Market briefing --- Matt (slow)
Martha Stewart --- Alan (slow)
NYSE --- Julie (slow)
Coke beat --- Su (fast)
>> welcome to "world financial report." i'm matt nesto. we'll begin with martha stewart. she had a press conference today and says she wants to begin her prison term as soon as possible. she spoke to reporters at the manhattan offices of the company she founded. martha stewart living omni media. bloomberg's alan dodd frank was there for a tearful presentation and joins us now with details.
>> matt, martha stewart says she wants finality on her two-year, seven-month-long nightmare and says the only way to get closure quickly is to begin serving her five-month prison term. she told reporters her lawyers have asked the judge to send her to federal prison camp in danbury, right now.
>> the only way to reclaim my life and the quality of life for all those related to me, with certainty, now, is to serve my sentence, surrender to the authorities, so that i can quickly return as soon as possible to the life and the work that i love.
>> speaking at the offices of the company she took public five years ago, martha stewart living omni media, the 63-year-old stewart took note of the sacrifices that will be required of her.
>> i am very sad knowing that i will miss the holiday season, halloween, thanksgiving, christmas, new year's, always an opportunity to celebrate family, friends and religious traditions that mean so much to many of us. and i will miss all of my pets, my two beloved fun-loving dogs, my seven lively cats, my canaries, my horses and even my chickens.
>> the chairman says officials are heartened by stewart's move.
>> this is a difficult day. but there is some consolidation, consolation in knowing that her decision brings this matter much closer to the time when she and all of us can truly get back to business as usual.
>> the c.e.o. of martha stewart living omni media, sharon patrick, noted the company still has nearly $160 million in cash and she refused to put a price tag on the damage done to the company by stewart's legal woes.
>> martha really is the-i mean, you call her the diva of domesticity. there is a reason for that. martha is the gold standard of domestic art and that remains fully and completely in tact.
>> stewart says she hopes to begin the five months home confinement portion of her sentence at her mansion in bedford, new york next march in time for the planning season and she departed, she got a standing ovation from her staff.
>> thanks again for atending today's meeting and i'll see you next year. [applause] >> on the news, shares of stewart's company rose to as high as $12.50 before closing 12 cents higher than yesterday, matt.
>> nothing more to be said there. alan dodds frank, use've been on that story for months. thank you very much. let's give you the closing numbers on wall street today. stocks were down, bonds were down, the dollar was up. if you look at the dow, the s&p and the nasdaq, fay finished close to their worst level of the day. .8, .7 and we'll call it 1%, my friends, to the nasdaq. the volume, kind of light, 1.2 billion at the big board. over at the nasdaq, how did they do? 1.5, not too bad. better than average of late. stocks closed lower after a handful of companies cut their earnings forecast, notably coca-cola and julie hyman has a wrapup on today's trading board and has this report from the big board.
>> stocks closed near the lows of today's session by the close today. it was not necessarily a good sign for tomorrow's open. the session really characterized by two main factors, one a number of companies cutting earnings forecasts and, two, the declines that we were seeing in technology. let's start with those earnings forecasts. coca-cola coming out and saying second half earnings will be below analyst estimates and really we saw that effect throughout this industry. we saw some of their competitors. pepsico, for instance, pepsi bottling, cadbury schweppes and coca-cola enterprises all falling in today's session. and tribune, the publishing company, saying its third quarter earnings forecast was coming in below analyst estimates. they're seeing below estimates. so those shares taking a hit. they touched an earlier 52-week low, but did not close at that level. the semiconductors really leading the way downward. we saw xilinks coming out and saying second quarter sales will miss estimates. they led the way lower. teradyne, l.s.i. and national semiconductor also declining. technology hardware taking a big hit in today's session. goldman sachs downgrading that industry, based on the fact that they think profit growth will slow next year among tech hardware companies. e.m.c., hewlett-packard, lexmark and storage technology were the individual stocks that were downgraded by goldman. also in technology, celestica cutting its third quarter profit and sales forecast. it's seeing some customers cutting back on orders and their rival fell in today's session as well. i'm julie hyman, bloomberg news at the new york stock exchange.
>> well, more now on why coca-cola's sales are so slow. it can no longer meet its earlier profit forecasts. shares of the world's largest soft drink maker fell toll the lowest price in a year and a half. leaving the dow and s&p lower along the way. it's part of a bigger trend that the company has been facing as they're cutting their year-end outlook. su keenan is on the coke beat today and joins us now with details.
>> got a loft of attention here, matt. there are serious questions about where the company is going and how it is going to get there. that's the view of tom perco, president of bev mark and says the company's business model is outdated. new c.e.o. neville isdell who came out of retirement in june, says the company is seeing sluggish sales in north america and europe. fewer cases of soda are shipped to this area and rainy weather abroad is hurting demand. second half profit is between 77 and 82 cents a share, roughly 20 cents below analyst expectation of 99 cents a share according to a survey by thomson financial. and coca-cola shares down 90 % year to date, fell to their lowest price in a year and a half. dave cliggott says coke is part of a bigger trend. he is predicting 0% earnings growth for the s&p 500 companies and says the market is overly optimistic.
>> we have a different view. we might be late in this earnings cycle. in fact, we think we're very much maybe in the first inning of the earnings disappointment so that i think there's a real tug-of-war in the market right now, saying the bad news is behind us, just wait, we're going to reaccelerate. earnings are going to look great.
>> well, while analysts expect profit growth to decelerate in the third quarter, the director of research at market street takes a more bearish view.
>> we're in the position where the market is rolling over in terms of earnings momentum, that we've seen the peak, that rising earnings will no longer be supportive of p/e multiple. as a p/e multiple of 20 on the s&p, for example, that makes it rich.
>> now in the case of coca-cola, merrill lynch analyst christine farcas cut her rating from neutral to buy saying challenges at the company may take longer than expected to resolve.
>> all right, su, thanks very much. well, speaking of long standing challenges, democrats have agreed to a republican proposal limiting a trust fund for asbestos victims to $140 billion. limiting it to $140 billion. u.s. senate majority leader tom daschle accepted the compromise, which he hopes will break the deadlock that has stalled the legislation in congress. the democrats previously insisted the fund would be $145 billion. the plan would end lawsuits that have bankrupted more than 90 u.s. companies. asbestos-related shares such as u.s.g., owens-corning and mcdermott international were mixed today. owens-illinois as you see down .10%. u.s. treasury secretary john snow in new york today, ensuring executives at the nation's banks and brokerages and capital markets are prepared, should terrorists succeed at trying to attack america's financial system. we'll bring you that report next.
