Interview: Commerce Secretary Carlos Guiterrez
>> the bush administration is trying to ally concerns from u.s. technology and movie companies about piracy. michael mckee has a special guest.
>> the commerce department is focusing on intellectual property. president bush appointing chris israel, deputy chief of staff at the commerce department with the priority of piracy and counterfeiting in china. joining me now, commerce secretary carlos guiterrez, joining me from washington, d.c. thank you for joining us, mr. secretary. interesting timing on this appointment because you went to beijing a couple of weeks ago and gave them some warnings about dealing with intellectual property and then yesterday we saw the chinese revalue their currency. do you think that some of the efforts the administration is making are getting through and you can reinforce those with this appointment?
>> well, the announcement the president made today is very important because it’s the first time we’ve had someone focus exclusively on intellectual property rights and that will enable us to monitor our agreements from the meetings in beijing, to follow up to ensure we have full coordination across government agencies to implement these agreements because it’s all about results. as the president said, it’s all about outcomes and performance.
>> do you think your meetings there helped produce the result yesterday?
>> well, we did not take up the subject of currency at the jcct. we talked about intellectual property rights and market access issues. i will say that i believe that this validates a lot of hard work, what was announced yesterday, a lot of hard work by secretary snow and leadership by president bush and validates the bilateral approach we’ve taken in our discussions with china.
>> how do you use this new position to to crack down even further? is it a carot and stick or a lot of stick?
>> we need the coordination and to be focused on results. we have a lot of people in government focused on intellectual property violations. what we need now is management of those resources. and coordination of those resources. that’s what this person will do, what chris israel will do. it’s a matter of getting focused, having the priorities right, making sure we’re measuring the right things and aligning resources to get results so we believe we can take our effort of intellectual property rights to a new level with the position the president has announced.
>> do you think the progress you’ve made and yesterday’s announcement on the yuan will have any effect on your efforts to try to get through the central american free trade agreement, convincing members of congress that you can make progress on trade problems?
>> i think this is another example that this administration is willing to enforce free trade agreements in that we take our agreements seriously. the central american free trade agreement is obviously very separate from our dealings with china but on cafta, cast cafta is something that will pass because of the merits of cafta. it is an agreement that opens up the central american markets for our products of the today, we’re paying a duty on our products going in. it will be important to give us regional competitiveness. as we continue to grow and compete against other regions in the world and companies in other regions of the world and very importantly, as the president has said, these are young, fragile democracies that need our support and want to embrace free trade so cafta will pass on its own merits and cafta is the right agreement for our country.
>> we spoke a week ago and you said at that time you didn’t have the votes yet. have you made progress?
>> i don’t count votes and it’s not part of my skill set but i can tell you that the momentum is clearly there. there is a feeling that people are getting behind cafta, that people are realizing that there is a lot of support throughout the country for cafta, whether it be the national association of manufacturers, the american farm bureau, small businesses. this is something that’s good for job creation, good for our country. i believe members of congress are realizing that and we’re seeing real momentum and that’s why i believe as well as others do that cafta will pass.
>> we’ve got just a few seconds left here. let me ask you this, the administration having to make any more deals to try to get that through?
>> well, as we made very clear before, we’re not going to reopen this agreement. the agreement is going to stay as it stands and we don’t believe that it would be fair to open up this agreement for any industry, given that the agreement is good the way it is, it benefits all industries, it’s been passed by three countries already in central america so we are not going to reopen the agreement for any industry. it is a good, solid agreement the way it is.
>> thank you very much. commerce secretary carlos guiterrez.
>> thanks, mike.
>> thank you very much, mike. we. will wrap up the day’s world and national news stories coming up on the other side of this break.
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Listen Market briefing --- Derek (slow)
NYSE --- Deirdre (slow)
Today's trading action --- Bob (fast)
Nasdaq --- Robert (slow)
headquarters in new york city, this is bloomberg “after the bell.” dow jones industrial average gained 23 points -- markets spent most of the session mixed but in the last 30 minutes of the trading day, we saw the benchmarks move to close higher. deirdre bolton has the market story.
>> energy stocks extended their gains, making all the difference. the s&p 500 energy index closed up over 3%, at a record. schlumberger, halliburton and occidental petroleum led gains after they all posted better than forecast second-quarter results. some say energy stocks will continue to outperform in the third quarteriment the higher the price of oil generally translate into higher profits for many companies such as an exxon-mobil or conocophillips. that’s definitely leading the way. the high price of oil has impacted materials negatively with rising import costs and energy costs going up.
>> technology earnings were mixed, disappointing some investors. microsoft and google weighed on markets . microsoft held back gains on all three benchmark indices, the company saying that sales and profits this quarter may trail projections. google’s stock closed down more than 3.5% after the company told analysts to expect a slow quarter this period. google’s second-quarter revenue grew at the slowest pace since google went public in august. profit margins shrank for the first time. broadcom, on the other hand, rose more than 11%. the manufacturer of micro chips for computer electronics posted better than forecast second-quarter sales. some strategists are optimistic about the outlook for technology companies’ profit growth.
>> these stocks are very attractively placed with strong earnings and strong balance sheets, so we think the situation is very positive for tech stocks going forward.
>> so far this year, the s&p 500 semiconductor index has gained 14.5%, outperforming the s&p 500 ‘s little bit better than 1.5% gain during that time.
>> per more on today’s trading action, here’s a report from bob bowden at the big board.
