Nightly Business Report (PBS) - 2005-10-07

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:03] The latest snapshot of American

[0:05] employment shows a fuzzy picture. On one

[0:08] hand, fewer jobs than expected were lost

[0:10] last month. On the other, the

[0:11] unemployment rate jumped to its highest

[0:13] level since May.

[0:15] >> The Treasury Secretary says despite that

[0:17] jump in the jobless rate, the economy is

[0:19] still going strong. We sit down with

[0:21] John Snow to get his analysis of the

[0:23] September employment report and his

[0:25] upcoming trip to China.

[0:27] >> The growing threat of avian flu has the

[0:29] government and pharmaceutical companies

[0:31] working [music] overtime to come up with

[0:32] ways to fight it. We look at the

[0:34] challenge of finding a vaccine to

[0:35] prevent it and a treatment to cure it.

[0:38] >> And tonight's Market Monitor says he

[0:40] sees two things happening: higher

[0:42] interest rates and lower stock prices.

[0:44] He is Robert Morrow, editor of the

[0:46] Investment Advisory Service.

[0:48] >> I'm Paul Kangas.

[0:50] >> And I'm Jeff Yastine. Susie Gharib is

[0:52] off tonight. This is Nightly Business

[0:53] Report for Friday, October 7th.

[0:56] >> Nightly Business Report is made possible

[0:59] by

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[1:45] >> [music]

[1:47] >> Good evening, everyone. A

[1:48] better-than-expected employment report

[1:50] for September contains some

[1:52] better-than-expected news about the

[1:53] economy, especially in the wake of the

[1:55] hurricanes. While the US lost just

[1:58] 35,000 jobs in September, the job

[2:00] numbers for July and August were revised

[2:03] upward. As Scott Gerber reports, experts

[2:06] say that shows a labor market strong

[2:08] enough to withstand disruptions caused

[2:10] by the storms.

[2:12] >> The most important headline in today's

[2:14] report on employment in September is

[2:16] what it says about employment in the two

[2:17] previous months. The Labor Department

[2:20] added 35,000 to the payroll employment

[2:22] number for July and 42,000 to August,

[2:25] indicating a much stronger economy

[2:27] before the hurricanes hit. The number

[2:29] for September does show a 35,000 job

[2:31] decline, the first decline since 2003.

[2:34] But some forecasters were looking for a

[2:36] drop of as much as 150,000.

[2:39] The separate survey of households found

[2:41] the unemployment rate to be 5.1%

[2:44] up 2/10 of 1% from August. The Labor

[2:46] Department admits this report does not

[2:48] fully reflect the impact of the

[2:50] hurricanes. The reference period for

[2:52] both surveys occurred before Hurricane

[2:54] Rita struck, and difficulty in

[2:56] collecting data in the disaster areas

[2:58] meant lower than usual response rates.

[3:00] Most economists noted a negative impact,

[3:02] but focused on indications of strength

[3:04] rather than weakness.

[3:06] >> You can see very sharp drops in the

[3:07] retail sector, in the hotel and

[3:10] restaurant industries, and in important

[3:13] parts of the transportation sectors of

[3:15] the US economy. So there were a lot of

[3:17] people who couldn't work over the month

[3:19] of September because of the hurricanes.

[3:21] Those losses are likely to be temporary,

[3:23] and when we look at the broader picture

[3:25] of job creation in the economy net of

[3:27] that, it still looked like it was

[3:29] running at a very solid trend.

[3:31] >> Bond traders had little reaction to the

[3:33] report, although most Fed watchers think

[3:35] the data almost guarantees the Central

[3:37] Bank will continue its policy of raising

[3:39] interest rates well into next year.

[3:42] >> I think if anything the Fed is going to

[3:44] try and look through the storm effects.

[3:46] And if you look at all the labor market

[3:48] data we get,

[3:50] they actually look pretty strong. Um,

[3:52] especially when you extract the effects

[3:54] of the storm. So, whether it's jobless

[3:56] claims when you take out hurricane

[3:58] effects there, they look like they've

[4:00] fallen. All right, it looks like payroll

[4:01] employment, the pace of it has actually

[4:03] stepped up. Um Fed's going to keep

[4:06] hiking rates.

