Market briefing---Mike (fast)
NYSE---Deb (fast)
Nasdaq---Julie (slow)
welcome from world headquarters in new york city. i’m michael mckee. electronic energy an metals trading has been shut down by computer systems problems. they do not know when trading will resume. we will have details for you as they become available. meanwhile, goldman sach’s reported first quarter earnings almost doubled to a record and capped the most profitable record for morgan stanley, lehman brothers and bear stearns. let’s check the numbers as the market closes. the market really took a dive as s the day ended. you see the dow jones industrials now virtually unchanged. s&p 500 down a point on the day and the nasdaq down a little over seven points. ing see the charts there. they had been up and rallying most of the day. that was really the last 20 minutes of trading. our top story, goldman sach’s group said fiscal first-quarter earns almost doubled. the third largest security firm boosted revenue on a stronger than expected surge in equities-related trading and underwriting and continued strength in the bond business. su keenan has been look into the numbers of
>> goldman’s chief executive officer controlled expenses and exploited price swings to boost profits. a 95% jump in net income, earnings of $2.50, far ahead of analyst forecasts of $1.66 a share revenue rose to almost $6 billion with 1/3 of that coming from trading in currency and commodities. stock trading almost tripled. last month’s c.e.o. says that a global economic expansion is helping the firm raise money for companies and advise on more mergers. the bernam financial services fund holds about 25,000 goldman shares and goldman in their words is hitting on all cylinders and taking a lead in mergers and acquisitions.
>> they’ve retained strong leadership. i mean, we’ve seen $500 trillion global m&a year to date. we’ve got a strong economy, low interest rates. great environment.
>> morgan stanley, lehman brothers and bear stearns all beat analyst expectations by a wide margin when they reported last week. they had combined net become of $3.55 billion last year to mate make for the most profitable three months on record. a brokerage analyst with merrill lynch says there’s no question the brokerage firms are in a bit of sweet spot.
>> what impressed us about the results was that the revenues were in line with the fantasticed income side, which helped dampen one of the concerns that people have had about goldman, which is that when eventually fantasticed income slows and there’s no sign of that happening here, but when eventually that happens, and the equity side gets better, it’s pretty clear that at goldman, at least, the wherewithal is there to offset the eventual decline in fantasticed income.
>> analysts remain cautious of the ability to sustain earnings growth. james mitchell maintains his neutral rating saying it’s hard o know how much of goldman’s surge in revenue comes from trading gains in its own account. and dan genter says “this news is as good as it gets.”
>> even though goldman’s news was good, the markets had a tough time today. the dow jones industrials slumped at midday on reports al qaeda is calling for retaliation against the u.s. for israel’s killing of hamas lead sheikh ahmed yassin yesterday. a rebound pushed stocks into pozz tv territory and 20 minutes before the bell, stocks really started to slump. stocks falling into negative territory. losing a point on the day, 10,063. volume on the new york stock exchange was 1.4 billion shares traded. that is about even with the three-month average. the s&p finished down by 1.5 points. they too ha the same lathe afternoon drop as the dow did. deborah kostroun is at the big board with a wrap-up of the action there. and deb, that was quite a turnaround in the last few minutes.
>> it was. we thought we had a rally on our hands for much of the afternoon. according to some trareds i talked to they said it wasn’t that convincing of rally to begin with. so probably not too surprising the market drifted lower by the closing bell. but it was a pretty dramatic turnaround. and actually as the market went up, about 1:30 new york time, really took us down here late in the day. and stocks were up at least at some point, that turnaround, really not holding until the close. a lot of concern about the geopolitical unrest. a lot of trareds i’ve been talking to saying you’re not getting a whole lot of ords coming in. shows you a lot of people on the trading desk just kind of waiting before making any moves even though we have solid fundamentals, we have low interest rates. and earnings nor this season, really what we’re expecting for the first quarter, likely to be really good. we haven’t had a whole lot of companies saying they’re not going to meet their numbers. also retail names, we did get limited brands. that, of course, is the owner of victoria secret, and also bath & body works saying their first quarter profit going to be better than expected. family dollar reported earnings saying profit rose 12% in the second quarter. retail names performing welch and material stocks were bounding after seeing some losses yesterday. eastman chemical, this is the largest maker of plastic for soda bottles saying their first quarter is going to be better than expected. see a pattern here? those stocks performed well along with many of the chemical stocks. helping that out. and see the gapes in nucor and alleghany tech. they said their quarter going to be better than expected. they said similar things to what we heard from nucor on friday. their first quarter is going to be better than expected as prices are being ratchetted up because of all the demand coming from china. take a look at some of the grocery stocks. supermarkets heading back. back to you in the studio, mike.
>> deborah kostroun. we have some earnings out now from red hat. the company reporting earnings that match the street estimate. fourth quarter earnings per share of 3 cent per share in line with analyst estimates. just ahead of con sen us by thomson financial. red hat also saying it is positive on its outlook for its fiscal 2005. you eel want to join us tomorrow morning at 7:54 new york time. we’ll speak to the red hat c.e.o. mat szulik about the earnings throort came out just a moment ago. that may have an impact on the nasdaq tomorrow. today, it struggled just the same as the dow and s&p never coming back as much as the dow and s&p. falling farther on the day, down eight points at 1,902. volume op the nasdaq, 1.8 billion shares a little bit below average. julie hyman standing by in times square.
>> hey there, mike. as you said, similar session today, up and below the zero mark. finishing up the day lower, as you mentioned. throughout the day, really a dip through the center of the day. and not down to the session lows, it looks like. but definitely lower than where we were this afternoon when we thought we might have a bit of a gain. we did have some various stocks in today’s session. some coming out with better than expected earnings. however, not big no really pull the market up as a whole. as you see with the same phenomenal on the new york stock exchange with goldman sach’s coming out. also want to talk about shares of microsoft today. these shares falling 1.5%. we will be learning tomorrow what the sanctions imposed by the european union will be on microsoft, related to their antitrust dispute. although it’s said by analysts and folks who watch microsoft that they’re going to appeal the decision on this immediately. and the sanctions might not actually take effect for a couple of years while they’re going through the appeals process.
>> better than expected earnings today, one of those was palm one. shares up 30%. their third quarter loss narrowed on a per share basis. a one-cent profit. analysts had expected a 33-cent loss. coming in considerably better than what folks had expected. also, news from amgen today. first ever research and development meeting. the company saying it expects profits excluding some costs between 271 and 2785 a share next year. analysts had expected 2.83 so that was a disappointment to some folks. those shares down in today’s session. mike, back to you.
>> julie hyman. when we come back, a trader’s perspective on today’s market action. mike driscoll from bear stearns.
