Market briefing---Lane (medium)
Retail sales---Sue (fast)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
>> welcome once again to “world financial report”. we are glad you joined us once again. i’m lane bajardi and here is what’s happening. in economic news today, fresh signs that growth is picking up steam. retail sales increased 1.4% last month, the sharpest gain since march, paced by demand for autos clothing and electronics. backing out cars and trucks, the value of goods sold climbed 8/10 of a percent. in both cases the gains were larger than expected by economists in a bloomberg sur vampt the government also reports that prices of imported goods rose for a second straight month in july, the half percent increase being led by higher cost for oil, food and industrial supplies. inventories at u.s. businesses rose in june for the first time in three months as retailers,en p kourged by increase necessary demand, replenished supplies. value of stockpiles at manufacturers, retailers and wholesalers rose 1/10 of a percent t bloomberg survey was looking for a drop of 1/10 of 1 percent. the increase was the first since back in march. today’s retail sales numbers sent treasuries tumbling. the yield on the 10-year note was pushed to its highest close in a year on the latest sign low interest rates and tax cuts are stoking growth that may lead to higher inflation. 10-year note down more than a full point. five-year note down 20/32, the three-year note down 13-32, two-year note down 6/32. stocks fell led by drug shares today t dow jones industrial average down 38 points. s&p down six. nasdaq composite barely moving, lower by 4/10 of a point. big board volume once again, light summertime volume, well below the six-month average, 1.2 billion sharps changing hands, 18 to 13 in favor of declines. on the nasdaq, 1.4 billion shares moving. and advancers over declines, 16 to 14. the wilshire 5000, broadest measure of the market down on the day by a half percent, 49 points. dollar was mixed against the euro/dollar and the yen. you see how the latest trade was. not much movement. closer look at the surge in u.s. retail sales for july. as we mentioned it is the biggest boost in four months. bloomberg’s su keenan has been following the numbers. she has the latest on earnings and outlook from two of the world’s largest chains. we’ve got wal-mart, of course, the biggest, and federated department stores, the biggest department store chain.
>> we start with wal-mart, the world’s largest retailer came in with sales slightly below analyst and investor expectations, yet investors say the big story is the boost wal-mart got from income at its sams club warehouse chain. sam’s in a surge in overseas safls pushed wal-mart’s second quarter profit 15% higher to 52 cents a share, seven cents more than wal-mart earned a year earlier. charles ryan who helps manage $11 billion for bb&t asset management says the company is improving its balance sheet and profit margins. he sees the 13% increase in profit from sam’s tand 19% boost in profit from the international unit as proof of wal-mart’s ability to continue to grow.
>> i do qualify as a growth stock t reason why is it’s international opportunities. china is an area where it could come on, even europe, continuing to expand. so i believe that there is still growth there. they are still increasing the-square-footage on their superstores. so i believe that that’s another expansion area for them.
>> ryan predicts wal-mart shares will trade as much as 15% higher in the next 1 it is. wal-mart shares closing down just over a percent lower. turning to federated, the owner of macy’s and bloomingdale’s, shares earlier today hit a new high for the year as the company reported a lower-than-expected drop in profit due to the pickup in july sales. that said, federated’s second quarter profit was cut in half, down 57% from a year earlier last year the company had gained from the sale of its finger hut unit. the company said sales were hurt as stores quickly sold out on some items, as it tried to keep its inventory lean and it closed some of its retail branches which resulted in added costs. profit of 64 cents a share came in two cents a share higher than the increased forecast of analysts surveyed by thompson financial, and federated forecast earnings this quarter may fall to as low as 25 cents a share, while fourth quarter profit may rise to as much as $2.20 a share. lane, back to you.
>> su keenan. deborah kostroun is at the new york stock exchange. and she continues a discussion about retail with anntaylor earnings after the bell. deb.
>> well, in fact anntaylor, of course, this is the women’s clothing retailer. they are coming in with their second quarter results. net income rising to 21.2 million dollars. as you can seerks 45 cents a share compared with a year ago 39 cents a share. meeting the estimates there. also sales in the three months that actually ended on their quarter, august 2, rose to $390 million. compare that to the $385 million estimate. also anntaylor looking at the outlook, they do see meeting their estimates and they also see meeting their fall season e.p.s. forecast, 98 to $1.04. the third quarter e.p.s. what they are looking at 57 to 61 cents. thompson financial 59 cents, right in line there. also for the fourth quarter they also expect to meet. but as you can see, the sales doing a little bit better for the second quarter. one of the reasons that you can see anntaylor trading a little bit higher in the after-hours session. and obviously in today’s session retail obviously a focus as the retail sales performing quite well. also tomorrow we have quite a few earnings and target definitely one of them. kohl’s, burlington coat factory all reporting their earnings tomorrow. tiffany reported their earnings today. in fact, tiffany’s looks like their profit, a 26% increase in their second quarter profit. that was also a little bit better than thompson financial estimates. and in today’s session, obviously it was the pharmaceuticals that helped lead the market lower in the s&p 500. the big story, as you can see, astra zeneca was higher. everything else on the screen lower. astra zeneca did get f.d.a. approval for their new cholesterol drug crestor. obviously going to directly compete with pfizer’s lipitor. also merck, one of the biggest drags in the dow jones industrial average. not only that, medical equipment such as medtronic, it got a downgrade. so we did see medtronics. some of the other healthcare equipment stocks also lower in today’s session. semiconductors, this is one area of the market that performed quite well in today’s session. also gorblgsd the commodity rising to a two-week high on expectations for higher inflation. all this moving around with treasuries. bonds with stocks still looking attractive, gold also very attractive right now. back to you.
>> deborah kostroun at the big board. coming out after the bell, metlife says the u.s. securities and exchange commission is investigating the handling of mutual fund accounts at its new england securities corporation unit. on monday the nation’s second biggest life insurer cut its previously reported second quarter profit by $31 million and fired four executives. the company blamed improperly recorded expenses. metlife shares closed down 20 cents at $28.75. checking extended hours trading, currently unchanged at that same price. now, brocade communications said third quarter profit plunged 90% as its sales declined and expenses rose. net income at the world’s largest maker of computed data storage switches fell to $1.9 million or one cents a share. by that measure it was in line with wall street estimates. revenue fell 12% to $134 million. analysts say competitors mc data and cisco may be cutting prices to gain market share, forcing brocade to do the same. in the regular session shares were up four cents and in the extended hours trading they are up another eight cents or 1%, now just six cents. look how quickly that changes. satellite television broadcaster echostar has seen its second quarter profit more than triple. the company increased subscribers to its dish network service by charging less and offering more channels in areas where cable hasn’t upgraded to digital service. net income came to almost $129 million, up from $37 million a year earlier. now on a per share basis echostar’s 26 cent profit is sharply higher than the 19 cents analysts expected. revenue rose to $1.4 billion. shares were off today, although they gained over 118% over the past year, down 5% in the latest session. u.s. traded shares of news corp reached a 52-week high today after rupert murdoch’s media company had its biggest quarterly profit in three years. that was helped by a jump in advertising on the fox network because of top rated shows like american idol. the media company’s fiscal fourth quarter net income came to $370 million or 28 cents per american depository receipt, after payment of preferred dividends. revenue was up almost 20% to $4.6 billion. you may associate utilities, financial services and healthcare as some mainly large-cap groups. our next guest says these groups in the mid-cap asset class are ones to watch now.
