Market briefing---Lane (medium)
Mr. Grasso---Bob (fast)
NYSE---Deb (fast)
Amerisouce---Su (fast)
>> welcome to “world financial report”. i’m lane bajardi in new york. people familiar with the matter say the nyse board has named a search committee to find a successor for chairman richard grasso. the board met this friday. we bring in bob bowden who is standing by outside of the exchange with more details on this story. bob.
>> thank you, lane. as we reported, a number of people have said they don’t want the interim job of running the nyse. these include names such as larry sonsini, a silicon valley attorney, as well as herbert allison, chief executive officer of tiaa krep. former treasury secretary robert rubin under the clinton administration and many others have come forward saying they don’t want the job. don’t offer it. the news within the last hour, you mentioned a moment ago lane, that as people familiar with the situation are saying lawrence fink will at least head at the head of the search committee to find a interim head of nyse. he’s c.e.o. of black rock financial. he has been there since 1988. before that he also spent some time at first boston. other members of the search committee include madeleine albright, former secretary of state under the clinton administration, john mack, co-c.e.o. of credit suisse first boston. larry sonsini as a gentleman who turned down the job as interim c.e.o. of the nyse. he’ll be on the search committee as well. jeff rosenswag is a chairman for ethics and a dean at emirate university. he had this to say about the newly announced search committee.
>> those are solid people. i wanted to make sure we get a diverse group of people and they are diverse and people that are not children. people that have had some experience. people with some depth.
>> and lane, we should also point out with all this discussion of who is going to run the nyse, there was also some question of what may be going on these days in terms of trading. carl mccall wanted to settle down investors. he said that the operations are kurment in good hands, using his quote. quote, “good hands,” with the co-presidents robert grits and catherine kenny in place now, running the day-to-day operations. i’m outside the new york stock exchange.back to you.
>> bob bowden. deborah kostroun is also at the new york stock exchange. she’s inside in the bloomberg booth high above the trading floor with more on the trading action today. deb.
>> well, in fact, lane, a lot of things going on in today’s session. in fact, that dollar―the dollar and gomd relationship, very interesting, as gold got up to that seven-year high. not only that, the dollar at a 2 1/2 year low against the euro. i was talking to peter hen der not of fleet specialists. he says this is kind of a relationship we typically don’t see. you have gold doing well, stocks doing well, bonds doing quite well. and real estate all doing well at the same time. of course, bonds, obviously they are not rocking, but at least the yields on bonds have gone from 4.6% to 4.1%. coming off on those yields a little bit. he said gold typically a defensive play. he says that’s typically a relationship we don’t see, gold doing well while also bonds -- well, excuse me. gold doing well while stocks are doing well as well. also financials this week performing quite well. market momentum definitely there. taking a look at some of those financials. the s&p diversified financial index was the biggest gainer for the week, though friday it was a little bit lower. but still for the week it actually was the best performer. what really got things started off was really kind of the broker dealers. some of the other financials performing well in today’s session but the amex broker dealer index lower in friday’s session. but some of the broker dealers, bear stearns reporting their earnings. that very important, in fact, because they reported their earnings, their profit more than doubled. peter henderson talks about the financials saying that they typically trade about 12 to 13 times earnings. right ow they are at 18 to 21 times earnings. we haven’t really seen the financials in this kind of positions in quite some time. not only that. remember semiconductors. they have been the best performers since the low on march 11th. but all the sudden we have financials in a leadership position this week. and that is a change, and that is also very positive, because when we typically see financials performing well, the rest of the market performs well. and the reason for that, financials comprise 1/5 of the s&p 500. in addition, consumer durables a big story today. it was the best performer in the s&p 500. that was really being led by nike. nike coming out and saying that their orders for sneakers increased for the first time in a year. however, on the other end of the spectrum we saw newell rubbermaid. newell rubbermaid, actually the big story there, the maker of calflon cookware. they cancelled a meeting with analysts. that’s one of the reasons we saw newell rubbermaid one of the big losers in today’s session. back to you in the studio.
>> deborah kostroun at the new york stock exchange. amerisource bergen denied allegations of an illegal profit scheme while disclosing for the first time that it was the subject of a federal probe two years ago. shares of the nation’s largest drug wholesaler fell more than 3% after the “wall street journal” reported the company resold drugs to obtain multiple rebates on the same product. one analyst is downgrading the rating on the company. bloomberg su keenan is here with much more on this story. su.
>> lane, that “wall street journal” report prompted amerisource bergen to halt trading for two hours and hold a morning conference call to deny allegations of illegal activity. the c.e.o. said, “the article, referring to the “wall street journal”, implies that amerisource bergen somehow participated in an illegal scheme. such inference, he says, is absolutely not true. the “wall street journal” says the nation’s largest drug wholesaler used a complex arrangement to sell its drugs, buy them back and sell them yet again to obtain multiple rebates on the same product. amerisource, bergen’s c.e.o., says this report is probably about one of its customers who illegally resold some products bought from the company a few years back. amerisource says it held its own internal investigation and ended business with that account in early 2000. the company says it cooperated with government investigators at the time, and this had no contact with those investigators since early 2001. standard & poor’s, meanwhile, downgraded shares to hold from accumulate, citing concern about the boost in profits, and saying shares are unlikely to strengthen until the situation resolved. shares are currently flat year to date. jefferies & company, david francis, on the other hand, an analyst who rates the stock a buy, says he thinks the wal-mart was “overblown” relative to the potential involvement of amerisource in any sort of criminal activity. he said today’s drop in the stock is in his view the end of the issue. lane.
>> su keenan. let’s get to the numbers now in today’s action. dow jones industrial average down on the session by 14 points at 9,644. the s&p 500 down 3 1/4. the nasdaq lower by just under four points. new york stock exchange volume, 1.4 billion shares changed hands. 1,764 moving higher, 1,441 moving lower. at the nasdaq, 1.8 billion shares changed hands. 1,601 moving higher, 1,542 moving lower. the wilshire 5000 is the broadest measure of the market, and it was down on the day by 22 points. bond-wise, the 10-year notes, a yield of 4.16%, five-year note down 5/32. the shorter end you see the three-year note down 3/32. a quick look at currencies. lots of activity for the dollar ahead of the big g-7 meeting concerning currencies action. we expect to hear a lot of talk on that. stay tuned to bloomberg television for details of that event. the price of crude oil in new york fell to a four-month low on speculation hurricane isabel will have little effect on fuel deliveries as u.s. inventories rise. gold futures rose to their highest closing price in almost seven years, as the dollar fell against the euro and yen. gold closing at $382 an ounce. merrill lynch plans to hire brokers for the first time since the equity bear market began three years ago. chief executive stanley o’neal is working to double the proportion of its retail business to 50%. by pushing kline brokerage and portfolio trading. merrill will add investment bankers, according to this report. o’neill fired almost a third of merrill’s staff in the past two years, contributing to the firm peace largest pretax profit margin in 25 years. merrill lynch is a passive minority investor in bloomberg l.p.the parent of bloomberg news. the world’s biggest distributor of the linux operating system said sales will exceed forecasts.
