Market Briefing---Lane (medium)
Nike---Su (fast)
Nasdaq---Anthony (slow)
NYSE---Deb (fast)
>> welcome once again to “world financial report”. i’m lane bajardi in new york. nike, the world’s largest sports shoe company out with after-the-bell earnings. su keenan is here with the very latest, moving the stock in extended hours. su.
>> we’re looking at the stock down as much as 2% in extended hours. the conference call just getting under way. let’s look at the numbers. fourth quarter e.p.s. is 92 cents a share, a penny below the average analyst estimate according to thompson financial t company reports an 18% increase in net income of 246 million. that compares with 208 million in the year ago period. revenue rose 11% to $3 billion, that’s again against $2.7 billion a year ago. nike’s future orders worldwide rose 2.4%. however, future orders for the u.s. show a 10% decline. wells fargo analyst casper says that’s a dramatic decline. he says that’s why nike stock is down in extended trading. the fall in u.s. orders is an indication nike will lose market share just as it has the past three years. he is also concerned about a 10% increase in nike’s inventory during the quarter. the 1.5 billion. if that increase is mainly in one country and one product line he says nike will be force todd cut prices to get rid of the excess product. he rates nike shares a hold. effectively today the u.s. supreme court declined a ruling on the appeal of the world’s largest athletic schumacher. it sends the original lawsuit back to the california court. nike may find itself defending its business practices.
>> the commerce department reported today the u.s. economy grew in the first quarter at a 1.4% pace as companies kept inventories lean ahead of the iraq war. the growth was slower than last month. earlier treasury secretary john snow said the growth rate to date in american economy is too anemic and the tax bill would help growth later this year.
>> i’d see growth in the third quarter and fourth quarter as well over 3%. the blue chip survey has growth at 3.5% in the third quarter. and a little higher in the fourth. our own internal estimates parallel those. so i think we are poised for a nice pickup in economic activit activity.
>> snow did not rule out the possibility of perfect tax cuts.
>> the american economy is still a great place to invest. we’ve got low inflation rates but low real interest rates to reflect those low inflation rates. but high productivity. as long as we keep the fundamentals of the american kmoyp sound with high productivity, low inflation, we’re going to do fine.
>> now, the treasury secretary also says there is no change in the bush administration’s policy of endorsing a strong dollar as being in the national interest. the dollar fell last month after comments by snow led traders and investors to conclude he had abandoned the traditional currency policy to help boost the u.s. economy and exports in particular. u.s. stocks rose on expectations the lowest interest rates in 45 years will lead to bigger increases in profit later this year. computer related shares included microsoft and intel, led the advance. running down the numbers for you. the dow up 67.5 points at 9,079. s&p better by 10, if we bring it on back, so we can show you the nasdaq which is up 31 1/3 at 1,634. the big board volume, 1.38 billion shares, advancers outpacing declines by a two to one margin. on the nasdaq we saw a similar situation, more than a half billion shares changed hands. the wilshire 5000 with a gain of 1%, while u.s. treasuries fell for a second day pushing the 10-year note yield to a four-week high after the federal reserve trimmed ipts benchmark interest rate less than some investors expected. investors also saw a dimmer possibility the fed would purchase treasury notes as another way of lowering yeelgds which serve as benchmark for corporate bond rates and home mortgages. expectations the fed might use that alternative had driven prices up in recent weeks. prices of crude oil in new york fell after the opec secretary general said they may not cut output. it closed at $29 a barrel. you see it on the move in the past year. natural gas futures in new york fell more than 9% to a seven-week low. u.s. government saying inventories soared by a record amount last week easing concerns about shortages when demand peaks next winter. gold futures closed at $343 an ounce. let’s bring tu latest news from the biggest software company in the world. here is the scoop on microsoft with anthony massucci at the nasdaq market site.
>> one of the stocks rebounding along with the nasdaq today? microsoft. the shares up 2%. late in the afternoon a couple of headlines coming across the bloomberg terminal. let me share them with you. microsoft winning an appeal that it won’t be forced to carry sun micro’s java programming on ipts windows operating system. coming from a u.s. appellate court this afternoon reversing a lower court order saying microsoft had to carry it. so again, microsoft trading higher on the day. sun micro trading lower. one other headline coming across the terminal on microsoft. microsoft will cut 161 consulting jobs, that’s 11% of its consulting workforce. they will focus those left on helping customers build computer systems. that plan coming across from microsoft as well today. now, latest news on peoplesoft. the rebate offer, they are giving customers an offer to get their money back after oracle -- if oracle would acquire peoplesoft in its hostile offer. peoplesoft is offering to give money back to customers. analysts are saying this is helping peoplesoft with their sales here at the end of the quarter. manugistics, the stock falling today after the company said first quarter sales fell 12%. the company also said second quarter sales will be less than analysts expect. that’s the current quarter over at manugistics and the stock going lower. ebay, another stock on the move today, trading, closing up above 103 for the day, the company having meetings in orlando. first of all, their shareholders gettinginging the and increasing the number of stock options available for employees and the company having a convention of ebay users helping them increase their sales on ebay. back to you in the studio.
>> anthony massucci at the nasdaq. while interest rates are helping to spur ideas of an increase in tech spending and that helped those tech stocks out there. deborah kostroun has more at the big board.
>> well, that’s right, lane. in fact, i was talking with peter henderson of fleet specialists today. he said we saw a rotation out of bonds into stocks , particularly tech stocks . he says after three years of lower markets, we did see that buying going on. but he says it really may not make a whole lot of sense because techs are some of the highest―seeing some of the highest valuations right now. he says the market really acting pretty well today, given the kind of action we saw yesterday. but he says overall the market looking a little bit tired, losing a little bit of the momentum that we saw just a couple of weeks ago. he says some of the institutional activity slowing% -pdown here just a little bit. so he said we could be coming to the end of this upward move that we’ve had for so long, at least since the low on march 11th. he also mentioned that next tuesday, the start of the third quarter, monday likely to be a pretty hectic day with the rebalancing of the russell 2000. second quarter earnings may not be that great. semiconductors some of the big of the gainers in the s&p 500. there they are putting in a strong performance. technology shares gaining grounds. pharmaceuticals, another area of the market that generally performed quite well. alone, one of the stocks lower after it failed to report 2002 results. its creditors may be demanding some immediate payments of as much as $2 billion, a lot of concern as to whether they can actually shore up that kind of money. eli lilly looks like they have a little bit more drugs throughout the pipeline upcoming. so one of the reasons they did see a big up day. medical instruments, guidant at the top of the list as they will―they said today they are going to report their second quarter sales that either exceeded their estimates or going to reach the higher end of their forecast, so that’s one of the reasons that they performed quite well. transports, not a whole lot of news coming out on fed ex. they reported their earnings earlier in the week but they performed quite well in today’s session, along with many of the transports and many of the other airlines. electronic retail, circuit city coming out today rejecting a buyout offer from billionaire carlos slim. they said the offer was just too low. back to you in the studio.
>> deborah kostroun at the big board. now, we have breaking news from raytheon at the moment. headlines crossing the bloomberg professional service as the company says it sees itself meeting or exceeding second quarter objectives here. it sees at this point the continuing operations objective to be met or exceeded. second the financial objectives, same story there. total cost per project will be up by 90 million, however. it will record a $90 million charge for the second quarter. more on this, keep an eye on the stock , see how it’s trading in extended action. our next guest sees the long and short of stock investing. up next we talk to james elmer, fund manager at seiko capital.