[4:07] >> The Fed has raised interest rates at

[4:09] each of its last 11 meetings. It meets

[4:11] next November 1st. Scott Gerber, Nightly

[4:13] Business Report, New York.

[4:15] >> That smaller than expected loss of jobs

[4:17] was a relief to investors, encouraging

[4:19] them to buy stocks depressed by this

[4:21] week's steep sell-off. At the outset of

[4:23] trading, the Dow rose 35 points, and

[4:24] Nasdaq was up 10.

[4:26] That tepid rebound disappointed many

[4:28] potential buyers, as did a comeback in

[4:30] the price of oil. So, the upturn

[4:32] flattened out this afternoon, and stocks

[4:33] ended with just modest gains. Dow

[4:35] Industrial Average up only 5.21 at

[4:37] 10,292.31.

[4:40] It was the Dow's only gain this week, as

[4:42] it fell 276.39

[4:44] points overall. The Nasdaq Composite was

[4:46] up 6.27, closing at 2,090.35 today. It

[4:50] rose twice and fell three times this

[4:52] week for a net loss of 61.34 points.

[4:55] Standard & Poor's 500 was up 4.41 today

[4:58] at 1,195.90.

[5:00] In the bond market, the 10-year note

[5:01] climbed 11/32 to 99 and 6/32, lowering

[5:05] the yield to 4.35%.

[5:08] By the way, the stock market is open,

[5:09] but the bond market is closed on Monday

[5:11] for the Columbus Day holiday.

[5:19] >> [music]

[5:33] [music]

[5:35] >> And back now to our top story,

[5:36] September's employment report. Treasury

[5:39] Secretary John Snow says the numbers

[5:40] show the fundamentals of our economy

[5:42] remain, quote, exceptionally strong, end

[5:45] quote. Washington Bureau Chief Darren

[5:47] Gersh sat down with Snow today and began

[5:49] by asking if the report gives us an idea

[5:52] of the full economic impact of Hurricane

[5:54] Katrina.

[5:56] >> Well, I think so. We're continuing to

[5:59] refine our assessments of it. It looks

[6:02] like most of uh

[6:04] of the negative

[6:07] economic news is in the region.

[6:10] And

[6:11] if it hadn't been for Katrina

[6:13] we would have had the very strong job

[6:16] numbers nationwide. I was

[6:19] never happy to see unemployment of

[6:21] course go up. But it's a tribute to the

[6:24] strength of the underlying economy that

[6:26] these numbers came in so far under the

[6:30] the estimates.

[6:31] >> Well, be a little more specific. What

[6:32] what strength are you seeing even in

[6:34] this week report? What what fundamental

[6:36] underlying strength does it show?

[6:37] >> Well, the the overall GDP growth I think

[6:41] is continuing to be well above

[6:43] trendline.

[6:45] And if we lost 300,000 jobs or so in the

[6:49] region

[6:50] and we only have unemployment down by 35

[6:56] thousand jobs, that suggests that lots

[6:58] of jobs are being created outside the

[7:00] region. So I'd point to that.

[7:03] >> Now, the Fed is concerned about

[7:04] inflation.

[7:06] Given what's going on in this report,

[7:08] are you worried about inflation?

[7:10] >> Well, I think we're going to continue to

[7:13] to have

[7:14] an overall

[7:17] non-inflationary environment or low

[7:19] inflation environment. That is, it looks

[7:21] to me as if inflation is is pretty well

[7:23] in check. We have some sectors, energy

[7:26] most notably, where prices have risen

[7:29] quite dramatically. But overall, we

[7:34] continue to benefit from a low inflation

[7:36] environment.

[7:37] The Fed's committed to to stable

[7:40] non-inflationary growth. They need to be

[7:42] vigilant. They are vigilant. Uh

[7:45] inflation is largely a monetary

[7:46] phenomenon. We We benefit from an

[7:49] economy that is so competitive. Uh with

[7:53] the rising productivity, with high

[7:54] productivity rates.

