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Interview: Nasdaq marketsite

>> the dollar’s recent drop to a record low against the euro and five-year drop against the yen hasn’t helped close the record trade deficit. still, some of the biggest companies are seeing benefits on the balance sheets.

>> it benefits us because we report results in dollars so given that we have 22% of our business outside the u.s., when that 22% is translated back into dollars at higher rates, that benefits our business. but by the time you get to the bottom line, it’s more of a revenue effect.

>> yahoo reported yesterday its fourth-quarter earnings jumped five-fold and revenue topped $1 billion. yahoo owns 33% of yahoo japan, japan’s most popular website. yahoo japan is due to report results later today after the tokyo market closes. earnings news from yahoo and juniper networks was better than analysts expected. better than forecast earnings from juniper and yahoo failed to translate into gains in the nasdaq on wednesday. robert gray reports.

>> the followthrough from the earnings reports from yahoo and juniper networks was short lived, rising briefly in the open on the nasdaq before falling along with the rest of the composite, suffering its second worst drop of the new year in point and percentage terms on this wednesday. juniper networks, traders saying their better-than-expected earnings were good but not good enough to keep the stock rallying. it rallied more than 50% from its low in august up to its recent peak and pulled up ahead of the earnings and was not enough to keep the momentum going. similar story at yahoo, beaten by two cents but the carry-through not happening today. google touched a record high during the session but ended turning lower by the end of the day, falling, as well, on the session. ebay was the big stock to fall during the session, its report out after the close of trading today, lifts expecting 34 cents a share. the stock briefly traded higher but closed the session 3.5% here in new york and overstock.com, a beneficiary from ebay, rising after saying their listings were up 50% in the five days since ebay raised their prices, so a lot of people defecting from ebay to overstock for listings. qualcomm, another stock we were watching during the day, that stock finishing lower in the session as well as symantec, also reporting its earnings out after the close of regular trading today. at the nasdaq marketsite, i’m robert gray.

>> general motors says profit fell more than 1/3 on higher healthcare costs and losses in europe. net income at the world’s biggest automaker fell 37% to $630 million. sales rose 5.1% to $51.3 billion. medical expenses for the company’s employees, retirees and dependents account for $1,400 for every vehicle it sells and those costs are rising 10% each year. in europe, general motors lost $742 million last year, its fifth straight annual decline. profit was hurt by $600 million in costs related to plant closings and writing down its investment in fiat. g.m.’s finance chief says the automaker has a strategy in place to turn around the business.% 

>> what you’ll see in 2005 is about 25% of our expected volume this year will be new product. so i think we’re going in the right direction. you’re seeing the renaissance of a number of new products. it started with the cadillac. saturn’s on the way, new pontiac. a number of other products from the g.m.c. side, the chevrolet side so you’re starting to see this roll up.

>> g.m. has the smallest market capitalization of the six major automakers operating in the u.s. executives familiar with the plans say mitsubishi motors will ask other mitsubishi group companies and banks for at least 500 billion yen or $4.9 billion u.s. japan’s only unprofitable carmaker needs the money as a bailout for the second time in nine months. executives say mitsubishi motors plans to sell at least 200 billion yen of preferred shares in subordinated bonds to three mitsubishi companies. another 50 billion yen would come from the state owned development bank of japan and the rest from the units of mitsubishi tokyo financial that would provide credit and swap debt for equity. coming up, the biggest lumber maker in australia and new zealand says declining lumber sales hurt profit. we’ll ask a fund manager whether this means investors should avoid shares of carter holt harvey.
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Listen Interview: NYSE marketsite

carmaker takes another shot at reorganizing finances. we’ll have details on mitsubishi motors’ bailout plan. and ebay’s fourth-quarter earnings jump yet investors and analysts looked for more. ebay said this year’s earnings won’t meet current estimates. we’ll hear from chief executive meg whitman in the following hour. dow components pfizer, j.p. morgan both missed analysts’ estimates. bank of japan governor toshihiko fukui suggests japan will resist international pressures to let the yen strengthen, sending the yen lower in new york. u.s. stocks fell on disappointing results from companies like motorola. economic figures showed declines in consumer prices and jobless claims. the s&p 500 lost 1%, dow lost about .8% and nasdaq declined more than 1.5%. julie hyman reports from the new york stock exchange.

>> the s&p and dow closed near their lows for the year today. if we have another downsession, they could break through the years thus far for 2005. it looked like investors were weighing negative earnings more heavily than they were more positive economic news that came out in the morning. technology largely responsible for the decline that we had today. these four gruns you see here -- technology, hardware, semiconductors, software services and telecom services were the four biggest declines within the s&p 500, all technology-related industries. a number of technology-related companies were out with earnings today. motorola said fourth-quarter profit was higher by 34%. however, its first-quarter profit may miss analysts’ estimates. those shares taking a hit of 7%. lucent, its first-quarter net income down 49%. its revenue rose less than expected, seeing declining orders from wire-line carriers, companies like bellsouth, those shares down 7.5%. teradyne, semiconductor equipment maker, saying it had a fourth-quarter profit versus a loss a year earlier. however, the company said revenue would decline in the first quarter. those shares fell 6%. big declines for many companies releasing earnings today. speaking of companies out with earnings, let’s talk about pfizer. fourth-quarter earnings there up more than four-fell. expenses fell. sales of lipitor cholesterol treatment rose, however, they did miss the average analyst estimates. they took the drug stocks generally down along with them, down .8%. we also saw a similar story with diversified financials. j.p. morgan, one of the companies out with earnings within that particular group. its fourth-quarter profit was down 11%, missing analysts’ estimates and because of that, we also saw diversified financials generally doing poorly once again in today’s market , pretty broad-based decline today. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> australia’s markets will open in about half an hour. woodside petroleum and virgin blue are among stocks to watch today. let’s go to stuart kelly, our stocks reporter in sydney, for more on those companies. what’s the latest?

>> the benchmark indexes futures contracts for march declined by about 1/3, indicating that the benchmark index may fall again for the third session in a row. watch for oil producers woodside petroleum and santos limited. they may fall today after crude oil futures in new york declined 1.7% on speculation a u.s. government report may show inventories of oil and petroleum products rose last week. keep an eye on james hardie shares. they may gain after u.s. housing starts surged 11%, the biggest increase in almost seven years, slightly ahead of expectations.

>> and, i gather there is news about miller’s retail. what’s the latest on that company?

>> watch out for miller’s retail shares, a discount apparel company in australia. the chief executive said he bought a 15.8% stake in the company this morning. that’s after the shares plunged 13% on friday after a disappointing earnings report. investors, though, were surprised, because on monday, the shares surged or rebounded back 11% and then another 15% again on tuesday. pearlstein said he bought the stake because he believed in the future of miller’s retail.

>> thank you, stuart. in news outside the business world, more than two dozen are killed in iraq 10 day before legislative elections. ron madison has more.

>> five car bombings in and around baghdad leave at least 27 people dead. the u.s. military says u.s. soldiers killed two civilians who tried to drive through an army patrol. the first bombing took place near australia’s embassy in central baghdad. the deadliest blast came an hour later where 18 people were killed near a hospital in the capital’s center. interim prime minister iyad allawi said he expects such attacks to increase as the election day in iraq approaches. the u.s. foreign relations committee endorses condoleeza rice as secretary of state. on the senate panel, democrats john kerry and barbara boxer voted against george w. bush’s nominee, expressing concerns about the administration’s iraq policies. the full senate does plan to confirm rice later after bush is sworn in for his second term. rice will be the first black woman to serve as secretary of state. meantime, at the u.s. state department, the man rice called her dear friend and mentor said farewell to his colleagues at the state department. outgoing secretary of state colin powell defended the record of the administration’s last four years, saying american diplomacy over that time produced a record all americans could be proud of and praised department workers, calling them america’s troops.

>> even though i step down as your secretary, i will never leave you, i will always be a part of this wonderful family. thank you all and god bless you. [applause]

>> powell called condoleeza rice, as well, a dear friend. the death toll, now, from last month’s tsunami rises above 200,000. the a.f.p. puts the new total at almost 220,000 after indonesia announced an additional 50,000 deaths. figures were cited from thailand, sri lanka and india to compile the new tally. a father and daughter are being reunited after being separated by the december 26 tsunami in this video. that is the latest look at world news. i’ll bring you another update at the top of the hour. back to you.

>> thank you, ron. up next, yahoo’s c.f.o. susan decker tells us why she prefers a weak dollar despite government calls to strengthen the currency.

Interview: Standard & Poor's debt ratings

>> more violence in baghdad. ron madison has that story from tokyo.

>> associated press saying today that a suicide bomber has killed three people at the baghdad headquarters of iraq’s biggest shiite political party. the attack comes as iraqi officials step up security measures to prevent violence during the nation’s election there is. according to associated press, the suicide driver blew up his vehicle after security guards stopped it at a checkpoint. iraq says international borders will be closed from the day before the election to the day after. nighttime curfew is also being set in place there. sunni muslim insurgents have promised to disrupt the january 30 vote. many sunnis fear a loss of power to the shiite muslim majority there. chinese government officials say they are doing all they can to secure the release of eight construction workers abducted in iraq. the official chinese news agency says the eight men from southern china vanished last week traveling to jordan. the workers are said to be seen in this videotape released monday by militants. a note delivered with the tape says the abductors will consider releasing the hostages because china did not participate in the iraq war. a catholic archbishop kidnapped in iraq is freed a at a after he was seized near a church in mosul. the archbishop of the syrian catholic church said he was treated well. condoleeza rice promises to work to mend international relations frayed by the war in iraq. the nominee to be u.s. secretary of state says she hopes to strengthen ties with old and new allies. at her confirmation hearing, rice defended u.s. actions following september 11.

>> september 11, 2001, was a defining moment for our nation and for the world. under the vision and leadership of president bush, our nation has risen to meet the challenges of our time, fighting tyranny and terror and securing the blessings of freedom and prosperity for a new generation. the work that america and our allies have undertaken and sacrifices we have made have been difficult and necessary and right. now is the time to build on these achievements to make the world safer and to make the world more free.

>> condoleeza rice is expected to have little trouble being confirmed. still, democrats plan to question her on a variety of issues. that is the latest look at world news. back to you.

>> thank you, ron. ranbaxy’s profit dropped 11% for the fourth quarter. reasons for the declines at india’s biggest drugmaker include competition from the u.s. and a doubling of research costs. shobi pereira is in singapore bringing us details with more on that story. what kind of competition did ranbaxy face from the u.s. market ?

>> good morning. chief executive officer brian tempest told reporters after the earnings announcement pricing pressure began in july and increased in the fourth quarter so that’s the kinds of competition we’re talking about. at the end of december, the company decided to forego some business because of price competition. ranbaxy is facing increased competition in the u.s. generic companies are competing to sell their versions of the drugs losing patent production in the the world’s biggest drug market . cathy?

>> what about for research expenses? why did they double?

>> research expenses in the fourth quarter doubled to $26 million mostly because of the increased number of filings to sell drugs in the u.s. the company filed to sell 26 drugs in the u.s. in the fourth quarter. earnings were also hurt by the strengthening of the indian rupee against the dollar, reducing the value of the country’s exports. the rupee gained 5.3% in the quarter.

>> how much progress is the company making with the sale of lipitor, which is the cholesterol drug in the u.s.?

