Street Sweep

Dow Makes it Two for Two; Nasdaq Rallies to Another Record; AOL and Time Warner Pledge More Consumers Choices Before Senate

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JAN HOPKINS, CNN ANCHOR: You are looking at live pictures from the New York Stock Exchange. We are less than 60 seconds away from the closing bell.

Good afternoon, I'm Jan Hopkins. Let's find out how the markets are doing in this last minute of trading.

SUSAN LISOVICZ, CNN CORRESPONDENT: The Dow Jones industrials make it two for two, but it is tech stocks that fueled today's rally on Wall Street.

CHARLES MOLINEAUX, CNN CORRESPONDENT: I'm Charles Molineaux at the Nasdaq marketsite. They have been split for weeks, but today, technology stocks moved in sync with the Big Board. Investors brought the Nasdaq up sharply, and kept it up, and on its way to a new record all day.

BRUCE FRANCIS, CNN CORRESPONDENT: I'm Bruce Francis at CNNfn headquarters. AOL and Time Warner pledge more choices for consumers in front of a sometimes skeptical Senate. I will have the details.

HOPKINS: And an all-too-familiar scene of tragedy has played out at yet another American school today. We'll bring you the latest details on the Michigan elementary school shooting.

It is Tuesday, February 29. Welcome to STREET SWEEP.

Investors buying the old economy stocks and the new economy stocks today, especially technology stocks here at the Big Board.

Susan Lisovicz has the details from the floor -- Susan.

LISOVICZ: Hello, Jan.

Well, "Sports Illustrated"'s swimsuit model of the year rang the closing bell today, and there were some tears on the floor, not completely motivated by today's triple-digit rally, but I will tell you, today's session did deserve some applause. Lower levels than yesterday's big rally, but a stronger rally, all in all, better breadth, more stocks participating. Yesterday, the Dow industrials were losing steam, the breadth was slightly negative, and there was some concern that they would not have that momentum at opening bell today. But that was not the case. Touch and go in the early going, but the Dow industrials built up steam. What was strong today? Well, you had retailers, financial stocks, telecoms, and especially chip stocks, based on higher DRAM prices, positive comments from Wall Street analysts, and some optimistic, forward-looking statements from executives. Especially Micron Technology, trades right behind me to the right, soaring nearly 20 points today. It was something that you don't see all the time here, something more familiar to the Nasdaq.

The Dow industrials not quite making it into a triple-digit rally, but close to it, up 97, to 10136, moving away from under 10,000. And we did have strong breath, advancers beating decliners by a three-to-two margins, second day in a row more than a billion shares.

Back to you, Jan.

HOPKINS: Thanks, Susan.

We did have a rally in the chip stocks that helped push the Nasdaq higher. You can't keep that index down long.

Charles Molineaux has more from the Nasdaq marketsite. Charles?

MOLINEAUX: Yes, Jan, we also have a new record for volume on the Nasdaq, two billion shares traded, this is the most actively traded day ever for the exchange, market watchers say, if you want to see the cause of today's big surge on the Nasdaq, for one thing, look at yesterday's sell-off, which brought the bargain hunters in today and powered the Nasdaq composite to another new record. In fact, the Nasdaq was in record territory throughout the session, and we close out up 119 points at 4696, right about our high for the session.

The businesses trade on the exchange were overwhelmingly higher, biotechnology stocks resumed a leadership position, there were up four percent. Industrial stocks were up that high as well, but check out financials, they were up even better, up 4.1 percent. We saw computers up, telecoms up, transports up, insurance stocks up, and banking, which was down until just a couple of minutes ago, is also up right now. But the star performers were the chips, the Philadelphia semiconductor index rose nine percent after a series of positive analyst comments.

Check out Broadcom, up 8.7; Altera up 11,6, and Apnel (ph), up 13 1/2 percent. Market strategists are very encouraged by the fact that the Dow and the Nasdaq both moved up today, and the fact that so many stocks participated in this rally, stocks that went up outnumbered those that went down by three to two, which strategist say is a sign of a very healthy market, and some confident investors -- Jan.

HOPKINS: Thanks very Charles Molineaux at the Nasdaq marketsite.

