Interview: NYSE
>> a look at world news. palestinian authority president mahmoud abbas wins agreement from armed palestinian groups to endorse the truce with israel through the end of the year. abbas agreed to a cease-fire at a summit with israeli prime minister ariel sharon february 8. military attacks have dropped considerably since then. sharon called the agreement a positive first step. israel says it’s committed to handing over west bank cities to palestinian control in return for control of groups attacking israelis. and porter goss telling a c.i.a. committee the c.i.a. does not torture prisoners. goss told the congressmen torture is not productive and policies exist to prevent such practices. u.s. president george w. bush nominated ohio congressman robert portman to be the nation’s top trade negotiator. if confirmed, portman would replace robert zoellick who left in february to the number two post in the state department. a former trade lawyer and member of the house leadership, portman has been a long-time free trade advocate.
>> as you and i have discussed, open markets and better trade relations are key components to a more peaceful, more stable and more prosperous world. through expanded trade, the routes of democracy and freedom are deepened and here at home, trade policy opens markets to create jobs, a higher standard of living and greater economic growth.
>> portman’s new post would put him in charge of negotiating trade accords. martha stewart wants a new trial, telling a federal appeals court, the jury relied on tainted testimony. u.s. district judge last year ordered stewart to serve five months behind bars and five more in home confinement. if stewart’s appeal is successful, her conviction would be overturned, forcing prosecutors to decide whether to retry her. oil prices retreated in new york after reaching a $57.60 a barrel. june grasso reports.
>> crude oil futures reached $56.50, the highest since the contract was introduced in 19yeah. 1983. u.s. supplies dropped last week, nearly triple the one million barrel drop forecast by analysts surveyed by bloomberg.
>> i am concerned about the price of energy. i’m concerned about what it means to the average american family when they see the price of gasoline going up. i’m concerned what it means to small businesses.
>> opec countries are already pumping about 700,000 barrels a day, more than promised, in a failed bid to cut prices. more than half of the members are operating at or close to full capacity.
>> this market has nothing but sky in front of it and it looks like it will go higher. opec is becoming increasingly unable to influence the price of oil right now. it can’t stop the juggernaut we have moving higher.
>> refco analyst jim steel says oil could trade around $60 in the next couple of months and much depends on if opec with squeeze out more production and refineries produce a comfortable surplus in the second quarter.
>> minolta slashessits profit forecasts by 70%, citing a delay in releasing new copiers and cites falling prices. other japanese stocks to watch today include suzuki motor. the nation’s large evaluate maker of mini cars says it will recall more than 14,000 vehicles to fix defective fog lamps. china’s biggest mobile phone maker may report lower annual profit today. beijing shougang also released results. shares of malaysia’s stock exchange may rise today in their trading debut. bursa runs malaysia’s stock derivatives and off-shore financial exchanges and will become the fourth largest publicly traded exchange in asia. coming up on “live,” the dollar rises against the euro and yen as demand for treasuries increases. we’ll speak with a strategist in melbourne.
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Listen Market briefing --- Gene (slow)
Sydney market --- David (slow)
Hongkong dollars --- Bernie (slow)
welcome to “ live” from tokyo. sitting in for catherine yang, i’m gene otani. we’ll look at the prospects for the dollar as investors buy treasuries, boosting demand for the u.s. currency. we’ll speak with craig pherson―ferguson from australia new zealand banking. we’ll speak with huw mckay of westpac banking about australian mining companies and growing demand. we’ll continue our coverage of the csfb conference in hong kong. morgan stanley and goldman sachs report earnings exceeding analysts’ estimates. higher revenue from bond trading and underwriting drove earnings higher at two of the world’s biggest securities firms. morgan stanley’s first-quarter net income rose 20% to $1.74 billion, the highest in five years. the number two securities firm beat the highest estimate by 7%. goldman’s profit climbed 17%, beating the highest estimates by 18%.
>> it’s tough not to like goldman sachs. they’re one of the most expensive in the group but they have their business aligned to be in the right place for the right time for the entire industry.
