base for the O.J. and it`ll start arriving on store shelves next week. Coke`s shares fell $0.12, to $45.40.

KANGAS: A big reduction of staff for AmeriDebt, the company known for helping consumers reduce debt. The 50 worker firm is laying off most of its staff amid allegations it defrauded customers by charging millions of dollars in hidden fees. AmeriDebt will stop all advertising and will not take on any new customers.

YASTINE: Well, here`s a look at what`s happening next week. Our Friday market monitor guest is Derwood Chase, President and Chief Investment Officer at Chase Investment Counsel. On the economic calendar, Monday, it`s September new and existing home sales; Tuesday, the Federal Reserve decides to meet on interest rates; and Friday, we`ll see personal income and spending reports for September.

KANGAS: My guest market monitor this week is Michael O`Higgins, President of O`Higgins Asset Management.

And welcome back to NIGHTLY BUSINESS REPORT, Michael.

MICHAEL O`HIGGINS, PRES O`HIGGINS ASSET MANAGEMENT: Thank you, Paul.

Nice to be here.

KANGAS: Great to see you.

You know, for some time, you have been one of the most vocal bears on the stock market. Has the strong recent rally of recent months changed your mind at all?

O`HIGGINS: No. On the contrary. It`s made me more bearish than ever.

KANGAS: Why? Because it`s getting far more overvalued than you thought it was last time?

O`HIGGINS: The higher it goes, the more overvalued it becomes.

KANGAS: But look at what you`ve missed. You know, the last time you were with us in March, the Dow was around 8,500. Now it`s testing the 10,000 range. And the NASDAQ Composite was way down at 1,400. Now it`s 1,800. You missed some big moves there.

O`HIGGINS: Yes, but my gold stocks are up even more than that.

KANGAS: Well, that`s true. That was the next thing I would mention. You gave us four gold stocks and, boy, they were winners. Let`s have a look in review.

We see Newmont Mining (NEM), which is the granddaddy of them all. It was then $24 back in March and now $42. That`s up 73 percent. And then, of course, Gold Corp. has had a rise of about 60 percent. Then you had two other recommendations, Anglo Gold (AU) at $28 is now bordering $40. That`s at 39 or almost 40 percent gain. And Gold Fields (GFI) was then $965. It`s now $1,503. And that`s a 50 percent gain. A lot better than the average did. So I compliment you on those fine recommendations.

O`HIGGINS: Thank you.

KANGAS: Do you still own the golds or have you taken some profits?

O`HIGGINS: No, I`ve stayed with them. Gold is still very cheap on a longer term basis. People forget that gold did very poorly for almost 20 years. And so it`s just started to come back up after the last couple of years.

KANGAS: Why is it attractive to you?

O`HIGGINS: Well, for one thing, it`s real money. And when you have the government threatening to print all the money it can to reflate the economy, you`ve got to — and you have something that traditionally has had about a 10 to one relationship with the Dow — in other words, the Dow has traded about 10 times gold — right now as we speak the Dow is 26 times gold so.

KANGAS: So that`s another reason. All right, now, so you think that the gold has a — I mean, do you have a target price in mind over a certain time frame?

O`HIGGINS: Well, I think it depends on what — actually, to tell you the truth, I think gold and the Dow could trade at the same price, which they did in 1980.

KANGAS: Good point.

O`HIGGINS: The Dow was 850 and gold was $850 an ounce. But, conservatively, I think that it could go to a long-term median average, which is 10 to one, which at today`s price would put gold at, what, $970 or something like that, $960.

KANGAS: You know, there`s something about gold that the major brokerages don`t seem to like. You see very few of them recommending any gold stocks. One of the few market monitors that`s on this program, Jim Dines, he`s been a gold bug now for over a year and a half, two years.

O`HIGGINS: Right.

KANGAS: How come nobody wants to recommend gold except a few of you people out there in the wilderness?

O`HIGGINS: Well, for one thing, that makes me very happy. When people agree with me, that`s when I get nervous.

KANGAS: I see.

O`HIGGINS: Especially the Wall Street firms. But gold is a — it`s a very narrow market. It`s not a huge large capitalization and it`s kind of a negative thing. Wall Street wants to be always optimistic.

KANGAS: A very good point.

O`HIGGINS: And in bad times they`re kind of, you know, betting the wrong way. But that`s how it is.

KANGAS: So, you still own the four that you recommended last time. Do you have any new suggestions?

O`HIGGINS: Well, I think the, these are — some of these major stocks have moved so much that the real value is in the more smaller capitalization. But they`re harder to buy. So I think people would be better off buying a good no load gold fund.

KANGAS: OK. We just have a minute left so let`s have one of these recommendations.

O`HIGGINS: Well, Tocqueville Gold Fund (TGLDX) is one that I own personally. I also own Newmont personally in my own account.

KANGAS: OK. Tocqueville has had quite a rise, as most of the gold stocks. How about another one?

O`HIGGINS: And to short the market I`d use the Rydex Octos Fund, which goes up proportionately with the NASDAQ 100. As it goes down, this fund goes up.

KANGAS: OK.

O`HIGGINS: And then there`s a — bonds are cheap at the moment, so I`d use a Rydex Bond Fund and then I`d have 40 percent in cash, money market or Treasury bills.

KANGAS: And with these funds, of course, you`re getting the advantage of a lot of diversification rather than just four stocks?

O`HIGGINS: Exactly. And no commissions, really so.

KANGAS: OK. So there you go. He still likes the gold and you own everything that we`ve mentioned.

O`HIGGINS: Yes, I do.

KANGAS: Well, I`m afraid our time is up. But we`ll look in next time and see how you`ve done, about six months from now.

Thanks very much, Michael.

O`HIGGINS: Thank you, Paul.

KANGAS: My guest market monitor this week was Michael O`Higgins, President of O`Higgins Asset Management.

YASTINE: And recapping today`s market action, the Dow slides 30 points. The NASDAQ loses almost 20.

And please be sure to join us at our World Wide Web site, nbr.com.

Finally tonight, the world`s only supersonic jetliner, the Concorde, flew into the history books today. This morning it took off for the last time from New York`s JFK Airport, landing at London`s Heathrow about three hours and 20 minutes later. The sleek, drop nosed plane is being mothballed because it`s too expensive to fly. Concorde first took to the skies back in 1976, with planners hoping for hundreds of them. But in the end, only 16 were built, flown by British Airways (BAB) and Air France. And, Paul, the retirement of the Concorde obviously marking an end to quite a glamorous era in aviation history, and a comparatively short one, too.

KANGAS: I was aboard it only one time, and not in flight, on the ground. But it wasn`t very large inside. But it`s a shame to see it go.

YASTINE: Very speedy.

KANGAS: Yes, it was.

YASTINE: Well, that`s NIGHTLY BUSINESS REPORT for Friday, October 24. I`m Jeff Yastine. Have a good weekend, everyone. Paul, you have a good weekend, as well.

KANGAS: And the same to you, Jeff. I`m Paul Kangas wishing all of you the best of good buys.

END

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH e-Media, Inc. 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. (c) 2003 Community Television Foundation of South Florida, Inc.

TO PURCHASE A VIDEOTAPE OF THIS PIECE, PLEASE CALL 888-266-3601

Content and programming copyright 2003 Community Television Foundation of South Florida,

Inc. Formatting and transcription copyright 2003 FDCH e-Media, Inc. (f/k/a Federal Document Clearing House Inc., eMediaMillWorks, Inc.), No quotes from the materials contained herein may be used in any media without attribution to Community Television Foundation of South Florida, Inc. This transcript may not be copied or resold in any media.

xfdce NIGHTLY-BUSINESS-REPO-00

Show: NIGHTLY BUSINESS REPORT>

Date: October 15, 2003>

Time: 18:30:00>

Tran: 101500cb.118>

Type: SHOW>

Head: Nightly Business Report>

Sect: Business>

Byline: Susie Gharib, Jeff Yastine>

Guest: Kathy Kristof>

Spec: Business; Economy>

Time: 00:00:00>

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: A late day earnings report from IBM leaves investors blue. The stock falls in after hours trading on word from Big Blue`s chairman, saying it`s still too early to call a rebound in tech spending.

JEFF YASTINE, NIGHTLY BUSINESS REPORT ANCHOR: General Motors (GM) in with a blockbuster third quarter, reversing big losses and handily beating the Street. But you might be surprised at just what`s driving profits at the nation`s largest automaker.

GHARIB: Then, with the major stock indices at new yearly highs, many investors are worried this could be another bubble. We get the outlook from leading market technicians.

YASTINE: And it`s the end of an era in Malaysia, as its leader for the past 23 years prepares to step down. We look at how that economy has fared under the rule of Mahathir Mohamad.

GHARIB: I`m Susie Gharib.

YASTINE: And I`m Jeff Yastine.

Paul Kangas is off tonight.

And this is NIGHTLY BUSINESS REPORT for Wednesday, October 15.

GHARIB: Good evening, everyone.