>> this is the backbone. ranbaxy, challenged in the u.s., pfizer’s patent on the cholesterol treatment lipitor and lipitor is the world’s best selling drug and ranbaxy has started preparing to sell the drug in the u.s. ranbaxy c.e.o. said the company has begun buying the raw materials and expanding capacity, steps, in fact, that will reduce the company’s working capital and generate other expenses going forward. legal trials on lipitor began in a u.s. court on november 30 in delaware. ranbaxy sells more than 80 drugs and their variations in the u.s., including copies of glaxosmithkline’s anti-viral tegmentin and bayer’s cipro. ranbaxy also received approval to sell four u.s. generic drugs, including eli lilly’s antidepressant prozac and bristol-myers hypertension drug, money on pro. that’s what i have for you now.

>> thank you, shobi. malaysia’s inflation rate probably accelerated in november. economists we surveyed expect the consumer price index rose 2.3% from a year ago. malaysia reports december inflation figures this afternoon in kuala lumpur. thailand’s central bank today will probably leave its key rate steady after raising interest rates three straight times. falling oil prices and strengthening local currency are slowing inflation in southeast asia’s number two economy. expect the decision from thailand’s central bank around 1:00 p.m. in bangkok. up next, u.s. stocks with a late start to the week with the biggest gains for the year from major indexes. a detailed report from the new york stock exchange coming up.
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Listen Interview: Australian market and Tokyo market
in store for today in a live report from sydney. earnings from tech companies dominate after-the-bell earnings in the u.s. i.b.m.’s sam palmisano leads i.b.m. to a 12% profit gain but it wasn’t p.c.’s that drove the growth. demands for consulting and computer maintenance services helped boost profit. shares rise in extended trading. motorola shares head the other way. higher phone prices helped the cell phone maker boost profits to 27 cents a share on $8.8 billion in sales. yahoo shares rise in extended trading. net income jumped almost five-fold to $372 million or 25 cents a share. revenue grew 62% to more than $1 billion. international business machines says fourth-quarter profit climbed 12%. i.b.m. says net income rose to 3.04 billion or $1.81 a share. a year earlier, the world’s largest computer maker earned $2.71 billion. with a market capitalization of $142 billion, i.b.m. is the world’s second largest technology company behind microsoft. for more, i’m joined by john jacobs, president of jacobs and company in new york, helping to manage i.b.m. shares, joining us from charleston. it’s good to see you again, john. what do you make of i.b.m.’s earnings and outlook?

>> initial review of the report looks really good. not only do we have better profit numbers but revenue numbers were―we were thinking they would come in softer. what excites me the most are the gross margins where they continue to move higher quarter to quarter. i think the plan of palmisano is working well and when we look at i.b.m. as a company offering total packages this is where we see the consulting side help us with the surprise this quarter.

>> i.b.m. can generate earnings growth of more than 10% going forward?

>> i think going forward, it’s very possible. i think as i.t. spending comes back globally, i think they’re very well positioned to take advantage of this. when you look the gross margins when we look, you’ll see across the board larger gross profit margins under all segments and more cost cutting coming into play. it’s not so much focused on the revenues but the dollars they’re getting, they’re very strong and are sistered in the new core businessed where more than half of their business now comes from services. we’re not seeing the gigantic contracts but lots of smaller contracts starting to build up, helping move these numbers.

>> will you be adding more i.b.m. shares to your portfolio after today’s results and outlook?

>> after today’s outlook, i think we probably will. we’ll definitely take a hard look. we’ve had more of a moderate position. we wanted to see comments. we’ve seen they’ve also talked about raising for the rest of the year, the 44 cents on top of earnings. i think right now, as we look at the final comments and the conference call, we will be very positive on this because i do think i.b.m. is where they are, they’re trading a little below the s&p 500, now, in terms of the p.e. and i think you can see shares move as they’r indicated early in aftermarket trading. i think we’ll take a hard look and probably add especially over the next quarter, cathy.

>> i.b.m. is seeing a lot of competition from hewlett-packard. h.p. has just started selling new computers based on intel’s itanium processors to replace machines made by i.b.m. and sun microsystems. how are you seeing h.p.’s move affecting i.b.m. server sales?

>> at one time i think h.p. had a closer chance to take more market share from i.b.m. i think the key here is you have to look at the intellectual side in terms of those particular properties. when you get into the companies and you’re able to work with a team effort with all the consulting and all the sides, i think h.p. has a small disadvantage as they’ve begun to lessen their head count from the intellectual side after the compaq merger whereas i think i.b.m. has strengthened the core services and have begun to focus in on them. when you look at the p.c. side going to len ovo these five years, this has always been a drag on i.b.m. and they’re pretty much saying we’ll give the commodity back to the commodity players and let them fight the turf war and we’ll come to the higher margin business and i think over the long term, i.b.m. will be more successful and also gain market share.

>> john, thank you very much for joining us, john jacobs, president of jacobs and company in charleston, west virginia. australian mining companies may be active in today’s trading as u.b.s. raised share price targets for b.h.p. billiton. let’s go straight to stuart kelly, our sydney reporter. another broker upgrade for b.h.p. billiton and rio tinto.

>> yes, there is. there’s been a spate of broker upgrades for b.h.p. billiton and rio tinto, positive broker reports from morgan stanley, credit suisse and deutsche bank mainly on expectations that both of those companies will be able to secure price hikes of iron ore as much as 30%. a.g. raised their price forecasts for both of those companies’ london-based shares. the american depository receipts of rio tinto rose in new york last night, closing higher .8%. it’s difficult to say today which way those two shares will move on the australian market as it opens a short time from now although the benchmark index futures contracts is up .4%.

>> any other movers to watch today?

>> keep an eye on miller’s retail shares. the shares rose 11% yesterday. there is speculation in the press this morning in several newspapers that it may be the subject of a takeover perhaps some time in the near future. miller’s on friday plunged 13%. that’s after it reported disappointing first-half earnings. the shares, then, rose 13% on monday and again as i said, another 11% yesterday. so that’s what’s got some of the tongues here wagging and certainly amongst traders although none of the newspapers specified a source of the speculation. that’s all from me, catherine.

>> thank you, stuart. coming up, india’s biggest drugmaker says fourth-quarter profit fell 11%. learn what’s happening at ranbaxy laboratories.

Interview: Standard & Poor's debt ratings

>> the philippines debt ratings have been cut by standard & poor’s. the move came after president gloria arroyo failed to get lawmakers to pass tax increases needed to narrow the nation’s budget deficit. shobi pereira joins us with more. what steps did standard & poor’s take?% 

>> the s&p cut the long-term foreign currency rating to double-b-minus from double-b, and the local currency rating to double-b-plus from triple-b-minus. the foreign currency rate suggest three levels below investment grade. the foreign currency rating is also the lowest it’s been since june 1993 and on par with brazil, turkey and vietnam. cathy?

>> what exactly is it that president bush arroyo hasn’t done that prompted the move from s&p?

>> in july, arroyo asked congress to approve eight tax changes. the president wanted to boost taxes by 80 billion pesos or $1.4 billion u.s. a year. lawmakers have so far approved one of her proposals. the philippine government announced yesterday that it failed in 2004 to meet its tax collection target for the sixth time in seven years. s&p does say it has a stable outlook on its philippine rating. the ratings company said that deficits are expected to remain high over the medium term in light of persistently weak revenue collection and the company says that failure to adhere to a credible fiscal strategy could pressure the rating. cathy?

>> what’s been the reaction from investors after this move?

>> desmond sune, an asset manager in singapore, says the rating cut is bad news to the bond market and although it had been expected, he’s not buying the nation’s debt because the government has, in his words, serious fiscal problems. a lower rating may increase the nation’s borrowing costs because investors will ask for a bigger premium when buying the nation’s debt. the philippines is the only asian nation to have had its debt rating cut over the past two years. ratings have been raised in eight other countries, including malaysia, india and indonesia. that’s it for now, cathy.

>> thank you, shobi. indonesia says it may need as much as $150 billion for new roads, power plants and other projects. reconstruction in areas devastated by the december 26 tsunami could cost an additional $4 billion. the government plans to finance around $60 billion of infrastructure spending from its own funds and bank loans. southeast asia’s largest economy is cogating on foreign -- counting on foreign investments. corruption concerns have stimied foreign investment in indonesia, totalling $10 billion last year, down 75% over the past nine years. hewlett-packard will sell new computers based on intel’s itanium processors. hewlett-packard chief executive officer carly fiorina will announce new versions of the integrity series computers tuesday. hewlett-packard and intel are going after the most lucrative part of the market with powerful computers. companies use those to manage databases and perform complex tasks. gartner research says hewlett-packard has 28% of the market for server computers in the third quarter, trailing i.b.m.’s share of 32%. u.s. automakers, including general motors and ford motor, are expected to report the worst quarterly profits this week among the members of the s&p 500 index. analysts expect first-quarter earnings for automotive companies to drop 26% from the same period a year earlier, citing increased competition from asian competition, higher healthcare costs and rising interest rates. g.m. and ford are among s&p 500 companies to release results in the first week of earnings reports this year. continental airlines gets $9 million in cost cuts to avoid millions in losses this year. the fifth biggest airline agrees on wage and benefit cuts for some non-union workers. the cuts for 12,000 ticket counter, gate and operations employees take effect february 28, including unspecified changes to wages, overtime rules, pensions and holiday compensation. the airline reports fourth-quarter earnings thursday. continental shares have fallen 43% in the past 12 months. airbus plans to unveil the world’s largest passenger plane later today. the 555-seat airbus a 380 will surpass boeing’s 747 in size. airbus says it already has orders for 139 of the jets and planes to win as many as 700 contracts for the a380 in the next two decades. it has a wing span of 262 feet, is 73 meters long and ways 569 ton when is fully loaded for takeoff. after the break, coal demand is rising. we’ll discuss the outlook for coal prices.
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Listen Interview: Australian market and Tokyo market
led by miners like b.h.p. we’ll go to our sydney reporter in just a minute for a preview. the dollar trades near a five-year low against the yen in asia. volume is thin. traders are declining to bet ahead of a u.s. treasury report of foreign purchases of foreign assets. the economy may not attract enough investment to compensate for its current account deficit. intel is reorganizing five business units from two, which may indicate a change in direction for intel. otellini becomes chief executive in may and may push the company into new markets like wireless devices and consumer electronics. global stocks rise led by miners and electronics like samsung. european and asian benchmarks advance. u.s. markets were closed for the martin luther king jr. day holiday. china airlines and five other taiwan carriers sign up to operate non-stop lunar new year charters to china. the airlines bet the largely symbolic flight may lead to money-making regularly scheduled service in the future. the flights will be an expanded version with carriers participating for the first time. instead of having to stop in a third country, the non-stop flights will be required to merely pass through hong kong’s airspace. taiwan’s businesses have been pressing the governments to open talks on regularly scheduled direct flights. a government official says china’s investment in factories and homes and fixed assets is growing too fast. the government spokesman says it needs to step up efforts to cool expansion and inflation saying “we need to enhance and improve the country’s macro economic controls.” the comment was made in a speech to the economic forum in china yesterday. china’s premier hu jintao made the changes. monday, the benchmark asx 200 added .4%, expanding its recent record. australian miners advanced to a three-month high on the price of copper. we’ll go to stewart kelly, our stock reporter in sidney. with the u.s. markets closed, what will u.s. investors look for ahead of the markets open in sydney.

