Market briefing --- Matt (slow)
NYSE --- Deb (fast)
Nasdaq--- Julie (slow)
Fed meeting --- Su (fast)
welcome to “world financial report.” i’m matt nesto. one investor says this is probably the most anticipated interest rate increase in the history of mankind. let’s get the closing market numbers. we mentioned a busy day at the end due to the index reshuffling, .7% decline finally for the dow. the s&p down just over .5%. the nasdaq, the best of the three, .5% higher. the volume as we said, busy day, almost a two-month high, at 1.8 billion shares. similar superlatives for the nasdaq, 1.9 billion. haven’t seen a two-billion-share day for two months. treasuries rose for the second straight week as investors say higher rates are factored in. checking on the bonds here, 4.64 on the 10-year. five-year at 3.84 and on the% shorter end, 2.73 for the two-year. currencies -- deb kostroun was tracking all the action at the new york stock exchange and has this wrap-up report from wall street. deb?
>> thanks, matt. as we closed out today’s session, we did see the rebalancing of the russell indexes certainly impacting, as% -we were trying to get all the closing numbers about at 4:00 when the markets closed, the dow at 10,411. once everything settled out, the dow closing at 10,371 with all of the reshuffling going on, 1.8 billion shares, our best volume in about seven weeks tied to this. also, many imbalances to sell especially on dow components like g.e. with 14 million shares to sell near the close, along with that, exxon and johnson & johnson. those were the biggest drags in the dow jones industrial average. a lot of selling in the last few minutes related to this closing in this rebalancing. in today’s session, we saw telecom, some of the best performers in the s&p 500. it has been a long road for the telecom stocks this week. we started out this week hearing about all of the―s.b.c. and sprint going to be implementing improvements into networks, infusing money into the networks and trying to compete with the satellite television services, as well. so telecoms, although they were lower on at&t lowering revenue and profit forecasts, by the end of the week, they were some of the best performers. asbestos-related stocks also some of the best performers today on the fact that democratic leader tom daschle offering senate republican leader bill frist to create a $141 billion trust for asbestos. back to you.
>> thank you very much. as we said, the dow and s&p down on the day, down on the week, but that was not the case for the nasdaq. up on the day, up on the week. julie hyman wraps up from the nasdaq marketsite in times square.
>> the nasdaq rose 2% this week, i should say. it rose about .5% in today’s session, extending those gains we saw and did outperform the other major indexes. the strength this week really came from some of the networking names after we had a couple of phone companies―s.b.c. and sprint, notably―saying they would spend to upgrade networks. so a lot of the networking companies which provide things like fiber optics to the networks of the phone companies benefited from that news. we saw the amex networking index higher this week by about 7%, outperforming the nasdaq’s 2% gain. names like juniper and j.d.s. uniphase, as well as ciena, all performing well on the week. in today’s session, interesting session because we really had a surge in volume at the end of the day and it looks like for the first time in a couple of months we returned back up to the average for the year in terms of volume. also a lot of volatility today. both of those things tied to the rebalancing of the russell indexes. because of that, that was an element in today’s session. a couple of other things to note today and indeed for the week, the stock, taser, i want to bring your attention to, as it gained more than 60% this week after there was speculation and confirmation that the company was in talks with the sharper image to sell their stun guns or a version of their stun guns to consumers. so those shares gaining today. a couple of decliners in today’s session―paychex was one of those, the payroll services company. after their 2005 sales forecast came in behind analysts’ estimates and also palmsource, maker of software for the palm% -hand-held computers, coming in% -with a wider fiscal fourth-quarter loss and those shares falling on that news. back to you.
>> and on we go from the nasdaq to commodities. the biggest weekly drop for crude oil prices in three months. the government in norway halting a week-old strike that cut production there by 10%. norway, of course, the world’s third largest oil exporter. most traders and analysts expect oil prices to remain little changed or drop further next week. of 50 surveyed by bloomberg, only six say prices will rise. at the same time, gold futures fell today but are still up 1.6% for the week. yesterday, gold rose above $400 an ounce for the first time in two months partly on concern over bomb negligence iraq and turkey. a bloomberg survey of gold traders, analysts and investors indicates that prices are expected to hold steady over the rest of the year as u.s. interest rates head higher. new evidence that the economy is growing, but at a slower rate than originally thought. existing home sales, though, rose to an annualized pace of $6.8 million, up 2.6% from the previous month and housing construction helped the economy grow at a revised rate of 3.9% annually down from 4.4 initially. the latest data takes on added significance as we await the two-day fed meeting kicking off next week. su keenan is tracking that with the details.
>> looking to see if this changes the forecast out there. many economists agree that the revised report on gross domestic product was weaker than expected. some now question whether this forces the federal reserve to raise rates at a more aggressive time table. today, the commerce department said the economy grew slower than expected in the first quarter, slower than the original estimate of 4.4%, given last month. now, this is because companies imported more goods and services to meet demand. this final reading on gross domestic product shows growth at a moderate 3.9%. economists such as bank one’s peter glassman say this shows the economy hasn’t picked up since the third quarter of last year.
>> definitely weaker than we were expecting. we didn’t expect a lot of change.% it looks like the price index increased significantly. so g.d.p. overall, real g.d.p. fell down.
>> let’s look at that price index because it shows inflation on the rise. the so-called g.d.p. price deflater was the highest in a year. more than earlier estimates. the price deflater is an index used to adjust the g.d.p. reading for price changes. miller tabak’s tony crezcenzi says the combination of moderate growth and rising inflation could encourage the fed to move aggressively with a potential 1/2 point rate increase later in the summer.
>> in terms of the 1/2 point hike, it still may be necessary because 4% growth going forward will produce these inflation readings, negative for growth, one of the key reasons the g.d.p. was revised down to begin with.%
>> peter glassman disagrees, saying the fed is in what he calls a risk management mode and knows an aggressive move could roil the market .
>> the fed will tighten at its next meeting but maybe it takes a different stance in the overall statement when it comes out and maybe keeps the measured statement. there is debate overall in the fed about whether or not to keep the term “measured” and now there’s a decent chance they will.%
>> we’ll know next wednesday. also today, the university of michigan’s consumer confidence june index, higher than previously expected, final reading at 95.6, up from preliminary estimates. the first rise in three months and as of right now, talking about the fed, the bloomberg survey of 135 economists indicates most expect a quarter-point rate increase and 17 predict no rate change and only three economists we talked to predict a 1/2 point move. that could change getting into next week.
>> oh, yeah, it will be fun. thank you. bill gross, you probably know the name, he runs the world’s biggest bond fund at pimco, pacific investment management, we’ll hear what he has to say about interest rates, the bond market , outlook for treasuries, the fed, greenspan, all in an exclusive interview with brian sullivan.
