NYSE --- Julie (slow)
Asia Pacific markets --- Shobi (slow)
>> 9:12 a.m. in sydney. hot, sunny with high temperatures reaching 32 degrees sulsuous. you’re watching “live” from hong kong. s.b.c. communications will pay microsoft $400 million for software to deliver of it over the internet to hope to fight competition. s.b.c. is building a fiber optic network capable of providing 18 million customers with video and high-speed internet access. for microsoft, it’s the first major contract for the software. u.s. stocks resume their rally. retail and technology shares lead the indexes higher. the s&p, dow and nasdaq have all rallied. julie hyman reports from the new york stock exchange.
>> stocks were spurred higher today by sears and kmart and shares of hewlett-packard affecting the industry. starting with sears and kmart. kmart announced it was buying sears for $11 billion and both of those companies are soaring in the session. sears rising to higher than its acquisition price. the price on a per-share basis is 11% higher than its previous close. other retailers and types of companies that could benefit from the deal gaining today. danaher, which makes sears craftsman tools, whirlpool and martha stewart living omnimedia, in partnership with kmart, doing well today. other retailers gaining today, accounting for strength in the markets today. also nordstrom gaining today. the company said third-quarter profit was up 71%, ahead of analysts’ estimates and its own forecasts, boosting its annual profit forecast. as for hewlett-packard, that company said fourth-quarter profit came in ahead of forecasts and c.e.o. carly fiorina said she had taken steps to correct mistakes at the company’s server and storage businesses. those shares up better than 2.5% and affecting the technology group. tech hardware and semiconductors doing well today. contract electronics makers like selectron, jabil circuits gaining today. the semiconductors, across the board gains in stocks like l.s.i. logic, national semiconductor, micron as well as teradyne. i’m julie hyman, bloomberg news at the new york stock exchange.
>> asia stocks rise in u.s. trading. hewlett-packard’s better-than-expected earnings lifted technology shares. shares of japan’s n.e.c., taiwan’s a.u. opteronics and l.g. philips all rallied. shobi pereira joins us from tokyo with a look at the stocks to watch in japan.
>> the “nihon keizai” says that mitsubishi corporation plans to buy about 27 billion yen of isuzu motors preferred shares. the report says mitsubishi will acquire a portion of the preferred shares that isuzu sold to banks as part of a bailout in 2002. the preferred shares were issued with a provision that they could be converted to common stock. isuzu’s biggest shareholder is general motors. mitsubishi corporation already owns 15% of mitsubishi truck and bus corporation. “nikkei news” saying that the insurance company plans to seek approval from china’s government to open a new branch office in china. the aim is to sell fire and cargo coverage to japanese companies doing business in the region. the new branch would allow aioi to increase marketing of its products. the report says japanese life insurance companies are increasing business in china as the domestic non-life insurance market slows and more companies set up chinese operations. the “asahi newspaper” website reports that seibu railway may make kokudo a subsidiary. the tokyo stock exchange decided to remove shares after the company said it misstated financial documents. earnings came out for pioneer, japan’s largest maker of car navigation systems cutting its sales forecast for the fiscal year starting april 1 from 900 billion yen to one trillion yen.
>> thank you, shobi. china’s central bank raises its rate on u.s. dollar deposits. by offering higher dollar returns, the move may discourage purchases of the yuan. yuan purchases have hurt government efforts to hurt -- slow the economy. china raised the rate by a little more than 3%. the new rate takes effect today. the dollar dropped against the yen and euro, sean callow will join me and i’ll ask him if he thinks the dollar will keep falling.
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Listen Market briefing --- Cathy (fast)
Kmart --- Bob (fast)
good morning, and welcome to “ live” from hong kong. i’m catherine yang. you’ll be able to hear what john snow said in a moment. in 20 minutes, the currency strategist will tell you where he sees the dollar headed. also coming up on the show, reports on today’s new york market action and previews of what’s in store for asian trading and richard branson’s virgin blue challenges qantas as it becomes the second largest airline three years after its launch. we’ll hear from the airline’s chief executive to explain why first-half profit dropped. maybe you stayed at a motel six. how about a new hotel next to the great wall of china? we’ll learn about the expansion plan. treasury secretary john snow helped send the u.s. dollar to a record low against the euro by signaling he won’t back measures to support the dollar.
>> nobody’s devalued their way to prosperity, can’t be done. currencies ought to reflect the fundamentals of the marketplace, you have to use the marketplace.
