Market briefing---Suzy (medium)
Third quarter---Su (fast)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
>> welcome to world financial report. i’m suzy assaad. thank you for being with us this monday. topping the news is the action in the treasury markets. treasuries plunged sending the yield on the 10-year note to the highest level since december. demand for government securities fell on speculation that economic growth will accelerate and the treasury will sell more debt. the loss is extended in almost half point decline in the 10-year note last week. that was the worst since march. adding to today’s selloff, investors in mortgage backed securities hedged against an anticipated slowdown in the home loan refinancing by selling even more treasuries. let’s take you straight to the markets and let’s take a look at what’s going on right now with the equity markets. the markets closing lower across the board. the dow jones industrial average losing 13r7b9 exactly, closing at 9,096. we’ve got the s&p 500 closing down almost 1.5% lower. the nasdaq composite down 1.6%. keep in mind it is still up 26% year to date for the nasdaq. the internals on the market over at the nyse. we did 1.2 billion shares, declining issues outweighing advancers by almost a three to one ratio, as you can see there. over on the nasdaq, volume was 1.4 billion shares, a two to one in favor of the declining issues today. the wilshire 5000 is the broadest measure of the u.s. equity markets. and that index closed down 1.4%. take a look at what’s gone on with the dollar today. relatively unchanged at 118.5 against the yen. you’ve got the euro holding on at 1.1349. sterling coming back a little bit from the lows that we saw over the weekend following the concerns, or alleviated concerns about the investigation into the british scientist’s supposed suicide. back to the equity market, shares of texas instruments closed 4 percentage points lower ahead of the company’s second quarter earnings report. this is the world’s biggest maker of chips that power mobile phones. the company says their second quarter profit rose by 27% as their sales gained. however, t.i., says it’s outlook for the third quarter sales is below analysts’ projections. our own su keenan has more for us on the story. su.
>> suzy, ahead of the earnings report analysts and investors said the real question will be the outlook for the second half of 2003. after the worst ever slump in the chip industry contributed to annual losses in the last two years. texas instruments is now saying it sees third quarter sales in a range of $2.29 billion to $2.49 billion. ed that is lower than the consensus estimate of $2.41 billion. texas instruments taking down both its sales estimate and e.p.s. estimate for the current quarter. check out second quarter earnings, however. they came in stronger than expectations at seven cents a share. analysts polled by thompson financial expected earnings to be in line, but the company recently lowered expectations of six cents a share. the company reports second quarter revenue of $2.34 billion as you saw, was in line with analysts projections. learning more about the company’s outlook in the next half hour as the conference call gets under way. now, smith barneyy citing a “relatively slib ri chip recovery” says the entire second half estimates are correctly predicted texas instruments would lower ipts projections for this current quarter. the buying trend that now favors cheaper phones 0 hurt future earnings.
>> t.i. derives more dollars from the higher end phones. so with the transition happening where the lower end phones are selling better, the higher end phones aren’t selling as well, this is creating somewhat of a negative shift for timentd, which is not seeing the same dollar for cell phone that it was seeing a couple quarters ago. an analyst at j&p securities sees demand for color screen phones driving sales at the end of the year. but he remains neutral on the stock for now.
>> i still have a market perform on t.i. stock but i think this is is a stock we are warming up to. once we see the decks clear in asia and pick up in the high end color screen cell phone demand, we would get more constructive on the stock .
>> we are going to bring you headlines from the conference call once it gets under way. texas instruments now trading again in extended hours. it is sticking up higher, about 20 cents higher.
>> all right, su. thank you for the update. turning our attention to the new york stock exchange, of course, the home of texas instruments and other stocks moving in the after-hours session, we have deborah kostroun joinings with an update.
>> that’s right, suzy. in fact, taking a look at cendant really quickly, cendant coming out with their earnings after the closing bell, having a second quarter profit of $382 million on some of their real estate. in fact, cendant, this is the largest u.s. travel and real estate services company saying their second quarter profit rose to $382 million as record home sales went through its residential growth rates business. the company raised its 2003 profit forecast. you can see, however, it is unchanged in the after-hours session, saying net income rose to $382 million or 37 cents a share from about one cent a year ago. revenue also rising 21%. of course, this is the franchiser of century 21 brokerages, and also they also own days’ inn hotels. their mortgage unit benefitting from their home sales as they expect to reach a record $6.56 million this year. as we take a look at some of the other things, some of the other big stories in today’s session, obviously it was about the earnings. the manager of 1.3 billion at evergreen strategic gropth fund saying that second quarter earnings have come in very nicely, but he says the market was pretty much priced in for that to happen. he also says the numbers were fine, but he says they weren’t up enough to get us for another substantial leg up. merck obviously one of the disappointments on the day. and that, of course, the biggest drag on the dow jones industrial average. and merck, that was after they came out and lowered estimates for their top selling zocor drug and also quarterly profit, however, did climb 6.6%, that as the dollar weakened. one story, however, a little bit different in the farm suits, we did see barr labs performing quite well. this after it looks like one company saying that galen holdings saying that they ended talks with a potential buyer. many people had suspected it could have been barr labs. that’s one of the reasons that barr labs was kind of reversing the trend on many of those pharmaceuticals. back to you.
>> thank you, deborah. the nasdaq down again, the fourth day out of five. internet stocks , though, they were higher. let’s hear from anthony massucci on today’s session.
>> the nasdaq was lower today with the internet stocks a bit of strength there. let me show you the story with yahoo. those shares rose today more than a dollar on the nasdaq. the stock was upgraded to an outperform by analysts lanny baker at smith barney. here is what he said in the report. he said recent weakness in the stock would provide buying opportunity, as he likes the stock to go up to $38 in the next 12 months. originally he had a $33 price forecast. he thinks investor expectations have been tempered, but he also thinks the purchase of overture services bif yahoo would help increase sales and likes the stock sales into 2004. let me show you the internet names, overture services closed higher today, ebay and amazon also closing up. the internet stocks showing a bit of strength, but the nasdaq did go down. in fact, the downward movement this morning was prompted by news from activision which came late friday, and knocked the stock down all day long, just about 9%. the company said the s.e.c. is investigating the way it accounts for sales. that knocked activision down. and t.h.q. interactive known as t.h.q. incorporated, both activision and t.h.q. said the companies are being investigated and said other game makers would be investigated. midway games, we got headlines on that at the end of the day, saying it got a notice from a formal inquiry by the s.e.c., n.w.y., the ticker. traits trades at the new york stock exchange. take 2 interactive, the s.e.c. opened an investigation on it last year, also moved down more than a dollar today. atari shares down about 6%. they make the matrix video game. so video game stocks were downtown the internet stocks were up, but the nasdaq down three of the last four trading days. back to you in the studio.
>> and that was anthony massucci from the nasdaq market site. the august crude oil contract fell as gasoline demand prompted speculators to unlloyd some of their futures contracts which they held in record numbers last week. so it closed at $31.62 a barrel. gold futures in new york had their biggest gain in almost three weeks. gold closing at $351 an ounce. and when we come back, everybody we are going to be talking about oil services companies. companies like smith international, weatherford, they reported their earnings today. we’ve got more reporting tomorrow, like b.j. services and schlumberger. they are scheduled to report and investors should get an idea of what to expect from this group. for that we go to mckenzie of friedman billing ramsey on what he sees for the industry.
