Market Briefing---Kathleen (slow)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
Mortgage industry---Su (fast)
>> welcome to “world financial report”, everyone. i’m kathleen campion. shares of baxter international felled after the company announced 2500 job cuts because of stiff competition from around the world. baxter is the world’s biggest maker of blood disease treatments. it’s cutting its sales forecast for the third time in nine months mongts as foreign competition forces baxter to lower prices. john fisher is a fund manager at fifth third bank which owned more than a million baxter shares. he has billing selling the stock . he says baxter overpromises and underdelivers. shares of bionet fell as analysts raised questions about revenue in the company’s most recent quarter. he cites the degree to which revenue growth depended on currency fluctuations. s&p said sales of spinal implants were below forecasts. biomed is the fourth largest maker of reconstructive implants. earnings rose 28% to meet expectations of 30 cents a share. u.s. stocks rose, this after merrill lynch told investors to buy shares of microsoft, sparking a rally in computer related companies. let’s get to the numbers now and see how we settled out today. the dow industrials picked up 101 points. as you see, better than a full percentage point gain. similar story in the s&p 500. the nasdaq, the big percentage gainer, as you can tell, up 2.35% in the session. volume in big board trade relatively modest, 1.5 billion shares changed hands, the edge with the advancing issues. nasdaq volume a bit richer, 1.8 billion shares, similar story on the advance/decline line. the wilshire 5000, a similar trading pattern and one point -- let’s call it 3% gain on the day. looking at the treasury trading now, the notes here rose in new york trading, as tomorrow’s employment report becomes the focus of speculation. earlier today that stronger than expected factory orders number put pressure on notes.
>> in currency trading the dollar fell against the yen and gained some ground against the euro. the dow enjoyed yet another healthy gain today, as we just pointed out. deborah kostroun is at the big board to tell us more about today’s big movers. deb.
>> kathleen, another big day of gains. the dow jones industrial average still looking very resilient. a lot of traders that i talked with today, like john picket of le branch specialists saying this market is for real. he also says the second quarter, of course, as we are getting out and going to―we’ll be getting those earnings reports starting next week. he says maybe this market with the numbers that we do have, maybe the market isn’t overinflated. he also mentions the economy, a lot of questions about the economy and how robust it is. he said certainly the economy is not turning on a dime. a little bit slower. a little slower turn around e he also says, remember, this is only the second day of the third quarter. we also-e says, have a long way to go before we get to the end of the quarter, and a lot of hope for economic gain and expansion that we can get through this quarter. but he also mentioned, of course the second quarter earnings numbers and how they are going to be coming in. the guidance we get from those companies going to be very key to sustaining the gains we’ve already had. we look at the market. what was really propping things up in the s&p 500, it was the software companies performing quite well. microsoft at the top of the list as they were added to the focus one list at merrill lynch. b.m.c., and e.m.c. entering a market agreement. e.m.c. looking to be the big winner, gaining potentially 5,000 customers. the semiconductors right behind software in the s&p 500 posting some of the big gains in today’s session. also retail as wal-mart also added to merrill lynch’s focus list, wal-mart enjoying a healthy gain as supporting their merrill lynch, their sales growth will accelerate.
>> deborah kostroun. well, software analyst jason maynard said software spending remains tepid but thinks the outlook is bright for microsoft. anthony massucci has more on the nasdaq market site.
>> the nasdaq on a roll, closing up 2% today, actually 2.4%. i’m checking my bloomberg terminal. microsoft also up. 2.8%. so moving hand in hand there. merrill lynch put microsoft on its focus one list today. basically jason maynard, the software analyst says he sees better expense management at microsoft, mo dedly―modestly better earnings and p.c. sales, dividend could get a boost. raises estimates for 2004 by 30 cents. the manager of $23 billion said computer spending should pick up as the economy recovers. microsoft should benefit from that. he’s thinking about buying more microsoft shares and said tech companies have slimmed their businesses to a point where growth demand will directly improve the bottom line. again, growing demand will improve the bottom line. that’s why you are seeing the techs up. the nasdaq up 33% since we hit lows back in march. now, jason maynard talking about software said that the companies he thinks will meet expectations for june because forecasts are so conservative. with that in mind, peoplesoft said they would actually beat estimates for the quarter, and peoplesoft’s c.f.o. said some folks are buying from rival, oracle able to come through squelching doubts. oracle saying peoplesoft is using gimmicks. j.d. edwards sitting on the sideline waiting to be acquired by peoplesoft. biotech stocks led the way up 4%. invitrogen, gilead, a couple of stocks on the move, ox i gene. we also saw starbucks going up after they said same store sales rose 10%. an across-the-board move at the nasdaq. back to you in the studio.
>> anthony, thank very much. anthony massucci. there is new evidence of strengths in the housing market. mortgage industry reports show that mortgage applications rebounded last week, reflecting an increase in both new purchases and refinancing. home building executives say the boom is likely to continue even if the face of rising interest rates. su keenan says our―has our story.
>> that is right. economists say rising mortgage rapts may have caused people to lock in cheap financing while it’s still available. mortgage applications increased 5% last week according to the mortgage bankers association of america’s index. the index hit 1,635 last week, above the average for the year, but below the record reached in may. now, the group’s purchase index rose 6.6% which represents the strongest week since the end of may when purchases, applications and refinancing applications all hit record levels. refinancing applications increased 4.8% last week from the previous week. last week it saw a rise in mortgage rates, as you recall. the average 30-year fixed mortgage rate rose to 5.23%, the highest in seven weeks. the increase came on the heels of the fed’s decision to lower the benchmark overnight bank lending rate by a quarter percentage point to 1%. because many investors had expected a bigger rate cut, bond yields moved higher. that caused mortgage rates to rise. douglas duncan, an economist with mortgage bankers association says record low mortgage rates helped out.
>> three years ago the 10-year treasury hit 3.08, that was bottom. rates will head up gently throughout the rest of the year. the 10-year treasury sort of the bellwether to watch. as it moves you’ll see the mortgage rate move. it’s not going to go so far that it’s going to dramatically slow the housing sector. though refinancings will tail off later in the year and into next year.
>> duncan says this will continue to be the best year in history for mortgage lenders, the boom in activity will continue into the first quarter of 2004. the c.e.o. of d.r. horton, one of the nagds’s largest home builders is even more bullish on bloomberg news today, that he expects the boom to continue for the next three to five years.
>> obviously interest rates have helped the industry in the last two or three years. i think it’s a win win. i tell people the best thing that can happen to our industry right now is for interest rates to go up. we’ve had a marginal economy for two to three years. we’ve sold a lot of homes but there are a whole lot of people out there who we need job growth and median income growth. i think if we could give confidence to those consumers we’d sell more homes.
>> he said his company’s had 25 years of higher rev news and higher profits. the company’s stock up 66% so far this year, up on the day. luxury home builder toll brothers down for the day, up 42% year to date. centex shares up 59%. pulte homes, the nation’s third largest home builder, up 34% for the year so far.
>> su keenan. now, up next, a bear turned bull. we’ll talk to hedge fund manager greg hun after the break.
