Market briefing---Matt (slow)
NYSE---Bob (fast)
>> welcome to “world financial report.” i’m matt nesto. the federal reserve’s policy setting group ended the first meeting of the year without changing interest rates, no prices there. but the federal open market committee did drop its pledge to hold interest rates low for a “considerable period.” so the phrase that has been included in every policy statement since august of last year has now been removed and replaced by “within inflation quite low and resource use slack, the committee believes that it could be patient in removing its policy accommodation.” the fed also says that output is expanding briskly and that new hiring remains subdued. but the panel, led by chairman greenspan says other indicators suggest an improvement in the labor market. only two of 23 firms that trade directly with the traditional bank had expected the fed to drop the “considerable period” wording, so the change to the statement caught the markets off guard.
>> the economy is getting better and the usually saying is when the party gets going god the fed is posed to take the punch bell way, not pike it and keep interest rates down too low too long would have been a problem. this is a good move, a pig move than i would have expected. and i think that fore tells the long term rates going up more.
>> i think they reviewed the various economic statistics and are, it’s clear they want to signal the market that they will be, they are thinking about raising the funds targets sooner than a lot of participants in the marketplace had been thinking.
>> i think the guidance was a little more negative in the market. it is inevitable that the fed would eventually have to say, you know, there will be a period where we will have to raise rates. whale it knew it was coming, didn’t want to believe it was today.
>> treasury prices, which had been higher, plunged after the decision was released. stocks , of course, also struggling following bonds lower. today if i could paint a picture, you will notice that an intraday chart all three of these particular indexes will show you the time no surprises there, this is the dow on the left falling almost 200 points from the high of about 10,650 finishing as we pointed out at 10,468. a similar decline in terms of percentages and volatility for the nasdaq―excuse me, for the s&p and nasdaq. and it is also worth looking at the bond market here. i’m showing you bond prices falling. i will give you a glimpse at the 10-year note, for example. again this is the bond price falling meaning the yield of course is rising at the same time. 10, five, three, two all lower as a result of the action to the news. you saw the intraday and now we will go to bob bowdon who is at the nyse for what was really moving.
>> i want to get to one bit of reaction to regarding this news today. it took the floor by surprise. i asked a few guys before 2:15 if anyone cared about the announcement and everyone said no, it doesn’t matter around they shrugged and said no impact. then once everything hit the fan you might say they said, well, i guess that shows what we know. we are just floor traders. but this is a reaction from a person from deutsche asset, a real investor. this may trigger a big selloff. it is less of an incentive to hold treasury and we could see the 10-year yield moving up 25 basis points pretty fast. that of course a reference to the reaction in the treasury market. apart from the issue of the federal announcement i want to get to some breaking news regarding earnings. hartford financial had fourth quarter earnings beating estimates, $1.59 reported against $1.47 expected. the forecast, it raised for full year 2004 now seeing $5.80 to $6.10 against $7.70 to the $6 range. so it took the 30 cent range and moved up 10 cents. also perk and elmer, computer company out. shares up 10 cents. they reported 24 cents a share against 22 expected. and they are predicting first quarter revenues―excuse me -- earning, in the range of 10 to 14 cents, analysts looking for 13. the mid point is below the 13 cent estimate for them. the great lakes chemical corporation out with its fourth quarter earnings. shares unchanged. they reported less than expected one cent per share operating earnings for fourth quarter. a loss a good deal more than that. i don’t have the number on net income. but operating earnings were at one they want a share against the five cent expectation. to wrop up the day, certainly a big change, attack, as you may say in the field of sailing when you go in one direction and now you are in another direction, that what happened at 2:15 when the fed announcement was released. that is the latest. back to you.
>> we look at some of the other issues within this marketplace today, the federal preserve’s decision to hold rates at that -- reserve decision is being bolstered by economic data and weaker than expected data at that. two reports out “today show” that the u.s. economy slowed unexpectedly in the fourth quarter. durable goods orders remained flat in december. economists had been expecting a jump of 2% in orders designed to last at least three years. that makes them durable. new home sales fell to the lowest level in eight months in december. so a double whammy surprise of news. purchases of the new homes dropped 5.1% to 1.06 million. the disappointing economic news with the weaker than expected december payroll report could force economists to revise their estimates for fourth quarter growth lower. fourth quarter g.d.p. due out friday. we will now give you the official numbers. 10,468, 1.3%, dow and s&p 1.8% for the nasdaq. we look at the volume on the big board. 1.8 billion shares, way above average. the 1.3 billion is the average last six months. nasdaq volume strong, 2.3 billion shares and broader indexes red arrows. small cap index 1.9% lower, russell 2000. the total share, 1.% lower, 160 point decline for the wilshire. we talked about treasury prices on the slide in those yields. there are the 10 almost back to 4.20. five-year back to 3.21. shorter end of the curb also seeing weakness and this is with the fed unexpectedly dropping that “considerable period” from its policy statement. at the same time that stocks and bonds were falling not surprisingly the dollar getting a big boost and rising against its major peers. what you are looking at now is the latest trade. you see the euro down a little bit. 1.2455, yen, the dollar buying less yen. so that unchanged before our eyes. so not really holding the gains and the pound down a little bit, .1%. the gains were sharper during u.s. trade. in other news tough―veritas software fell 13% in after hours after saying sales may miss mates. veritas is the world’s biggest independent maker of data storage programs. the company says first quarter sales will be about $455 to $470 million, less than the $467 million that analysts were looking for or surrounding it to the low end. as for the last quarter net income 24 cents a share, sales up. that compares to a loss a year ago. operating earnings top forecast by a penny. stay with us, because there’s more after this break.
