Marketplace: News Archives

Monday, September 25, 2000
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It's Monday, the 25th of September. I'm David Brancaccio.

A drop in crude oil prices, engineered in part by the Clinton Administration, is sticking, at least for now. On Friday, the Energy Department said it's releasing about 30 million barrels of oil that were being saved for a rainy day in vast salt domes in Texas and Louisiana. Today, Treasury Secretary Lawrence Summers hinted that other countries may soon dip into their oil stockpiles and the price of crude for November delivery dropped $1.11 to $31.57 a barrel. That's 16 percent lower than oil's peak of last week. Oil analysts say intervention only works like this if the market is primed. That is to say, "You can't beat city hall, unless city hall wants to be beaten." Sarah Miller is editor of Energy Intelligence Group.

Miller: "While inventories are still very low, OPEC has increased production enough now that you should be able to have a stock build over the winter. Normally, over the winter you have a stock draw because that's a season of high demand. In that sense, the market looked as if it was beginning to tighten up a bit. In fact, we had expected prices to fall some time ago."

Oil company stocks fell as well. It's not unusual for oil stocks to fall as the price of crude declines. Investors figure lower oil prices will mean less profit for companies like Exxon, Chevron and BP Amoco. Exxon fell 0.4 percent. Chevron fell 1.2 percent. BP fell 2.3 percent. Shareholders, however, are also consumers, which in the case of oil produces some telling conflicts. Marketplace's Sarah Gardner explains.

Gardner: "Folks who own stock in companies like Chevron and Exxon-Mobil may grumble about high gas prices just like everybody else, but are they secretly smiling behind the pump? After all, high gas prices can mean a higher stock price. On the other hand, as gas prices go down, so can oil company stocks. And a lot of us own a piece of 'Big Oil' these days, even if it's just through mutual funds. Beverly Roca in Alexandria, Virginia owns Exxon-Mobil stock that her mother gave her. She also owns a gas-guzzling Chevy pickup truck. It costs almost $60 to fill up the tank."

Roca: "But at the same time, when you get your quarterly statement from your stocks, it is up."

Gardner: "Whether Roca's rising stock portfolio makes up for those wallet-draining trips to the gas pump is hard to tell. Even if it did, Roca's tightening her belt. She says she's keeping the Chevy pickup in the driveway until gas prices come down some more and taking her Honda Accord to work instead. Mack McDonald owns oil stocks through his mutual funds but he couldn't tell you how much. Even if the Nashville real estate developer has made money off rising oil stocks in the past, it doesn't keep him from grousing about the $28 it costs to fill his Jeep Cherokee these days. McDonald says he did wonder whether President Clinton's move last week to release oil from the nation's emergency reserves will make any difference to him."

McDonald: "Certainly, it did cross my mind. But, it wasn't enough of a thought process to encourage me to call my broker this morning, that's for sure!"

Gardner: "Some investors we talked to had no idea there was a connection between high gas prices and their stock portfolios. They expressed doubts that any extra stock profit could really make up for the extra bucks they've been spending at the pump this year. Of course, the surest way to make that scenario work is to quit driving altogether. And so far, few Americans have been willing to go that route. I'm Sarah Gardner for Marketplace."

NBC dropped a Nike Sportswear ad featuring a chain-saw-wielding psycho chasing a female Olympic runner when viewers complained. If it had been released earlier in the season, it might have been eligible for an award tonight at a ceremony highlighting the best and worst of ads targeted at women. Not to worry, there are plenty of other contenders, as Marketplace's Jessica Smith reports from New York.

Smith: "Women may have come a long way. But some still find a new dishwashing liquid the height of fulfillment."

Advertisement: "It's Spring Sensations! Now, Palmolive brings you the scent of spring blossoms..."

Smith: "At least according to the advertising industry."

Gallup: "There are still a lot of female stereotypes out there that continue to portray women as ludicrously joyful at the prospect of a new washing machine or a new laundry detergent. There are stereotypes out there which continue to be demeaning and offensive to women."

Smith: "Cindy Gallup is president of BBH-New York and a co-organizer of tonight's fourth annual 'Good, The Bad and The Ugly Awards', sponsored by Advertising Women of New York. Gallup says women are well represented in the industry. But the creative departments of firms, which come up with the images and messages, are still bastions of machismo. Tonight's 'Grand Ugly' award goes to this ad for Clairol Herbal Essences Shampoo, featuring a female lawyer in a courtroom."

Advertisement: "Counselor, I urge you to continue. Urge... Urge... Urge. I've got the urge..."

Smith: "But what if these ads, that some women find so offensive, actually sell the product?"

Gallup: "The fact of life is that if an advertiser has a product to sell that has a very clear benefit, and if that benefit does come through in advertising no matter how stereotyped or patronizing, then it is likely that that product will sell. But then the question would be how much more of that product could you sell if you took a more enlightened and forward thinking approach toward advertising it?"

Smith: "Tonight's awards also honor ads that do a good job of marketing to women. As for that Nike ad axed by NBC, Gallup says she found it extremely entertaining. In New York, I'm Jessica Smith for Marketplace."

Researchers know that men in industrialized countries are less fertile than they used to be. What isn't clear is why. A European medical study to be published tomorrow has a new theory about why, that will be of interest to parents as well players in the $3.6 billion market for disposable diapers. Researchers at the University of Kiel in Germany have now established that things get a little warm inside of disposable diapers, perhaps two degrees higher than normal body temperature. Researchers wonder if these higher temperatures might somehow hinder the development of the testicles, which might in turn connect to low sperm counts later in life. Reusable cotton diapers kept things at normal body temperature, by the way. Research is on going into other factors that might explain lower sperm counts, including exposure to synthetic hormones, sedentary lifestyles, and tight underwear.

And that's the top of our news for Monday. Today the Dow Jones Industrial Average fell 39 points, that's 0.4 percent. The Nasdaq Composite fell 1.66 percent. The European single currency held steady today.