HEADLINE: Nightly Business Report

BYLINE: Paul Kangas, Susie Gharib

PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: Oil traders in New York push the price of crude down almost $2 a barrel today. The move comes on an evening of concern about events halfway around the globe and it helps spur stocks on Wall Street.

SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: The controversy simmers on tonight, over America`s ports and whether a company owned by an Arab country will eventually run them. But it may surprise you to learn just what else the United Arab Emirates already runs and owns right here in the United States.

KANGAS: Cisco`s CEO says giving back is good business and good for business. We talk to John Chambers about how American companies are making a difference in places far from Wall Street.

GHARIB: And home improvement super store Lowe`s nails down a solid fourth quarter of earnings. The company benefits from warmer than usual weather this winter and homeowners continue to spruce up their digs.

KANGAS: I`m Paul Kangas.

GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Monday, February 27.

Good evening, everyone. A big slide in oil prices today. At the New York Mercantile Exchange, April crude futures fell 3 percent or nearly $2, to $61 a barrel. Traders breathed a sigh of relief in the wake of Friday`s failed attack on a key Saudi Arabian oil facility. But as Erika Miller reports, there`s much debate on where prices head from here.

ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Oil traders shouted and waved, eager to trade in a declining market. Today`s steep sell-off reflects relief that Iran appears to have reached a compromise nuclear plan. The proposal reportedly calls for Iran and Russia to form a joint venture to enrich uranium on Russian soil. Iran has not said whether it will end the atomic program in its own country, something the U.S. and other nations are demanding. Even so, traders are optimistic an agreement will be hammered out to avert UN sanctions against Iran.

FADEL GHEIT, OIL & GAS ANALYST, OPPEHEIMER & CO.: At the end of the day, the Iranian government will have to sell oil to the world. They need oil exports revenue more than we, the world, need the Iranian oil. Almost 50 percent of Iranian GDP is generated through oil sales. Ninety percent of their exports revenue comes from selling oil.

MILLER: With geopolitical worries subsiding, traders say they`re focusing on recent mild winter weather, which has boosted energy supplies.

EVARISTO STANZIALE, TRADER, SCS COMMODITIES: I think that the thing that has really been driving the market here is the fundamentals. Fundamentally, demand has been weak. Supply has increased comparative to last year. We have an abundance of oil in the market right now.

MILLER: Most oil experts do expect demand to creep higher in the coming months, as the summer driving season gets under way. Even so, they expect oil prices to fall further.

STANZIALE: Overall, I think oil prices will back down to $55. That`s the target number I`m looking for for crude oil again and that will be as we head into the gasoline season.

MILLER: However, others warn a move the mid-50s will happen only under an ideal scenario. They say it`s not a stretch to expect oil prices could rise 15 to 20 percent.

GHEIT: If we have any real supply disruption, we should expect that oil prices would go significantly above $70.

MILLER: The next big test for the energy markets is weekly oil inventory data Wednesday. If it suggests plentiful supplies, experts expect oil prices will drift even lower. Erika Miller, NIGHTLY BUSINESS REPORT, New York.

KANGAS: Despite the warmest weather in more than 100 years, new home sales in January cooled off significantly. The Commerce Department says sales of new single family homes dropped by 5 percent last month. That decline was much bigger than expected and the slowest sales pace in a year. The data also showed the number of unsold homes hit a record high of 528,000. Economists say it`s more evidence of a softening in the housing market and they`re predicting downward pressure on home prices over the next few months. That drop in new home sales briefly took some of the punch out of a strong opening rally on Wall Street. Then those falling oil prices and better than expected earnings from Lowe`s helped pick things up again.

At midmorning, the Dow was up 42, with the NASDAQ up 13 points. The market improved this afternoon with the Dow up over 60, but late selling trimmed some of the gains. So the Dow closed up 35.70 at 11,097.55. The NASDAQ Composite was up 20.14 points ending at 2307.18. Standard & Poor`s 500 up 4.69 ending at 1294.12. Over in the bond market, the 10-year note fell 5/32 to 99 8/32, putting the yield at 4.6 percent.