>> the benchmark index futures are up .33% today. in the absence of direction from the united states, investors are looking at markets in europe and asia where indexes rose on optimism demand growth will lift corporate profit. shares of rio tinto group rose 2.6% on the london stock exchange yesterday. that’s after yet another positive broker report. you may remember deutsche bank a.g. raised its earnings estimates for rio tinto on friday. today, it was morgan stanley and credit suisse first boston. morgan stanley raised profit estimates for b.h.p. billiton and rio tinto group saying iron ore prices may rise 1/3 this year. also, credit suisse first boston raised its estimates for iron ore prices 35%, also raising its rating for b.h.p. to neutral from underperform. catherine?

>> any other stocks that we should keep our eye on today?

>> keep your eye, in particular, on foster’s group limited. its shares may fall again today after falling nearly 7% yesterday. that’s after a negative broker report here in sydney. foster’s shares yesterday fell 6.7% after it said it would take over its next biggest rival, southcorp limited. merrill lynch today released a report saying it viewed the potential takeover negatively saying that they were inherent risks for foster’s to take over southcorp and they reduced their rating for foster’s to neutral from buy. that’s all from me, catherine, enjoy your day.
　

>> thank you. more instability in iraq. less than two weeks before legislative elections. ron madison joins us from tokyo with the story.

>> insurgents kill 14 members of iraq’s security forces north of baghdad. the u.s. military says seven iraqi soldiers died when rocket-propelled grenades hit their vehicle. another seven were killed when a car bomb blew up at a checkpoint. iraq says a cousin of saddam hussein controls as much as $7 billion, which is used to finance these attacks. interim prime minister iyad allawi has said assaults by insurgents will not derail elections planned for later this month. and iraqis around the globe register to take part in their homeland’s first independent election in nearly 50 years. expatriots from sydney, australia, to washington, d.c., started registering for the country’s january 30 legislative election. poll organizers say as many as a million people are expected to put down their names. many iraqis say they have been waiting for this chance to vote.

>> basically we’ve been waiting for this, in election for so long. and we have to―we have to participate in the election. we have to use our right for the election and we have to vote.

>> those living in iraq will cast their ballot on january 30. those living abroad will be able to vote from january 28 through the 30. the palestinian authority approves a security plan to stop a surge in attacks on israeli targets. a cabinet spokesman says the plan includes more security at crossing points between israel and gaza. here we see palestinian president mahmoud abbas meeting with a delegation of israel’s parliament in ramallah. six israelis has been killed in bombings and gun fires since abbas was elected. a united nations report calls on nations to boost foreign aid 55% next year, saying countries including the united states need to give $135 billion if they hope to half halve world poverty in 10 years. the report calls for more efficient aid delivery, saying only 30 cents of everiated dollar―aid dollar reaches people in poor nations.

>> thank you, ron. coming up, no new taxes in the philippines but the country suffers a cut in debt ratings. those two facts are directly related. details coming up.

Interview: Protecting intellectual property rights

>> u.s. commerce secretary is in beijing to product chinese leaders into taking a tougher stance in the fight against counterfeiters and software pirates. he says china’s lowering of 9 threshold for putting counterfeiters in jail wasn’t enough to please u.s. officials. he says they must do more in protecting intellectual property rights.

>> i tell you, the most important thing for them to stay focused on is enforcement of the laws. and that means putting people in jail. we’re pleased that they have lowered the threshold for the criminalization of counterfeiting and piracy and i think we believe that’s a very constructive step. we’d like to have seen them go somewhat further than they went. what i really believe is that what they need to do is be putting more people in jail.
>> i hear that you don’t believe that the recent textile support tariff they say they’ll tack on is high enough. can you tell us how high should they be and can u.s. textile makers survive after all the tariffs are lifted?

>> listen, the textile industry in the united states has been downsized considerably over the last several decades. it has been downsized in terms of employment in particular. and the export tax or tariff that china put on textiles and apparel recently was interesting but it wasn’t particularly impressive. it was a nominal amount. and i would say that the textile industry in america is competitive in the world and certain specific areas of the textile economy or the textile sector of the global economy. the industry is adjusting, it’s transforming itself. it is forming partnerships around the world. it is developing joint ventures around the world and look, the american workers, american companies can compete with anybody in the world. and we’ll. it’s an economy that will continue to gravitate toward those areas of the economy where they’re most competitive.

>> do you think china should up the textile tariffs―export tariff as soon as >> i think they need to look very carefully at their own policies with respect to subsidies, with respect to non-performing loans, with respect to other structural issues within their economy that create the impression of an unlevel playing field. we want china to stay focused on structural issues that make sure that we can look our workers and companies in the eye and tell them we’re on a level plague field with other companies in the world.

>> why do you think china support of a state source risk of backlash. you said this recently. doesn’t the u.s. give its industries preferential treatment as well?

>> no. what i said is any time that you see they’re not moving forward on structural kinds of reforms, eliminating or reducing non- performing loans in their banking system or sponsoring state-owned enterprises, what it means is that american workers and american companies are being asked to compete against subsidized companies in other countries. and, you know, that needs to change. otherwise you can see how people might consider taking steps to level the playing field.

>> also, this is a key issue for the u.s.. china says it plans to pull the plug on the ramimbi as soon as the financial sector is reformed. but that may take some time. why isn’t this answer good enough for the u.s.?

>> well, we think that economies function best in the world when there is free trade, free flow of capital and market forces determine exchange rates. and we just think it’s important for all countries, all economies in the world to create an environment for long-term economic growth. and those are the kinds of policies that lead to long-term economic growth. and so we have been encouraging secretary snow has been encouraging china to continue to express how important it is to move toward a flexible exchange rate.

>> u.s. commerce secretary donald evans in beijing. hong kong’s billionaire plans to sell a stake in canadian imperial bank of commerce and give the proceeds to charity. more in the second hour of this program. we are seeing a bit of the philanthropist in our landlord.

>> that’s right. we only refer to him as hong kong’s billionaire tycoon. you might want to add another label and call him philanthropist. he will tell 5% stake in cibc and donating the proceeds to charity. it is worth 1.2 billion canadian. the money from the stock sale will be donated to a charity in toronto. no date set for the sale. he has been pleased to be an investor in this stock. judging by the one-year chart, can you understand why.

>> we’re being good corporate citizens, too. we’re paying him rent.

>> we are.

>> one of his companies is in the midst of selling part of its stake to china netcom. what are the details there?

>> china network communications. his second son runs the company. it’s been a bit of stop and go. we weren’t sure’ deal would go ahead. netcom said you may or may not want to bank on this because there’s no guarantee of a deal. richard lee held a press conference yesterday. the press conference was partly a call to dispel rumors that richard lee disappeared in the aftermath of the tsunami. there was media noise in hong kong that he was in maldese at the time. he was on a plane to india to talk about the netcom sale when the disaster struck. network communication sincere

在线播报
Listen Interview: Currency

>> the dollar drops by the most in five weeks against the euro. also fell versus the yen after the u.s. trade deficit expanded to a record in november. declines for the u.s. currency accelerated after u.s. treasury secretary john snow urged japan and europe to boost their economics to help shrink the trade deficit. traders say that’s sign that the u.s. may resist pressure to support its currency. for more on currency, we are going to san francisco to talk to a foreign exchange strategist of barclays global investors which manages more than $1 trillion. good to see you. how much pressure is there for the dollar to fall further?
>> yeah, there definitely is pressure. look that the trade deficit. an absolute monster coming out in the last day. we really have to take a step back and realize there are some actual positive factors for the dollar. one of which is we do expect interest rates to increase which is positive for the u.s. dollar. additionally the bush administration is enacting some budgetary reform that may be credible going forward. so although the marketplace is excited about the dollar dropping and potentially to keep dropping because of the massive trade deficit, there are some mitigating factors here. that’s why we have maintained a small short position in the dollar. it may not be as short as what other folks are doing in the marketplace.

>> given those mitigating factors, when are you seeing investors buying dollars on expectations that interest rates will increase in the u.s.?

>> yeah, well certainly there is this expectation of interest rate increases. the federal reserve has been very clear they expect to raise interest rates on a moderating basis going forward. there is a question, though, in light of that will foreign investors be able to fund this current account deficit we have? there will be data releases in the next week that should be helpful in understanding that. overall i would say that we have competing factors here and the net net is it will be somewhat negative for the dollar in the near term.

>> so for the whole quarter where do you see the dollar trading versus the euro and yen?

>> well, certainly for the quarter coming up we see some degradation in the dollar versus the euro and yen. although i would say that it’s somewhat mitigated because you get a situation here where some of the economies like the japanese yen and european situation, their growth is somewhat mitigated. they have had downgrades in the g.d.p. estimates for those regions. that is concerning. there is a limit of how far the dollar can drop relative to the currencies.

>> the u.s. is pressing japan and europe to boost their economies to help shrink the trade gap and the e.c.b. is calling for asian currencies to strengthen. how do you see asian central banks and governments reacting to international pressure?

>> this is the sort of regional fight that has been going on. there is a question of how are the asian banks going to react to this. one thing is for sure. the asian banks have been credible in intervention activities with particular focus on japan. when japan says they’re going to intervene, they do and do it in a big way. there is really this risk of intervention in japan and primarily to support their export industries. obviously they want to weaken the japanese yen to support the exports of that country. interestingly enough, the export industries have done reasonably well in recent times. it could be that they lay off the intervention for the moment. but certainly the market is fearing that and that is why typically market makers right now are positioning longer the euro relative to the dollar than they would long the japanese yen relative to the dollar because intervention risk is much higher in japan than in european regions.

>> what sort of dollar trades would you recommend before the g -7 finance ministers meeting in london?

>> well, certainly right now we maintain a long position in the euro, although the growth has been somewhat mitigated. it is a strong momentum, positive momentum for the currency. we maintain a long position on the australian dollar versus the u.s. dollar. that’s primarily because it maintain as very large interest rate differential with the u.s. right now the australians have a large and robust interest rate differential with the u.s. that. may be mitigated in the medium term but now is fairly robust and is attractive to us.

>> in fact, the australian dollar rallied after the u.s. trade deficit unexpectedly widened. what is your outlook for the local dollar given concerns over the u.s. trade deficit?

>> my outlook for the australian dollar, is that it?

>> that’s right.

>> right now the australian dollar is supported by a variety of factors. obviously the interest rate as i mentioned earlier. but also the commodity prices have been supported for that export oriented country. the interesting thing about the australian dollar right now is that their current account deficit is actually larger on percentage of g.d.p. basis than in the u.s. that. is extraordinary and that could weigh heavily. the market is not focused on that. they focus on the interest rate differential and the fact that

Saddam Hussein's banned weapons --- Ron (slow)

>> coalition forces and their hunt for saddam hussein’s banned weapons. that story and more in world news.