Disappointing sales numbers from IBM late today sent its stock tumbling in after hours trading, down more than $3, or three percent, to $89.70. Big Blue reported that its revenues rose nine percent in the third quarter, but it was below analysts` estimates. The company managed to meet earnings estimates of $1.02 a share, a gain of five percent from a year ago. IBM said it expects to hire 10,000 new workers in 2004. CEO Sam Palmisano said the company is “beginning to see signs that the economy has stabilized,” but cautioned that “It`s too early to say that a rebound is at hand.”

YASTINE: General Motors also reported better than expected profits, as well, today, as lagging car sales were offset by profit gains at the automaker`s GMAC financing unit. General Motors said it earned $0.79 a share in the third quarter. That far exceeding Street estimates and turned around a major loss in the same period last year. Now, profits on its auto making activities plunged sharply in the quarter from year ago levels, but the GMAC financing group notched record profits, thanks largely to new mortgage financing.

JOHN DEVINE, CFO, GENERAL MOTORS: We`re pleased with the results in the mortgage business. We`re delighted with the overall track record of GMAC. It`s been great. But make no mistake, we know we have to be successful in the car and truck business. That`s our focus. That`s where we`re geared. We`re continuing to cutting costs. That continues. We`ve been able to keep our profitability in this business over the last couple of years, which has not been an easy issue.

YASTINE: Devine also said the rising stock market has helped the company`s $25 billion pension funding shortfall. G.M. has also borrowed billions through a contingent convertible bond offering to help close that pension gap.

GHARIB: With earnings season well underway, investors have been watching the daily reports for signs of market direction. But through it all, the technical analysts have remained almost unanimously bullish.

Scott Gurvey reports.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: With the Dow Jones Industrial average once again approaching the 10,000 mark, traders are beginning to wonder if the bubble is about to burst. The Dow is up 17 percent, the S&P 500 18 percent, since the start of the year. They are both up 32 percent from their March lows. But with each gain, retail customers seem to be getting more nervous, afraid of missing the action on one hand and at the same time afraid of a downturn, which the technical experts say is coming, but not right away.

RALPH ACAMPORA, ANALYST, PRUDENTIAL EQUITY GROUP: I see a lot of people very concerned about the month of October. They are concerned about the VIX Index, the insider seller, too many bulls, bull bear numbers, et cetera. So the sentiment side of the technical picture is still very, very negative. But whenever I have a problem like that, I always default to price. And the price action, that tape action is so powerful. The thing you really have to look at is the breadth, the advancers over the declines. It`s enormous.

GURVEY: The technicians see the Dow reaching 10,400 or 500, and the S&P 500 between 1,120 and 1,150 before a correction, which their charts tell them to watch out for next year.

JEFF DEGRAAF, ANALYST, LEHMAN BROTHERS: What we`re seeing is low quality stocks rallying, really the benefactors of liquidity, the massive amounts of liquidity, both stimulus from the monetary side and the fiscal side, and that this is sort of a one time shot, if you will. But there aren`t a lot of additional inputs from that. That`s why we believe that you will have some issues coming into 2004.

GURVEY: How the market reacts to those issues next year, the technicians say, depends a lot upon market fundamentals, such as the outcome of the presidential election and the state of the economy.

Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.

YASTINE: Well, the indexes finally succumbed to profit taking pressures today, despite Intel`s (INTC) highly positive earnings report late yesterday.

The NASDAQ opened about 23 points higher and the Dow hit 9,850 in the first minutes of trading. And that marked the highs of the day, as traders began cashing in from the rally of recent days.

The stocks managed a slight rebound at midday, as bargain hunters stepped in and both indexes pushed back into positive territory. But with about 90 minutes left in the session and perhaps fearing what IBM might have to say, the selling heated up again and continued into the close of trading.

The losses weren`t too bad, though, the Dow falling nearly 10 points, to close at 9,803. The NASDAQ Composite falling just over 4 points, to 1,939. And the S&P 500 sliding 2 3/4 points.

Bonds fell following a pair of reports showing strength in the economy. A New York Fed report on manufacturing showed a sharp rebound in factory activity for October. Also, retail sales for August were revised upward, to about 1.2 percent, and that was double the earlier estimate.

So, the 10-year note falling 14/32, to 98 26/32. That pushed the yield up to 4.4 percent.

GHARIB: The fate of Frank Quattrone is now in the hands of a New York jury. The former Credit Suisse First Boston investment banker is accused of obstructing justice and witness tampering. Prosecutors say that Quattrone was aware of a federal probe into IPO spinning when he forwarded an e-mail to fellow bankers urging them to catch up on file clean up. In closing arguments, Quattrone`s lawyers blamed the situation on the firm`s legal staff, saying they should have told Quattrone that specific investment banking files needed to be saved.

YASTINE: And more fallout tonight from Eliot Spitzer`s probe of the mutual fund industry, this time at Bank One (ONE). Mark Beeson, the head of the firm`s mutual fund unit, has resigned. Beeson`s departure comes just one month after Bank One was named in a criminal complaint by the New York state attorney general`s office. Bank One`s president says the Canary Capital Partners Hedge Fund was allowed to trade his company`s mutual fund shares after hours. And separately, in an SEC filing late today, Bear Stearns (BSC) says it has been subpoenaed by Spitzer`s office as part of that ongoing investigation into mutual fund trading.

GHARIB: Practice what your preach, that was the message from the nation`s top financial cop for the New York Stock Exchange. Testifying on Capitol Hill today, Securities and Exchange Commission Chairman William Donaldson told lawmakers his views on reshaping the markets in view of the crisis at the NYSE.

Stephanie Woods reports.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: With the New York Stock Exchange under fire, SEC Chairman William Donaldson told the Senate Banking Committee that self-regulatory organizations, or SROs like the New York Stock Exchange, must live by the same rules as the companies they govern.

WILLIAM DONALDSON, CHAIRMAN, SEC: SROs play a critical role as the standard setters for sound governance practices. Just as SROs have demanded that their listed companies strengthen their governance practices, we must demand that, at a minimum, SROs match the standards that they set for listed companies.

WOODS: The NYSE and the NASDAQ are the two largest markets that police themselves. Big board Interim Chairman John Reed has already met with the SEC, but will make his first appearance before Congress tomorrow. The head of NASDAQ was in Washington today to lobby for changes in its corporate structure. The NASDAQ spun off its regulatory function from its market in 1997 after a pricing scandal. Now, NASDAQ wants regulators to recognize it as an exchange so it can complete the separation.

ROBERT GREIFELD, PRESIDENT, THE NASDAQ STOCK MARKET: We are of a fundamental belief that the regulator has to be separated from the market`s center. It`s just inconceivable in this post-Enron day that you want the person who is being regulated to have any sort of financial interest in the regulator.

WOODS: The NASDAQ applied for exchange recognition with the SEC in November of 2000. A decision has yet to be made and that leaves some in Congress wondering what`s taking so long.

SEN. JIM BUNNING (R), KENTUCKY: I am concerned with the length of time it takes for an application to be approved or disapproved.

DONALDSON: This is an extremely complex subject. It`s not just–

BUNNING: I understand that, sir. I`m just asking you, over a period of two years seems to be plenty of time to make a decision, even though it`s complex.

DONALDSON: It`s not a simple decision for them alone. It`s a decision that has ramification for the entire rest of the marketplace.

WOODS: Donaldson says the SEC is proceeding carefully. He`s concerned big changes could unintentionally damage capital markets.

Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: Microsoft (MSFT) is once again warning about software security. The company says it`s found four new flaws in its Windows operating system, but that so far it doesn`t think hackers have exploited any of those vulnerabilities. The flaws affect Windows 2000 and some versions of Windows XP. The announcement comes just days after Microsoft said that it would begin posting monthly security updates and software patches on its Web site.

Jeff?

YASTINE: Well, Susie, Microsoft was among the NASDAQ most actives, and we`ll see it in just a moment.

Now, let`s take look at some stocks in the news tonight.

And topping our list, El Paso Corp. (EP) falling $0.45. This happened just before the close of trading. A two and a half million share block sold for $7.25 a share, and that`s where the stock closed at.

EMC (EMC) falling $0.54. Investors expressing their disapproval of its proposed stock swap acquisition of Documentum (DCTM) for $1.7 billion worth of shares.

No change in Lucent Technologies (LU).

NorTel Networks (NT) edging up $0.02.

Tyco (TYC) losing a $0.05, but still near its two year high, except just recently in the last few trading sessions.

G.E. (GE) losing $0.44.

Nokia (NOK) ending up $0.16.

Pfizer (PFE) settling $0.28 lower.

Micron Technologies (MU) gaining $0.17.

Hewlett-Packard (HPQ) advancing a little over $0.50.

CarMax (KMX) tumbling a little over $6. The company warned that third quarter earnings will likely come in as low as $0.16 a share. The heavy discounts being offered by auto makers for new cars are apparently making a dent in CarMax`s own used car marketplace.

