Market briefing --- Bob (fast)
Nasdaq --- June (slow)
>> you are watching “world financial report.” recapping the day on wall street, stocks moving higher on friday with the dow up and the s&p―all three major indexes up about .4%. the dow, you see, at 9933. insurance stocks tumbled for a second day on friday as the industry responded to a lawsuit brought by new york attorney general eliot spitzer. today, marsh & mclennan, world’s largest insurance broker, suspended collecting the contingent commissions from insurers targeted in the suit. spitzer called the fees lucrative paves. according to some analysts, the payments would have accounted for more than 1/4 of the company’s profit next year. hank greenberg said his company would probably stop paying the fees cited by the attorney general but doubts it will have an effect on how much the insurance industry charges customers.
>> i don’t think it will have a material impact on the pricing in the insurance industry. i think that will continue as i don’t think it will make rates go up or down. i think that will be more reflective of experience overall in the industry.
>> two a.i.g. executives were arrested as part of spitzer’s investigation. in a conference call on friday, hank greenberg downplayed the extent of the corruption and said the company is cooperating fully. ace limited, an insurance company run by greenberg’s son, evan, is also implicated. a vice president at the company became the third person to plead guilty in the spitzer probe. shares in national financial partners fell, as well, down 10%. the firm said it received two subpoenas related to the insurance suit. but it was a different story for transportation stocks on the day, especially some of the truckers. our june grasso has details from the nasdaq marketsite in times square.
>> transportation stocks were the leading economic group at the nasdaq today. probably led by j.b. hunt transport services, better-than-expected earnings and sales. the second largest u.s. trucker said third-quarter profit rose 46% as the company raised rates and carried more freight with increased industrial production. it’s the first u.s. trucker to report third-quarter profit and raised rates 9.3% saying it was able to charge higher prices because demand rose faster than the supply of equipment and drivers to move cargo and despite historic fuel prices. if you look at the transportation index, you’ll see it was up 45.87 points. some of the leading movers in that index were warner enterprises, landstar system, c.h. robinson and yellow roadway sun microsystems led tech shares higher after the number three u.s. maker of servers to run corporate networks said first-quarter profit beat analysts’ estimates. stocks such as compuware, siebel systems and research in motion were the largest percentage gainers in the nasdaq 100 and research in motion reached a 52-week high today. shares of netflix, largest mail order video rental service, plunged after the company said it would cut its monthly subscription price as amazon.com will be offering a competing service and video store chain blockbuster started its only online service in august. starting in november, netflix will offer a monthly price of $17.99, $3 less than it does now. i’m june grasso, bloomberg news at the nasdaq marketsite in times square.
>> moving on to economic news, higher oil prices and sluggish job growth did not keep americans from spending. retail sales rose in september more than 1.5%, the biggest gain in six months. if you back out autos, retail sales sales rose further for the fifth straight month. the university of michigan’s preliminary sentiment index fell to its lowest level since april of 2003, coming in at 87.5, well below expectations. the presidential election is weighing on the consumer. president bush and senator john kerry are locked in a tight race for the white house. still, with all the uncertainty about jobs, oil and the election, economists say the consumer is hanging in there.
>> consumers have hung tough all throughout the past several years and continue to spend. i suspect, though, this will be the best retailing number we’ll get for a few months. the job market has weakened a bit. the higher energy prices will start flowing through so i suspect this will be about the best number we get for at least the foreseeable future.
>> in other economic news, wholesale inflation rose at the fastest pace in three months, even if you strip out food and energy, core producer prices, what we call it when you strip away food and energy, increased 3.10%, suggesting companies are passing on higher costs for raw materials. including food and energy, producer prices rose .1%. and the federal reserve says demand for electricity fueled the rise in industrial production last month. the output from utilities overcame declines at many factories. checking u.s. treasuries on the day -- up next, the recap of the overseas’ market . asian stocks ended the week on a sour note and northeastern benchmarks didn’t fare much better. details and a preview of the week ahead on the other side of the break.
