Market briefing---Bob (fast)
John Reed---Su (fast)
NYSE---Deb (fast)
>> welcome to “world financial report”. i’m bob bowden. sun microsystems dropped as much as 12% in extended hours trading after the company said it will have a net loss of as much as 10 cents a share because of pressure from competitors. that’s a higher loss than wall street was expecting. sun will record over a billion dollars in expenses for the year that ended in june for the expiration of some tax benefits. the company is revising its net loss for the fourth quarter to 32 cents a share. that compares with a break even net income the company reported on july 22nd. sun now expects a first quarter loss of seven to 10 cents a share. sun’s revenue has fallen for nine straight quarters as its customers struggle with their own declining sales. chief executive scott mcnealy has cut 8300 jobs in the past two years, and will cut 1,000 more over the next few months. checking the numbers right now, we saw in the regular session sun micro system shares up just two cents or 1/2 of a percent to $3.86. now look at that movement in the extended hours, down almost 10% right now, down 33 cents. right now trading at $3.53. there are new developments on the changing of the guard at the new york stock exchange. interim exchange chairman john reed is set to meet with reports in thes 30 minutes. earlier today reed traveled to washington to meet with s.e.c. chairman william donaldson in that city. and su keenan has the latest on that story. su.
>> bob, the new and temporary chairman of the new york stock exchange, john reed, is expected to make his first public statement on the most pressing question surrounding the future of the exchange this evening. the news conference begins at 5:30 here in new york, and it’s likely reed will be asked about the future board’s make-up. the interim chairman denied a “wall street journal” report that he decided to take c.e.o.’s from wall street firms off the board, an idea floated by goldman sachs c.e.o. andrew paulsen. there will also be questions most likely posed to him about the status of board member kenneth ran gon, one of the staunch defenders of richard grasso and his controversial pay package. we are expecting to learn more about the corporate governance report. the new york stock exchange was to submit it to the s.e.c. this week. he is being allowed extra time with the report so he can better understand the issues. this morning he got that extension in washington as he met with william donaldson, the head of the securities and exchange commission for the first time since accepting his new position. donaldson says the new york stock exchange must come up with its own reforms, and he describes reed’s task as tough and challenging.
>> beginning the process in terms of the s.e.c. trying to be of whatever help it can be to chairman reed in terms of a very tough and challenging time.
>> donaldson confirmed it helped precipitate the resignation of richard grasso forcing details of his package to be disclosed.
>> i’m in a listening mode. a week ago i was happily retired off on an island someplace, so this was a little culture shock. so i’m here to talk to chairman donaldson to get his insight.
>> reed, of course, ow back in new york. his news conference for later today is the second visit to the exchange. you are looking at the first official visit as the interim chairman made on friday, in comments to reporters, again, reed will be talking, as he says about what he expects to see on the board. he did say earlier, “it would be stupid beyond belief,” that is a quote, not to have some continued role for executives for financial firms within the new york stock exchange. meanwhile managing director georges ugeux to be the third high ranking official to resign. he plans to start an advisory firm. he told grasso of his desire to leave a year ago, he says. bob, we will be bringing you the very latest.
>> su keenan on the reed beat. two success stories from the 1990’s stock boom. both began criminal trials today in separate courtrooms just blocks away from each other. former tyco chief executive dennis kozlowski is charged with fraud. prosecutors say he and former tyco c.f.o. mark schwartz stole company money. they say kozlowski used the proceeds to support a lavish lifestyle including a $6,000 shower curtain and $15,000 umbrella stand. the obstruction ofs tis trial of former credit suisse investment banker frank quattrone began. they say he encouraged employees to destroy documents. quattrone’s lawyers have denied wrongdoing and said he did not know the government’s investigation would extend to his investment banking unit. he’s the first wall street executive charged in connection with the government i.p.o. investigation. quattrone was based at silicon valley and handled many of the computer-related i.p.o.’s of the internet boom. well, stocks rose for the first day in four after a government report showed an increase in consumer spending, and that bolstered confidence the economy and earnings will grow fast enough to warrant fewer gains in benchmark indexes. let’s get to the closing numbers. we saw the dow jones industrial average up 67 points, about 7/10 of 1%. s&p up about 1% or 10 points to 1,006. the nasdaq was the percentage gainer of the day up 1.8% or 32 points to 1,824. checking volume on the nyse, 1.3 billion shares traded hands. advancers led decliners by better than a two to one ratio. over at the nasdaq, volume at 1.66 billion. advancers led decliners not quite by a two to one ratio, but approaching that, you might say. moving over to the wilshire 5000 the broadest look at the u.s. markets, that index up 1%, virtually the same gain as the s&p 500, up 96 points to 9,742. treasuries fell in new york for the benchmark 10-year note falling for the first day in five. you see down 20/32 on the day. the yield up to 4.08%. checking the shorter end of the curve, similar action as we saw prices heading lower on treasuries. the dollar tumbled against both the euro and the yen in new york trading. you see the euro finishing at 1.1604 on the day. well, the dow and s&p are on track to close out the third quarter with the first back-to-back quarterly gains since the year 2000. what do traders and investors make of that two-quarter action? deborah kostroun is at the big board with more on that story. deb.
>> well, in fact what we saw in the second quarter, obviously some pretty big gains in the dow and the s&p 500. however, the third quarter really doesn’t look―the gains aren’t as big. however, you have to always remember that the market is always a pretty good predicter of where the economy is going. in fact, if you take a look at the gains we are looking at in the second quarter in the s&p 500, you saw a 15% gain. right now what we are looking at a 3.3% gain for the dow jones industrial average for the second quarter, we saw a 12% gain, for the third quarter, of course that closes tomorrow, we are looking at a 4.4% gain. so once again we are not looking at huge gains. however, i was talking with jim maquire of la branche specialists today. and he said that not too much of a concern. however, a lot of comments really kind of supporting the third quarter today from smith barney chief stock strategist tobias levkovich. he says thes outlook seems pretty healthy. the economic data he says far from lethargic. he says the jobs data could show a modest fourth quarter 2003 improvement. he also is pretty bullish on equities for the fourth quarter of 2003. he says not only just because of rising earnings, but also the outlook from the improving jobs market. and many traders saying they will likely get more insight into that friday when we get the unemployment number. richard reece, he’s chief investment officer with city national asset management says they are expecting positive earnings surprises for the third quarter. they also see the economic recovery in place, and intact. of course, that helps out even today’s action. of course, technology, that was the biggest gainer in the s&p 500 led by semiconductors. semiconductors performing well as after the semiconductor industry association saying that global semi sales increased 12.5% for a sixth consecutive monthly gain. and most of the semis ending higher. you can see micron just a little bit lower. in addition, in the s&p 500 kind of helping out the idea that economic recovery intact. materials performing quite well. and also the industrials have one laggard in the industrials with 3m. this after they were the biggest drag on the dow. they filed to sell a registration, to sell 1.5 billion in debt securities. back to you in the studio.
>> thank you, deborah kostroun. when we come back we’ll take a closer look at investing in municipal bonds. steven carpenter is senior portfolio manager at the armada fund.
