Market briefing --- Matt (slow)
Nasdaq--- Julie (slow)
Morgan Stanley --- Su (fast)
>> counting at the “world financial report.” matt nesto here. tuesday trade, a strong finish at the wire, smarty jones. the s&p 500 also known as, up .3%, the dow .2% but the nasdaq by a nose with a full 1% gain. treasuries little changed. the 10-year yield up, price down, 9/32. the nasdaqa volume bounced back as the index had a late-day rally. julie hyman has a wrap-up report from the martha market site.
>> the nasdaq with its second busiest day this month, it would be the busiest day excluding last friday with the expiration of options and futures. with volume picking up today, not looking too shabby and up 1% or almost 20%. telecommunication shares, in particular, we saw them as the biggest decliners in yesterday’s session, they were the biggest gainers in the session today, up just about 1.4%. semiconductor shares also coming back, the philadelphia semiconductor index with a rise over 3% in the session. some of the semiconductor names were the biggest gainers so if you go down the list, you have intel, qualcomm and maxim integrated, all three semiconductor names. news for qlogic, another semiconductor company, helping it today. merrill lynch upgrading the shares from neutral to buy, saying they think the shares are fairly valued at this price. shares are down 45% on the year. they said given that drop, they’re looking good as these levels and within a year they think the shares can reach $34. helping those shares in today’s session. another technology company today, j.d.s. uniphase, benefiting from an announcement by s.b.c. communications that will it spend as much as $6 billion to build a fiber optic network offering digital tv in order to compete with tv and satellite. alcatel supplies s.b.c. with networking products and j.d.s. supplies alcatel so j.d.s. uniphase rising on that news, as well, in the session. also, a couple of i.p.o.’s today today. momentum pharmaceuticals and sinomics rising both more than 10%. color kinetics down slightly.
>> and on we go. brokerage shares rallied after morgan stanley and goldman sachs reported close to record profits, surge in investment banking, as well as bond trading helped to push the gains of the nation’s second and third largest securities firm. su keenan has been on the brokerage beat today and joins us with a wrap.
>> goldman sachs shares ended the day up 2%. morgan stanley up 1.75 on the strength of the fixed income business, which they reported today. federated’s david grun is surprised by the degree of strength. he managed 200 million in assets including shares of morgan stanley and goldman sachs. morgan stanley, nation’s second biggest securities firm, said revenue from fixed income sales and trading rose to 1.68 billion dollars, a record. the pickup comes as clients lock in interest rates in advance of a widely anticipated move by the federal reserve to raise rates.
>> the fixed income market will come down, it will be necessary for them to rely more heavily on other products, notably equity offerings and mergers and acquisitions, to keep their business going and i’m not sure that business will be there as strongly over the next couple of quarters as it was over the last quarter.
>> morgan stanley’s profit more than doubled to $1.2 billion or $1.10 a share. morgan stanley’s net revenue rose 32% to $6.7 billion with merger advisory revenue more than doubling. mark schultz, analyst and portfolio manager, holds more than 600,000 shares.
>> we saw continued good momentum from fixed income carried through into the quarter and of course that’s been one of the things that could have been causing concern and weighing down the stocks in the sector recently. and the numbers from the equity side of the business look pretty% -solid and looked like momentum was gathering nicely there.
>> and momentum in goldman sachs, the nation’s third biggest securities firm, earned% -$1.2 billion. net revenue in the second quarter rose 38% from this time last year, more than $5.5 billion. goldman’s trading in principal investment revenue surged 35%, making up more than half the firm’s business. this is part of chief operating officer henry paulson’s plan to take on more risk. he also benefitted from underwriting and merger fees and in the last quarter goldman held the position of wall street’s top merger advisor. both firms may be close to a settlement with regulators over i.p.o. allocation. the “wall street journal” quotes people familiar with the situation as saying morgan and goldman have each agreed to pay $40 million to settle allegations they improperly awarded shares of i.p.o.’s in 1999 and 2000. the s.e.c. has accused firms of extracting promises from shareholders to buy more shares at a higher price once the i.p.o.’s started trading to create demand. the “wall street journal” is saying it could be several weeks, not months, before a formal agreement is announced.
>> that will be interesting because one of the factors affecting brokers is interest rates and our next guest will find out what rising interest rates mean for the market . we’ll hear from doug cliggott with brummer & partners in our special series, “markets at midyear.”
