Market briefing --- Mike (fast)
NYSE --- Deb (fast)
Martha Stewart --- Allan (slow)
>> welcome to “world financial report.” i’m michael mckee. the dow joneses leading the major indexes down on the day with the dow down 88 point. that is a loss of almost .9%. the s&p 500 finished down by almost 11. that is almost a full percentage point loss. the nasdaq the biggest loser ton day. two percentage points down. 39 points, almost 40-point loss for the day. volume ton new york stock exchange, 1.3 billion shares. that’s just a little bit below average trading recently. not bad for a friday. the nasdaq trading volume 1.7 billion shares traded. taking a look at the broader market indexes t new york composite down by 67 points, a percentage point lost. the amex finishes down .9% at about an 11-point loss. and the russell 2000 small caps a 1.3 loss. they are down by seven points on the day. taking a look at the broadest market measure t wilshire 5000 finishes 110 points down on the day, a percentage point loss there. checking on the fixed income market , not a lot of action, although bonds did complete a down week on the prospect of higher interest rate. the 10-year treasury note is about about 1/16 on the day. the yield falling a basis point to 4.43%. five-year notice ton day were up about 1/16 as well. another basis point lost to 3.67%. no change for the two-year note on the day. the yield unchanged at 2.65%. taking a look at the dollar, it completed the first up week against the euro in some time and also finished higher against the japanese yen and the british pound. the dow, as we said, closed below 10,000 for the first time in two months. what’s next for the markets ? deborah kostroun is at the big board. she’s been talking to traders about that possibility. deb?
>> well, mike, a lot of concern is about where the dow is going to be heading, especially next week because closing below 10,000 for the first time since may 23. but it looks like one of the dee r key levels that we are looking at is 9906. that is the lowest level of the year in the dow. we hit that on may 17. getting below that certainly would be very critical. we didn’t hit that today. a lot of concern if we get below the level that we could be in the 9600 or 9700 area according to labranche specialists. a lot of concern about earnings coming in and the guidance has been disappointing, especially for the second half of the year, and that is one of the things leading the market lower. also t dow and the s&p near the lowest level of the year as we just mentioned. also, the dow once again fifth week in a row it was lower. the s&p for a sixth week in a row lower. a lot of that is is on concern about earnings and what we’re expecting for the second quarter earnings growth and still up about 24%. if you kind of take a look at what we saw in the first quarter, we saw earnings growth of 27.5%. so for the fourth quarter in a row, what we’re looking at is earnings growth above 20%. it starts to slow down in the third quarter and the fourth quarter. that is one of the reasons we have the market really kind of coming in here. also, we had 62 new 52-week highs and well over 300 -- 348 new 52-week lows. that is a trend we have been seeing for the past 12 days. more new lows in this market than highs. it really kind of tells you the downward kind of downward pressure we have been seeing in the dow jones industrial average. also, talking with peter henderson of fleet specialists who says we’re going to be looking at crude oil next week. also a lot of concern with democratic national convention getting underway. back to you in the studio, mike.
>> deborah kostroun. xerox is hoping to copy a strong second quarter through the rest of 2004. the company raised the full-year forecast after reporting profit more than doubled last quarter. cost cutting allowed xerox to sell new products at lower prices to compete with rivals cannon and hewlett-packard. xerox also sold more products with wider margins such as color cop yers an printers. share of xerox finished up on the day by 49 cents at $13.80 a share. we’ll have details of the company’s full earnings report in the next half hour. another chapter closed in the martha stewart case. douglas faneuil t former stock brocker’s assistant, who became the government’s star witness, was sentenced this morning in federal. allan dodds frank was there and he is joining me now with the details.
>> mike, u.s. district judge cedarbaum gave douglas faneuil no prison time and fined him $2,000 payable in installments. the judge gave faneuil “enormous credit for becoming the prosecution’s star witness against martha stewart and his former boss, stewart’s stockbroker, peter bacanovic.” faneuil told the judge how hard it was to turn on bacanovic who faneuil described during the four days of testimony as the best boss he had ever had. on december 27, 2001, bacanovic instructed faneuil, then his 26-year-old assistant, to tell martha stewart that another client, imclone systems chairman sam waksal was dumping the company’s stock. after sticking with the cover story concocted by bacanovic, for months faneuil in june 2002 decided to tell prosecutors what had happened. reading a statement in a shaky voice to the judge, faneuil said “i should have listened to my gut feelings. instead, i suppressed them. in the months that followed, i should have offered the candor and honesty that are owed to the u.s. government and to all decent people by refusing to cover up a misdeed.” in a letter to the judge, the prosecutor described why the government was urging leniency for faneuil. the prosecutor said he also knew his crimes would probably never be uncovered if, like martha stewart and peter bacanovic, he chose simply to stick to the cover story. after the sentencing, faneuil hugged several family members before leaving the courthouse. greeted by a media crowd outside in the rain, faneuil and his attorneys left without comment. as the prosecutor noted, faneuil has been barred from the securities industry. he now would be eligible for reinstatement if he chooses to go back into the business.
>> any indication if he would?
>> right now he seems to be happy working in an art gallery.
>> all right. thank you very much, allan dodds frank. an 8% drop in coca-cola’s share price was the largest in 21 months. down $3.80 to $45.17 a share. the world’s largest soft drink maker says expense wills rise more in the year. lit spend more on marketing the low carb c2 cola. in the last quarter, the global volume rose only 1%, short of the 5% annual gain. pepsico had a 10% increase in the beverage sales last quarter. coke’s total revenue rose at the slowest pace in two years, missing the average analyst estimate. share this is year have dropped 11%, while pepsi’s stock has climbed 9%. shares of maytag were sharply lower today after its slashed its forecast. they closed down $2.07 at $19.21, the biggest drop in more than a year. the nation’s number three appliance maker says net income will fall this year to as little as 20 cents a share. in june, maytag had forecast annual income will exceed $1 a share. the company lost 52 cents a share in the second quarter compared to a year ago profit of 32 cents. maytag, which makes products including the hoover vacuum, says the high cost of steel drove costs higher. the parent company of united airlines has secured half a billion in financing after failing to win a request for a government loan last month. the bankrupt u.a.r. also says it will pull off nearly $600 million in pension contributions. united hopes the latest finance willing allow the airline to exit bankruptcy this year. the company says for that to happen and to insure further loans, more cost cutting and restructuring will be necessary. at&t and other phone companies may be catching a break. people familiar with the situation say for six months the f.c.c. will freeze traits on local lines paid by companies like at&t. at&t rents lines from local carriers including verizon and s.b.c. in march they struck down rules to force the companies to rent the lines at a discount. during the freeze, the f.c.c. would try to adopt new regulations to replace those rule. the six-month freeze is a temporary win for at&t, which yesterday said it would retreat from the residential business because regulatory changes make it too expensive. the local carriers are baby bells who were higher today. a u.w.s. analyst uped the group saying an exit from at&t would less competition and increase earnings. investors were disappointed by microsoft’s and coke’s earnings. the companies still to report earnings include time warner, exxonmobil, and lockheed martin. when we return, we’ll have an earnings score card.
