NBR Transcripts: 04-06-2006
Thursday, April 06, 2006The Great Immigration Debate May Soon Be Settled
SUSIE GHARIB: Lawmakers on Capitol Hill tonight are close to reaching an agreement on the hotly contested issue of immigration reform. Senate leaders said that although some details still need to be worked out, they expect to pass a bill tomorrow that would give millions of immigrants a path to citizenship. As Stephanie Dhue reports, it would be the Senate`s most sweeping immigration bill in two decades.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: After a vote to keep debate open on the immigration reform bill, a bi-partisan news conference had the feel of a celebration.
SEN. BILL FRIST, MAJORITY LEADER: We`ve had a huge breakthrough which will allow us to pivot in the next several hours that will lead us to the conclusion of passing a very important bill.
DHUE: The compromise proposal by Senators Chuck Hagel and Mel Martinez would increase the number of employment based green cards from 290,000 to 450,000. It would allow illegal immigrants who`ve been in the country more than five years to transition to legal status if they meet certain conditions, including working, speaking English and paying taxes. Illegal immigrants in the country for fewer than two years would be required to leave. President Bush says he`s encouraged by the breakthrough.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I recognize there are still details to be worked out. I would encourage the members to work hard to get the bill done prior to the upcoming break.
DHUE: Conservative opponents blasted the proposal as amnesty for illegal immigrants who break the law.
REP. TOM TANCREDO (R) COLORADO: If you`ve broken the law, and if you`ve done it for long enough you`ll get amnesty. If you`ve only broken it a short time, you`re out of here, right?
DHUE: Opponents say it won`t fly with the House-passed bill that would make it a felony to live in the country illegally and make it a crime to help illegal immigrants. Supporters of the Senate compromise are seeking assurances their plan will be included in a final bill.
SEN. HARRY REID, MINORITY LEADER: We can`t declare victory, but we`ve moved a long ways down the road. The movement has taken place by inches. As with everything it`s the last few inches that count and we`re almost there.
DHUE: The Senate plans a final vote on its immigration bill tomorrow. That as immigrant supporters plan more rallies around the country next week. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington
Spring Spending Is Blooming Late This Year
JEFF YASTINE: The nation`s largest chain stores rang up lackluster sales in March. Retailers from Wal-Mart to Limited Brands said a late Easter stymied demand for spring merchandise. As Suzanne Pratt reports, the outlook for April is sunnier.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Retailers across the country blamed tepid March sales on the tardiness of the Easter bunny. Last year, the holiday fell in March. This year it comes three weeks later on April 16. Experts say the calendar shift makes for tough comparisons. Retailers also blamed mother nature as cold temperatures and rain dampened demand for spring fashions and other seasonal merchandise.
MICHELLE TAN, RETAIL ANALYST, UBS SECURITIES: It`s a little bit of a weather sensitivity thing. It`s a little bit of an Easter shift because people do tend to buy outfits going into the holiday. There are big promotions around apparel. And, also maybe there`s a little bit with the fashion.
PRATT: Few, however, blamed the consumer, even though gasoline prices are nearing record levels and interest rates keep heading higher. Experts believe the March weakness is a temporary thing, not the sign of a broad- based slowdown in consumer demand. To that end, Wal-Mart posted a 1.4 percent gain in sales, while Federated also disappointed. Nordstrom was one of the month`s few standouts. Gap experienced a hefty 13 percent drop in sales and teen merchant Abercrombie & Fitch also fell short.
CHRISTINE CHEN, SPECIALTY RETAIL ANALYST, PACIFIC GROWTH EQUITIES: The teen retailers are particularly susceptible to the spring break shift because their customer definitely shops the most right before and during spring break and so, you saw a lot of negative news come out of the teen space. And I would expect them to make that up in April.
PRATT: Experts say for most retailers the story should be the same: March`s loss will be April`s gain. They predict warmer temperatures and pent up demand for spring items will boost sales.
TAN: In general, we should see much better business in April. At this point, we think the apparel business will pickup. We think the juniors business, which has been a soft spot across the board, should pickup. Some of the schools had later spring breaks so some of that business gets pushed out into April.
PRATT: Despite the March weakness, retail stocks held up fairly well today. Analysts say that`s because the March softness was expected and because investors are lining up their positions for April. Suzanne Pratt, NIGHTLY BUSINESS REPORT, New York.
