Market briefing --- Mike (medium)
NYSE --- Bob (fast)
welcome to “world financial report.” i’m michael mckee. with less than a day to go, polls show the presidential race in the united states is too close to call. while that’s happened before, one thing hasn’t, according to the man who does the gallup poll.
>> we have never had an election where our final gallup poll was an absolute dead heat. usually one candidate is one or two points ahead of the other. we’ve called it a statistical tie but when we did the final modeling last night, it came out 49 to 49.
>> the election may draw the largest turnout since the vietnam war. analysts say it is possible we won’t have a clear winner tomorrow. univest fund manager james fisher says the election is keeping investors from making any specific moves as they wait to see what happens.
>> on wednesday morning, stocks rise. it’s just the uncertainty of who the president will be will be removed and that’s positive for the stock market .
>> some who see a rally the day after are less optimistic in the longer term.
>> i think the markets are poised to try to trade higher here albeit in the context of an overall range-bound market . i don’t see anything that will knock us out of a trading range for a few years.
>> some economists say it doesn’t matter who wins the election.
>> the kerry plan starts with a bush plan, takes back some of the tax increases and more than spends it. in that sense, there’s not a huge difference between their approaches to the economy.
>> neither bush or kerry may have the weapons to jumpstart growth and stimulate the economy. the interest rate is already near a 40-year low and president bush has cut taxes $1.7 trillion, boosting government expenditures, as well. the record budget deficit makes further tax cuts and spending risky. some investors say they have picked individual stocks that will do well with president bush or senator kerry.
>> analysts say if president bush wins re-election, bet on the energy companies. nabors industries and el paso are among stocks that may rise if bush wins re-election because of bush’s push to increase exploration. as jeff quinlan says, “bush is good for energy.” and the anticipated move to keep the president’s tax cuts on dividends in place with increased demand for stocks with the largest payouts such as utility company duke energy. paul lieberman with bear stears says bush and kerry each have a state of setted policies that can be interpreted as either beneficial or detrimental to u.s. firms and industries. many analysts say energy stocks would fare differently under kerry than under bush.
>> oil and gas and energy services and equipment could experience unfavorable condition s for―under a kerry administration because of the willingness of a kerry administration to curb demand for oil either through gas taxes or something along those lines.
>> kerry says he favors looking for alternative energy resources so analysts look to other stocks where they expect gains if kerry wins. if kerry’s pledge to reduce tax cuts for the wealthy and reduce taxes on the middle class could bolster shares at retailers such as kohl’s. on the other hand, luxury merchants such as coach may be hurt. a kerry victory could also move stocks in the drug industry. kerry wants to cut prescription drug costs, which may be a boon to generic drugmakers. strategists at brokerage houses have all written notes to help gauge stocks.
>> today was a day of waiting with volume low and the major indexes all moving less than .3%. the dow jones industrials finishing 27 points higher, the s&p less than a point and the nasdaq up by five points. on the eve of this u.s. presidential election, trading activity, as we mentioned, light at the new york stock exchange. for more on that, here’s a report from bob bowden at the big board.
>> it was a light day of trading in the pre-election monday. volume at the new york stock% exchange came in below 1.4 billion shares. here you see the last month of volume at the nyse. the low point is a columbus day holiday. in october, there were only five sessions below 1.4 billion and now we’ve started november, we have another one. another issue today, oil prices falling below $50 a barrel intraday before rebounding in electronic trading, finishing a little above $50 but oil investors are used to the all-time records in oil prices and anything otherwise is bearish for those stocks as you see on the list there, oil services, in particular, down between 1% and 2%. humana, the h.m.o., raising its quarterly forecast. humana shares, by rising 6.25%, made them the third best performing s&p 500 stock. the enthusiasm did not flow through to other h.m.o.’s on the day like united technologies, united health, wellpoint, coventry, down on the day, not anticipating the humana enthusiasm. one analyst said guidant may not appreciate because of speculation it may be bought and quarterly results may be an impediment on future stock price improvements. that stock down 5.5% on monday. other medical device makers took a hit, as well, including medtronic and boston scientific.
>> crude oil fell below $50 a barrel in new york for the first time since october 5 on speculation growth in demand will ease as supplies increase. we didn’t close under $50, however, finishing at $50.22 a barely for december oil. currently, crude oil trading down to $50.13, lower by $1.63. unleaded gasoline, heating oil and nasdaq futures all down. manufacturing expanded at the slowest pace in over a year in october in the u.s. fewer factories reporting production gains suggesting higher energy prices may be beginning to restrain growth. the institute for supply management’s factory index for last month dropped to 56.8 from 58.5 in september. economists say some of the slowing may be due to uncertainty.
>> i think you have to take into account the fact that most of the data we see is influenced by the fact that c.e.o.’s are not certain who will win the election. they’re not certain what energy prices will do in the coming months and if c.e.o.’s are uncertain, they’ll hold back on ordering things and employing more people and be more cautious in building inventory.
>> a government report suggests americans are dipping into savings at a time when energy bills are on the rise. consumer spending rebounding in september from a decline the previous month. the increase tripled the gain in incomes for the month. the commerce department says income growth slowed last month because of the hurricanes that hit the southeast. the savings rate falling to the second lowest ever. treasuries fell as the drop in crude prices suggested high energy costs may not damage economic growth as much as forecast. the 10-year note down about .3 at this hour, the yield up five basis points to 4.07%. on the middle of the curve, the belly of the curve, down about a quarter, yield of 3.33%. on the shorter end of the curve, down 1/16 with the yield at 2.59%. freshmen. release earnings once again. its first report due out in the second quarter of 2005. the mortgage financier has been cleaning up accounting and finagating―financial reporting. a change in interest rates eventually led to a $5 billion revision up in their bookkeeping. first-quarter profit at food distributor cisco rose over 8% even after paying for the surge in energy and food costs. we’ll talk to the c.e.o. coming up. sneaders
