Market briefing---Bob (fast)
Focus on Alcan---Su (fast)
NYSE----Deb (fast)
>> welcome back to final half hour of “world financial report”. i’m bob bowden recapping the day on wall street. it was a rally day. we saw the dow jones industrial average up 146 points, 1.6% to 9,216. s&p 500 up 1.9%, up 18.5 points, almost 19 points to 1,04. the nasdaq was the big winner of the day, up 3.44%, 57 points, breaking the 1700 barrier to the finish of 1,720. checking big board most actives, lucent up a penny, liberty media up 74 cents. the company’s credit rating may be lowered to below investment grade or junk by moody’s investor service after the company said it would pay almost 8 million to buy the rest of home chopping channel qbc. also time warner shares up 46 cents on the day. alcan, the world’s second biggest aluminum producer made a hostile offer to buy pechiney for 3.9 billion. the stock and cash offer is 21% above pechiney’s friday closing price. alcan wants to cut costs and boost sales to airplane makers after a collapse in metals prices. pechiney says the offer is unfriendly and undervalued the company. american depostory rekreepts of french aluminum companies sold 26% to a new high for the year. alcan tried to buy pechiney four years ago but european regulators rejected the deal. su keenan joins me to look at what’s different this time.
>> analysts say alcan’s willingness to divest assets and the change in the competitive environment are among the big differences in the company’s latest attempt to buy rival pechiney. alcan’s original plan to buy the french aluminum maker was abandoned three years ago after european regulators opposed the deal. to make this deal work analysts say alcan may now give up control of two aluminum rolling mills that are part of a german joint venture with nors key high dro.
>> we went through quite an extended valuation several years ago. for us the road map has been identified. when we look at the businesses they represent 5% of the revenues of the two companies combined. so this will be something which will reduce our size a little bit. but still, lower the effort considering the great opportunities we have in the businesses we’ll be keeping.
>> alcan’s c.e.o. wants to create a company that would overtake alcoa as the world’s biggest aluminum company based on sales. makers of aluminum which are used in everything from beer cans to aircraft are trying to save money after prices plunged by 1/5 from early 2000. now, victor lazarovich with nesbitt burns says today’s deal is different from several years ago. alcan’s management has changed and the industry itself has changed. he has cut both his ratings on the companies, while giving his support to the merger. he said, “it makes tremendous sense. the outlook for aerospace has weakened, he says, and the outlook for the whole sector has weakened. even that it makes the deal more compelling than before. a portfolio manager at toronto’s mfc global management which eens 100,000 shares of alcan questions the hostile nature of the bid. she says that surprises me since the companies were friends the one time. now, pechiney’s c.e.o. last month told investors in london while he still favored a merger with alcan he didn’t think regulators would have changed thear minds since 2000. this is a story bloomberg continues to follow.
>> thank you, see. su keenan on the aluminum wars. deborah kostroun is at the big board with an update on trading there today, deborah.
>> bob, you know, one of the reasons we saw this market moving up sharply higher, that was the fact that we expect a lot of improvement in the economy and also corporate profit, given some of the reports coming out today. jus tips keating, chief investment officer says we expect a market improvement in economic growth in the second half and also into 2004 because rarely in u.s. history has the economy seen so much stimulus combined at the same time. he also says this should put us on the path for an improving labor market, also higher complat profits and higher stock prices. higher corporate profits will get more of an idea into the second quarter profits. thompson financial expects second quarter profits to have risen 5.3%, tomorrow as he was talking about alcan, alcoa the first dow component to be reporting their quarterly earnings after the closing bell. then we’ll get a kind of a slough of earnings reports over next couple of weeks, about 1/4 of the companies in the s&p 500 will be reporting their earnings.
>> now, as companies reporting their earnings, a couple of companies coming out today and cutting their profit outlook. schering-plough one of those, schering-plough is the maker of claritin. they lost their patent protection last year saying their second quarter profit fell more than expected. earnings in the second half of this year will lag, that as their generic medicines erose sales. profits dropping to about 12 cents a share. analysts were expecting 18 cents a share. b m c the wear, another company saying their first quarter numbers not going to come in as expected. they are expecting a first quarter loss at contract of more than $1 million decline. in fact, they are expecting a net loss of 1 cent to 4 cents a share in the quarter they previously said they would have a break even to a profit of five cents a share. bmc software one of the only software companies that was lower on the day. microsoft really kind of leading the way up. microsoft had quite a bit of news coming out, and that, of course, being that some of their p.c. sales actually increasing over in japan. not only that, they potentially may be handing out a quarterly dividend as well. along with the software, semiconductors some of the biggest gainers in the s&p 500. bob, back to you.
>> deborah kostroun. when we come back, increased optimism about the pace of the economy may boost japanese stocks for a second day this week. for a preview of the asian stocks to watch ahead of japan’s market open we’ll go to tokyo when weem back after this commercial break.