One On One With Martha Stewart & Federated Dept. Stores CEO, Terry Lundgren
GHARIB: Federated Department stores announced today that Martha Stewart will design an exclusive line of home furnishings for its Macy`s stores. The new "Martha Stewart collection" which will include everything from bedding to dinnerware, will debut in the fall of next year. Earlier today I sat down with Martha Stewart and Federated`s CEO Terry Lundgren. I began by asking Stewart why the deal is important for her company.
MARTHA STEWART, FOUNDER, MARTHA STEWART LIVING OMNIMEDIA: It has always been our intention to move up the retail pyramid with our merchandise. With our signature furniture, we are already in furniture stores across the country. Now we will be able to, with a vast array of wonderful merchandise for the home, be at the department store level. This is what is very exciting.
GHARIB: Terry, Martha Stewart sells furnishings to Kmart. So why would you want to carry merchandise that is sold by a discounter?
TERRY LUNDGREN, CHMN. & CEO, FEDERATED DEPT. STORES: Well, it is going to be a totally different product, Susie. This is all going to be designed with Martha and with our collaboration focused on the Macy`s consumer. So this is going to a whole new level, whole new level of product, a whole new level of a different assortment. And this is never been possible for us before to satisfy the demand of the Martha Stewart product.
GHARIB: Martha, how are you going to differentiate the products that you`re selling at Macy`s versus Kmart?
STEWART: By manufacturing techniques, by design, by assortment and also by price. The Macy`s product will be a little bit more expensive than the Kmart product, but it will also have much added value.
GHARIB: Terry, Federated really has never done that well with the whole home goods area. Is the Martha Stewart name the answer or do you have other ways for making this work?
LUNDGREN: It is a $4 billion business today. It is just not growing. The reason is pretty simple to me and that is, there is nothing really unique about the product out there. It is very widely available. This is going to be different. We`re going to now have a very big product lifestyle group of categories throughout the home store with Martha`s brand expertise. I mean she`s got credibility in the field of home furnishings. For the first time, we`re going to have a very big and important launch here for home.
GHARIB: Can you at all quantify for us how much of a draw will these new products be for the shoppers?
STEWART: We do know that 75 million women are interested in buying Martha Stewart products. We know that 50 million women have already purchased Martha Stewart products. That`s a lot of man power - women power out there. And in many of our surveys, people have said we like to shop at Macy`s. So we would like to be there. We want to be where the shopper wants us and needs us.
GHARIB: So where are all these Martha Stewart products going to be replacing in the Macy`s collection?
LUNDGREN: Well, in some cases they`re going to actually be replacing our own products, the seller products that we have on the floor today. But what I`m looking forward to and I think we`re going to have new products. I think we`re going to have products that Martha would think about that we don`t naturally carry in our stores. We have had a few dinners and conversations over the last couple of months, talking about this and I don`t even know where it ends. I`m not going to put any limitations on it.
GHARIB: Martha, you`ve been doing a deal a minute in television, in publishing, now in home furnishings. Is there a danger that as you launch more and more businesses using your name, that you`re spreading your brand too thin?
STEWART: I don`t really think so. I think that we would have already been here if I hadn`t had my two-year problem. Now that that is primarily over, we are just picking up where we left off and proceeding as a growth company in a very exciting field of the home.
GHARIB: Speaking of growth, you`ve been going through your own growing pains. You`ve bought May department stores. You`re selling Lord & Taylor. Where do you see growth coming from?
LUNDGREN: Well, my vision is to have Macy`s as America`s department store, be the only national brand. We`ve never been able to advertise on our Macy`s Thanksgiving Day parade before because we weren`t a national company and now we are. We`re thinking outside of the box. We`re trying to think of a brand new ways of connecting with the consumer and so I feel really good about this reinvention of the department store and Martha is going to be a big part of that.
GHARIB: Let`s talk a little bit about both of your company stocks. A great day for Martha Stewart Living Omnimedia today. What more do you think you need to do to get the stock back up to the $30 level it was a while ago?
STEWART: Well, we certainly want to create shareholder value and making a partnership like this with Macy`s is just part of the program for doing that. Then we will have the products in the stores. We will prove that they will sell very, very well and we will help not only our stock and our shareholders, but also the shareholders of Macy`s.
GHARIB: Terry?
LUNDGREN: As you probably know, our stock has tripled in the past two- and-a-half years. So I think our shareholders are saying today, thank you, keep on performing the way you`ve been performing and delivering, both the earnings results as well as the vision for the future and we`ll keep delivering the great growth we`ve had in our stock.
