Market briefing---Lane (medium)
NYSE---Deb (fast)
>> welcome to “world financial report”. i’m lane bajardi. shares of i.b.m. falling in after-hours trading after the company released its third quarter financial picture. take a look at how big blue is doing right now. it’s down $2.34 at $90.40. the company said it earned $1.02 a share, matching analysts’ average st. compiled by thomson financial. profit jumped 36% from the same period last year, helped along by strong sales in its software and global services units. acquisitions made in the past year also appeared to be aiding the company’s revenues. sales overall rose 8% to $21.5 billion. that was $300 million lighter than what wall street was looking for. revenue at the company’s hardware division slumped 1% to 6.7 billion. now, in a statement i.b.m.’s chief executive said the company is beginning to see signs that the economy has stabilized. he went on, although it is too early to say that a rebound is at hand, we are confident that we will benefit from both the pickup and i.t. spending and in economic recovery. in fact, i.b.m. said it would be adding approximately 10,000 new jobs next year to meet demand for its products and services. john joyce, i.b.m.’s chief financial officer, tempered his boss’s remarks, however, after that release was put out, saying the company was experiencing added pricing pressure from competitors. gross profit margin dipped slightly last quarter, bopth sequentially and compared with last year. the company said it spent $1.2 billion last quarter to purchase its stock . shares of i.b.m. have gained 20% this year on optimism that technology spending will improve. ahead of this news it was trading near $94, right around $94 a share at the high of the day, a 52-week high for i.b.m. shares. apple computer is out with its results for its latest quarter as well. the company reporting earnings of eight cents a share. analysts were looking for seven cents. revenue came in at $1.72 billion. thompson fpl’s estimate was for $1.44 billion. in the regular session apple closed at nearly $25 a share. it was up 1% ahead of the news. and in extended hours action, it is down, well, that’s jabil circuit, not apple computer. we don’t know. we’ll get a quote on that as soon as we can for you. kraft foods saw profit fall for the first time in two years as third quarter income dropped 6% from a year ago. craft lowered prices to meet competition. that helped lower earnings to 47 cents a share. that was a penny ahead of analysts estimates. revenue came in higher than what analysts were predicting. kraft is reaffirming its forecast for the full year and will provide a forecast for next year, coming up in january. the company reported earnings after the end of regular session trading. stock closed at $29.49 in new york, and was little changed in the extended session. stocks overall fell as some investors said third quarter results from companies such as general motors, failed to reassure them that profit growth will need estimates. let’s run down the final numbers. dow jones industrial average down nearly 10 points, 9,803. the s&p 500 lower by 2 3/4, while the nasdaq fell four points. big board volume today, you are looking at about 200 million more shares than yesterday. 1.47 billion shares changed hands. declines outpaced advancers on both the nyse and the nasdaq where 1,774 stocks declined, 1,322 advanced. now, nasdaq volume followed up by wilshire 5000 action, the broadest measure of the market, of course. it was lower by 36 points or about 1/3 of a percent. treasuries fell in new york trading after today’s economic data added to recent evidence u.s. growth is accelerating. the 10-year note lrb/32. the three year down 16/3 2:the dollar rose versus the euro and yen after today’s economic reports. in new york trading here is the latest quote from the asia pacific trading session. many of the nation’s retailers saw their businesses grow for another month in september. factoring out autos, retail sales rose for a fifth straight month, advancing by 0.3% in september. the increase in august was almost twice as much as first reported. this suggests that consumer spending is helping to drive what may be the fastest economic growth in four years. and new figures show that manufacturing in new york state expanded to its strongest level in at least two years. the empire manufacturing index rose to 33.7 this month. that’s almost twice as high as in september. economists were expecting a decline there. also today the fed’s latest regional survey found the u.s. expansion strengthened in september and early october, as retailers reported robust sales and manufacturing expanded. the survey known as the beige book found the pace of economic expansion has picked up in the 12 regional fed districts. consumer spending generally strengthened, though most districts reported recent pull back in auto sales, it said. manufacturing showed significant improvement in some districts, according to the survey. now, deborah kostroun is at the new york stock exchange, and she’s here to tell us more about the day’s session.
>> in fact, lane, we saw the market really kind of ignoring the really good earnings reports that we got after the close of trading yesterday. obviously that was intel. we had really good economic news today. retail sales coming in better than expected. also the empire manufacturing number hitting a record, really kind of shows us, just kind of coupling those two things that consumers still are continuing to spend. also semiconductors coming in, once again the philadelphia semiconductor index hitting a 52-week high. also up 65% year to date. in addition, obviously intel is still the biggest gainer in the dow jones industrial average year to date, up about 105%. right in second place behind it, caterpillar up 70%. so as you can see, intel year to date definitely one of the biggest winners. now, in addition to intel, it being at its best level in more than a year, having a positive impact on its biggest competitor a.m.d., also teradyne, they resed their earnings saying they had a narrower third quarter loss as expenses were down 30%. telecom names, some of the biggest gainers in the s&p 500. remember recently, telecom has been on the bottom of the list. they have been some of the biggest laggards. so telecom making a little bit of a turnaround after seeing several days of being lower. many of those telecom names performing well. oil services on the losing end. rowan drilling, at least one company releasing their earnings. third quarter profit was up 14%. but that was less than forecast, and so we did see oil services lower. in fact, many in the energy sector were the biggest drags on the s&p 500, along with those utility names. utility names sharply lower. harley-davidson one of the biggest net losers in today’s session. harley-davidson, though they said third quarter profit actually rose 15% after cost cutting and they boosted profit from financing some of their product sales, the company issued a production forecast that lagged expectations, and even the c.f.o. at harley-davidson saying everyone was really focusing in on their production numbers for 2004. and definitely it is going to be a decrease. and that’s what investors looked at in today’s session. the diversified banking index performed rather poorly today, even though we actually had a couple of really good earnings reports coming out from fleetboston, and also wachovia. in fact, they both said third quarter profits actually were increasing. also in today’s session, john wilson coming out and just kind of talking about the market here just a little bit. he says a few things that he says that his gut feeling is there may be some panic buying building. he says clearly the economy is surging. those intel numbers were phenomenal. one of the things he would like to see is a big volume day, something we have been lacking, though volume today actually just about on average. back to you.
>> thank you very much. deborah kostroun at the new york stock exchange. we do have breaking news right now from general mills. the minnesota-based food giant talking about a request for information from the securities and exchange commission. here is what they are saying at this point. the request relates to sales practices and its accounting practices as well. it is a formal request. this is more serious than an informal request, clearly by the words, but important to point out that they are saying this is a formal request. general mills in a statement says it believes its business and accounting practices are “proper and comply with all applicable regulations.” it also said, of course, it is cooperating with the s.e.c., but it certainly has to make this news public that the s.e.c. has made a request for information rattling to general mills sales practices and accounting. on the news, general mills shares down 89 cents at $43.92 a share. we’ll be keeping an eye on that story, bringing you more details when they become available. in the meantime, commodities, the price of crude oil in new york fell on speculation a government report will show u.s. inventories rose last week. it closed at almost $32 a barre barrel. gold futures fell for the first time in four sessions in new york trading. we see gold quoted at $372 an ounce at the close. coca-cola will report its quarterly results tomorrow before the opening bell. we’ll take a look at what wall street is expecting from the world’s largest softdrink company when we preview the numbers.
