Marketplace: News Archives

Monday, November 6, 2000
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It's Monday, November 06, 2000. I'm David Brancaccio.

These days investors tend not to flee the stock market during times of uncertainty. They just shift money away from the more speculative, cutting edge stuff into the more established brand names of the Dow Jones Industrial Average. You could see that flow today on the eve of Presidential and Congressional elections that remain too close to call. The Nasdaq fell one percent, 35 points. The Dow, packed with the blue chips, rose 159 points or 1.5 percent. During the day, the Dow traded for a time above 11-thousand. Jessica Smith reports from the Marketplace New York desk.

Smith: "Its been a slow and quiet day on Wall Street. Investors are hunkering down, waiting to see what happens tomorrow, says Bruce Lonsinger, a stock trader at Credit Suisse First Boston."

Lonsinger: "I think its more confusion. A lot of people have made the joke that if Gore had any personality whatsoever he would probably be way in the lead by a Lion's share. Not a lot of people know who is exactly going to win I think the majority of people feel Bush is probably going to be the victor."

Smith: "Conventional wisdom says Republicans are better for Wall Street, but is it really true? Movers and shakers here DO tend to be wealthy people concerned about income- and estate taxes. Which could mean a knee jerk rise in stock prices if Bush wins. But elections years always end up, according to Harry Clark, who runs Pennsylvania Money mgmt firm Clark Capital Management. That's partly due to sheer relief, after such great uncertainty.

Clark: "What seems to happen though after the first three months after the election happens, then the markets reevaluates things and say 'OK where is this guy gonna go with things?' And then the uncertainty comes back again in spades, and traditionally, the year after the election is a down year!"

Smith: "But this year, does it even matter who wins?"

Clark: "Its not going to matter who's in the White House."

Lonsinger: "The fact that Alan Greenspan is staying where he is, is the main factor of this election."

Clark: "The future lies in technology. So no matter who wins, technology will do well."

Smith: "And that brings us to what's really on Wall Street. Cisco Systems, the four hundred billion-dollar Internet networking behemoth, reported earnings today. And for technology investors, at least that will be much more important that who ends up in the White House. In New York, I'm Jessica Smith for Marketplace."

Al Gore and George W. Bush are spending record amounts of money in hopes of squeezing out a victory. The campaigns aren't revealing just how much they're shelling out for what might be termed "voter outreach" these last few days, but as Marketplace's Sarah Gardner reports, the folks in battleground states are sure feeling it.

Gardner: "Here's the sound of money being spent for Al Gore's presidential campaign."

Redford: "Hi, I'm Robert Redford. If you compare the records of Al Gore and George Bush on the environment, the differences are dramatic."

Gardner: "Yes, even Robert Redford's getting into the act that's the celebrity in an automated phone message dialed to voters in the battleground states of Michigan and Oregon. The Democrats and Republicans won't say exactly how much they're spending on these telemarketing-style campaign ads, but voters have received calls from everybody from the comedian Al Franken to the basketball legend Magic Johnson to George Bush's mama. Kurt Kimball, city manager in Grand Rapids, Michigan, says he's received at least 20 such phone calls in the past few weeks, 50 pieces of political mail (that includes federal and state races, of course) and television ads don't even talk about it."

Kimball: "I'm learning the virtues of not watching TV these days or tuning in my radio. And I can't figure out who these undecided voters are because they been barraged with advertisements from all concerned. I'd like to know who they are and meet them."

Gardner: "Voters in states like Florida and Wisconsin can sympathize. And it's not over yet. Nearly 3 billion dollars has been spent on presidential and congressional races and spending by the parties and interest groups now overwhelms the money spent by the candidates themselves. By October the Republicans had raised almost $211 million dollars in soft money. The Democrats: $199 million. Sheila Krumholz at the Center for Responsive Politics."

Krumholz: "It's pouring in like never before. And it's rendering our campaign finance limits virtually meaningless."

Gardner: "Gore told a crowd in Philadelphia this weekend "this is one of those elections you're going to tell your grandchildren about." They might just hear about how expensive the race was as well. I'm Sarah Gardner for Marketplace."

Perhaps lost in all the election hullabaloo is a key U.S. Supreme Court that could radically alter the way government agencies regulate business. The Justices will hear arguments tomorrow over the importance of clean-up costs in preventing air pollution. Christy George reports from the Marketplace Business and Environment Desk.

George: "It all started in 1997 when the Environmental Protection Agency issued new Regulations cutting smog and soot emissions. Industry sued, saying the new rules would cost billions and asked the Court to force regulators to consider costs as well as benefits when they write new regulations. But the EPA says that would require putting a pricetag on a human life. And, says the EPA's Robert Brenner, the track record on predicting what regulations cost business isn't too good."

Brenner: "For example, meeting automobile standards or acid rain standards for power Plants, the costs ended up far less than projected because of new technology that was developed and new ways of complying were found that were far cheaper."

George: "But the group that sued, the American Trucking Associations, says the EPA won't admit it but it DOES look at costs as well as benefits - which is why most regulations have a longer phase-in time than most environmentalists would like. But no one can check the EPA's numbers, says the ATA's lawyer, Robert Gasaway."

Gasaway: "They have considered costs traditionally but tried very carefully to protect their authority to set virtually any standards they choose which is what's caused this particular dispute to come to a head in the Supreme Court."

George: "The Court will also hear arguments on whether two appeals court judges Were right last year when they said the Clean Air Act is unconstitutional because federal agencies are usurping congress' power to make the rules. From Oregon Public Broadcasting, I'm Christy Goerge for Marketplace."

The European Union is suing two US tobacco giants, in a US court, accusing them of helping cigarette smugglers evade European taxes. If the EU wins its civil suit in a U.S. court, tobacco companies could be forced to cough up billions of dollars. In Paris, Nick Spicer reports.

Spicer: "The European Commission filed the civil suit in a New York district court against RJ Reynolds and Phillip Morris. They make some of the world's best selling cigarettes such as Marlboro, Winston, and Camel. Europe's executive body accuses the two American firms of helping to smuggle smokes into the 15 member union and it says they should foot the bill for billions in lost taxes. Interestingly, the commission chose to file the case under the US racketeering and corrupt organization act design to fight mobsters. That move could triple any damages the firms would pay out. RJ Reynolds is denying any support for smuggling, Phillip Morris wouldn't comment on the news, and the commission had little to say about the case. But it has said that up to 10 percent of cigarettes in some EU countries are contraband and that each shipping container that slips past its customs officials costs the European tax man nearly one million dollars. The commission says cigarette smuggling is the biggest cause of fraud in the EU and it's warning that the member governments of the union may well launch their own individual lawsuits in the near future. In Paris, I'm Nick Spicer for Marketplace."

And that's the top of our news for Monday, November 06, 2000. Again, the Dow went up 1.5 percent today, while the Nasdaq fell a percent. Details when we do the numbers.