Market briefing --- Matt (slow)
Ford --- Bob (fast)
NYSE --- Julie (slow)
>> welcome to “world financial report.” i’m matt nesto. we said it―ford shares higher today after the company raised that third quarter earnings forecast by a dime, 10 cents a share. bob bowdon is here with details of the ford story. bob?
>> thank you, matt. if you’re expecting that better car and truck sales compeled that higher forecast from ford, you’d be incorrect. but first, the headline numbers. ford now forecasting third quarter earnings in a range between 10 and 15 cents a share, and that entire range is above the old forecast of break even to five cents a share. the company cited two reasons, continued strong performance in financial services and cost cutting in the automotive sector. you will not find increased sales among the reasons. ford said it would eliminate -- also said it would eliminate over 1,100 jobs and cut production at an unprofitable jaguar plant in coventry, england. it will ship the final operations done in that plant now to another jaguar plant in the u.k. the company said last month it would cut jaguar production by 15,000 units this year to trim inventories of unsold cars, particularly in the u.s., its largest market . jaguar sales in the u.s. this year through august have declined 12% compared to last year. together, the pretax costs of cutting the u.k. jobs and pulling out of formula one racing will be $450 million, according to ford, $375 million of those charges will occur in 2004. daniel poole is the vice president of equity research at national city bank.
>> if you look at this company over the past couple of years, they’ve done a great job with the cost cuts. the fact that they’re a little bit ahead of schedule this quarter, you know, is not a big surprise. we’re glad to see it. but i think to get really excited about ford, you’d like to see some better sales numbers.
>> he’d like to see better sales numbers, but that was not part of today’s news. on friday’s trade, we see ford shares up almost 2%, closing at $14.22 a share. checking other auto-related stocks, g.m. mostly unchanged, daimlerchrysler up .4%. and a couple of auto parts makers rallied, as well. johnson controls and delphi up 1.2% on friday. matt nesto, back to you.
>> bob, thanks very much. appreciate it. and, you know, we’re also going to continue to take a look at ford shares as only i do it, as we say here. so let’s take a look, and we’ll use the bloomberg terminal. i putting to a chart that’s about 15 years. interestingly, sunday, the the 19th of september, would mark the exact 15th anniversary when ford made its first initial offer to buy 15% of jaguar. so 15 years of ford we’re looking at. over that 15-year period, they’ve really reinvented themselves to become the multibranded global company that we know today. you’re looking at 15 years of, well, less than market performance. some would say lackluster. the stock finishing today below at $14.22, so below $15 a share, and it was adjusted around $10 a share back at that point in the fall. also just worth pointing out about jaguar in 1989, it bought astin martin, 75% of that two years before. but then in 1999, it bought volvo. then in 2000, it bought land rover. of those premium brands, only volvo has been the one to consently make the profits for ford. so if we take a look at the market reaction today, bob had mentioned that at one point 9% increase in ford, you can see kind of a mixed, really not any notable move for the auto group here today. i think it had a broader effect on the markets as a whole. if we look at the broader global auto industry, it’s worth looking at some of the year to dathe numbers here, because you see fleetwood, they make campers and r.v., pugh goat among the outperformers year to date. if we look at the bottom of the list, some names you might here, at least our u.s.a. audience know them well, and that is going to be g.m. and ford, they’re close to the bottom of the pack, only being underperformed by shares of volkswagen. and last but not least, if you compare the regional indexes, the regional auto indexes, u.s. versus europe versus asia over a 12-month period of time, what you see is the white line, the u.s. automakers, the best performer, up almost 16% in 12 months. and it’s pretty close between the orange line, that’s the european, the bloomberg european auto index, and the yellow line, which is the asia pac auto index, and they’re up 5% and 6.5% respectively over a 12-month period of time. so that’s my little automotive soliloquy, and that’s where we leave it. well, ford’s optimistic forecast and an analyst bullish call on g.e. earnings fueled that stock rally today on a friday. let’s check it out. four cents higher for the dow, similar gains for the s&p 500 in terms of percentages. and the nasdaq up about .3%, as up see. the volume, well, at 1.4 billion shares, better than we’ve seen for most of this week at least. if you take a look at the volume over at the nasdaq, 1.6 billion shares there. and a quick check on some of the broader indexes, the composite up. amex little changed. russell down about a quarter of a point. and those 5,000 shares in the dow jones wilshire 5000 up .3%. speculation that the federal reserve will raise its benchmark rates next week is helping to cap demand for treasuries or pushing them down. 4.11% for a 10-year yield right now, the bond giving back there. there’s similar retreats in the price of the five-year. the yield there up at 3.33%. and the two at 2.47%. and if we take a look, are we doing bonds? ok. we’ll leave it there. well, the down and the s&p went in different directions this week. for more on today’s trading action and a look at the week that was, we have julie lieman with this report from the big board. law a a mixed week for stocks. the dow jones industrial average did finish the week lower by about .3%. the s&p 500 finished the week higher by .4%. by the way, that was the sixth straight weekly gain for the s&p. hasn’t had a streak like that since the nine weeks that ended january 23. the biggest gainer this week in terms of groups, energy stocks, up about 2.6% on the week as the price of oil gained. and on the down side, we had food and beverage stocks, down about 1.9%. also just wanted to note, in today’s session, we had quite a bit of volatility. we also had a late-day surge in volume. that’s all linked to quadruple witching, which is the expiration of four types of futures and options contract. we had the highest volume today since we had back on august 6. also, in today’s session, we had shares of general electric quite active after some comments by an analyst over at prudential saying that they’re attractive, the shares are attractive because they expect to return to double-digit earnings per share growth in 2005 compared to slowing growth in the economy. also, energy stocks gaining in today’s session, the biggest gainers in terms of groups, we had a number of stocks reaching record highs in today’s session. exxonmobil, apache, and occidental petroleum. also, earlier this week, we had thomson financial coming out with its earnings forecasts for these energy companies. they’re expected to grow 39% in the third quarter. that is versus 15% growth for s&p 500 companies generally. and finally, just wanted to note, texas instruments rising after it boosted its dividend for the first time in nine years and announced a $1 billion stock buyback. i’m julie hyman, bloomberg news, at the new york stock exchange.
>> all right, well, oil, another huge story today, surging almost $3, or 6.5% for the week, to a four-week high. that on concern that shutdowns caused by hurricane ivan will further reduce u.s. inventories. let’s take a look at the charts, if we will. you can see just about 4% higher for the day at $45.59. that’s about 6.5% higher than friday a week ago. prices are also almost 70% up over the past 12 months. and b.p. chief executive john browne says the era of cheap oil may have ended. he says the tension in the middle east and persisting growth in demand may make it unlikely that prices of the 90’s will ever return. let’s look at some other energy movers here today, 3.5% higher for gasoline futures, heating oil up 2.5%. and the big mover of the day, 8% higher, natural gas futures. deloitte and teach and ernings and young have dropped at least eight small u.s. audit clients in the past seven weeks. that’s raising the concern of the s.e.c.’s chief accounts. the big four firms say they’re overworked as they help their biggest and most profitable clients meet a november 15 deadline to improve financial reporting that’s required under the new sarbanes-oxley law. the s.e.c. is worried the you’d tords may be using the law as an excuse to abandon smaller jobs. no comment from those firms. saturn rolling out new models next year. will that help revive sales? we’re going to hear from the g.m. of saturn, next.