[7:56] >> One more Katrina question though. We're

[7:58] hearing these estimates out out of

[7:59] Capitol Hill that the spending by the

[8:02] federal government could go as high as a

[8:03] quarter trillion dollars.

[8:05] That seems like a very high number. Can

[8:08] you put some kind of cap on this? Is

[8:09] there going to be some kind of

[8:10] discipline

[8:11] >> Well, the president said

[8:13] and I reiterated it yes his comments

[8:15] yesterday in testimony before the

[8:17] finance committee that we are going to

[8:20] assist in the rebuilding of the region.

[8:22] And we are going to assist people in

[8:24] rebuilding their lives.

[8:26] Uh and we're going to do it in a

[8:27] fiscally responsible way. We're going to

[8:29] make sure that the money's that that are

[8:31] deployed are deployed in

[8:32] well, targeted well, and and spent well.

[8:36] And

[8:37] I think we can do that will be done, but

[8:39] it will be done in a way that

[8:42] that is far below those those outer

[8:45] outer level estimates that you're

[8:47] referring to.

[8:48] Yesterday the CBO

[8:49] >> 100 billion?

[8:50] >> Yesterday the CBO

[8:53] indicated they thought the number was uh

[8:55] uh was was closer to 100 and I think

[8:59] they had 150 billion.

[9:02] Uh

[9:02] which is a lot less than the 250 billion

[9:05] that others or 300 billion that others

[9:06] are talking about. I think it's going to

[9:08] be much closer to that low end of the

[9:10] low end of the range.

[9:12] >> You're going to leave for Asia tomorrow.

[9:13] You'll be talking with the Chinese. It

[9:15] looks like they gave you on paper

[9:17] a flexible exchange rate, but in

[9:19] practice have not.

[9:21] Are you disappointed?

[9:22] >> Well, we're going to we're going to

[9:24] continue to press for flexibility. We We

[9:27] of course

[9:28] were pleased to see that initial move

[9:31] which took the it took the yuan up 2.1%.

[9:35] Uh with a commitment to, uh, to move,

[9:39] uh,

[9:39] move forward to put in place greater

[9:41] flexibility and a commitment to use

[9:43] market forces. A commitment in their

[9:45] statement to use demand and supply.

[9:48] Uh,

[9:49] >> But why haven't they done it? Why

[9:50] haven't they moved more than 2%?

[9:52] >> We, uh,

[9:54] uh,

[9:54] are going to continue to press for

[9:57] greater flexibility. Uh,

[10:00] and I think quiet diplomacy, quiet

[10:02] outreach to them,

[10:04] uh, continuing to to to make it clear

[10:06] that this isn't just the United States,

[10:09] but it's the it's the IMF, and it's the

[10:12] World Bank, and it's the G7, and it's

[10:14] the G20, and it's the Central Bank

[10:16] Governor of, uh, the ECB, and it's

[10:19] virtually all the financial leaders of

[10:20] the world are saying it's time for China

[10:23] to move.

[10:24] >> Secretary Snow, thank you very much.

[10:25] >> Thank you.

[10:27] >> The White House said today President

[10:28] Bush hopes to choose a replacement for

[10:30] retiring Federal Reserve Chairman Alan

[10:32] Greenspan as soon as possible. The

[10:34] administration says that is a priority

[10:37] appointment and the president's staff

[10:38] has been looking at potential

[10:39] candidates. Greenspan's 18-year tenure

[10:42] at the Fed is slated to end January

[10:44] 31st.

[10:49] >> [music]

[10:56] [music]

[11:07] [music]

[11:16] >> Delphi Corporation is taking new steps

[11:18] to fight off bankruptcy. The auto parts

[11:21] maker sweetened the severance policies

[11:23] of 21 of its top officers to try to keep

[11:26] them loyal to the firm, but analysts say

[11:28] it's going to be an uphill battle.