A report out tonight by the U.S. Coast Guard says there are many intelligence gaps in an Arab owned company`s proposed buyout of operations at six U.S. ports. That company, Dubai Ports World of the United Arab Emirates, has asked for a review of its bid to manage the facilities, a bid under fire in Congress. As Darren Gersh reports, business groups worry the ongoing controversy may hurt foreign investment in the United States.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: In September, when Dubai investment group announced it would pump $50 million into a renovation of New York`s Essex House on top of the $450 million purchase price, New York Mayor Michael Bloomberg called it excellent news. Last April, those same investors bought 21,000 apartments in Houston and seven other U.S. cities. Investors in Dubai own a major stake in DaimlerChrysler; this office building in downtown Washington, DC; and are the biggest buyers of Kentucky thoroughbreds in the world. With such good customers having trouble investing in U.S. ports, business groups worry other foreign investors will think twice before buying American.

STEPHEN CANNER, V.P. INVESTMENT POLICY, U.S. COUNCIL FOR INTERNATIONAL BUSINESS: They may say to themselves, why do I want to bother? Why should I do this? If the purpose of my investment is to access the U.S. market, I can access the U.S. market through Canada or through Mexico with zero duties, producing in either one of those countries and accessing my products with zero duties. So why do I need this headache?"

GERSH: Critics of the deal rallied in New Jersey today, saying the issue is whether a government-controlled company like Dubai Ports World should be allowed to own a critical piece of U.S. infrastructure. New Jersey`s governor says the extra scrutiny will not chill private business deals.

GOV. JON CORZINE, (D) NEW JERSEY: I think trade on a global basis will continue. What this is about it making sure that we have security for the American people.

GERSH: But the definition of national security is expanding. In the 1980s, the Federal government began reviewing deals involving military technology. After 9/11, the scrutiny turned to telecommunications, energy and other critical infrastructure. Now Congress is considering going even further.

JOANNE THORNTON, TRADE ANALYST, STANFORD WASHINGTON RESEARCH: Proposals that would give Congress a role in triggering the reviews or investigations or in potentially disapproving presidential decisions at the conclusion of these reviews, would inject a dramatic amount of uncertainty into the process.

GERSH: The Middle East accounts for less than 1 percent of the $1.5 trillion foreigners have invested in the United States. Whether that figure grows depends on where Congress draws the line between security and economics. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.

GHARIB: Some star performers rang the opening bell here at the New York Stock Exchange this morning. But these stars were judged on a different type of performance. They were all being honored for excellence in corporate philanthropy. Cisco Systems, Home Depot, (INAUDIBLE) Corporation and (INAUDIBLE) were all singled out by the Committee to Encourage Corporate Philanthropy. All the firms have innovative programs that inspire their employees to volunteer for thousands of hours of community service. I talked with Cisco`s president and CEO John Chambers right after the opening bell and began by asking him why corporate philanthropy is so important for him and for Cisco.

JOHN CHAMBERS, PRESIDENT& CEO, CISCO SYSTEMS: Cisco`s in a unique spot to really make a difference and I`ve always believed the most successful companies should be the best at giving back. It`s the right thing to do ethically, but it`s also just plain good business.

GHARIB: John, we`ve seen more and more large companies be more generous in handing out money to charitable organizations. But still, it`s a very small percentage of overall corporate profits. When you talk to CEOs, what`s your business case for giving?

CHAMBERS: I think it starts with it creates the right attitude in your company in terms of transparency, openness, caring about your employees, caring about your communities. But secondly, it`s just plain good business.

GHARIB: So you`re saying that giving back is good for business.

CHAMBERS: Yes I am.

GHARIB: Tell us how that works.

CHAMBERS: What it does is, it creates an environment for you to attract the best and brightest employees. We`re probably the number five best place to work in America according to surveys by "Fortune", et cetera, the large companies. Giving back creates an environment where your customers, be they private customers or the public customers look at you with the confidence to make a difference. In Katrina, where the terrible disaster hit our country, we said let`s not just build schools like they were before; let`s build a 21st century education system. Public and private partnerships making a difference but it also has a direct correlation to your business long term in my opinion. I didn`t believe that perhaps 10 years ago, but I hear from the government leaders all the time.

