Market Briefing---Kathleen (slow)
Ford---Su (fast)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
welcome to “world financial report”, everyone. i’m kathleen campion. shares of the world’s two largest auto makers, ford and general motors, finished the session lower today. both companies said their june sales were below analysts’ expectations. su keenan has our story. su.
>> big difference from what analysts had expected, kathleen. ford saying last month’s sales were unchanged year over year, and general motors reporting a sales gain of 1.% when compared with last june. you see a lot of red for ford, general motors and daimler chrysler. ford and general motors fell short of forecasts from eight analysts surveyed by bloomberg who expected a 2% sales gain for ford, and a 3% gain for general motors. the third biggest u.s. automaker daimler chrysler, beat analysts’ expectations with a year-over-year sales increase, as you can see, of 6.3%. toyota gained 11%, and nissan motor company was up 22%. the japanese companies spent less on discounts and no interest loans, than their u.s. rivals. now, andrew palmer who helps manage 1.6 billion in bonds at a.s.b. capital management, says the market has maintained a high sales volume and he says that could be hurting sales of u.s. auto makers now. he also says ford’s numbers are, “a little on the weak side.” let’s get to them. total sales for ford fell 7.7%, that’s without an adjustment for a difference in sales days. when you account for the fact that last month had fewer sams days than june a year ago, ford’s truck sales showed an increase of 3.9%. car sales on the adjusted basis fell 6.5%. turning to general motors numbers, g.m. truck sales for june rose 10.3%, total car sales however, fell 8.5%. general motors ooms cut its third quarter forecast for production in latin america, africa, and the mideast. industry wide incentives during the month rose 5.8%, according to y.n.w. marketing research net. g.m. and ford both spent more than $3700 per vehicle on rebates and discount loans in the month of june. pnb paribas expects the incentives to continue if not increase through the rest of the year.
>> as we head into the summer august, july and august, i think they’ll be looking to the auto manufacturers will be looking to clear out any 2003 inventory as they prepare for the new model year, the 2004 model year. so i don’t suspect―and also the level of competition as we see a number of foreign auto makers launch new products, we’ll also necessitate them to continue the incentive levels.
>> he thinks the lower-than-expected-sales numbers for u.s. auto makers shows the market is intensely competitive, his words. he expects sales to pick up in the coming months as the economy shows signs of improvement. kathleen.
>> su, thanks very much, su keenan. merrill lynch and the former analyst henry blodget won a dismissal of investor lawsuits accusing them of issuing biased research for two internet companies. u.s. district judge milton pollack in manhattan called the plaintiffs high risk speculators. plaintiffs who were seeking what he called cost free speculator’s insurance. pollack issued his ruling in two cases involving analysts’ reports for 24/7 real media and interliant. those cases are part of is a larger group involving merrill lynch research that are also pending before pollack. merrill lynch is a passistic minority owner of bloomberg l.p. parent of this network. earlier today goldman sachs, credit suisse and morgan stanley won dismissal of san investor’s lawsuit accusing these firms of issuing biased research about internet company kovad communications group. now, today’s i.s.m. report surprised many economists. manufacturing activity contracted in june with factories reluctant to add to inventories until demand picks up. the manufacturing index put out by the institute for supply management came in at 49.8, and any reading below 50 signals a contraction which means that manufacturing has now been contracting for four straight months. economists were expecting an expansion of the reading to 51. this, according to the median prediction in a bloomberg survey. we will talk more about this report and the economy at large coming up in about 15 minutes. we are going to bring in bloomberg news reporter carlos torres from the eco team. when the economic data hit the tape this morning, stocks initially dropped. later in the session the brokerage stocks led a mid day turn around after today’s judicial decisions. so, when the smoke cleared let’s take a look where we finished out the session. the dow up 55.5 points, the s&p up, as you see, almost eight points, an 8/10 move. the nasdaq was the percentage win are, up more than a full percent.
