Market briefing --- Lane (slow)
NYSE --- Deb (fast)
Richard Grasso --- Allan (slow)
Dreamworks --- June (slow)
>> starbucks reporting numbers this quarter. we’ll go live to one of their coffee shops to speak with starbucks c.e.o., orrin smith. we’ll look at the numbers from the new york stock exchange -- you can see the weakness as the day went on, closing at the low of the day. traders have concern about that when that happens, especially when the wilshire is down 1.5%. deborah kostroun is at the new york stock exchange where it was a pretty busy day there, busiest day in a month, deb?
>> that is right, busiest day in a month here at the new york stock exchange. stocks fall for a fifth day in six and what led to all that activity, the huge turnaround we saw in today’s session, the volume really at 1.6, almost 1.7 shares. however, most of that volume was down volume, something traders don’t like to see. it looked like a lot of institutional activity was in the market because you saw a lot of brokers really moving around on the trading floor. that’s when you know you have institutions going into the market . also, it was a 190-point turnaround. at the top, we saw the dow jones industrial average at one time up 88 points. by the close, down 102 points. that, a very large move. much of that move came in the last hour of trading. peter henderson of fleet specialists today said what today tells you is maybe the market doesn’t believe that the economy is moving along at the good clip we think it is. also, the s&p 500, closing below its 200-day moving average in today’s session. and all of this big move downward came after dow members actually posted better-than-expected earnings from many of the companies like j.p. morgan, also general motors. united technologies raised their 2004 earnings forecast and although we had some good movement there, you also saw the downward pressure mainly from capital good stocks like 3m and caterpillar. back to you, lane.
>> deborah kostroun at the new york stock exchange. eight states and new york city today sued five of the nation’s largest power companies in an effort to force a 30% reduction in carbon dioxide emissions. after the press conference about the global warming lawsuits, allan dodds frank caught up with new york attorney general eliot% -spitzer to get his reaction to the latest legal maneuver by former new york stock exchange chairman, richard grasso.
>> when richard grasso asked a federal judge yesterday to order the exchange to pay to him more than $50 million, he also claimed he had been defamed by john reed, the exchange’s new chairman. grasso’s filing said that a secret report done for the stock exchange by former prosecutor dan web would exonerate him while making the exchange and reed look bad. so far, the exchange has refused to release the report. i asked new york attorney general eliot spitzer about grasso and the webb report.
>> let me say this, i have read the webb report. it was one of the early documents we examined before we then did our own significant examination. but there is absolutely no tension between the webb report and the allegations we make in our complaint and therefore i think mr. grasso’s characterization is not one that i think is an accurate statement about the webb report.
>> there may be more filings in the case this week, but the next big step will be the federal court decision about whether the case is heard in federal court or state court.
>> any idea when we’ll hear which court it will be in?
>> the judge is still going over it. i expect more filings by ken langone, the former director in charge of the compensation commission. he hasn’t yet responded and might file his own counterclaim against the stock exchange. we’ll wait and see.
>> thank you very much.% the big after-the-bell earnings report from ebay. shares fell as much as 6% in extended trading. the company says profit forecasts for the current quarter and full year will be below analysts’ estimates. the stock after-hours down over $4. in the last quarter ebay doubled. that’s up from 14 cents a share earlier. excluding costs, ebay’s profit came in at 29 cents a share, two cents ahead of estimates. and ebay’s c.e.o. meg whitman about our guest in about an hour and 24 minutes. out with earnings, qualcomm’s profit more than doubling last quarter and topping analysts’ estimates in the current quarter. shares are rising in extended-hours’ trade by 15 cents. net income topped analysts’ estimates. sales rose for a ninth straight quarter. qualcomm benefiting from rising global demands for phones based on the wireless cdma technology. qualcomm said fourth-quarter earnings grew 54 to 57 cents a share, excluding items, above analysts’ estimates. the animation unit of dreamworks is going public with the goal of challenging walt disney. june grasso has more.
>> dreamworks animation is known for capturing the imaginations of children and adults. now the company wants to capture as much as $650 million from investors. the sale would be the biggest entertainment company i.p.o. in nine years. this follows the release in may of dreamworks’ highest grossing film, “shrek 2”. the company had the fourth biggest market share of the top films showing in the united states and canada last weekend. dreamworks animation will separate from its parent, the movie studio started by jeffrey katzenberg and david geffen. managing partner at media tech capital partners says separating from the parent company was the only solution for dreamworks animation.%
>> they have a blockbuster in the animation right now and they’re going to try to capitalize on it. they have a big debt and unhappy shareholders, paul allen, co-founder of microsoft, locked in with a significant investment and the only thing they can do is see if they can get the public on board.
>> dreamworks plans to use the cash to double its film production to compete with pixar animation studios and disney. it ranked number eight in the u.s. market share among hollywood studio, dis disney, number one. but disney may lose its film distribution agreement with pixar and hasn’t had much luck with its last animation films. dreamworks has released eight films grossing close to $800 million in the u.s. the company only made money in two out of the last five years. goldman sachs and j.p. morganchase are managing the sale.
>> shares of imclone sank after the company reported second-quarter profits. the stock ending the day down 19%. imclone makes the colon cancer drug erbitux and reported profits of 29 cents a share, ahead of analysts’ expectations. the company declined to issue a forecast of erbitux sales.
>> it’s very difficult to predict something such as erbitux sales in such a short period after launch. there are only so many data points, just a few months, to be able to project so it’s a difficult thing to do. we have not provided guidance because it is so difficult. we only want to guide if we can guide with accurate information and i think because of that and the difficulty to predict --
>> yesterday, imclone said it would wait until next year to seek u.s. approval for a new use of erbitux in head and neck cancer. j.p. morganchase lost more than $500 million last quarter after setting aside cash to settle lawsuits stemming from corporate scandals. we talk with the bank’s chief financial officer about when it may be able to put that behind them, coming up.