St. Jude Medical (STJ) climbing $3.70. Third quarter earnings rose 18 percent and revenues rose 18 percent, as well. The company`s implantable defibrillators sold nicely. They were up 28 percent in sales for the quarter.

Shares in Harley-Davidson (HDI) skidding $3.30. The company had record third quarter earnings. But revenues were flat with year ago levels and it looks like the company is planning on selling fewer hogs in 2004. Analysts were a little surprised by that.

Shares in EDO (EDO) jumping $2.61. The company won a contract to develop passive sonar technology for U.S. Navy submarines. Raymond James (RJF) thinks the company should get a boost with defense contracts for its electronic bomb jamming gear, as well.

Here`s another defense company, Carlisle Companies (CSL). It surged $6.09. It reported stronger than expected third quarter profits of $0.80 a share. That was $0.08 above Street estimates and the company expects 2003 earnings to come in at the high end of forecasts.

Clear Channel Communications (CCU) sliding nearly a $1. The Soundview Brokerage sees continued weakness in the advertising market and so it downgraded Clear Channel and Viacom (VIA).

Triad Hospitals (TRI) plunging nearly $4. The stock fell after the company said it will increase its allowance for uncollected debts by $50 million. Those are owed by uninsured patients and the like.

Over on the NASDAQ, mostly gainers despite the smaller loss in the broader index.

Intel (INTC) gaining $0.68. You heard the earnings news last night. The stock hit its high of the day at $32.75 at the start of the session and sold off from there.

Microsoft (MSFT) picked up $0.55.

Applied Materials (AMAT) gaining $0.70. Some think this company and other chip equipment makers might get hurt by Intel`s decision, which it announced last night, that it`ll spend only a small amount extra on chip research and design. It didn`t seem to hurt the stock today.

Cisco Systems (CSCO) off $0.12. It settled a lawsuit with a Chinese company that was illegally copying Cisco`s router software technology. The terms of the settlement were not disclosed.

And here`s SanDisk (SNDK) surging more than $3. It makes digital camera components. It had healthy third quarter profits of $0.60 a share. That was $0.16 above Wall Street targets. Revenues doubled and it raised its 2003 revenue forecast.

Dell (DELL) picked up $0.21.

Amgen (AMGN) losing $1.48.

KLA-Tencor (KLAC), another chip equipment maker, up $1.22.

Amazon (AMZN) losing $1.37.

Novellus (NVLS) gaining $1.12. Shares hit a high early today of nearly $40, but could not hold. Last night the company reported a net loss of $0.64 a share. Net sales in the third quarter fell about four percent from year ago levels.

ASML Holdings (ASML) moved up $0.87. This is another chip equipment maker and it reported a smaller than expected quarterly loss and it says it has seen equipment orders picking up rather sharply in the last few weeks.

And here`s a look at SCO Group (SCOX), surging almost $5. A Deutsche Bank (DB) analyst started coverage of the company and put a price target of $45 a share on the stock. For background, SCO is involved in a $1 billion lawsuit with IBM, which it says illegally embedded some of its software in the Linux operating software that IBM itself gives away.

Authentidate Holdings (ADAT), this one also moved because of an analyst`s recommendation at Roth Capital Partners. The company`s software allows users to sign and seal electronic documents.

And finally Audiovox (VOXX) tumbling $2.02. Analysts were expecting profits of $0.07 a share, but fiscal third quarter profits came in at $0.03 a share and investors sold the stock.

And that`s a look at our stocks in the news tonight.

Susie?

GHARIB: Thanks, Jeff.

He`s Asia`s longest serving elected leader, but Mahathir Mohamad`s days at the top are coming to an end. The outspoken Malaysian prime minister is due to step down at the end of the month, after almost 23 years in power.

From Kuala Lumpur, Rian Maelzer takes a look at Mahathir`s legacy.

RIAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Mahathir Mohamad has won much praise for Malaysia`s rapid economic development and has been accused of allowing rampant cronyism to hurt the economy. He`s been credited with preserving harmony in this multi-ethnic country and accused of dividing Malaysia thanks to his heavy-handed leadership. Although broadly speaking a democracy, Malaysia under Mahathir has been accused of human rights violations, including the prosecution five years ago of former Deputy Prime Minister Anwar Ibrahim. Many feel it was politically motivated and the U.S. Government was among those that condemned the jailing of Anwar, Mahathir`s protege turned rival.

LIM KIT SIANG, DEMOCRATIC ACTION PARTY: It`s undermined important institutions of government and affecting the rule of law, the independence of the judiciary, the important rule of parliament.

MAELZER: On the economic front, though, even most critics acknowledge many successes. Mahathir`s liberalization of the economy prompted a massive influx of foreign investment and rapid industrialization. That, in turn, helped slashed poverty and stimulate the emergence of a thriving middle class. Mahathir has also overseen the creation of impressive physical infrastructure and steered the country up the industrial value chain into areas such as I.T.

ZULKIFLI ALWI, UNITED MALAYS NATL. ORGANIZATION: It is undeniable that Dr. Mahathir has been the main architect in the programs that we have charted in these fields.

MAELZER: All those achievements, though, took a hit with the onset of Asian financial crisis in 1997. Mahathir chose not to follow International Monetary Fund prescriptions, as Malaysia`s neighbors did. Instead, he controversially opted to pit the currency to the dollar and institute strict controls to prevent capital flight. Even many long time critics now praise his actions.

DR. CHANDRA MUZAFFAR, POLITICAL SCIENTIST: It was a very bold position and it worked. I would regard his ability to protect the nation`s economic sovereignty and, indirectly, its political independence, as a major achievement.

MAHATHIR MOHAMAD, MALAYSIA PRIME MINISTER: Find some way of protecting yourself from such huge corporations.

MAELZER: The financial crisis turned Mahathir into an outspoken critic of global capital. And that criticism has often taken the form of anti-Western tirades, not something people expect from his mild-mannered successor, Abdullah Badawi.

TERENCE GOMEZ, UNIVERSITY OF MALAYA: Mahathir has actually upset a lot of people in the West, governments of the West. But now he can play a more conciliatory role, especially in terms of trying to draw in response from the West by toning down some of the rhetoric that Mahathir has been propagating.

MAHATHIR: The result of this confrontation between the haves and the have notes, the developed and the developing, is a world that is practically ungovernable.

MAELZER: That same anti-Western rhetoric, though, coupled with Malaysia`s economic achievements, have made Mahathir a leading spokesman for the developing world and many will be hoping that when the 77-year-old steps down Malaysia`s prime minister at the end of this month he won`t be stepping out of the international spotlight for good.

Rian Maelzer, NIGHTLY BUSINESS REPORT, Kuala Lumpur.

YASTINE: Tomorrow, Mr. Reed goes to Washington. The interim head of the NYSE talks market structure with the House Financial Services Committee.

GHARIB: The salary freeze is over at Merrill Lynch. Employees received a memo today saying the two year freeze has been lifted, just one day after Merrill posted a $1 billion third quarter profit. Chairman Stanley O`Neal says those earning less than $100,000 will be the first to see salary increases. The freeze was part of cost cutting efforts that trimmed 20,000 jobs from Merrill Lynch`s payrolls over the last two years.

YASTINE: The Federal Reserve Bank of New York has a new president. Timothy Geithner will take over the post next month. The job has been vacant since June, when William McDonough stepped down to head the public company accounting oversight board. The 42-year-old Geithner is currently the head of policy development at the International Monetary Fund and was a senior Treasury official during the Clinton administration.

GHARIB: Here`s a look now at what`s happening tomorrow. On the economic calendar, weekly jobless claims, as well as the September Consumer Price Index and August business inventories. Several Dow components are scheduled to report results tomorrow including Altria (MO), Caterpillar (CAT), Coca Cola (KO), Honeywell (HON) and United Technologies (UTX).

In the Money File tonight, the benefits of pre-tax spending accounts.

Here`s Kathy Kristof, Business Writer for the “Los Angeles Times” and author of “Investing 101.”

KATHY KRISTOF, AUTHOR, “INVESTING 101”: It`s open enrollment season, which means that employees have a once annual chance to choose among employee benefits at work. That makes this a perfect time to consider flexible spending accounts, which are offered by many major employers.

What these accounts do is allow you to save tax dollars by saving for ordinary expenses such as health care and child care, through a dedicated savings account that you set up at work.

The way these accounts works is this. You tell your employer how much you want to save. Your employer deducts that amount from your weekly paychecks. When you have qualifying expenses, you bill the account. You are still spending your own money, but because that money is coming out of your pay before taxes are computed, you save unemployment and income taxes on every dollar that comes out of the account.

What does that mean in dollars and cents? Well, let`s say you`re in the 28 percent federal income tax bracket and you save $5,000 for, in a dependent care account for your child care expenses. That reduces your taxable income by $5,000, which reduces your income tax by $1,400.

You also save $382 in Social Security and Medicare taxes. In the end, your total tax savings amounts to nearly $1,800.

