Marketplace: News Archives

Tuesday, October 3, 2000
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It's Tuesday, the 3rd of October. I'm David Brancaccio.

There's a certain breed of computer users who go out of their way to be offbeat and work to swim against the Microsoft flow. These are the aficionados of the free operating system Linux. These are the Apple users or the ones who stick by the WordPerfect word processing program in a world of Microsoft Word. Today, Microsoft announced it's buying a $135 million piece of WorldPerfect's owner, Corel and Corel's stock went up 57 percent. Marketplace's John Dimsdale has an explanation.

Dimsdale: "The word processor war is over and Microsoft Word has won. WordPerfect is the only alternative and it is no longer a serious contender. In fact, without some cash soon, WordPerfect's owner, Corel, would likely go out of business. Since Microsoft is defending itself from a lower court ruling that it has abused its monopoly status, now is not the time for Microsoft to be losing a competitor. Any collapsing challenger could make legal hay. With Microsoft's investment, Corel agrees to drop pending litigation. Technology analyst Rob Enderle at Giga Information Group says with its Microsoft partnership, Corel will be able to distribute its software on Microsoft's new Internet-based distribution system called .Net."

Enderle: "It's in Microsoft's interest to keep Corel alive for a lot of reasons. One, because it would be very bad timing to lose a competitor. Number two, because Corel would have an opportunity to take Microsoft to court and whether they would win or not, that would be ill timed. And number three, it does provide an opportunity for Corel to focus on Microsoft.net, and the current executive management at Corel and the management over at Microsoft are much more closely aligned than the previous management was."

Dimsdale: "Keeping competitors viable is not a new strategy for Microsoft. In 1997, the company poured $150-million into the struggling Apple Computer. In Washington, I'm John Dimsdale for Marketplace."

One the one hand we have the widely-followed stock market guru Abby Joseph Cohen at Goldman Sachs saying it's too soon to throw dirt on Nasdaq-listed technology stocks. She's predicting they will soon bounce back from the drops of September. The Nasdaq Composite, however, wasn't listening with the index falling 113 points today, or 3.2 percent. And technology companies don't have to be listed on the Nasdaq to be suffering. Xerox shares fell a breathtaking 26.5 percent today after warning late Monday that an expected profit in the 3rd quarter is, instead, a loss. Evaporating profits is becoming a familiar tune, as Marketplace's Michelle Brier reports.

Brier: "Xerox did it Monday night. Priceline.com did it last week. Kodak, Intel, Apple... they all did it. That is, warn investors that their third quarter earnings will be off, in some cases, way off."

Johnson: "A lot went wrong in the third quarter."

Brier: "Hugh Johnson is chief investment strategist at First Albany. He says so many companies were forced to confess their shortfalls because of a convergence of financial events."

Johnson: "The economy slowed, the euro declined, which hurt a lot of companies doing business in Europe, and of course oil prices rose, which raised the cost of raw materials for many companies. And it all added up to lower sales and lower earnings."

Brier: "And hardly any industry was immune."

Johnson: "You have chemical companies like Dupont. Colgate, McDonalds, companies in relatively safe, conservative industries, telling us. Obviously, technology companies like Apple and Intel, but also just about every industry was represented, telling us it was just a miserable September."

Brier: "The goods news is that September, and the pre-announcements of profit warnings are over. But the bad news is that historically, October has its own troubles. Think the October stock market crashes of 1987 and 1929. In New York, I'm Michelle Brier for Marketplace."

The Senate overwhelmingly passed legislation today to provide 600-thousand new visas over the next three years for foreign workers who will fill openings high-tech industry. The bill will allow the Immigration and Naturalization Service to issue up to 195-thousand temporary visas annually to skilled foreign workers. The current law, which allowed the workers to enter the country, known as H-1B visas, expired on Saturday. Without this new legislation, the number of workers allowed into the country would have fallen to 65,000 next year. Technology companies maintain that 300-thousand jobs go unfilled because of a lack of skilled workers. The 96-1 vote followed weeks of partisan wrangling over efforts by Democrats to allow more illegal immigrants and political refugees to remain in the country.

In a development that's unleashing both excitement and ethical apprehension, doctors in Chicago have created the first baby genetically engineered in the test tube, in hopes that his healthy genes could heal his terminally-ill sibling. While there have been other genetically altered babies born, Adam Nash becomes the first child specifically designed to help his sister. From the Marketplace Health Desk, Helen Palmer reports.

Richesky: "Baby is beautiful, baby is 10 lbs already. He's smiling and the most important thing is he is healthy."

Palmer: "Dr. Lana Richesky is one of two Russian scientists at Chicago's Reproductive Genetics Institute who can claim credit for helping Lisa and Jack Nash fulfill their dream: more children."

Richesky: "This baby is not only an apple of their eye, but also a savior in their family."

Palmer: "Adam is also unique, selected by Dr. Richesky from several potential embryos created in the test-tube from the parents' eggs and sperm. He has the same tissue type as the Nash's six year old daughter Molly but he doesn't have the inherited blood disorder that's expected kill her within months. When Adam was born, stem cells, primitive cells that can grow into any kind of blood cell, were collected from the umbilical cord and transplanted into Molly to help repair her immune system. Dr. Yuri Verlinsky, the director of the Institute who pioneered this 'Pre-implantation genetic technology', says stem cells like this were her only hope."

Verlinsky: "The stem cells from the umbilical cord for this case is a magic bullet to help her to survive."

Palmer: "They're not a cure, he notes, but he gives them a 90 percent chance of success. They'll know for sure in 10 days. The alternative, a bone marrow transplant, has about a 30 percent success rate. And there's another disadvantage:"

Verlinsky: "A bone marrow transplant probably costs around $400,000 to $500,000. Stem cell transplants, it's at least five or six times less expensive."

Palmer: "Sickle cell anemia, childhood cancers, kids with these serious health problems could all benefit, he says. But a note of caution is raised as the ethics community contemplates custom designed babies."

Annas: "Where do we draw the line here? What if the couple just wanted to have boys. We could have done that, too. Or just wanted to have girls?"

Palmer: "George Annas, Professor of Health Law at Boston University."

Annas: "That's definitely worth worrying about. We don't have any regulation at all of the industry, and most people think it's time we at least had some oversight for the infertility industry."

Palmer: "He sees the real problem as a wider societal one, that there's no national stem cell bank where virtually all umbilical cord blood could be saved for anyone who needs it. From the Health Desk at WGBH Boston, I'm Helen Palmer for Marketplace."

And that's the top of our news for Tuesday. Today the Dow Jones Industrial Average rose 19 points, but an earlier two percent rally on the Nasdaq fizzled ignominiously. As we mentioned, that index closed down 3.2 percent. More details when we do the numbers.