Market briefing --- Matt (slow)
NYSE --- Lane (medium)
Viacom --- Carmen (fast)
Disney --- Su (fast)
welcome to “world financial report.” i am matt nesto. let’s bring you a recap of the day on wall street. i mentioned the final 90 minutes of trade because it had a turning effect on all three of the benchmark indexes, turning them green for the day, all up, off of earlier lows. the volume light for the second straight day on the new york stock exchange. only 1.2, down from an average of 1.7 year to date. nasdaq, similar trend, similar story, similar light volume. broader indexes, more of a mixed picture here today, no change in the composite. amex up just shy of .5% and the russell 2000, small caps with a strong day up .75%. bonds down, we mentioned that factory data from the institute of supply management, surprisingly strong dealing a blow to the 10-, five-year, three-year and two-year notes. and the dollar in new york trade bought more yen, up against the yen, but down against the euro and pound. you see little change there as things get underway in asian trade. for more on today’s market movers, we’ll go to lane bajardi, posted down at the big board today. lane?
>> thanks. and you mentioned the volume briefly. today’s new york stock exchange trading volume was among the 10 10 slowest of the year. also the fourth straight day of below-average volume. and if we look at the s&p 500 in an intraday chart, that today,% -as well, the s&p was down .7%. the index hasn’t lost more than 1% during the day since may 17. that was more than two weeks ago. the low of the day coincides with 2:30 p.m., the close of trading at the new york mercantile exchange for crude oil. crude oil rose to the high of the day right around that time and traders were focused on what happened with crude as equities slid. one head trader with s.g. cowen said he was surprised with oil being up and it was positive that the market rallied in the final hour of trading. he said the numbers from this morning were positive and with oil up so much, the fed may not be willing to raise rates as as it’s inflationary. and head of listed trading with wells fargo said that the stronger-than-expected economic data earlier in the day enabled the market to shrug off higher oil prices and new money for june contributed to the market ‘s move. new dollars from pension funds, mutual funds, individual investors, et cetera. tim heekan with thomas weisel partners said he feels the last hour of trading was computer buy programs and he didn’t see anything fundamental to account for the rebound. automakers releasing may sales figures tomorrow and on the move ahead of that, to see how they were trading today, some of the automakers include general motors, which was down.% daimlerchrysler was lower. ford was up and people will be watching to see how s.u.v. sales were affected by the gasoline prices that continued to rise. over the weekend, i paid $2.69 for unleaded premium, a record high sales number for me, there, matt and we’ll probably see those numbers rise as we move through the summer.
>> and i rejoice on this saw tooth 22, i thought it was a good deal. the viacom management shakeup a big story today. president mel karmazin resigning. class-b shares for viacom sliding today. that chart shows a lot as the shares opened down 3.2%. karmazin’s departure at viacom will enable two insiders to move up the ranks. bloomberg’s costa carmen roberts has been tracking that and has details.
>> it is a big move for these two. viacom’s chief executive sumner redstone promoting the heads of two companies, mtv and cbs networks to share the number two spot. they will be co-president and co-chief operating officers with karmazin staying on as a consultant for a couple of months. redstone says he’ll relinquish the role as c.e.o. within a few years, a decision that may pit preston and mune advise against―munvez against each other for the top spot from time to time the time warner standpoint, it’s increasingly apparent the heir-apparent to parsons and that took 18 months to evolve.
>> and guzman and company analyst david joyce saying that the sharing of leadership roles won’t last too long.
>> in the past, though, co-presidents, co-c.e.o.’s, are arrangements that do not tend to work very well and that’s why on the call with investors today, sumner redstone did say that he’d be surprised if one of them were not the c.e.o. in a few years.
>> describing mtv’s president% -during a bloomberg interview in february redstone said, “there’s probably no more creative genius in the world” and called munvez as a new superstar. munvez joined cbs in 1995 and has been chief executive there since last year. smith barney analyst wrote in a note to clients that management changes removed an overhang plaguing viacom for years and she recommends buying on weakness. there is a wild card in the mix. redstone’s 50-year-old daughter, sherry redstone, her father says she will probably inherit his control of viacom and whatever her role of control will be, her father’s shares valued at $7.5 billion and 71% of the shareholder vote, she’ll make% -her presence known. uri landesman says his guess is% that cbs’s munvez will run viacom. karmazin leaves after four years of tension with sumner redstone. su keenan looks at what’s next for the parting executive.
>> karmazin told cnbc he left viacom because he wants to be chief executive of another media company. during that interview, he said he plans to take this week off and search for a job as early as next week. angela kohler with federated analysts is one of many media insiders to focus on disney as a likely destination and says disney should trip over themselves to make the call to karmazin.
>> obvious spots open today. disney’s at a great position to take him where they’re in a need to name the next successor to michael eisner. he’d be a great candidate. we’re also that disney shareholders would approve.
>> two former disney board members, roy disney and stanley gold, say karmazin should be on a short list of candidates in disney’s succession planning and they have been critics of michael eisner. late today, disney chairman george mitchell reiterated his complete confidence in eisner. doug kass with seabreeze partners and a long position in disney stock says eisner is “pretty much entrenched at disney” and he predicts karmazin will buy viacom’s infinity assets and run his own company. howard stearn, one of the stars of infinity, says he is shocked karmazin is leaving and said, “there’s a coup d’etat going on here.” according to the former chief executive of the yes network, mel karmazin is one of the greatest c.e.o.’s to walk through the media industry. karmazin engineered the merger of infinity broadcasting into cbs to become the c.e.o. of that network and then proposed to redstone merging cbs into viacom. investors credit karmazin with cutting costs and boosting profit at the combined company, with viacom going from a loss in 2000 to a profit of $1.4 billion last year. a senior media analyst with sanford c. bernstien says it will be interesting to watch where karmazin goes and he’ll leave with plenty. he received more than $80 million in compensation in the last seven years. as of december, he held more than two million shares of class-b stock in the company and is expected to receive tens of millions of dollars in a payout over the next two years.
>> checking out this chart quickly, folks, this is the volume today. you can see it on the bottom of the circle, 16.1 million shares, 2.5 times the daily average. our next guest started to buy healthcare stocks as we move past the growth phase of the cycle.