>> good morning, cathy. the white house says the hunt for weapons of mass destruction in iraq came up empty so it is now over. scott mclellan says there’s no longer an active search for chemical, biological or nuclear arms. george w. bush used the threat of iraq’s banned weapons as a reason to go to war. the chief u.s. weapons hunter is going to deliver his final report on the search next month. in september it was reported that saddam hussein had no weapons of mass destruction, nor the ability to make them. bush insists that the invasion of iraq was justified. he has appointed a panel to investigate why the intelligence about iraq’s weapons was wrong. the indonesian government is reasserting control over foreign troops, relief workers and journalists in areas devastated by the sue thauply. marines scaled back plans to send hundreds of troops ashore. the marines have agreed not to carry guns while on indonesian soil. most of the troops return to ship stations off the coast after each day’s operation. aid workers have been ordered to declare travel plans or face expulsion from aceh. this underscores sense activities to having foreign military forces operating there even if a humanitarian effort. they come amid warnings from the indonesian military that areas of aceh province may not be safe for aid workers. the world’s wealthiest nations are finalizing plans now to temporarily forgive billions of dollars owed by the asian countries devastated by the tsunami. a french official says a proposed moratorium on debt repayment is endorsed by the 19 creditor nations that make up the paris club. details are still being worked out but the goal is to give the asian countries breathing space while they recover from the disaster. cathy, the latest look at world news. another update coming up in about an hour. back to you.

>> i’ll see you then. thanks, ron. back to business, motorola says its president has resigned. the announcement comes 13 months after he was passed over for the c.e.o. position. the world’s second largest mobile phone maker says he won’t be replaced until after he leaves on january 31. the company says the heads of the company’s four division also report directly to the chief executive officer, ed zander. after the c.e.o. said in september 2003 that he would% -presign. oil rises to a six-week high after crude oil stockpiles fell% -pmore than expected. inventories dropped 3 million%  pbarrels to 289 million. steel demand growth may slow from a record over the next two years. the organization for economic cooperation and development says industrialized economies are slowing, reducing demand for the metal. the metal rose 5% this year and 3.5% in 2006. the group expects economic growth for the 30 members to average 2.9% less than the forecast made six months ago. members do not include faster growing india, china or brazil. pospo is the world’s most profitable steel maker and benefits from rising prices. analysts expect fourth quarter net income more than doubled to $961 million. rising profits give posco money to expand overseas. posco reports national results this afternoon. tata will probably report rising profits. that after more orders were placed with the india number one software maker. expected it rose 33% in the three months ended in december. that’s $140 million. tata reports third quarter results this afternoon. two asian central banks meet today to set interest rates in south korea. policymaker also probably keep borrowing costs at a record low to revise spending―revive spending in asia’s number four economy. a decision is due at 11:00 a.m. in seoul. economists surveyed by bloomberg expect policymakers will leave the key interest rate at 12-year lows in the philippines. the peso is slowing filipino inflation. expect a decision this afternoon in manila. australia probablyed a jobs for a fourth straight month az ricing profits led companies to hire. expected payrolls grew by 3,500 last month after employers pwaosd jobs by 24,000 in november. the increase may keep australia’s jobless rate near a 28-year low of 5.2%. australia reports employment figures at 11:30 this morning in sydney. coming up, the dollar drops by the most in five weeks against the euro. we’ll ask a strategist in san francisco if he expects further dollar weakness in coming weeks.
在线播报
Listen Market briefing --- Cathy (fast)
Weak dollar --- John Snow (slow)
Outlook and earnings --- Su (fast)
Australian market --- David (slow)

welcome to “ live” from hong kong. i’m catherine yang. the u.s. trade deficit balloons to a record. commerce secretary donald etches addresses concerns. we’ll have more in 50 minutes. investors ignore reports for a stronger dollar. we talk to a currency strategist live in 20 minutes. shares of cosco rise ahead of earnings from south korea’s largest steel maker. we preview the results of posco. the dollar lower in new york. the dollar posted its biggest loss in five weeks versus the euro and dropped back into the 102 range. you are looking at live market quotes. the kwraoro at 1.3254. the yen at 102.45 to the dollar. the u.s. trade gap widened. a bigger than expected 7.7% to $60.3 billion in november, biggest monthly deficit on record. the deficit with china accounted for more than a quarter of total deficit. the u.s. trade gap with the european union and japan grew in november despite dollar’s drop last year. treasury secretary john snow says he is counting on those countries an not the weak dollar to help close the gap.

>> we’re growing faster than our trading partners. whenever you grow faster than your trading partners, you create more disposable income and part of that disposable income that we’re creating is being used to buy goods and services from our trading partners. by the same token, our trading partners growing more slowly are generating less disposable income and are not buying as much from us as they would if they’d get their economies growing faster.

>> and taking a look at other deficit. narrowed in december to $3.4 billion. still, that’s bigger than economists surveyed by bloomberg. more on apple computer earnings. shares surge more than 13% in extended trading in the u.s. the company says first quarter profit more than quadruple thanks to record sales of its ipod digital music player. su keenan breaks down the earnings and outlook. what’s the latest, su?

>> the latest is the stock just began trading and we’re seeing it jump $7 to an all-time high. the latest trade, 72.42 for apple. it hasn’t traded above $72 since march of 2000. let’s talk about what is happening here. apple’s latest earnings report easily beat the most optimistic of analyst forecasts. all of this coming as c.e.o. steve jobs makes ipod not just a priority for the company but the must have item for many young adults. the ipod is now apple’s fastest growing product with the company saying today 4.6 million units were shipped during this past quarter. analysts say it is play ago big role in the reports. let’s look at numbers. net income rose $295 million or 70 cents a share that. from $63 million or 17 cents a year earlier. sales topped well over 60% to $3.49 billion. that compares with just over $2 billion in sales this time last year.%  pand it compares with a $3.18 or $3.2 billion expected by the 19en lists surveyed by thomson financial. the popularity of the ipod is translating into higher sales of apple’s macintosh personal computers. sales of the imacs surged to 460,000 units shiped in the quarter, roughly an increase of 26%. now just yesterday apple’s c.e.o. unveiled a new version of the ipod to capitalize on its popularity. this is the lower cost ipod shuffle as it is called. runs for $99. jobs also introduced the new mac mini, lowest priced computer in the company’s history. munder capital’s analyst is concerned that this could shrink apple’s operating margin but he says the payoff could be worth while.

>> i think there’s an opportunity for them to make an investment here at low end of the market and to turn that market up into perhaps buying other a.m. products where they’ll be more profitable.

>> as for apple’s stock, it tripleded in the past year making it the 17 s&p 500’s best performer in 2004. analysts, at least before today, were divided on the stock. over half rated a hold, mainly on the concern that the stock was too expensive. harris & company’s analyst expected the rally to continue. she’s looking good at this hour saying the music products of the ipod are just the beginning.

>> i think there’s still a lot of momentum here.
>> you think that apple is really addressed and there’s several more to come down the pike. we view digital media as becoming increasingly important in consumers’ lives as more content becomes digital. we are used to digital photos, digital music. we’ll become accustomed to making our own d.v.d.’s, etc. apple is right there providing consumers the tools they need to create, manage, share.

>> again, she rates apple a buy. the conference call taking place that the hour. and one thing that appears clear with the stock trading 13% higher in extended trading is that this will definitely be a driver for tech stocks going into thursday’s trading.%  pstay tuned.

>>> digital media gadgets are getting smaller. thanks. u.s. stocks rose before the release of apple’s earnings. the dow and nasdaq gained .6%. s&p rose .4%. intel boosted semiconducter shares after it said yesterday sales this quarter will beat forecasts. treasuries were little changed after the government auctioned off $15 billion of five-year securities. international investors accounted for almost 40% of the bidders, down from 66% in the previous sale. traders now fear foreign investors may be avoiding the u.s. debt market . today’s auction is the first of eight this month and next. $10 billion of 10-year securities will go on sale tomorrow. asian stocks rise in u.s. trading. investors are optimistic oil prices at six-week highs will boost profits at cnooc and petrochina. futures point to a mixed start for futures. the tokyo stock exchange opens in less than two hours. bank of australia’s a.d.r. is up .7%. s.p.i. 200 futures up .3%. let’s go for more in sydney. what are investors looking at in australia before the open?

>> first of all we might see gains in mining stocks. b.h.p. and rio tinto. we had crude rising to a six- week high. also rio tinto could be higher. a big copper producer in australia. we had an increase in the copper price in overnight trading as well. the third reason we might see gapes there is both of the mining stocks were raised to buy from hold by the broker in the u.k. which cited confidence about robust earnings when they reported in february and also the fact that they’ll probably have some pretty positive outlooks when they report those earnings. so have a look out for mining stocks. the big story of the day could possibly be network 10. this is one of australia’s three commercial television networks. there was an―a report in the australian newspaper that said john fairfax holdings, publisher of the “sydney morning herald” may be interested in buying a $1 billion stake. back to you.

>> thanks for that, david. and coming right up, the paris club of creditor nations agrees to allow countries hit by the tsunamis to suspend repayment that. story and more world news after the break.

Interview: Why the takeover trend has been growing

>> posco reports fourth quarter profit today. economists forecast it to report a 10th straight quarter of net% -pincome growth.%  pnet income probably doubled to $961 million in the three months ending december 31 from a year earlier. that according to the median estimate of eight analysts polled by bloomberg. full-year profit probably rose at 85% to a record $3.67 trillion. for reaction, i’m joined by the head of asian credit research at calyon investment bank. good to have you with us. analysts expect posco to report 10 straight quarters of profit. why is the company doing so%  pwell?

>> well, it’s a race between the steel price increases. steel price vs. shot through the roof for the last five or seven quarters. they have been upwards of $600, $700 imported prices in america and europe. coal prices are going up and metal prices are going up, too. still, both these taken together posco’s operating margins have risen. they are now hovering at around 25% for about six quarters now. so i think the basic thing is demand for steel, steel prices an how it is able to curtail prices.

>> do you expect costs to rise faster than steel price this is year and what effect will that have on the pace of profit growth for posco? there are reports that coal prices are likely to increase more than 100%. i know prices are likely to increase about 60%. both have negotiations going on right now. still we think the demand for steel will continue to be strong in the new year and the steel prices will stay at these high levels for some time to come. we have high forecasts for economic growth in the united states. we are looking at 3.6%. we think china will slow down but only slightly. so we are still looking at% growth for 2005. india, although the monsoons may play a role in the overall growth rate, production seems to be going very well. all of these factors are to be considered. demand for steel is likely to be high and i think steel prices can catch up with the price increases, maintaining posco’s profit margins at current levels.
>> so given your optimism for steel demand this year, will posco be able to pass on the costs as easily as it did last year?

>> i think in the first two quarters posco will be able to pass on. toward the end of the year we may have some negative influences coming into play. the u.s. growth rate may dip a little more in the year 2006. china will have slowed down to a cruising pace rather than a blistering pace. we may have chinese catching up with the rate of demand. i don’t think it will happen as early as this year. it’s a story maybe a year and a half, two years down the line. so from the beginning of next year we may have some moderating influences. until then i think it should be fine.

>> posco will hold their analyst conference call later this evening. are there any specific areas or issues that you would want the company to address?

>> i would think three questions are important. first of all, the operating margin outlook has been discussed. the rate between steel prices and the raw material prices. and secondly, i would like to know a little more about posco’s medium term strategy. they’re expanding in china. they’re talking about brazil, india. where are they going, how much will they invest and when will the benefits start flowing? thirdly, there used to be talks of diversification at least some time ago. they wanted to get into the private sector. talks have also slowed down. i would like to know once steel goes down a little bit, will they talk of diversification and if so, what are the areas they’d like to look at? these are the questions i’d like to ask them.

>> dilip, before you go, the unemployment rate for december in south korea is at 3.6% from 3.5% the previous month. what do you make of the data and the effect it may have on interest rates in south korea?