Judiciary Committee in Washington holding hearings all day today on the pending merger of America Online and Time Warner, the parent of CNN. AOL Chairman Steve Case and Time Warner Chairman Gerald Levin testifying on the agreement. The two companies signed the memorandum of understanding, which will give cable customers a choice of Internet service providers, available via broadband. The stock of the companies finishing down, Time Warner down more than one, America Online down 1 5/8.

Bruce Francis has been monitoring the hearing. He joins now from our New York studios -- Bruce.

FRANCIS: Jan, interesting that we had both stocks down amid a pretty strong rally, though, for tech shares. The big news coming into this hearing, something that a lot of senators want to hear, that Time Warner and AOL will open up their cable systems so that other ISPs, Internet service providers, can offer services over those networks.

Now, that has been something that AOL had been pushing for, even with the government for some time. Now that it appears to be heading towards control of Time Warner, it looks like that is going to happen. And there will be no limit of providers, no fixed limit on the number anyway, although Time -- the spokesman for AOL does acknowledge that there might be technological limits.

Now, allowing direct billing and other direct contact with the customer, that is something that Case at AOL had wanted for quite some time, and that does appears to be something that the two companies will allow. And a lot of companies do want that because they want that kind of contact with the customer.

And interestingly, they will allow these Internet service providers to offer video streaming, essentially offer video services over another company's cable lines. So that does opens them up to competition.

Now today at that time hearing there was a lot of concern expressed about whether this merged entity, this huge company, would have undue control over programming and content on the Internet. Earlier, Steve Case, the chairman and CEO of AOL and the possible chairman of Time Warner, noted that it is really not possible to control the Internet.

(BEGIN VIDEO CLIP)

STEVE CASE, CHMN. & CHIEF EXECUTIVE, AOL: We do not intend to limit content diversity on any of our systems. If we limit content, if we do not promote a diversity of voices, if we do not maintain scrupulous journalistic standards, then consumers will waste no time migrating to other Internet and media services.

(END VIDEO CLIP)

FRANCIS: Interestingly, you see a stock chart here of AOL's stock chart, a price which has rebound a little bit lately, but has been falling dramatically ever since the announcement of the merger with AOL.

Now, interestingly -- rather with Time Warner. Interestingly, earlier, Case did also mentioned that if he owned a cable network, he would want as many people as possible reselling services on that network. So obviously, he thinks that this is not just a sop to the regulators, but he also thinks it is a good business news.

HOPKINS: Thanks very much Bruce Francis.

And now joining us from Boston with his thoughts on the market today, Sylvester Marquardt, he is of John Hancock Funds.

What did you see going on? We have the Nasdaq coming back again just a little bit of profit taking yesterday. Is that really the focus for investors still?

SYLVESTER MARQUARDT, JOHN HANCOCK FUNDS: Well, today was a great day with all sectors moving up. But more generally, technology stocks have been advancing based on currently strong fundamentals, while most other sectors have been acting as if an economic slowdown is at hand.

HOPKINS: And that's part of the reason why the Dow has been under performing, but then yesterday and today we've had rallies in those so-called "old economy" stocks.

MARQUARDT: Yes, they have rallied briefly, but I think more generally, investors feel the Fed is intent on showing the economy, Greenspan made it clear, it is too strong, and that there are concerns that that will lead to slowing profit growth among economically- sensitive stocks, including eventually technology stocks.

HOPKINS: Thanks very much. Sylvester Marquardt of John Hancock in Boston.

Wall Street is abuzz about 3Com's planned spin-off of its Palm Pilot division. The handheld unit's initial public offering price has been more than doubled, to between $30 and $32 a share. That announcement sent 3Com's shares surging about $19 to $98 each.

Joining us now with his views on that and his outlook on the market is Gregg Hymowitz, of Entrust Capital. So lots of investors love Palm Pilot all of a sudden, right? I mean, that's why they are buying 3Com's stock.

GREGG HYMOWITZ, ENTRUST CAPITAL: Yes, Absolutely, demand for the deal is obviously tremendous, and it is a cheap way potentially of playing the deal, and also for those who not going to be able to participate on the deal, you still own the 93 percent remaining of Palm Pilot, that's not being floated in the deal.

HOPKINS: It is partly a bet on wireless technology, too, isn't? I mean, that's kind of the buzzword these days.

