Market briefing --- Matt (slow)
NYSE --- Bob (fast)
welcome to “world financial report.” i’m matt nesto. how about the closing numbers today, folks? down 1%, 1.5% and 2%, the big three benchmark indexes, all the aftermath of comments from alan greenspan. the first of two days of testimony in washington. snapping a three-day winning streak for the s&p 500. at the same time, bonds also feeling the rate hike pinch, the possibility there, sending the yield on the 10-year note almost to 4.5%, it down just about .5 point. three-year and two-years also trading lower, all helping the dollar. the latest trade there showing little change following up on the strength in new york of the greenback with gains against all three of its major peers. motorola shares had soared as much as 20% in after-hours trading after the company reports a tripling in its first-quarter earnings. the company’s cell phone business is rising and motorola is also raising its sales and earnings forecasts for the current quarter, the second quarter. for the record, the first quarter profit up to 25 cents a share, look at that, a 260% increase, much better than the seven cents expected. also sales far surpassed the estimate, rising 42% from a year ago. $8.5 billion in sales. motorola, the world’s second largest maker of cell phones. the company unveiled 14 new models last year and solved parts shortages which hurt sales in the prior quarter. allstate says its earnings jumped 43% last quarter and it, too, it raising its profit forecast for the year. first-quarter net income, $1.34, and backing out the one-time expenses, the number is better than analysts’ estimates, beating boy four cents. for the full year, the auto and home insurers it will make as much as $5.10 a share, 80 cents more than the low end of its prior estimate. shares closed down ahead of the results. allstate says auto and home policy sales are rising as the company offers discounts to clients that file the fewest claims. what was the big market mover today? we said federal reserve chairman alan greenspan saying that the threat of deflation is gone. in addition, the fed chief told the senate banking committee the pricing power is being restored. wall street took the remarks as a sign that interest rates will be headed higher. the fed chairman says he’ll speak at length on the economy during his testimony to congress tomorrow beginning at 10:00 a.m. new york time. guess where you can watch it live, folks? hint, right here. bob bowden at the big board with a wrap-up of the action today. bob, busy 90 minutes heading to the closing bell.
>> absolutely, matt. stocks fell off a shelf, you might say, in the last 90 minutes, finishing down at their lowest point of the session, the intrachart of both the s&p and dow certainly showing that. and in a search for the most succinct quote, some of how the market interpreted the fed’s comments today, “greenspan is implying that rates are going up.” the words of michael mcglone, interest rate futures analyst with abn amro futures in new york so we saw a broad decline in stocks. by the end of the session, 443 of the s&p 500 stocks were down on the day and 28 of the 30 dow industrial stocks down on the day. getting to specific stocks that were lower, pfizer shares down after reporting first-quarter profit 50% on the cost of acquisitions, the stock down 2.3%. sales of viagra declined with competition from cialis and pfizer’s net income came in at 30 cents a share, down from 76 cents a year ago. just about all the pharmaceutical stocks were down on the day, by the way, including novartis, merck, eli lilly and wyeth. also down on the day, toymaker mattel said first-quarter earnings tumbled 73%. the stock was down 1.7%. earnings per share, mattel, only 2 cents a share versus 9 cents expected by analysts, attributing that to higher plastic costs and lower barbie doll sales. mattel shares hitting a 52-week low today. and lucent lost over 10% by the end of the session saying fiscal 2004 revenue would rise only in the low single-digit percentage rate, less than analysts’ estimates. back to you.
>> that was a succinct quote. we appreciate that here. thank you very much. coca-cola is going to report its first-quarter earnings tomorrow. numbers may show growth is coming from areas without much fizz. i read them, folks, i don’t write them. coke is reaping the benefits of non-carbonated drinks such as powerade and dasani bottled water. these profits are expected to help coke report growth to 28 cents, revenues forecast to increase 8%. the non-carbonated business has been growing 14%, or it did last year. comparing that to the 2% growth in sodas such as coke and spright, and you see some concern.
>> i think you’ll see a higher rate of growth from non-carbs than carbs, so, yes. and indeed that’s a trend we have seen over the last few years. but very importantly, if you look at the overall business model, it’s extremely important to get a healthy level of growth from coca-cola, from spright.
>> in the last month, coke said that the soda was selling well above expectations despite weakness in total solaically -- cola sales, and i believe that was diet coke with lime. reporting tomorrow, j.p. morgan/chase. william harrison set out to bridge commercial banking and investment banking through the merger of j.p. morgan. first-quarter net income at j.p. morgan/chase probably climbed 29%, the fifth straight quarterly gain.
>> thinking trading should be very solid, investment banking revenues should be pretty strong and credit should be much better.
>> analysts say gains in the fixed income trading probably lifted j.p. morgan’s tragged trading revenue to $1.25 billion for the quarter. investment banking revenue probably climbed 54% to nearly $1 billion itself. harrison trying to build up the bank’s consumer unit, part of his strategy to combine the two banks to begin with. the $55 billion transaction which could close by the summer will put harrison in charge of a bank with over a trillion dollars in assets, more than any other financial house. maybe didn’t notice the rally in the dollar. the dollar index on track for its best month in lee years. march of 2001. something here for you on the bloomberg to give you an idea about this. this is a correlation chart between the dollar index, mind you, the dollar index a basket of six currencies, versus the u.s. dollar. more than half of it, 60%, made up of the euro. this is the dollar index, two years diving down until about the new year where we’ve seen a little bit of a bounce back. this at the same time is being matched against the morgan stanley multinational index. you can see it rising most of that time just about to the new year when you can see it dropping down. we have rising up, dropping down and then you can see the inverse correlation on those particular currencies or the currency index versus equity index. looking at the specific currencies. i talked about the biggest monthly decline, we’re not even through the month yet but it would have to be a huge monthly decline, the biggest one recently 4.8% decline or increase, excuse me, for the dollar index was march of 2001. we’re 3.3% at this point in the month with the euro, pound and swiss franc all lower. if we look at the multinational stocks, eli lilly, conagra, a.d.p., dupont and medtronic, the biggest winners there. clearly, the correlation is that the second quarter with the dollar strengthening, the end of the dollar weakness may make the sales profits coming from overseas a little less sweet. coming up, eric ritter will be joining us.
