Market briefing---Lane (medium)
NYSE---Deb (fast)
Retail situation---Carmen (fast)
Nasdaq---Anthony (slow)
welcome to “world financial report”. i’m lane bajardi in new york. stocks fell across the board on profit concerns. drugs, semiconductor and software shares were the weakest groups. let’s run down the numbers for you. the dow jones industrial average down 120 points at 9,036. the s&p 500 lower by 13 1/2 points to 988. nasdaq composite down 31 points to 1,715. volume at the new york stock exchange, 1.44 billion, declines overwhel advancers i a two to one margin plus. nasdaq volume same story, two to one margin in favor of the lose, 1.7 billion shares changed hands. wilshire 5000 is the broadest measure of the market, lower by 1 1/3 of a percent. shorter term government debt rose as stocks fell and unemployment claims rose unexpectedly. see the 10-year note on the move by a quarter point. three-year note up 1/8 of a point, two-year note was better by& -- 2/32. today’s economic news helped send stocks lower as well. deborah kostroun is at the new york stock exchange with more on the action there. deb.
>> tom madden oversees 200 billion as vice chairman of investment management at federated investors, talking about today and saying we really cannot have a sustainable recovery, better corporate profits and an improved outlook for common stocks unless the job picture gets better. today’s initial jobless claims didn’t help things out. he says after the pace of the second quarter advance nobody should really be surprised to see the market correct as we did today. he says there is lots of market history that would suggest that the market should slow down its pace in sales. he says economic data over the next six weeks will be the driving force behind the stock market, and in fact he mentions industrial machinery materials and consumer cyclicals are likely to show a little more strength than the bears have been anticipating. also remember tomorrow before the opening bell we will get earnings from g.e. to give us a little more insight into some of those industrials. some of the big stories for today, not only the initial jobless claims but also retail and semiconductors also really not that much of a story. but it was the biggest laggard in the s&p 500. we heard about micron. they actually―texas instruments actually selling about 24.7 mine shares or about 43% of its stake in micron. so both of those stocks actually lower into today’s session, along with many of the other semiconductors. one of the worst performers. the best performer and the only one really hanging on was the softdrinks, as coca-cola, the big of the gainer in the dow jones industrial average after pepsi’s earnings.
>> deborah kostroun at the big board. many u.s. retail stores say june sales were disappointing, as concerns over unemployment slowed down spending and rainy weather cooled shoppers on buying summer items. carmen roberts joins us with a closer look at the retail situation.
>> lane, june is typically a clearance month for spring and summer goods. stores get ready for back-to-school shopping and fall items. last month a lot of chain stores had problems moving that merchandise out the door. the bank of tokyo mitsubishi says u.s. retail sales rose 2.4% in june, less than half of last year’s number. kohl’s and other merchants had to cut prices more than expkted to attract shoppers trying to trim budgets, and to win back shoppers from those low priced chains. discount department store kohl’s saw sales fall 2.4%, leading it to cut its second quarter earnings estimate. sales at wal-mart, the world’s biggest retailer came in at the low end of its 2.4% prediction. costco sales rose 5%, b.j. rose 6%, estimate, 3.4%. sears says sales fell 1.8% hurt by slower air conditioning and appliance sales. federated said sales dropped more than an expected 2%. however, j c pennies says sales topped estimates rising 1/10 of a percent, rather than falling 4/10. on the specialty side, the gap continues with its turn around story. sales at the largest ugs chain store rose 10%, analysts expecting 7.8. limited sales climbed 5%. analysts only expected 1.6% there. eric meyers, an analyst for federated investors with $196 billion in assets, says that the concern now is will there be a glut in inventory, especially on the apparel side.
>> we’ve heard kohl’s and wal-mart talk about inventories being high coming out of q1. the idea is that they have sawed through a lot of that in the last couple of months but that clearly remains the issue. ultimately greater inventory equals lower gross margins equals lower profits, lower earnings.
>> looking ahead, analyst jeff klinefelter at u.s. bancorp piper jaffray expects back-to-school shopping in july and august to show modest year over year improvement.
>> we have a tax rebate and tax cut coming through. it’s not as significant in size as it was two years ago but it’s still going to hit 25 million families with children with a check of a size ranging somewhere in the mid to high hundreds. that will hit right about back to school.
>> he said that combined with better fashion trends, better inventory control and easier year-over-year comparisons should make a better second half for retailers. as a note, klinefelter and myers do not own any of the stocks that they discussed. lane, back to you.
>> carmen roberts. juniper networks reported second quarter earnings after the close of trading. the world’s number two maker of equipment to direct internet traffic said net income rose to $13.6 million, or three cents a share. that beat wall street expectations wi a penny a share. sales rose 41% to over $165 million. also topping analysts’ expectations. juniper lagged cisco systems in sales of routers but the company is benefit frg rising demand overseas. this is juniper’s third consecutive quarter of earnings after net losses in five of the preceding six quarters. in the regular session, we take a look at juniper which was down 5% in a down market of $14.11. however, it is up 1% or 14 cents in extended hours trading. also reporting, sonus networks, the makers of telecom gear and computer program said its loss narrowed at some costs fell. reporting a net loss of one cent a share, analysts expected a loss of two cents a share. sales were unchanged at $21.4 million, topping wall street expectations. in the regular session sonus networks down 10 2/3%. in the extended trading it’s on the move higher by 10.8%.
>> the nasdaq led the major averages lower today. anthony massucci at the market site tells us what traders had to say about that move.
>> the nasdaq dropping for the first time this week, and with that drop in mind, after yahoo reported somewhat disappointing outlook for investors. let’s tell you what analysts are looking for. dan varrow, a fund manager at pal said saying markets were overdue for a pullback. he said yahoo didn’t blow the number out. it’s the casualty of excess valuation. what he means by that, the stock price getting maybe ahead of what the company would come in with. he said investors are concerned at this point with valuation, especially with tech stocks . he thinks markets have gone too far too quickly. tech he thinks is moving in anticipation of a recovery which may be slower than what some folks thought. with that in mind franklyn moore at ariel capital capital told us he thinks the market has come too far too fast as well, saying he thinks the market will be higher at the end of the year. so even with that in mind, seeing a higher market by the end of the year, and charles crane at victory sbsf said tech stocks are the most prominent. at this point they are the most extend and most likely to go backward. that’s what we saw today as the nasdaq fell just under 2%. let me show you some of the big movers, though. p.d.i. incorporated, pdii the beinger, a big move higher, up more than $6-a drug and sales marketing company saying earnings would be 30 cents better than what they had expected and they got a contract with glaxo smith kline so that helped boost the shares. coin star, this stock down more than $5, a 30% drop. they make the machines you drop your change in to get money back saying safeway will no longer be using its machines. back to you in the studio.
>> anthony massucci at the nasdaq. we have breaking news from dupont which has been ordered to pay a jury award of almost $4 million, to a florida woman who argued the company wa drew a fungicide that caused birth defects in her child t child was born without eyes after her mother was exposed to benlate at a strawberry farm. general election’ earnings are out tomorrow.the next guest has the information you need before the report comes out. wayne wilbanks is chief investment officer at wilbanks, smith & thomas.