[11:29] Delphi is desperately trying to cut

[11:31] costs, asking the United Auto Workers

[11:34] Union for huge concessions on cutting

[11:36] wages and health care costs. That help

[11:38] is critical, as is financial help from

[11:40] the company's former parent, General

[11:41] Motors. Delphi is working to get a

[11:43] restructuring deal in place before

[11:45] October 17th, when the bankruptcy laws

[11:48] change. And Paul late today, Standard &

[11:50] Poor's dropped Delphi from the S&P 500

[11:53] index. They'll be replaced with

[11:54] Patterson Companies.

[11:56] >> Well, Delphi stock fell almost 50%

[11:58] today, Jeff. It closed down $1.08 at

[12:02] $1.12 a share.

[12:04] Now, let's look at our other stocks in

[12:06] the news tonight.

[12:11] Big board volume leader on 19.9 million

[12:13] shares, General Electric up another 63

[12:15] cents, gained 91 cents yesterday after

[12:17] the company said third quarter earnings

[12:19] will be 44 cents, and that's at the high

[12:21] end of its previous

[12:22] estimates. Pfizer was down 26 cents.

[12:24] ExxonMobil bouncing back a dollar three.

[12:27] Lucent plus a penny and Taiwan

[12:29] Semiconductor up 13 cents. That was

[12:31] fifth in big board volume. Blockbuster

[12:33] up 97 cents, that's a 22% gain. Company

[12:36] said they'll meet its third quarter debt

[12:37] payments, contrary to speculation. It

[12:39] sees third quarter earnings being cut by

[12:41] only about two cents a share due to the

[12:43] hurricanes. Time Warner a 9-cent gain.

[12:45] CVS Corp, the drugstore chain, down

[12:48] another 72 cents. It was off a dollar 75

[12:50] yesterday when the company cut its third

[12:51] quarter guidance by two cents down to 29

[12:54] cents a share. Texas Instruments up a

[12:56] dime and SBC Communications lost 34

[12:58] cents. Accenture Limited rising a dollar

[13:01] 42. Good fourth quarter earnings, 38

[13:03] cents up from 30 cents last year.

[13:05] Revenues up 13%. Standard & Poor's

[13:07] repeated a buy recommendation. And

[13:09] Accenture did initiate a 30 cent per

[13:11] share annual dividend.

[13:13] Then we see Apria Healthcare Group

[13:15] losing $5.46.

[13:17] Company cut its 2005 revenue growth

[13:19] forecast from growth of 5 to 6% all the

[13:22] way down to just 2 to 3% growth. Cable &

[13:26] Wireless down a dollar 15, company sees

[13:28] first half 2006 revenues dropping 6% due

[13:31] mostly to poor results in its United

[13:33] Kingdom operations.

[13:35] Crimi Mae, up $4.19. This is a

[13:38] commercial mortgage lender. It's going

[13:39] to be acquired by CDB Capital Financing,

[13:42] a Canadian company. The price, $20 a

[13:44] share in cash.

[13:46] Oxford Industries, which makes men's and

[13:48] women's apparel, up $3.08. Big first

[13:51] quarter earning, 79 cents up from 36

[13:53] cents a year ago. Sales up 27%. Company

[13:56] comfortable with 2006 earnings estimates

[13:58] of $3.42 to $3.52 a share. Georgia Gulf,

[14:02] a chemical company, was up $2.23 after

[14:05] the Fulcrum Partners brokerage upgraded

[14:07] it from neutral to buy. And Perkin Elmer

[14:09] rising $1.44. The company's going to

[14:12] sell its aerospace unit to Eaton Corp

[14:14] for $333 million. Baird upgraded Perkin

[14:17] from neutral to outperform. And then

[14:20] Westlake Chemical up $1.59. Electric

[14:22] power has been restored to its Lake

[14:24] Charles, Louisiana petrochemical

[14:25] complex.

[14:27] Volume leader Google, up 24 cents on top

[14:30] of a good gain yesterday when UBS

[14:31] boosted its price target from 350 to 375

[14:35] dollars a share. Research In Motion down

[14:37] $2.42. Traded as low as 60 today. A US

[14:40] Appeals Court rejected the company's

[14:42] plea to challenge a ruling that its

[14:43] BlackBerry email device infringed on

[14:46] patents held by NTP Corp. Microsoft down

[14:49] 14 cents. 40 cent loss in Apple

[14:50] Computer. Dell, up 41 cents, fifth in

[14:53] dollar volume. Sandisk was up 84 cents.

