Market briefing --- Bob (medium)
NYSE --- Julie (slow)
Nasdaq --- June (slow)
welcome to the friday edition of “world financial report.” i’m bob bowden. the investigation into the insurance industry is widening. california’s attorney general says his state will now investigate insurance brokers and the cuchs they work for following an investigation underway in new york. last week, california’s insurance commissioner called secret commissions paid to brokers a serious problem that betrays the public trust. john garamendi said that brokerages will face fines and could loose their insurance licenses. gross domestic product grew at a 3.7% growth in the third quarter. economists predicted growth of 4.3%. consumer spending rose at a 4.6% pace, the fastest in a year. business investment also grew and a measure of inflation fell to a four-decade low. the report is among the last before next week’s presidential election. both parties reacted to the data. white house economist stephen friedman welcomes the acceleration of growth in the third quarter.
>> it is confirmation that the economy came out of what the federal reserve called a soft patch in the second quarter and it was really quite impressive given some substantial headwinds. oil prices, indeterminant impact of hurricanes, slower growth than we wanted from overseas trading partners so it’s a tribute to the resilience of the american company.
>> robert reich, kerry adviser and former labor secretary says today’s report is further evidence workers are struggling with falling wages and healthcare soaring healthcare costs.
>> more than 800,000 jobs have been lost under the watch of this administration so in terms of what consumers are concerned about, jobs, wages, healthcare, this economy is still in very, very poor shape.
>> most voter polls rank the economy as the top issue in this year’s election. one regional survey of the manager’s activity rose to the highest level in more than six years. consumer confidence fell with record oil prices, slower job growth and uncertainty about the presidential election taking a toll on the consumer for october. the benchmark 10-year note rose on the day. you see there 7/32 on the day. the g.d.p. data showing inflation rose at the slowest pace in more than 40 years, driving up the 10-year there. the shorter end of the curve with the two-year treasury up 1/32. investors focused on the chicago-area readings and the consumer confidence number. a mixed market on friday with the dow jones industrial average up .23% as was the s&p 500. the dow finished at 10,027, s&p at 1130. the nasdaq virtually unchanged on the day at 1975. energy and material stocks led gains while household products declined. for more on the day’s trading action, we have a report from julie hyman at the new york stock exchange.
>> a choppy session for both the dow and the s&p, really a lot of elements pulling the market in both directions. because of that, we saw a lot of up and down. we came up in the last hour or so in frauding but on lower-than-average volume so both the dow and s&p finishing with a gain of about .2%. if you look at the elements causing the lack of activity in the markets , the upcoming election is a big factor on tuesday. a lot of folks don’t want to place big bets ahead of that. economic reports were relatively mixed and because of that, people not knowing what direction to take on the economy and oil gaining by the end of the session pressuring stocks although oil was unchanged most of the session. in terms of what we saw gaining in the session, oil stocks did well with the energy index gaining 1.4%. we saw chevrontexaco gaining after it came out with earnings up 62% in the third quarter. anadarko petroleum, on the other hand, lowered the top end of its sales forecast for the year and it was one of the decliners within the group. we saw materials stocks doing well, rebounding after yesterdayee declines when the chinese raised their interest rates. so some of the big advancers today were decliners yesterday. stocks like allegheny technologies, nucor, freeport-mcmoran and phelps dodge. one weak group was household products makers because of avon coming out with earnings that rose. they also raised their forecast for the year. however, their sales declined for the first time in five years sales were particularry weak in the u.s., their largest market . i’m julie hyman, bloomberg news, at the new york stock exchange.
>> the nasdaq ended the week up 3.be 1% for its best gain in four weeks. june grasso has details on nasdaq trading from the nasdaq marketsite in times square, new york.
>> insurance stocks were the worst performing group at the nasdaq today led down by u.s.i. holdings, distributor of insurance services said in a statement it may receive a subpoena from the new york attorney general as part of an industry-wide investigation relating to the pricing and placement of insurance. smantex, world’s largest maker of anti-virus software, led the nasdaq lower following its competitor mcafee’s report that said last quarter’s sales of a product that prevents network attacks more than doubled while its consumer products jumped 90% and after a.o.l. announced it would give away the mcafee anti-virus software free. symantec was cut to hold at deutsche bank. telecommunication stocks were the best performing group at the nasdaq led by@road, provider of a service that allows companies to trace employees via the internet. looking at chinese internet stocks, which generally tradeed lower today, sohu.com, one of the most active stocks on the nasdaq and leading decliners by percentage is one of dhin’s three largest internet companies and forecast fourth-quarter sales would be as much as $24.4 million compared to estimates by thomson financial of $27.3 million. third-quarter earnings per share were 21 cents, lagging analysts’ estimates. it led down the other chinese internet stocks. i’m june grasso, bloomberg news, at the nasdaq marketsite in times square.
>> we’ve been talking about oil prices lately. crude oil futures finished the day higher after losing 8% in the past two sessions. in new york trading, futures rallied on concern nigeria’s production could be hurt by labor disputes. su keenan tells me more than half the traders and analysts see prices falling next week.
>> big shift in sentiment, bob. a week ago,65% of those surveyed were bullish and now almost the same amount of traders have turned bearish. the main concern, that china’s first interest rate rise in nine years will slow demand growth amid rising u.s. inventories. the survey shows 62% expect crude prices to continue declining. 17 expect prices to rise and only three say oil will be little changed. fimat’s michael fitzpatrick says barring a major supply disruption, oil could trade close to $40 a barrel by year’s end.
>> all things being equal as they are right now, prices should move lower, especially with china slowing down a little bit, evidence that the e.u. economy is beginning to contract certainly evidence here our economy is contracting.
>> fimat predicts prices will continue to drop next month as heating oil supply concerns ease. crude oil supplies are the highest in eight weeks and heating oil futures have dropped in the past eight sessions. prudential’s richard rippe predicts $40-a-barrel oil in the months ahead.
>> when you go from $30 oil to $55 oil, that $20-plus hike represents a significant drag on the economy and the best possible news we could get in coming months would be if oil prices began to recede back into the $35 to $40 zone.
>> the oil rally so far was the best possible news for chevrontexaco, its profit up 62% for the third quarter. net income rose to $3.2 billion or $1.51 a share compared to $1.9 billion or $1.01 a share.
>> when we return, canadian energy company, encan asold its british business for $2 billion. we’ll speak with the company’s c.e.o. coming up.