>> we think the domestic demand will still remain down for at least two quarters now. maybe from the third quarter it may rising. it is too soon. employment data reflects that. on top of that, we think exposure may moderate this year compared to last year. they’ll not collapse. they’ll continue to grow at a reasonable pace but not as strong as they used to last year. so given this kind of thing, we think interest rates will only go down. we don’t think the central bank would cut interest rates as soon as this week 25 basis points but we do expect a 25 basis point cut in the next meeting next month. that is because the central bank would like to watch where the currency is going. ‘ currency is appreciating, they don’t have to be in a hurry to cut the interest rates.

>> good to speak with you. thank you for that, dilip. head of asian credit research at calyon investment bank on the phone in hong kong. coming up, a special interview with u.s. commerce secretary donald evans. he will talk about trade, currency and china’s future, just ahead.

在线播报
Listen Market briefing --- Cathy (fast)
Australia market --- David (slow)
Tokyo market --- Ron (slow)

>> chinese leaders failed to produce results on points of friction in our trading relationship. their failure only empowers those critics within the u.s. political system.

>> we’ll hear from outgoing u.s. commerce secretary don evans as the u.s. trade deficit balloons to a record. the widening trade gap pushes the dollar lower in new york. the dollar posts its biggest drop against the euro in five weeks. it loses all the gain it is had against the yen earlier this year. the tsunami-ravaged countries get a break. the paris club agrees to delay debt payments until the i.m.f. and world bank come up with complete debt relief plans. apple computer shares surge more than 12% in extended trading. sales of the ipod helped apple more than quadruple profit in the last quarter. breaking news from south korea. the nation’s jobless rate is at 3.6% in december. that is up from november’s 3.5%. economists we surveyed expect that the jobless rate would hold near a three-year high of 3.5%. rising unemployment is hurting consumer confidence in asia’s number four economy. south korea’s central bank will probably keep borrowing costs at a record low to revive spending% -pand investment. futures on the a.s.x. are up .3%. let’s go straight to david in sydney for more. david, what are investors looking at in australia before the open?

>> looks like we might have a rising market , cathy. people will probably look at so. mining companies. b.h.p., biggest oil and gas producer in australia after crude rose to a six-week high. rio tinto to watch after copper increased. a buy recommendation on both the stocks. earnings may be good and they may have good outlooks when they report their earnings. watch for those two shares. b.h.p. ended up .4% higher in u.s. trading than it did in australia yesterday. also one of the big stories of the day is going to be 10 network. there was an unsourced report in the australian newspaper which said that john fairfax holdings, a publishing company that publishes “the sydney morning herald” may be in talks to buy a $1 billion stake from a canadian company which own as 57% stake in network 10. john fairfax holdings declined to comment on the story at moment. the background to this is, of course, the government in -- speculation is that the government will take steps to loosen some of the media ownership laws. since that election, 10 network holdings’ stock has reufb by 15%. watch for 10. the other one to look for is promina group. earnings forecast for fiscal 2004 was raised by about 12% by csfb this morning. csfb is going to do well because of the decrease in bond yields and strong equity markets that we have seen. now remember that csfb increased its forecast also for a.m.p., biggest insurance company in australia, earlier this week because of the same reason, the increase we saw in fourth quarter equity markets in australia. back to you, cathy.

>> thanks for that, david. third quarter profit rose 52% on higher profit. what are they saying about third quarter earnings?

>> good morning, cathy. let’s look and see what it forecasts for the fourth quarter. infosys’ chief executive officer told cnbc they predict 50% fourth quarter growth. going forward we’ll have to take a look at the growth rate. now infosys is saying third quarter profit rose 52% on orders from new customers and infosys technologies is india’s second largest software exporter. the company says that 38 customers in this quarter. they did that at prices higher by 5%. cathy?

>> what is the company’s strategy in trying to mitigate the local currency gains?

>> cathy, infosys is betting more orders on businesses like consultants and network management would compensate for that depreciation against the u.s. dollar. the indian currency gained at least 5.4% in the third quarter cutting the value of overseas earnings. infosys expects earnings per share to rise as much as 50% in the current quarter. now the manager of $40 million in mumbai says that the company improved its operating margins despite rupee pressure. he says there’s been a marginal increase in the pricing of the new customers. here’s how the stock did in the previous day’s session. infosys fell 3.4%. benchmark index itself fell 1.9% which is the lowest since november 25. cathy?

>> before you go, a lot of the success of eupbd kwrao software companies are based on the pay structure for employees. what can you tell us about that?

>> that’s right, cathy. that’s one advantage. india’s software exporters are winning customers in part because they can pay workers the equivalent of about 12,000 u.s. dollars a year. that’s 1/6 the average programmer salary in the u.s. even so, wages are rising as local rivals and overseas technology companies in india take on growing numbers of skilled engineers. the head of worldwide sales at infosys says demand for offshore outsourcing continued to be strong. he says clients have respond favorably to a combination of the consulting services and offshore delivery. infosys hired about 2,280 employees in the third quarter which is less than half the 55,010 they had in the second quarter. back to you.

>> you bet. thank force that. airbus beat boeing again. the european plane maker says 2004 aircraft deliveries rose 5%. they’re counting on the super jumbo a-380 to help it maintain its number one position above boeing. the chief executive. hailed the a-380. this will greatly contribute to airbus financial reserve notice years to come.

>> stay tuned.

Interview: Apple chief executive

>> it’s 9:12 a.m. in sydney. expect a dry and sunny wednesday in that city. hot in the west. strong northeast winds. high temperatures, it’s 29 degrees celsius. as we mentioned earlier, news just coming in that microsoft chief financial officer john conners will retire. microsoft says conners will become a partner of a seattle-area venture capital firm. the company will consider internal and external candidates to fill the position. apple computer unveils its $500 mac into be computer, its cheapest ever. the company is also selling a new low-cost ipod music player. the shuffle will sell for under $100. the company says that makes it smaller, lighter and shock resistant. apple chief executive steve jobs unveiled it in san francisco.

>> this is the new ipod shuffle. take off the cap, put it right on, you’re set to go. [applause]

>> tomorrow, apple may report the ipod sales drove quarterly earnings to a four-year high. apple shares tripled last year. the european union and the u.s. agree to seek a settlement of government aid to airbus and boeing. the move is to prevent a 10-year-old dispute from becoming the biggest case in the history of world trade organization. the position heads off the immediate threat of a court case after the u.s. filed a complaint that the w.t.o. back in october. the u.s. argues european government loans to airbus were an am of legal subsidies under global trade rules. the e.u. countered, saying boeing has benefited from unfair support of $23 million from a military contract. the prospect of a lawsuit is threatening to undermine the way the two biggest plane makers finance the development of a new aircraft. analysts surveyed by bloomberg expect net income to rise 46%. infosys reports third quarter results this afternoon. indian investor production probably rose in november after the cheapest loans in 31 years spurred demand for homes and cars. economists surveyed by bloomberg expect factory output in asia’s number four economy gained 8.2%. it rose a record 10.1% in october, that was the same month india’s central bank kept its benchmark interest rate the lowest since 1973. european investors are watching chipmakers’ reactions to intel’s earnings as well as retailer’s results. bloomberg’s mark barton has a preview of wednesday’s agenda.

>> now wednesday, european chipmakers will be the center of attention, at least at the start of trading after the release of intel’s earnings. now metro may report that quarterly sales rose 6.3%, germany’s biggest retailer opened stores abroad, out pacing royal ahold and replacing the dutch company as the world’s third biggest retailer. germany’s economy shrank in 2003, proming metro to open cash and carry wholesale stores in countries, including china and media mart consumer electronic outlet elsewhere in europe. britain’s biggest consumer electronics retailer, dixons may say that u.k. sales grew 2.5% in the eight weeks through december. that would be less than half the pace of the previous 28 weeks. dixons, whose u.k. businesses include curry’s p.c. world and the link is having to cut prices to keep up competition with retailers such as pesco, britain’s number one food retailer and wal-mart stores. staying with retailer, burr berry group reports fourth quarter sales. the luxury retailer known for its trimmed raincoat may report an increase as it added products in open stores and cities in moscow and tokyo as well. turning to aerospace. and airbus will probably raise its 2005 production by 15% when it gives its annual outlook. the world’s biggest commercial aircraft maker would widen its 2-year-old lead over boeing. the company would also probably say 2004 sales rose marg untilly, even as deliveries rose 5% because of the weak dollar. the e.u. and the u.s. agreed to seek a settlement in regardses to airbus s.a.s. and boeing. in london, i’m mark barton.

>> the man who co-founded the quantum hedge fund with george soros is both bearish and bullish in china at the same time. jim rogers who now turns a $1.3 billion commodity fund says he plans to jump into china when others get scared away.

>> you’re probably going to see real estate investors in china go bankrupt, you’re probably going to see financial types in china go bankrupt in 2005. that is going to scare everybody. they’re going to cut back on their import. it is not in the world, it’s the buying opportunity. you see turmoil in china, you pick up the phone and buy all of china you can because it is a buying opportunity.

>> the yen rises the most against the dollar in almost a month. here’s a look at where the japanese currency is trading right now. a currency strategist at national australia bank talks about when the bank will step in to strengthen the rising yen.
在线播报
Listen Market briefing --- Cathy (fast)
Australia market --- David (slow)
Tokyo market --- Ron (slow)

>> welcome to “live” from hongcofpblg i’m catherine i can’t think. we have plenty in store for you on this edition including intel’s fourth quarter results. andy bryant will join us live from the company’s headquarters in silicon valley in less than two hours. plus, a fund manager who owns the stock will join us half an hour. he’ll tell us whether he’s planning to buy more or plans to sell. also coming up t dollar resumes its tumbling. we’ll tell you why and get a live reaction from a currency strategist in 20 minutes and donald evans heads to china to press u.s. trade concerns ahead of international affairs and the u.n. manufacturers group will tell us what he is looking for. intel reports that fourth quarter sales rose to a record as holiday shoppers bought laptops. net income fell as company trimmed production. net income fell to $2.12 billion or 33 cents a share. sales rose 9.8% to $9.6 billion, topping intel’s analyst expectations. the market was expecting sales of the world’s biggest chipmaker to rise 8% to $9.4 billion, according to analysts surveyed by thomson financial. analysts say intel’s figures are driven by laptop sales.

>> overall, the trend is towards laptops long-term. that’s where their real business is because of the migration of desk tops to lap tops around the world. asia is already there, europe is guessing there, the u.s. is getting there as well and that’s where the strength is coming from.