[14:56] Intel a 6 cent gain. Amgen did well, up

[14:58] a dollar six. Cisco down a dime. And

[15:00] Qualcomm, tenth in dollar volume, was

[15:02] down 23 cents a share.

[15:04] UTS Starcom, $2.01 loss, about 26 and a

[15:08] quarter percent on the downside on news

[15:10] the SEC is probing the company's

[15:12] financial disclosures. The company did

[15:14] issue a third quarter revenue warning

[15:16] yesterday.

[15:17] And those are the stocks in the news

[15:19] tonight, Jeff.

[15:20] >> Well, Paul, uh

[15:21] from

[15:22] countries, international organizations,

[15:24] and drug makers are in Washington, D.C.

[15:27] today for talks about dealing with a

[15:29] possible spread of avian flu. Currently,

[15:31] the disease is mostly contained to Asia,

[15:33] but as Stephanie Do reports, the Bush

[15:36] administration wants to ensure it does

[15:37] not spread.

[15:39] >> Health officials say the US is not

[15:41] prepared for a bird flu pandemic. There

[15:44] is only one plan in the US making

[15:46] vaccine against the virus known as H5N1,

[15:49] which is believed to cause bird flu.

[15:51] Health and Human Services Secretary

[15:52] Michael Leavitt says the US is working

[15:54] on a comprehensive plan to deal with any

[15:57] potential flu outbreak.

[15:58] >> that this cannot simply be about

[16:00] preparation for H5N1.

[16:03] Uh we don't know if H5N1 virus will

[16:06] become a pandemic or not. What we do

[16:08] know is that someday there will be a

[16:10] pandemic, and our preparation is not

[16:13] adequate, and our purpose is to prepare.

[16:16] >> Years of low profits and manufacturing

[16:18] problems have driven most drug makers

[16:20] from the vaccine business. Current

[16:22] vaccine production uses 50-year-old

[16:24] technology with chicken eggs. Public

[16:26] health advocates say companies need to

[16:28] update their production methods.

[16:30] >> There are

[16:31] other technologies, cell-based

[16:33] technologies, and reverse genetic

[16:34] technologies that companies should be

[16:36] investing in, which would allow them to

[16:39] manufacture vaccine in a far more

[16:41] efficient way and do it year-round,

[16:43] which is something they cannot do right

[16:44] now.

[16:45] >> If there's an outbreak of bird flu in

[16:47] the US, analysts estimate there could be

[16:49] a billion-dollar market for a vaccine,

[16:51] but isolating the specific strains

[16:53] needed would take 6 to 9 months.

[16:55] >> The problem here is not so much as

[16:57] supply. I think there's going to be a

[16:59] lot of supply, particularly within the

[17:00] next year or so. The problem really is

[17:03] knowing what target we're aiming at, and

[17:05] we don't really know yet. That's what's

[17:07] going to take the time.

[17:08] >> Drug companies are also producing flu

[17:10] treatments. The administration is

[17:12] negotiating with the Swiss firm Roche to

[17:14] stockpile of

[17:16] Tamiflu. Individuals are also stocking

[17:18] up on the drug, but Roche warns

[17:20] consumers that Tamiflu sold over the

[17:22] internet could be fake. Stephanie Dhue,

[17:24] Nightly Business Report, Washington.

[17:27] >> Monday, one view of why the White House

[17:30] should be paying its bills.

[17:43] >> [music]

[17:48] [music]

[19:06] [music]

[19:12] >> Well, here's a look at what's happening

[19:13] next week. Our Friday Market Monitor

[19:15] guest is Sam Stovall, Chief Investment

[19:17] Strategist at Standard & Poor's. On the

[19:20] economic calendar, Thursday weekly

[19:21] jobless claims, the August trade gap,

[19:24] and uh September import prices. Friday,

[19:26] September consumer prices, retail sales,

[19:29] and industrial production and capacity

[19:30] utilization. As for earnings, Dow

[19:32] components Alcoa and General Electric

[19:35] report, as do Apple Computer and

[19:37] Harley-Davidson.

