Asia Pacific markets --- Shobi (slow)
>> a busy harbor at 8:12 a.m. in sydney. expect light to moderate north to northeast winds with high temperatures reaching 26 degrees celsius. this is “ live” from hong kong. merck loses its triple-a credit rating. merck withdrew its vioxx painkiller drug after a study found side effects of taking that drug included increased risk of heart attack, stroke. s&p says merck may face lawsuits, revenue suffering. merck’s secured be debt was cut three levels. its shares plunged after the vioxx withdrawal and are down 41% so far this year. peoplesoft’s top shareholders are polit over whether―split over whether to back the takeover bid from oracle. oracle says peoplesoft’s number three shareholder will tender its 5.9% stake, putting pressure on peoplesoft to open talks with oracle. oracle last week made its fifth bid for peoplesoft, offering $24 a share. the offer, a 5.3% premium to tuesday’s premium, expires in four days. michael eisner says the board was informed of the pay package given to michael ovitz. eisner is defending himself against disney shareholders who claim eisner and former board members failed to do their duty in approving ovitz’s pay.
>> i wanted to make sure that while we were all in the same room everybody had all the information and any questions that people had―because there was a lot of press, speculation -- was this the heir apparent, what’s happening with sandy? i mean, we read the press documents but i wanted to give the facts to the board.
>> ovitz was fired after 14 months as disney president. investors want his $140 million compensation package returned to disney. eisner returns to court tomorrow. singapore’s economy probably shrank 3% in the third quarter because of slowing overseas demand for the island’s trips. economists surveyed by bloomberg expect the g.d.p. contracted .3% the bank of japan will probably leave interest rates near zero and pump more cash into the economy. all economists surveyed by bloomberg agree that the central bank will not alter monetary policy. junichiro koizumi’s cabinet grew more pessimistic about the state of the economy for the first time in 17 months. the cabinet said, while the economy recovers, it is seeing weak movements. japan’s g.d.p. accelerated at a slower-than-anticipated rate in the third quarter. shobi pereira has a look at stocks to watch this morning in japan. good morning.
>> good morning, a report that mitsubishi motors may receive additional help from mitsubishi group companies, and the report that mitsubishi heavy industries , mitsubishi financial group are considering providing assistance to the struggling automaker. mitsubishi may sell a portion of land to mitsubishi corporation for $189.8 million gain. these and other steps will be included in mitsubishi motors’ new management plan. citizen watch, maker of watches, electronic instruments and machine tools has raised its annual net income forecast to 24 billion yen after first-half profit rose. the company cut its full-year forecast. also keeping an eye out for vodafone, the unit for vodafone group in japan, saying first-half operating profit fell 13%, attracting fewer new subscribers while existing customers spent less. vodafone is japan’s number three provider of cell phone services, lags rivals in attracting 3g users. a senior analyst with dresdner kline wart said the key issue is the launch of 3g this month. the company announced first-half results after the close of equity markets in japan. that’s how it’s looking for now, cathy, back to you.
>> how about surfing the web through your mobile phone? thank you, shobi . up next, greg gibbs will join me with his opinion regarding the euro’s rise.
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Listen Market briefing --- Cathy (fast)
NYSE --- Bob (fast)
welcome to “live” from hong kong. i’m catherine yang. there’s plenty in store for you in this edition of “ live.” we’ll wrap up the action―set the daily events for asia. we’ll have reports from the new york stock exchange and nasdaq -- also coming up, the next generation of telephone service struggling in the u.s. and europe, mobile phone companies setting their sights on asia for what the industry calls 3g. we’ll have interviews with executives from sprint, ericsson -- some of the biggest names in vegas aiming to set up a new strip in macau. crude oil falls to a two-month low on speculation u.s. supplies will increase. crude oil for december delivery fell 1.6% in new york trading. traders expect the u.s. report to show inventories rose 1.5 million barrels last week. threats to supplies remain. associated press reports iraqi insurgents blew up a pipeline, cutting off exports. growth in the developing world is said to remain strong. in the annual economic report, the world bank says global growth will slow to―grow to 3.2%.