There`s just one catch. Any money you don`t spend is lost. So you never put more money in these accounts than you think you`re going to use.

I`m Kathy Kristof.

YASTINE: And recapping today`s market action, the Dow losing almost 10 points; the NASDAQ falling 4 points.

And please be sure to join us at our World Wide Web site, nbr.com.

GHARIB: And finally tonight, the folks who brought you the meat lovers` stuffed crust pizza with six kinds of meat toppings are unveiling a new low fat pizza. Pizza Hut says its new Fit and Delicious line reflects what customers want–healthier pizza with less fat and lighter toppings like chicken and veggies. The Fit and Delicious pizzas have three to five grams of fat per slice, and that works out to 32 fat grams and 1,200 calories for a large pizza. The same size meat lovers` stuffed crust pizza has 168 fat grams and 3,600 calories.

So, Jeff, Pizza Hut isn`t the only fast food chain offering healthier fare. There`s McDonald`s (MCD), Taco Bell and Burger King. Recently all of them have launched lower fat alternatives on their menus.

YASTINE: Well, if you really want to lose weight, do you go to Pizza Hut and McDonald`s? And whatever happened to the McLean burger? Nobody bought it.

That`s NIGHTLY BUSINESS REPORT for Wednesday, October 15. I`m Jeff Yastine. Good night, everyone. Good night to you, Susie.

GHARIB: And good night, Jeff. I`m Susie Gharib. We hope to see all of you again tomorrow night.

END

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH e-Media, Inc. 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. c 2003 Community Television Foundation of South Florida, Inc.

TO PURCHASE A VIDEOTAPE OF THIS PIECE, PLEASE CALL 888-266-3601

(Copy: Content and programming copyright 2003 Community Television Foundation of South Florida,

Inc. Formatting and transcription copyright 2003 FDCH e-Media, Inc. (f/k/a Federal Document Clearing House Inc., eMediaMillWorks, Inc.), No quotes from the materials contained herein may be used in any media without attribution to Community Television Foundation of South Florida, Inc. This transcript may not be copied or resold in any media.)

xfdce NIGHTLY-BUSINESS-REPO-00

Show: NIGHTLY BUSINESS REPORT>

Date: October 3, 2003>

Time: 18:30:00>

Tran: 100300cb.118>

Type: SHOW>

Head: Nightly Business Report>

Sect: Business>

Byline: Susie Gharib, Jeff Yastine>

Guest: Douglas Cliggott>

Spec: Business; Economy>

Time: 00:00:00>

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: From Wall Street to Main Street, Americans cheer upbeat news about the job market. Stocks rally on today`s report that U.S. businesses added jobs for the first time in eight months. Details coming up.

JEFF YASTINE, NIGHTLY BUSINESS REPORT ANCHOR: Tonight`s market monitor guest says he isn`t bullish, but he isn`t bearish either. Douglas Cliggott, President and Investment Strategist of B&P Research, will explain where he thinks Wall Street is heading.

GHARIB: It`s a question for the high court: how old do you have to be to be a victim of age discrimination? The U.S. Supreme Court is likely to look at that issue when its session begins next week. We`ll preview some cases that could have big implications for American business.

YASTINE: And Singapore is making big changes in the way it is run. The city-state desperately needs to jump start its economy. We`ll tell you how it plans to do that.

GHARIB: I`m Susie Gharib.

YASTINE: And I`m Jeff Yastine.

Paul Kangas is off tonight.

And this is NIGHTLY BUSINESS REPORT for Friday, October 3.

GHARIB: Good evening, everyone.

Good news on the jobs front sparked a rally on Wall Street today. The Dow rose 84 points and the NASDAQ jumped 44. Investors were encouraged that the American economy saw a net increase in jobs last month for the first time since last winter. Payrolls grew by 57,000 in the month of September. Economists had been expecting job losses of 30,000. But the unemployment rate held steady at 6.1 percent.

Scott Gurvey has more.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: It was what Wall Street had been awaiting for eight long months–a report showing that the number of Americans working last month was greater than the number working the month before. And it was a surprise, as the consensus among Wall Street economists called for another decline in jobs and an increase in the unemployment rate. Instead, the rate held steady at 6.1 percent, while employers added 57,000 workers to their payrolls. It is a small number. We would need to see more than 100,000 new jobs a month for many months to make a real dent in the unemployment rate. But economists were encouraged to see a positive number and applauded it, as well a revision which added 52,000 jobs to the August report.

IAN MORRIS, CHIEF U.S. ECONOMIST, HSBC SECURITIES: It is significant that the revisions are up instead of down, like they have been for most of this year. And the fact that jobs are rising again is definitely good news. However, one month does not make a trend. There`s more light coming through, but we`re not out of the woods just yet.

GURVEY: Job growth has been the missing element for an economy that otherwise appears to be recovering from recession. Employers have been meeting increased demand through increased productivity, rather than by hiring new workers. Employment has become a hot political issue. Speaking today in Milwaukee, President Bush said things are getting better but there`s still work to do. Most economists would agree.

ETHAN HARRIS, ECONOMIST, LEHMAN BROTHERS: It was a little bit surprising just how weak the employment numbers have been in the last few months. You would have expected stability in the labor market, not job cuts. Now that we`ve gotten a positive number, you feel a little bit more comfortable that at least we`re in the right track towards growth later in the year.

GURVEY: Corporate earnings season is about to begin and most analysts expect to see good results. But economists say businesses will have to see several quarters of good growth before they will be willing to hire large numbers of new workers.

Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.

YASTINE: Well, today was a day of extremes. After that employment report, the stock market zoomed and the bond and gold markets plunged.

The markets opened sharply higher, with the Dow gaining about 140, the NASDAQ up about 40 points. In late morning, another wave of buying, perhaps fed by short sellers trying to cover their losing bets, pushed the Indexes to new intraday highs. The Dow came within about 20 points of surpassing the old intraday high it set on September 19, but then began to fade in late afternoon, ultimately giving back about half of the day`s gain.

So, the Dow closing up 84 1/2 points, to 9,572.31. And for this week, the Index rising in four out of five sessions, for an overall gain of 259 points, or about 2.8 percent.

The NASDAQ surging more than 44, or about 2 1/2 percent, to settle at 1,880. And for the week it, too, fell only once, and rose an impressive 88 1/2 points, or almost five percent.

And the S&P 500 advancing 9 2/3 points.

The bond market posted one of the largest losses since the sell-off began this summer, as you might expect, with the 10-year note tumbling 1 21/32, to 113/32, and that pushed the yield up to 4 1/4 percent.

GHARIB: Next Monday is the first Monday in October, and that means it`s the beginning of a new term for the U.S. Supreme Court. This session, the high court will weigh in on cases testing the limits of the nation`s disabilities, age discrimination and telecommunications laws.

Stephanie Woods has a preview.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: General Dynamics (GD) is asking the high court to rule that the federal age discrimination law doesn`t apply to younger workers. A group of employees sued the company after it changed the health care benefits available to workers when they retire. The company kept coverage for workers over 50, but dropped the retirement coverage for workers over 40. The U.S. Chamber of Commerce has weighed in on the case on behalf of General Dynamics, arguing employers should have the right to set job benefits.

STEPHEN BOKAT, GENERAL COUNSEL, U.S. CHAMBER OF COMMERCE: If that right is taken away from business, it will significantly increase their costs and could lead to many employers just deciding not to provide health care to anyone.

WOODS: In another case, Raytheon (RTN) is asking the court to throw out a lawsuit by a worker who wants his job back after being fired for using illegal drugs. The company argues the Americans With Disabilities Act doesn`t protect an employee with a history of drug use.

TOM GOLDSTEIN, APPELLATE ATTORNEY, GOLDSTEIN & HOWE: I think what happened is that the lower court might have gone too far in saying that even though Raytheon dismissed somebody for, you know, wrongful drug use, that they had to rehire the person, even if their policy is so imply neutrally look, if we dismiss you, we`re not going to rehire you. So I expect the court is going to fix that problem.

WOODS: The court will also settle disputes stemming from the 1996 Telecommunications Act. Verizon was fined by the Federal Communications Commission for not opening its network to AT&T (T). Now AT&T`s customers want the court to affirm their right to sue Verizon (VZ), claiming they were harmed as well.

GOLDSTEIN: The telecommunications companies are definitely worried about Pandora`s box, that if they can get sued by every customer around the country, they`ll be in never ending litigation and they`ll be billions of dollars in debt. So you really couldn`t have a more important case for the industry right now.

WOODS: Usually, the high court hears arguments on the first Monday in October. But this Monday, for the first time, the court is recognizing the Jewish holiday of Yom Kippur and won`t begin to hear cases until Tuesday.

Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: Heinz (HNZ) is playing catch up in the low carbohydrate market, quite literally. The food maker said today it`s rolling out a host of new products later this year, including a new low carb ketchup to take advantage of nutrition plans like the Atkins and South Beach diets. Heinz has been expanding its ketchup lines with differently colored versions and an organic version introduced recently. The company is also beefing up its frozen Ore-Ida potato chips–potato products, rather, which have shown slow growth. Heinz also reaffirmed its guidance for 2004 earnings at $2.20 a share.