GHARIB: Well, congratulations to both of you, your big announcement. Thank you so much, Martha Stewart and Terry Lundgren.
STEWART: Thank you very much.
Home Ec-Inventing 101
SUSIE GHARIB: We all hear the success stories of entrepreneurs who turn their ideas into multi-million dollar winners. But what about that business idea you might be kicking around in your head, but don`t know how to get started or whether even to bother. In tonight`s "home ec" segment, Brett Graff talks to some entrepreneurs and gets some advice from the experts. BRETT GRAFF, NIGHTLY BUSINESS REPORT CORRESPONDENT: Forget Madonna. Today`s moms want to be Julie Clark, founder of the baby Einstein books and videos. One day Clark`s in her basement, video taping her cat. And the next day, she`s selling her company for way more than $20 million. Julie Clark decided to mix baby videos and Beethoven after unsuccessfully searching the stores for classical music toys. Parents think about filling voids in the market all the time. So if you have a great idea and are totally sick of not having millions of dollars, here is how to start. PETER MATOS, PATENT ATTORNEY: Well the very important first thing you should do is really try to protect your invention. Because the moment other people start getting involved in the process, other people start sharing in the invention and that has ramifications regarding ownership. So it`s really very important that some advice be sought relative to how do I protect myself before you go out there and start doing a lot. RAUL LIZASO, DMD/INVENTOR: I invented -- we call it the baby boater. It`s basically similar to a car seat but it`s for a boat for child safety. ROBERT VAN DER WALL, PATENT ATTORNEY: Only about 5 percent of patents that are granted become commercially successful. So it`s a high risk type thing. GRAFF: For dentist Raul Lizaso, it`s a risk worth taking. So far, he`s spent $20,000 and two years just to design and patent his product. MATOS: There are unfortunately two related but very different issues that most inventors need to worry about or at least think about. One is how do I protect myself so that nobody will copy me? And then the other is how do I make sure that I`m not infringing somebody else`s patent such that I will get sued. GRAFF: Denise Magarino`s daughter wanted to start a scrapbook, but her mom could only find materials for adult women. So two years ago, Magarino started an online scrapbooking club for girls. Today, the business is breaking even. DENISE MAGARINO, SCRAPLOCKER: We need a lot of members. Basically, it`s like everything. We`re a membership based business and so the goal is to have thousands and thousands of members. GRAFF: Nowadays, being in business means being online. But even a knockout website needs to generate traffic to generate sales. MATOS: The typical individual inventor is often somebody who is frustrated with something. They`ve come up - they`ve been doing something that they are just having difficulties with on their job, at home, mothers with their children, something along those lines. They`re just fed up with something and they want to fix it. They want to make it better. And, they`ve come up with something to make their own daily lives better. And they figure, hey other people can benefit from that and maybe I can benefit too because I can make some money from this. GRAFF: Basically, get all the expert advice you`re offered but do not ignore your gut. Clark, now a multi-millionaire mom, says she successfully defied the odds by making it up as she went along. Brett Graff, NIGHTLY BUSINESS REPORT, home economist.
SUSIE GHARIB: In tonight`s commentary, a few thoughts on the immigration reform debate. Here`s Todd Buchholz, author of "Bringing the Jobs Home."
Commentary: Immigration Reform Improvements
TODD BUCHHOLZ, FORMER WHITE HOUSE ECONOMIC ADVISOR: To look at the immigration debate, let`s take a step backwards. It`s 150 years ago. You`re looking to come to America. Now, take a look at your hands. Do you see calluses and scars or do you see soft skin, softened by lotions? If you had smooth skin, they would have thrown you off of the boat. America needed tough workers with tough hands and muscle to man the sooty factories and labor in the fields. Now, our economy has become literally lighter. What makes a successful country in this century? Forget Dow points and NASDAQ points. We are in a worldwide race for IQ points. Whichever country harnesses intelligence wins the race. We`re not looking to fill factories or drag plows alongside mules. We are looking to produce scientists, teachers and engineers. During the 1990s, we lost about one in five farm jobs, but created 30 percent more jobs for engineers. Our economic future doesn`t depend on who pushes the lawnmower. Our immigration system is broken. The overwhelming number of legal immigrants gain admittance simply because they have relatives here. Unlike Canada, we give virtually no credit to those who offer a skill. Imagine Albert Einstein coming to the border today. "I know a little about science," he says, "I think I could help America." What would the INS say? Oh, we don`t care about that Doctor, but do you have an photos of nephews to show us? The U.S. economy needs more immigrants, but we need them to come safely, legally, and with their wits about them. In fact, we need their wits more than their hands. I`m Todd Buchholz.
