Market briefing---Lane (medium)
Economy---Brian (medium)
Yahoo---Carmen (fast)
NYSE---Deb (fast)
>> thanks for joining us. we have these stories and much more. first up, the latest on the u.s. economy as seen by some of america’s leading chief executives, today kick off the business council’s biennial conference. many leading c.e.o.’s are there to discuss the economy, job market and overallstate of american business. the group puts out a survey detailing their sentiment towards business in the coming months. joining us to discuss that survey is brian sullivan coming to us from the greenbriar resort in west virginia. what’s the overall theme of this report.
>> thank you, lane. the overall theme is basically this. the c.e.o.’s do expect as a consensus, to see a modest growth in the economy, inflation remaining relatively low with perhaps some little rise in interest rates here. now, this survey, and i should say it is an anonymous one so we are not breaking out which c.e.o.’s expect to see growth. it hits the economy, jobs, federal budget deficit to the dollar. let’s walk you through the more interesting aspects of the survey. although the majority of the c.e.o.’s surveyed do not think we are in a ri session, i thought what was interesting was 6% at all did believe we are in a recession. let’s talk about inflation expectations, because the majority do not believe that we will see a major rise in inflation. in fact, 75% of the c.e.o.’s see inflation rates remaining between 1.1 and 2.0%, although 17% of the c.e.o.’s surveyed think that inflation will rise to a rate between 2.1 and 3.0%. also one of the more interesting aspects of the survey surrounds the federal budget deficit. in fact, most of the c.e.o.’s polled do expect the deficit to exceed the government’s official projections, both in the short-term, i.e., this year and next year, also all the way out to 2007, lane.
>> these are the men and women who make the decisions about the workforce. do they expect to hire more workers in the months ahead?
>> i would say that the aspect or at least the thought is modestly optimistic. i’ll tell you why i say that. the majority of the c.e.o.’s polled expect the unemployment rate this year to remain between 5.8 and 6.3%. so not many of the c.e.o.’s expect unemployment rates to rise. some expect the unemployment rate to come down fractionally. the reason i say “optimistic” is if we look out to 2004, the projection for 2004 for the majority of the c.e.o.’s, and they didn’t provide a set percentage, is they think that the unemployment rate will fall between 5.1 and 5.8%. so the majority of c.e.o.’s polled by the business council survey do see a pickup in job growth next year, lane.
>> let’s talk about the dollar as well. the c.e.o.’s keeping an eye on currency fluctuations. what do they think about what’s happening.
>> this is the most interesting aspect. there is zero consensus. no aspect of the survey is perhaps more convoluted. here is why. 37% think the dollar will rise against the euro, 23% see no change at all. 24% think the dollar will fall against the euro. so i guess the one consensus we can say about corporate america’s views about the dollar lane, is that there is no consensus.
>> there you have it, brian sullivan at the greenbriar. we may check in with him again in the “world financial report”. in the meantime investors are getting their first look at third quarter earnings from the internet industry as yahoo reports earnings. the most used internet sites says profit more than doubled to $65.3 million or 10 cents a share as advertising picked up in the quarter. carmen roberts is here to break down the numbers.
>> yahoo has best revenue producing quarter in its history as more businesses returned to internet advertising and yahoo poured on the power in those paid search ads. that’s where businesses pay to have their web address listed at the top of search results. revenue rose 43% from a year ago to $356.8 million, $19 million more than analysts surveyed by thomson financial were expecting. net income rose $1 --126% to $65.3 million or 10 cents a share, a penny more than wall street expected, and twice what it earned a year ago. u.s. bancorp piper jaffray’s analyst told us before earnings were released that yahoo’s growing revenue reflects a pickup in online advertising, something most companies had shunned when the internet bubble deflated.
>> most recently there has been tests that have proven that advertising is very effective on line, forgetting about the clicks, just exposing viewers to a brand impression has value. yahoo has been doing very well. in fact, yahoo is probably gaining market share.
>> he does not own yahoo shares but says brand advertising or the regular internet advertising is yahoo’s core business. while that is the core business, paid search ads are driving yahoo’s growth, and anthony valencia, an analyst at t.c.w. group who owns yahoo shares, says paid search is one of the fastest if not fastest growing online advertising medium. and yahoo’s regular and paid search advertising revenues rose 48% to $245 million. revenue from its fee based business such as pernls rose to $79.4. hotjobs grew to $32.4 million. yahoo shares fell in the market in regular trading but after-hours yahoo shares are up by just a fraction. yahoo says that it sees fourth quarter operating earnings per share of 11 cents to, that’s compared to the 13 cents it had a year ago, 11 cents is the consensus. yahoo’s conference call just getting under way right now. investors eager to hear yahoo’s forecast. more about the holiday season and the shopping that is ahead. we’ll have more on that for you later. lane, back to you.
>> carmen roberts, thanks. if we see any kind of things coming across the bloomberg service we’ll tell you. genentech is out with results for its latest quarter. the biotechnology company reporting earnings of 27 cents a share. analysts had expected a profit of 25 cents a share. sales of two of its cancer drugs climbed in the quarter. revenue coming in at $817 million, above thomson financial’s estimate of $810 million. the company expected to meet or exceed earnings in revenue growth for the full year. in the regular session it was down about 1%, in the extended hours it is down once again by 17 cents at 78.58. a continued pullback even though that earnings per share number beat expectations.
>> stocks closed lower for the first time this month. deborah kostroun is at the new york stock exchange. she’s back there after a few days off. deb, i don’t think it’s your fault the market has dropped.
>> no, unfortunately the market has actually a mind of its own. in fact, so many traders really kind of focusing in on the fact that we’ve had such a really good run. in fact we are looking at tomorrow, the first birthday of this new bull market as we close out october 9th of 2002. we closed out the market at 7,286, so a one-year chart looking very good, especially since the beginning of this year we are still looking at some very good gains. look at the biggest gainers so far in the dow jones industrial average actually caterpillar. caterpillar after the close of stock market trading yesterday―today, raising its quarterly dividend to 37 cents a share from 35 cents a share. that dividend actually payable on november 20th. caterpillar, the second biggest gainer so far this year in the dow jones industrial average, up 65% behind intel, actually intel the biggest gainer. it is up 91% year to date. in today’s session we saw a market that was really kind of drifting. over the past week we’ve seen these big market moves. we’ve seen the market up 200 points. but in today’s session, didn’t see that much of an exaggeration. telecom the big story today as the f.c.c. is going to have that new rule on number portability which says cell phone users will be able to keep their phone numbers when they switch carriers. this is something we’ve known about.however, it was written up once again today in the “wall street journal” saying maybe some of the wireless carriers could stand to lose as customers continue to switch their numbers and that will cost some of the telephone companies a little bit more money. avaya, however, on the winning end. in fact, that stock benefitting as scan source which is a reseller of avaya products, said their first quarter estimates will be, so avaya hitting a 52-week high today.
>> deborah kostroun, thank you. vivendi and nbc next.