GHARIB: I understand that when Cisco was celebrating its 20th anniversary last year, that the company encouraged its employees to volunteer in their communities. What is your approach to corporate citizenship?

CHAMBERS: Well, I think you shouldn`t just spend your shareholders` money, you should treat it like it`s your own and say, how does the shareholder win? How does your employees win, your customers and your partners. On our 20th anniversary, we actually gave 265,000 hours of give back (ph) work if you will. I went and painted a homeless shelter on one day. It was interesting, one of the little young people running around said you`re not bad for a CEO. I said thank you. He said don`t give up your day job however. But it is the right thing to do. It creates the environment that you`re proud for your company. It`s the right image for a shareholder to have in terms of your organization. Our stock is up 54,000 percent since we went public 15 years ago. So I think there`s a direct correlation between how good you give back and how well you run your company. It`s just one of the elements.

GHARIB: What do you look at in determining where you`re going to spend your philanthropic dollars?

CHAMBERS: We looked at in the terms of basic needs, where you can make a difference, for example, in hunger or in education or health care and work force preparedness.

GHARIB: Some people would say that corporate philanthropy is really just another form of public relations and it`s not genuine charitable giving. What are your thoughts on that?

CHAMBERS: We just don`t give money and time. We give of our own resources throughout all of our employees. It really makes a difference in creating the right works environment and the right success overall. So I think if you talk to customers and you talk to government leaders, they want to do business with companies that really make a difference, that not only take but also give back.

GHARIB: But what I`m saying is, there are probably some cynics out there.

CHAMBERS: The majority of people do not believe in it. You`ve got to do it religiously. It`s like giving at church. I`ll take those that give at church because they really feel they`ll make a difference. We`ll also accept those that perhaps give because of a bit of peer pressure. So if my CEO counterparts are out there, I encourage you to get involved as well. We can make a difference. We can change the world and we should. The most successful should always be the best at giving back.

GHARIB: So what does charitable giving ultimately mean for shareholders?

CHAMBERS: I`m customer driven, I listen to what my customers say. They say if you`re involved and you give back, you`ll be more successful. Secondly it`s the right thing to do. I think our shareholders trust us to do the right balance.

GHARIB: John, thank you very much and congratulations on your award.

CHAMBERS: Susie, it`s an honor, thank you very much for having us on your show as always.

GHARIB: It looks like General Motors could be coming down with a case of March madness. Published reports say the auto maker will launch a nationwide discount program tied to the NCAA college basketball tournament. GM is not confirming that. But a spokesperson did tell us that while GM has shifted away from incentives like deep discounts and 0 percent financing, it still plans to use promotional events to clear inventory. The basketball offer is expected to roll out Wednesday, when GM releases its February vehicle sales numbers, Paul.

KANGAS: Susie, General Motors shares rose $0.12 to close at$20.11. Now let`s take a look at some other stocks in the news tonight.

Big board volume leader on 21.4 million shares, Pfizer (PFE) moving up $0.23. As part of its restructuring, the company announced a number of executive changes.

Then came Time Warner (TWX) with a $0.04 gain.

EMC Corp (EMC) up $0.25.

Bank of America (BAC) $0.26 rise.

And General Electric (GE) was up $0.18. The company is vying to buy a big stake in TXU Corporation`s electricity delivery business, but so is an Australian investment fund. TXU was up $2.95 to $52.70 today on that word.

Disney (DIS) moved up $0.40. There`s speculation mentioned in this week`s "Baron`s" financial magazine that Apple Computer may attempt a merger with Disney, but a JPMorgan analyst said that`s extremely doubtful.

Micron Technologies (MU) down $0.23.

Texas Instruments (TXN) $0.04 loss.

Hewlett-Packard (HPQ) in a firm tech sector, up $1.39.

And Lucent Technologies (LU) lost a penny a share.

Merrill Lynch (MER) moving up $1.12. The company plans to buy back up to $6 billion of its own common stock.