Jeff?

YASTINE: Well, Susie, investors liked this variety of news. Heinz`s (HNZ) stock gained $0.09, to $25.30.

Now let`s catch up with a look at the rest of the stocks in the news tonight.

And toping our list tonight, NorTel Networks (NT), which picked up a $0.01.

Lucent Technologies (LU) gaining $0.06.

Pfizer (PFE) losing $0.27.

G.E. (GE) gaining $0.07. There were some last minute snags in the plans between NBC (NBY) and Vivendi (V) to put the finishing touches on their deal. When it does go through, it`s estimated to be about a $40 billion project.

Nokia (NOK) rising $0.24.

Citigroup (C) slipped $0.14. It got as high as $47.90 before falling off as the day wore on.

Biovail (BVF) losing $6.67. Bad luck for this company. The company had a truck with inventory of about $20 million worth of its Wellbutrin anti-depressant drug. The truck was involved in a very bad accident and those pills had to be shipped back to Biovail`s plant in Canada for re-inspection. So that, combined with some other separate problems, caused the company to warn it will miss previous revenue and profit estimates.

Medtronic (MDT) down $2.37. Sales growth is slowing on its implantable cardiac devices and Prudential downgraded the shares.

Meanwhile Ford (F) gaining $0.39. All the auto makers doing pretty nicely today.

AOL Time Warner (AOL) finished $0.12 lower. The stock opened at $15.73.

And shares in 3M (MMM) were among the Dow standouts, jumping $1.75 thanks to an upgrade from Lehman Brothers. And here are some of the others leading the charge.

Alcoa (AA) up over a $1.

DuPont (DD) advancing $0.82.

Eastman Kodak (EK) up nearly a $1.

United Technologies (UTX) gaining $1.35.

And those listed here, including 3M, accounted for at least 40 points of today`s Dow gains.

Hewlett-Packard (HPQ) jumped $0.78. H.P. is offering Sun Micro`s (SUNW) corporate customers $25,000 worth of free services to ditch Sun`s computer systems and buy new ones from Hewlett-Packard that are based on Linux. CIBC`s analyst called the offer a publicity stunt. But Hewlett Packard apparently trying to make Sun Micro`s loss into their gain, or their problems recently into their gain.

Airline stocks taking flight. The carriers all releasing stronger than expected traffic figures for September.

AMR (AMR), the nation`s largest air carrier, rising 8 percent. Merrill Lynch upping its earnings estimates for the company.

And a rundown of other airline stocks, Alaska Air (ALK), Continental (CAL), Delta (DAL), JetBlue Airways (JBLU) all turning in nice gains. JetBlue up $1.73 today.

On the down side, Newmont Mining (NEM) tumbling $2.04. The December contract for New York gold registered a 3 1/2 percent decline, to about $370 an ounce. And those who are long on gold were liquidating after the dollar rebounded nicely against the other major currencies. Some analysts, though, still optimistic that gold will break $400 an ounce in the coming months.

Administaff (ASF) perked up $1.07 on that surprise jump in employment that we mentioned earlier, with the economy showing some signs of a rebound.

And most of the other major staffing companies moving higher, as well.

Labor Ready (LRW) up $0.03.

Manpower (MAN) up nearly $2.50.

Robert Half (RHI) up more than $2.50, as well.

Oxford Industries (OXM) jumped $4.30. The designer clothing maker raising its 2004 earnings guidance after reporting record first quarter profits of $0.84 a share. Sales in 2004 expected to clear $1 billion.

But Collins & Aikman (CKC) sank $1.30, or nearly 35 percent. DaimlerChrysler (DCX) may terminate its contract with the company, which makes car interior fabrics, cockpit panels and the like. Chrysler reportedly has already begun talking to new bidders.

Shares in EMCOR Group (EME) falling $8.66. The construction services firm warning second half earnings will come under pressure because of shrinking margins on smaller projects.

Now, take a look at the NASDAQ. They all did quite nicely today.

Intel (INTC) up nearly a $1.

Microsoft (MSFT) gaining more than a $0.50.

Cisco Systems (CSCO) up $0.77.

Oracle (ORCL) gaining $0.58.

Dell Computer (DELL) up $ 1.04.

eBay (EBAY) gained $2.25.

Amgen (AMGN), though, losing $1.18.

And Applied Materials (AMAT) up $0.91.

Yahoo! (YHOO) up another $1.33 after its pretty good gain yesterday.

And Amazon.com (AMZN) up $2.80.

Juniper Networks (JNPR) jumped $1.39, or 9 percent. The analyst at U.S. Bancorp Piper Jaffray said a lot of the negatives that would have hurt Juniper`s quarterly performance have now gone away. That includes a strike at Verizon which never materialized. And sales for Internet routing gear have turned out to be better than expected earnings.

Adtran (ADTN) soaring $9. The company said third quarter profits and revenue would be better than expected earnings and exceed analysts` previous estimates of $0.05 to $0.06 a share.

California Amplifier (CAMP) up almost $2. Analysts expected a loss, but the company reported a fiscal second quarter profit of $0.03.

Meanwhile, Spectronetics (SPNC) down $3.29. The FDA did not approve the company`s laser system for treating a particular kind of arterial disease. The company, though, says that it`s not giving up on the approval.

And finally, Dove Pharma (DOVP) off $3.54. The FDA halting Phase 3 trials of its anti-anxiety drug. It says, the FDA, rather, says it wants more safety information.

And those are our stocks in the news tonight.

Susie?

GHARIB: Thanks a lot, Jeff.

After falling into its worst recession in 40 years in 2001, Singapore`s economy was on the mend until the SARS crisis hit. Since it can no longer count on the rapid economic growth it enjoyed for decades, the city-state`s normally conservative government is making a bold change in direction.

Rian Maelzer reports.

RIAN MAELZER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Avant garde art, all night entertainment, bar top dancing–Singapore is shaking up its staid, prudish image. Aside from just having legalized bar top dancing, the government now says it`s willing to hire openly gay people and it`s easing censorship of the arts and entertainment.

UNIDENTIFIED FEMALE: A new season of “Sex and The City.”

MAELZER: Vivian Balakrishnan heads a committee advising the government on the remaking of Singapore.

VIVIAN BALAKRISHNAN, MINISTER OF STATE, NATIONAL DEVELOPMENT: We will see a more faciliatory governance rather than a prescriptive, heavy-handed governance. We call this governing with a lighter touch to give the people more space.

MAELZER: More space to be creative and innovative and entrepreneurial, qualities this risk averse society lacks and qualities Singapore badly needs if it`s to develop new economic niches like biotechnology, I.T., multimedia and the arts. It knows it can no longer rely so heavily on its former strengths, such as shipping and electronics. Singapore`s economy has never really recovered from the global electronics slump and the country now finds that in many industries, it can no longer compete with low cost producers. Unemployment is at 20 year highs and expected to rise. And thanks in part to SARS, the economy is expected to grow one percent at most this year.

Amid this economic turmoil, though, the government has built a dramatic symbol of its new way of thinking, a $340 million arts complex called The Esplanade. It aims to sow the seeds of creativity here, but also has clear economic spin-offs, with eight million people having passed through its doors since it opened a year ago.

BENSON PUAH, CEO, THE ESPLANADE: We perhaps have already been able to already capture the imagination and the interest of tourists because it has added another dimension to Singapore, which has never quite existed.

MAELZER: The government`s hope is that a livelier entertainment scene and softening of its image as a place of endless rules will do more than boost tourism. It`s counting on these changes to help attract talented, creative foreigners to live and work here.

HWEE HWEE TAN, NOVELIST: They are not interested in creativity for its own sake. They are interested in creativity as a thinking skill that can create more income.

MAELZER: Whatever its motives, having long trained Singaporeans to conform and obey, the government now seems determined to foster a society where people are willing to take risks and think for themselves. Given the new economic realities the country faces, it doesn`t feel it has a choice.

Rian Maelzer, NIGHTLY BUSINESS REPORT, Singapore.

YASTINE: Monday, this man knows his leaders. We talk with Wharton Professor Mike Useem about leadership in corporate America.

GHARIB: The nation`s second largest insurer of businesses is getting out of the reinsurance business. CNA Financial (CNA) is selling its policy renewal rights to Folksamerica Reinsurance Company. Terms of the deal were not disclosed, but Folksamerica says it will pay CNA based on the number of policies renewed during the next two contract periods. CNA`s stock rose $0.18, to $21.67.

YASTINE: It looks like some business is booming at BellSouth (BLS). Analysts say BellSouth`s wireless customer base grew by about 40 percent in the third quarter. That figure, along with strong sales of its high speed Internet and long distance services, are expected to boost the company`s bottom line. BellSouth would not confirm those estimates. As for the stock, it rose $0.76, to $24.88.

