Market briefing --- Matt (slow)
NYSE--- Julie (slow)
Morgan Stanley --- Su (fast)
>> welcome back to “world financial report.”% matt nesto reporting here. and recapping the day that was on wall street. a day that saw the benchmark indexes give it all back. the final 90 minutes of trade on lower-than-average volume. it’s almost a cliche. a couple of acquisitions topping business headlines today. first and foremost, shares of% chelsea property group surged on news that it’s being caught. simon property acquiring the factory outlet owner for about $3.5 billion in cash and stock. simon is the world’s biggest manager of shopping malls and the deal adds factory outlet centers in major cities like new york, boston and l.a. the other big major story today in the m&a world, a group of buyout firms acquiring loews cineplex entertainment. bane capital of boston along with carlyle group and spectrum equity investors are buying the theater chain for $1.5 billion. sellers are oak tree capital management and canadian buyout firm, onyx. the sale is expected to close in the third quarter. the nasdaq fell about 12 points today as 1.36 billion shares changed hands. that’s the slowest trading day of the year. i believe it’s the fourth slowest. julie hyman will know in the wrap-up report from times square.
>> this turned out to be the fourth slowest trading day of the year on the nasdaq. we’ve been below average volume for the year for many days now, almost two months’ time and today was the fourth slowest trading day. to give you an idea of how slow it has been this month in terms of volume and price action, the nasdaq hasn’t moved more than 3.2% so far in the month of june, 64 points. when you hear traders talk about stuck in a trading range, this is what they’re talking about. the nasdaq has been bouncing between 1960 and 2024 but has not broken out of that range so far this month. people waiting for the upcoming fed meeting and the next earnings season to roll around. we saw the nasdaq, as well as the other indexes, break down late in the trading day on the very low volume. telecommunication stocks a drag% throughout the session, continuing to be so heading into the end of the session. we had a story in “barron’s” over the weekend saying that phone, cable and satellite prices will vine as companies that provide them competing more with each other and failing to meet growth quotas. because of that, we saw telecom% stocks decline today. notably we saw stocks such as% comcast, a cable provider, and echostar, a satellite president tv provider, both declining ph.d. the source of strength today were banks, especially regional% -banks.% on speculation that after a couple of the bank deals we saw today, other smaller banks might be takeover targets. the nasdaq banking index rising throughout the session despite the overall decline in the market . stocks like huntington bank share, capital federal financial and first merit all gains today on related speculation. back to you.
>> as we said, fourth slowest day. merrill lynch, no longer listed as an underwriter for google’s% -i.p.o.% merrill lynch wasn’t included in the list of 30 underwriters in a recent filing google made with the s.e.c., although merrill had been on the list last month, merrill’s exclusion from the i.p.o. comes after the company has already lost market share in the u.s. for new stock offerings. a merrill spokesman declined to comment. two of the biggest financial companies on wall street report earnings this wek. in fact, tomorrow. goldman sachs and morgan stanley. su keenan joins us with what i have a feeling will be an insightful report.
>> could be a highlight of the week when they report, early tomorrow morning. morgan stanley and goldman sachs will likely say second-quarter profits nearly doubled when they report their results before the opening bell tomorrow. morgan stanley c.e.o. phil purcell increased investment banking business at the nation’s second largest securities firm. more demand for merger advice and equity sales likely increased profits to $1.2 billion or $1.08 per share according to a thomson financial survey of analysts.
>> right now there’s a back log of some $56 billion of deals expected to come to market . that represents $275 offerings.% that has constantly increased from six months ago when it was $33 billion and two years ago when it was under $5 billion.
>> meantime, goldman sachs c.e.o. henry paulson took more risks this quarter using the firm’s own money to make bets on currencies and commodities. the nation’s third biggest securities firm probably boosted profits to $1 billion or $1.95 per share according to analysts surveyed by thomson financial. prudential analyst david trone says both companies may benefit from near record levels of debt trading from march to may and raised profit estimates for both companies last week after lehman brothers and bear stearns reported better-than-expected second-quarter results. bond trading may slow as interest rates rise. there’s been much talk about this. yet investors say the strong economy will fuel gains in other parts of their business.
>> it’s my feeling that we’ll see a pickup in equity issuance and importantly we’ll have to see more i.p.o.’s because that’s very profitable and i think we’ll see m&a advisory, that should take up the slack from the bond business.
>> they’ll look at the stocks. financials have lagged the market this year. shares of morgan stanley down nearly 11%. shares of goldman sachs down more than 9% compared to the s&p 500’s gain of 2%. shares of both companies closed lower ahead of their reports, about .5% and .75% respectively.
>> and worse than the 7% decline of the amex broker/dealer index. legg mason up 14% year to date. thank you, su. we’ll have more on those goldman and morgan numbers coming up. u.s. securities analyst with sanford bernstien will tell us why he’s bullish on both when we return.
