Market briefing --- Lane (medium)
AT&T --- Carmen (fast)
NYSE --- Deb (fast)
Crude oil futures--- Matt (slow)
>> welcome to “world financial report.” thanks for joining us. we’re getting numbers now from micron technology just out with its latest earnings coming in at 13 cents a share for the third quarter. the third quarter financial estimate from analysts with nine cents so that looks to be at least on the preliminary numbers beating the estimate by four cents a share. micron technology’s third quarter revenue came in at $1.12 billion. the thompson financial estimate for that was $1.15 billion. we’ve seen just in the last couple weeks a number of technology companies indicating revenue that is lower than expected although they’ve been beating the earnings per share number. so we’ll have more on micron’s information in just a bit as we get more information. but in the meantime, two points of interest from at&t today. just moments ago the largest u.s. long distance provider says sales this year will be less than originally forecast. earlier, the company said it will not compete in seven states for residential customers after losing access to discount rental rates for local phone lines. car men roberts has been following the developments of at&t today and has the latest.
>> thank you. we know at&t has projected revenue of 2004 of $29.5 billion to $30.5 billion at least $800,000 less than the average forecast by analysts surveyed by thompson financial. they were expecting $31.3 billion. we can also tell you that at&t is going to take a $70 million charge and that’s reflected from the job cuts and it says it’s about―ahead of count reel-in the job reduction plan -- really for the job reduction plan for the year looking to reduce jobs by 8%. so the company is saying it’s going to miss the estimates for the full year revenue forecast. now, at&t’s decision to stop doing business, not business but stop competing for new business in seven states, is stemming from a court ruling that throughout―threw out federal rules requiring local phone companies to lease lines at a discount rate to rivals. at&t is the first company to threaten to stop offering services since the bush administration refused its efforts to keep the discounts in place. without them, at&t says wholesale rates will rise and it likely won’t be able to economically serve customers. the standard and poors equity analyst todd rosen bloom says at&t is trying to influence the federal communications commission which is currently writing new rules.
>> we think a lot of this is politically motivated. seven states for at&t in our view doesn’t have a large presence on the enterprise side of things, they’ll continue to service local and long distance customers they already have in these seven markets . it’s just they’re not going to be going after new customers down the road.
>> at&t says it won’t compete in arkansas, louisiana, missouri, new hampshire, ohio, tennessee and washington. which have a combined population of 38 million people. however, the company says that business customers and existing residential users won’t be affected and new customers, well, they can still sign up for the service. one analyst says probably the financial impact from all of this won’t be very much. principal global owns at&t bonds. taking a look at at&t shares for the day they’re up about .5% before the close of trading and we had them falling 18% over the past 12 months. s&p’s rosenblume who does not own at&t shares is recommending investors buy them because he sees it trades at a discount to its peers and he finds the dividends compelling.
>> we also believe verne: and wireless and―we also believe voip and wireless are strong positives and all that said standard and poors has a buy recommendation on at&t shares, one of the few telecom stocks we have buy recommendations on.
>> the bush administration has sided with the local phone companies such as verizon. the old rules which expired last week said local phone companies must open networks to competitors at discount prices. one of those other competitors is the second largest long distance provider and just out of bankruptcy. that is m.c.i., said that without the discounts it may raise prices in some markets and it may withdraw from other markets . so again, lane, at&t saying it’s got ongoing pricing pressure and changes in regulations which this was about and therefore it’s going to miss its full-year revenue forecast.
>> all right. carmen roberts. thanks. bed, bath and beyond says profit and revenue topped analysts’ estimates last quarter. that income rose more than 40% to 27 cents a share. that is two cents better than expectations. revenue came in at $1.1 billion. wine glasses and bathroom scales were the hot items. the company opened 17 stores during the quarter. more than twice as many as the same time a year ago. it plans to open as many as 90 stores this fiscal year. shares are lower in the extended hour trade. they closed up 1.5% ahead of that report. the s&p reversed direction nine times in the first hour of trading. closing on the day, dow jones industrial average up 84 points to 10,479. the s&p up 9 2/3 at 1144. nasdaq composs witness the largest gain of the day up 1.3% at 2020. the new york stock exchange just under 1.5 billion shares. the nasdaq 1.8 billion shares. treasuries rose for a second day in three after the government sold $25 billion of two-year notes at the highest yield in two years. the 10-year was up 6/32 and the two-year on the―the five-year first of all up 3/32. keep moving with those bonds. see the two-year treasury note up 2/32 on the day. the incline against the dollar and euro after a government report showed japanese exports rose to a record in may what you’re seeing here is the after trading, happening now in the pacific rim following the new york close and you can see the movement. a late-day push led the markets to close near their best levels of the day.
>> well, lane, we saw the dow and s&p closing at their best levels since april 12 and what led us higher, a lot of those industrial stocks really kind of getting a late-day push along with technology. also, another big topic among traders is crude oil. crude oil closed lower on the fact that inventory seemed to be rising, in fact, inventories at the best level since august of 2002 and we also saw the trans ports making a good rally and also over the next couple days you’ll hear us talk a lot about economic reports. we haven’t had many so far this week but tomorrow we have durable goods orders, jobless claims, new home sales then on friday g.d.p. and also university of michigan confidence so we should have quite a few more interesting insight into the market for investors. also on friday we have the rebalancing of the russell indexes and that usually leads to―we could see a pop in the markets . however, we did see a pop in today’s session as well with that rebalancing, also add tog the volatility. semiconductors some of the best performers today and you saw the semiconductors increasing over that past hour. not only the semiconductors but the capital goods stocks, the s&p capital goods index actually at its highest price since march of 2002 so that a two-year high for that index. many of the capital goods and the dow component stocks performing well today. lane, now back to you.
>> crude oil futures closed lower today after the energy department reported u.s. inventories rose more than analysts expected. stocks editor matt nesto has the details on that.
>> lane, it was interesting. we get this weekly number but the big picture is intact. that is that the oil stockpiles in the u.s. are at their highest levels in just about two years depending which economist or analyst you speak to they were either on target or disappointed. but the average number coming in better than the median forecast of the analysts we surveyed. it was up 2.5 million barrels, and this is how it looks on a chart. this gives you a better picture for the rebound. five years of both american petroleum institute and the department of energy’s oil inventory data weekly and you can see, i’m not sure how good your eyes are but i wrote it so i know that this little tiny line right here says 17%. that’s how much inventories have risen this year and as we pointed out that beats a two-year high. same thing d.o.e. and a.p.i. gasoline inventories, not the time of year that you typically see gasoline stockpiles building up but, indeed, it is happening, folks. and, also, we talked about this last hour and this is the difference between supply and demand, the main thing we want to see, is this white line here rising above that green neutral arrow and that means that supply is outstripping demand. back to you.
>> all right, matt. up next, playing the bond market as rates go higher. pimco will tell us why the best strategy for investors may be to stay short when we return.
