Market briefing --- Matt (medium)
Google --- Allan (slow)
NYSE --- Julie (slow)
welcome to “world financial report.” I am Matt Nesto. the long-awaited initial public offering for google is now official. in the last hour, the securities and exchange commission accepting registration for google’s pared-down offering which could still value the company at more than $25 billion. allan dodds franks has been tracking this and joins us with details.
>> you’re right. it’s official. the bidding is closed but the story is google is a day late and $10 million short. now, that’s the story with this initial public offering from google, the company that owns the most widely used internet search engine. the securities and exchange commission approval of the registration of its offering is of the revised offering. the company now expects the price of 19.9 million shares in the selling between $85 to $95 a share. the lower offering price reflects the lukewarm reception given to google’s dutch auction and its management’s presentations to the investment community.
>> the reception on the road show has now been reflected in the revised price range.
>> the company had hoped to sell about 10% of the company stock at a projected range of $108 to $135 a share. at the high end that would have indicated a value of $35 billion for the company. in early hours of today and in a development first reported by bloomberg news the company revised its offering downward. the revised offering suggests the company if it prices at $95 a shares worth nearly $25 billion. that still gives google a market cap comparable to ford, caterpillar, lockheed martin and fedex.
>> i think the management team did not want to go public. it slipped up and unfortunately had over 500 investors who were forced to go public and then tried to create a whole set of circumstances that would allow them to run this company like a private company. we’re still leery of what’s going on here.
>> once it became obvious that the online bidding would not top $100 a share, the company’s insiders, who were selling more than 11.5 million shares reduced that allocation by six million shares. although the i.p.o. will still make them billionaires google cofounders cut the number of shares they were selling in half. so did the google c.e.o. eric smith. and several major venture capital firms managed by google directors also withdrew four million shares from the offering. once google prices, it is expected to trade on the nasdaq under the symbol goog. that decision is apparently not made just when that trade will open yet.
>> i understand we’ll get that data some time tomorrow morning maybe around 8:00 a.m. the price we all want to know and the trade. google’s venture capital investors won’t be selling their shares of the search engine company even after the stock sales value was cut almost in half. funds managed by john door and sequoia capital are withholding their shares from the sale. that’s according to google’s amended prospectus filed with the s.e.c. and that may be a good move considering futures traders have increased their bets that shares of google will rise on their first day of trading. contracts on the offering at intrade.com showed better see a 70% chance the shares will advance once trading starts up from about 60% yesterday. but if history is any guide google may join the ranks of internet companies suffering through the biggest slump in two years. declines among stocks such as yahoo and amazon and ebay sent this index down 17% so far this quarter. only eight of 105 members are up. the losses reflect comments from several of the companies that business has been hurt as internet use slowed in the summer months. the bloomberg index searched 74% last year, almost triple the gain of the s&p 500. let’s talk about the stock markets here today. all three of the bench ma’ake indexes were up again, 1.1% higher for the dow, 110 points. s&p up 1.25%. the nasdaq 2% higher. the volume though wasn’t there. traders vacationing apparently. 1.2 billion shares at the nyse and the nasdaq 1.5 billion shares. traded broader indexes, similar story. green, green, green there. 2.2% higher for the smallcap shares. bonds were down, giving back some of the gains we saw yesterday. your yield now on the 10-year note thus up at 4.24%. if we look at the shorter end, you can see 3.42% for the five-year and the two 2.42%. the dollar and euro trade is mixed. euro unchanged. the pound unchanged. both the euro and the pound were down in new york trade and the yen was up so that’s a reversal of what we saw in the u.s. today. stocks rose for a fourth day on retail and technology shares for recap of today’s action, julie hyman has this report from the big board.
>> the s&p 500 and dow jones industrials continuing to rally now entering its fourth day and both of the indices bouncing off of their lows for the year. their intraday lows which they hit on friday morning. since then the dow jones is up 3% and the s&p 500 up 3.2%. both these indices really seeing a broad-based rally in that time. all 24 industry groups within the s&p 500 are higher for that four-day period. as for today’s session a similar story. some of the various types of groups that were gaining today, from stocks that are seen as not resistant to an economic downturn like semiconductors and technology hardware and those that are seen as more resistant like pharmaceutical stocks. technology hardware doing well today in particular because of network appliance after it said second quarter results could top estimates. but some of the other movers we saw do well today, symbol, e.m.c., scientific-atlanta as well as lucent technologies. also the semiconductors doing well in today’s session. both of these groups incidentally a couple l of the worst performers on the year now rebounding over the four-day period. l.s.i. logic, micron technology and advanced micro devices and texas instruments some of the gainers there. also wanted to check on oil stocks since we saw oil perform well in today’s session after some declines yesterday as we saw oil once again approaching record highs. halliburton, el paso and burlington resources some of the gainers there. also want to look at utilities. again, showing the broad-based nature of this rally we’ve seen. the pee s&p utilities index which does include electric utilities in particular closed at a two-year high today. the dow jones industrials utilities index similar story there. also closing at a two-year high. really what’s helped the indices over the past couple of days have been the growing belief that the economic data we saw for the month of june was indeed an app ration also being helped by earnings out from retailers. as you can see there borders out today with earnings up more than analysts estimated. however, dillard’s and t.j.x. were on the decline today. back over to you.
>> on we go. metronics says first quarter income was up 18% as demand increased for devices used in back surgery. net income increased to $529 million. that works out to 43 cents per share. the sales were up 14%, $2.3 billion in sales from the world’s largest maker of spinal implants. the company is trying to produce more revenue from a wider range of devices to maintain a goal of 15% sales growth over a five-year period. well, let’s get a quick check of how the energy markets did today. crude oil prices yet another record in new york trading. crude oil for september delivery as you see up 1.1%. $47.27 intraday prices even higher than $47.50. energy department reports show the u.s. refineries boosted their operation to almost 96% of capacity. the report also showed that u.s. inventory fell last week to $293 million -- 293 million barrels, a 1.3 million barrel decline and we need to point out that’s up 5% from a year ago. gasoline demand rose to the highest level this year. gasoline for september delivery is now trading at a $129.72. you see down .6% today. and heating oil up 30 cents, $122.50. over in the natural gas futures you see little change there. we’re steady at 5.38. well, time for a quick break. when we get back, did google have access to the best advice money could buy? and did it get it?