[19:43] >> My guest Market Monitor this week is

[19:44] Robert Morrow, editor of the

[19:46] Institutional Advisory Service and

[19:48] publisher of the monthly letter entitled

[19:50] the High-Tech Growth Forecaster. And

[19:52] Bob, welcome back to Nightly Business

[19:53] Report.

[19:54] >> Thank you very much, Paul.

[19:55] >> You've been saying for some time now

[19:56] that the stock market has seen its peak

[19:58] in this cycle and is headed lower. Why

[20:00] are you bearish and how much lower will

[20:02] it go?

[20:03] >> Well, the the numbers that I I had uh

[20:06] were 11,180.

[20:08] >> That was going to be the top.

[20:10] >> That could be the top, and the Nasdaq

[20:11] 2242,

[20:13] and 1267. It got within 1 or 2% of these

[20:16] numbers, and my trend models turned

[20:18] negative. So, from a technical

[20:19] standpoint, I think that we've seen the

[20:21] top of the market.

[20:22] >> How low can we go? And then let's say

[20:24] the Dow.

[20:24] >> The Dow I expect to be about 8700, the

[20:27] Nasdaq 1500.

[20:30] >> 870 you mean on the Dow?

[20:31] >> 870. And uh the S&P 500 would be

[20:35] uh 996.

[20:37] >> Ooh, well you are definitely bearish.

[20:39] And I know your indicators technically

[20:41] are are bearish. What what's What is the

[20:43] worst of them?

[20:44] >> Well,

[20:45] actually it's in I see inflation, I see

[20:48] high PE ratios, I see uh

[20:52] bullish sentiments way too high,

[20:54] complacency. I I think these will all

[20:56] blend into a bubble.

[20:57] >> you know, fundamental bearish things.

[20:58] And your And your all of your indicators

[21:00] technically are also bearish.

[21:02] >> That's right. Cycle and market um um

[21:05] uh pattern recognition.

[21:06] >> So, the fundamentals justify the

[21:08] pessimism of your technical indicator.

[21:10] >> They mesh very nicely now.

[21:11] >> How about a word about interest rates?

[21:13] Are we close to the top?

[21:15] >> Well, I think that we're going to go to

[21:17] uh

[21:18] 4 and 3/4 by the end of the year. I

[21:20] think we're going to see 5 and 1/4, 5

[21:22] and 1/2 in the first quarter of next

[21:24] year.

[21:24] >> Before they pause and then

[21:25] >> Right. And that'd be the 10-year note.

[21:26] >> Okay. And while we're talking about

[21:28] inflationary things, how about oil? Are

[21:30] we near a top?

[21:31] >> I I think we're in a range of 60 to 70.

[21:34] I don't have a better number than that.

[21:36] >> Okay, but uh it's going to stay up there

[21:38] pretty high.

[21:38] >> so.

[21:39] >> You know, on your last visit in late

[21:40] January, you recommended the purchase of

[21:42] three

[21:43] exchange-traded funds. Let's have a look

[21:45] at how they how they've done since then.

[21:47] Look at that energy spider of 36.1% at

[21:51] the beginning of this week before the

[21:52] market tanked, it was doing better,

[21:54] wasn't it?

[21:54] >> Right. 47.3%

[21:56] earlier.

[21:56] >> Wow. It's been a rough week for even

[21:59] energy. Utilities have done nicely. That

[22:01] spider up 17 and 1/2% since late

[22:03] January.

[22:04] >> Right. It is well on to 23.6.

[22:06] >> Mhm. On the plus side. Right on the plus

[22:08] And then there was one other that you

[22:09] had for our viewers last time, and that

[22:11] was the gold ETF.

[22:13] >> Right. I I thought it had a shot at 480

[22:15] this year and it went to 473 so far.

[22:18] >> Okay, so it's on track, so to speak.

[22:20] >> Exactly.

[22:22] >> Exactly.

[22:23] >> Do you have any new recommendations?

[22:25] >> Uh yes, the

[22:26] energy

[22:28] uh spider I still recommend.