>> intel makes sentry know chips used in laptops. craig baret, the c.e.o., calls sentry know a wonderful success story. the chips have helped intel turn around a year when new product delays and record inventory could have hurt sales and profit. intel was the second worst performing stock on the dow jones industrial average last year, down 27%. we’ll be going live to intel’s headquarters in santa clara to talk to andy bryant, the company’s chief financial officer, that’s at 7:55 a.m. hong kong, 8:55 a.m. in tokyo and 6:55 p.m. new york time. and elsewhere in the semiconductor industry, we’ll be getting fourth quarter figures from the second biggest chipmaker in the world, samsung electronics on friday. we have breaking news for use on the bloomberg. microsoft says its chief financial officer john conners will retire. i’ll give you more details as soon as they’re available. but first, u.s. stocks fell before those intel figures were released, disappointing fourth quarter profits from big-name companies like advanced micro devices and alcoa caused investors to sell u.s. stocks. a bad start to fourth quarter earnings season caused the dow and s&p 500 to fall .6%. the nasdaq closed lower by .8%. a.m.d. suffered its biggest one-day drop since october 2002. the company says fourth quarter operating profits fell from the previous period because of its loss in the memory chip business. u.b.s. and piper jaffray and company have downgraded a.m.d. the fall in stocks fueled demand for bonds. the fed is expected to continue raising rates this year. according to economists surveyed by bloomberg, the fed funds target rate is expected to reach 3 1/2% by year-end. it currently stands at 2.25%. the dollar post its biggest loss against the yen in four weeks. comments from the european central bank’s chief economist triggered that decline. the dollar’s drop against the euro has already gone too far and the key to cutting u.s. record trade deficits lie in asia and especially in china. it send the dollar to a six-day low against the yen, almost wiping out all of its gains against the japanese currency so far this year. and the dollar posted a second consecutive loss against the euro for the first time this year. oil prices rose to their highest this year, once again cold weather is to blame. oil topped $46 a barrel in new york for the first time since mid december. it’s gained more than 10% over the past month. oil jumped in new york tuesday after a weather service said temperatures in the northeastern united states would fall below normal beginning thursday. that region consumes about 80% of the nation’s home heating oil. oil has also been rising this year, after opec made good its pledge to cut production in an effort to boost prices. australian stocks rise in new york trading with the bank of new york australia a.d.r. index gaining .6%. let’s go to david dweed for more on the australian market . good to have you with us, david. what are australian investors looking at this morning?

>> well, you’re right. the a.d.r. index did ride. we have the futures on the a.s.x. 200 indicating down about .4%. that might be just some catch up to yesterday’s trading and also it might be reflecting the decline in u.s. stocks that we saw overnight. that said, copper prices are up 2%. that could help some of our mining companies and it has come out with a report, they’re predicting that thermal coal, used in power generation, may rise 27% this year after gaining 41% last year. that could help some of the miners such as rio tinto. also we have january consumer confidences coming up. remember that in december, that fell from a 10-year high and a drop in confidences, if there was one, could support the contingent that the central bank may keep interest rates on hold longer than some people have been expecting and just remember, of course, tomorrow about the jobs report coming up. catherine?

>> and in terms of corporate news, what are investors looking at this morning?

>> well, we’ve got harvey norman’s first half sales coming up and just before―as i just came on now, i’m hearing that boardman, the third biggest iron ore producer in australia, has a takeover, 11.5% above the closing price of the company last week. there could be more action here because, of course, some of the chinese companies are―might also join the bidding because they might want to secure their iron ore supplies. cathy?

>> thanks for that, david. now china turns in a record monthly trade surplus as exports surge. overseas shipments jumped 23% in december, rising faster than 30% for the 30th consecutive month. that pushed exports to a record $63 billion last month. imports jump as well, but not as fast to close the gap, resulting in a $11 billion trade surplus for the month. china’s trade surplus with the u.s. top add record $131 billion last year, more than doubling the size of japan’s trade advantage over the u.s. the u.s. has been pressing china to strengthen its currency in an effort to close the trade gap. last month’s tsunami left hundreds of thousands of indonesians homeless. ron madison has a look at how that country is responding. good morning, ron.

>> good morning, cathy. indonesia now working to set up refugee camps for more than 600,000 people left homeless by last month’s tsunami. the united nations says indonesia is building 24 camps in banda aceh, the worst-hit area of the country. a spokeswoman says the aid agency is flying a 100-bed fuel hospital in the region. health officials say they are worried that water-borne especially dimics such as cholera and malaria will increase the death toll. the last four britains held without charge in guantanamo bay in cuba are going to return home. u.k. foreign secretary jack straw says they will face questioning upon arrival.

>> the four men will be returned in the next few weeks. once they are back in the united kingdom, the police will consider whether to arrest them for questioning in connection with possible terrorist activity. any subsequent action will be a matter for the police and the crime prosecution service.

>> the u.s. held the four men for almost three years at the military detention center. the government set up the camp to detain suspected terrorists captured in afghanistan. the secretary of homeland security says president george w. bush’s inauguration will be held under unprecedented security. tom ridge says security will be the highest ever for a presidential swearing in ceremony. bush does retake the oath of office next thursday. it is the first inauguration since the september 11 attacks. more than 6,000 law enforcement officers and 2500 soldiers are going to be deployed for the event. cathy, that is the latest look at world news. back to you.

>> thank you for that, ron. after the break, u.s. stocks extend the january decline after disappointing earnings from advanced micro and alcoa. our roars from the new york stock exchange will wrap up the day’s trading. you’re watching “live.”

Interview: Why the takeover trend has been growing

>> it’s 9:12 a.m. in sideny. we’re expecting a dry day today, a warm and mostly sun in day in that city with high temperature reaching 26 degrees celsius. and now we take a closer look at the day’s trio of deals in the u.s. and why the takeover trend has been growing since last year. su keenan has that story from new york. what more can you tell us, su?

>> well, cathy, these latest transactions deal in structure and strategy and industry group. we have media and telecom, yet scottsman capital management’s charles crane sees one common theme and that is that u.s. c.e.o.’s are putting their financial strength to work.

>> corporate balance sheets are pretty healthy and they’re looking for ways to put that money to work. dividends are one option, but buying other companies, especially if there are opportunities to cut some costs, is another option.

>> well, let’s take a look at the growing option of merging companies. rising stock prices, lower interest rates here in the u.s., and a rebounding economy has set the stage for a surge in mergers. according to bloomberg data, wall street firms advised on $1.89 trillion in deals last year, many of the transactions coming in the final weeks of the year. and that compares with roughly $1.2 trillion in 2003. burnham securities’ david liebowitz, a managing director there, says growing competition and price cutting in certain industries could spur history-making deals in the months ahead.

>> i would expect to see significantly more and not just in these two industries, but several of the other consolidating industries as well. this year may very well prove to be the best deal year dollarwise, that we’ve enjoyed, if not in the last several years, but perhaps even the best single year ever in a dollar amount.

>> well, the maxim group’s barry ridholt, a market strategist there, he views the trend of deals as positive, but he also takes a lesson from recent history.

>> it does show that c.e.o.s are optimistic and they’re looking to put their capital to work. that is a net positive over the long run. recognize we did see a whole lot of deals in 1999 and beginning of 2000 and we know how that worked out. you have to take it with a little bit of a grain of salt.

>> well, let’s take a closer look at 1999-2000. bloomberg data shows that the year 2000 turn out to be a recent peak for deal making with wall street firms advising on almost $3 trillion worth of transactions. ridholt says after 2000, we entered what he called a desert for deal making and says, quote, it would be foolish to ignore similar signs taking place now. jim rogers, former manager of the quantum hedge fund, takes a stronger position. he says the surge in deals, quote, signals we’re nearing a top in the u.s. stock market . cathy, back to you.

>> thank you for that, su. toyota motors threatens general motor’s 80-year reign as the world’s biggest automaker. japan’s largest car maker came to the detroit auto show this week with four new models aimed at grabbing gsm’s customers. toyota is introducing vehicles including a sedan, targeted at people who might otherwise buy g.m.’s new buick. toyota became the first foreign car maker to sell more than two million cars in the u.s. last year. the japanese automaker aims to grab 15% of the global market share by the end of the decade. g.m. has a 14.5% market share now and is currently closing u.s. factories and cutting production capacity in europe. nissan’s chief executive is counting on four new models to surpass last year’s record sales performance in the u.s. this year.

>> in 2005, we have four new products coming and they are in very important segments of the market . we have a new pickup truck coming, we have a new s.u.v. coming, which is a new xterra and a new product in infinity, the luxury car, the m-45 and we launched already the pathfinder at the end of 2004, which is going to impact mainly the year 2005.

>> japan’s second largest car maker show cased some of is new cars and trucks at the detroit auto show this week. nissan sold more than one million vehicles in the u.s. last year, grabbing a bigger piece of the market . he says that should help nissan turn its fifth straight record profit in the current fiscal year. he also plans to move more production in the u.s.

>> we started the revival of nissan t revival effort of nissan―we were at 60%, 60% of the cars sold in the u.s. market were sold, assembled in north america. today, we are above 80% and hopefully in the next three years, we should be above 90%. we’re trying to move systematically towards the higher level of autonomy in our u.s. operation. >> record profits failed to lift nissan shares in 2004. they declined 9% last year and have recovered about 2% so far this year. australia’s trade deficit probably widened for a fourth month in november. the stronger australia dollar slowing exports from asia pacific’s number five economy and imports are rising thanks to higher demand for cars and consumer goods. economists survived by bloomberg expect australia’s trade deficit grew 7.1% in november. the figures are due at 1:30 a.m. today in sideny. the philippines reports november trade numbers today. economists we surveyed estimate overseas sales rose 13.5%, for the biggest gain in three months. rising demand for computers and mobile phones is boosting exports there. and coming right up, the dollar falls for the first time this year against the euro in new york monday.
在线播报
Listen Market briefing --- Cathy (fast)
Australia market --- David (slow)
Tokyo market --- Ron (slow)
>> plenty in store for you in this edition in 20 minute, a economy strategist will comment about the loss of the dollar against the euro in the new year and global semiconductor outlook from the world’s biggest semiconductor maker. plus, we’ll be taking you live to the detroit motor show. we’ll find out whether japan’s only losing car maker is ready to turn things around. and then we’ll hear from nissan’s chief executive and find out how carlos ghosn plans to boost u.s. sales after turning in a record performance in 2004. alcoa, the world’s biggest aluminum maker has prices with a unexpected fall in earnings. fourth quarter profits fell 7.9% to $283 million or 32 cents a share. it says higher costs and the weak u.s. dollar cut into earnings. aluminum prices have risen 20% on average, demand from china. china last month said it will end subsidies in aluminum exports to curb output and ease energy shortages. some analysts say alcoa stands to gain if china exports less aluminum.

>> if chinese export less, the price of aluminum should be better. if the price of aluminum is better, that’s a plus for alcoa.

>> alcoa is the first dow company to release results for the quarter. oil turns lower after rising to a six-week high. prices had risen on news that the region oil output is reduced by 12% because of storms in the north sea. that oil, norway’s biggest oil company, has been forced to cut production by 205,000 barrels a day. its field wells were off on november 26. bad weather is delaying work to restore output from those oil fields. royal/dutch shell has stock pumping the equivalent of 44,000 barrels of oil a day since friday. a supply disruption in the north sea comes as opec cuts production. opec promised last year to reduce output by one million barrels a day starting january 1. norway is the world’s third largest oil exporter after saudi arabia and russia. the dollar’s longest winning streak against the euro in more than a year comes to an end. the dollar slipped against the european currency in new york for the first time this year. it also eased back versus the yen and you are looking at the line market quotes on your screen with the yen worth 10.31 and strategists say the dollar is pulling back after rising too far too fast. they point to short-term technical indicators which suggest the dollar could fall further, depending on u.s. trade figures out wednesday. economists surveyed by bloomberg expect the gap to shrink somewhat, coming in just $54 billion, the third biggest monthly deficit on record. before the alcoa earnings announcement, u.s. stocks the rose on hopes that fourth quarter earnings from companies reporting this week will beat forecasts. 12 companies in the s&p 500 are reporting this week, including intel tomorrow. the dow is up .2%. the s&p and nasdaq both higher .4%. treasurys grew on speculation that job growth will hurt debts this week. the treasury department will sell $25 million of five and 10-year notes in the next two days. the economy added more jobs in december than in november and the fed suggested last week its rate is the too low to prevent inflation from accelerating. higher interest rates are negative for treasuries. asia stocks rising u.s. trading. gainers included japan’s three largest automakeringses, toyota, nissan and honda. both are introducing new models at this week’s auto show in detroit. the bank of new york’s indexes, the track asian stocks rose. nikkei futures point to a higher start than the tokyo stock exchange when the market opens in two hours. japan’s market was closed yesterday for a holiday. news corps offers to buy out minority holders of fox entertainment group for $5.85 billion. the move is news corps to continue its founder, rupert murdoch, continue its largest u.s. assets. let’s go to david dweed in sydney for more on that story. good morning, david. how are news corps shares expected to open in australia?