Then we see Lowe`s Companies (LOW) up $3.78. Fourth quarter earnings strong, $0.87, up from $0.64 a year ago, $0.07 above the Street consensus. Same store sales up a very respectable 7.8 percent and Standard & Poor`s repeated on "buy" on Lowe`s common stock.

Stewart & Stevenson (SVC), this company makes diesel-powered equipment for the military and others. Armor Holdings will acquire this company for $35 a share in cash and Armor itself moved up $3.67 to $59.13.

Keyspan (KSE) the big utility, $0.65 loss, although National Grid PLC, a big British firm, will acquire it for $42 a share. That amounts to about $7.2 billion.

DJ Orthopedics (DJO) doing well, up $5.79. A positive reaction to this company`s $290 million acquisition of Aircast Company.

Phelps Dodge (PD) plunged $8.17. Copper prices down today on reports of slowing demand for copper in China.

Newmont Mining (NEM), the gold stock, down $3.32. Fourth quarter earnings less than half of last year, $0.16 versus $0.34. The company cited rising cost pressure. Standard & Poor`s however, repeated a "buy" on the granddaddy of the golds.

Giant Industries (GI) down $4.43. The oil refiner was downgraded by the Friedman Billings Ramsay brokerage from "outperform" to just a "market perform" rating.

International Aluminum (IAL) down $2.87. A class action suit has been filed against the company regarding defects in certain of its aluminum windows or at least allegations of that.

And then finally we see Novastar Financial (NFI) up $4.09. Fourth quarter earnings $0.89, way up from $0.65 a year ago. The company said 2006 dividends will be at least $5.60 a share. That`s about an 18 percent yield at the price of the stock here.

Google (GOOG) topped the active list, rebounding nicely, up nearly $13.

Apple Computer (AAPL) down $0.47.

Intel (INTC) $0.16 gain.

Microsoft (MSFT) a $0.42 rise.

And Sandisk (SNDK) up $4.74. Citigroup upgraded it from "hold" to a "buy." That was fifth in volume.

Cisco Systems (CSCO) a $0.12 gainer. The company closed on its acquisition of Scientific Atlanta today incidentally.

Applied Materials (AMAT) down $0.40.

Amgen (AMGN) $0.73 gain.

Qualcomm (QCOM) up $1.16.

And tenth in volume was Dell (DELL), with a $0.34 gain.

Parallel Petroleum (PLLL) down $1.93. The company quashed speculation it would merge with Southwest Energy, said it`s not even in the cards.

Those are the stocks in the news tonight. Susie.

GHARIB: Paul, investing in real estate is usually seen as a fairly safe move. So how safe is investing in real estate in China? As Rob McBride reports, there are now new ways to buy into Chinese properties that can reduce, but not eliminate risk.

ROB MCBRIDE, NIGHTLY BUSINESS REPORT CORRESPONDENT: A property sector hungry for investment and international investors hungry for better returns. Real estate investment trusts or REITs, are promising to drive the growth of China`s relatively new private property market ever faster. Buying into shopping malls and office blocks, REITs have been popular elsewhere in the world, allowing investors to get into property while spreading risk. And in China, with its strong rental market, they potentially offer investors a better way to invest in its booming cities.

ANDREW NESS, CB RICHARD ELLIS: You`re not buying company and its management and its vision. You`re buying an income stream. We typically pay out 90 percent of the rental income which they receive to the unit holders. Rental markets don`t move very quickly and hence, they have proven very sort of stable rental income.

ERIC WONG, UBS SECURITIES ASIA: There`s also very strong demand for exposure to China property or the China economy in general, particularly with Peking market in the U.S. and Peking market in Australia and in Europe. Fund managers are looking for better returns outside their home market. So there`s a lot of money coming this way and looking for investment opportunities.

McBRIDE: The successful debut of the first exchange-traded mainland Chinese REIT on the Hong Kong Stock Exchange whetted investors` appetites for more offerings. But for China property, read risk, particularly for individual investors seeking to build their own real estate portfolios. Edwin Ng is a Hong Kong investor who`s managed so far to ride the investment wave just right, at one point owning 15 apartments in booming Shanghai. But in this still young sector, the rules can change from city to city, even from one development to the next.

