Market briefing --- Matt (slow)
NYSE --- Deb (fast)
SEC --- Peter (slow)
I am Matt Nesto. let’s begin where we like to, the numbers, up today thanks to the last 90 minutes of trading. the dow and s&p up .2% and .3%, respectively. and the nasdaq 19 points higher. the three charts on the bottom tell it all. you can see the bounce off the bottom and really gaining strength in the latter half of the afternoon. volume better than ylvet yesterday, still below average. the nasdaq volume better than yesterday, but still below average. the bonds were little changed, down slightly. you see the yield up at 4.72 on the 10-year note -- deborah kostroun was at the big board for a day that had a really big finish and here to explain why, deb.
>> matt, some of the things we did see, it was the technology, as you mentioned, helping to lift the major averages in that last hour. yesterday, we saw a reversal where the market closedler but today the reversal showed the market close higher led by j.d.s. uniphase, also lucent, after a telephone company saying they would spend billions of dollars upgrading networks, helping out semiconductors, as well. as you see, semiconductors, the best performers in the s&p 500. in addition to semiconductors, you also saw tech hardware along with those telephone equipment stocks performing well. the tech hardware and equipment, this was the second best performer in the s&p 500. qualcomm, a major part of that. and also qlogic. qlogic did get that upgrade from merrill lynch. in today’s session, something we’ve been talking about for some time, volume. volume, however, today, excluding the quadruple witching from last friday with the expiration of options and futures, that volume 1.38 billion shares, the busiest day throughout the new york stock exchange all month. today’s volume at 1.38, above% this month’s average of 1.25 billion shares. we typically see volume slow down in the summer, but seeing that above-average volume on the market turning around was certainly very good for the sentiment. retail in the spotlight, generally a drag on the market . target a little to do with that. the company expects sales to be at the low end of their forecast, an increase of 5% to 7% for the month. also wal-mart saying yesterday that june sales would rise less than 4%, also below their expectations.
>> thanks, always good to hear from you. a member of the securities and exchange commission predicts the s.e.c. will adopt a controversial proposal aimed at improving mutual fund governance when they vote tomorrow. the proposal would require independent chairmen on mutual fund boards. it has been met with strong opposition from within the industry. peter cook joins us from washington.
>> the vote tomorrow, one of the most contentious at the s.e.c. in recent memory. if approved, the heads of fidelity and vanguard will have to give up separate roles. many in the industry say the change may do the more harm than good for investors but s.e.c. commissioner harvey goldschmid says it will help in an inherent conflict of interest. he told me in an interview that despite opposition, he expects the rule will be adopted tomorrow.%
>> i understand why some in good faith say i can do it all and others say we don’t want to give up power. but in the interest of investors, the public and the industry, this ought to be changed.
>> the proposal is the latest in a package of reforms the s.e.c. is pushing in the wake of recent abuses in the seven.5 trillion trillion -- $7.5 trillion mutual fund industry. some involved funds involved with affiliateed chairmen, some involved with outsiders. if the rule is implemented, vice. james riipi of vanguard will have to step aside as chairman. >> we’re opposed that every single mutual fund has to have an independent chairman and that the board members don’t get to make that decision.
>> republican commissioners atkins and glassman have questioned the potential benefit and cost of the change. but republican s.e.c. chairman william donaldson has joined goldschmid and other democrat on the commission in expressing support for the proposal. goldschmid said the position was bolstered last week when all former s.e.c. chairmen, republicans and democrats, sent letters supporting the change.
>> by itself it won’t change the world, but it will create the discipline and diligence that i think are required of mutual fund directors.
>> goldschmid says the vote may be 3-2 tomorrow but expects ultimately his position will prevail at tomorrow’s meeting.
>> peter cook, thank you very much. shares of 3com are higher in extended trading, 34 cents on a $7 stock. the maker of computer networking equipment reported a narrow narrower-than-expected loss of $18.7 million, working out to five cents a share. analysts looked for them to lose a dime. 11 cents, they lost a year ago. sales with the first gain in five years, up $183 million, also exceeding estimates. 3com chief financial officer will resign, that also coming% -out in a company statement. the company saying he would not commit to relocating to the new headquarters in massachusetts. ahead of the earnings report, shares of 3com were 6% higher today. darden restaurants says profits will miss forecasts for the first half of the year. the owner of red lobster and olive garden says net income will be as low as $1.46, 18 cents below the current consensus estimate of analysts surveyed by thomson financial. profits slipped to 32 cents a share. shares unchanged ahead of the% report and have risen 3% this year. let’s take a look at darden. remember, it was a company that spun off from general mills. if you look at it, though, it’s had a give-back since the high water mark in march. and this at a time when the s&p 500 has pretty much been chugging along sideways. darden, the white line hitting that high mark up around middle of march and it is now, in terms of percentages year to date, neck and neck really. darden up 2.8% year to date versus the s&p 500. if you look, going back to the general mills space, spun off in 1995. may of 1995. if you electric back over the past decade, you can see you more or less tripled your money, spun off $7 a share, at 21 today. interesting thing to look at here on this particular chart. the green line is a 200-day moving average, which you’ve heard a lot of people talking about 200-day moving averages lately. look at that, bounce, bounce, bounce, bounce bounce bounce, bounce. i’m thinking that’s the support line, the 200-day moving average, and the stock, as you can see, from 25 down to 21, so down 20% from those march highs over that period of time. in the last but not least, darden has had a volatile ride. looking at the three-year chart, the all-time high in february of 2002. but these red circles are 15% to 20% one-day or multiday declines for darden and every one of them was precipitated by a profit warning. so perhaps what we hear in extended hours from darden today, maybe this is a precursor, maybe not. but as the world turns, we will track it for you tomorrow. coming up in special series “markets at mid year,” lehman brothers strategist chip dickson will tell us where he’s putting his money in the second half. that interview is coming up.