>> looking at the volume picture about 1.5 billion shares changed hands in big board trading. you see the edge there went to the advancers over the decliners. the volume picture in nasdaq trading, 1.6, 1.7 billion shares. and as you see, it was kind of a dead heat in terms of the advance/decline. wilshire 5000 picked up 7/10 percent gain in today’s trading. and let’s take a look now at the treasury trading. there was a turnaround here, too. notes initially rallied on the manufacturing report that seemed to signal a less-than-vibrant economy. on further krpgs investors sold treasuries. there you see the impact. the two-year, though, stands changed. in currency trading investors sold the dollar for the euro for the third day, apparently reacting to a concern that the u.s. economy is growing too slowly to attract sufficient foreign investment. now, the market staged that late afternoon turn around etalked about. deborah kostroun was there. she’s now at the big board to tell us more about today’s trading activity. deb.
>> kathleen, a couple of reasons for the turnaround that we did see. in fact, todd lioni, head of listed trading at s.g. cowen. talk about today, it’s the beginning of the third quarter. he says that first day of the quarter you do get buyers coming in, although it did come very late in the day. of course, earlier in the day we saw the i.s.m. number really giving the market a little weakness that stayed with us until the last couple of hours of trading. but one of the areas of the market that did see a lot of strength, that was the semiconductors. in fact, yot the philadelphia semiconductor index is up almost 27%. we saw a turnaround from the negative to close up 1.7%. the semiconductors putting in a very good performance. not only was it the first day of the third quarter, but obviously the news coming out of merrill lynch and some of the other firms with their lawsuits being dismissed, we saw a turnaround in the amex broker dealer index as well. while that may not speak specifically to the economy it certainly was one reason that we did see money moving into many of the broker dealers. owen buhrmann, he helps oversee two billion as managing director at rigs investment management. he says one of the things we’ll have to get through this first couple of weeks of this month of july, he says with earnings preannouncements it’s hard to get through that by going straight up in the market. he says the best that the market can really hope for may be a sideways move. but one of the things that he does say, companies may indicate that profits in the second half won’t grow as fast as what analysts are expecting. back to you in the studio, kathleen.
>> thanks very much. deborah kostroun. the nasdaq rallied as well as we told you, up better than a full percent. it was only the second higher move in the past nine trading days. anthony massucci tells us all about it.
>> the nasdaq rebounded and rebounded strok strong today, closing up about 1%. initially the nasdaq did no cuss on those manufacturing numbers falling for a fourth month. that actually caused the nasdaq to go below the level of 1600. but nasdaq closing right at 1,640. gill knight over at allied investment said we’ll see further runs in the market he said, because economic fundamentals will continue to improve. let me show you some of the big four on the nasdaq. intel, microsoft, cisco, oracle, rebounding as the nasdaq rebounded. all four of these stocks were down earlier in the day. now, shares did rise after lawsuits against merrill lynch were dismissed, a dismissal of investor lawsuits accusing them of issuing biased research for internet companies, for example. now, ebay, amazon, yahoo all rebounded as well. so the internet stocks bouncing, really just showing an overall broad tech move on the day. let’s give you the news on peoplesoft. we heard from peoplesoft saying that oracle’s hostile offer has massive downside risk. they said parliament because clients are delaying purchases until this offer is resolved. peoplesoft did rebound. we already mentioned oracle went up. peoplesoft said that antitrust regulators may block oracle’s plan and they think customers will not commit millions of dollars until this uncertainty is lifted, this coming from peoplesoft’s board in an open letter. so peoplesoft did rebound. but that’s the headline on the peoplesoft and oracle story today. again, the nasdaq up 17 points on the day. biotechs were down but internet stocks , checking the bloomberg terminal here, hardware networking stocks , even semiconductors all bouncing back right at the end of the day. back to you in the studio.
>> ok, anthony. thanks very much. anthony massucci. now, up next we are going to talk with a fund manager of a growth fund with a five-year record in the top 1% of all 17,000 u.s. mutual funds tracked