EDWIN NG, BUSINESSMAN: For some cities, there`s not so many well managed, there`s some risk. Even you pay money, you sign a contract, you may not get the property.

McBRIDE: It all points up the advantage of buying into a REIT rather than an actual property and for investors, does the knowledge that a listing here in Hong Kong or any other established stock exchange at least offers a certain degree of protection.

NESS: To get over the hurdle to come to Hong Kong, there`s a huge amount of due diligence which has to be done. We think that with more REIT listings in Hong Kong of China properties or REITs holding China assets, this will enforce a kind of transparency.

McBRIDE: Even so, for any young market, the old adage applies: buyer beware.

WONG: You`re still talking about China being an emerging market, so it will take some time before the market will be feeling comfortable about all these risks.

McBRIDE: Rob McBride, NIGHTLY BUSINESS REPORT, Hong Kong.

KANGAS: Tomorrow, Boeing and the battle of the homeland security budget.

GHARIB: Chinese Internet firm net-ease.com and two of its former officers have reached a deal with U.S. regulators over alleged improper accounting. The Securities and Exchange Commission says the officers were responsible for overstating revenues and understating losses at net-ease between 2000 and 2001. Net-ease also agreed to refrain from further misconduct as part of the settlement. The stock was up on the deal, rising $2.57 to $88.67.

KANGAS: Time to buy the donuts. Canadian donut chain Tim Horton`s filed paperwork with the SEC today to go public. The chain is owned by Wendy`s International. Up to 29 million shares of Tim Horton`s will be offered to the public, between $18 and $20 a share. Horton`s will trade on the New York Stock Exchange under the ticker symbol THI.

GHARIB: Here`s a look at what`s happening tomorrow. The preliminary number for fourth quarter GDP comes out, as well as January existing home sales. Also tomorrow, the Conference Board releases its February consumer confidence index.

Tonight`s commentator has been watching the new Federal Reserve chairman in his first month on the job and says so far, so good. Here`s Alan Blinder, partner in the Promontory Financial Group and former vice chair of the Federal Reserve.

ALAN BLINDER, FORMER VICE CHAIR, FEDERAL RESERVE: Last month I praised Alan Greenspan for his remarkable 18 and a half year run as chairman of the Federal Reserve. Now we have a new Fed chairman, Ben Bernanke. While on the job for just a month, his first congressional testimony has already accomplished three important things and two of them stand in sharp contrast with the Greenspan era.

First, Bernanke`s short direct answers delivered in plain English were notable and drew praise from a number of congressmen and senators. Adopting English as its official language will make the Fed more transparent by making it more intelligible. During Greenspan`s long tenure, the financial markets developed a talent for ferreting out the meaning of his Delphic utterances, but 99 percent of Americans had no idea what he was talking about. Since they, too, have a right to know what their central bank is up to, English is welcome.

Second, when the politicians tried to draw Bernanke out on issues beyond the Fed`s purview, he frequently declined to take the bait. Greenspan, of course, was all too willing to opine on almost any issue, no matter how political. The Bernanke approach is wiser, I believe. Central banks need to stay out of the political thicket and one good way to do that is to duck the political questions.

I said that Bernanke accomplished three things. The third was to make it clear that monetary policy under Bernanke will closely resemble monetary policy under Greenspan, as well it should. Why quarrel with success? I`m Alan Blinder.

KANGAS: Recapping today`s market action, stocks rise on falling oil prices. The Dow gained 35 points and the NASDAQ Composite closed up 20 points. To learn more about the stories in tonight`s broadcast, go to our new Web site. You can find it at pbs.org.

GHARIB: And that`s NIGHTLY BUSINESS REPORT for Monday, February 27. I`m Susie Gharib. Good night, everyone and good night to you, Paul.

KANGAS: Good night, Susie. I`m Paul Kangas, wishing all of you the best of good buys.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by Voxant, 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 2006 Community Television Foundation of South Florida, Inc.

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