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COPYRIGHT 2006 Voxant, Inc.
Original Source: NIGHTLY BUSINESS REPORT
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Not a memorable month of May on Wall Street. The S&P 500 index turns in its worst May performance in 22 years, and the NASDAQ its worst May in six years. That`s despite the fact that all the major indices close with gains today.
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: He`s steering the nation`s largest auto maker through a road full of potholes, including a possible strike at its largest parts supplier. We talk with General Motors Chairman and CEO Rick Wagoner.
GHARIB: Google says two or more, companies may be better than one when it comes to expanding on the Internet. The online search engine says it may be in the search for partners.
KANGAS: Also tonight, the matter of your mortgage. With interest rates rising, is now the right time to refinance? We`ll have some answers.
GHARIB: I`m Susie Gharib.
KANGAS: And I`m Paul Kangas. This is NIGHTLY BUSINESS REPORT for Wednesday, May 31.
Good evening, everyone. Wall Street bid good riddance to a dismal May today. Stocks moved higher as investors digested the latest Fed minutes and picked up bargains after yesterday`s steep sell-off. The Dow Jones Industrial Average ended the day up almost 74 points and the NASDAQ Composite added 14. The gains came despite the release of the minutes of the Federal Reserve`s last meeting. The central bankers agreed that there were both upside risks to inflation and downside risks to economic growth. They also mulled and rejected, raising rates by half a percentage point to help stamp out inflation. Some strategists think the markets have hit their near-term lows.
DOUG SANDLER, CHIEF EQUITY STRATEGIST, WACHOVIA SECURITIES: Remember, going into May, folks were pretty positive. So here we are off 7, 8 percent in the month of May, and I think for those who actually had some slight valuation concerns, we`ve pretty much erased those and we`re right back to fair value on the market and on a lot of stocks.
KANGAS: Sandler says he`s also seeing a shift in the market from low- quality names to higher quality companies. He especially likes the big banks and consumer staples for their slow and steady growth prospects.
GHARIB: Shares of General Motors bounced back today, up more than a percent, as GM`s CEO says that talks between the auto maker, its top supplier, Delphi and the United Auto Workers continue quote, in earnest. Rick Wagoner also said that negotiating a bail-out deal is his top priority, especially since the United Auto Workers union is threatening a strike at Delphi. I sat down with Wagoner a short while ago and asked him whether GM will be forced into bankruptcy if there`s a strike at Delphi.
RICHARD WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: It`s possible that a plant or whatever goes on a short strike. We`ve built up a bank of parts to perhaps protect against those circumstances. We have to see, but our view is that their is such a community of interest in coming to a solution in a reasonable time frame that I don`t think it adds any value to speculate on the worst, worst-case scenario.
GHARIB: We`ll bring you the rest of my interview with Rick Wagoner a little later in the program.
KANGAS: Stocks on Wall Street snapped back this morning from yesterday`s plunge thanks to bargain hunters. Also helping, a drop in oil prices and end-of-month demand from institutions. At 11:30 a.m., the Dow was sporting a 90-point gain, NASDAQ up 21. At 2:00 p.m., those Fed minutes were released and the market gave back some of its early gains. But the Dow Jones Industrial Average held on to a closing gain of 73.88 putting it at 11,168.31. The NASDAQ Composite rose...
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