[22:29] >> one you liked before.

[22:30] >> Exactly. I still like it. I like the uh

[22:32] utilities.

[22:33] >> Okay. Yeah, that's the same one that you

[22:35] recommended in late January, which has

[22:37] done well.

[22:38] >> And I'm repeating myself again on the

[22:39] gold. I like it, too.

[22:40] >> And the gold as well. Utilities puzzles

[22:43] me if you say interest rates are going

[22:45] to 5 and 1/4 short term, why would you

[22:47] like the utility index?

[22:49] >> I just look at it on a technical

[22:50] standpoint apart from the interest rates

[22:53] and I still think that they'll be a good

[22:55] defensive area to be in.

[22:56] >> Well, you are defensive in the in these

[22:58] different ETFs. Do you have a new new

[23:00] recommendation? You like the same three

[23:02] as you did in January. What about a new

[23:04] one?

[23:04] >> A new one is the consumer staples, the

[23:06] XLP spider.

[23:09] Um this would represent companies like

[23:11] Walmart and Procter & Gamble and

[23:13] Coca-Cola.

[23:14] >> Things that consumers have to buy in

[23:15] order to exist.

[23:16] >> Food, drugs, everything they need to

[23:18] buy.

[23:19] >> Okay, so another defensive issue.

[23:21] >> Right.

[23:22] >> But they've done very well in a rather

[23:24] negative market atmosphere, haven't

[23:25] they? And I guess that's why you like

[23:27] them.

[23:27] >> Right, exactly.

[23:28] >> Okay. And you know, the fourth quarter

[23:30] of most years the

[23:32] tech stocks do well and that's your

[23:34] specialty. You're not recommending any

[23:35] of those.

[23:36] >> Not at this point, but I think after the

[23:37] first quarter of 2006, I'm going to be

[23:40] in on tech in a very heavy way. I think

[23:43] it'll lead the market back in a very

[23:45] substantial way in a new bull market.

[23:46] >> Well, you certainly have given us some

[23:48] good ones like Apple in its heyday

[23:50] recently.

[23:51] Uh do you personally own any of the

[23:52] securities that you're recommending?

[23:54] >> No, I do not.

[23:55] >> Okay. Fair enough. Bob, I want to thank

[23:57] you very much for sharing your insights

[23:59] with us.

[24:00] >> Thank you very much, Paul.

[24:01] >> My guest, Robert Morrow of the

[24:02] Institutional Advisory Service.

[24:05] >> And recapping today's market action,

[24:07] stocks end the week with a day in the

[24:09] black, but not by much. The Dow gains

[24:11] five points, the Nasdaq gains six.

[24:14] To learn more about the stories in

[24:16] tonight's broadcast, go to nbr.com.

[24:20] And finally tonight, there are big

[24:21] houses and then there's David Duffield's

[24:24] house, or at least the house he wants to

[24:25] build. Duffield, you'll recall, made a

[24:27] mint last year selling PeopleSoft to

[24:29] Oracle. Now he wants to use some of the

[24:31] money to build a 72,000 square foot home

[24:34] in a tony suburb of San Francisco.

[24:37] That's 18,000 square feet bigger than

[24:39] the White House, 32,000 square feet

[24:41] bigger than Bill Gates' house, and

[24:43] almost 12,000 square feet bigger than

[24:45] the Hearst Castle at San Simeon. And

[24:48] Paul, that's not all. Duffield also

[24:49] wants 25,000 additional square feet for

[24:52] outbuildings that includes a stable and

[24:54] what, a 20-car underground garage? And

[24:57] the neighbors are not happy about the

[24:58] property.

[24:59] >> I'm not surprised. Trying to keep up

[25:00] with the Duffields is a real challenge.

[25:02] >> Very expensive.

[25:04] That's Nightly Business Report for

[25:06] Friday, October 7th. I'm Jeff Yastine.

[25:08] Have a good weekend, everyone, and Paul

[25:10] is saying to you

[25:10] >> Same to you, Jeff.

[25:12] I'm Paul Kangas wishing all of you the

[25:14] [music] best of goodbyes.

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