Focus: Enron
>> enron ex-chairman kenneth lay back on the witness stand in his fraud trial in houston today. lay telling jurors he trusted finance chief andrew fast fastow and believed critical newspaper articles that fastow’s off-the-book partnerships were part of a witch hunt. june grasso is covering the trial in houston.
>> it was all about andy fastow today, as former c.f.o. of the company. lay testified that the board and he were feeling confident about fastow because there was no reason at all not to trust what he said. but then they were shocked when they learned that fastow had made $45 million from those off-the-books partnerships that the newspaper stories had been so critical of. lay said at that point they began to suspect their trust in fastow was unfounded. that was just six weeks before the collapse of enron. after an emergency board vote, lay asked fastow to leave enron immediately, but fastow hesitated. he wanted to discuss a severance package saying he wasn’t going to be greedy, but looking in the neighborhood of $5 million. lay’s response to that, “hell no, andy, pack up your stuff and leave the building.” lay maintained it was newspaper stories damaging investor confidence in enron and driving down the stock price at a time when the company was doing extremely well. this afternoon, lay’s attorney has been taking him through the indictments count by count to deny the government’s allegations. for example, the government accuses lay of misleading employees in an open email forum in september, but lay denied that, saying that at the time “i did believe the balance sheet was strong and the company was financially sound. i believed it then, and i believe it now.” this is continuing count by count as he takes each one and tries to prove the government’s allegations against him are false. cross examination is expected to begin tomorrow and legal experts say this is the most critical part of the case for lay as the jury judges his credibility and that the outcome of the case for lay depends on his credibility. back to you, mike.
>> june grasso in houston. the department of home depot security today started conducting background check it’s nation’s estimated 400,000 port workers. secretary michael chertoff says workers deemed a security risk will be denied access. the checks initially will only compare workers against terrorist watch lists and confirm immigration status. they may be expanded to include other government databases. port security in the spotlight since last month’s public outcry against d.p. world, dubai state-owned country buying terminal operations at six american ports. the house committee tomorrow is expected to pass legislation requiring the installation of radiation and nuclear detectors at all u.s. ports. similar legislation in the senate has attracted bipartisan support. complicationss for immigration legislation. a lot more going on in washington besides gasoline price wars. “political notes” are next.
点击播报
Listen Market briefing --- Ellen (slow)
Nasdaq --- Robert (slow)
down day for the major benchmark indices, biggest decline, in fact, for stocks in two weeks after reports on consumer confidence and housing came in stronger than expected and ultimately re-ignited concerns that interest rates may continue to rise. at the closing bell -- president george w. bush announced plans to address surging gasoline prices today. the president said he’s strongly committed to using more ethanol to power vehicles. his comments sparked a rally in shares of many alternative energy companies. let’s turn to robert gray at the nasdaq marketsite for more on the group. robert?
>> it was that comment that he was strongly committed that helped to send these stocks higher, although they came off their highs after he said he may allow the environmental protection agency to relax some of the laws regarding blending ethanol into gasoline, which is due to begin this summer, just to help allay some of the costs because there have been shortages of ethanol. the energy bill signed into law last august and will allow for ethanol, calls for it to replace mtbe as the additive in gasoline. ethanol derived from grain, which you see on the screen. pacific ethanol among the companies rising to a record in today’s session. bill gates, the largest shareholder in that company, up 1% on the day. m.g.p. ingredients also at a record and xethanol closed lower, but showing volatility in the stocks, it was up several percentage points headed toward the close in the session. many of these small cap companies, small amounts of stock outstanding and many investors, including barry ritholtz, say it could be difficult to play ethanol with some of the bigger companies in the business.
>> the ones that of any decent size, more than a few million dollar market cap, they do so many different things, that the ethanol part of the business is relatively tiny so it’s very difficult to play ethanol with a stock that’s established and a billion dollar cap or higher.
>> some of those larger cap companies include archer-daniels-midland, an agriculture company, very diversified, the largest ethanol producer in the u.s. it rose to a record in the session before turning lower. the disaens up 4.5%, also rising to a record. • the andersons. tom barry said i would not sell it here, it’s an exciting story and new reliance on ethanol is going to help them. he’s owned the stock of andersons since 2002. i spoke with scott weber at paulson capital in portland, moving more towards working in the green, as he calls it. they’re bullish on the sector and the long-term prospect for the group will be good but volatile. we did see volatility today with the alternative energy plays, some of the fuel cell companies. fuelcell energy, evergreen, hybrid and ballard power systems down 21% today. the stock nearly tripled coming into today’s session and cut to sell at citigroup. ballard reports earnings tomorrow so closely watched in tomorrow’s session.
>> thanks so much. high gas prices, topic of conversation in washington these days. president bush announced this morning that the justice department will investigate possible price gouging when it comes to gas prices. you heard robert talking some about this. the president also says he’ll free up oil added to the nation’s emergency reserves in order to ease tight supply. after the president’s speech at an ethanol producer’s trade conference in washington, the chrysler unit of daimlerchrysler announced it will expand the number of flexible fuel vehicles it produces.
>> today, beer we’re announcing that in the 2007 model year we’ll put our popular jeep grand cherokee and jeep commander on our list of flex fuel vehicles for both fleet and retail sales.
>> aside from the jeep grand cherokee and commander, chrysler has added dodge dakota to its list of flexible fuel vehicles. flexible fuel cars can run on a combination of gasoline and as much as 85% ethanol. in an exclusive interview with bloomberg television, chrysler c.e.o. and president thomas lasorda said the automakers are doing their part to encourage the use of alternative fuel.
>> if we want oil independence and a more secure home to get away from oil importing from the middle east and other parts of the world, it’s time we stepped up together. “we’re” is general motors, chrysler and ford. by the end of 2008, we’ll have eight million vehicles on the road for people, let’s put the infrastructure in place so i can go fill it up at a local gas station and reduce the dependence on foreign oil.
>> let’s see if we can have a look at shares of daimlerchrysler and how they traded today. unfortunately, we don’t have the chart for you. sun microsystems stock finished the day a little bit higher. the company’s new chief executive officer pledged to revive sales growth and reverse five years of market share losses. jonathan schwartz said he’ll review spending over the next 90 days.
>> are we going to be looking at pruning back on the things that aren’t returning? absolutely. we’re bringing down real estate, we’re getting rid of projects and processes that don’t make sense in sun and we’ve delivered tremendous efficiency in the past two years. we’re going to continue to drive the top line.
>> schwartz says he doesn’t plan to cut a lot of jobs. schwartz was named yesterday to replace scott mcnealy as c.e.o. mcnealy said it was his decision to step down after 22 years at the helm.
>> we have sun fixed, we’re post bubble, we are growing now with a 21% growth quarter. we have $4.4 billion of cash in the bank so we’re here for the long haul.
>> while mcnealy’s strategy boosted sales, it failed to stem losses that totalled $4.5 billion over four years. sun is falling behind hewlett-packard and dell. we’ll take a quick break and bring you reaction to amazon’s earnings and what to expect next for the stock with david garrity of dinosaur securities.