GHARIB: Here`s a look now at what`s happening next week. Our Friday market monitor guest is Al Goldman, Chief Market Strategist at A.G. Edwards (AGE). On the economic calendar, Wednesday, wholesale inventories for August come out; Thursday, it`s September import prices; and on Friday, we`ll see producer prices for September. As for earnings, Dow components ALCOA (AA) and General Electric (GE) are scheduled to report.

Our market monitor guest this evening says he`s no longer a bear, but he`s not a bull either.

Joining us now, Doug Cliggott, President and Investment Strategist of B&P Research. It`s the U.S. unit of a $3.5 billion Swedish hedge fund.

Hi, Doug.

Nice to see you.

DOUGLAS CLIGGOTT, PRESIDENT & INVESTMENT STRATEGIST, B&R RESEARCH: Oh, thank you, Susie. It`s great to be here.

GHARIB: You know, the last time when we talked, which was January, you were our first market monitor of the year. You were very bearish. But we`ve seen that the Dow and the NASDAQ and the S&P have all done rather well this year. And yet you`re still not bullish. So what`s your feeling on the markets?

CLIGGOTT: Well, Susie, we think something very important happened late in the month of May. We had a lot of tax law changes. And to us, those tax law changes are largely responsible for the good stock performance this year. They really did two things. One, by lowering the rate of taxes on dividends and capital gains, essentially they forced the market to reprise stocks up relative to bonds. The other thing it did is it transferred a tremendous amount of money, as much as $200 billion, from the U.S. Treasury into households and corporate checking accounts. And we`ve been very eager to spend that money. And so we`ve had stronger growth than we expected early in the year. But unfortunately by the middle of next year, that growth spurt will fade and the second half of next year, I think, will be quite weak.

GHARIB: And so even though there are forecasts for a really strong third and fourth quarter earnings, that`s not enough for you to turn more positive on the markets?

CLIGGOTT: Well, Susie, those, I think, are the reason the market`s as high as it is. I think the market`s pretty good at discounting events six months ahead. I think what happened over the course of the summer is the market came to expect very strong earnings in the third quarter and in the fourth quarter. I think by the time we move into the winter months, the market will be looking ahead to next summer and that`s where our concerns are. We don`t think growth can be sustained at anything like the current rate. Maybe it can be strong through the winter, but by next summer or autumn, it could be back to something like two percent again.

GHARIB: And yet you told me there are still opportunities to make money in the markets. And I know that you don`t single out specific stocks. But you can talk about sectors. When last time we talked, you liked energy stocks. What`s your view on that now?

CLIGGOTT: We still like energy, Susie. Our view six months ago was that the commodity price would stay stubbornly high and that would be very good for the stocks. And that view hasn`t changed. So which think energy is still a pretty interesting place to be in the U.S. market.

GHARIB: What segments of energy do you like?

CLIGGOTT: We like integrated oils and we like utilities. And I think utilities are especially attractive because they generate a much larger share of earnings in their market capitalization as now. So I think utilities might be one of the best places to be in the U.S. market right now.

GHARIB: You were keen on health care stocks the last time we talked. How about now?

CLIGGOTT: Certain segments of health care still look good. We would favor services over the large pharmaceutical companies. I think the pharmaceutical companies have a lot of legislative issues. It`s very uncertain what will happen in terms of Medicare and really in terms of the government trying to be involved in pricing.

GHARIB: Now, I know you`ve added defense stocks to your list of recommendations. A lot of people think that all the good that you can get on defense stocks has been already priced in.

CLIGGOTT: That`s exactly–

GHARIB: Do you agree with that?

CLIGGOTT: That`s why we like them, Susie. I think they were too expensive for our blood in the spring and summer. But as, I think, more and more brokers have gotten negative on them, they`ve come down quite a bit. And we think that provides an interesting opportunity.

GHARIB: Now, I understand that you also favor European bonds and international stocks. Not American bonds, but European bonds. Is this an area that you think U.S. investors should start putting their money?

CLIGGOTT: We sure do. And I think the theme here is twofold. One, the U.S. budget situation is bad and it`s probably going to get worse, the federal budget situation. That`s bad for bonds. Budgets in Europe are much more under control than they are in the United States. Second, we think the dollar is going to be going down versus European currencies.

GHARIB: OK.

CLIGGOTT: That really favors holders of–dollar based holders of European bonds.

GHARIB: OK.

Doug, thank you very much for your thoughts.

We appreciate it.

CLIGGOTT: Thank you, Susie.

It`s great to be here.

GHARIB: We`ve been speaking with Doug Cliggott, President and Investment Strategist of B&P Research.

YASTINE: And recapping today`s market action, a positive jobs reports has investors buying up stocks. The Dow gaining 84 points, the NASDAQ climbs 44.

And please be sure to join us at our World Wide Web site, nbr.com.

And that`s NIGHTLY BUSINESS REPORT for Friday, October 3. I`m Jeff Yastine. Have a good weekend, everyone. Susie, you have a good weekend, as well.

GHARIB: Oh, and the same to you, Jeff. I`m Susie Gharib. We`ll see all of you again on Monday.

END

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH e-Media, Inc. 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. c 2003 Community Television Foundation of South Florida, Inc.

TO PURCHASE A VIDEOTAPE OF THIS PIECE, PLEASE CALL 888-266-3601

(Copy: Content and programming copyright 2003 Community Television Foundation of South Florida,

Inc. Formatting and transcription copyright 2003 FDCH e-Media, Inc. (f/k/a Federal Document Clearing House Inc., eMediaMillWorks, Inc.), No quotes from the materials contained herein may be used in any media without attribution to Community Television Foundation of South Florida, Inc. This transcript may not be copied or resold in any media.)

xfdce NIGHTLY-BUSINESS-REPO-00

Show: NIGHTLY BUSINESS REPORT>

Date: October 1, 2003>

Time: 18:30:00>

Tran: 100100cb.118>

Type: SHOW>

Head: Nightly Business Report>

Sect: Business>

Byline: Paul Kangas, Susie Gharib>

Guest: Barry Griswell, Kevin McCormally>

Spec: Business; Economy>

Time: 00:00:00>

PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: The fourth quarter comes in like a lion on Wall Street. The Dow roars to a big 194-point gain, and the NASDAQ Composite rises more than 45 points. Investors are encouraged by a new report on the nation`s manufacturing sector that isn`t too bad.

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: It`s getting to be sweater weather in parts of the country, and that means get ready for the winter`s heating bills. We`ll look at where natural gas prices are expected to be for the season.

KANGAS: Are you planning for your retirement? Chances are this company, Principal Financial Group (PFG), is part of those plans. We ask its chairman and CEO if America`s Baby Boomers will be financially ready to call it quits in the workplace.

GHARIB: And it`s a September to remember for General Motors (GM). The automaker`s sales jump 13 percent in the month, and the company is taking steps to keep that trend going.

KANGAS: I`m Paul Kangas.

GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Wednesday, October 1.

GHARIB: Good evening everyone.

Wall Street greeted the fourth quarter with euphoria: all of the major stock indexes surged by 2 percent or more. The Dow soared 194 points today, and the NASDAQ vaulted 45. Investors bought up stocks on encouraging news about earnings and the manufacturing sector.

Erika Miller takes a look at where the market could be heading for the rest of the year.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: There`s an old saying on Wall Street: “sell in May and walk away.” But chances are if you followed that advice, you`re kicking yourself now. Historically, May through October has been the weakest six-month period for stocks. But so far, this year has been an exception. Since May, the Standard & Poor`s 500 benchmark is up more than 10 percent.

SAM STOVALL, SR. INVESTMENT STRATEGIST, STANDARD & POOR`S: Basically it`s because in the first year of a new bull market, you can throw all old adages out the window, because investors are more typically optimistic about the longer term.

MILLER: While October is notorious for its market crashes and steep sell-offs, most investment strategists are confident neither will happen this year. In fact, quite the opposite. They see big gains for stocks powered by solid corporate profits and an improving economy.

STOVALL: Both an economic recovery and then a follow-through in terms of earnings increases are likely to cause the market to rebound for the rest of this year. S&P is looking for about a 19 percent increase in year-over-year operating earnings for the third quarter, followed up by about a 21 percent increase in the fourth quarter. And so that kind of an earnings increase will likely boost the optimism toward stocks.

MILLER: But other investment strategists are concerned the market has come too far, too fast. They warn if the economic recovery proves disappointing, there could be a retreat in stock prices.

JAMES AWAD, PORTFOLIO MGR., AWAD ASSET MGMT.: I am concerned that the stimulus will last only a quarter or two, and that it will not lead to enough hiring and gains in the labor market to allow the recovery to keep up the strength next year that it will have had in the third and fourth quarters of `03. And therefore, you have to question as to whether the stock market can keep going.

MILLER: Another potential concern is that the election climate next year could make investors uneasy. But one comforting thought is that since 1939 there hasn`t been a single down year for Wall Street in the third year of a presidential term.

Erika Miller, NIGHTLY BUSINESS REPORT, New York.