HYMOWITZ: It is a bet on wireless technology, wireless communication, but it is not a sure bet. I mean, there seems to be a real debate that is going to ultimately be played over the next couple of years, which is what device wins? Is it a PDA device that wins, like the Palm Pilot? or is it the wireless phone? And really that is going to be the interesting challenge, what device you are going to be carrying. Because it is very doubtful that we are going to carrying two or three or four devices. We are going to be carrying one device. Is it going to Palm Pilot or is it going to some kind of Nokia or Motorola phone?

HOPKINS: Thanks very much, Gregg Hymowitz.

And later, the "Sports Illustrated" cover model is in the building. IN fact, she is just a few feet away. We'll be talking to her. She rang the closing bell today. Also in the news, a school shooting involving first graders. More on that from CNN Center in Atlanta. Plus, what happens to a business franchise when half the partnership walks out? The business side of the TV marriage of Regis and Kathie Lee.

(COMMERCIAL BREAK)

HOPKINS: Two months after rioters disrupted the World Trade Organization's Seattle summit, U.S. trade representative Charlene Barshefsky will updates us what is happening on trade issues. That's in a moment. But first, the latest news CNN Center and Lou Waters -- Lou.

LOU WATERS, CNN ANCHOR: Hello, Jan.

A busy day on the presidential campaign trail. Virginia and Washington State hold primaries today, North Dakota a caucus. But much of the focus is on next week's Super Tuesday contests. Vice President Al Gore and his challenger Bill Bradley are campaigning in California today. George W. Bush crisscrosses Ohio, one of those so- called Super Tuesday states. His chief rival, Senator John McCain, focuses on California. He's speaking live right now. That's the state with the most people and the most delegates.

A Michigan first-grader is accused of shooting a classmate to death. Today's shooting happened in a crowded classroom at an elementary school near Flint, Michigan. The boy is in custody. The victim, a 6-year-old girl. Prosecutors say the two children may have scuffled yesterday on the playground.

President Clinton says Medicare needs more cash. The president told reporters today he wants half the non-Social Security budget surplus to shore up Medicare. He also wants to cover up to $5,000 a year in prescription drug costs. The president said the GOP would leave out half the older folks who need the coverage.

Campaign finance reform is Granny D's axe to grind She walked across the country to prove it. She arrived at the capitol today after 14 months on the road. Ninety-year-old Doris Haddock plans to lobby until election day to ban so-called soft money contributions from special interest groups.

More news later. I'm Lou Waters.

Now more of Jan Hopkins in New York.

HOPKINS: Thanks, Lou. It has been more than two months since the world was riveted by these images of what became known as the battle in Seattle. Demonstrators rioting in that city, protesting everything from farm subsidies to child labor. Joining us now from our New York bureau for an update on global trade issues is U.S. trade representative Charlene Barshefsky.

Welcome.

CHARLENE BARSHEFSKY, U.S. TRADE REPRESENTATIVE: Pleasure to be here.

HOPKINS: Now, we were talking about that campaign a moment ago, Lou Waters was. The trade issues have really not become big issues in this campaign. Why is that, do you think?

BARSHEFSKY: I think that, for the most part, Americans recognize the value of trade to our economy. As you know, about a third of our domestic economic growth has been because of our exports. I think Americans also appreciate imports into this country, with respect to consumer choice, and as you know, imports keep inflation down.

So while we did see rioting in Seattle, I do think the bulk of Americans appreciate that U.S. involvement in the global economy is not only a must, it's an absolute necessity for our own domestic economic heath.

HOPKINS: Now in November, you worked out an agreement with China to enter the World Trade Organization. That agreement is now before Congress for approval. And yet now China is making noises to threaten Taiwan, and Congress is concerned about that. Why should we open trade with China when there are still security and human rights issues?

BARSHEFSKY: This isn't a question of opening the U.S. market to China. We don't change our trade policies one iota toward China. This is a question of China opening its market to our exports, which is absolutely vital given that China is the largest country on Earth, a fifth of the world's population. This is a critical access for us.

So of course we want to see China's market open. We want strengthen the hands of economic reformers in China, and in order to do that, World Trade Organization accession for China is absolutely in America's interest.

HOPKINS: Thanks very much, Charlene Barshefsky, the chief U.S. trade negotiator.

General Electric one of the big winners in the market today. We'll tell you why in a few moments. But first, let's check in with Willow Bay in Los Angeles.

Willow, I understand that Stuart is interviewing GE's CEO John Welch tonight on "MONEYLINE" tonight.