>> the gain extends an earnings surge that drove profits to a record last year. morgan stanley shares in new york trading down 1.5%, goldman sachs up a fraction. this year, investors say the federal reserve’s six interest rate increases may drag down revenue growth as bond trading and underwriting slow. toys ‘r’ us agreed to a $6.6 billion offer by an investment group attracted to the value of its real estate. kohlberg kravis roberts, bain capital and vernado reality will pay an 8% premium over wednesday’s closing price per share. the buyers will take toys ‘r’ us private and assume an unspecified amount of debt. analysts expect the group to sell or lease a minimum of 100 stores. toys ‘r’ us in the u.s. rose almost 5%. the battle for m.c.i. intensifies. qwest communications international raises its takeover offer for m.c.i. to $8.45 billion, putting pressure on rising communications -- verizon communications to increase its competing offer. qwest says it will pay $15.50 in stock and $10.50 for each share. oil prices retreat after reaching a record $57.60 a barrel in new york. venezuela’s energy minister says opec may not be able to ease oil prices because members cannot pump much more. the group decided at its meeting in iran to raise its output by 1.9% and allow a buildup in inventories in the second quarter. we’ll have more on oil in 10 minutes from our reporter in new york. on wall street, energy stocks rallied on those rising oil prices. the s&p 500 rose for the first day in three, higher by .2%. viacom lifted media stocks. sumner redstone says he may split the company. general motors fell for the second day after the world’s biggest automaker said it expects the biggest quarterly loss since 1992. g.m. is already the worst performer on the dow jones industrial this year. in treasuries, the 10-year note with its first two-day gain in more than a month. investors bought government debt as emerging markets and corporate bonds continue to fall. treasuries reached their highs for the day after a report from the philadelphia fed showed manufacturing in march fell more than expected. the dollar rises against the euro as investors shift assets from emerging markets to u.s. government bonds. against the euro, the dollar’s trading at 1.3378. the dollar-yen we see this at 1 104.53, trading higher against the yen, down by a fraction against the yen. eastern european currencies had some of the biggest declines, falling on speculation rising u.s. interest rates will make their markets less attractive for investors. asian stocks rise in u.s. trading. shares of chinese companies including cnooc and petrochina rose after crude futures rose to a record. the bank of new york indexes ating―tracking asian stocks gained. the second of four steps in news corporation’s removal from all australian indexes will take place from the close of business following the company’s relocation to the u.s. let’s go to bloomberg’s david tweed in sydney for more on news corporation’s move there. what does this mean for news corporation’s shares?
>> goldman sachs estimates that more than $3 billion australian of selling could be associated with this stage of the exit of news corporation from the asx 200. news corporation has moved its headquarters to the u.s. news corporation itself is being included in the s&p 500. that’s the benchmark in the u.s. and the s&p, standard & poor’s, doesn’t want to double count the news corporation shares for its world series, that’s why it’s coming out of the australian index in a staged exit. this is the second of the exits and goldman sachs says this exit is probably the most significant of the exits in terms of the effect on the benchmark. the flip side of news corporation coming out means that the stocks remaining in the index could benefit as that $3 billion is pumped back into the index so watch out for the biggest stocks like b.h.p. billiton, whose stock, i might add, rose 2.4% in new york overnight. watch out also for big media stocks because people will want to maintain some sort of representation of media stocks and publishing and broadcasting is one of the ones that is tipped to benefit the most if that one.
>> talking about the steel sector, chorus group in the u.k. says demand for steel is weakening in north america and europe. will that affect bluescope steel today?
>> it could very possibly. bluescope steel, australia’s biggest steelmaker, dropped 1.9% yesterday after steel dynamics also said profit would lag analysts’ estimates. what chorus said yesterday was the fact that steel prices have doubled means that some of the customers are eating into stockpiles, cutting demand. chorus also sells into the u.s. and bluescope gets 15% of their sales there.
>> david tweed in sydney. hong kong financial secretary henry tang says the city’s exports will benefit if china sends its currency’s peg to the dollar. tang discussed trade, taxes and hong kong’s economy with bernie lo last night.
>> the hong kong dollar is pegged to the u.s. dollar. if the u.s. were to revalue, most people think they would revalue upwards rather than downwards, of course we would have short-term gains from it and our exports of services and products would be more competitive because we’re pegged to the u.s. dollars but in the longer term―what kind of effect it will have on hong kong remains to be seen.
>> our entire interview with hong kong’s financial secretary on “bloomberg voices” this afternoon. our reporter in new york will tell us whether analysts and traders expect to see rising oil prices continue.