KANGAS: Wall Street opened with a solid rebound from yesterday`s sell-off as institutions bought sectors they thought would do well in the fourth quarter, like the financials, technology, retail, and housing stocks. After a half hour of trading, the Dow was up 85 points and the NASDAQ rose 23 points. The market faded slightly in mid-morning after the Institute of Supply Management reported a slight dip in its September business activity index, while August construction spending rose a weaker than expected 0.2 percent. Institutions used that little market dip to step up their buying with early fourth-quarter money inflows. So the Dow Industrial Average soared to a closing gain of 194.14, that`s 2.1 percent, ending now at 9469.20. The NASDAQ Composite vaulted 45 1/3 points, or 2 1/2 percent, to 1832.25. The Standard & Poor`s 500 Index jumped 22 1/4 points, or 2.2 percent, to close at 1018.22. Over in the bond market, the 10-year note managed to edge up 1/32 to 102 18/32, putting the yield at 3.93 percent.

GHARIB: Our guest tonight is the leading provider of 401(k)s in the country. Joining us now, Barry Griswell, chairman and CEO of Principal Financial Group.

Mr. Griswell, nice to have you on the program.

BARRY GRISWELL, CHMN. & CEO, PRINCIPAL FINANCIAL GROUP: Thank you, Susie, good to be here.

GHARIB: Thank you. Well, as you heard us reporting at the top of our program, we have gotten a strong start to the fourth quarter. Just wondering what your market strategists are forecasting for the balance of this year?

GRISWELL: Yes, we really do see a slow but continuing growth through the balance of this year. And we are continuing to be pretty optimistic about next year. I think we`re definitely in a recovery. I think the question is how quickly it will unfold. But we`re pretty optimistic about the balance this year, some slight growth and then better growth next year.

GHARIB: I know it`s difficult to generalize but what kind of allocations are you suggesting for the portfolio–401(k) portfolio that you manage in terms of stocks, bonds and cash?

GRISWELL: Yes, you know, that`s a great point. People in 401(k)s, we typically recommend that it`s a pretty complex process. It really depends on their risk tolerance. It depends on their age, how far away they are from retirement. But we`re seeing, quite frankly, a slight movement back to equities. If you look at our overall portfolio, I think something in the order of 52, 53 percent are allocated to equities. And if you look at new cases that we`re bringing in today, new sales, about 70 percent of the allocation is toward equity. So we actually do see on the margin a slight movement back toward equities.

GHARIB: Given all of the volatility and the corporate scandals that we`ve seen over the last couple of years, are you finding that investors are holding back from making more contributions to their 401(k)s?

GRISWELL: No. Quite the contrary. In fact, we just completed a very comprehensive study of 23,000 of our 401(k) plans. We have 2 million plan participants. And we actually saw year over year an increase in participation rates and an increase in deferral rates. And company matches are holding quite steady as well. So-and I think this is particularly true in small to medium businesses. I think a lot of the news your hear is about Fortune 100 companies where maybe some of that is going on. Certainly in the smaller end of the market, that`s not the case. It`s just the opposite. There is good confidence among participants in small 401(k) plans.

GHARIB: Do you-are you finding that Americans, particularly the Baby Boomers, are taking the right steps for what they should be doing for their retirement planning?

GRISWELL: Well, I think they are to some extent but there is a lot of room for improvement. One of the things that we`re finding unfortunately is that among the younger workers in America, say 35 and under, there is a real lack of participation. I think only 42 percent of those workers are actually participating. That`s real problematic. Obviously as people get closer to retirement they understand the need. But we have got to educate people early to start saving, because the power of compound interest in returns over a long period of time really do make the difference. The other thing is investment advice. We really have, in this country, to get to a point where we can provide more investment advice to people in 401(k) because they really don`t understand some of the rebalancing techniques, some of the asset allocation techniques. And so I think that`s an area we could really improve in this country.

GHARIB: Well, one of the vehicles for planning for retirement have been investing in mutual funds. And I`m just wondering what your take has been on the trading abuses in mutual funds and what impact this has had on investors confidence and putting money into a mutual fund?

GRISWELL: Well, I think it`s very, very unfortunate what has happened. I mean, obviously all of us who run mutual funds and retirement plans have a fiduciary responsibility to all shareholders. And I think it`s very unfortunate that some would be allowed to optimize returns for a few to make fees and then disadvantage other shareholders. So I`m very discouraged at that. I hope it`s not widespread but I think it`s a trend that we have really got to stop. We`ve been very vigilant at our company to make sure that we don`t allow market timers in our plans because it disadvantages other shareholders.

GHARIB: Have you had to suspend any of the mutual funds that you do business with?

GRISWELL: No we haven`t, at this point.

GHARIB: What kinds of changes would you like to see, that is, the mutual funds or hedge funds?

GRISWELL: Well, I think there does need to be more oversight and more regulation. I don`t usually like to say that, but I think the hedge funds to some extent have gotten a bit out of control. You`d like to think self-regulation and the best interest of your shareholders, but it seems to me all this brings to light that we probably do need some level of oversight just to make sure it doesn`t happen.

GHARIB: All right. Thank you very much for coming on the program. Appreciate it.

GRISWELL: Thank you, Susie.

GHARIB: We`ve been speaking with Barry Griswell, chairman and CEO of Principal Financial Group.

KANGAS: A dozen stockbrokers and branch managers at Prudential Securities are out of jobs tonight after an investigation into improper mutual fund trading by the company. The internal probe was conducted by the firm`s majority owner, Wachovia Securities, which confirmed the departures, but said their nature was, “a personnel matter.” The employees worked at Prudential offices in Boston and New York, and are reported to have engaged in market timing of mutual funds. Those practices are currently under investigation by the federal securities regulators, and state regulators in New York and Massachusetts.

GHARIB: Federal regulators are suing one of the nation`s largest natural gas traders, accusing it of manipulating the market by reporting fake prices and pocketing $63 million in profits. American Electric Power (AEP) says it`s cooperating with the government to resolve the matter, and is surprised by the timing of the legal filing. Meanwhile, if you heat your home with natural gas, be prepared for your bills to be almost 10 percent more this winter than last year. Natural gas prices have backed off their highs a bit for the year. But experts say a colder than normal season could easily send prices soaring.

As Stephanie Woods reports, worries over increasing prices are already heating up on Capitol Hill.

STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The sight of jackets and sweaters in Washington has brought with it heated debate over the energy bill. The sudden cold snap in the East this week boosted the price of natural gas futures 6 percent. Price spikes this summer shut down some fertilizer and chemical manufacturing plants, and prices are expected to remain volatile.

GUY CARUSO, ADMINISTRATOR, ENERGY INFORMATION AGENCY: The main reason for the volatility is our natural gas industry in this country and our total supply situation is operating very close to its capacity.

WOODS: The energy bill contains financial incentives for exploration and drilling to boost natural gas supplies. Environmentalists oppose that in favor of conservation. Congressman Chris John, from the energy-producing state of Louisiana, today called on business leaders to recast the debate.

REP. CHRIS JOHN (D), LOUISIANA: If we change this debate to talk about jobs, and you are very critical, the businesses of this country, the guys who create the jobs, to tell your employees that guys, your job could rely on an energy bill in Congress making sure that we have cheap, reliable natural gas.

WOODS: The House and Senate have both passed different versions of an energy bill. The battle is now being waged in conference behind closed doors, largely by Republicans. Democrats complain they`re being shut out.

SEN. BYRON DORGAN (D), NORTH DAKOTA: In my judgment we should have an energy bill. We need an energy bill, but the process by which this energy bill is being written, with only one party present and the other party deliberately excluded, I believe threatens the ability to get an energy bill.

WOODS: Analysts predict anxiety over high fuel prices, blackouts, and keeping the economy on track will push lawmakers to get an energy bill done.

Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: Some signs of an economic rebound at two of the big Detroit automakers, as sales shifted into gear last month. General Motors (GM) said its sales jumped almost 13 percent in the month of September. GM also announced a new round of incentives on its 2004 models. Ford (F) sales rose 5 percent last month to almost 295,000 cars and trucks. Much of that boost came from a 31 percent increase in sales of the company`s retooled F-Series pickup trucks. But it was a different picture at DaimlerChrysler (DCX): sales dropped an unexpected 15 percent led by a 22 percent plunge in car sales. And like GM, Daimler also launched a new round of incentives today, Paul?

KANGAS: There wasn`t much movement in the automakers` stocks, although Ford was among the 10 most actives on the big board. And we`ll see it in just a moment. Now let`s take a look at some other “Stocks in the News” tonight.

The most active big board issue, as it has been so often recently, Lucent Technologies (LU) today trading 21.7 million shares, the stock losing $0.02.

Followed by Pfizer (PFE), up $0.42.

AOL Time Warner (AOL), a $0.21 gain there.

General Electric (GE) rose $0.82.

And fifth in volume was Motorola (MOT) with a $0.16 gain.

Citigroup (C) had a nice move. I mentioned earlier the financials were strong. And that`s a good example, up $1.49.