WILLOW BAY, "MONEYLINE" ANCHOR: Exactly. You're exactly right. Jack Welch, the king of the so-called old economy, trying to turn his company into a new economy lion. Is he scared of young Net upstarts? Not by a longshot.

(BEGIN VIDEO CLIP)

JOHN WELCH, CHAIRMAN & CEO, GE: We have the brand. We have the fulfillment capability. We have the quality systems. Now we have to get the Net. That's the easiest part of the game.

(END VIDEO CLIP)

BAY: You can catch all of Stuart's interview with Jack Welch tonight on "MONEYLINE." Plus, from Los Angeles, make way for the fact pipe. We'll ask Henry Nicholas, chief executive of Broadcom, about his red hot company and the broadband revolution. That's "MONEYLINE," 6:30 p.m. Eastern, right here on CNN -- Jan.

HOPKINS: Thanks, Willow.

And coming up. the stocks that won and lost big today, and later, the chief operating officer of Sun Microsystems with some new wireless alliances and what it will mean to all of us. Plus, a new dimension in magazine marketing. "Sports Illustrated" goes 3-D. Find out more -- you'll be seeing the cover model -- in just a moment.

(COMMERCIAL BREAK)

HOPKINS: Taking a closer look at some of today's Big Board movers, let's rejoin Susan Lisovicz here on the floor of the New York Stock Exchange -- Susan.

LISOVICZ: Hi, Jan. Well, we had a broad-based rally today. And that is not something we could have said about yesterday, despite that triple-digit gain on the Dow. One winner today, General Electric, a stock that has been beaten down recently. GE gaining today on the news that it's getting together with another Dow-listed company, Boeing, to build the world's first passenger jet capable of flying more than 10,000 miles without refueling. That is about the distance from New York to Kuala Lumpur. GE up on the news. Boeing down slightly. And Brown Brothers Harriman reiterating a buy on GE.

Motorola, bigtime winner today. We told you about chip stocks gaining as a whole based on positive comments, in part, from Solomon Smith Barney, saying that there's strong demand for communication components. Micron Technology took off, so did Motorola gaining about 8 percent in value just today.

And finally, financials, up today as a group. National Discount Brokers one of the winners, up in double digits. It says it expects to beat analyst expectations for the third quarter. What's fueling its expectations?

Well, the online brokerage business has a lot a lot of volume, a lot of demand, and that's why they can make those comments, and that helped lift that stock higher today. Back to you, Jan.

HOPKINS: Some really big movers today. Thanks, Susan Lisovicz.

Let's go back to the Nasdaq marketsite and bring in fn's Charles Molineaux, see if he can top that -- Charles.

MOLINEAUX: We actually have a nice dramatic jump up for Speedus.com, for one thing, Jan. It's up 137 percent, or just under $12 a share. Speedus provides broadband wireless high-speed Internet service, and it hit new highs after its affiliate, Speedia.com issued a statement, agreeing with a bullish story about wireless Internet access that appeared in "Barron's" over the weekend. Investors loved hearing it yesterday, they loved hearing it again, today. And look at where we ended up, at $20 9/16. It more than double today.

Epimmune is up by 49.2 percent, or $4 on the day. Yes, this is a biotech, and it has identified a possible new vaccine for the prevention and treatment of Hepatitis C. And then there's Ather (ph), also up dramatically: 21 percent or $45 a share. Ather has a new alliance with Nextel Communications to provide wireless Internet and wireless data solutions to enterprise customers. Meanwhile, Deutsche Bank Alex Brown has upgraded Ather from a market performer to a buy, a nice positive performance there on a very positive day for the Nasdaq.

One more time, we gained 118 points to 4696 on the most actively traded day ever on the Nasdaq, two billion shares -- Jan.

HOPKINS: A record, thanks, Charles Molineaux.

HOPKINS: What do you do when half of a successful business partnership walks away? That's what the folks at Buena Vista Television are wondering tonight as Kathie Lee Gifford announces that she is leaving the "Regis and Kathie Lee" show.

I don't think we were hearing that. The long-running show has been hugely successful in the ratings, ranking as one of the top 20 ratings getters for syndicated shows with nearly four million viewers.

Joining us now to talk about the dissolving of one of TV's most successful marriages is Al Primo. He's former ABC vice president of news, creator of the eyewitness news format, and now vice chairman of medium4.com.

Welcome, Al.

