The fate of Frank Quattrone---Allan (slow)
NYSE---Bob (fast)
A preview for what is ahead for next week---Su (medium)
Market briefing---Lane (medium)
>> welcome back to world financial report.
>> the jury of five women and six men were told by the judge to go home for the weekend, not read any papers, not watch any television, savor the yankees’ victory over the red sox and come back monday morning to be prepared for more instructions about the fate of frank quattrone. he is charged, of course, with three counts, one of obstructing justice, the second of obstructing an agency proceeding, and the third of tampering with a witness. he could face up to 10 years on two of those counts and five years on the third. but the jury sent out a note at about 3:00 telling the judge they were in substantial disagreement. the lawyers then went into the judge’s chambers for more than an hour to discuss what to do next. sometimes in cases like this, the judge will come out and give the jury another instruction, ordering them to resume deliberations to do their best to reach a verdict. that seems to be the situation here at federal court in manhattan, lane.
>> alan dods frank reporting for us. and bob bowden is at the new york stock exchange this friday afternoon looking at the week% -that was. bob, the markets overall hardly moved for the week. the dow jones industrial average up 47 points or .5% for its third weekly gain and the s&p up for its third consecutive week. tell us more.
>> lane, i’m having an audio problem, but i assume it’s time to go. i’ll just start talking. the markets overall hardly moved for the week. the dow jones industrial average up 47 points for the week or up .5% and it’s the third weekly gain for the dow jones industrial average. the s&p 500 was up for its third consecutive week, as well, although just a measly one-point gain for the week, amounting to .1% for the s&p 500. the nasdaq fell by about three points for the week. the best performing s&p 500 stock for the week was international game technology, symbol i.g.t. the company makes slot machines and other casino gaming systems, which sounds like a fancy term, doesn’t it? the company said harrah’s entertainment agreed to purchase at least 11,000 of its slot machines that let gamblers wage wer ticketsin instead of coins. the worst percentage s&p 500 loser for the week was mid immune shares traded on the nasdaq down almost 6% for the week, the company saying that wal-mart will not sell its flumist spray, the first nasal spray vaccine for influenza after some states objected to pharmacists administering the product. the best-performing sector for the week was financial stocks , led by state street financial, up almost 9% on the week, touching a 52-week high today after closing lower, down about 1.66% on the day. state street reporting that third-quarter net income was up 11% and revenue up 18% and shares were upgraded by r.b.c. capital and creeth bruyette and woods. the worst performing sector on the week, utility stocks , although dragged down primarily by some stocks that do more than function as utilities, dynegy, el paso and williams companies. those companies down on the week, they have drilling and pipeline operations, as well. in general, to wrap it up, not too much movement on the week with a mixed indication of the three major indexes and when the s&p moves around 1%, it’s not a big move for the week but nevertheless, we’ll take it, third week up in a row.
>> more than 150 companies in the s&p 5 s&p 50 s&p 500 have now reported quarterly earnings as of friday and thomson financial’s joe cooper says results are better than expected. by his calculation, only 10% have missed analysts’ estimates and the rest have exceeded by greater amounts than normal. su keenan has a preview of what is ahead for next week, a bigger earnings week ahead.
>> citigroup is scheduled to release its third-quarter results on monday. much focus here. the world’s biggest financial services company will probably report a 10% rise in third-quarter profits thanks to a pick up in investment banking business. this month, charles prince took over from sandy weill as chief executive of citigroup and analysts say prince has benefited as citigroup cuts expenses and collects more fees on selling stocks and bonds and advising on mergers. the estimate is 85 cents a share, up from 74 cents a year ago. revenue is forecast to rise more than 3% from a year earlier. merrill lynch forecasts profit at citi’s investment banking unit rose 38% in the three months ended in september, which would be the biggest gain for the unit in three years. citigroup and other wall street firms, including merrill itself, are coming out of a three-year slump in investment banking as the economy improves and the stock market starts to recover. but some analysts and investors wonder if profit gains from investment banking can be sustained.
>> the question on investment banking is what’s the outlook? is there continued activity in the pipeline? are companies interested in moving forward in equity and m&a transition? so investors are interested in the outlook.
>> citigroup shares closed lower by 1% today. they are up 37% year to date and reached their highest price this week since july of 2001. looking ahead to other earnings reports that will be out next week, 3m reports on monday, amgen on tuesday and merck on wednesday. among other companies reporting on tuesday, at&t, u.p.s., and amazon.com. also out next week, sprint, hilton hotels and american airlines. we’ll be sure to cover it all, lane.
>> su keenan, thanks. we’ll have more on the earnings situation when we speak to robert benson of banc of america capital management coming up later in the program. consumer sentiment rose more than forecast in october. the university of michigan’s preliminary index increased to 89.4. it is the first increase since july, a move that may reflect the rising stock market, fewer job cuts and cheaper gasoline. economists say more hiring may be needed to further lift consumer confidence and spending. separately, the commerce department said u.s. housing starts rose 3% last month to an annual pace of 1.888 million units. the government reports that residential building permits, a gauge of work to come, slipped in september but the 2% decline was smaller than expected. builders say demand for housing will continue.
>> housing market continues to be very strong. basically that is being driven by very strong fundamentals, population continues to grow fueled by the very high levels of immigration. interest rates remain at very low levels historically and in addition, the very low supply of homes.
>> residential construction accounts for 5% of g.d.p. and strength in the housing industry has been fueling economic growth. stocks fell, though, on friday, on concern earnings will not increase fast enough to extend this year’s rally. the dow jones industrial average down 69, nearly 70 points at 9721. the s&p down 10 and nasdaq lower by 37 points at 1912. volume at the new york stock exchange -- traders said talks between president bush and japanese officials reinforce speculation the u.s. wants to weaken its currency to keep the economy expanding. price of crude oil in new york plunged with its first weekly decline if four after the u.s. government reported a larger than forecast inventory gain. gold futures fell in new york, as well, completing their third losing week in four. still to come, more than 151 companies in the s&p 500 have reported earnings so far for the quarter. we’ll look at the quality of third-quarter earnings and what that they mean for the markets with bob benson of banc of america capital management, coming up.
