Market briefing --- Matt (medium)
Google --- Allan (slow)
NYSE --- Julie (slow)
>> welcome to “world financial report.” months of anticipation have come to tonight. two weeks of registration and five days of bidding. initial public offering for google is now on the books. they closed the dutch auction at 4:00 p.m. new york time and says it could price its offering as soon as 5:00 p.m. allan dodds frank has been tracking the details.
>> we will soon find out how popular with investors google, the company that runs the world’s most popular internet search engine, really is. they are expected to price the 25.7 million share initial offering any time. based on a projected price, the 6-year-old mountain view, california, company, with 2,300 employees and $1.3 billion in revenue this year should be worth more than $30 billion. its lead underwriters and the company had estimated it would sell between $108 and $135 a share. analysts had been saying the google offering was in jeopardy coming out in the doldrums of august. but by this morning some analysts had changed their tune. one predicted it would go for $120 or more per share.
>> everybody wants to own google. nobody wants to overpay for it. everybody was just scared to death of overpaying for it in the offering and then getting burned about it dropped afterwards. on the other hand nobody wanted to be caught short not owning it after the offering if it takes off right away.
>> one more wrinkle. if the demand is really strong the underwriters can sell an additional 3.85 million shares. by the way, the i.p.o. makes multibillionaires of the co-found, who met at graduate school at stanford. larry page and sergei bryn. the minute the stock prices we will have reaction from analysts so stay with us. when it begins trading it will be under goog. unbelievable stuff.
>> let’s move on. shares of applied material are high are in extended trading. you can check it out now. the stock at last tick is up -- well, little change. we are getting more headlines saying it will buy back $500 million of stock in the fourth quarter after the company reported its largest quarterly profit in almost four years. they earned $440 million, 26 cents a share and it also compares to a loss a year ago, a penny better than estimate. sales up more than 100%. they doubled purchases of its machine or chipmakers rather doubled purchase of its machines. they are gaining customers by offering to service the equipment that it makes by rivals. shares gained 3% ahead. report so far this year their stock is down 28%. they have come out with a fourth quarter, it says sales at $2.35 billion ahead of a $2.30 billion from thomson financial. economic data released today shows more evidence of a growing economy with subdued inflationary pressure. the consumer price index fell .1%, the first decline in eight months. shoppers paid less for gasoline, clothing and transportation. the core rate, that excludes food and energy, was up .1%, the same as a month ago. u.s. industrial production strengthened in july for the third month in four. production at the nation’s factories and mines and utilities rose .4% which followed a revised half percent drop. industrial capacity use rose to 77.1%, down slightly from the previous month of june. housing starts rose more than forecast in july. and building permits also a sign of future activity, increased. sales of new homes reached a record in may and were the second strongest ever in june. economists are saying that mortgage rates, which have inched up recently, will have to go higher before they really crimp housing demand. starts have averaged close to 1.9 million units own an annual basis this year. and that would be on pace to surpass last year’s level, which was the highest in 25 years. let’s talk about the to being market . both stocks and bond bulls found something to like in today’s economic numbers. the dow, s&p and nasdaq all up today. particularly the nasdaq, .7% higher. the volume though 1.26 billion shares at the big board, at the nasdaq about the same, a little bit more, 1.3 billion. broader indexes a mix because the amex was down, little change to speak of. and the bonds and wilshire 5000, .3% high are. bond also up, yield on the 10-year note close to the four-month low at 4.19%. shorter end of the curve not moving as much but higher, 3 -- 2.4%. here is the latest trade on the dollar. you buy more yen and the euro and pound are both up versus the dollar. so mixed picture for the dollar right now as things get under way. it was mixed also in u.s. trade. the stock markets rallied after that inflation number and earnings from retailers and for more on today’s trading action here julie hyman from the big board.
>> the dow jones industrials and s&p 500 continue being the rally today taking it to three days. not much of a rally. s&p 500 up about 1.6% -- 1.7%, dow jones up about 1.6%. the themes we saw that helped the various indipses consumer price index coming in ahead of expectations. reassuring investors inflation is not getting out of hand and the fed may not raise rates as quickly as anticipated. retail companies’ earnings ahead of expectations and that helped the market . oil rising to a record once again in today’s session. didn’t put a damper on the markets . other elements did overwhelm that and oil stocks declined today. oil the energy index the biggest decliner in the s&p 500. and that is due in part to we had a filing that soros fund management reduced their stakes in oil stocks during the second quarter. companies like b.p. chevron, texaco and all falling in the session on that news. on the other hand detailing a couple of retail names, the biggest gainers today. home depot out with their second quarter earnings which rose 19% beating estimates boosting the forecast for the years. sape manies beating estimates and boosting the forecast. and also b.j. beating estimates. dick’s sporting goods beat estimates and raised their forecast due to their recent acquisition of gallion so it was really retail store and semiconductors gaining.
>> more rapid economic activity in july didn’t translate into bullishness for stocks among professional investors. a merrill lynch survey shows more investors expect corporate profit growth to slow than accelerate. money managers this month boosted the proportion of assets held in cash to the highest since a global stock rally began in march of 2003. fund managers worldwide cut holdings of technology stocks to the lowest in at least nine months. at the same time they added shares of drug makers and utilities. both of those groups tend to be less reliant on economic expansion. a record proportion of investors expect government bonds to perform better than company debt in the coming year. money managers cited concern that global economic growth is slowing. in fact more than half of the managers surveyed said the global economy may slow. for the first time since merrill begin the monthly survey in april of 2001, more investors say they expect global earnings growth to slacken in the next year. it is after 5:00 p.m. or as jimmie buffet said it is 5:00 somewhere. here it 5:00 so the happy hour season is there and as we talk about cocktails and rum maker bacardi comes to mind. they said they are acquiring premium vodka maker gray goose and that has some pointing to an i.p.o. possibility. we will find out more with the company commarme next.
