Market briefing---Lane (medium)
Japanese market---Catherine (slow)
>> welcome back to “world financial report”. i’m lane bajardi in new york. recapping the day on wall street dow jones industrial average, as you can see here, closing at the low of the day. things deteriorated in the final hour of trading here. 9,036 the close. down 1 2/3 percent. the s&p 500 down asle, a similar chart down 1 3/4 percent at 965. nasdaq composite down 2 1/3 percent, 40 and a half points at 1,673. treasuries tumbled after a 24 billion sale of three-year h notes failed to spark investor interest. service industries expanded more than expected in july. 10-year note down 26/32. five-year note down a half a point. nasdaq had its lowest close in a month falling 2.4% on the day. here with more on the trading day is anthony massucci.
>> not only was it the lowest close in a month but it was the biggest decline in two weeks at the nasdaq. about two months now we’ve been talking about the nasdaq’s 25 to 30% gains for the year. nothing has been able to bring it down. earnings news has certainly kept the market higher. economic news has kept the market as least maintaining its levels in recent weeks. today with interest rates rising investors can certainly cash out of those 25% gains on the nasdaq go into cash where they can make a safer investment there. that is the concern as we sawtek stocks fall today. one of the big reasons is weakness in the retail sector, costco falling almost $7. they cut their fourth quarter outlook. the company did say earnings will fall rather than rise, which was previously expected. now, earnings look lower than its forecast, and it could be as much sas nine cents lower than analysts’ forcasts. costco we saw go lower, also dollar tree and fred which trade at the nasdaq, two discount stores going down, as well as wal-mart, we are showing sam’s club and b.j.’s wholesale club going down 10%. weakness in biotech stocks , cephalon falling, the stock dropped after the company dropped its third quarter profit forecast. that knocked down cephalon as well as some biotech stocks like genzyme, gilead, biogen. those stocks falling on the day. finally interactive corporation. barry dillard said he’s definitely looking to make more acquisitions, possibly in the $1 billion range t earnings came% -pin, the outlook not what some investors had hoped for. interactive corporation falling, as well as lendingtree and expedia. both companies interactive will be acquiring. looks like the nasdaq is down three days in a roa and four out of the last five. possibly cisco may lead the nasdaq lower tomorrow. stay tuned. back to you in the studio.
>> anthony massucci at the nasdaq. now, japan’s computer-related shares may be among companies to watch following cisco’s earnings out this evening. catherine yang in our tokyo bureau joins us with a preview of wednesday’s trade dag there.
>> lane, cisco’s earnings may weigh on shares of asian rivals like japan’s n.e.c. corp. cisco fell more than 5% in extended trading. nikkei futures for september delivery closed lower in chicago compared to osaka and singapore. they are an indication traders expect stocks to open lower when trading begins in tokyo. the bank of new york japan a.d.r. next fell. n.e.c. is the largest maker of telecom equipment. before cisco’s report, fujiwara is not changing his tech positions just yet. toyota motors may rise following release of its earnings. it closed higher. credit suisse first boston wrote toyota’s officials were apparently very bullish forecasting a stronger second half. now, endo agrees with that view. keiko kondo disagrees.
>> we could see stress in the u.s. with a tax cut coming through. that doesn’t mean sales is going to be increasing sharply because we are seeing it especially in the auto sector in the past few years.
>> toyota said first quarter group net income fell 9.7%, hurt by a stronger yen and increased costs. the drop in u.s. retail shares may weigh on exporters like japan’s canon, the world’s third largest digital camera maker, relying on sales outside japan for 70% of its revenue. a slowdown in the u.s. recovery may mean decreased demand for canon’s digital cameras. fujiwara says outlook is uncertain. the leading economic is going to point to expansion for the first time since survey. economists expect it to rise to 78%. the coincidence index is expected to rise moving up to 66.7% in june. a reading above 50 signals an expansion in the next three to six months. the cabinet office yesterday raised its assessment of the economy citing the rally in japanese stocks as signs of a u.s. recovery. lane.
>> and you also have somebody coming up after the close today. right? canon’s rivals, seiko epson reporting second quarter earnings after the market shuts down. why is that going to be significant?
>> seiko epson releases earnings for the first time since it raised a billion dollars in june. that share sale is japan’s biggest so far this year. japan’s biggest maker of ink jet printers expects income to double to $194 million. asian shares of telecom equipment and auto makers will be watched.
>> catherine yang, her global coverage of tokyo begins after international right after this program you are watching at 6:00 p.m. new york time, 3:00 p.m. in california, very early in tokyo. followed by “moneycast asia” with catherine yang an hour after that. sars and the threat of terrorism hurt many businesses across the globe, mobile phone sales remained strong. the rise came as more consumers bought digital camera phones. shipments rose 6.7% compared to the first three months of the year. nokia remained the world’s largest maker of handsets with a 34.6% share of the market. managed healthcare companies posted big declines today on concerns over competition cutting into premium rates.