AL PRIMO, VICE CHAIRMAN, MEDIA4.COM: Nice to see you, Jan.

HOPKINS: So, was it that Regis was getting too successful. I mean, you're talking about a $20 million contract for "Millionaire." Is that part of the reason why Kathie Lee decided that she wanted to leave the show?

PRIMO: Well, I think Kathie Lee is a brilliant business person, and I think she recognized that this was the perfect opportunity for her to exit while she's near the top, and I emphasize near the top.

HOPKINS: But how important is it, therefore, to replace her with somebody that the audience can relate to, or can Regis do it by himself?

PRIMO: Well, I think the big secret is is that Regis is the guy who has been driving the show, and leads all the polls and he's the man really on that program.

ABC has an abundance of opportunities here in the sense that his wife, Joy, easily fits in when Kathie Lee is gone. They can certainly go with that very quickly and they could also go to guest hosts or they could do Regis by himself.

The problem is, is that Regis has become probably the ABC's most valuable asset and property. And he's a guy that's had a history of some health problems, and some heart problems, and you don't want to injure him or overwork him.

So it's a dilemma, but it's a pleasant one that they will be able to go through quite easily I think.

HOPKINS: Well, and also, you have a situation where talk shows just aren't as popular as they were in past. Game shows are much more popular these days.

PRIMO: Yes, I think that's true. And I think that what you have in Regis Philbin is somebody who can move very easily between both. You know, CBS recognized that. They brought him in to substitute for Letterman, a brilliant move took advantage of his newfound popularity. And I think that, you know, he's just really a man four all seasons, and he's worked at it for a very, very long time, and I think he's come into it on his own. And by the way, he's a genuinely nice gay.

HOPKINS: Thanks very much for joining us, Al Primo.

And coming up: What's better than a cover girl? A cover girl in 3-D. That's what "Sports Illustrated" is betting. More on models and money after the break.

(COMMERCIAL BREAK)

HOPKINS: Our next guests were on the podium, ringing the closing bell today. If you missed that, then perhaps you've seen Daniela Pestova in more revealing attire on the front cover of "Sports Illustrated." The magazine visiting the Exchange today in order to the launch the swimsuit 2000 edition. I'm joined by cover girl Daniela Pestova and Michael Klingensmith. He's president of "Sports Illustrated." Both of you, welcome.

So, Daniela, ringing the closing bell, I mean, is Wall Street a big part of your life? Are you invested in stocks?

DANIELA PESTOVA, MODEL: It is not, but actually, I started my career going to the movies to go see Wall Street, but that's these (UNINTELLIGIBLE) I think I will have to go to Wall Street. And this is definitely the first time for me, and it's very exciting to be here.

HOPKINS: But you really aren't invested directly? You aren't watching the market every day?

PESTOVA: Not yet.

HOPKINS: Not yet? You were saying you wanted to pick up all the papers on the floor and see what...

PESTOVA: Exactly. And see what I get, to go home and start trading, so. No, but I think it's definitely something that I think we all need to do, and I should be getting into the market, and I will eventually.

HOPKINS: Let's talk about "Sports Illustrated," and the swimsuit edition. It's incredibly important to the magazine, isn't it. I mean, in terms of revenues, is it half, or?

MICHAEL KLINGENSMITH, PRESIDENT, "SPORTS ILLUSTRATED": No, but it's about a $50 million event for us each year. It's sort of our Super Bowl in print.

HOPKINS: And this year, you went to 3-D, with glasses, including glasses, right?

KLINGENSMITH: We did, right here, with these glasses and this issue, a powerful combination.

HOPKINS: I mean, that's like a kids thing, right, seeing stuff in 3-D? What's the attraction?

KLINGENSMITH: Well every year, we try to come up with something that's got a little bit of an edge, that's a little bit of an attraction for people, and this has been hugely popular, and it's really a lot of fun. It reminds you of -- you're exactly right -- when you're a kind with a Viewmaster.

HOPKINS: And with comics books, and this is "Sports Illustrated."

KLINGENSMITH: Right.

HOPKINS: Thank you both for being here. We've ran out of time.

KLINGENSMITH: It's a pleasure.

HOPKINS: That's all for this half hour of STREET SWEEP. For our CNN viewers, "SHOWBIZ TODAY" is coming up next, and we'll have more, including an interview with the COO of Sun Microsystems. That's coming up.

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