>> on friday, the s&p 500 finished up .5%, about the weekly finish. but sometimes it’s good to take a bigger picture perspective and if you look at the weekly finishes for the s&p, four weeks in a row the s&p 500 has finished up. four solid weeks in a row, in fact, six of the last seven weeks, the s&p has gained. however, dean ghoulis with loomis sayles says second-quarter earnings will been solid everywhere. on the day, 7 up stocks for every three down stocks on the s&p 500 and oil stocks winning. oil prices above $58 a barrel today after four closes below $58. also earnings from the likes of halliburton, that up 9.4%. the world’s largest oil services contractor reported $5.2 billion revenue against a $4.9 billion estimate. schlumberger gained over 5%, saying second-quarter profit was 78 cents a share compared to the 67 cents analysts expected. robert half international, the best stock of the s&p 500 today, up 17% in one session. that company said revenue was $817 million compared to $787 that analysts expected. moving on, here’s a fun one for you, maiden form brands climbed 16.75% in one session, moving down intraday, finishing up almost 17%, the first day of trading for the maker of intimate apparel. aventrix pharmaceutical gained on the day, developer of drugs to improve the performance of existing medicines, carl icahn and other investors bought a combined $20 million of the stock. losers include celestica, down 16%, actually 15.3%. from the new york stock exchange, i’m bob bowden.
>> microsoft and google moved lower on friday but the nasdaq closed the week with a small gain. robert gray has details on today’s nasdaq trading from the nasdaq marketsite in times square.
>> the nasdaq composite managing a one-point gain on friday, has now risen 12 of the 15 trading sessions so far this month and managing a nearly 1% gain for the week, the fourth consecutive week of gains, the longest streak since may for the nasdaq composite. more importantly, for some technical analysts remaining in the gains for the year, up some four points from where we started the year, closing at 21 79 in friday’s session. on wednesday, the nasdaq closing at a four-year high and on thursday, touching a four-year intraday high, as well. that’s a look at the nasdaq for the week. looking at the stories from friday, it was strong earnings and revenue reports coming out thursday evening after the close of regular trading. those stocks trading on friday that were propelling the nasdaq higher, the likes of broadcom, sandisk, xilinx, all rising. sandisk and broadcom both posting better than 11% gains and xilinx with a 5% gain. genesis microchip also moving higher after first-quarter sales beat the average analyst estimates, as well, for them. on the laggard side, google shares moving lower from their record in thursday’s session as sales growth slowed. the chief executive saying analysts should not assume they would have a 15% sales growth this year, matching what they did in the year-ago period. microsoft disappointing investors with its revenue period, the range below the average analyst estimates, even though it gave the new name for its windows operating system and release date, late 2006, calling it windows vista. biotech was weak with gilead sciences, although touching a record wednesday, downgraded at u.b.s. to neutral. affymetrix, tumbling after beating the average estimate by a nickel and amgen falling, as well.
>> crude oil rose amid speculation a stronger chinese currency will make fuel imports cheaper, leading to increased consumption. oil will be cheaper for china’s users because it is denominated in dollars. surging demand in china, world’s second biggest oil consumer, has spurred a two-year, 91% rally in prices. the rally may not extend into next week. according to a bloomberg survey, 62% said oil will drop and only 20% expect prices to rise amid signs refiners will have adequate supplies to meet peak fuel demand later this year. u.s. inventories of crude, gasoline and distillate fuels such as heating oil were above the five-year average last week. 10-year notes rose for the third day in four after a decline that pushed yields to the highest in more than four months drew investors. government debt boosted today from increased concern about terrorism as london police are investigating new incidents the day after the underground network was paralyzed by attempted bombings. the dollar gained against the yen and euro on speculation its drop yesterday following china’s currency revaluation was overdone. kimberly-clark is cutting about 10% of its work force. the consumer products company plans to shed as many as 6,000 jobs by the end of 2008. it will take a $775 million after-tax charge. the move comes after kimberly-clark saw second-quarter profit fall more than 7% to $422 billion. higher commodity and marketing costs outweighed a sales gain of 8%. the company says it will invest more in developing markets such as china. investment banking house lazard is lending advice to an unusual new client, the united auto workers. the union wants to determine whether it should bailout general motors on healthcare costs after the automaker posted $1.4 billion in losses during the first half of this year. the union represents over 100,000 workers and has hired two law firms to evaluate healthcare costs. union cooperation is central to g.m. chief executive rick wagoner’s plan to cut costs. the u.a.w. and its technical team has been meeting intentionally―internally with u.a.w. legal, research, healthcare staff and g.m. representatives in the last several weeks. american express may say profit rose by at least 10% for the 14th quarter, adding new card customers through partnerships with partners such as mbna. second-quarter income probably rose 14% to 78 cents a share according to wall street estimates. the company has benefited from its agreement last year to allow mbna to issue american express credit cards along with mastercard and visa cards. however, the partnership may be at risk after bank of america decided in june to buy mbna. american express is scheduled to report earnings on monday. citigroup chief executive charles prince says chairman sanford weill is still thinking of leaving to start a private equity fund. in a memo, prince says the chairman has not made up his mind about pursuing a new career in buyouts but if he does, citigroup will ensure an orderly transition. people familiar with the matter have said directors blocked weill’s effort to leave before his contract ran out and still keep all his retirement compensation. the commerce department is focusing on making a new effort to combat inelectual piracy