EMC (EMC), a $0.37 rise.

Liberty Media (L) edged up a nickel.

NorTel Networks (NT), a $0.12 gain.

And there we see it, Ford Motor (F) rising $0.33 a share, tenth in big board volume.

3M Company (MMM), member of the Dow Industrial Average, doing it some favors with that gain of a $1.83. 3M said after the close yesterday its 2000 (sic) earnings will be growing on the order of 12 to 14 percent.

And while we`re looking at one Dow stock, let`s look at some other majors in the average, Caterpillar (CAT) up $2 1/2 a share.

IBM (IBM) rising $2.02.

And then United Technologies (UTX) a nice gain of $2.60.

Wal-Mart (WMT) stores gained $1.21.

Eli Lilly (LLY) did well today, up $3.61. The FDA says the company`s Cymbalta anti-depression drug can now be approved without any further studies, a big plus there.

And American Electric Power (AEP) down $0.40. A story here, the company confirmed it is the target of a lawsuit filed in federal court alleging that the firm attempted to manipulate natural gas prices.

Cablevision Systems (CVC) moved up nearly a dollar. In two weeks the company will launch its Voom DBS satellite television service with 39 high definition channels.

Then we take a look at another channel, that`s Clear Channel Communications (CCU), up $2.01. The company repeated its earnings guidance for the third quarter, says it will be in the mid to high single digit growth range.

British Energy (BGY) moved up $0.54, an 8 1/2 percent gain there. The company`s creditors gave it a final approval for a government-backed restructuring plan.

And Actuant (ATU) doing well, up $4.46. The company is involved in electronic components and systems, in with fourth-quarter earnings up 41 percent over last year, $0.82 a share versus $0.58. The company also increased its sales and earnings guidance for the year 2004. And on top of all that, announced a two-for-one stock split. Pretty good combination.

D.R. Horton (DHI), one of the major residential builders, up $2.46. August residential construction hit a record high. And this had a very positive impact on the homebuilding sector. Let`s have a look at some other majors in that area: Centex (CTX) up $4.68; a similar gain in K.B. Homes (KBH); Lennar (LEN) moved up $4.36; and Toll Brothers (TOL) rising $2.24. Very strong group.

On the other hand, LaBranche (LAB), which is the major specialist firm on the New York Exchange, down $1.23, or nearly 8 1/2 percent. The company now predicting third-quarter earnings will fall to only $0.03 to $0.05 versus the Wall Street estimate of $0.17 a share. A major drop there.

Mastec (MTZ) moved up $1.21. The Friedman Billings brokerage upgraded it from market perform to outperform on the potential the company will have a rebound in earnings in the years 2004 and 2005.

And Christopher & Banks (CBK), a retailer of woman`s apparel doing well, up $2.27. The company`s September same-store sales were up 3 percent. And Christopher & Banks sees a similar rise for the rest of the year. The Brean Murray brokerage upgraded it from buy to a strong buy.

The NASDAQ most active issue was Intel (INTC), rising $1.11.

Microsoft (MSFT) moved up $0.72.

Cisco Systems (CSCO) up $0.61.

eBay (EBAY) did well, up a $1.06.

SINA Corp. (SINA), that`s one of those Chinese Internet portal companies, down $0.45.

And then we see Dell (DELL) moving up $0.60.

Followed by Nextel (NXTL) with a $0.20 loss.

Amgen (AMGN) up $1.76.

Yahoo! (YHOO) gained $1.01.

And Amgen (AMGN) was up $1.76, tenth in dollar volume on NASDAQ.

Hollis-Eden Pharmaceuticals (HEPH) tumbling $4.79. The Legg Mason brokerage issued a sell recommendation on concern the stock is overvalued. And it has had quite a ride, as you can see.

Essex Corporation (EYW), which has only been trading since June on the American Exchange, was up $1.50, a 27 percent rise. The company won a new defense-related contract worth about $57 million over the next four years. And the contract is for its custom software.

And those are the “Stocks in the News” tonight, Susie?

GHARIB: Thanks, Paul.

The Securities and Exchange Commission says J.P. Morgan Chase (JPM) will pay $25 million to settle an investigation into how it offered stock in initial public offerings to its clients. Chase neither admits nor denies wrongdoing in the matter. But the SEC alleges that the firm induced some customers who bought its hottest IPOs to then buy additional shares in the after market. It`s a practice known as “laddering.” It`s illegal, and it was seen primarily in tech and telecom stocks in the boom of the late 1990s.

KANGAS: Tomorrow, we get an update on corporate governance at the New York Stock Exchange from its interim chairman.

GHARIB: The U.S. is urging China to adopt more flexible, market-based foreign exchange rates. Treasury Under Secretary John Taylor made the comments in testimony today before the House Financial Services Committee. Taylor said it`s time for China to take a leadership role on exchange rates by scrapping its decade-old currency peg. If that were to happen, Taylor said American consumers would see a small increase in prices on Chinese imports.

KANGAS: A big win for VaxGen (VXGN) today: Its stock jumped almost 5 percent after the company won an $80 million contract to develop a new anthrax vaccine. The three-year contract with the National Institute of Health is part of project bio-shield, a program designed to fund and make available treatments for biological and chemical attacks. VaxGen stock rose $0.58 to close at $12.65.

GHARIB: Here`s a look now at what`s happening tomorrow. A light day on the economic calendar, the August report on factory orders comes out, also tomorrow, weekly jobless claims.

In the “Money File” tonight, a new tax break from Uncle Sam. Here`s Kevin McCormally, executive editor of “Kiplinger`s Personal Finance.”

KEVIN MCCORMALLY, EDITORIAL DIR., “KIPLINGER`S PERSONAL FINANCE”: Does the thought of collecting receipts and hassling with paperwork give you a headache? Well, at least you can use pretax money in a flexible spending account to pay for your aspirin.

That`s right, the IRS has reversed itself and now says the cost of aspirin and other over-the-counter medications qualify for reimbursement. In the past, only prescription drugs made the cut. Now vitamins still don`t qualify, but the cost of herbal remedies might if they have been recommended by a doctor.

This change comes at a great time because it calls attention to flex plans just as we enter the season when employees are asked how much money they want to contribute to their accounts for next year. As you decide, remember it`s much better to put in too much than too little. Sure, there`s that pesky use-it-or-lose-it rule, and you do forfeit any money that you put into the account but don`t spent by the end of the year. But the tax breaks are so powerful that you can forfeit a good chunk of change and still come out ahead.

Remember, salary run through a flex plan avoids federal income and Social Security taxes, and in all states but New Jersey, state income taxes, too. It`s easy for the savings to be 25 percent to 40 percent or even more. So you could forfeit 25 to 40 percent and still break even. They money you lose would have gone to Uncle Sam, not into your pocket.

Of course you don`t want to lose anything, so “Kiplinger`s” has built a calculator to help you estimate how much to set aside, and to encourage you to go whole-hog for the tax benefits, we`ll even show how much you can forfeit and still win with your flex plan. You`ll find a link to the calculator at the NIGHTLY BUSINESS REPORT Web site at www.nbr.com.

I`m Kevin McCormally.

KANGAS: Recapping today`s market action: a solid start to the fourth quarter on Wall Street. The Dow gains 194 points, and the NASDAQ Composite climbs 45 points. And please be sure to join us at our World Wide Web site, NBR.com.

GHARIB: And finally tonight, in the “don`t call me, but I`ll be sure to call you” department, 11 top executives of the Direct Marketing Association, the nation`s largest trade group of telemarketers, have put their home phone numbers on the new national “do-not-call” registry. The numbers were tracked down through public records by reporters at the “Hartford Courant” newspaper, and the executives admit their phone numbers are on that list. A spokesman said the telemarketing insiders did it deliberately as an experiment to see whether it makes a difference in the number of calls that they get.

And they`re not the only ones on the registry. Apparently, Paul, the CFO of Convergys (CVG) also signed up. It`s a company that makes 50,000 outbound sales calls every day.

KANGAS: I wonder if it`s possible that half of them are at my home right around dinner hour.

GHARIB: I know the feeling. That`s NIGHTLY BUSINESS REPORT for Wednesday, October 1. I`m Susie Gharib. Good night everyone.

Good night to you, Paul.

KANGAS: Good night, Susie.

I`m Paul Kangas, wishing all of you the best of good buys.

END

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by FDCH e-Media, Inc. 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. c 2003 Community Television Foundation of South Florida, Inc.

TO PURCHASE A VIDEOTAPE OF THIS PIECE, PLEASE CALL 888-266-3601

(Copy: Content and programming copyright 2003 Community Television Foundation of South Florida,

Inc. Formatting and transcription copyright 2003 FDCH e-Media, Inc. (f/k/a Federal Document Clearing House Inc., eMediaMillWorks, Inc.), No quotes from the materials contained herein may be used in any media without attribution to Community Television Foundation of South Florida, Inc. This transcript may not be copied or resold in any media.)