>> well, we would expect those shares to open to follow what happened in the united states. we saw the preferred shares dropping about 1.6% in australian dollar equivalent terms and the ordinary shares down about 1.7%. so, given the fact that news corporation shares still represent about 4.5% of the australian a.s.x. 200 index, we would expect to see the index pulled a little bit lower by those. the index was indicating the futures on the index was indicating that it would open about .1% higher. one of the interesting aspects about what news corporation is doing is that david duveaux, the chief financial operation, said since news corps moved their headquarters to the u.s., having fox as a separate listed company no longer exists because american investors can invest straight into news corporation shares, especially american investors whose mandates wouldn’t allow them to invests in companies outside. so, fox up until then, had been one way that these u.s. investors would be able to get access to some of news corporations business and they had certainly invested in fox and fox’s shares right up to the highs since its initial public sale back in 1988. cathy?

>> what else will investors be looking at before the market opens?

>> looking in australia we have had ansalo, the luxembourg-based steel company, declined to report on speculations reported in the financial review yesterday that it might be in the market to buy blue scope steel, the biggest steel company in australia. a couple of other one, cleveland clips and westfield have been named for portman shares whose shares were suspended from trading yesterday. cathy?

>> thank you for that, david. in world news, the election of a new palestinian leader tops our world news. ron madison with that story and more in tokyo. good morning, ron.

>> good morning, cathy. the newly elected palestinian authority president says he does have a tough job ahead. mahmoud abbas is expected to resume peace talks with israel and reign in militant groups that have been blamed for stalling the process. israeli leaders say they will watch closely to see how hard abbas tries to subdue militants. u.s. president george w. bush has welcomed abbas to the white house. it is an invitation he refused to extend to late palestinian leader yasser arafat.

>> well, i personally want to offer my congratulations to abu mazen. i look forward to talking with him at the appropriate time. i look forward to welcoming him here to washington if he chooses to come here. i look forward to helping to make sure that the conference in london, a conference all aimed at helping the palestinians develop the institutions necessary to support abu mazen’s vision of a peaceful, active, vibrant state to become reality.

>> well, aides to israeli prime minister ariel sharon say sharon plans to meet with the new leader soon. abbas has received more than 62% of the vote, considered a clear mandate. an american observer says the election was freeze and fair. meantime, president bush says america will be aiding tsunami victims for a long time to come. he says the united states is quote, committed today and will be committed tomorrow. bush would not commit, though, to specific amounts of additional aid. he says any increases will be demand-driven. bush has pledged $350 million to countries hit hardest by the tsunami. but officials stress that’s just for the initial relief stage. cathy, that is the latest look at world news. going to hand things back over to you in hong kong.

>> thank you for that, ron. and right after the break, u.s. wireless company alltel agreed to buy western wireless for $4.2 billion, capping a big day for u.s. mergers. bloomberg’s su keenan takes a look at why 2005 may be another strong year for corporate deal making.

Interview: Asia Pacific Region markets
European markets

>> it is back to the table for united airlines and the pilots. the bankruptcy judge rejected a cost cutting agreement between the carrier and also united pilots. the judge agreed with lawyers for other united unions who argued the court would give pilots too much power over the airline’s negotiations with other labor groups. the agreement would have saved u.a.l. $1089 million a year. turning now to a preview of the markets in the asia pacific region. we have this filed tape report.

>> china’s exports probably slowed in december. higher oil prices left consumers in the u.s. and europe with less to spend on toys and electronic gadgets and clothes. in november, exports grew 46% to nearly $61 billion. december figures are expect the any day for monday. direct investment figures are also due. investment rose to a record last year. companies such as wal-mart are expanding in china to take advantage of rising demand. sri lanka may cut the key interest rate in the coming weeks to boost economic growth threatened by last month’s tsunami. in november the central bank said the $18 billion economy would grow as much as 6.5% this year. more than 30,000 people were killed when sri lanka was hit by the tsunami on december 26. the government says coastal areas may take as long as 10 years to rebuild. the cheapest loans in 30 years probably fueled indian industrial production in november. figures are expected to show output rose 1.8% from a year eermier. production rose 10.1% in october. india’s two biggest software companies will probably report higher profits in the quarter ending december 31. infosys reports wednesday and tata on thursday. the companies have been receiving more orders from clients in the u.s. and europe. south korea’s largest steel maker reports earnings on thursday. and it may say net profit almost doubled last year helped by higher steel prices. korean steel makers plan to increase capital spending by 52% this year to meet growing demand from china. asia’s biggest electronics maker sam sung probably saw profits jump 12% in the fourth quarter. as demand for cell phones, flat screens and computer chips soared. that means forecast of analysts thompson financial is for profit of 2.1 trillion. that is $2 billion. earnings around next friday -- earnings announced next friday. those are the highlights of the coming week here in arab yafment back to you.

>> for a previewst week ahead in europe, mark barton filed this report from our london bureau.

>> central bank is from the group of 10 countries meet in switzerland starting a week that includes interest rate decisions in europe’s largest economy. the central bankers may express concern about the impact of a further drop in the dollar on global economic growth. a press conference will follow with e.c.b. president, a spokesman for the group, he will also speak on thursday. essentially the rate unchaunchinged on that day. again in paris on friday. it’s another big week for retailers amid evidence that european house holds did boost their spending over the christmas shopping season. the u.k.b.r.c. retail sales monitor is due monday. a word of warning, u.k. retailers may have to bring their trading statement forward after the financial services authority bartend that information likely to surprise the market should be released promptly. still, the current schedule starts on tuesday. william morrison and matalan. metro follows on monday. there is more data, toorks on monday. easy jet, europe’s second largest discount airline reports passenger traffic for last month and the whole of last year. it will be followed during the week by luff tan saturday and sas on tuesday and baa on wednesday and fraport on thursday. in economic news, exports from germany, europe’s largest economy, probably grew at the slowest pace in three months in move. as the euro appreciated against the dollar and hurt demand. in the u.k., we have p.p.i., the constant goods leaving british factories was most likely unchanged in december after oil prices fell. and the u.k. also has the c.b.i. financial services survey.

>> that was mark barton from our london bureau. verizon wireless is not planning to block sprint’s purchase of nextel. speaking to bloomberg at the consumer electronic’s show, verizon wireless c.e.o. said his company is not interested in trying to buy sprint.

>> there’s nothing ever out of the question. but i think the market has spoken. sprint and nextel have put a deal together. and we’ll see what happens.

>> last month sprint agreed to buy nextel for $34.8 billion. the combined company will be the third biggest wireless operator in the country right behind wireless―verizon wirlse. krispy kreme donut share holders are seeking the ouster of scott lifengood. it took a 73% plunth in the company’s shares in the past year. he declined to comment because of the investigation aand shareholder lawsuits. many invoftors say his mistake was expanding krispy kreme too quickly. we’ll be right back after the break.

在线播报
Listen Market briefing --- Bob (fast)
Elliot Spitzer --- Allan (slow)

>> welcome back. you have the good fortune of finaling world report friday edition. stocks were down fractionally on the day. the dow jones industrial average and s&p 500 were down for the fourth session in five in the new year. the nasdaq has fallen in all five sessions this year. well the dollar may snap a three-year decline over the euro this year. bloomberg polled 53 strategist, investors and analysts. and the results, according to the average forecast, the dollar will rise to 1.34 per euro by the end of the year, up 2005 from from 1.30 today. further rate increases by the fed will enhance the yield advantage of treasury notes over euro region debt. the european central bank kept the benchmark rate at 2% since june of 2003. new york attorney general eliot spitzer was the leadoff witness today at a new york assembly committee hearing about canned scandal in the insurance industry. and allen dodds frank covered the hearing. he joins me with more on that insurance story.
>> new york attorney general eliot spitzer told the new york assembly committee on insurance that he expects his on going investigation into the sales of lines of personal insurance to have a broad impact on the industry. he talked about it with reporters afterward.

>> there will be disclosures i think will change the way business is done because of the contingency fees and lack of transparency to the detriment of individuals that paid premiums that are higher than they otherwise would have been. and that sun fortunate. and that is why we’re pursuing. this

>> spitzer said his investigation into bid rigging and hidden commission has proud widespread evidence of illegal activities. he told the committee that before he filed the first charges against marsha mcclenan told them false hds about how they handle the business. spitzer told reporters that thursday’s guilty plea to a criminal fraud by a managing director should be regarded as a step toward higher ranking officials.

>> even if there are going to be settlements with the individual companies, the criminal cases will continue. and the six criminal plea that’s we have obtained so far, in each instance require on going and full cooperation. and, therefore, i think it’s fair to assume that we are laying a foundation with these criminal cases that will permit us to make criminal cases and bring criminal actions against those more senior within the companies.

>> new york insurance superintendent gregory serio testified the insurance industry practice of disregarding regulatory directives has long raised red flags.

>> we have very publicly expressed our us from at an industry that will not sign a certification that filings they are making to the insurance department actually comply with the insurance law.

>> spitzer said the committee has so much to learn from the on going investigation that he is not yet prepared to as the legislature for new laws governing insurance. bob?

>> thank you, allen. appreciate that.

>> don hudson secretaryal alfonzo jackson said that fannie mae and freddie mac could compete without one of the core federal perks they receive. jackson told bloomberg news that fanny and freddy don’t need to lower borrowing cost that’s come with a $2.25 billion line of credit they receive. fanny and freddy say the benefit helps lower income americans buy homes while contributing to their profittability. jackson says they should look to the open market just like everyone else. through their government ties, fannie mae and freddie mac gain a borrowing advantage that amounted to between 119 billion anded 1ds64 billion during a four-year period ending last december plfment jackson also told bloomberg his agency plans to publish a proposed rule come monday that will open the mortgage portfolio to greater public scrutiny.

>> the books will be open. they can no longer close the books. the people will be you, bloomberg, and others will be able to see. we will not permit them again to stry this as they have in the past by keeping their books closed.

>> last october hud retired them to offer greater public access to details on recent loans including information about the borrower’s race, gender, and the property’s location.