>> our forecast in 2005, 2006, are predicated on oil falling to the mid to high 30’s. and the problem becomes if there is an oil price surge that goes beyond that and is sustained for some period of time. at that point, that could cut into consumer demand and could slow growth and growth of developing countries, europe and japan.
>> the world bank says a slowdown in the u.s. investment cycle, higher interest rates and slowing chinese economy contributed to forecasts. inflation suggested to be on the rise as the p.p.i. rose 1.7%, far more than expectations of .6% increase, make something investors worry the federal reserve may raise rates at a faster pace than previously thought. financial shares like citigroup declined as well as homebuilders. retailers were not spared, either. wal-mart led decliners after reporting disappointing numbers. the bank of new york a.d.r. index lost .8%. signs of faster inflation hurt the value of the bonds fixed payments. the euro rises to near another record against the dollar. the gains come after european finance ministers failed to encourage the european central bank to sell currency. the ministers met in brussels on monday. the euro has risen 4% this month, leading some finance ministers to publicly complain the yen may hurt growth. the u.s. currency dropped to a seven-month low of 105.17 yen. hewlett-packard released fiscal fourth-quarter profits moments ago. bob bowden has the numbers from new york.
>> thank you. i’ll tell you the fact the company exceeded expectations on earnings and revenue―first, the headline number. operating earnings reported at 41 cents a share, ahead of both the 36-cent figure a year ago and 37 cents that analysts expected. revenue coming in 8% above the same quarter a year ago and $300 million higher than analysts’ estimates. the highlight being record quarterly revenue in software, up 25% on the bottom line on the screen. h.p. reporting operating margin by unit. not surprisingly, imaging and printing the star with 16.6% operating margin. personal systems, 1.2% operating margin and enterprise servers, 2.6% for the group. software approaches breakeven, they said. enough of the past, what of the future? h.p.’s forecast was for the first half of 2005, 72 to 74 cents a share predicted. the low end of the range matches the analysts’ number. same with h.p.’s revenue forecast of $41.8 to $22.3 billion. about fiscal 2005, which we’re already in according to h.p.’s calendar, carly fiorina said this -- checking other p.c.-related stocks, a mixed page reacting to h.p. actually, i’m going to check those numbers on those reaction stocks. those may be the closing prices rather than after-hours’ prices but nevertheless, a big rally in h.p. shares after their earnings. back to you in hong kong.
>> thank you, bob. rising gasoline prices bite into sales at wal-mart, j.c. penney awjd and saks. revenue at wal-mart rose 9.9% to $69.3 billion. lower merchandise costs boosted profit 13% to $2.3 billion. j.c. penney reported the slowest gain in a year. saks reported a loss, hurt by hurricanes that struck in the southeast. the chief executive says sales will improve as the holidays approach. u.s. retailers get 1/4 of their sales during the year-end holidays. shares of china netcom may rise in the hong kong debut after surging in new york. its shares begin trading today on the hong kong stock exchange after the company’s i.p.o. raised $1.14 billion last week. virgin blue reports first-half results today―analysts surveyed by bloomberg expect net income fell 7% because of increased competition and higher fuel costs. asia’s second largest steel maker reports today. j.f.e. holdings will probably say first-half profit nearly doubled due to rising steel prices. in world news, u.s. president george w. bush tapped condoleeza rice to replace colin powell as secretary of state. rice has been a confidant of president bush since he was governor of texas, the first woman to serve as national white house security adviser, the first black woman to head the state house department. rice said she was honored to serve again.
>> i look forward with the consent of the senate to pursuing your hopeful -- ambitious agenda as secretary of state. mr. president, it is an honor to be asked to serve your administration and my country once again and it is humbling to imagine succeeding my dear friend and mentor, colin powell.
>> a confirmation hearing may be held as early as next month -- rice’s deputy will replace her. on the heels of the resignation of colin powell, richard armitage resigns as deputy secretary of state. armitage was also a deputy assistant secretary of defense from 1981 until 1983. after the break, asian stocks fall in u.s. trading―our tokyo stocks reporter is here next.
