Market briefing --- Matt (slow)
NYSE --- Deb (fast)
Boeing --- Bob (fast)
Press conference on the Boeing contract
>> welcome back to “world financial report.” i’m matt nesto. let’s give you the closing numbers as they came in today. the dow, s&p and nasdaq all down. the tech heavy nasdaq the worst of the three by a full half a percent, down 1.5%. the volume down trend continues. couldn’t put it more simply than that. we’re about 20% below average over the past month or so. only 1.1 billion shares on the big board. if you check on the nasdaq, only 1.4 billion shares there. both about half a billion shares less than their average. on to the broader indexes we go. more red arrows there, particularly small-cap stocks down 2% today and we look at the wilshire 5000 index also down about 1% today. on to the bond market we go. little changed. kind of a mixed market here today. you see the 10 and five both trading lower. yields obviously pushing higher. three and two not quite as sharp in the declines and the dollar was mixed in new york trade. the latest trades showing you virtually no change against the three major there. it was hard to find any winners in today’s session. deborah kostroun tried her darndest at the big board to give us a few to give us a roundup of today’s action. here she is. deb?
>> matt, obviously we saw the markets all lower, dragging on concern about inflation. inflation and interest rates really kind of themes in today’s session, especially heading that c.p.i. report coming out tomorrow. and the big concern is that the high gasoline prices we have been seeing could contribute to an increase in inflation and that could lead the fed to raise thares benchmark rate for overnight loans faster than expected and so those were really kind of the two big headlines. take a look at laggards today in the s&p 500. what led us lower is semiconductors, real estate, and also autos f. you take a look at the winners, the winners in the s&p 500, they were also lower. maybe there was some individual winners. if you take a look at the groups in general, household products was the best performer, down 3.5%, health care, equipment services and capital good among the best performers. the semiconductors we mentioned were the worst performers today. they actually got downgraded by deutsche bank and u.b.s. on friday. however, that’s when u.s. markets were closed. they really kind of are trading off that information today. also seeing downgrades in today’s session, that was real estate stocks as merrill lynch cutting their reit ratings -- their rating on reits, main lift as they said they’re really just too expensive relative to the value of the real estate. and interest rate-sensitive stocks like the home builders among the worst performers in today’s session. along with many of the financials, including the bank stocks really taking a hit in today’s session. back to you in the studio.
>> all right, deb. thank you very much. appreciate it. on to our top story of the moment. boeing beating lockheed martin to develop the next generation of so-called submarine attack planes, a contract for the navy. and this is according to people familiar with the situation. bob bowdon has been working on the story and joins us you now with the details. bob?
>> thank you, matthew. it has been called the multimission maritime aircraft or m.m.a. and the contract could be worth $20 billion over the next 10 to 15 years. the first delivery is scheduled for 2012. it could add $700 million to boeing’s revenue as early as 2006 according to analysts. schwab soundview analyst wrote in a note last week that a win by boeing would mean five cents a share to be added to boeing’s bottom line in 2006. for comparison purposes, he forecast beauing in 2005, a different year, full-year earnings of $2.50 a share. he does not yet have 2006 full-year earnings estimate. he proposed the new m.m.a. would be based on the 737 jet while lockheed martin propose add propeller driven airplane as a modernized version of its old earp p-3. boeing c.e.o. harry stonecipher is 68 years old and is working to residence pair relations with the military and salvage a $23 billion contract to supply refueling tankers to the air force. that award had been suspended after boeing said its former chief financial officer had made a offer to an air force procurement official during negotiations with the air force. it was smart money predicting a boeing win in regular trading today. ahead of that decision, look at what happened with lockheed shares down 1% and boeing shares up fractionally on the day, before the decision came through. now since the close of trading, boeing shares have gained around 2%. you see up $1.07 right now. and on the other hand, lockheed martin shares falling in extend hours trading falling 75% -- scuning, 757 cents, right now trading at $49.70. just for a little―matt, to give you perspective here, $700 million to be added to the revenue of beauing in 2000 6, that’s what one analyst predicted the contract might be, compare that to boeing’s full-year revenue of $50 billion. we’re talking about 1.5% of boeing’s revenue in 2003. so, that’s some perspective.
>> ok. and nice to have it always. thank you, bob. appreciate it very much. interesting story and it’s just coming out. also today, we are previewing lehman brothers. lehman and bear sterns are going to report record earnings in the first quarter and if we can interrupt myself right now, we’re going to go to this press conference on the boeing contract win down in washington.
>> that event as the navy moves forward to replace the u.s. navy’s fleet of aging p-3 orions, which currently provide valuable, strategic blue water and undersea warfare capabilities, as well as performing armed reconnaissance, intelligence and surveillance roles. mcdonald douglas corporation, a wholly owned subsidiary of the boeing company, has been slectsd as the prime contractor of the multimiss maritime aircraft. the company is headquartered in long beach, california. today’s m.m.a. decision reps an important milestone for the war fighter and our acquisition team. our p-3 fleet has made major crixes to operationses in afghanistan and iraq, while also impeaching their core maritime mission. in many casings, we have put hours on these airframes substantially times the monthly allotment. it is becoming urgent to replace the p-3 with a new airframe and the enhanced capability offered by m.m.a. both industry teams produced high-quality proposals and the acquisition team has worked with industry to make a good decision on schedule. m.m.a. offers a modern, highly-reliable airframe, which will be equiped with improved maritime surveillance and attack capability, allowing a smaller force to provide worldwide responsiveness while potentially on a smaller support infrastructure. m.m.a. will ensure the navy’s future capability in long range marrytime patrol. it will be equiped with modern anti-submarine warfare, anti-surface warfare and intelligence, surveillance, and reconnaissance sensors. in short, it is a long range a.s.w., i.s.r. aircraft that is capable of broad area maritime and undersea operations. it will use simulation training systems and implement low jisic-based performance concepts. it will be a key component in the navy’s sea powered c-21 shield concept by providing consistent a.s.w. and anti-surface warfare capabilities and will support c-powered 21 c-strike doctrine flu provisions of intelligence, surveillance, reconnaissance and armament capabilities. this platform will play a key role in the army’s force net architecture of the common undersea picture. these prational capabilities will be key factors in providing the sustained presence, sea domination, and districted a network intelligence t.m.m.a. program’s initial acquisition strategy calls for an initial operational capability in 2013. it’s characterized by a progressive, tightly-integrated developmenttal and operational test approach and a strong emphasis on modeling, simulation, and system integration laboratory tools used to offset flight test costs and the schedule burden of the program. as we proceed into the system development and demonstration phase, the program will focus on developing the system that will significantly transform how the navy’s marrytime, patrol, and reconnaissance force will man, train, operate and deploy. the contractor for the system development and demonstration phase, as i noted, is the boeing corporation. they will be award add $$3 ,899,000 contract to develop the m.m.a. aircraft. joining me is tom lox, as you mentioned the program executive officer for a.s.w., assault and special mission programs. i’d like to thank tom lox and his wonderful team --
>> all right, folks. we’re hearing from the assistant secretary of the navy outlining a $3.8 billion navy patrol plane contract won by boeing. boeing itself going to be having its own news conference at 6:00 p.m. eastern time. of course, the bloomberg news team will be covering that. stay with us. more news after the break.