>> the dollar fell as far as 1.3048 against the euro in new york trading on wednesday. the dollar came in within less than half a yen of a 4 1/2 year low. there is concern the record u.s. trade and budget deficits will get bigger during president bush’s second term.
>> we know the deficit has to come down and it will come down. the president’s policies will cut the deficit in half over the course of the next few years, bringing it to a level which is low, low by historical standards.
>> the falling dollar boosted gold to a 16-year high of $445.10 in new york. gold tends to rise when the dollar drons as it becomes cheaper for international investors to buy the precious metal. oil prices and a string of five straight declines. crude gains after the u.s. energy department reported heating oil and diesel supplies fell. inventories of heating oil and other distillate fuels are down 11% from a year ago. u.s. industrial production and consumer prices rise, suggesting the economy may be growing at a rate that threatens to push up inflation. the concern for investors is that may mean the federal reserve will continue raising interest rates. industrial production for october increased .7%, the most in three months. on wall street, u.s. stocks rose on omentimism about the economy. the dow and s&p rose .5%. kmart announced it is buying sears for $11 billion. hewlett-packard shares rose more than 2.5% boosted by better-than-expected earnings. asian stocks traded in the u.s. rose on hewlett-packard’s profit report which lifted optimism on the technology industry. the bank of new york a.d.r. index rose 1.6%. treasuries rose on speculation japan may sell the yen and buy u.s. debt. applied materials shares reverse ed earlier gains. splinter blames weaker demand from china, higher inventories from chipmakers. the conference call came after they said fourth-quarter profit rose to the highest in four years. net income came in 30 times bigger than last year. that’s $455 million. sales rose 80%. amat plans to buy back up to $500 million in stock in the first quarter. kmart buys sears in the largest retail merger ever. shares of both companies soared on the news. the $11 billion deal will create the nation’s third biggest retailer. the cash offer is 11% above sears’ clothe price yesterday. for more on that story, we’re joined by bob bowden, back from the company’s press conference in new york city. what’s the latest, bob?
>> he took their name. eddie lampert will be chairman of the newly created sears holdings.
>> we’re trying to blend this into one great culture. while we will be operating the stores under two name plates, the cultures we’d like to be as similar as possible.
>> management gave a number of reasons a combined sears, kmart would outperform the brands on their own. first, the brands, including kenmore, craftsman, lands’ end and diehard. the combined company plans to sell over $200 more a year because of the cross selling. the chairman of the combined company said, if you have the greatest store in the world and that’s not where the customers are, you have a problem. and a typical sears sells $80 more per square foot than a kmart. they say moving the better sears brands into the better kmart locations will produce synergies. management said that several hundred kmarts will become sears. analyst gary balloter for u.b.s.
>> the deal makes sense for sears shareholders to give them the opportunity to expand the brands into the kmart stores. whether this is what kmart shareholders were looking for, we’ll see over time.
>> the credit rating services are taking a dim view of the ferger. standard, pores said it would probably cut the rating below investment grade. moody’s cut the rating one level. on the day, kmart up 7.69% in the wednesday session. sears shares up 17.23% in what was a large retail rally. back to you in hong kong.
>> more choices for consumers at one shop. in world news, the u.s. military says about 75% of mosul’s police stations are secured. u.s. and iraqi forces stepped up operations in mosul. a flare up in violence saw rebels raid police buildings. mortar shells hit two areas near the main government building and city center, killing three civilians, wounding 25. in western iraq, 31 police officers are kidnapped. associated press reports the policemen were ambushed by gunman as the officers returned from training in jordan. there’s no claim of responsibility for the kidnappings. in the past, insurgents have targeted members of iraqi security forces for cooperating with u.s.-led coalition. the terrorists group led by abu musab al-zarqawi claimed responsibility for previous killings. there are reports that the palestinian prime minister has ordered an investigation into yasser arafat’s death. the associated press reports that a statement from the office says a commission will take testimony from the palestinian and other arab doctors. arafat’s urologist called forautopsy. the hospital refuses to reveal his cause of death or hand over medical records to anyone but arafat’s minister, and she has remained silent. back to business, hong kong’s unemployment rate probably fell to its lowest level in nearly three years last month, retailers, hotels and restaurants hired workers to cope with influx of tourists from china. economists surveyed by bloomberg expect hong kong’s jobless rate dropped to 6.7%. the jobs fixture robbery released at 5:15 local time. central banks in japan and the philippines will probably leave interest rates unchanged to encourage economic growth. you’re watching “ live.”