>> bear stearns agreed to settle a fraught lawsuit with the retirement systems of alabama. the move avoids a retrial in a case due to start next week. alabama’s 25 billion dollar pension fund sued bear stearns in 2002. claiming the firm sold them $10 million in worldcom backed bonds knowing worldcom finances were deteriorating. the fund was seekinged 15ds million in damages including interest. the first trial ended with a hung jury in november. citigroup, j.p. morgan and banc of america were among the orginal defendants in the suit. they agreed to pay $111 million to settle. borrowing by u.s. consumers foal a record $8.7 billion in november that came as auto sales dropped and fewer people used charge cards. the drop in nonmortgage debt was the first in a year and followed an increase of $9.5 billion in october. total debt outstanding fell to $.085 trillion. consumers are showing signs of being overextended. the percentage of consumer loans with overdue payments rose in the third quarter of last year according to the american banker’s association. the stock market ‘s year end rally may have prompted investors to take money off of the table. according to a.n.g. data services, clients pulled $1 billion from stock market funds just over the past week. they also took $5 billion from money market funds while adding $56 million to municipal bond funds. when we come back after the break, stock markets in tokyo and hong kong fell on the week after the break, we’ll get a preview of next week’s likely market movers in that asia pacific region.

Interview: John Snow ---The stand on the dollar

>> welcome back. the world financial report, treasury secretary john snow says the president’s tax cut policies helped the economy and job growth and should be made permanent. earlier today on bloomberg television, he talked about the administration’s policies beginning with the stand on the dollar.

>> the dollar reflects the fundamentals. we need to keep the fundamentals of the american economy strong. we need to continue to sustain growth, job creation, low inflation, high productivity. we need to continue to make sure america is the best place to invest money as it is. and on a risk-return basis, there is no other place like the united states. and we need to deal with our deficit. we need to take the steps to bring the deficit down. the president’s committed to that. we know deficits matter. we know we have to restrain spending. and the budget that you will see soon, that will be released, the president’s 2006 budget will be a very tight budget, constraining spending, and helping us to get the deficit in a much better picture.

>> now secretary snow, when you just said there that the dollar reflect the fundamentals, has there been any shift at all in the bush administration’s policy for a strong dollar?

>> no. as i’ve said on countless occasions, we support a strong dollar. we think a strong dollar is good for america. it’s our policy. it has been our policy. and will be our policy.

>> now with the dollar following, though, each of the past three yoors, especially against the euro, how do you define a strong dollar then?

>> well, we define the strength in all its dimensions. our focus is on the things that sustain strength. and as i said, first and foremost now is dealing with the deficit. and we will be working with the congress and n. a bill: way, i hope, to restrain spending and see that the president’s objective of cutting the deficit in half over the course of the next few years will be achieved.

>> and i want to followup with you on that point. certainly you’re saying really bringing the deficit down a key here. one of the big questions has been in the budget that you’re going to propose in february, that the administration will come out with, will the social security reform bill be included in that budget?

>> well, i’m going to wait for the budget could come out to -- where that question will be answered. but we are already heavily engaged in―on the issue of social security. it’s a pressing issue. it’s an essential issue. the president is invested in the issue. he’s gone to the american people with it. we’ll continue to do that. we need to―we need to modernize social security. we need to protect it and secure it. so it will be available for future generations.

>> and when you talk about your goal to have the budget deficit within five years, does that goal, that target of having the budget deficit, does that include in the deficit itself the necessary funds to fix social security?

>> well, as i―as i’ve said, we’re―we haven’t put the 2006 budget out yet. but everything that we do in the administration will be focused on achieving the president’s objectives. remember by fixing social security, we bring down the long-term deficit in the united states. our actions here, i think, will be applauded by financial markets in america and abroad.

>> i want to ask you one question about today’s jobs report. certainly no major surprises at least. the market ‘s opinion. wage growth, though, did come in a bit weaker than anticipated. certainly not good for workers. but on the inflation front, do you feel any more secure that inflation is not a problem given the wage data you heard today in the jobs report? well, i think we continue to benefit from a low inflation environment. and i think that will―that will continue. and that’s―that’s a helpful and benign note for the american economy. and i think it will continue. i think we’ll continue to benefit from a low inflation environment for the foreseeable future.

>> what metric are you watching most closely to determine if you become a little less sanguinetti win about that inflation outlook?

>> the usual. the usual metrics that the c.p.i., the chain link c.p.i., the g.d.p., deflator and core inflation. the key is the core inflation rate. and as i say, i―we had pretty good news on core inflation. and it’s―it’s―the core inflation rate. and it’s well under control now.

>> that was u.s. treasury secretary john snow speaking with bloomberg’s burnham. the president named senators connie mac and john breaux to head a panel that will recommend ways to make the tax code simpler. according to the president the code is complex and discourages savings. he’s setting up a study. during the first it term the president signed into five tax cuts totalinged 2ds trillion. the new panel the will report back to the president at the end of july. when we come back after the break, today’s jobs report supports those who expect the fed to proceed with interest rate increases. our sue keenan takes a look at that story after the break.
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Listen Market briefing --- Mike (fast)
NYSE --- Julie (slow)
Nasdaq --- June (slow)

>> welcome to world financial report. our top story . u.s. employers adding 157,000 workers to payrolls in the month of december. the figure was below economist expectations but the support capped the best year for job growth since 1999. manufacturers added 3,000 jobs in december and 76,000 jobs for the year. first annual gain since 1997 in manufactures payroll. the unemployment rate held steady tying a three-year low of 5.4% in december. average hourg earnings gained .1% raising at a slower rate. this bolstered speculation that federal reserve will keep raising interest rates this year. and the s&p 500 completed its worst five-day start to a year since 1991. let’s get to the numbers as they settled on friday with fractional loss as cross the board. the dow jones industrial average down about .2%. s&p 500 down .14%. and the nasdaq down .07%. and checking volume at the big board, almost 1.5 billion shares traded. over at the nasdaq, almost 2.2 billion shares were traded. also decliners outpacing advancers by the same ratio as the nasdaq. the treasury market shrugged off the jobs data finishing the day little changed checking the 10-year. we see change in price down 1/32. the yield up one basis point to 4.27%. the five-year down 4/32. the yield 3.71%. the two-year down 2/32. the yield at 3.18%. more on today’s jobs report and what it may mean for bonds and the fed later on in the program. stocks finished the day and the week lower as we indicated on concern about the economy and interest rates. for more on today’s trading action, here’s a report that our julie hyman filed from the big board.

>> after volatile session, stocks finally ended the day lower. we had a lost up and down action. a lost going positive then negative again. on both the dow and s&p 500. both indices ended the week solidly lower. for the dow, the worst week since october. for the s&p 500, longer, the worst week since the beginning of august. the decline of over 2%. also on the week, want to look at the big declines in group terms. we had a really only two groups on the s&p 500 rising this week. real estate, one of the worst performers on interest rate concerns. semiconductors declining this week as well as retailers on the december same-store sales that came in shoddy at best. so that group down 4%. now one of the rising groups i was talking about aun the one that really won on the week that is for the food retailers, food and staples retailers. we’re talking like wal-mart, coss co-that help lift the index. these are the retailers that did do solidly well in terms of the december same-store sales figures. semiconductors i mentioned were some of the worst performers on the week. they were the best performers in today’s session. looks like we had a bounce back effect. because certainly we didn’t have any corporate news, necessarily that was encouraging in today’s session. so the stocks doing well. also people definitely talking about the jobs in today’s session that accounts for the volatility that we did seek. the jobs report did come in a little worse than expectations, we had something really both for bulls and bears in the report. for folks wanting to be more pessimistic, we had the fact that report was worse than expected. o according to other investors, that will allow the fed to be less aggressive going forward. a couple leftovers. we did have a couple companies out with earnings rising. when hal co-do yo doing well in to r day’s session and intel gaining in today’s session. the shares were up 1.5% in today’s session reflecting the gain we saw in sems overall. i’m julie hyman, bloomberg news, at the new york stock exchange.

>> the nasdaq had the six verage day of decline matching the longest slump since august 2600 3. our june grasso has details on today’s nasdaq trading.

>> the worst performing group at the nasdaq today was a transportation index which was the best performing economic group yesterday. the leading decliners bare yellow roadway, j.b. hunt and frontier airlines. two of the biggest decliners today, u.t. starcome, that is the biggest supplier of wireless telephone systems in china yafment fourth quarter sales as much as 745 million dollars missed the forecast because an economic slowdown in china. crimped growth there. taser international, the biggest mager of stun guns says it is cooperating with an investigation by the u.s. securities and exchange commission. the agency is looking into both the safety of the company’s products and an order from a firearms distributor. “the new york times” reported that a government study found that the taser weapons could be dangerous. the u.s. justice department began investigating. shares have almost graw quadrupled in the last year. the computer shares which declined for five straight sessions to day advanced. and they were the leader of the nasdaq for the day. led by intel which was one of the most actively traded stocks, apple which is going to be announcing results on january 12. and also it’s going to announce a flash base ipod and upgrade next week at mac world according to piper jaffray analyst. oracle, which will complete its 10.3 billion dollar purchase of peoplesoft today after investors hand over more than 97% of peoplesoft shares. 90% was needed to create the world’s second biggest maker of business management software. i’m june grasso, bloomberg news, at the nasdaq marketsite in times square.

>> so far 2005 has not been bullish for the stock market . some, like lord abbett say obsession with the chance of a fed rate hike produced an undervalued stock market .

>> i think the market has yet to catch up with the strength in this economy, the strength in earnings and especially since the fed is measured, they’re going to keep rates lower than they otherwise might be, not lower than they are. i think the market has 10% to get to fair value. but that’s where lord abbett is focusing thoon fair value.

>> the next driver of the stock market will be fourth quarter earnings next week. analysts expect fourth quarter earnings will come in 15.3% higher than a year ago. that’s slightly down from the 16.8% growth in the third quarter. analysts predict the best groups for the fourth quarter profit growth will be material stocks at 76% followed by energy companies at 70%. but the future may not repeat and strategists are bearish on energy stocks this year.

>> you almost never want to own commodities and cyclical industries in general when you have supply accelerating demand. that’s the scenario for this year. stocks have not attractively valued. so you really need to have a positive surprise. i just don’t see a positive surprise this year.

>> analyst forecast the week of sector for fourth quarter earnings will turn out to be utilities where they predict 4% growth. 31 s&p 500 companies are expected to report earnings next week clgal co-yarks intel, apple computer, and sun micro system. arthur andersen is getting a supreme court hearing. that as the defumbingt accounting firm seeks to overturn the conviction for obstructing the enron investigation. the high court agreed to review an appeal’s court decision. the jury found andersen guilty of orchestrating a document destruction campaign after hearing of a securities and exchange commission investigation into enron’s audits. that forced andersen, once the largest auditor torks stop conducting audits leading to the firm’s collapse. airbus plans to boost the production 15% this year to a record 370 planes. that will widen its 2-year-old lead over boeing. bloomberg learned also that airbus plans 440 deliveries in 2006 and 465 in 2007. last year airbus produced just 320 planes. analysts say airbus could outperform boeing for the next decade. customers have been tracted to airbus’ new models and smaller cockpits. that reduces the cost of parts and training. also checking shares of boeing, friday they were down about a third of 1%. losing 17 cents ated 50ds.31. crude oil rose friday after opec cut output to keep the surplus from developing. opec, of course, pumps more than a third of the world’s oil and december production dropped 100 barrels a day from the previous month. hedge fund managers helped push prices high they are week as they bought futures in expectations of a rally. checking the price on the day, crude oil finishing up 4.5% at $45.43 a barrel. that’s the weekly chart, there i should say. 4.5% up for the week. among other energy movers, they were down on the day. gasoline down .7%, heating oil down .6%. natural gas futures finishing at .7%. we’ll talk about job creation numbers when we come back with quotes from secretary snow.