Paul Kangas' Stocks In The News
JEFF YASTINE: Those disappointments among the retailers were reflected somewhat in the broader averages today. The Dow dropped 70 points for the morning session on weakness in Wal-Mart, also Merck and the banking stocks. Then just like yesterday, an afternoon rally broke out, helping the NASDAQ make up its 12 point deficit. But with tomorrow`s March employment report on the horizon, traders then moved to the sidelines. So the down dropped 23 points to 11,216 1/2 and the NASDAQ Composite falling over a point to, excuse me, gaining a little bit over a point to end at 2361. Then the S&P 500 climbed back 2 1/2 to close at 1309 and a fraction. And Treasury prices headed lower today on fears the March jobs report will show unexpected strength. The 10-year note falling 14/32 to 96 28/32 and the yield at 4.91 percent. That`s a four-year high.
Starting things off, Lucent Tech (LU) gaining $0.03. It topped the most actives. It is suing Microsoft, claiming the Xbox 360 gaming system infringes on a patent which Lucent holds.
Time Warner (TWX) dropping $0.11.
Pfizer (PFE) losing $0.08.
And Merck & Co (MRK) dropping $1.15. The stock down sharply after yesterday`s latest Vioxx jury decision. The punitive damages portion of that New Jersey trial began today.
Motorola (MOT) gaining $0.48.
And then here`s a new issue, Goodman Global (GGL) with its IPO priced at 18 and touched $20.70 before backing off. It`s a maker of heating and air conditioning systems.
Nortel Networks (NT) gaining $0.14.
General Electric (GE) up a nickel.
And Boston Scientific (BSX) rising $0.24. The medical device maker`s acquisition of Guidant can now move forward after the company reached a deal with the Federal Trade Commission over antitrust issues.
And then ExxonMobil (XOM) dropping $0.07 today.
3M Co (MMM), those shares rising nearly $4. The company raised its first quarter forecast for sales and profits and it sees strength pretty much across the board over its range of products.
Then Lehman Brothers (LEH) in with a nice gain. It rose over 2 1/2. The company`s board of directors approving a two for one stock split for shareholders.
And Newmont Mining (NEM) climbing $0.82. New York gold settling at a 25 year high, rising a little over $7 to $599.70 and it did touch an intraday high of $600 an ounce.
Now here we have Novelis (NVL) jumping over $3. Don`t get this confused with the NASDAQ chip making stock with a similar name. Novelis is a maker of rolled aluminum products. The CEO says they`re focused on paying down their high debt levels, but they`re also seeking leeway with lenders while they restate last year`s financials.
And then there`s Martha Stewart Living Omnimedia (MSO) shares posting a huge gain of $2.35 on word with that design pact with Macy`s that we told you about just a moment ago.
And then Brush Engineered Materials (BW) rising nearly 3. Earlier in the week, the company raised its first quarter guidance on strong demand across most of its markets.
And then finally Spectrum Brands (SPC), the big loser of the day, tumbling about $6. This is a profit warning. The company used to be the old Rayovac battery maker before a merger last year. Spectrum is cutting its second quarter profit outlook because of weaker battery sales and Standard & Poor`s cut its credit rating on the company`s bonds.
A look at the NASDAQ where Apple Computer (AAPL) led the list, adding over $4. Bear Stearns says it thinks that the concerns about iPod sale slowdowns are overblown and thinks they should top second quarter Street estimates.
Here`s Google (GOOG) rising a little over $3. The city of San Francisco hiring Google and Earthlink to develop its free citywide wi-fi service.
Cisco Systems (CSCO) losing about a half a dollar.
Microsoft (MSFT) down $0.18.
Sandisk (SNDK) up $0.90.
And then there`s Intel (INTC) down a dime.
Yahoo! (YHOO) gaining $0.68.
Amgen (AMGN) down a little over $1.
Sirius Satellite (SIRI) up $0.37.
And Bed Bath & Beyond (BBBY) gaining $2.50. The home furnishings retailer posting stronger than expected fourth quarter profits. Earnings coming in $0.02 above analysts projections.
And finally a look at some other retailers faring on the day on the NASDAQ, American Eagle Outfitters (AEOS), Bebe Stores (BEBE) and Costco Wholesale (COST) all posting decent gains thanks to solid growth in March same store sales.
Those are our stocks in the news tonight.
